U.S. Attorney's Office - District of Oregon
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News Releases
Yamhill County Photographer Charged with Producing Child Pornography - 07/17/19

PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that Robert Arnold Koester, 52, a photographer from Yamhill County, Oregon, has been charged with six counts of production of child pornography.

According to the indictment, beginning in January 2015, Koester is alleged to have knowingly coerced six minor victims in Oregon to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct.

Koester is a suspected serial sexual predator who took nude photos of models and is alleged to have sexually assaulted many of these models, some of whom are minors. Koester, also known as Bert Kay, Rhake Winter, and Qitooly, has potentially been engaging in these criminal acts since 1994, continuing until his initial arrest in Carlsbad, California, on November 13, 2018.

Koester faces dozens of additional state and federal charges for related criminal conduct in Yamhill County and Carlsbad. On November 15, 2018, Koester was charged in San Diego County Superior Court with six felony counts involving sex crimes against minors. A week later, 35 additional related state charges were added. On February 6, 2019, Koester was charged with 32 related felony charges in Yamhill County Circuit Court. And finally, on March 7, 2019, Koester was charged in a two-count criminal information with production of child pornography by the U.S. Attorney’s Office in the Southern District of California.

Federal law enforcement officials across the country have been working closely with local law enforcement in Carlsbad, Yamhill County and elsewhere to identify potential victims in this case. The FBI has created an online system to collect victim information.

If you have information about this ongoing investigation or believe you or someone you know may have been victimized by Koester, the FBI requests that you complete this secure, confidential online questionnaire. Information and tips from the public may also be submitted confidentially via email to modelcase@fbi.gov.

Identified victims may be eligible for certain services and rights under federal and/or state law. More information is available at fbi.gov/modelcase.

This case was investigated by the FBI in Portland and San Diego, the Yamhill County Sheriff’s Office and the Carlsbad Police Department. It is being prosecuted by Ravi Sinha, 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-Koester-Final.pdf
Area Man Sentenced to 110 Months in Federal Prison for Bank Robbery - 07/16/19

EUGENE, Ore.—Dannie Kay Alston, 67, was sentenced today to 110 months in federal prison and three years’ supervised release for robbing four Oregon and Southwest Washington banks in a four-week period beginning in August 2017. Alston has no known permanent residence.

On February 21, 2019, Alston pleaded guilty in federal court to the following bank robberies:

  1. August 7, 2017; Chase Bank in Vancouver, Washington; collecting $2,300
  2. August 15, 2017; Wells Fargo Bank in Medford, Oregon; collecting $4,690
  3. August 24, 2017; Wells Fargo Bank in Salem, Oregon; collecting $1,317
  4. September 9, 2017; First Interstate Bank in Roseburg, Oregon; collecting $3,441

In each of his robberies, Alston attempted to disguise his identity by wearing sunglasses and some type of ball or ski cap. He communicated with the targeted bank tellers primarily through handwritten notes or signs. At his last robbery, in Roseburg, witnesses were able to provide a description of Alston’s getaway vehicle, leading to his quick arrest by the Oregon State Police. Police recovered the note used in the Roseburg robbery, a starter’s pistol with loaded caps, a Taser, sunglasses, wig and $3,441 cash from Alston’s person and vehicle.

Alston is a career offender with a criminal history spanning five decades and four states. He has previous burglary convictions in California and Texas, robbery convictions in California, Florida and Oregon, as well as assault, theft and narcotics convictions.

During sentencing, U.S. District Court Judge Michael J. McShane ordered Alston to pay $11,748 in restitution.

