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September 2, 2015

Orange County Attorney Charged with Fraud and Money Laundering in Scheme Related to Real Estate Purchases and Other Investments

Filed under: California Defense Attorney — fayarfa @ 3:57 am

LOS ANGELES – An attorney who allegedly took several million dollars in investment capital from clients and used the funds for personal expenses and luxury items was indicted today by a federal grand jury.

Stephen Young Kang, 46, of Newport Beach, was named in a 25-count indictment filed in United States District Court in Los Angeles. The indictment charges Kang with 20 counts of wire fraud and five counts of money laundering.

The indictment comes after Kang was arrested by special agents with the FBI and IRS – Criminal Investigation on August 10 at Los Angeles International Airport as he attempted to board a flight to Seoul, Korea. Kang is currently free on a $750,000 secured bond.

According to the indictment, Kang defrauded a Gardena-based food distribution company, Ottogi America, Inc., whose representatives hired the attorney to help the company purchase additional properties near its distribution center. Between October 2012 and March 2014, Ottogi wire transferred approximately $3.7 million to a trust account in Houston, Texas, to be used for the purchase of the properties. But Kang allegedly did not use the money to invest in properties. Rather, Kang allegedly caused the vast majority of the funds to be transferred to other accounts that he controlled, and then used a substantial portion of Ottogi’s money to pay for personal expenses and business ventures, as well as to make partial payment to other victims.

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Former United Commercial Bank Chief Credit Officer Sentenced to Over Eight Years for Felony Fraud Conviction

Filed under: California Defense Attorney — fayarfa @ 3:25 am

Ebrahim Shabudin, 66, of Moraga, California, was sentenced today to 97 months in prison for his role in a securities fraud scheme and other corporate fraud offenses stemming from the failure of United Commercial Bank (UCB), announced U.S. Attorney Melinda Haag of the Northern District of California, Acting Inspector General Fred W. Gibson, Jr. of the Office of the Inspector General for the Federal Deposit Insurance Corporation (FDIC), Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP), Inspector General Mark Bialek of the Board of Governors of the Federal Reserve System and the Office of the Inspector General of the Consumer Financial Protection Bureau and Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division.  The sentencing brings to a close one of the most significant prosecutions to arise out of the 2008 financial crisis.

Shabudin was the Chief Operating Officer and Chief Credit Officer at UCB in 2008 and 2009.  Shabudin was the second most senior officer in executive management at UCB after former Chief Executive Officer Thomas Shiu-Kit (“Tommy”) Wu.

On Nov. 6, 2009, UCB was taken over by the FDIC.  With over $10.9 billion in assets, UCB’s failure was the ninth largest failure since 2007 of a bank insured by the FDIC’s Deposit Insurance Fund, according to the FDIC.  In 2013, FDIC estimated that total losses for UCB would exceed $1.1 billion.  Through 2014, however, with the recovery of the United States economy, FDIC now estimates the loss to the Deposit Insurance Fund to be approximately $677 million.  On Nov. 14, 2008, the Troubled Asset Relief Program (TARP) provided approximately $298 million in federal funds to UCB during the financial crisis.  Shabudin was charged with conspiring with others within the bank to falsify key bank records as part of a scheme to conceal millions of dollars in losses and falsely inflate the bank’s financial statements.  Among the records Shabudin was charged with falsifying were those filed with the United States Securities and Exchange Commission (SEC) and FDIC related to the third and fourth quarters of 2008 describing UCB’s so-called Allowance for Loan Losses.  Also falsified were documents relating to UCB’s quarterly and year-end earnings per share as announced by the bank to the investing public.  On March 25, 2015, following a six-week trial before the U.S. District Judge Jeffrey S. White , a jury found Shabudin guilty of seven crimes related to the scheme:

· Count One:Conspiracy to Commit Securities Fraud, with a maximum penalty of 25 years of imprisonment, a $250,000 fine, a five year term of supervised release and a $100 special assessment.

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Santa Barbara Doctor Found Guilty of 79 Federal Charges for Writing Prescriptions for Huge Quantities of Dangerous Narcotics

Filed under: California Defense Attorney — fayarfa @ 3:20 am

SANTA ANA, California – A Santa Barbara-area physician who wrote numerous prescriptions for powerful painkillers, such as OxyContin, for “patients” – many of whom were drug addicts, and some of whom died from drug overdoses – was convicted today of 79 drug trafficking charges.

Julio Gabriel Diaz, 67, a Goleta resident who operated the Family Medical Clinic in Santa Barbara, was found guilty following a 2½-week trial in United States District Court.

Diaz, who was known to some “patients” as the “Candyman,” was a prolific writer of prescriptions for highly addictive and dangerous drugs. In 2011, for example, Diaz wrote prescriptions for more than 1.7 million doses of painkillers. His “patients” typically paid cash, waited hours for a 10-minute visit with Diaz, and received prescriptions for powerful drugs that included opioids, anti-anxiety medications and muscle relaxants. Several doctors and pharmacists who testified during the trial said that they had never seen any doctor prescribe the combination and quantity of drugs prescribed by Diaz.

