Eastern District of New York
Press releases recorded for this federal judicial district.
Long Island MS-13 Gang Member Pleads Guilty to 2016 Murder in BrentwoodRead the Press Release
Earlier today, in federal court in Central Islip, Ever Flores, a member of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to racketeering charges relating to his participation in the murder of Dewann Stacks and a conspiracy to distribute cocaine and marijuana. The proceeding was held before United States Circuit Judge Joseph F. Bianco.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Stuart Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
“Today’s guilty plea makes clear that the defendant, an MS-13 gang member who admittedly hunted on residential streets in Long Island in order to kill, actively participated in the butchering and beating death of the victim until he was almost unrecognizable,” stated Acting U.S. Attorney Kasulis. “This Office and the Long Island Gang Task Force have vowed to end these horrific killings and dismantle the MS-13.”
“This case is a grim reminder of just how vicious MS-13 can be,” stated SCPD Acting Commissioner Cameron. “This victim was sought out like prey and killed in an act of savagery illustrating the danger this street gang poses. Today, there is one less murderer and drug dealer to plague the streets of Suffolk County, and I commend the U.S. Attorney’s Office for the Eastern District of New York and our law enforcement partners for their continued dedication to bringing individuals like Ever Flores to justice.”
According to prior court filings and Flores’s statements during the plea proceeding, on October 13, 2016, Flores and other MS-13 co-conspirators drove around the streets of Central Islip and Brentwood hunting for rival gang members to attack and kill. They located Stacks on American Boulevard, a residential street in Brentwood and, believing him to be a rival gang member, decided to kill him. Flores, wielding a machete, and two other MS-13 members, one armed with a machete and the other a baseball bat, attacked the victim, beating and hacking him to death. The victim sustained severe sharp and blunt force trauma to the face and head, leaving him nearly unrecognizable.
In addition, Flores also pleaded guilty to participating in a drug conspiracy, admitting that between April 2016 and October 2017, he and other members of the Sailors clique conspired to distribute cocaine and marijuana to raise money for the MS-13.
Today’s conviction is the latest 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, comprised primarily of immigrants from Central America. 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 60 murders in the Eastern District of New York and has convicted 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.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution.
The Defendant:
EVER FLORES (also known as “Negro” and “Grone”)
Age: 29
Brentwood, New YorkE.D.N.Y. Docket No. 16-CR-403 (S-7)(JFB)
Long Island Doctor Convicted of Illegal Distribution of OxycodoneRead the Press Release
A federal jury in Central Islip returned a guilty verdict this afternoon against Frank Parasmo, a medical doctor with an office in Deer Park, on 31 counts of unlawfully distributing oxycodone, a highly addictive prescription painkiller, and one count of unlawfully distributing hydrocodone without a legitimate medical purpose. The verdict followed four weeks of trial before United States District Judge Joan M. Azrack. When sentenced, Dr. Parasmo faces up to 20 years in prison.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the verdict.
“By prescribing painkillers in the absence of any recognized medical need, the defendant not only betrayed his oath as a physician to do no harm, he also endangered the lives of vulnerable patients and contributed to the spread of the opioid epidemic by peddling dangerous drugs,” stated Acting United States Attorney Kasulis. “As today’s verdict demonstrates, this Office will continue to hold accountable medical professionals like the defendant who misuse their advanced education, specialized training and access to prescription painkillers to exploit drug dependency in our communities.”
“The egregious prescribing records detailed in court proceedings outlined clearly how the defendant disregarded his patients’ health, and instead, risked their lives while they suffered from substance abuse,” stated DEA Special Agent-in-Charge Donovan. “There is no excuse for a doctor, an individual who is given great trust and responsibility, to put their patient’s lives and the public’s health, in jeopardy. I commend the DEA Long Island District Office Tactical Diversion Squad and the U.S. Attorney’s Office Eastern District of New York for their diligent work throughout this investigation.”
As proven at trial, between January 2014 and December 2015, Dr. Parasmo provided prescriptions for oxycodone and hydrocodone pills to 18 of his patients without a legitimate medical purpose and outside the course of a professional medical practice. Parasmo issued prescriptions to patients who had just completed detox treatment in rehabilitation facilities, as well as patients who had just been discharged from the hospital following an overdose, In addition, Parasmo issued prescriptions to many patients he knew were taking illegal drugs or who he suspected were addicts. There is a significant risk of an overdose when oxycodone is taken with heroin and cocaine. From 2010 to 2015, Dr. Parasmo prescribed over 1.5 million oxycodone and hydrocodone pills making him one of the top prescribers of the painkiller in New York State during that time period.
This case was investigated by the DEA’s Long Island District Office Tactical Diversion Squad comprising agents and officers of the DEA, Nassau County Police Department, Suffolk County Police Department, Port Washington Police Department, and Department of Health and Human Services-Office of Inspector General.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Michael Maffei and Charles P. Kelly are in charge of the prosecution.
The Defendant:
FRANK PARASMO
Age: 75
Great River, New YorkE.D.N.Y. Docket No. 19-CR-1 (JMA)
Former Long Island Doctor Sentenced to Five Years in Prison for Conspiring to Illegally Distribute OxycodoneRead the Press Release
Earlier today, in federal court in Central Islip, Tameshwar Ammar, a former medical doctor in Roslyn, New York, was sentenced by United States District Judge Denis R. Hurley to five years’ imprisonment for conspiring to illegally distribute oxycodone. In June 2020, Ammar relinquished his license to practice medicine. In July 2020, Ammar pleaded guilty to the charge. As part of his sentence, Ammar agreed to forfeit $245,700 in criminal proceeds.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the sentence.
