Law Enforcement

Santa Ana – Attorney General Edmund G. Brown Jr. today announced that agents from his office and the Santa Ana Police Department have arrested a “serial con artist” who defrauded hundreds of people by charging them $500 to apply for credit cards that did not exist.

Ralph Adam Rendon, 33, of Orange County, was arrested late last week on suspicion of grand theft and forgery. While no new charges have been filed at this point, his bail has been increased to $1 million and a search warrant was executed at his Santa Ana business. He is currently being held in custody at the Santa Ana Jail.

“This serial con artist was arrested and charged last year for selling bogus travel packages to senior citizens who wanted to go to Cuba,” Brown said. “He is behind bars again for charging his victims hundreds of dollars in application fees for credit cards that did not exist.”

On April 8, 2008, Brown’s office filed 78 criminal counts of grand theft, embezzlement, and mishandling consumer funds against Rendon in Orange County Superior Court for stealing more than $160,000 from consumers who paid him for trips to Cuba that he never booked. He was arrested a few days later and posted bail. Trial in that case is set to begin on October 26, 2009.

Nearly a year after posting bail, Rendon started a Santa Ana based company called London Exchange, which offered “No FICO” credit cards with credit lines of $50,000 to $100,000. A “No FICO” credit card does not require a credit check. Rendon’s company also claimed to offer credit repair counseling.

To receive the credit cards, consumers were required to pay an upfront processing fee of $500. However, no consumers who investigators have interviewed reported receiving a credit card, despite paying the fee. Rendon collected more than $300,000 from over 600 individuals who responded to his company’s online advertisements from May to August 2009.

The scheme eventually unraveled after the credit card processing company that Rendon used to process his customers’ payments discovered that he was a defendant in a pending criminal case. The credit card processing company notified Brown’s office, which launched an investigation.

After interviewing several consumers, investigators from Brown’s office obtained a warrant to search the company’s Santa Ana office in September 2009. Investigators found hundreds of credit card applications and checks made out to the London Exchange. No evidence was found indicating that any credit cards were ever issued or that the company employed professionals who could offer credit repair counseling.

The company also failed to register with Brown’s office as a credit repair agency as required by California law.

Consumers who may have applied for one of these credit cards should check their credit reports for any suspicious activity. Although investigators have seized credit card applications as well as computers records containing personal identifying data, this information could have been misused. If you believe you have been defrauded by the London Exchange, file a complaint with the Attorney General’s Office at (916) 322-3360.

To view a copy of the first press release about Rendon, go to http://ag.ca.gov/newsalerts/release.php?id=1546&year=2008.

Los Angeles – Continuing his fight against financial fraud, Attorney General Edmund G. Brown Jr. today filed suit against “Madoff middleman” Stanley Chais, who directed hundreds of millions of dollars of his clients’ investments to Bernard Madoff, while actively concealing the link between the two.

This suit seeks at least $25 million in civil penalties, restitution for victims, disgorgement of profits and compensation and an injunction prohibiting future violations of California law.

“For decades, Stanley Chais posed as an investment wizard, but in truth, he was nothing more than a Madoff middleman, channeling hundreds of millions of dollars in investor funds to his friend’s Ponzi scheme,” Brown said. “Chais intentionally concealed his close ties to Madoff, while collecting nearly $270 million in fees.”

From the early 1970s until December 2008, Chais directed hundreds of millions of dollars to Madoff through three funds -- the Brighton, Lambeth and Popham companies -- collectively known as the Chais Funds.

Chais, who operated out of Beverly Hills, attracted hundreds of investors to these funds by producing annual returns of 20 to 25 percent.

Chais claimed that he generated these high returns through superior skill and experience, use of advanced technology and connections to sophisticated brokers in New York. Investors were discouraged from asking about his investment strategy and were led to believe that he utilized a complex and diversified approach involving arbitrage, derivates, stock, currency and futures trading.

In reality, Chais turned over all of the Chais Funds’ investments to Madoff, who relied on such feeder funds and middlemen to attract the cash flow needed to prop up his Ponzi scheme. In return, Madoff produced made-to-order returns.

Chais told Madoff that he did not want any losses on the Chais Funds’ trades, and Madoff accommodated his request. Between 1999 and 2008, despite supposedly executing thousands of trades on behalf of the Chais Funds, Madoff did not report a loss on a single equities trade. The Chais Funds received improbably high and consistent returns of between 20 and 25 percent, with only three months of negative returns between 1996 and 2007.

For his services, Chais charged investors an astronomical annual fee of 25 percent on all profits. Over the past decade, Chais collected almost $270 million in fees.