This case was investigated by the FBI, Clark County Washington Sheriff’s Office, Medford Police Department, Oregon State Police and Roseburg Police Department. It was prosecuted by Pamela Paaso, Assistant U.S. Attorney 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: PDF Release
Lake Oswego Man Sentenced to Federal Prison for Distributing Fentanyl From China Leading to Overdose Death - 07/11/19

PORTLAND, Ore.—Joseph Richard Caruso, 34, a prolific darknet narcotics vendor residing in Lake Oswego, Oregon, was sentenced today to 87 months in federal prison and three years’ supervised release for illegally distributing fentanyl that was linked to a 2017 fatal overdose in Wisconsin.

“A highly-coordinated effort by four law enforcement agencies led to Mr. Caruso’s arrest less than two days after his most recent inbound fentanyl package was discovered. It’s this sort of nimble and decisive law enforcement work that’s required to keep synthetic opioids off of our streets and prevent additional overdoses,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “I applaud the tremendous work of everyone involved in this case.”

“This sentence is a significant step forward in eliminating deadly drugs from our community,” said Brad Bench, Special Agent in Charge of HSI Seattle. “Fentanyl is an extremely deadly substance. Blatant disregard for the safety of those who could have come into contact with it will not be tolerated. This case is a testament to the hard work HSI, and our law enforcement partners, do every day to combat these drugs from making it to our streets.”

According to court documents, on November 19, 2017, a U.S. Postal Inspection Service inspector discovered a suspicious package addressed to Caruso at the U.S. Postal Service Portland Air Cargo Center. The package was transported to the Portland Police Bureau’s Drugs and Vice Division for further examination in a safe environment. Wearing a ventilated hood for protection, a Homeland Security Investigations (HSI) agent assigned to the High Intensity Drug Trafficking Area Interdiction Taskforce opened the heat-sealed package and found a clear Ziploc baggie containing a fine powdery substance. A test conducted the following day at the Oregon State Police Laboratory confirmed the substance was cyclopropylfentanyl, a power opioid and Schedule I controlled substance.

Investigators removed the cyclopropylfentanyl from the package and replaced it with an inert powder similar in appearance. On November 21, 2017, they conducted a controlled delivery of the package with the inert powder to Caruso’s residence in Lake Oswego. Shortly thereafter, Caruso was observed retrieving the package from his apartment postal box. HSI agents and other task force officers confronted Caruso and placed him under arrest.

On April 3, 2019, Caruso pleaded guilty to one count of distributing a controlled substance resulting in death. At sentencing, he was ordered to forfeit more than $764,000 and a 2013 Audi A4 sedan.

This case was investigated by the High Intensity Drug Trafficking Area Interdiction Taskforce, Homeland Security Investigations, the U.S. Postal Inspection Service and the Portland Police Bureau Drugs and Vice Division. It was prosecuted by Scott M. Kerin and Julia E. Jarrett, Assistant U.S. Attorneys for the District of Oregon.

The Oregon HIDTA program was established by the White House Office of National Drug Control Policy (ONDCP) in June of 1999. In 2015 the program expanded into Idaho and was renamed the Oregon-Idaho HIDTA. The Oregon-Idaho HIDTA consists of 14 counties and the Warm Springs Indian Reservation. Counties in the HIDTA include Oregon’s Clackamas, Deschutes, Douglas, Jackson, Lane, Linn, Malheur, Marion, Multnomah, Umatilla and Washington counties, and Idaho’s Ada, Bannock and Canyon counties.

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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Attached Media Files: PDF Release
Happy Valley Man Sentenced to 57 Months in Federal Prison for Distributing Fentanyl and Possessing a Machine Gun - 07/11/19

PORTLAND, Ore.—Johnell Lee Cleveland, 37, of Happy Valley, Oregon, was sentenced today to 57 months in federal prison and three years’ supervised release for distributing cyclopropyl fentanyl, possessing a machine gun and money laundering.

According to court documents, in March 2018, the Portland Police Bureau (PPB), FBI, and IRS executed a series of search warrants on Cleveland’s residence in Happy Valley, his storage unit in Clackamas, Oregon and a stash house in Vancouver, Washington as part of an ongoing investigation of Cleveland, a suspected distributor of oxycodone pills in the Portland, Oregon metropolitan area.