“Today’s sentence sends a stern warning that doctors who decide to betray their Hippocratic oaths by acting as profit-seeking drug dealers will face severe consequences,” stated Acting United States Attorney Kasulis. “This Office and our partners at the DEA are working tirelessly to combat the opioid epidemic on Long Island and elsewhere, including by prosecuting medical professionals who contribute to the risk of addiction, overdose and death by their callous actions.” Ms. Kasulis also thanked the U.S. Department of Health and Human Services, Office of Inspector General, New York Region, for their assistance during the investigation.
“Doctors are supposed to be among the most trusted professionals in our society. This defendant, on the other hand, used his position to prey upon members of our community,” stated DEA Special Agent-in-Charge Donovan. “By knowingly and intentionally writing prescriptions of addictive opioids that he knew would be resold, he violated not only his oath as a doctor, but the trust of his community. I applaud the efforts of the Long Island District Office’s Tactical Diversion Squad and the US Attorney’s Office in the Eastern District of New York for their dedication to this investigation.”
As set forth in the indictment and other court filings, between 2013 and 2019, Ammar illegally prescribed thousands of highly addictive oxycodone pills to two individuals identified in the indictment as John Doe 1 and John Doe 2. According to a review of Ammar’s medical files for the two individuals, Ammar wrote the prescriptions without any diagnostic proof of legitimate medical need. Ammar prescribed oxycodone pills to John Doe 1, knowing that he intended to sell the pills to others. In addition, Ammar continued to prescribe oxycodone pills and methadone to John Doe 2, even after learning that he had been admitted to a psychiatric facility in March 2018.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, comprised of agents and officers of the DEA, Nassau County Police Department, Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the U.S. Department of Health & Human Services Office of the Inspector General and the Hempstead Police Department.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution.
The Defendant:
TAMESHWAR AMMAR
Age: 53
Amityville, New YorkE.D.N.Y. Docket No. 19-CR-516 (DRH)
United States Reaches Agreements with New York State and Local Government Agencies to Improve Accessibility to Covid-19 Vaccination Websites for People with Vision ImpairmentsRead the Press Release
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, today announced agreements pursuant to Title II of the Americans With Disabilities Act of 1990 (the “ADA”), with five New York State and local government agencies to fix accessibility barriers for people with visual impairments on their COVID-19 vaccination websites.
Pursuant to Title II of the ADA, the United States Attorney’s Office investigated the vaccination websites for New York State’s Department of Health, the City of New York’s Department of Health, New York City Health + Hospitals, Nassau County, and Suffolk County. As a result of this review, the United States Attorney’s Office identified multiple areas where text was difficult to read for visually impaired people. On some of the websites, individuals with visual impairments using screen readers were prevented from identifying what steps they needed to take to complete forms, or from readily navigating the websites. On some websites, lettering was set against a background causing a low contrast.
Following this investigation, the New York State’s Department of Health, the City of New York’s Department of Health, New York City Health + Hospitals, Nassau County, and Suffolk County have now entered into written agreements with the United States Attorney’s Office certifying that they have corrected the identified problems. These government entities further committed to maintaining that their COVID-19 vaccination websites will be accessible for people with visual impairments.
“In the midst of the ongoing global pandemic, people with vision impairments must be able to access information about how and where to obtain COVID-19 vaccinations,” stated Acting United States Attorney Kasulis. “Our Office thanks the New York State Department of Health, the City of New York, New York Health + Hospitals, and Nassau and Suffolk counties for their cooperation in complying with the requirements of the ADA and for ensuring that these vital websites are accessible to the visually impaired.”
The United States Attorney’s Office gratefully acknowledges the assistance of WebAIM, a nonprofit web accessibility organization based at the Institute for Disability Research, Policy, and Practice at Utah State University, which provided information on accessibility issues on the websites addressed in the agreements announced today.
The government’s review was handled by Assistant United States Attorney Edward K. Newman. The United States Attorney’s Office for the Eastern District of New York recently announced a Civil Rights Team in the Office’s Civil Division. The Civil Rights Team focuses on protecting the rights of the most vulnerable residents of the Eastern District of New York. The Office has also a webpage, located at https://www.justice.gov/usao-edny/civil-rights, dedicated to Civil Rights Enforcement, which highlights the work of the Office and provides links to complaint forms and to other civil rights resources. For more information on the U.S. Attorney’s Office, or to report to report suspected violations of civil rights please visit https://www.justice.gov/usao-edny.
Four Former Employees of Utility Company Plead Guilty in Bribery and Kickback SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Patrick McCrann and Richard Zavada, two former employees of a New York-based utility company (the “Company”), pleaded guilty to accepting bribes and kickbacks from the owners of a Long Island-based contractor (the “Contractor”) in exchange for steering lucrative contracts to the Contractor. Last week, Ricardo Garcia and Jevan Seepaul, two other former employees of the Company, also pleaded guilty to accepting bribes and kickbacks from the Contractor. Today’s proceedings took place before United States District Judge Carol Bagley Amon.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.
