Law Enforcement

SAN FRANCISCO --- Attorney General Kamala D. Harris announced today the arrest of 30 gang members in the Tracy area.

The arrests come one day after Attorney General Harris announced the arrests of 101 leaders and members of two transnational gangs operating violent criminal enterprises in the Central Valley cities of Madera, Los Banos, Livingston, Merced, Atwater and Dos Palos.

“Today the Department of Justice delivered another blow to the criminal gangs that have been making inroads into California’s Central Valley,” said Attorney General Harris. “The arrests we have made over the past few days send a message to the individuals who are bringing drugs and guns into our communities. This conduct will receive swift and certain consequences.”

The operation in Tracy was dubbed “Operation Gateway” because of the centralization of three interstates, the 205, 580 and 5, connecting Sacramento, the Bay Area and the Central Valley.

During the operation, Department of Justice agents served 28 state arrest warrants and 24 state search warrants in the Tracy area. The investigation has resulted in 30 arrests, 11 guns and approximately 1/4 ounce of methamphetamine. Everyone arrested was booked into the San Joaquin County Jail.

“Operation Gateway” is a spin-off from Operation Crimson Tide into the criminal activities of the Nuestra Familia gang.

The investigation, a collaborative effort led by California Department of Justice Bureau of Narcotic Enforcement, and assisted by the Tracy Police Department, California Department of Corrections and Rehabilitations Special Services Unit, and the Federal Bureau of Investigation, Safe Streets Task Force. The operation involved over 200 law enforcement officers and 28 locations.

“The community of Tracy is safer today because of the hard work and dedication of the multiple law enforcement agencies involved in this 11-month investigation,” said Tracy Police Chief Janet Thiessen.
“Designed to identify, arrest and prosecute individuals and gangs responsible for violent crime and narcotics trafficking in Tracy, we are confident today’s arrests will have a significant positive impact on crime in our city today and in the future.”

The operation is the latest in a series of actions by Attorney General Harris designed to attack gang violence. In February, agents arrested three associates of a Tijuana drug cartel in a murder-for-hire plot in Southern California. In March, the Attorney General brought law enforcement leaders from across the state to California’s border with Mexico to see firsthand the problem of transnational gangs smuggling guns, drugs and human beings across the border. In April, the Attorney General announced the creation of the first multi-agency gang task force in Tulare County.

LOS BANOS --- Attorney General Kamala D. Harris announced the arrests of 101 leaders and members of two transnational gangs operating violent criminal enterprises in the Central Valley cities of Madera, Los Banos, Livingston, Merced, Atwater and Dos Palos.

“As transnational gangs traffic crime into California, we must counter their ruthlessness with our resolve,” said Attorney General Harris. “The arrest of dozens of transnational gang leaders and members frees California from a significant criminal threat.”

The operation, code-named “Red Zone,” was led by Attorney General Harris’ Bureau of Narcotic Enforcement office in Fresno. It is the latest in a series of actions the Attorney General has taken against transnational gangs.

Attorney General Harris was joined today in the announcement of Operation Red Zone by U.S. Attorney Ben Wagner, Madera County Sheriff John Anderson, and Merced District Attorney Larry Morse II.

Law enforcement from 16 local, state, and federal agencies arrested 75 individuals yesterday, adding to 26 previous arrests, and seized methamphetamine, marijuana plants and crack cocaine during sweeps in Madera and Merced counties. Police also seized more than a dozen firearms, including five assault rifles, and more than $64,000 in currency.

Operation Red Zone was launched in August 2010, when agents with the Department of Justice discovered that members of the Nuestra Familia gang – effectively driven out of Salinas in earlier sweeps – had set up drug trafficking operations in the cities of Madera, Los Banos, Livingston, Merced, Atwater and Dos Palos.

Agents from the Department of Justice logged more than 8,100 hours on the investigation. Out of this focused attention, and the full-time commitment of 21 individuals from the Fresno Bureau of Narcotic Enforcement, agents narrowed in on dozens of gang members – tracking their day-to-day activities and gathering evidence of felonies ranging from drug trafficking to attempted murder.

Seventy-two arrest warrants were served yesterday at more than 50 locations in Merced and Madera counties, in an operation conducted by 31 multi-agency teams. Those arrested were booked into the Madera and Merced County jail. Eight of the individuals arrested will be federally indicted, while the remainder will be prosecuted in Merced County.

