Author: MIL-OSI Publisher

Source: US FBI

Owner, Operator, and Corporate Entity Charged with Travel Act violations, Money Laundering, and Maintaining a Drug Premises

PHOENIX, Ariz. – Today, the Federal Bureau of Investigation and United States Marshal Service, in coordination with the Phoenix Police Department, executed search and seizure warrants at the Royal Inn hotel, located at 2510 West Palo Verde Drive in Phoenix. Federal agents seized control of the hotel and shut down its operations due to widespread prostitution and drug trafficking activities that have gone unabated by its owners and operators.

Also today, the United States District Court unsealed a 44-count indictment returned by a federal grand jury on September 17, 2024, against the Royal Inn’s owner, operator, and corporate entity, among others. Specifically:

• Varsha Patel, 56, of Chino Hills, California, the owner of Royal Inn, was charged with two counts of Using a Facility of Interstate Commerce in Aid of Racketeering, one count of Maintaining a Drug Premises, and 34 counts of Promotional Money Laundering. Varsha Patel was also charged with multiple counts of Making False Statements to Obtain a Small Business Administration Loan.
• Sarang Hospitality LLC, aka Royal Inn, the Arizona corporation through which the hotel does business, was similarly charged with two counts of Using a Facility of Interstate Commerce in Aid of Racketeering, one count of Maintaining a Drug Premises, and 34 counts of Promotional Money Laundering.
• Nilam Patel, 54, of Phoenix, the live-in operator and day-to-day manager of the Royal Inn, was also charged with two counts of Using a Facility of Interstate Commerce in Aid of Racketeering, one count of Maintaining a Drug Premises, and 34 counts of Promotional Money Laundering.
• Four other individuals were charged with Distribution of Fentanyl and Methamphetamine for drug dealing at the Royal Inn: Anthony Curtis, 42, of Buckeye; Otis Childers, 31, of Phoenix; Chauntelle Mills, 24, of Phoenix; and Leonardo Guerrero, 49, of Phoenix.

The indictment alleges that defendants Varsha Patel, Nilam Patel, and Sarang Hospitality LLC, operated the Royal Inn by primarily renting rooms to individuals engaging in prostitution and drug dealing. From 2017 through September 2024, these defendants used the funds they obtained from the Royal Inn room rentals to maintain and promote the Royal Inn’s operations; pay the mortgage on personal property located in Chino Hills, California; fund certificates of deposit; purchase life insurance policies; and pay for their own personal expenses.

The indictment further alleges that Varsha Patel, Nilam Patel, and Sarang Hospitality LLC were aware that most activities at the Royal Inn were illegal acts of prostitution, drug dealing, and drug using. Over the course of several years, Phoenix Police Department officials repeatedly informed these three defendants of the drug dealing and prostitution activities on the property, of the hundreds of calls for service local police received, and of the need to abate the criminal activities taking place. Despite having been served with multiple abatement letters, these defendants continued to operate the Royal Inn to intentionally facilitate and profit from the criminal activities occurring on the premises. This included: renting rooms to persons who overtly engaged in prostitution, and to persons who distributed illegal drugs; directing the sex workers to attract sex buyers off the property, and to walk separate from the sex buyer while going to the room; directing the sex workers, pimps, and drug dealers to park off the property; alerting sex workers, pimps, and drug dealers of law enforcement presence; failing to request a credit card, together with a government-issued identification, in order to rent a room; failing to evict persons engaged in prostitution and drug dealing, thereby allowing lengthy stays at the Royal Inn without detection; and failing to call the police when criminal activities were occurring.

A conviction for Using a Facility of Interstate Commerce in Aid of Racketeering carries a maximum penalty of five years in prison and a $250,000 fine. A conviction for Maintaining a Drug Premises carries a maximum penalty of 20 years in prison and a $500,000 fine. A conviction for Promotional Money Laundering carries a maximum penalty of 20 years in prison and a $500,000 fine. A conviction for Making False Statements to Obtain a Small Business Administration Loan carries a maximum penalty of two years in prison and a $250,000 fine. A conviction for Distribution of Fentanyl and Methamphetamine carries a maximum penalty of 20 years in prison and a $1,000,000 fine.

An indictment is simply a method by which a person or entity is charged with criminal activity and raises no inference of guilt. A criminal defendant is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

The Federal Bureau of Investigation, United States Marshal Service, and Phoenix Police Department conducted the investigation in this case. Assistant U.S. Attorneys Gayle Helart and Patrick Chapman, United States Attorney’s Office, District of Arizona, Phoenix, are handling the prosecution.
 