“The defendants have admitted to accepting thousands of dollars in bribes and kickbacks for their own enrichment and to subverting the no-bid process for awarding contracts,” stated Acting U.S. Attorney Kasulis. “The Office will remain vigilant in prosecuting criminals who seek to enrich themselves at the expense of taxpayers and consumers.”
As alleged in the criminal information and other court filings, the defendants were managers employed in the facilities department of the Company who steered contracts to certain Long Island-based contractors, including the Contractor, in exchange for hundreds of thousands of dollars in bribes and kickbacks. The Contractor secured more than $50 million in facility maintenance contracts from the Company during the time that the Contractor was paying bribes to the defendants. As managers, the defendants had the authority to approve “no-bid” contracts valued at less than $50,000. The Contractor understood that if it did not pay bribes, the defendants would award the Company’s work to the Contractor’s competitors. In exchange for the bribe payments, the defendants also took various steps to assist the Contractor in obtaining contracts from the Company for which there was a bidding process, including providing it with non-public bidding information, circumventing the Company’s competitive bidding process and offering favorable reviews of the Contractor’s work. The Contractor paid bribes to ensure that the defendants did not slow or stop disbursement of project funds to the Contractor, provide negative performance reviews regarding the Contractor’s work, or otherwise claim that the Contractor’s work did not meet contractual specifications.
The illicit payments to the defendants included cash, the purchase of a recreational vehicle, home improvements, landscaping and an overseas vacation. As part of the investigation, agents recovered approximately $300,000 in cash from a safe deposit box held by Zavada.
When sentenced, each defendant faces a maximum sentence of five years in prison, a maximum fine of $500,000, mandatory restitution and forfeiture.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Turner Buford and Artie McConnell are in charge of the prosecution.
The Defendants Who Pleaded Guilty Today:
PATRICK MCCRANN
Age: 57
Selden, New YorkE.D.N.Y. Docket No. 21-CR-467 (CBA)
RICHARD ZAVADA
Age: 65
Hicksville, New YorkE.D.N.Y. Docket No. 21-CR-468 (CBA)
The Defendants Who Previously Pleaded Guilty:
RICARDO GARCIA
Age: 48
Stroudsburg, PennsylvaniaE.D.N.Y. Docket No. 21-CR-460 (CBA)
JEEVAN SEEPAULAge: 36
Rockville Centre, New YorkE.D.N.Y. Docket No. 21-CR-469 (CBA)
Two Individuals Convicted of Murder and Extortion of Queens Business OwnerRead the Press Release
Earlier today, a federal jury in Brooklyn convicted Ppassim Elder, also known as “Bsam,” “Big Sam” and “Sam,” and Wilbert Bryant, also known as “Will” and “La,” of extortion, bank fraud, firearms and murder offenses. The verdict followed a three-week trial before by United States District Judge William F. Kuntz, II. When sentenced, the defendants face up to life in prison.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Dermot F. Shea, Commissioner, New York City Police Department, announced the verdict.
“With today’s verdict, a jury has held the defendants accountable for their heinous crimes, including the murder of a Queens business owner while attempting to collect a debt they claimed was owed by the victim’s son,” stated Acting United States Attorney Kasulis. “This Office and our law enforcement partners are working tirelessly to protect the communities in our district from violent criminals like the defendants who will now face very serious consequences for their actions.” Ms. Kasulis also expressed her appreciation to the Queens County District Attorney’s Office for their assistance during the investigation and prosecution.
As proven at trial, on the morning of October 23, 2017, Bryant and two other perpetrators walked into Garden Valley Distributors, a family-owned wholesale distribution business located in Ozone Park, Queens. The perpetrators said that “Big Sam” had sent them to collect his money. Earlier that year, Elder, who was known as “Big Sam,” had given the murder victim’s son money, which the son used to support the business. When Elder demanded full repayment, the son was unable to repay the debt because much of the money had been used to purchase merchandise for Garden Valley. Elder then began a campaign of intimidation against the son and his family. On one occasion, Elder paid co-conspirators to throw a rock through a window of the victim’s home. On another, Elder barged into the family home, intimidating members of the victim’s family. Finally, Elder dispatched Bryant and two co-conspirators into Garden Valley business where, on October 23, 2017, the perpetrators brandished a firearm, pistol-whipped the son and fatally shot the father in the face.
In addition to the murder, Elder extorted another person whose brother had stolen the proceeds of a fraud scheme committed by Elder. Although the victim was not involved in the theft, Elder nonetheless punched him in his face in front of his daughters, breaking and bloodying his nose in order to “send a message” to the victim’s brother. Elder and Bryant were also convicted of bank fraud conspiracy for lying to banks about the true owner of certain bank accounts, which permitted Elder to defraud innocent victims across the country, including an elderly man who lost over $30,000 when he was tricked into believing he was purchasing a car and another individual who lost over $150,000 when he was defrauded into believing he was purchasing two real estate properties. Elder was also convicted of crimes committed after his arrest in this case, including stealing his attorney’s identity and lying to federal officials.
This case was brought as 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. As part of the program, U.S. Attorneys’ Offices work in partnership with federal, state, local and tribal law enforcement and their local communities 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 Keith D. Edelman, Genny Ngai and Anna L. Karamigios are in charge of the prosecution.