The arrests were conducted with assistance from Merced Gang Task Force, Madera Gang Task Force, Merced Narcotics Task Force, Merced County Sheriff’s Department, Merced Police Department, Atwater Police Department, Los Banos Police Department, Livingston Police Department, Madera Police Department, Madera County Corrections, and the Drug Enforcement Agency.

Operation Red Zone grew out of intelligence obtained in earlier operations. In April 2010, agents from the Attorney General’s Gang Suppression Enforcement and other law enforcement agencies arrested 37 members of the Nortenos and Surenos gangs in Salinas. These arrests targeted the most dangerous gang leaders and, along with an additional 57 arrests, had a significant impact on gang operations in Salinas.

Likewise, the arrests in Madera and Merced counties yesterday focused on gang leadership – and signal the Attorney General’s commitment to disrupting the influence of transnational gangs in communities across the state.

In February, agents arrested three associates of a Tijuana drug cartel in a murder-for-hire plot in Southern California. In March, Attorney General Harris brought law enforcement leaders from across the state to California’s border with Mexico to see firsthand the problem of transnational gangs smuggling guns, drugs and human beings across the border. In April, the Attorney General announced the creation of the first multi-agency gang task force in Tulare County.

Last month, the collaboration of local, state and federal law enforcement agencies led to two significant gang takedowns. In Contra Costa, a gang sweep netted 35 arrests and the seizure of more than 135 pounds of methamphetamine (http://oag.ca.gov/news/press_release?id=2082&). In another bust in Chico and surrounding areas, local, state and federal agents arrested 23 individuals and seized a significant stash of methamphetamine, marijuana and cocaine (http://oag.ca.gov/news/press_release?id=2084&).

Four of every 10 homicides that occur in California are gang-related, and more than 80 percent of the California cases in which relocation is required for the protection of witnesses involve gang violence.

Launched in Folsom Prison in 1968, Nuestra Familia is one of seven prison gangs in the state. Through top-down leadership, Nuestra Familia controls illegal activities inside several prisons, as well as most of the Nortenos gangs who operate in central California – from Yuba City to Bakersfield and from Salinas to the Sierra foothills.

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LOS ANGELES – Attorney General Kamala D. Harris announced she has subpoenaed Lender Processing Services, Inc. (LPS), as part of her continuing probe into “robosigning” of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure.

Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy – often thousands of different documents signed by a single individual per day. In many cases, the robosigners don’t even read or understand the document they are signing.

“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” said Attorney General Harris. “Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures.”

Former LPS employees have testified that LPS designees “robosigned” foreclosure documents. LPS prepared and recorded these foreclosure documents on behalf of many of the largest mortgage lenders and servicers in the country.

The Attorney General’s investigative subpoena requires LPS to produce documents and provide written answers to questions from the Attorney General’s office. The time period covered by the subpoena runs from Jan. 1, 2007, until just before the compliance date, which is no later than June 24 of this year.

LPS, based in Jacksonville, Fla., with several offices in California, provides loan management services to mortgage lenders, including document preparation services and a software platform used by much of the mortgage industry. According to its website, LPS systems are used for servicing over 50% of all mortgages in the United States and more than 80 financial institutions contract with LPS to service more than 30 million loans with an outstanding principal balance exceeding $4.5 trillion.

Attorney General Harris warned that the risks posed by robosigning are particularly dangerous in non-judicial foreclosure states such as California, where the courts typically are not involved in overseeing the foreclosure process.

On Monday, Attorney General Harris announced the creation of a Mortgage Fraud Strike Force, staffed by two dozen Department of Justice attorneys and investigators to monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.

SACRAMENTO – Attorney General Kamala D. Harris today released updated figures showing that the homicide rate in California continued to fall during 2010, reaching the lowest level since 1966.

Preliminary figures gathered by the Department of Justice from the state’s largest jurisdictions show that the number of homicides reported in 2010 declined by 9.6% from the year before.

“The decline in homicides and other violent crimes reflects the tireless efforts of our peace officers,” said Attorney General Harris. “My office is committed to supporting their brave, relentless and selfless work in protecting the people of California from hardened criminals.”

Overall, the number of violent crimes declined 6.4% in 2010, according to statistics compiled from 89 agencies that report about 65% of all crimes committed annually in California. Forcible rape declined 6%. Robbery dropped 8.9%, and aggravated assault fell 4.6%.

