The last of 13 defendants charged in connection with an alleged La Mirada-based credit card skimming and drug trafficking ring has been captured in Orange County, authorities announced Friday.
Lloyd Luis Leyh, of Huntington Beach, was apprehended Thursday in Orange, FBI officials announced via Twitter. Details of his arrest were not available.
He joined a dozen other suspects already in custody in connection with the federal 27-count indictment announced last month.
The suspects — many of which have ties to La Mirada- and Norwalk-area street gangs, such as the La Mirada Punks, the Carmelas and the Nazi Low Riders — are accused of using credit card skimming machines to steal the information from more than 500 credit cards, according to U.S. Department of Justice spokesman Thom Mrozek. Many of the credit card numbers were obtained at a Huntington Beach restaurant.
Prosecutors allege the ring then made expensive purchases, then returned to items to stores for cash, netting more than $500,000.
Three of the defendants are also accused of methamphetamine trafficking, and one is charged with weapons violations.
Federal officials said the investigation has been ongoing for more than two years.
PHOTO courtesy of the U.S. Department of Justice
WHITTIER >> A 27-year-old man awaiting sentencing for his role in a $16 million wire fraud scheme revolving around the popular FIFA soccer video game was found dead in his home last month of unknown causes, authorities said.
Anthony Jordan Clark was found unresponsive on Feb. 26 at his home in the 14600 block of Montevideo Drive in Whittier, according to Los Angeles County Department of Medical Examiner-Coroner Assistant Chief of Operation Ed Winter. An autopsy has been conducted, but Clark’s cause of death is yet to be determined pending the results of forensic testing.
He was initially scheduled to be sentenced in federal court the following day, though the sentencing hearing was re-scheduled in mid-February to April 3, federal court records show. He faced a maximum sentence of 20 years in prison, as well as $250,000 in fines and restitution for the fraudulently obtained $16 million.
A federal jury convicted Clark in November of conspiracy to commit wire fraud in November following a three-day trial in the Department of Justice’s Northern District of Texas, where the case was initially filed.
A federal judge granted a motion to dismiss the case against the late convict on March 16, “in the interest of justice,” records show.
His three codefendants had already pleaded guilty in connection with the case, and each face the same potential maximum sentences.
Eaton Svear is scheduled to be sentenced on March 29 in his home state of Virginia. Nicholas Castelluci is to for sentencing April 24 in his home state of New Jersey and Ricky Miller is scheduled to be sentenced May 1 in his home state of Texas.
The men’s scheme centered around “FIFA Coins,” an electronic currency within the FIFA Football video game, produced by California-based Electronic Arts. Gamers use the coins, which are generally earned through gameplay, to make purchases within the game, U.S. Attorney’s Office spokeswoman Kathy Colvin explained.
But players also purchase coins from one another in a secondary marketplace, she said in a written statement.
By hacking into EA’s servers and circumventing security measures, Clark and his crew managed to fraudulently get their hands on more than $16 million worth of the digital, in-game currency.
They created software that tricked EA computers into logging thousands of hours of gameplay within a matter of a seconds, resulting in the awarding of unearned FIFA Coins, Colvin said.
FORT WORTH, TEXAS >> A federal jury in Texas convicted a Whittier man of wire fraud charges on Wednesday for his role in a scheme to defraud a video game manufacturer of more than $16 million of digital currency for the popular soccer video game, FIFA Football, authorities said.
Anthony Clark, 24, was found guilty in U.S. District Court in Fort Worth, Texas, of wire fraud and conspiracy to commit wire fraud, U.S. Attorney’s Office spokeswoman Kathy Colvin said in a written statement.
“He faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and restitution,” she said. Sentencing is scheduled to take place Feb. 27.
Three co-defendants in the case — a 24-year-old New Jersey man, a 24-year-old Texas man and a 24-year-old Virginia man — have already entered guilty pleas and are also awaiting sentencing, officials said.
The alleged scam revolves around “FIFA Coins,” a digital currency used within the popular Electronic Arts video game, FIFA Football, prosecutors explained. Gamers can use the coins, which are generally earned through gameplay, to make purchases in the game.
But a secondary market has also emerged, in which players sell the FIFA coins to each other for cold, hard cash.
“Clark and his co-conspirators circumvented multiple security mechanisms created by EA in order to fraudulently obtain FIFA coins worth over $16 million,” Colvin said.
