Eastern District of New York
Press releases recorded for this federal judicial district.
Former Federal Correction Officer Sentenced to Prison for Accepting Bribes in Exchange for Smuggling Contraband into the Metropolitan Detention Center in BrooklynRead the Press Release
Earlier today, in federal court in Brooklyn, former federal correction officer Quandelle Joseph was sentenced by United States District Judge Dora L. Irizarry to 30 months’ imprisonment for accepting bribes in exchange for providing contraband to individuals detained at the Metropolitan Detention Center (MDC) in Brooklyn. Joseph pleaded guilty in January 2024 to the charge of accepting bribes as a public official.
Breon Peace, United States Attorney for the Eastern District of New York, Ryan T. Geach, Special Agent in Charge, Department of Justice, Office of the Inspector General, Northeast Region (DOJ-OIG), and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Quandelle Joseph put his own interests above the safety of incarcerated individuals and other correction officers at the Metropolitan Detention Center by accepting bribes to smuggle drugs, cell phones and other contraband into the jail he was sworn to protect,” stated United States Attorney Peace. “This Office has zero tolerance for corruption in prison facilities and those who abuse the trust placed in them to carry out their duties will find themselves on the wrong side of the bars like this defendant.”
“We trust Correctional Officers to carry out their duties with honor and integrity. Joseph did the opposite when he accepted tens of thousands of dollars in bribes in exchange for smuggling dangerous contraband into MDC Brooklyn. Today’s sentencing shows that Correctional Officers who commit these selfish crimes will be held accountable,” stated DOJ-OIG Special Agent in Charge Geach.
“Quandelle Joseph abused his authority as a former correction officer by supplying inmates with contraband for cash and offering advanced warnings to his clientele to obscure this illicit trade from other guards. His actions not only violated the order and regulation necessary for a secure correctional institution, but also threatened the public’s trust in our system. The FBI remains diligent in its pursuit of corrupt public officials who value personal benefit over fulfilling their duty to protect and serve,” stated Acting Assistant Director in Charge Curtis.
According to court documents and facts presented at today’s sentencing proceeding, Joseph became a correction officer at the MDC in May 2020. During his employment, Joseph accepted tens of thousands of dollars from inmates in exchange for smuggling narcotics, cigarettes, and cell phones into the MDC. In one instance, Joseph accepted bribes to smuggle contraband into the MDC for an inmate, who then sold the contraband widely throughout his unit. Joseph also warned the inmate about upcoming contraband searches at the MDC. For example, on January 26, 2021, Joseph texted an inmate from whom he was taking bribes: “Tighten up search comin clean phones out call logs n text n try to stash it.” The next day, Joseph texted the inmate: “keep your phones cleannnnnnnnnn erase texts and call logs every night.”
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Philip Pilmar and Sara K. Winik are in charge of the prosecution.
The Defendant:
QUANDELLE JOSEPH
Age: 34
Brooklyn, New YorkE.D.N.Y. Docket No. 23-CR-306 (DLI)
Brooklyn Business Owner Convicted of Operating an Unlicensed Money Transmitting Business, Bank Fraud, Money Laundering and Other Felony ChargesRead the Press Release
A federal jury in Brooklyn today convicted David Motovich of perpetrating a years-long scheme to establish and conceal a massive illegal check-cashing operation. Motovich was found guilty on 16 counts of an indictment charging him with operating an illegal money transmitting business, failure to file currency transaction reports, bank fraud, conspiracy to commit bank fraud, money laundering, aggravated identity theft, and conspiracy to defraud the United States. The verdict followed a three-week trial before United States District Judge William F. Kuntz, II. When sentenced, Motovich faces up to 30 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Thomas Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the verdict.
“Taken behind the façade of a seemingly legitimate lumber business in Brooklyn, the jury followed the trail of evidence to find an infestation of crimes,” stated United States Attorney Peace. “Motovich operated an illegal money transmitting business that funneled millions of dollars to himself to get rich, evade taxes and fund a lavish lifestyle of luxury cars, jewelry and a spectacular penthouse apartment. With today’s verdict, the defendant finds there is a very high price to pay for his blatant disregard for the law.”
“David Motovich developed an illicit scheme using his family’s business to launder more than $55 million through construction companies to finance lavish purchases. For seven years, Motovich funneled his proceeds through falsely named bank accounts to conceal the profits and evade authoritative oversight. Despite his efforts to disrupt our investigation into his unlawful activity, today’s verdict highlights the FBI’s tireless dedication to apprehending criminals who employ fraudulent tactics to fund expensive lifestyles,” stated FBI Acting Assistant Director in Charge Curtis.
“Motovich made millions from his back office deals, cashing checks for clients who paid more in fees just to know their transactions were hidden from the government. But we found out. And although his shady business allowed him to lease a high-end apartment with expensive renovations and luxury cars, today’s verdict will ensure that his next lease is only for a prison cell, no renovations required,” said Thomas M. Fattorusso, Special Agent in Charge of IRS CI New York.
As proven at trial, Motovich used his family-run business in the Midwood section of Brooklyn as a front for an illegal, unlicensed check-cashing operation. From the second floor of Midwood Lumber on Coney Island Avenue, Motovich offered his services primarily to the owners and operators of construction companies, cashing millions of dollars in checks to fund off-the-books payrolls for those businesses. As part of the scheme, Motovich cashed checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between four and 15 percent. Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check cashing businesses because the customers understood that Motovich would not file Suspicious Activity Reports or Currency Transaction Reports for cash transactions in amounts greater than $10,000, as required by federal anti-money laundering statutes. Motovich supplied his check cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.
In furtherance of his scheme, Motovich created shell companies for the sole purpose of facilitating his illegal check cashing business and instructed his customers to issue checks drawn against their business accounts and make the checks payable to one of the companies. Motovich then deposited the checks into bank accounts that he created at several financial institutions. To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.
In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus luxury vehicles; pay premiums on multi-million dollar life insurance policies for himself, his wife and others; renovate his penthouse apartment in Manhattan to include a swimming pool; and to fund other business ventures.
Motovich’s co-defendants Marina Kuyan, Kemal Sarkinovic, and Joshua Markovics, all previously pleaded guilty to various charges in connection with the scheme. They are awaiting sentencing.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni, Erik Paulsen, Andrew Grubin and Matthew Skurnik are in charge of the prosecution, with assistance from Eastern District of New York Special Agent George Dietz and Paralegal Specialist Kavya Kannan.
The Defendant:
DAVID MOTOVICH
Age: 49
New York, NYE.D.N.Y. Docket No. 21-CR-497 (WFK)
Montenegrin Citizen Extradited from Italy to Face Maritime Narcotrafficking ChargesRead the Press Release
Milos Radonjic, a citizen of Montenegro, also known as “Pirate of the Unknown,” was extradited yesterday to the Eastern District of New York from Italy. Radonjic, who is charged in a superseding indictment with conspiracy and attempt to violate the Maritime Drug Law Enforcement Act, had previously been arrested in Italy on October 6, 2023 pursuant to a provisional arrest warrant, after entering the country to compete in an international yacht race in which he was to captain a racing yacht. Radonjic will be arraigned in federal court in Brooklyn on Monday, July 29, 2024, before United States Magistrate Judge Cheryl L. Pollak.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent in Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York, and David J. Scott, Special Agent in Charge, Federal Bureau of Investigation (FBI), Washington Field Office Criminal and Cyber Division, announced the extradition.
“This arrest and successful extradition is a lesson that the high seas are not a no-man’s land for the rule of law, and that we are committed to bringing those who violate it to justice,” stated United States Attorney Peace. “Working together with our law enforcement partners and allies around the world, this Office will continue to pursue narcotraffickers who seek to corrupt the critical infrastructure of global shipping to transport their poisonous cargo to our communities.”
Mr. Peace expressed his appreciation to the United States Marshals Service, the United States Department of State, and Italian law enforcement and prosecutorial authorities, including the Ministry of Justice. The Justice Department’s Office of International Affairs provided valuable assistance with securing the arrest and extradition of Radonjic.
HSI New York Special Agent in Charge Ivan J. Arvelo said: “The defendant’s alleged efforts to utilize the open ocean to transport tons of cocaine were no match for the versatile investigative capabilities of HSI and our law enforcement partners. HSI New York’s El Dorado Task Force is committed to leveraging our international footprint to protect the innocent public – at home, abroad, and in whatever capacity possible. We will relentlessly pursue transnational criminal organizations and their efforts to flout the laws vital to ensuring our communities’ safety and wellbeing.”
“Radonjic and his co-conspirators allegedly transported tons of cocaine across the world using commercial cargo vessels," stated FBI Special Agent in Charge Scott. “His extradition is a testament to global multiagency efforts to disrupt transnational criminal organizations who traffic drugs by air, land, or sea.”
According to the indictment and court filings, in 2020, Radonjic was a high-ranking member of a large-scale transnational criminal organization that trafficked tons of cocaine across the world using commercial cargo vessels traversing the high seas. Radonjic communicated and coordinated with multiple co-conspirators to arrange multi-ton shipments of cocaine from South America to the Balkans and elsewhere. Radonjic allegedly organized three separate attempts, with the assistance of a corrupt crew member on a commercial cargo vessel, to load a container ship with more than 2,500 kilograms of cocaine in Ecuador and off the coast of Colombia.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proved guilty. If convicted, the defendant faces a mandatory minimum of 10 years’ imprisonment and up to life in prison.
The extradition of Radonjic is the result of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nomi D. Berenson and Robert M. Pollack are in charge of the prosecution, with assistance from Paralegal Specialist Samuel Ronchetti.
The Defendant:
MILOS RADONJIC (also known as “Pirate of the Unknown”)
Age: 34
MontenegroE.D.N.Y. Docket No. 23-CR-257 (S-1) (ARR)
Brooklyn Man Convicted of Money Laundering Scheme in Connection with Theft of Millions of Dollars from Foreign BanksRead the Press Release
A federal jury in Brooklyn today convicted Alex Levin on both counts of an indictment charging him with conspiracy to commit money laundering and conspiracy to violate the Travel Act in connection with his role in a scheme that resulted in the theft of millions of dollars and property from safe deposit boxes at multiple banks outside of the United States, including in Ukraine, Russia, North Macedonia, Moldova, Latvia, Uzbekistan and Azerbaijan. The verdict followed a seven-day trial before United States District Judge LaShann DeArcy Hall. When sentenced, Levin faces up to 10 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.
“The jury found that Levin played an integral role in a highly sophisticated and well-organized international crew of thieves who stole millions of dollars’ worth of jewelry and cash from banks in Eastern Europe,” stated United States Attorney Peace. “Levin’s role here in Brooklyn of laundering the cash and purchasing equipment used in the break-ins of safe deposit boxes overseas was crucial to the crew’s success, but with today’s verdict, that role proved to be the defendant’s undoing.”
Mr. Peace also thanked the U.S. Customs and Border Protection for their valuable assistance to the investigation.
“Alex Levin’s conviction signals the downfall of an individual at the center of an international crime spree that utilized technology and illicit methodologies to exploit vulnerabilities within financial institutions around the world. Today’s verdict proves once again that even the most sophisticated bank heists are no match for HSI New York and our law enforcement partners, both domestic and abroad,” stated HSI New York Special Agent-in-Charge Arvelo. “I commend the Long Island-based HSI Financial Crimes Group, the Eastern District of New York and the FBI for consistently proving no criminal is too savvy to evade justice.”
FBI Acting Assistant Director in Charge Curtis stated: “Using sophisticated camera tools that he purchased here in Brooklyn, Levin and his international co-conspirators stole from safe deposit boxes belonging to innocent bank customers through a string of thefts across the globe. Today’s verdict is demonstrative of the FBI’s commitment to holding people accountable for their attempts to unlawfully obtain money and valuable items, and we applaud the investigative efforts of our office as well as our partners at the U.S. Attorney’s office in delivering this outcome.”
As proved at trial, between March 2015 and October 2019, Levin was a member of a sophisticated group that targeted foreign banks that appeared to lack strong security features. Members of the conspiracy posed as customers at the target banks and rented safe deposit boxes. After gaining access to safe deposit box rooms, the conspirators used specialized medical equipment to take photographs of the inside of the locks of other customers’ safe deposit boxes. Using these photographs, the conspirators created duplicate keys for the safe deposit boxes in order to steal money and valuables from customers at the foreign banks.
Levin’s role in the conspiracy was based in Brooklyn. He assisted in laundering the proceeds of the scheme to the United States. For example, around the time of various bank heists in Ukraine, a company used in furtherance of the unlawful scheme wired the unlawful proceeds to the defendant. Specifically, on July 31, 2015, Glenport Merchants LLP, a company with a Latvian bank account, wired $150,000 to Levin. Shortly thereafter, Levin wired $144,727 to a member of the conspiracy who personally participated in the bank heists.
Levin also used bank accounts in the United States, including accounts located in the Eastern District of New York, to purchase sophisticated camera equipment used in the thefts, including borescopes, which are small, specialized, medical grade cameras.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level money launderers and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Lorena Michelen, Lauren A. Bowman and Megan Larkin are in charge of the prosecution, with the assistance of Paralegal Specialist Wesley Roberts.
The Defendant:
ALEX LEVIN
Age: 55
Brooklyn, New YorkE.D.N.Y. Docket No. 21-CR-208 (LDH)
Riverhead Man Sentenced to 25 Years' Imprisonment for Conspiring to Distribute Large Quantities of Narcotics, Including Fentanyl, on the East End of Long IslandRead the Press Release
Earlier today, in federal court in Central Islip, Marquis Douglas, a narcotics trafficker who operated a narcotics business that was responsible for the distribution of large quantities of cocaine, fentanyl and other illicit substances throughout the North Fork of Long Island, was sentenced by United States District Judge Joanna Seybert to 25 years’ imprisonment. Douglas pleaded guilty in November 2023 to conspiring with others to distribute and possess with the intent to distribute more than five kilograms of cocaine, more than one kilogram of heroin, more than 280 grams of crack cocaine, more than 40 grams of fentanyl and a quantity of fentanyl analogue (fluorofentanyl), and distribution of cocaine and fluorofentanyl on or about August 12, 2021, which resulted in the overdose deaths of four people.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Raymond A. Tierney, Suffolk County District Attorney, announced the sentence.
“Douglas’s singular contribution to the opioid epidemic on Long Island is horrific as the drugs he distributed contributed to the deaths of four human beings,” stated United States Attorney Peace. “Today’s lengthy sentence should serve as a deterrent to those endangering our communities by distributing potentially lethal drugs. It is my hope that holding the defendant accountable for the terrible consequences of his actions will bring a measure of closure to the victims’ families.”
U.S. Attorney Peace also extended his thanks to the Riverhead Police Department, the Southold Police Department, the Shelter Island Police Department and the New York State Police for their assistance with the investigation.
“Marquis Douglas’s unlawful narcotics trafficking operation resulted in the deaths of four individuals on Long Island and posed a significant threat to the welfare of its citizens. His actions fueled an ongoing epidemic by supplying lethal drugs to our community. The FBI is committed to disrupting the flow of these illicit substances in our streets to prevent future unnecessary fatalities,” stated FBI Acting Assistant Director in Charge Curtis.
“This defendant dealt multiple kilograms of various deadly drugs, resulting in four tragic overdose deaths. This underscores why New York State needs to adequately address the opioid overdose epidemic plaguing communities throughout NY state and the country,” said District Attorney Tierney. "Thankfully, the strong collaboration between our office and our federal law enforcement partners allowed this case to be charged federally and provide justice for the families of these victims.”
On August 13, 2021, four men were found dead on the East End of Long Island after using cocaine that had been laced with a fentanyl analogue. An investigation by the Southold Police Department, the Shelter Island Police Department, the Suffolk County District Attorney’s Office and the FBI determined that Douglas was the source of the lethal narcotics. In August of 2021, Douglas’ operation distributed a quantity of cocaine laced with a fentanyl analogue in Greenport, New York. When this product was re-distributed at the street level, it ultimately led to four fatal overdoses on a single day in Greenport and Shelter Island. Douglas had distributed multiple kilograms of cocaine over the years, as well as kilogram level quantities of heroin and large quantities of fentanyl. At the time of his arrest in May of 2022, Douglas was found in possession of 105 grams of fentanyl and 135 grams of cocaine.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Michael R. Maffei and Andrew P. Wenzel, along with Special Assistant United States Attorney Dana Gremaux, are in charge of the prosecution.
The Defendant:
MARQUIS DOUGLAS
Age: 39
Riverhead, Long IslandE.D.N.Y. Docket No. 22-CR-246 (JS)
Indonesian National Pleads Guilty to International Ponzi Scheme that Defrauded Indonesian and Indo-American CommunityRead the Press Release
Earlier today, in federal court in Brooklyn, Francius Marganda, an Indonesian national, pleaded guilty to securities fraud in connection with a $23 million Ponzi scheme that defrauded hundreds of predominantly Indonesian and Indo-American victim investors. The plea proceeding took place before United States Magistrate Judge Marcia M. Henry. As part of his plea, Marganda admitted that he agreed to launder proceeds of the securities fraud, and he agreed to forfeit more than $7.5 million that he misappropriated from investors. When sentenced, Marganda faces up to 20 years in prison. Marganda was extradited to the United States from Singapore in November 2023.
Breon Peace, United States Attorney for the Eastern District of New York; Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Ivan J. Arvelo, Special Agent in Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), announced the guilty plea.
“As he admitted today, Marganda led a $23 million Ponzi scheme directly targeting his fellow countrymen, Indonesian and Indo-American victims, stealing their hard-earned funds and spending them on luxury goods and real estate,” stated United States Attorney Peace. “This Office will continue to use all tools available to protect those living in the Eastern District, from prevention efforts, including educating the public about red flags of financial fraud, to holding swindlers accountable for their crimes and seeking to recover and return victims’ money.”
Mr. Peace thanked the Justice Department’s Office of International Affairs, particularly the DOJ Attachés based in Manila and Bangkok; law enforcement partners at the U.S. Embassy in Singapore, including the FBI’s Legal Attaché, the HSI Attaché and the U.S. Department of State’s Diplomatic Security Service Overseas Criminal Investigations office; and Singaporean authorities, particularly the Singapore Police Force and the Attorney-General’s Chambers, for their assistance with Marganda’s arrest and extradition. Mr. Peace also thanked the Securities and Exchange Commission, Fort Worth Regional Office; the United States Attorney’s Office for the Southern District of New York; the Internal Revenue Service Criminal Investigation, New York; the Federal Trade Commission; the New York State Attorney General’s Office; the Commonwealth of Massachusetts Attorney General’s Office; the New York County District Attorney’s Office; the Queens County District Attorney’s Office; the New York City Police Department; the Westford Police Department, Westford, Massachusetts; the Richfield Police Department, Richfield, Minnesota; and the Lexington Police Department, Lexington, South Carolina, for their assistance with the investigation.
“Francius Marganda’s guilty plea serves as a positive step toward justice for more than 400 victims, whom he and his co-conspirators are estimated to have swindled out of over $23 million collectively throughout the global, years-long Ponzi scheme. We recognize there is more work to be done and there are likely countless additional victims worldwide who have not yet come forward. HSI New York’s El Dorado Task Force is committed to leveraging our international footprint to protect the innocent public at home and abroad," said HSI New York Special Agent in Charge Ivan J. Arvelo. "We are proud to stand alongside the Eastern District of New York, the FBI, and all law enforcement partners in relentlessly pursuing predators who place their own selfish gain above all else.”
As set forth in court filings, while living in New York, Marganda and his co-conspirators ran a scheme to defraud investors from May 2019 to May 2021 by soliciting investments in two sham loan programs called Easy Transfer and Global Transfer, which Marganda and his co-conspirators falsely represented were short-term, high-interest loan programs in which investors would earn passive income. The victims resided in more than a dozen states in the United States, including in New York, and in Indonesia. Many of the victims had limited means and had pooled their resources with relatives and friends to make investments. Marganda and his co-conspirators misappropriated the funds for their own benefit, including by buying real estate and luxury goods. The Ponzi scheme ultimately collapsed in May 2021, when Marganda and his co-conspirators stopped making payments.
The FBI and HSI have established a website and an e-mail hotline for potential victims. If you have information regarding the allegations in the indictment or believe that you may be a victim, please go to www.fbi.gov/Marganda or e-mail [email protected]
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud, such as the fraud that Marganda committed.
To request a financial fraud presentation from the U.S. Attorney’s Office for the Eastern District of New York, please email [email protected].
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Victor Zapana and Laura Zuckerwise are in charge of the prosecution, with assistance from Paralegal Specialist Kavya Kannan.
The Defendant:
FRANCIUS MARGANDA
Age: 41
Jakarta, Indonesia and formerly of Queens, New YorkE.D.N.Y. Docket No. 22-CR-481 (DLI)
Four Men Plead Guilty to Defrauding Global Financial Services Company of over Two Million DollarsRead the Press Release
Between June 4, 2024 and today, in federal court in Central Islip, four defendants, Edward Hernandez, Christopher Flagg, Daquan Lloyd and Corey Ortiz pleaded guilty to money laundering conspiracy in connection with a scheme to steal millions of dollars from a global financial services company based in Menlo Park, California. The proceedings were held before United States District Judge Gary R. Brown. When sentenced, each defendant faces a maximum sentence of 20 years’ imprisonment, restitution of up to $2,087,164, and forfeiture between $56,390 and $700,425.
Breon Peace, United States Attorney for the Eastern District of New York and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty pleas.
“Each defendant was convicted of their roles in a sprawling and complex nationwide scheme organized from Long Island to steal millions of dollars that were intended for legitimate investors and launder the proceeds of their crime,” stated United States Attorney Breon Peace. “Today’s guilty plea demonstrates how this Office will swiftly bring to justice those who fraudulently manipulate the financial system, no matter how complex the scheme.”
Mr. Peace expressed his appreciation to the Securities and Exchange Commission for their assistance with the case.
Between December 2018 and January 2023, the defendants engaged in a scheme to defraud a global financial services company of millions of dollars of short-term cash advances, called “Instant Deposits.” The Instant Deposits were intended to enable legitimate investors to immediately trade in their brokerage accounts without having to wait for an incoming wire transfer to clear. To gain access to millions of dollars of Instant Deposits, which were typically capped at $5,000 per account, the defendants established a multi-state recruitment network through which the defendants opened hundreds of fraudulent accounts held in the names of straw account holders, or “Losing Accounts.”
Using the Instant Deposits available to the Losing Accounts, the defendants repeatedly bought thinly traded and highly speculative stock options at above-market prices. Selecting these virtually worthless stock options enabled the defendants to match their bids in the Losing Accounts with offers to sell the same overpriced stock options initiated by other brokerage accounts, or “Winning Accounts,” that were also controlled by the defendants and their conspirators. In effect, the defendants transferred the Instant Deposits from the Losing Accounts to the Winning Accounts by way of fraudulent securities transactions.
Meanwhile, the incoming wire transfers supposed to cover the Instant Deposits in the Losing Accounts had purposely been initiated by the defendants from bank accounts that had little or no balance. These wire transfers, therefore, failed to clear, but not before the defendants drained the Instant Deposits, leaving the accounts with negative balances and worthless options. The defendants then laundered the stolen funds through multiple electronic banking platforms.
In total, the defendants recruited dozens of individuals to engage in their fraudulent scheme and stole more than $2 million.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud and money laundering.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jonathan P. Lax and Sara K. Winik are in charge of the prosecution with the assistance of Paralegal Specialists Jacob Menz, Liam McNett and Sarah Burn.
The Defendants:
EDUARDO HERNANDEZ (also known as “Ghost”)
Age: 33
Lindenhurst, New YorkCHRISTOPHER FLAGG (also known as “Venus”)
Age: 28
Copiague, New YorkDAQUAN LLOYD (also known as “Payday”)
Age: 29
Copiague, New YorkCOREY ORTIZ (also known as “Jefe”)
Age: 29
Greensboro, North CarolinaE.D.N.Y. Docket No. 23-CR-428 (GRB)
Georgian National Charged with Soliciting Hate Crimes and a Mass Casualty Attack in New York CityRead the Press Release
A Leader of Maniac Murder Cult, a White Supremacist Group, Allegedly Recruited Others to Commit Arsons and Bombings Targeting Racial Minorities and the Jewish Community
Planned New Year’s Eve Attack Involved Santa Claus Handing Out Poisoned Candy to Racial Minorities as well as Distributing Poisoned Candy to Jewish Children in Brooklyn
A federal grand jury in Brooklyn, New York, returned a four-count indictment today charging Georgian national Michail Chkhikvishvili, 20, also known as Mishka, Michael, Commander Butcher and Butcher, with soliciting hate crimes and acts of mass violence in New York City.
According to court documents, Chkhikvishvili was arrested pursuant to an Interpol Wanted Person Diffusion, which was issued based on a criminal complaint. Chkhikvishvili is alleged to be a leader of the Maniac Murder Cult, also known as Maniacs Murder Cult, Maniacs: Cult of Killing, MKY, MMC and MKU, an international racially or ethnically motivated violent extremist group. MKY adheres to a neo-Nazi accelerationist ideology and promotes violence and violent acts against racial minorities, the Jewish community and other groups it deems “undesirables.” MKY members share a common goal of challenging social order and governments via terrorism and violent acts that promote fear and chaos. MKY has members in the United States and abroad. Chkhikvishvili allegedly recruited others to commit violent acts in furtherance of MKY’s ideologies, including planning and soliciting a mass casualty attack in New York City from an undercover law enforcement employee whom Chkhikvishvili believed was a prospective MKY recruit.
Since approximately September 2021, Chkhikvishvili has distributed a manifesto titled the “Hater’s Handbook” to MKY members and others. The handbook discusses MKY’s principles and encourages members to engage in acts of mass violence in furtherance of those principles. In the handbook, Chkhikvishvili states that he has “murdered for the white race” and encourages and instructs others to commit acts of mass violence and “ethnic cleansing.” For example, and among other things, the handbook encourages its readers to commit school shootings and to use children to perpetrate suicide bombings and other mass killings targeting racial minorities. The document describes methods and strategies for committing mass “terror attacks,” including, for example, using vehicles to target “large outdoor festivals, conventions, celebrations and parades” and “pedestrian congested streets.” It specifically encourages committing attacks within the United States.
In June 2022, Chkhikvishvili traveled to Brooklyn, New York and stayed with his grandmother while he was there. He provided to border authorities his grandmother’s address in Brooklyn as his address of record in the United States.
