The Sheriff's Blogger

Federal Enforcement Actions Directed At Marijuana Stores Continue with Four New Property Forfeiture Lawsuits and Warning Letters

 Department of Justice

LOS ANGELES – As part of a continuing, coordinated effort against commercial marijuana operations in California that started last fall, federal prosecutors over the past week have filed four asset forfeiture lawsuits against properties housing marijuana storefronts in Los Angeles and Orange counties and have sent warning letters to property owners and operators of illegal marijuana stores in several Southland cities.

Three asset forfeiture complaints against buildings in Costa Mesa where marijuana stores are currently operating were filed this morning in United States District Court in Los Angeles. Prosecutors this morning also sent letters to marijuana store operators and to the owners of properties where nearly two dozen marijuana stores currently operate in Costa Mesa.

The three forfeiture actions filed today allege that the owners knowingly allowed marijuana stores to operate. The Costa Mesa buildings named in the forfeiture lawsuits house:

 

• three marijuana stores currently operating at 440 Fair Drive, where the owner of the building has been “cited numerous times by Costa Mesa officials for allowing the operation of marijuana dispensaries,” according to the lawsuit;
• American Collective, a marijuana store allegedly operated by a man with a 2003 state court conviction for marijuana sales that was one of two Costa Mesa stores and related locations where federal and state agents yesterday executed search warrants that led to the of two separate marijuana grows, each with more than 500 marijuana plants; and
• Otherside Farms, whose operator told Costa Mesa Code Enforcement personnel that he intended “to make so much money” at the location that he was going to give the city of Costa Mesa a “donation” of up to $500,000 every year that would help the city stave off layoffs.

Letters went out today to the owners and operators of currently operating or recently closed marijuana stores – nearly three dozen in Costa Mesa, and one now-shuttered store in Newport Beach. All known stores in these two South Orange County cities are now the subject of federal enforcement actions.

 Last week, the United States Attorney’s Office filed another asset forfeiture lawsuit against the building that houses the Alternative Medicinal Cannabis Collective (AMCC) in an unincorporated part of Covina. This complaint alleges that Los Angeles County code enforcement personnel took action against the operation and, in March 2011, the County filed a lawsuit against the owners of the property where the store is located.

Warning letters were sent last week to property owners and operators associated with marijuana stores in unincorporated Walnut, La Puente, Murrieta and Lake Elsinore, where a total of 17 stores are believed to be currently operating. Those receiving letters were warned that the stores are operating in violation of federal law and that they have 15 days to take steps to discontinue the sale and distribution of marijuana at the stores.

In October, the four United States Attorneys in California announced coordinated enforcement actions targeting illegal marijuana cultivation and trafficking. In the Central District of California (see http://www.justice.gov/usao/cac/Pressroom/2011/144.html), one criminal case that now involves seven defendants linked to a North Hollywood marijuana store called NoHo Caregivers is set for trial on May 22. Three civil forfeiture actions filed in October are still pending, but the stores in the properties have been closed. And dozens of letters sent to those associated with marijuana stores in 13 Southland cities have resulted in nearly all of the stores being closed, with the remainder currently being the subject of eviction proceedings.

 Last week, the United States Attorney in Sacramento announced a civil forfeiture action against a marijuana store, as well as letters that were sent to the owners of properties in several counties where marijuana is being cultivated or sold (see:

http://www.justice.gov/usao/cae/news/docs/2012/01-12-12MarijuanaStore.html).

The United States Attorney’s Office is working in conjunction with the Drug Enforcement Administration and IRS - Criminal Investigation.

Santa Ana Intern Gets Six Months for Secret Bathroom Videos

Jan. 12, 2012

Case # 11CM08525

INTERN CONVICTED OF SECRETLY VIDEOTAPING MEN UNDER SANTA ANA CITY HALL RESTROOM STALLS USING HIS CELL PHONE

SANTA ANA - An intern for the City of Santa Ana was convicted and sentenced today for surreptitiously creating 64 videotapes using his cell phone of men while the victims were using restrooms in City Hall.

Miguel Ruiz Fabian, 24, Santa Ana, pleaded guilty to eight misdemeanor counts of disorderly conduct by unlawful viewing and was sentenced to six months in jail and three years of formal probation.

At the time of the crime, Fabian was an engineering student at California State Polytechnic University, Pomona and was an intern for the City of Santa Ana Public Works Department.

