A Valencia man who claimed to be a tax preparer was sentenced Tuesday to 84 months in federal prison for defrauding his clients out of more than $4 million by falsely promising them huge windfalls from a sham federal program that purportedly would issue large grants to them.
Edgardo Zeta Montalban, 70, of Valencia, was sentenced by United States District Judge Stanley Blumenfeld Jr., who said Montalban “exploited human frailty” in conducting his fraud. Judge Blumenfeld said the criminal conduct in this case was “despicable, cruel and callous,” and it caused “devastating effects on numerous victims,” according to the United States Attorney’s Office.
From 2013 to September 2020, Montalban, who held himself out as an accountant and tax preparer, asked some of his clients to invest in a federal grant program he called “Suppressed IRS Accounts.”
Montalban told his clients that if they paid him in cash, the federal government would issue them grants many times larger than what they paid. In reality, no such grant program existed, prosecutors said.
In furtherance of the scheme, a co-conspirator made counterfeit Treasury checks payable to the victim clients for tens of millions of dollars, which Montalban used as props to entice the victims to pay him. Montalban explained to the victims that they had to pay him in cash to protect the federal grant program’s secrecy.
After his victims paid him, Montalban made up excuses as to why the Treasury checks had been delayed, and tricked the victims into paying him more money, purportedly for expenses necessary to overcome the obstacles to their checks’ issuance, according to the U.S. Attorney’s Office.
“[Montalban] would promise his victims a huge windfall from the government in exchange for a modest payment up front to [Montalban] in cash,” prosecutors wrote in their sentencing memorandum. “Because the windfall was a fraud, each purported difficulty overcome by an additional cash payment had to lead to yet another difficulty, requiring yet another cash payment. [Montalban] repeated this process until he had bled his victims dry, or they realized they had been defrauded and stopped paying him.”
Montalban has been in federal custody since April 6, when Judge Blumenfeld found that he violated the conditions of his bond by continuing to commit the fraud even after pleading guilty in December 2020 to one count of conspiracy to commit wire fraud.
Federal prosecutors recommended Montalban receive a prison sentence of 120 months, but Judge Blumenfeld decided to issue the seven-year sentence after considering Montalban’s significant health issues.
The FBI investigated this case with assistance from the U.S. Secret Service and the U.S. Treasury Inspector General for Tax Administration (TIGTA).
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.
Vineland Boys Gang Member Sentenced To 31 Years Racketeering, Attempted Murder
A member of the San Fernando Valley-based Vineland Boys street gang was sentenced Thursday to 372 months in federal prison for committing multiple felonies, including the attempted murders of three rival gangsters.
Jesus Gonzalez Jr., 28, “Lil Chito,” “Gunner” and “Chuy,” of Sun Valley, was sentenced by United States District Judge Michael W. Fitzgerald, according to the United States Attorney’s Office.
Gonzalez pleaded guilty on Jan. 22 to five felonies: one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, two counts of violent crime in aid of racketeering, one count of conspiracy to distribute controlled substances, and one count of discharging a firearm in furtherance of a crime of violence.
According to court documents, to consolidate control over their “territory” in Sun Valley, North Hollywood and Burbank, the Vineland Boys shot and brutally assaulted rival gang members, controlled and conducted drug and firearms trafficking activity, and extorted money in the form of “taxes” from drug dealers, and trafficked narcotics.
Gonzalez conspired with Vineland Boys members and associates to engage in acts of racketeering in the form of attempted murder and drug trafficking. Gonzalez admitted that he was involved in multiple gang-related shootings, including a December 2015 shootout in South Los Angeles with rival gang members.
In early April 2016, Gonzalez shot and severely wounded one victim and injured others in a drive-by shooting outside a party in Sun Valley after Gonzalez believed the victim had insulted the Vineland Boys gang, according to the Department of Justice (DOJ).
A few weeks later, Gonzalez stalked and shot a rival gang member on Lankershim Boulevard in North Hollywood, firing several shots at close range at the victim, who survived. In May 2016, Gonzalez and other Vineland Boys members drove next to a vehicle in North Hollywood near Lankershim Boulevard, and Gonzalez confronted and shot the other vehicle’s passengers because he believed they were rival gang members.
Gonzalez also sold methamphetamine and illegally sold numerous firearms, including an AR-style rifle bearing no serial number – commonly known as a “ghost gun” – that he sold in May 2016 outside a McDonald’s restaurant in San Fernando.
In January 2019, a federal grand jury indicted 31 Vineland Boys members and associates. So far, prosecutors in this case have secured 17 convictions and multiple prison sentences exceeding 10 years, according to the DOJ.