During the search of Cleveland’s home in Happy Valley, investigators seized $27,372 in cash, seven firearms, a ballistic vest, and more than 300 suspected oxycodone pills wrapped in two plastic baggies. One of the firearms seized was a fully-automatic machine gun with a drum magazine. In Cleveland’s garage, investigators found a white Mercedes-Benz with exterior bullet holes believed to be involved in a December 2017 downtown Portland shooting that left one man critically injured.

In searches of Cleveland’s storage unit and the Vancouver stash house, investigators found an additional $124,040 in cash, more than 900 additional suspected oxycodone pills and more than $100,000 worth of jewelry and Rolex watches. Laboratory tests revealed that the suspected oxycodone were in fact counterfeit pills made with cyclopropyl fentanyl, a powerful synthetic opioid.

On March 22, 2019, Cleveland pleaded guilty to one count of conspiring to distribute cyclopropyl-fentanyl, one count of possessing a machine gun and two counts of money laundering. As part of his plea, Cleveland agreed to abandon any interest in the seized firearms and forfeit all criminally-derived proceeds as identified by the government.

Cleveland is currently awaiting trial in Multnomah County Circuit Court for attempted murder with a firearm related to the December 2017 shooting in Portland.

This case was investigated by PPB, FBI and IRS Criminal Investigation. It was prosecuted by Peter Sax and Benjamin Tolkoff, Assistant U.S. Attorneys for the District of Oregon.

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Attached Media Files: PDF Release
Darknet Drug Dealer Sentenced to 86 Months in Federal Prison - 07/10/19

PORTLAND, Ore.—Skylaar Daylan Ford, 24, of Portland, Oregon, was sentenced today to 86 months in federal prison and three years’ supervised release for using the darknet to sell ecstasy to customers across the U.S.

According to court documents, in June 2017, Ford was on post-prison supervision after a previous conviction for possession of a Schedule II controlled substance in Lane County Circuit Court. During a June 9, 2017 visit to and search of Ford’s Northeast Portland home, a Multnomah County Probation and Parole Officer found more than 100 grams of heroin. Upon discovery of the heroin, the probation and parole officer contacted the Portland Police Bureau for assistance. PPB officers and a Homeland Security Investigations (HSI) agent responded.

When the officers and agent arrived, they placed Ford under arrest and received consent to search his residence. During the search, the HSI agent located an unopened parcel addressed to Ford and his dog “Orbit.” The package was opened and found to contain nearly 500 grams of 3,4-methylenedioxymethamphetamine (MDMA) also known as “ecstasy” or “molly.” Ford admitted to purchasing the ecstasy from a vendor in the Netherlands and reselling on AlphaBay, a darknet marketplace. Investigators were later able to confirm that Ford had been an AlphaBay vendor since November 2016 and had completed more than 500 confirmed sales of ecstasy.

On January 9, 2019, Ford pleaded guilty to one count of possession with intent to distribute MDMA, a Schedule I controlled substance. As part of his plea agreement, Ford agreed to forfeit any property used to facilitate his crimes as identified by the government.

This case was investigated by HSI and the Portland Police Bureau. It was prosecuted by Scott M. Kerin, Assistant U.S. Attorney for the District of Oregon.

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Attached Media Files: SENTENCING-Ford-Final.pdf
Warm Springs Man Sentenced to 25 Years in Federal Prison for the Repeated Sexual Abuse of a Child - 07/03/19

PORTLAND, Ore.—Robert Glenn Warner, 36, a member of the Confederated Tribes of the Warm Springs Indian Reservation, was sentenced today to 300 months in federal prison and 10 years’ supervised release for the repeated sexual abuse and rape of an 11-year-old child.