Property crimes declined 2.2% in 2010. Burglary dropped 0.9%. Motor vehicle theft declined 7.2%. Arson dropped 15%. Larceny under $400 dropped 4.9%. Only larceny over $400 rose, by 0.7%.

The 2010 figures are a preliminary update of the annual report “Crime in California 2009,” which was released earlier this year. That report, which was compiled using data submitted to the Department of Justice by police and sheriffs in the state’s 58 counties, showed the homicide rate in California fell in 2009 by nearly 9%.

A second report, “Homicides in California 2009,” provides an even more detailed analysis.

Homicides dropped from 2,143 in 2008 to 1,970 in 2009. That marked the fourth consecutive year of decline, and a numerical decline of 5% since 2000.

One troubling note is that the number of gang-related homicides between 2008 and 2009 increased 18% – to nearly 40% of all homicides in California where the contributing circumstances were reported.

The falling homicide rate was mirrored by the rates of other violent crimes, which dropped in every category in 2009: Robbery declined 8.6%; aggravated assault, 5.5%; and rape, 3%.

The majority of homicides in 2009 in the state – 70.5% – involved firearms. More than 84% of victims ages 18 to 29 were killed with guns, but just slightly more than 51% of victims over 40 were killed with guns.

Besides firearms, the weapons used in 2009 homicides were knives (15.1%); hands and feet (5.5%); clubs and other blunt objects (5.3%); rope, drugs and all other weapons (3.6%).
Some 35% of 2009 homicides, where the contributing circumstances were reported, occurred as a result of an argument. Another 8.4% occurred as the result of rape, burglary or robbery. Another 2.5 % were drug related, a decrease from 3% in 2008.

In cases where police could determine relationships, the majority of victims were killed by friends or acquaintances. Less than 30 percent were killed by strangers, the rest by family members.

Hispanics were homicide victims far more often than whites, African Americans or members of other ethnic groups; they accounted for 46.6% of all homicides in 2009.

Among those arrested in 2009 for homicide, 90% were male and 10% were female. Men were victims 82.2% of the time; women, 17.8%. Females were more likely to be killed in their residences, while men were more likely to be killed on streets or sidewalks.

Gang-related homicides claimed more male victims than any other factor (46.2%). Domestic violence claimed more female homicide victims (41.3%). Homicide victims under the age of 5 overwhelmingly died as a result of child abuse (almost 90%).

Among the state’s 35 largest counties in 2009, Monterey County had the highest homicide rate per 100,000 population (11.8), and Napa County had the lowest (0.7). Merced County had the second highest rate (10.1).

For more detailed statistics and local data, please see the reports “Homicide in California 2009” and “Crime in California 2009.” Both are available on the Attorney General’s website at ag.ca.gov/cjsc/pubs.php#homicide.

The preliminary crime report for 2010 is attached to the electronic copy of this press release at ag.ca.gov.

LOS ANGELES – Attorney General Kamala D. Harris today announced the creation of the California Attorney General’s Mortgage Fraud Strike Force, staffed by Department of Justice attorneys and investigators charged with protecting innocent homeowners and bringing to justice those who defraud them.

Composed of both civil and criminal enforcement teams, the Mortgage Fraud Strike Force will monitor and prosecute violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public.

“Californians in search of the American dream all too often found a protracted personal and legal nightmare,” said Attorney General Harris. “Families are losing their homes, while those who perpetrated crimes and frauds against them walk free.”

At her announcement of the new mortgage fraud unit, Attorney General Harris was joined by Mayor Antonio R. Villaraigosa, representatives from U.S. Department of Housing and Urban Development (HUD) and the Center for Responsible Lending, as well as homeowners harmed by unlawful lending, servicing and foreclosure practices.

“We will work to safeguard the homeowner at every step of the process – from origination of a loan to its securitization, and we will prosecute to the fullest extent of the law those who take advantage of trusting California families,” said Attorney General Harris. “We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed.”

The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
• The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
• The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
• The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.

Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. “With nearly 10,000 foreclosures in the City of Los Angeles last year,” he said, “this strike force is certain to help countless residents and families from becoming victimized.”

“The Attorney General’s authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all,” said Mayor Villaraigosa. “I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods.”

