California Woman Pleads Guilty to Feeding Whales in Marine Sanctuary

WASHINGTON—A California woman pleaded guilty to illegally feeding killer whales in the wild this Tuesday in federal court in San Jose, California; the Department of Justice Environment and Natural Resources Division; and the U.S. Attorney’s Office for the Northern District of California announced.
Nancy Black, of Monterey, California, pleaded guilty to one count of violating the Marine Mammal Protection Act (MMPA), specifically, the MMPA’s feeding prohibition. The MMPA regulations make it a crime to feed marine mammals in the wild. The prohibition applies to commercial and recreational boaters and applies to all species of marine mammals.
Killer whales (orcas) prey on gray whales in the Monterey Bay National Marine Sanctuary. On the occasions when orcas manage to kill a gray whale, the pod of orcas does not always eat all the gray whale at once. Often, portions of the carcass, including strips and chunks of blubber (some over six feet in length and weighing over a hundred pounds), remain floating or semi-submerged after a kill. Orcas and sea birds feed on these chunks of blubber while they are still available in the area.
According to the factual basis of the plea agreement, on or about April 25, 2004, Black was on her boat in the Monterey Bay National Marine Sanctuary when she and her assistants encountered a place where orcas had killed a gray whale calf. She was observing the orcas as they fed on pieces of gray whale blubber that were floating in the water. In an effort to facilitate their viewing, she or her crew grabbed the blubber, cut a hole through the corner of the blubber chunk, and ran a rope through the piece of the blubber. Shortly thereafter, they returned the blubber to the water and monitored the feeding behavior of the orcas as they ate the blubber off the rope. Black and her crew repeated the process with the rope and other pieces of the blubber. In court papers, Black admitted that she did not have a permit that would have allowed her to engage in this conduct. She also admitted that on or about April 11, 2005, she was involved in a similar incident involving the collection of floating blubber and offering it to orcas utilizing the same rope method.
In a separate incident on or about October 24, 2005, Nancy Black met with a sanctuary officer and a National Oceanic and Atmospheric Administration (NOAA) investigative agent at their offices in Monterey. The sanctuary officer was investigating a reported harassment of an endangered humpback whale earlier that month in the Monterey Bay National Marine Sanctuary. The interaction with the humpback whale was filmed by one of Black’s crewmembers. Before October 24, the sanctuary officer had previously asked Black to provide the videotape of the humpback whale encounter.
Black voluntarily agreed to provide the videotape, but prior to doing so, she edited the video footage to remove several minutes that included footage of the humpback whale between two vessels that belonged to Black’s whale watching business, among other footage, and sounds. Black did not tell the officer that she had edited the tape. In filed court papers, Black admitted that by not disclosing the editing of the video, she could have impeded or influenced NOAA’s investigation into the humpback whale incident.
Sentencing in the case is set for August 6, 2013.
The case was investigated by agents of the National Oceanic and Atmospheric Administration and the FBI with support from enforcement personnel from the Monterey Bay National Marine Sanctuary. The case was prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division, and Jeffrey Schenk of the U.S. Attorney’s Office in San Jose, California.