“Specifically, Clark and his co-conspirators created software that fraudulently logged thousands of FIFA Football matches within a matter of seconds, and as a result, EA computers credited Clark and his co-conspirators with improperly earned FIFA coins,” she said. “Clark and his co-conspirators subsequently exchanged their FIFA coins on the secondary market for over $16 million.”
PASADENA >> Police and fire officials arrested a man Wednesday in connection with an alleged scam ripping off dozens of Pasadena businesses over recent years through a series of fraudulent fire extinguisher service businesses, officials said.
Operating under several different business names, Joshua Lopez, 32, of Rowland Heights, was among a group of suspects who used deceptive tactics to obtain appointments with local businesses, then failed to properly service the fire extinguishers, often leaving behind old or faulty extinguishers with new inspection certificates, Pasadena Fire Department spokeswoman Lisa Derderian said.
Not only did the scam bilk Pasadena business owners out of money, but it left them in serious danger with a “false sense of security” should they depend on their fire extinguishers to fight a fire, Derderian said.
When business owners get their fire equipment services, as is required annually by law, “There’s an expectation that it’s going to work during an emergency,” Derderian said.
To secure business, the companies relied on deceitful and dishonest practices, such as falsely telling employees that their superiors had previously approved the service, officials said.
The alleged scam has been taking place in Pasadena for several years, but those responsible eluded authorities until Wednesday, Derderian said.
Officials arrested Lopez Wednesday when he showed up to service a fire extinguisher at a Pasadena nonprofit organization, CALSTART, which has been victimized by the alleged scam for the past three years, according to CALSTART Chief Financial Officer Scott Carrano. The nonprofit group is dedicated to the advancement of green transportation technologies and workforce training, primarily through research, consulting and education.
Carrano said he first became suspicious of the fire equipment servicing company last year after noticing they had grossly overbilled for their purported services.
After having the extinguishers examined, Carrano learned they had not been properly serviced, or even serviced at all.
There was no inspector license number or company license number listed on the fire extinguisher certificates left by the company, and the dates on the certification cards did not match those on the labels attached to the extinguishers themselves.
In once instance, Lopez caught on surveillance camera simply replacing the certification tag without servicing the extinguisher, officials said.
CALSTART has since replaced its seven fire extinguishers from others from a reputable company, he said.
While the extinguisher service businesses charged $25 to $30 per each fire extinguisher purportedly serviced, Carrano said he was far more disturbed by the deceit, and the potential danger it placed his employees in, “from a safety perspective.”
“We’ve got 20 lives in our building, and I’m responsible for them,” he said.
Carrano thanks Pasadena fire officials for their help and urged other businesses to check on their fire extinguishers.
The investigation into Lopez, his businesses and his associates was ongoing, officials said.
Lopez was issued a misdemeanor fraud citation, Pasadena police Lt. Mark Goodman said.
He could not be reached for comment Friday.
Pasadena fire officials urged business owners to be mindful when it comes to their fire safety equipment.
“The Pasadena Fire Department reminds businesses and residents (of) condominium and apartment units to ask questions if an uninvited person shows up claiming they were scheduled,” Derderian said. “After confirming that the company was actually requested, make sure you ask for a city business license and their state fire marshal identification that authorizes them to work on fire extinguishers. Additionally, their vehicle should be labeled with a company name and business license number.”
Fire department officials urged business owners to contact the department at 626-744-7177 with any concerns regarding a fire extinguisher service company.
LOS ANGELES >> A San Dimas mad who formerly served as vice president of an Ontario-based tool company received a sentence of more than 5 years in federal prison Wednesday for a $9.6 million bank fraud scheme, authorities said.
Chung Yu Yeung, 39, pleaded guilty in late-March to four counts of bank fraud and one count of conspiracy to commit bank fraud.
At his sentencing hearing Wednesday in federal court in Los Angeles, U.S. District Judge Christina A. Snyder sentenced Yeung to 63 months in prison and ordered him to pay $9,618,908 in restitution to his victim, East West Bank, U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
He was also ordered to forfeit a property in San Dimas that he purchased “with proceeds of the scheme,” Mrozek said.
Yeung previously admitted that while working at Eastern Tools and Equipment Inc., Yeung admitted that he and his co-conspirators defrauded East West Bank by misrepresenting the company’s accounts receivable and financial statements in order to obtain loans the company otherwise would not have been able to get, Mrozek explained.
“The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business,” Mrozek said. “Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank.”
“Yeung created companies and profits that were nothing but illusions, tricking a bank into loaning him millions of dollars,” U.S. Attorney in the Central District of California Eileen M. Decker said. “This was a sophisticated crime that caused substantial losses, warranting the punishment imposed by the Court today.”