California has been hit hard by the foreclosure crisis, and by predators who seek to profit from the millions of Californians who are underwater in their mortgages, in foreclosure, or at risk of entering foreclosure.

Last year alone, there were foreclosure filings against 546,669 California homes. It is projected that between 2009 and 2012, a total of 2 million California homes will enter the foreclosure process. In the last year, the California Department of Justice has received thousands of complaints related to foreclosure scams, mortgage fraud, and mortgage servicing practices.

“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the California Office, Center for Responsible Lending. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”

Attorney General Harris has long been dedicated to prosecuting mortgage fraud. In 2009, as District Attorney of San Francisco, she launched the first stand-alone district attorney’s mortgage fraud unit in California with $1.1 million from the U.S. Department of Justice.

If you are a homeowner who has been scammed, you can learn more or file a complaint online with the Attorney General’s office at: http://oag.ca.gov/consumers.

SAN BERNARDINO, Calif. – Three men were arrested this morning in San Bernardino County in a $102 million bribery scheme. A fourth, former Supervisor Paul Biane, remains a fugitive from justice.

The four individuals were indicted yesterday by the San Bernardino County Grand Jury on 29 counts of conspiracy to commit bribery, misappropriation of public funds, improper influence, conflict of interest, and additional charges.

“When public officials act corruptly, every Californian is their victim,” said Attorney General Kamala D. Harris. “Let the San Bernardino indictments send a strong message that we will never tolerate this sort of abuse of the public trust.”

The indictments are the result of a combined effort by Attorney General Kamala D. Harris and San Bernardino County District Attorney Michael A. Ramos. Their two agencies jointly investigated the case and presented it to the grand jury, and will share in prosecution of the charges.

Turning themselves in to authorities for arrest this morning were Mark Kirk, former chief of staff for a member of the board of supervisors and current director of government relations in the county administrative office; James Erwin, former chief of staff for a member of the board of supervisors; and Jeffrey Burum, a general partner of Colonies Partners, L.P., a developer. The three were arrested and booked at Central Detention Center in San Bernardino.

Former Supervisor Paul Biane did not turn himself in after the indictment. Biane is also charged with misappropriation of public funds, filing a fraudulent tax return, perjury, filing a false instrument, and two counts of bribery.

Kirk is also charged with bribery, improper influence, forgery, filing a fraudulent tax return, willful failure to file a tax return, four counts of perjury, three counts of filing a false instrument, and four counts involving bribery.

Burum is also charged with four counts involving bribery.

The case is part of a continuing probe by both the Attorney General and the DA into corruption in San Bernardino County.

The current charges, according to the indictment, stem from a $102 million settlement approved by the Board of Supervisors in 2006 with the developer Colonies over flood control improvements on 434 acres of land in Upland. The indictment alleges that the defendants engaged in a corrupt scheme to obtain the settlement from the county.

Between January 2005 and November 2006, according to the indictment, that corrupt scheme included Burum influencing “members of the Board of Supervisors through a combination of threats, extortion, inducements and bribery, in order to secure their vote in favor of a settlement.”

Erwin joined the conspiracy, the indictment says, and conveyed threats and/or inducements from Burum to William John Postmus (then chairman of the Board of Supervisors), Biane and Kirk. Erwin agreed to accept money in exchange for influencing the votes of Postmus and Biane. Kirk agreed to accept money to influence the vote of another member of the board. And Postmus and Biane joined the conspiracy by agreeing to accept a bribe to approve the Colonies settlement.

The bribes were $100,000 each.

After Colonies received a substantial amount of the $102 million settlement, the indictment says, Burum distributed the agreed-upon bribes and payments to Postmus, Biane, Kirk and Erwin. The defendants used political action committees to conceal the bribes.

Postmus pleaded guilty in March to 14 felony counts, including conspiracy to accept a bribe and conflict of interest. He agreed to cooperate in the continuing investigation.

SAN FRANCISCO – Attorney General Kamala D. Harris announced the successful conclusion of a major law enforcement sweep that shut down a father-and-son-led criminal operation connected to violent transnational and prison gangs that dealt in narcotics and firearms in Butte, Glenn, Sacramento, Placer and Yuba counties.

“As long as violent gangs continue to wreak havoc up and down California,” Attorney General Harris said, “my office will continue to partner with local law enforcement to shut them down and prosecute them to the fullest extent of the law.”

