U.S. Attorney's Office - District of Oregon
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News Releases
Washington State Man Accused of Marketing Fraudulent Tax Avoidance Schemes Disguised as Churches, Other Entities - 04/19/19

PORTLAND, Ore.—A federal grand jury in Portland has returned a seven-count indictment charging Glen Stoll, 68, a resident of Washington State, with multiple crimes stemming from a scheme whereby he organized, promoted, and marketed fraudulent tax avoidance strategies. Stoll made his initial appearance in the District of Oregon today before U.S. Magistrate Judge Stacie F. Beckerman.

Stoll is charged with one count each of conspiracy to defraud the U.S., conspiracy to commit bank fraud, bank fraud, and making a false statement on a loan application and three counts of tax evasion.

As alleged in the indictment, Stoll served as the director of an entity called Remedies at Law. Stoll used Remedies at Law and other related entities, including the Oregon-based Embassy of Heaven, to promote schemes designed to assist people in evading the assessment and collection of federal income taxes. Stoll advised clients that they could avoid paying taxes by creating a church or ministry and placing their assets and income in so-called ministerial trusts.  Stoll referred to himself as a “general counsel” with legal experience when, in reality, he held no license to practice law.

Beginning in September 2007, Stoll assisted former Oregon couple Karl and Laurie Brady with the creation of two “ministerial trusts” called Progeny Services and Progeny Foundation. At Stoll’s direction, Karl Brady opened bank accounts for the nominee entities, issued checks from his business payable to Progeny Services or Progeny Foundation, and deposited the checks into the nominee accounts. This enabled the Brady’s to avoid the assessment of federal income tax while maintaining full access to the money for personal and family expenses.

From 2008 through 2015, at Stoll’s direction, Karl Brady filed no personal income tax returns despite receiving more than $3 million and ignored repeated letters from the IRS notifying him of his failure to file. This scheme allowed Brady to evade in excess of $1.2 million dollars in income taxes.

Separately, in 2015, Stoll assisted Brady in defrauding two of Brady’s mortgage lenders.  Stoll assisted Brady in submitting a false short sale application and other fraudulent documents to avoid repayment on a vacation rental in Hawaii. At Stoll’s direction, Brady’s short sale application included a letter claiming he and his wife were under the complete care of a church ministry, had no income, no assets, and were completely dependent on a church. Relying on this false information, the lenders authorized the short sale and suffered combines losses of approximately $120,000.

This case was investigated by IRS Criminal Investigation and is being prosecuted by Donna Brecker Maddux, Assistant U.S. Attorney for the District of Oregon.

An indictment is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.

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Attached Media Files: INDICTMENT-Stoll-Final.pdf
Former Aequitas Owner and Executive Vice President Pleads Guilty in Fraud and Money Laundering Conspiracy - 04/19/19

Criminal conspiracy could have cost investors more than $600 million

PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that Brian A. Oliver, a former owner and executive vice president of Aequitas Management, LLC and several other Aequitas-related companies has pleaded guilty to conspiring to commit mail and wire fraud and money laundering.

According to court documents, Oliver, 54, of Aurora, Oregon, and unnamed co-conspirators used the Lake Oswego, Oregon, based company to solicit investments in a variety of notes and funds, many of which were purportedly backed by trade receivables in education, health care, transportation, and other consumer credit areas. Oliver was the company’s primary fundraiser and shared responsibility for the operation and management of Aequitas-affiliated companies and investment products as well as for the use of investor money.

From June 2014 through February 2016, Oliver and others solicited investors by misrepresenting the company’s use of investor money, the financial health and strength of Aequitas and its related companies, and the risks associated with its investments and investment strategies. Oliver and his co-conspirators also failed to disclose other critical facts about the company, including its near-constant liquidity and cash-flow crises, the use investor money to repay other investors and to defray operating expenses, and the lack of collateral to secure funds.

Oliver faces a maximum sentence of 30 years in prison, a $250,000 fine or twice the gross monetary gains or losses resulting from his crimes, and three years’ supervised release. He will be sentenced on August 5, 2019 before U.S. District Court Judge Michael W. Mosman.

As part of the plea agreement, Oliver has agreed to pay restitution in full to each of victim’s as determined and ordered by the court.

This case is being investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Labor Employee Benefits Security Administration. It is being prosecuted by Scott E. Bradford and Ryan W. Bounds, Assistant U.S. Attorneys for the District of Oregon.

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Attached Media Files: CHANGE_OF_PLEA-Oliver-Final.pdf
Jackson County Man Sentenced to 10 Years in Prison for Distributing Cocaine and Trading Cocaine for Firearms - 04/19/19

MEDFORD, Ore.—On Thursday, April 18, 2019, Jonathan Alan Ochoa, 31, of Talent, Oregon, was sentenced to 120 months in federal prison and five years’ supervised release for conspiring to distribute and possess with intent to distribute cocaine and possessing a firearm in furtherance of a drug trafficking crime.

“Mr. Ochoa’s actions show a blatant disregard for the law and public safety. The lengthy prison sentences ordered in this case reflect the seriousness of mixing firearms and drug trafficking,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “I thank the ATF agents involved in bringing Mr. Ochoa and Mr. Manzer to justice. Our communities are safer thanks to their efforts.”

“Mr. Ochoa compounded his drug dealing by accepting firearms in trade for illicit drugs,” said ATF Seattle Field Division Special Agent in Charge Darek Pleasants. “His willingness to engage in this lawless behavior undermines the safety and security of his community and contributes to other related criminal activities. His sentence is appropriate and serves to send a message to the community that actions like this will not be tolerated.”

