Eastern District of New York
Press releases recorded for this federal judicial district.
Justice Department Announces Achievements in Police Reform in Suffolk County, New YorkRead the Press Release
WASHINGTON – The Justice Department announced yesterday that the Suffolk County Police Department (SCPD) has achieved sustained compliance with provisions of its settlement agreement with SCPD, including requirements concerning tracking and trending hate crimes and hate incidents, investigating allegations of police misconduct and development of policies and training. As a result, the department has terminated those provisions of the settlement agreement.
“The County and its Police Department have made significant progress towards ensuring that all Suffolk County residents benefit from constitutional policing,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Police Department has improved the tracking of hate crimes, is strengthening the handling of internal affairs investigations and has improved the way it handles complaints of discriminatory policing. This progress demonstrates that meaningful policing reform and change can be achieved through our work. The Justice Department is committed to collaboratively working with the community, Suffolk County officials and the police department to ensure constitutional, fair and nondiscriminatory policing for all County residents. Residents across Suffolk County deserve nothing less.”
“We are pleased to see the Suffolk County Police Department’s progress in fulfilling significant requirements of the police reform agreement to help ensure fair and equitable policing and make the County better and safer for its residents and visitors,” said U.S. Attorney Breon Peace for the Eastern District of New York. “By terminating the areas of the agreement where reform efforts have been successful, we can focus on the areas that require additional attention. We look forward to working together to help the Suffolk County Police Department successfully achieve the reforms required by the remaining areas of the agreement.”
SCPD has made substantial changes in reaching compliance with provisions of the police reform agreement that the Justice Department is terminating, including:
- SCPD provides annual training on responding to, investigating and charging hate crimes.
- SCPD implemented a mapping system to track and analyze hate crimes and hate incidents. These maps are available to the public on SCPD’s website.
- SCPD improved its systems for reporting allegations of discriminatory policing and accepting third-party complaints of discrimination.
- Members of the public can now submit complaints of bias to any part of the police department — the hate crimes unit, internal affairs, any officer and any precinct.
- SCPD improved the quality of internal affairs investigations.
- SCPD now tracks civilian complaints and internal investigations by the nature of the allegation, the status of the investigation and how it resolved the investigation. This tracking allows SCPD to evaluate trends and identify patterns of problematic behavior.
- SCPD has developed and updated a number of policies, which are available on SCPD’s website in English and Spanish.
The Civil Rights Division and U.S. Attorney’s Office for the Eastern District of New York entered an agreement with Suffolk County in January 2014 to ensure that SCPD provides fair and equitable policing services to all members of the Suffolk County community, including the Latino community.
In determining that SCPD has achieved and sustained full and effective compliance with significant portions of the agreement, the United States relied on its own independent evaluations of SCPD’s compliance.
Long Island Woman Indicted for $3.28 Million Paycheck Protection Program Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Donna Ingram with wire fraud, disaster relief fraud, and theft of public funds relating to her scheme to submit fraudulent applications for loans under the United States Small Business Administration’s (the “SBA”) Paycheck Protection Program (“PPP”), which Congress created as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Ingram was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Sanket J. Bulsara.
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); Patrick J. Freaney, Special Agent-in-Charge, United States Secret Service (USSS); Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the SBA, Eastern Region Office (SBA-OIG); Edward A. Caban, Commissioner, New York City Police Department (NYPD); and Jonathan Mellone, Special Agent-in-Charge, U.S. Department of Labor, Office of the Inspector General, Northeast Region (DOL-OIG), announced the arrest and charges.
“As alleged, the defendant made a business out of defrauding the government by falsely claiming that she and others needed government loan benefits to pay their employees during the pandemic. This money was meant to help businesses weather the pandemic. In reality, the defendant was lining her own pockets,” stated United States Attorney Peace. “This Office will continue prosecuting those who took advantage of the COVID crisis and stole funds from vitally important government relief programs.”
“Donna Ingram is accused of spearheading a scheme that defrauded the United States government of over $3.2 million in relief funds meant for the well-meaning public during a time when their lives were in unparalleled crisis. The defendant’s alleged crimes were anything but victimless, and robbed small businesses — the backbone of this country — of critical resources. HSI New York stands at the forefront of investigating financial crimes, and will pursue justice on behalf of New Yorkers regardless of how much time has passed,” said HSI New York Special Agent in Charge Ivan J. Arvelo. “I commend our state and local law enforcement partners for their exceptional collaboration that resulted in today’s arrest.”
“Bilking a loan program that served as a lifeline to businesses experiencing distress during the pandemic is simply unconscionable," said Patrick J. Freaney, Special Agent-in-Charge, United States Secret Service (USSS). "While our nation has moved past the pandemic, the United States Secret Service remains steadfast in its commitment to holding these alleged fraudsters accountable. I want to thank our many law enforcement partners for their seamless collaboration in this important and ongoing work.”
“Abusing the Paycheck Protection Program, which was established to support struggling small businesses during the pandemic, for personal gain is inexcusable,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Braithwaite. “Our office is dedicated to safeguarding the integrity of SBA programs and ensuring that individuals who commit fraud are held accountable. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
“This indictment underscores law enforcement’s ongoing commitment to ensuring that only people and businesses truly in need used public resources earmarked for relief programs during the pandemic,” stated NYPD Commissioner Caban. “The NYPD will continue to assist our federal partners in any of their investigations related to that grave time, with the goal of protecting taxpayer funds and holding all alleged fraudsters accountable for their actions.”
“An important part of the mission of the U.S Department of Labor, Office of Inspector General is to investigate allegations of pandemic-related fraud. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Jonathan Mellone, Special Agent-in-Charge, Northeast Region, U.S. Department of Labor, Office of Inspector General.
As set forth in court filings, between May 2020 and May 2021, Ingram submitted at least 27 PPP loan applications (the “Subject Applications”) on behalf of her own companies as well as at least 22 other businesses (the “Subject Businesses”). The Subject Applications contained false information about the Subject Businesses, including false claims about their revenue, number of employees, payroll costs, and intended use of the loan proceeds. For example, for one business, referred to in the Indictment as Subject Business-3, Ingram submitted two separate applications for loans, one which falsely claimed that the business had earned approximately $950,950 in 2019 and another which falsely claimed that the same business had earned approximately $820,000 in 2019. Subject Business-3 received two PPP loans for $150,000 each and its owner paid Ingram approximately $50,500 in kickbacks. In total, the Subject Businesses received loans in the amount of approximately $3.28 million and Ingram received kickbacks totaling at least $430,000 for her preparation and submission of the fraudulent Subject Applications.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Ingram faces up to 20 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.
The Defendant:
DONNA INGRAM
Age: 50
Freeport, Long IslandE.D.N.Y. Docket No. 24-CR-214 (HG)
Justice Department Announces Achievements in Police Reform in Suffolk County, New YorkRead the Press Release
The Justice Department announced today that the Suffolk County, New York, Police Department (SCPD) has achieved sustained compliance with provisions of its settlement agreement with SCPD, including requirements concerning tracking and trending hate crimes and hate incidents, investigating allegations of police misconduct and development of policies and training. As a result, the department has terminated those provisions of the settlement agreement.
“The County and its Police Department have made significant progress towards ensuring that all Suffolk County residents benefit from constitutional policing,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Police Department has improved the tracking of hate crimes, is strengthening the handling of internal affairs investigations and has improved the way it handles complaints of discriminatory policing. This progress demonstrates that meaningful policing reform and change can be achieved through our work. The Justice Department is committed to collaboratively working with the community, Suffolk County officials and the police department to ensure constitutional, fair and nondiscriminatory policing for all County residents. Residents across Suffolk County deserve nothing less.”
“We are pleased to see the Suffolk County Police Department’s progress in fulfilling significant requirements of the police reform agreement to help ensure fair and equitable policing and make the County better and safer for its residents and visitors,” said U.S. Attorney Breon Peace for the Eastern District of New York. “By terminating the areas of the agreement where reform efforts have been successful, we can focus on the areas that require additional attention. We look forward to working together to help the Suffolk County Police Department successfully achieve the reforms required by the remaining areas of the agreement.”
SCPD has made substantial changes in reaching compliance with provisions of the police reform agreement that the Justice Department is terminating, including:
- SCPD provides annual training on responding to, investigating and charging hate crimes.
- SCPD implemented a mapping system to track and analyze hate crimes and hate incidents. These maps are available to the public on SCPD’s website.
- SCPD improved its systems for reporting allegations of discriminatory policing and accepting third-party complaints of discrimination.
- Members of the public can now submit complaints of bias to any part of the police department — the hate crimes unit, internal affairs, any officer and any precinct.
- SCPD improved the quality of internal affairs investigations.
- SCPD now tracks civilian complaints and internal investigations by the nature of the allegation, the status of the investigation and how it resolved the investigation. This tracking allows SCPD to evaluate trends and identify patterns of problematic behavior.
- SCPD has developed and updated a number of policies, which are available on SCPD’s website in English and Spanish.
The Civil Rights Division and U.S. Attorney’s Office for the Eastern District of New York entered an agreement with Suffolk County in January 2014 to ensure that SCPD provides fair and equitable policing services to all members of the Suffolk County community, including the Latino community.
In determining that SCPD has achieved and sustained full and effective compliance with significant portions of the agreement, the United States relied on its own independent evaluations of SCPD’s compliance.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about civil rights enforcement at the U.S. Attorney’s Office for the Eastern District of New York, including the Office’s Civil Rights Division work, is available at www.justice.gov/usao-edny/civil-rights.
Two Defendants Sentenced to Life Imprisonment in Murder-For-Hire of Perceived Business RivalRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Qing Ming Yu, also known as “Allen,” and Zhe Zhang, also known as “Zack,” were sentenced by United States District Judge Carol Bagley Amon to mandatory life imprisonment for their roles in the February 12, 2019 killing of 31-year-old Xin “Chris” Gu outside a karaoke bar in Queens. In October 2023, following a two-week trial, a federal jury found the defendants guilty of murder-for-hire and murder-for-hire conspiracy. As part of the sentence, the Court ordered the defendants to pay $1,035,000 in restitution to the victim’s family.
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 sentences.
“Allen Yu set out to kill Xin Gu because he started a rival business and Zhang agreed to carry out the execution-style murder without hesitation,” stated United States Attorney Peace. “Driven by greed and revenge, they hired a hitman to commit a brutal murder of a young man, traumatizing the victim’s family as well as the Flushing community. The defendants will spend the rest of their lives behind prison walls for this premediated murder. I hope today’s sentences bring some measure of closure to Xin Gu’s family.”
“Threatened by Xin Gu’s entrepreneurial skills, Allen Yu sought revenge and unwarranted retribution against his former employee. After securing Zhang and a hitman as accomplices to his calculated plot, the trio unjustly ended the life of a promising young businessman. Today’s lifelong sentences serve as a just punishment for two individuals who deemed cold-blooded murder as an acceptable response for slighted feelings,” stated FBI Assistant Director-in-Charge Smith.
“Today’s sentences bring with them some satisfaction to the dedicated investigators who worked on this horrific case and, hopefully, a modicum of relief to the family and friends of the victim,” stated NYPD Commissioner Caban. “Life in prison is an appropriate outcome for the crimes these men coldly carried out. I commend and thank our NYPD investigators for their meticulous work and our partners at the office of the U.S. Attorney for the Eastern District of New York for their diligent prosecution.”
Allen Yu was the president of Amaco, a multi-million-dollar construction company that renovated apartments in New York City. In 2015, Xin Gu joined Amaco as a project manager. Although Amaco’s business nearly quadrupled after he joined the company, Xin Gu became concerned about the company’s financial viability and resigned in 2018 to start his own property development company called KG Management. After Xin Gu’s departure, several clients and employees also cut ties with Allen Yu’s business. Multiple companies took their lucrative projects from Amaco to KG Management, including one project valued at $1 million. Enraged at Xin Gu’s perceived disloyalty, Allen Yu hired Zhe Zhang and another co-conspirator to kill Xin Gu in exchange for payment. Zhang in turn hired another co-conspirator, Antony Abreu, to act as the shooter in carrying out the murder.
On the evening of February 11, 2019, into the following morning, Xin Gu’s new company hosted a celebration of the Lunar New Year at Lake Pavilion restaurant in Flushing. After that dinner, Xin Gu and a smaller group went to a karaoke bar, Grand Slam KTV, on Fowler Avenue. The hit team learned of the party and with Zhe Zhang serving as the getaway driver, Abreu walked up to the victim and shot him multiple times as he waited for an Uber, killing him. Over the next three months, Allen Yu paid a co-conspirator $150,000 and Zhe Zhang $30,000 for the murder.
Abreu was convicted of murder-for-hire and murder-for-hire conspiracy following a two-week trial in April 2024 and is awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Devon Lash, Nadia E. Moore, Gabriel Park and Eric Silverberg are in charge of the prosecution with the assistance of Paralegal Specialist Elizabeth Reed and Legal Assistant Thomas “Cole” Englert.
The Defendants:
QING MING YU (also known as “Allen”)
Age: 56
Oyster Bay, New YorkZHE ZHANG (also known as “Zack”)
Age: 36
Arcadia, California and Flushing, New YorkE.D.N.Y. Docket No. 22-CR-208 (CBA)
Long Island Man Sentenced to 30 Years in Prison for Drug Trafficking, Distribution of Drugs Causing Death, and Illegal Possession of FirearmsRead the Press Release
Earlier today, in federal court in Central Islip, Marlon Thompson was sentenced by United States District Judge Joan M. Azrack to 30 years in prison for distribution of fentanyl causing the death of a young Long Island man, conspiracy to distribute controlled substances on Long Island, and being a felon in possession of firearms. Thompson was found guilty on all counts following a December 2022 jury trial.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Robert Waring, Acting Police Commissioner, Suffolk County Police Department (SCPD), and Raymond A. Tierney, Suffolk County District Attorney, announced the sentence.
“Today, Thompson was held accountable for the large quantities of fentanyl he distributed all over Suffolk County which had a devastating impact on the community, including the tragic poisoning death of a young man on Long Island,” stated United States Attorney Peace. “This Office, together with our federal and local partners, will continue to work tirelessly to prosecute those who contribute to this epidemic.”
"Today’s sentencing reflects the consequences to those who manufacture and distribute lethal narcotics, while tearing our communities apart” stated DEA New York Division Special Agent in Charge Frank Tarentino. “We will continue to work with our law enforcement partners in making sure those responsible for poisoning our communities bear the heavy burden of the lives they have destroyed.”
“The lethalness of fentanyl is not a secret, and yet, this defendant continued to distribute the deadly drug at the expense of others to make a profit,” Suffolk County Police Acting Commissioner Robert Waring said. “We will continue to work with our law enforcement partners to stem the flow of deadly opioids.”
"Opioid overdose deaths are at crisis levels in the United States and here in Suffolk County, where at least one of our residents dies every day from a fentanyl overdose. I appreciate the help from our federal partners at the Eastern District and the DEA in combating this scourge and I hope that this sentence brings some measure of closure to the family of Mr. Koenig," stated Suffolk County D.A. Raymond A. Tierney.
As proven at trial, from January 2017 through May 2019, the defendant conspired to distribute fentanyl, heroin and cocaine base throughout Suffolk County. On Christmas Day in 2018, the defendant supplied fentanyl to the victim, Freddy Koenig, who suffered a fatal overdose at his parents’ home in Selden, New York. The defendant continued supplying fentanyl, heroin, and crack in Suffolk County for months after Koenig’s death.
When Thompson was arrested, law enforcement recovered fentanyl and drug packaging materials from his basement bedroom, and also seized three illegal guns, including a sawed-off shotgun, and ammunition from Thompson’s storage unit. The government’s evidence included testimony from Thompson’s co-conspirators, text messages between the defendant and drug dealers discussing their illicit business, drug paraphernalia, and thousands of dollars of bundled U.S. currency derived from the drug sales seized from the defendant’s residence.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Samantha Alessi, Gabriel Park and Catherine M. Mirabile are in charge of the prosecution, with the assistance of Paralegal Specialist Adam Bernard.
The Defendant:
MARLON THOMPSON
Age: 42
Selden, New YorkE.D.N.Y. Docket No. 19-CR-596 (S-1) (JMA)
Final Elite Assassin Milla Gang Member Sentenced to More Than 18 Years in Prison for Violent Crimes in Two Separate CasesRead the Press Release
Earlier today, in federal court in Brooklyn, Qawon Allen, also known as “40” and “Phorty Wap,” was sentenced by United States District Judge Kiyo A. Matsumoto to 140 months in prison for assault in-aid-of-racketeering in connection with his role in the shooting and attempted murder of a rival. Allen pleaded guilty to the charges in May 2022. Today’s sentence will be served consecutive to the seven-year term of imprisonment imposed earlier this year by United States District Judge Nicholas G. Garaufis for brandishing a firearm in furtherance of a crime of violence. Allen pleaded guilty to the firearm charge in January 2020.
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, announced the sentence.
Allen was a long-time member of the East New York-based Elite Assassin Millas (E.A.M.), a set of the Bloods street gang that operated primarily in East New York. The gang made money through fraud and drug dealing, particularly sales of crack cocaine and marijuana. The gang murdered or attempted to murder its rivals to maintain its power and referred to East New York as “Gun Town” for the level of violence its members and associates committed and perpetuated. Allen helped track down rivals so E.A.M members could shoot them.
In United States v. Allen, Docket No. 19-CR-128, Allen pleaded guilty to robbing a drug dealer at gunpoint. In United States v. Allen, Docket No. 20-CR-213, Allen pleaded guilty to his role in the shooting of a victim. Specifically, Allen alerted the gang’s so-called “Godfather” Quandel Smothers and another member of E.A.M. to the victim’s location so that the victim could be murdered. Allen also provided the location of a hidden firearm that others could pick up to use in the shooting.
All other members and associates of E.A.M. that were charged with Allen have been convicted of crimes including conspiracy to commit murder, using firearms in connection with murder, assault, and interstate stalking causing life threatening injury and sentenced for their conduct. Tyshawn Corbett was sentenced to 45 years’ imprisonment; Smothers was sentenced to 23 years’ imprisonment after being convicted at trial; Marlon Bristol was sentenced to 135 months’ imprisonment; Devon Bristol was sentenced to 80 months’ imprisonment; and Desmonn Beckett was sentenced to 64 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, Genny Ngai, and Matthew Galeotti are in charge of the prosecution with the assistance of Paralegal Specialist Brittany Wissel.
The Defendant:
QAWON ALLEN (also known as “40” and “Phorty Wap”)
Age: 28
Brooklyn, New YorkDefendant Convicted at Trial:
QUANDEL SMOTHERS (also known as “Chucky”)
Age: 32
Brooklyn, New YorkDefendants Who Pleaded Guilty
TYSHAWN CORBETT (also known as “Reck”)
Age: 32
Brooklyn, New YorkDESMONN BECKETT (also known as “Des”)
Age: 30
Brooklyn, New YorkDEVON BRISTOL (also known as “D”)
Age: 32
Brooklyn, New YorkMARLON BRISTOL (also known as “Marlo”)
Age: 35
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-213 (KAM); E.D.N.Y. Docket No. 19-CR-128 (NGG)
Staten Island Man Sentenced to 33 Months in Prison for $1.9 Million Baby Formula SchemeRead the Press Release
BROOKLYN, NY – Earlier today in federal court in Brooklyn, Vladislav Kotlyar was sentenced by United States District Judge William F. Kuntz II to 33 months in prison and ordered to pay approximately $738,000 in restitution and forfeit approximately $1 million for his role in a scheme to fraudulently obtain specialty baby formula. Kotlyar pleaded guilty to mail fraud in March 2023.
Breon Peace, United States Attorney for the Eastern District of New York, 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, announced the sentence.
Kotlyar submitted and caused the submission of forged prescriptions and medical records for specialty baby formula that was paid for by health insurers. Kotlyar obtained prescriptions and medical records for infants who were prescribed baby formula and forged those records to obtain specialty baby formula. After receiving the specialty baby formula, Kotlyar fabricated issues with the shipments, including by impersonating the infants’ parents, to falsely claim that shipments were damaged or contained the incorrect formula to acquire additional formula at no additional cost. Kotlyar then sold the fraudulently obtained formula. A portion of Kotlyar’s scheme occurred during a national shortage of infant formula.
Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section prosecuted the case. Assistant United States Attorney Claire S. Kedeshian of the Eastern District of New York’s Asset Recovery Section is handling forfeiture matters.
The Defendant:
VLADISLAV KOTLYAR
Age: 45
Staten Island, New YorkE.D.N.Y. Docket No. 23-CR-75 (WFK)
Man Sentenced for $1.9M Baby Formula SchemeRead the Press Release
A New York man was sentenced today to two years and nine months in prison and ordered to pay approximately $738,000 in restitution and forfeit approximately $1 million for his role in a scheme to fraudulently obtain specialty baby formula.
According to court documents, Vladislav Kotlyar, 45, of Staten Island, submitted and caused the submission of forged prescriptions and medical records for specialty baby formula that was paid for by health insurers. Kotlyar obtained prescriptions and medical records for infants who were prescribed baby formula and forged those records with respect to the type and amount of formula prescribed to obtain high volumes of expensive specialty baby formula. After receiving the specialty baby formula, Kotlyar fabricated issues with the shipments, including by impersonating the infants’ fathers, to falsely claim that shipments were damaged or contained the incorrect formula to acquire additional formula at no additional cost. Kotlyar then sold the fraudulently obtained formula. A portion of Kotlyar’s scheme occurred during a national shortage of infant formula.
Kotlyar previously pleaded guilty in March 2023 to mail 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; Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division; and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.
The FBI New York Field Office investigated the case.
Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Claire S. Kedeshian for the Eastern District of New York assisted with forfeiture.
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.
Brooklyn Man and Cryptocurrency Personality "T.J. Stone" Pleads Guilty to Wire FraudRead the Press Release
Yesterday, in federal court in Brooklyn, Thomas John Sfraga, also known as “T.J. Stone,” pleaded guilty to an information charging him with wire fraud. The proceeding was held before Chief United States Magistrate Judge Lois Bloom. When sentenced, Sfraga faces a maximum sentence of 20 years’ imprisonment, as well as restitution of over $1.33 million.
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 guilty plea.
“For years, Sfraga brazenly lied to friends, neighbors and investors to swindle over $1.3 million of their hard-earned life savings,” stated United States Attorney Peace. “This Office will continue to hold fraudsters accountable and achieve justice for victims throughout the Eastern District of New York and across the United States.”
As set forth in the information and court filings, from at least 2019 to 2022, Sfraga held himself out as the owner and principal of multiple businesses, including Vandelay Contracting Corp. and Build Strong Homes LLC. In the television show “Seinfeld,” the character George Constanza falsely claimed to have interviewed for a job with the fictional company Vandelay Industries. The defendant held himself out as ‘T.J. Stone,’ a serial entrepreneur with experience in real estate development, media relations, podcasting and cryptocurrencies, including acting as the host or emcee of cryptocurrency events in New York.
Sfraga defrauded over a dozen victims, including victims in Brooklyn, Staten Island and Long Island. Sfraga convinced victims to loan him monies for, or to invest in, multiple fraudulent investments including purchasing, renovating and “flipping” homes. On one occasion, Sfraga convinced a victim to lend him $100,000 in cash as start-up costs for a non-existent major construction project. On yet another occasion, Sfraga convinced a victim to invest in a fictitious cryptocurrency “virtual wallet.” He promised the victims returns on their investments as high as 60% in three months. In reality, however, Sfraga converted the monies to his own benefit, to pay expenses, and to pay earlier victims and business associates.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney John Vagelatos is in charge of the prosecution, with assistance from Paralegal Specialist Madison Bates.
The Defendant:
THOMAS JOHN SFRAGA (also known as “T.J. Stone”)
Age: 55
Brooklyn, New YorkE.D.N.Y. Docket No. 24-CR-194 (FB) (LB)
Southampton Investment Advisor Convicted of Fraud and Money Laundering ChargesRead the Press Release
Jeffrey Slothower, a former registered investment adviser and founder of the New York investment advisory firm Battery Private, Inc. (Battery Private), was convicted today by a federal jury in Central Islip of all three counts of an indictment charging him with wire fraud, investment adviser fraud and money laundering in connection with a scheme to misappropriate more than $1 million from clients. The verdict followed a three-day trial before United States District Judge Gary R. Brown. When sentenced, Slothower faces up to 30 years in prison.
