Author: MIL-OSI Publisher

Source: US FBI

OAKLAND – Freddie Lee Davis III, who pleaded guilty to wire fraud and aggravated identity theft, was sentenced to 24 months and a day in federal prison.  The sentence was handed down on Oct. 24, 2024, by the Hon. Yvonne Gonzalez Rogers, United States District Judge.  Davis’ co-defendant, Sene Malepeai, also pleaded guilty to wire fraud and aggravated identity theft, and has yet to be sentenced.

Davis and Malepeai, both 27, were charged by criminal complaint on June 30, 2023.  Davis was remanded to federal custody on Aug. 31, 2023, and has remained in custody since then.  Both defendants were charged by superseding information on July 19, 2024, with one count of wire fraud and one count of aggravated identity theft.

The criminal complaint describes that on June 17, 2021, officers responded to a report of a robbery in the parking lot of a Costco in San Leandro. The victim of the robbery was an Asian female (identified in the complaint as “Q.D.”). The robbery took place in the store’s parking lot after the victim exited Costco. As she was walking to her vehicle, a car drove alongside Q.D. and an individual reached out of a window and grabbed hold of her purse from the moving car.  Q.D. held onto her purse and was dragged the width of several cars.  The car then sped away and Q.D. let go of her purse and fell to the ground, resulting in bodily injuries, including abrasions to her leg and swelling on her hand.  Several witnesses heard Q.D. scream, heard her body hit the asphalt, and saw a black Honda speed away from the incident.  Surveillance cameras revealed that the car had a license plate number registered to Davis.

On Aug. 1, 2024, Davis pleaded guilty to one count of wire fraud and one count of aggravated identity theft.  In Davis’ plea agreement, he acknowledged this robbery and admitted that he received some of the stolen items, including Q.D.’s MasterCard credit card.  Davis further admitted that days after the robbery, he knowingly and unlawfully possessed the credit card knowing it belonged to Q.D., and possessed it in relation to a violation of wire fraud.  In particular, he and co-defendant Malepeai used Q.D.’s credit card, while misrepresenting Malepeai as the lawful user of the credit card, to fraudulently purchase merchandise at a shoe store in San Leandro and make a number of other fraudulent purchases.

In addition to sentencing Davis to 24 months and a day in federal prison, Judge Gonzalez Rogers ordered him to pay restitution in an amount to be determined and to serve three years of supervised release to begin after his prison term is completed.  

“Community members should be able to live their lives without fear of being robbed and having items stolen from them used fraudulently,” said United States Attorney Ismail J. Ramsey.  “We will vigorously prosecute these crimes and make sure that defendants like Mr. Davis face serious consequences for their misconduct.”

On Sept. 17, 2024, Davis’ co-defendant Malepeai also pleaded guilty to one count of wire fraud and one count of aggravated identity theft.  Malepeai admitted that, on the day of the robbery, she was a passenger in a vehicle with three other individuals.  As detailed in Malepeai’s plea agreement, earlier that day, the three other occupants of the vehicle had discussed “going to Chinatown to rob Asian women with purses or jewelry.”  They first drove to Chinatown to look for Asians with purses, then went to the parking lot of a retail store, and eventually ended up at a Costco in San Leandro.  Two of the occupants in the vehicle had previously stated that they “preferred robbing Asians because they thought they have more money, and because Asians are ‘easy targets’ who don’t fight back,” according to Malepeai’s plea agreement.  After the robbery, the three other occupants of the vehicle divided up the stolen goods from Q.D.’s purse, including cash, credit cards, a checkbook, and two cell phones, as Malepeai admitted.  Malepeai further admitted to using Q.D.’s credit card, while misrepresenting herself as the lawful user of the credit card, to fraudulently purchase merchandise at a shoe store in San Leandro and make a number of other fraudulent purchases.

Malepeai’s next hearing before Judge Gonzalez Rogers is set for Nov. 7, 2024.  

The mandatory minimum penalty for aggravated identity theft is two years in prison, and the maximum statutory penalty for wire fraud is 20 years in prison.  However, any sentence following a conviction is imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

The announcement was made by U.S. Attorney Ismail J. Ramsey and FBI Special Agent in Charge Robert Tripp.

Assistant United States Attorneys Eric Cheng and Molly Priedeman are prosecuting the case, with assistance from Mimi Lam. The prosecution is the result of an investigation by the FBI with assistance from the San Leandro Police Department.  
 