Beginning at least as early as July 2022, Chkhikvishvili repeatedly encouraged others, primarily via encrypted mobile messaging platforms, to commit violent hate crimes and other acts of violence on behalf of MKY. This included conspiring to solicit violent acts with a leader of a separate violent extremist neo-Nazi group and soliciting acts of mass violence in New York from an individual who claimed to be a prospective MKY recruit, but who, unbeknownst to Chkhikvishvili, was actually an undercover FBI employee (the UC).
In a September 2023 conversation, the UC messaged Chkhikvishvili whether there was an application process to join MKY. The defendant responded, “Well yes we ask people for brutal beating, arson/explosion or murder vids on camera.” He further stated that “[p]oisoning and arson are best options for murder,” and suggested also considering a larger “mass murder” within the United States. Chkhikvishvili advised the UC that the victims of these acts should be “low race targets.”
Beginning in approximately November 2023, Chkhikvishvili solicited the UC to commit violent crimes, such as bombings and arsons, for the purpose of harming racial minorities, Jewish individuals and others. Chkhikvishvili provided detailed plans and materials such as bomb-making instructions and guidance on making Molotov cocktails to facilitate his desire for the UC to carry out these crimes. In November 2023, Chkhikvishvili began planning a mass casualty attack in New York City to take place on New Year’s Eve. The scheme involved an individual dressing up as Santa Claus and handing out candy laced with poison to racial minorities. The scheme also involved providing candy laced with poison to children at Jewish schools in Brooklyn. Chkhikvishvili drafted step-by-step instructions to carry out the scheme and shared with the UC detailed manuals on creating and mixing lethal poisons and gases. He also instructed the UC on methods of making ricin-based poisons in powder and liquid form, including by extracting ricin from castor beans. Some of the materials transmitted by Chkhikvishvili have been linked to radical Islamist jihadist groups and designated foreign terrorist organizations such as the Islamic State of Iraq and Syria (ISIS). Chkhikvishvili intended that the planned attack would be a “bigger action than Breivik,” referring to Anders Behring Breivik, a Norwegian neo-Nazi who killed 77 people in a bombing and mass shooting in Norway in 2011. Meanwhile, he told others of his plan and claimed to have previously committed other hate crimes while living in Brooklyn, New York, in 2022. Chkhikvishvili boasted to others that he was “glad I have murdered,” and that he would “murder more” but “make others murder first.”
If convicted, Chkhikvishvili faces a maximum penalty of 20 years in prison for solicitation of violent felonies (including hate crime acts and transporting an explosive with intent to kill or injure), a maximum penalty of five years in prison for conspiring to solicit violent felonies, a maximum penalty of 20 years in prison for distributing information pertaining to the making and use of explosive devices and a maximum penalty of five years in prison for transmitting threatening communications.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Breon Peace for the Eastern District of New York and Executive Assistant Director Robert R. Wells of the FBI’s National Security Branch made the announcement.
The FBI is investigating the case.
Assistant U.S. Attorneys Ellen H. Sise and Andrew D. Reich for the Eastern District of New York and Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section are prosecuting the case. The Justice Department’s Civil Rights Division also provided assistance.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Georgian National Charged with Soliciting Hate Crimes and a Mass Casualty Attack in New York CityRead the Press Release
Planned New Year’s Eve Attack Involved Santa Claus Handing Out Poisoned Candy to Racial Minorities as well as Distributing Poisoned Candy to Jewish Children in Brooklyn
BROOKLYN, NY – A federal grand jury in Brooklyn yesterday returned a four-count indictment charging Georgian national Michail Chkhikvishvili, also known as “Mishka,” “Michael,” “Commander Butcher” and “Butcher,” with soliciting hate crimes and acts of mass violence in New York City. Chkhikvishvili was arrested in Chișinău, Moldova on July 6, 2024 pursuant to an Interpol Wanted Person Diffusion, which was issued based on a criminal complaint. Chkhikvishvili is alleged to be a leader of the Maniac Murder Cult, also known as “Maniacs Murder Cult,” “Maniacs: Cult of Killing,” “MKY,” “MMC” and “MKU,” an international racially or ethnically motivated violent extremist group. Chkhikvishvili allegedly recruited others to commit violent acts in furtherance of MKY’s ideologies, including planning and soliciting a mass casualty attack in New York City from an undercover law enforcement employee whom Chkhikvishvili believed was a prospective MKY recruit.
Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.
“As alleged, the defendant sought to recruit others to commit violent attacks and killings in furtherance of his Neo-Nazi ideologies,” stated United States Attorney Peace. “His goal was to spread hatred, fear and destruction by encouraging bombings, arson and even poisoning children, for the purpose of harming racial minorities, the Jewish community and homeless individuals. We will not hesitate to find and prosecute those who threaten the safety and freedoms of all members of our community, including members of minority communities, no matter where in the world these criminals might be hiding.”
Mr. Peace praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force (JTTF), which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state and local agencies.
FBI Acting Assistant Director in Charge Curtis stated, “Today’s charges underscore the dedication of our Joint Terrorism Task Force and our partners in New York in safeguarding our nation’s security. The swift disruption of this individual, accused of allegedly plotting violent attacks in New York, sends a clear message: we will use every resource in our power to ensure the safety of the American people. The men and women who work on this task force day in and day out exemplify true service to our community, demonstrating unwavering commitment in thwarting those who seek to harm our citizens and our way of life.”
As alleged, Chkhikvishvili was a leader of MKY, an international racially or ethnically motivated violent extremist group. MKY adheres to a Neo-Nazi accelerationist ideology and promotes violence and violent acts against racial minorities, the Jewish community and other groups it deems “undesirables.” MKY members share a common goal of challenging social order and governments via terrorism and violent acts that promote fear and chaos. MKY has members in the United States and abroad.
Since approximately September 2021, Chkhikvishvili has distributed a manifesto titled the “Hater’s Handbook” to MKY members and others. The Handbook discusses MKY’s principles and encourages members to engage in acts of mass violence in furtherance of those principles. In the Handbook, Chkhikvishvili states that he has “murdered for the white race” and encourages and instructs others to commit acts of mass violence and “ethnic cleansing.” For example, and among other things, the Handbook encourages its readers to commit school shootings and to use children to perpetrate suicide bombings and other mass killings targeting racial minorities. The document describes methods and strategies for committing mass “terror attacks,” including, for example, using vehicles to target “large outdoor festivals, conventions, celebrations and parades” and “pedestrian congested streets.” It specifically encourages committing attacks within the United States.
In June 2022, Chkhikvishvili traveled to Brooklyn, New York and stayed with his grandmother while he was there. He provided to border authorities his grandmother’s address in Brooklyn as his address of record in the United States.
As alleged, beginning at least as early as July 2022, Chkhikvishvili repeatedly encouraged others, primarily via encrypted mobile messaging platforms, to commit violent hate crimes and other acts of violence on behalf of MKY. This included conspiring to solicit violent acts with the leader of a separate violent extremist Neo-Nazi group, and soliciting acts of mass violence in New York from an individual who claimed to be a prospective MKY recruit, but who, unbeknownst to Chkhikvishvili, was actually an undercover FBI employee (the UC).
In a September 2023 conversation, the UC messaged Chkhikvishvili whether there was an application process to join MKY. The defendant responded, “Well yes we ask people for brutal beating, arson/explosion or murder vids on camera.” He further stated that “[p]oisoning and arson are best options for murder,” and suggested also considering a larger “mass murder[]” within the United States. Chkhikvishvili advised the UC that the victims of these acts should be “low race targets.”
Beginning in approximately November 2023, Chkhikvishvili solicited the UC to commit violent crimes, such as bombings and arsons, for the purpose of harming racial minorities, Jewish individuals and others. Chkhikvishvili provided detailed plans and materials such as bomb-making instructions and guidance on making Molotov cocktails to facilitate his desire for the UC to carry out these crimes. In November 2023, Chkhikvishvili began planning a mass casualty attack in New York City to take place on New Year’s Eve. The scheme involved an individual dressing up as Santa Claus and handing out candy laced with poison to racial minorities. The scheme also involved providing candy laced with poison to children at Jewish schools in Brooklyn. Chkhikvishvili drafted step-by-step instructions to carry out the scheme and shared with the UC detailed manuals on creating and mixing lethal poisons and gases. He also instructed the UC on methods of making ricin-based poisons in powder and liquid form, including by extracting ricin from castor beans. Some of the materials transmitted by Chkhikvishvili have been linked to radical Islamist jihadist groups and designated foreign terrorist organizations such as the Islamic State of Iraq and Syria (ISIS).
Chkhikvishvili intended that the planned attack would be a “bigger action than Breivik,” referring to Anders Behring Breivik, a Norwegian Neo-Nazi who killed 77 people in a bombing and mass shooting in Norway in 2011. Meanwhile, he told others of his plan and claimed to have previously committed other hate crimes while living in Brooklyn, New York in 2022. Chkhikvishvili boasted to others that he was “glad I have murdered,” and that he would “murder more” but “make others murder first.”
The charges in the complaint and indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Chkhikvishvili faces a maximum sentence of 20 years’ imprisonment for solicitation of violent felonies (including hate crime acts and transporting an explosive with intent to kill or injure), five years’ imprisonment for conspiring to solicit violent felonies, 20 years’ imprisonment for distributing information pertaining to the making and use of explosive devices, and five years’ imprisonment for transmitting threatening communications.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Ellen H. Sise and Andrew D. Reich are in charge of the prosecution with assistance from Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section and Paralegal Specialist Wayne Colon. The Justice Department’s Civil Rights Division also provided assistance.
The Defendant:
MICHAIL CHKHIKVISHVILI (also known as “Mishka,” “Michael,” “Commander Butcher” and “Butcher”)
Age: 20
Tbilisi, GeorgiaE.D.N.Y. Docket No. 24-CR-286 (CBA)
Former Banker Extradited from the United Kingdom for Bribing Ghanaian OfficialsRead the Press Release
A dual citizen of the United States and Ghana will make his initial appearance today in the Eastern District of New York to face charges related to his participation in a scheme to bribe Ghanaian officials to obtain and retain business from the Republic of Ghana.
Asante Kwaku Berko, 50, was extradited yesterday from the United Kingdom to the United States.
According to court documents, between December 2014 and March 2017, Berko, an executive director in the Investment Banking Division of a wholly owned subsidiary of a U.S. global investment banking, securities, and investment management firm, allegedly conspired with others in connection with a multi-year bribery and money laundering scheme. During this time, Berko was a member of the team at the firm that was responsible for securing and managing a deal between its client, a Turkish energy company, and the Republic of Ghana to build a power plant in Ghana and to provide financing for the plant. Berko and others allegedly offered and paid more than $70,000 in bribes to government officials in Ghana in exchange for their assistance in ensuring that the Turkish energy company was successful in winning the bid to build and operate the power plant.
Berko is charged with one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), one count of violating the FCPA, and one count of conspiring to commit money laundering. If convicted, he faces a maximum penalty of 20 years in prison for conspiring to commit money laundering and five years in prison for each count of violating the FCPA and conspiring to violate the FCPA.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; and Executive Assistant Director Michael Nordwall of the FBI’s Criminal, Cyber, Response, and Services Branch made the announcement.
The FBI’s International Corruption Unit is investigating the case.
Trial Attorney Elina A. Rubin-Smith of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Alixandra Smith, Tara McGrath, and Jessica Weigel for the Eastern District of New York are prosecuting the case.
The Justice Department’s Office of International Affairs worked with the Government of the United Kingdom, U.K. National Central Bureau of INTERPOL, and U.S. Marshals Service to secure the arrest and extradition of Berko.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Banker Charged with Bribing Ghanaian Officials Extradited to the United States from the United KingdomRead the Press Release
Asante Kwaku Berko, a dual citizen of the United States and Ghana, will be arraigned in federal court in Brooklyn today before Magistrate Judge Vera M. Scanlon on an indictment charging him with violations of the Foreign Corrupt Practices Act (FCPA) and money laundering for bribing Ghanaian government officials to secure a power plant deal and laundering the payments through the U.S. financial system. Yesterday, Berko was extradited to the Eastern District of New York from the United Kingdom where he was arrested on November 3, 2022 pursuant to an Interpol Diffusion Notice.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Principal Deputy Assistant Attorney General, Head of the Criminal Division and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the extradition.
“As alleged, the defendant bribed Ghanaian government officials to secure a lucrative development contract relying on the U.S. banking system to execute his scheme,” stated United States Attorney Peace. “My Office is committed to rooting out bribery and other criminal practices that create inequities in the playing field for business both here and abroad and exploit the U.S. banking system.”
Mr. Peace expressed his appreciation to the Government of the United Kingdom, the U.K. National Centre Bureau for INTERPOL, the Embassy of the United States in London, the Department’s Office of International Affairs and the U.S. Marshals Service for providing substantial assistance in securing the arrest and extradition of the defendant.
“For over two years, Asante Berko, a dual citizen of the U.S. and Ghana, allegedly bribed Ghanian government officials to monopolize a promising business deal and used United States bank accounts to transfer such kickbacks. Financially influencing decision-makers, including those overseas, jeopardizes the integrity of affected countries while creating an unfair advantage to those promoting the bribery scheme. The FBI will not permit citizens, regardless of their nationality, to obtain corrupt contracts by exploiting foreign countries and utilizing our nation to facilitate the movement of unlawful payments,” stated FBI Assistant Director in Charge Curtis.
As set forth in the indictment, between approximately December 2014 and March 2017, Berko conspired with others to bribe Ghanaian government officials in connection with the development and financing of a multi-million-dollar power plant in Ghana. Berko, an Executive Director in the Investment Banking Division of a subsidiary of a U.S. bank, was responsible for securing and managing a deal between its client, a Turkish energy company, and the Republic of Ghana, for the construction and financing of a power plant in Ghana.
During the scheme, Berko and his co-conspirators paid hundreds of thousands of dollars in bribes—including to Ghanaian officials—to ensure the Turkish energy company won its bid to build and operate the power plant. For example, in April 2015, bribes were paid to five Ghanaian officials during an all-expenses-paid trip to Turkey to view equipment for the power plant, during which the officials each received $5,000. After the power plant deal was ratified by the Ghanaian parliament in July 2015, Berko and his co-conspirators exchanged detailed emails regarding their bribe payments. In August 2015, they discussed $250,000 in bribe payments paid to various individuals, including $20,000 to the “MoP Girls”—who were with the Ghanaian Ministry of Power and who a co-conspirator described as “vital to our communication and information acquisition.” The emails further detailed tens of thousands of dollars in bribes that Berko had personally paid and for which he was still owed. Payments in furtherance of the bribery scheme were laundered through U.S. and foreign bank accounts, including several in Berko’s name.
The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty. If convicted, Berko faces a maximum penalty of 20 years in prison for conspiring to commit money laundering and five years in prison for each count of violating the FCPA and conspiring to violate the FCPA.
The investigation was conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alixandra Smith, Jessica Weigel and Tara McGrath are in charge of the prosecution, along with Trial Attorney Elina Rubin-Smith of the Department of Justice’s Criminal Division, Fraud Section.
The Justice Department’s Office of International Affairs worked with the Government of the United Kingdom, U.K. National Central Bureau of INTERPOL, and U.S. Marshals Service to secure the arrest and extradition of Berko.
The Defendant:
ASANTE KWAKU BERKO
Age: 50
Ghana / United KingdomE.D.N.Y. Docket No. 20-CR-328 (DG)
Carlos Watson, Founder and Former CEO of Ozy Media Inc., Convicted of Multi-Million Dollar Fraud SchemeRead the Press Release
Carlos Watson, the founder and former Chief Executive Officer of Ozy Media Inc. (Ozy), was convicted today by a federal jury in Brooklyn of conspiracy to commit securities fraud, conspiracy to commit wire fraud and aggravated identity theft in connection with a years-long scheme to defraud investors in and lenders to Ozy of tens of millions of dollars. Ozy was also convicted on both counts of the indictment. The verdict followed 8 weeks of trial before United States District Judge Eric R. Komitee. When sentenced, Watson faces a minimum sentence of two years in prison, and a maximum sentence of 37 years in prison. The company also faces financial penalties. Watson was remanded pending sentencing.
Breon Peace, United States Attorney for the Eastern District of New York and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.
“The jury found that Watson was a con man who told lie upon lie upon lie to deceive investors into buying stock in his company. Watson invented phony financial figures and caused others to forge fake contracts and impersonate a media executive,” stated United States Attorney Peace. “Ozy Media ultimately collapsed under the weight of Watson’s dishonest schemes and with today’s verdict, Watson himself has been held accountable for his brazen crimes. My Office is committed to ensuring integrity in the financial markets and protecting investors, small and large, from fast-talking fraudsters looking to betray their trust and separate them from their money.”
“The conviction of Carlos Watson underscores the profound damage caused by corporate fraud schemes. Watson's deceitful actions in defrauding investors of their funds and an attempt to defraud a financial institution of tens of millions of dollars illustrated the vulnerability of investors to false information. The FBI remains committed to bringing to justice those who engage in fraudulent activities, ensuring that the integrity of our financial markets is upheld and that market participants are protected from dishonest practices,” stated FBI Acting Assistant Director in Charge Curtis.
Ozy was a media and entertainment company with businesses that included digital newsletters, television production, podcasts and live events, the most prominent of which was a live festival known as “Ozy Fest.” Watson founded Ozy in 2012 and served as the company’s Chief Executive Officer. The company is now defunct.
As proven at trial, between 2018 and 2021, Watson and his co-conspirators, including then-Chief Operating Officer Samir Rao and then-Chief of Staff Suzee Han, orchestrated a scheme to defraud investors out of tens of millions of dollars through fraudulent misrepresentations and omissions about Ozy’s financial performance, including revenue, cash on hand and profit, ongoing business relationships with celebrities, acquisition prospects from high- profile technology and media corporations, contract negotiations and other corporate metrics. For example, Watson and his co-conspirators lied to prospective investors about who else might be investing in Ozy, the existence and size of acquisition offers received by Ozy, the existence and timing of “Series C” and “Series D” financing rounds by Ozy, and the existence and terms of Ozy’s business contracts — going so far as to direct Ozy employees to create fake contracts with forged signatures to provide in due diligence. On multiple occasions, when faced with questions from lenders or potential investors, Watson and his co-conspirators assumed the identities of and impersonated actual media company executives to cover up their prior fraudulent misrepresentations.
Forged Cable Television Contract and Impersonation of Media Executive
In December 2019, Watson and his co-conspirators attempted to induce a bank to lend Ozy money based on misrepresentations and omissions about Ozy’s business. Watson and his co-conspirators sought to secure the loan with anticipated revenues from a second season of an Ozy television show. However, the contract between Ozy and the show’s cable network for the second season of the show was still under negotiation. To induce the bank to make the loan sooner, Watson directed Ozy’s then-Chief Financial Officer (CFO) Tripti Thakur to send the bank a fake signed contract between Ozy and the cable network purporting to be for the second season. When Thakur refused, Rao, with Watson’s approval, sent the fake contract to the bank, copying the then-CFO. Later that day, Thakur emailed Watson and Rao to say that she was resigning effective immediately. She explained, “this . . . is illegal. This is fraud. This is forging someone’s signature with the intent of getting an advance from a publicly traded bank.” She continued, “To be crystal clear, what you see as a measured risk — I see as a felony.”
In subsequent months, Watson and his co-conspirators continued to attempt to induce the bank to lend Ozy several million dollars based on misrepresentations and omissions, including regarding the expected revenue from the second season of the Ozy television show. During these discussions, the bank requested to speak to a representative of the cable network. To conceal the lies about Ozy’s relationship with the cable network and the status and terms of their agreement, Rao, with Watson’s approval, created a fake email address in the name of an actual executive of the cable network, which Rao used to impersonate the executive and communicate with the bank about the potential loan.
Attempted Fraudulent Investment and Impersonation of Another Media Executive
From approximately November 2020 through February 2021, Watson and his co-conspirators attempted to induce Goldman Sachs to invest up to $45 million in Ozy by means of material misrepresentations and omissions regarding Ozy’s historical and projected financial results, debts, and business relationships. Had the full $45 million investment occurred as intended, $6 million of the $45 million would have been paid to Watson personally.
As part of its due diligence process, Goldman Sachs executives asked Watson and Rao to arrange a meeting with someone from YouTube. Watson and his co-conspirators claimed the online video service had paid Ozy nearly $6 million in licensing revenue for “The Carlos Watson Show.” This was another misrepresentation — Ozy was never paid by YouTube for Ozy content. Because Ozy did not in fact have any business relationship with YouTube, Watson and Rao agreed that Rao would impersonate a media executive at YouTube in communications with Goldman Sachs. On January 28, 2021, Rao, with Watson’s agreement, created a fake email address in the name of the media executive, which he used to correspond with representatives of Goldman Sachs.
On February 2, 2021, Rao had a phone call with employees of Goldman Sachs during which he impersonated a media executive from YouTube using a voice alteration application that he downloaded onto his cellular telephone to mask his voice during the call. During the call, Watson was in the same room as Rao, and texted Rao instructions about what to say and what not to say on the call. Shortly after the call, one of the employees of the financial institution contacted the actual media executive of YouTube who confirmed that he had not been on the call and that the online video service had no role in the production of The Carlos Watson Show. When members of Goldman Sachs later spoke with Watson, he falsely claimed that Rao had acted alone and as a result of a mental breakdown.
* * * * *
Rao and Han previously pleaded guilty to charges relating to their roles in the scheme and are awaiting sentencing.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jonathan Siegel, Gillian Kassner, and Dylan A. Stern are in charge of the prosecution, with assistance from Paralegal Specialist Jacob Menz.
The Defendants:
CARLOS WATSON
Age: 54
Mountain View, CaliforniaOZY MEDIA, INC.
Mountain View, CaliforniaE.D.N.Y. Docket No. 23-CR-82 (EK)
Defendants Plead Guilty to Stealing Identities of the Homeless to Fraudulently Apply for Unemployment BenefitsRead the Press Release
Earlier today, in federal court in Brooklyn, Olabanji Otufale and Marc Lazarre pleaded guilty without a plea agreement to conspiracy to commit wire fraud and aggravated identity theft. The proceeding was held before United States District Judge Kiyo A. Matsumoto. The defendants pleaded guilty as jury selection and trial was set to begin this morning. When sentenced, the defendants each face a maximum sentence of 32 years’ imprisonment and a mandatory minimum sentence of 2 years’ imprisonment.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jocelyn Strauber, Commissioner, New York City Department of Investigation (DOI), announced the guilty pleas.
“The defendants shamefully stole vulnerable homeless victims’ personal identifying information for their own personal gain,” stated United States Attorney Breon Peace. “Instead of investigating fraud, as the City of New York trusted Otufale to do, the defendants abused Otufale’s position and access to sensitive data to commit fraud. That the defendants face a mandatory prison sentence of two years should serve as a deterrent message to others who think about corruptly stealing identities and taxpayer funds.”
“Leveraging his position within the New York City Department of Homeless Services, Olbanji Otufale stole homeless individuals’ personal information and enlisted a co-conspirator to use these sensitive details for his own financial benefit. The defendants’ actions exemplify the harmful abuses of power the FBI is dedicated to preventing, and we applaud the efforts of our office and the Department of Investigation in bringing about this verdict,” stated FBI Acting Assistant Director in Charge Curtis.
DOI Commissioner Jocelyn E. Strauber said, “These two defendants exploited the intended beneficiaries of public funds to steal those funds for their own gain. Unacceptable under any circumstances, this conduct is particularly troubling because one defendant, a City fraud investigator, had a duty to identify and prevent the very crimes in which he engaged, abusing his access and position of trust and authority. I thank the United States Attorney’s Office for the Eastern District of New York and the FBI for their continued partnership in protecting public funds and holding accountable those who drain these precious resources for personal profit.”
As alleged in the indictment, court filings and statements made in court, in the fall of 2020, the defendants conspired to steal the personal identifying information of homeless individuals and use that stolen information to fraudulently apply for unemployment insurance benefits in the names of those homeless individuals without their knowledge or consent.
At the time of the scheme, Otufale was a fraud investigator with the New York City Department of Homeless Services. In that role, Otufale was responsible for ensuring individuals who applied for homeless services—such as housing in homeless shelters—were qualified to receive New York City Department of Homeless services.
Otufale, however, used his access to a Department of Homeless Services database to steal the personal identifying information—names, social security numbers, dates of birth—of vulnerable victims who had given that personal information to the Department of Homeless Services when they applied for social services. Otufale then texted this victim information to Lazarre who applied online for unemployment benefits in the names of the homeless victims. Otufale and Lazarre conspired to split the fraudulent benefits they received.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Sara K. Winik, Laura Zuckerwise and Katherine P. Onyshko are in charge of the prosecution, with assistance from Paralegal Specialist Nadya Osman.
The Defendants:
Olabanji Otufale
Age: 41
Brooklyn, New YorkMarc Lazarre
Age: 39
Secaucus, New JerseyE.D.N.Y. Docket No. 24-CR-170 (KAM)
MS-13 Gang Member Sentenced to 292 Months in Prison for Retaliation Murder on Long IslandRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Edwin Amaya-Sanchez, also known as “Strong,” a member of the Guanacos Lil Cycos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, was sentenced by United States District Court Judge Gary R. Brown to 292 months’ imprisonment. Amaya-Sanchez pleaded guilty in April 2018 to firearms-related murder charges in connection with his participation in the July 14, 2014 murder of Jose Lainez-Murcia, who was shot and killed while sitting in a car outside his home in Brentwood.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence.
“As Amaya-Sanchez admitted, the murder he committed was premeditated and brutal. Now he will have a long time to think about his cruel actions as he serves his sentence behind bars,” stated United States Attorney Peace. “This Office and our law enforcement partners will continue working tirelessly to eliminate MS-13 and the threat this transnational criminal enterprise presents to our community.”
“After ten years, justice has been served. In 2014, Edwin Amaya-Sanchez, a MS-13 gang member, meticulously planned the calculated murder of Jose Lainez-Murcia based upon unverified assumptions of his involvement in the deaths of former MS-13 affiliates. Today’s sentencing affirms the FBI’s relentless commitment to eradicating the presence of violent gangs in our neighborhoods,” stated FBI Acting Assistant Director in Charge Curtis.
“Edwin Amaya-Sanchez's calculated actions to seek out the victim at his home are proof that he would stop at nothing to carry out his crimes,” Suffolk County Police Acting Commissioner Robert Waring said. “This sentencing sends a message that the Suffolk County Police Department and its law enforcement partners will continue to work tirelessly to combat violent criminal enterprises and bring justice to the victims and their families.”