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 verdict.
“This case was about greed and betrayal of clients who trusted the defendant and thought their money was safely invested with him,” stated United States Attorney Peace. “Slothower tricked those clients so he could steal their money and lavish himself with a new car, high-end clothing and jewelry, and a membership at an East End country club. Protecting investors from fraudsters like the defendant has always been a priority of this Office and today’s verdict underscores our resolve to vigorously prosecute those who enrich themselves at the expense of victims.”
Mr. Peace thanked the Special Agents of the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.
As proven at trial, Slothower orchestrated a scheme to misappropriate more than $1 million from current and prospective clients. Specifically, while operating Battery Private, Slothower solicited business from Victim-1 and Victim-2, a couple from California whose money Slothower had managed at another financial services firm where he was previously employed. Slothower promised the victims he could beat any rate of return they were receiving and do so without market risk. In 2017, he offered to invest Victim-1’s money into what Slothower described as bonds backed by homeowner’s association fees (the “HOA Bonds”), which would pay an eight percent return.
Slothower sent Victim-1 wiring instructions for his investment and attached a document that made additional representations about Victim-1’s purported investment, claiming that Victim-1’s money would be held in the “capital reserves” of Battery Private. Between January 25, 2017 and January 27, 2017, Victim-1 sent more than $500,000 to Slothower at Battery Private to be invested in the purported HOA Bonds. Instead of investing in HOA Bonds or holding the funds in “capital reserves,” Slothower funneled the money into his personal bank accounts, and then used those funds to purchase a $125,000 Mercedes Benz SUV, and membership dues at Long Island National Golf Club, a private East End country club. To further the fraudulent scheme, Slothower made payments to Victim-1 that were falsely represented as quarterly distributions from Victim-1’s “investment.”
Later, Slothower solicited Victim-1 to invest additional moneys, including funds controlled by Victim-1’s spouse, who was then a Battery Private client. Enticed by the supposedly steady rate of return, Victim-2 agreed to invest in the same purported HOA Bonds, and in December 2017, Victim-2 sent more than $500,000 to Slothower at Battery Private. However, like Victim-1, Victim-2’s money was not invested in HOA Bonds or held in “capital reserves” as represented by Slothower. Instead, he used that money to pay tens of thousands of dollars in personal credit card debt traced to an approximately $6,500 Chanel purse, an approximately $13,000 Rolex watch, and more than $11,000 in Ralph Lauren clothing, among other things. To further the fraudulent scheme, Slothower made payments to Victim-2 that were falsely represented as quarterly distributions from Victim-2’s investment.
In June 2018, still unaware of the fraudulent scheme, Victim-1 made an additional investment of approximately $84,000 into the purported HOA Bonds. Slothower used Victim-1’s money to make purported quarterly payments to Victim-1 and Victim-2 that were falsely represented as their investment returns and to pay membership dues at the private golf club.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division and the Office’s Business and Securities Fraud Section. Assistant U.S. Attorneys Drew G. Rolle, Anthony Bagnuola, Adam Toporovsky and Benjamin Weintraub are in charge of the prosecution, with the assistance of Paralegal Specialists Adam Bernard and Michael Compitello.
The Defendant:
JEFFREY SLOTHOWER
Age: 46
Southampton, New YorkE.D.N.Y. Docket No. 21-CR-602 (GRB)
Florida Man Charged with Conspiracy to Distribute Oxycodone for Prescription Drug Diversion SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, a three-count indictment was unsealed charging Devin Anthony Magarian with conspiracy to distribute oxycodone and possessing oxycodone with intent to distribute. Magarian is charged with orchestrating a years’ long conspiracy to commandeer physicians’ e-prescribing privileges in order to divert Oxycodone and other controlled substances into the illicit market.
Breon Peace, United States Attorney for the Eastern District of New York, Anne T. Donnelly, District Attorney of Nassau County, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA) and Patrick Ryder, Nassau County Police Commissioner, announced the indictment and charges.
“As alleged, Magarian led the conspiracy to pirate the digital prescription pads of physicians, putting thousands of lives at risk through this illicit diversion scheme,” stated United States Attorney Breon Peace. “This Office will continue doing its part to find and hold responsible individuals at all levels who, motivated by greed, perpetuate the opioid and prescription drug epidemic with careless disregard for the safety of the communities in this district and nationwide.”
United States Attorney Peace thanked the New York State Bureau of Narcotic Enforcement for their significant contributions to the investigation.
“Devin Magarian was the primary facilitator of a complex narcotics conspiracy, coordinating drug-running operations in dozens of states across the county and maximizing profits for the illicit venture,” said Nassau County District Attorney Anne T. Donnelly. “Tens of thousands of prescriptions for narcotics and other controlled substances were filled in Nassau County and beyond at this defendant’s direction using pirated e-prescribing credentials of unwitting doctors, putting our communities at risk. Magarian was an important cog in a much larger machine – one that we will dismantle piece by piece with our federal partners at the U.S. Attorney’s Office and the Drug Enforcement Administration.”
“The indictment against Devin Anthony Magarian for conspiracy to distribute oxycodone through a diverted e-prescription scheme and distribute on the illicit market for the purpose of putting profits above public health is not only reckless and dangerous, but unconscionable” stated DEA New York Special Agent-in-Charge Frank Tarentino. “Trading in lives for profit is a dark path and we will continue to work with our law enforcement partners to make sure those responsible face justice.”
As alleged in the indictment, in or around and between December 2022 and March 2024, the defendant was the key driver of a wide-ranging conspiracy in which he and his associates surreptitiously commandeered the e-prescribing credentials of doctors throughout the country, and then used those compromised accounts to issue and fill thousands of prescriptions for narcotics and other controlled substances, including Oxycodone and Promethazine with Codeine syrup, commonly known as Codeine, throughout Nassau County and nationwide. These highly abused substances were then diverted into the illicit market, where the defendant often advertised them for sale to street-level resellers and buyers on his social media accounts and elsewhere.
Over the course of this investigation, law enforcement identified dozens of medical practitioners who experienced a similar series of occurrences which ultimately resulted in the defendant and his associates issuing and filling thousands of illicit prescriptions in the names of countless fictitious patients. Many of the physicians experienced unusual activity on their cellphones, including being flooded with text messages in the days leading up to losing control of their cellphones and e-prescribing accounts. Unbeknownst to the physicians, these text messages were related to efforts by the defendant and his associates to “clone” the SIM card of the doctors’ cellphone, thereby giving the defendant full access to the phone, and ultimately, the physicians’ e-prescribing credentials.
Once the credentials were compromised, the defendant advertised the prescriptions and controlled substances he had for sale on social media. Using automated “bots,” the defendant would generate and transmit thousands of prescriptions using the compromised doctor’s e-prescribing credentials within a matter of hours. These bots generated fictitious names, dates of birth, and addresses, and sent electronic prescriptions for controlled substances and narcotics to pharmacies in specific areas where the defendant’s associates were waiting. The defendant transmitted thousands of prescriptions, which when filled, resulted in thousands of pills of pharmaceutical grade narcotics being illicitly diverted and re-sold at a premium. The defendant’s profits from the resale of those illegally procured narcotics ranged from $75,000 to $250,000 per month, in the form of payments which were primarily made via cryptocurrency, at the defendant’s request.
The government’s case is being prosecuted by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Adam Toporovsky and Kaitlin McTague, and Special Assistant United States Attorney Brian Rodriguez, of the Nassau County District Attorney’s Office, are in charge of the prosecution with assistance from Paralegal Specialists Adam Bernard and Samantha Schroeder.
The Defendant:
DEVIN ANTHONY MAGARIAN
Age: 21
Kissimmee, New YorkE.D.N.Y. Docket No. 24-CR- 178
Members of Brooklyn-Based Hyena Crips Gang Charged with Multiple Murders and Racketeering Activity Spanning Nearly a DecadeRead the Press Release
Earlier today, in federal court in Brooklyn, a superseding indictment was partially unsealed variously charging seven members of the Brooklyn-based Hyena Crips gang with racketeering and using a firearm in the course of a murder in connection with three murders, murder conspiracies, robberies and identity-fraud schemes dating back to 2012. Three defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge James R. Cho. The four remaining defendants, who are in state and federal custody on other charges, will be arraigned at a later date.
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), Edward A. Caban, Commissioner, New York City Police Department (NYPD), and Jonathan Mellone, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Northeast Region (DOL-OIG), announced the arrests and superseding indictment.
“For years, the Hyena Crips terrorized our community with brutal acts of violence—including murders, shootings and brazen armed-robberies—and funded their criminal activities through fraud schemes,” stated United States Attorney Peace. “The crimes alleged in today’s superseding indictment illustrate well the damage this gang has wrought on individuals, small businesses and the community at-large. This Office and its law enforcement partners are working tirelessly to dismantle violent criminal enterprises, take out their leadership and obtain justice for their victims. It is my hope that today’s indictment brings some measure of solace particularly to the families of Samuel Joseph, Leandre Mallinckrodt and Roodson Polynice who were senselessly murdered.”
“As alleged, these defendants and the Hyena Crips gang at-large have for years inflicted unimaginable pain on the community and claimed the lives of innocent New Yorkers. While nothing can bring back Leandre Mallinckrodt, Samuel Joseph, and Roodson Polynice, HSI New York will never forget its commitment to seeking justice on behalf of victims, regardless of how much time has passed,” said Special Agent-in-Charge Arvelo. “HSI New York will not sit idly by as gangs terrorize the public. I commend our law enforcement partners, including the New York Police Department, for working together to eliminate violent criminal organizations and the fear they cause.”
“The ‘Hyena lifestyle’ was one of wanton violence coupled with acute ineptitude, as the individuals charged today allegedly murdered innocent men they mistook for rival gang members,” stated NYPD Commissioner Caban. “The actions of this busy criminal network ranged from robbery to financial fraud, which, for too long, cast a pall over large swaths of our city. I highly commend all the investigators involved in this case, starting us toward a modicum of justice for the grieving families of those senselessly killed.”
“An important part of the mission of the U.S Department of Labor, Office of Inspector General is to investigate allegations of fraud involving COVID-19 pandemic unemployment insurance programs. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Jonathan Mellone, Special Agent-in-Charge, Northeast Region, U.S. Department of Labor, Office of Inspector General.
As detailed in the government’s detention letter filed earlier today, the Hyena Crips set of the Crips street gang is a violent criminal enterprise operating in the East Flatbush section of Brooklyn. The gang engages in acts of violence, including murder, robbery and assault, and earns money through drug trafficking, bank fraud and access device fraud. Members of the gang refer to each other as “Hyenas,” “Heenz” or some variation of hyena, and use social media emojis depicting a bluish-purple face with horns and an animal resembling what appears to be a hyena, wolf or fox.
Murder of Leandre MallinckrodtOn September 3, 2012, defendant Rick Jasmin and other members of the Hyena Crips were present at the annual West Indian Day Parade in Brooklyn. A fight broke out and Jasmin allegedly stabbed Leandre Mallinckrodt, who the defendant mistook for a rival gang member, in the neck. Mallinckrodt, who had been visiting from upstate New York and had no gang affiliation, died from the wound.
Murder of Samuel JosephOn February 22, 2019, Martial H. Amilcar and a co-conspirator drove to 15-year-old Samuel Joseph’s apartment building and waited outside until Joseph’s teenage sister arrived at the building’s entrance. While Joseph’s sister prepared to enter the building, the victim was walking down an internal staircase towards the building’s exit. When Joseph’s sister opened the building door to enter, Amilcar walked into the building behind her, pulled out a gun and shot Joseph three times at close range, killing him. The shooting and events leading up to it were captured on security camera footage taken nearby. Amilcar and the co-conspirator allegedly killed Joseph in retaliation for an altercation earlier that day between Amilcar’s relative, a fellow gang member, and Joseph’s older brother, a rival gang member.
Murder of Roodson PolyniceIn the summer of 2020, Hyena Crips leader Dave Augustin allegedly directed Richler Morette and Bradley Augustin to retaliate against a rival gang for the non-fatal shootings of two Hyena Crips leaders. On September 2, 2020, Bradley Augustin, Morette and others allegedly carried out the fatal shooting of Roodson Polynice. Polynice, like Mallincrodt, had no gang affiliation and was killed after he was wrongly identified by the defendants as a rival. Following the murder, Morette responded to a group Facebook messages about Polynice’s death in which he replied with three laughing-face emojis and stated, “[d]on’t care who got hit” and “pic [sic] a side or get killed with them Hyenalifestyle or no life.”
COVID-19 FraudDave Augustin, Matthew Harris, Rick Jasmin, Wisny Joseph, and Richler Morette are charged with allegedly conspiring to commit identity fraud in connection with fraudulently obtaining unemployment benefits and loans issued by the Small Business Administration for relief during the COVID-19 pandemic. Dave Augustin, Harris, Joseph and Morette are also charged with money laundering conspiracy arising from their fraudulently opening bank accounts to conceal the source of ill-gotten gains obtained by members of the Hyena Crips.
The superseding indictment also charges several defendants with the attempted armed robbery of a Caribbean Air check cashing businesses, the attempted robbery of a pharmacy and the non-fatal shooting of an individual following an argument during a dice game.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted, Martial H. Amilcar, Bradley Augustin, Dave Augustin, Jasmin, and Morette face a maximum sentence of life imprisonment. Harris and Joseph face prison terms of up to 20 years.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Devon Lash, Jessica Weigel, Joshua Dugan and Andres Palacio are in charge of the prosecution. The case was initiated and investigated by Assistant United States Attorney Andrew Wenzel in the Long Island Division.
The Defendants:
MARTIAL H. AMILCAR (also known as “Drippy”)
Age: 27
Brooklyn, New YorkBRADLEY AUGUSTIN (also known as “Cradley”)
Age: 24
Brooklyn, New YorkDAVE AUGUSTIN (also known as “Juice”)
Age: 38
Brooklyn, New YorkMATTHEW HARRIS (also known as “Kappy”)
Age: 24
Brooklyn, New YorkRICK JASMIN (also known as “Jab”)
Age: 31
Brooklyn, New YorkWISNY JOSEPH (also known as “Weezy”)
Age: 32
Brooklyn, New YorkRICHLER MORETTE (also known as “Breezy”)
Age: 29
Brooklyn, New YorkE.D.N.Y. Docket No. 23-CR-18 (S1) (AMD)
Long Island Man Sentenced to 42 Months' Imprisonment for $3 Million Bank Loan SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Gary Confredo, also known as “Gary Conte,” the former operator of Goldstar Financial Management Corp. (Goldstar), a financial services business based in Commack, New York, was sentenced by United States District Judge Joan M. Azrack to 42 months’ imprisonment for conspiring to commit bank fraud in connection with a scheme to defraud Bank of America of more than $3.2 million in loans and lines of credit that were obtained under false pretenses. The Court also ordered Confredo to pay $1,096,882 restitution to Bank of America. Confredo pleaded guilty to the charge in November 2022.
Breon Peace, United States Attorney for the Eastern District of New York, and Daniel B. Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the sentence.
“The defendant’s scheme of submitting fraudulent applications for commercial loans and lines of credit to Bank of America was full of lies and deception. With today’s sentence the defendant learns a powerful truth, that cheating financial institutions for personal gain will be punished and the cost is significant,” stated United States Attorney Peace.
“As a financial consultant, Confredo was a trusted member of the financial industry. However, instead of acting ethically, he used his position to submit fraudulent loan applications on his clients’ behalf. Many of whom were complicit in this scheme. Driven by greed, Confredo and these co-conspirators caused Bank of America to lose millions of dollars in defaulted loans. These crimes have a far-reaching and long-lasting negative impact on the financial industry and the American public. Today’s sentencing bears truth to the fact that Postal Inspectors and our law enforcement partners will investigate and prosecute white collar criminals to the fullest extent of the law,” stated USPIS Inspector-in-Charge Brubaker.
According to court filings and facts presented at the plea proceeding, between November 2016 and October 2019, Confredo conspired with others to submit fraudulent applications for commercial loans and lines of credit to Bank of America on behalf of Goldstar clients, who agreed to pay Confredo a portion of any loan that he secured on their behalf. To manipulate the application process, Confredo submitted altered tax returns and bank statements that falsely inflated the clients’ incomes and assets and allowed them to qualify for loans and lines of credit under Bank of America’s lending criteria. As a result of Confredo’s scheme, Bank of America issued approximately $3.2 million in loans and lines of credit to Goldstar’s clients and sustained losses of approximately $1 million when those loans and lines of credit were not repaid.
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 mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorney Bradley T. King is in charge of the prosecution with assistance from Paralegal Specialist Samantha Schroeder and Legal Assistant Danielle Casey. Assistant United States Attorney Madeline O’Connor is handling forfeiture matters.
The Defendant:GARY CONFREDO (also known as “Gary Conte”)
Age: 61
East Northport, New YorkE.D.N.Y. Docket No. 22-CR-425 (JMA)
Federal Law Enforcement Dismantles Brooklyn Gun Trafficking RingRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, a six-count indictment was unsealed charging Yashiya Louisdor, Zaire Alman, Marques Seals and a fourth defendant with conspiring to illegally traffic more than 40 firearms in three months. Louisdor, Alman and Seals were arrested yesterday and are scheduled to be arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon. The fourth defendant is still at large. During the arrests 33 guns, including several rifles and shotguns, were recovered.
Breon Peace, United States Attorney for the Eastern District of New York, Thomas Kalogiros, Acting 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 charges.
“As alleged, in just three short months the defendants attempted to bring over 40 guns into our community to sell them on our streets, including selling near an elementary school,” stated U.S. Attorney Peace. “Thanks to our Office and our law enforcement partners, this gun trafficking ring has been dismantled and we hope this sends a message to all who seek to profit from the illegal gun trade that we will not stop in our efforts to keep our community safe.”
“This indictment highlights NYPD investigators’ ongoing intelligence-driven efforts to pinpoint, arrest, and hold accountable gun traffickers,” stated NYPD Commissioner Caban. “Allegedly selling these illegal firearms in broad daylight, close to a school, makes these charges especially disturbing. Along with our partners at the ATF and the office of the U.S. Attorney for the Eastern District of New York, the NYPD vows to remain relentless in our quest to eradicate gun violence in all New York City neighborhoods.”
Stated ATF Acting Special Agent-in-Charge Kalogiros: “Firearms trafficking is a central focus of the ATF strategy to protect the public from violent crime. These individuals are alleged to have brought dozens of illegal firearms to the streets of New York. With their arrests we have disrupted and dismantled a trafficking ring that profited from bringing illegal firearms to our city streets endangering each and every one of their fellow citizens. I would like to thank the ATF Special Agents and Task Force Officers of the NYPD/ ATF Joint Firearms Task Force for their diligent efforts on this case. This case is yet another example of how the many units in the NYPD and ATF can collaborate and coordinate their efforts with their Federal partners at the United States Attorney’s Office to make the streets safer for all.”
According to the indictment and other court documents, the defendants made multiple sales of at least 40 illegal firearms, including semi-automatic and defaced weapons, between February 2024 and April 2024. The defendants conducted many of these firearms sales in a vehicle in the parking lot of a fast-food restaurant in Brooklyn, New York, which was at a busy intersection and mere blocks away from an elementary school and a sports venue and concert arena. The defendants also conducted these firearm sales in a vehicle near a public transportation hub in Manhattan. Three members of the gun-trafficking operation obtained the firearms in Georgia and then transported them to New York to be sold on the streets of Brooklyn. The firearms deals often occurred in the middle of the afternoon and in broad daylight. Some of the firearms had defaced serial numbers.
The charges in the indictment 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 Katherine P. Onyshko is in charge of the prosecution, with the assistance of Paralegal Specialist Peiyuan Lo.
The Defendants:
YASHIYA LOUISDOR
Age: 23
Brooklyn, New YorkZAIRE ALMAN
Age: 23
Douglasville, GeorgiaMARQUES SEALS
Age: 23
Douglasville, GeorgiaE.D.N.Y. Docket No. 24-CR-187
Leader of Brooklyn-Based Elite Assassin Millas Gang Sentenced to 23 Years in Prison for Racketeering Conspiracy and Firearms OffensesRead the Press Release
Earlier today, in federal court in Brooklyn, Quandel Smothers, also known as “Chucky,” was sentenced by United States District Judge Kiyo A. Matsumoto to 23 years in prison for racketeering conspiracy and possessing a firearm in furtherance of a drug trafficking crime in connection with his leadership of the East New York-based Elite Assassin Millas (E.A.M.), a set of the Bloods street gang. Smothers was convicted of the charges by a federal jury in February 2023 following a two-week trial. Smothers conspired with other gang members and associates to deal drugs, commit fraud and to murder or attempt to murder their rivals from 2006 to 2019, resulting in multiple shootings that left one individual dead and several other victims permanently disabled.
Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.
“Smothers, who fancied himself the gang’s “Godfather” and East New York his ‘Gun Town,’ deserves the decades behind bars imposed today for leading a criminal enterprise that endangered the community with their mindless killing, shootings and assaults of rivals,” stated United States Attorney Peace. “This Office and our law enforcement partners have dismantled the Elite Assassin Millas and will continue the important work of ridding our district of violent groups that have no respect for the law or human life.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, and the New York City Police Department for outstanding work in the case.
As proven at trial, E.A.M. operated primarily in East New York, which the gang referred to as “Gun Town.” The gang made money through fraud and drug dealing, particularly sales of crack cocaine and marijuana. Smothers rose to the leadership position of E.A.M. through violence and fear. E.A.M. members reporting to Smothers referred to themselves as “Homicide Town.” Smothers agreed with other gang members and associates to deal drugs, commit fraud, and to murder or attempt to murder their rivals from 2006 to 2019, resulting in numerous shootings.
On April 30, 2011, Smothers, the so-called “Godfather” or “GF” of E.A.M., shot a fellow E.A.M. member in the torso and leg over a drug and loyalty-related dispute, causing the victim’s leg to be amputated. Over the years that Smothers led the gang, his underlings engaged in feuds with other local street gangs in East New York that frequently resulted in shootouts between the groups. As a result of shootings, two individuals were paralyzed by members of E.A.M., and one victim — Michael Tenorio — was murdered.
All six other members and associates of E.A.M. that were charged with the defendant have pleaded guilty to crimes including murder, conspiracy to commit murder, assault, and interstate stalking causing life threatening injury. Tyshawn Corbett was sentenced to 45 years’ imprisonment; Marlon Bristol was sentenced to 135 months’ imprisonment; Devon Bristol was sentenced to 80 months’ imprisonment; Desmonn Beckett was sentenced to 64 months’ imprisonment; and Andrew Campbell was sentenced to 30 months’ imprisonment. Qawon Allen is awaiting sentencing.
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 Matthew Galeotti, Genny Ngai and Jonathan Siegel are in charge of the prosecution with the assistance of Paralegal Specialist Brittany Wissel.
The Defendant:
QUANDEL SMOTHERS (also known as “Chucky”)
Age: 32
Brooklyn, New YorkDefendants Who Pleaded Guilty
TYSHAWN CORBETT (also known as “Reck”)
Age: 32
Brooklyn, New YorkQAWON ALLEN (also known as “40” and “Phorty Wap”)
Age: 28
Brooklyn, New YorkDESMONN BECKETT (also known as “Des”)
Age: 30
Brooklyn, New YorkDEVON BRISTOL (also known as “D”)
Age: 32
Brooklyn, New YorkMARLON BRISTOL (also known as “Marlo”)
Age: 35
Brooklyn, New YorkANDREW CAMPBELL (also known as “Phaze”)
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-213 (KAM)
Billionaire Chinese National Sentenced to Seven Months in Prison and Removal from United States for Straw Donor Campaign Contribution Scheme and Other FraudsRead the Press Release
Earlier today, in federal court in Central Islip, Hui Qin, also known as “Qin Hui,” “Hui Quin,” “Muk Lam Li” and “Karl,” a citizen of the People’s Republic of China (PRC), who was listed on Forbes Magazine’s List of Billionaires and who operated SMI Culture, a Hong Kong-based entertainment entity, was sentenced by United States District Judge Joan M. Azrack to seven months’ imprisonment for making political contributions in the names of others, immigration fraud and producing a false identification document. Qin pleaded guilty to the charges in March 2024. As part of his plea, the defendant consented to abandonment of his fraudulently obtained LPR status and removal from the United States immediately after the sentencing. Qin has been incarcerated since his arrest seven months ago on October 2, 2023.
