FBI Los Angeles: “$11 Million Boiler Room Mail and Wire Fraud Indictment Unsealed Today”

October 2, 2013

The Federal Bureau of Investigation on October 1, 2013 released the following:

Owner, Manager, and Salesperson at Fraudulent Investment Venture Taken into Custody for Mail and Wire Fraud in Connection with $11 Million Fraudulent Oil and Gas Well Investment Scheme.

LOS ANGELES—Two men were taken into custody today by special agents of the FBI for their alleged involvement in an Orange County boiler room operation that defrauded investors by falsely claiming high returns from oil and gas wells and by failing to disclose high sales commissions on investments, announced Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., United States Attorney for the Central District of California. A third defendant charged in this indictment is already in custody on unrelated charges.

Jerry Aubrey, 51, already in custody, his brother Timothy Aubrey, 53, of Moreno Valley, who self surrendered to the FBI’s Riverside Resident Agency, and Aaron Glasser, 30, of Mission Viejo, who was arrested without incident, are all in custody today after a federal grand jury indictment that charges them with mail and wire fraud was unsealed.

The indictment alleges Jerry Aubrey founded, managed, and operated the telemarketing investment scheme (also known as a “boiler room”) located in Costa Mesa, CA, doing business as Progressive Energy Partners, LLC (PEP). Timothy Aubrey worked as a PEP manager and salesperson, in addition to preparing, with Aaron Glasser, the sales scripts read to potential investors. Finally, Aaron Glasser was a PEP salesperson who worked as both a sales “fronter” and “closer,” making cold calls and closing deals. In his work as a salesperson, the indictment alleges Glasser raised around a quarter of the total amount of investments.

PEP allegedly employed salespersons called “fronters” and “closers” to raise over $11 million in five unregistered securities offerings for the purported purpose of developing and supporting oil and gas wells. In reality, most of the money was used to pay for the Aubrey brothers’ personal expenses, to pay up to 30% commissions to salespersons, and to make Ponzi-like payments to previous investors.

The defendants directed salespersons to cold call potential investors from purchased lead lists and solicit investments using scripts touting the profitability of investing in PEP. Fronters would pass the names of those who were potentially interested to closers, who could conclude the sale.

As alleged in the indictment, the defendants caused the salespersons to make material misrepresentations and conceal material facts when speaking to investors about, among other things, the percentage of investor money that would be spent on the development and operation of oil and gas wells, the anticipated amount and timing of returns to investors, and the payment of sales commissions to PEP salespersons, i.e., the fronters and closers.

Some of the false and deceptive statements indicated that investors would receive a greater than 50% annual rate of return on their investments; that almost half of the investor funds would be spent on oil and gas wells, and that the remainder of the investor funds would be spent on other business expenses; that salespersons would only receive a sales commission in the form of a share of the investment profits; and that PEP would use the assistance of an “independent CPA firm” to make distributions to investors.

The indictment alleges that, through the scheme, the defendants concealed from investors the material facts that approximately 30% of the investor funds would be spent on the Aubreys’ personal expenditures; that almost 20% of the investor funds would be used to make investor distributions and to return investor principal; that less than 10% of investor funds was spent on oil and gas wells; that investors would not, in fact, earn an annual rate of return of over 50%; and that defendant Jerry Aubrey, rather than an “independent CPA firm,” would determine the distributions to investors. The indictment alleges that by devising, executing, and participating in the above scheme, the defendants induced more than 200 investors to distribute to PEP over $11 million between 2005 and 2010.

In 2011, the Securities and Exchange Commission (SEC) obtained summary judgment against these defendants in connection with the PEP investment scheme. Additionally, Jerry Aubrey was charged in 1998 by the SEC with violating the broker-dealer registration provisions of the Securities Exchange Act of 1934 in connection with an offering fraud in which he sold securities in a fictitious cruise ship. The following year, he was permanently enjoined from future violations of Section 15(a)(1) of the Exchange Act (failure to register as a broker dealer), a permanent injunction he has violated through his alleged activities in PEP.

If convicted on all eight counts of Mail Fraud and two counts of Wire Fraud, the defendants face a maximum statutory penalty of 200 years in federal prison.