As set forth in the government’s sentencing memorandum, prior court filings and statements during the sentencing, Amaya-Sanchez and other MS-13 members orchestrated the murder of Lainez-Murcia because they suspected that Lainez-Murcia was an assassin who had killed MS-13 members in El Salvador. Amaya-Sanchez knew where Lainez-Murcia lived, what car he drove, and what time he left for work in the morning, because they previously worked together. In the early morning hours of July 14, 2014, Amaya-Sanchez drove two other MS-13 members, each of whom was armed with a 9mm handgun, to Lainez-Murcia’s neighborhood and dropped them off. When Lainez-Murcia left the house and entered his car, the MS-13 members approached and fired multiple times with the 9mm handguns, killing him. The two MS-13 members ran down the block where Amaya-Sanchez picked them up and drove away.
Amaya-Sanchez, an undocumented immigrant from El Salvador, who previously was deported from the United States and illegally returned, was initially arrested on September 21, 2015, in connection with federal immigration charges. During today’s hearing, Judge Brown also sentenced the defendant to time served following his guilty plea to the immigration charge in April 2016. Upon completion of the 292-month sentence, the defendant faces deportation from the United States.
Today’s sentencing is the latest achievement in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across the United States. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution.
The Defendant:
Edwin Amaya-Sanchez (also known as “Strong”)
Age: 36
Brentwood, New YorkE.D.N.Y. Docket No. 16-CR-403 (JFB)
Two Former Postal Workers Charged with Stealing U.S. Treasury Checks Valued at More Than $4 Million from Kennedy Airport Mail FacilityRead the Press Release
Four separate indictments were unsealed today at the federal courthouse in Brooklyn charging five defendants with crimes related to the fraudulent theft and deposit of checks issued by the United States Department of the Treasury. As alleged in the indictments, two of the defendants, both former United States Postal Service (USPS) employees, allegedly sold the checks which were stolen from a USPS mail facility located at John F. Kennedy International Airport (JFK Mail Facility) where one of the defendants worked. The other three defendants fraudulently endorsed and deposited Treasury checks that were not addressed to them. Four of the defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Taryn A. Merkl. One of the defendants remains at large.
Breon Peace, United States Attorney for the Eastern District of New York; Daniel Brubaker, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), Matthew Modafferi, Special Agent in Charge, United States Postal Service Office of Inspector General, Northeast Area Field Office (USPS OIG); Edward A. Caban, Commissioner, New York City Police Department, (NYPD); Michael Carpenter, Special Agent in Charge, United States Treasury Inspector General for Tax Administration, Northeast Field Division (TIGTA); and Patrick J. Freaney, Special Agent in Charge, United States Secret Service (Secret Service), announced the arrests and charges.
“The former postal workers abused their positions of trust to allegedly pull one of the biggest thefts at John F. Kennedy International Airport,” stated United States Attorney Peace. “The charges allege these five defendants stole, sold and fraudulently deposited millions of dollars in U.S. Treasury checks, which included pandemic relief payments, for their own financial benefit. Criminals who cash in on checks stolen from the mail can expect to fill out change of address forms for the federal prison they will be calling home.”
“Postal Inspectors relentlessly pursue criminals who exploit the US Mail for unlawful purposes. The indictments of these co-conspirators who allegedly stole Treasury Checks and defrauded the American taxpayer serve as a resounding message to anyone who wants to steal US Mail. We will steadfastly work with our partners in law enforcement and the US Attorney’s Office, and we will hold criminals accountable for their actions,” stated USPIS Inspector in Charge Brubaker.
“The Special Agents of the U.S. Postal Service Office of Inspector General will vigorously investigate Postal Service employees and their co-conspirators who break the public’s trust. Postal Service employees who trade their integrity for greed and those who conspire with them should know that the Agents of the U.S. Postal Service Office of Inspector General will tirelessly work to bring them to justice. The USPS OIG is thankful for the great relationships we have developed with our law enforcement partners and with the U.S. Attorney’s Office to combat this criminal scheme affecting the American public,” stated USPS-OIG Special Agent in Charge Modafferi.
“NYPD investigators are proud to have helped thwart this multimillion-dollar scheme that allegedly bilked innocent victims of their deserved checks,” stated NYPD Commissioner Caban. “We and our law enforcement partners are committed to maintaining the integrity of a postal system relied upon by millions of New Yorkers. And we vow to hold accountable anyone involved in the types of crimes outlined in these indictments, especially public employees who might pursue illicit gain by leveraging their positions of trust.”
“The Treasury Inspector General for Tax Administration (TIGTA) aggressively investigates individuals who attempt to exploit United States Treasury refund checks meant for hard working taxpayers for their own private gain,” stated TIGTA Special Agent in Charge Carpenter. “Our mission at the TIGTA is to protect the integrity of our Nation’s system of tax administration. We are committed to working with our law enforcement partners to ensure that those who endeavor to violate federal laws related are prosecuted to the fullest extent possible.”“This 21-month investigation brought down a brazen criminal enterprise whose very existence violated the public trust,” stated Secret Service Special Agent in Charge Freaney. “I want to commend the United States Postal Inspection Service, along with our many partners for rooting out this flagrant corruption through persistent and exacting investigative work. The Treasury checks stolen in this case disrupted thousands of lives and syphoned funds from the pockets of the very people the accused were expected to serve. The Secret Service is proud to play a role in holding these defendants accountable.”
United States v. Kevaughn Wellington and Ky-Mani Straker
As alleged in the indictment, between at least June 2021 and August 2023, the defendants Kevaughn Wellington and Ky-Mani Straker engaged in a scheme to steal and sell Treasury checks intended for, among other things, individuals entitled to Social Security benefits, COVID-19 stimulus checks and tax refunds. Wellington stole parcels containing Treasury checks from the JFK Mail Facility where he was employed at the time as a postal worker. Then, together with Straker and others, Wellington sold the stolen Treasury checks for a cut of the profit.
As part of the scheme, Wellington and Straker stole over 125 Treasury checks valued at more than $4 million. Straker falsely endorsed and deposited stolen Treasury checks in a bank account and withdrew the deposited funds for his own financial gain.
The defendants have been charged with conspiring to steal government funds, theft of government funds and possession of stolen mail. In addition, Wellington has been charged with theft of mail by a postal service employee and Straker has been charged with passing Treasury Checks bearing forged endorsements.
United States v. Angel Ortiz; United States v. Mark Dawson; United States v. Fuquan Bradley
As alleged in the remaining indictments, Angel Ortiz, Mark Dawson and Fuquan Bradley each deposited and falsely endorsed Treasury checks in excess of $1,000 that were not addressed to them. Each defendant has been charged separately with theft of government funds and passing Treasury Checks bearing forged endorsements.
The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Elias Laris is in charge of the prosecutions.
The Defendants:
KEVAUGHN WELLINGTON
Age: 31
Jamaica, New YorkKY-MANI STRAKER
Age: 24
Orange, New JerseyE.D.N.Y. Docket No. 24-CR-275 (DG)
ANGEL ORTIZ
Age: 27
Jamaica, New YorkE.D.N.Y. Docket No. 24-CR-281 (DG)
MARK DAWSON
Age: 28
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-278 (LDH)
FUQUAN BRADLEY
Age: 34
Bronx, New YorkE.D.N.Y. Docket No. 24-CR-279 (RER)
High-Ranking MS-13 Gang Leader Pleads Guilty to Eight Murders, Multiple Attempted Murders, Arson and Firearms OffensesRead the Press Release
Earlier today, in federal court in Central Islip, Alexi Saenz, also known as “Blasty” and “Plaky,” the leader of the Brentwood/Central Islip chapter of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to racketeering charges in connection with his participation in eight murders, namely, the January 28, 2016 murder of Michael Johnson; the April 29, 2016 murder of Oscar Acosta; the September 5, 2016 murder of Marcus Bohannon; the September 13, 2016 murders of Kayla Cuevas and Nisa Mickens; the October 10, 2016 murder of Javier Castillo; the October 13, 2016 murder of Dewann Stacks; and the January 30, 2017 murder of Esteban Alvarado-Bonilla; as well as his participation in three attempted murders, arson, narcotics trafficking, and firearms offenses.
Today’s guilty plea proceeding was held before United States District Judge Gary R. Brown. When sentenced, Alexi Saenz faces up to 70 years in prison, and a minimum sentence of 40 years in prison, under the terms of his plea agreement.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.“To say that Alexi Saenz’s hands are drenched in blood does not begin to describe the multiple killings and extreme mayhem he personally directed and committed in the span of one year in Suffolk County,” stated United States Attorney Peace. “While those murders and violent crimes were intended to further the sordid mission of the MS-13, the defendant has failed miserably. As a result of the exceptional work of this Office’s prosecutors and the members of the Long Island Gang Task Force, the MS-13 has been decimated in the district and we will continue working tirelessly to hold every one of these violent gang members accountable for the crimes they have committed and harm they have caused. It is my sincere hope that today’s guilty plea brings some measure of solace and closure to the families of his victims.”
“Alex Saenz’s actions were senseless and barbaric,” stated SCPD Acting Commissioner Waring said. “The murders of teenagers Kayla Cuevas and Nisa Mickens shook our communities and reverberated around the nation. My hope is that this guilty plea will give the victims’ families some closure while also demonstrating our commitment to dismantling these criminal enterprises. I commend the work of the SCPD detectives and officers, the Long Island Gang Task Force and the Eastern District of New York for their continued success in prosecuting these gang members.”
According to court filings and statements made during today’s guilty plea proceeding, Alexi Saenz was the local leader of the Brentwood/Central Islip chapter of the Sailors clique of the MS-13 – one of the more powerful, violent, and well-established cliques on the East Coast of the United States. He committed the following crimes in order to maintain and increase his membership and status within the gang, and to further the mission of the MS-13:
January 28, 2016 Murder of Michael Johnson
On January 28, 2016, Alexi Saenz and other MS-13 members and associates were at the Jocorena Deli in Brentwood, where they saw 29-year-old Michael Johnson, and claimed to recognize him as a member of the rival Bloods street gang. At that point, Johnson was marked as their “food” – a reference to their intention to kill him.
After receiving the requisite approval from the New York leader of the Sailors clique to commit this murder, Alexi Saenz contacted several other MS-13 members, informed them of the plan to kill Johnson, and instructed them to bring weapons, including a machete and a baseball bat, to a wooded area in Brentwood. Alexi Saenz then lured Johnson to that secluded meeting location under the guise of smoking marijuana. The MS-13 members and associates ambushed Johnson from behind – striking Johnson with the baseball bat, stabbing him with a knife and taking turns hacking him with the machete. They fled after hearing police sirens in the area.
Johnson was reported missing by family members. Less than one week after his murder, on February 2, 2016, members of the SCPD responded to a 911 call about a body found in the woods by a passerby and recovered Johnson’s body. An autopsy determined Johnson’s cause of death to be sharp and blunt force injuries.
April 29, 2016 Murder of Oscar Acosta
In early 2016, Alexi Saenz and his fellow Sailors clique members decided to “green light,” or approve, the murder of 19-year-old Oscar Acosta because they suspected that he was associating with the rival 18th Street gang after previously aligning himself with the MS-13. The New York Sailors clique leader assigned roles as to which members would take the lead in planning and carrying out the murder.
On April 29, 2016, MS-13 members met Acosta in a wooded area near an elementary school in Brentwood where he had been lured under the guise of smoking marijuana. They brutally beat Acosta with tree limbs, knocking him unconscious. They bound Acosta’s hands and feet, wrapped an article of clothing around his mouth to prevent him from making noise, and summoned other MS-13 members, including Alexi Saenz. The MS-13 members loaded Acosta into the trunk of Alexi Saenz’s car, and drove to a more secluded area in Brentwood near the abandoned Pilgrim State Psychiatric Hospital. At the direction of Alexi Saenz, the MS-13 members removed Acosta, who was still alive, from the trunk and carried him deeper into the woods where they took turns hacking him to death with a machete. The murder was supervised by Alexi Saenz, as his role as the local clique leader. The MS-13 members then buried Acosta’s body in a shallow grave.
Acosta’s body was discovered by law enforcement nearly five months later, on September 16, 2016, during a search for another MS-13 victim. His cause of death was homicidal violence, including sharp and blunt force injuries to his head and torso.
July 18, 2016 Attempted Murders of John Doe #1 and John Doe #2
On July 18, 2016, during a Sailors clique meeting at Alexi Saenz’s house in Central Islip, the defendant instructed the group to hunt for rival gang members who had been disrespectful to the MS-13, in order to attack and kill them.
Later that evening, other members of the MS-13, who were driving around Brentwood armed with firearms and a machete, spotted a group of men on Apple Street. Believing these men to be members of a rival gang, three MS-13 members got out of the car and attacked the group, firing rounds from two different guns, and then using a machete to hack at one of the men who had fallen to the ground. After the attack, the group drove back to Alexi Saenz’s house, where they hid the weapons.
Two individuals were injured as a result of this attack. John Doe #1 was struck with a bullet, but survived. John Doe #2 was attacked with a machete and was permanently disfigured.
August 10, 2016 Attempted Murders of Suspected Rival Gang Members
In 2016, members of the MS-13 were engaged in a series of disputes with members of the Goon Squad, a rival gang in Brentwood.
On August 10, 2016, Alexi Saenz and another MS-13 member drove through the neighborhood around Lukens Avenue in Brentwood, and spotted several men who they believed were members of the Goon Squad. They then rallied other members of the Sailors clique to come kill the rivals.
The MS-13 members divided into two vehicles and drove towards the house where the suspected Goon Squad members had been spotted. Alexi Saenz’s car kept watch for the police, while two other MS-13 members, each bearing a gun, approached the group of suspected rivals and fired numerous shots in their direction. No one was hit, although a stray bullet entered a neighbor’s house and struck the headboard of a bed in which the neighbor was sleeping.
September 5, 2016 Murder of Marcus Bohannon
On September 4, 2016, during a Sailors clique meeting at Alexi Saenz’s house in Central Islip, the defendant and other MS-13 members went out hunting for rival gang members to kill.
The MS-13 members separated into several cars and drove around Central Islip and Brentwood, until Alexi Saenz’s group spotted 27-year-old Marcus Bohannon walking along Lowell Avenue in Central Islip in the early morning hours of September 5. Suspecting that Bohannon was a member of the rival Bloods gang, two MS-13 members, carrying firearms, got out of the vehicle, approached him, and started shooting. Alexi Saenz then drove them away. Bohannon was struck nine times, including in his head, neck, and chest, and died from his wounds.
September 12, 2016 Arson
During the summer of 2016, Sailors clique members of the MS-13 were regularly having altercations with local gang members based in a neighborhood on Freeman Avenue in Brentwood.
On September 12, 2016, the MS-13 members retaliated by setting fire to a car parked in the driveway of one of the houses in that rival gang neighborhood. Alexi Saenz directed other gang members to purchase gasoline and carry out the arson, while he drove around watching for police presence. Other MS-13 gang members drove to that house, where they poured gasoline on a car parked in the driveway and set it on fire. The car exploded and set another parked car on fire.
September 13, 2016 Murders of Kayla Cuevas and Nisa Mickens
On September 13, 2016, Sailors clique members brutally murdered 15-year-old Nisa Mickens and 16-year-old Kayla Cuevas, both students at Brentwood High School.
In the months leading up to the murders, Cuevas was involved in a series of disputes with members and associates of the MS-13. Approximately one week before the murders, these disputes escalated when Cuevas and several friends were involved in an altercation with MS-13 members at Brentwood High School. After that incident, the MS-13 members vowed to seek revenge against Cuevas.
On the evening of September 13, 2016, Alexi Saenz and other members of the Sailors clique of the MS-13 were driving in separate cars around Brentwood in search of rival gang members to attack and kill. One group of MS-13 members spotted Cuevas and Mickens walking down residential Stahley Street. Recognizing Cuevas, they called Alexi Saenz and were granted permission to kill the girls. Several MS-13 members then chased down and attacked both Cuevas and Mickens, wielding baseball bats and a machete, striking each of the girls numerous times in their heads and bodies, while Alexi Saenz’s car drove around watching for police. After the murders, the group retreated to Alexi Saenz’s home in Central Islip, where they changed clothes and hid the weapons.
Mickens, whose body was discovered later that evening on Stahley Street, not far from Cuevas’s home, sustained significant sharp force trauma to her face and blunt force trauma to her head. Cuevas, whose body was discovered the following day behind a house adjacent to where Mickens’s body was found, sustained significant blunt force trauma to her head and body and multiple lacerations.
October 10, 2016 Murder of Javier Castillo
In October 2016, the MS-13 targeted 15-year-old Javier Castillo because he was believed to be a member of the 18th Street gang, one of MS-13’s principal rivals.
On October 10, 2016, several members of the Sailors clique convinced Castillo, who lived in Central Islip, to drive with them to Freeport – approximately 30 miles away – to smoke marijuana. Once there, they met Alexi Saenz and other Sailors clique members. The group then lured Castillo to an isolated marsh area in Cow Meadow Park, where they attacked him, taking turns hacking him to death with a machete.
Afterwards, the MS-13 members dug a hole and buried Castillo’s body, which was not recovered until one year later, in late October 2017. Castillo was determined to have suffered multiple sharp force injuries to his head, neck, torso and extremities.
October 13, 2016 Murder of Dewann Stacks
On the evening of October 13, 2016, Alexi Saenz and other members of the Sailors clique of MS-13 were driving around Central Islip and Brentwood in search of rival gang members to attack and kill.
That night, they spotted 34-year-old Dewann Stacks and, believing him to be a rival gang member, Alexi Saenz authorized his murder. While Alexi Saenz drove around watching for police presence, another group of MS-13 members, armed with two machetes and a baseball bat, drove over to attack Stacks. Three armed MS-13 members got out of the car, and beat and hacked Stacks to death on American Boulevard, a residential street in Brentwood. Stacks sustained severe sharp and blunt force trauma to his face and head, leaving his body nearly unrecognizable.
January 30, 2017 Murder of Esteban Alvarado-BonillaOn the morning of January 30, 2017, Alexi Saenz and other members of the Sailors clique of MS-13 spotted 29-year-old Esteban Alvarado-Bonilla inside El Campesino Deli in Central Islip. Alvarado-Bonilla was wearing a football jersey bearing the number “18,” which led the MS-13 to conclude that he was a member of a rival gang, and they plotted to kill him.
Several other MS-13 members obtained a mask and another vehicle that would be used to commit the murder. Alexi Saenz provided the clique’s 9-millimeter handgun for use in the murder.
At approximately 10:30 a.m., a masked MS-13 member entered the deli, approached Alvarado-Bonilla from behind, and shot him multiple times, killing him. One of the bullets pierced through Alvarado-Bonilla’s head and struck the chest of a female employee of the deli, who was standing directly in front of him. The deli employee survived the gunshot wound.
Narcotics Trafficking Conspiracy
For a year and a half, from approximately April 2016 through March 2017, in order to finance the illegal operations of the Sailors clique, Alexi Saenz obtained wholesale quantities of cocaine and marijuana, which he distributed to other Sailors clique members and associates for street-level sales in Brentwood and its surrounding areas. After the sales, the profits were turned over to Alexi Saenz, for use in, among other things, purchasing firearms for use by clique members, wiring money to MS-13 leaders in El Salvador and buying additional narcotics for further distribution.
* * * *
Today’s guilty plea is the latest achievement in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across the United States. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution, with the assistance of Paralegal Specialist Kerry Ucci and Automated Litigation Specialist Michael Compitello.
The Defendant:
ALEXI SAENZ (also known as “Blasty” and “Plaky”)
Age: 29
El Divisadero, Morazán, El Salvador; and Central Islip, New YorkE.D.N.Y. Docket No. 16-CR-403 (S-8)(GRB)
Man Charged with Gunpoint Robbery of Queens Jewelry StoreRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Ildemar Chirinos-Torres was arraigned before Magistrate Judge Lara K. Eshkenazi on an indictment charging him with robbery of a jewelry store, discharging a firearm during the robbery and interstate transportation of stolen property. Chirinos-Torres is detained pending trial.
Breon Peace, United States Attorney for the Eastern District of New York and Bryan Miller, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Division (ATF), announced the charges.
“As alleged, Chirinos-Torres and his co-conspirators stole from, threatened and viciously shot a hardworking merchant during a violent gunpoint robbery of a neighborhood jewelry store,” stated United States Attorney Peace. “We will continue to vigorously prosecute in federal court armed robbers like the defendant who jeopardize the safety and security of members of our community.”
“This brazen act of armed robbery in which the defendant is alleged to have shot an innocent business owner is reprehensible. ATF NY’s Strategic Pattern Armed Robbery and Technical Apprehension (SPARTA) Group and our NYPD partners are committed to investigating and apprehending those who use violence to steal from New York’s hardworking business owners. We are grateful for the diligent efforts of the NYPD's Queens 115th Squad and the U.S. Attorney's Office Eastern District in the pursuit of justice for our community,” stated ATF Special Agent-in-Charge Miller.
As set forth in the indictment and public filings in support of the charges, on December 12, 2023, Chirinos-Torres and others robbed a jewelry store at gunpoint in Jackson Heights, Queens. During a struggle with the owner of the store, one of the defendant’s co-conspirators fired a gun multiple times, striking the owner in the leg with one bullet and grazing his face with another. After stealing approximately $120,000 in jewelry, Chirinos-Torres and his co-conspirators fled on two mopeds. The stolen jewelry was then transported from New York to Florida.
Evidence obtained pursuant to search warrants for the defendant’s phones corroborated his involvement in the armed robbery. For example, a selfie taken approximately two hours before the robbery showed Chirinos-Torres wearing clothing and a messenger bag consistent with the clothing and messenger bag worn by one of the perpetrators during the robbery. The phones also contained images of jewelry taken mere days after the robbery that the store owners confirmed was consistent with jewelry stolen from the store.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Chirinos-Torres faces up to life imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Sean M. Sherman is in charge of the prosecution.
The Defendant:
ILDEMAR CHIRINOS-TORRES
Age: 29
Freeport, New YorkE.D.N.Y. Docket No. 24-215 (WFK)
Brooklyn Resident and Canadian National Plead Guilty to Multi-Million Dollar Export Control SchemeRead the Press Release
Earlier today in federal court in Brooklyn, Canadian national Nikolay Goltsev and Brooklyn resident Salimdzhon Nasriddinov pleaded guilty to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies, including companies with Russian military contracts. Some of the electronic components shipped by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. The proceeding was held before United States Magistrate Judge Taryn A. Merkl. When sentenced, Goltsev and Nasriddinov each face up to 20 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York; Lisa O. Monaco, United States Deputy Attorney General; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations New York (HSI), Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, U.S. Department of Commerce, announced the plea.
“The defendants flouted U.S. law to help Russia in its war against Ukraine, but they were stopped in their tracks and swiftly brought to justice,” stated United States Attorney Peace. “This Office will take on and successfully neutralize the complicated procurement networks that are making it possible for Russia to continue its unprovoked war against Ukraine.”
Mr. Peace thanked the U.S. Customs and Border Protection and the Justice Department’s Office of International Affairs for their valuable assistance to the investigation.
“The defendants shipped millions of dollars of U.S. electronics critical to the missiles and drones Russia uses to attack Ukraine, and they now face U.S. prison time for their scheme,” stated Deputy Attorney General Monaco. “As Russia continues to wage its unjust war of aggression against Ukraine, the Department remains committed to holding accountable those who fuel Putin’s war machine.”
“The defendants shipped millions of dollars’ worth of electronic components to Russia, including the exact type of parts found in Russian weapons and drones used to attack Ukraine,” stated Assistant Attorney General Olsen. “We know the devastation and destruction that these weapons cause and the Justice Department is committed to holding accountable those who violate U.S. laws to supply the Russian war machine.”
“With today’s guilty pleas, all three defendants have acknowledged their involvement in their scheme to provide more than $7 million worth of material support to the Kremlin in its inhumane attacks on Ukraine. Nikolay Goltsev, Salimdzhon Nasriddinov, and their co-conspirator coordinated the deployment of over 300 shipments of restricted electronics that were ultimately used on the Russian battlefield. HSI New York remains committed to utilizing its unique authorities to relentlessly pursue individuals who seek to exploit U.S. export control laws for financial gain,” stated HSI New York Special Agent in Charge Arvelo. “I am proud to stand alongside the Department of Justice, the FBI, and the Department of Commerce in confronting these issues directly.”
“The defendants in this case orchestrated a sophisticated, illegal scheme to smuggle electronic components to Russia for use in its invasion of Ukraine,” stated FBI Acting Assistant Director Curtis. “By using front companies, they sought to disguise their treachery but were ultimately exposed and brought to justice. These cases are critical because they undermine the global sanctions regime designed to isolate adversarial nations and protect international security. The FBI will relentlessly pursue and hold accountable those who threaten our national security and violate international laws.”
“Eliminating illegal global procurement networks that prop up the Russian war machine requires a full-court press,” stated Assistant Secretary for Export Enforcement Axelrod. “That’s why we and our law enforcement partners are working nonstop to ensure that those operating such networks – like Nasriddinov and Goltsev – face American justice.”
According to the court filings and statements made during the plea proceeding, the defendants used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase, and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia. Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including the Torn-MDM radio reconnaissance complex, the RB-301B “Borisoglebsk-2” electronic warfare complex, the Izdeliye 305E light multi-purpose guided missile, the Vitebsk L370 airborne counter missile system, Ka-52 helicopters, Orlan-10 unmanned aerial vehicles (UAVs), and T-72B3 battle tanks. Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.
To carry out their criminal scheme, Nasriddinov and Goltsev purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics, and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn. Nasriddinov and Goltsev then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China, and the United Arab Emirates, where they were rerouted to Russia.
The defendants were aware of the potential military applications of the electronics that they exported to Russia. For example, in a message exchange on or about and between November 8, 2022 and November 15, 2022, Goltsev commented how shipping to Russia had become “dangerous” and discussed a shipment of electronic components that had been detained by U.S. officials at John F. Kennedy International Airport in Queens, New York. Nasriddinov responded that “Ukrainians alleged that they’re being bombed from parts from there [the U.S. manufacturer], maybe that’s why they started investigating everything?” Goltsev responded that, “we need to figure out why they keep holding the package . . . I don’t really understand how they figured [it] out.” In a subsequent message, Goltsev commented that, “in the future we will need to load from several companies, not to attract attention . . . for now large packages will be dangerous until we understand what they figured out . . . we will need to think of diversifying the load . . . so that not everything is moving from the same deck.”