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), Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the sentence.
“Qin’s brazen flouting of our political and immigration systems, and his defrauding government agencies resulted in a felony conviction, prison sentence and today, his removal from the United States,” stated United States Attorney Peace. “Qin has learned a lesson in American civics the hard way, that no one is above the law.”
“Hui Qin violated our democratic norms by illegally attempting to influence election campaigns through fraudulent political donations,” stated FBI Assistant Director-in-Charge Smith. “His unlawful actions and repeated efforts to exploit various government agencies were disrupted by the FBI and such attempts by other threat actors will not be tolerated. Today’s sentence and his removal from the United States should dissuade any future schemers from engaging in similar activity. The FBI is committed to exposing all forms of corruption, especially those that threaten election integrity and our duly elected officials.
“Qin interfered with our election system and tried to gain advantage through his straw donations. He furthered his criminal activity by misrepresenting himself on documents to obtain a false Visa, then lived with an illegitimate status in his $5 million Manhattan apartment. It is through our law enforcement partnerships and good police work that Qin was held accountable for behaving like he was above the law,” stated IRS-CI Special Agent-in-Charge Fattorusso.
“By flouting laws vital to the sanctity of the federal election and immigration systems, the defendant threatened not only the community's safety, but the democratic foundation on which the United States of America was established,” stated HSI New York Special Agent-in- Charge Arvelo. “Hui Qin’s sentencing today underscores the importance of law enforcement’s collaboration, coordination, and unwavering dedication to one common goal: protecting the public. HSI New York stands united with our partners against any individuals attempting to jeopardize our national security.”
As set forth in court filings and facts presented at the plea proceeding, between December 2021 and December 2022, Qin agreed to reimburse other individuals who made contributions on his behalf to the campaign committees for a candidate for a New York City-wide political office, a member of the United States House of Representatives for a congressional district in the Eastern District of New York and a candidate for a House of Representatives seat in a Rhode Island congressional district. During the scheme, straw donors made approximately $11,600 in contributions on Qin’s behalf, which caused the campaign committees to file false contribution reports with the Federal Election Commission in 2022.
Additionally, as part of his plea Qin admitted that, in April 2019, he filed a false application for LPR status with United States Citizenship and Immigration Services. In the application, Qin falsely swore, under penalty of perjury, that he had never used another name. In fact, in 2008, a PRC government official provided Qin with the alias “Muk Lam Li” and between 2008 and the filing of Qin’s LPR application, Qin obtained identification documents, including a Hong Kong identification card, a PRC identification card and a Hong Kong passport in the name of the Li alias, which contained Qin’s photograph, but a date of birth different than Qin’s. Around September 2017, Qin used the Li alias to transfer more than $5 million from the PRC to a United States bank account, a portion of which was used to purchase a luxury Manhattan apartment, where Qin resided.
Qin also pleaded guilty to engaging in interstate travel to fraudulently obtain a Florida driver’s license. In December 2020, Qin traveled from New York to Florida and applied for a driver’s license at Florida Department of Highway Safety and Motor Vehicles (FLHSMV). At the time of his travel, Qin was a resident of Old Westbury, Long Island and Manhattan, but he signed an application stating that it was “true and correct” that he resided at an address in Miami, where he had never lived. To bolster this false assertion, Qin presented FLHSMV officials with fake bank and credit card statements bearing the name “Hui Quin” and the false Miami address. After FLHSMV issued Qin a Florida Driver’s License, he presented it to banks and a motor vehicle insurer as identification.
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 Adam Toporovsky are in charge of the prosecution.
The Defendant:
HUI QIN (also known as “Qin Hui,” “Hui Quin,” “Muk Lam Li” and “Karl”)
Age: 55
Old Westbury, Long Island and Manhattan, New YorkE.D.N.Y. Docket No. 24-CR-100 (JMA)
Two Men Sentenced for Defrauding JetBlueRead the Press Release
Earlier today, in federal court in Brooklyn, Julien Levy and Keily Nunez were sentenced by United States District Judge Pamela K. Chen to 20 and 40 months in prison, respectively, for defrauding JetBlue Airways of approximately $10 million. Levy and Nunez pleaded guilty to committing honest services wire fraud in June and July 2023, respectively.
Breon Peace, United States Attorney for the Eastern District of New York, and Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, announced the sentence.
“These defendants shamelessly lined their own pockets by diverting millions of dollars in airline part contracts to entities they controlled,” stated United States Attorney Peace. “Today’s sentence sends a clear message that those who betray the trust of their employers by disrupting marketplaces for their own personal gain will be held to account.”
Mr. Peace thanked Internal Revenue Service Criminal Investigation for their assistance with the investigation.
“The defendants abused their positions of power to orchestrate a scheme that defrauded JetBlue Airways out of millions of dollars. Levy and Nunez went as far as manipulating the identity of a deceased airline employee to circumvent the company’s policies and procedures with the sole intention of enriching themselves. Today they face the consequences of their unbound greed," said HSI New York Special Agent in Charge Ivan J. Arvelo. "I commend HSI New York and our law enforcement and private sector partners for stemming this corruption before it ultimately impacted well-meaning customers.”
Between approximately July 2017 and June 2021, Nunez and another JetBlue employee accepted bribes from Levy in exchange for approving more than $1.5 million in aircraft part invoices between JetBlue and Levy’s company, Summit Aviation Supply LLC. Nunez also accepted bribes in connection with his approval of more than $8.5 million in aircraft part invoices between JetBlue and Alaris Aerospace Systems LLC, a Florida-based aircraft parts seller a co-conspirator controlled. Nunez was previously sentenced to two years’ imprisonment in connection with this role in a separate scheme to defraud the United States Small Business Administration’s Economic Injury Disaster Loan program of approximately $1.5 million through the submission of false loan applications.
Department of Justice Trial Attorney Patrick J. Campbell and Assistant United States Attorney Nick Axelrod are in charge of the prosecution with assistance from Paralegal Specialist Liam McNett.
The Defendants:
KEILY NUNEZ
Age: 44
Jamaica, New YorkJULIEN LEVY
Age: 39
Englewood, New JerseyE.D.N.Y. Docket No. 22-CR-281 (PKC)
Ghanaian National Sentenced to 48 Months’ Imprisonment for Receiving Money Stolen from Romance Scam VictimsRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Emmanuel Quamey, a Ghanaian national, was sentenced by United States District Judge Carol Bagley Amon to 48 months in prison for his role in receiving and laundering stolen money which was obtained through romance scams that defrauded over a dozen vulnerable and/or elderly victims in the United States. As part of his sentence, Quamey was ordered to pay $3.3 million in forfeiture and restitution to the victims in the amount of approximately $3.8 million. Quamey pleaded guilty in October 2023 to conspiring to receive stolen money for his role in the romance scams.
Breon Peace, United States Attorney for the Eastern District of New York, and Ivan J. Arvelo, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the sentence.
“Romance scams are callous crimes in which perpetrators steal money from vulnerable and elderly victims by taking advantage of the victims’ trust and desire to form human connections,” stated United States Attorney Peace. “This sentence serves as a warning to individuals like the defendant that there are real consequences to participating in these cruel scams. This Office and our law enforcement partners are committed to bringing these fraudsters to justice and getting the victims’ money back.”
Mr. Peace thanked the Special Agents of Homeland Security Investigations New York for their exemplary work on the case.
As set forth in court filings, between September 2019 and March 2023, Quamey and a network of co-conspirators received over $3.8 million in fraud proceeds that were stolen from several vulnerable and elderly U.S. victims of romance scams. A “romance scam” is a type of online financial fraud that occurs when an individual user of social media or an internet dating website is targeted for fraud by a scammer posing as a potential romantic partner. The scammers use a fake persona to express strong romantic interest in the targeted victim in order to trick them into sending money to the scammer under false pretenses. The specific stories that the scammers use to induce romance scam victims to send money vary, but as part of the fraud, the victims are directed to wire their money to one or more bank accounts to purportedly help their romantic partners. The victims would then be defrauded of the money.
Quamey was responsible for receiving and laundering the victims’ money. He personally received approximately $3.3 million of the victims’ money that was wired into bank accounts he directly controlled. Using more than a dozen bank accounts in the United States and Ghana, Quamey and his co-conspirators would then transfer the victims’ money overseas to Ghana.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Shannon C. Jones and Genny Ngai are in charge of the prosecution with the assistance of Paralegal Specialist Jacob Menz. Assistant United States Attorney Claire Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters in the case.
The Defendant:
EMMANUEL QUAMEY
Age: 36
Accra, GhanaE.D.N.Y. Docket No. 23-CR-226 (CBA)
Two Individuals Arrested for Defrauding Canadian Company that Sought to Purchase Protective Surgical Masks at Outset of Covid-19 PandemicRead the Press Release
Earlier today, at the federal courthouse in Central Islip, a criminal complaint was unsealed charging Jonathan Cannon and Julie Dotton with wire fraud in connection with a scheme to defraud a company seeking to purchase personal protective equipment (“PPE”) at the outset of the COVID-19 pandemic. Cannon was arrested this morning at his home on Long Island and arraigned before United States Magistrate Judge Steven L. Tiscione who released the defendant on a $500,000 bond. Dotton was arrested this morning in Buffalo and will make her initial appearance this afternoon in federal court in the Western District of New York.
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 arrests and charges.
“As alleged in the complaint, the defendants sought to take advantage of a provider’s need for life-saving personal protective equipment through a fraudulent scheme that was designed in reality to line their own pockets,” stated United States Attorney Peace. “This Office will continue to work diligently to ensure that fraudsters who sought to capitalize on the worldwide pandemic will be brought to justice. There is no free pass for Covid-19 fraud.”
“Jonathan Cannon and Julie Dotton allegedly defrauded a healthcare company of approximately $8.2 million under the false pretense of selling personal protective equipment. The defendants’ alleged failure to provide these critical garments, especially during the onset of a global pandemic, selfishly deprived potential consumers and patients in need. Today’s arrests highlights the FBI’s steadfast pursuit of those who jeopardize the health of others for personal financial gain,” stated FBI Assistant Director-in-Charge Smith.
According to court filings, as part of their fraudulent scheme, Cannon and Dotton allegedly misrepresented their ability to obtain PPE to a Canadian company that was an official provider of PPE to two Canadian provinces during the COVID-19 pandemic. Using a nominal entity she controlled, Dotton entered into a contract with the company to sell approximately 12 million face masks to it for $8.2 million. Cannon and Dotton then caused the company to wire the $8.2 million payment to a purported third-party escrow agent’s bank account. Rather than use the funds to procure the PPE as promised, Cannon and Dotton caused the purported escrow agent to transfer the funds to a bank account controlled by Cannon, who, in turn, disbursed the funds to various third parties for the defendants’ benefit. After Cannon and Dotton failed to procure the agreed upon PPE for the company, and the company demanded delivery of the PPE or a refund, Cannon and Dotton strung them along with excuses for a number of months.
The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Drew G. Rolle, John O. Enright and Adam Toporovsky are in charge of the prosecution with assistance from Paralegal Specialist Peyton Jefferson.
The Defendants:
JONATHAN CANNON
Age: 58
Miller Place, New YorkJulie Dotton
Age: 51
Orchard Park, New YorkE.D.N.Y. Docket No. 24-MJ-342
Former Village of Brewster Police Officer Sentenced to 36 Months in Prison for his Role in Commercial Sex Bribery SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, former Village of Brewster Police Officer Wayne Peiffer was sentenced by United States District Judge LaShann DeArcy Hall to 36 months’ imprisonment for his participation in a conspiracy to commit Hobbs Act extortion and conspiracy to commit bribery. Additionally, Peiffer must pay $5,000 in forfeiture as well as perform community service during his supervised release for no less than four hours per week for a total of 208 hours. The community service should benefit Brewster, New York or a nearby community.
The charges arose from Peiffer’s protection of two Queens-based prostitution businesses from law enforcement when the businesses brought women to his jurisdiction in Brewster, New York, to engage in prostitution. Peiffer pleaded guilty to the charges in April 2022.
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), 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 charges.
“The defendant is rightly punished with a prison sentence for disgracing his badge, violating the public trust in the community he was sworn to serve, and facilitating the victimization of vulnerable women all for his own self-satisfaction,” stated United States Attorney Peace. “Rooting out public corruption in all its pernicious forms is a priority of this Office as such conduct undermines trust in law enforcement.”
Mr. Peace also expressed his appreciation to the Putnam County District Attorney’s Office for their continued support and assistance throughout this investigation.
“Wayne Peiffer violated his sworn oath to serve the community by using his authority as law enforcement to protect known sex traffickers and perpetuate the further victimization of the trafficked women,” stated FBI Assistant Director-in-Charge Smith. “Today, justice has been restored. Peiffer’s sentence emphasizes the FBI’s intolerance of corrupt individuals who abuse their position and disrupt the public’s confidence in our law enforcement departments.”
“Wayne Peiffer, a police officer and trusted public servant, used his official position to shield prostitution route drivers and sex traffickers from other local and state law enforcement in exchange for sexual favors,” stated HSI New York Special Agent-in-Charge Arvelo. “This case is particularly alarming because Peiffer not only betrayed his sworn duty to uphold the law, but his actions also facilitated the trafficking of young women. HSI will not tolerate those who abuse their positions of trust to commit these despicable acts exploiting the most vulnerable members of our society.”
“Today, a former police officer who once swore an oath and then betrayed it in reprehensible fashion is facing the consequences of his actions,” stated NYPD Commissioner Caban. “Law enforcement is a noble profession that provides no harbor for those who would tarnish the shield we proudly wear. I commend everyone from the NYPD, HSI, FBI, and the U.S. Attorney’s Office for the Eastern District for their work on this important case.”
From approximately 2010 through October 2018, Peiffer provided protection to members of a prostitution business and a sex trafficking organization that each transported women from Queens to Brewster for the purposes of engaging in prostitution. Peiffer’s protection included advance notice of increased law enforcement activities and assistance with avoiding detection and apprehension. For example, on one occasion Peiffer warned members of the Cid-Hernandez Sex Trafficking Organization not to travel to Brewster because law enforcement officers in a narcotics investigation were conducting car stops in the area. Peiffer met one of the criminal organization’s employees in a service station and told him to leave the area. On another occasion Peiffer called one of the organization’s drivers and advised him not to travel to Brewster because of law enforcement activities. When a driver for the organization was pulled over by another Brewster police officer, Peiffer vouched for the driver, describing him as a “friend.” In exchange for his assistance, Peiffer received sexual services from the women at no cost.
Four of Peiffer’s co-defendants, Luz Elvira Cardona, Roberto Cesar Cid Dominguez, Blanca Hernandez Morales and Jose Facundo Zarate Morales were convicted after trial of sex trafficking in October 2023, and they are awaiting sentencing. Co-defendant Cristian Godinez pleaded guilty to conspiracy to facilitate prostitution and conspiracy to facilitate bribery. He was sentenced in December 2023 to 14 months in prison.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Nicholas J. Moscow and Rachel A. Bennek are in charge of the prosecution, with the assistance of Paralegal Specialist Ryan Costley.
The Defendant:
WAYNE PEIFFER
Age: 51
Highland, New YorkCo-Defendants:
LUZ ELVIRA CARDONA
Age: 35
Queens, New YorkROBERTO CESAR CID DOMINGUEZ
Age: 61
Queens, New YorkCRISTIAN NOE GODINEZ
Age: 44
Queens, New YorkBLANCA HERNANDEZ MORALES
Age: 53
Queens, New YorkJOSE FACUNDO ZARATE MORALS
Age: 35
Queens, New YorkE.D.N.Y. Docket No. 21-CR-622 (LDH)
Queens Investment Advisor Sentenced to 78 Months in Prison for Multi-Million Dollar Securities Fraud SchemeRead the Press Release
Today, in federal court in Central Islip, Surage Roshan Perera, the founder and Executive Director of Janues Capital, Inc. in Bellerose, Queens, was sentenced by United States District Judge Gary R. Brown to 78 months’ imprisonment for securities fraud in connection with running a Ponzi scheme in which the defendant used investor money to pay redemptions to prior investors and his personal expenses, and fund his highly speculative day trading. Perera pleaded guilty to the charge in October 2023. As part of his sentence, Perera was ordered to pay $6.3 million in restitution.
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 sentence.
“Perera’s sentence is just punishment for causing more than $6 million in losses to the victims who are now saddled with debts, some who lost their life savings and others who have been forced to delay retirement all because of the lies he peddled to them about their investments,” stated United States Attorney Peace. “I commend the members of my Office and the FBI Special Agents for disrupting the defendant’s Ponzi scheme so that he could not wreak even more financial harm and holding him accountable for his criminal conduct.”
Mr. Peace thanked the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group for their assistance with the case.
“Surage Perera pays the price for using his relationships with the victims to swindle them of over $6 million and casting several into a lifetime of debt. Today’s sentence reaffirms the FBI’s promise to uphold financial integrity and to pursue those who create fraudulent schemes for personal gain,” stated FBI Assistant Director-in-Charge Smith.
As alleged in the indictment and set forth in court filings, between February 2022 and March 2023, Perera abused his position of trust as an investment advisor to convince unsuspecting investors to part with their hard-earned money for what they believed were safe, well-performing investments. For example, Perara falsely told one victim (“Jane Doe”) that he had relationships with large institutions and could purchase stock in companies that traded on the NASDAQ and NYSE at discounted prices. He also told Jane Doe that her investment was low-risk and he would use her investment capital to purchase shares in those public-traded companies. As a result, Jane Doe gave Perera more than $4.2 million. In reality, Perera was operating a Ponzi scheme. Instead of investing as promised, Perera misappropriated those funds by, among other things, paying redemptions to prior investors, paying personal expenses and funding his day trading. To conceal his fraudulent scheme, Perera sent fraudulent confirmation notices and account statements to investors. In the end, Perera caused 15 victims, some of whom were his close friends, to lose approximately $6.3 million.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorney Christopher Caffarone is in charge of the prosecution.
The Defendant:
SURAGE ROSHAN PERERA
Age: 51
Bellerose, QueensE.D.N.Y. Docket No. 23-CR-129 (GRB)
New York Man Pleads Guilty to Conspiracy to Unlawfully Export Dual-Use Electronics Used in Russian Military DronesRead the Press Release
Nikolay Grigorev, 36, of Brooklyn, pleaded guilty today to conspiring to defraud the United States for his role in an illicit export control scheme to ship electronic components from the United States to companies affiliated with the Russian military. Co-defendants Nikita Arkhipov and Artem Oloviannikov remain at large.
“In pleading guilty today, the defendant admitted he conspired to smuggle over $250,000 worth of sensitive American drone technology to Russian companies fueling Putin’s unlawful war against Ukraine,” said Deputy Attorney General Lisa Monaco. “Swift action by agents and prosecutors unraveled a web of fake orders and wire transfers to prevent over 11,500 electronic components from making their way to the Russian war machine. The Justice Department will continue to hold accountable those who defy our sanctions and export controls to support Russia’s unprovoked and unjustified aggression in Ukraine – whether they’re based in New York City or overseas.”
“The FBI is relentless in its efforts to prevent sensitive, dual-use technology from being acquired by adversaries,” said FBI Deputy Director Paul Abbate. “The technologies in this case supported Russia’s war effort and poses a significant threat to the United States and its allies. The FBI continues to tirelessly pursue any illegal transfers that threaten national security and hold accountable those who violate the law.”
“When I visited Ukraine last November, I saw firsthand the death and destruction that such drones and other Russian weapons of war have caused, and heard from our counterparts about the importance of stopping the illicit flow of technology to support the Russian war machine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s plea reinforces our commitment to hold accountable those who violate our laws and our determination to undermine the Russian government’s unjustified campaign of aggression against the Ukrainian people.”
“Grigorev admitted today that he conspired to supply Russia with U.S.-sourced, dual-use technologies, knowing full well that his actions violated export controls and sanctions designed to stop those items from being sent to Russia and used in the production of drones like those found on the battlefields in Ukraine,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s guilty plea reaffirms that my office will pursue anyone who violates our export controls and threatens our national security.”
“Today’s guilty plea is just the latest example of our unyielding efforts to reduce the flow of electronic components to the Russian military,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “Criminal convictions await those who willfully circumvent U.S. export controls and aid the manufacture of Russian drones used against Ukraine.”
As alleged in the indictment, Grigorev utilized a Brooklyn-based corporate entity, Quality Life Cue LLC (QLC), to facilitate the scheme. QLC was registered and controlled by Grigorev and Oloviannikov, with Arkhipov utilizing a QLC email account from Russia. Through QLC, the defendants procured dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine. The most notable of these entities was SMT-iLogic, a Russia-based technology company that was sanctioned in May 2023 for its involvement in the supply chain for producing Russian military UAVs used in Russia’s war against Ukraine.
Between Oct. 22, 2021, and Feb. 22, 2022, QLC accounts controlled by Grigorev received wire transactions from SMT-iLogic totaling approximately $272,830. These funds were used almost entirely to make payments to a Brooklyn-based electronics distributor (the “Brooklyn Company”) or to pay Grigorev’s credit cards, which he used to buy goods from the Brooklyn Company. In email and chat communications, the defendants explicitly discussed their efforts to circumvent U.S. export restrictions, including through the use of front companies in third countries, such as Kazakhstan, and they also forwarded invoices listing SMT-iLogic as the recipient of semiconductors and other electronic components purchased from the Brooklyn Company. In addition, in December 2022, in response to negative press coverage of SMT-iLogic, Grigorev forwarded a news article to his co-defendants and stated, “they are already writing about your (sic) guys in articles about how Russia is getting American components for drones.” In June 2023, a court-authorized search warrant of Grigorev’s residence in Brooklyn resulted in the successful seizure of over 11,500 electronic components that had been purchased from the Brooklyn Company and were awaiting unlawful export to Russia.
As a result of today’s guilty plea, Grigorev faces a maximum penalty of five years in prison. A sentencing hearing has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Artie McConnell and Kate Mathews for the Eastern District of New York are prosecuting the case. Natalya Savransky, formerly of the National Security Division’s Counterintelligence and Export Control Section, provided valuable assistance.
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.
Brooklyn Resident Pleads Guilty to Conspiracy to Unlawfully Export Dual-Use Electronics Used in Russian Military DronesRead the Press Release
BROOKLYN, NY - Today, in federal court in Brooklyn, Nikolay Grigorev pleaded guilty to conspiring to defraud the United States for his role in an illicit export control scheme to ship electronic components from the United States to companies affiliated with the Russian military. The proceeding was held before United States District Judge Nicholas G. Garaufis. When sentenced, Grigorev faces up to five years in prison. Co-defendants Nikita Arkhipov and Artem Oloviannikov remain at large.
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; James Smith; Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Jonathan Carson, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office (DOC-BIS-OEE), announced the guilty plea.
“Grigorev admitted today that he conspired to supply Russia with U.S.-sourced, dual-use technologies, knowing full well that his actions violated export controls and sanctions designed to stop those items from being sent to Russia and used in the production of drones like those found on the battlefields in Ukraine,” stated United States Attorney Peace. “Today’s guilty plea reaffirms that my Office will pursue anyone who violates our export controls and threatens our national security.”
“In pleading guilty today, the defendant admitted he conspired to smuggle over $250,000 worth of sensitive American drone technology to Russian companies fueling Putin’s unlawful war against Ukraine,” stated Deputy Attorney Monaco. “Swift action by agents and prosecutors unraveled a web of fake orders and wire transfers to prevent over 11,500 electronic components from making their way to the Russian war machine. The Justice Department will continue to hold accountable those who defy our sanctions and export controls to support Russia’s unprovoked and unjustified aggression in Ukraine – whether they’re based in New York City or overseas.”
“When I visited Ukraine last November, I saw firsthand the death and destruction that such drones and other Russian weapons of war have caused and heard from our counterparts about the importance of stopping the illicit flow of technology to support the Russian war machine,” stated Assistant Attorney General Olsen. “Today’s plea reinforces our commitment to hold accountable those who violate our laws and our determination to undermine the Russian government’s unjustified campaign of aggression against the Ukrainian people.”