On 64 occasions over 23 separate days between Dec. 28, 2010, and May 31, 2011, Fabian used his cell phone video camera to surreptitiously record men using the restroom at Santa Ana City Hall and the Santa Ana City Hall Annex. He entered bathroom stalls and put his phone on the floor to record men in the adjacent stall urinating and defecating.

On May 31, 2011, a victim looked down while using the restroom and observed a cell phone on the floor at the foot of his stall. He grabbed the phone, identified Fabian as the owner, and called 911.

The victims were primarily employees of the City of Santa Ana and all of the victims who could be identified have been contacted by the Santa Ana Police Department, who investigated this case. The identities of some of the victims are still unknown.

Deputy District Attorney Brad Schoenleben prosecuted this case.

San Diego Gang Bangers Convicted in OC Jewelry Robberies

January 10, 2012

THREE SAN DIEGO GANG MEMBERS CONVICTED OF CRIME SPREE ROBBERIES IN TWO ORANGE COUNTY JEWELRY STORES *Eight co-defendants have also been convicted in this case

WESTMINSTER - Three gang members have been convicted for their role in a crime spree involving the armed robbery of two Orange County jewelry stores, identity theft, and street terrorism. Two of the defendants were found guilty by a jury Jan. 9, 2012, and the third defendant pleaded guilty mid-trial. All three are scheduled to be sentenced April 20, 2012, in Department W-18, West Justice Center, Westminster.

 

Aida Arroyo, 29, pleaded guilty mid-jury trial on Jan. 5, 2012, to one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member. She faces a maximum sentence of 15 years in state prison.

Michael Burgin, 32, was convicted of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity, the vicarious use of a firearm by a gang member, and two prior strike convictions for first degree burglaries in 1999 and 2002. He faces a maximum sentence of 70 years to life in state prison.

 

Adam Weick, 30, was convicted of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity, the vicarious use of a firearm by a gang member, and a prior strike for kidnapping in 2005. He faces a maximum sentence of 25 years in state prison.

This case involved 11 co-defendants, all residents of San Diego County, and was jointly investigated by the Laguna Beach Police Department (LBPD), Tustin Police Department (TPD) and Orange County District Attorney's Office with assistance from the Orange County and San Diego County Sheriff's Departments, Chula Vista and Oceanside Police Departments, and the U.S. Department of Homeland Security.

Co-Defendants

Salvador Barajas, 31, pleaded guilty Feb. 5, 2010, to one felony count each of receiving stolen property and street terrorism and was sentenced to 225 days in jail and three years of probation.

Touradj Barman, 69, pleaded guilty March 19, 2010, to one misdemeanor count of a pawnbroker failing to report receipt of property and was sentenced to one year of probation and a $10,000 payment to the Victim Witness Emergency Fund.

Sylvia Elena Castaneda, 31, pleaded guilty June 20, 2011, to one felony count of second degree robbery with a sentencing enhancement for criminal street gang activity and was sentenced to five years in state prison.

Jose Jesus Garcia, 37, pleaded guilty March 26, 2010, to one misdemeanor count of a pawnbroker failing to report receipt of property and was sentenced to one year of probation and a $10,000 payment to the Victim Witness Emergency Fund.

Pedro Avina Hernandez, 31, was found guilty by a jury Feb. 2, 2010, of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member. He is expected to be sentenced Jan. 27, 2012, in Department C-40, Central Justice Center, Santa Ana.

Alonso Jose Lopez, 33, was found guilty by a jury May 20, 2010, of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member. He has a prior strike conviction for kidnapping in 1998, Lopez was sentenced July 23, 2010, to 25 years in state prison.

Daisy Oregon, 23, pleaded guilty Feb. 5, 2010, to one felony count each of receiving stolen property and street terrorism with a sentencing enhancement for criminal street gang activity. She has a prior strike for robbery in 2005. Oregon was sentenced to two years and eight months in state prison.

Arturo Carlos Perez, 23, pleaded guilty July 9, 2010, to one felony count each of accessory after the fact and street terrorism with a sentencing enhancement for criminal street gang activity. He was sentenced to two years in state prison.

Tustin Robbery

At approximately 5:00 p.m. on Aug. 4, 2009, Arroyo entered Tustin Village Jewelers under the pretense of selling a ring. The jewelry store has security gates and the defendant was buzzed in. While negotiating a price with the store owner, Arroyo asked to be let out of the store to make a phone call. When the owner buzzed the security gate to let Arroyo out, Burgin and Weick immediately rushed in to the store wearing caps and bandanas. They were armed with firearms and demanded at gunpoint that the victim unlock the jewelry cases to give them access to the diamonds.