In a February 23, 2023 message, Nasriddinov wrote to Goltsev, “Happy Defender of the Fatherland,” referring to the holiday in Russia and parts of the former Soviet Union celebrating those who served in the armed forces. Goltsev responded, “happy holiday to you too my friend, we are defending it in the way that we can [smile emoji].”
The scheme involved millions of dollars and proved to be lucrative for the defendants. For example, in a September 15, 2022 text message from Nasriddinov to Goltsev, Nasriddinov boasted, “SH [Brothers] is one of the best companies in the world, it’s time to move forward onto the stock exchange and stock market, capital should be in the billions, we are working.” Goltsev responded, “pushing components to those who need it I can do, everything else you will have to teach me [three smile emojis].”
The government seized $20,000 in cash from the New York hotel room in which defendant Goltsev was arrested. In total, the government has seized approximately $1.68 million in connection with this export scheme.
A third co-defendant, Kristina Puzyreva, pleaded guilty in February 2024 to conspiracy to launder the proceeds of the export scheme. She is awaiting sentencing.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Ellen H. Sise are in charge of the prosecution, along with Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section. Assistant United States Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendants:
NIKOLAY GOLTSEV
Age: 38
Montreal, CanadaSALIMDZHON NASRIDDINOV
Age: 53
Brooklyn, New YorkDefendant Who Previously Pleaded Guilty
KRISTINA PUZYREVA
Age: 32
Montreal, CanadaE.D.N.Y. Docket No. 23-CR-452 (LDH)
Bloods Gang Leader Sentenced to Life in Prison for Racketeering ChargesRead the Press Release
Earlier today, in federal court in Central Islip, New York, Howard Davis, also known as “Mousey” and “Mr. Fedup,” a leader of the violent Bloods street gang, was sentenced by United States District Judge Joan M. Azrack to life in prison plus 132 years for attempted murder, assault, robbery, distribution of controlled substances, obstruction of justice and brandishing and discharging firearms during the commission of these offenses. Davis was convicted of all 48 counts in the indictment after a six-week trial in June 2021.
Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York, and Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence.
“Davis and his violent gang tormented our Long Island neighborhoods for years,” stated United States Attorney Peace. “Today’s sentence ends his reign of terror and demonstrates my Office’s commitment to eradicate gang violence that has plagued our communities for too long.”
“Howard Davis’s tyranny over Long Island has come to an end. His myriad of crimes repeatedly violated the law as Davis used his status as the gang’s leader to breed further criminality and gun violence. Today’s sentence demonstrates the FBI’s determination to take armed criminals who threaten the safety of our communities off the streets,” stated FBI Acting Assistant Director in Charge Curtis.
“Howard Davis was a prolific gang leader responsible for heinous crimes that terrorized Long Island communities and he actively recruited other members of the Bloods to perpetuate the same brutality. Today’s sentencing has effectively stripped him of the violent power he once wielded with impunity,” stated HSI New York Special Agent-in-Charge Arvelo. “As a result of the outstanding coordination between HSI New York and our law enforcement partners, this merciless gangster can no longer wreak havoc on our communities.”
“Howard Davis committed countless crimes while both free and incarcerated which proves his callousness and depraved indifference to others,” SCPD Acting Commissioner Waring stated. “It is my hope this sentence sends a message that the Suffolk County Police Department and its law enforcement partners will stand against these criminal organizations.”
As proven at trial and in court filings, Davis was the leader of Long Island-based G-Shine set of the Bloods, a racketeering enterprise that engaged in multiple crimes of violence and narcotics trafficking. While leading this criminal organization, Davis directed a campaign of violence against his rivals, including issuing a standing order to kill certain individuals whenever and wherever they were found. Between June 2016 to November 8, 2017, Davis ordered two shootings that left two people wounded; he ordered two armed home invasions; he actively participated in three shootings, including one where three victims were struck by gunshots leaving one of those victims in a coma for an extended period of time; he ordered an armed robbery of two individuals; he physically assaulted a person at a bar, causing the victim to suffer a broken kneecap and broken nose; he sold fentanyl, heroin and crack; and he possessed countless firearms. Davis also convinced the mother of his child to testify falsely before a federal grand jury, resulting in the 2016 dismissal of a firearms charge.
While incarcerated, Davis continued to commit crimes. He incurred nine disciplinary violations, including assaults and slashing a victim in the face. In addition to those violations, on Christmas in 2018, Davis used the mother of one of his children and his infant child to smuggle narcotics into the Metropolitan Correctional Center.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being prosecuted by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Christopher Caffarone and Mark Misorek are in charge of the prosecution, with assistance from Paralegal Specialist Samantha Schroder.
The Defendant:
HOWARD DAVIS (also known as “Mousey” and “Mr. Fedup”)
Age: 36
Bellport, New YorkE.D.N.Y. Docket No. 17-CR-615 (JMA)
Queens Woman Charged with Using a Hitman-For-Hire Website on the Dark Web to Order Murder of Her Lover’s WifeRead the Press Release
This afternoon, at the federal courthouse in Brooklyn, Yue Zhou is scheduled to be arraigned on an indictment charging her with murder-for-hire. Zhou was arrested on June 5, 2024 in the Eastern District of Virginia and removed to the Eastern District of New York on Wednesday, July 3, 2024. Today’s proceeding will be held before United States Magistrate Judge Robert M. Levy.
Breon Peace, United States Attorney for the Eastern District of New York and Ivan J. Arvelo, Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations, New York (HSI), announced the charges.“As alleged, the defendant took affirmative steps to hire a hit man to carry out the ruthless killing of the wife of her romantic partner,” stated United States Attorney Peace. “Her depraved plan was only thwarted because the web site she used to set up the murder-for-hire was a scam. Although the scheme involved newer technologies like the Internet and Bitcoin, the end result would have been age-old cold-blooded murder.”
Mr. Peace thanked the U.S. Attorney’s Office for the Eastern District of Virginia for their assistance.
“Yue Zhou is accused of offering cryptocurrency, cash, and even sexual favors during her discussions related to having her then-partner’s spouse and adult daughter killed. Little did she know, the website she allegedly thought she was using to solicit a hitman was a farce, and the crimes of which she is accused soon caught up to her,” stated HSI New York Special Agent in Charge Arvelo. “I commend HSI New York’s El Dorado Task Force Cyber Division, Customs and Border Protection, the New York Police Department, and the Eastern District of New York for their unwavering commitment to utilizing their state-of-the-art methods to secure justice on behalf of New Yorkers.”
As alleged in the indictment and other court documents, between March 25, 2019 and April 4, 2019, Zhou sought to hire a hitman through a murder-for-hire website on the dark web (Website) to murder Victim-1, the spouse of the defendant’s then-romantic partner. Using an alias on the website, Zhou placed an order to have Victim-1 murdered. To pay for the murder, Zhou contracted with a Bitcoin exchange service in Ukraine to make a $5,000 payment in Bitcoin on her behalf to the Website. Zhou provided approximately $5,000 in cash to a middleman in Brooklyn and then communicated with the Website administrator to confirm payment. After sending payment, Zhou provided a detailed description of Victim-1, including her home, her work schedule, and the best times to target Victim-1, so that Victim-1’s husband would have an alibi for the murder. Zhou later tried to use to the Website to secure the murder of Victim-2, her romantic partner’s adult daughter. In February 2021, Zhou also sent a text message to a neighbor of Victim-2 seeking to hire that neighbor to kill Victim-2. Zhou offered the neighbor $10,000 and sexual favors in exchange for killing Victim-2 and disposing of the body in a lake. Zhou was not aware at the time of her scheme that the Website was a scam operated by a third party and there was no actual hitman for hire.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Amanda Shami and Andy Palacio are in charge of the prosecution.
The Defendant:
YUE ZHOU
Age: 42
Flushing, New YorkE.D.N.Y. Docket No. 24-CR-123 (MKB)
U.S. Attorney Breon Peace Announces New Leadership for Criminal Division and Long Island DivisionRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, announced today the appointment of Alixandra E. Smith as the Office’s Chief of the Criminal Division as well as John J. Durham as Chief of the Long Island Division and Chief of the Criminal Section of the Long Island Division. Additionally, in September 2023, Richard K. Hayes was named the Office’s Chief of the Civil Division.
“I make these announcements with tremendous pride and excitement. Alix, John and Rich are brilliant legal minds with vast expertise in serving the Office, through both impressive casework and leadership positions. I have the utmost confidence they will continue to do what they do best – inspire and lead their teams in the pursuit of equal justice,” stated U.S. Attorney Peace.
Alixandra E. Smith
Ms. Smith joined the Office in 2012 and has served in the General Crimes, Organized Crime and Gangs, and Business and Securities Fraud (BSF) Sections, and as a Deputy Chief of BSF, Chief of BSF and a Criminal Division Deputy Chief. Among other roles, Ms. Smith is Vice Chair of the Criminal Division Hiring Committee, Chair of the Office’s e-Litigation Committee and co-teaches the EDNY Prosecution Externship at New York University Law School. Ms. Smith is a graduate of Harvard College and Harvard Law School. Prior to joining the Office, she worked as an associate at Cravath, Swaine & Moore LLP and at Jenner & Block LLP, and clerked for the Honorable Faith Hochberg, United States District Court for the District of New Jersey, as well as the Honorable Julio Fuentes, United States Court of Appeals for the Third Circuit.
During her time in the Office, Alix has investigated and prosecuted significant white-collar cases. She co-led the investigation and prosecution of United States v. Shkreli and Greebel, in which the defendants were charged with orchestrating four interrelated schemes to defraud investors in two hedge funds of more than $7 million, to steal more than $10 million from a public company and to manipulate the price and trading volume of the public company’s stock. Both defendants were convicted following back-to-back six-week and 11-week trials in 2017, and Alix successfully argued both appeals. In several cases related to United States v. Odebrecht and United States v. Braskem, Alix led the Office’s team which, along with the Department of Justice’s Fraud Section (Fraud Section), prosecuted two Brazilian-based petrochemical companies that paid almost a billion dollars in bribes to government officials in at least 12 countries in order to win business. Both companies pleaded guilty to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a combined penalty of at least $3.2 billion to resolve charges in the United States, Brazil and Switzerland. A number of individuals were also convicted for their roles in the bribery scheme, including Braskem’s Chief Executive Officer. In United States v. AmerisourceBergen, Alix led the criminal prosecution of the second-largest drug distributor in the United States, which ultimately paid a combined total of $885 million to resolve civil and criminal liability stemming from its distribution, over a period of ten years, of millions of syringes of oncology drugs to immunocompromised cancer patients nationwide that were prepared under insanitary conditions and contaminated. The criminal case was resolved with a $260 million penalty, and a subsidiary of the company pleaded guilty to a criminal violation of the Federal Food, Drug and Cosmetics Act. And in United States v. Goldman Sachs Group, Inc. and related cases, which were prosecuted in conjunction with the Fraud Section and the Department of Justice’s Money Laundering and Asset Recovery Section, Alix led the Office’s team in the prosecution of investment bank Goldman Sachs (Goldman), its subsidiary and individuals, who were charged for their roles in a scheme to pay $1.6 billion in bribes to government officials and launder billions of dollars in criminal proceeds. The case was resolved when Goldman’s subsidiary pled guilty to a FCPA violation, Goldman entered a DPA and paid $2.9 billion in criminal penalties as part of a global resolution with eight different foreign and domestic authorities, and a Goldman banker was convicted of FCPA and money laundering charges after a nine-week trial.
In addition, Ms. Smith has investigated and prosecuted important violent crimes cases, including United States v. Rivera et al, in which the leader and co-founder of the TF Mafia gang were each convicted of, among other crimes, racketeering, murder, drug trafficking, sex trafficking, sex trafficking of children and firearms offenses following an 11-week trial; and United States v. Lopez. et al., in which four MS-13 members were convicted of murdering a fellow MS-13 gang member whom they suspected of being a cooperating witness.
Among other awards, Ms. Smith is the recipient of the Attorney General’s John Marshall Award for the Trial of Litigation, the Harry L. Stimson Medal, the Assistant Attorney General’s (AAG) Award for Exceptional Service, the AAG Award for Distinguished Service and the EOUSA Director’s Award.
John J. Durham
Mr. Durham joined the Office in October 2005 and has served in the General Crimes Section and Long Island Criminal Section. Mr. Durham has been appointed to several leadership positions in the Office and the Department of Justice, including Deputy Chief for the Long Island Criminal Section, the Office’s Capital Case Coordinator, the Attorney General’s Review Committee on Capital Cases and Chair of the MS-13 Subcommittee of the Attorney General’s Transnational Organized Crime Task Force. In August 2019, Mr. Durham was appointed to serve as the Director of Joint Task Force Vulcan (JTFV), a Department of Justice initiative to combat La Mara Salvatrucha (MS-13), where he spearheaded indictments against MS-13’s highest-ranking international leaders. He graduated from the College of the Holy Cross in 1998 and from the University of Connecticut School of Law in 2001. Mr. Durham clerked for United States District Judge Stephen C. Robinson in the Southern District of New York.
During his time in the Office, Mr. Durham has investigated, prosecuted and supervised a broad range of federal offenses, including racketeering, murders, terrorism, civil rights, obstruction of justice, armed robberies, narcotics trafficking, money laundering, firearms and public corruption. Most significantly, he has directed the Office’s efforts to dismantle the operations of MS-13 in the EDNY, as well as nationally and internationally. In a series of EDNY indictments, he has led teams of AUSAs and investigators that have arrested and convicted hundreds of MS-13 leaders, members and associates, including charges related to more than 65 murders committed in this district between January 2008 and the present. United States v. Amaya-Sanchez, et al.; United States v. Acosta, et al.; United States v. Cerna, et al.; United States v. Alvarenga et al.; and United States v. Prado et al. As the Director of JTFV, Mr. Durham led a team of AUSAs and law enforcement officers from across the country and secured significant indictments against MS-13’s command and control structure across the United States, Central America and Mexico, including the first use of national security charges against MS-13 leaders. United States v. Henriquez, et al. (EDNY); United States v. Arevalo-Chavez, et al. (EDNY); United States v. Carias, et al. (SDNY); and United States v. Melgar-Diaz, et al. (EDVA). In addition to his work combatting MS-13, Mr. Durham has prosecuted defendants who attempted to travel to Yemen for the purpose of joining al-Qaeda in the Arabian Peninsula (AQAP) and fighting jihad against United States allies (United States v. Kaliebe/Zea), and members of numerous other violent criminal organizations, including the Bloods, 18th Street gang, Crips, Salvadorans With Pride and violent narcotics trafficking and robbery crews based in the district. Finally, in addition to his violent crime work, Mr. Durham has prosecuted a number of significant and sensitive public corruption and civil rights matters, including the former Chief of Department for the Suffolk County Police Department (United States v. Burke, et al.), the former Suffolk County District Attorney and former Chief of Investigations and Chief of the Government Corruption Bureau for the Suffolk County District Attorney’s Office (United States v. Spota and McPartland), a then-sitting Nassau County Legislator (United States v. Corbin), a New York City Police Department sergeant (United States v. Green) and a Food and Drug Administration official (United States v. Oliver, et al.).
Among other awards, Mr. Durham is the recipient of the Charles E. Rose Award; Henry L. Stimson Medal; EOUSA Director’s Award for Superior Performance; National Association of Former United States Attorneys, Exceptional Service Award; and several Federal Law Enforcement Foundation Awards.
Richard K. Hayes
Mr. Hayes joined in the Office’s Civil Division in 1991, and since then has litigated nearly every type of case. He had been a Deputy Chief of the Civil Division since 2012 with overall supervisory responsibility for the Division’s Affirmative Civil Enforcement, Civil Rights, Drug and Listed Chemical, Environmental and Health Care Fraud practices. Prior to serving as Deputy Chief, Mr. Hayes was the Office’s Chief of Affirmative Civil Enforcement. Mr. Hayes graduated from Fordham University School of Law, where he was on the Moot Court Editorial Board and a member of the Fordham Urban Law Journal. He received his B.A. in History and Political Science summa cum laude from Fordham University and was inducted into Phi Beta Kappa.
Mr. Hayes has handled some of the largest matters with the Office and the Department of Justice stemming from the Financial Crisis. These included the 2012 $25 billion National Mortgage Settlement, which resolved federal and state claims against the nation’s five largest mortgage servicers. In addition to recovering damages incurred by the Federal Housing Administration, the settlement provided for billions of dollars in homeowner relief nationwide. Mr. Hayes also originated and led the Office’s Residential Mortgage-Backed Securities (RMBS) practice, a component of the Department of Justice’s RMBS Working Group. This entailed building teams that at one point comprised more than sixty AUSAs, other attorneys and professional staff which investigated banks that underwrote hundreds of billions of dollars in failed RMBS. Ultimately, six banks and several individuals paid more than $11 billion in penalties and provided $6.6 billion in consumer relief to resolve claims under the Financial Institutions Reform Recovery and Enforcement Act. All told, the Office has received over $20 billion in credit for financial crisis era cases that Mr. Hayes handled and supervised.
In addition to his financial fraud work, Mr. Hayes has obtained monetary and injunctive relief in a wide range of matters. For example, in United States v. Staten Island University Hospital, he led an investigation of multiple Medicare and Medicaid billing schemes and negotiated an $89 million global settlement of civil fraud claims. In United States v. Lawrence Aviation Industries, Mr. Hayes and his team members obtained a $48 million judgment after trial in a Superfund cost recovery and penalty case. And, in United States v. Local 14 of the International Union of Operating Engineers, he filed and resolved civil RICO claims, securing appointment of a court-ordered monitorship over the mob-infiltrated union.
Mr. Hayes is a two-time recipient of the Attorney General’s Award for Distinguished Service, a two-time recipient of the Director’s Award for Superior Performance, and a recipient of the Henry L. Stimson Medal for outstanding performance as an Assistant United States Attorney.
U.S. Attorney Breon Peace Announces 11 Arrests in National Health Care Fraud Enforcement ActionRead the Press Release
Today, United States Attorney Breon Peace announced criminal charges against nine defendants in connection with alleged schemes to defraud Medicare and Medicaid.
Merrick B. Garland, United States Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation; Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Christi A. Grimm, the Department of Health and Human Services Inspector General (HHS-OIG); Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York, (IRS-CI); and Raymond A. Tierney, Suffolk County District Attorney, announced the arrests and charges.
“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” stated Attorney General Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”
“These defendants have been charged with treating the Medicare and Medicaid programs like cash registers they could use to ring up withdrawals from the public treasury straight into their pockets,” stated United States Attorney Peace. “The enforcement actions announced today demonstrate my Office’s resolve to prosecute those who exploit our health care benefits programs for personal gain.”
Mr. Peace expressed his appreciation to the U.S. Drug Enforcement Administration, the New York City Police Department and the New York City Human Resources Administration, for their work on the cases.
“Health care fraud affects every American,” stated Principal Deputy Assistant Attorney General Argentieri. “It siphons off hard-earned tax dollars meant to provide care for the vulnerable and disabled. In doing so, it also raises the cost of care for all patients. Even worse, as the prosecutions we announce today underscore, health care fraud can harm patients and fuel addiction. The Criminal Division is committed to rooting out health care fraud, wherever it may be found, no matter who commits it. And we are using more tools than ever before to uncover misconduct and hold wrongdoers to account, whether they are executives in corner offices or doctors who violate their oaths.”
“These nine defendants allegedly submitted bills for services not provided collecting millions in reimbursements from Medicare and Medicaid programs. This is yet another unfortunate example of individuals abusing government services intended to help patients in need. These actions are representative of the FBI’s nationwide efforts to bring justice to criminals who attempt to manipulate healthcare programs for personal benefits,” stated FBI Assistant Director-in-Charge Smith.
“As alleged, the defendants abused their positions and power to exploit vulnerabilities in the Medicare and Medicaid systems to the tune of $7.1 million in illicit funds. Through the American Medical Utilization Management Corporation (AMC), these purported medical providers are accused of flouting vital narcotics regulations and healthcare practices despite the incalculable risks to the public,” said HSI New York Special Agent in Charge Ivan J. Arvelo. “HSI New York, through the New York OCEDTF Strike Force and in coordination with our law enforcement partners, is committed to disrupting the illegal distribution of prescription drugs by utilizing its broad statutory authorities to bring to an end the plague of overprescribed pharmaceuticals.”
“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” stated HHS-OIG Inspector General Grimm. “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”
“Health care providers are rightly expected to treat their patients with honesty and integrity, often in the most vulnerable times,” stated IRS-CI Special Agent-in-Charge Fattorusso. “The defendants in this case are accused of or have been convicted of betraying this sacred trust strictly for their own greed and financial gain. Today’s actions should serve to restore integrity in the system and put those who engage in these fraudulent acts on notice that law enforcement will not turn a blind eye.”
“My Office remains committed to stand and work with our federal partners in combatting crime and keeping our citizens safe," stated Suffolk County District Attorney Tierney. “Those who seek to illegally profit off the backs of hardworking U.S. taxpayers will be found out and brought to justice. The defrauding of our citizens will not be tolerated.”
U.S. v. Feng JiangOn June 26, 2024, Feng Jiang was charged by indictment with conspiracy to commit health care fraud, conspiracy to defraud the United States and pay health care kickbacks, conspiracy to commit money laundering and money laundering in connection with an alleged $24 million scheme involving multiple New York pharmacies. As alleged in the indictment, Jiang and his co-conspirators paid kickbacks in the form of supermarket gift certificates and cash to Medicare beneficiaries and Medicaid recipients who filled medically unnecessary prescriptions at Elmcare Pharmacy Inc. and NY Elm Pharmacy Inc. The indictment further alleges that Jiang and others wrote checks to various “trading companies” to obtain cash that was distributed as profits amongst the pharmacies’ owners and used to pay illegal kickbacks and bribes.
The case is being prosecuted by Trial Attorney Patrick J. Campbell of the Criminal Division, Fraud Section, Health Care Fraud Unit, Northeast Strike Force, which is based out of the Office’s Business and Securities Fraud Section.
U.S. v. Joseph Tony Brown-Arkah and Evens JeanOn June 26, 2024, Joseph Tony Brown-Arkah and Evens Jean were charged by indictment in connection with an alleged $7.1 million health care fraud scheme and narcotics distribution. Brown-Arkah and Jean were charged with conspiracy to commit health care fraud, health care fraud, conspiracy to distribute narcotics and narcotics distribution, and Jean was also charged with false statements. As alleged in the indictment, Brown-Arkah, the owner of American Medical Utilization Management Corporation (AMC), a medical clinic in Brooklyn, along with Jean, a nurse practitioner, and others, engaged in an alleged scheme to bill Medicare and Medicaid fraudulently for services not provided or not provided as billed, and to prescribe narcotics pursuant to prescriptions that were not issued for a legitimate medical purpose by a provider acting in the usual course of professional practice. In particular, AMC was a purported provider of medicated addiction treatment and had a significant number of patients being treated with buprenorphine (Suboxone), a Schedule III narcotic. Many of these patients received prescriptions written by Jean, who lived in Florida and did not see or speak with the patients; instead, Jean issued the narcotics prescriptions based on information provided by individuals not entitled to prescribe buprenorphine, some of whom were not licensed medical professionals. As alleged in the indictment, Jean also made multiple false statements to law enforcement regarding his prescriptions of buprenorphine.
The case is being prosecuted by Trial Attorneys Miriam Glaser Dauermann of the Department’s National Rapid Response Strike Force and Margaret Mortimer of the Criminal Division, Fraud Section, Health Care Fraud Unit, Northeast Strike Force, which is based out of the Office’s Business and Securities Fraud Section.
For patients who are prescribed a controlled substance medication and have lost access to their healthcare provider, contact either of these virtual treatment providers for evaluation, prescription for medication to help manage opioid withdrawal (buprenorphine, as applicable), and referral to outpatient care:
Virtual Express Care (NYC Health and Hospitals) (631) 397-2273; 24 hour/day, 7 days/week www.expresscare.nyc or MATTERS Medication for Addiction Treatment (765) M-A-T-T-E-R-S [(765) 628-8377] www.mattersnetwork.org
Referrals to harm reduction services and drug treatment programs:
Call the OASAS (Office of Addiction Services and Supports) 24/7 HOPEline 1-877-8-H-O-P-E-N-Y or text HOPENY (467369)
U.S. v. Albert MuratovAlbert Muratov pleaded guilty on June 11, 2024 to health care fraud in connection with a scheme to defraud Medicare by billing for undispensed cancer medication. Muratov, who operated Ave M Pharmacy in Brooklyn, New York, along with Artom Rafaelov and others, handled the pharmacy’s finances and payments and, together with others, caused the submission of approximately 253 claims to Medicare for Targretin Gel 1%. Targretin is a prescription drug used to treat skin conditions caused by Cutaneous T-Cell Lymphoma, a rare skin cancer. The average wholesale price for a 60-gram tube of Targretin Gel 1% was over $34,000. From 2017 to 2021, the defendant and his co-conspirators, including Rafaelov, billed Medicare for Targretin that was medically unnecessary, not ordered by a professional, or that they did not dispense; as a result, Medicare paid Ave M Pharmacy more than $4 million.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant U.S. Attorney John Vagelatos is in charge of the prosecution.
U.S. v. Artom RafaelovArtom Rafaelov pleaded guilty on September 28, 2022 to a criminal information charging him with health care fraud. Rafaelov owned and operated Ave M pharmacy in Brooklyn. Between approximately February 2017 and September 2021, Rafaelov and co-conspirator Albert Muratov defrauded Medicare by causing Ave M to submit fraudulent claims for Targretin Gel 1% (described above) that were neither purchased nor stocked by Ave M; and not medically necessary or not prescribed by the doctors that Ave M claimed had prescribed the medication. In March 2024, Rafaelov was sentenced by United States District Judge William F. Kuntz II to 37 months’ imprisonment and ordered to pay $4.2 million in restitution to Medicare.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant U.S. Attorney John Vagelatos is in charge of the prosecution.
U.S. v. Ahmed et al.
On June 11, 2024, Noman Ahmed, Adnan Arshad, Rehman Diwan, Jessica Hendrickson, Jose Marte, Mohammed Saleem, Faisal Shamsi and Waqas Shamsi were arrested on a eight-count indictment charging them with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and pay health care kickbacks, paying health care kickbacks, and money laundering. The defendants owned, operated and were employees of several transportation companies. From approximately December 2020 to the present, the defendants paid illegal health care kickbacks to Medicaid beneficiaries so that those beneficiaries would order medical transportation services specifically from the defendants, which generally included transportation to addiction treatment centers for the beneficiaries’ purportedly necessary methadone treatment.
