CALIFORNIA - An indictment was unsealed today following the arrests of nine individuals who are charged in a drug trafficking conspiracy, United States Attorney Benjamin B. Wagner announced today.
On April 11, 2013, a federal grand jury returned a 29-count indictment charging 13 defendants with conspiracy to manufacture, distribute, and possess with intent to distribute controlled substances, including oxycodone, hydrocodone, and marijuana, and conspiracy to structure cash transactions in order to avoid federal currency reporting requirements.
The following Modesto residents are charged: Sarith Chim, 45; Sdey Chim, 40; Chanrath Yim Yath, 33; Chanrou Yath, 28; Phally Thach, 31; Raeb Chou, 23; Say Eng, 64; and Loc Huu Chau, 49. The remaining defendants are Iris Stephanie Garcia, 24, of Lathrop in San Joaquin County; Chantha A. Chim, 42, of Murrieta in Riverside County; and Washington residents David Ruem, of Tacoma, 31; and Phary Chim, 30; and Cindy Comilang, 29, of Kent. At this time, Sarith Chim, Phally Thach, Loc Huu Chau and Raeb Chau have yet to be arrested.
The indictment alleges that from October 2008 to April 2013, the defendants obtained prescriptions for oxycodone, hydrocodone, and medical marijuana cards from a doctor in Modesto. They recruited other individuals to obtain prescriptions and marijuana cards from the doctor by offering them payments in return for the prescriptions and marijuana cards. On some occasions, the defendants would drive other individuals to the doctor and then collect their prescriptions and marijuana cards after they had visited the doctor. The defendants filled the prescriptions at pharmacies in Modesto, and posted the marijuana cards on marijuana grow sites in California. After obtaining the oxycodone and hydrocodone pills, the defendants shipped the pills to other states, including Washington. The defendants also shipped marijuana to other states, including Massachusetts and Louisiana.
After the pills and marijuana were sold in other states, the defendants caused the cash to be deposited into bank accounts established for the sole purpose of funneling funds back to California. The cash deposits were all $10,000 or less so that the banks would not file Currency Transaction Reports on those transactions. Shortly after the deposits were made, the defendants would withdraw cash in equivalent amounts from the bank accounts in California. In addition to funneling the proceeds of their drug distribution through bank accounts, the defendants mailed and physically transported cash from Washington, Louisiana, and Massachusetts. In total, the defendants deposited more than $3,365,000 in cash into bank accounts and withdrew more than $3,090,000 from the same accounts.
U.S. Attorney Wagner stated: “These arrests are the result of a successful investigation into a multistate drug trafficking conspiracy. We have charged 13 individuals, stripped them of assets, and disrupted their infrastructure. It has often been said that to find criminal conduct, follow the money. That is exactly what we are doing.”
Drug Enforcement Administration Acting Special Agent in Charge Bruce C. Balzano stated: “These arrests have dismantled a well-organized drug trafficking network that had distribution systems from California to Massachusetts. The successful outcome of this investigation can be attributed to the knowledge and expertise brought by each agency working together to achieve justice.”
IRS-CI Special Agent in Charge of the Oakland Field Office, José M. Martínez stated: “Structuring financial transactions through funnel accounts to avoid currency reporting requirements is a criminal violation of federal law under the Bank Secrecy Act. Funnel account activity often involves a customer structuring currency deposits into an account in one geographic area, with the funds subsequently withdrawn in a different geographic region with little turn-around time. The rapid flow of funds may also span a large geographic area between the deposits and withdrawals, including instances where the deposit location is thousands of miles away from the withdrawal location. The currency deposits and withdrawals often have no apparent lawful or business purpose and do not reflect the stated occupation of the account holder. This type of activity is being investigated by United States Postal Inspection Service, Drug Enforcement Administration, and Internal Revenue Service-Criminal Investigation in the newly formed task force called “Operation Footprint” out of the Eastern District of California, United States Attorney Office - Fresno Division.”
Acting Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service, San Francisco Division stated: “We work closely with the U.S. Attorney Office and our partners in law enforcement to arrest and prosecute those who deal drugs and launder money for criminal gain.”
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative
led by the U.S. Attorney’s Offices, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
The maximum statutory penalty for conspiracy to manufacture, distribute, and possess with intent to distribute a controlled substance is 20 years in federal prison and a $1 million fine; the maximum statutory penalty for structuring is 10 years in prison and a $500,000 fine; the maximum statutory penalty for conspiracy to structure is five years and a $250,000 fine. Any sentences, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.