The Defendants:
PPASSIM ELDER (also known as “Bsam,” “Sam” and “Big Sam”)
Age: 42
Staten Island, New YorkWILBERT BRYANT (also known as “Will” and “La”)
Age: 57
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-92 (S-5) (WFK)
Turkish National Pleads Guilty to Conspiracy to Commit Health Care and Wire Fraud in “Birth Tourism” SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Ibrahim Aksakal pleaded guilty to conspiring to commit health care and wire fraud in connection with a so-called “birth tourism” scheme in Suffolk County between approximately 2017 and 2020. The scheme facilitated pregnant Turkish women fraudulently entering the United States using tourist and business visas to give birth so that their children would obtain birthright citizenship and medical benefits. As part of his plea, Aksakal consented to the forfeiture of $397,500 as proceeds linked to his role in the scheme. Today’s proceeding was held before United States District Judge Joanna Seybert.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Timothy D. Sini, District Attorney for Suffolk County; Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, New York Region (HHS-OIG); Frank T. Walsh, Jr., Acting Medicaid Inspector General, New York State Office of the Medicaid Inspector General (OMIG); and Stuart Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
“With today’s plea, Aksakal admits to an outrageous scheme in which he caused the Medicaid program to disburse more than $1 million in benefits for pregnant Turkish nationals who, masquerading as tourists, entered the United States under false pretenses to obtain birthright citizenship for their newborns,” stated Acting U.S. Attorney Kasulis. Ms. Kasulis also thanked the United States Department of State, Diplomatic Security Service, for its assistance with the case.
“This was an extremely complex, international investigation that led law enforcement to the core of this scheme right here in our backyard,” stated District Attorney Sini. “More than $1 million of American citizens’ hard-earned money was stolen through this conspiracy, and today’s plea holds its ringleader accountable. We will not tolerate the theft of taxpayer money in any form, and will continue to work with all of our law enforcement partners to target, arrest and prosecute anyone trying to take advantage of the system.”
“The criminality of birth tourism manipulates our visa and immigration systems and diverts precious financial resources from an already exhausted health care system that serves our local communities to combat COVID-19 and other critical needs,” stated HSI Special Agent-in-Charge Fitzhugh. “This is a criminal organization that threatens our homeland and preys on the vulnerable. HSI, along with its valued partners, will continue to use every resource to dismantle and bring those responsible to justice.”
“Millions of people in New York depend on Medicaid for vital services, and taxpayers across the state pay for that care,” stated HHS-OIG Special Agent-in-Charge Lampert. “When individuals like Mr. Aksakal use this program to perpetrate fraud, they divert precious funding that puts the future availability of Medicaid and other public assistance programs at risk. HHS-OIG and our law enforcement partners will continue to aggressively root out fraud schemes and hold criminals accountable.”
“Medicaid fraud, as this egregious scheme represents, threatens the health and safety of beneficiaries, wastes tax payer dollars and drains essential resources from the health care delivery system,” stated Acting OMIG Inspector General Walsh. “My office will continue to be vigilant, particularly in these most challenging times in responding to the COVID-19 pandemic, and work closely with our law enforcement partners to protect the integrity of the Medicaid program, hold wrong doers fully accountable, and preserve precious health care resources.”
“Healthcare fraud is an issue that hurts both the individuals who rely on these services and the taxpayers who ultimately get stuck with the bill,” stated SCPD Commissioner Cameron said. “This is the first time the Suffolk County Police Department handled a birth tourism case and I would like to commend the efforts of our Criminal Intelligence detectives as well as our partners in law enforcement who successfully worked on this case while also sending a message to others exploiting birth tourism—bilking the system and swindling our residents is not be an acceptable practice here in Suffolk.”
From at least January 2017 to the September 2020, Aksakal and his co-conspirators advertised a birth tourism scheme on two Turkish-language Facebook pages, www.facebook.com/ bebegimamerikadadogsun and www.facebook.com/amerikadadogum.org, and a Turkish-language website https://amerikadadogum.org. Translated into English, “bebegimamerikadadogsun” means “My baby should be born in America,” and “amerikadadogum” means “Giving Birth in America.” As translated, some of the defendants’ advertisements stated, “If you believe your baby should be born in the USA and become a U.S. citizen then you are at the right place. . . . [W]e at ‘Bebegim Amerika Dogsun’ . . . will provide future mothers and fathers this opportunity, with minimal costs . . . .” The advertisements further stated that fees paid by pregnant women – approximately $7,500 nearly all in cash – would include transportation, “insurance” to cover the costs of pre-natal, delivery and post-natal medical care, assistance with the process for applying for United States citizenship on behalf of children born in connection with the scheme and consultation in Turkish concerning health care issues. Aksakal and his co-conspirators also instructed the women to conceal their pregnancies.
The pregnant women stayed in one of seven “birth houses” that Aksakal maintained in Center Moriches, Dix Hills, East Northport, East Patchogue, Smithtown and West Babylon, New York. In addition to facilitating fraudulently obtained Medicaid benefits and lodging and transportation of the pregnant women, Aksakal and his co-conspirators also advertised the scheme on websites. As a result of the scheme, Medicaid disbursed more than $1 million in fraudulently obtained benefits.
When sentenced, Aksakal faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Oren Gleich and Special Assistant United States Attorney Jeremy Glicksman are in charge of the prosecution.