Diaz was found guilty of 79 counts of distribution of a controlled substance. Twenty-six of the charges relate to oxycodone (a drug often sold under the brand name OxyContin), 10 of the charges relate to methadone, seven of the counts relate to hydromorphone (a drug commonly sold under the brand name Dilaudid), 10 of the charges relate to fentanyl, 11 of the charges relate to hydrocodone (a drug often sold under the brand names Vicodin and Norco), 10 of the charges relate to alprazolam (a drug often sold under brand name Xanax), and five of the charges related to the distribution of various controlled substances to a minor. In relation to all 79 counts, the jury found that Diaz distributed the drugs outside of the usual course of professional practice and without a legitimate medical purpose.

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September 1, 2015

PHYSICIAN CONVICTED OF TAX EVASION AFTER MISAPPROPRIATING $220,000 IN DONATIONS FROM HOSPITAL FUND FOR CHARITY FOUNDATION

Filed under: California Defense Attorney — fayarfa @ 3:18 am

NEWPORT BEACH, Calif. – A physician was convicted today of tax evasion by failing to file personal and business state income tax returns after he misappropriated $220,000 from a hospital fund that was designated for donations to the Hoag Hospital Foundation. Bruce Allan Hagadorn, 56, Newport Beach, pleaded guilty to eight felony counts of willful failure to file tax return with sentencing enhancements for property damage or loss over $200,000, and aggravated white collar crime over $100,000. He was sentenced to one year in jail, three years formal probation, and paid restitution in full today to the State of California Franchise Tax Board (FTB) for $103,865 and $250,000 to the medical staff of Irvine Regional Hospital.

At the time of the crime, Hagadorn was the Chief of Staff at Irvine Regional Hospital and served as a board member of the Medical Executive Committee.

Between January 2009 and December 2010, Hagadorn misappropriated $220,000 from the medical staff account at Irvine Regional Hospital that the hospital physicians established and funded as a non-profit charitable organization. Prior to the hospital’s closure in January 2009, the Medical Executive Committee members voted to donate the funds remaining in the account to the Hoag Hospital Foundation and assigned Hagadorn with coordinating the donation.

Prior to donating any funds to the Hoag Foundation, the defendant wrote numerous checks from the account, paid himself in cash, and deposited the money into his personal medical practice, Canyon Pacific OB/GYN, in Irvine.

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COUNTY EMPLOYEE CONVICTED OF INSURANCE FRAUD BY MAKING FALSE STATEMENTS AND CONCEALING INFORMATION RELATED TO WORKERS’ COMPENSATION CLAIM

Filed under: California Defense Attorney — fayarfa @ 3:10 am

SANTA ANA, Calif. – A county employee was convicted and sentenced today for committing insurance fraud by making false statements and concealing information related to his Workers’ Compensation claim. William Parker, 43, Corona, pleaded guilty today to one felony count of making a fraudulent statement, five felony counts of insurance fraud. Parker was sentenced to six months in jail and paid over $41,000 in restitution.

On June 4, 2005, Parker was hired by the Orange County Probation Department (OCPD) as a Deputy Juvenile Corrections Officer. On Oct. 5, 2007, Parker was involved in a non-work related motor vehicle accident which caused injuries to his back and resulted in loss of time from work. Parker filed an insurance claim as a result of that automobile accident and received a settlement. Parker failed to disclose his back injury to the OCPD.

On Sept. 28, 2010, Parker suffered a back injury while working for the OCPD. Parker filed a Workers’ Compensation claim and was taken off work by his treating doctors after the county accepted the claim. The county was not aware of the previous back injury that Parker suffered in 2007.

On Jan. 31, 2012, Parker saw a medical examiner and told the doctor he still has daily pain. The doctor determined Parker had reached maximum medical improvement but would have to have permanent work restrictions. The defendant settled his Workers’ Compensation case and continued to see his primary doctor in the Worker’s Compensation claim from 2012 to 2014.

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Former Silk Road Task Force Agent Pleads Guilty to Money Laundering and Obstruction

Filed under: California Defense Attorney — fayarfa @ 12:03 am

A former U.S. Secret Service special agent pleaded guilty today to money laundering and obstruction of justice in connection with his theft of digital currency during the federal investigation of Silk Road, an online marketplace used to facilitate the purchase and sale of illegal drugs and other contraband.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General’s Washington, D.C. Field Office, and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.

Shaun W. Bridges, 32, of Laurel, Maryland, had been a special agent with the U.S. Secret Service for approximately six years in the Baltimore Field Office and was assigned to the Electronic Crimes Task Force.  He pleaded guilty before the U.S. District Judge Richard Seeborg of the Northern District of California and a sentencing hearing is scheduled for Dec. 7, 2015.

“There is a bright line between enforcing the law and breaking it,” said Assistant Attorney General Caldwell.  “Law enforcement officers who cross that line not only harm their immediate victims but also betray the public trust.  This case shows we will act quickly to hold wrongdoers accountable, no matter who they are.”

