Category: MIL-OSI

Source: United States Department of Justice Criminal Division

Last week, a federal jury in Las Vegas convicted a Mexican national of operating a scheme in which he claimed to be an IRS officer and misrepresented to victims that he was able to obtain hundreds of thousands of dollars for them from a fictitious IRS program.

The following is according to court documents and evidence presented at trial: Francisco Ivan Velazquez, a Mexico national, falsely held himself out to be an employee of the IRS and claimed to his victims that he could secure large monetary payments for them from the IRS. Velazquez falsely claimed that such funds were available from a purported IRS program that allowed people who had previously lost a home to foreclosure to recoup money by applying to the IRS and filing certain documents. Velazquez advised the victims that, in exchange for a fee, he would submit an application for them to recover the funds. In some instances, Velazquez then aided in the presentation of a false tax return with the IRS on behalf of the victim that claimed that the victim had federal tax withholdings of $100,000 or more and requested the withholdings be refunded.

Velazquez was convicted of three counts of wire fraud, one count of aiding the presentation of a false tax return, and two counts of impersonating an IRS officer. The jury did not return a verdict on four counts of aiding in the preparation of false tax returns.

Velazquez is scheduled to be sentenced on Feb. 18, 2026, and faces a maximum penalty of 20 years in prison for each wire fraud count, a maximum penalty of three years in prison for aiding in the presentation of a false tax return, and a maximum penalty of years in prison for each count of impersonating an officer or employee of the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation and the Treasury Inspector General for Tax Administration are investigating the case.

Source: United States Department of Justice Criminal Division

MIAMI – A federal jury in Fort Lauderdale convicted two Maryland brothers who owned a pharmaceutical wholesale company on Oct. 29 for their roles in a scheme to purchase and resell more than $92 million worth of illegally obtained misbranded HIV drugs.

According to court documents and evidence presented at trial, Patrick Boyd, 47, and Charles Boyd, 43, of Easton, Maryland, owned and operated a pharmaceutical wholesale company called Safe Chain Solutions.  Their co-owner and co-defendant, Adam Brosius, previously pleaded guilty to conspiring to commit wire fraud with the Boyds.

“This case exposed a reckless disregard for human life,” said U.S. Attorney Jason A. Reding Quiñones. “The defendants put profit ahead of patient safety, moving more than $92 million in tampered, black-market HIV medication through pharmacies across the country. Our Office will continue holding accountable those who endanger the public and betray the trust that underpins our healthcare system.”

Trial evidence showed that the Boyds conspired with at least five black-market suppliers to purchase HIV drugs obtained through patient “buyback schemes.” The Boyds then resold the drugs to thousands of pharmacies nationwide—including South Florida—while using falsified paperwork to make the medications appear to have been purchased from legitimate distributors.

One of their suppliers, Peter Khaim, owner of Boulevard 9229, testified that he purchased HIV drugs from patients on the street, removed the original prescription labels, and packaged the bottles in cardboard boxes—sometimes scavenged from trash on pick-up days—before shipping them to the Boyds. On one occasion, Khaim used a diaper box he found on the street to ship the drugs because it was sturdy enough to hold the bottles. In a separate shipment, he sent approximately $500,000 worth of HIV medications in a single cardboard box to Safe Chain Solutions. Many of the bottles were dirty, scuffed, and missing patient instructions, yet the Boyds accepted and resold them with falsified paperwork concealing their origin. 

In total, the Boyds purchased and resold more than $35 million in black-market HIV drugs from Boulevard 9229 and more than $42 million from another supplier, Gentek, whose leaders were based in Miami.  One Gentek leader has already been convicted and sentenced to 15 years in prison.

Throughout the conspiracy, pharmacies repeatedly complained that the drugs purchased from Safe Chain Solutions were dirty, tampered with, or contained the wrong medication. On at least a dozen occasions, pharmacies reported receiving bottles labeled as HIV medication that instead contained other drugs, including Seroquel, an anti-psychotic, and pain medication.

One patient who ingested Seroquel believing it was his prescribed HIV medication lost consciousness for 24 hours.  Evidence at trial established that missing even a single dose of HIV medication can increase a patient’s viral load and heighten community transmission risk in areas with high HIV infection rates.

A former attorney for the Boyds testified that they concealed and misrepresented material information while seeking legal advice about pharmacy complaints and reporting obligations to the Food and Drug Administration (FDA).  According to the evidence, the Boyds failed to report numerous incidents to the FDA involving pharmacies that had received incorrect or tampered medications.

Safe Chain Solutions’ former Director of Compliance testified over four days that she repeatedly warned the Boyds about the risks of purchasing from black-market suppliers, but her concerns were ignored. She testified that Charles Boyd falsely told her the company could continue doing business with Boulevard 9229 because the lawyers had approved it, contradicting both attorney testimony and contemporaneous emails.      