The Defendant:
IBRAHIM AKSAKAL (also known as “Dennis”)
Age: 49
East Patchogue, New YorkE.D.N.Y. Docket No. 20-CR-400 (JS)
Three Current and Former NYPD Officers Charged with BriberyRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging James Davneiro, Giancarlo Osma, and Michael Perri with one count of conspiracy to violate the Travel Act and one count of using interstate facilities to commit bribery. During the relevant period, Davneiro, Osma, and Perri were New York City Police Department (“NYPD”) officers assigned to the 107th Precinct in Queens. Perri retired from the NYPD in June 2020.
The defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Lois Bloom.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot Shea, Commissioner, NYPD, announced the charges.
“As alleged in the indictment, these defendants disgraced their badges and betrayed the public trust and their oaths as police officers by lining their pockets with cash bribes,” stated Acting U. S. Attorney Kasulis. “We will continue to root out and prosecute corruption by those who are sworn to enforce and uphold the law.” Ms. Kasulis also thanked the National Insurance Crime Bureau for its assistance with the case.
“Accepting bribes as a law enforcement officer in lieu of following legal procedure is against the law and won't be tolerated. Those charged today aren't representative of the tens of thousands of men and women who serve the NYPD with honor day in and day out and, as such, will be held accountable for their alleged crime,” stated FBI Assistant Director-in-Charge Driscoll.
“The NYPD cleans its own house. Corruption is a crime and a violation of a police officer’s sworn oath. This investigation is the third phase of an ongoing case where our Internal Affairs Bureau investigators left no stone unturned. I want to thank our FBI partners from the Public Corruption Unit, and the prosecutors of the U.S. Attorney’s Office for the Eastern District of New York who have helped guide this case throughout,” stated NYPD Commissioner Shea.
Beginning in approximately May 2020, after Davneiro and Osma responded as NYPD officers to automobile accidents, they would steer the damaged vehicles to a licensed tow trucking and automobile repair business operated by Perri, instead of using the NYPD’s Directed Accident Response Program, as legally required. That program requires the NYPD to identify appropriate licensed tow trucking and automobile repair businesses to respond to automobile accident scenes and remove damaged vehicles. In exchange for steering the removal and repair of damaged vehicles to Perri’s business, Perri paid Davneiro and Osma thousands of dollars in cash bribes.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to five years in prison.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Ryan C. Harris and Olatokunbo Olaniyan are in charge of the prosecution.
The Defendants:
JAMES DAVNEIRO
Age: 42
Bayside, New YorkGIANCARLO OSMA
Age: 39
Deer Park, New YorkMICHAEL PERRI
Age: 32
East Islip, New YorkE.D.N.Y. Docket No. 21-CR-508 (RPK)
Former New York City Department of Education Senior Official and Three Others Charged with Extortion Conspiracy and BriberyRead the Press Release
A complaint was unsealed today in federal court in Brooklyn charging Eric Goldstein, the former Chief Executive Officer of the New York City Department of Education’s (“NYC DOE”) Office of School Support Services (“OSS”), Blaine Iler, Michael Turley and Brian Twomey with conspiring to commit extortion under color of official right and solicitation and giving of bribes relating to programs receiving federal funds. Goldstein was arrested this morning, made his initial appearance this afternoon before United States Magistrate Judge Lois M. Bloom and was released on a $150,000 bond. Turley was arrested in Arkansas this morning and will make his initial appearance in the Western District of Arkansas tomorrow. Iler and Twomey will make their initial appearances in the Northern District of Texas this afternoon.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.
“Goldstein is alleged to have abused his position as a senior executive with the Department of Education by soliciting and accepting thousands of dollars in bribes for pure financial gain. In exchange, Goldstein’s co-conspirators obtained lucrative contracts to provide food services that consisted of substandard products that were served to students, teachers and staff in public schools.” stated Acting U.S. Attorney Kasulis. “This Office and its law enforcement partners are committed to ensuring integrity in government contracts, and will not tolerate corruption that compromises the quality of food that is served in New York City public schools.”
“As alleged, Goldstein used his position within the DOE to help promote a business in which he had a financial interest, which is not only illegal, but also doesn’t allow for a fair bidding process between competing interests. As a result of this scheme, Goldstein—and his coconspirators—learned a lesson of their own today in what not to do with taxpayer money,” stated FBI Assistant Director-in-Charge Driscoll.
As alleged in the complaint, from 2008 to 2018, Goldstein was the Chief Executive Officer of OSS. In that role, Goldstein was the NYC DOE senior executive in charge of overseeing the management, budget and operations of several NYC DOE departments, including the Office of Food and Nutrition Services, also known as SchoolFood, which is responsible for managing the food service operations for all New York City public schools. Iler, Turley and Twomey were the founders and operators of a food services company (the “Food Service Company”) that sold food products to retail and food service markets, including schools.
Between 2015 and 2016, Goldstein, while he was head of OSS, together with Iler, Turley and Twome, formed and operated a grass-fed beef importation business called Range Meats Supply Co., LLC (“RMSCO”). During the same time, between 2015 and 2016, Goldstein used his official position within SchoolFood to ensure that the food products promoted and sold by the Food Service Company would be purchased by SchoolFood and served in New York City public schools. In exchange, Iler, Turley and Twomey transferred tens of thousands of dollars to RMSCO for Goldstein’s benefit, including a payment of $7,000 to Goldstein’s personal divorce lawyer and a $3,000 wire transfer to a close relative of Goldstein.