The defendants generally did not provide the medical transportation services ordered by the Medicaid beneficiaries. In total, the defendants and their transportation companies – 668 MTK Taxi LLC, All-Star Taxi LLC, Apollo Transportation, Sunrise Taxi LLC, and Transportation Solution NY Corp. d/b/a A1 Transport – fraudulently billed Medicaid millions of dollars for these services throughout the course of the scheme. At least two claims were submitted to Medicaid for individuals who were deceased, and some claims were submitted for individuals who were hospitalized or incarcerated.
The government’s case is being prosecuted by Assistant U.S. Attorney Adam Toporovsky of the Criminal Section of the Office’s Long Island Division, and Special Assistant U.S. Attorney Jennifer Milito.
* * *
The charges in the indictments are allegations and the defendants are presumed innocent unless and until proven guilty.
The enforcement actions announced today by U.S. Attorney Peace are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings to government programs. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Department of Justice, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold and other assets.
The Defendants:
FENG JIANG (also known as “Jeff”)
Age: 42
Oakland Gardens, QueensE.D.N.Y. Docket No. 24-CR-264
_______________________________
JOSEPH TONY BROWN-ARKAH
Age: 76
Brooklyn, New YorkEVENS JEAN
Age: 58
Cape Coral, FloridaE.D.N.Y. Docket No. 24-CR-263
______________________________
ALBERT MURATOV
Age: 46
Forest Hills, QueensE.D.N.Y. Docket No. 24-CR-164 (WFK)
______________________________
ARTOM RAFAELOV
Age: 41
Fresh Meadows, Queens
E.D.N.Y. Docket No. 22-CR-368 (WFK)
______________________________
NOMAN AHMED
Age: 37
Port Jefferson Station, New YorkADNAN ARSHAD (also known as “Eddie”)
Age: 45
Mount Sinai, New YorkREHMAN DIWAN
Age: 24
Hicksville, New YorkJESSICA HENDRICKSON
Age: 36
Patchogue, New YorkJOSE MARTE
Age: 33
Bronx, New YorkMOHAMMED SALEEM
Age: 38
Dix Hills, New YorkFAISAL SHAMSI (also known as “Jimmy”)
Age: 49
Massapequa, New YorkWAQAS SHAMSI (also known as “Ricky”)
Age: 44
Massapequa, New YorkE.D.N.Y. Docket No. 24-CR-231 (JMA)
Five Employees of Juvenile Detention Center Charged with Smuggling Contraband in Exchange for BribesRead the Press Release
Five criminal complaints were unsealed today in federal court in Brooklyn charging current New York City Administration for Children’s Services (ACS) employees Da’Vante Bolton, Roger Francis, Christopher Craig and Nigel King, and former ACS employee Octavia Napier, with conspiracy to commit Travel Act bribery. All five defendants were Youth Development Specialists at the Crossroads Juvenile Center in Brownsville, Brooklyn (Crossroads). All five were arrested this morning, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Joseph A. Marutollo.
Breon Peace, United States Attorney for the Eastern District of New York, Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI) and James Smith, Assistant Director-in-Charge, New York Field Office (FBI), announced the charges.
“As alleged, these so-called ‘Youth Development Specialists’ violated their duty to the City and the residents at Crossroads by smuggling in weapons, drugs, and other contraband in exchange for bribes, placing young people and other staff members at an alarming risk of serious harm,” stated United States Attorney Breon Peace. “Today’s arrests demonstrate that this Office remains committed to rooting out corruption and cleaning up our city’s jails and juvenile detention facilities.”
DOI Commissioner Strauber said, “As Youth Development Specialists at ACS, these defendants were trusted to ensure the safety and security of residents in the City’s youth detention facilities. They betrayed that trust when, as charged, they accepted cash payments in exchange for smuggling drugs, weapons, and other contraband, into the Crossroads Juvenile Center in Brooklyn, destabilizing the facility and increasing the risk of violence to residents and staff alike. I thank ACS for reporting information to DOI, which prompted, in part, the work that led to this investigation with our law enforcement partners in the United States Attorney’s Office for the Eastern District of New York and the FBI, and the charges we announce today.”
“These five defendants, each Youth Development Specialists at the Crossroads Juvenile Center, are alleged to have repeatedly smuggled dangerous contraband into the facility in exchange for bribes. Youth development specialists are entrusted to help troubled youth get back on the right path, instead these individuals allegedly strayed themselves, placing personal gain above the safety and rehabilitation of the juveniles under their watch. The arrests today highlight the FBI’s continued dedication to eradicating public corruption and holding those responsible accountable in the criminal justice system,” stated FBI Assistant Director-in-Charge James Smith.
Approximately 120 residents, ranging from ages 14 to 20, are detained at Crossroads. Residents at Crossroads are prohibited from possessing narcotics, cellular telephones, cigarettes, weapons, and alcohol, among other items. ACS employees at Crossroads are trained to confiscate any contraband they find and must notify a supervisor if any contraband is discovered. Although staff members are supposed to undergo a security screening whenever they enter the facility, a significant amount of contraband has recently been recovered from Crossroads residents. Between approximately March 2022 and May 2024, at least 75 cell phones and more than 340 scalpels or blades were recovered from the facility, as well as narcotics and tobacco.
The defendants either are or were Youth Development Specialists at Crossroads, which required them to supervise residents. Their responsibilities are similar to those of a correction officer at a jail facility.
As alleged in the complaints, the defendants accepted bribes in exchange for smuggling contraband and violating their duties as staff members.
The Defendants and the Alleged Criminal Conduct
Da’Vante Bolton has been employed by ACS since March 2020. As alleged, Bolton accepted more than $20,000 from Crossroads residents or their associates and smuggled in razor blades and marijuana in exchange for those bribes.
Roger Francis has been employed by ACS since July 2018. As alleged, Francis received more than $17,000 in bribes from Crossroads residents and their associates for smuggling in contraband, including marijuana and phone accessories.
Christopher Craig has been employed by ACS since August 2018. As alleged, Craig received more than $5,000 in bribes to smuggle in contraband, including marijuana and tobacco.
Nigel King has been employed by ACS since October 2021. As alleged, King accepted more than $6,800 in bribes for smuggling in marijuana, prescription pills and alcohol.
Octavia Napier was employed by ACS from June 2022 to May 2023. As alleged, Napier received more than $2,000 in bribes to both smuggle in contraband and allow a Crossroads resident to use her Cash App account to run his contraband distribution business from within Crossroads.
* * * * *
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face a maximum sentence of five years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Philip Pilmar and Andrew D. Grubin, and Special Assistant United States Attorney Cassie Perez of the Bronx District Attorney’s Office, are in charge of the prosecution with assistance from Legal Assistant Thomas Englert.
The Defendants:
DA’VANTE BOLTON
Age: 31
Queens, NYE.D.N.Y. Docket No. 24-MJ-435
ROGER FRANCIS
Age: 58
Brooklyn, NYE.D.N.Y. Docket No. 24-MJ-432
CHRISTOPHER CRAIG
Age: 37
Brooklyn, NYE.D.N.Y. Docket No. 24-MJ-433
NIGEL KING
Age: 45
Queens, NYE.D.N.Y. Docket No. 24-MJ-431
OCTAVIA NAPIER
Age: 26
Brooklyn, NYE.D.N.Y. Docket No. 24-MJ-434
Pharmacy Owners Sentenced for $18M COVID-19 Health Care Fraud and Money Laundering SchemeRead the Press Release
Today, in federal court in Brooklyn, Peter Khaim was sentenced by United States District Judge Ann M. Donnelly to 97 months in prison for using New York-area pharmacies to submit false and fraudulent claims to Medicare and then laundering the criminal proceeds. Khaim’s brother and codefendant, Arkadiy Khaimov, was previously sentenced on April 3, 2024 to six years in prison for his role in the money laundering scheme. Khaim and Khaimov pleaded guilty in November 2022 to conspiracy to commit money laundering. As part of their sentences, Khaim was ordered to pay more than $18 million in restitution and to forfeit more than $2.7 million; Khaimov was ordered to pay more than $18 million in restitution and to forfeit more than $9.6 million.
Breon Peace, United States Attorney for the Eastern District of New York; Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation; Naomi Gruchacz, Special Agent-in-Charge, U.S. Department of Health and Human Services Office of Inspector General; and Patricia Tarasca, Special Agent-in-Charge, Federal Deposit Insurance Corporation Office of Inspector General, announced the sentences.
According to court documents, Khaim and Khaimov engaged in a complex money laundering conspiracy to launder the proceeds of a fraudulent health care scheme involving over a dozen New York-area pharmacies that they, and their co-conspirators, owned and controlled. Khaim and Khaimov used the New York pharmacies to submit millions of dollars in fraudulent claims to Medicare, including during the COVID-19 pandemic. Khaim, Khaimov, and their co-conspirators exploited the COVID-19 emergency for their own financial gain by using COVID-19-related “emergency override” billing codes to submit fraudulent claims for expensive cancer medications Targretin Gel 1% and Panretin Gel 0.1% that were not prescribed by physicians or dispensed to patients, and that were purportedly dispensed during periods when certain pharmacies were closed.
Khaim and Khaimov concealed over $18 million of their criminal proceeds by funneling money through several shell companies, including sham pharmacy wholesale companies designed to look like legitimate wholesalers. Khaim and Khaimov typically sent the funds from the pharmacy bank accounts they controlled to the sham wholesale companies. The funds were then typically sent to companies in China for distribution to individuals in Uzbekistan, and the defendants received some of these funds in cash. At other times, the fraudulent proceeds were sent from the sham wholesale companies to Khaim, Khaimov, their relatives, or their designees, in the form of certified cashier’s checks and cash. Khaim and Khaimov used the proceeds of the scheme to purchase real estate and other luxury items.
Trial Attorney Arun Bodapati of the Fraud Section’s Northeast Strike Force prosecuted the case. Fraud Section Principal Assistant Chief Jacob Foster and Assistant Chief Patrick Mott assisted with the investigation. Assistant United States Attorney Claire Kedeshian of the Eastern District of New York’s Asset Recovery Section is handling forfeiture matters.
Defendants:
PETER KHAIM
Age: 44
Forest Hills, QueensARKADIY KHAIMOV
Age: 41
Forest Hills, QueensE.D.N.Y. Docket No.: 20-CR-580 (AMD)
Pharmacy Owners Sentenced for $18M COVID-19 Health Care Fraud and Money Laundering SchemeRead the Press Release
Two pharmacy owners were sentenced for using New York-area pharmacies to submit millions of dollars in false and fraudulent claims to Medicare and then laundering the proceeds, including during the COVID-19 pandemic.
Peter Khaim, 44, of Forest Hills, New York, was sentenced today to eight years and one month in prison, and his brother and co-defendant, Arkadiy Khaimov, 41, also of Forest Hills, was sentenced on April 3 to six years in prison.
According to court documents, Khaim and Khaimov engaged in a complex money laundering conspiracy to launder the proceeds of a fraudulent health care scheme involving 16 New York-area pharmacies that they and their co-conspirators owned and controlled. Khaim, Khaimov, and their co-conspirators exploited the COVID-19 emergency for their own financial gain by using COVID-19-related “emergency override” billing codes to submit fraudulent claims for expensive cancer medications Targretin Gel 1% and Panretin Gel 0.1% that were not prescribed by physicians or dispensed to patients, and that were purportedly dispensed during periods when certain pharmacies were closed.
To conceal over $18 million of their criminal proceeds, Khaim, Khaimov, and their co-conspirators funneled money through several shell companies, including sham pharmacy wholesale companies designed to look like legitimate wholesalers. Khaim and Khaimov typically sent the funds from the pharmacy bank accounts they controlled to the sham wholesale companies. The funds were then typically sent to companies in China for distribution to individuals in Uzbekistan. The defendants then received a corresponding amount of cash from a co-conspirator, minus a commission. At other times, the fraudulent proceeds were sent from the sham wholesale companies to Khaim, Khaimov, their relatives, or their designees, in the form of certified cashier’s checks and cash. Khaim and Khaimov used the proceeds of the scheme to purchase real estate and other luxury items.
Khaim pleaded guilty on Nov. 3, 2022 to one count of conspiracy to commit money laundering. Khaimov pleaded guilty on Nov. 16, 2022 to one count of conspiracy to commit money laundering. At sentencing, Khaim was ordered to pay more than $18 million in restitution and to forfeit more than $2.7 million. Khaimov was ordered to pay more than $18 million in restitution and to forfeit more than $9.6 million.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Assistant Director in Charge James Smith of the FBI New York Field Office; Special Agent in Charge Thomas M. Fattorusso of the IRS Criminal Investigation; Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG); and Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) made the announcement.
HHS-OIG, the FBI, IRS Criminal Investigation, and FDIC-OIG investigated the case.
Trial Attorney Arun Bodapati of the Criminal Division’s Fraud Section’s Northeast Strike Force prosecuted the case, with assistance from Principal Assistant Chief Jacob Foster and Assistant Chief Patrick Mott of the Criminal Division’s Fraud Section.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Leader and Two Members of Brooklyn-Based Real Ryte Gang Each Sentenced to More Than a Decade in Prison for Violent Racketeering OffensesRead the Press Release
Earlier today, in federal court in Brooklyn, Semaj Smith, also known as “Bam Bam” and “Real Ryte Sport,” a member of the Brooklyn-based street gang Real Ryte, was sentenced by United States District Judge Hector Gonzalez to 132 months in prison for racketeering conspiracy and brandishing a firearm in furtherance of a crime of violence. Last month, co-defendants Dajahn McBean, also known as “Jeezy Mula,” who is the leader of Real Ryte, and Real Ryte member Mark Waiters, also known as “Telly,” were sentenced to terms of imprisonment of 150 months and 149 months, respectively. All three defendants pleaded guilty in September and October 2023 to charges in a superseding indictment stemming from Real Ryte’s gang war with the Breadgang crew of the 5-9 Brims, a subset of the Bloods.
Breon Peace, United States Attorney for the Eastern District of New York, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentences.
“The defendants have dedicated themselves to committing violent crimes on behalf of their gang without any regard for endangering the public,” stated United States Attorney Peace. “We will not tolerate our communities being turned into scenes out of video games with gang warfare, reckless shootings and car chases. Today’s sentence shows that individuals, like these defendants, who don’t get that message will be punished with significant time in prison.”
Mr. Peace expressed his appreciation to the New York City Police Department and to the Department of Homeland Security, Homeland Security Investigations New York for their outstanding work and assistance in this investigation.
According to court filings and facts presented during the defendants’ guilty plea proceedings, Real Ryte was a violent street gang that operated in, among other places, Brooklyn, New York. Members of Real Ryte have committed acts of violence, including acts involving murder and assault, and engaged in bank fraud, wire fraud and other crimes. Between at least 2015 and 2018, members of Real Ryte committed serious crimes to further the interests of the gang, including earning money for the gang’s members through illicit means, and committing acts of violence to enhance the gang’s position with respect to rival criminal organizations.
During the charged period, Real Ryte was engaged in a violent conflict with members of a rival crew known as the “Breadgang,” whose members also operated in Brooklyn. The gang war led to a series of shootings between Real Ryte and Breadgang, including the murder of Sean Peart, a Real Ryte member, a crime for which Marvin Pippins, a Breadgang member, was convicted following a trial in this District. In response to Peart’s death, the defendants and other members of Real Ryte retaliated against Pippins and other Breadgang members. On January 3, 2017, the defendants learned that a Breadgang member could be found in lower Manhattan, and, at McBean’s direction, Smith, Waiters and a co-conspirator traveled to the location to shoot and kill him. However, during a chase with vehicles speeding through the streets of Manhattan in the wrong direction, the defendants mistakenly shot an innocent person they mistook for their intended target, seriously injuring the victim before fleeing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Joy Lurinsky and Rebecca Schuman are in charge of the prosecution, with assistance from Paralegal Specialists Cleon Thomas and Abiodun Ojo.
The Defendants:
DAJAHN MCBEAN (also known as “Jeezy Mula”)
Age: 28
Brooklyn, New YorkMARK WAITERS (also known as “Telly”)
Age: 26
Brooklyn, New YorkSEMAJ SMITH (also known as “Bam Bam” and “Real Ryte Sport”)
Age: 30
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-260 (S-1) (HG)
Justice Department to Monitor Compliance with Federal Voting Rights Laws in New YorkRead the Press Release
The Justice Department announced today that it will monitor compliance with federal voting rights laws in Queens, New York, for the June 25 primary election.
The Justice Department enforces the federal voting rights laws that protect the rights of all citizens to access the ballot. The department regularly deploys its staff to monitor for compliance with federal civil rights laws in elections in communities all across the country. In addition, the department deploys federal observers from the Office of Personnel Management, where authorized by federal court order.
The Justice Department’s Civil Rights Division’s Voting Section, working with U.S. Attorneys’ Offices, enforces the civil provisions of federal statutes that protect the right to vote, including the Voting Rights Act, National Voter Registration Act, Help America Vote Act, Civil Rights Act and Uniformed and Overseas Citizens Absentee Voting Act.
More information about voting and elections is available on the Justice Department’s website at www.justice.gov/voting. Learn more about the Voting Rights Act and other federal voting laws at www.justice.gov/crt/voting-section.
Complaints about possible violations of federal voting rights laws can be submitted through the Civil Rights Division’s website at civilrights.justice.gov or by telephone at 1-800-253-3931. The United States Attorney’s Office for the Eastern District of New York will also be available to receive complaints on Tuesday, June 25, 2024 at the following number (718) 254-7000 for Brooklyn, Queens, Staten Island, Nassau and Suffolk counties.
Justice Department to Monitor Compliance with Federal Voting Rights Laws in New YorkRead the Press Release
The Justice Department announced today that it will monitor compliance with federal voting rights laws in Queens, New York, for the June 25 primary election.
The Justice Department enforces the federal voting rights laws that protect the rights of all citizens to access the ballot. The department regularly deploys its staff to monitor for compliance with federal civil rights laws in elections in communities all across the country. In addition, the department deploys federal observers from the Office of Personnel Management, where authorized by federal court order.
The Justice Department’s Civil Rights Division’s Voting Section, working with U.S. Attorneys’ Offices, enforces the civil provisions of federal statutes that protect the right to vote, including the Voting Rights Act, National Voter Registration Act, Help America Vote Act, Civil Rights Act and Uniformed and Overseas Citizens Absentee Voting Act.
More information about voting and elections is available on the Justice Department’s website at www.justice.gov/voting. Learn more about the Voting Rights Act and other federal voting laws at www.justice.gov/crt/voting-section. Complaints about possible violations of federal voting rights laws can be submitted through the Civil Rights Division’s website at civilrights.justice.gov or by telephone at 1-800-253-3931.
Long Island Man Sentenced to 20 Years in Prison for Conspiring to Distribute Fentanyl That Contributed to Two Poisoning DeathsRead the Press Release
Earlier today, in federal court in Central Islip, Charles Carter, also known as “Chase,” was sentenced by United States District Judge Gary R. Brown to 20 years in prison for conspiring to distribute fentanyl that contributed to two poisoning deaths. In November 2023, Carter pleaded guilty to conspiring to distribute more than 40 grams of fentanyl. As part of his plea, Carter admitted that fentanyl that he sold contributed to the deaths of two victims in 2020 and 2021 respectively. Carter also admitted that in 2021, he sold more than 43 grams of fentanyl to an undercover Glen Cove Police Department (GCPD) officer (UC-1). As part of the sentence, the defendant was ordered by the Court to pay restitution in the amount of $29,416.50 to cover the victims’ funeral expenses.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Patrick J. Ryder, Commissioner of the Nassau County Police Department (NCPD), and William Whitton, Chief of Police, GCPD, announced the guilty plea.
“Carter, who openly acknowledged his drug dealing was all ‘about the money,’ is held responsible today for callously selling fentanyl that contributed to the deaths of two victims on Long Island. Fentanyl is a lethal drug that is killing so many people across this nation every day,” stated United States Attorney Peace. “This Office is working nonstop with our federal and local partners to address the fentanyl crisis and prosecute those who push the deadly poison for profit.”
“While this guilty plea can't undo the tragic loss of life, it sends a message that we will do everything we can to make sure those responsible for drug related deaths face the consequences for their actions and the families of those lost receive justice. The men and women of DEA New York Division, along with our law enforcement partners, will continue to target those responsible for poisoning and destroying our communities” stated DEA New York Division Special Agent-in-Charge Tarentino.
“The sentencing of defendant Charles Carter to 20 years in prison for conspiring to distribute fentanyl is a clear example that this behavior will never be tolerated. Two victims lost their lives and their families are suffering due to this poison being accessible. We need to set an example and continue to investigate and arrest these offenders to keep our communities and residents safe. I would like to thank all of the investigators and their agencies for a job well done,” stated NCPD Commissioner Ryder.
“The Glen Cove Police Department will continue to work with federal, state and local law enforcement to prevent the distribution of illegal substances into our community. Those who decide to profit by selling their poison, will be identified, arrested and prosecuted,” stated GCPD Chief of Police Whitton.
Between August 2020 and February 2021, Carter sold more than 40 grams of fentanyl to two overdose poisoning victims and an undercover GCPD detective. The investigation revealed that on August 6, 2020, a 23-year-old individual (Victim-1) died of a drug-related overdose at her residence in Glen Cove, Long Island. Cellular telephone analysis and additional investigation showed that the fentanyl that Victim-1 used was purchased from Carter about two days before Victim-1’s death. On February 5, 2021, a 40-year-old individual (Victim-2) died of a drug-related poisoning at his residence in Farmingdale, Long Island. A search of Victim-2’s phone revealed text messages between Carter and Victim-2 which related to Victim-2’s purchase of fentanyl shortly before, and in the months preceding, Victim-2’s death. For example, on January 21, 2021, Carter wrote text messages to Victim-2, stating “im.(sic) around and I got the good stuff[.] Do u (sic) need to see me..??”
Additionally, Carter repeatedly sold fentanyl to the UC-1 in doses that could have been lethal if consumed, including approximately 43 grams of fentanyl in January 2021. For example, on October 23, 2020, Carter sent text messages to UC-1, stating “Next time imma (sic) give you some super fire cuz (sic) I’m getting some new sh-- in a couple days so let your people know . . . . I ain’t going to lie I’m going to have some way stronger sh-- in the next couple days then I might have to cut it might be that strong seriously.” On January 13, 2021, in response to a text message from UC-1 describing how much money UC-1 could make from reselling Carter’s drugs, Carter wrote “I’m about the money.”
According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2023, nearly 108,000 people died from drug overdoses, making it a leading cause of injury-related death in the United States. The increase in overdose deaths has been driven in large part by fentanyl, a drug that has been described as 50 to 100 times more potent than morphine. In 2023, over 74,000 people died from a drug overdose involving synthetic opioids such as fentanyl, a figure that was around 2,000 less than the more than 76,000 synthetic opioid overdose deaths that occurred in 2022. Between 2022 and 2023, overall drug overdose deaths decline approximately 3% from around nearly 111,000 such deaths in 2022.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution, with assistance from Paralegal Specialist Samantha Schroder and Legal Assistants Janelle Robinson and Danielle Casey.
The Defendant:
CHARLES CARTER (also known as “Chase”)
Age: 34
Amityville, New YorkE.D.N.Y. Docket No. 21-CR-88 (S-1) (GRB)
Former Vice President and Branch Manager of Popular Bank Convicted of Fraud and Money Laundering ChargesRead the Press Release
Anuli Okeke, the former vice president and manager of a New York branch of Popular Bank was convicted yesterday afternoon by a federal jury in Brooklyn of all four counts of an indictment charging her with conspiracy to commit bank and wire fraud, wire fraud, bank fraud and money laundering conspiracy. The charges arose out of a scheme the defendant led to fraudulently obtain millions of dollars from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program during the height of the COVID-19 pandemic. The verdict followed a one-week trial before United States District Judge Frederic Block. When sentenced, Okeke faces up to 30 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York; Principal Deputy Assistant Attorney General Nicole M. Argentieri, Head of the Justice Department’s Criminal Division; Gail S. Ennis, Inspector General for the Social Security Administration (SSA-OIG); James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation New York Field Office (FBI); Patricia Tarasca, Special Agent-in-Charge, Federal Deposit Insurance Corporation Office of Inspector General, New York Regional Office (FDIC OIG); Brian Tucker, Special Agent-in-Charge, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, Eastern Region; and Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG), announced the verdict.
“While the global pandemic caused widespread economic and personal harm for so many, the defendant abused her trusted position at a bank to steal millions of dollars from programs designed to keep small businesses afloat and workers on payroll,” stated United States Attorney Peace. “This verdict reaffirms that our Office and law enforcement partners continue to bring to justice those who took advantage of a global crisis to commit crimes.”
“The jury’s verdict confirms that Anuli Okeke’s actions were not only criminal but also exploitive, damaging the integrity of programs put in place to help those suffering during a time of national crisis. My office will continue to work with our law enforcement partners to investigate those who misuse the identities of others for their selfish devices,” stated SSA Inspector General Ennis. “I commend our law enforcement partners for their outstanding work in this investigation and the U.S. Attorney’s Office for prosecuting this case and holding Ms. Okeke accountable for her crimes.”
“Today the defendant in this case was held accountable for abusing her position of trust as a banker to facilitate millions of dollars of fraudulent Paycheck Protection Program loans in exchange for kickbacks. The defendant used these stolen funds to enrich herself while small businesses were struggling during the pandemic,” stated FDIC-OIG Special Agent-in-Charge Tarasca. “The FDIC OIG remains committed to working with our law enforcement partners to protect the Nation’s financial system and hold accountable those individuals, like Ms. Okeke, who steal benefits designated to help those in need.”
“Anuli Okeke used her position to defraud the federal government of pandemic relief funds for her own personal gain and will now pay the price for her crimes,” stated Special Agent-in-Charge Tucker, Office of Inspector General for the Board of Governors of the Federal Reserve System. “We are proud to have worked with our federal law enforcement partners and the U.S. Attorney’s Office to hold Ms. Okeke accountable.”