Two San Fernando Valley Men Sentenced For Counterfeit Passport, Green Card Scheme
Two San Fernando Valley men who participated in an extensive scheme that produced and sold counterfeit identity documents – including United States passport cards, Social Security cards and driver’s licenses – each received federal prison sentences on Monday.
Carlos Ayala Hernandez, a.k.a. “Juan Juarez,” 45, of Granada Hills, was sentenced Monday to 30 months in federal prison by United States District Judge John F. Walter.
The other plaintiff in the case, Miguel Juarez Guerrero, 24, of Van Nuys, was also sentenced Monday to 20 months in prison, according to the U.S. Attorney’s Office.
Hernandez pleaded guilty on April 27 to one count of conspiracy to produce, transfer and possess false identification documents, and one count of being an illegal alien in possession of firearms.
Guerrero pleaded guilty on May 3 to one count of conspiracy to produce, transfer and possess false identification documents, and one count of producing false identification documents.
From January 2016 to January 2021, Hernandez, Guerrero and Nestor Perez, a.k.a. “Daniel Perez,” 32, of Van Nuys, operated an illegal business in which they manufactured and sold false identification documents.
These counterfeit documents included U.S. passport cards, lawful permanent resident cards, more commonly known as “green cards,” employment authorization document cards, Social Security cards, and driver’s licenses purporting to be from multiple states.
At the direction of – and in exchange for payment from – Hernandez and Guerrero, Perez manufactured the counterfeit identification documents at a Van Nuys apartment. Perez made the bogus documents using personal identifying information – including names, dates of birth and Social Security numbers – of real persons After manufacturing the phony documents, Perez provided them to Hernandez and Guerrero, who then sold the documents to others.
In January 2021, law enforcement executed search warrants on Hernandez’s residence and the Van Nuys apartment. In Hernandez’s residence – where Guerrero also lived – law enforcement found firearms, assorted ammunition and $40,483 generated from the false identification document scheme.
At the Van Nuys apartment, officers also found a robust counterfeit document lab, including approximately 243 completed false identification documents, approximately 1,000 fraudulent authentication seals, 14 printers, a scanner and an ultraviolet light used to test the security features on counterfeit ID documents.
Hernandez, a Mexican national, admitted in his plea agreement that he knew he was an illegal alien in the United States, including during the times he possessed the firearms.
Perez pleaded guilty on April 12 to one count of conspiracy to produce, transfer and possess false identification documents, and one count of producing false identification documents. His sentencing hearing is scheduled for July 19.
Three Encino Residents Found Guilty Of $18 Million In COVID-19 Loan Fraud
A federal jury has found three Encino residents guilty of criminal charges for scheming to submit fraudulent loan applications seeking millions of dollars in COVID-19 relief funds.
Richard Ayvazyan, 42, Marietta Terabelian, 37, and Artur Ayvazyan, 41, were found guilty at the conclusion of an eight-day trial on Monday, according to the United States Attorney’s Office.
All defendants were found guilty of one count of conspiracy to commit bank fraud and wire fraud, 11 counts of wire fraud, eight counts of bank fraud and one count of conspiracy to commit money laundering.
Additionally, Richard Ayvazyan was found guilty of two counts of aggravated identity theft. Artur Ayvazyan also was found guilty of one count of aggravated identity theft. Vahe Dadyan also was found guilty of one count of money laundering.
On June 28, the jury found the defendants must forfeit bank accounts, jewelry, watches, gold coins, three residential properties and approximately $450,000 in cash.
According to the evidence presented at trial, the defendants used fake, stolen and synthetic identities – including the created identities of “Iuliia Zhadko” and “Viktoria Kauichko” – to submit fraudulent applications for PPP and EIDL loans guaranteed by the Small Business Administration (SBA) under federal law.
In support of the fraudulent applications, the defendants often submitted false and fictitious documents to lenders and the SBA, including fake identity documents, tax documents and payroll records, prosecutors said.
The defendants then used the fraudulently obtained funds as down payments on luxury homes in Tarzana, Glendale and Palm Desert. They also used the funds to buy gold coins, diamonds, jewelry, luxury watches, fine imported furnishings, designer handbags, clothing, and a Harley-Davidson motorcycle.
The conspirators obtained more than $18 million in COVID-relief funds, according to the DOJ.
United States District Judge Stephen V. Wilson has scheduled a Sept. 13 sentencing hearing, at which time each defendant will face decades in federal prison.