“Nikolay Grigorev intentionally avoided export controls by masking his business’s production and shipment of technologies designed to support Russian military operations, especially its ongoing attacks in Ukraine,” stated FBI Assistant Director-in-Charge Smith. “These sanction violations intentionally subvert those laws designed to protect international trade and illustrate the defendant’s malintent in this scheme. The FBI prioritizes all threats to our national security and will disrupt any entity attempting to covertly collaborate with our adversaries”
“Deliberately circumventing U.S. export controls to enable production of drones that support Russia’s full-scale invasion of Ukraine and the indiscriminate bombing of Ukrainian citizens and critical infrastructure will not be tolerated,” stated DOC-BIS-OEE Special Agent-in-Charge Carson. “Today’s guilty plea demonstrates the direct impact that OEE investigations have in supporting U.S. national security interests.”
As alleged in the indictment, Grigorev utilized a Brooklyn-based corporate entity, Quality Life Cue LLC (“QLC”), to facilitate the scheme. QLC was registered and controlled by Grigorev and Oloviannikov, with Arkhipov utilizing a QLC email account from Russia. Through QLC, the defendants procured dual-use electronic components for entities in Russia involved in the development and manufacture of drones for the Russian war effort in Ukraine. The most notable of these entities is SMT-iLogic, a Russia-based technology company. On or about May 19, 2023, SMT-iLogic was also added to the Specially Designated Nationals and Blocked Person List (“SDN List”). According to the Office of Foreign Assets Control, SMT-iLogic is known to be involved in the supply chain for producing Russian military drones used in Russia’s war against Ukraine. SMT-iLogic is associated with an entity known as the Special Technology Centre (“STC”). STC is a Russia-based entity that was added to the SDN List on or about December 29, 2016, for assisting the foreign military intelligence agency of Russia’s armed forces, commonly known by the acronym “GRU,” in conducting signals intelligence operations. On or about January 4, 2017, STC was added by the U.S. Department of Commerce, Bureau of Industry and Security to the Entity List for supporting the GRU. STC was involved the production of the “Sea Eagle Orlan 10 UAV,” a drone vehicle that has been involved in Russian military operations in Ukraine. STC’s largest customer is Russia’s Ministry of Defense, which paid STC the equivalent of nearly $99 million between February and August of 2022.
Between October 22, 2021 and February 22, 2022, QLC accounts controlled by Grigorev received wire transactions from SMT-iLogic totaling approximately $272,830. These funds were used almost entirely to make payments to a Brooklyn-based electronics distributor (the “Brooklyn Company”) or pay Grigorev’s credit cards, which he used to buy goods from the Brooklyn Company. In email and chat communications, the defendants explicitly discussed their efforts to circumvent U.S. export restrictions, including through the use of front companies in third countries, such as Kazakhstan, and they also forwarded invoices listing SMT-iLogic as the recipient of semiconductors and other electronic components purchased from the Brooklyn Company. In addition, in December 2022, in response to negative press coverage of SMT-iLogic, Grigorev forwarded a news article to his co-defendants and stated, “they are already writing about your (sic) guys in articles about how Russia is getting American components for drones.” In June 2023, a court-authorized search warrant of Grigorev’s residence in Brooklyn resulted in the successful seizure of over 11,500 electronic components that had been purchased from the Brooklyn Company and were awaiting unlawful export to Russia.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Kate Mathews are in charge of the prosecution, with assistance from Litigation Analyst Mary Clare McMahon. Natalya Savransky, formerly of the National Security Division’s Counterintelligence and Export Control Section, also provided valuable assistance.
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 Defendant:
NIKOLAY GRIGOREV
AGE: 36
Brooklyn, New YorkE.D.N.Y. Docket No. 23-CR-429 (NGG)
Instagram Influencer Known as “Jay Mazini” Sentenced to 84 Months in Prison for Overlapping Fraud SchemesRead the Press Release
Earlier today, in federal court in Brooklyn, Jebara Igbara, also known as “Jay Mazini,” was sentenced by United States District Judge Frederic Block to 84 months in prison for wire fraud, wire fraud conspiracy and money laundering arising out of multiple schemes that resulted in millions of dollars in loss to trusting investors. Igbara pleaded guilty to the charges in November 2022. As set forth in the information, up until March 2021, Igbara maintained a popular Instagram account under the name “Jay Mazini,” where he would post videos depicting, among other things, occasions during which he would hand out large amounts of cash to various individuals as gifts. In reality, Igbara was perpetrating overlapping fraud schemes, scamming investors out of at least $8 million. As part of his sentence, Igbara was ordered to pay $10 million in forfeiture. The amount of restitution will be determined at a later date.
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 Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.
“The prosecution of Igbara unmasked him as a fraudster who used his social media popularity to con investors out of millions of dollars,” stated United States Attorney Peace. “Shamefully, he targeted his own religious community, taking advantage of their trust in him so he could spend and gamble their hard-earned money. Hopefully today’s sentence will influence fraudsters, like this defendant, to think twice about the consequences before they victimize investors for their own benefit.”
“Igbara was a crypto con man. He not only created a fake online presence to purport that he was a wealthy crypto investor, he used his Instagram persona as proof of success when convincing his unsuspecting victims to invest in his schemes. He conned a New York Muslim community out of millions then simply spent it and gambled it away. Igbara had no regard for the victims he affected with his scam, but today’s sentence means that this crypto swindler, along with his social media persona, will now spend years in prison for his criminal acts,” stated IRS-CI Special Agent-in-Charge Fattorusso.
Igbara maintained a popular social media presence on Instagram, calling himself “Jay Manzini,” with nearly one million followers during the offense period of 2019 to 2021. The defendant portrayed himself as a successful investor and businessman, and also posted material relating to his Muslim faith, portraying himself as religious. Igbara touted his purported wealth by posting videos on his Instagram account showing him handing out large sums of cash to shoppers waiting on the checkout line in grocery stores, individuals working in fast food restaurants and a woman he met at the airport who had lost her purse.
Igbara perpetrated an investment fraud scheme via a company called Halal Capital LLC. The scheme targeted members of the Muslim-American community in New York by soliciting their money for purported investments in stock, electronics resale and the sale of personal protective equipment. In reality, Igbara was operating a Ponzi scheme, and misappropriated nearly all of the money for his personal expenses, luxury vehicles and gambling. To raise money in order to pay his investors “returns,” and keep them on the hook, Igbara also perpetrated a second fraudulent scheme, wherein he posted on his Instagram and other social media accounts that he was willing to pay above-market prices for various cryptocurrencies. He would then send his victims doctored images of wire transfer confirmations that purported to show he had sent money for the cryptocurrency as promised, when in reality, the payment was never sent, and Igbara was merely stealing the cryptocurrency sent by his victim.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Lauren Howard Elbert and Joshua Dugan are in charge of the prosecution.
The Defendant:
JEBARA IGBARA (also known as “Jay Mazini”)
Age: 28
Edgewater, New JerseyE.D.N.Y. Docket No. 22-CR-424 (FB)
Defendant Convicted of Murder for Hire in Fatal Shooting Outside Karaoke Bar in QueensRead the Press Release
Today, a federal jury in Brooklyn returned a guilty verdict against Antony Abreu on both counts of an indictment charging him with murder-for-hire and murder-for-hire conspiracy in connection with the February 12, 2019 killing of 31-year-old Xin “Chris” Gu, outside of a karaoke bar in Queens. The verdict followed a two-week trial before United States District Judge Carol Bagley Amon. When sentenced, the defendant 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.
“With today’s conviction of Abreu, a cold-blooded triggerman who executed a young man in exchange for an expensive wristwatch, this Office has held all the conspirators responsible for this murder plot driven by greed and revenge,” stated United States Attorney Peace. “The victim was marked for death simply because he was pursuing the American dream by starting his own company. Chris Gu was celebrating his promising future and the Chinese New Year when his life was violently ended in the street without warning. His killers will spend the rest of their lives in prison.”
“Antony Abreu appraised Xin “Chris” Gu to be worth that of an expensive watch, murdering him for such jewelry. After Gu decided to pursue his own business dream, his slighted employer bribed Abreu to carry out the final step in this twisted judge, jury, and executioner scheme. Today’s conviction of the final defendant in this cold-blooded conspiracy emphasizes the FBI’s commitment to restoring the balance of justice and reaffirming that no individual is permitted to put a price on another’s life,” stated FBI Assistant Director-in-Charge Smith.
“The tireless work of the detectives, agents, and prosecutors in this case helped hold to full account the men responsible for this murder,” stated NYPD Commissioner Caban. “This is another example of our agencies’ collaborative commitment to public safety, and further proof that no one is beyond the reach of the law.”
As proven at trial, Abreu was hired to murder Gu as part a revenge scheme orchestrated by Gu’s former boss, Allen Yu. Allen Yu’s business, Amaco, lost substantial business when Gu left to start his own property development company. Enraged at Gu’s perceived disloyalty, Allen Yu hired co-conspirators You You and Zhe Zhang to kill Gu in exchange for payment. Zhang in turn hired Abreu to carry out the murder.
On the evening of February 11, 2019, and into the following pre-dawn hours, Gu’s new company hosted a celebration of the Lunar New Year at Lake Pavilion restaurant in Flushing. After dinner, Gu and a smaller group went to a karaoke bar, Grand Slam KTV in Flushing. When Gu left the bar and was getting into a cab, Abreu approached and shot Gu multiple times at close range, killing him. In exchange for committing the murder, Zhang gave Abreu a luxury Richard Mille wristwatch valued at over $100,000.
In the days after the murder, in an effort to avoid detection, Abreu sold the car he used in the murder to a relative and sold a burner phone used to facilitate the murder. In the following months, Abreu repeatedly bragged about committing the murder to various associates and posted on social media about the wristwatch Zhang had given him. After his arrest, Abreu obtained a contraband phone in jail, which he used to attempt to intimidate and retaliate against government witnesses in the case and to make payments to potential defense witnesses.
You You pleaded guilty to murder-for-hire conspiracy in June 2023 and is awaiting sentencing. Allen Yu and Zhang were convicted at trial in October 2023 and face mandatory life sentences when they are sentenced.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Devon Lash, Gabriel Park and Eric Silverberg are in charge of the prosecution with the assistance of Paralegal Specialist Elizabeth Reed and Legal Assistant Thomas “Cole” Englert.
The Defendants:
ANTONY ABREU (also known as “Anthony”)
Age: 36
Corona, QueensE.D.N.Y. Docket No. 22-CR-208 (CBA)
White Supremacist Leader Sentenced to 44 Months in Prison for Conspiring to Make Death Threats Against Brooklyn JournalistRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Nicholas Welker, also known as “King ov Wrath,” was sentenced by United States District Judge Pamela K. Chen to 44 months’ imprisonment for conspiring to make death threats. Welker, the leader of Feuerkrieg Division (“FKD”), an international racially or ethnically motivated violent extremist (“RMVE”) group, which translates to “War Fire,” posted death threats against a Brooklyn-based journalist (the “Journalist”) so that the Journalist would stop reporting on the Neo-Nazi group. Welker pleaded guilty in September 2023.
Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.
“Welker tried to silence a journalist from reporting on his white supremacist group so that his fellow extremists could continue to commit violence against racial, ethnic, and religious minorities, and the LGBTQ+ community,” stated United States Attorney Peace. “There were real victims of this crime—the journalist and his news media organization. Today’s sentence demonstrates that we will stand up for them and other journalists who bravely report on these violent hate groups.”
Mr. Peace expressed his thanks to the Federal Bureau of Investigation’s New York Joint Terrorism Task Force which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies. Mr. Peace also thanked the Estonian Internal Security Service and Prosecutor’s Office for their valuable support.
According to court filings, Welker’s threat included a photograph of the Journalist with a gun aimed at his head and the words “Race Traitor” over the Journalist’s eyes. The threat stated, “JOURNALIST F[***] OFF! YOU HAVE BEEN WARNED.” The threat listed the Journalist and his employer by name. Welker posted the threat to a public online forum. Two under-aged FKD members tweeted the death threat directly at the Journalist’s social media handle so that he would see it. Welker intended to frighten the Journalist into dropping his reporting on Welker’s hate group.
FKD members share a common goal of challenging laws, social order, and the government via terrorism and other violent acts. The organization encourages attacks on racial minorities, the Jewish community, the LGBTQ+ community, the U.S. Government, journalists, and critical infrastructure. FKD has members in the United States and abroad.
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.
The Defendant:
NiCHOLAS WELKER (also known as “King ov Wrath”)
Age: 33
San Jose, CaliforniaE.D.N.Y. Docket No. 23-CR-141 (PKC)
Two Men Charged with Murder in the Course of Sex-Trafficking at Open-Air “Penn Track” in Brooklyn and Related CrimesRead the Press Release
Earlier today, a seven-count indictment was unsealed in federal court in Brooklyn charging Omari Scott, also known as “Prince” and “Sir Prince,” and Michael Simmons, also known as “Victory,” with murder in the course of sex trafficking, sex trafficking by force and related crimes. The charges stem from the defendants’ trafficking of women and promoting prostitution with customers in cars, hotels and along a stretch of Pennsylvania Avenue in Brooklyn known as the “Penn Track” which has operated for years as an open-air commercial sex market. In the spring of 2023, Scott violently punished a trafficking victim who attempted to leave his control to work instead for Cleveland Clay, another individual who had women working for him in prostitution on the Penn Track. Scott and Simmons decided to murder Clay, which Simmons carried out by shooting him multiple times at close range on May 1, 2023. Scott was arrested earlier today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Joseph A. Marutollo. Simmons is currently serving a sentence on unrelated charges and 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 and 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 arrest and charges.
“As alleged, the defendants conspired to brazenly murder a rival for control of a victim they perceived to be their property in the course of sex trafficking,” stated United States Attorney Peace. “This Office is working alongside our federal and state law enforcement partners to prosecute the perpetrators who exploit vulnerable women for profit and we will provide support for these victims who have been harmed.”
Mr. Peace also expressed his appreciation to the New York City Department of Corrections, the New York City Human Resources Administration, the Kings County District Attorney’s Office and the New York County District Attorney’s Office for their valuable assistance with the case.
FBI Assistant Director-in-Charge Smith said, “Human lives are not pawns for criminals to manipulate for their own cruel wishes. Omari Scott and Michael Simmons’s desire to establish control over their sex trafficking operation extended beyond violence against their victims, leading to the alleged murder of their rival. Their alleged actions – sexually exploiting women and conspiring to take a life of another individual – show a blatant disregard for humanity. The FBI will continue its efforts to pursue and bring to justice those who prey upon vulnerable populations with violence.”
“It is unequivocally detestable to compound the loathsome act of sex trafficking by allegedly murdering a business rival,” stated NYPD Commissioner Caban. “I commend everyone at the office of the U.S. Attorney for the Eastern District and the FBI’s New York Field Office for their continued partnership in this case. The NYPD and our colleagues remain steadfast in holding accountable anyone who seeks to profit from the abuse and exploitation of others.”
As alleged in court documents, Scott and Simmons both recruited women to work in prostitution on their behalf along the Penn Track. Scott used threats and violence to force at least two victims to engage in commercial sex work and provide him with the proceeds. For example, in a conversation obtained by law enforcement, Scott warned a victim that he would “knock [her] out for disrespecting me,” and, on another occasion, told an associate on a recorded call that he was “beating this b---- up tonight” for failing to work quickly enough to locate customers.
On April 30, 2023, when Scott learned that a victim planned to leave him and work with Clay, he was captured on video violently dragging the victim by her hair into his car, and later told an associate on a recorded call, “I’m bout to violate that b----. . . I’m about to do her something crazy. . . I’m not respecting this shit. . . . I’m about to kill this b----!” Early the next morning, Scott and Simmons were captured on video engaged in a heated argument with Clay. Less than three hours later, Scott and Simmons were captured on video outside of a laundromat near the Penn Track before Simmons walked off to kill Clay in a parking lot, shooting him at least five times at close range. When Simmons returned, the laundromat video captured Simmons telling Scott, “He’s down. . . he’s down!” Clay succumbed to his injuries and died later that day.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the sex trafficking charges, the defendants face a minimum term of 15 years in prison, and up to life imprisonment. If convicted of the murder charge, the defendants face up to life imprisonment, and are eligible for the death penalty.
If you are a victim of trafficking—whether by Scott, Simmons or someone else—and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorney Erin Reid, Anna Karamigios and Joshua Dugan are in charge of the prosecution with the assistance of Paralegal Specialists Anna November and Ryan Costley.
The Defendant:
OMARI SCOTT (also known as “Prince” and “Sir Prince”)
Age: 43
Brooklyn, New York
Michael Simmons (also known as “Victory”)
Age: 40
Pittsburgh, Pennsylvania
E.D.N.Y. Docket No. 24-CR-158 (KAM)High-Ranking MS-13 Leader Arraigned on Terrorism IndictmentRead the Press Release
Earlier today, Fredy Ivan Jandres-Parada, also known as “Lucky de Park View” and “Lacky de Park View,” a high-ranking leader of La Mara Salvatrucha, also known as MS-13, was arraigned at the federal courthouse in Central Islip, New York by United States Magistrate Judge Steven L. Tiscione. Jandres-Parada and 13 other high-ranking MS-13 leaders were indicted in December 2020 on terrorism offenses relating to their direction of the transnational criminal organization’s criminal activities in the United States, El Salvador, Mexico and elsewhere over the past two decades. Specifically, Jandres-Parada 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. For more than three years, Jandres-Parada was a fugitive, but he was arrested by the Federal Bureau of Investigation (FBI) and Homeland Security Investigations (HSI) earlier this month and made an initial appearance in federal court in the Southern District of California, where he was ordered to be transferred in custody to the Eastern District of New York.
Breon Peace, United States Attorney for the Eastern District of New York (EDNY); Mehtab Syed, 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 Jandres-Parada’s arrest and arraignment.
“As alleged, Jandres-Parada, a high-ranking leader in MS-13, engaged in drug trafficking, public and private displays of violence, and terrorism — all in pursuit of power for the organization,” said United States Attorney Peace. “This arrest is a monumental achievement for our Office and international partners, highlighting our dedication to dismantling MS-13 and their reign of terror wherever they hide.”
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 Legal Attachés in Mexico City and San Salvador, FBI and HSI’s San Diego Field Offices, HSI Attaché Mexico City and Assistant Attaché Tijuana, USMS Legal Attaché in Mexico City and the United States Customs and Border Protection Officers at the San Ysidro Port of Entry 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 California for coordinating the defendant’s initial appearance in San Diego. 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.
“The arrest of Jandres Parada demonstrates the FBI's commitment to protecting the American public by proactively targeting MS-13's highest ranking leaders in order to dismantle this transnational criminal organization, which is among the most violent in the world," said Mehtab Syed, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. "This collaborative effort among many agencies spanned coast to coast and led to this successful capture.”
“Fredy Ivan Jandres-Parada, (a/k/a “Lucky”) has been a fugitive on HSI's Most Wanted list since 2021. As one of the founding members of the MS-13 street gang, Jandres-Parada is alleged to be responsible for ordering acts of violence against gang rivals, law enforcement, and civilians alike. However, Jandres-Parada’s reign of violence came to an end when he was arrested in a joint operation by HSI and FBI,” said HSI New York Special Agent in Charge Ivan J. Arvelo. “With the apprehension of one of HSI’s most wanted, I commend HSI New York, our Long Island Division, and our law enforcement partners for their steadfast commitment and resolve to securing justice for the countless victims whom have been impacted by MS-13’s violence.”
As set forth in the indictment and related court filings, Jandres-Parada 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, Jandres-Parada, 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, Jandres-Parada 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 Jandres-Parada 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. Jandres-Parada, who previously resided in the Los Angeles area before being deported to El Salvador, played a key role coordinating communication and criminal activity between the Ranfla Nacional and MS-13 leaders in the United States, Mexico and elsewhere.
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.
One of Jandres-Parada’s co-defendants, Cesar Humberto Lopez-Larios, also known as “El Grenas de Stoners” and “Oso de Stoners,” and 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, Jandres-Parada 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 from the Office’s Long Island Criminal Division.
Newly Arrested Defendant in U.S. Custody:
FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age: 47Previously Arrested Defendant in U.S. Custody:
ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age: 48Fugitive Defendants:
CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age: 45BORROMEO 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: 45ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age: 46E.D.N.Y. Docket No.: 20-CR-577 (JMA)
Cabecilla De Alto Rango De LA MS-13 Instruído De Cargos Según Una Acusación Formal Del Gran Jurado (Indictment) Por TerrorismoRead the Press Release
Hoy, Fredy Iván Jandres-Parada, también conocido como “Lucky de Park View” y “Lacky de Park View”, un cabecilla de alto rango de La Mara Salvatrucha, también conocida como la MS-13 fue instruído de cargos en el Tribunal Federal en Central Islip, Nueva York ante el Juez Magistrado Federal Steven L. Tiscione. Jandres-Parada y otros 13 cabecillas de alto rango de la MS-13 fueron acusados formalmente en diciembre de 2020, por delitos de terrorismo relacionados con su dirección de las actividades criminales transnacionales de la organización criminal en los Estados Unidos, El Salvador, México, y otros lugares durante las últimas dos décadas. Específicamente a Jandres-Parada se le imputan cargos de conspiración para proporcionar y ocultar apoyo material a terroristas, conspiración para cometer actos de terrorismo que trascienden las fronteras nacionales, conspiración para financiar el terrorismo y conspiración para el narcoterrorismo. Durante más de tres años, Jandres-Parada era prófugo de la justicia, pero fue detenido por el FBI y HSI antes este mes y tuvo su primera comparecencia en el Tribunal Federal en el Distrito Sur de California, donde se dió la orden de trasladarle bajo custodia al Distrito Este de Nueva York.
Breon Peace, Fiscal Federal de los Estados Unidos para el Distrito Este de Nueva York (EDNY), Mehtab Syed, Director Adjunto Encargado en Funciones de la Oficina Regional de Los Ángeles del FBI, y Ivan J. Arvelo, Agente Especial Encargado en Funciones de la Oficina Regional de HSI en Nueva York anunciaron la detención e instrucción de cargos de Jandres-Parada.
“Se alega que Jandres-Parada, un líder de alto nivel en la MS-13, participó en el tráfico de estupefacientes, en muestras públicas y privadas de violencia y en el terrorismo - todo en búsqueda de poder para la organización” dijo el Fiscal Federal Peace. “Esta detención es un logro monumental para nuestra Oficina y los socios internacionales, recalcando nuestra dedicación para desmantelar la MS-13 y su reino de terror, donde sea que se escondan.”
El Sr. Peace expresó su agradecimiento a la Oficina Regional del FBI en Los Ángeles y a la Unidad Contra Pandillas para Calles Seguras de la División de Investigaciones Criminales, y a la Unidad contra Pandillas Nacionales y Delitos Violentos del HSI y a la Oficina Regional en Nueva York por encabezar las investigaciones de la MS-13. Además dió las gracias a los Agregados Legales del FBI en la Ciudad de México y San Salvador, las Oficinas Regionales del FBI y HSI en San Diego, al Agregado de HSI en la Ciudad de México, al Agregado en Tijuana, al Agregado Adjunto del USMS en la Ciudad de México, y a los Oficiales de los Estados Unidos de Aduanas y Protección de las Fronteras en el Puerto de Entrada de San Ysidro por el apoyo crítico que proporcionaron relacionado con la detención, y a la Oficina del Fiscal Federal y al Servicio de Marshals para el Distrito Sur de California por coordinar la comparecencia inicial del acusado en San Diego. El Sr. Peace también agradeció a numerosos componentes del Departamento de Justicia que contribuyeron a esta Acusación Formal del Gran Jurado (Indictment), incluyendo la Sección Contra el Terrorismo de la División de Seguridad Nacional, y a la Oficina Ejecutiva de los Grupos de Trabajo Contra el Crimen Organizado.
“La detención de Jandres-Paarada muestra el compromiso del FBI para proteger al pueblo norteamericano persiguiendo proactivamente a los líderes de más alto rango en la MS-13 para desmantelar esta organización criminal transnacional, que figura entre las más violentas en el mundo entero” dijo Mehtab Syed, Director Adjunto en Funciones Encargado de la Oficina Regional del FBI en Los Ángeles. “Este esfuerzo colaborativo entre muchas agencias abarcaba desde una de nuestras costas hasta la otra, y llevó a esta captura exitosa.”