“The abuse of critical resources, intended to support small businesses during a time of unprecedented need, will not be tolerated,” stated SBA-OIG Special Agent-in-Charge McCall-Braithwaite. “Today’s verdict is a testament to our unwavering dedication to protecting the integrity of SBA’s programs. Our collaboration with the U.S. Attorney’s Office and our law enforcement partners is essential to ensuring that those who defraud the government are brought to justice and the taxpayer interest are protected.”
COVID-19 Relief Overview
The CARES Act was enacted to provide emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. The PPP provided for forgiveness of the loan if recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.
Another source of relief provided by the CARES Act was the EIDL program, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. Under the program, EIDL recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance). The amount of an EIDL Advance was determined based on the number of employees working for the applicant. The EIDL Advance did not have to be repaid.
Criminal Conduct
As proven at trial, Okeke, and her co-conspirators, both from within and outside the bank fabricated loan and tax documents and stole funds from the PPP and EIDL programs. Despite knowing that the PPP and EIDL applications contained false statements, and helping applicants make those false statements, Okeke signed each PPP loan application on behalf of the bank and submitted them for approval. Once the loan proceeds were disbursed to the borrowers, Okeke and her co-conspirators took kickbacks from the loan proceeds. The defendant also submitted her own fraudulent EIDL loan that contained false information. In addition, the defendant also took unauthorized commissions from legitimate PPP recipients.
As shown at trial, the defendant boasted about her earnings from the scheme. In handwritten notes found at her desk at work, the defendant wrote “I am making more than enough money,” “money comes to me easily,” “I am grateful I make $15k every month,” and “I have an extra $5000 every month.” Around the time of the scheme, the defendant’s bank accounts saw an influx of cash deposits.
Prior to the defendant’s conviction at trial, seven other co-conspirators pled guilty to wire and bank fraud conspiracy in connection with the defendant’s pandemic aid fraud conspiracy at the bank.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section as well as the Criminal Division’s Fraud Section. Assistant United States Attorneys Chand Edwards-Balfour and Adam Amir and Trial Attorney Jennifer Bilinkas are in charge of the prosecution, with assistance from Paralegal Specialists Samuel Ronchetti, Michaela Ausbrooks, and April Ward.
The Defendant:
ANULI OKEKE
Age: 52
Bronx, New YorkE.D.N.Y. Docket No. 22 CR 20 (FB)
Staten Island Man Sentenced to 40 Years in Prison for Drug Trafficking and the Distribution of Heroin and Fentanyl Causing Death and Serious InjuryRead the Press Release
Earlier today, in federal court in Brooklyn, Keith Wyche was sentenced by United States District Judge Dora L. Irizarry to 40 years in prison for distribution of heroin and fentanyl causing the death of a Staten Island man, distribution of heroin causing the overdose of a Staten Island woman, conspiracy to distribute heroin and fentanyl, and distribution of heroin and fentanyl. Wyche and co-defendant Oneil Allen were convicted by a federal jury in February 2023 following a three-week trial. Allen was previously sentenced to 30 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Special Agent-in-Charge, Federal Bureau of Investigation, Newark Field Office (FBI), and Edward A. Caban, New York City Police Department (NYPD), announced the sentence.
“Both defendants have been punished with very long jail sentences for pushing drugs, including heroin and fentanyl, which tragically claimed the life of one victim and nearly killed another member of our Staten Island community,” stated United States Attorney Peace. “I commend the outstanding work of the NYPD and the FBI in determining who was responsible for trafficking these drugs and holding them accountable for the pain, death and harm they caused.”
“Addiction is an unbelievably insidious and grotesque demon. Drugs envelop and take over people's lives, and the criminals who supply them use the disease to cash in on everyone else's pain. Both Wyche and Allen have now been served justice for the injustice they inflicted on their victims,” stated FBI Special Agent-in-Charge Dennehy.
“Today’s sentencing marks a victory in the NYPD’s battle against illicit drug trafficking and serves as a reminder of our unwavering commitment to hold accountable anyone who puts monetary gain above the lives of New Yorkers,” stated NYPD Commissioner Caban. “We vow to keep pursuing those who peddle illegal drugs in our neighborhoods, and we commend all of our law enforcement partners for their continuing efforts to help stem the opioid crisis.”
Between February 2017 and September 2018, the defendants operated a drug delivery service in Staten Island selling heroin and fentanyl and preying upon those suffering from narcotics addiction. Each day, Wyche and Allen sent out a mass text message advertising that they were open for business. After receiving orders from their customers, the defendants would drive to a preselected location and hand deliver drugs. The defendants would then return to a New Jersey apartment where they packaged the narcotics.
On April 18, 2017, a 43-year-old Staten Island man (John Doe) was found dead in his bathroom by his father. When NYPD detectives responded, they found a syringe containing fentanyl on the floor near the deceased victim’s body along with glassines containing fentanyl. The detectives reviewed the victim’s phone and found recent text messages between him and a person named “Marco 5” who was later revealed to be Wyche.
On October 27, 2017, a then-28-year-old Staten Island woman (Jane Doe) purchased heroin from the defendants, ingested it, and promptly suffered an overdose. First responders saved her life by quickly administering Narcan and transporting her to the hospital. A review of text messages in Jane Doe’s phone showed messages similar to those found in John Doe’s phone. Jane Doe testified at trial that she frequently purchased heroin from the defendants and later assisted law enforcement in gathering additional evidence against them.
The case is being handled by the Organized Crime and Gangs Section and the General Crimes Section. Assistant United States Attorneys Irisa Chen and Gilbert Rein are in charge of the prosecution with assistance from Paralegal Specialist Teri Carby. Assistant United States Attorney Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendants:
KEITH WYCHE
Age: 38
Staten Island, New YorkONEIL ALLEN
Age: 31
Staten Island, New YorkE.D.N.Y. Docket No. 18-CR-561 (S-1) (DLI)
Members of Brooklyn-Based “Bully Gang” Convicted of Racketeering, Murder and Gang-Related CrimesRead the Press Release
On Thursday and today, a federal jury in Brooklyn convicted Moeleek Harrell, Derrick Ayers, Franklin Gillespie and Anthony Kennedy on 21 counts of an eighth superseding indictment charging them variously with racketeering, murder, murder conspiracy, robbery, drug offenses, money laundering and bribery of state correction officers. The defendants are members of a violent Brooklyn-based street gang known as the “Bully Gang,” which operated and committed crimes in and around Bedford Stuyvesant with a headquarters located at 1625 Fulton Street. Harrell was one of the founders and the leader of the Bully Gang; Ayers was a high-ranking member; Kennedy was a longstanding member; and Gillespie was a violent enforcer for the gang. Today’s verdicts followed a 13-week trial before United States District Judge Brian M. Cogan. When sentenced, the defendants each face a maximum sentence of life in prison and mandatory minimum sentences ranging from 15 to 55 years.
Breon Peace, United States Attorney for the Eastern District of New York, Bryan Miller, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), Edward A. Caban, Commissioner, New York City Police Department (NYPD), and Jocelyn Strauber, Commissioner, New York City Department of Investigation (DOI), announced the verdict.
“With today’s convictions, the leadership of the Bully Gang has been taken down and their criminal enterprise is a shell of the violent crew that wreaked havoc on Bedford Stuyvesant, other parts of New York City and the Eastern Seaboard with murder, broad daylight shootings, robberies, arsons, drug trafficking and bribery of correction officers at Rikers Island to facilitate a drug trafficking scheme,” stated United States Attorney Peace. “They used force and violence against rivals, terrorized the surrounding communities and enriched themselves and their members with the illicit proceeds of their criminal activities. These lawless, so-called ‘Bullies’ have been held responsible for their crimes thanks to the outstanding work by law enforcement agents and detectives who, together with our excellent prosecutors, brought this comprehensive investigation to a successful conclusion.”
“These convictions put an end to the reign of terror committed by this gang, shattering the myth that criminals can commit atrocious acts without consequence. This is the result of a multi-year investigation involving multiple law enforcement agencies spanning multiple jurisdictions. I commend our law enforcement partners—NYPD, NYC Department of Investigations, and our law enforcement partners in New Jersey, Massachusetts, Maine and prosecutors with the U.S. Attorney’s Office—for their relentless efforts in making our communities safer,” stated ATF Special Agent-in-Charge Miller. “In particular, I am proud of the men and women of ATF NY and the ATF/NYPD Joint Firearms Task Force, who fight every day to prevent violence in any form, and are committed to dismantling and disarming violent gangs that plague our streets. ATF once again reaffirms its unwavering commitment to protecting the public from violent offenders.”
“These convictions represent the culmination of an extensive investigation combined with a vigorous prosecution,” stated NYPD Commissioner Caban. “The stakes could not have been higher because these gang members were responsible for an assortment of despicable crimes, including murder, robbery, narcotics trafficking, money laundering, and bribery. A powerful message has been sent: Our city will not tolerate such criminal activity, and the NYPD and our law enforcement partners will keep working tirelessly to identify and investigate these enterprises and bring the individuals involved to justice.”
DOI Commissioner Strauber stated: “The violence and drug trafficking in which these defendants engaged had far-reaching effects, including compromising the security of the City’s jails through the bribery of City correction officers used to traffic drugs from gang members to inmates on Rikers Island. I thank the U.S. Attorney for the Eastern District of New York, the ATF and the NYPD for their partnership on this significant investigation and their commitment to bring to justice those who would jeopardize the safety of our communities through gang violence.”
MURDER CONSPIRACY, MURDER AND FIREARMS OFFENSES
Ayers was convicted of murdering Jonathan Jackson, an associate of the rival “Stukes Crew” gang, at a gender reveal party for Harrell’s child on March 3, 2018, in Brooklyn. Gillespie was convicted of conspiring to murder Mike Hawley in April 2020 to prevent him from informing authorities about the murder of Paul Hoilett in Brooklyn on April 11, 2020. Hawley was murdered in Queens four days later, on April 15, 2020.Ayers and Harrell were convicted of conspiring to murder the leader of the Stukes Crew, whom they stalked by aggregating information from public databases, including the locations where their cars were ticketed. That stalking led to at least three occasions in 2017 and 2018, when the gang members shot at their rivals and injured some of them.
Ayers and Harrell were convicted of conspiring to murder Chris King, who had previously killed a Bully Gang member. King was stalked, including having his court appearances tracked, and was ultimately shot outside a Queens restaurant. A woman who was with King at the time was also wounded. Both survived their injuries.Finally, Harrell, Ayers, Gillespie and Kennedy were convicted of illegal possession, brandishing and discharge of firearms.
NARCOTICS TRAFFICKING CONSPIRACIES
Harrell and Kennedy were convicted of conspiring to smuggle drugs into Rikers Island from at least 2019 until 2021. During that time, members of the Bully Gang arranged for papers and comic books soaked in synthetic cannabinoids, also known as “K2,” to be mailed to inmates at Rikers, smuggled in by third parties, including correction officers and sold to inmates. Once inmates received the K2-soaked papers, they sold smaller quantities to other inmates at a substantial profit.
Harrell, Ayers, Kennedy and Gillespie were convicted of a separate, years-long scheme to transport large quantities of drugs, including cocaine base, heroin and fentanyl, from New York and New Jersey to Maine, where members and associates of the Bully Gang sold the drugs out of stash houses. The narcotics were transported in vehicles equipped with concealed compartments, also called “traps,” that were professionally installed. Ayers was also convicted of running numerous “stash houses” in Maine, from which his underlings sold drugs on behalf of the conspiracy.
MONEY LAUNDERING
Harrell and Kennedy were convicted of laundering the illicit proceeds from the Rikers drug sales by transferring thousands of dollars each month into CashApp accounts and making wire transfers to co-conspirators through intermediaries. A portion of this money was used to purchase more K2 and bribe correction officers at Rikers.Also, Harrell and Ayers were convicted of laundering the illicit proceeds from the lucrative East Coast drug trafficking scheme. Harrell, Ayers and their co-conspirators purchased high-value assets, including expensive jewelry and vehicles. They also disguised the proceeds of the scheme by having co-conspirators, some of whom had legitimate jobs, use the cash to make ostensibly legitimate purchases that were actually for the benefit of Harrell and Ayers.
BRIBERY
Harrell and Kennedy were convicted of participating in the Rikers Island drug trafficking scheme by bribing correction officers at Rikers. Harrell’s leadership of the gang continued even after his detention at Rikers, where he led a drug trafficking, bribery and money laundering scheme responsible for smuggling drugs into the jail through the use of co-conspirators and the payment of bribes to correction officers.ROBBERY
Gillespie was convicted of robberies on consecutive days in August 2020, in downtown Manhattan. Gillespie and others in the Bully Gang pointed firearms, including a large Mac-10-style firearm, at their victims while demanding their money, jewelry and shopping bags. After the robberies, Gillespie was arrested with some of the same firearms.
* * * * *
The jury was unable to reach a unanimous verdict with respect to several remaining counts of the eighth superseding indictment, which charged Ayers with causing Jackson’s death through the use of a firearm; Gillespie with causing Hoilett’s death through the use of a firearm and illegally possessing, brandishing and discharging a firearm in connection with that death; and Gillespie and Kennedy with causing Hawley’s death through the use of a firearm and illegally possessing, brandishing and discharging a firearm in connection with that death. A mistrial was declared as to those counts. The Office intends to retry the defendants on those counts that the jury was unable to reach a verdict. Those charges are allegations and the defendants are presumed innocent unless and until proven guilty.
Since 2020, 53 members and associates of the Bully Gang have been publicly charged with a variety of crimes in connection with this investigation, and 49 have been convicted. Three defendants are awaiting trial, and one is a fugitive.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section and Public Integrity Section. Assistant United States Attorneys Drew G. Rolle, Lindsey R. Oken, Joy Lurinsky and Victor Zapana are prosecuting the case with the assistance of Lead Legal Administrative Specialist Samantha E. Ward and Paralegal Specialists Emily Moosher and William Daniels, as well as Intelligence Analyst Eungee Hwang and a number of EDNY Criminal Investigators and Special Agents.
The Defendants:
DERRICK AYERS (also known as “Dee” and “Mel”)
Age: 37
Rahway, New JerseyMOELEEK HARRELL (also known as “Moe Money”)
Age: 34
Brooklyn, New YorkFRANKLIN GILLESPIE (also known as “Spazz” and “Frankie Gino”)
Age: 33
Newark, New JerseyANTHONY KENNEDY (also known as “Biggie”)
Age: 38
Queens, New YorkE.D.N.Y. Docket No.: 20-CR-239 (BMC)
Woman Pleads Guilty to COVID-19 Vaccine Card Fraud SchemeRead the Press Release
A New York woman pleaded guilty today to fraudulently destroying over 2,600 COVID-19 vaccines and issuing a corresponding number of fraudulent COVID-19 vaccination record cards.
According to court documents, Kathleen Breault, 66, of Cambridge, a midwife at Sage-Femme Midwifery PLLC (Safe-Femme), an authorized COVID-19 vaccine administration site in Albany, New York, conspired to obstruct the government’s distribution of COVID-19 vaccines by providing COVID-19 vaccination record cards to individuals who were not vaccinated, including to minors who were at the time ineligible to be vaccinated and to Canadian citizens who were not present in the United States when they were purportedly vaccinated. In addition to destroying COVID-19 vaccines and issuing fraudulent vaccination record cards, Breault and her co-conspirators made over 2,600 false entries into a New York State database that tracked COVID-19 vaccine distribution. Breault agreed to pay more than $37,000 in restitution for the destroyed vaccines.
Breault pleaded guilty to conspiring to defraud the United States and its departments and agencies. She is scheduled to be sentenced on Sept. 18 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division; and Assistant Director in Charge James H. Smith III of the FBI New York Field Office made the announcement.
The FBI is investigating the case, with assistance from the New York State Department of Health.
Trial Attorneys Patrick J. Campbell and Hyungjoo Han of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Department of Health and Human Services Office of Inspector General, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Two Men Plead Guilty to Computer Intrusion and Aggravated Identity Theft for Hacking into Federal Law Enforcement Web PortalRead the Press Release
Today, in federal court in Brooklyn, Sagar Steven Singh pled guilty before United States Magistrate Judge Marcia M. Henry to conspiring to commit computer intrusion and aggravated identify theft. On May 30, 2024, Nicholas Ceraolo pled guilty before Judge Henry to the same offenses. Singh and Ceraolo were charged in March 2023.
Breon Peace, United States Attorney for the Eastern District of New York, and Ivan J. Arvelo, Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York, announced the charges.
“The defendants called themselves ‘ViLe,’ and their actions were exactly that,” stated U.S. Attorney Peace. “They hacked into a law enforcement database and had access to sensitive personal information, then threatened to harm a victim’s family and publicly release that information unless the defendants were ultimately paid money. Our Office is relentless in protecting victims from having their sensitive information stolen and used to extort them by cybercriminals.”
Mr. Peace thanked HSI's El Dorado Task Force, the Federal Bureau of Investigation and the New York Police Department for their assistance on the case.
“The defendants, along with their co-conspirators, exploited vulnerabilities within government databases for their own personal gain. These guilty pleas send a strong message to those that would seek illicit access to protected computer systems," said HSI New York Special Agent in Charge Ivan J. Arvelo. "HSI New York's El Dorado Task Force will continue to work with law enforcement partners to uncover evidence until every member of the ViLe group and similar criminal organizations are brought to justice.”
ViLE Overview
Singh and Ceraolo belonged to a group called “ViLE,” the logo of which includes the body of a hanging girl, as depicted below in the group’s official roster:
Members of ViLE sought to collect victims’ personal information, including social security numbers. ViLE then posted that information (or threatened to post it) on a public website administered by a ViLE member – an action known as “doxxing.” Victims could pay to have their information removed from or kept off the website.
Conduct
Singh and Ceraolo unlawfully used a law enforcement officer’s stolen password to access a nonpublic, password-protected online portal (the “Portal”) maintained by a U.S. federal law enforcement agency. The purpose of the Portal was to share intelligence from government databases with state and local law enforcement agencies, and the Portal provided access to detailed, nonpublic records of narcotics and currency seizures, as well as law enforcement intelligence reports.
Singh wrote to a victim (Victim-1) that he would “harm” Victim-1’s family unless Victim-1 gave Singh the credentials for Victim-1’s Instagram accounts. In order to drive home the threat, Singh appended Victim-1’s social security number, driver’s license number, home address and other personal details. Singh told Victim-1 that he had “access to [] databases, which are federal, through [the] portal, i can request information on anyone in the US doesn’t matter who, nobody is safe.” He added: “you’re gonna comply to me if you don’t want anything negative to happen to your parents.” Singh ultimately directed Victim-1 to sell Victim-1’s accounts and give the proceeds to Singh.
After Singh and Ceraolo accessed the Portal, they both acknowledged knowing that their conduct was criminal. Ceraolo wrote to Singh: “were [sic] all gonna get raided one of these days i swear.” Later that day, Singh wrote to a contact that the “portal [] i accessed i was not supposed to be there not one bit.” Singh said he had “jacked into a police officer’s account” and “that portal had some f***ing potent tools.” Singh continued: “it gave me access to gov databases,” followed by the names of five search tools accessible through the Portal.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander Mindlin, Ellen H. Sise and Adam Amir are in charge of the prosecution.
When sentenced, the defendants each face a minimum sentence of two years in prison, and a maximum of seven years.
The Defendants:
Nicholas Ceraolo (also known as “Convict,” “Anon” and “Ominous”)
Age: 26
Queens, New YorkSagar Steven Singh (also known as “Weep”)
Age: 20
Pawtucket, Rhode IslandE.D.N.Y. Docket No. 23-cr-236
New York Woman Pleads Guilty to COVID-19 Vaccine Card Fraud SchemeRead the Press Release
BROOKLYN, NY – Kathleen Breault pleaded guilty today to conspiring to defraud the United States by fraudulently destroying over 2,600 COVID-19 vaccines and issuing a corresponding number of fraudulent COVID-19 vaccination record cards. The proceeding was held before United States District Judge Rachel P. Kovner.
United States Attorney Breon Peace of the Eastern District of New York, Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
According to court documents, Kathleen Breault, a midwife at Sage-Femme Midwifery PLLC (Sage-Femme), an authorized COVID-19 vaccine administration site in Albany, New York, conspired to obstruct the government’s distribution of COVID-19 vaccines by providing COVID-19 vaccination record cards to individuals who were not vaccinated, including to minors who were at the time ineligible to be vaccinated and Canadian citizens who were not present in the United States when they were purportedly vaccinated. In addition to destroying COVID-19 vaccines and issuing fraudulent vaccination record cards, Breault and her co-conspirators made over 2,600 false entries into a New York State database that tracked COVID-19 vaccine distribution. Breault agreed to repay more than $37,000 in restitution for the destroyed vaccines.
Breault pleaded guilty to conspiring to defraud the United States and its departments and agencies. When sentenced, Breault faces a maximum penalty of five years in prison.
The FBI is investigating the case. The New York State Department of Health assisted with the investigation. Trial Attorneys Patrick J. Campbell and Hyungjoo Han of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
The Defendant:
KATHLEEN BREAULT
Age: 66
Cambridge, New YorkE.D.N.Y. Docket No.: 23-CR-158 (RPK)
Resident of China Pleads Guilty to Conspiracy to Send Leading Electric Vehicle Company’s Trade Secrets to an Undercover U.S. AgentRead the Press Release
Today, in federal court in Central Islip, Klaus Pflugbeil, a resident of the People’s Republic of China (the PRC or China) and a Canadian and German national, pleaded guilty to conspiring to send trade secrets that belonged to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil, a former employee of a company later purchased by Victim Company-1, stole trade secrets from his then employer, and later used the trade secrets to build Business-1, marketing his business as a replacement for Victim Company-1’s products. The proceeding was held before United States Magistrate Judge Arlene R. Lindsay. When sentenced, Pflugbeil faces up to 10 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“Today, the defendant is guilty of boldly sending valuable trade secrets, detailed documents and drawings that he stole from a U.S.-based leading manufacturer of battery-powered electric vehicles to an undercover law enforcement agent expertly posing as a businessman on Long Island,” stated United States Attorney Peace. “Today’s guilty plea demonstrates how this Office will swiftly bring to justice those who misappropriate intellectual property belonging to American companies, to safeguard our economy and national security.”
Mr. Peace also thanked the Justice Department’s Computer Crime and Intellectual Property Section for their invaluable assistance on the case.
“Despite Pflugbeil’s agreement to protect what he knew was proprietary, sensitive technology, he chose to abscond with these trade secrets to China, where he sought an unfair and illegal advantage in critical industries such as electric vehicle manufacturing,” stated Assistant Attorney General Olsen. “With his guilty plea, Pflugbeil is now being held accountable for this unlawful conduct that jeopardized our national security.”
Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the “Canadian Manufacturer”). Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium-ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion alkaline battery assembly (the “Battery Assembly Trade Secret”). The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process.
Both Pflugbeil and his co-defendant Shao are former employees of the Canadian Manufacturer. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao subsequently confirmed, among other things, that, “we have all of original assembly drawings by PDF.”
The conspirators took measures to obfuscate that they had stolen documents. For example, Pflugbeil wrote to Shao about a document he created based on a document that Shao had stolen from Victim Company-1, “[it's] in a different format, so it looks very original and not like a copy.”
In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian Manufacturer developed. Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube and LinkedIn.
Pflugbeil purchased ads on Google for Business-1. These ads read, for example, “[Business-1] | Replacing [Canadian Manufacturer] Pumps & Parts | [Canadian Manufacturer] Identical Spare Parts. We manufacture precision metering pumps and fill tubes. | Contact Us for your [Canadian Manufacturer] replacement pumps and parts.” In any given week, this ad was shown tens of thousands of times.
Pflugbeil also repeatedly sent LinkedIn messages that said, “Hello [name], I used to work at [Canadian Manufacturer], and after [Victim Company-1] purchased and closed the company, I am now part of a company providing similar products and services.” Pflugbeil’s LinkedIn profile background, pictured below, read:
On September 11, 2023, undercover FBI agents attended a trade show for the packaging and processing industries (the “Trade Show”) in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.
Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal (the “Proposal”) to an undercover agent (“UC-1”). The Proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.” In reality, the Proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1: at least half a dozen drawings Pflugbeil used in the Proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and the Criminal Section of the Long Island Criminal Division. Assistant United States Attorneys Ellen H. Sise and Samantha Alessi are in charge of the prosecution, along with Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
The Defendant
KLAUS PFLUGBEIL
AGE: 58
Ningbo, ChinaE.D.N.Y. Docket No. 24-CR-238 (JMA)
Resident of China Pleads Guilty to Conspiracy to Send Leading Electric Vehicle Company’s Trade Secrets to Undercover U.S. AgentRead the Press Release
Klaus Pflugbeil, 58, a Canadian and German national and resident of the People’s Republic of China (PRC), pleaded guilty today to conspiring to send trade secrets that belonged to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil, a former employee of a company later purchased by Victim Company-1, stole trade secrets from his then employer and later used the trade secrets to build Business-1, marketing his business as a replacement for Victim Company-1’s products.
“Despite Pflugbeil’s agreement to protect what he knew was proprietary, sensitive technology, he chose to abscond with these trade secrets to China, where he sought an unfair and illegal advantage in critical industries such as electric vehicle manufacturing,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “With his guilty plea, Pflugbeil is now being held accountable for this unlawful conduct that jeopardized our national security.”
“The defendant boldly took what did not belong to him and used stolen trade secrets for his own personal profit knowing those valuable trade secrets were rightfully owned by an American company,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s guilty plea demonstrates how this office will swiftly bring to justice those who misappropriate intellectual property belonging to American companies particularly where the use of the technology poses a national security risk.”
“The defendant knowingly and illegally took trade secrets with no regard to the damage that would be done to the victim or the financial impact it would have on the U.S. economy,” said Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division. “The FBI and our partners will aggressively investigate and hold accountable anyone who seeks to profit by stealing technology from U.S. companies.”
According to court documents, Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the Canadian Manufacturer). Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium-ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion alkaline battery assembly (the Battery Assembly Trade Secret). The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process.
Both Pflugbeil and Shao are former employees of the Canadian Manufacturer. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao subsequently confirmed, among other things that, “we have all of original assembly drawings by PDF.”
The conspirators took measures to obfuscate that they had stolen documents. For example, Pflugbeil wrote to Shao about a document he created based on a document that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”
In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian Manufacturer developed. Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube and LinkedIn.