Jury Convicts Bay Area Man of Knowingly Receiving Stolen Property

SAN FRANCISCO—Alexander Kosmin was convicted of one count of receiving stolen property that had traveled in interstate commerce by a federal jury yesterday, United States Attorney Melinda Haag announced. The guilty verdict followed a five day jury trial before U.S. District Court Judge Charles R. Breyer.
The evidence at trial showed that Kosmin, 23, formerly of San Jose, California, knowingly received stolen cellular telephones, including iPhones, that had been fraudulently ordered on AT&T and Verizon online customer accounts. The customer accounts were unlawfully accessed online. Orders in the names of other persons were placed on the accounts and shipped to locations that did not correspond with the addresses of the true customers on the accounts. In connection with the fraudulent orders, the defendant arranged to have the stolen cellular telephones sent to various hotels in the Bay Area from San Francisco to Santa Cruz. When Kosmin picked up the stolen cellular telephones, he used numerous false names and presented false identity documents in those names. The jury found that the value of the stolen cellular telephones was $5,000 or more. After receiving the stolen cellular phones, Kosmin sent the phones to a co-conspirator in Russia, who has not yet been identified, or sold the cellular phones using Craigslist. After selling the stolen phones, Kosmin, using his name and false names, wired half of the proceeds back to his co-conspirator in Russia.
The investigation began after AT&T contacted the National Cyber Forensic Training Alliance (NCFTA) regarding fraudulent orders on customer accounts. The NCFTA referred the matter to the Federal Bureau of Investigation.
Kosmin was indicted by a federal grand jury on June 26, 2012. He was charged with one count of conspiracy to commit wire fraud and one count of receiving stolen property that had traveled in interstate commerce. Kosmin was acquitted, upon motion to the court, of the conspiracy to commit wire fraud count in the indictment.
Kosmin was remanded into the custody of the United States Marshals Service following his conviction. The sentencing hearing in this matter is scheduled for July 10, 2013, before Judge Breyer in San Francisco. The maximum statutory penalty for receiving stolen property that had traveled in interstate commerce in violation of 18 U.S.C. § 2315 is 10 years, a fine of $250,000, three years’ supervised release, and restitution. However, any sentence will 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.
Michelle Kane and Denise Barton are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Paralegal Denise Oki and Legal Assistants Janice Pagsanjan, Rayneisha Booth, and Elizabeth Garcia. The prosecution is the result of a seven-month investigation by the Federal Bureau of Investigation.

Executive Recruiter David Nosal Convicted of Computer Intrusion and Trade Secret Charges

SAN FRANCISCO—David Nosal, an executive recruiter based in San Francisco, was convicted of all charges in a six-count indictment by a federal jury today, United States Attorney Melinda Haag announced.
The jury found that Nosal had conspired to gain unauthorized access to the computer system of his former employer, the executive search firm Korn/Ferry International, and to illegally obtain trade secrets belonging to Korn/Ferry. The jury also found Nosal guilty of three substantive computer intrusions in April and July 2005 and two substantives trade secret offenses that occurred in April 2005. The guilty verdict followed a two-week jury trial before U.S. District Court Judge Edward M. Chen.
Evidence at trial showed that Nosal, 55, of Danville, entered into an agreement with other Korn/Ferry employees in 2004 to take confidential and proprietary materials from Korn/Ferry’s computer system to be used in a new business that Nosal intended to establish with those individuals after he left Korn/Ferry’s employment in late 2004. The evidence showed that two of those employees downloaded large numbers of “source lists” (essentially, targeted lists of candidates developed by Korn/Ferry for the purpose of filling particular positions at particular client-companies) prior to their own departures from Korn/Ferry. Thereafter, those two employees used the Korn/Ferry login credentials of another conspirator who was still employed at Korn/Ferry to download additional source lists and other information from Korn/Ferry’s computer system in April and July 2005 for use in Nosal’s new business.
The trial in this case occurred after remand from the Ninth Circuit Court of Appeals, which had affirmed then-District Court Judge Marilyn H. Patel’s pre-trial dismissal of several computer intrusion counts.
Nosal was initially indicted by a federal grand jury on April 10, 2008. The government obtained superseding indictments on June 26, 2008 and February 28, 2013. In the most recent superseding indictment, Nosal was charged with one count of conspiracy, three counts of unauthorized access to a computer used in interstate or foreign commerce or communication, one count of unauthorized downloading and copying of trade secrets, and one count of unauthorized receipt and possession of stolen trade secrets. Nosal was found guilty on all six counts of this indictment.
The sentencing of Nosal is scheduled for September 4, 2013, before Judge Edward M. Chen in San Francisco. The maximum statutory penalty for the conspiracy charge in violation of Title 18, United States Code, Section 371 and the unauthorized access charges in violation of Title 18, United States Code, Section 1030(a)(4), is five years’ imprisonment and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for the trade secret charges is 10 years’ imprisonment and a fine of $250,000, plus restitution if appropriate. 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 United States Attorneys Kyle F. Waldinger and Matthew A. Parrella and U.S. Department of Justice Trial Attorney Jenny C. Ellickson are the attorneys who are prosecuting the case with the assistance of Rayneisha Booth, Elise Etter, Beth Margen, and Hui Chen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Federal Murder Charges Announced in San Jose Gang Shooting