Although Chais turned over all the Chais Funds’ assets to Madoff, most investors had never heard of Madoff and were completely unaware of the connection between the two men until after the Ponzi scheme collapsed and their investments were lost.

After conducting a seven-month investigation, Brown today filed suit in Los Angeles Superior Court. The suit demands:
• An injunction prohibiting Chais, his successors, agents, representatives and employees from continuing to operate;
• Full restitution of any money or other property acquired through these illegal actions;
• Disgorgement all profits and compensation obtained through these illegal actions; and
• Payment at least $25 million in civil penalties.

Brown is suing Chais for:
• Committing securities fraud in violation of California Corporations Code Section 25401;
• Engaging in acts, practices or a course of business as an investment advisor that are fraudulent in violation of California Corporations Code Section 25235;
• Making or disseminating untrue or misleading statements in violation of California Business and Professions Code Section 17500; and
• Engaging in unfair competition in violation of California Business and Professions Code Section 17200.

On March 12, 2009, Madoff pleaded guilty to 11 felony counts and admitted to defrauding thousands of investors of billions of dollars. Federal prosecutors estimated client losses, which included fabricated gains, of almost $65 billion. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.

On June 22, 2009, the SEC filed a complaint against Chais in U.S. District Court for the Southern District of New York alleging that he committed fraud by misrepresenting his role in managing the funds' assets and for distributing account statements that he should have known were false.

Sacramento – Attorney General Edmund G. Brown Jr. announced today that a former life insurance agent who “bilked” retirees out of $435,100 to pay for a daily gambling habit, pled no contest late Thursday to 12 counts of grand theft and burglary.

Maria Elna Flora, 59, of Sacramento, will be sentenced on October 8 in Sacramento Superior Court to 13 years, 4 months in prison and will be ordered to pay her victims full restitution.

“Maria Elna Flora bilked retirees out of hundreds of thousands of dollars by persuading them to shift their retirement savings into sham real estate investments,” Brown said. 'Flora stole thousands from retirees and used it to fund a daily gambling habit.”

Flora, a licensed life insurance agent, sold annuities to retirees looking for financial security. After completing annuity sales, Flora would offer additional investment opportunities, promising returns ranging from 10 to 20 percent. The funds, she said, would be used to make real estate loans to investors willing to pay high interest rates. In reality, none of the funds Flora collected were invested as promised.

From January 2005 through August 2007, Flora convinced at least twelve individuals living in Butte, El Dorado, Sacramento, San Joaquin, Solano, Stanislaus and Yolo counties to invest between $5,000 and $88,000. Flora encouraged investors, who ranged in age from 51 to 92 years old, to shift savings from annuities, life insurance policies, certificates of deposit and savings accounts, to her short term, high return investment. In total, retirees invested more than $435,000 with Flora.

In most of these cases, Flora made a few interest payments to investors and then stopped. When victims asked about the returns, Flora promised to pay at a later date, but never did.

In 2007, the California Department of Insurance initiated an investigation after Flora's former employer filed a complaint. Earlier this year, the case was turned over to the Yolo County District Attorney's Office for prosecution. The Yolo County District Attorney's Office continued the investigation and then referred the case to Brown's office because there were victims in at least five other California counties.

The investigation found that Flora used investors' money to fund an expensive gambling habit which included almost daily slot play from January 2005 through August 2007 at Thunder Valley Casino.

She was arrested June 18, 2009 by Yolo County law enforcement officials.

Flora's victims included:
• A 78-year old Placerville resident who invested $88,000;
• A 76-year old retired bookkeeper in Elk Grove who invested $50,000;
• An 85-year old retired education professional in West Sacramento who invested $47,000;
• A 71-year old Modesto resident who invested $45,000;
• An 83-year old Chico resident who invested $42,600;
• A 72-year old Woodland resident who invested $32,000;
• A 92-year old Vacaville resident who invested $20,000;
• An 80-year old retired department store employee in Citrus Heights who invested $10,000;
• A 73-year old Sacramento resident who invested $10,000;
• A 67-year old West Sacramento resident who invested $5,000;
• An 82-year old Lodi resident who invested $71,500; and
• A 51-year old North Highlands resident who invested $19,000.
On June 19, 2009 Brown filed criminal charges against Flora in Sacramento County Superior Court for:
• Grand theft in violation of Section 487 of California's Penal Code;
• Embezzlement from an elder or dependent adult in violation of Section 368 of California's Penal Code; and
• Burglary in violation of Section 459 of California's Penal Code.
Copies of the felony complaint and arrest warrant affidavit, filed in Sacramento County Superior Court, are attached.

