MURRIETA: Marijuana collective suing city raided by DEA

Federal drug enforcement agents on Thursday raided a Murrieta marijuana collective for the second time in a month -– two days after it filed a $3 million suit against the city.

Agents wearing blue jeans, T-shirts and with handguns in their holsters surveyed the vehicles approaching Greenhouse Cannabis Club, located in a largely vacant commercial building on Jefferson Avenue. Inside, handcuffed volunteers wearing dress shirts and ties sat quietly while agents searched for evidence to support their belief that the collective was in violation of federal and local laws prohibiting the distribution of marijuana.

In a lawsuit this week, the cannabis club alleged that Murrieta invaded patient privacy and sought court orders to stop police patrols around the store and to strike down the city’s moratorium on marijuana collectives.

“I’m angry — so angry — that they think it’s right to deny sick people the medication they need,” collective Director Eric McNeil said moments after the agents released two volunteers and a patient who were handcuffed during the 10 a.m. raid.

A judge signed the warrant for the raid on Monday, the day before the collective filed its lawsuit.

Agents at the scene declined to comment. A department spokesman Jose Martinez for could not be reached for comment. Thom Mrozek, spokesman for the U.S. Attorney’s Office, said he had no details about what was seized.

Greenhouse volunteers said agents seized less than an ounce of marijuana, a shipment of THC vaporizing tools, a desktop computer and baked goods that did not contain marijuana. Volunteers said the “fake edibles” were placed after the first raid and intended as a joke in case federal agents returned.

Scene of search

While volunteers were shaken when agents first raided the collective in mid-March, volunteer Kevin Ford, who was present during both raids, said agents were “nice” as they came through the door and ordered him and others to the ground. After agents handcuffed those inside, Ford said he “took the opportunity to educate them,” on medical marijuana issues.

“I told them ‘If you can convince me I’m wrong, I’ll come work for you,’” Ford said. “All I wanted to do was make them question if what they’re doing is right. I believe in what I’m doing.”

Outside, some patients turned away when they saw the agents, who were dressed in T-shirts and jeans. Others, like throat cancer survivor Eric Allbrook, decided to watch the scene from a distance.

Allbrook said he relies on cannabis for relief from after affects of the extensive treatments, including radiation, chemotherapy and surgery, that he has undergone in the past three years since his diagnosis. Cannabis, he said in a permanently guttural voice, has taken the place of 15 different prescriptions.

“It helps me eat, helps me sleep,” said Allbrook, who has surgery scars on both sides of his Adam’s apple. “Without it, I’d be dead by now.”

Legal battle

The collective has attracted much attention since opening in early January in defiance of a city-wide moratorium on marijuana-related establishments, particularly after a Riverside County Superior Court Judge declared that Murrieta cannot infringe on constitutional rights of assembly, which apply regardless of the presence of medical marijuana.

After that determination, the city’s legal team wrote, and the same judge signed, an order that says the collective cannot dispense marijuana to “more than two people.”

Since then, McNeil has continued to dispense medical marijuana to hundreds of card-holding patients under an interpretation that he can serve no more than two people at a time. A jury in June is scheduled to decide whether McNeil is in contempt of court for violating the order. A judge also has evicted the collective from its suite, although the club has not yet vacated.

In its lawsuit against the city, McNeil’s attorney, Richard Ackerman, has accused Murrieta Police Department enforcement officers of following patients as they leave the collective, pulling patients over and questioning their use of marijuana for medicinal purposes. Those practices were detailed in the first federal search warrant served on the collective in mid-March.

 

MEDICAL MARIJUANA: Court rulings leave both sides uncertain of clinic bans

Advocates and opponents of California’s medical marijuana clinics are in a legal no-man’s land after a flurry of appellate court decisions that contradict each other on whether local governments can ban the dispensaries.

The decisions also conflict on how the clinics can supply themselves with marijuana.

“We have had a potpourri of various court rulings, and they’re all conflicting,” said Lanny Swerdlow, a registered nurse and board member of a Riverside-based Inland Empire Patient’s Health and Wellness Center.