In one instance alleged in the complaint, in October 2016, SchoolFood stopped serving the Food Service Company’s chicken tenders after a NYC DOE employee choked on a bone that had not been removed from a chicken tender supplied by the Food Service Company. Goldstein, who had final approval as to whether and when the chicken tenders would be allowed back in schools, delayed approving the reintroduction of the tenders until Iler, Turley and Twomey agreed to transfer the Food Service Company’s ownership interest in RMSCO to Goldstein as well as to transfer $66,670 to a bank account in RMSCO’s name that Goldstein had opened and controlled. Following weeks of negotiations, on November 29, 2016, Iler, Turley and Twomey agreed to pay the bribe Goldstein was soliciting and one day later, on November 30, 2016, Goldstein approved reintroduction of the Food Service Company’s chicken products in schools. The products were served in schools until April 2017 when, following repeated complaints from students and staff that the chicken tenders continued to contain foreign objects, including plastic, metal and bones, SchoolFood decided to remove all of the Food Service Company’s food products from New York City public schools.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni and Laura Zuckerwise are in charge of the prosecution.
The Defendants
ERIC GOLDSTEIN
Age: 53
New Rochelle, New YorkBLAINE ILER
Age: 34
Dallas, TexasMICHAEL TURLEY
Age: 51
Fayetteville, ArkansasBRIAN TWOMEY
Age: 48
Dallas, TexasE.D.N.Y. Docket No. 21-MJ-1102
Long Island Man Sentenced to 13 Years’ Imprisonment for Drug Trafficking and Firearms OffensesRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Ira Hall was sentenced by United States District Judge Joanna Seybert to 13 years’ imprisonment for distributing cocaine and the unlawful use of a firearm in furtherance of drug trafficking in August 2017. When Hall pleaded guilty in June 2021, he also admitted to distributing fentanyl that caused the death of a 27-year-old resident of Glen Cove, New York in May 2017.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and William Whitton, Chief, Glen Cove Police Department, announced the sentence.
“Today’s sentence ensures that the defendant will serve a lengthy prison term for selling dangerous drugs while carrying a firearm, and also for callously causing the fentanyl overdose death of a resident of this district,” stated Acting U.S. Attorney Kasulis. “This Office, together with our federal and local partners, will continue to prosecute and hold accountable those who contribute to the opioid epidemic and overdose deaths in our communities.” Ms. Kasulis thanked the Drug Enforcement Administration for its assistance on the case.
“This investigation and arrest is an example of the Glen Cove Police Department’s continuing commitment to combat the sale of illegal drugs and to identify and arrest those responsible for overdose deaths occurring in our community,” stated Glen Cove Chief Whitton.
On May 30, 2017, Hall sold a quantity of fentanyl to a coconspirator who then provided the fentanyl to the victim, who suffered a fatal overdose. In August 2017, while investigating the overdose death, detectives of the Glen Cove Police Department arrested Hall after he sold cocaine in a Taco Bell parking lot while carrying a loaded .38 caliber Smith & Wesson revolver. A search warrant of Hall’s residence the following day led to the seizure of additional rounds of .38 caliber ammunition.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles N. Rose and Lara Treinis Gatz are in charge of the prosecution.
The Defendant:
IRA HALL (also known as “Streets”)
Age: 33
Glen Cove, New YorkE.D.N.Y. Docket No. 18-CR-239 (JS)
“R. Kelly” Convicted of All Counts by a Federal Jury in BrooklynRead the Press Release
Robert Sylvester Kelly, the R&B singer also known as “R. Kelly,” was convicted today by a federal jury in Brooklyn of all nine counts of a superseding indictment charging him with racketeering predicated on criminal conduct including sexual exploitation of children, forced labor and Mann Act violations involving the coercion and transportation of women and girls in interstate commerce to engage in illegal sexual activity. The verdict followed six weeks of trial before United States District Judge Ann M. Donnelly.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the verdict.
“Today’s guilty verdict forever brands R. Kelly as a predator, who used his fame and fortune to prey on the young, the vulnerable, and the voiceless for his own sexual gratification,” stated Acting U.S. Attorney Kasulis. “A predator who used his inner circle to ensnare underage teenage girls, and young women and men, for decades, in a sordid web of sex abuse, exploitation and degradation. To the victims in this case, your voices were heard, and justice was finally served. We hope that today’s verdict brings some measure of comfort and closure to the victims.” Ms. Kasulis also thanked the U.S. Attorney’s Office for the Northern District of Illinois and the Cook County State’s Attorney’s Office for their assistance with the case.
“Robert Kelly is a serial sexual predator who used his fame and musical tours as his personal hunting grounds to find his victims,” stated HSI Special Agent-in-Charge Fitzhugh. “Mr. Kelly ran a criminal enterprise whose mission was to serve his sexual gratification by setting up a complex organization of enablers and handlers. When his victims tried to escape, Mr. Kelly and his accomplices silenced them through bribery, intimidation, and physical violence. The brave survivors who overcame Mr. Kelly’s abuse deserve our upmost respect for telling their stories and bringing an end to his 30-year reign of terror over the young and vulnerable.”
As proven at trial, for nearly three decades, Kelly was the leader of a criminal enterprise (“the Enterprise”) consisting of himself and an entourage of individuals who served as managers, bodyguards, accountants, drivers, personal assistants and runners for the defendant. As the leader of the Enterprise, Kelly used his fame to recruit women and girls to engage in illegal sexual activity with him. Kelly identified these girls and women at concerts, and then directed members of the Enterprise to escort them backstage following his musical performances. Kelly exchanged contact information with girls and women so that he and other members of the Enterprise could arrange travel and lodging for them to visit Kelly and engage in the charged illegal sexual conduct.