A second former Compliance Manager testified that the Boyds instructed her not to document concerns in writing and often responded to compliance questions by saying, “Figure it the **** out,” or “FITFO,” a phrase she said was commonly used by the Boyds.

After a multi-week trial, the jury convicted the Boyds each of one count of conspiracy to introduce misbranded drugs, two counts of introducing misbranded drugs into interstate commerce, one count of conspiracy to traffic in medical products with false documentation, one count of conspiracy to commit wire fraud, and one count of wire fraud.

The Boyds each face a maximum penalty of five years in prison for the conspiracy to introduce misbranded drugs count, three years in prison for each count of introducing misbranded drugs into interstate commerce, 15 years in prison for conspiracy to traffic in medical products with false documentation, 20 years in prison for conspiracy to commit wire fraud, and 20 years in prison for the wire fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Reding Quiñones for the Southern District of Florida; Acting Special Agent in Charge Fernando Porras of the U.S. Department of Health and Human Services, Office of Inspector General, (HHS-OIG), Miami Regional Office; and Special Agent in Charge Brett D. Skiles of the FBI, Miami Field Office, made the announcement.

HHS-OIG Miami and FBI Miami are investigating the case.

Assistant U.S. Attorney Alexander Thor Pogozelski and Trial Attorney Jacqueline Zee DerOvanesian of the Department of Justice’s Fraud Section are prosecuting the case.  Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 24-cr-20255.

Source: United States Department of Justice Criminal Division

KANSAS CITY, Mo. – A Mexican National pleaded guilty in federal court today for his role in a drug-trafficking conspiracy.

Francisco Lopez-Sanchez, 44, pleaded guilty before U.S. District Judge Greg Kays to conspiracy to distribute cocaine.

According to court documents, in 2019 law enforcement began an investigation into the drug trafficking activities of co-defendant, Serjio Diaz, which identified him as a primary organizer of a drug-trafficking organization responsible for methamphetamine, heroin, and cocaine distribution.  Other members of the organization included Lopez-Sanchez, Tony Diaz, Maria Jasmin Lopez, and Vicente Aguilera.  Lopez- Sanchez is the last of these individuals to plead guilty.

On April 16, 2021, surveillance observed Lopez-Sanchez arrive at Serjio Diaz’s residence in Belton, Mo., in a black 2015 GMC Yukon with Texas license plates.  Lopez-Sanchez had arrived prior to an arranged controlled drug purchase by a confidential human source.  Lopez-Sanchez was observed carrying a blue bag into the residence.  Lopez-Sanchez left the residence approximately 10 minutes later and before the arrival of the confidential human source, carrying the same blue bag.  Later that day, the Missouri State Highway Patrol stopped the black Yukon as it was travelling westbound on Interstate 44 near the Oklahoma state line.  Inside the Yukon, law enforcement recovered 995 grams of cocaine and $58,601.00.

Co-defendant Serjio Diaz, 41, of Belton, Mo., pleaded guilty to one count of conspiracy to distribute heroin, methamphetamine, and cocaine, one count of possessing heroin with the intent to distribute, one count of possessing a firearm in furtherance of a drug-trafficking crime, and one count of money laundering and was sentenced on Oct. 9, 2024, to 15 years in federal prison without parole.

Co-defendant Tony Diaz, 42, of Raymore, Mo., pleaded guilty to one count of conspiracy to distribute heroin, methamphetamine, and cocaine, one count of possessing heroin with the intent to distribute, one count of possessing firearms in furtherance of a drug-trafficking crime, and one count of being a felon in possession of firearms and was sentenced on Dec. 13, 2024, to 9 years in federal prison without parole.

Co-defendant Maria Jasmin Lopez, 25, of Phoenix, Az., pleaded guilty to her role in the drug-trafficking conspiracy and was sentenced on Aug. 1, 2023, to 11 years and two months in federal prison without parole.

Co-defendant Vicente Aguilera, 41, of Kansas City, Mo., pleaded guilty to use of a communication facility to facilitate a conspiracy to distribute cocaine and was sentenced on Nov. 1, 2024, to one year and four months in federal prison without parole.

Under federal statutes, Francisco Lopez-Sanchez is subject to a sentence of not less than 5 years and up to 40 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Bradley K. Kavanaugh. It was investigated by the U.S. Postal Inspection Service, the FBI, the Jackson County Drug Task Force and the Missouri State Highway Patrol.

Operation Take Back America

This case is part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Organized Crime Drug Enforcement Task Forces (OCDETFs) and Project Safe Neighborhood (PSN).