“We have had one 4th District Court branch say cities can ban; we have had another 4th District Court branch saying ‘no,’ cities can’t ban; We’ve had the 2nd District court say you are allowed to transport, whereas the 4th District Court said you can’t transport – it’s just a total disaster,” he said.

The whipsaw of court rulings leave more than 200 cities that have instituted bans of medical marijuana clinics — as well as the clinic operators and patients who use them — uncertain of where they will land when the law gets settled.

The battle is over whether local governments can preempt the state laws governing medical marijuana clinics – the state’s 1996 Compassionate Use Act (Prop. 215) or the state Legislature’s Medical Marijuana Program.

Clinic advocates say local governments disregard state law by banning the clinics; attorneys for the counties and cities say they are within their right to use zoning laws to ban the dispensaries.

The courts’ north-and-south pole rulings are likely because of a lack of clarity in the laws, said Stanford Law School professor Robert Weisberg.

“Clearly the problem here is that there is some language in the medical marijuana laws that some people think is a little ambiguous,” he said. “That might invite municipalities to use local zoning laws that restrict or forbid the clinics, and there seems to be some ambiguities about that.”

The Riverside decision cites, “Where, as here, there is no clear indication of preemptive intent from the Legislature, we presume Riverside’s zoning regulations…are not preempted by state law,” Associate Justice Carol Codrington wrote.

A ruling regarding the City of Long Beach took another turn. The coastal city decided it would allow dispensaries, but wanted to regulate them with its own ordinances. A court decided that the city could not make such rules because under federal law, marijuana is illegal.

The latest twist in the dispensary legal saga came Feb. 29, when the 4th District Court of Appeal based in Santa Ana ruled that the City of Lake Forest in Orange County could not ban medical marijuana dispensaries.

That came after a series of rulings that favored cities and counties exerting greater local control over the clinics, topped by a decision by the 4th District Court in Riverside’s November ruling that local governments could ban the dispensaries outright, said John Higginbotham, an attorney with the Riverside-based law firm of Best Best & Krieger. The law firm has represented several cities in the legal fight to ban the clinics.

“The Lake Forest decision was kind of a surprise to many people,” Higginbotham said. “It’s hard to reconcile all those previous cases with that.”

The Riverside decision was vacated when the state Supreme Court in January took it and three other medical marijuana cases to eventually rule on the already tumultuous legal structure of California’s medical marijuana laws.

Attorneys for Lake Forest have petitioned to the state high court to take their case as well; but for now the published decision, which says local governments cannot ban the clinics, is the only effective one in the state.

And that left a new tear in the legal fabric for the more than 200 local governments that now have laws banning medical marijuana dispensaries, an estimate from the Coalition for a Drug-Free California, a group that opposes the clinics.

In March, a Shasta County Superior Court judge denied the City of Redding’s bid for a court order to shut down dispensaries in that city. The judge cited the Lake Forest case.

Redlands attorney James De Aguilera, who represents several clinics, says he has started sending legal challenges called demurrers on behalf of his clients to cities that banned the dispensaries. The demurrers cite the Lake Forest case, and say that ruling leaves the cities trying to ban clinics without jurisdiction to do so.

De Aguilera said he has filed on behalf of two clinics in Upland and one in Jurupa Valley.

“There is going to be a lot of activity,” he said. “Lake Forest is the law of the land right now.” De Aguilera added that he expects the Supreme Court will take the Lake Forest case and vacate it as well. But until then, he said, “The city clerk has a duty to issue business licenses. If they law changes again, we’ll already have our business licenses. That is our plan.”

And there’s another twist: the Lake Forest decision, while saying cities and counties could not ban dispensaries, also ruled that each dispensary must grow all their marijuana on location. Dispensary advocates said that part of the ruling guarantees to shut down most operations.

“That would put 98 percent of the collectives out of business,” Swerdlow said.

But Higginbotham of BB&K said it would only end small outlets and allow dispensary operators with big money to open storefronts attached to warehouse-sized operations, to comply with the court ruling.