Pflugbeil purchased ads on Google for Business-1. These ads read, for example, “[Business-1] | Replacing [Canadian Manufacturer] Pumps & Parts | [Canadian Manufacturer] Identical Spare Parts. We manufacture precision metering pumps and fill tubes. | Contact Us for your [Canadian Manufacturer] replacement pumps and parts.” In any given week, this ad was shown tens of thousands of times.
Pflugbeil also repeatedly sent LinkedIn messages that said, “Hello [name], I used to work at [Canadian Manufacturer], and after [Victim Company-1] purchased and closed the company, I am now part of a company providing similar products and services. Pflugbeil’s LinkedIn profile background, pictured below, read:
Pflugbeil’s LinkedIn profile background.On Sept. 11, 2023, undercover FBI agents attended a trade show for the packaging and processing industries in Las Vegas. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.
Subsequently, on or about Nov. 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal to an undercover agent (UC-1). The proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.” In reality, the proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1: at least half a dozen drawings Pflugbeil used in the Proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret.
Pflugbeil pleaded guilty to conspiring to send trade secrets. He is scheduled to be sentenced on Oct. 9 and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case. The Criminal Division’s Computer Crime and Intellectual Property Section provided valuable assistance.
Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section and Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York are prosecuting the case.
This action was coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation-states. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. government to enhance the criminal and administrative enforcement of export control laws.
Four Individuals Charged in Connection with Business Email Compromise Schemes and Related Romance SchemesRead the Press Release
Today, indictments were unsealed in federal court in Brooklyn charging four defendants for their participation in a series of fraudulent business email compromise (BEC) schemes and related romance schemes that resulted in more than $50 million in losses by individuals and small businesses located within the Eastern District of New York and throughout the United States. The defendants Animashaun Adebo, Idowu Ademoroti, Nelson Ojeriakhi and Noguan Marvellous Eboigbe, together with their network of co-conspirators, misappropriated victim funds and laundered them through shell company accounts in the United States and abroad, sometimes using unsuspecting middlemen, including escrow attorneys and other victims, to further obscure the audit trail and disassociate the funds from the frauds.
Adebo was arrested yesterday in Chicago, Illinois. Ademoroti was arrested yesterday at John F. Kennedy International Airport in Queens, New York, and will be arraigned today before United States Magistrate Judge Peggy Kuo in federal court in Brooklyn. Ojeriakhi was arrested previously in Paris, France, and remains in custody pending the resolution of extradition proceedings. Adebo will be arraigned in the Eastern District of New York at a later date. Eboigbe remains at large.
Breon Peace, United States Attorney for the Eastern District of New York, and Patrick J. Freaney, Special Agent-in-Charge, United States Secret Service, New York Field Office (USSS), announced the arrests and charges.
“As alleged, from breaking hearts to breaking into email accounts, no scheme was too depraved for the defendants and their network of criminal associates to steal over $50 million from innocent victims in Brooklyn and throughout the country,” stated United States Attorney Peace. “Business email compromise schemes like these cause devastating financial losses and other harm to victims. The indictments unsealed today charge perpetrators at every step of the schemes – from executing the frauds to laundering and receiving the proceeds. Prosecuting online criminal actors and recovering the victims’ stolen funds is a priority of this Office.”
“Today’s indictment is a cautionary tale for anyone who thinks they can target innocent victims through sophisticated cyber fraud and get away with it,” said USSS Special-Agent-in-Charge Freaney. “Through deception and lies the alleged ringleaders schemed unwitting victims of more than 50 million dollars, leaving a wake of anguish in their path. I am incredibly proud of the investigators and prosecutors who were relentless in bringing accountability to these crimes.”
A BEC scheme is a form of cyber-enabled financial fraud. In a typical BEC scheme, a malicious actor compromises legitimate business email accounts through computer intrusion techniques or social engineering and uses those accounts to cause the unauthorized transfer of funds. Techniques for perpetrating these schemes include identity theft, spoofing of emails and websites and the use of malware. Confidence fraud is another form of cyber-enabled financial fraud. In a typical confidence fraud, a malicious actor befriends and gains the confidence of another individual through online communications and uses that confidence to cause the transfer of funds for unauthorized purposes. A romance scheme is a type of confidence fraud wherein the perpetrator adopts a fictitious online identity to gain a victim’s affection and trust. The perpetrator then uses the illusion of a romantic relationship to cause the transfer of funds for unauthorized purposes.
Between April 2021 and March 2022, the defendants and their co-conspirators allegedly orchestrated a series of fraudulent BEC schemes and related romance schemes and laundered and received proceeds from the fraudulent schemes. As one part of the BEC schemes, victim-individuals involved in real estate transactions received fraudulent emails purporting to be from legitimate parties to those transactions. The emails instructed them to wire funds they believed to be related to the real estate transactions to specified bank accounts. The fraudulent email accounts that contacted the victims closely resembled, but were slightly different from, the email addresses of the legitimate parties to the transaction (a process known as “spoofing”).
As another part of the BEC schemes, employees of victim-companies received fraudulent emails purporting to be from legitimate vendors or other business partners of those companies directing them to transfer funds to specified bank accounts. The employees were also defrauded through email spoofing and received fraudulent emails from accounts that closely resembled, but were slightly different from, the email addresses of the legitimate vendors and business partners.
In each case, after the victims executed the wires in accordance with the fraudulent instructions, the transferred funds were misappropriated from the victims and sent to and through accounts controlled by the defendants and their co-conspirators. As described below, the defendants played varying roles in the schemes.
Animashaun Adebo, also known as “Kazeem” and “Kazeem Animashaun,” was charged with wire fraud conspiracy, money laundering conspiracy, conspiracy to receive stolen funds and receipt of stolen funds. As alleged, Adebo conspired to perpetrate multiple internet-based fraud schemes on victims and directed others to launder the proceeds of those schemes through shell company accounts, through the purchase of luxury watches, and through an illegal money exchange operation run by his co-defendant Ademoroti. Adebo ultimately received fraudulent proceeds in corporate bank accounts located in Nigeria. If convicted, Adebo faces a maximum sentence of 20 years’ imprisonment on each of the wire fraud and money laundering conspiracy charges, five years’ imprisonment on the conspiracy to receive stolen funds charge, and 10 years’ imprisonment on the receipt of stolen funds charge.
Idowu Ademoroti was charged with money laundering conspiracy, operating an illegal money transmitting business, conspiracy to receive stolen funds and receipt of stolen funds. As alleged, Ademoroti laundered and received fraudulent proceeds of the schemes perpetrated by Adebo and others through the operation of an illegal money exchange business in which he facilitated the trading of fraudulent dollar proceeds to individuals overseas in exchange for Nigerian naira. If convicted, Ademoroti faces a maximum sentence of 20 years’ imprisonment on the money laundering conspiracy charge, five years’ imprisonment on the illegal money transmitting business charge, five years’ imprisonment on the conspiracy to receive stolen funds charge, and 10 years’ imprisonment on the receipt of stolen funds charge.
Noguan Marvellous Eboigbe, also known as “Randall Olson,” “Martin Roberto” and “Carlos Eduardo,” was charged with wire fraud, wire fraud conspiracy, money laundering conspiracy, money laundering and engaging in unlawful monetary transactions over $10,000 for facilitating the flow of more than $10 million in fraudulent proceeds from victims to the defendants and their co-conspirators. Using false identities, Eboigbe contacted law firms that provided escrow services and posing as a potential client, told them that he would send them funds for a business transaction, and instructed them to wire those funds to specified accounts. However, the funds received by the attorneys were in fact fraudulent proceeds of the real estate and corporate BEC schemes described above and were sent unwittingly by the victims. If convicted, Eboigbe, who is on the USSS Most Wanted list, faces a maximum sentence of 20 years’ imprisonment on each of the wire fraud conspiracy, wire fraud, money laundering conspiracy and money laundering charges and 10 years’ imprisonment on the unlawful monetary transactions charge.
Nelson Ojeriakhi, also known as “Ojeey Mami” and “Oba Millie,” was charged with wire fraud and wire fraud conspiracy for sending spoof emails to unsuspecting victims in order to misappropriate millions of dollars from them in connection with the schemes described above. The funds were subsequently laundered by the defendants and their co-conspirators. Ojeriakhi was arrested in Paris, France on April 18, 2023. If convicted, Ojeriakhi faces a maximum sentence of 20 years’ imprisonment on each of the wire fraud conspiracy and wire fraud charges.
A fifth co-conspirator, Franziska Von Greve-Dierfeld, was previously charged with money laundering conspiracy for receiving and disbursing fraudulent proceeds from the schemes described above in shell company accounts she created. Von Greve-Dierfeld was arrested in May 2022 and pleaded guilty to charges in connection with her conduct. Von Greve-Dierfeld served time in custody and, following the completion of her sentence, returned to Germany pursuant to a judicial order of removal from the United States.
The U.S. Attorney’s Office for the Eastern District of New York conducts presentations by Assistant U.S. Attorneys about ways to protect yourself and your community against scams, especially those targeting financial exploitation. To request a presentation please email [email protected].
The charges in the indictments are allegations and the defendants are presumed innocent unless and until proven guilty.
Assistant United States Attorneys Andrew D. Reich and Daniel J. Marcus are in charge of the prosecution with the assistance of Paralegal Specialists Liam McNett and Jacob Menz.
The Defendants:
ANIMASHAUN ADEBO (also known as “Kazeem” and “Kazeem Animashaun”)
Age: 39
Chicago, IllinoisIDOWU ADEMOROTI
Age: 31
Milwaukee, Wisconsin; Atlanta, GeorgiaE.D.N.Y. Docket No. 24-CR-239 (PKC)
NOGUAN MARVELLOUS EBOIGBE (also known as “Randall Olson,” “Martin Roberto” and “Carlos Eduardo”)
Age: 44
Lagos, NigeriaE.D.N.Y. Docket No. 24-CR-240 (PKC)
NELSON OJERIAKHI (also known as “Ojeey Mami” and “Oba Millie”)
Age: 31
Lagos, NigeriaE.D.N.Y. Docket No. 23-CR-188 (PKC)
FRANZISKA VON GREVE-DIERFELD
Age: 79
Aachen, GermanyE.D.N.Y. Docket No. 23-CR-033 (BMC)
Brooklyn Woman Pleads Guilty to Conspiring to Traffic Firearms into BrooklynRead the Press Release
Earlier today, in federal court in Brooklyn, Ariana Charles pleaded guilty to trafficking firearms and conspiring to distribute fentanyl and cocaine base. The proceeding was held before United States District Judge William F. Kuntz II. The defendant was charged in January 2024 under the provisions of the Bipartisan Safer Communities Act, the first federal statute specifically designed to target gun trafficking, which Congress and the President enacted in June 2022. When sentenced, Charles faces a maximum sentence of 20 years’ imprisonment for the controlled substance distribution conspiracy and 15 years’ imprisonment for firearms trafficking.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A Tarentino III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA) and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
“This Office has made it a top priority to stop the illicit flow of firearms and drugs into our community and today’s guilty plea is the result of those ongoing efforts,” stated United States Attorney Peace. “Gang members, felons and violent individuals who use deadly weapons to inflict irreparable harm on our community do not come into possession of these instruments of death out of thin air; instead, they rely on traffickers like this defendant, who must be held accountable for their role in the violence that results from the use of these weapons.”
According to the indictment, statements made during the plea proceeding and court documents, Charles personally sold 18 firearms to an undercover law enforcement officer (the “UC”) in residential areas of Brooklyn in broad daylight, including in and around the New York City Housing Authority’s Breukelen Houses, outside other apartment buildings and in shopping center parking lots. The UC told Charles and her co-conspirators that he was a drug dealer who needed guns and was going to resell them. Several guns sold by Charles were purchased in Virginia and Georgia and then transported to New York. Among other weapons, Charles sold a firearm with a defaced serial number and several semi-automatic rifles.
Charles also sold drugs to the UC, including crack cocaine and fentanyl. Some of the fentanyl she sold had been disguised as Oxycodone pills.
Four of Charles’s co-conspirators are awaiting sentencing after pleading guilty to conspiring to traffic firearms into Brooklyn in the first case in New York to publicly charge the gun trafficking provisions of the Bipartisan Safer Communities Act.
The case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Adam Amir, Irisa Chen and James R. Simmons are in charge of the prosecution.
The Defendant:
ARIANA CHARLES
Age: 28
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-8 (WFK)
Brooklyn Man Charged with Firearms Trafficking ConspiracyRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, a four-count indictment was unsealed charging Tony Terry with conspiring to illegally traffic firearms from Georgia to Brooklyn, New York. Terry was arrested this morning and is scheduled to be arraigned this afternoon before United States Magistrate Judge Peggy Kuo.
Breon Peace, United States Attorney for the Eastern District of New York, Bryan Miller, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the arrest and charges.
“As alleged, the defendant brought deadly weapons from Georgia to the streets of East New York, Brooklyn, a community that has suffered terribly from gun violence,” stated United States Attorney Peace. “My Office and our law enforcement partners are working tirelessly to investigate, prosecute and disrupt the flow of illegal guns along the Iron Pipeline, and keep them out of the hands of criminals who have no respect for the law or human life.”
Mr. Peace thanked the United States Attorney’s Office for the Southern District of Georgia for their assistance in the case.
“This indictment underscores the unwavering commitment of the Bureau of Alcohol, Tobacco, Firearms and Explosives to disrupt the flow of illegal guns into our streets,” stated ATF Special Agent-in-Charge Miller. “Those who purchase and traffic guns to sell to those who cannot legally obtain them are a threat to our community. Disrupting firearms trafficking schemes like this is a top priority for us. The ATF NY/ NYPD’s Joint Firearms Task Force Joint is dedicated to ensuring the safety of our communities. We extend our gratitude to our colleagues in ATF Atlanta’s Savannah Field Office & Eastern District of New York for their assistance. For those engaging in gunrunning conspiracies in NY, justice will be served in court.”“This indictment underscores the NYPD’s commitment to eradicating the illicit firearms supply chain that continues to threaten our communities,” stated NYPD Commissioner Caban. “I commend the diligent efforts of our NYPD investigators, especially our brave undercover officer in this case, along with our colleagues at the ATF and the office of the U.S. Attorney for the Eastern District for their critical role in removing these guns—and those who peddle them—from New York City’s streets.”
As set forth in the indictment and other filings, on November 22, 2022 and November 28, 2022, Terry traveled to Savannah, Georgia where members of his family served as straw purchasers for multiple firearms from licensed firearm dealers. Terry then returned to Brooklyn where a co-conspirator sold two of the firearms. On December 6, 2022, Terry sold a Taurus 9mm G2e handgun to an undercover NYPD officer in East New York, Brooklyn.
The straw purchasers, Jose Marrero and Jacqueline Christmas, were indicted and prosecuted by the United States Attorneys’ Office for the Southern District of Georgia for an additional 15 firearms they purchased on behalf of the defendant. Marrero pleaded guilty and was sentenced in May 2024 to 18 months in prison. Christmas pleaded guilty in March 2024 and is awaiting sentencing.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Assistant United States Attorney Raffaela S. Belizaire is in charge of the prosecution.
The Defendant:
TONY TERRY
Age: 35
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-244 (CBA)
Illinois Man Pleads Guilty to Securities Fraud Conspiracy in Multi-Million Dollar Ponzi SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Alan John Hanke, the sole member of IOLO Capital (IOLO), pleaded guilty to conspiracy to commit securities fraud for his role in misappropriating more than $8 million as part of a Ponzi scheme. As part of his plea, Hanke also stipulated that he filed a bankruptcy petition and documents in a bankruptcy proceeding to conceal the conspiracy. Hanke was indicted in February 2024. The proceeding was held before United States District Judge Ramon E. Reyes, Jr. When sentenced, Hanke faces up to five years in prison.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation (“FBI”), New York Field Office, and David Walker, Special Agent in Charge, FBI, Tampa Field Office, announced the guilty plea.
“Hanke admitted today that he conspired to defraud clients of millions of dollars of their investments, and then tried to cover up his crime by declaring bankruptcy which was an intentional abuse of the U.S. Bankruptcy Court,” stated United States Attorney Peace. “Today’s guilty plea reaffirms my Office’s efforts to root out white-collar crime where we find it and ensure integrity in the financial markets and the court system.”
As alleged in the indictment, between November 2018 and August 2021, Hanke persuaded numerous investors, often in meetings in New York City, to invest in IOLO or related Hanke-run companies. Hanke promised investors high returns within short periods of time by investing in, among other things, “standby letters of credit,” “medium term notes,” and “high yield bonds.” He also assured investors that their investments would be insured against losses. As alleged, however, nearly all the money that the victims invested with Hanke was not recovered. The bulk of the victims’ money went to Hanke’s personal expenses, including cruises, airfare, hotels, gambling expenses, and a luxury car. Hanke also paid co-conspirators and other investors with money that he wrongfully obtained during the scheme. Hanke filed a bankruptcy petition in June 2021 in which he sought to discharge the debts that he owed to his victims. In the bankruptcy petition, Hanke disclosed that he received monthly Social Security disability payments but did not disclose the millions of dollars of income he received from his victims. Hanke also did not disclose the proceeds from the sale of an airplane, or that he used the proceeds for personal expenses, including gambling and repairs to a close relative’s home, as well as $180,000 that was withdrawn in cash.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Nicholas J. Moscow and Matthew Skurnik are in charge of the prosecution, with assistance from Paralegal Specialist Madison Bates.
The Defendant:
ALAN JOHN HANKE
Age: 50
Crystal Lake, IllinoisE.D.N.Y. Docket No. 24-CR-27 (RER)
Fugitive High-Ranking MS-13 Leader Arrested on Terrorism ChargesRead the Press Release
CENTRAL ISLIP, NY - Yesterday afternoon, in federal court in Houston, Texas, Cesar Humberto Lopez-Larios, also known as “Grenas de Stoners” and “Oso de Stoners,” a high-ranking leader of La Mara Salvatrucha, also known as “MS-13,” was ordered to be transferred in custody to the Eastern District of New York where he, together with 13 other high-ranking MS-13 leaders, are charged with directing the transnational criminal organization’s criminal activities in the United States, El Salvador, Mexico, and elsewhere over the past two decades. Lopez-Larios, who had been a fugitive for more than three years, was arrested by the Federal Bureau of Investigation (FBI) and Homeland Security Investigations (HSI) on June 9, 2024 when he arrived at George Bush Intercontinental Airport in Houston, Texas. Specifically, Lopez-Larios is charged with conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism, and narco-terrorism conspiracy. Lopez-Larios will be arraigned in the Eastern District of New York at a later date.
Breon Peace, United States Attorney for the Eastern District of New York (EDNY), Krysti Hawkins, Acting Assistant Director-in-Charge of the FBI’s Los Angeles Field Office, and Ivan J. Arvelo, Special Agent-in-Charge, HSI’s New York Field Office, announced Lopez-Larios’s arrest.
“The arrest of Lopez-Larios, who is one of the most senior leaders of MS-13 in the world, is a significant achievement for law enforcement and another crucial step in the dismantling of this international criminal enterprise,” stated United States Attorney Peace. “The defendant will soon face a reckoning in a federal courtroom on Long Island where, acting on his orders, MS-13 has spilled so much blood and turned communities into war zones.”
Mr. Peace expressed his thanks to the FBI’s Los Angeles Field Office and Criminal Investigative Division’s Safe Streets Gang Unit, and HSI’s National Gangs and Violent Crime Unit and New York Field Office for spearheading the MS-13 leadership investigations. Additionally, he thanked the FBI and HSI’s Houston Field Offices, and the United States Customs and Border Protection Officers at the George Bush Intercontinental Airport in Houston for the critical support provided in connection with the arrest, and the U.S. Attorney’s Office and the United States Marshals Service for the Southern District of Texas for coordinating the defendant’s initial appearance in Houston. Mr. Peace also thanked the numerous Department of Justice components that contributed to this indictment, including the National Security Division’s Counterterrorism Section and the Organized Crime Drug Enforcement Task Forces Executive Office.
“Now that Mr. Lopez-Larios is behind bars, he's no longer in his alleged position of power directing a reign of terror, nor enriching MS-13 and their cartel associates,” stated FBI Acting Assistant Director-in-Charge Hawkins. “The FBI will continue to collaborate with our partners to seek justice and to find the remaining fugitives of this vicious transnational criminal enterprise.”
“Cesar Humberto Lopez-Larios’ arrest represents yet another significant leader of MS-13 to be brought to justice this year. Despite his attempts to evade authorities, Lopez-Larios must now answer to criminal charges stemming from his alleged management of one of the most malicious transnational criminal organizations in existence today,” stated HSI New York Special Agent-in-Charge Arvelo. “Although Lopez-Larios, also known as ‘Grenas de Stoners’ to his followers, is now in custody, we recognize there is more to be done. HSI New York, working with our law enforcement partners, will not cease in our efforts to hold MS-13 accountable for their unmitigated violence in communities across New York and elsewhere.”
As set forth in the indictment and related court filings, Lopez-Larios and his co-defendants are part of MS-13’s command and control structure, consisting of the Ranfla Nacional, Ranfla en Las Calles, and Ranfla en Los Penales. They play significant leadership roles in the organization’s operations in El Salvador, Mexico, the United States, and throughout the world. In total, 27 of the highest-ranking leaders of MS-13 have been charged in the Eastern District of New York in this indictment and the related indictment of United States v. Arevalo-Chavez, et al.
As further alleged, in approximately 2002, Lopez-Larios, his co-defendants and other MS-13 leaders began establishing a highly organized, hierarchical command and control structure as a means to effectuate their decisions and enforce their orders, even while in prison. They directed acts of violence and murder in El Salvador, the United States and elsewhere, established military-style training camps for MS-13 members and obtained military weapons such as rifles, handguns, grenades, improvised explosive devices (IEDs) and rocket launchers. Further, beginning in approximately 2012, Lopez-Larios and other members of the Ranfla Nacional negotiated with officials from the government of El Salvador (GOES) to obtain benefits and concessions from the government. In order to extort those benefits and concessions, MS-13 engaged in public displays of violence to threaten and intimidate civilian populations, target GOES law enforcement and military officials, and manipulate the electoral process in El Salvador.
Additionally, as alleged, the Ranfla Nacional directed the expansion of MS-13 activities around the world, including the United States and Mexico, where Lopez-Larios and other high-ranking leaders were sent to organize operations, make connections to obtain narcotics and firearms from Mexican drug cartels such as the Zetas, Gulf Cartel, Cártel de Jalisco Nueva Generación (CJNG) and Sinaloa Cartel, and engage in human trafficking and smuggling. The Ranfla Nacional also directed MS-13’s large membership in the United States to engage in criminal activities, such as drug trafficking and extortion to raise money to support MS-13’s terrorist activities in El Salvador and elsewhere. Lopez-Larios, who has been an MS-13 leader for approximately two decades in El Salvador, Mexico and the United States, was an original member of MS-13's Twleve Apostles of the Devil and later became a member of the Ranfla Nacional.
Finally, the Ranfla Nacional and MS-13’s transnational leadership structure is alleged to have directed members in the United States to commit acts of violence to further its goals and implement rules enabling MS-13 to entrench itself in parts of the United States, including within the Eastern District of New York where, under the defendants’ leadership and rules, MS-13 has committed murders, attempted murders, assaults, kidnappings, drug trafficking, extortion of individuals and businesses, and obstruction of justice, and has sent dues and the proceeds of criminal activity by wire transfer to MS-13 leaders in El Salvador. For example, this Office's Long Island Criminal Division has prosecuted hundreds of MS-13 leaders, members and associates for carrying out more than 70 murders in the Eastern District of New York between 2009 and the present.
Two related defendants from the Arevalo-Chavez indictment, Jorge Alexander De La Cruz, also known as “Cruger de Peatonales,” and Francisco Javier Roman-Bardales, also known as “Veterano de Tribus,” remain at large. Members of the public with information concerning their whereabouts are strongly encouraged to contact the FBI’s toll-free MS-13 tip line, 1-866-STP-MS13 (1-866-787-6713), or HSI’s tip line at (866) 347-2423 or https://www.ice.gov/webform/ice-tip-form. Together, FBI and HSI have offered a $20,000 reward for information leading to the arrest and conviction of the fugitives.
These charges are allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, Lopez-Larios faces a maximum sentence of life in prison.
This case was brought by Joint Task Force Vulcan (JTFV), which was created to combat MS-13, led by Assistant United States Attorney John J. Durham of the EDNY, and comprised of U.S. Attorney’s Offices across the country, including the District of New Jersey; the Northern District of Ohio; the District of Utah; the District of Massachusetts; the Eastern District of Texas; the Southern District of New York; the Southern District of Florida; the Eastern District of Virginia; the Southern District of California; the District of Nevada; the District of Alaska; and the District of Columbia, as well as the Department of Justice’s National Security Division and the Criminal Division. Additionally, the FBI; HSI; the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the USMS; the U.S. Bureau of Prisons; and the United States Agency for International Development, Office of Inspector General have been essential law enforcement partners and spearheaded JTFV’s investigations.
The government’s case is being prosecuted by Assistant U.S. Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell of the Criminal Section of the Office’s Long Island Division with the assistance of Automated Litigation Support Specialist Michael Compitello.
Newly Arrested Defendant in U.S. Custody:
CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age: 45Previously Arrested Defendant in U.S. Custody:
ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age: 48FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age: 48Fugitive Defendants:
BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age: 45EFRAIN CORTEZ (“Tigre de Park View” and “Viejo Tigre de Park View”)
Age: 54RICARDO ALBERTO DIAZ (“Rata de Leewards” and “Mousey de Leewards”)
Age: 51EDUARDO ERAZO-NOLASCO (“Colocho de Western” and “Mustage de Western”)
Age: 51EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Age: 49JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Age: 49LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Age: 44JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” and “Viejo Pavas de 7-11”)
Age: 59HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age: 51SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age: 46ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age: 46E.D.N.Y. Docket No.: 20-CR-577 (JMA)
Eight Defendants Charged with Multi-Million Dollar Health Care Fraud SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, an indictment was unsealed charging Noman Ahmed, Adnan Arshad, Rehman Diwan, Jessica Hendrickson, Jose Marte, Mohammed Saleem, Faisal Shamsi and Waqas Shamsi with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and pay health care kickbacks, paying health care kickbacks, and money laundering. The defendants allegedly offered and paid health care kickbacks and submitted fraudulent claims to Medicaid for ambulette services to medical appointments that were not performed, or the costs were artificially inflated. The defendants were arrested today and all but Marte will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay. Marte will be arraigned tomorrow.