The criminal investigation was conducted by the FBI. The Securities and Exchange Commission conducted the civil investigation.

An indictment itself is not evidence that the defendants committed the crimes charged. Every defendant is presumed to be innocent until and unless proven guilty in court.”

More Information on Federal Mail Fraud Statutes, Jury Instructions, and Crimes
Federal Mail Fraud Crimes – 18 U.S.C. § 1341

Video on Federal Mail Fraud Crimes

More Information on Federal Wire Fraud Statutes, Jury Instructions, and Crimes
Federal Wire Fraud Crimes – 18 U.S.C. § 1343

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


ICE Leads A Federal Investigation and Arrests 9 in an Alleged Drug Trafficking Ring

May 2, 2013

The U.S. Immigration and Customs Enforcement (ICE) on May 1, 2013 released the following:

“9 defendants indicted in far-reaching cocaine and meth distribution scheme

LOS ANGELES — A federal investigation into a drug-trafficking organization led by two brothers who oversaw the distribution of cocaine to Italy and across the United States as well as methamphetamine being trafficked across the U.S. – has led to the indictment of nine defendants, three of whom were arrested Wednesday.

Operation “Family Guy” targeted the Urena family drug-trafficking organization through the use of undercover operatives and wiretaps that led to the interception of telephone calls, text messages, and communications sent through BlackBerry Messenger. The probe was conducted by the Los Angeles High Intensity Drug Trafficking Area (HIDTA) Task Force, including the Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and IRS – Criminal Investigation. The Los Angeles Sheriff’s Department and Whittier Police Department also assisted with the case.

The investigation, which culminated with the issuance of a seven-count grand jury indictment April 24, resulted in the seizure of approximately 40 kilograms of cocaine being smuggled into Italy from the Dominican Republic and Mexico. That cocaine was being transported by female drug couriers allegedly recruited by the two Urena brothers, with assistance from their uncle Francisco Javier Vargas-Oseguera and others. The investigation also uncovered a conspiracy to distribute significant quantities of methamphetamine and cocaine throughout the United States using vehicles with hidden compartments.

The indictment also alleges members of the narcotics-trafficking operation laundered drug proceeds from the Dominican Republic through the use of Western Union wire transfers sent to Fontana and Rancho Cucamonga.

Those named in the indictment unsealed Wednesday are:

  • Milton Urena, 29, of the Dominican Republic, who is currently being sought by authorities;
  • Rafael Urena, 27, of Rancho Cucamonga, Milton Urena’s brother, who was arrested Wednesday;
  • Daniel Alejandro Agredano Vazquez, 22, of the Dominican Republic, who allegedly oversaw the distribution of cocaine from the Dominican Republic to Italy and conspired to launder drug proceeds. He is currently being sought by authorities;
  • Francisco Javier Vargas-Oseguera, 51, an uncle of the Urena brothers, previously of Seattle and recently of Fontana. He is currently in federal custody in Seattle after being charged in federal court there for allegedly possessing eight pounds of methamphetamine in a case unrelated to Operation Family Guy;
  • Leonel Urena-Partida, 49, of Guadalajara, Mexico, another uncle of the Urena brothers, who allegedly conspired to transport cocaine to Italy. He is being sought by authorities;
  • Carmen Garcia, 35, of San Bernardino, allegedly supplied methamphetamine and assisted with the recruitment of drug couriers, who was arrested Wednesday;
  • Eliseo Carrillo Duarte, 45, of Montebello, who is currently in federal custody in Indianapolis after being arrested there in March on unrelated drug-trafficking charges stemming from the seizure of approximately 10 pounds of methamphetamine;
  • Jenna Michelle Martin (also known as Jenna Michelle Smith), 25, of Upland, an alleged drug courier who was arrested Wednesday; and
  • Beth Rene Ford (also known as Beth Rene Florance), 26, formerly of Ontario and now living in the Denver area, a second alleged drug courier, who is expected to self-surrender soon to authorities.

The defendants arrested Wednesday morning are expected to be arraigned Wednesday afternoon in U.S. District Court in downtown Los Angeles.