But it’s not a settled issue. A few days before the Lake Forest decision, a Los Angeles appellate court ruled in a criminal case that it was not illegal for a man to bring a pound of marijuana from one medical marijuana establishment to another, in this case from Humboldt County to Los Angeles.

How that sets with the civil ruling saying dispensaries have to home-grow all their supply is unclear, like much of the rulings regarding medical marijuana.

 

Billionaire’s suit vs. Swiss bankers faces dismissal

Real estate billionaire Igor Olenicoff’s hopes to get up to $1.7 billion from his former Swiss bankers will likely be dashed by a U.S. judge.

Olenicoff. Source: Register file photo; click to see a list of Orange County’s nine biillion-dollar fortunes.

Bloomberg News reports that a judge’s tentative ruling issued today issued rejects Olenicoff’s lawsuit against Zurich-based UBS. Olenicoff claimed UBS defrauded the creator of the Newport Beach-based Olen real estate empire by misleading him about tax liabilities that eventually saw Olenicoff plead guilty to tax-evasion charges. Olenicoff has demanded $1.7 billion in damages.

Olenicoff was arguing that UBS gave him bad advice. But Bloomberg reported that U.S. District Judge Andrew Guilford  wrote in a 28-page opinion: ”Olenicoff’s claim that he justifiably relied on UBS tax advice is entirely inconsistent with his plea agreement … The tension between these two inconsistent statements can be felt throughout Olenicoff’s case.” Bloomberg said that Guilford “expected to issue a final ruling after considering further arguments from Olenicoff’s attorney, Thomas Newmeyer.”

Oleniciff in 2007 plead guilty to charges that “he and his wife, Jeanne, had attempted to conceal assets as far back as 1990. The agreement cites $257 million in transactions to overseas bank accounts between 1992 and 2002.”

Olenicoff’s sentence included paying $52 million to settle a federal criminal tax case, two years probation and 120 hours of community service. Olenicoff, at his sentencing, said: “It was bad advice and me not thinking about it. I’m sorry. The intent was never to defraud the federal government.”

Forbes magazine’s 2011 American wealth rankings had Olenicoff at No. 150 with a net worth of $2.6 billion. Forbes writes: “Through his Olen Properties owns more than 6.4 million square feet of office space, nearly 12,000 residential units in Las Vegas, Arizona, Florida.

 

INLAND: Embezzlement on rise in hard economic times

Inland nonprofit organizations and small businesses have been hit hard by embezzlement in the past few years, and a detective who investigates such thefts says they are increasing because of the bad economy.

No group or business appears immune. Churches, a library, a school district, a water company, a hospital, a club for children and even a nonprofit group that supports grieving families have reported thefts.

 

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Two common threads emerged in most cases: The organization trusted a single person with the financial books, and the organization believed it lacked the resources to provide proper oversight.

“If you entrust one person and you never check that one person, then it’s possible for a theft to happen because that person has complete control over everything,” said Riverside police Detective Jerilynn Czobakowski.

She said embezzlements and other money crimes such as check fraud and lottery scams are increasing. The three investigators in her unit each are working from 40 to 50 cases.

“Some people are desperate right now,” Czobakowski said.

Among recent Inland cases:

Gigi Wellott, a longtime bookkeeper and congregant at Corona United Methodist Church, was arrested in December on suspicion of stealing $220,000 since 2003. She has not been charged and the case is still being reviewed, Riverside County district attorney’s office spokesman John Hall said Monday.

Fundraising assistant Crystal Marie Hoyes pleaded guilty in December to stealing a laptop computer and a trip to New York that were to be included in an auction benefiting the Boys & Girls Club of Southwest County.

Dusti L. Brock, a former president of the Nicolas Valley Elementary School PTA in Temecula, pleaded guilty in August to embezzling $14,000.

Debra Sutton, former general manager of the Box Springs Mutual Water Co. in Moreno Valley, pleaded not guilty in March to embezzling $780,000 and spending it on cruises and gambling.

Misti C. Moore, a former employee at A.K. Smiley Public Library in Redlands, pleaded not guilty in July to stealing more than $30,000 from donations and gift shop sales.