Breon Peace, United States Attorney for the Eastern District of New York, Naomi Gruchacz, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York, (IRS-CI), and Raymond A. Tierney, Suffolk County District Attorney, announced the arrests and charges.
“As alleged, the defendants abused the trust placed in them by Medicaid by falsely and brazenly treating this essential program like a piggy bank for their own enrichment,” stated United States Attorney Peace. “Their transportation scam ended today with law enforcement providing the defendants a free ride to the courthouse to face serious criminal charges. My Office will prosecute health care providers who steal from taxpayer-funded programs intended to help those in need.”
Mr. Peace also thanked the Office of the New York State Comptroller and the New York Attorney General’s Office, Medicaid Fraud Control Unit for their assistance in the case.
“HHS-OIG will continue to work with our law enforcement partners to ensure that individuals are held accountable if they attempt to exploit federal health care programs for their own greed,” stated HHS-OIG Special Agent-in-Charge Gruchacz. “It is alleged in this case that the defendants offered illegal kickbacks and billed Medicaid improperly for millions of dollars, which can affect the availability of funds and services for others and drive up the cost of taxpayer-funded health care.”
“Healthcare fraud is not a victimless crime. The loss created by criminals bilking the system generates a gap in funding that gets filled by law-abiding citizens paying more than their fair share. This team of alleged criminals are charged with a multimillion dollar fraud involving health care kickbacks and false claims. While legitimate claimants continue to work through the Medicaid system, some of the alleged fraudsters purchased luxury vehicles and million-dollar homes. This is unacceptable, and each offender will now face justice for their actions,” stated IRS-CI Special Agent-in-Charge Fattorusso.
“My Office remains committed to stand and work with our federal partners in combatting crime and keeping our citizens safe," stated Suffolk County District Attorney Tierney. “Those who seek to illegally profit off the backs of hardworking U.S. taxpayers will be found out and brought to justice. The defrauding of our citizens will not be tolerated.”
As set forth in court filings, the defendants owned, operated and were employees of several transportation companies. From approximately December 2020 to the present, the defendants paid illegal health care kickbacks to Medicaid beneficiaries so that those beneficiaries would order medical transportation services specifically from the defendants, which generally included transportation to addiction treatment centers for the beneficiaries’ purportedly necessary methadone treatment.
The defendants generally did not provide the medical transportation services ordered by the Medicaid beneficiaries. Yet in total, the defendants and their transportation companies – 668 MTK Taxi LLC, All-Star Taxi LLC, Apollo Transportation, Sunrise Taxi LLC, and Transportation Solution NY Corp. d/b/a A1 Transport – fraudulently billed Medicaid millions of dollars for these services throughout the course of the scheme. At least two claims were submitted to Medicaid for individuals who were deceased, and some claims were submitted for individuals who were hospitalized or incarcerated.
The defendants also submitted artificially inflated claims to Medicaid. Although there were numerous addiction treatment centers on Long Island the beneficiaries could have utilized, the defendants instructed them to order rides to addiction treatment centers in New York City and to list false addresses so they could obtain higher reimbursement rates from Medicaid for longer rides. The transportation companies owned or operated by the defendants billed Medicaid over $16 million for trips to just three addiction treatment centers in New York City.
The defendants Adnan Arshad and Mohammed Saleem used the illicit proceeds of the schemes to purchase approximately 15 additional transport vehicles for use in the scheme and to purchase multimillion-dollar homes and luxury vehicles.
The government’s case is being prosecuted by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorney Adam Toporovsky and Special Assistant United States Attorney Jennifer Milito, of the Suffolk County District Attorney’s Office, are in charge of the prosecution with the assistance of Paralegal Specialist Adam Bernard. Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendants:
NOMAN AHMED
Age: 37
Port Jefferson Station, New YorkADNAN ARSHAD (also known as “Eddie”)
Age: 45
Mount Sinai, New YorkREHMAN DIWAN
Age: 24
Hicksville, New YorkJESSICA HENDRICKSON
Age: 36
Patchogue, New YorkJOSE MARTE
Age: 33
Bronx, New YorkMOHAMMED SALEEM
Age: 38
Dix Hills, New YorkFAISAL SHAMSI (also known as “Jimmy”)
Age: 49
Massapequa, New YorkWAQAS SHAMSI (also known as “Ricky”)
Age: 44
Massapequa, New YorkE.D.N.Y. Docket No. 24-CR-231 (JMA)
Queens and Brooklyn-Based Eye Doctor Settles Health Care Fraud Claims for More Than $2.4 MillionRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, Letitia James, New York State Attorney General, and Naomi Gruchacz, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced today a settlement agreement with a New York-based ophthalmologist, his ophthalmology practice and related entities which allegedly provided ophthalmological health care services to Brooklyn and Queens residents, many of whom were elderly or non-native English speakers. The settlement agreement requires the defendants to pay more than $2.4 million to resolve claims that they billed or caused to be billed false claims for payment to Medicare and Medicaid for certain procedures, tests, and other ophthalmological services that were either unnecessary or could not have been performed because the ophthalmologist was not in his office. Under the terms of the agreement, these providers, including Sheldon Rabin, Sheldon Rabin, M.D., Sheldon Rabin, M.D., P.C. d/b/a New York Eye Care, will pay $2,426,144.93 to the United States to resolve claims under the False Claims Act. The defendants have also separately agreed to pay $73,855.07 to New York State to resolve claims under New York State’s False Claims Act, for a total payment of $2.5 million.
“As alleged, the defendants took advantage of our district's older residents and other vulnerable individuals in defrauding the Medicare and Medicaid programs for their own personal gain,” stated U.S. Attorney Peace. “As this settlement makes clear, our Office will protect the integrity of government health care programs and pursue providers who enrich themselves through fraud.”
Mr. Peace also thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General for their assistance with the investigation.
“Doctors who exploit their patients undermine the health care system that all New Yorkers rely on,” stated New York Attorney General James. “Dr. Rabin and his practice unjustly enriched themselves with taxpayer funds by taking advantage of their elderly and vulnerable patients, and today they are being held accountable. I thank U.S. Attorney Peace and our partners in this investigation for bringing this case to ensure New Yorkers get the high-quality care they deserve.”
“The Medicare and Medicaid fraud claims in this case involved services that were not medically necessary, which always raises a concern about potential patient harm,” stated HHS-OIG Special Agent-in-Charge Gruchacz. “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”
As alleged by the Government, from 2013 through 2016, defendants improperly submitted claims to Medicare and Medicaid for treatments that were unnecessary by manipulating patient test readings to create an appearance of a need for certain eye care services, when in fact, the patients’ test readings indicated no such need. Further, during this same time frame, the government alleged instances of services having been billed, but never actually rendered by Dr. Rabin, because he was out of the office or out of the country when the services were purportedly rendered.
The settlement includes the resolution of two civil actions brought under the qui tam or whistleblower provisions of the False Claims Act. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. As alleged in the qui tam actions, the defendants provided ophthalmological health care services to Brooklyn and Queens residents, many of whom were elderly or non-native English speakers.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The government’s case was handled by Assistant United States Attorney Artemis Lekakis of the Office’s Civil Division.
E.D.N.Y. Docket Nos. 13-CV-1930 (HG) and 15-CV-6356 (HG)Leader of Brooklyn-Based Ninedee Gang Convicted of Racketeering and the Murder of a Former Government WitnessRead the Press Release
A federal jury in Brooklyn today returned a guilty verdict against Maliek Miller, a leader of the Ninedee Gang, a violent criminal enterprise operating out of the Louis H. Pink Houses in East New York, on all counts of a second superseding indictment charging him with racketeering, conspiracy to commit murder in-aid-of racketeering, murder in-aid-of racketeering, unlawful use and possession of firearms, causing death through the use of firearms, being a felon in possession of ammunition and conspiracy to distribute and possess with intent to distribute marijuana. The verdict followed a four-week trial before United States District Judge LaShann DeArcy Hall. When sentenced, Miller faces a mandatory term of life in prison.
Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the verdict.
“Today’s verdict is momentous because it holds Miller accountable for orchestrating a cowardly plot to kill a woman who bravely stood up to his Ninedee Gang, and it upholds the rule of law for the residents of the Pink Houses who just want to go about their lives and raise their children without the plague of violence and danger inflicted on them by ruthless criminals like the defendant,” stated United States Attorney Peace. “The verdict ensures that Miller will spend the rest of his life in prison, which I hope provides some measure of solace to the family of Shatavia Walls.”
“The perceived need for revenge never justifies murder. In 2020, Maliek Miller ordered the heinous killing of Shatavia Walls - who testified against Miller's gang - to send a message to residents in the Louis H. Pink Houses not to cooperate with law enforcement. There is no place for such egregious violence in our city, especially when used in retaliation to incite fear. May today's conviction offer some closure to Shatavia Walls's family and serve as a deterrent to gangs who use violent tactics in furtherance of their criminal activity,” stated FBI Assistant Director-in-Charge Smith.
“Today’s guilty verdict is another step toward eradicating gang violence in New York City,” stated NYPD Commissioner Caban. “The NYPD will continue to partner with the FBI and everyone at the office of the U.S. Attorney for the Eastern District to present solid cases for prosecution, to secure meaningful federal prison sentences, and to deliver justice for victims, their families, and our communities.”
As proven at trial, Ninedee Gang members are affiliated with the “5” and “6” Pink Houses apartment buildings and have engaged in ongoing gang-related violence within and outside of the New York City Housing Authority complex. The Ninedee Gang’s main rivalry, dating back over a decade, is against the “7” and “8” buildings in the Pink Houses. Ninedee Gang protects its turf through violence, makes money by selling drugs and committing fraud and seeks to silence anyone who they perceive to be working with law enforcement.
The murder of former government witness, Shatavia Walls, was coordinated by Miller and other Ninedee Gang members as part of that ongoing gang rivalry. Specifically, the victim was targeted by the Ninedee Gang because of her affiliation with the “7” and “8” buildings associated with the Makk Baller Brims gang and because she had previously testified at a federal criminal trial against a Ninedee associate in the Eastern District of New York. Prior to her testimony, fliers had been posted around the Pink Houses stating, “Shatavia Been a Rat And She Still Ratting.”
On July 4, 2020, Ms. Walls and others were involved in a physical altercation with members of Ninedee, including Miller’s cousin, for lighting fireworks around young children. Miller went to the scene of the altercation, called Ms. Walls a “snitch,” fought with Ms. Walls and fired a shot in the air. Following the altercation, Miller agreed with other Ninedee Gang members to kill Ms. Walls, and set a plan to do so in motion.
On July 7, 2020, Walls was spotted by a Ninedee Gang hit team, who chased her down a path at the Pink Houses. She was shot numerous times by Ninedee Gang members Quintin Green and Joe Santana. Ninedee Gang member Shakur Bey destroyed the clothing that Green and Santana wore during the shooting by throwing the items down an incinerator chute. Ninedee Gang member Kevin Wint, who was not present at the murder, rented a hotel room at a Best Western Hotel near John F. Kennedy International Airport to provide a place where the shooters could hide out overnight. Ms. Walls died of her injuries ten days later.
Green, Santana, and Bey have pleaded guilty to their roles in the murder and are currently awaiting sentencing. Wint pleaded guilty in March 2023 and was later sentenced to 110 months’ imprisonment.
The government’s case is being handled by Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Emily J. Dean, Margaret Schierberl and Irisa Chen are in charge of the prosecution with the assistance of Paralegal Specialist Elizabeth Reed and with the assistance of Intelligence Analyst Eungee Hwang and Intelligence Specialist Ashley Hinkson.
The Defendant:
MALIEK MILLER
Age: 30
Brooklyn, New YorkDefendants Who Previously Pleaded Guilty:
SHAKUR BEY (also known as “Speedy)
Age: 27
Brooklyn, New YorkQUINTIN GREEN (also known as “Wild Child”)
Age: 23
Brooklyn, New YorkJOE SANTANA (also known as “Baby Joe”)
Age: 20
Brooklyn, New YorkKEVIN WINT (also known as “Kev G”)
Age: 30
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-331 (LDH)
Brooklyn Man Arrested for Illegal Sports Betting Scheme Involving National Basketball Association PlayerRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging Long Phi Pham, also known as “Bruce,” with conspiring with others to defraud a sports betting company (Betting Company 1) by placing “under prop” bets on a National Basketball Association (NBA) player (Player 1) in NBA games on January 26, 2024 and on March 20, 2024. Pham was arrested on Monday and made his initial appearance this afternoon before United States Magistrate Judge Cheryl L. Pollak. Pham was ordered detained pending trial. Three co-conspirators charged in the scheme remain at large.
Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“Whether on the court or in the casino, every point matters. As alleged, the defendant and his co-conspirators, as well as an NBA player, participated in a brazen, illegal betting scheme that had a corrupting influence on two games and numerous bets,” stated United States Attorney Peace. “This prosecution serves as a warning that fraud and dishonesty in professional sports will not be tolerated and those who engage in this flagrant flouting of the law will be prosecuted.”
"Long Phi Pham allegedly participated in a conspiracy to defraud an online sports betting website, encouraging an NBA player to unnecessarily withdraw himself from select games in an attempt to profit from personal bets made with this advanced, insider knowledge. These alleged actions violated the prohibition of using non-public information - eliminating the risk associated with the unpredictable nature of the betting world – an unfair advantage not afforded to other bettors. There is no 'over/under' when intentionally circumventing rules for financial gain, the FBI remains vigilant in its investigations of those who engage in such fraudulent conspiracies," stated FBI Assistant Director-in-Charge Smith.
The Betting Scheme
The NBA is a professional basketball league in North America. The NBA maintains a code of conduct for all of its players which prohibits wagering in connection with NBA games.
As alleged in the complaint, Pham and his co-conspirators placed “under prop” bets on Player 1’s performance in two NBA games, knowing in advance that Player 1 planned to withdraw from those games for purported health reasons. A “prop,” or proposition bet is a wager placed on a player’s performance, rather than the outcome of the game. For example, a betting platform could offer users a wager that a player would score more (referred to as betting the “over”) or fewer (betting the “under”) points than a certain number of points designated by the betting platform for a given game.
The January 26, 2024 Game
In early 2024, Player 1 had amassed large gambling debts to certain of the co-conspirators. Player 1 was encouraged to clear those debts by withdrawing from certain games prematurely to ensure that under prop bets on Player 1’s performance were successful. On January 22, 2024, Player 1 sustained a purported eye injury during a game. He was evaluated and diagnosed with a corneal abrasion, but was not placed on the NBA injury list. Shortly before the game on January 26, 2024 (the January 26 Game) Player 1 told the defendant that he would be removing himself early from the game, claiming that he was injured. Player 1 entered the January 26 Game midway through the first quarter. After playing just four minutes and recording zero points, three rebounds and one assist, Player 1 removed himself from the game after he complained to team officials that he had reaggravated the eye injury.
Player 1’s performance in several statistical categories during the January 26 Game was under the designated amounts set by Betting Company 1 in its prop bets related to Player 1. Thus, several bettors, including co-conspirators, who wagered the “under” on prop bets related to Player 1’s performance for the January 26 Game won those bets.
For example, a relative of a co-conspirator placed a $10,000 parlay bet through Betting Company 1 on the “under” for Player 1’s three pointers, assists and steals. As a result of Player 1 removing himself from the January 26 game, the bet was successful and the relative won $85,000 (netting a profit of $75,000). Additionally, a co-conspirator placed a $7,000 parlay bet through Betting Company 1 on the “under” for Player 1’s three pointers, points, assists and rebounds. As a result of Player 1 removing himself from the January 26 Game, the bet was successful and the co-conspirator won $40,250 (netting a profit of $33,250).The March 20, 2024 Game
Prior to a game on March 20, 2024 (the March 20 Game), Pham and his co-conspirators discussed in a Telegram group chat that Player 1 would be removing himself early from the game, claiming that he felt ill. They agreed to share the profits for money won on successful under bets placed on Player 1, and that Pham would receive approximately 24% of the profits. On March 20, 2024, Pham and his co-conspirators met at a casino in Atlantic City, New Jersey, and placed several bets on Player 1. After playing just three minutes and recording zero points, three rebounds and zero assists, Player 1 removed himself from the March 20 Game, complaining he felt ill. Several bettors, including the co-conspirators, who wagered the under on prop bets related to Player 1’s performance won those bets. In total, the defendant and his co-conspirators netted over $1 million in profits.
On April 4, 2024, in a group chat between Player 1 and the conspirators, Player 1 wrote to the group that they “might just get hit w a rico,” referring to a racketeering charge, and asked if the group chat participants had “delete[d] all the stuff” from their personal cell phones.The charge in the complaint is based on allegations and the defendant is presumed innocent unless and until proven guilty. If convicted of wire fraud, the defendant faces up to 20 years in prison.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and General Crimes Sections. Assistant United States Attorneys Kaitlin Farrell, Benjamin L. Weintraub and David Berman are in charge of the prosecution.
The Defendant:
LONG PHI PHAM (also known as “Bruce”)
Age: 38
Brooklyn, New YorkE.D.N.Y. Docket No.: 24-MJ-404
Brooklyn Man Charged with Gunpoint Robbery of Postal WorkerRead the Press Release
Earlier today, a ten-count indictment was unsealed charging the defendant Alfonso Forney with robbery of a postal worker, a related firearms offense, mail theft related offenses, wire fraud, bank fraud, access device fraud and aggravated identity theft. The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge Joseph A. Marutollo at the federal courthouse in Brooklyn.
Breon Peace, United States Attorney for the Eastern District of New York and Daniel Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS) announced the charges.
“The safety of our mail carriers is essential to assuring the unobstructed flow of goods, checks and information through the United States Postal Service,” stated United States Attorney Breon Peace. “The defendant’s pattern of violent behavior endeavored to turn this vital system into his own personal pipeline for theft and fraud.”
USPIS Inspector-in-Charge Daniel B. Brubaker said, “Our highest priority as postal inspectors is the safety of our employees, especially our letter carriers who are out on the streets every day delivering for the American public. They deserve to be protected from violent criminals who prey on these hardworking public servants that serve our communities. Today’s arrest of this alleged armed robber and mail thief is proof of this fact: postal inspectors working alongside our law enforcement partners in the NYPD, and the U.S. Attorney’s Office, Eastern District of New York, will relentlessly pursue violent criminals wherever they lurk. No matter how long it takes, no matter where they hide, we will find them and bring them to justice for their alleged crimes.”
As alleged in the indictment and other court papers, the defendant engaged in both a robbery and mail theft scheme as well as an identity theft scheme.
With respect to the robbery and mail theft scheme, between January 2023 and December 2023, the defendant and others committed gunpoint robberies of United States Postal Service mail carriers to obtain arrow keys, which are universal keys that allow mail carriers to access various postal boxes within a certain geographic area. The defendant and others used the keys to steal mail, including checks from the mail, which were subsequently deposited into the defendant’s bank accounts or otherwise cashed.
With respect to the identity theft scheme, between January 2024 and March 2024, the defendant misrepresented himself as another individual (the “Victim”) to fraudulently gain access to the Victim’s bank accounts. He did so by changing the address on the Victim’s driver’s license to his own address, and then ordering a duplicate of that driver’s license to his residence. After gaining access to the Victim’s bank accounts, the defendant withdrew at least $245,000 and deposited a portion of the funds into his own bank accounts. The defendant also used the Victim’s identity to obtain an automobile loan for approximately $25,000, which the defendant used to purchase a vehicle in the Victim’s name.
The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 39 years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Sean M. Sherman is in charge of the prosecution, with the assistance of Paralegal Specialist Stephanie Heyward.
The Defendant:
ALFONSO FORNEY
Age: 45
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-220 (KAM)
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Gangster Disciple Leader Sentenced to 35 Years in Prison for Three Shootings in 2020 and Related Firearms OffensesRead the Press Release
Earlier today, in federal court in Brooklyn, Jean Fremont, also known as “Juno” and “Bigga Twirl,” was sentenced by United States District Judge William F. Kuntz II to 35 years in prison for his participation in three shootings occurring on November 7 and 9, 2020, committed by members and associates of the No Love City (NLC) gang, a subset of the Flatbush-based Folk Nation Gangster Disciples gang (GD). Fremont was convicted by a jury in November 2022 on eight counts of a superseding indictment charging him with conspiracy to murder rival gang members in-aid-of racketeering, two counts of attempted murder in-aid-of racketeering, two counts of assault in-aid-of racketeering, one count of attempted assault in-aid-of racketeering and two counts of discharging a firearm during a crime of violence in connection with multiple shootings in Brooklyn in November 2020.
Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.
“Fremont will spend decades in prison for attempting to murder individuals for the sole purpose of defending his gang’s reputation,” stated United States Attorney Peace. “Incarcerating Fremont and his co-defendants for a long period of time for their ruthless acts of violence and complete disregard for human life will serve to protect the community while sending a message of deterrence to others who foolishly seek status by choosing to join violent gangs.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office and the New York City Police Department for their assistance in the case.
As proven at trial, Fremont and his co-defendants are all members or associates of NLC. Fremont was also a leader of NLC, having served on its five-member “Steering Committee.” The November 2020 shootings, in which several individuals were injured, were committed on behalf of GD in retaliation for the theft of a gold chain and pendant from Fremont by rival gang members following the filming of a music video in Brooklyn. On November 7, 2020, a chain with a pendant featuring the letters “SPMB” that was closely associated with NLC’s leader was stolen from the defendant by gang rivals. In response, members of NLC retaliated by engaging in a series of shootings in rival gang territory. In the resulting violence, three victims were shot and survived their wounds.
Seven other members and associates of GD that were charged with Fremont have been convicted of crimes including conspiracy to commit murder, attempted murder, assault and firearms-related offenses for their conduct related to the November 2020 shootings. Lorenzo Bailey was sentenced to 34 years’ imprisonment; Quincy Battice was sentenced to 32 years’ imprisonment; Oluwagbenga Agoro was sentenced to 30 years’ imprisonment; Hans Destine was sentenced to 20 years’ imprisonment; Deryck Thompson was sentenced to 210 months’ imprisonment; Ricardo Hapburn was sentenced to 135 months’ imprisonment; and McKoy Lima was sentenced to 108 months’ imprisonment.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Jonathan Siegel, Dana Rehnquist and Sophia Suarez are in charge of the prosecution.
The Defendant:
JEAN FREMONT (also known as “Juno” and “Bigga Twirl”)
Age: 32
Brooklyn, New YorkOther Defendants Convicted at Trial:
OLUWAGBENGA AGORO (also known as “Gee Banga”)
Age: 24
Brooklyn, New YorkLORENZO BAILEY (also known as “Renzo” and “St. Clair Bailey”)
Age: 35
Brooklyn, New YorkQUINCY BATTICE (also known as “Hush Dinero” and “George Ayala”)
Age: 35
Brooklyn, New YorkDefendants Who Pleaded Guilty
HANS DESTINE (also known as “YL Flocks”)
Age: 32
Brooklyn, New YorkRICARDO HEPBURN (also known as “Riko Floxks”)
Age: 22
Brooklyn, New YorkMCKOY LIMA (also known as “Mak”)
Age: 29
Brooklyn, New YorkDERYCK THOMPSON (also known as “Benzo,” “DBenzo” and “Kenzie”)
Age: 25
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-293 (S-1) (WFK)
Former Investment Banker and Registered Broker Sentenced to 41 Months’ Imprisonment for Cryptocurrency Investment Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Rashawn Russell, a former investment banker, who was formerly a registered broker with the Financial Industry Regulatory Authority, was sentenced by United States District Judge Hector Gonzalez to 41 months in prison for a cryptocurrency fraud scheme that resulted in approximately $1.5 million in investor losses and for a separate access device fraud scheme. Russell was also ordered to pay more than $1.5 million in restitution to victims of his fraud scheme. Russell pleaded guilty in September 2023 to wire fraud and access device fraud.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division, and Eric Shen, Inspector-in-Charge, United States Postal Inspection Service, Criminal Investigations Group (USPIS), announced the sentence.
From November 2020 to August 2022, Russell engaged in a scheme to induce multiple victims to invest with him based on false promises that he would use their funds for cryptocurrency investments and that they would earn large—and sometimes guaranteed—returns. Russell misappropriated much of the victims’ assets and used them for his personal benefit, to gamble, and to repay other investors. Russell also repeatedly failed to repay the victims’ principal investments and failed to provide them with promised rates of return. After some victims requested to be repaid their investments, Russell falsely represented that he had wired them money.
In a separate scheme, between September 2021 and June 2023, Russell fraudulently obtained at least 97 credit/debit cards and at least 43 identification cards in the names of third parties, often from gym lockers in New York and New Jersey. Russell obtained these devices with the intent to use them to complete unauthorized transactions.
Assistant United States Attorney Drew Rolle of the Eastern District of New York, Trial Attorney Kyle Crawford and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section prosecuted the case.
The Defendant:
RASHAWN RUSSELL
Age: 28
Brooklyn, New YorkE.D.N.Y Docket No.: 23-CR-152 (HG)
Former Investment Banker and Registered Broker Sentenced for Operating $1.5M Cryptocurrency Investment Fraud SchemeRead the Press Release
A former investment banker, who was formerly a registered broker with the Financial Industry Regulatory Authority, was sentenced today to three years and five months in prison for a fraud scheme that resulted in approximately $1.5 million in investor losses and for a separate access device fraud scheme.
According to court documents, from November 2020 to August 2022, Rashawn Russell, 28, of Brooklyn, New York, engaged in a scheme to defraud multiple investors by inducing them to invest with him based on false promises that, among other things, he would use their funds for cryptocurrency investments and that the investors would earn large—and sometimes guaranteed—returns from those investments. Russell misappropriated much of the investors’ assets and used them to fund personal expenses, to gamble, and to repay other investors. Russell also repeatedly failed to repay investors’ principal investments and failed to provide investors with promised rates of return. After certain investors requested to be repaid their investments, Russell also falsely represented that he had wired the money to them.
In a separate fraud scheme, between September 2021 and June 2023, Russell fraudulently obtained at least 97 credit and debit cards and at least 43 identification cards in the names of third parties, often from gym lockers in New York and New Jersey. Russell used the stolen card information to complete unauthorized transactions, including opening online gambling accounts and making fraudulent purchases.
Russell was also ordered to pay more than $1.5 million in restitution to victims of his cryptocurrency fraud scheme. Russell pleaded guilty in September 2023 to wire fraud and access device fraud.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group made the announcement.
USPIS investigated the case.
Trial Attorney Kyle Crawford and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Drew Rolle for the Eastern District of New York prosecuted the case.