According to court documents, between July and August 2017, Ochoa agreed and conspired with co-defendants Gonzalo Manzo, Jr. and Rodolfo Quevedo to send more than 500 grams of cocaine from California to Oregon to sell and distribute to others. During this time, Ochoa and Manzo negotiated a sale of cocaine with an undercover agent from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in exchange for multiple firearms.

On August 17, 2017, at Manzo’s request, Quevedo transported approximately 1000 grams of cocaine from California and delivered it to Ochoa in the Medford area. The firearms and cash were intended to be transported back to California but agents arrested Ochoa and his co-conspirators and the firearms were seized by law enforcement.

Manzo pleaded guilty to the same charges in August 2018 and was sentenced to 188 months in prison and three years’ supervised release on December 11, 2018. Quevedo pleaded guilty in September 2018 to a single count of conspiracy to distribute and possess with intent to distribute cocaine and was sentenced to one year and one day in prison and five years’ supervised release on December 20, 2018.

Ochoa previously pleaded guilty to one count each of conspiracy to distribute and possess with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime on October 29, 2018.

This case was investigated by ATF and is being prosecuted by Nathan J. Lichvarcik and Adam E. Delph, Assistant U.S. Attorneys for the District of Oregon.

The case is part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

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Attached Media Files: SENTENCING-Ochoa-Final.pdf
Bend Police Department Featured in Justice Department Report on Improving Safety and Wellness of Law Enforcement - 04/18/19

WASHINGTON – On April 17, 2019, the Department of Justice released two complementary reports focusing on the mental health and safety of the nation’s federal, state, local and tribal police officers. The Bend Police Department in Bend, Oregon was featured in the report as one of eleven law enforcement agencies demonstrating a range of innovative approaches to safeguarding the mental health of both sworn and nonsworn employees.

The reports, Law Enforcement Mental Health and Wellness Act: Report to Congress and Law Enforcement Mental Health and Wellness Programs: Eleven Case Studies, were published by the Office of Community Oriented Policing Services (COPS Office) as required by the Law Enforcement Mental Health and Wellness Act (LEMHWA) of 2017.

The LEMHWA passed both chambers unanimously and without amendment and was signed by the President shortly thereafter. These actions show that its purpose and intended effects are uncontroversial among policymakers – law enforcement agencies need and deserve support in their ongoing efforts to protect the mental health and well-being of their employees. Congress took the important step in improving the delivery of and access to mental health and wellness services that will help our nation’s more than 800,000 federal, state, local, and tribal law enforcement officers.

“Serving as a law enforcement officer requires courage, strength, and dedication,” Attorney General William P. Barr said. “The demands of this work, day in and day out, can take a toll on the health and well-being of our officers, but the Department of Justice is committed to doing our part to help. I want to thank the men and women of our COPS office for their hard work to support our officers every day, and specifically for these thoughtful and insightful reports, which detail both the challenges facing our officers and some specific ways we can give them the support that they deserve.”

“We are incredibly proud of everyone at the Bend Police Department for the innovative steps taken to protect the mental health of all employees. Not only does this protect officer and staff wellbeing, but it also bolsters public safety. I am grateful to Chief of Police Jim Porter for his leadership and commitment to supporting the men and women under his command.” said Billy J. Williams, U.S. Attorney for the District of Oregon. “I hope that Bend PD’s example will mark the beginning of a new era in policing where protecting the mental health of officers and staff is universally viewed as an essential element of effective law enforcement.”

“A damaging national narrative has emerged in which law enforcement officers – whether federal, state, local, or tribal – are seen not as protectors of communities but as oppressors,” said COPS Office Director Phil Keith. “In this environment, where an inherently stressful job is made more so by a constant undercurrent of distrust and negative public opinion, the risks to officer wellness are exacerbated. This report is an important measure and reflection in our ongoing commitment to protect those who protect us.”

Under the Law Enforcement Mental Health and Wellness Act, the COPS Office was required to submit reports to Congress that addressed:

  1. Recommendations to Congress on effectiveness of crisis lines for law enforcement officers, efficacy of annual mental health checks for law enforcement officers, expansion of peer mentoring programs, and ensuring privacy considerations for these types of programs;
  2. Mental health practices and services in the U.S. Departments of Defense (DoD) and Veterans Affairs (VA) that could be adopted by federal, state, local, or tribal law enforcement agencies; and
  3. Case studies of programs designed primarily to address officer psychological health and well-being.

The first report, Law Enforcement Mental Health and Wellness Act: Report to Congress, includes 22 recommendations to Congress ranging from supporting programs to embed mental health professionals in law enforcement agencies to supporting the development of model policies and implementation guidance for law enforcement agencies to make substantial efforts to reduce suicide.

The case studies report, Law Enforcement Mental Health and Wellness Programs: Eleven Case Studies, is designed to provide an overview of multiple successful and promising law enforcement mental health and wellness strategies with the joint aims of informing Congress, state and local government officials, and the law enforcement field. The report includes 11 case studies from a diverse group of sites across the United States.

The Department of Justice is pleased to respond to the LEMHWA as officer safety, health, and wellness is a longstanding priority of the agency. The reports released today address some of the most pressing issues currently facing our law enforcement community.

The COPS Office has a near 25-year history of supporting the efforts of state, local and tribal law enforcement, including the management of the National Blue Alert Network. The agency awards grants to hire community policing officers, develop and test innovative policing strategies, and provide training and technical assistance to community members, local government leaders, and all levels of law enforcement. Since 1994, the COPS Office has invested more than $14 billion to help advance community policing.