The indictment specifically charges eight defendants (not Duarte) with conspiracy to distribute cocaine to Italy, which carries a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment. Six of the defendants (not Agredano Vasquez, Martin or Ford) are charged in another conspiracy involving the domestic distribution of cocaine and methamphetamine, a charge that also carries a mandatory minimum sentence of 10 years in federal prison.

Various defendants are also named in a charge that alleges the distribution of approximately one pound of methamphetamine, three counts of use of a communication facility in committing a felony drug offense, and conspiracy to launder money.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal Authorities Arrest Maverick County Commissioner Rodolfo Heredia and Two Others in Alleged Connection with a Money Laundering and Bulk Cash Smuggling Scheme

October 19, 2012

The Federal Bureau of Investigation (FBI) on October 18, 2012 released the following:

“Scheme involved the sale of vehicle to a known associate of the Los Zetas Drug Trafficking Organization In Eagle Pass this morning, federal agents arrested Maverick County Commissioner Rodolfo Bainet Heredia and two accomplices charged in connection with a money laundering and bulk cash smuggling scheme announced United States Attorney Robert Pitman and Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.

A four–count federal grand jury indictment, returned yesterday and unsealed today, charges Heredia, age 54; 62-year-old Jose Luis Aguilar of Eagle Pass; and 28-year-old David Gelacio of Eagle Pass with one count each of conspiracy to commit money laundering; aiding and abetting money laundering; conspiracy to commit bulk cash smuggling; and aiding and abetting bulk cash smuggling.

According to the indictment, on January 4, 2011, Heredia had Aguilar travel to a ranch in Mexico owned by a known associate of the Los Zetas Drug Trafficking Organization for the purpose of selling Heredia’s Ford F-250 King Ranch truck for $13,000. Following the sale, at Heredia’s bidding, Aguilar and Gelacio, carrying $7,000 cash and $6,000 cash, respectively, crossed the money from Mexico into the United States via the Eagle Pass Port of Entry. They are alleged to have divided and concealed the money in order to avoid a reporting requirement at the Port of Entry.

Upon conviction, each faces up to 20 years in federal prison for each money laundering-related charge and up to five years in federal prison for each bulk cash smuggling-related charge. All three remain in federal custody pending a detention hearing at 1:30 p.m. on Tuesday in Del Rio before U.S. Magistrate Judge Collis White.

This case was investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, and the Texas Department of Public Safety. Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the government. An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Twenty-Three Arrested by the FBI on Federal Charges as a Result of San Antonio Eastside Gang Violence Initiative

May 14, 2012

The Federal Bureau of Investigation (FBI) on May 11, 2012 released the following:

Six-Month-Long Operation Triple Beam Results in Approximately 700 Additional Arrests Based on State Charges

Twenty-three San Antonio gang members face federal charges in connection with a federal, state, and local law enforcement operation targeting Eastside gang violence.

That announcement was made jointly today by United States Attorney Robert Pitman, Bexar County District Attorney Susan Reed, San Antonio Police Chief William McManus, Bexar County Sheriff Amadeo Ortiz, United States Marshal Robert Almonte, ATF Assistant Special Agent in Charge Crisanto Perez, DEA Assistant Special Agent in Charge Manuel Fernandez, and FBI Special Agent in Charge Armando Fernandez.

The operation, initiated in response to community outcry, focused on narcotics trafficking and violent acts committed by members of rival gangs including the East Terrace Gangster Crips, Crockett Blocc Crips, Wheatly Courts Bloods, Blood Stixx, Denver Heights Bloods, as well as other San Antonio area gangs operating on the city’s Eastside. During this operation, authorities have seized more than 70 firearms, approximately 38 kilograms of narcotics, and an estimated $85,500 in U.S. currency.

The 23 defendants, all listed below, are charged by either a federal grand jury indictment or criminal complaint filed since March 7, 2012. Federal charges include felon in possession of a firearm, possession of a firearm during a drug trafficking crime, possession with intent to distribute “crack” cocaine, and maintaining a residence for the distribution of a controlled substance. State charges filed in connection with this investigation include: narcotics-related offenses, unlawful carrying of a firearm, and gang injunction violations.