The evidence at trial included the testimony 45 government witnesses, including more than 10 victims, five of whom are named in the superseding indictment, testimony from employees of the defendant, text messages, video and audio recordings, photographs, phone and travel records, DNA evidence and expert witnesses.
Kelly issued rules that many of his sexual partners were required to follow, including that the women and girls were to call him “Daddy”; they were not permitted to leave their rooms to eat or visit the bathroom without receiving his permission; they were required to wear baggy clothing when not accompanying Kelly to an event; and they were directed to keep their heads down and not look at or speak to other men. Kelly also isolated the women and girls from their friends and family and made them dependent on him for their financial well-being. He required the victims to engage in sex with him and others, and recorded many of the sexual encounters.
Racketeering Act One – Bribery
Kelly bribed a state employee to create an identification card for Jane Doe #1, then 15 years old, so that Kelly could marry Jane Doe #1 because he believed she was pregnant and therefore the marriage could keep him out of jail.
Racketeering Acts Two, Seven and Ten – Sexual Exploitation of a Child – Jane Doe #2, Jane Doe #4 and Jane Doe #5
Kelly coerced Jane Doe #2, Jane Doe #4 and Jane Doe #5 to engage in sexually explicit conduct for the purpose of producing video recordings. Over the course of decades, he made these recordings, and other recordings of sexually explicit conduct, using VHS video cameras, Canon camcorders, iPhones and iPads.
Racketeering Acts Six, Eleven and Thirteen – Forced Labor – Jane Doe #4, Jane Doe #5 and Jane Doe #6
Kelly used the threat of physical harm and physical restraint to ensure that his victims, including Jane Doe #4, Jane Doe #5 and Jane Doe #6, performed sexually at his command. As to Jane Doe #4, he slapped her, choked her and spit on her, before demanding she give him oral sex. As to Jane Doe #5, over a period of years, he spanked her, viciously assaulted her, confined her for periods of days and otherwise manipulated her, to ensure that she would perform for him sexually, including with other women and a man. As to Jane Doe #6, he forced her to give him oral sex. When he did that, there was a gun within Kelly’s reach.
Racketeering Acts Five and Nine – Mann Act Violations – Jane Doe #4 and Jane Doe #5
Between May 2009 and January 2010, Kelly regularly spoke with Jane Doe #4 over the telephone to arrange for Jane Doe #4 to come to his residence in Olympia Fields for the purpose of illegal sexual activity, which was illegal because Jane Doe #4 was too young to consent to sex in Illinois. Similarly, between September 2015 and October 2015, Kelly transported Jane Doe #5, who was then 17 years old, from New York City to Oakland, California for the purpose of illegal sexual activity, as she was too young to consent to sex in California.
Racketeering Acts Eight, Thirteen and Fourteen – Mann Act Violations – Jane Doe #5 and Jane Doe #6
In April 2015, Kelly arranged for Jane Doe #5 to fly from her home in Orlando, Florida, to Los Angeles, California, for the purpose of illegal sexual activity, which was illegal because Kelly knew he had an incurable sexually transmitted disease (“STD”) and did not inform Jane Doe #5 about the STD prior to engaging in sexual intercourse with her. In May of 2017 and again in February of 2018, Kelly arranged for Jane Doe #6 to fly from her home in San Antonio, Texas, to La Guardia Airport in Queens, New York, for the purpose of illegal sexual activity, which again was illegal because Kelly failed to disclose that he had an incurable STD and obtain Jane Doe #6’s consent to engage in sexual intercourse under those circumstances.
When sentenced, Kelly faces a mandatory minimum sentence of 10 years’ imprisonment and up to life in prison.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Elizabeth Geddes, Nadia Shihata and Maria Cruz Melendez are in charge of the prosecution.
The Defendant:
ROBERT SYLVESTER KELLY (also known as “R. Kelly”)
Age: 54
Chicago, IllinoisE.D.N.Y. Docket No. 19-CR-286 (AMD)
United States Announces Settlement of Civil Action Addressing Clean Air Act Violations at New York City Public SchoolsRead the Press Release
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Todd Kim, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division, and Walter Mugdan, Acting Regional Administrator of the United States Environmental Protection Agency, Region 2 (EPA), announced today that the United States filed suit under the Clean Air Act (CAA) against the City of New York and the New York City Department of Education (NYCDOE) to address their longstanding failure to properly monitor and control harmful emissions from NYCDOE oil-fired boilers in New York City public schools. Many of NYCDOE’s boilers are located in disadvantaged communities whose residents are exposed to disproportionately high pollution levels that result in adverse health and environmental impacts. The parties agreed to enter into a Consent Judgment, also filed today with the court, that requires NYCDOE to: (1) conduct regular tune-ups to monitor and repair its boilers as required by the CAA to control excess emissions; (2) reduce its boiler emissions by transitioning seven of its largest oil-fired boilers to cleaner, natural gas boilers by 2023 at an approximate cost of $50 million; and (3) pay a civil penalty of $1 million to the United States.
The Complaint and Consent Judgment were filed in the United States District Court for the Eastern District of New York, in Brooklyn, New York. Following a 30-day public comment period, the United States will review all comments and, if appropriate, ask the court to enter the Consent Judgment.