Los Angeles — Continuing his fight against mortgage scams, Attorney General Edmund G. Brown Jr. today announced that agents from his office have arrested Michael McConville, and two of his associates for their roles in a “criminal conspiracy” to steal nearly $1 million from borrowers seeking to refinance their homes.

McConville and his co-conspirators lured dozens of borrowers into refinancing home loans by falsely promising low interest rates and brokers’ fees, and other attractive terms. They then negotiated different terms with lenders, forged the victims’ signatures on the final loan documents and collected hefty brokers fees – ranging from $20,000 to $57,000 – that were never disclosed. Only when the borrowers received true copies of the loan documents after the refinance did they discover that their names had been forged. In total, defendants stole over $950,000 from more than 70 borrowers, leaving victims holding $30 million in loans with terms they did not agree to.

“After victims signed their closing papers, McConville and his associates doctored the loan documents, forged borrowers’ signatures and slipped in hefty fees that were never disclosed,” Brown said. “This was not some clerical error but a criminal conspiracy to steal nearly a million dollars from borrowers.”

Earlier this week, Brown filed 44 criminal charges against:

• Michael McConville, 31, of Simi Valley, sales manager of ALG, Inc, a Los Angeles based mortgage company. McConville was arrested at his home late Thursday. He is being held in Ventura County Jail on $2 million bail.

• Garrett Holdridge, 23, of Palmdale, California and Texas, loan officer for ALG, Inc. Holdridge is being held at the Los Angeles County Jail (Palmdale Station) on $2 million bail.

• Alan Ruiz, 28, of Huntington Beach, a loan officer for ALG, Inc. Ruiz was arrested at his home late Thursday. He is being held at Orange County Sheriff's Main Jail on $2 million bail.

The charges include:

• 28 counts of grand theft, by violating Penal Code section 487, subdivision (a);
• 14 counts of forgery, by violating Penal Code section 470, subdivision (d);
• One count of elder abuse, by violating Penal Code section 368, subdivision (d);
• One count of conspiracy to commit grand theft, by violating Penal Code section 182, subdivision (a)(1);
• Three special allegations of aggravated white-collar crime in excess of $500,000, by violating Penal Code section 186.11, subdivision (a)(2); and
• Taking in excess of $3,200,000, by violating Penal Code section 12022.6, subdivision (a)(4) and (b).

From April 2007 to October 2008, McConville and his associates provided homeowners closing documents bearing terms promised, but which the lender never approved. After homeowners signed those documents, key pages were removed and replaced with pages bearing the terms that the lender had actually agreed to. The homeowners’ signatures were forged on the replacement pages, and ALG forwarded the forged documents to the escrow company.

Homeowners only discovered they had been defrauded when they received the final loan documents with the true terms and saw their signatures forged on disclosures of closing costs, Truth-in-Lending disclosures, loan applications and other documents. ALG often collected between $20,000 and $30,000 in undisclosed broker fees. In one transaction, they collected over $57,000 in such fees.

As a result of this scheme, homeowners suffered devastating financial losses. Some were forced to sell their homes, come out of retirement, or tap into retirement savings. Others paid significant prepayment penalties -- in one case, over $21,000. Borrowers often never received the significant amounts of cash-out they were promised.

VICTIMS
Michael McConville promised one couple a 5.5 percent fixed interest rate, cash-out of $58,000 and $4,500 in closing costs. Only after they signed the documents, they realized their copy did not include the pages detailing the key terms of the loan. The couple soon received loan documents from Indymac Bank and discovered their signatures had been forged and they had received a 7 percent interest rate, no cash-out, and over $50,000 in closing costs, including a $42,000 origination fee paid to ALG.

ALG contacted a 65-year-old retired woman in July 2007 and promised her a 30-year fixed rate loan at 5.25 percent. A month later, a notary had arrived at the victim’s house with loan documents reflecting the 5.25 percent fixed interest rate. After closing, the victim discovered she had received an adjustable rate mortgage with an initial rate of 8.65percent, a $22,000 origination fee, and $2,230 in miscellaneous fees. The victim’s signature had been forged on most of the documents.

Brown recently sued Michael McConville and his brother Sean for their part in the “Property Tax Reassessment” scam which targeted Californians looking to lower their property taxes. Tens of thousands of mailers were sent out that featured official-looking logos and demanded hundreds of dollars in payments for property tax reassessment and reassessment appeal services. The statements warned homeowners that if payments were not received by the 'due date' they faced late fees or would have their file marked 'non-responsive' or 'ineligible for future tax reassessments.' A copy of the press release can be found at: http://ag.ca.gov/newsalerts/release.php?id=1734

Brown has made it a top priority to combat mortgage fraud. In July, as part of a nationwide sweep, Brown filed suits against 21 individuals and 14 companies who ripped off thousands of homeowners seeking mortgage relief. In total, Brown has sought court orders to shut down 32 companies and has brought criminal charges and obtained lengthy prison sentences for deceptive mortgage consultants.