CHANGES AT CHURCH

Corona United Methodist Church made changes to its oversight practices after an audit found discrepancies in the books that a spot check had failed to reveal, the Rev. Doug Dickson said.

The church hired a company to review its procedures and policies and created more checks and balances. Several people now oversee the money and an outside accountant handles the books.

“If some people look at it, they might think we went a little overboard,” Dickson said. But he has a duty to safeguard the church’s money, he said.

“The first thing in nonprofits and especially churches, people have a tendency to think checks and balances are showing mistrust in people, when in reality they protect the people who are there,” he said.

At the Boys & Girls Club in Temecula, CEO Maryann Edwards said the fact that Hoyes was caught after about two months indicated the organization’s financial oversight worked, not that it failed. Edwards said she doesn’t expect to make policy changes.

There are regular audits, background checks on all employees and oversight by committees.

“I am constantly re-evaluating our internal controls,” said Edwards, a Temecula city councilwoman.

In Redlands, Don McCue, curator of the library’s Lincoln Memorial Shrine Association, said authorities suspect financial controls were circumvented. Checks written on the accounts require two signatures, but a computer was used to place a second signature on checks. Auditors did not catch the forgery because they saw only online check images.

Now, McCue said, three people will handle transactions: one to receive the paperwork, another to write the checks and a third to reconcile the books.

STARTING SMALL

Czobakowski, the police detective, said embezzlers often follow familiar patterns, starting out with small amounts of money and, if no one notices, graduating to larger thefts.

“Right now, with the economic situation for a lot of people, they’re just in need of money to pay their bills, Czobakowski said. “Most of the time they don’t realize the amount of money they have stolen.”

There are other common tactics that should arouse suspicion, Czobakowski said. Sometimes, other employees aren’t allowed access to the financial tracking systems; books are so confusing that thefts are difficult to detect; suspects constantly check the mail, looking for bank statements; and financial documents are kept at home instead of the office.

Ronald Marks was Box Springs’ treasurer before furious shareholders ousted the water company board of directors. He said Sutton consistently prevented him from reviewing the finances.

Czobakowski said some leaders of organizations believe they don’t have the time or resources to watch the books closely. But the threat of financial ruin should be enough to persuade them to review financial data weekly and have an outside party review it monthly, she said.

Venable LLP, which practices corporate law at seven offices nationwide including Los Angeles, makes several recommendations on its website on how businesses and other organizations can protect themselves. Checks should never be presigned. Blank checks and signature stamps should be locked up.

DISBELIEF

When the trust placed in someone turns out to be misplaced, the psychological toll on an organization can compound the financial woes, especially when it is a longtime employee or volunteer, Czobakowski said.

Dickson said his congregants went through behavior usually reserved for grief: disbelief followed by acceptance.

The fact that her Boys & Girls Club suffered a theft was shocking, Edwards said.

“What made the whole thing heinous to us, people who work for nonprofits … they’re doing it because they have a love of the cause. They know they are making differences in the lives of children. You do feel like you’ve been betrayed.”

Follow Brian Rokos on Twitter: @Brian_Rokos

 

EASTVALE: Complacency leading to thefts from vehicles

Eastvale residents consider their city one of the safest around.

“You see folks out with baby carriages in the evening and feeling very good about it,” Mayor Jeff DeGrandpre said.

But that safe feeling, buoyed by a 20 percent decrease in crime this year over last year, has bred an unwelcome consequence: complacency.

Visitors to Eastvale shopping centers are leaving their cars unlocked with valuables visible inside, creating inviting targets for thieves.

There were 23 thefts from vehicles citywide as of mid-March, Riverside County Sheriff’s Lt. Jason Horton said, 12 of them at the city’s largest shopping center, Eastvale Gateway.

“It’s one of those things where not everybody, but a significant amount of victims have stated, ‘I didn’t think to lock my valuables or lock my door or roll my window up because Eastvale is a safe community. Eastvale is not like other surrounding communities,’ ” said Horton, the department’s liaison to the city, a former dairy town that incorporated in 2010.