“Fredy Ivan Jandres-Parada, (a/k/a) “Lucky”) ha sido un prófugo de la Justicia en la Lista de los Más Buscados del HSI desde 2021. Como uno de los miembros fundadores de la pandilla callejera MS-13, se alega que Jandres-Parada es responsable por ordenar actos de violencia contra pandillas rivales, contra las autoridades de orden público, y contra civiles. Sin embargo el reino de violencia de Jandres-Parada terminó cuando fue detenido en una operación conjunta de HSI y el FBI”, dijo Darren B. McCormack, Agente Especial Encargado en Funciones de la Oficina Regional de HSI en Nueva York. “Con la detención de uno de los más buscados de HSI, felicito a HSI en Nueva York, a nuestra División en Long Island, y a nuestros compañeros en las fuerzas de órden público por su compromiso constante y su empeño para asegurar que se haga justicia para las víctimas incontables que han sido afectados por la violencia de la MS-13”.
Según la Acusación Formal (Indictment), y documentación pertinente radicada en la Corte, Jandres-Parada y sus coacusados forman parte de la estructura de mando y control de la MS-13, que consiste en la Ranfla Nacional, Ranfla en Las Calles, y Ranfla en los Penales. Juegan un papel importante de liderazgo en las operaciones de la organización en El Salvador, México, los Estados Unidos, y en todo el mundo. En total, 27 de los líderes de más alto rango de la MS-13 han sido imputados con cargos en el Distrito Este de Nueva York en esta Acusación Formal del Gran Jurado (Indictment), y la Acusación Formal (Indictment) relacionado de los Estados Unidos v. Arévalo-Chávez, et al.
Además se alega que, en aproximadamente 2002, Jandres-Parada, sus coacusados, y otras cabecillas de la MS-13 empezaron a establecer una estructura de hierarquía de mando y control muy organizada como mecanismo para hacer cumplir sus decisiones y ejecutar su órdenes, aún estando encarcelados. Dirigían actos de violencia y asesinatos en El Salvador, los Estados Unidos y en otros lugares, establecieron campamentos de entrenamiento estilo militar para miembros de la MS-13 y obtuvieron armas militares tales como fusiles, pistolas, granadas, artifactos explosivos improvisados, y lanzacohetes. Además, comenzando en aproximadamente 2012, Jandres-Parada y otros miembros de la Ranfla Nacional negociaron con funcionarios del gobierno de El Salvador (GOES) para obtener beneficios y concesiones del gobierno. Para extorsionar esos beneficios y concesiones, la MS-13 participó en muestras públicas de violencia para amenazar e intimidar a las poblaciones civiles, poner en su mira a las fuerzas GOES de orden público y a oficiales militares, y a manipular el proceso electoral en El Salvador.
Además según se alega, la Ranfla Nacional dirigía la expansión de las actividades de la MS-13 por todo el mundo, incluyendo los Estados Unidos y México, donde Jandres-Parada y otros líderes de alto rango, fueron enviados para organizar las operaciones, establecer vínculos para obtener drogas y armas de fuego de carteles Mexicanos tales como los Zetas, el Cartel del Golfo, el Cartel de Jalisco Nueva Generación (CJNG), y el Cartel de Sinaloa, y participar en la trata de personas y contrabando. La Ranfla Nacional también dirigía a la membresía numerosa de la MS-13 en los Estados Unidos, para su participación en actividades criminales, tales como el narcotráfico y la extorsión para recaudar dinero para apoyar las actividades terroristas de la MS-13 en El Salvador y otros lugares. Jandres-Parada, que antes vivía en el área de Los Ángeles, antes de ser deportado a El Salvador, tenía un puesto clave coordinando la comunicación y la actividad criminal entre la Ranfla Nacional y las cabecillas de la MS-13 en los Estados Unidos, México y otros lugares.
Y por último, se alega que la Ranfla Nacional y que la estructura transnacional del liderazgo de la MS-13 han dado órdenes a miembros en los Estados Unidos para cometer actos de violencia para promover sus objetivos e implementar reglas para la MS-13, establecerse en algunas partes de los Estados Unidos, incluyendo el Distrito Este de Nueva York, donde, bajo el liderazgo y las reglas de los acusados, la MS-13 ha cometido asesinatos, atentados de asesinatos, agresiones, secuestros, narcotráfico, extorsión de personas y negocios, y obstrucción de la justicia, y ha enviado las cuotas y ganancias de la actividad criminal a través de giros electrónicos a los líderes de la MS-13 en El Salvador. Por ejemplo, la División en Long Island de esta Oficina ha procesado a cientos de líderes, miembros y asociados de la MS-13 por llevar a cabo más de 70 asesinatos en el Distrito Este de Nueva York desde 2009 hasta hoy.
Uno de los coacusados de Jandres-Parada, César Humberto López-Larios, también conocido como “El Grenas de Stoners” y “Oso de Stoners”, y dos acusados relacionados con la Acusación Formal (Indictment) de Arévalo-Chávez, Jorge Alexander De La Cruz, también conocido como “Cruger de Peatonales” y Francisco Javier Román-Bardales, también conocido como “Veterano de Tribus” siguen en libertad. Se anima a los miembros del público que tengan información sobre sus paraderos que se pongan en contacto en la línea gratis del FBI línea de información sobre MS-13, 1-866-STP-MS13 (1-866-787-6713) o la línea de información de HSI al (866) 347-2423 o https://www.ice.gov/webform/ice/tip/form. Juntos, el FBI y el HSI ofrecen una recompensa de $20,000 por información que lleva a la detención y condena de los prófugos.
Estos cargos son alegatos, y se presume la inocencia del acusado hasta y cuando se pruebe su culpabilidad más allá de una duda razonable en una Corte de Justicia. Si es condenado, Jandres-Parada confronta una condena máxima de cadena perpetua en prisión.
La imputación en este caso viene del Grupo de Trabajo Conjunto Vulcan (JTFV) que fue creado para combatir a la MS-13, encabezado por el Fiscal Adjunto John J. Durham de EDNY, y compuesto de las Oficinas de las Fiscalías Federales en todo el país, incluyendo el Distrito de Nueva Jersey, el Distrito Norte de Ohio, el Distrito de Utah, el Distrito de Massachusetts, el Distrito Este de Texas, el Distrito Sur de Nueva York, el Distrito Sur de la Florida, el Distrito Este de Virginia, el Distrito Sur de California, el Distrito de Nevada, el Distrito de Alaska, y el Distrito de Columbia, además de la División de Seguridad Nacional del Departamento de Justicia y la División Criminal. También el FBI, HSI, la DEA, el Bureau de Alcohol, Tabaco, Armas de Fuego y Explosivos, el USMS, la Junta Federal de Prisiones, y la Agencia de Estados Unidos para el Desarrollo Internacional, Oficina del Inspector General. Todos han sido socios esenciales y han promovido las investigaciones del JTFV.
La causa por parte del Gobierno será procesada por los Fiscales Federales Adjuntos John J. Durham, Paul G. Scotti, Justina L. Geraci, y Megan E. Farrell de la División Criminal de la Oficina en Long Island.
Acusado Recién Detenido en la Custodia de los Estados Unidos.
FREDY IVAN JANDRES-PARADA (“Lucky de Park View” y “Lacky de Park View”)
Age: 47Acusado Detenido Antes en la Custodia de los Estados Unidos.
ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age: 48Acusados Prófugos de la Justicia:
CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” y “Oso de Stoners”)
Age: 45BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age: 45EFRAIN CORTEZ (“Tigre de Park View” y “Viejo Tigre de Park View”)
Age: 54RICARDO ALBERTO DIAZ (“Rata de Leewards” y “Mousey de Leewards”)
Age: 51EDUARDO ERAZO-NOLASCO (“Colocho de Western” y “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” y “Viejo Pavas de 7-11”)
Age: 59HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age: 51SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age: 45ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age: 46E.D.N.Y Causa No: 20-CR-577 (JMA)
Long Island Man Sentenced to 8 Years in Prison for Prescription Drug Diversion SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Trevor Lawry was sentenced by United States District Judge Joan M. Azrack to 96 months in prison for orchestrating a yearslong conspiracy to divert Oxycodone and other prescription medications from a Hempstead pharmacy into the illicit market.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and Naomi Gruchacz, Special Agent-in-Charge, New York Regional Office, Department of Health and Human Services Office of Inspector General, announced the sentence.
“While communities across the country reeled from an opioid epidemic, this defendant operated an elaborate scheme that illegally diverted huge quantities of prescription medications into the hands of drug users, including people struggling with addiction,” stated United States Attorney Peace. “This Office will continue doing its part to find and hold responsible individuals at all levels of the illegal supply chain who contribute to the scourge of opioids in this District.”
United States Attorney Peace thanked the New York State Bureau of Narcotic Enforcement, the New York City Human Resources Administration, the New York Police Department, and the Nassau County Police Department for their significant contributions to the investigation.
DEA New York Division Special Agent in Charge Frank Tarentino stated “For two years, Lawry spearheaded a diverted prescription drug trafficking conspiracy using forged prescriptions, putting profits above public health. This sentencing stands as a testament to our commitment in combatting the scourge of opioids being sold on the street, and those responsible for selling them.”
“HHS-OIG is committed to working with our law enforcement partners to combat the illegal distribution of controlled substances to patients enrolled in HHS programs,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “The defendants in this drug trafficking organization are being held responsible for wantonly disregarding responsible prescribing practices, seemingly exploiting the opioid epidemic affecting our communities.”
As set forth in court filings, between February 2018 and March 2020, Lawry headed a drug trafficking organization that used forged paper prescription forms—sourced from stolen prescription pads—to obtain large quantities of several controlled substances that are commonly diverted for recreational use: Oxycodone, Adderall, Alprazolam (also known as “Xanax”), and Promethazine with Codeine syrup. During the relevant time period, more than 500 fraudulent prescriptions for these medications were filled at D.R.A. Pharmakon, Inc. d/b/a D’s Pharmacy (D’s Pharmacy) in Hempstead, where one of Lawry’s co-conspirators worked as a pharmacist. In total, the conspiracy involved nearly a kilogram’s worth of stolen prescription medication, which Lawry and his co-conspirators then advertised for sale on social media and eventually sold at street level.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Anthony Bagnuola is in charge of the prosecution, with assistance from the Office’s Special Agent Michael J. Cassidy.
The Defendant:
TREVOR LAWRY
Age: 38
Hempstead, New YorkE.D.N.Y. Docket No. 22-CR-506 (JMA)
Individual Charged with Sex-Trafficking of Women on Pennsylvania Avenue in Brooklyn Known as the “Penn Track,” and Enticement of A MinorRead the Press Release
BROOKLYN, NY - Earlier today, an indictment was unsealed in federal court in Brooklyn charging Joel David Forney, also known as “Sirbar,” with three counts of sex trafficking, Mann Act transportation for purposes of commercial sex and coercion and enticement of a minor. The charges in the indictment arise from the defendant’s trafficking of women to work as prostitutes in New York, including along an open-air sex trafficking market on a stretch of Pennsylvania Avenue in Brooklyn, New York known as the Penn Track, as well as the defendant’s alleged transportation of women from New York to multiple other states, including Connecticut and Missouri, with the intent that they engage in commercial sex for his financial benefit. The charges also arise from the defendant’s alleged rape of a teenage girl in 2014. Forney was arrested this morning in Kissimmee, Florida and is scheduled to be arraigned this afternoon in the Middle District of Florida.
Breon Peace, United States Attorney for the Eastern District of New York, Kristen M. Clarke, Assistant Attorney General for Civil Rights at the Justice Department, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.
“As alleged, the defendant raped a minor, and preyed on vulnerable women to sell their bodies for his own profit, while subjecting them to constant acts and threats of violence,” stated United States Attorney Peace. “With today’s arrest, this Office seeks to hold Forney accountable for his cruel and depraved crimes. We will continue working with our law enforcement partners to eradicate the degradation of women forced into sex work at the Penn Track and elsewhere in the district.”
Mr. Peace expressed his thanks to the New York City Police Department/FBI Child Exploitation Human Trafficking Task Force for their outstanding investigative work on the case.
“These charges represent the darkest side of the criminal world. Not only did Joel Forney allegedly force several victims into commercial sex trafficking through repeated violence and death threats, but he also allegedly raped a female minor victim after luring her into his residence. Today’s arrest affirms the FBI’s promise to investigate those who commit such heinous crimes, and ensure they are brought to justice,” stated FBI Assistant Director-in-Charge Smith.
As alleged in court filings, between at least the summer of 2016 and continuing through at least 2022, Forney trafficked women to engage in commercial sex in Brooklyn, New York and in other states through force, fraud and coercion for his financial benefit. The defendant trafficked his victims both in hotel rooms and on Pennsylvania Avenue in East New York, Brooklyn, a notorious location for commercial sex known as the Penn Track. The defendant subjected the victims to his total control and forced them to adhere to a list of rules designed to maximize his profits and minimize their resistance. When his victims disobeyed his directives, he used physical violence, and sometimes death threats, as a form of punishment.
Forney allegedly began trafficking Jane Doe #1 in the summer of 2016, when he lured her to travel from her home in Wisconsin to New York City with false promises of a legitimate job offer. When Jane Doe #1 arrived, he brought her to a hotel where he raped her and threatened her with violence. He then photographed her and posted advertisements on the internet using her photo to promote commercial sex. For the next several months, the defendant trafficked Jane Doe #1, bringing her to hotels in New York, Connecticut, Massachusetts and other locations, where he compelled her to engage in commercial sex. The defendant retained the majority of the proceeds of her commercial sex work. If Jane Doe #1 failed to earn enough money or acted in a way that he viewed as disrespectful, he would slap, punch, or sexually assault her. He routinely threatened to kill Jane Doe #1. On one occasion, he showed Jane Doe #1 a photograph on his phone of a dismembered woman and told her that “this is what happens to bi-----s who leave their pimps.”
Forney began trafficking Jane Doe #2 in October 2017 at the Penn Track and in other states where he forced her to perform commercial sex for his financial benefit. As was the case with Jane Doe #1, Forney kept the majority of the financial proceeds of Jane Doe #2’s work. Forney would beat her if she violated his rules. On one occasion, angered by Jane Doe #2’s perceived disobedience, Forney punched her in the face, breaking her front tooth.
Forney trafficked a third victim, Jane Doe #3, beginning in May 2017. As with Jane Doe #2, the defendant compelled Jane Doe #3 to work in commercial sex largely on the Penn Track, and kept most of her earnings. Like all the women the defendant trafficked, Jane Doe #3 was instructed to strictly adhere to the defendant’s rules, and any acts of disobedience were met with violence and threats.
In addition to sex trafficking, Forney also engaged in sexually predatory conduct directed at a minor. Specifically, in June 2014, when Forney was 31-years-old, he encountered Jane Doe #4, who was then 14 years-old, walking home in Queens. He told her she was pretty; she told him her age. After exchanging contact information, the defendant continued to communicate with the girl—regularly telling her she was beautiful—before inviting her to his home where he raped her.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Forney faces a minimum term of 15 years in prison, and up to life imprisonment.
If you are a victim of trafficking—whether by Forney or someone else—and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Lauren Elbert and Antoinette N. Rangel and Trial Attorney Leah Branch of the Civil Rights Division’s Human Trafficking Prosecution Unit are in charge of the prosecution.
The Defendant:
JOEL DAVID FORNEY (also known as “Sirbar”)
Age: 41
Kissimmee, FloridaE.D.N.Y. Docket No. 24-CR-146 (KAM)
Florida Man Charged with Sex Trafficking Multiple Women and Sexually Assaulting a Minor in New YorkRead the Press Release
An indictment was unsealed in Brooklyn, New York, today charging a Florida man with sex trafficking multiple women and coercion and enticement of a minor.
Joel David Forney, 41, of Kissimmee, was charged with sex trafficking; interstate transportation for purposes of prostitution; and coercion and enticement of a minor. Forney was arrested today and is scheduled to be arraigned this evening in the Middle District of Florida.
Forney allegedly trafficked women to work in commercial sex in New York, including at an open-air sex trafficking market along a stretch of Pennsylvania Avenue in Brooklyn known as the Penn Track, as well as the defendant’s transportation of women from New York to multiple other states, including Connecticut and Missouri, with the intent that they engage in commercial sex for his financial benefit. Forney is also charged with coercion and enticement of a minor.
According to the indictment, for years, Forney preyed on vulnerable women in tough financial circumstances by sex trafficking them, violently assaulting them and subjecting them to constant threats of violence.
If convicted, Forney faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Breon Peace for the Eastern District of New York and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.
The FBI New York Field Office is investigating the case.
Assistant U.S. Attorneys Lauren Elbert and Antoinette N. Rangel for the Eastern District of New York and Trial Attorney Leah Branch of the Civil Rights Division’s Human Trafficking Prosecution Unit are prosecuting the case.
If you are a victim of trafficking — whether by Forney or someone else — and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Long Island Businessman Sentenced to 24 Months in Prison for Covid-19 Loan FraudRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Donald Finley, a Locust Valley businessman and owner of the now-defunct Jekyll & Hyde theme restaurant in Manhattan and the Bayville Adventure Park on Long Island, was sentenced by United States District Judge Joan M. Azrack to 24 months in prison. Finley pleaded guilty in May 2023 to disaster relief fraud and wire fraud in connection with his receipt of $3.2 million dollars in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP). As part of his sentence, Finley has paid in full $3.2 million in restitution. As part of his sentence, Finley was also ordered to pay a $15,000 fine and complete 500 hours of community service.
Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and Daniel B. Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the sentence.
“Finley viewed the deadly pandemic that was gripping the nation as a way to steal millions of dollars in COVID-19 relief funds that he used to purchase a vacation home in Nantucket,” stated United States Attorney Peace. “Today the defendant learned the price to pay for such a shameful crime is a loss of his freedom and full restitution for the victims of his scam. Let this be a lesson to other lawbreakers who have engaged in similar conduct that this Office will not forgive and forget COVID-19 fraud.”
“Donald Finley is an admitted criminal, pleading guilty to pocketing millions in COVID-19 relief funds. While he was enjoying his spoils from his ill-gotten gains, many business owners with legitimate needs were just able to keep the doors open. Today’s sentencing means that no one was amused by this Bayville Adventure Park owner’s criminal acts, and he will now face time in prison,” stated IRS-CI Special Agent-in-Charge Fattorusso.
USPIS Inspector-in-Charge Brubaker said, “Postal Inspectors and our law enforcement partners are committed to fighting fraud in whatever form it takes, and we will pursue criminals from the busy streets of Manhattan to the shores of a quiet seaside village. We want crooks to know that when you use the mail to defraud the public, justice will be served. Today’s sentencing is proof of that truth.”
Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic. The PPP program was overseen by the Small Business Administration (“SBA”) and various financial institutions received and processed the PPP loan applications, which, if approved, would then be funded directly by the lenders and backed by the federal government.
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.
Another source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. Under the program, EIDLP recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL Advance which did not have to be repaid.
As set forth in court filings, between March 2020 and March 2021, amid the COVID-19 pandemic, Finley fraudulently applied for, and received, at least 29 PPP and EIDLP loans totaling approximately $3.2 million on behalf of corporate entities he controlled. The applications contained false information, bogus financial data and fabricated supporting documentation, all of which was designed to fraudulently induce the SBA and the lenders administering the PPP and EIDL programs to approve the loans. Once the loans were approved, Finley sent the funds through more than 30 bank accounts to prevent tracing of the proceeds, with substantial portions of the stolen funds being used to purchase real property in Nantucket, Massachusetts in February 2021.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Mark E. Misorek is in charge of the prosecution.
The Defendant:
DONALD FINLEY
Age: 61
Locust Valley, New YorkE.D.N.Y. Docket No. 23-CR-181 (JMA)
Five Members and Associates of the Genovese Crime Family Plead Guilty to Various Felony Charges, Including Illegal GamblingRead the Press Release
Earlier today, in federal court in Brooklyn, Salvatore Rubino, also known as “Sal the Shoemaker,” an associate of the Genovese organized crime family of La Cosa Nostra, pleaded guilty to operating an illegal gambling business associated with the crime family. Previously, on April 5, 2024, four co-defendant members and associates of the Genovese crime family pleaded guilty to various felony charges stemming from their long-running operation of several lucrative gambling operations in the Eastern District of New York. Carmelo “Carmine” Polito, a former acting captain and a soldier within the Genovese crime family, pleaded guilty to racketeering involving the operation of an illegal gambling business and an attempted extortion. Joseph Macario, also known as “Joe Fish,” a soldier within the Genovese crime family, also pleaded guilty to racketeering. Joseph Rutigliano, also known as “Joe Box,” and Mark Feuer, associates of the Genovese crime family, pleaded guilty to felony charges relating to the operation of various illegal gambling businesses also associated with the crime family. The proceedings were held before United States District Judge Eric N. Vitaliano.
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 Anne T. Donnelly, District Attorney, Nassau County District Attorney’s Office, announced the guilty pleas.
“With their guilty pleas, these five members and associates of the Genovese crime family have admitted they committed crimes to benefit a criminal enterprise notorious for inflicting harm on our communities for generations,” stated United States Attorney Peace. “As long as the Mafia doesn’t get it that illegal gambling is a losing proposition, they can bet on this Office and our partners vigorously enforcing the law and flushing them out of the shadows, as in this case, where they operated secretly in a coffee bar and a shoe repair shop.”
Mr. Peace expressed his appreciation to the New York City Police Department and the Nassau County Police Department for their invaluable assistance in the investigation.
“These Mafia figures operated surreptitiously in back rooms of restaurants and retail locations in suburban Long Island, running underground gambling parlors and kicking up the profits to the Genovese crime family,” said Nassau County District Attorney Anne T. Donnelly. “For decades, organized crime families have steered violence and other illicit activities in our communities. With our partners at the EDNY, FBI, and the Nassau County Police Department, we are doubling down on driving out these illegal gambling operations.”
As detailed in earlier court filings and in facts presented at the guilty plea hearings, members of the Genovese and Bonanno organized crime families operated several illegal gambling operations in the Eastern District of New York. Beginning in at least May 2012, the Genovese and Bonanno families jointly operated a lucrative illegal gambling operation in Lynbrook, New York called the Gran Caffe. The profits earned through the Gran Caffe and other illegal gambling locations generated substantial revenue, which was then “kicked up” to the crime families’ leaders. Rutigliano and Rubino collected the proceeds for the Genovese crime family and distributed them up to higher-ranking members, including Polito and Macario. In addition to the Gran Caffe, the Genovese crime family—through Polito, Macario, Rutigliano, Rubino and others—operated illegal gambling parlors at establishments called Sal’s Shoe Repair and the Centro Calcio Italiano Club.
Carmelo Polito, a former acting captain in the Genovese crime family, also operated an illegal online gambling scheme in which bets were placed on sporting events through a website called “PGWLines.” In connection with his operation of PGWLines, Polito attempted to extort an individual who lost several thousand dollars in bets he placed through the website. For example, in an October 2019 call concerning a delinquent debtor whose “face” Polito had previously threatened to “break,” Polito instructed another individual to relay a new message to the debtor: “Tell him I’m going to put him under the f------g bridge.”
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar, Drew Rolle, Anna Karamigios and Sean Sherman are in charge of the prosecution.
The Defendants:
JOSEPH MACARIO (also known as “Joe Fish”)
Age: 69
West Islip, New YorkCARMELO POLITO (also known as “Carmine Polito”)
Age: 64
Whitestone, New YorkSALVATORE RUBINO (also known as “Sal the Shoemaker”)
Age: 60
Bethpage, New YorkJOSEPH RUTIGLIANO (also known as “Joe Box”)
Age: 65
Commack, New YorkMARK FEUER
Age: 61
Oceanside, New YorkE.D.N.Y. Docket No. 22-CR-356 (ENV)
Nebraska Man Indicted for Multi-Million Dollar "Cryptojacking" SchemeRead the Press Release
Today, an indictment was unsealed charging Charles O. Parks III, also known as “CP3O,” with operating a large-scale illegal “cryptojacking” operation. As part of the scheme, Parks defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million. Parks was charged with wire fraud, money laundering and engaging in unlawful monetary transactions in connection with the scheme. Parks was arrested on April 13, 2024 in Nebraska and is scheduled to make his initial appearance in federal court in Omaha on April 16, 2024.