 

One of the defendants held a gun to the back of the victim's head and threatened to shoot him if he did not open the safe. The defendants then duct-taped the victim and put him in the bathroom. Burgin, Weick, and Arroyo stole over $160,000 in jewelry and fled the scene.

Laguna Beach Robbery

At approximately 7:00 p.m. on Aug. 25, 2009, Burgin, Lopez, and Hernandez entered Baca Jewelers in Laguna Beach as the store was closing. They were dressed in black and attempted to hide their faces by wearing hoods and baseball caps. The defendants robbed a store employee at gun-point and stole over $1 million in watches and jewelry before fleeing the scene.

Officers from LBPD responded and Burgin, Lopez, and Hernandez led police on a pursuit from Laguna Beach to Aliso Viejo. The defendants abandoned their car in an Aliso Viejo parking garage and evaded police by fleeing. LBPD officers learned that the abandoned vehicle was owned by Castaneda. Castaneda attempted to impede the police investigation by reporting her car stolen in San Diego County, despite loaning it to Lopez, Burgin, and Hernandez knowing that it would be used for a jewelry store burglary.

Perez assisted Lopez evade arrest and hide in an Oceanside home by acting as a look-out to determine if police were surveiling the home and obtaining a calling card for Lopez to make phone calls without detection. Based on a law enforcement bulletin put out by LBPD, TPD noticed similarities between the two robberies and the agencies began jointly investigating their cases.

Identity Theft and Receiving Stolen Property On Sept. 8, 2009, Barajas drove Castaneda, Oregon and Arroyo to Laguna Beach to pick up Castaneda's car, which had been abandoned after the Aug. 25, 2009, robbery and impounded by LBPD. While Castaneda was meeting with LBPD, the three other defendants stole mail from local Laguna Beach mail boxes. Arroyo was in possession of and fraudulently using credit cards, which had been stolen in San Diego County the day before.

Subsequent investigation into the robberies revealed that two second-hand jewelry stores in San Diego County, San Diego Jewelry and Loan and J&L Jewelers, were selling some of the stolen jewelry. Garcia attempted to make identifying the stolen jewelry more difficult by grinding off identifying markings. Barman purchased the property, knowing it had been stolen.

All of the defendants, except for Barman and Garcia, are members or associates of a San Diego Hispanic criminal street gang. They planned and committed these crimes to benefit their criminal street gang.

Senior Deputy District Attorney Jim Mendelson of the Gang Unit is prosecuting this case.

Woman Indicted for Cutting Off Man's Penis

From the OC District Attorney's Office

January 5, 2012

Case # 11WF1668

WOMAN INDICTED FOR CUTTING OFF MAN'S PENIS AFTER TYING HIM TO BED

SANTA ANA - A woman was indicted by the Orange County Grand Jury today for cutting off a man's penis after tying him to his bed.

Catherine Kieu, 48, Garden Grove, was indicted on one felony count of torture, one felony count of aggravated mayhem, and a sentencing enhancement for the personal use of a knife. If convicted on all counts, she faces a maximum sentence of life in state prison with the possibility of parole. The defendant is being held on $1 million bail and is scheduled to be arraigned on the indictment Monday, Jan. 9, 2012, at 8:30 a.m. in Department C-5, Central Justice Center, Santa Ana.

On July 13, 2011, the Orange County District Attorney's Office (OCDA) released a press release with the following information:

Kieu and 60-year-old John Doe live together in Garden Grove. 

On the night of July 11, 2011, Kieu is accused of engaging John Doe in an argument over the possibility of a friend staying at the residence at a later date. The defendant is accused of serving John Doe dinner.

At approximately 9:00 p.m. John Doe became tired and went to bed. As he slept in his bed, Kieu is accused of tying the victim's legs and arms to the four corners of the bed with nylon ropes. When he awoke, the defendant is accused of pulling down John Doe's pants, grabbing the victim's penis, and severing it with a knife. Kieu is accused of then taking the penis to the kitchen, throwing it into the garbage disposal, turning it on, and mutilating the organ. Kieu is accused of then contacting 911.

Garden Grove police arrived at the scene and John Doe was transported to University of California, Irvine Medical Center for emergency surgery.

Senior Deputy District Attorney John Christl of the Special Prosecutions Unit is prosecuting this case.