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Las Vegas Woman Sentenced to 39 Months in Federal Prison for Operating Fraudulent Tax Return Business - 04/17/19

PORTLAND, Ore.—Gloria Harris, 48, of Las Vegas, Nevada, was sentenced today to 39 months in federal prison and three years’ supervised release for operating a fraudulent tax return business. Harris was also ordered to pay more than $548,000 in restitution.

As part of the scheme, Harris prepared more than 100 fraudulent tax returns requesting nearly $600,000 in fraudulent refunds from the IRS.

According to court documents, between 2012 and 2016, Harris operated a covert tax preparation scheme whereby she would file client tax returns as “self-prepared” returns to mask her participation in the filings. Harris would increase the size of the fraudulent returns by falsely claiming that unrelated children were dependents to qualify clients for various tax breaks including the Earned Income Tax Credit.

Harris began to raise suspicion among certain clients by refusing to provide copies of file returns, chastising them for asking questions in writing, and withholding refunds. On one occasion, Harris delivered a $1,400 “refund” in cash to a client in a parking lot. Investigators later learned that this client was a due a refund of more $8,500 from the IRS.

Harris previously pleaded guilty to one count each of making false, fictitious, or fraudulent claims against the U.S. and aggravated identity theft on July 18, 2018.

This case was investigated by IRS Criminal Investigation and prosecuted by Quinn P. Harrington, Assistant U.S. Attorney for the District of Oregon.

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Attached Media Files: SENTENCING-Harris-Final.pdf
Columbia City Man Pleads Guilty to Selling Counterfeit Rifle Optics Online - 04/17/19

PORTLAND, Ore.—On Tuesday, April 16, 2019, Mark Aaron Culp, 56, of Columbia City, Oregon, pleaded guilty to knowingly trafficking counterfeit, Chinese-made Leupold-branded rifle scopes online. Leupold & Stevens, Inc., an Oregon company, manufactures its rifle scopes in Beaverton, Oregon.

According to court documents, between May and July 2015, Culp sold rifle optics bearing various Leupold trademarks and design features online via at least two commercial websites: GunBroker.com and eBay. Culp sold 13 counterfeit rifle scopes that he had imported from China, generating approximately $3,700 in revenue.

Culp’s sales were discovered by Leupold & Stevens personnel.  They purchased a scope from Culp online, confirmed that it was counterfeit, and referred the matter to the Beaverton Police Department and the Department of Homeland Security’s Bureau of Immigration and Customs Enforcement.

Culp faces a maximum sentence of 10 years in prison, a $2 million fine and 3 years of supervised release. He will be sentenced on July 18, 2019 before U.S. District Court Judge Anna J. Brown.

This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI). It is being prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.

# # #

Attached Media Files: CHANGE_OF_PLEA-Culp-Final.pdf
Former Madras Police Officer Sentenced to Six Years in Federal Prison for Repeated Sexual Abuse of Minor - 04/11/19

PORTLAND, Ore.—John Joseph Wallace, Jr., 35, of Madras, Oregon, was sentenced today to 72 months in prison and life term of supervised release for the repeated sexual abuse of a minor.

According to court documents, the government’s investigation of Wallace began in January 2018, when Warm Springs Tribal Police officers responded to Wallace’s home on the Warm Springs Indian Reservation. Officers were responding to a report that Wallace had abused a young girl. The minor victim and her mother, who contacted police to report Wallace’s crimes, are both Warm Springs tribal members.

An investigation later revealed that Wallace, over a period of years, had repeatedly abused the child by touching her breasts, buttocks, and genitals, both over and under her clothing. Wallace used his cell phone to communicate with the child and facilitate multiple incidents of abuse at his home on the reservation and on a separate occasion in Madras.

On January 3, 2019, Wallace pleaded guilty in federal court to three counts of abusive sexual contact with a minor. In a related state court matter, Jefferson County Circuit Court Judge Annette C. Hillman found Wallace guilty of attempted sexual abuse in the first degree and official misconduct in the first degree. Wallace will be sentence in state court on April 12, 2019.

This case was investigated by FBI Portland’s Safe Trails Task Force, the Warm Springs Tribal Police Department, and the Oregon Department of Justice. It was prosecuted federally by Paul T. Maloney, Assistant U.S. Attorney for the District of Oregon.

The Safe Trails Task Force (STTF) unites FBI and other federal, state, local, and tribal law enforcement agencies in a collaborative effort to combat the growth of crime in Indian Country. STTF allows participating agencies to combine limited resources and increase investigative coordination in Indian Country to target violent crime, drugs, gangs, and gaming violations.

Anyone who has information about the physical or online exploitation of children are encouraged to call the FBI at (503) 224-4181 or submit a tip online at www.fbi.gov/tips.

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Attached Media Files: SENTENCING-Wallace-Final.pdf
Canadian National Arrested Aboard Sailing Vessel in International Waters Off Oregon Coast, Methamphetamine Seized - 04/11/19

PORTLAND, Ore.—A criminal complaint was filed today in federal court alleging John Phillip Stirling, 65, a citizen of Canada, illegally possessed with the intent to distribute methamphetamine aboard a U.S. flagged vessel.

According to court documents, on April 9, 2019, while on a routine patrol, the U.S. Coast Guard Cutter Alert detected a sailing vessel traveling north 225 nautical miles from Newport, Oregon. The vessel, named Mandalay, had a home port of Seattle, Washington and visible U.S. registration numbers. When Coast Guard personnel attempted to communicate with Stirling, he went below deck and would only respond via VHF radio. Once Coast Guard personnel determined the Mandalay was a U.S. flagged vessel, they boarded and found Stirling to be the vessel’s sole occupant.