Source: US FBI

United States Attorney Ismail J. Ramsey announced today that Assistant United States Attorney (AUSA) Sarah Griswold will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.  AUSA Griswold has been appointed to serve as the District Election Officer (DEO) for the Northern District of California, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

United States Attorney Ramsey said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election.  Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence.  The Department of Justice will always work tirelessly to protect the integrity of the election process.”

The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur.  The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).

United States Attorney Ramsey stated that: “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Griswold will be on duty in this District while the polls are open, with the assistance of AUSA Kimberly Hopkins and AUSA Katherine Lloyd-Lovett.  They can be reached by the public at the following telephone numbers: AUSA Griswold, (408) 535-5060; AUSA Hopkins, (415) 436-6991; AUSA Lloyd-Lovett, (510) 637-3932.”

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at (415) 553-7400.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at (800) 253-3931.

United States Attorney Ramsey said, “Ensuring free and fair elections depends in large part on the assistance of the American electorate.  It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
 

Source: US FBI

OAKLAND – A federal grand jury indicted Oluwatobi Otukelu and Evan Edwards on charges of conspiracy and causing damage to a computer in connection with an alleged scheme to steal wages earned by workers of a delivery service, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp.  Defendant Otukelu made his first appearance in Oakland to face the charges after having previously appeared with Defendant Edwards in federal court in Houston, Tex.

According to the indictment, Otukelu, 25, and Edwards, 24, both of Houston, conspired to carry out a scheme to defraud DoorDash, Inc. (DoorDash) by fraudulently obtaining wages of independent contractors, called “Dashers,” who made deliveries for the delivery service.  As part of this scheme, the co-conspirators allegedly obtained the personal identifying information of Dasher victims; falsely impersonated the Dasher victims to DoorDash support; took over Dashers’ existing online accounts; created new, unauthorized accounts using Dashers’ personal information; and directed payments of Dasher wages from DoorDash to accounts controlled by Otukelu and Edwards. The indictment further alleges that the defendants used the stolen funds to pay for and attempt to pay for goods and services, including vehicles, airline tickets, cosmetic procedures, and personal training. The indictment alleges that Otukelu and Edwards stole the DoorDash wages of at least 138 individual Dashers, amounting to over $1 million.

Otukelu and Edwards were arrested in Houston on Sept. 26, 2024, and made their initial appearances in Houston the same day. Defendant Otukelu was ordered detained pending trial. Defendant Edwards was released on a $25,000 bond. Otukelu’s next scheduled appearance is at 10:30 a.m. on Oct. 22, 2024, for status regarding detention before the Hon. Kandis A. Westmore, U.S. Magistrate Judge. Edwards’ initial appearance in this District has not yet been scheduled.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face the following maximum penalties:

CHARGE	STATUTES	MAXIMUM STATUTORY PENALTIES
Conspiracy to Commit Wire Fraud	18 U.S.C. § 1349	Twenty years of imprisonment; $250,000 fine; three years of supervised release; $100 special assessment; forfeiture; and restitution
Conspiracy	18 U.S.C. § 371	Five years of imprisonment, $250,000 fine; three years of supervised release; $100 special assessment; forfeiture; and restitution
Causing Damage to a Protected Computer	18 U.S.C. §§ 1030(a)(5)(A), (c)(4)(A)(i)(I), and (c)(4)(B)(i)	Ten years of imprisonment; $250,000 fine; three years of supervised release; $100 special assessment; forfeiture; and restitution

However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Michelle J. Kane is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the FBI.

Oluwatobi Emmanuel Otukelu Indictment
 

Source: US FBI

SAN FRANCISCO – Lin Chen pleaded guilty in federal court today to illegally exporting U.S. technology to a prohibited end user in China, in violation of the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR). The plea was accepted by the Hon. William Alsup, Senior U.S. District Judge.

In pleading guilty, Chen, 65, a citizen of the People’s Republic of China (PRC), admitted to acting on behalf of Jiangsu Hantang International Trade Group Corp., Ltd. (JHI), a company headquartered in Nanjing, PRC, to procure a wafer cutting machine on behalf of Chengdu GaStone Technology Co., Ltd. (GaStone), an entity located in Chengdu, PRC.  Chen admitted to knowing that GaStone was designated on the U.S. Department of Commerce’s Entity List on Aug. 1, 2014.  Federal regulations restrict the export of certain items to companies, research institutions, and other entities identified on the Department of Commerce’s Entity List. Under applicable Department of Commerce regulations, wafer cutting machines, which are used to cut thin semiconductors used in electronics (also known as silicon wafers), require a license for export to end-users such as GaStone.