Countrywide Settles Discrimination Suit with Government for $335 Million

Department of Justice

JUSTICE DEPARTMENT REACHES $335 MILLION SETTLEMENT TO RESOLVE ALLEGATIONS OF LENDING DISCRIMINATION BY COUNTRYWIDE FINANCIAL CORPORATION

More than 200,000 African-American and Hispanic Borrowers who Qualified for Loans were Charged Higher Fees or Placed into Subprime Loans

WASHINGTON – The Department of Justice today filed its largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008. 

The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders.

The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Central District of California in conjunction with the department’s complaint which alleges that Countrywide discriminated by charging more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending.  The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. 

The United States also alleges that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans.  All the borrowers who were discriminated against were qualified for Countrywide mortgage loans according to Countrywide’s own underwriting criteria.

“The department’s action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for lending discrimination,” said Attorney General Eric Holder. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”

The settlement resolves the United States’ pricing and steering claims against Countrywide for its discrimination against African Americans and Hispanics. 

The United States’ complaint alleges that African-American and Hispanic borrowers paid more than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin.  Countrywide’s business practice allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors.  This subjective and unguided pricing discretion resulted in African American and Hispanic borrowers paying more.  The complaint further alleges that Countrywide was aware the fees and interest rates it was charging discriminated against African-American and Hispanic borrowers, but failed to impose meaningful limits or guidelines to stop it. 

“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.”

The United States’ complaint also alleges that, as a result of Countrywide’s policies and practices, qualified African-American and Hispanic borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans.  The discriminatory placement of borrowers in subprime loans, also known as “steering,” occurred because it was Countrywide’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan.  In addition, Countrywide gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Countrywide’s employees had discretion to grant these exceptions.       

This is the first time that the Justice Department has alleged and obtained relief for borrowers who were steered into loans based on race or national origin, a practice that systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans.  By steering borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide harmed those qualified African-American and Hispanic borrowers.  Subprime loans generally carried higher-cost terms, such as prepayment penalties and exploding adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.

The settlement also resolves the department’s claim that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home ownership rights.  The law allows married individuals to apply for credit either in their own name or jointly with their spouse, even when the property is owned by both spouses.  For applications made by married individuals applying solely in their own name between 2004 and 2008, Countrywide encouraged non-applicant spouses to sign quitclaim deeds or other documents transferring their legal rights and interests in jointly-held property to the borrowing spouse.  Non-applicant spouses who execute a quitclaim deed risk substantial uncertainty and financial loss by losing all their rights and interests in the property securing the loan. 

In addition, the settlement requires Countrywide to implement policies and practices to prevent discrimination if it returns to the lending business during the next four years.  Countrywide currently operates as a subsidiary of Bank of America but does not originate new loans.  

The department’s investigation into Countrywide’s lending practices began after referrals by the Board of Governors of the Federal Reserve and the Office of Thrift Supervision to the Justice Department’s Civil Rights Division in 2007 and 2008 for potential patterns or practices of discrimination by Countrywide.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.   The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.   For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing. 

The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of Countrywide’s discrimination.  The department will make a public announcement and post contact information on its website once an administrator is chosen.  Borrowers who are eligible for compensation from the settlement will then be contacted by the administrator.  Individuals who believe that they may have been victims of lending discrimination by Countrywide and have questions about the settlement may email the department at countrywide.settlement@usdoj.gov.

Part Owner and Managers of Douglas Nissan Sentence for Defrauding Customers

December 16, 2011

Case # 08CF2755

PART-OWNER AND TWO MANAGERS OF DOUGLAS NISSAN SENTENCED FOR DEFRAUDING CUSTOMERS AND BANKS IN THEFT CONSPIRACY *A fourth co-defendant is a fugitive in this case

SANTA ANA - A part-owner and two managers of Douglas Nissan in Orange were sentenced today for their role in an elaborate conspiracy to steal unsuspecting customer identities and defraud banks in the sale of used cars. Part-Owner Frank Ignacio Urbano, 57, Anaheim, and desk managers Luz Belem Corral, 29, Costa Mesa, and Kevin Allen DeRosier, 31, Anaheim, pleaded guilty May 6, 2011, to felonies including 43 counts of forgery, 31 counts of grand theft, and two counts of conspiracy. Corral additionally pleaded guilty to one felony count of perjury by declaration. Urbano was sentenced to one year in jail and 10 years in state prison suspended pending successful completion of five years of formal probation. DeRosier was sentenced to 240 days in jail and five years of formal probation. Corral was sentenced to 360 days in jail and five years of formal probation.

A fourth defendant is a fugitive with a $2 million warrant in this case. Marwan Abdellatif, 49, formerly of Lakewood, was charged Nov. 5, 2010, with one felony count of failing to appear in court. He is also charged in the Douglas Nissan case with 43 felony counts of forgery, 31 felony counts of grand theft, one felony count of conspiracy to defraud another of property, and one felony count of conspiracy to commit a crime. If convicted, he faces a maximum sentence of 38 years in state prison. Anyone with information regarding his whereabouts is asked to call their local police department's non-emergency number or Supervising District Attorney Investigator Eric Akerlind at (714) 347-8691.

ORIGIN OF CASE

In April 2007, the Orange County District Attorney's Office (OCDA) began investigating possible fraudulent activity at Douglas car dealerships. The OCDA discovered that between 2005 and 2007, more than two dozen relevant police reports were filed with the Orange Police Department regarding Douglas Nissan of Orange. More than 100 complaints had been filed with the DMV and Better Business Bureau about Douglas Nissan and the other dealerships for unfair business practices.

Investigators from the OCDA searched Douglas Nissan at 1140 West Katella Avenue in Orange on July 9, 2007. Evidence was seized including two computers, electronic data from four additional computers, and approximately 350 boxes containing approximately 12,000 car transaction dealer jackets. Each dealer jacket contained several documents including contracts, credit reports, applications, warranty and insurance information, and other documentation relevant to the sale or lease of a vehicle. The felony charges in this case represent only the most egregious acts, focusing on 31 fraudulent transactions and representing a small percentage of the large volume of evidence.

THE CONSPIRACY

At the time of the crime, Urbano was a minority share owner and general manager of Douglas Nissan responsible for day-to-day operations. Corral, DeRosier, and Abdellatif were desk managers who supervised dealership sales staff, secured documentation and financing for vehicle sales, and signed off on all car sale deals.

Between February 2005 and June 2007, the defendants participated in an elaborate ongoing conspiracy to sell used cars at prices above their value to drive up the cost of monthly payments by the customer. They participated in illegal business practices by submitting false loan information to defraud lenders and defrauded vulnerable customers by securing unaffordable loans in the customer's name.

When making a lending decision related to the purchase of an automobile, banks rely on Kelley Blue Book to determine the value of a vehicle. In order to justify high loan values for cars on their Douglas Nissan lot, the defendants falsified electronic Kelley Blue Book records by overstating the value of certain vehicles and falsifying features of the car. They defrauded the banks out of an estimated $911,500 in financing through the submission of the falsified records. Eight known banks and lending institutions were defrauded in the scheme. Bank of America, who had received dozens of identity theft affidavits from consumers, had stopped conducting business with Douglas Nissan in June 2007 because of the high number of fraudulent vehicle loan packages from the dealership. The other seven banks and institutions included Americredit Financial Services, Capital One Auto Finance, Nissan Motor Acceptance Corporation, NuVision Federal Credit Union, Wachovia Financial Services, Wells Fargo Bank, and Wescom Credit Union.

In addition to the banks, the increased loan also victimized customers. Urbano, Corral, DeRosier, and Abdellatif primarily targeted Spanish speaking customers who did not have proper identification or understand the process of buying a vehicle. They obtained or created false identities and assigned the identities to customers without their knowledge in order to qualify for higher loans. They created fake customer pay-stubs to support the falsified claim of higher income. The defendants encouraged victims to sign loan and purchase documents that had not been completed, and later filled in the documents with information that overstated the victims' loan payment abilities.

The defendants intentionally overstated the income of customers without the customer's knowledge in order to qualify the victim for a higher loan. In many cases the victims could not afford the payment on the higher loans and lost their cars. The defendants engaged in "loan packing," or having customers purchase extra insurance and warranty coverage by deceiving them about the amount charged for add-on items.

Victims also included non-customers, whose identities had been stolen and used to purchase cars. This resulted in victims with loans and vehicles in their names about which they did not know and to which they did not consent. In some cases, the defendants misled victims into believing they were acting as a reference for another customer, and instead used that victim as a co-signer without the victim's knowledge. These victims were left with the responsibility of the high loan if the original customer defaulted on the payments. 

In addition to the conspiracy, Corral also committed perjury for using a fake social security number on her application for a sales license, which is required in order to sell cars.

Senior Deputy District Attorney Doug Brannan of the Major Fraud Unit prosecuted this case.

Parole Denied in Workplace Violence Murder Case

December 20, 2011

PAROLE DENIED FOR MAN CONVICTED OF STABBING-MURDER OF COWORKER AND ATTEMPTED MURDER OF ANOTHER

SANTA ANA - The Board of Parole Hearings (Board), California Department of Corrections and Rehabilitation, denied the parole today for an inmate who was convicted of stabbing and murdering his coworker and attempting to murder another.

Ivory Joe Valentine, 57, is currently being held at Correctional Training Facility in Soledad, CA. Valentine was sentenced Oct. 21, 1986, to 20 years to life in state prison with an additional one year for the sentencing enhancement for the personal used of a deadly weapon, after he was found guilty of one felony count of second degree murder and one felony count of attempted voluntary manslaughter. This case was originally prosecuted by former Deputy District Attorney Mike Jacobs.

Deputy District Attorney Marc Labreche attended the hearing via video conference to oppose Valentine's parole. Before denying the inmate's parole, the Board took into consideration Valentine's recent prison rules violations and his lack of insight and remorse for the crime, citing that he is as dangerous today as he was in 1985. Valentine will be eligible for his next parole hearing in 2016.

Murder of Ronald Gorby

On Nov. 8, 1985, 31-year-old Valentine was at work when he was called to the Human Resources office on another floor. Valentine refused to go, which forced his supervisor, Personnel Director Ronald Gorby, and two other employees, including John Wolcott, to approach him at his work station. Valentine was being let go from his employment due to a personal problem he had with the Internal Revenue Service (IRS), which had become disruptive to the workplace and diminished his work performance.

During the termination, Valentine was told his last paychecks would be garnished to pay the IRS. Valentine became enraged, grabbed a knife, and murdered Gorby by repeatedly stabbing him. When Wolcott came to Gorby's aid, Valentine stabbed him multiple times. Wolcott survived the stab wounds.

 

Lack of Rehabilitation, Remorse, and Threat to Public Safety While incarcerated, Valentine has accumulated 16 prison rules violation, the last two serious prison rules violations for disobeying orders in October 2009 and disrespect in January 2010. The inmate's other prison rules violations include force and violence, disobeying orders, contact conducive of violence, unauthorized possession of a computer disk, attempting to post changes to a computer from which he was restricted, being aggressive towards staff, refusal to work, substandard job performance, incomplete and inaccurate work, job performance, disruptive behavior, delaying lock-up, being out of bounds, and possession of an unauthorized food item. Valentine has proven that he cannot follow the rules, even in a highly structured environment, for any significant amount of time without engaging in institutional misconduct.

Valentine has yet to show remorse for his crime and sees himself as a victim for his and his family's suffering due to his incarceration. In the People's 2011 opposition letter it states that "the inmate continues to focus on the victims' behaviors that provoked his aggressive reaction instead of recognizing that he escalated the situation by picking up a weapon."

Valentine continues to display a lack of rehabilitation and remorse, proving he cannot adhere to the rules and regulations of his environment while incarcerated, which demonstrates the serious threat he poses to public safety and shows that he needs to remain in prison.

Former Newport Beach Socialites Convicted of Multi-Million Tax Fraud

December 19, 2011

Case # 03HF1207

MARRIED COUPLE CONVICTED OF FAILING TO PAY TAXES ON OVER $180 MILLION IN UNREPORTED INCOME FROM POWER PLANT REFURBISHING BUSINESS

SANTA ANA - A formerly married couple was convicted Friday of failing to pay taxes on over $180 million in unreported income from their power plant refurbishing business. Richard Engel pleaded guilty Dec. 16, 2011, to four felony counts of failing to file tax returns for his corporation, three felony counts of filing false personal tax returns, and one felony count of failing to file a personal return.  The defendant also admitted sentencing enhancements for fraud in excess of $500,000 causing a loss in excess of $1 million.  Richard Engel faces a sentence up to 12 years and eight months in state prison at his sentencing Aug. 3, 2012, in Department C-40, Central Justice Center, Santa Ana.

Richard Engel's then-wife Jolene Engel pleaded guilty Dec. 16, 2011, to one felony count of failure to file tax returns for her corporation and one felony count of failing to provide material information in a tax return.  She faces a sentence up to five years and eight months at her sentencing Aug. 3, 2012 , in Department C-40.

Both defendants are required to pay the California Franchise Tax Board (FTB) approximately $1.2 million prior to sentencing.  They will also be required to pay over an additional $2 million in restitution as a term of their sentences.

Facts of the Case

Beginning in 1998, the defendants operated Powerplant Maintenance Specialists, Inc. (PMSI), a business that specialized in contracting for the refurbishment of power facilities. Jolene Engel acted as president of PMSI until June 30, 2001, when Richard Engel took over that role.  Richard Engel was also Chief Financial Officer (CFO) of the company, negotiated all contracts, handled company operations, and directed PMSI's financial affairs. 

Between 1998 and 2001, the company had a gross revenue of over $180 million. 

In October 2000, Richard and Jolene Engel entered PMSI into a contract with AES Corporation (formerly Southern California Edison) to refurbish its Huntington Beach power plant for approximately $108 million.  The contract called for AES to make bi-weekly $6.13 million payments to PMSI to obtain a discount on the contract price. The project was estimated to take 90 days from the date the project received the required permits, and the contract called for completion of the project by June 1, 2001. 

Oct. 4, 2000, and Dec. 31, 2000, the defendants received over $36 million to PMSI from AES for the power plant refurbishment, for which PMSI did virtually no work.  Richard and Jolene Engel diverted over $24 million in 2000 for their own purposes without fulfilling their end of the PMSI contract. The fraudulently diverted money was spent on luxury items for both defendants including jewelry and cars, a down payment on a Lear jet for Richard Engel, over $1 million to Richard Engel's other companies, and more than $8.5 million to Jolene Engel for her stock in the company when the couple divorced.  

Prior to June 2001, PMSI received nearly $100 million from AES as full payment on the balance owed on the contract. Despite this payment, PMSI failed to perform the work for which they were paid due to problems obtaining the required construction permits by June 1, 2001, the date the project was to be completed.  Richard and Jolene Engel continued to divert funds for their personal expenses. 

Due to Richard and Jolene Engel's diversion of funds, PMSI had insufficient funds to pay for required labor and materials when the company was required to complete the project. As a result, AES had to pay an additional $35 million for the project in order to pay for workers and materials directly so that the project could be completed. PMSI never completed the project, and left workers, subcontractors, and creditors unpaid.

In addition to this project, Richard and Jolene Engel received more than $72 million on behalf of PMSI for work performed in other states outside of California between 1998 and 2001. The result was that the company had little or no taxable income for state income tax purposes during those years. Despite this, California law requires that timely tax returns are filed for companies and a minimum $800 in tax is paid.

Richard Engel filed false tax returns in 1998 through 2000, and failed to file a return for 2001.  In late 2000, Richard Engel filed forms claiming no income for 1998 and 1999, and in March 2001 reported only $144,231 in income. During this time, Richard Engel received millions of dollars from PMSI, which he spent on personal luxuries including stays at Four Seasons Hotels, a 1999 Bentley, jewelry and other expenses. 

Jolene Engel failed to file personal income tax returns for 1998 through 2000, despite receiving a salary from PMSI and unreported income including the $8.5 million she received in 2000 for her stock in the company and approximately $3.7 million in 2001.    

The Orange County District Attorney's Office began investigating this case in late 2001 after receiving a call from a labor union regarding possible fraud related to the unpaid workers on the AES project. FTB assisted in the investigation.

Senior Deputy District Attorney Bill Overtoom of the Major Fraud Unit prosecuted this case.

Broker Gets 15 Years for $6.9 Million Theft in Ponzi Scheme and Real Estate Fraud

December 16, 2011

Case # 09CF1446

HARD MONEY LENDER BROKER SENTENCED TO 15 YEARS IN PRISON FOR STEALING OVER $6.9 MILLION FROM INVESTORS IN PONZI AND REAL ESTATE FRAUD SCHEME

SANTA ANA - A broker for "hard money lenders" was sentenced today to 15 years in state prison and three years of formal probation for stealing $6.9 million from investors in a Ponzi and real estate fraud scheme. 

Mark Alan Helsing, 53, Tustin, pleaded guilty Oct. 3, 2011, to 55 felony counts of grand theft, seven felony counts of filing false recorded documents, six felony counts of elder financial exploitation, and sentencing enhancements for white collar crime over $500,000 and excessive taking over $1 million and $1.3 million. Restitution will be determined at a later date.

Between May 2004 and June 2007, Helsing defrauded approximately 12 people in a Ponzi and real estate fraud scheme. Helsing operated as a broker for "hard money lenders" through his four Orange County based businesses including Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage. The term "hard money lender" is a private investor who provides money to borrowers looking for funds from non-bank lenders.

He stole from his private investors, most of whom were long-time friends who trusted the defendant, by keeping the money they lent for borrowers and not funding the loans as promised. Helsing supplied investors with bogus interest payments by taking small sums from their initial investment and providing them with falsified and forged documents to prevent them from discovering that the loans had not been repaid. Helsing embezzled the money and failed to return it the investors' initial principal.

Helsing operated a Ponzi scheme and used funds from new investors to pay off old investors. A Ponzi scheme is a fraudulent scheme that offers investors high, short-term returns on investments by using the money from other investors. Instead of using the money to generate actual income and legitimate profits, the money from investors is kept for the benefit of the defendant or used to repay earlier investors.

In December 2008, the Tustin Police Department began investigating the case after receiving complaints of checks bouncing from some of Helsing's victims. Helsing was arrested in court June 12, 2009, after pleading guilty in an unrelated case (#08CF3304) to six felony counts including grand theft and check fraud.

 Deputy District Attorney George McFetridge of the White Collar Crime Team prosecuted this case.

 

Man Gets Life for Killing WWII Vet During Veterans Day Robbery

December 16, 2011

Case # 09CF1955

 MAN SENTENCED TO LIFE IN PRISON WITHOUT PAROLE FOR VETERANS DAY ROBBERY-MURDER OF WWII VETERAN *Defendant and co-defendant left victim in a coma for three years and were charged with murder after the victim's death

SANTA ANA - A man was sentenced today to life in state prison without the possibility of parole for the beating-murder of a WWII veteran during a robbery on Veterans Day. The victim was left in a coma for over three years until he died as a direct result of his injuries sustained in the 2003 attack. Curtis James Hill, 29, Huntington Beach, was found guilty by a jury Nov. 1, 2011, of one felony count of special circumstances murder in the commission of a robbery.

Co-defendant John Kirk McKinney, 29, Huntington Beach, is charged with one felony count of special circumstances murder in the commission of a robbery and faces a sentence of life in state prison without the possibility of parole if convicted. McKinney faces a jury trial Feb. 27, 2011, in Department C-41, Central Justice Center, Santa Ana.

The following was argued by the People during the trial against Hill. McKinney is accused of committing the following crimes:

At approximately 6:00 a.m. on Nov. 11, 2003, McKinney and Hill entered the parked van of 77-year-old Cecil Warren, a WWII veteran, with the intention of stealing items from inside. The victim, who was working as a handyman cleaning the Huntington Beach bank parking lot where his van was parked, noticed the defendants in his van. When Warren asked Hill and McKinney what they were doing, the defendants attacked the victim. The defendants hit and kicked Warren in the head, robbed him of his wallet, and left the victim on the ground before fleeing the scene.

Approximately 30 minutes later, a pedestrian found Warren bleeding and moaning on the ground in the parking lot and called 911. The victim gave police a brief description of the two defendants before losing consciousness. Warren was transported to the hospital, where he spent the next three and a half years in a coma.

For this crime, Hill pleaded guilty and was sentenced Oct. 10, 2006,  to nine years in state prison for one felony count of second degree robbery, one felony count of aggravated assault, and admitted to sentencing enhancements for great bodily injury to an elder and committing a crime against a vulnerable victim (Case #03WF2996).

 

McKinney was found guilty by a jury Nov. 15, 2006, of one felony count of second degree robbery and one felony count of aggravated assault. The sentencing enhancement for committing a crime against a vulnerable victim was found true (Case #03WF2996). He was sentenced on Feb. 2, 2007, to four years in state prison.

After spending more than three and a half years on life support in a coma, 81-year-old Warren died on Sept. 22, 2007. The defendants directly caused the head injuries that resulted in the victim's death. 

Hill and McKinney were charged with murder on Sept. 4, 2009. At the time, both defendants were serving prison sentences for the assault and robbery convictions stemming from the same attack. Prior to being charged with murder, Hill was set to be released from prison on Aug. 12, 2011, and McKinney was scheduled to be released on Sept. 1, 2009.

Senior Deputy District Attorney Sonia Balleste of the Homicide Unit prosecuted case.