“This young victim demonstrated tremendous courage in reporting Warner’s repeated abuse and fully participating in the judicial process. Her brave actions put in motion our ability to stop this heinous crime and prosecute the defendant. The U.S. Attorney’s Office remains fiercely committed to holding child predators accountable and safeguarding the rights and dignity of victims,” said Billy J. Williams, U.S. Attorney for the District of Oregon.

“Warner used his position of power to perpetrate multiple, violent sexual assaults on a victim who was vulnerable and accessible. We are thankful to the victim, who has shown great strength, and to our partners at the Warm Springs Tribal Police who help end the abuse of this child,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon.

According to court documents, in July 2016, the victim, a minor member of the Warm Springs Tribe, told a friend’s mother that they had been repeatedly sexually abused and raped by Warner, a person known to the victim. Most recently, Warner raped the victim in a trailer parked in a wood cutting lot on the outskirts of the Warm Springs Reservation. The victim reported the abuse to the Warm Springs Tribal Police Department and Warner was arrested the same day.

On July 16, 2018, Warner pleaded guilty to one count of abusive sexual contact with a minor before U.S. District Court Judge Michael H. Simon.

This case was investigated by the Warm Springs Tribal Police Department and the FBI. It was prosecuted by Natalie Wight, Assistant U.S. Attorney for the District of Oregon.

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 tips.fbi.gov.

On March 3, 1994, the FBI initiated “Operation Safe Trails” with the Navajo Department of Law Enforcement in Flagstaff, Arizona. The operation, which would later evolve into the Safe Trails Task Force (STTF) Program, 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. STTFs allow participating agencies to combine limited resources and increase investigative coordination in Indian Country to target violent crime, drugs, gangs, and gaming violations.

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Attached Media Files: PDF Release
Oregon Man Pleads Guilty for Instagram Threats Against Portland Mayor Ted Wheeler - 07/03/19

PORTLAND, Ore.—Kermit Tyler Poulson, 40, pleaded guilty today to one count of transmitting threatening communications with the intent to extort Portland Mayor Ted Wheeler.

According to court documents, on October 9, 2018, Poulson posted multiple threatening comments on Mayor Wheeler’s personal Instagram account. Poulson threatened to firebomb the mayor’s home if he did not immediately fire a Portland police officer recently involved in an on-duty shooting. Investigators tracked the IP address associated with the comments to a Portland residence where Poulson was staying. Poulson was present when investigators searched the property and after initially making a number of misleading statements, admitted that he alone was responsible for the comments.

Poulson faces a maximum sentence of two years in prison, a $250,000 fine and three years of supervised release. He will be sentenced on October 2, 2019 before U.S. District Court Judge Michael H. Simon.

As part of the plea agreement, Poulson has agreed to forfeit property used to facilitate his crimes identified by the government prior to sentencing.

This case was investigated by the Portland FBI Joint Terrorism Task Force (JTTF) and the Portland Police Bureau (PPB). The Portland JTTF includes FBI special agents and more than a dozen state and local law enforcement officers.

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Attached Media Files: PDF Release
Bandon Educational Assistant and Coach Sentenced to 30 Years in Federal Prison for Sexually Abusing an Infant - 06/27/19

MEDFORD, Ore.—U.S. Attorney Billy J. Williams announced today that former Bandon School District educational assistant and coach Sean Jeffrey Haga, 33, was sentenced to 360 months in federal prison and a life term of supervised release for sexually abusing a 2-month-old infant and distributing photos of the abuse on the internet.

“Mere hours passed between FBI agents first discovering the photographic evidence of Sean Haga’s abuse online and their rescue of the infant victim assisted by local law enforcement. Unfortunately, Haga’s victimization of this child did not stop with his arrest. These images will continue to be circulated on the internet forever, a heartbreaking fact this child will one day come to understand,” said U.S. Attorney Williams. “We believe the sentence imposed will prevent Haga from abusing other children and hope that it brings some measure of solace and comfort to the victim’s family and community.”