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 arrest and charges.
“As alleged, by hijacking cloud providers’ computing power, Parks stole millions worth of powerful computing resources to acquire cryptocurrency,” stated United States Attorney Peace. “This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in the old scheme of fraud and deceit.”
Mr. Peace expressed his appreciation to the FBI’s New York Cyber Crimes Task Force (CCTF) and the United States Attorney’s Office for the District of Nebraska for their assistance on this case.
“Charles Parks, also known as CP3O, allegedly created a cryptojacking scheme to defraud prominent cloud service providers of millions and illegally mine approximately $1M in cryptocurrency for personal use. Criminals are becoming more adept at manipulating digital tools and hiding behind advanced technology, which often causes significant financial damage to their victims. The FBI is committed to the steadfast pursuit of those who attempt to develop innovative techniques to commit crimes,” stated FBI Assistant Director-in-Charge Smith.
“This arrest illustrates the power of law enforcement joining forces with the private sector to identify and track down cybercriminals, and to put an end to their sophisticated thievery,” stated NYPD Commissioner Caban. “While the threat landscape in this space is growing in complexity and depth, the NYPD and our federal partners continue to ably confront malicious actors even as they adopt new tactics.”
“Cryptojacking,” also referred to as malicious cryptomining, is the unauthorized use or hijacking of another party’s resources, such as electricity, hardware or computing power to mine cryptocurrency. As alleged in the indictment, from in or about January 2021 through August 2021, Parks created and used a variety of names, corporate affiliations and email addresses, including emails with domains from corporate entities he operated called “MultiMillionaire LLC” and “CP3O LLC,” to register numerous accounts with the cloud providers and to gain access to massive amounts of computing processing power and storage that he did not pay for. Parks used those fraudulently obtained resources to mine various cryptocurrencies including Ether (ETH), Litecoin (LTC) and Monero (XMR). Parks tricked the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations, and deflected inquiries from the providers regarding questionable data usage and mounting unpaid subscription balances.
Parks converted and laundered the cryptocurrency proceeds through cryptocurrency exchanges, a non-fungible token (NFT) marketplace, an online payment provider, and traditional bank accounts, in order to disguise the audit trail and disassociate the funds from the fraud. Parks also structured various money movements to avoid transaction reporting requirements under federal law. After converting the ill-gotten cryptocurrency into dollars, Parks used the proceeds of the scheme to make extravagant purchases, including a Mercedes Benz luxury car, jewelry and first-class hotel and travel expenses.
The charges in the indictment are allegations, and Parks is presumed innocent unless and until proven guilty. If convicted, Parks faces a maximum sentence of 20 years’ imprisonment on the wire fraud and money laundering charges and 10 years’ imprisonment on the unlawful monetary transactions charges.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Andrew Reich and Artie McConnell are in charge of the prosecution.
The Defendant:
CHARLES O. PARKS III (also known as “CP3O”)
Age: 45
Omaha, NebraskaE.D.N.Y. Docket No. 24-CR-105 (EK)
Former Marine Corps Reservist Sentenced to 21 Months in Prison for Stealing, Forging and Distributing Hundreds of Fraudulent COVID-19 Vaccination Cards During the PandemicRead the Press Release
Earlier today, in federal court in Brooklyn, Jia Liu was sentenced by United States District Judge Diane Gujarati to 21 months in prison for conspiring to steal, forge and distribute fraudulent COVID-19 Vaccination Cards. On June 9, 2023, co-defendant Steven Rodriguez, a Long Island nurse, was sentenced to 30 months’ imprisonment for his role in the same scheme. Liu and Rodriguez pleaded guilty in April 2023 to conspiracies to defraud and obstruct the United States’ response to the COVID-19 pandemic.
Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.
“At the height of the COVID pandemic, Liu and Rodriguez brazenly fabricated vaccine cards and sold them for profit, thereby putting the safety of others at risk during this deadly health crisis” stated United States Attorney Peace. “This prosecution demonstrates our Office’s ongoing commitment to holding accountable those who engaged in COVID-19 fraud. These prison sentences should deter other lawbreakers who put their own interests above public health.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.
According to court filings and facts presented at sentencing, in May 2021, Liu and Rodriguez conspired to steal, forge, sell and distribute COVID-19 Vaccination Cards to hundreds of unvaccinated persons. In addition to the cards, Liu and Rodriguez also offered buyers and co-conspirators false entry into government immunization databases.
Liu and Rodriguez went to great lengths to evade law enforcement and conceal the scheme. Members of the scheme used code words such as “gift cards,” “Pokemon cards,” or “Cardi Bs” to refer to fraudulent COVID-19 Vaccine Cards. Liu also instructed his co-conspirators to communicate by encrypted applications and hide payment records. Liu and Rodriguez also disguised the source of mail items containing COVID-19 Vaccination Cards by omitting or using false sender names on envelopes. As Covid-19 raged and hundreds of thousands of Americans perished, Liu exploited the pandemic to enrich himself, and push his anti-vaccine agenda, messaging a co-conspirator: “f--- the vaccine”.
In addition, Liu specifically targeted the armed forces and their attempts to contain the COVID-19 pandemic. From approximately August 2021 or earlier, the defendant created and distributed false COVID-19 Vaccination Cards to members of the U.S. Marine Corps Reserve to help them evade its vaccination requirements. Liu boasted to a co-conspirator on an encrypted messaging app: “you have no idea how many documents I have faked in my usmc (United States Marine Corps) career.”
The government’s case is being prosecuted by Assistant United States Attorney Adam Amir with the assistance of Paralegal Specialist Sam Ronchetti.
Defendants:
JIA LIU
Age: 28
Queens, New YorkSTEVEN RODRIGUEZ
Age: 29
Long Beach, New YorkE.D.N.Y. Docket No.: 22-CR-70 (DG)
Brooklyn Man Sentenced to Life in Prison in First Prosecution of Federal Statute Criminalizing Murder in the Course of Sex TraffickingRead the Press Release
Earlier today, in federal court in Brooklyn, Somorie Moses, also known as “Somorie Barfield,” “Sugar Bear,” “Bear” and “Daddy,” was sentenced by United States District Judge Carol Bagley Amon to 10 terms of life imprisonment to run concurrently for each of the 10 counts of conviction for sex trafficking eight women and for committing the January 2017 murder of one of the women, Leondra Foster. At the sentencing hearing, the Court heard victim impact statements from several of the defendant’s victims. This prosecution is the first use of the federal statute criminalizing murder in the course of sex trafficking. Moses pleaded guilty to the charges in September 2023.
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 sentence.
“The life sentence imposed today on Somorie Moses is significant because it reflects the brutality and utter depravity of his crimes against vulnerable women and girls, which were committed over nearly two decades,” stated United States Attorney Breon Peace. “The defendant forced his victims into prostitution through violence and beatings, and then murdered and dismembered Leondra Foster. A lengthy prison sentence cannot undo the extreme and lasting harm Moses has inflicted on his victims, but incarceration will prevent this killer who clearly has no respect for human life from victimizing others. It is my hope that today’s sentence brings some closure to the victims and their families.”
Mr. Peace also expressed his appreciation to the Kings County District Attorney’s Office for their assistance in this investigation and prosecution.
“Today’s sentence reaffirms the commitment of the NYPD and our law enforcement partners to protect and support all the victims and survivors of sex trafficking, one of our society’s most exploitative and dehumanizing crimes,” stated NYPD Commissioner Caban. “The defendant’s numerous offenses, including the heinous murder of Leondra Foster, were truly despicable. I thank the NYPD and FBI investigators for their dedication, and I commend everyone at the U.S. Attorney’s office for their tireless efforts to secure this meaningful prison term.”
Since at least 2003, Moses lured women and girls with false promises of love, but then used threats, violence, and psychological manipulation to force his victims into prostitution for his benefit. Moses kept all the money his victims earned as prostitutes and required many of his victims to have his first name, “Somorie,” tattooed on their bodies.
Moses used brutal beatings, rape, torture, and threats to coerce his victims to work in prostitution in Brooklyn and Queens. Moses threatened to throw one victim, identified at the sentencing proceeding as Jane Doe #1, off a roof and raped her, and bit off a piece of her buttocks and spit it at her. As to another victim, identified as Jane Doe #2, Moses slashed her arms and back with a razor and beat her with a belt before pouring lemon juice on her wounds, leaving her with extensive scarring over much of her body, including her arms, head, legs and back. When a victim identified as Jane Doe #6 did not give Moses money as he demanded, Moses beat her with an extension cord, leaving her with numerous open, bleeding cuts, and told her that he “was a pimp, this is what [he] did.” When a victim identified as Jane Doe #7 told Moses she did not want to work as a prostitute, he put a shotgun in her mouth and threatened to kill her and her child.
The Murder of Leondra FosterIn the early morning of January 13, 2017, Moses murdered Leondra Foster, one of his sex trafficking victims, by beating her until she died. The defendant beat Foster all over her body, leaving bruises and abrasions on the front and back of her torso. Moses inflicted at least five blunt force injuries to Foster’s head, either by hitting her directly or by banging her head into another surface. The fatal blow was the blow to the back left of her head. She had been alive for all of the other injuries, but that last blow to her head fractured her skull, rendering her unconscious. Foster suffered a a seizure and died within minutes. The following morning, using a knife and a saw, Moses dismembered Foster’s body inside their shared apartment in Brooklyn. Moses brought another woman back to his apartment for a sexual encounter while Foster’s dismembered body was concealed in it. The woman later told law enforcement that there was a strong odor of bleach in the apartment. Four days later, on the morning of January 17, 2017, Moses transported Foster’s torso and limbs to the Bronx for disposal at a garbage transfer station. After disposing of most of Foster’s body parts, Moses texted another victim that he was on his way home from the Bronx and, “Just did 110 over the Brooklyn bridge.” Foster’s head, hands and feet — including a foot with the name “Somorie” tattooed on it — were subsequently recovered by law enforcement inside the freezer of Moses’s apartment. Foster was 32-years-old at the time of her murder.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Jonathan Siegel and Tanya Hajjar are in charge of the prosecution, with the assistance of Paralegal Specialist Anna November.
The Defendant:
SOMORIE MOSES (also known as “Somorie Barfield,” “Sugar Bear,” “Bear” and “Daddy”)
Age: 48
Brooklyn, New YorkE.D.N.Y. Docket No. 22-CR-232 (CBA)
Long Island Man Charged with Distributing Fentanyl, Heroin, Cocaine and OxycodoneRead the Press Release
Defendant Distributed Fentanyl that Caused the Death of a 49-Year-Old Man in Elmont
Earlier today, at the federal courthouse in Central Islip, a two-count indictment was unsealed charging Ryan Mueller with distributing fentanyl that caused the death of a victim (Victim‑1) and with conspiring to distribute heroin, cocaine, and oxycodone. Mueller was arrested this morning and is scheduled to be arraigned this afternoon before Magistrate Judge Anne Y. Shields.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Darren B. McCormack, Acting Special Agent-in-Charge, Homeland Security Investigations (HSI), and Patrick J. Ryder, Commissioner Nassau County Police Department (PDCN) announced the arrest and the charges.
“As alleged, the defendant purposely disguised fentanyl to look like prescription drugs and sold them to unsuspecting customers, leading to the poisoning death of a Long Island resident,” stated United States Attorney Peace. “The defendant’s callous disregard for human life in pushing deadly drugs on to the streets of Long Island concealed as prescription drugs has contributed to the alarming opioid epidemic that has continued to harm communities in this district.”
“Today’s arrest shows the commitment the DEA and our law enforcement partners have in targeting those individuals who are poisoning our communities. Fentanyl is a lethal drug that dealers mix into their product knowing the harmful effects it presents to those using it, including death” stated DEA New York Division Special Agent in Charge Frank Tarentino. “We will continue to bring those responsible for this deadly distribution to justice.”
“It is appalling how criminals attempt to profit from the distribution of fentanyl which has led to a rising number of overdose and poisoning fatalities,” said HSI New York acting Special Agent in Charge Darren B. McCormack. “HSI New York continues to prioritize investigations into individuals and organizations that intentionally misrepresent fentanyl, heroin and other dangerous opioids as prescription drugs, having a devastating impact on the health of our citizens and the safety of our neighborhoods. Together with our law enforcement partners, HSI New York is committed to crippling and dismantling the illicit drug supply chains plaguing our American communities.”
“Today’s indictment of defendant Ryan Mueller for selling Fentanyl, Heroin, Cocaine and Oxycodone to numerous individuals and lead to the death of a 49 year old Elmont man is a clear message that these crimes will never be tolerated. In addition, Defendant Mueller was also in possession of numerous illegal firearms in which he is also being charged with. Law Enforcement continues to work together to bring these criminals to justice, thus keeping our communities and neighborhoods safe. I would like to congratulate all of the dedicated law enforcement professionals and their agencies for a job well done,” stated Nassau County Police Department Commissioner Ryder.
According to court filings, over the last several years, the defendant conspired with others to sell several controlled substances, including heroin, cocaine, oxycodone, and fentanyl. The investigation revealed that in December 2022, a 49-year-old individual (Victim-1) died of a drug-related overdose at his residence in Elmont, Long Island. Additional investigation showed that the fentanyl that killed Victim-1, which was in a pressed pill that made it appear to be oxycodone, was sold to the victim by the defendant. During the investigation, law enforcement officers recovered several kilos of fentanyl from the defendant’s home. Law enforcement also recovered multiple pill press parts from another location controlled by the defendant, including powder dryers, blenders, and grinders.
According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2019, nearly 71,000 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 2019, over 14,000 people died in the United States from a drug overdose involving heroin. From 2013 to 2019, the synthetic opioid death rate increased by more than 1,000 percent. Of those deaths, over 70% involved a prescription or illicit opioid. Among New York State residents, the number of overdose deaths involving any opioid increased each year between 2010 and 2017, with an overall increase of 200.2 percent from 1,074 in 2010 to 3,224 in 2017, according to the New York State Health Department. If you or someone you know is struggling with substance abuse, please contact the Substance Abuse and Mental Health Services Administration (SAMHSA) Helpline: 1-800-662-HELP (4357) or FindTreatment.gov.
If convicted on the charges in the indictment, the defendant faces a statutory mandatory minimum sentence of 20 years’ imprisonment and a maximum sentence of life.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Adam R. Toporovsky is in charge of the prosecution.
The Defendant:
RYAN MUELLER
Age: 32
Lynbrook, New YorkE.D.N.Y. Docket No. 24-CR-134
MS-13 Gang Member Pleads Guilty to 2017 Quadruple Murder in Central IslipRead the Press Release
Today, in federal court in Central Islip, Edwin Rodriguez, also known as “Manicomio” (Rodriguez), a member of the violent transnational criminal organization La Mara Salvatrucha, also known as the “MS-13,” pleaded guilty to racketeering charges in connection with his participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre, and Jefferson Villalobos. After committing the murders, Rodriguez was a fugitive from justice before he was arrested in El Salvador and extradited to the United States in 2022. The guilty plea proceeding was held before United States Circuit Judge Joseph F. Bianco, sitting by designation. When sentenced, Rodriguez faces up to 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 Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
Mr. Peace expressed his appreciation to all the members of the FBI’s Long Island Gang Task Force and the FBI’s Legal Attaché in San Salvador for their outstanding collaboration in investigating, locating and apprehending this fugitive. Mr. Peace also thanked the International Criminal Police Organization (INTERPOL) for their assistance in this case.
According to court filings and statements made during today’s guilty plea proceeding, Rodriguez was a member of the Normandie Locos Salvatruchas (Normandie) clique of the MS-13. In order to maintain and increase his membership and status in the gang, in early 2017, he conspired with other MS-13 members and associates to orchestrate and execute the murders of perceived rival gang members who had disrespected the MS-13 in their social media postings. On the evening of April 11, 2017, five young men, including the four murder victims, were lured to a wooded park in Central Islip by MS-13 associates, under the guise of smoking marijuana. There, Rodriguez and nearly a dozen other MS-13 members and associates, armed with machetes, knives, an axe, and wooden clubs, surrounded the victims under the cover of darkness, and attacked them. One of the intended victims was able to escape. However, Llivicura, Lopez, Tigre and Villalobos were captured and then brutally hacked, stabbed and bludgeoned to death. The victims’ bodies were discovered the following evening. More than a dozen MS-13 members and associates have been charged in connection with the April 11, 2017 murders.
Rodriguez, who was three months’ shy of his eighteenth birthday at the time of these murders, was originally charged in a sealed Juvenile Information filed on March 16, 2018. He remained a fugitive from justice until August 28, 2019, when he was arrested in El Salvador, pursuant to an INTERPOL Red Notice. The United States formally requested his extradition on September 3, 2019. Rodriguez was detained pending his extradition to the United States, which was formally authorized by the Supreme Court of Justice of El Salvador on July 7, 2022. He was extradited to the United States, and made his first appearance in-district on August 10, 2022. In connection with his guilty plea today, Rodriguez also agreed to be transferred to adult status for purposes of prosecution.
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 Office’s Long Island Criminal Division. Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci, and Megan E. Farrell are in charge of the prosecution. The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition of Rodriguez.
The Defendant:
EDWIN RODRIGUEZ (also known as “Manicomio”)
Age: 24
El Salvador; and formerly of Central Islip, New YorkE.D.N.Y. Docket No. 18-CR-135 (JFB)
Two Individuals Indicted for Distributing Heroin and Fentanyl that Caused the Death of Transgender ActivistRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, a four-count indictment was unsealed charging Michael Kuilan and Antonio Venti with distributing the heroin and fentanyl that caused the death of New York transgender activist, Cecilia Gentili. Kuilan is also charged with unlawful gun possession. Kuilan and Venti are in custody and are scheduled to be arraigned this afternoon before United States Magistrate Judge Lois Bloom.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA) and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the charges.
“Cecilia Gentili, a prominent activist and leader of the New York transgender community was tragically poisoned in her Brooklyn home from fentanyl-laced heroin. Today, the alleged perpetrators who sold the deadly dose of drugs to Gentili have been arrested,” stated United States Attorney Peace. “Fentanyl is a public health crisis. Our Office will spare no effort in the pursuit of justice for the many New Yorkers who have lost loved ones due to this lethal drug.”
“Today’s indictment delivers a strong message to anyone who profits from poisoning our communities with illicit drugs: There are dedicated investigators, across multiple agencies, working tirelessly to disrupt your shameful industry by pinpointing the source of these unlawful substances,” stated NYPD Commissioner Caban. “It is imperative that we continue to hold distributors accountable for their callous actions. I commend the NYPD’s partners at the DEA and the office of the U.S. Attorney for the Eastern District of New York for their ongoing commitment to this critical mission.”
“These arrests result in the charges brought against the defendants for causing the death of transgender rights activist Cecilia Gentile. Drug poisonings take too many lives too soon from communities nationwide and DEA is committed to bringing to justice those responsible. Fentanyl is a deadly drug that dealers mix into their product and has accounted for 70% of drug related deaths nationwide. The more people that know about the dangers of today’s drug landscape, the more lives can be saved” stated Special Agent in Charge Frank Tarentino of the Drug Enforcement Administration - New York Division “The death of Ms. Gentile is a reminder of the dangers that illicit drugs have on all communities, including the LGBTQ+ community. I applaud the hard work by the DEA New York Division, NYPD Brooklyn South Narcotics and the U.S. Attorney’s Office Eastern District of New York.”
According to the indictment and court documents, on February 6, 2024, following a 911 call by Gentili’s partner, NYPD officers reported to Gentili’s home in Brooklyn, New York and found Gentili dead in her bedroom. Gentili died due to the combined effect of fentanyl, heroin, xylazine, and cocaine. Text messages, cell site data, and other evidence revealed that Venti sold the fentanyl and heroin mixture to Gentili on February 5, 2024, and Kuilan supplied Venti with those lethal narcotics.
In addition, law enforcement searched an apartment in Williamsburg, Brooklyn belonging to Kuilan and found hundreds of baggies of fentanyl, a handgun, and ammunition.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If found guilty, they face up to life in prison.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant U.S. Attorney Adam Amir is in charge of the prosecution, with the assistance of Paralegal Specialist Samuel Ronchetti.
The Defendants:
MICHAEL KUILAN
Age: 44
Brooklyn, New YorkANTONIO VENTI
Age: 52
West Babylon, New YorkE.D.N.Y. Docket No. 24-CR-130 (BMC)
Four Gun Traffickers Plead Guilty to Conspiring to Traffic Firearms into BrooklynRead the Press Release
Earlier today, David Mccann and Calvin Tabron pleaded guilty at the federal courthouse in Brooklyn, New York to conspiring to traffic firearms. Mccann also pleaded guilty to conspiring to distribute fentanyl. Today’s proceedings took place before United States District Judge William F. Kuntz, II. Co-defendants Raymond Minaya and Tajhai Jones pleaded guilty to conspiring to traffic firearms earlier this month. When sentenced, Mccann faces up to 40 years in prison, Minaya faces up to 20 years in prison, and Jones and Tabron each face up to 15 years in prison. The defendants were charged in January 2023 in the first case in New York to publicly charge the gun trafficking provisions of the Bipartisan Safer Communities Act.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA) and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.
“With these guilty pleas, the defendants have admitted to bringing dozens of deadly weapons and dangerous drugs, including fentanyl, to the streets of Brooklyn,” stated United States Attorney Peace. “This Office will vigorously use all tools available, such as Bipartisan Safer Communities Act, to ensure that no one is able to illegally feed the cycles of gun violence and drug abuse in our community.”
“These pleas resonate public sentiment that gun and drug trafficking will not be tolerated. These deadly weapons have been removed from circulation, saving lives along the way. I commend our law enforcement teams from the DEA Group D-41, NYPD and the U.S. Attorney’s Office Eastern District of New York for their diligent work,” stated DEA Special Agent-in-Charge Tarentino.
“Today’s guilty pleas underscore the unwavering commitment of our investigators to disrupt the flow of illegal guns and deadly drugs coming into our communities,” stated NYPD Commissioner Caban. “I thank our colleagues at the DEA for their partnership, and I commend our NYPD undercover officer for their diligent work, performed under the most dangerous of circumstances. I also applaud everyone at the office of the U.S. Attorney for the Eastern District of New York for delivering this prosecution to its righteous conclusion.”
According to court filings and facts presented during the plea proceedings, the gun-trafficking operation involved the sale of at least 50 illegal firearms over multiple transactions in Brooklyn between January 2022 and August 2022. The defendants conducted these firearms sales in broad daylight in a public park, in shopping center parking lots, and in vehicles in and around the New York City Housing Authority’s Breukelen Houses complex, located in Canarsie, Brooklyn, across from a church, and blocks away from a preschool and grade school. Two members of the gun-trafficking operation obtained the firearms in Virginia and then transported them to New York to be sold on the streets of Brooklyn. Some of the firearms the defendants sold had defaced serial numbers or were made from ghost gun kits, making them harder for law enforcement to trace. Two defendants also engaged in significant narcotics trafficking conspiracies, including a fentanyl distribution conspiracy that introduced thousands of lethal doses of fentanyl into the community.
Firearms sold in the conspiracy have also been linked to several shootings in Brooklyn. For example, on June 22, 2022, a defendant sold an undercover officer a Glock 30, .45 caliber handgun. The investigation revealed that this gun was used in an August 21, 2021 shooting in Bedford-Stuyvesant during which armed perpetrators shot into a large crowd gathered for a family day celebration. In total, eight individuals were struck by gunfire. Another gun trafficked by a defendant—a Glock 43, 9 millimeter caliber handgun—is linked to a December 18, 2021 shooting of an individual in Canarsie, in the blocks surrounding the Breukelen Houses complex. That individual sustained multiple gunshot wounds to his body, including his right hand, shoulder, neck, and the base of his skull.
This prosecution is among the first in the country, and the first in New York, to charge the gun trafficking provisions of the Bipartisan Safer Communities Act, which Congress and the President enacted in June 2022.
Assistant United States Attorneys Adam Amir, Irisa Chen, and James R. Simmons are in charge of the prosecution.