Yeung’s co-defendant in the case, former Eastern Tools president Guo Xiang Fan, remains a fugitive, Mrozek said.
IRS Criminal Investigations Acting Special Agent in Charge Anthony J. Orlando described the scene as “truly astounding.”
“(It) illustrates the lengths to which fraudsters will go to game the financial system for personal gain. IRS Criminal Investigation is proud to work with our law enforcement partners by lending our financial expertise in these complex investigations,” he said.
LOS ANGELES >> A Hacienda Heights man began serving a two-and-a-half-year prison term after he was sentenced for his role in a scheme that netted more than $2.6 million in bogus tax returns using stolen identities, authorities said.
Heber Cotton, 40, pleaded guilty late last year to a count of conspiracy to defraud the federal government by obtaining the payment of fraudulent tax refunds, U.S. Department of Justice spokesman Thom Mrozek said in a written statement. U.S. District Judge Michael W. Firzgerald handed down the 30-month prison term Monday in federal court in Los Angeles.
Cotton was additionally ordered to pay $725,000 in restitution.
His father and co-conspirator, 64-year-old Adel Cotton, pleaded guilty to the same charge in 2012 and has since been sentenced to 4 years and three months in federal prison, officials said.
“This father and son pair prolifically defrauded the government and hundreds of taxpayers, earning them the significant sentences imposed by the court,” according to United States Attorney for the Central District of California Eileen M. Decker.
From December of 2008 to March of 2010, “the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS,” Mrozek said. “Those fraudulent returns sought income tax refunds totaling more than $2.6 million.”
The father and son used the names and social security numbers of victims without their knowledge to fill out fraudulent tax returns, officials said. They instructed the refund checks to be sent to addressed they controlled.
Heber Cotton admitted in court documents that he gave stolen identity information to a co-conspirator, who worked as a bank manager, who opened bank accounts with the fraudulently obtained funds, in exchange for a 20 percent cut of each refund check.
The bank manager, identified in court documents as Michael Rodriguez, managed a U.S. Bank branch inside a Tustin supermarket, Mrozek said.
He has since pleaded guilty to charges in connection with the scheme and is awaiting sentencing.
“These unscrupulous defendants, a father and son team, thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando added. “IRS CI has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
LOS ANGELES >> A federal jury convicted a Pasadena doctor and an Anaheim doctor Thursday of health care fraud for collecting more than $8 million in fraudulent insurance payments and kickbacks by falsely certifying that patients were terminally ill and referring them to a Covina hospice care facility, authorities said.
Boyao Huang, 43, of Pasadena and Sri Wijegoonaratna, also known as “Dr. J,” were found guilty of taking part in the fraudulent scheme between March of 2009 and July of 2013 following a two-week trial in federal court in Los Angeles, U.S. DOJ spokesman Thom Mrozek said in a written statement.
In concert with Covina-based California Hospice Care, the doctors falsely stated that patients were ill in order to bill Medical and Medi-Care for $8.8 million worth of hospice services that were not necessary, Mrozek said.
“CHC nurses performed ‘assessments’ to determine whether the beneficiaries were terminally ill and, regardless of the outcome, Wijegoonaratna and Huang certified that the beneficiaries were terminally ill — even though the vast majority of them were not dying,” according to Mrozek. “CHC personnel altered medical records in response to Medicare audits to make the beneficiaries appear sicker.”
Wijegoonaratna also took tens of thousands of dollars in illegal “kickback” payments from CHC in return for sending patients to the facility, prosecutors alleged.
Huang was convicted of four counts of health care fraud, while Wijegoonaratna was convicted of seven counts of health care fraud.
The doctors are due for sentencing August 15, officials said. Huang faces up to 40 years behind bars, and Wijegoonaratna faces up to 70 years in prison.
Four other defendants have already been charged and convicted in connection with the case, including Priscilla Villabroza, 70, of Placentia, “who purchased CHC in 2007 and operated the facility after being charged and incarcerated in another health care fraud scheme,” and her daughter, Mrozek said.
“This scheme is one of many that has victimized public health care programs and, in the end, the taxpayers who fund these important programs,” according to U.S. Attorney for California Central District Eileen M. Decker. “We will continue to investigate these fraudulent schemes, shut down the operations and incarcerate those responsible for stealing from the system.”
LOS ANGELES >> A San Dimas man who served as vice president of an Ontario tool wholesale company on Wednesday admitted to federal charges of defrauding a Pasadena-based bank out of more than $9 million, authorities said.
