Source: United States Department of Justice

An indictment was unsealed today in the Southern District of Texas charging 14 members and associates of the Bandidos Outlaw Motorcycle Gang for their alleged roles in a criminal enterprise engaged in murder, robbery, arson, narcotics distribution, and witness intimidation in and around Houston.

The indictment accuses the defendants of various crimes, including engaging in a conspiracy to commit racketeering (RICO) activity and committing violent crimes in furtherance of the gang such as murder, attempted murder, and assault. The indictment alleges that the Bandidos are a self-identified “outlaw” motorcycle organization with a membership of approximately 1,500 to 2,000 in the United States and an additional 1,000 to 1,500 members internationally, including in Mexico.

“Today’s indictment is an important step in eliminating the Bandidos Outlaw Motorcycle Gang,” said Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division. “The Bandidos declare war on rivals — and they wage that war on our streets. Criminal behavior like this has no place in America, and the Department of Justice is fully committed to bringing peace back to our communities.”

“Ensuring the safety of the public is Southern District of Texas’ paramount concern,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “The indictment here not only alleges shocking crimes of violence, but also alleges that these offenses were committed openly and wantonly, where any innocent member of the public could have been hurt or killed.”

According to court documents and statements in court, beginning in 2019, a violent turf war erupted between the Bandidos and B*EAST, a rival outlaw motorcycle gang in the Houston area. As part of this turf war, Bandidos national leadership allegedly put out a “smash on site” order to commit physical assaults, including murder, against B*EAST members. The turf war has resulted in gunfire exchanged on public roadways and in public establishments with innocent civilians present, according to the charges.

John M. Pfeffer, also known as Big John, 32, Darvi Hinojosa, also known as 10 Round, 35, and Bradley Rickenbacker, also known as Dolla Bill, 37, all of Katy, Texas; Michael H. Dunphy, also known as Money Mike, 57, of Cleveland, Texas; Christopher Sanchez, also known as Monster, 40, of Tomball, Texas; and Brandon K. Hantz, also known as Loco and Gun Drop, 33, of Crosby, Texas, are charged with conspiracy to commit racketeering activity. Pfeffer, Dunphy, Hinojosa, Rickenbacker, and Sanchez are further charged with multiple counts of assault in aid of racketeering. Pfeffer, Hinojosa, Rickenbacker, and Sanchez are also charged with using a firearm during and in relation to a crime of violence, while Sanchez faces charges of being a felon in possession of a firearm. Hantz is also charged with arson.

If convicted, Pfeffer, Hinojosa, Rickenbacker, and Sanchez each face a maximum penalty of life in prison, while Dunphy and Hantz each face a maximum penalty of 20 years in prison on each of their counts.

The indictment also charges David Vargas, also known as Brake Check and First Time, 33, of Houston, with murder in aid of racketeering; using a firearm during and in relation to a crime of violence resulting in death; attempted murder in aid of racketeering; and using a firearm during and in relation to the attempted murders. All those charges relate to the killing of a rival and the shooting of two others. If convicted, Vargas faces a mandatory penalty of life in prison or the death penalty.

Further, Marky Baker, also known as Pinche Guero and Guero, 40; Ronnie McCabe, also known as Meathead, 56; and Jeremy Cox, also known as JD, 37, all of Houston; Roy Gomez, also known as Repo, 50, of Richmond, Texas; and Marcel Lett, 56, of Pearland, Texas, are charged along with Pfeffer and Rickenbacker with assault in aid of racketeering and using a firearm during and in relation to a crime of violence. These charges are in relation to an alleged assault and robbery that resulted in the death of a rival. If convicted, they each face a maximum penalty of life in prison.

Hinojosa is also charged along with John Sblendorio, also known as Tech9, 54, of Houston, with conspiracy to commit murder in aid of racketeering, attempted murder in aid of racketeering, assault in aid of racketeering, and using a firearm during and in relation to a crime of violence in connection with the shooting of a rival gang member. Hinojosa is also charged with conspiracy to distribute cocaine and three counts of possession with intent to distribute cocaine. If convicted, Sblendorio and Hinojosa each face a maximum penalty of life in prison.

In addition, Sean G. Christison, also known as Skinman, 30, of Katy, is charged with possession with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime. He faces a maximum penalty of life in prison.

For all defendants, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI, Texas Board of Criminal Justice — Office of Inspector General, Texas Department of Public Safety, and Montgomery County Sheriff’s Office conducted the investigation, with assistance from the Harris County Sheriff’s Office; Houston and Pasadena Police Departments; Texas Alcoholic Beverage Commission; LaMarque and Katy Police Departments; U.S. Marshals Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; and Cypress-Fairbanks Independent School District Police Department.

Trial Attorneys Grace H. Bowen and Christopher Taylor of the Criminal Division’s Violent Crime and Racketeering Section and Assistant U.S. Attorneys Byron H. Black and Kelly Zenón-Matos for the Southern District of Texas are prosecuting the case.

This investigation was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found on the Justice Department’s OCDETF webpage.