Stirling stated he did not have vessel documentation and refused to produce identification. Upon further questioning, Sterling’s speech began to deteriorate and he displayed signs of a possible drug overdose. Coast Guard personnel administered medical aid to Stirling and evacuated him by helicopter to Astoria, Oregon. He was later transported by ambulance to Adventist Health Portland for additional treatment.

Coast Guard personnel conducted a search of the Mandalay and discovered 28 seven-gallon jugs containing liquid methamphetamine.

Stirling made an initial appearance today in federal court before U.S. Magistrate Judge Stacie F. Beckerman. Stirling was ordered detained pending trial.

A criminal complaint is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.

This case is being investigated by the U.S. Coast Guard Investigative Service (CGIS) and Homeland Security Investigations (HSI).

# # #

Attached Media Files: COMPLAINT-Stirling-Final.pdf
Portland Man Pleads Guilty For Role in Interstate Marijuana Trafficking Conspiracy - 04/11/19

PORTLAND, Ore.—On Thursday, April 10, 2019, Paul Eugene Thomas, 38, of Portland, pleaded guilty to one count of conspiring to manufacture, possess with intent to distribute, and distribute marijuana and maintaining drug involved premises, and one count of money laundering for his role in a vast conspiracy to traffic marijuana grown in Portland to Virginia and Texas.

According to court documents, Thomas and co-defendants Jody Tremayne Wafer, 29, Trent Lamar Knight, 30, and Brittany Lesanta Kizzee, 28, of Houston, Texas and Raleigh Dragon Lau, 33, also of Portland, conspired to manufacture marijuana in Portland, transport it across state lines, and sell it in Virginia and Texas.

Drug proceeds, in the form of bulk U.S. currency, were returned to Oregon via U.S. mail and passenger luggage on commercial airlines. As part of this investigation, federal authorities have seized approximately 11,000 marijuana plants, 546 pounds of processed marijuana, more than $2.8 million in cash, 51 firearms, 26 vehicles, trailers, pieces of heavy equipment, a yacht, and three houses used as marijuana grow sites, all since August 2017.

Conspiring to manufacture, possess with intent to distribute, and distribute marijuana and maintaining drug involved premises carries a maximum sentence of 40 years in prison, a mandatory minimum sentence of 5 years in prison, a $5 million fine, and a lifetime of supervised release. Money laundering carries a max sentence of 20 years in prison, a $250,000 fine, and three years’ supervised release. As part of the plea agreement, Thomas has agreed to forfeit any criminally-derived proceeds and property used to facilitate his crimes identified by the government prior to sentencing.

Thomas will be sentenced on August 6, 2019 before U.S. District Court Judge Robert E. Jones.

Kizzee entered a guilty plea on November 27, 2018, and is scheduled to be sentenced on May 7, 2019. Lau and Knight have scheduled change of plea hearings for April 22, 2019 and May 8, 2019, respectively. Wafer is scheduled for trial on June 18, 2019.

In a related case, in August 2018, Cole William Giffiths was charged of conspiring to manufacture marijuana in Hood River, Oregon and shipping it to Florida. He has scheduled a change of plea hearing for April 22, 2019.

This case was investigated by the U.S. Drug Enforcement Administration, IRS Criminal Investigation, Homeland Security Investigations and the FBI. It is being prosecuted by the U.S. Attorney’s Office for the District of Oregon.

This case was brought as part of the Justice Department’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the department’s strategy for reducing the availability of drugs in the U.S. OCDETF was established in 1982 to mount a comprehensive attack on drug trafficking by disrupting and dismantling major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in coordination with state and local law enforcement.

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Attached Media Files: CHANGE_OF_PLEA-Thomas-Final.pdf
Tigard Man Sentenced to 15 Years in Federal Prison for Sexually Exploiting Minors Using Social Media - 04/10/19

PORTLAND, Ore.—David Earnest Otto, 50, of Tigard, Oregon, was sentenced today to 180 months in federal prison and lifetime supervised release after finding, contacting, grooming and sexually exploiting seven minor girls ages 13-to-17 using a variety of social media platforms.

According to court documents, on November 20, 2016, the mother of one of Otto’s minor victims contacted the Sonora Police Department in Sonora, California to report that her fifteen-year-old daughter had been communicating on Instagram with an unknown adult male. An analysis of the victim’s chat log revealed that she had engaged in highly sexual conversations with another Instagram user and, when prompted, sent the user nude photos of herself. Investigators linked the subject’s Instagram account to Otto using the IP address of his home in Tigard.

Following execution of a search warrant at the Tigard residence, investigators analyzed the data on Otto’s seized digital devices and discovered six additional minor victims located around the country.  FBI agents, in cooperation with local officials, then sought to locate and interview the victims.  The victims described similar crimes, in which Otto contacted them on social media or via the internet and, having built rapport with them, directed them to produce and send him images and videos of child pornography.

On February 6, 2018, Otto pleaded guilty to one count of production of child pornography.

This case was investigated by FBI Portland’s Child Exploitation Task Force (CETF) and Sonora Police Department and was prosecuted by the U.S. Attorney’s Office for the District of Oregon.

FBI Portland CETF conducts sexual exploitation investigations—many of them undercover—in coordination with other federal, state, and local law enforcement agencies. The CETF is committed to locating and arresting those who prey on children as well as recovering underage victims of sex trafficking and child exploitation.

Anyone who has information about the physical or online exploitation of children are encouraged to call the FBI at (503) 224-4181 or submit a tip online at www.fbi.gov/tips.

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Attached Media Files: SENTENCING-Otto-Final.pdf
Former Tigard Resident Sentenced to Seven Years in Federal Prison for Defrauding Investors in Ohio Gold Mine - 04/09/19

PORTLAND, Ore.—Harry Dean Proudfoot III, 79, formerly a resident of Tigard, Oregon, was sentenced today to 84 months in federal prison and three years’ supervised release for running a fraudulent gold mining investment scheme and stealing approximately $4 million from more than 140 investors.