SAN JOSE—A federal grand jury in San Jose, California, indicted Jose Farias Barajas, a/k/a “Oso,” and Victor Manuel Rodriguez, a/k/a “Silencer,” both of San Jose, on April 24, 2013. with racketeering and murder, United States Attorney Melinda Haag announced.
According to the superseding indictment, Barajas, 23, and Rodriguez, 25, are alleged to be members of the San Jose-based Sureño street gangs Varrio Colonias Trece (“Colonias” or “VCT”) and the Varrio Tami Lee Gangsters (“VTG”), respectively. Colonias and VTG have existed as Sureño street gangs in San Jose for over 10 years. The gangs are located in east San Jose, and their respective claimed territories have historically abutted and overlapped with each other. Their collective territory covers the area south of Story Road, north of Tully Road, east of McLaughlin Avenue, and west of Highway 101.
For at least the last five years, Colonias and VTG have joined forces and essentially operate as a single, unified association-in-fact enterprise, although they each retain their separate historical gang names, which are referred to in graffiti and tattoos. Colonias/VTG Gang members coordinate their activities and engage in violence together to defend their collective territory against rival Norteño gangs.
The superseding indictment alleges on August 13, 2012, in the vicinity of Denair Avenue and Letitia Street in San Jose, California, Rodriguez, aided by Barajas, who served as the driver, shot and killed an individual who they believed was a rival Norteño gang member. The indictment further alleges that the shooting was done in furtherance of the goals of the Colonias/VTG Gang.
The defendants also distributed methamphetamine as part of their ongoing gang activity.
The superseding indictment charges each defendant with the following:

• 18 U.S.C. § 1962(d)—racketeering conspiracy
• 18 U.S.C. § 1959—violent crime in aid of racketeering
• 18 U.S.C. § 924(j)—use of firearm causing murder
• 21 U.S.C. § 846—conspiracy to possess with intent to distribute and distribute methamphetamine
• 21 U.S.C. § 841(a)(1)—possession with intent to distribute and distribution of methamphetamine
• 18 U.S.C. § 924(c)—use/possession of firearm in furtherance of crime of violence and drug trafficking crime
• 18 U.S.C. § 2—aiding and abetting

Additionally, Rodriguez is also charged with 18 U.S.C. §§ 922(g)(3) & (5)—possession of a firearm by prohibited person, (a) an unlawful user of and addicted to a controlled substance and (b) an alien who was illegally and unlawfully in the United States)
The maximum penalty each defendant faces upon conviction is life imprisonment. The decision whether to seek the death penalty against either defendant is pending. However, any sentence following conviction would 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.
On October 3, 2012, the defendants were arrested on methamphetamine distribution charges and ordered detained. The defendants are currently in the custody of the United States Marshals Service. The case has been assigned to the Hon. Edward J. Davila for trial purposes.
The next appearance has been set for Monday, April 29 at 9:00 a.m. before Magistrate Judge Paul S. Grewal for arraignment on the superseding indictment.
Stephen Meyer and Daniel Kaleba are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of paralegal Nina Burney. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the San Jose Police Department.
An indictment contains only allegations against an individual and, as with all defendants, Barajas and Rodriguez must be presumed innocent unless and until proven guilty.

Man Claiming to be the Son of the President of the Congo Charged with Defrauding Victims of $1.6 Million