“People who are thieves know target-rich environments. They know where there are opportunities,” he said..

Since the beginning of the 2011 Christmas shopping season, deputies at the Jurupa Valley station have engaged in a multi-pronged program that includes community outreach, working with businesses and utilizing extra patrols.

The two most important actions residents can take are to accept more responsibility for their vehicles and report suspicious people, Horton said.

He and other deputies have distributed pamphlets at community events that offer theft-prevention tips, such as locking vehicles, storing valuables in the trunk, closing windows completely and parking in well-lit areas — though most of the thefts have occurred in daylight hours, he said.

Yesenia Villagomez, who shopped Friday at Target at Eastvale Gateway, said she learned a hard lesson. Someone broke into her car at a shopping center in Rancho Cucamonga and stole CDs. Now she hides valuables under the front seat.

“I always double check that my doors are locked. It doesn’t matter if it’s only (coins), I put it away,” Villagomez said while loading purchases into her SUV.

Horton said it’s important to report suspicious activity. Some residents don’t because they don’t want to bother deputies or they worry that they are mistaken.

“Call us and we’ll jump on it,” Horton said.

Thefts from work trucks have been a problem in Eastvale Gateway’s Home Depot parking lot, where workers sometimes leave tools unguarded in the truck beds. Horton asked Home Depot managers to post warning signs or broadcast the public service announcement over the public-address system. Other merchants have similarly cooperated, Horton said.

Volunteers patrol the parking lot, and deputies are required to roll through when they pass the area, Horton said.

“Even with doing some of those things, the crime trends, they’ve gone down slightly, but not as much as we’d like, Horton said.

Follow Brian Rokos on Twitter: @Brian_Rokos

 

SOUTHWEST: Deputies arrest 40 in DUI sweep

Deputies from several special task forces and California Highway Patrol officers arrested 40 people suspected of driving under the influence of drugs or alcohol and failed to appear in court.

Saturday’s warrant sweep included Temecula and surrounding unincorporated areas within the southwest county region, a Riverside County sheriff’s news release stated. The sweep was a joint operation conducted by the Riverside County Sheriff’s Department, the Temecula Police Department, the Southwest County Task Force, the Riverside County Gang Task Force, the Riverside County Sheriff’s Department Special Enforcement Bureau, the Riverside Sheriff’s Emergency Response Team and the California Highway Patrol.

The subjects targeted during the sweep had multiple driving under the influence of alcohol or drug warrants. Most had a history of failing to appear in court or complete court-imposed guidelines, the release stated. All 40 were arrested for misdemeanor warrants.

All were booked into the Southwest Detention Center.

 

Man out on bail accused of another investor scheme

SANTA ANA – An Irvine man expected to be arraigned in federal court Monday is accused of working on another investment scheme while out on bail on federal charges of bilking 40 investors of more than $1.8 million in a scam to market a product to combat childhood obesity.

A second grand jury indictment adds nine additional counts of mail and wire fraud, money laundering and committing an offense while on release for Charles “Chuck” Davis. The indictment alleges that Davis defrauded about 20 investors of more than $900,000 with promises of developing and marketing a product to treat diabetes.

For the earlier 2010 indictment related to a child obesity product development and marketing, Davis, then 53, was accused of two counts of mail fraud, five counts of wire fraud and three counts of money laundering.

If convicted on those counts alone, Davis would have faced a maximum sentence of 170 years in federal prison, according to a previous news release from the U.S. Attorney’s Office.

Davis was notified of the potential effects of committing new offenses while on pretrial release after he pleaded not guilty to the earlier charges in December 2010, according to court documents.

The earlier case stemmed from Davis signing agreements with investors promising to provide a 15 percent interest on investment over a 13-month period, according to documents.

The indictment alleged his Newport Beach-based LifeRight Holdings Inc. was going to develop and use infomercials to market a product to combat childhood obesity, the news release said.

The new scheme related to a product to be developed and marketed to treat Type II diabetes began in December 2009 and continued to about September 2011, according to a federal indictment. This time investors were promised a 15 percent interest at the end of a two-year period for money invested in another of Davis’ companies, DT2 Health Solutions Inc., court documents say.