Sacramento – Governor Arnold Schwarzenegger and Attorney General Edmund G. Brown Jr. today presented six California peace officers who “exhibited extraordinary bravery in the line of duty” with the Public Safety Officer Medal of Valor at a Capitol ceremony today.

“These individuals exhibited extraordinary bravery in the line of duty when they risked their lives to protect their fellow officers and members of the public,” Brown said. “It is fitting that we honor their fine service and thank all the men and women of law enforcement who safeguard our communities every day.”

“Today we honor California's best and bravest for showing extraordinary strength and character while answering the call of duty,” said Governor Schwarzenegger. “In the face of danger, each of these men protected their fellow officers, members of the public and communities. They are true heroes and serve as an inspiration to us all. On behalf of all Californians, I thank them for their selfless and courageous service.”

The Public Safety Officer Medal of Valor is the highest state award for valor awarded to a public safety officer. Under the Public Safety Officer Medal of Valor Act of 2003, the Attorney General nominates individuals who demonstrate extraordinary valor above and beyond the call of duty, and the Governor subsequently awards the medal.

On June 12, 2009, Brown nominated six individuals for the Medal of Valor in a letter to Schwarzenegger. On Thursday, Schwarzenegger officially awarded the officers with their medals at a ceremony in the Governor’s Council Room.

Attached is a copy of Brown’s letter of nomination:

June 12, 2009

The Honorable Arnold Schwarzenegger
Governor of California
State Capitol Building
Sacramento, CA 95814

Re: 2008 Governor’s Public Safety Officer Medal of Valor

Dear Governor Schwarzenegger:

The Medal of Valor Review Board met on April 29, 2009, to assess 28 nominations for the 2008 Medal of Valor. The Board made six selections and presented those to me for approval. I concur with the Board’s unanimous recommendations that the following public safety officers deserve this award:

• Lieutenant Raymond Garcia and Officer Scott O’Connor, El Segundo Police Department
April 11, 2008 Lieutenant Garcia and O’Connor were working a special detail at a theatre complex when they were told by the manager of an uncooperative man in the lobby who was demanding a ticket refund. The officers approached and noticed the man appeared extremely sweaty. The subject pulled away at an attempted pat down and then retrieved a weapon when the officers reached for him. The subject opened fire, his first shot striking Lieutenant Garcia in the face. The round entered above Lieutenant Garcia’s lip, shattering the right side of his upper jaw, knocking out several teeth. The bullet continued on, striking a vertebrae and finally lodging in Lieutenant Garcia’s neck. Officer O’Connor tackled the subject, but he continued firing, striking Officer O’Connor in the chest and shoulder at point blank range. Fortunately Officer O’Connor’s bullet proof vest absorbed the impact from the torso shot, but the shoulder shot caused extensive damage, severing several tendons and muscles. The subject then got up and ran from the building. As he did so, Officer O’Connor followed, engaging the subject in a running gun battle. Lieutenant Garcia, dazed and bleeding profusely fought off his injuries and followed, also firing his service weapon. Both officers fired until the subject was incapacitated.

• Officers Bryan Paul and Joe Romeo, Los Gatos/Monte Sereno Police Department
On October 17, 2008 Officer’s Paul and Romeo received a call that a car had left a driveway and gone backwards down a steep embankment on an isolated hillside. The older couple in the car was uninjured, but the driver, now holding the brake, was unable to leave the car without it sliding further down the hill. Officer’s Paul and Romeo had to first scale a locked gate and then search for the car in the dark. Footing was treacherous when the officers located the vehicle, and when the victim attempted to exit the car, it started to slide further down the hill. There was no way to brace the car, so Officer Romeo held the driver’s door while Officer Paul continued pressure on the brake with his hands, exposing his body to a rollover threat, but relieving the exhausted driver. Officer Paul and Romeo held these positions for over a half hour as fire personnel worked to set up rigging to stabilize the car. When the officers themselves began to tire, they devised a plan to extricate the driver in a sudden move pulling him free. As this plan was deployed, the driver was rescued, but Officer Romeo was dragged down the hill by the now released car as he continued to hold the door for the rescue. Fortunately no one was injured in the incident.