SAN FRANCISCO—A federal criminal complaint was filed on April 24, 2013, against Blessed Marvelous Herve, of San Francisco, charging him with wire fraud, United States Attorney Melinda Haag announced. Herve told victims that he was son of the president of Congo and needed money to release his riches. He promised repayment plus a bonus of millions.
According to the complaint, Herve, 41, collected $1.6 million from victims through his fraud scheme. In order to lure victims and bolster his credibility, Herve showed various documents, such as a letter written to him from a United States senator, copies of awards of recognition he received from the city and county of San Francisco, and a certificate of Special Congressional Recognition from a member of Congress. He also claimed he lived at the Four Seasons hotel in San Francisco.
One of Herve’s victims was a real estate agent from whom Herve promised that his father would purchase tens of millions of dollars in real estate. Herve convinced the agent to give him tens of thousands of dollars to pay expenses related to the purported father’s real estate tours, such as the rental of bulletproof limousines. In the final years of the scheme, Herve claimed that the U.S. government seized millions of dollars from him during the course of secret court proceedings. Herve also claimed he was incarcerated as a result of these proceedings. When the victims ran out of money, Herve claimed that he was being deported to Puerto Rico and was not heard from again.
Herve was arrested Wednesday evening in San Francisco and made his initial appearance in federal court in San Francisco yesterday morning. Herve’s next scheduled appearance is at 9:30 a.m. on April 29, 2013, for a detention hearing before Magistrate Judge Nathanael Cousins.
The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years’ imprisonment and a fine of $250,000. 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.
Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of a three-week investigation by the Federal Bureau of Investigation and the United States Department of Homeland Security.
Please note, an criminal complaint contains only allegations against an individual and, as with all defendants, Herve must be presumed innocent unless and until proven guilty.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

AU Optronics Corporation Executive Sentenced for Role in LCD Price-Fixing Conspiracy

WASHINGTON—An executive of AU Optronics Corp., a Taiwan-based liquid crystal display (LCD) producer, was sentenced today in U.S. District Court in San Francisco for his participation in a worldwide thin-film transistor-liquid crystal display (TFT-LCD) price-fixing conspiracy. Shiu Lung Leung, AU Optronics Corp.’s former senior manager in its Desktop Display Business Group, was sentenced to serve 24 months in prison and to pay a $50,000 criminal fine, the Department of Justice announced.
AU Optronics Corp., based in Hsinchu, Taiwan, and its American subsidiary, AU Optronics Corp. America, headquartered in Milpitas, California, were found guilty in March 2012, for their participation in the price-fixing conspiracy, following an eight-week trial. Former AU Optronics Corp. President Hsuan Bin Chen and former AU Optronics Corp. Executive Vice President Hui Hsiung were also found guilty at that time. A mistrial was declared against Leung after that trial. Today’s sentencing took place before Judge Susan Illston and follows a three-week retrial that started in November 2012 and resulted in Leung’s conviction.
“These international price-fixers caused consumers to pay inflated prices for their computer monitors, notebook computers, and televisions,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division. “Prison sentences for culpable executives, combined with substantial fines against corporate wrongdoers, are the most effective deterrents for protecting consumers from this kind of illegal cartel behavior.”
The indictment charged that AU Optronics Corp. participated in the worldwide price-fixing conspiracy from September 14, 2001 to December 1, 2006, and that its subsidiary joined the conspiracy as early as spring 2003. The indictment further charged that Leung participated in that conspiracy from May 15, 2002 to December 1, 2006. LCD panels affected by the conspiracy were a major component in flat-panel computer monitors, notebook computers, and flat-screen televisions sold in the United States. The conspirators fixed the prices of LCD panels during monthly meetings with their competitors, which were secretly held in hotel conference rooms, karaoke bars, and tea rooms around Taiwan.
Eight companies have been convicted of charges arising from the department’s ongoing investigation and have been sentenced to pay criminal fines totaling $1.39 billion. All together, 22 executives have been charged. Including today’s sentence, 13 executives have been convicted and have been sentenced to serve prison terms ranging from six to 36 months.
Today’s charges are the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco office and the FBI in San Francisco. Anyone with information concerning illegal conduct in the LCD industry is urged to call the Antitrust Division’s San Francisco Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.