The indictment alleges Davis instead used investor funds for personal expenses, including payments to himself, family members and girlfriends; to buy clothing, jewelry and other items; and for rent, utilities and credit card payments. Davis also used the money for legal fees for lawyers representing him in lawsuits brought against him, the document alleges.

 

Courts help veterans in Orange County and around the nation

Veterans whose lives have collided with the criminal justice system are increasingly turning up in veterans courts across the nation.

There are now more than 90 courts across the U.S., including nine in California, tailored to veterans willing to work to repair their lives.

One of the first such courts was in Orange County, where veterans who meet the judge’s criteria, including maintaining steady employment and staying clean and sober, can have their charges dropped or reduced.

The weekly sessions at Orange County’s Combat Veterans Court provide a one-stop service, bringing together representatives from the district attorney’s office and the U.S. Department of Veterans Affairs’ Justice Outreach program, along with probation officers and volunteer mentors. Each veteran is carefully evaluated by a team before being accepted into the program.

It took three arrests and the threat of prison to get Shaughn Whittington to the court. He slumped in a black suit, blue shirt and black tie, bracing for a claustrophobic courtroom, a stern judge.No need. Here, defendants are called participants. People applaud. Judge Wendy Lindley hands out gift cards.

“It looks more like a support group instead of a courtroom,” said Whittington, 27, who was arrested twice on drug charges and once on suspicion of assault. “It’s that Marine Corps mentality. You look at it like it’s a joke.”

Lindley’s court stands apart nationally. It is designed exclusively for combat veterans. As a longtime Superior Court judge, she has seen what the residue of combat stress can do.

“We are dealing with people whose mental and physical health is very compromised,” she said. “We owe them, each one of them, the highest level of care.”

She designed her court to be especially sensitive to war’s psychic wounds, which are difficult to understand, let alone heal. Participation is voluntary; only murder cases are ineligible.

The program is capped at 50 to ensure individualized treatment. What began with five participants is now fully booked. From 2010 to 2011, the number of people referred to the program jumped 41%. As with other veterans courts, if a judge’s criteria are met, charges can be dropped or reduced.

Those in Lindey’s program share more than battlefield experience. All had been diagnosed with post-traumatic stress disorder, often with additional war-related complications, such as traumatic brain injury. She hadn’t been looking for these conditions as a requirement.

Paul Freese, vice president of the Public Counsel Law Center, calls Lindley’s court the “gold standard.”

“This is by far the model we want people to emulate,” he said. “Individuals don’t have to go from place to place to place to get the services that they need.”

Los Angeles County launched a veterans court in 2010 and accepts only veterans facing felony charges, not misdemeanors. It expects its first graduates Tuesday.

“If these guys don’t get help, I think they’re going to deteriorate,” said Superior Court Judge Michael Tynan, who oversees about 75 veterans in the L.A. County program.

As for Whittington’s case, the story is familiar. Deployed as a mortar man in the Iraq invasion, he returned to civilian life in 2005. The transition was fitful at best. He was diagnosed with PTSD and, later, traumatic brain injury.

There are scraps of war memories, like bullets whistling past him, inches from his head. There was a recurring nightmare from the battlefield. He was angry, depressed. Fearing he might hurt his then-wife, he started sleeping in a different bed. Vices took hold. He started popping narcotic pain relievers and smoking meth.

Then he found himself in Lindley’s court.

“You start coming out of a coma, pretty much,” said Whittington, who checked into an in-patient treatment center during Phase 1. “You start realizing all the damage you did to the people around you.”

 

PERRIS: Man charged in Salvation Army robbery

A 22-year-old Menifee man has been charged with robbing a Perris Salvation Army thrift store employee who was on her way to the bank to deposit $7,000, authorities said.

Brian Keith Fouse pleaded not guilty Tuesday morning to robbery, court records show.

A warrant for his arrest in the Dec. 3 incident was issued earlier this month and Fouse was arrested over the weekend, according to court records.