“The sexual abuse of this victim—an infant—is reprehensible. Sean Haga's further exploitation of this baby as he shared that abuse with other pedophiles is unconscionable. I want to thank the FBI agents and local partners at the Bandon Police Department and Coos County Sheriff's Office who worked around the clock to rescue this child and arrest Haga,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon.

On June 17, 2016, Haga shared photos depicting the sexual abuse of children online with an undercover FBI task force officer using Kik Messenger, an instant messaging mobile application. Haga told the undercover officer that he wanted to travel to have sex with the officer’s minor daughter and that he possessed photos of himself sexually abusing a minor victim. Haga sent multiple pictures depicting this abuse to the undercover officer.

The FBI worked through the night to identify the person associated with the Kik account and the location from which it was being used. Based on the information collected, FBI agents from the Medford Resident Agency were able to obtain search and arrests warrants for Haga who was arrested on June 18, 2016 without incident.

On April 25, 2018, Haga pleaded guilty to one count of sexual exploitation of a minor.

This case was investigated by the FBI and prosecuted by Judi Harper and Amy Potter, Assistant U.S. Attorneys for the District of Oregon.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

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 tips.fbi.gov.

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Attached Media Files: PDF Release
Attorney General's Advisory Subcommittee on Native American Issues Meets to Discuss Violent Crime in Indian Country - 06/27/19

WASHINGTON— Attorney General William P. Barr’s Advisory Subcommittee on Native American Issues (NAIS) convened this week during the U.S. Attorney’s National Conference in Washington, D.C., to discuss a wide range of justice issues affecting Indian Country, announced U.S. Attorney Trent Shores, Subcommittee Chair, U.S. Attorney Kurt Alme, Subcommittee Vice Chair and U.S. Attorney Billy J. Williams, Subcommittee Member.

“The Native American Issues Subcommittee is focused on reducing violent crime against women and children in Indian Country, including missing and murdered indigenous persons,” said U.S. Attorney Trent Shores. “I am thankful for Attorney General Barr’s leadership on these issues. He understands the law enforcement and jurisdictional challenges faced by Native Americans and Alaska Natives. We look forward to working with him and with our federal, tribal, state and local partners to find viable solutions that will improve public safety in Indian country.”

“Pursuing justice on behalf of native women is a priority for our office and has been for many years. We are deeply committed to the advancing rights of native women, increasing their access to justice, and combatting invisibility and erasure” said Billy J. Williams, U.S. Attorney for the District of Oregon. “Reducing violence in tribal communities, especially against native women, is a sacred duty. I look forward to continuing to work with my colleagues from the Native American Issues Subcommittee on this issue and many others affecting public safety in Indian Country.”

On Tuesday, the NAIS met with Tara Katuk Mac Lean Sweeney, Assistant Secretary of Indian Affairs, Department of the Interior, and discussed cross-agency collaboration in order to provide more responsive and effective justice services to Indian Country. They further discussed Indian Country case investigations, case intake and tracking databases, and tribal law enforcement resource allocation. The NAIS also reviewed President Trump’s priorities for Indian Country justice. Those priorities include protecting Native American children in the Indian Health Services system, collaboration among Department of Justice, the Department of the Interior, and tribal law enforcement agencies, reducing violent crime, and providing services to help victims to overcome trauma.

On Wednesday, Trent Shores, NAIS Chair and U.S. Attorney for the Northern District of Oklahoma, moderated a panel titled Murdered and Missing Indigenous Women: A Crisis in Urban America & Indian Country. Panelists included Charles Addington, Director of the Office of Justice Services, Bureau of Indian Affairs; Kurt Alme, U.S. Attorney for the District of Montana; Tracy Toulou, Director of the Office of Tribal Justice; Laura Rogers, Acting Director of the Office on Violence Against Women; and Bryan Vorndran, Deputy Assistant Director of the FBI. The panel discussed the development and implementation of protocols to investigate murdered and missing indigenous persons and how to more accurately measure the scope of the problem in both urban America and Indian Country in order to develop strategies to address it.