Mortgage Broker Pleads Guilty to $100 Million Loan Origination Fraud

United States Attorney Laura E. Duffy and Federal Housing Finance Agency Inspector General Steve A. Linick announced today that Mary Armstrong, an unlicensed mortgage broker who operated a nationwide loan origination fraud and kickback scheme from San Diego, pled guilty today before United States District Judge John A. Houston to all five counts of an indictment charging her with wire fraud, money laundering, and conspiracy. Armstrong was indicted on May 10, 2012, and apprehended in Las Vegas, Nevada, in July 2012; she has been held in custody since her arrest.
As part of today’s guilty plea, Armstrong admitted that she defrauded mortgage lenders by arranging for the sale of $100 million worth of real estate at inflated prices and then siphoned the overpayments to bank accounts she controlled. She created false loan applications on behalf of straw buyers and then arranged for her co-conspirators to create fake documents in support of those applications, including W-2 forms, paystubs, bank statements, and other records. According to Armstrong’s accountant and tax preparer, Audrey Yeboah, who pled guilty in October 2012 to participating in the same scheme, Armstrong collected over $14.5 million in kickbacks from the fraudulently obtained mortgage loans.
Armstrong joins defendants Teresa Rose, a Ramona real estate agent; Seattle businessman Justin Mensen; and Yeboah, each of whom has pled guilty to participating in the scheme. These defendants admitted that they carried out their scheme by recruiting investors through the Internet and advertisements in The LA Times and offering them the opportunity to purchase homes located in Southern California, Washington state, and elsewhere. In reality, these so-called investors were nothing more than straw buyers who were promised $10,000 for each property purchased as part of the scheme. The defendants were able to secure mortgages for the properties by falsifying loan applications for the straw buyers, falsely claiming exorbitant income from fake employers and using fake W-2s and paystubs to support the claims. The defendants submitted these fraudulent loan applications to mortgage lenders to obtain 100 percent financing and thus avoided having to make any down payment on the properties.
According to the defendants’ plea agreements, they profited on these fraudulently acquired mortgage loans by inflating the purchase price of the properties by $100,000 (or more) and having the straw borrowers kick-back to them the illicit proceeds. Although the conspirators claimed to lenders that the extra money would be used for construction improvements; in fact, the conspirators funneled the money to sham construction companies that they controlled, thereby concealing their kickbacks.
Armstrong admitted that after the conspirators collected the overpayments, the strawbuyers defaulted on the mortgage loans, resulting in mortgage lenders and secondary purchasers, including Fannie Mae and Freddie Mac, suffering losses of up to $20 million.
Two additional defendants charged as part of the scheme, John Allen and William Fountain, are scheduled to begin trial on November 5, 2013.
The public is reminded that an indictment is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
United States Attorney Duffy commented, “Armstrong’s fraudulent conspiracy endangered not only the particular lenders ensnared in her scheme, but every American who subsequently suffered from the destabilization of the housing and financial sectors. And the country’s taxpayers were ultimately left holding the bag when forced to bail out Fannie Mae and Freddie Mac. Today’s guilty plea is another important step in this office’s aggressive prosecution of such financial frauds and the vindication of all Americans who have suffered in the recent financial crisis.”
FBI Special Agent in Charge Daphne Hearn commented, “Mortgage fraud losses cost taxpayers billions of dollars every year and is a threat to our national economy. The FBI will continue to dedicate substantial amount of expert resources to investigate these crimes.”
United States Attorney Duffy reminded the community that anyone with information relating to these charges should contact the San Diego branch of the Federal Bureau of Investigation at (858) 565-1255 or the Federal Housing Finance Agency-Office of Inspector General hotline at (800) 793-7724.
A sentencing hearing is scheduled for Armstrong before Judge Houston on August 12, 2013, at 8:30 a.m.
Defendants in Criminal Case No. 12CR1848-JAH
Mary Armstrong
Teresa Rose
William Fountain
John Allen
Summary of Charges
Count one: Title 18, U.S.C., Section 371-conspiracy to commit wire fraud and to launder money
Maximum penalty: five years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Count two (all defendants): Title 18, U.S.C., Section 1343-wire fraud
Maximum penalty: 20 years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Counts three through five (Mary Armstrong): Title 18, U.S.C., Section 1956 (a)(1)(B)(I)-money laundering
Maximum penalty: 15 years’ custody, a maximum fine of $500,000 or twice the value of the property involved in the transaction, and $100 special assessment (Mary Armstrong).
Defendant in Criminal Case No. 12CR1458-JAH
Justin Mensen
Summary of Charges
Title 18, U.S.C., Section 371-conspiracy to commit wire fraud and to launder money
Maximum penalty: five years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Defendant in Criminal Case No. 12CR4322-JAH
Audrey Yeboah
Summary of Charges
Title 18, U.S.C., Section 1343-wire fraud
Maximum penalty: 20 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Investigating AgenciesFederal Bureau of Investigation
Federal Housing Finance Agency-Office of Inspector General