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August 31, 2015

Attorney General Kamala D. Harris Files Involuntary Manslaughter Charges Against Skilled Nursing Facility Verdugo Valley, LLC

Filed under: California Defense Attorney — fayarfa @ 1:03 am

SAN FRANCISCO – Attorney General Kamala D. Harris announced today that her office has filed involuntary manslaughter charges against Montrose, California-based Verdugo Valley Skilled Nursing & Wellness Centre, LLC for failing to provide requisite nursing care to a burn victim resident, leading to his death.

“Families who entrust loved ones to the care of a nursing home rightfully expect residents will receive the care and attention they need and that nursing homes have a legal duty to provide,”  said Attorney General Harris.  “We have filed criminal charges because we allege Verdugo Valley and its employees violated that trust and their legal duties in a way that resulted in a senseless, tragic and unnecessary death.  I thank the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse attorneys and agents working tirelessly to ensure these individuals are held accountable.”

The complaint filed by Attorney General Harris alleges that Verdugo Valley, LLC was grossly negligent in its care of James Populus, a resident with burns on 90 percent of his body from an arson fire two decades earlier.  In the 14 months that Populus was in the care of Verdugo Valley, he was examined by a doctor far fewer times than required by law, despite the respiratory and other health needs of burn victims.

His declining health led to severe weight loss, sepsis, and pneumonia and on August 30, 2014, Populus died of multiple system failure due to sepsis. At the time of his death, Populus had infections throughout his body.

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Five Indicted on Federal Fraud Charges Related to Multi-Million Dollar Pyramid Scheme that Targeted Chinese-American Victims

Filed under: California Defense Attorney — fayarfa @ 12:09 am

LOS ANGELES – A federal grand jury returned a 14-count indictment late yesterday that charges five defendants with participating in a fraud scheme that generated tens of millions of dollars by soliciting investments in a company that purportedly offered children’s educational courses, but in reality was a pyramid scheme designed to generate revenue by adding new investors.

Members of the conspiracy allegedly made false promises about the company, including claims that it generated substantial revenues from the sale of courses, that investments could be quickly liquidated for significant returns, and that they planned to take the company public through an IPO. In fact, according to the indictment, “the only way for investors to earn any meaningful returns was for them to actively recruit new investors.” The defendants promoted the company through YouTube videos and other postings on the Internet, as well as through meetings with prospective investors and live presentations about the purported investment opportunity.

The indictment alleges that the defendants solicited investments primarily from members of the Chinese-American communities in Los Angeles, San Francisco and New York City.

The five defendants charged in the indictment are:

· Cheong Wha “Heywood” Chang, 47, formerly of Hacienda Heights and most recently a resident of           Taiwan;

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TWO MEN SENTENCED FOR MONEY LAUNDERING AND CONSPIRING TO SELL COUNTERFEIT ELECTRONIC MERCHANDISE VALUED AT NEARLY $3 MILLION

Filed under: California Defense Attorney — fayarfa @ 12:06 am

WESTMINSTER, Calif. - Two men were sentenced today for money laundering and conspiring to sell counterfeit electronic goods valued at nearly $3 million, including counterfeit iPhones and iPads, following an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HIS) and the Fountain Valley Police Department (FVPD).

RatebSaid Najjar, 60, and his son, Eyad Rateb Najjar, 36, both of Westminster, pleaded guilty to one felony count of conspiracy to commit trademark counterfeiting, one felony count of trademark counterfeiting, one felony count of conspiracy to commit money laundering, one felony count of money laundering, and sentencing enhancements for the value of the counterfeit merchandise seized over $1.3 million and money laundering over $2.5 million. Both defendants were each sentenced to eight years and four months in jail stayed pending the completion of three years formal probation, ordered to serve one year in jail and ordered to forfeit over $500,000 in cash assets to the County of Orange General Fund.

Eyad Najjar was arrested by HSI special agents and detectives from FVPD on Dec. 10, 2014. Rateb Najjar surrendered himself to the court on Dec. 17, 2014.

A third defendant, Amir Ali Shaerzadeh, 36, Irvine, is charged with 134 felony counts of money laundering, six felony counts of manufacturing and sale of a counterfeit mark, two felony counts of conspiracy to commit a crime with sentencing enhancements for property damage over $1.3 million, and money laundering in excess of $2.5 million. If convicted, the defendant faces a maximum sentence of 104 year! s in jail. Shaerzadeh is currently a fugitive with an outstanding warrant for his arrest.

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August 28, 2015

Four Men Named in Federal Child Pornography Indictment that Alleges Filming of 15-Year-Old Girl Engaged in Sex Acts

Filed under: California Chid Pornography Attorney — fayarfa @ 12:22 am

LOS ANGELES – Three men were taken into custody this morning after being indicted by a federal grand jury on a host of federal charges related to the sexual exploitation of a 15-year-old girl. A fourth defendant named in the indictment is expected to be taken into custody later today.

The indictment alleges that the defendants participated in the production of child pornography involving the 15-year-old victim. The three arrested this morning are:

· Darrius Marques Sutton, also known as “Biz,” 25, of Compton;

· Darius Dajohn Burks, 26, of Los Angeles;

· Edwin Donnell Franklin, 28, of Bellflower.

These defendants are expected to be arraigned on the federal charges this afternoon in United States District Court.

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