According to court documents and information shared at trial, in 2008, Harry Proudfoot created 3 Eagles Research and Development, a company based in Tigard, that he used from 2008 through 2012 to solicit investors for a purported goldmining operation in Ohio. Harry Proudfoot, along with his adult children, including co-defendant Matthew Proudfoot, falsely promised to use investors’ money to purchase mining equipment and conduct mining operations at two gravel pits in Ohio.

To entice investors, Proudfoot and his children offered high rates of return, typically 10% of gross revenues, payable once the mine became operational. They falsely told investors they had all the necessary legal and business requirements in place for the mining operation.

At the same time, Proudfoot and his children withheld important facts from investors including that Harry Proudfoot had received cease and desist orders from the States of Alaska and Oregon for selling unregistered securities through material misrepresentations in 1992, 1993, and 2003 and that Matthew Proudfoot had filed for bankruptcy in 2010. Rather than using investor money as promised, they diverted it to their personal use, funding living expenses, cars, travel, credit card bills, medical payments, lulling payments and other expenses to keep the scheme afloat.

In 2011, the U.S. Securities and Exchange Commission (SEC) began investigating the group for securities violations. Ultimately, the U.S. District Court for the District of Oregon entered a judgment against Harry Proudfoot, Matthew Proudfoot and the 3 Eagles Research and Development Company in the SEC enforcement action

On December 13, 2018, a federal jury convicted Proudfoot of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and money laundering.

Proudfoot’s son and co-defendant Matthew Proudfoot pleaded guilty to wire fraud and money laundering on November 1, 2017. He will be sentenced on July 8, 2019.

The case was investigated by the FBI and IRS Criminal Investigation, and prosecuted by Scott E. Bradford and John C. Brassell, Assistant U.S. Attorneys for the District of Oregon.

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Attached Media Files: SENTENCING-Proudfoot-Final.pdf
U.S. Attorney's Office Joins in Recognizing National Crime Victims' Rights Week, April 7-13, 2019 - 04/09/19

PORTLAND— Every April, the Justice Department’s Office for Victims of Crime (OVC) leads communities across the country in observing National Crime Victims’ Rights Week (NCVRW) to honor crime victims, promote their rights and recognize those who advocate on their behalf. This year’s observance takes place April 7-13, with the theme: Honoring Our Past. Creating Hope for the Future.

The U.S. Attorney’s Office joins its federal, state, local and tribal law enforcement partners in taking this opportunity to highlight the importance of providing necessary services at the earliest possible stage of victimization and litigation. Early intervention helps prevent further victimization and encourages victim involvement in the criminal justice system, mitigating the cycle of violence and restoring hope for the future.

“Victims of crime deserve justice. This Department works every day to help them recover and to find, prosecute, and convict those who have done them harm,” said Attorney General William P. Barr. “During this National Crime Victims’ Rights Week, we pause to remember the millions of Americans who have been victims of crime and we thank public servants who have served them in especially heroic ways. This week the men and women of the Department recommit ourselves once again to ensuring that crime victims continue to have a voice in our legal system, to securing justice for them, and to preventing other Americans from suffering what they have endured.”

“Protecting the rights and dignity of crime victims is as important a part of the administration of justice as completing an investigation or bringing a case to trial,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “Every day in courtrooms across the country, crime victims show great courage and strength by participating in the judicial process. It’s this courage that inspires prosecutors and law enforcement to tirelessly pursue justice in every case. I am proud to honor these victims and the people who serve them.”

OVC and the U.S. Attorney’s Office encourages widespread participation in the week’s events and in other victim-related observances throughout the year. The Justice Department will host OVC’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C. on April 12, 2019 to honor outstanding individuals and programs that serve victims of crime. For additional information about this year’s National Crime Victims’ Rights Week and how to assist victims in your community, please visit OVC’s website at www.ovc.gov.

If you or someone you know has been a victim of a crime, please contact your local law enforcement agency or your nearest FBI office immediately. The FBI Portland Field Office can be reached at (503) 224-4181.

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Attached Media Files: ANNOUNCEMENT-NCVRW-Final.pdf
Federal Investigation of Portland Drug Trafficking Organization Reveals Black Market Peso Exchange Scheme - 04/08/19

PORTLAND, Ore.—Esteban Guillen Ramirez, 53, of Guadalajara, Jalisco, Mexico, was sentenced today to one year in federal prison and three years’ supervised release for his role in a complex black market peso exchange money laundering scheme. The scheme was uncovered in 2015 following a lengthy investigation by the U.S. Drug Enforcement Administration (DEA) into a Portland-based heroin trafficking organization.

In February 2015, the DEA executed multiple search warrants throughout the Portland and Vancouver, Washington metropolitan area following a long-term heroin trafficking investigation. Agents arrested over twenty drug trafficking defendants, seized multiple kilos of heroin and seized over $400,000 in bulk cash. At one search location, agents seized evidence of bank deposit slips and deposit instructions, in which heroin traffickers deposited drug proceeds into multiple wholesale businesses in the Los Angeles Fashion District.