• Sergeant Dave Peruzzaro, San Mateo Police Department
On November 25, 2008, at roughly 9:30 AM, numerous San Mateo police officers were dispatched to a residential robbery in progress. Sergeant Dave Peruzzaro, one of the first to arrive, approached the front door and saw the male suspect walking down a hallway in the residence carrying a handgun. It was determined that the 24-year-old female resident and her two children, ages three years and one year, were being held against their will by the armed suspect. The victim spoke with negotiators over a cellular telephone and stated the suspect was trying to break down the door to the bedroom. She told negotiators that she was going to drop her two children from the bedroom window to safety.

An armored rescue vehicle was driven to the scene to attempt the rescue of the victim and her children. Sergeant Peruzzaro climbed onto the exposed roof of the armored rescue vehicle and it was driven to a position directly below the bedroom window. Sergeant Peruzzaro placed himself in a precarious and defenseless position in order to accept the children from the victim. Sergeant Peruzzaro leaned toward the window frame and placed both his hands against the building. The mother of the children handed Sergeant Peruzzaro the first child who was quickly and safely passed on to other officers on the ground. As the second child was handed to Sergeant Peruzzaro, the suspect fired 10 rounds through a wall into the room where the victim was standing. Three rounds struck the victim while four struck the frame around the window where Sergeant Peruzzaro was accepting the last child. As the bullets tore through the bedroom walls, Sergeant Peruzzaro kept his grasp on the child, but lost his ability to support himself and fell to the ground from the roof of the armored rescue vehicle. As Sergeant Peruzzaro fell, he placed his arms around the child and twisted his own body to protect the child. Sergeant Peruzzaro, stunned by the fall, got to his feet and ran with the child to safety, believing he was shot due to a burning pain in his upper body. Ultimately, upon medical examination, Sergeant Peruzzaro was determined not to have been struck by a bullet. Tragically, the mother of the two children was fatally wounded by the suspect. The suspect was also located, deceased from a self-inflicted gunshot wound.

• Officer Roger Smith, California Highway Patrol
Tuesday December 2, 2008 CHP Officer Roger Smith responded to a domestic violence call to provide backup to Tehama County Sheriff’s Deputies and another CHP officer already on the scene. Officer Smith picked up radio traffic indicating that the other officers had come under shotgun fire from the subject, and that one of the officers was injured. While rushing to assist, Officer Smith relayed critical information to the communications center. The injured officer, wounded in the femoral artery and bleeding profusely, advised that he was still pinned down and feeling faint. Upon arrival, and realizing the urgency of the situation, Officer Smith positioned his car, rear doors open and still under fire, so as to facilitate the extraction of the injured officer. Having rescued the bleeding officer from the scene, Officer Smith drove him to awaiting medical personnel.

As you will see from the enclosed nomination forms, these six public safety officers put their own lives directly in jeopardy. The State of California, and particularly their communities, should be proud of these individuals for their bravery, character, professionalism and willingness to serve with such uncommon valor.

Therefore, I request that you award the Medal of Valor to the aforementioned public safety officers. Tom Sawyer, your Public Safety Liaison Officer, has notified the Board that the date of September 10, 2009 and a time from 11:30 a.m. to 12:30 p.m. in the Governor’s Council Room has been reserved by your office for the 2008 Medal of Valor Ceremony. The Department of Justice will have the awards prepared and notifications sent to the award recipients, their families and the Medal of Valor Review Board members.

Thank you for your consideration of this very worthy recognition of California’s top public safety officers.

Sincerely,

EDMUND G. BROWN JR.
Attorney General

Sacramento - On September 10, 2009, at 11:30 a.m. in the State Capitol, Governor Arnold Schwarzenegger and Attorney General Edmund G. Brown Jr. will present six California peace officers who exhibited extraordinary bravery in the line of duty with the Public Safety Officer Medal of Valor at a ceremony in the State Capitol.

Date: Thursday, September 10, 2009
Time: 11:30 a.m. to 12:30 p.m.
Location: Governor’s Council Room, State Capitol building

On June 12, 2009, Brown nominated the following individuals for the Medal of Valor:

• Lieutenant Raymond Garcia and Officer Scott O’Connor of the El Segundo Police Department;
• Officers Brian Paul and Joe Romero of the Los Gatos/Monte Sereno Police Department;
• Sergeant Dave Peruzzaro of the San Mateo Police Department; and
• Officer Roger Smith of the California Highway Patrol.

On Thursday, Governor Schwarzenegger will officially award these individuals with the Medal at a ceremony in the Governor’s Council Room.

The Public Safety Officer Medal of Valor is the highest state award for valor awarded to a public safety officer. Under the Public Safety Officer Medal of Valor Act of 2003, the Attorney General nominates individuals who demonstrate extraordinary valor above and beyond the call of duty, and the Governor subsequently awards the medal.