This investigation was conducted by the San Antonio Police Department Gang Unit; Bexar County District Attorney’s Office; Bexar County Sheriff’s Office; Bexar County Adult Probation Office; United States Marshals Service; Bureau of Alcohol, Tobacco, Firearms, and Explosives; together with the Drug Enforcement Administration; Federal Bureau of Investigation; Texas Department of Public Safety-Narcotics Division; and the Texas Department of Criminal Justice.

It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.

Operation Triple Beam arrests release:

Defendant—Age

Bal, Raja—27
Brock, Demetrius—35
Butler, Alvin—33
Farris, Robert—25
Fields, Tyronn—30
Fisher, Devonshae—18
Foster, Brian—27
Girela, Joshua—24
Hemphill, Emmanuel—26
Hemphill, Katherine—58
Johnson, Rodney—23
Johnson, Samuel—27
Losoya, Juan—28
Mackey, Antoine—29
Martinez, Michael—19
McHenry, Dominick—21
Miller, Glen—32
Minor, Milton—34
Molden, Travis—22
Phillips, Marcus—24
Robinson, Chris—34
Robinson-McClellan, Devon—22
Robinson-Tynes, Marcus—24″

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


U.S. busts an alleged global online drug market, arrests eight

April 17, 2012

Chicago Tribune on April 16, 2012 released the following:

“Dan Whitcomb | Reuters

LOS ANGELES (Reuters) – Eight men charged with running an elaborate online narcotics market that sold drugs to 3,000 people in the United States and 34 other countries have been arrested following a two-year investigation dubbed “Operation Adam Bomb,” prosecutors said on Monday.

The secret ring known as “The Farmer’s Market” operated through the TOR computer network, which allows users to communicate anonymously, according to a federal grand jury indictment unsealed on Monday in Los Angeles.

The online drug market provided order forms and customer service, guaranteeing delivery in exchange for a commission and accepting payment through PayPal, Western Union and other means, the indictment charges.

Authorities said the defendants were accused of running one of the most sophisticated drug marketplaces on the Internet and said the prosecution represented a first of its kind.

“The drug trafficking organization targeted in Operation Adam Bomb was distributing dangerous and addictive drugs to every corner of the world, and trying to hide their activities through the use of advanced anonymizing on-line technology,” Briane Grey, U.S. Drug Enforcement Administration acting special agent in charge, said in a written release.

“Today’s action should send a clear message to organizations that are using technology to conduct criminal activity that the DEA and our law enforcement partners will track them down and bring them to justice,” Grey said.

Marc Willems, 42, who is accused of creating and running “The Farmer’s Market,” was taken into custody at his home in Lelystad, Netherlands, by Dutch authorities, U.S. Attorneys spokeswoman Gymeka Williams said.

Law enforcement officials in Bogota arrested 42-year-old Michael Evron, a U.S. citizen living in Argentina who allegedly oversaw technical and customer support for the online marketplace, as he was attempting to leave Colombia, Williams said.

Jonathan Colbeck, 51; Brian Colbeck, 47; Ryan Rawls, 31; Jonathan Dugan, 27; George Matzek, 20; and Charles Bigras, 37, were arrested at their respective homes in Iowa, Michigan, Georgia, New York, New Jersey and Florida.

All eight defendants were charged with federal drug trafficking and money laundering charges and prosecutors had filed extradition papers to return Willems and Evron back to the United States for trial, Williams said.

Each faces a maximum sentence of life in prison if convicted.

According to the 66-page indictment, “The Farmer’s Market” allowed independent sources to advertise illegal drugs – including LSD, ecstasy, fentanyl, mescaline ketamine, DMT and high-end marijuana – for sale to the public.

The deals were allegedly handled through the online marketplace, which processed more than 5,200 orders for controlled substances valued at more than $1 million between January 2007 and October 2009, the indictment charges.

The law enforcement operation was called “Adam Bomb” because the original name of the marketplace was Adamflowers, according to the indictment.

According to its website, TOR offers free software and an open network that allows users to defend against “network surveillance that threatens personal freedom and privacy.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.