According to the plea agreement, by no later than Dec. 4, 2015, Chen knew that GaStone was prohibited from receiving restricted exports without a license, including a DTX-150 Scribe and Break Machine, a machine for processing silicon wafer microchips.  On approximately Dec. 10, 2015, Chen worked with a co-defendant to arrange the sale of a DTX-150 to GaStone by shipping it to the PRC in the name of JHI without an export license from Commerce. Chen used JHI’s status as an intermediary to conceal GaStone as the true end-user of the technology.

A federal grand jury indicted Chen on Dec. 1, 2020, charging him with conspiracy to violate IEEPA; submitting false electronic export information; smuggling; and IEEPA violations.  Under the plea agreement, Chen pleaded guilty to count four, causing an unlawful export in violation of IEEPA.  Defendant currently is released on bond.

Chen’s sentencing hearing is scheduled for January 28, 2025, before the Judge Alsup.  The maximum statutory penalty for an IEEPA violation is up to 20 years in prison and a $1 million fine.  However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

United States Attorney Ismail J. Ramsey, Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp, Homeland Security Investigations (HSI) Special Agent in Charge Tatum King, and Brent Burmester, U.S. Department of Commerce, Bureau of Industry and Security (BIS) Special Agent in Charge, San Jose Field Office, made the announcement today.

Assistant U.S. Attorney Colin Sampson and Brett Reynolds of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case with the assistance of Claudia Hyslop and Nina Burney.  The prosecution is the result of an investigation by FBI, HSI, and BIS.
 

Source: US FBI

Source: US FBI

NEWS RELEASE SUMMARY – March 26, 2024

SAN DIEGO – An indictment was unsealed today charging current and former minor league baseball players Jordan Qsar, Grant Witherspoon and Austin Bernard with insider trading in Del Taco, Inc. stocks after they received advanced notice of the acquisition of Del Taco by Jack in the Box, Inc. on December 6, 2021.

According to the indictment, Qsar learned from a close friend who worked at Jack in the Box that the company was acquiring Del Taco. The friend was a senior associate in Jack in the Box’s strategic finance department who personally worked on the acquisition project. The disclosure was a violation of duties to Jack in the Box and its shareholders.

The indictment states that Qsar fraudulently shared the inside information with Witherspoon and Bernard, who were connected to Qsar through collegiate and minor league baseball teams at Pepperdine University and the Tampa Bay Rays.

In the following months, after learning the inside information, Qsar, Witherspoon, and Bernard purchased Del Taco stocks, discussed when and how many shares they were purchasing, and tipped others with the inside information.

According to the indictment, after Jack in the Box and Del Taco went public with the acquisition on December 6, 2021, Del Taco stocks jumped in price from $7.53 to $12.51 per share—representing a 66 percent increase from the prior trading day’s closing price. In the days following, Qsar, Witherspoon, and Bernard sold all their Del Taco stocks, earning them illegal profits of approximately $56,000, $41,800, and $64,600, respectively.

“The system has to be fair for everyone, or the market fails,” said U.S. Attorney Tara McGrath. “Those who seek to undermine this system for personal gain will face consequences.”

“Insider trading directly affects the integrity of our economy,” said FBI San Diego Special Agent in Charge Stacey Moy. “We will continue to work with our federal, state, and local law enforcement partners to ensure people who intentionally undermine and threaten our economy will be brought to justice.”

This case is being prosecuted by Assistant U.S. Attorney Ronald Sou.

DEFENDANTS                                 Case Number: 24-CR-0385-DMS

Jordan Joseph Qsar                             Age: 28

Grant Lee Witherspoon                      Age: 27

Austin Lane Bernard                          Age: 28

SUMMARY OF CHARGES

Title 18 U.S.C. 371 – Conspiracy

Maximum Penalty: Five years in prison; $250,000 fine

Title 15 U.S.C. 78j(b), 78ff & Title 17 C.F.R. 240.10b-5 and 240.10b5-1 – Securities Fraud

Maximum Penalty: Twenty years in prison; $5 million fine

Title 18 USC 1343 – Wire Fraud & Title 18 USC 2 – Aiding and Abetting

Maximum Penalty: Twenty years in prison; $250,000 fine

Title 18 USC 981(a)(1)(C) and Title 28 USC 2461(c) – Criminal Forfeiture

INVESTIGATING AGENCY

Federal Bureau Investigation

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Source: US FBI

NEWS RELEASE SUMMARY – March 25, 2024

SAN DIEGO – Zhiwei “Allen” Liao was sentenced in federal court today to 51 months in prison for his role as an organizer and leader of an international conspiracy to traffic in counterfeit Apple products. The defendant was also ordered to forfeit two residences along with $120,370 in U.S. currency and more than 200 Apple devices seized during the investigation.