Agents began a money laundering investigation. Bank records showed that the majority of cash deposits made by Portland heroin traffickers into the Los Angeles wholesale business bank accounts were systematically structured to avoid detection by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

In November 2015, agents executed 14 federal search warrants in the Los Angeles Fashion District. At four separate wholesale businesses, agents seized financial records identifying Stefano Fashions as the beneficiary of the cash deposits made by the Portland heroin traffickers. Stefano Fashions, owned by Guillen Ramirez, is a successful Guadalajara business engaged in the sale of women’s accessories and cosmetics. Financial investigators found evidence of a high volume of structured cash deposits and large quantities of bulk cash delivered to the wholesale businesses on behalf of Stefano Fashions. While this financial activity was highly unusual for a U.S. wholesale business, it was a telltale sign the Los Angeles Fashion District businesses and Stefano Fashions were participating in a black market peso exchange scheme to launder the drug proceeds of a Mexican drug trafficking organization.

A black market peso exchange is a trade based money laundering scheme commonly used by Mexican drug trafficking organizations to obtain pesos in exchange for U.S. dollars acquired from narcotics sales in the U.S. This complex money laundering scheme involves money derived from the sale of drugs in the United States that is laundered through wholesale business in the Los Angeles Fashion District in order to repatriate the drug proceeds back to Mexican drug trafficking organizations.

In July 2018, federal agents arrested Guillen Ramirez in Las Vegas, Nevada. Guillen Ramirez pleaded guilty to one count of conspiracy to commit money laundering on December 13, 2018. Five Los Angeles wholesale business owners and one former CEO pled guilty to money laundering, tax and structuring related crimes. Each of the business owners that has been sentenced was required to a serve prison term and more than $2 million has been seized, forfeited or applied to restitution.

Following this money laundering investigation, the national bank used by the drug traffickers to deposit proceeds, changed its policy governing third party cash deposits. Prior to this investigation, this national bank allowed third parties to make cash deposits under $10,000 into personal bank accounts without providing identification. The bank now requires individuals making cash deposits into third party accounts to provide identification and be an authorized user of the account.

This case was the result of a joint investigation by the DEA, Homeland Security Investigations (HSI), IRS-Criminal Investigation, and the U.S. Marshals Service. The money laundering prosecution was led by Steven T. Mygrant, Assistant U.S. Attorney for the District of Oregon.

This case was brought as part of the Justice Department’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the department’s strategy for reducing the availability of drugs in the U.S. In 2018, the case was recognized nationally by OCDETF with the Outstanding Investigation Award for the Financial Investigation of an Opioid Network.

OCDETF was established in 1982 to mount a comprehensive attack on drug trafficking by disrupting and dismantling major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in coordination with state and local law enforcement.

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Two Oregon Tribes Receive Justice Department Grant Supporting Native American Crime Victims - 04/03/19

WASHINGTON— The Office of Justice Programs’ Office for Victims of Crime today awarded more than $8 million to support crime victims in Native American communities in six states: Alaska, California, Maine, Oregon, Washington and Wisconsin. The group of 13 awards is the third in a series of grants being made by OVC to American Indian and Alaska Native communities. OVC has now awarded more than $17 million of nearly $100 million to support tribal victim service programs.

The awards—30 in total so far—will fund critical crime victim services, such as counseling, transitional housing, emergency services and transportation. The grants are supported by the Crime Victims Fund, a repository of federal criminal fines, fees and special assessments. The fund includes zero tax dollars.

“American Indian and Alaska Native communities face extensive public safety challenges, but through creative approaches that combine traditional methods with innovative solutions, they are demonstrating their determination to meet the needs of victims in their communities,” said OJP’s Principal Deputy Assistant Attorney General Matt M. Dummermuth. “These grants, part of historic levels of funding awarded by the Department of Justice to American Indian and Alaska Native communities, will provide significant resources to bring critical services to those who suffer the effects of crime and violence.”

“One of our priorities in the District of Oregon is our unwavering commitment to members of tribal communities. Our office stands firmly on the side of tribal victims and will continue to work tirelessly pursuing justice on their behalf,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “The Justice Department’s tribal grant programs ensure all tribes have the resources necessary to support victims and keep their communities safe.”

According to OJP’S Bureau of Justice Statistics, American Indians and Alaska Natives experience violent crime at rates far greater than the general population.

Two Oregon tribes were among the 13 receiving grant awards today. Nearly 170 tribes are expected to receive funding this spring to help their communities support crime victims over the next three years:

  • The Klamath Tribes of Oregon (Oregon) was awarded $396,793 to enhance existing services and outreach to victims of domestic violence, sexual assault, stalking, sex trafficking, and dating violence.
  • The Cow Creek Band of Umpqua Tribe of Indians (Oregon) was awarded $714,783 to offer longer term transitional housing to provide stability for families and individuals while they receive restorative services.
  • Aroostook Band of Micmacs (Maine) was awarded $569,086 to expand the existing victim services program by providing 24/7 staffing of the emergency shelter.
  • Bad River Band of Lake Superior Tribe of Chippewa Indians (Wisconsin) was awarded $699,925 to create a central location for the victim services program, currently located in multiple locations on the reservation, and expand their crime victim services to include children and elders.
  • The Jamestown S'Klallam Tribe (Washington) was awarded $369,176 to establish a satellite Children’s Advocacy Center at the Jamestown Tribe to increase accessibility to culturally relevant services; state-of-the-art recording equipment; and skilled, trained forensic interviewers.
  • The Scotts Valley Band of Pomo Indians (California) was awarded $546,586 to build a culturally relevant, long-term strategic plan to improve services to victims; and develop programming around the concept of historical intergenerational trauma therapy using a practice-based curriculum.
  • The Karuk Tribe (California) was awarded $719,970 to improve access to, and delivery of, services to victims of crime by establishing a Victim Services Access Center, which will include secure space for a victim interview room and a private waiting area for victims.
  • The Bishop Paiute Tribe (California) was awarded $715,750 to enhance services provided through Relief After Violent Encounters by expanding the victim service program to include direct emergency supportive services.
  • The Central Council Tlingit & Haida Indian Tribes of Alaska (Alaska) was awarded $1,413,000 to implement a culturally appropriate response to address elder abuse and provide crime victim services for the Native older adult population within the Juneau urban area, and also serve victims in the villages.
  • The Puyallup Tribe of Indians (Washington) was awarded $407,448 to expand existing services by strengthening their continuum of care for homeless victims of crime and for victims with alcohol and substance abuse issues. Funding will also support culturally appropriate inpatient treatment services at a local or regional treatment center.
  • The Big Valley Rancheria Band of Pomo Indians (California) was awarded $670,443 to conduct a community needs assessment and develop a strategic plan to help inform the implementation of crisis intervention services for men, boys, and elders who are victims of crime. The tribe will also improve case management, incorporate healing and cultural practices into their victim advocacy services, and expand community outreach and education to help connect victims to vital resources.
  • The Tetlin Tribal Council (Alaska) was awarded $513,865 to conduct a community needs assessment and create a strategic plan that will guide the development, implementation, and expansion of victim services.
  • The Aleut Community of St. Paul Island Tribal Government (Alaska) was awarded $562,200 to expand existing services and develop additional services for victims of crime through strategic planning and enhanced training of program staff.