Chung Yu Yeung, also known as Louis Yeung, 39, served as vice president of Ontario-based Eastern Tools and Equipment Inc., U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
At an appearance Wednesday in federal court in Los Angeles, Yeung admitted to one count of conspiracy to commit bank fraud and four counts of bank fraud, Mrozek said. He was scheduled to return to court June 20 to be sentenced by U.S. District Court Judge Christina A. Snyder.
Between 2007 and 2012, Yeung admitted to setting up a network of shell companies, controlled by himself, to give the false illusion that Easter Tools was conducting far more business than he really was, officials said.
“Yeung admitted that the fictitious companies allowed him and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank,” according to Mrozek.
After using fraudulent documents to boost his business’ line of credit, “Eastern Tools defaulted on the promissory note after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, Mrozek said.
FBI and IRS agents conducted the investigation.
“This defendant went to great lengths to create the illusion of business that defrauded the victim bank out of millions, but law enforcement was able to penetrate the illusion,” U.S. Attorney Eileen M. Decker said. “Crimes like these can threaten the stability of our financial institutions and therefore our national economy.”
Yeung was arrested in connection with the investigation in April of 2015. Alleged co-conspirator and Eastern Tools and former Equipment President Guo Xiang “David” Fan, 53, is also named in the same indictment charging Yeung. He remains at large.
LOS ANGELES >> A Monterey Park doctor received a four-year jail sentence Friday for prescribing diet pills without a legitimate medical purpose and insurance fraud, authorities said.
Dr. Thomas Lin, 46, was scheduled to surrender Friday evening after pleading “no contest” in December to two felony counts, Los Angeles County District Attorney’s officials said in a written statement.
“Lin provided diet pills known as phentermine, a controlled substance, through his pediatrics clinic known as “Kid’s M.D.” on Atlantic Boulevard in Monterey Park,” according to the statement.
He also fraudulently billed Medi-Cal and other insurers for services never rendered, prosecutors said.
“Over the course of several months in 2012, investigators from the California Medical Board posed as new patients and were able to secure phentermine with little or no physical examination by Dr. Lin,” according to the district attorney’s office statement. “Investigators received the drug either by paying his front office staff or receiving the drug for free.”
After serving two years in custody, Lin is to remain on mandatory supervision for another two years, officials said.
Prior to pleading “no contest” to the two felony charges, Lin was initially named in a 55-count indictment. If convicted on all original charges, he could have faced up to 34 years in state prison.
LOS ANGELES >> A federal grand jury Thursday indicted a Rowland Heights woman, a former Hacienda Heights couple and two other defendants who are accused of running a $30 million pyramid scheme targeting Chinese communities on both coasts, authorities said Friday.
Wen Chen “Wendy” Lee, 53, of Rowland Heights; Cheong Wha “Heywood” Chang, 47, of Taiwan and a former resident of Hacienda Heights; Chang’s wife Toni Chen, 46; Dalian “David” Guo, 53, of Hyde Park, New York; and Chih Hsuan “Kiki” Lin, 50, of Los Angeles and La Vegas are each charged with 13 counts of wire fraud and one count of conspiracy, U.S. Department of Justice spokesman Thom Mrozek said in a written statement.
The five operated a Hong Kong-based company known as CKB, WIN169 Biz Solutions Ltd., CKB168 Ltd. and Cyber Kid Best Education Limited, officials said.
The company purported to run a profitable business selling online educational courses for children, “but in reality was a pyramid scheme designed to generate new revenue by adding new investors,” Mrozek said.
Prosecutors allege the defendants collected about $30 million from investors, primarily in Chinese-American communities in Los Angeles, San Francisco and New York City between 2011 and 2014. They kept about $6.5 million of the money for themselves and transferred the rest to others involved in the scheme, according to the indictment.
“We believe that over 1,000 people invested in CKB, though it is unclear how many of those people invested directly through the defendants charged in this case,” Assistant U.S. Attorney Stephen Goorvich said.
To lure investors into the scam, the defendants made numerous false promises and statements about CKB, which was not registered with the U.S. Securities and Exchange Commission, authorities said.
All five defendants are expected to appear in court to enter pleas next month, Mrozek said. They were arrested earlier this month following the filing of a sealed criminal complaint, Mrozek said.
Lin, who is also accused in the indictment of threatening victims in order to collect funds and dissuade them from talking to authorities, is being held without bond, while the others have been freed on bonds ranging from $250,000 to $500,000. If convicted as charged, each defendant faces up to 265 years in federal prison.