Bakersfield – Attorney General Edmund G. Brown Jr. announced that Kern Valley Hospital administrator Pamela Ott was charged on eight felony counts of elder abuse today for allowing staff to forcibly administer psychotropic medications to patients for their own convenience, rather than for their patients’ therapeutic interests. These actions are alleged to have resulted in the deaths of three nursing home residents.

“As hospital administrator, Pamela Ott, was ultimately responsible for safeguarding the welfare of her patients,” Brown said. “Instead, Ott abdicated her responsibility and allowed the staff of the Kern Valley Hospital to foricibly sedate patients who questioned their care.”

Brown the charges against Ott in Kern County Superior Court. She surrendered herself in court this morning and pled not guilty. She was released on her own recognizance on the condition that she not run a skilled nursing facility. A preliminary hearing is set for November 4, 2009. Today’s charges are in addition to those filed in February 2009 against:

• Gwen Hughes, the former Director of Nursing at the skilled nursing facility of the Kern Valley Healthcare District in Lake Isabella, Kern County on charges of elder abuse and assault with a deadly weapon.

• Debbi Hayes, the former pharmacist at the Valley Healthcare District, on charges of elder abuse and assault with a deadly weapon. On August 14, 2009, Hayes pled no contest to a felony charge of conspiracy to commit an act injurious to public health. She is a cooperating witness for the people.

• Dr. Hoshang Pormir, a staff physician at Kern Valley Healthcare District, who was serving as the medical director of the skilled nursing facility, on charges of elder abuse.

As the Administrator of the Kern Valley Health Care District, Ott hired and supervised Director of Nursing Gwen Hughes.

Upon taking over in September 2006, Hughes ordered that Alzheimer's and other dementia patients be given high doses of psychotropic medications to make them more tranquil and easy to control. She ordered the administration of these medications to patients who argued with her, were noisy, or who were otherwise disruptive. Two patients who resisted were held down and forcibly given injections. Ms. Ott was informed of these actions and allowed them to continue.

Hughes is also alleged to have directed Debbi Hayes, the hospital pharmacist, to fill prescriptions for psychotropic medications. Hayes wrote and filled these prescriptions without first obtaining a doctor's approval.

Dr. Pormir approved these psychotropic medications only some time after they had been administered and without examining the patients first and determining whether these psychotropic medications were medically necessary.

Several of these patients are alleged to have had medical complications as a result of being given these psychotropic medications, including lethargy and the inability to eat or drink properly. It is believed that three patients died and one patient suffered great bodily injury as a result.

The investigation

Kern Valley Healthcare District operates a small community hospital and skilled nursing facility in Lake Isabella. The case came to the attention of authorities in January 2007, when an ombudsman reported to the Bakersfield office of the California Department of Public Health that a patient in the skilled nursing facility had been held down and given an injection of psychotropic medication by force.

The Department of Public Health immediately sent an investigative team with a doctor, a nurse, and a doctor of pharmacology. They determined that 22 patients, including some who were suffering from Alzheimer's at the skilled nursing facility, were being given high doses of psychotropic medication not for therapeutic reasons, but to simply control and quiet them for the convenience of the staff.

The Department of Public Health issued a Certificate of Immediate Jeopardy which resulted in the immediate dismissal of the Ms. Hughes. The matter was then turned over to the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.

Special Agents from the Bureau of Medi-Cal Fraud and Elder Abuse began a year-long investigation, with the co-operation and assistance of the Department of Public Health and the administration of the Kern Valley Healthcare District.

A search warrant was served on the facility in August 2008, resulting in the seizure of numerous medical files and records.

If convicted, all defendants could face up to 11 years in prison.

The case is being prosecuted by the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse, with the co-operation and assistance of the Kern County District Attorney's Office.

To view the news releases issued February 2009 about this case, go to http://ag.ca.gov/newsalerts/release.php?id=1682&.

To report elder abuse or Medi-Cal fraud, call the Bureau of Medi-Cal Fraud and Elder Abuse's hotline at (800) 722-0432.

The complaints are attached.

El Centro, Calif. – Attorney General Edmund G. Brown Jr. announced today that agents from his office have once again “successfully disrupted” operations of the dangerous Sinaloa drug cartel, seizing more than $1.1 million in U.S. currency and arresting six individuals who attempted to purchase approximately 160 pounds of cocaine this week.

“Agents from the Bureau of Narcotic Enforcement have arrested six associates of the Sinaloa drug cartel and seized over $1 million in U.S. currency,” Brown said. “Combined with last week’s indictments and seizures, these arrests have once again successfully disrupted the operations of this dangerous criminal syndicate.”