In August, the subcommittee is scheduled to reconvene in Indian Country in New Mexico.

The NAIS consists of the approximately 53 U.S. Attorneys serving in districts that include Indian Country or one or more federally recognized tribes. The NAIS focuses exclusively on Indian Country issues, both criminal and civil, and makes policy recommendations to the Attorney General regarding public safety and legal issues that impact tribal communities.

The NAIS is the longest standing subcommittee to the Attorney General’s Advisory Committee and helps develop, shape, and otherwise implement justice policies affecting Native Americans and Alaska Natives. The NAIS has identified four priority areas: 1) Violent crime 2) Law enforcement resources 3) Drug trafficking and substance abuse, and 4) White collar crime.

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U.S. Attorney's Office to Join FBI, Local Law Enforcement for House of Worship Safety Seminar - 06/27/19

Seminar is part of the national One Congregation One Precinct (OneCOP) initiative

PORTLAND—U.S. Attorney Billy J. Williams announced today that the U.S. Attorney’s Office will join the FBI and other Portland area law enforcement agencies to host a safety and security seminar for faith communities.

Leaders and subject matter experts from the U.S. Attorney’s Office, the FBI, Oregon State Police, Portland Police Bureau and the Multnomah, Clackamas and Washington County Sheriffs’ Offices will jointly present information designed to support and update existing house of worship security protocols and preparedness measures.

All senior faith leaders and congregation security personnel in Multnomah, Clackamas and Washington counties are encouraged to attend. The training will include a robust question and answer period.

Please note: this training is being offered for information and preparedness purposes only and is not responsive to any active or known threats to area congregations.

WHAT: Safety Seminar for Faith Communities

WHEN: Sunday, June 30, 2019 from 3:00-6:00pm PDT

WHERE: Congregation Neveh Shalom—2900 SW Peaceful Lane, Portland, Oregon

This training is free and designed for senior faith leaders and congregation security personnel.

A news conference featuring senior leaders from OneCOP and participating law enforcement agencies will be held on Thursday, June 27, 2019 at 12:30 p.m. on the 15th floor of the Justice Center (Chief's Office Conference Room). Media can arrive at 12:00 p.m. for set-up and a representative will meet interested media in the lobby to assist with entry.

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Portland Man Pleads Guilty to Cyberstalking and Anonymous Telephone Harassment - 06/25/19

PORTLAND, Ore.—On June 24, 2019, Bob Ibenne Ugwa, 50, of Portland, pleaded guilty to cyberstalking and anonymous telecommunications harassment after making repeated threatening and harassing telephone calls to seven individuals over an eight-year period.

According to court documents, between 2011 and 2018, Ugwa made thousands of anonymous, interstate telephone calls from Oregon to seven victims in Pennsylvania. In these calls, Ugwa threatened or harassed each victim by breathing heavily, moaning, and saying sexually explicit things. Telephone records were used to confirm Ugwa’s threatening calls. Each of the victims made multiple unsuccessful attempts to stop Ugwa from calling, citing substantial emotional distress.

Ugwa faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release. He will be sentenced on September 10, 2019 before U.S. District Court Judge Michael W. Mosman.

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

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Attached Media Files: PDF Release
Former President of Oregon Foster Care Agency Sentenced to Federal Prison for Theft, Money Laundering and Tax Evasion - 06/21/19

PORTLAND, Ore.—Mary Holden Ayala, 59, of Portland, was sentenced today to 33 months in federal prison and three years’ supervised release for stealing over $1 million from an Oregon foster care agency, money laundering and filing false personal income tax returns.

On February 7, 2019, after eight days of trial, Ayala was convicted by a federal jury in Portland on five counts of theft concerning programs receiving federal funds, two counts of engaging in monetary transactions in criminally derived property and seven counts of filing a false federal tax return.