CASE NUMBER:           CR-24-01529-PHX-SPL
RELEASE NUMBER:    2024-127_Patel

Source: US FBI

PHOENIX, Ariz. – Ma’Kiah Cherae Coleman, 20, of Glendale, was sentenced last week by United States District Judge Douglas L. Rayes to four months in prison, followed by 36 months of supervised release for assaulting a Transportation Security Administration (TSA) agent at Phoenix Sky Harbor Airport. Coleman pleaded guilty to Assault on a Federal Officer Inflicting Bodily Injury on April 23, 2024.

On April 25, 2023, Coleman assaulted a TSA agent at Sky Harbor Airport by grabbing the agent’s hair, forcing the agent’s head down against a baggage screening area table, and punching the agent in the head several times with a closed fist. Coleman had to be restrained by several other TSA agents.

In addition to being sentenced to prison, Coleman is banned from traveling by commercial aircraft during the three-year term of her court supervision.

TSA officers are federal employees who work for the Department of Homeland Security to protect the nation’s transportation systems. Their primary role is to screen passengers, baggage, and cargo for terrorism threats. Coleman’s actions resulted in the temporary closure of a Sky Harbor Airport Security Checkpoint while law enforcement responded.

The Transportation Security Administration, the Federal Bureau of Investigation, and the Phoenix Police Department conducted the investigation in this case. The United States Attorney’s Office, District of Arizona, Phoenix, handled the prosecution.
 

CASE NUMBER:            CR-23-00780-PHX-DLR
RELEASE NUMBER:    2024-124_Coleman

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

Source: US FBI

A nationwide FBI effort to raise awareness of frauds and scams that affect the public is underway. The goal is to share information with the public to highlight different types of fraud and scams, tips for identifying them and preventing losses, and how victims can report to protect others.

One of the most common tactics scammers employ is a false sense of urgency or isolation. They may try to instill trust, induce empathy or fear, or promise monetary gains, companionship, or employment opportunities—all to lure victims into immediate action. For this reason, the FBI’s awareness campaign urges the public to “Take A Beat”: resist pressure to act quickly, pause for a moment, and assess the situation.

According to the FBI’s latest Internet Crime Complaint Center (IC3) data, there have already been $1.6 billion in losses from January to May 2024, which is nearly $300 million more from the same time last year.

“The FBI is committed to investigate and pursue those who commit fraud for personal gain, and we take that responsibility very seriously,” said FBI Phoenix Special Agent in Charge Jose A. Perez. “We, along with our law enforcement partners, will continue to seek justice and hold accountable those who use illegal means and criminal behavior to take advantage of others.”

While fraud can happen to anyone, there are small steps that can be taken for citizens to protect themselves and their information:

• Take precautionary measures to protect your identity should a criminal gain access to your device or account. Immediately contact your financial institutions to place protections on your accounts and monitor for suspicious activity.
• Be cautious of unsolicited phone calls, mailings, and door-to-door service offers.
• Search online for the contact information (name, phone number, email, addresses) of any unknown source which reaches out to you, as well as the proposed offer. Verify the legitimacy of businesses on websites such as Better Business Bureau. Other people have likely posted information online about businesses and individuals attempting to run scams.
• Never give or send to unverified people or businesses any personally identifiable information, money, checks, gift cards, or wire information.

If you believe you or someone you know may have been a victim of a fraud or scam, contact your local FBI office or submit a complaint on ic3.gov. You should document the name of the scammer/company and methods of contact, dates of contact, methods of payment, where funds may have been sent, and a thorough description of the interactions.

For more information on the common frauds and scams the FBI encounters, visit fbi.gov/scams.

To view the latest stats and trends, visit ic3.gov.

Source: US FBI

PHOENIX, Ariz. – Terri Lynn Victor, 43, of Peridot, was sentenced on August 26, 2024, by U.S. District Judge Diane J. Humetewa to 180 months in prison, followed by three years of supervised release. Victor is a member of the San Carlos Apache Tribe.

In the late-night hours of July 6, 2022, and into the early morning hours of July 7, 2022, Victor stabbed her husband in the chest, ultimately killing him. Victor pleaded guilty to Voluntary Manslaughter on February 14, 2024.

The investigation in this case was conducted by the San Carlos Apache Police Department and the Federal Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorneys Dimitra Sampson and Vinnie Lichvar, District of Arizona, Phoenix.
 

CASE NUMBER:           CR-22-01129-PHX-DJH
RELEASE NUMBER:    2024-122_Victor

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

Source: US FBI

TUCSON, Ariz. – Last week, a federal grand jury indicted Matthew Leyvas, 28, of Tucson, on one count of Second-Degree Murder. Leyvas is an enrolled member of the Pascua Yaqui Tribe.

The indictment alleges that, on August 8, 2024, Leyvas stabbed the victim multiple times. The victim was promptly transported to Banner University Medical Center but was pronounced dead shortly after arriving.

