MIL Security Engine-1

Source: US FBI

RIVERSIDE, California – A Riverside County man was sentenced today to 188 months in federal prison for running a Ponzi scheme that lasted nearly 20 years and fraudulently obtained more than $24 million from at least 200 investors.

Paul Horton Smith Sr., 61, of Moreno Valley, was sentenced by United States District Judge Jesus G. Bernal, who also ordered him to pay $13,331,505 in restitution.

Smith pleaded guilty on January 8 to one count of wire fraud.

“This defendant’s greed and deceit caused major losses for his victims, who discovered that the supposed gains for their retirement were nothing more than a lie,” said United States Attorney Martin Estrada. “My office will continue to aggressively prosecute fraudsters who take advantage of victims in our community, and I also encourage everyone to use caution and skepticism with regard to any investments, especially those that seem too good to be true.”

“Paul Smith’s clients trusted him. Smith knew that and used it to his advantage, selling them on a bogus investment opportunity and pocketing those funds,” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “The fact that the bulk of his investors were seniors, men and women alike, and in various stages of vulnerability, makes this case all the more heartbreaking. Now, he’s finally being held accountable. The FBI will continue shutting down crooks like this to help find justice for their victims.”

Smith operated Riverside-based companies named Northstar Communications LLC, Planning Services Inc., and eGate LLC. From July 2000 to May 2020, Smith obtained money from investors by soliciting individuals – who often were elderly or retired – to invest in something Smith called “Northstar.” Some of the investors previously were Planning Services clients.

Smith communicated with the victim investors regarding Northstar in person, over the telephone, and via email and text messages. He falsely told investors that Northstar was an annuity or an investment like an annuity. He falsely told other investors that Northstar invested in real estate or followed the stock market. He typically told the investors that their investment would generate a fixed rate of return and was a “safe investment.”

While Smith led most Northstar investors to believe his company reinvested their initial investment, generating the percentage they were to earn, in fact, he never invested the money. Instead, Smith deposited all investor funds into a non-interest-bearing checking account.

Smith used some money from later Northstar investors to pay earlier Northstar investors’ monthly interest payments and to repay earlier investors who wanted to withdraw their investment.

For example, in April 2019, Smith caused one victim to invest with him $400,000 – life insurance proceeds after the victim’s spouse had died. The victim wrote a personal check for that amount and the check was deposited into a bank account in Riverside, which then was electronically transferred to the bank’s Alabama headquarters for processing.

Smith promised the victim he would invest the $400,000 in a safe investment with a 5% rate of return. But Smith never invested the money. Instead, he transferred the funds to pay other victims of his Ponzi scheme. In an attempt to conceal his criminal activity, Smith made 11 payments to the victim that totaled $163,324.

As a result of the scheme, Smith fraudulently obtained more than $24 million from at least 200 investors. Of these investors, 106 victims have not been fully repaid. The total loss for these victims is $13,331,505.

The FBI investigated this matter. The United States Securities and Exchange Commission, which filed a complaint and obtained a judgment against Smith and Northstar Communications LLC in 2020, provided assistance.

Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office prosecuted this case.

Source: US FBI

SANTA ANA, California – A former Inglewood Police Department (IPD) officer was sentenced today to 30 months in federal prison for stealing cocaine from IPD’s lock-up and reselling it on the street.

John Abel Baca, 48, of Whittier, then a 21-year veteran of the Inglewood Police Department and its union representative, was sentenced by United States District Judge James V. Selna. Judge Selna also ordered Baca to pay a $40,000 fine and found that Baca abused his position of trust as a police officer and that his sales extended over a lengthy period beginning in 2020.

Baca pleaded guilty in October 2023 to one count of distribution of cocaine.

“This defendant – a veteran of the Inglewood Police Department – abused his position as a law enforcement officer to promote his drug trafficking activities,” said United States Attorney Martin Estrada. “I thank IPD for its cooperation in bringing the defendant to justice – someone who broke his oath to protect the public.”

“Former officer Baca tarnished the badge and dishonored the majority of those who serve and protect our communities with integrity,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This case serves as a reminder that no one is above the law, and corruption and criminal behavior will not be tolerated.”

Baca distributed cocaine on two occasions, the first in April 2021, when he delivered cocaine to a buyer. Baca then delivered approximately one kilogram of cocaine to the same buyer during another meeting in May 2021, in exchange for $22,000 in cash.

In February 2021, the buyer informed the FBI that Baca, then an active-duty IPD officer, previously had offered to sell the buyer one kilogram of cocaine, two kilograms of “White China” heroin, and an unlimited supply of black tar heroin. The buyer reported that Baca claimed to have stolen drugs and cash during routine traffic stops that Baca made as a drug task force officer with IPD.

