Southern Oregon Couple Sentenced to Federal Prison on Fraud and Tax Charges

MEDFORD, OR—Kenneth Johnson, 62, and Diana Arredondo, 56, both of Central Point, Oregon, were sentenced to federal prison based on an embezzlement and tax fraud scheme relating to the operation of a local hotel. Johnson was a partner in the Super 8 Hotel in Central Point, Oregon, since it opened in October 2005. He was in charge of the hotel’s daily operations and reported the hotel’s revenue to his partners in Montana. Johnson hired his girlfriend, Arredondo, as the assistant hotel manager. They operated the hotel from October 2005 through 2011. Johnson engaged in a scheme to defraud his hotel partners by providing them false information regarding the amount of cash collected by the hotel and diverting some of the funds for his and Arredondo’s use. Over a period of time, Johnson diverted a total of about $500,000 and shared some of the tainted funds with Arredondo. In addition, both defendants filed fraudulent income tax returns, failing to report the money embezzled from the hotel. Based on a plea agreement entered into with the government, Johnson pleaded guilty to tax fraud and wire fraud, and Aredondo pleaded guilty to tax fraud.
On Monday, March 31, 2014, Senior U.S. District Judge Owen M. Panner sentenced Johnson to 33 months in federal prison and Arredondo to 10 months in prison. Johnson was ordered to pay $561,101.05 in restitution, and Arredondo was ordered to pay $16,229.00 in restitution.
This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Judith Harper.

Operator of Two Convenience Stores Sentenced to Two Years in Prison for Food Stamp Fraud

BALTIMORE, MD—U.S. District Judge William D. Quarles, Jr. sentenced Ahmed Ayedh Al-Jabrati, age 58, a citizen of Yemen residing in Baltimore, today to two years in prison, followed by three years of supervised release, for wire fraud in connection with a scheme to illegally redeem food stamp benefits in exchange for cash. Judge Quarles also ordered that Al-Jabrati pay restitution of $1.2 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture’s Office of Inspector General, Northeast Region; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
Al-Jabrati operated two convenience stores, Second Obama Express and D&M Deli and Grocery, located next door to each other at 901 Harlem Avenue in Baltimore. According to their plea agreements and court documents, the stores participated in the Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Al-Jabrati knew that it was a violation of SNAP regulations to trade cash for SNAP benefits. Nevertheless, from October 2010 to July 2013, Al-Jabrati exchanged SNAP benefits for cash at less than face value of the EBT benefits, in violation of the food stamp program rules, and kept up to 50 percent of the benefits for themselves.
Judge Quarles determined today that Al-Jabrati obtained at least $1.5 million in payments for food sales that never occurred.
Eight of the 10 convenience store owners or operators who were indicted in September 2013 in connection with schemes to illegally redeem food stamp benefits in exchange for cash have pleaded guilty to food stamp fraud and/or wire fraud. Amara Cisse, age 50, of Windsor Mill, Maryland, was sentenced to 27 months in prison and ordered to pay restitution of $654,349.24, and his wife, Fanta Keita, was sentenced to two months in prison. Retailer Hyung Cho, age 40, was sentenced to 38 months in prison, and his mother, Dae Cho, age 67, was sentenced to 18 months in prison. The Chos were also ordered to forfeit $371,439.21 and pay restitution of $1.4 million. Two more retailers were indicted in January 2014.
United States Attorney Rod J. Rosenstein praised USDA’s Office of Inspector General and FBI for their work in the investigation. U.S. Attorney Rosenstein expressed appreciation to Secretary Ted Dallas and the Maryland Department of Human Resources, as well as U.S. Citizenship and Immigration Services-Office of Fraud Detection and National Security for their assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kathleen O. Gavin, who prosecuted the case.

Richmond Man Sentenced to 21 Months for Failing to Report to Serve a Previously Imposed Sentence

OAKLAND—Dontae Jerome Jones was sentenced today to 21 months in prison for failing to surrender to serve a previously imposed sentence, United States Attorney Melinda Haag announced.
Jones, 31, of Richmond, admitted in his plea agreement that he had been previously convicted of being a felon in possession of a firearm and ammunition and had been sentenced to 72 months in custody. Jones was allowed to voluntarily surrender to serve his sentence on November 5, 2012. Jones also admitted that he failed to report to serve his sentence as ordered, and he later evaded capture by the U.S. Marshals, who had located him at a residence in Vallejo, California. Jones was finally caught on April 29, 2013, in Vallejo by the Vallejo Police Department.
Jones was indicted by a federal grand jury on May 9, 2013. He pleaded guilty on August 12, 2013. The sentence was handed down by The Honorable Claudia Wilken, U.S. District Court Chief Judge. In addition to his prison term, Jones was also sentenced to a three-year period of supervised release.
Brian C. Lewis is the Assistant U.S. Attorneys who is prosecuting the case with the assistance of Legal Assistant Janice Pagsanjan. The prosecution is the result of an investigation by the FBI, the U.S. Marshals, and the Vallejo Police Department.

Twelve Charged in ATM Card Skimming Scheme That Caused Thousands of Dollars in Losses to Banks

LOS ANGELES—Twelve members of an organized criminal group operating in southern California have been charged for their roles in an ATM skimming conspiracy that victimized U.S. banks and customers, causing losses in the hundreds of thousands.
Nine of the 12 defendants were charged with conspiracy to commit bank fraud in a criminal complaint unsealed yesterday in United States District Court. Three defendants were charged in connection with the conspiracy in a second criminal complaint filed today.
The complaints allege that the defendants obtained or manufactured skimming devices to be placed over ATM card readers in order to obtain information on customers’ debit cards. The complaints further allege that the defendants installed mini video cameras that would capture personal identification numbers (PINs). After obtaining this information, the defendants allegedly replicated the data on blank bank and gift cards. Utilizing the newly coded bank cards and captured PINs, the defendants allegedly made cash withdrawals from ATMs in Los Angeles, Orange County, Las Vegas, and San Francisco.
The criminal complaints charge the following defendants with conspiracy to commit bank fraud:

• Oliver Raducu Marian, aka Tyrone Steven Constant, a fugitive, age, 33
• Gheorghita Vlasin, of Los Angeles, age 26
• Petru Olteanu-Ursachi, of Los Angeles, age 36
• Bogdan Ciuchi, a fugitive, age 29
• Codrin Marian Lupu, of Los Angeles
• Adrian Saran, of Los Angeles, age 36
• Marius Robert
• Manciu Claudiu Buculei, a fugitive, age 37
• Roman Florin Buciumi, of Los Angeles
• Vasile Gabriel Branisteanu, of Los Angeles
• Cotovanu Claudiu-Dumitru, of Los Angeles, age 31
• Calian Marios Dumitru, of Los Angeles

On Tuesday morning, agents and officers with multiple law enforcement agencies executed arrest and search warrants in Los Angeles. Six of the defendants charged in the first complaint were apprehended without incident. Three additional individuals located during the execution of the warrants were also taken into custody and charged in the second criminal complaint. All the defendants are expected to be in federal court this afternoon for initial appearances. The three remaining defendants are fugitives believed to be overseas and are currently being sought by investigators.
Six federal search warrants were executed throughout the day on Wednesday when investigators found hundreds of thousands of dollars in cash and credit card skimming equipment.
If convicted of the charge in the complaint, the defendants each would face a statutory maximum penalty of 30 years in federal prison.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
This case is a continuing joint investigation by the Federal Bureau of Investigation, the Los Angeles Police Department, the Las Vegas Metropolitan Police Department, Homeland Security Investigations, and the United States Secret Service.
The defendants will be prosecuted by the United States Attorney’s Office.