“American Indian and Alaska Native crime victims continue to face challenges in accessing vital services and resources needed to help survivors address their trauma and navigate a complex system,” said OVC Director Darlene Hutchinson. “The Justice Department has made it a priority to partner with tribes to help victims and their families rebuild their lives in the aftermath of violence.”

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Matt M. Dummermuth, provides federal leadership, grants and resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal justice system. More information about OJP and its components can be found at www.ojp.gov.

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Portland Baggage Handler Pleads Guilty to Federal Charges After Stealing Firearms from Luggage - 04/03/19

PORTLAND, Ore.—Deshawn Antonio Kelly, 27, a Portland resident and former baggage handler at Portland International Airport, pleaded guilty today to five counts of possessing a stolen firearm after he was caught stealing firearms from the checked luggage of airline passengers.

According to court documents, between August 19, 2018 and September 17, 2018, Kelly was employed as a contract baggage handler at Portland International Airport. Over a four-week period beginning August 19, 2018, Kelly stole six firearms— three 9mm pistols, two .40 caliber pistols and one .45 caliber pistol—from five different checked bags. The guns were checked by passengers traveling to and from Oregon.

On September 25, 2018, Kelly was arrested at the airport and search warrants were conducted on his person, vehicle and residence. Kelly admitted to stealing the six firearms, and told investigators where they were located.

A charge of possessing a stolen firearm carries a maximum sentence of 10 years in prison, a $250,000 fine and three years’ supervised release. Kelly will be sentenced on July 29, 2019 before U.S. District Court Judge Michael H. Simon.

This case was investigated by the FBI and the Port of Portland Police and is being prosecuted by Hannah Horsley, Assistant U.S. Attorney for the District of Oregon.

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Attached Media Files: CHANGE_OF_PLEA-Kelly-Final.pdf
Retired Attorney Pleads Guilty to Tax Evasion - 04/02/19

PORTLAND, Ore.—Bruce L. Lamon, 64, of Hillsboro, Oregon, pleaded guilty today to one count of tax evasion after failing to pay $744,000 in personal income taxes.

“As a retired attorney, Lamon was well-versed in the law and clearly knew tax evasion was a crime. It’s a crime of greed and arrogance that hurts every citizen who lawfully pays their taxes,” said Billy J. Williams, U.S. Attorney for the District of Oregon.

“Mr. Lamon’s chosen profession to serve those seeking justice from the law stands in stark contrast to his admission of guilt to evade his personal tax liability,” said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. “IRS-Criminal Investigation prioritizes bringing to justice individuals who engage in tax evasion in order to protect the integrity of the tax system by ensuring everyone pays their share.”      

According to court documents, between 2006 and 2012, Lamon worked as a commercial litigator at a law firm in Honolulu, Hawaii earning a substantial income. After retiring in 2012, he withdrew all the funds in his retirement account—approximately $395,000—and moved to Hillsboro. As of mid-October 2015, Lamon owed approximately $744,000 in individual income taxes for calendar years 2008 through 2013. To conceal his assets from the IRS and evade payment of his taxes, Lamon paid cash for vehicles, titling them in his former spouse’s name, and purchased rental properties with cash using an LLC registered in Hawaii.

On October 22, 2018, a federal grand jury in Portland returned a two-count indictment alleging Lamon evaded payment of his taxes for calendar years 2008 through 2013 and failed to disclose rental income in an application to proceed In Forma Pauperis in a civil case he filed in federal court in 2016.

Lamon faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release. He will be sentenced on July 9, 2019 before U.S. District Court Judge Marco A. Hernandez.

As part of the plea agreement, Lamon will pay $744,000 in restitution to the IRS. At sentencing, the government will move to dismiss Count 2 of the October 2018 indictment charging Lamon with giving a false statement.

This case was investigated by IRS Criminal Investigation (IRS-CI) and prosecuted by Seth D. Uram, Assistant U.S. Attorney for the District of Oregon.

The U.S. Attorney’s Office and IRS-CI remind Oregonians that tax day is Monday, April 15, 2019. For tips to assist taxpayers in choosing a reputable tax professional or preparing their own taxes, visit the IRS website: https://www.irs.gov/help-resources.