During a secretly recorded meeting in late April 2021, Baca provided a sample of the cocaine to the buyer to provide to purported buyers. During that meeting, Baca also offered to sell the buyer a kilogram of “China White” heroin for $10,000. Several days later, Baca negotiated the price for one kilogram of cocaine – $22,000 in cash – and then delivered a brick of cocaine to the buyer’s workplace on May 4, 2021. Later the same day, Baca collected $22,000 in cash from the CW’s residence.

The FBI investigated this matter. The Inglewood Police Department provided its full cooperation during the investigation.

Assistant United States Attorney Cassie D. Palmer of the Public Corruption and Civil Rights Section prosecuted this case.

Source: US FBI

LOS ANGELES – Disbarred plaintiffs’ personal injury attorney Thomas Vincent Girardi was found guilty by a jury today of leading a years-long scheme in which he embezzled tens of millions of dollars of money that belonged to his clients, some of whom awaited payment for treatment of severe physical injuries.

Girardi, 85, of Seal Beach, was found guilty of four counts of wire fraud.

“Tom Girardi built celebrity status and lured in victims by falsely portraying himself as a ‘Champion of Justice,’” said United States Attorney Martin Estrada. “In reality, he was a Robin-Hood-in-reverse, stealing from the needy to support of a lavish, Hollywood lifestyle. Today’s verdict shows that the game is up – we can all now see this defendant for what he was and the victims he callously betrayed.” 

“Mr. Girardi exploited his clients’ misfortunes on a grand scale,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “His clients sought his help in the wake of significant trauma and injury, yet he violated their trust to steal from them and fund his own lavish lifestyle, and he will now face the consequences of his actions.”

“Mr. Girardi was retained to advocate for clients who put their trust in him, but instead, lied to them and stole their money to fund his lavish lifestyle,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Girardi falsely promoted himself in the media as a pillar of the legal community with a heightened sense of justice, but the clients he wronged for many years have now found actual justice in today’s verdict.”

According to evidence presented at a 13-day trial, Girardi – a once-powerful figure in California’s legal community – ran the now-defunct law firm Girardi Keese. For years, Girardi misappropriated and embezzled millions of dollars from client trust accounts at his law firm. The scheme involved defendant Girardi stealing millions of dollars in client settlement funds and failing to pay Girardi Keese clients – some of whom had suffered serious injuries in accidents – the money they were owed.

In carrying out this scheme, from October 2010 to late 2020, Girardi provided a litany of lies for failure to pay clients and directed a law firm employee to pay previously defrauded clients or other unrelated expenditures. Girardi sent lulling communications to the clients that, among other things, falsely denied that the settlement proceeds had been paid and falsely claimed that Girardi Keese could not pay the settlement proceeds to clients until certain purported requirements had been met. These bogus requirements included addressing supposed tax obligations, settling bankruptcy claims, obtaining supposedly necessary authorizations from judges, and satisfying other debts.

Girardi diverted tens of millions of dollars from his law firm’s operating account to pay illegitimate expenses, including more than $25 million to pay the expenses of EJ Global, a company formed by his wife related to her entertainment career, as well as spent millions of dollars of Girardi Keese funds on private jet travel, jewelry, luxury cars, and exclusive golf and social clubs.

At the end of 2020, as Girardi and his law firm faced mounting legal problems related to his years-long theft of client funds, Girardi Keese was forced into involuntary bankruptcy. The State Bar of California disbarred Girardi in July 2022.

United States District Judge Josephine L. Staton scheduled a December 6 sentencing hearing, at which time Girardi will face a statutory maximum sentence of 20 years in federal prison for each count.

Relatedly, co-defendant Christopher Kazuo Kamon, 50, formerly of Encino and Palos Verdes and who was residing in The Bahamas at the time of his November 2022 arrest on a federal criminal complaint, awaits trial in this matter in January 2025. Kamon, the former chief financial officer at Girardi Keese, is charged with multiple fraud counts for allegedly aiding and abetting Girardi’s scheme to defraud clients. Kamon allegedly also embezzled millions of dollars from the law firm’s accounts for his own personal enrichment. Kamon, who remains in federal custody, has pleaded not guilty to these charges.

Girardi, Kamon, and David R. Lira, Girardi’s son-in-law and a former lawyer at Girardi Keese, also face federal fraud charges in Chicago. Trial in that case is scheduled for March 3, 2025.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

IRS Criminal Investigation and the FBI investigated this matter. The Office of the United States Trustee provided assistance.

Assistant United States Attorneys Scott Paetty of the Major Frauds Section and Ali Moghaddas of the Corporate and Securities Fraud Strike Force are prosecuting this case.

Source: US FBI

      LITTLE ROCK – A Maumelle man has pleaded guilty to assaulting a flight attendant. Leon Anderson, 40, entered his guilty plea Wednesday afternoon before United States District Judge James M. Moody, Jr.