As part of an undercover operation last month, agents from the Attorney General’s Bureau of Narcotic Enforcement (BNE) met with associates of the Sinaloa drug cartel who were interested in purchasing a large quantity of cocaine. These individuals operated out of Imperial, Los Angeles and San Bernardino counties.

From August 29 through August 31, 2009, BNE agents brokered a narcotics transaction with the suspects through a series of undercover meetings. The individuals eventually agreed to purchase approximately 160 pounds of cocaine for just over $1.1 million. The street value of this quantity of cocaine is more than $7 million.

After the deal, BNE agents made arrests at two locations. The first location was in a Home Depot parking lot located at 6400 Alondra Boulevard in Paramount, Calif. where two of the suspects had arrived to pick up the 160 pounds of cocaine. The second was at a residence on the 15000 block of Lime Street in Hesperia, Calif. where four of the suspects were waiting with the $1.1 million in U.S. currency.

The following suspects were arrested and are being held in Imperial County Jail on $2 million bail each for Possession for Sales of Cocaine; Transportation of Cocaine; and Possession of Excess $100,000 of Drug Proceeds:

• Mario Sicairos Eseberre, 46, of Culiacan, Mexico;
• Carlos Victor Lopez Mora, 66, of Mexicali, Mexico;
• Edgar Laureano Cruz, 40, of Los Angeles, Calif.
• George Rico, 32 of Hesperia, Calif.;
• Janette Rico, 32 of Hesperia, Calif.; and
• Modesto Marin Rico, 53, of Hesperia, Calif.

If convicted on all charges, each suspect faces up to 15 years in prison.

Agents from the Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT) and the El Monte Police Department assisted BNE with the investigation.

After the arrests were made, three children, between the ages of 10 and 15, living at the residence in Hesperia were turned over to child protective services.

Agents also seized five weapons at the Hesperia residence, including:

• Bushmaster, model XM15E2S, .223 caliber;
• Olympic Arms AR-15, .223 caliber;
• Llama, model 38 super, 38 caliber;
• MAADI Co., MISR AK-47; and
• Dan Wesson, model 445, caliber .44.

Approximately $27,000 was also seized from the suspects arrested in Paramount.

This bust follows last week’s announcement that Brown’s office, working with Imperial County District Attorney Gilbert Otero, had secured indictments against 16 individuals and seized over 550 pounds of cocaine and marijuana as part of “Operation Silver Fox,” an eight- month undercover investigation into the Sinaloa drug cartel. This investigation involved BNE, the Imperial County Narcotic Task Force, Imperial County District Attorney Otero and Imperial County Sheriff Raymond Loera.

The Sinaloa drug cartel is notorious for smuggling drugs into Southern California—often through the Calexico ports of entry—and purchasing cocaine from other drug traffickers in San Bernardino, Los Angeles and Imperial Counties. The drugs are ultimately distributed to local buyers in Southern California, Atlanta, Chicago, New York and Canada.

Pictures of the currency and weapons seized are attached.

Los Angeles – Attorney General Edmund G. Brown Jr. today announced that, at the request of the Los Angeles Police Department, agents from his office have launched an independent investigation into matters uncovered in the Michael Jackson inquiry.

“Responding to a request from the LAPD, agents from my office will investigate several physicians whose names have come up in the course of the Michael Jackson death inquiry,” Brown said. “This investigation is at its earliest stages, and no conclusions can be drawn at this point.”

On August 20, 2009, the LAPD met with representatives from the Attorney General’s Bureau of Narcotic Enforcement (BNE) and the Drug Enforcement Administration to discuss information uncovered during its investigation into the death of Michael Jackson.

In the coming days and weeks, BNE agents will review relevant records and documents.

The LAPD is the primary agency responsible for the investigation into the death of Michael Jackson. The Attorney General’s office will continue to assist the LAPD as necessary.

The Attorney General’s office maintains a prescription drug monitoring system, known as CURES (Controlled Substance Utilization Review and Evaluation System). The CURES system is designed to identify and deter drug abuse and diversion through accurate and rapid tracking of controlled substances.

Imperial, Calif. – Attorney General Edmund G. Brown Jr. announced at a news conference today that, working with Imperial County District Attorney Gilbert Otero, his office has secured indictments against 16 individuals and seized over 550 pounds of cocaine and marijuana, dealing a “body blow” to Mexico’s notorious Sinaloa drug cartel.