According to court documents, Zhiwei Liao and his brothers, Zhimin Liao and Zhiting Liao, led an international exchange fraud scheme involving more than 10,000 counterfeit iPhones and iPads. The Liaos imported counterfeit iPhones and iPads from China that looked genuine and included identification numbers (IMEI and serial numbers) matching identification numbers on real iPhones and iPads that were under warranty and had been previously sold to customers in the United States and Canada.  At the direction of the Liao brothers, co-conspirators traveled to hundreds of Apple Stores across the United States and Canada, and attempted to exchange counterfeit iPhones and iPads for genuine iPhones and iPads resulting in a loss of $6.1 million to Apple, Inc. Zhiwei Liao then sent the fraudulently obtained, but genuine Apple products primarily to China where they were sold at a premium.       

In court today, U.S. District Judge Cynthia Ann Bashant said that a significant prison sentence was appropriate because Zhiwei Liao was the organizer and leader of an extensive international criminal organization that trafficked in counterfeit goods throughout North America for several years.

The scheme was sophisticated and dynamic, involving counterfeit devices imported from China that looked like genuine devices under warranty. Zhiwei Liao micromanaged the operations and created a moving target for law enforcement by directing counterfeit Apple products and criminal proceeds to be sent to different co-conspirators, companies, and family members throughout the scheme. Co-conspirators supported these efforts to avoid law enforcement by exchanging the counterfeit products using a variety of false names and email accounts.

The defendant’s brothers, Zhimin Liao and Zhiting Liao, who were also leaders of the conspiracy, were previously sentenced to 41 months in custody in October 2023. 

This case is part of a multi-year investigation led primarily by the Federal Bureau of Investigation and the San Diego Police Department that resulted in 12 felony convictions, the forfeiture of five residences in San Diego with an estimated value of more than $4.1 million, over $250,000 in cash, and more than 200 Apple products that were either counterfeit, fraudulently obtained, or used during the criminal operations.

“This was a massive, sophisticated fraud that victimized not only Apple, Inc., but thousands of Apple product owners across North America,” said U.S. Attorney Tara McGrath. “Theft of intellectual property and the sale of counterfeit goods are growing global problems with serious economic implications.” 

“Mr. Liao’s sentencing closes a major chapter in a multi-year investigation that exposed an international, elaborate scheme to sell counterfeit goods worldwide,” said FBI San Diego Special Agent in Charge Stacey Moy. “This investigation would not have been successful without the unwavering dedication and persistence of our law enforcement partners. We remain diligent in the pursuit of justice to help maintain the integrity of our economy.”

This case is being prosecuted by Assistant U.S. Attorney Timothy F. Salel.

DEFENDANTS                                 Case Number 19cr4407-BAS                                               

Zhiwei Liao, aka “Allen”                   San Diego, CA                                    Age:    34

Zhimin Liao, aka “Jimmy”                 San Diego, CA                                    Age:    36

Zhiting Liao, aka “Tim”                     San Diego, CA                                    Age:    33

Dao Trieu La, aka “Selena”                San Diego, CA                                    Age:    32

Mengmeng Zhang, aka “Aria”           San Diego, CA                                    Age:    31

Tam Nguyen, aka “Kelly,”                 San Diego, CA                                    Age:    39

Charley Hsu                                        San Diego, CA                                    Age:    41

Danny Tran Chan                               San Diego, CA                                    Age:    32

Phillip Pak, aka “Teddy”                    San Diego, CA                                    Age:    33

Deedee Zhu, aka “David,”                  San Diego, CA                                    Age:    35

Jiaye Jiang, aka “joejoekong”            San Diego, CA                                    Age:    34

Hyo Yang, aka “Will”                        San Diego, CA                                    Age:    33

SUMMARY OF CHARGES

Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Section 2320

Maximum penalty: Ten years in prison, $2 million fine, mandatory restitution, and forfeiture.

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego Police Department

San Diego County Sheriff’s Department

U.S. Customs and Border Protection

Homeland Security Investigations

U.S. Marshals