Second-Degree Murder carries a maximum penalty of life in prison, a fine of up to $250,000, and up to five years of supervised release.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The Federal Bureau of Investigation and the Pascua Yaqui Police Department conducted the investigation in this case. Assistant United States Attorney Micah Schmit, District of Arizona, Tucson, is handling the prosecution.
 

CASE NUMBER:           CR-24-5789-TUC-JCH
RELEASE NUMBER:    2024-121_Leyvas

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

Source: US FBI

Frank Carillo Made Thousands of Posts Online Against Vice President Kamala Harris, Former President Barrack Obama

Source: US FBI

TUCSON, Ariz. – Roy L. Layne, 44, of St. David, pleaded guilty yesterday to two counts of Wire Fraud and one count of Filing a False Claim. Sentencing is scheduled for February 3, 2025, before United States District Judge John C. Hinderaker.

Layne admitted that during the COVID-19 global pandemic he fraudulently applied for U.S. Small Business Administration (SBA) Economic Injury Disaster Loans, SBA Paycheck Protection Program Loans, and pandemic-related tax relief in the names of fictitious business entities, himself, and others. Layne filed numerous fraudulent SBA loan applications, ultimately receiving $306,700 that he was not entitled to. Layne also filed numerous false claims for tax refunds with the Internal Revenue Service totaling over $7.4 million, receiving and keeping $549,992 that he was not entitled to. In his plea agreement, Layne has agreed to pay restitution to the SBA and the U.S. Treasury totaling $856,692.91.

A conviction for Wire Fraud carries a maximum penalty of 30 years in prison, a fine of $1,000,000, or both, and a term of five years of supervised release. A conviction for Filing a False Claim carries a maximum penalty of five years in prison, a fine of $250,000, or both, and a term of three years of supervised release.

Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation conducted the investigation in this case. Assistant U.S. Attorney Mary Sue Feldmeier, District of Arizona, Tucson, and Department of Justice Trial Attorney Matthew R. Hoffman, Tax Division, Washington, D.C., are handling the prosecution.
 

CASE NUMBER:           CR-24-04907-TUC-JCH
RELEASE NUMBER:    2024-118_Layne

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

Source: US FBI

A federal judge in Phoenix today sentenced the three owners of Backpage, a prostitution website, for offenses arising from their promotion of and associated money laundering.

Michael Lacey, 76, of Paradise Valley, Arizona, was sentenced to five years in prison and three years of supervised release; Scott Spear, 73, of Phoenix, was sentenced to 10 years in prison and three years of supervised release; and John “Jed” Brunst, 72, of Phoenix, was sentenced to 10 years in prison and three years of supervised release. The Court also ordered that all defendants turn themselves in to the U.S. Marshals Service by noon on Sept. 11.

“The defendants and their conspirators obtained more than $500 million from operating an online forum that facilitated the sexual exploitation of countless victims,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The defendants thought they could hide their illicit proceeds by laundering the funds through shell companies in foreign countries. But they were wrong. Their sentences should serve as a stark reminder that the Criminal Division and its law enforcement partners are committed to protecting victims and following the money to unmask those who exploit human beings for financial gain.”

“These convictions hold accountable three C-Suite executives who controlled an enterprise and its illicit profits,” said U.S. Attorney Gary Restaino for the District of Arizona. “The courage of the victims of Backpage’s criminal activities is vindicated by the sentences imposed by the Court, to include the loss of liberty for each defendant as well as the additional large fine imposed on defendant Lacey, which will inure to the benefit of the Crime Victims Fund and crime victims everywhere.”

According to court documents and evidence presented at trial, Lacey, Spear, and Brunst owned Backpage. From September 2010 through its seizure by the United States in April 2018, Backpage was the internet’s leading forum for prostitution ads. Evidence at trial showed that the conspirators knowingly promoted prostitution via various marketing strategies. For example, the conspirators engaged in a reciprocal link program with an independent web forum that permitted “johns” to post reviews of prostitution acts with specific women. Additionally, the conspirators used an automated filter and human moderators to remove terms known to indicate sex-for-money, while still allowing the ads to be posted. Through this attempt to sanitize the ads, the conspirators sought “plausible deniability” for what the conspirators knew to be ads promoting prostitution. Over the life of the conspiracy, the conspirators earned more than $500 million. In an effort to preserve the money earned, Lacey, Spear, and Brunst laundered the money through numerous shell companies they created in multiple foreign countries.

In November 2023, a federal jury in Phoenix convicted Lacey of one count of international concealment money laundering; Spear of conspiracy to violate the Travel Act, 17 counts of violating the Travel Act, money laundering conspiracy, and 10 counts of concealment money laundering; and Brunst of conspiracy to violate the Travel Act, money laundering conspiracy, 10 counts of concealment money laundering, and five counts of international promotional money laundering.