The indictments and seizures come as part of “Operation Silver Fox,” a joint investigation between the Attorney General’s Bureau of Narcotic Enforcement, the Imperial County Narcotic Task Force, Imperial County District Attorney Otero, and Imperial County Sheriff Raymond Loera.

“This notorious cartel smuggled massive quantities of cocaine and marijuana into Southern California, fueling addiction and violence across the nation,” Brown said. “Through a very dangerous and courageous undercover operation, the Bureau of Narcotic Enforcement and Imperial County Narcotic Task Force has dealt a body blow to this syndicate and seized hundreds of pounds of narcotics.”

Initiated in January 2009, the investigation found that the Mexican cartel smuggled drugs into Southern California—often through the Calexico ports of entry using vehicles equipped with hidden compartments—and would subsequently distribute the drugs to buyers in cities throughout the United States and Canada.

The 8-month investigation included more than 100 surveillance operations (carried out in Bell Gardens, Calexico, Colton, Fontana, Los Angeles, Ontario, Pacoima, Rialto, Riverside and San Diego), 30 undercover meetings and the execution of 6 search warrants. The operations resulted in the seizure of:

• 420 pounds of cocaine and 136 pounds of marijuana, with a combined street value of more than $19 million;
• $1.7 million in U.S. currency; and
• 9 firearms, including 7 handguns and 2 assault rifles.

In addition to smuggling drugs across the border, the cartel also purchased cocaine from other drug traffickers in San Bernardino, Los Angeles and Imperial Counties. The drugs were ultimately distributed to local buyers in Southern California, Atlanta, Chicago, New York and Canada in large monthly shipments.

A March 2009 operation, for instance, resulted in the seizure of a large cargo truck used as a cocaine vault to distribute more than 1,000 pounds of drugs every month to Canada, for two years. The seizure came after agents followed a vehicle from Imperial County to an auto repair shop in Pomona. At the shop, agents seized 51 pounds of cocaine from hidden compartments in the vehicle and an additional 119 pounds of cocaine from the cargo truck vault.

In addition to the vehicle, cargo truck and cocaine seized in Pomona, the following vehicles were seized over the course of the investigation:

• 1996 Honda Accord with 37.4 pounds of cocaine hidden in the vehicle in February 2009;
• 2003 Ford Expedition with 37.4 pounds of cocaine hidden in the vehicle in February 2009;
• 2000 Ford Excursion with $19,106 hidden in the vehicle in February 2009;
• 2000 Nissan Xterra with 81 pounds of cocaine hidden in the vehicle in March 2009;
• 2003 Toyota 4Runner with $658,470 hidden in the vehicle in March 2009;
• 2007 GMC Yukon with $738,960 hidden in the vehicle in April 2009;
• 2003 GMC Pick-up truck with 97 pounds of cocaine hidden in the vehicle in April 2009;
• 2001 Dodge Pick-up truck involved in the purchase of 22 pounds of cocaine in May 2009; and
• 2001 Dodge Dakota involved in the purchase of 22 pounds of cocaine in May 2009.

Based on the results of the investigation, the Imperial County Grand Jury indicted the following 16 suspects:

• Marco Mendoza, 43, of South Gate, Calif. was arrested in March 2009 and is being held in Los Angeles County Jail;
• Gerald William Andrews, 42, of Pacoima, Calif. was arrested in July 2009 and is being held in Imperial County Jail;
• Lorena Lara, 29, of Fontana, Calif. was arrested in August 2009 and is being held in San Bernardino County Jail;
• Juan Berumen Sandoval, 44, of Rialto, Calif. was arrested in August 2009 and is being held in Imperial County Jail;
• Juan Gabriel Molina, 28, of South Gate, Calif.;
• Hilario Lopez Rodriguez, 43, of Pacoima, Calif.;
• Norberto Ruelas Urias, 39, of Long Beach, Calif.;
• Ramon Valenzuela, 33, of South Gate, Calif.;
• Rodrigo Grijalva, 31, of Mexicali, Mexico;
• Jose Abraham Guzman, 26, of Mexicali, Mexico;
• Cesar Yaserf Lara, 21, of Mexicali, Mexico;
• Sergio Villagrana Murillo, 62, of Mexicali, Mexico; and
• Four other suspects whose names are being withheld to avoid compromising future arrests.

The investigation is ongoing. Brown’s agents continue to work with U.S., Mexico and local law enforcement officials to apprehend the outstanding suspects.

In addition to the news conference, Brown today met with Mexico, U.S., state and local law enforcement officials to discuss how to improve intelligence gathering, law enforcement action and cross-border collaboration. This includes a first-of-its-kind meeting between Brown, Mexico’s Baja California Attorney General, the Imperial County District Attorney and Sheriff.