From at least 2008 to 2015, Ayala, a longtime Portland resident, served as the President, Executive Director and primary agent of Give Us This Day (GUTD), a private foster care agency and residential program for youth.

“Mary Holden Ayala was responsible for protecting and caring for children in Oregon’s foster care system. Instead she callously stole from them,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “Stealing from vulnerable children she was entrusted to serve with taxpayer money is a despicable act and warrants severe consequences.”

“Foster children have already lost almost everything—their parents, their homes, their sense of security. Mary Holden Ayala took from them the last thing they had—faith in a foster care system that is supposed to give them a chance at a better life. To steal from society’s most vulnerable children to enrich yourself is simply unconscionable,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon.

“Mary Ayala’s crimes include stealing funds intended to provide support for juvenile foster kids entrusted in her care, spending the funds selfishly on a luxurious lifestyle, and then hiding her personal use of the funds by filing false tax returns,” said IRS Criminal Investigation Special Agent in Charge Justin Campbell. “Today’s sentence holds Ayala accountable. IRS Criminal Investigation is proud to work with our partners and investigate those who steal from the most vulnerable in our society.”

“Stealing money meant to pay for foster care expenses is reprehensible,” said Special Agent in Charge Steven Ryan of the HHS Office of Inspector General. “Such greed-fueled fraud can impact those in need and cheats taxpayers; however, today’s sentence shows that our hardworking investigators and law enforcement partners are committed to making sure criminals are held accountable for their actions.”

According to court documents, since its inception in 1979, GUTD was primarily funded by the Oregon state and federal government for foster care services including hiring and screening foster parents for community placements, compensating foster parents for services and placing foster children in residential or group homes. GUTD federal funding originated from the Administration for Children and Families, a division of the U.S. Department of Health and Human Services, and was administrated by ODHS.

From 2009 through 2015, Ayala exercised sole and complete control over GUTD finances. No other GUTD employee or board member had access to the organization’s bank accounts or statements during this time. With no internal controls in place, Ayala wrote checks, used the GUTD debit card and withdrew cash at will, using the organization’s bank accounts as her own.

Ayala used the money stolen from GUTD to pay her mortgage, remodel her home and fund other retail, travel and transportation expenses. Additionally, she used the money to fund other, non-GUTD business ventures including a media company, Big Mary’s fish and ribs restaurant in Portland, and to purchase and flip a commercial property.

In total, Ayala stole over $1 million from GUTD. As a result, her employees, foster parents and foster children in GUTD’s care suffered. GUTD residential house managers complained about a lack of basic necessities, including but not limited to food, toiletries and cleaning supplies.

In 2015, the day after Ayala resigned her position at GUTD, she filed five false federal income tax returns for tax years 2009 through 2013. Shortly thereafter, she filed a sixth false return for tax year 2014. Ayala failed to file a tax return in 2015.

During sentencing, U.S. District Court Judge Marco A. Hernandez ordered Ayala to pay $239,192 in restitution to the IRS and $1,025,235 to satisfy a forfeiture money judgement. The court also forfeited to the U.S. more than $451,000 in net proceeds from the sale of a commercial property on NE Martin Luther King Boulevard in Portland that Ayala purchased with stolen GUTD funds.

In a superseding indictment returned on May 3, 2017, a federal grand jury in Portland charged Ayala with five counts of theft concerning programs receiving federal funds, one count of concealment of money laundering, one count of failure to file a personal federal tax return and two counts each of engaging in monetary transactions with criminally derived property and filing a false personal federal tax return. The government dropped the concealment of money laundering charge prior to trial.    

This case was investigated by the FBI, the Department of Health and Human Services Office of Inspector General and IRS-Criminal Investigation. It was prosecuted by Donna Maddux, Clemon Ashley and Julia Jarrett, Assistant U.S. Attorneys for the District of Oregon.

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Attached Media Files: PDF Release