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Attached Media Files: CHANGE_OF_PLEA-Lamon-Final.pdf
Fusion Wellness Clinic
Fusion Wellness Clinic
Portland Nurse Practioner Sentenced to Four Years in Federal Prison for Illegal Opioid Distribution (Photo) - 03/26/19

Prosecution marks the first opioid pill mill case in the District of Oregon

PORTLAND, Ore.—Former nurse practitioner Julie Ann DeMille, 60, of Portland, was sentenced today to 48 months in federal prison and three years’ supervised release for illegally distributing prescription opioids, filing a false tax return and lying to federal agents.

“Our nation is drowning in substance abuse. We must wake up to this reality and stop pushing the reckless use of controlled substances. DeMille treated her nursing credentials like a license to deal opioids—a drug dealer masquerading as a medical professional. It’s hard to comprehend that in the midst of the deadliest drug crisis in history, DeMille risked the lives of hundreds to turn a profit,” said Billy J. Williams, U.S. Attorney for the District of Oregon.

“Opioid abuse is devastating our communities and we must respond aggressively to stem the flow because every person lost in this crisis is one too many,” said DEA Special Agent in Charge Keith Weis.

“This case is an excellent example of how the financial expertise of IRS-Criminal Investigation employees contributes to the federal law enforcement fabric,” said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. “IRS-Criminal Investigation is committed to serving the U.S. taxpayers and working with our partners to make our communities safer. DeMille has been held accountable for her actions and we will continue to investigate and seek prosecution of individuals who do not report their taxable income, regardless of whether the income is legal or illegal.”          

According to court documents, in January 2015, DeMille opened the Fusion Wellness Clinic on Southeast 122nd Avenue in Portland across the street from the Multnomah County Parole and Probation Office. From the clinic’s opening until July 2016, DeMille illegally wrote thousands of prescriptions for opioids including oxycodone and hydrocodone.

As early as 2013, DeMille began planning a move from Houston, Texas to Portland. She was attracted to Oregon where licensed nurse practitioners can write prescriptions without the oversight and approval of a physician. She moved in 2014 and was hired by a publicly funded, county health clinic. From the beginning, DeMille planned to subsidize her county income by operating an illegal opioid pill mill. By the end of 2014, DeMille had registered the “Fusion Wellness” business name and begun searching for clinic locations.

After DeMille’s first clinic opened in January 2015, word spread quickly that the small, cash-only operation was a reliable source for cheap and easy opioid prescriptions. On Friday and Saturday mornings, customers would spill into parking areas outside the clinic and wait in cars for their turn in the cramped office. The clinic quickly outgrew its original location and, in April 2015, was moved to a new location on Northeast 101st Avenue in Portland.

Before long, DeMille’s prescribing habits began attracting the attention of law enforcement and the Oregon State Board of Nursing. Shortly after the clinic opened, three of DeMille’s patients attempted to fill identical prescriptions for 30mg doses of oxycodone together at a local pharmacy. The pharmacist turned the patients away and contacted police. A Gresham police officer later contacted DeMille by phone to discuss the prescriptions and forwarded a copy of the general offense report to the state nursing board. The nursing board opened an investigation into DeMille’s prescribing practices just three weeks after the clinic opened.

In early 2015, the clinic’s patient files included very few records. Knowing her lax prescribing practices and record keeping would not pass investigative scrutiny, DeMille began forging patient signatures on newly created forms. In March 2015, DeMille met with nursing board investigators to discuss the complaint and her prescribing practices. During the course of the interview, she repeatedly lied about the nature of her practice, insisting that the clinic’s patients were treated for simple chronic diseases and a variety of other wellness issues. Ultimately, the nursing board issued a letter of concern to DeMille, but did not pursue disciplinary action.

DeMille quickly altered her practices in response to the nursing board’s investigation in an attempt to avoid further detection. Throughout the remainder of 2015, DeMille continued her work at the county health clinic while operating the clinic just two days a week. In a typical day at the clinic, DeMille saw up to 20 patients, charging each $200 in cash. In 2015, the clinic generated at least $388,000 in revenue, none of which was reported on DeMille’s income tax return. In July 2016, while conducting a federal search warrant, DEA agents found more than $51,000 in cash stored in DeMille’s bedroom.

In 2015 alone, according to data from the Oregon Prescription Drug Monitoring Program, DeMille wrote more than 1,940 prescriptions for controlled substances. Together, these prescriptions resulted in the distribution of more than 219,000 pills, 96.7% of which were opioids.

DeMille pleaded guilty on December 12, 2018 to two counts of illegally distributing a controlled substance and to one count of filing a false tax return and lying to federal agents.

DeMille’s co-conspirator and former Fusion Wellness Clinic manager, Osasuyi “Ken” Idumwonyi, pleaded guilty on February 28, 2017, to conspiring to distribute or dispense and possessing with intent to distribute or dispense the Schedule II controlled substances oxycodone and hydrocodone. He will be sentenced on June 3, 2019.

This case was investigated by the Drug Enforcement Administration, Internal Revenue Service, U.S. Marshals Service and Portland Police Bureau. It was prosecuted by Thomas S. Ratcliffe and Donna Brecker Maddux, Assistant U.S. Attorneys for the District of Oregon.

Drug abuse affects communities across the nation, and opioid abuse continues to be particularly devastating. The CDC reports that from 1999 to 2016, more than 630,000 people have died from a drug overdoses. In 2016, 66% of drug overdose deaths involved an opioid. Drug overdose is now the leading cause of injury or death in the United States. In Oregon, the total number of deaths related to drug use increased 11 percent between from 2013 to 2017, with 546 known drug related deaths in 2017.

If you or someone you know suffers from addiction, please call the Lines for Life substance abuse helpline at 1-800-923-4357 or visit www.linesforlife.org. Phone support is available 24 hours a day, seven days a week. You can also text “RecoveryNow” to 839863 between 8am and 11pm Pacific Time daily.

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