Source: United States Department of Justice Criminal Division

Editor’s Note: This matter occurred on date indicated but not published at that time due to the government shutdown. Press release posted and made available following the return to normal operations.

Source: United States Department of Justice Criminal Division

ST. GEORGE, Utah – Daniela Ganassim Ericksen, 47, of Ivins, Utah, was sentenced today after she vandalized petroglyphs on the Bureau of Land Management land located in in Kane County, Utah, in 2024.

The court ordered Ericksen to 12 months’ probation and ordered her to pay a total of $14,853.36 in fines and restitution. Ericksen was also ordered to send a letter of apology to the relevant stakeholder tribes in the area and is prohibited from entering on to Bureau of Land Management land during her probationary period.

According to court documents, on November 23, 2024, Ericksen entered onto U.S. BLM land near the confluence of Buckskin and Wire Pass in Kane County and vandalized archaeological resources, specifically a petroglyph panel. As a result of her illegal conduct, the cost to restore and repair the damage is $11,853.36.

United States Attorney Melissa Holyoak for the District of Utah made the announcement.

The case was investigated by the Bureau of Land Management.

Assistant United States Attorney Joseph M. Hood of the United States Attorney’s Office for the District of Utah prosecuted the case.

Source: United States Department of Justice Criminal Division

Victor Cruz, 41, of Bakersfield, was sentenced today to 18 months in prison for participating in a scheme to submit fraudulent individual federal income tax returns that claimed $25 million in refunds, U.S. Attorney Eric Grant announced.

According to court records, between November 2019 and June 2023, Miguel Martinez, 42, a Mexican national residing in the United States illegally, led a scheme to file thousands of fraudulent tax returns that claimed millions of dollars in refunds. Martinez created fake businesses that reported to the IRS phony wages paid and withholding information for supposed employees. Martinez then filed thousands of individual income tax returns in the names of the supposed employees that claimed the employees were owed refunds based on the phony wages paid and withholding information that had been reported for them.

Cruz helped Martinez carry out the scheme by preparing and filing more than 500 of the fraudulent tax returns. This was approximately 10% to 15% of the total fraudulent tax returns for which Martinez was responsible. Cruz received thousands of dollars in fees from Martinez in exchange for his services.

The IRS actually paid out $2.3 million of the $25 million in refunds that were claimed by the fraudulent tax returns.

Martinez pleaded guilty and, in September 2024, was sentenced to six years in prison.

This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorney Joseph Barton prosecuted the case.

Source: United States Department of Justice Criminal Division

Spokane, Washington – United States Attorney Pete Serrano announced that on October 1, 2025, a federal jury in Spokane, Washington, convicted Reynaldo Garza, age 53, of Othello, Washington, of five felony counts of Odometer Tampering.

As evidence presented at the trial established, a thorough investigation initiated by the Adams County Sheriff’s Office determined that Garza would purchase high-mileage used cars for cheap. Garza would replace the odometers in the vehicles with an odometer purchased from wrecking yards or used auto parts sellers. The new odometer would display many fewer miles than the original. Garza then sold the vehicles under the false and fraudulent representation that they had fewer miles than was true. In some cases, Garza sold cars by misrepresenting the mileage by up to 100,000 miles less than it the actual mileage. In other cases, the difference was tens of thousands of miles. In doing so, Garza made thousands of dollars in profits for each fraudulent sale.

U.S. Attorney Serrano said, “Unlike in the movies where driving a car backwards may change the odometer, cars these days have digital odometers that are harder are tamper with, making customers unsuspecting of any inaccuracies. This sophistication allowed Mr. Garza to defraud and cheat the public and sell unsuspecting customers cars with false odometers for thousands of dollars more than they would be valued had these vehicles displayed correct mileage. Mr. Garza violated several statutes and regulations designed to protect the consumer; my office will continue to prosecute these cases.”

Odometer fraud is a serious crime that costs Americans billions of dollars every year. This scourge makes our roads less safe for everyone by leading purchasers to believe their brake pads and other components are newer than they are. Buyers of these tampered vehicles were deprived of their vehicles’ full-service history and overpaid for vehicles nearing the end of their lifespans. NHTSA encourages everyone to learn how to identify odometer fraud before purchasing a used vehicle,” NHTSA Administrator Jonathan Morrison said.

Garza’s sentencing is scheduled for January 12, 2026. Garza faces a statutory maximum of 3 years imprisonment per count. 

This case was investigated by the U.S. Department of Transportation National Highway Traffic Safety Administration Office of Odometer Fraud and the Adams County Sheriff’s Office. The case was prosecuted by Assistant United States Attorneys Jacob E. Brooks and Jeremy J. Kelley. 