      On October 6, 2020, a federal grand jury indicted Anderson with one count of abusive sexual contact on an aircraft. Yesterday, he pleaded guilty to a Superseding Information charging him with one count of interference with a flight attendant.

      Anderson was a passenger on PSA Airlines flight 5686 from Charlotte, North Carolina, to Little Rock on February 11, 2020. Prior to takeoff, a flight attendant was walking through the aisle of the plane when a passenger grabbed his leg. Startled, the flight attendant turned around, and the passenger—Anderson—apologized and said it was a mistake. Moments later, Anderson put one arm around the flight attendant’s shoulder and attempted to put a hand around his waist while apologizing again. The flight attendant told Anderson he did not need to apologize further.

      The flight attendant continued his duties, but Anderson made inappropriate, sexual comments to the flight attendant and ultimately grabbed the flight attendant two more times in a sexual manner. The flight attendant notified the captain, who notified law enforcement.

      Judge Moody will sentence Anderson at a later date. Anderson’s crime is punishable by not more than 20 years imprisonment, a fine of not more than $250,000, and not more than three years supervised release. The case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Kristin Bryant and Benecia Moore.

# # #

This news release, as well as additional information about the office of the

United States Attorney for the Eastern District of Arkansas, is available online at

http://www.justice.gov/edar

Twitter:

@EDARNEWS

Source: US FBI

FORT SMITH – James Read, 45, of Mountain Home was sentenced on September 20, 2021 to 63 months in prison followed by three years of supervised release for charges stemming from his abuse of various COVID-19 related economic relief programs.  According to court documents, Read falsified documents to apply for Small Business Administration loans intended for businesses struggling from the COVID-19 pandemic.  Read also filed for Pandemic Unemployment Assistance, on behalf of himself and others, in multiple states despite being ineligible for the funds.  The Court further ordered Read to pay $277,827.00 in restitution for the fraudulently obtained funds.

“Our office will continue to vigorously pursue criminals such as Mr. Read and Mrs. Payne,” stated Acting United States Attorney David Clay Fowlkes.  “This couple executed a scheme to steal money that was intended to help those who were truly in need.  This sort of fraud is reprehensible and will not be tolerated in the Western District of Arkansas.  It is our sincere hope that this sentence sends a clear message to all those who would endeavor to steal money that is intended for the less fortunate: that we will continue to investigate and prosecute these crimes to the very best of our ability and that we will seek sentences that will deter this kind of criminal conduct in the future.”

“Our agents will continue to pursue fake business owners such as Mr. Read aka ‘Snowbird Bob’, who chose to steal funds intended for small business owners crippled by this global pandemic,” said Special Agent in Charge Christopher Artemis, of Internal Revenue Service – Criminal Investigations.

“In a time of national turmoil and uncertainty, Mr. Read flagrantly defrauded programs intended to assist Americans and their businesses,” said FBI Little Rock Special Agent in Charge James Dawson. “Mr. Read’s total disregard for his fellow citizens during the COVID-19 pandemic revealed his true colors as a fraudster. The FBI will continue to work with its partners to bring criminals who defraud SBA and PUA programs to justice.”

“The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud programs afforded to the American people under the Coronavirus Aid, Relief, and Economic Security Act,” said J. Russell George, of the Treasury Inspector General for Tax Administration.  “We appreciate the efforts of the U.S. Department of Justice and our law enforcement partners in this effort.” 

Read’s wife, Crystal Payne, 43, was sentenced on September 20, 2021 to five years of probation, a $5,000 fine, and $59,130.00 in restitution for her role in the offense.

The case was investigated by IRS-Criminal Investigations, the Federal Bureau of Investigations, the Treasury Inspector General for Tax Administration (TIGTA), and the Small Business Administration Office of the Inspector General.

Assistant United States Attorney Hunter Bridges prosecuted the case for the United States.

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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov.

Source: US FBI

FORT SMITH – A Van Buren man was sentenced yesterday to 360 months in prison followed by 10 years of supervised release on one count of Transportation of a Minor with Intent to Engage in Criminal Sexual Activity. The Honorable Judge P. K. Holmes III presided over the sentencing hearing in the U.S. District Court in Fort Smith.

According to court documents, in September of 2014, Jeffrey Callen Gonzagowski Jr., 39, transported a minor, across state lines from Mt Ida, Arkansas to Oklahoma. During this time Gonzagowski sexually assaulted the minor. Gonzagowski was arrested in December 2020 and pled guilty in March 2021.

Acting U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.

The Federal Bureau of Investigations investigated the case.

Assistant U.S. Attorney Tyler Williams prosecuted the case for the United States.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.