As part of an operation code-named “Mario Brothers,” a joint task force of more than 200 local, state and federal law enforcement agents led by Attorney General Harris’ Bureau of Narcotic Enforcement concluded an investigation into a drug-dealing ring with connections to the criminal street gang known as the Nortenos, which has ties to the vicious prison gang Nuestra Familia.

Yesterday in Chico and surrounding areas, agents arrested 23 individuals and seized a significant stash of methamphetamine, marijuana and cocaine. Police also seized eight firearms, including two assault rifles, and more than $17,000 in currency.

Those arrested include Mario Salazar, 57, of Chico and his son, Jose Salazar, 31, of Hamilton City. Mario Salazar dealt in multiple pounds of methamphetamine by tapping into his son’s gang affiliation.

Operation Mario Brothers began in August 2010, when the North Butte Interagency Narcotic Task Force sought assistance from the Attorney General’s Bureau of Narcotic Enforcement. Through surveillance and other investigative techniques, agents determined that the Salazars dealt methamphetamine, and bought and sold firearms, in several counties.

The operation is the latest in a series of actions by Attorney General Harris designed to attack transnational gang violence. In February, agents arrested three associates of a Tijuana drug cartel in a murder-for-hire plot in Southern California. In March, the Attorney General brought law enforcement leaders from across the state to California’s border with Mexico to see firsthand the problem of transnational gangs smuggling guns, drugs and human beings across the border. Last month, the Attorney General announced the creation of the first multi-agency gang task force in Tulare County.

Four of every 10 homicides that occur in California are gang-related, and more than 80 percent of the California cases in which relocation is required for the protection of witnesses involve gang violence.

Along with agents from the Attorney General’s Bureau of Narcotic Enforcement, the operation was conducted by the North Butte Interagency Narcotic Task Force; the Butte County Sheriff’s Office; the Chico Police Department; and federal agents with the FBI and ICE.

Search warrants were served at 16 locations in Butte, Placer, Sacramento and Yuba counties. Those arrested were booked into the Butte County jail.

Yesterday’s bust follows closely on the heels of another major gang sweep in Contra Costa County, which netted 35 arrests and the seizure of more than 135 pounds of methamphetamine. (http://oag.ca.gov/news/press_release?id=2082&p=3)

SAN FRANCISCO – Attorney General Kamala D. Harris today announced the successful conclusion of Operation Red Reach, a coordinated law enforcement sweep that shut down a network of local and transnational gangs that dealt in narcotics and firearms, homicide and fraud in western Contra Costa County and nearby areas.

“We are fighting transnational gangs from one end of California to another,” Attorney General Harris said. “With the cooperation of local and federal law enforcement agencies, we’re going to outmuscle, outsmart and undo them.”

San Pablo Police Chief Walt Schuld added: “Exceptional collaboration among the California Department of Justice, local law enforcement, and the FBI has resulted in the successful dismantling of this violent street gang involved in high-level drug and gun trafficking. Our community is much safer due to the tireless efforts of the agents and officers.”

Operation Red Reach, which concluded today, resulted in 35 arrests and the seizure of more than 135 pounds of methamphetamine, 26 firearms – including two assault rifles – more than $86,500 in currency and six vehicles. Police are looking into two weapons that may be tied to a homicide.

Those arrested include Joseph Abbate, aka Sherman Fisher or Butch, an identified member of the criminal street gang known as the Nortenos, which has ties to the vicious prison gang Nuestra Familia.

The operation is the latest in a series of actions by Attorney General Harris designed to attack gang violence.
In February, agents arrested three associates of a Tijuana drug cartel in a murder-for-hire plot in Southern California. Last month, the Attorney General traveled to California’s border with Mexico with law enforcement leaders to underscore the problem of transnational gangs, and earlier this month, the Attorney General announced the creation of the first multi-agency gang task force in Tulare County.

Four of every 10 homicides that occur in California are gang-related, and more than 80 percent of the California cases in which relocation is required for the protection of witnesses involve gang violence.

Operation Red Reach began in February 2009 primarily to investigate the illegal activities of Abbate. As the probe developed, investigators identified his co-conspirators, who include other members of the Nortenos gang, members of local gangs, and members of a Mexican drug trafficking cartel.