Individuals with information relating to odometer tampering should call NHTSA’s Vehicle Safety Hotline at 888-327-4236. More information on odometer fraud, including prevention tips, is available on NHTSA’s website. 

Source: United States Department of Justice Criminal Division

Spokane, Washington – On October 8, 2025, United States District Judge Thomas O. Rice sentenced Raymond and Jennifer Hilderbrand, ages 55 and 54, of Spokane Valley, Washington. Earlier this year, the Hilderbrands were found guilty at a jury trial on multiple fraud charges. Raymond Hilderbrand was sentenced to 30 months in federal prison; Jennifer Hilderbrand was sentenced to time served. Both Raymond and Jennifer Hilderbrand will be on supervised release for three years and are required to pay $363,000 in restitution.

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide “bridge” funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. The EIDL program have provided billions of dollars in aid, the vast majority of which have not been paid back, including hundreds of millions of dollars disbursed within Eastern Washington.

The evidence presented at trial established that the Hilderbrands engaged in an elaborate scheme to obtain money from the Small Business Administration (SBA) to spend on their entertainment business called Powerline Enterprise LLC (Powerline), even though in September of 2021, the SBA had declined to fund a loan for the company.

To execute this scheme, in January of 2022, Raymond Hilderbrand completed a EIDL application in the name of Hilderbrand Auto Services, which was an automotive repair business, owned by the Raymond Hilderbrand, located at 10423 E. Trent Avenue, Spokane Valley. In the application he told the SBA the EIDL funds would be used as working capital for Hilderbrand Auto Services and would not be used for another company. However, in February 2022, when SBA sent $320,000 to Hilderbrand Auto to be used by that business to alleviate economic injury caused by the pandemic, the Hilderbrands immediately transferred $311,000 to Powerline. The Hilderbrands then used $295,000 of the EIDL funds to purchase the Trent Avenue property in the name of Powerline, with Jennifer Hilderbrand as the sole owner. 

The Hilderbrands continued to attempt to obtain additional EIDL funds in the name of Powerline by making false representations about the company’s revenue on their EIDL application. The SBA declined the reconsideration of the Powerline EIDL application in early May of 2022. Shortly thereafter, the Hilderbrands requested a modification for the EIDL loan for Hilderbrand Auto. The SBA approved the request, and Raymond Hilderbrand again promised to use the money solely for Hilderbrand Auto. On May 17, 2022, the SBA disbursed an additional $43,000 in EIDL funds to the Hilderbrand Auto bank account, $35,000 of which was immediately withdrawn by check and transferred to Powerline.

“I am grateful for the prosecutors and investigators that worked together to seek justice in this case,” stated United States Attorney S. Peter Serrano. “Their work ensured both Raymond and Jennifer Hilderbrand were held accountable for lies told to obtain funding that was designed for small businesses in need of a lifeline. As a result of the Hilderbrands’ fraud, other small businesses were unable to obtain the help they needed during the COVID-19 pandemic.”

“The investigative efforts of the Treasury Inspector General for Tax Administration (TIGTA) and its partners, along with the prosecutorial work of the U.S. Attorney’s Office, demonstrate the commitment to pursuing, capturing, and prosecuting those who try to defraud the American people,” said TIGTA Special Agent-in-Charge Krystofor Proev.

This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force and by TIGTA, SBA OIG, and IRS-CI. This case was prosecuted by Assistant United States Attorneys Frieda K. Zimmerman, Jeremy J. Kelley, and Jacob Brooks.

2:23-cr-00114-TOR

Source: United States Department of Justice Criminal Division

Jacksonville, Florida – United States Attorney Gregory W. Kehoe announces the return of an indictment charging Carlos Felipe Jaramillo Grajales (55, Jacksonville) with making false statements in an application for a U.S. passport, falsely claiming to be a U.S. citizen to obtain a Florida driver license (3 counts), falsely claiming that a Social Security number had been assigned to him (4 counts), falsely claiming to be a U.S citizen to vote in an election, voting by an alien in a federal election, and aggravated identity theft (9 counts). If convicted, Grajales faces a maximum penalty of 10 years in prison for the passport fraud count, 5 years for each false claim of U.S. citizenship count and each fraudulent use of a Social Security number count, 1 year imprisonment for the voting by an alien count, and a mandatory 2 years in prison for each aggravated identity theft count, which must be served consecutively to any other sentence.

According to the indictment, Grajales is a Colombian citizen who used the name, date of birth, and Social Security number of a U.S. citizen to apply for a passport. He used those same identifiers and claimed to be a U.S. citizen to obtain a Florida driver license on three occasions and to vote in the November 2020 general election.

An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.

This case was investigated by the U.S. Department of State’s Diplomatic Security Service, Homeland Security Investigations, and the Social Security Administration – Office of the Inspector General. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier.