Seattle Company Indicted for Conspiracy to Traffic Counterfeit Goods

A Lynnwood electronics company, a China-based manufacturer and four individuals were indicted by a federal grand jury Thursday, January 17, 2013, for conspiracy to traffic in counterfeit goods, following a probe by the Seattle-Tacoma Border Enforcement Security Task Force (BEST), including U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

ConnectZone.com, LLC, its owner Daniel Oberholtzer, 50, of Lynwood, sales manager Warren Lance Wilder, 46, of Auburn, and production manager Edward Vales, 31, of Seattle, are alleged to have sold counterfeit network products bearing the trademark of Cisco Systems through their online store. They falsely advertised the knockoffs as genuine and offered them for sale at a much lower price than genuine Cisco products. Through the investigation, authorities learned the U.S.-based conspirators were responsible for arranging the manufacture of the counterfeit goods through Mao Mang, aka "Bob Mao," a representative for Shenzhen Xiewei Electronic, LTD of Shanghai, China. Both Mang and the company are also named in the indictment.

In addition to HSI, the other members of BEST that played a prominent role in the case included the Seattle Police Department, the Port of Seattle Police Department, with additional assistance provided by U.S. Customs and Border Protection Office of Field Operations (CBP OFO).

"Counterfeiting high dollar goods can be very lucrative for enterprising criminals," said Brad Bench, special agent in charge of HSI Seattle. "Their illicit activities ultimately come at the expense of trademark owners and consumers. They don't contribute to research and development, and the knockoffs they sell generally don't match the quality and safety of genuine items."

The indictment alleges that Oberholtzer, Wilder and Vales would advise Mao and Xiewei Electronic, and other Chinese firms on how to manufacture products to look like genuine Cisco trademarked goods. In an attempt to evade U.S. customs officials, merchandise would be labeled "samples" when shipped to the United States. The indictment describes the various emails sent between the conspirators as they ran their scheme, including discussions on how to reverse-engineer products. In addition to the conspiracy count, the indictment also charges two counts of mail fraud and four counts of trafficking in counterfeit goods. Prosecutors believe Oberholtzer has been distributing counterfeit equipment from China since at least 1997.

"Protecting the intellectual property of American companies is critical to job growth and economic recovery – especially in our high tech industries," said U.S. Attorney Durkan. "I commend the dedicated investigators who uncovered this scheme."

Conspiracy to traffic in counterfeit goods is punishable by up to 10 years in prison and a $2 million fine. Mail fraud is punishable by up to 20 years in prison and trafficking in counterfeit goods is punishable by up to 10 years in prison. The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

BEST Seattle is comprised of full time members from HSI; CBP OFO; the U.S. Secret Service; the Port of Seattle Police Department; the U.S. Coast Guard Investigative Service; and the FBI. BEST Seattle investigates smuggling and related crimes and combats criminal organizations seeking to exploit vulnerabilities at the Seattle and Tacoma seaports and adjacent waterways. 

The case is being prosecuted by the U.S. Attorney's Office for the Western District of Washington.

Dutch Citizen Pleads Guilty to Tax and Mortgage Fraud

A Dutch citizen and resident of Canada pleaded guilty Friday, December 28, 2012, to several tax and mortgage fraud charges, following an investigation by the Internal Revenue Service's (IRS) Criminal Investigations, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the FBI.

Rudolf Straat, 49, of Sarnia, Ontario, Canada, pleaded guilty to mail fraud, conspiracy to commit mail fraud, conspiracy to defraud the United States, failure to file a tax return and conspiracy to commit money laundering.

In March, a federal grand jury in Tallahassee, Fla., returned an eight-count indictment against Straat and his wife and co-conspirator, Maria Gudelis, 45, of Sarnia, Ontario, Canada. Both were accused of falsely obtaining mortgage loans in excess of $8.8 million to purchase homes in Sandestin, Fla. Straat claimed he was a U.S. citizen, but he is a citizen of the Netherlands. He claimed that he was single, even though he married Gudelis in May 2000. He also misrepresented his employment status.

Additionally, Straat and Gudelis both lived in Sandestin from at least October 2005 through July 2007. While living in Sandestin, Straat did not file 2005 and 2006 income tax returns. As a result, he failed to report more than $1 million to the IRS during those years. Straat used a portion of his unreported capital gains to fraudulently obtain additional properties.

Straat faces up to 20 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering and mail fraud. He faces up to five years in prison for conspiracy to defraud the United States and up to one year in prison for failing to file tax returns. He is scheduled to be sentenced March 12.

Gudelis, a Canadian citizen, is charged with the same crimes included in the indictment against her husband. She turned herself in to authorities Thursday, December 27, 2012, and pleaded not guilty at her arraignment Friday, December 28, 2012. Her trial is scheduled to commence Feb. 4. 

Fraudulent Document Mill Shut Down by HSI

Two Fresno-area residents were arraigned Friday, December 14, 2012, on federal charges stemming from a probe by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) that allegedly revealed they operated a fraudulent document mill.

Antonio Mora-Cruz, 45, and Soledad Vargas-Herrera, 59, both of Madera, were arraigned before U.S. Magistrate Judge Shelia K. Oberto on a 12-count indictment charging them with conspiring to produce and sell false identification documents. Mora-Cruz was also charged with being a deported alien found in the United States. The two defendants have been in custody since their arrest Dec. 4, 2012.

According to the indictment, between November and December, Mora-Cruz and Vargas-Herrera produced false identification documents at a residence in Madera they used as a fraudulent document mill. During the course of the conspiracy, customers would place orders for false documents directly with Mora-Cruz and Vargas-Herrera. The defendants took photographs and biographical information from the customers and used the information to produce fraudulent Social Security cards and alien registration cards, also known as "green cards." Mora-Cruz and Vargas-Herrera then delivered the completed false documents to customers, charging approximately $120 for a set of counterfeit cards.

Assistant U.S. Attorney Christopher Baker is prosecuting the case.

If convicted, each defendant faces a maximum penalty of 15 years in prison and a $250,000 fine.

Puerto Rican Drug Ring Leader Sentenced to Life in Prison

The leader of a major drug trafficking organization arrested during the execution of Operation Grayskull by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) was sentenced Wednesday, December 12, 2012, to life in prison by U.S. District Judge Carmen Consuelo Cerezo.

Ismael Vazquez-Larrauri, 39, of Cayey, Puerto Rico, was found guilty June 15 of conspiracy to possess with the intent to distribute heroin, cocaine, cocaine base and marijuana within public housing projects and schools.

HSI special agents, working jointly with federal, state and local law enforcement partners, conducted simultaneous enforcement actions Aug. 25, 2008, in an operation dubbed Operation Grayskull in the Puerto Rican municipalities of Cayey, Salinas, Guayama, Coamo, Santa Isabel and Jayuya that resulted in the arrest of 64 individuals allegedly involved in a drug trafficking conspiracy. Vazquez-Larrauri, the leader of the organization, remained fugitive but was subsequently arrested May 1, 2009.

According to the Aug. 5, 2008, indictment, which charged 71 individuals for drug trafficking, the object of the conspiracy was to purchase wholesale quantities of heroin, cocaine, marijuana, Oxycodone (Percocet) and Alprazolam (Xanax) for distribution at several public housing projects in Cayey and at drug distribution points in the municipalities of Salinas, Coamo, Santa Isabel, Guayama and Jayuya, all for a significant financial gain and profit.

The indictment further alleges that some of the cocaine purchased was cooked in order to make cocaine-based crack that was later distributed, along with heroin, cocaine and marijuana, in small bags at the drug selling points. The leaders of the organization divided the proceeds of the drug trafficking sales among themselves and their subordinates.

The 71 individuals charged had different roles in the conspiracy, such as leaders, suppliers, runners, enforcers and facilitators to further the goals of the conspiracy. The charging document also alleges that some of the co-conspirators used residences in order to package and conceal the controlled substances as well as the materials to process the contraband.

"The importation of illegal narcotics into the United States is a very serious crime and the unscrupulous persons involved will not receive reprieve from law enforcement," said Angel Melendez, acting special agent-in-charge of HSI San Juan. "In our efforts to keep drugs off the streets of Puerto Rico, we will continue using all of our resources to identify and dismantle drug trafficking and money laundering organizations that operate within our jurisdiction."

ICE encourages the public to report suspected weapons and narcotics smuggling, and related information by calling at 1-866-DHS-2ICE. For more information, visit www.ice.gov.

RICO Indictment Charges Drug Traffickers for Racketeering, Drug Trafficking, and Murder

A Racketeering Influenced Corrupt Organizations (RICO) indictment was unsealed Tuesday, August 21, 2012, charging individuals with participating in a massive racketeering organization.

These charges stem from an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with the assistance of the New York City Police Department (NYPD).

The 40-count RICO indictment charges nine individuals with participating in the "Rodriguez Enterprise," a massive racketeering organization whose members allegedly sold large quantities of marijuana; engaged in murders and other violent acts; transported and laundered millions of dollars; obstructed justice and committed perjury; and engaged in firearms offenses. The RICO indictment was filed in connection with "Operation Green Venom," a coordinated multi-agency investigation that was led by HSI and first announced in October 2010.

"This organization allegedly placed their goal of profiting from the mass distribution of narcotics throughout New York City above all else, most importantly the regard for human life," said James T. Hayes Jr., special agent in charge of HSI New York. "Today's announcement should serve as a reminder that law enforcement collaboration to combat narcotics trafficking and distribution is greater than ever."

"This indictment illustrates the grim nexus between illegal drug sales, money laundering and deadly violence," said Raymond W. Kelly, commissioner of the NYPD. "We remain committed to working with our federal law enforcement partners to continue our efforts to rid the city of these violent criminals."

"As alleged, these nine defendants were part of a sweeping enterprise that has the blood of six people on its hands and that trafficked in tons of marijuana, laundered millions of dollars and obstructed justice," said U.S. Attorney Preet Bharara, Southern District of New York. "Thanks to the continued dedication and commitment of our law enforcement partners, we are now able to bring them to justice."

The following allegations are based on the RICO indictment unsealed Tuesday, August 21, 2012, in Manhattan federal court:

Manuel Geovanny Rodriguez-Perez (Manuel Rodriguez) is the leader of the Rodriguez Enterprise. He is charged with five murders and five attempted murders, including the murders of the following victims:

·                             Oct. 26, 1997: Francisco Perez, aka Francie;

·                             Dec. 13, 1998: Antonio Kasse, aka Toasty;

·                             2000: first and last name unknown, aka Carlos Valentin, aka Campi;

·                             May 3, 2004: Wilfredo Molina, aka Willie; and

·                             Jan. 16, 2006: Richard Cabrera, aka Bori.

Other charges against Manuel Rodriguez include: trafficking in marijuana from 1992 through 2010; laundering money in New York, Florida and the Dominican Republic; perjury; obstruction of justice; and firearms charges. Manuel Rodriguez has been in federal custody since Oct. 15, 2010.

Orlando Rodriguez – Manuel Rodriguez's younger brother – is also charged with the murder of Carlos Valentin; an attempted murder in 1996; as well as racketeering, marijuana trafficking and money laundering. Orlando Rodriguez was arrested in the Dominican Republic Aug. 16, 2012, and is detained pending his extradition.

Felipe Cantres-Sanjurjo (Felipe Cantres) is charged with the murders of Wilfredo Molina and Richard Cabrera, as well as racketeering, marijuana trafficking and two attempted murders. Felipe Cantres was transferred from local to federal custody in Puerto Rico Aug. 22, 2012.

Miguel Cantres-Sanjurjo (Miguel Cantres), Felipe Cantres' cousin, is charged with the murder of Jose Caba July 14, 2003, and the murder of Wilfredo Molina, as well as racketeering conspiracy, marijuana trafficking and an attempted murder. Miguel Cantres is currently in federal custody in connection with a robbery conviction.

Jose Manuel Espinal is charged in the indictment with racketeering, money laundering conspiracy and two instances of obstruction of justice. Espinal was previously arrested in connection with money laundering charges in December 2011.

Jesus Sanchez is charged with racketeering, marijuana trafficking, money laundering conspiracy and firearms offenses. Sanchez has been in federal custody since Oct. 15, 2010.

Jose A. Rodriguez, the older brother of Manuel Rodriguez and Orlando Rodriguez, is charged with racketeering, marijuana trafficking, money laundering conspiracy and firearms offenses. Jose A. Rodriguez has been in federal custody since Oct. 15, 2010.

Oscar Rodriguez, a cousin of the Rodriguez brothers, is charged with racketeering conspiracy and marijuana trafficking offenses. Oscar Rodriguez was previously arrested in connection with marijuana trafficking charges Oct. 14, 2010.

Theodore Jones is charged with racketeering conspiracy and marijuana trafficking. Jones is currently serving a sentence for an unrelated narcotics conviction.

Defendants Manuel Rodriguez, Jose A. Rodriguez, Oscar Rodriguez and Jesus Sanchez were arrested during an October 2010 takedown of more than 50 members of a massive marijuana trafficking ring that transported ton-quantities of marijuana from Florida and California for distribution in the greater New York area from the early 1990s to 2010. In addition to the defendants charged in the racketeering indictment, the defendants arrested during that takedown included Roc-A-Fella Records founder Kareem Burke, who was sentenced to five years in prison June 4, 2012.

The racketeering indictment seeks the forfeiture of $25 million, which is the approximate amount of gross proceeds received by the defendants in connection with their activities; at least nine separate properties in New York and in Florida; and over $500,000 in cash and nearly 40 pieces of jewelry that were previously seized from the defendants.

All nine defendants are currently in custody or are out on bail in connection with a previous arrest.
HSI encourages the public to report any information regarding these crimes. Any information may be provided anonymously to HSI by calling 1-866-DHS-22ICE or by completing its online tip form. Both are staffed around the clock by investigators.

U.S. Attorney Bharara praised the outstanding investigative work of HSI and the NYPD. He also thanked the U.S. Drug Enforcement Administration; U.S. Marshals Service; Bergen County (N.J.) Prosecutor's Office; Englewood (N.J.) Police Department; U.S. Department of Housing and Urban Development; and the City of New York Department of Investigation for their assistance.

Indictment for Five Individuals in Counterfeit Ring

A federal grand jury has indicted five individuals related to a conspiracy to traffic in counterfeit goods, following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

On Sunday, April 22, HSI Baltimore special agents arrested the following men charged in the indictment: Tidiane Ba, 44; Mamadou Lamine Ba, 51; Abass Baro, 44 and Sakho Oumar, 33, all of Baltimore. The fifth defendant charged in the indictment, Baba Toure, 39, also of Baltimore, is still being sought. The indictment was returned April 18 and unsealed today. The defendants each face a maximum sentence of 10 years in prison and a fine of $2 million. Tidiane Ba, Mamadou Lamine Ba, Abass Baro and Sakho Oumar had an initial appearance April 23 and were released under the supervision of U.S. Pretrial Services. No other court date is currently scheduled.

According to the six count indictment, from October 2011 through April 2012, the defendants operated in and around Baltimore, including at the Patapsco Flea Market, selling counterfeit purses, handbags, shoes, watches, hats and other items by luxury manufacturers such as Michael Kors, Coach, Gucci, Dolce & Gabbana, Louis Vuitton and Jimmy Choo. According to the indictment, the counterfeit goods bore the trademarks registered by victim companies with the U.S. Patent and Trademark Office. The indictment alleges that packages were received from merchandise suppliers in New York City and storage units were rented to store the counterfeit trademarked merchandise. According to court documents, HSI special agents seized counterfeit goods from the defendants on several occasions during the course of the investigation.

Four defendants were arrested Sunday, April 22, 2012, after HSI special agents executed search warrants at two residences and two storage units, seizing counterfeit items and cash.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

HSI manages the IPR Center in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

This indictment is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation's economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

The case is being prosecuted by Assistant U.S. Attorney Justin Herring and Special Assistant U.S. Attorney Christine Duey.

MS-13 Gang Members Indicted

An indictment was unsealed Thursday, April 19, against five members or associates of the Mara Salvatrucha (MS-13) street gang on racketeering, drug trafficking and firearms violations. These indictments were announced by U.S. Attorney Kenneth Magidson, Southern District of Texas, and Robert Rutt, special agent in charge of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) Houston.

The arrests took place Wednesday, April 18, throughout the Houston area by officers from the following law enforcement agencies: HSI; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Harris County Sheriff's Department, and the Houston Police Department. The arrests followed the conclusion of a two-year investigation.

The indictment was returned April 11; it was unsealed April 19 following the arrests of Rodney Zaid Mejia, Pedro Melendez and Hector Villarreal, all 20-year-olds from Houston. They will make their initial appearances Thursday, April 19, before U.S. Magistrate Judge Frances H. Stacy.

Two other defendants, Hector Abarca, 21, and Johnnie Sanchez, 31, also from Houston, were already in state custody and are expected to appear on these charges before a U.S. magistrate judge in the near future.

Those arrested April 18 are alleged members or associates of the MS-13 street gang. According to the indictment, the word "Mara" is the term used in El Salvador for gang, while the phrase "Salvatrucha" is a combination of the words "Salva" (an abbreviation for Salvadoran) and "trucha" (a slang term for the warning "fear us," "look out" or "heads up"). The gang allegedly makes money by trafficking in narcotics and protects its territory from rival gang members through violence.

The indictment alleges Mejia, Abarca and Melendez engaged in racketeering by attempting to commit murder to gain entry to or advance membership in MS-13. Sanchez and Villarreal allegedly participated in narcotics trafficking. The indictment also alleges various firearms charges.

If convicted of the racketeering charge, the defendants face up to 10 years imprisonment, a $250,000 fine, and three years of post-prison supervised release; the narcotics charges carry up to 20 years in prison. The firearms charge carries a term of up to 10 years imprisonment.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.

Assistant U.S. Attorneys Tim S. Braley and Mark Donnelly, Southern District of Texas, are prosecuting the case.