The operation, as well as the arrests and searches over the last several weeks, were conducted, in co-operation with federal agents, by an inter-agency task force known as West-NET (for West Contra Costa County Narcotic Enforcement Team). Besides the Attorney General’s Bureau of Narcotic Enforcement, other members of West-NET include the Contra Costa County Sheriff; police in San Pablo, Richmond, El Cerrito, and Kensington; and the Contra Costa Probation Office.

Search warrants were served in San Pablo, Richmond, El Sobrante, Pinole, Antioch, Pittsburg, San Rafael, Vallejo, Fairfield and Sacramento. Those arrested were booked into the San Pablo jail.

VENTURA – Daniel Avila, a former candidate for the Thousand Oaks City Council has been sentenced to six years and four months in prison for threatening to kill six prosecutors in the Ventura County District Attorney’s office.

Avila was convicted of six counts of making criminal threats and six counts of threatening public officials on April 4 in Ventura County Superior Court. He was sentenced yesterday. The case was prosecuted by Deputy Attorney General Jonathan Kline.

“As the chief law enforcement officer of California,” Attorney General Kamala D. Harris said, “I take very seriously any threat against prosecutors or police officers. They are the ones charged with keeping the public safe, so their own protection is doubly important, and violators must be punished. The result in this case achieves both objectives.”

Avila ran for the Thousand Oaks City Council in 2004, and was charged with hacking into the Verizon wireless system and sending bogus text messages to thousands of residents between midnight and 4 a.m. in the name of a fellow candidate. The District Attorney’s office filed charges including computer fraud and identity theft against him.

While he was in jail on those charges in 2008, Avila threatened in a phone call to kill one prosecutor, and wrote letters to five female prosecutors threatening to rape them, kill them with a fishing knife and burn their bodies with lighter fluid.

Avila has been in custody continuously since March 2006, including two stints in mental hospitals. The sentence gives him credit for 279 days served on the current charges, which means he must serve more than five-and-a-half additional years.

SACRAMENTO – Attorney General Kamala D. Harris today asked a Sacramento County Superior Court to hold “Tax Lady” Roni Deutch in contempt of court, imprison her for five days on each violation and fine her thousands of dollars for shredding millions of pages of documents and failing to pay refunds to her clients in violation of a court order.

“Deutch showed herself to be a predator for profit, preying on innocent, hard-working people who were simply hoping to settle their accounts with the IRS,” Attorney General Harris said. “By defrauding these victims, and then pleading poverty, she created a real danger that her clients will never receive their advance fees back.”

In August, the Attorney General filed a $34 million lawsuit against Deutch for swindling thousands of people facing serious and expensive tax collection problems with the IRS. On August 31, the court issued an order that prohibited Deutch from destroying evidence.

“Despite this order,” the Attorney General said in today’s action, “Deutch has been routinely shredding documents on an almost a weekly basis.” The Attorney General estimates that to date Deutch has shredded some 1,643,000 to 2,708,600 pages of documents. Deutch’s shredding campaign has permanently deprived the Attorney General of evidence needed to fully prosecute the action against her.

Deutch’s law firm, based in Sacramento County, had revenues of at least $25 million a year. She spent $3 million a year on advertising, much of it on late-night cable TV, and frequently offered tax advice on popular TV shows. In her pitches, she promised to significantly reduce the IRS tax debts of people who signed up with her firm. Instead, she took thousands of dollars in up-front fees from clients but offered little or no help in lowering their tax bills. Hundreds of clients complained to the Attorney General and other government agencies.

In addition to shredding documents, the Attorney General also charged that Deutch violated a November 17 preliminary injunction by failing to issue some $435,000 in refunds to her clients within 60 days. Instead she “decided to disperse funds to friends, family and other creditors. By draining her estate and that of the law firm, Deutch has placed her clients at serious risk of never receiving their refunds.”

For instance, Deutch opted to transfer hundreds of thousands of dollars in equity from the sale of her home to a media firm. She also personally withdrew $241,000 from the law firm’s accounts and her personal accounts at just one bank. In addition, since the preliminary injunction order was issued, Deutch made more than $21,000 in unnecessary expenditures, including gifts to family and friends, and a payment to a NASCAR racing team.

The Attorney General asked the court to fine Deutch $1,000 and imprison her for five days for each count of contempt, to immediately freeze Deutch’s personal assets, and to appoint a receiver to manage her law firm’s business operations.

Copies of the court filings are attached to the version of this press release found at ag.ca.gov.