The Defendants:
DAVID MCCANN
Age: 29
Brooklyn, New YorkTAIJHAI JONES
Age: 29
Portsmouth, VirginiaRAYMOND MINAYA
Age: 27
Brooklyn, New YorkCALVIN TABRON
Age: 26
Virginia Beach, VirginiaE.D.N.Y. Docket No. 23-CR-8 (WFK)
18th Street Gang Member Pleads Guilty to Racketeering Conspiracy and Two MurdersRead the Press Release
Earlier today, in federal court in Brooklyn, Yanki Misael Cruz-Mateo, a member of the 18th Street gang, pleaded guilty to racketeering conspiracy charges in connection with his participation in two murders: the October 25, 2017 murder of 20-year-old Jonathan Figueroa in Saugerties, New York and the February 2, 2018 murder of 20-year-old Oscar Antonio Blanco Hernandez in Queens. The guilty plea proceeding was held before United States Magistrate Judge Sanket J. Bulsara. When sentenced, Cruz-Mateo faces up to life in prison.
Breon Peace, United States Attorney for the Eastern District of New York, announced the guilty plea.
“Cruz-Mateo had boasted of his participation in the murders in a horrific video and in text messages, but today’s admission in a federal courtroom in Brooklyn holds him accountable for two savage killings committed for the purpose of instilling fear and promoting gang violence,” stated United States Attorney Peace. “While the defendant’s guilty plea cannot bring back the two lives senselessly taken or undo the cruelty of his actions, it is my hope that it will bring a measure of closure to his victims’ families.”
United States Attorney Peace also expressed his appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), United States Attorney’s Office for the Northern District of New York, the Ulster County District Attorney’s Office, the Queens County District Attorney’s Office, the New York State Police, the Kingston Police Department, and the New York City Police Department for their assistance during the investigation.
According to court filings, proceedings, and statements made during today’s guilty plea proceeding, Cruz-Mateo was a member of the Queens-based Shatto Park Locos Sureños sect of 18th Street. He committed the following crimes in order to maintain and increase his membership and status in the gang:
October 25, 2017 Murder of Jonathan Figueroa
In the late evening of October 24, 2017, Cruz-Mateo lured and travelled with Figueroa from Queens to Kingston, New York, planning to murder him because 18th Street members suspected he was an informant for law enforcement. Upon their arrival in Kingston, they were met by other 18th Street members and associates who, into the early morning hours of October 25, 2017, brought Figueroa to Turkey Point State Forest, stabbed him to death, and buried him in a makeshift grave. Cruz-Mateo ordered the murder to be video-recorded—capturing multiple 18th Street members and associates repeatedly stabbing Figueroa, slashing his throat, amputating his ear, and dragging his body. In the video, Cruz-Mateo stated that Figueroa was being murdered for “being a rat.” Cruz-Mateo then sent the video to other 18th Street members as a warning not to disrespect the gang or cooperate with law enforcement. Figueroa’s body was discovered in February 2018 by the FBI, along with state and local law enforcement authorities, in a five-foot deep grave. The victim sustained more than 100 stab wounds including at least one stab wound to the head that appears to have fractured his skull and a slash to his throat that ruptured his trachea.
February 2, 2018 Murder of Oscar Antonio Blanco Hernandez
On February 2, 2018, Cruz-Mateo shot and killed Blanco Hernandez in Queens because 18th Street gang members suspected him of being a member of 18th Street’s principal rival, La Mara Salvatrucha, also known as the MS-13 gang. Blanco Hernandez’s body was discovered on a residential street in the Jamaica Hills section of Queens. He had been shot three times in the torso and head. Cruz-Mateo fled the area and returned upstate to Kingston. He was arrested by the FBI following a statewide manhunt.
Co-defendant Israel Mediola Flores previously pleaded guilty to Figueroa’s murder and was sentenced in June 2023 to 425 months in prison. Co-defendants Yoni Alexander Sierra, Jose Jimenez Chacon, and Carolina Cruz previously pleaded guilty to Blanco Hernandez’s murder and are currently awaiting sentencing.
Today’s conviction is the latest in a series of recent convictions in this case of members and associates of 18th Street, a well-known and well-established international criminal organization and violent street gang with members and associates residing throughout New York State including Queens and Long Island, and elsewhere throughout the United States including Houston, Texas.
This case is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the FBI. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses 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 Jonathan P. Lax, Erin Reid and Margaret Schierberl are in charge of the prosecution, with the assistance of Paralegal Specialist Tareva Torres.
The Defendant:
YANKI MISAEL CRUZ-MATEO (also known as “Yenki Misael Cruz Mateo,” “Yankee Mateo,” “Doggy” and “Wino”)
Age: 25
Jamaica, New YorkCo-Defendants Previously Convicted:
ISRAEL MEDIOLA FLORES (also known as “Chapito” and “Sinaloa”)
Age: 29
Kingston, New YorkYONI ALEXANDER SIERRA (also known as “Arca,” “Arc Angel” and “Wasson”)
Age: 25
Jamaica, New YorkJOSE JIMENEZ CHACON (also known as “Little One”)
Age: 25
New Brunswick, New JerseyCAROLINA CRUZ (also known as “La Fiera”)
Age: 30
Elizabeth, New JerseyCo-Defendants Awaiting Trial:
WALTER FERNANDO ALFARO PINED (also known as “Clever”)
Age: 44
Houston, TexasJOSE DOUGLAS CASTELLANO (also known as “Chino”)
Age: 25
Brooklyn, New YorkJUNIOR ZELAYA-CANALES (also known as “Terco”)
Age: 27
Jamaica, New YorkERIC CHAVEZ (also known as “Lunatico”)
Age: 25
Jamaica, New YorkE.D.N.Y. Docket No. 18-CR-139 (S-7) (LDH)
United States Seeks Forfeiture of Former Mongolian Prime Minister's Luxury New York City Apartments Purchased with Proceeds of Corruption SchemeRead the Press Release
Earlier today, the United States unsealed a civil complaint seeking to forfeit two luxury apartments located in New York City at 21 East 61st Street and 230 West 56th Street, purchased for $14 million. According to court documents, the apartments were purchased, in whole or in part, with the proceeds of unlawfully awarded Mongolian mining contracts, at the direction and for the benefit of then-Mongolian Prime Minister Sukhbaatar Batbold and his family.
Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Principal Deputy Assistant Attorney General, 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 forfeiture action.
“As alleged, former Mongolian Prime Minister Batbold used the profits from his illicit corruption scheme to purchase high-end real estate in violation of United States federal law. Today’s forfeiture action sends a message that corrupt officials will not use our real estate market to conceal proceeds of crimes,” stated United States Attorney Peace. “My Office will not tolerate public corruption that undermines faith in government, wherever committed.”
“As alleged in the complaint, Sukhbataar Batbold — the former prime minister of Mongolia — abused his position as prime minster to profit from the sale of his country’s natural resources. He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States,” stated Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “With this action, those properties are subject to forfeiture. Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime.”
“Former Mongolian Prime Minister Sukhbaatar Batbold allegedly crafted a corruption scheme, funneling millions of dollars from mining contracts through illegitimate shell companies to finance his family’s lavish lifestyle including the purchase of two luxury apartments in Manhattan. Batbold’s alleged behavior – personally profiting off of public corruption comes at the expense of the law-abiding citizens he governed. Today’s action emphasizes the FBI’s commitment to dismantling public corruption and punishing those who utilize the U.S. banking system to illegally divert resources, wherever it may occur,” stated FBI Assistant Director-in-Charge Smith.
The civil forfeiture complaint alleges that while Batbold was Prime Minister of Mongolia, Catrison, an entity he owned through trusted intermediaries, was awarded a $68 million mining contract. Prior to being awarded that contract, Catrison had no operational history, no mining expertise, and no financial or logistical infrastructure to execute commodity sales, and its sole director was a former linguistics teacher. Millions of dollars from the mining contracts were then siphoned into foreign bank accounts, transferred through a series of shell companies, and, among other things, directed towards the purchase of the New York City apartments for the benefit of Batbold’s family, including his eldest son who used the apartments.
The civil forfeiture complaint further explains how Batbold and his family used state-owned mining contracts to funnel funds through shell companies for their personal use, consistent with the scheme used to purchase the apartments sought by the government for forfeiture. Although it had no operational history or experience in commodities, one of the shell companies was awarded a mining contract worth $30 million, and proceeds were wired to an account in the United States held by Batbold’s eldest son that was earmarked for personal use, such as car payments, travel and an interior designer.
The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and prosecuting corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act, and the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS). Assistant United States Attorneys Tara McGrath and Brian Morris and Trial Attorney Adam J. Schwartz are handling the case with assistance from Paralegal Specialist Jacob Menz. The Justice Department’s Office of International Affairs provided assistance.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of crime. These allegations are not proven until a court enters judgment in favor of the United States.
The Defendants In Rem:
ANY AND ALL SHARES OF 21 EAST 61 STREET APARTMENT CORP. HELD IN THE NAME OF LOVITAS, INC., TOGETHER WITH THE APPURTENANT PROPRIETARY LEASE FOR COOPERATIVE UNIT 12E WITHIN THE REAL PROPERTY AND PREMISES LOCATED AT 21 EAST 61ST STREET, NEW YORK, NEW YORK 10065
CONDOMINIUM UNIT 58D, LOCATED AT 230 WEST 56TH STREET, NEW YORK, NEW YORK 10019
E.D.N.Y. Docket No. 24-CV-2147
Justice Department Seeks Forfeiture of $14 Million Manhattan Apartments Purchased with Proceeds of Mongolian Corruption SchemeRead the Press Release
The Justice Department filed a civil forfeiture complaint today in the U.S. District Court for the Eastern District of New York alleging that two apartments located in New York City were purchased for $14 million with the proceeds from an international corruption scheme and are subject to forfeiture based on violations of federal money laundering statutes.
“As alleged in the complaint, Sukhbataar Batbold — the former prime minister of Mongolia — abused his position as prime minister to profit from the sale of his country’s natural resources,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States. With this action, those properties are subject to forfeiture. Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime.”
The civil forfeiture complaint alleges that Sukhbaatar Batbold, who previously served as Prime Minister of Mongolia and is a current member of Mongolia’s parliament, used his position as prime minister to award lucrative contracts to sell copper concentrates from a Mongolian state controlled mine to entities that were owned and controlled by his known associates or his son. These intermediaries, who had little to no experience in the copper trade, played no part in providing financing for the purchase of the copper concentrates or in arranging the sale or shipment of the commodities. They simply concealed the fact that Batbold and his family were violating Mongolian anti-corruption laws by benefiting from the sale of millions of dollars’ worth of Mongolian natural resources.
“As alleged, former Mongolian Prime Minister Batbold used high-end New York City real estate as a cover for his illicit corruption scheme,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s forfeiture action sends a message that criminal activity is never included in the homeowner’s agreement. My office will not tolerate public corruption that undermines faith in government, wherever committed.”
“While he was Prime Minister of Mongolia, the defendant allegedly used corrupt funds and a sophisticated money laundering scheme to purchase two luxury New York apartments,” said Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division. “Make no mistake, the FBI is dedicated to identifying assets gained through corruption and working with our partners to recover the funds, no matter how obscured.”
FBI New York’s International Corruption Squad is investigating the case.
Deputy Chief Adam J. Schwartz of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Tara McGrath and Brian Morris for the Eastern District of New York are handing the case.
The Justice Department’s Office of International Affairs provided assistance.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] (link sends e-mail) or https://tips.fbi.gov/.
A civil complaint is merely an allegation. The government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.
Seven Hackers Associated with Chinese Government Charged with Computer Intrusions Targeting Perceived Critics of China and U.S. Businesses and PoliticiansRead the Press Release
Note: Concurrent with this announcement, the U.S. Department of the Treasury imposed sanctions against two of the defendants, and the U.S. Department of State announced a Reward for Justice up to $10 million for information on these individuals, their organization, and associated entities.
See also the UK Government attribution statement; the National Cyber Security Centre statement; and the U.S. State Department's diplomatic statement from the Office of the Spokesperson.
View the indictment here.An indictment was unsealed today charging seven nationals of the People’s Republic of China (PRC) with conspiracy to commit computer intrusions and conspiracy to commit wire fraud for their involvement in a PRC-based hacking group that spent approximately 14 years targeting U.S. and foreign critics, businesses, and political officials in furtherance of the PRC’s economic espionage and foreign intelligence objectives.
The defendants are Ni Gaobin (倪高彬), 38; Weng Ming (翁明), 37; Cheng Feng (程锋), 34; Peng Yaowen (彭耀文), 38; Sun Xiaohui (孙小辉), 38; Xiong Wang (熊旺), 35; and Zhao Guangzong (赵光宗), 38. All are believed to reside in the PRC.
“The Justice Department will not tolerate efforts by the Chinese government to intimidate Americans who serve the public, silence the dissidents who are protected by American laws, or steal from American businesses,” said Attorney General Merrick B. Garland. “This case serves as a reminder of the ends to which the Chinese government is willing to go to target and intimidate its critics, including launching malicious cyber operations aimed at threatening the national security of the United States and our allies.”
“Over 10,000 malicious emails, impacting thousands of victims, across multiple continents. As alleged in today’s indictment, this prolific global hacking operation – backed by the PRC government – targeted journalists, political officials, and companies to repress critics of the Chinese regime, compromise government institutions, and steal trade secrets,” said Deputy Attorney General Lisa Monaco. “The Department of Justice will relentlessly pursue, expose, and hold accountable cyber criminals who would undermine democracies and threaten our national security.”
"Today's announcement exposes China's continuous and brash efforts to undermine our nation's cybersecurity and target Americans and our innovation,” said FBI Director Christopher Wray. "As long as China continues to target the US and our partners, the FBI will continue to send a clear message that cyber espionage will not be tolerated, and we will tirelessly pursue those who threaten our nation’s security and prosperity. This indictment underscores our unwavering commitment to disrupt and deter malicious cyber activity, and safeguard our citizens, businesses, and critical infrastructure from threats in cyberspace."
“The indictment unsealed today, together with statements from our foreign partners regarding related activity, shed further light on the PRC Ministry of State Security’s aggressive cyber espionage and transnational repression activities worldwide,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s announcements underscore the need to remain vigilant to cybersecurity threats and the potential for cyber-enabled foreign malign influence efforts, especially as we approach the 2024 election cycle. The Department of Justice will continue to leverage all tools to disrupt malicious cyber actors who threaten our national security and aim to repress fundamental freedoms worldwide.”
“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists, and academics; valuable information from American companies; and political dissidents in America and abroad. Their sinister scheme victimized thousands of people and entities across the world, and lasted for well over a decade,” said U.S. Attorney Breon Peace for the Eastern District of New York. “America’s sovereignty extends to its cyberspace. Today’s charges demonstrate my office’s commitment to upholding and protecting that jurisdiction, and to putting an end to malicious nation state cyber activity.”
“The recent indictments against the Chinese actors reaffirm the FBI’s relentless dedication to combating cyber threats,” said Assistant Director Bryan Vorndran of the FBI Cyber Division. “They serve as a reminder that cyber adversaries who seek to compromise our nation’s systems and target US officials cannot rely on the cloak of anonymity and will face consequences for their actions.”
“APT31 Group’s practices further demonstrate the size and scope of the PRC’s state-sponsored hacking apparatus,” said Special Agent in Charge Robert W. “Wes” Wheeler Jr. of the FBI Chicago Field Office. “FBI Chicago worked tirelessly to uncover this complex web of alleged foreign intelligence and economic espionage crimes. Thanks to these efforts, as well as our partnerships with the U.S. Attorneys’ Offices and fellow Field Offices, the FBI continues to be successful in holding groups accountable and protecting national security.”
Overview
As alleged in the indictment and court filings, the defendants, along with dozens of identified PRC Ministry of State Security (MSS) intelligence officers, contractor hackers, and support personnel, were members of a hacking group operating in the PRC and known within the cybersecurity community as Advanced Persistent Threat 31 (the APT31 Group). The APT31 Group was part of a cyberespionage program run by the MSS’s Hubei State Security Department, located in the city of Wuhan. Through their involvement with the APT31 Group, since at least 2010, the defendants conducted global campaigns of computer hacking targeting political dissidents and perceived supporters located inside and outside of China, government and political officials, candidates, and campaign personnel in the United States and elsewhere and American companies.
The defendants and others in the APT31 Group targeted thousands of U.S. and foreign individuals and companies. Some of this activity resulted in successful compromises of the targets’ networks, email accounts, cloud storage accounts, and telephone call records, with some surveillance of compromised email accounts lasting many years.
Hacking Scheme
The more than 10,000 malicious emails that the defendants and others in the APT31 Group sent to these targets often appeared to be from prominent news outlets or journalists and appeared to contain legitimate news articles. The malicious emails contained hidden tracking links, such that if the recipient simply opened the email, information about the recipient, including the recipient’s location, internet protocol (IP) addresses, network schematics, and specific devices used to access the pertinent email accounts, was transmitted to a server controlled by the defendants and those working with them. The defendants and others in the APT31 Group then used this information to enable more direct and sophisticated targeted hacking, such as compromising the recipients’ home routers and other electronic devices.
The defendants and others in the APT31 Group also sent malicious tracking-link emails to government officials across the world who expressed criticism of the PRC government. For example, in or about 2021, the conspirators targeted the email accounts of various foreign government individuals who were part of the Inter-Parliamentary Alliance on China (IPAC), a group founded in 2020 on the anniversary of the 1989 Tiananmen Square protests whose stated purpose was to counter the threats posed by the Chinese Communist Party to the international order and democratic principles. The targets included every European Union member of IPAC, and 43 United Kingdom parliamentary accounts, most of whom were members of IPAC or had been outspoken on topics relating to the PRC government.
To gain and maintain access to the victim computer networks, the defendants and others in the APT31 Group employed sophisticated hacking techniques including zero-day exploits, which are exploits that the hackers became aware of before the manufacturer, or the victim were able to patch or fix the vulnerability. These activities resulted in the confirmed and potential compromise of economic plans, intellectual property, and trade secrets belonging to American businesses, and contributed to the estimated billions of dollars lost every year as a result of the PRC’s state-sponsored apparatus to transfer U.S. technology to the PRC.
Targeting of U.S. Government Officials and U.S. and Foreign Politicians and Campaigns
The targeted U.S. government officials included individuals working in the White House, at the Departments of Justice, Commerce, Treasury, and State, and U.S. Senators and Representatives of both political parties. The defendants and others in the APT31 Group targeted these individuals at both professional and personal email addresses. Additionally in some cases, the defendants also targeted victims’ spouses, including the spouses of a high-ranking Department of Justice official, high-ranking White House officials, and multiple U.S. Senators. Targets also included election campaign staff from both major U.S. political parties in advance of the 2020 election.
The allegations in the indictment regarding the malicious cyber activity targeting political officials, candidates, and campaign personnel are consistent with the March 2021 Joint Report of the Department of Justice and the Department of Homeland Security on Foreign Interference Targeting Election Infrastructure or Political Organization, Campaign, or Candidate Infrastructure Related to the 2020 US Federal Elections. That report cited incidents when Chinese government-affiliated actors “materially impacted the security of networks associated with or pertaining to U.S. political organizations, candidates, and campaigns during the 2020 federal elections.” That report also concluded that “such actors gathered at least some information they could have released in influence operations,” but which the Chinese actors did not ultimately deploy in such a manner. Consistent with that conclusion, the indictment does not allege that the hacking furthered any Chinese government influence operations against the United States. The indictment’s allegations nonetheless serve to underscore the need for U.S. (and allied) political organizations, candidates, and campaigns to remain vigilant in their cybersecurity posture and in otherwise protecting their sensitive information from foreign intelligence services, particularly in light of the U.S. Intelligence Community’s recent assessment that “[t]he PRC may attempt to influence the U.S. elections in 2024 at some level because of its desire to sideline critics of China and magnify U.S. societal divisions.”
Targeting of U.S. Companies
The defendants and others in the APT31 Group also targeted individuals and dozens of companies operating in areas of national economic importance, including the defense, information technology, telecommunications, manufacturing and trade, finance, consulting, legal, and research industries. The defendants and others in the APT31 Group hacked and attempted to hack dozens of companies or entities operating in these industries, including multiple cleared defense contractors who provide products and services to the U.S. military, multiple managed service providers who managed the computer networks and security for other companies, a leading provider of 5G network equipment, and a leading global provider of wireless technology, among many others.
Targeting for Transnational Repression of Dissidents
The defendants and the APT31 Group also targeted individual dissidents around the world and other individuals who were perceived as supporting such dissidents. For example, in 2018, after several activists who spearheaded Hong Kong’s Umbrella Movement were nominated for the Nobel Peace Prize, the defendants and the APT31 Group targeted Norwegian government officials and a Norwegian managed service provider. The conspirators also successfully compromised Hong Kong pro-democracy activists and their associates located in Hong Kong, the United States, and other foreign locations with identical malware.
The charged defendants’ roles in the conspiracy consisted of testing and exploiting the malware used to conduct these intrusions, managing infrastructure associated with these intrusions, and conducting surveillance and intrusions against specific U.S. entities. For example:
- Cheng Feng, Sun Xiaohui, Weng Ming, Xiong Wang, and Zhao Guangzong were involved in testing and exploiting malware, including malware used in some of these intrusions.
- Cheng and Ni Gaobin managed infrastructure associated with some of these intrusions, including the domain name for a command-and-control server that accessed at least 59 unique victim computers, including a telecommunications company that was a leading provider of 5G network equipment in the United States, an Alabama-based research corporation in the aerospace and defense industries, and a Maryland-based professional support services company.
- Sun and Weng operated the infrastructure used in an intrusion into a U.S. company known for its public opinion polls. Sun and Peng Yaowen conducted research and reconnaissance on several additional U.S. entities that were later the victims of the APT31 Group’s intrusion campaigns.
- Ni and Zhao sent emails with links to files containing malware to PRC dissidents, specifically Hong Kong legislators and democracy advocates, as well as targeting U.S. entities focusing on PRC-related issues.
Assistant U.S. Attorneys Douglas M. Pravda, Saritha Komatireddy, and Jessica Weigel for the Eastern District of New York are prosecuting the case, with valuable assistance from Matthew Anzaldi and Matthew Chang of the National Security Division’s National Security Cyber Section.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Seven Hackers Associated with Chinese Government Charged with Computer Intrusions Targeting Perceived Critics of China and U.S. Businesses and PoliticiansRead the Press Release
BROOKLYN, NY – An indictment was unsealed today charging seven nationals of the People’s Republic of China (PRC) with conspiracy to commit computer intrusions and conspiracy to commit wire fraud for their involvement in a PRC-based hacking group that spent approximately 14 years targeting U.S. and foreign critics, businesses and political officials in furtherance of the PRC’s economic espionage and foreign intelligence objectives.
The defendants are Ni Gaobin (倪高彬), Weng Ming (翁明), Cheng Feng (程锋), Peng Yaowen (彭耀文), Sun Xiaohui (孙小辉), Xiong Wang (熊旺), and Zhao Guangzong (赵光宗).
Merrick B. Garland, United States Attorney General; 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; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge, FBI, Chicago Field Office (FBI), announced the indictment.
“The Justice Department will not tolerate efforts by the Chinese government to intimidate Americans who serve the public, silence the dissidents who are protected by American laws, or steal from American businesses,” said Attorney General Merrick B. Garland. “This case serves as a reminder of the ends to which the Chinese government is willing to go to target and intimidate its critics, including launching malicious cyber operations aimed at threatening the national security of the United States and our allies.”
“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists and academics; valuable information from American companies; and political dissidents in America and abroad. Their sinister scheme victimized thousands of people and entities across the world, and lasted for well over a decade,” stated U.S. Attorney Peace. “America’s sovereignty extends to its cyberspace. Today’s charges demonstrate my Office’s commitment to upholding and protecting that jurisdiction, and to putting an end to malicious nation state cyber activity.”
“Over 10,000 malicious emails, impacting thousands of victims, across multiple continents. As alleged in today’s indictment, this prolific global hacking operation – backed by the PRC government – targeted journalists, political officials, and companies to repress critics of the Chinese regime, compromise government institutions, and steal trade secrets,” said Deputy Attorney General Lisa Monaco. “The Department of Justice will relentlessly pursue, expose, and hold accountable cyber criminals who would undermine democracies and threaten our national security.”