Riverside County sheriff’s officials said Fouse was one of two men in hooded sweatshirts who accosted the employee as she approached the door to a Bank of America in Perris. The men grabbed her and snatched her purse, knocking her to the ground in the process, according to an investigator’s statement in support of a search warrant.

The men ran away, but a witness followed one of them and later identified Fouse as the person she saw, court records stated.

Deputies detained Fouse near the bank but the other man, as well as the purse containing the $7,000 cash, were not found.

The theft raised the suspicions of deputies, who suspected the robbers might have known ahead of time that the woman was carrying a large sum and targeted her.

The deposit that day was larger than usual, Salvation Army employees told investigators, according to court documents. Usually, the deposits didn’t exceed $1,500, but Dec. 2 was an exceptionally busy sales day, the employees said.

The employee who was robbed said she left to make the deposit about an hour earlier than normal, court records stated. She told another employee where she was going as she left the Orange Avenue store, then drove directly to the bank branch at 181 E. 4th St., the woman told deputies.

Investigators also learned from The Salvation Army that another $4,000 had been stolen from the store safe when it had been left unlocked a few months before the robbery, according to court records.

Sgt. Lisa McConnell said detectives investigated the possibility that the robbers knew someone with ties to the store but were unable to make such a connection.

Fouse was being held at the Southwest Detention Center with bail set at $30,000, jail records show.

 

Woman convicted in huge ID theft ring

SANTA ANA – A U.S. District judge has found guilty the wife of a key player in one of the largest I.D. theft schemes in Southern California with dozens of victims from Orange County and millions of dollars in losses.

Kristine Ogandzhanyan was convicted Wednesday after a bench trial in Judge David Carter’s courtroom of one count of conspiracy to commit bank fraud, two counts of attempted bank fraud, and four of aggravated I.D. theft, prosecutors said. She was acquitted of two attempted bank fraud counts.

A U.S. District judge has found guilty the wife of a key player in one of the largest I.D. theft schemes in Southern California with dozens of victims from Orange County and millions of dollars in losses in federal court.

Carter commented the trial educated the court, saying he was “astounded by the sophistication” of the group, prosecutors said.

Last week Carter found her husband, Arman “Horse” Sharopetrosian and another member of the conspiracy, Keren Markosian, all from the Glendale area, guilty of several similar counts.

A federal jury heard testimony in co-defendant Artush Margaryan’s case and found him guilty of similar charges, also in Carter’s court.

Margaryan was the only one of the defendants who opted for a jury trial, while Carter weighed the evidence against the other three.

The defendants face a possible 30 years in federal prison for each count of fraud, 30 years for each count of conspiracy and a mandatory two years on each identity theft charge at their Aug. 6 sentencing by Carter, said Joseph McNally and Martin Estrada, assistant U.S. attorneys who prosecuted the case.

At the sentencing, defense attorneys expect to argue there were no actual losses due to their clients’ actions because they became part of a fraud scheme in 2009, already well under way since 2005.

Prosecutors laid out for jurors what they said were the roles of the defendants:

Sharopetrosian approached low-paid tellers and call center workers for security information on account holders in exchange for money, Ogandzhanyan forged the checks, Markosian deposited the checks into accounts set up in third party names, many of them Armenians who had left the country, and Margaryan as the “one guy in the case who’s caught red handed with the checks.”

For the approximate six-year duration of the fraudulent scheme, defendants conspired to cause at least $8 million in losses, with victims in Orange, Los Angeles, San Bernardino counties, as well as in Arizona, Texas and Nevada, prosecutors said.

There were no losses after the Armenians joined in the summer of 2009 the scheme initiated by African Americans, prosecutors said. But sentencing in federal court is also about intended losses and among other factors the judge will take that into consideration along with any criminal histories of the defendants.

The defendants did everything they could to bypass bank security systems to drain the accounts of victims, many of them unsuspecting seniors whose sense of security was violated, McNally said in his opening statement.

According to the government’s trial memo, as early as 2005, the defendants and co-conspirators used bank insiders to execute a sophisticated fraud scheme throughout Southern California, targeting individual bank accounts by obtaining confidential information.