This case is being prosecuted as part of the joint federal, state and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Justice Department’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime. For more information about PSN, please visit www.justice.gov/psn.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

YAPP USA Automotive Systems Inc., a corporation with its principal place of business in Michigan, has agreed to pay $14,208,496 to resolve allegations that it violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.

Congress created the PPP in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive forgivable loans guaranteed by the Small Business Administration (SBA). Regulations provide various eligibility requirements for the PPP, including limitations on the number of employees and exclusions for certain types of businesses, like those that are owned by government entities. In their loan applications, borrowers were required to certify that they were eligible for the PPP and that the information they provided was accurate.

YAPP USA’s ultimate parent company is State Development and Investment Corp. Ltd, a company owned and controlled by the People’s Republic of China. Through common ownership and management, YAPP USA is affiliated with dozens of other companies worldwide. In applying for a first-draw PPP loan, YAPP USA represented that it was eligible for the PPP, and it received a first-draw PPP loan in the amount of $9,598,462, which the SBA later forgave. The United States alleged that YAPP USA was not eligible under the SBA rules for a PPP loan because YAPP USA, singly and together with its affiliates, employed more individuals than permitted by SBA’s size standard for its industry. The United States also contended that YAPP USA was not eligible because it is owned by a government entity. YAPP USA will pay $14,208,496 to the United States to resolve these allegations.

YAPP USA cooperated with the United States’ investigation by identifying individuals involved in or responsible for the conduct and disclosing facts and documents gathered during YAPP USA’s own investigation. As a result, YAPP USA received credit under the department’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases.

“PPP loans were intended to help small businesses in the United States,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “The Department remains committed to pursuing those who violated the requirements of this taxpayer funded program.”

“Congress and the SBA designed the PPP to help small businesses and their employees during the pandemic, not large companies owned by foreign governments,” said Acting U.S. Attorney Richard G. Frohling for the Eastern District of Wisconsin. “This settlement demonstrates that our office will continue to hold accountable those businesses and individuals who abused this vital program.”

“The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the SBA working with the Department of Justice, SBA’s Office of Inspector General, and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties,” said SBA General Counsel Wendell Davis.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on behalf of the United States and receive a portion of any recovery. The qui tam lawsuit was filed by GNGH2 Inc; GNGH2 Inc. will receive $1,420,849 in connection with this settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Wisconsin, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.

Trial Attorney Lindsey Roberts of the Justice Department’s Civil Division and Assistant U.S. Attorney Michael Carter for the Eastern District of Wisconsin handled the matter, with assistance from Christopher J. McClintock of the SBA.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Source: United States Department of Justice Criminal Division

Jose Miguel Carrillo, of Spring Hill, Florida, was sentenced yesterday to 84 months in prison after pleading guilty to conspiring to violate the dog fighting prohibitions of the federal Animal Welfare Act and being a felon in possession of a firearm.

According to court filings, Carrillo conspired with others to purchase, acquire, and breed dogs for use in dog fights. Carillo also staged dog fights at his home and traveled to dog fights in Massachusetts, Florida, and Connecticut.

A June 2023 search warrant was executed at Carrillo’s home and led to the seizure of 10 pit bull-type dogs, most of which were later adopted by new owners, as well as a firearm and ammunition. Carrillo also possessed dog fighting paraphernalia including a bloodstained dog fighting box, a skin stapler, syringes, and injectable veterinary medications.

“To its core, dog fighting is a cruel and criminal exploitation of animals for entertainment,” said Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division. “Today’s sentence sends a strong deterrent message that the Justice Department will vigorously prosecute these cases.”

“Exploiting and endangering the welfare of animals for personal gain is cruel and abhorrent,” said Acting U.S. Attorney Sara C. Sweeney for the Middle District of Florida. “Because of the hard work of our law enforcement partners, justice was served.”

“The Office of Inspector General is committed to working with all of our law enforcement and prosecutorial partners in pursuing individuals who choose to participate in animal fighting activities and engage in violations involving animal welfare, while also committing other serious offenses in our communities,” said Special Agent in Charge Charmeka Parker of the U.S. Department of Agriculture’s Office of Inspector General (USDA-OIG).

To report animal fighting crimes, please contact your local law enforcement or the USDA-OIG’s complaint hotline at: usdaoig.oversight.gov/hotline or 1-800-424-9121.

The USDA-OIG; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Pasco County (Florida) Sheriff’s Office and the Fitchburg (Massachusetts) Police Department investigated the case. Assistance was provided by the U.S. Marshals Service, Massachusetts State Police, New Hampshire State Police, Animal Rescue League of Boston’s Law Enforcement Division, U.S. Coast Guard Investigative Service, Homeland Security Investigations and U.S. Customs and Border Protection.

Senior Trial Attorney Matthew T. Morris of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorneys Erin Favorit and Tiffany Fields for the Middle District of Florida prosecuted the case. Trial Attorney Caitlyn Cook of the Environment and Natural Resources Division’s Wildlife and Marine Resources Section assisted with the transfer of the seized dogs to new owners.