“The indictment unsealed today, together with statements from our foreign partners regarding related activity, shed further light on the PRC Ministry of State Security’s aggressive cyber espionage and transnational repression activities worldwide,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s announcements underscore the need to remain vigilant to cybersecurity threats and the potential for cyber-enabled foreign malign influence efforts, especially as we approach the 2024 election cycle. The Department of Justice will continue to leverage all tools to disrupt malicious cyber actors who threaten our national security and aim to repress fundamental freedoms worldwide.”
“These defendants were part of a Chinese government sponsored hacking group, targeting U.S. businesses and U.S. political officials for intrusion for over a decade as part of a larger, malicious global campaign. These charges are yet another example of hostile actions taken by the PRC to attack not only American businesses and infrastructure, but the security of our nation. FBI New York is united with our partners - internationally, federally, and the private sector – to protect our common goals and ideals from antagonistic nation state actors,” stated FBI Assistant Director-in-Charge Smith.
“APT31 Group’s practices further demonstrate the size and scope of the PRC’s state-sponsored hacking apparatus,” said Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. “FBI Chicago worked tirelessly to uncover this complex web of alleged foreign intelligence and economic espionage crimes. Thanks to these efforts, as well as our partnerships with the U.S. Attorney’s Offices and fellow Field Offices, the FBI continues to be successful in holding groups accountable and protecting national security.”
Overview
As alleged in the indictment and court filings, the defendants, along with dozens of identified PRC Ministry of State Security (MSS) intelligence officers, contractor hackers, and support personnel, were members of a hacking group operating in the PRC and known within the cyber security community as Advanced Persistent Threat 31 (the APT31 Group). The APT31 Group was part of a cyberespionage program run by the MSS’s Hubei State Security Department, located in the city of Wuhan. Through their involvement with the APT31 Group, since at least 2010, the defendants conducted global campaigns of computer hacking targeting political dissidents and perceived supporters located inside and outside of China, government and political officials, candidates and campaign personnel in the United States and elsewhere, and American companies.
The defendants and others in the APT31 Group targeted thousands of U.S. and foreign individuals and companies. Some of this activity resulted in successful compromises of the targets’ networks, email accounts, cloud storage accounts, and telephone call records, with some surveillance of compromised email accounts lasting many years.
Hacking Scheme
The more than 10,000 malicious emails that the defendants and others in the APT31 Group sent to these targets often appeared to be from prominent news outlets or journalists and appeared to contain legitimate news articles. The malicious emails contained hidden tracking links, such that if the recipient simply opened the email, information about the recipient, including the recipient’s location, internet protocol (IP) addresses, network schematics, and specific devices used to access the pertinent email accounts, was transmitted to a server controlled by the defendants and those working with them. The defendants and others in the APT31 Group then used this information to enable more direct and sophisticated targeted hacking, such as compromising the recipients’ home routers and other electronic devices.
The defendants and others in the APT31 Group also sent malicious tracking-link emails to government officials across the world who expressed criticism of the PRC government. For example, in or about 2021, the Conspirators targeted the email accounts of various foreign government individuals world who were part of the Inter-Parliamentary Alliance on China (IPAC), a group founded in 2020 on the anniversary of the 1989 Tiananmen Square protests whose stated purpose was to counter the threats posed by the Chinese Communist Party to the international order and democratic principles. The targets included every European Union member of IPAC, and 43 United Kingdom parliamentary accounts, most of whom were members of IPAC or had been outspoken on topics relating to the PRC government.
To gain and maintain access to the victim computer networks, the defendants and others in the APT31 Group employed sophisticated hacking techniques including zero-day exploits, which are exploits that the hackers became aware of before the manufacturer or the victim were able to patch or fix the vulnerability. These activities resulted in the confirmed and potential compromise of economic plans, intellectual property, and trade secrets belonging to American businesses, and contributed to the estimated billions of dollars lost every year as a result of the PRC’s state-sponsored apparatus to transfer U.S. technology to the PRC.
Targeting of U.S. Government Officials and U.S. and Foreign Politicians and Campaigns
The targeted U.S. government officials included individuals working in the White House, at the Departments of Justice, Commerce, Treasury, and State, and U.S. Senators and Representatives of both political parties. The defendants and others in the APT31 Group targeted these individuals at both professional and personal email addresses. Additionally in some cases, the defendants also targeted victims’ spouses, including the spouses of a high-ranking Department of Justice official, high-ranking White House officials, and multiple United States Senators. Targets also included election campaign staff from both major U.S. political parties in advance of the 2020 election.
The allegations in the indictment regarding the malicious cyber activity targeting political officials, candidates, and campaign personnel are consistent with the March 2021 Joint Report of the Department of Justice and the Department of Homeland Security on Foreign Interference Targeting Election Infrastructure or Political Organization, Campaign, or Candidate Infrastructure Related to the 2020 US Federal Elections. That report cited incidents when Chinese government-affiliated actors “materially impacted the security of networks associated with or pertaining to US political organizations, candidates, and campaigns during the 2020 federal elections.” That report also concluded that “such actors gathered at least some information they could have released in influence operations,” but which the Chinese actors did not ultimately deploy in such a manner. Consistent with that conclusion, the indictment does not allege that the hacking furthered any Chinese government influence operations against the U.S. The indictment’s allegations nonetheless serve to underscore the need for U.S. and allied political organizations, candidates, and campaigns to remain vigilant in their cybersecurity posture and in otherwise protecting their sensitive information from foreign intelligence services, particularly in light of the U.S. Intelligence Community’s recent assessment that “[t]he PRC may attempt to influence the U.S. elections in 2024 at some level because of its desire to sideline critics of China and magnify U.S. societal divisions.”
Targeting of U.S. Companies
The defendants and others in the APT31 Group also targeted individuals and dozens of companies operating in areas of national economic importance, including the defense, information technology, telecommunications, manufacturing and trade, finance, consulting, legal, and research industries. The defendants and others in the APT31 Group hacked and attempted to hack dozens of companies or entities operating in these industries, including multiple cleared defense contractors who provide products and services to the U.S. military, multiple managed service providers who managed the computer networks and security for other companies, a leading provider of 5G network equipment, and a leading global provider of wireless technology, among many others.
Targeting for Transnational Repression of Dissidents
The defendants and the APT31 Group also targeted individual dissidents around the world and other individuals who were perceived as supporting such dissidents. For example, in 2018, after several activists who spearheaded Hong Kong’s Umbrella Movement were nominated for the Nobel Peace Prize, the defendants and the APT31 Group targeted Norwegian government officials and a Norwegian managed service provider. The conspirators also successfully compromised Hong Kong pro-democracy activists and their associates located in Hong Kong, the United States, and other foreign locations with identical malware.
The charged defendants’ roles in the conspiracy consisted of testing and exploiting the malware used to conduct these intrusions, managing infrastructure associated with these intrusions, and conducting surveillance and intrusions against specific U.S. entities. For example, defendants Cheng Feng, Sun Xiaohui, Weng Ming, Xiong Wang, and Zhao Guangzong were involved in testing and exploiting malware, including malware used in some of these intrusions. Cheng and Ni Gaobin managed infrastructure associated with some of these intrusions, including the domain name for a command-and-control server that accessed at least 59 unique victim computers, including a telecommunications company that was a leading provider of 5G network equipment in the United States, an Alabama-based research corporation in the aerospace and defense industries, and a Maryland-based professional support services company. Sun and Weng operated the infrastructure used in an intrusion into a U.S. company known for its public opinion polls. Sun and Peng Yaowen conducted research and reconnaissance on several additional U.S. entities that were later the victims of the APT31 Group’s intrusion campaigns. Ni and Zhao sent emails with links to files containing malware to PRC dissidents, specifically Hong Kong legislators and democracy advocates, as well as targeting U.S. entities focusing on PRC-related issues.
The government’s case is being prosecuted by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, Saritha Komatireddy, and Jessica Weigel are in charge of the prosecution, with assistance from Matthew Anzaldi and Matthew Chang of the National Security Division’s National Security Cyber Section and from the Office’s Litigation Analyst Mary Clare McMahon.
The Defendants:
Ni Gaobin (倪高彬)
Age: 38
People’s Republic of ChinaWeng Ming (翁明)
Age: 37
People’s Republic of ChinaCheng Feng (程锋)
Age: 34
People’s Republic of ChinaPeng Yaowen (彭耀文)
Age: 38
People’s Republic of ChinaSun Xiaohui (孙小辉)
Age: 38
People’s Republic of ChinaXiong Wang (熊旺)
Age: 35
People’s Republic of ChinaZhao Guangzong (赵光宗)
Age: 38
People’s Republic of ChinaE.D.N.Y. Docket No. 24-CR-42 (RER)
Long Island Man Pleads Guilty to Conspiring to Distribute and Distributing Fentanyl Causing Two Overdose DeathsRead the Press Release
Earlier today, in federal court in Central Islip, Devon Thurmond pleaded guilty to conspiring to distribute fentanyl from 2021 through 2023 and to distribution of fentanyl in April 2021that ultimately caused the overdose death of a victim (Victim-1). As part of his plea, Thurmond admitted that he knowingly conspired with his codefendant Cartier Funderburke to sell fake oxycodone pills that actually contained fentanyl and on or about April 29, 2021 sold fake oxycodone pills containing fentanyl to Victim-1, leading to their death. Additionally, Thurmond also admitted at his plea proceeding, that while he was incarcerated on an unrelated state charge, he caused fake oxycodone pills containing fentanyl to be distributed by codefendant Melissa Trimarchi which ultimately led to the overdose death of another victim (Victim-2) on or about January 9, 2023. The plea proceeding was held before United States District Gary R. Brown. Both codefendants previously pleaded guilty and are awaiting sentencing. When sentenced, Thurmond faces up to 40 years’ imprisonment.
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), and, William Whitton, Chief of Police, Glen Cove Police Department (GCPD), announced the guilty plea.
“As he admitted today, Thurmond’s conspiracy and sale of fentanyl disguised as prescription pain pills directly led to the poisoning deaths of two Long Island residents,” stated United States Attorney Peace. “My Office and our law enforcement partners will continue to prosecute traffickers for their callous disregard for human life in pushing deadly drugs and contributing to the alarming opioid epidemic that has continued to harm this District.”
"Fentanyl is the greatest threat to our nation. The men and women of DEA New York Division continue to do everything we can, along with our law enforcement partners, to target those responsible for poisoning and destroying our communities” stated DEA New York Division Special Agent in Charge Frank Tarentino. “While this guilty plea doesn’t bring back the lives lost, it sends a message that we will do everything we can to make sure those responsible face the consequences.”
“The Glen Cove Police Department will continue to collaborate with agents of the DEA and the U.S. Department of Justice to identify, arrest, and prosecute those who believe they can profit from selling lethal drugs in our community,” stated GCPD Chief of Police Whitton.
Between April 2021 and February 2023, Thurmond conspired with Funderburke and Trimarchi to sell fentanyl disguised as oxycodone pain pills and sold such pills to Victim-1 and Victim-2. The investigation revealed that on April 29, 2021, a 34-year-old individual (Victim-1) died of a drug-related overdose at his residence in Glen Cove, Long Island. Cellular telephone analysis and additional investigation, showed that the fentanyl that Victim-1 used was purchased from Thurmond and Funderburke earlier that same day and that Thurmond personally delivered the drugs to Victim-1. On January 9, 2023, a 27-year-old individual (Victim-2) died of a drug-related overdose at his residence in Locust Valley, Long Island. A search of Victim-2’s phone revealed text messages between Trimarchi and Victim-2, which related to Victim-2’s purchase of fentanyl in the form of a single fake oxycodone pill in the hours before his overdose death. In recorded jail calls between Thurmond and Trimarchi, Trimarchi admitted to selling the fatal dose of fentanyl in the form of a fake oxycodone pill to Victim-2, which pill came from the supply of fake oxycodone pills provided by Thurmond to Trimarchi to sell on his behalf while he was incarcerated.
According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2019, nearly 71,000 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 2019, over 14,000 people died in the United States from a drug overdose involving heroin. From 2013 to 2019, the synthetic opioid death rate increased by more than 1,000 percent. Of those deaths, over 70% involved a prescription or illicit opioid. Among New York State residents, the number of overdose deaths involving any opioid increased each year between 2010 and 2017, with an overall increase of 200.2 percent from 1,074 in 2010 to 3,224 in 2017, according to the New York State Health Department. If you or someone you know is struggling with substance abuse, please contact the Substance Abuse and Mental Health Services Administration (SAMHSA) Helpline: 1-800-662-HELP (4357) or Findtreatment.gov.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles N. Rose is in charge of the prosecution.
The Defendant:
DEVON THURMOND (also known as “D Rock”)
Age: 23
Glen Cove, New YorkDefendants Who Previously Pleaded Guilty:
CARTIER FUNDERBURKE (also known as “Kartier,” “Kar” and “Slim”)
Age: 24
Glen Cove, New YorkMELISSA TRIMARCHI (also known as “Mel”)
Age: 37
Glen Cove, New YorkE.D.N.Y. Docket No. 23-CR-232 (GRB)
Former New York City Transit Worker and Former New York State Court Officer Sentenced to 18 Months' Imprisonment for COVID-19 Loan FraudRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Arthur Cornwall, a former signal maintainer with the New York City Transit Authority, and Sean Williams, a former New York State Court Officer, were each sentenced by United States District Judge Joan M. Azrack to 18 months in prison for conspiring to commit wire fraud in connection with their receipt of approximately $770,000 in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP). The Court also ordered the defendants to pay $770,000 in restitution to the United States Small Business Administration. The defendants pleaded guilty to the charge in June 2023.
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 sentences.
“Abuse of public benefits programs, particularly shameful when those defrauding the government are public servants, will not be tolerated and not forgotten with the passage of time from the darkest days of the COVID-19 pandemic,” stated United States Attorney Peace. “The defendants’ theft of relief money, despite holding jobs with good salaries and benefits, so they could purchase real estate, cryptocurrency and pay off credit card bills with the stolen funds, is deserving of jail sentences. This Office and our agency partners will continue working to bring to justice those fraudsters who take advantage of a national emergency, and recover every dollar that they stole from the government.”
Inspector in Charge of the New York Division Daniel B. Brubaker said, “The sentencing today of these two defendants should serve as a clear message to anyone who schemes to steal the public’s money, Postal Inspectors and our law enforcement partners will track you down and see you prosecuted to the fullest extent of the law. What makes this case even more egregious is that the defendants were employed in positions of public trust when they stole money specifically intended for those struggling to keep their businesses afloat during the pandemic. Today is a win for the good guys and the people we protect, but the fight is far from over and we will continue to use every resource at our disposal to pursue anyone who attempts to defraud the public.”
Between May 2020 and July 2020, amid the COVID-19 pandemic, Cornwall and Williams fraudulently applied for, and received, at least six PPP and EIDLP loans, totaling approximately $770,000, on behalf of purported corporate entities they controlled. As part of the scheme designed to mislead the SBA and a financial institution disbursing the funds, the defendants submitted supporting documentation that contained false information, including the identity of the individual applying for the loan, the number of employees, revenue, payroll costs, and the intended use of the loan proceeds. Instead of using the funds for disaster relief, Cornwall and Williams diverted them for their personal use, including the discharge of personal credit card debt and the purchase of cryptocurrency. Following their guilty pleas, the defendants resigned from their respective government jobs.
Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Enacted on March 29, 2020, the CARES Act provided 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 the 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 EIDLP, which provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. Under the program, EIDLP 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.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Bradley T. King is in charge of the prosecution with assistance from Paralegal Specialist Samantha Schroder and Legal Assistants Danielle Casey and Janelle Robinson.
The Defendants:
ARTHUR CORNWALL
Age: 43
West Babylon, New YorkSEAN WILLIAMS
Age: 42
Valley Stream, New YorkE.D.N.Y. Docket No. 23-CR-238 (JMA)
Owners of China-Based Company Charged with Conspiracy to Send Trade Secrets Belonging to Leading U.S.-Based Electric Vehicle CompanyRead the Press Release
Klaus Pflugbeil, 58, a Canadian national and resident of the People’s Republic of China (PRC), was arrested today in Nassau County, New York, for conspiring with co-defendant Yilong Shao, 47, of Ningbo, China, to send to undercover law enforcement officers trade secrets that belonged to a leading U.S.-based electric vehicle company (Victim Company-1).
“The defendants stand accused of stealing valuable proprietary technology from a U.S. electric car manufacturer and using it to set up a rival business overseas,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would try to cheat our country of its economic potential and threaten our national security.”
“As alleged, the defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Rather than invest their own resources into competitive technology, the defendants looted Victim Company-1’s trade secrets for their own financial gain. Today’s arrest demonstrates that this office will prosecute those who engage in theft of trade secrets that places U.S. businesses at a competitive disadvantage, undermines innovation and creates a potential national security risk.”
“Klaus Pflugbeil and Yilong Shao allegedly used stolen confidential information – developed by their previous employers – to establish their own Chinese-based competitor,” said Assistant Director in Charge James Smith of the FBI New York Field Office. “When American economic intelligence is stolen by foreign businesses, it not only harms the victim companies, but also threatens our financial infrastructure. The FBI will bring to justice anyone who steals our proprietary trade secrets in an effort to both safeguard the American economy and our national security.”
According to court documents, Pflugbeil and Shao are operators of a PRC-based business (Business-1) that sold technology used for the manufacture of batteries, including batteries used in electric vehicles. The defendants built Business-1 using Victim Company-1’s sensitive and proprietary information, and marketed their business as a replacement for Victim Company-1’s products. Pflugbeil was arrested this morning after he sent multiple Victim Company-1 trade secrets to an undercover agent and traveled to Nassau County for a meeting with who he believed to be Long Island-based businesspeople, but who in reality were undercover law enforcement agents. Pflugbeil is scheduled to make his initial appearance today before U.S. Magistrate Judge Peggy Kuo. His co-defendant Shao remains at large.
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 battery assembly (the Battery Assembly Trade Secret).
The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process. Victim Company-1 spent at least $13 million developing the Battery Assembly Trade Secret.
Both Pflugbeil and Shao are former employes of the Canadian Manufacturer. The complaint alleges that, by no later than 2019, Pflugbeil and Shao planned to make use of Victim Company-1 trade secrets for their own business activities. For example, between October and November 2019, Pflugbeil and Shao discussed “set[ting] up” a company in Canada and China that would rely on the sensitive and confidential information needed to make and sell their own battery technology. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” from Victim Company-1 that they could copy for their planned business. Shao subsequently confirmed that “we have all of original assembly drawings by PDF.”
In or about July 2020, Pflugbeil and Shao opened Business-1, 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 Victim Company-1 manufactured using its proprietary technology. Business-1 is marketed by Pflugbeil as an alternative source for the sale of products that rely upon Victim Company-1 trade secrets, publishing online advertisements that state, for example, “Are you looking for [Victim Company-1] Metering pumps and spare parts? Look no further.”
In operating Business-1, Pflugbeil and Shao relied upon the Battery Assembly Trade Secret. For example, in September 2020, Pflugbeil emailed a series of drawings to a gears manufacturer in order to produce several parts and wrote “please keep the attached information confidential.” The attachment contained drawings belonging to Victim Company-1 related to the Battery Assembly Trade Secret. The drawings that Pflugbeil sent were identical to Victim Company-1’s drawings, except the name of the company was changed, the date of the drawing was changed, and the drawing identifying number was written in reverse of Victim Company-1’s drawing identifying number.
On or about Sept. 11, 2023, undercover agents attended a trade show for the packaging and processing industries 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 on 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) while UC-1 was in the Eastern District of New York. 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.
If convicted, Pfugbeil 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.
Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York are prosecuting the case, with valuable assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
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.
Owners of China-Based Company Charged with Conspiracy to Send Trade Secrets Belonging to Leading U.S.-Based Electric Vehicle CompanyRead the Press Release
A complaint was unsealed today in federal court in Brooklyn charging Klaus Pflugbeil, a resident of the People’s Republic of China (the “PRC” or “China”) and Canadian national, and Yilong Shao, a Chinese national, with conspiring to send trade secrets that belonged to a leading U.S.-based electric vehicle company (“Victim Company-1”). Pflugbeil and Shao are operators of a PRC-based business (“Business-1”) that sold technology used for the manufacture of batteries, including batteries used in electric vehicles. The defendants built Business-1 using Victim Company-1’s sensitive and proprietary information, and even marketed their business as a replacement for Victim Company-1’s products. Pflugbeil was arrested this morning after he sent multiple Victim Company-1 trade secrets to an undercover agent and traveled to Nassau County for a meeting with what he believed to be Long Island-based businesspeople, who in reality were undercover law enforcement agents. Pflugbeil is scheduled to make his initial appearance today before United States Magistrate Judge Peggy Kuo. His co-defendant Shao remains at large.
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 arrest and charge.
“As alleged, the defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets,” stated United States Attorney Peace. “Rather than invest their own resources into competitive technology, the defendants looted Victim Company-1’s trade secrets for their own financial gain. Today’s arrest demonstrates that this Office will prosecute those who engage in theft of trade secrets that places U.S. businesses at a competitive disadvantage, undermines innovation and creates a potential national security risk.”
Mr. Peace also thanked the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS) for its assistance.
“The defendants stand accused of stealing valuable proprietary technology from a U.S. electric car manufacturer and using it to set up a rival business overseas,” stated Assistant Attorney General Olsen. “This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would so try cheat our country of its economic potential and threaten our national security.”
“Klaus Pflugbeil and Yilong Shao allegedly used stolen confidential information—developed by their previous employers—to establish their own Chinese-based competitor. When American economic intelligence is stolen by foreign businesses, it not only harms the victim companies, but also threatens our financial infrastructure. The FBI will bring to justice anyone who steals our proprietary trade secrets in an effort to both safeguard the American economy and our national security,” stated FBI Assistant Director-in-Charge Smith.
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 battery assembly (the “Battery Assembly Trade Secret”).[1] The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process. Victim Company-1 spent at least $13 million developing the Battery Assembly Trade Secret.
Both Pflugbeil and Shao are former employees of the Canadian Manufacturer. The evidence reveals that, by no later than 2019, Pflugbeil and Shao planned to make use of Victim Company-1 trade secrets for their own business activities. For example, between October and November 2019, Pflugbeil and Shao discussed “set[ting] up” a company in Canada and China that would rely on the sensitive and confidential information needed to make and sell their own battery technology. Pflugbeil told Shao that he had “a lot of original documents” related to the technology, and sought out more “original drawings” from Victim Company-1 that they could copy for their planned business. Shao subsequently confirmed that “we have all of original assembly drawings by PDF.”
In or about July 2020, Pflugbeil and Shao opened Business-1, 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 Victim Company-1 manufactured using its proprietary technology. Business-1 is marketed by Pflugbeil as an alternative source for the sale of products that rely upon Victim Company-1 trade secrets, publishing online advertisements that state, for example, “Are you looking for [Victim Company-1] Metering pumps and spare parts? Look no further.”
In operating Business-1, Pflugbeil and Shao relied upon the Battery Assembly Trade Secret. For example, in September 2020, Pflugbeil emailed a series of drawings to a gear manufacturer in order to produce several parts, and wrote, “please keep the attached information confidential.” The attachment contained drawings belonging to Victim Company-1 related to the Battery Assembly Trade Secret. The drawings that Pflugbeil sent were identical to Victim Company-1’s drawings, except the name of the company was changed, the date of the drawing was changed, and the drawing identifying number was written in reverse of Victim Company-1’s drawing identifying number.
On or about September 11, 2023, undercover 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 on Long Island. 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”) while UC-1 was in the Eastern District of New York. 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 charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty. If convicted, Pflugbeil faces up to 10 years in prison.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and 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, with assistance from Litigation Analyst Joseph Levin.
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 Defendants:
KLAUS PFLUGBEIL
AGE: 58
Ningbo, ChinaYILONG SHAO
AGE: 47
Ningbo, ChinaE.D.N.Y. Docket No. 24-MJ-226
[1] Although some of the conduct described in the Complaint occurred before the Canadian Manufacturer was acquired by Victim Company-1, the Battery Assembly Trade Secret belongs to, and is the proprietary information of, Victim Company-1. Accordingly, unless otherwise indicated, the government refers to Victim Company-1 even where relevant conduct occurred when the Canadian Manufacturer was an independent entity.