Today’s sentences follow prior convictions of Backpage leadership and corporate entities:

• In April 2018, Carl Ferrer, 57, of Frisco, Texas, who was Backpage’s co-founder and CEO, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce and to engage in money laundering.
• In August 2018, Dan Hyer, 54, of Dallas, who was Backpage’s Sales & Marketing Director, pleaded guilty to conspiracy to facilitate prostitution using a facility in interstate or foreign commerce.
• In April 2018, several Backpage-related corporate entities, including Backpage LLC, pleaded guilty to conspiracy to engage in money laundering.

Co-conspirator James Larkin, 73, died on July 31, 2023, before trial began.

Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Gary M. Restaino for the District of Arizona, Special Agent in Charge Carissa Messick of the IRS Criminal Investigation (CI) Phoenix Field Office, Acting Assistant Director Jodi Cohen of the FBI’s Criminal Investigative Division, Special Agent in Charge Jose A. Perez of the FBI Phoenix Division, and Acting Inspector in Charge Matthew Shields of the U.S. Postal Inspection Service (USPIS) Los Angeles Division made the announcement.

Assistant U.S. Attorneys Kevin Rapp, Margaret Perlmeter, and Peter Kozinets for the District of Arizona and Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case, with significant assistance from the U.S. Attorney’s Office for the Central District of California, Office of the California Attorney General, and Office of the Texas Attorney General. Assistant U.S. Attorney Joseph Bozdech for the District of Arizona is handling the asset forfeiture aspects of the case.

Source: US FBI

TUCSON, Ariz. – On August 14, 2024, a federal grand jury in Tucson returned an 11-count indictment against Daniel Jarrett Ridlinghafer, 37, of Marana for Bank Fraud, Wire Fraud, and Mail Fraud.

The indictment alleges that Ridlinghafer owned and operated Psalm 112 LLC, d.b.a. Tucson Solar Pros, a solar installation company based in Tucson. Beginning in January 2021 and continuing through July 7, 2022, Ridlinghafer engaged in a scheme to defraud at least 25 homeowners and two federally insured credit unions. Ridlinghafer, or his employees, signed fraudulent contracts with victim homeowners for the purchase and installation of solar power electrical systems on the victims’ homes. The victim credit unions then funded loans for many of the projects based on those contracts. After receiving payment from the victim homeowners and credit unions, Ridlinghafer abandoned the projects, failed to provide the victim homeowners any of the equipment they had purchased, and did not install any solar equipment on their homes. Ridlinghafer allegedly defrauded the victim homeowners and credit unions out of at least $695,000.00.

A conviction for Bank Fraud carries a maximum penalty of 30 years in prison and a $1,000,000.00 fine. A conviction for Mail Fraud and Wire Fraud carries a maximum penalty of 20 years in prison and a $250,000.00 fine.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The Federal Bureau of Investigation conducted the investigation in this case. The United States Attorney’s Office, District of Arizona, Tucson, is handling the prosecution.
 

CASE NUMBER:           CR-2024-05232 TUC-RM
RELEASE NUMBER:    2024-115_Ridlinghafer

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

Source: US FBI

Director Christopher Wray has named Jose A. Perez as the special agent in charge of the Phoenix Field Office. Mr. Perez most recently served as a deputy assistant director within the Criminal Investigative Division at FBI Headquarters in Washington, D.C.

Mr. Perez joined the FBI as a special agent in 2003 and was assigned to the Jackson Field Office, where he conducted violent crimes and gang investigations under the Jackson Safe Streets Gang Task Force.

In 2006, Mr. Perez transferred to the Miami Field Office, where he worked on investigations into gangs and drug trafficking organizations. In 2013, Mr. Perez was promoted to supervisory special agent within the Criminal Investigative Division at FBI Headquarters, where he managed organized crime operations in South and Central America.

In 2016, Mr. Perez was assigned to the Las Vegas Division, where he led the Violent Crimes Against Children and Human Trafficking Squad. In 2017, Mr. Perez assumed leadership of the Violent Crimes Task Forces. In this role, Mr. Perez led the team through several successful gang and Hobbs Act investigations, as well the nomination and eventual capture of a Top Ten Fugitive. In 2018, Mr. Perez led the Las Vegas Joint Terrorism Task Force.

In 2019, Mr. Perez was promoted to assistant special agent in charge in the Dallas Field Office, where he oversaw the FBI Resident Agencies located in North Texas. In 2021, Mr. Perez was promoted to section chief over the Violent Crime Section of the Criminal Investigative Division.

Mr. Perez holds a bachelor of science degree in criminal justice from Florida International University. Prior to joining the FBI, Mr. Perez served as a U.S. Pretrial Services and Probation Officer.