“The United States brought this action to protect our children, teachers, staff, and communities from exposure to high levels of hazardous air particles and particulate matter emitted by oil-fired boilers at NYCDOE schools, many of which are located in areas of the city that are already burdened by disproportionate levels of air pollution,” stated Acting United States Attorney Kasulis. “This settlement demonstrates that this Office and its Environmental Justice Team are committed to addressing environmental justice concerns and reducing dangerous emissions and hazardous air pollutants in disadvantaged communities.”
"Students and teachers should not have to be concerned that the air they are breathing at school is harmful to their health,” stated Assistant Attorney General Kim. “This settlement will benefit New York’s schools and the communities they serve, who already suffer an unjust burden from polluted air.”
“Thousands of New York City residents will be breathing cleaner air as a result of this case, many of whom live in communities overburdened by dangerous air pollution and other environmental challenges,” stated EPA Acting Regional Administrator Mugdan. “This case demonstrates EPA’s commitment to advancing environmental justice and working with our partners like the Justice Department to ensure compliance with critical federal laws that protect public health and clean air. Children’s health is an EPA priority because they are often more vulnerable than adults to the risks of pollutants and environmental hazards.”
The CAA was passed by Congress in 1970, and amended in 1990, to protect public health and the environment through the regulation of air emissions from both stationary and mobile sources. The 1990 amendments to the law required the EPA to establish standards for air toxics, also known as hazardous air pollutants (HAPs). These standards impose limitations on HAP emissions from a variety of sources. In order to reduce these emissions from oil-fired boilers located at institutional sources including schools, the EPA promulgated national operation and maintenance standards for such boilers in 2011. These standards are commonly referred to as the Area Source Boiler Rule.
NYCDOE, the nation’s largest public school system, operates oil-fired boilers at hundreds of public schools throughout the city. When these boilers are properly maintained, they play an important role in keeping the schools warm. When these boilers are not properly maintained, they can emit excess HAPs, along with other regulated pollutants such as particulate matter, nitrogen oxides, sulfur oxides, carbon monoxide, and greenhouse gases. Regular tune-ups, which include monitoring of emissions, can increase a boiler’s combustion efficiency, lowering its actual emissions rate.
Over 1,300 of NYCDOE’s oil-fired boilers, at approximately 566 school facilities, became subject to the Area Source Boiler Rule in 2014. These regulations require boiler operators to conduct regular tune-ups and submit reports to the EPA about the status of all boilers subject to the rule. The rule also required NYCDOE to conduct one-time energy assessments for certain large oil-fired boilers. However, as set forth in the United States’ complaint, NYCDOE failed to comply with these requirements for several years after they took effect. As a result of the EPA’s enforcement efforts, NYCDOE has now brought its boilers into compliance with the CAA.
The NYCDOE’s failure to properly perform tune-ups resulted in excess emissions that will be mitigated under the Consent Judgment. Notably, many of NYCDOE’s boilers are located in communities identified by the EPA as posing Environmental Justice concerns, due to the large number of minority or low-income residents who are disproportionately exposed to air pollution and its harmful effects. Particulate matter and HAP emissions are linked to a range of health problems and also cause environmental harm. The mitigation projects described below are targeted to provide environmental benefits in these communities.
The settlement requires the NYCDOE to regularly and properly conduct periodic tune-ups of regulated boilers. These tune-ups will proceed according to a checklist which ensures that the proper procedures and quality assurance measures are followed, and that all necessary maintenance or repairs are identified and addressed. To mitigate past emissions, NYCDOE has also agreed to convert or replace seven large oil-fired boilers that burn more polluting number 4 oil to natural gas prior to March 2023 – including one of the largest boilers in the school system, located at K430 (Brooklyn Tech High School). The other schools at which boilers will be replaced or converted are: Q053 (M.S. 53 Brian Piccolo), X029 (P.S./M.S. 029 Melrose School), K068 (I.S. 068 Isaac Bildersee); K306 (P.S. 306 Ethan Allen), M013 and M117 (each containing various co-located schools). These new or converted boilers will emit far less HAPs when running on natural gas, a cleaner-burning fuel. This effort is projected to reduce NYCDOE’s oil consumption and combustion by over 3 million gallons by November 2027, thereby mitigating excess emissions caused by NYCDOE’s earlier failure to follow the Area Source Boiler Rule. The mitigation projects effectively advance NYCDOE’s compliance with New York City’s PlaNYC, under which the city plans to phase out number 4 oil from all boilers by 2030.
The civil negotiations and settlement were handled by Assistant U.S. Attorney Matthew Silverman of the U.S. Attorney’s Office for the Eastern District of New York, working with Liliana Villatora and Erick Ihlenburg, Office of Regional Counsel, U.S. EPA Region 2, Robert Buettner, Chief, Air Compliance Branch, U.S. EPA Region 2, Gaetano LaVigna, Chief, Stationary Source Compliance Section, Air Compliance Branch, and Ray Slizys and Harish Patel, also with the EPA Region 2 Air Compliance Branch, Greg Fried, Chief, Stationary Source Enforcement Branch, Air Enforcement Division, EPA Office of Enforcement and Compliance Assurance (OECA) and Robert Klepp, also with OECA.
In June of this year, Acting U.S. Attorney Kasulis announced the creation of an Environmental Justice Team within the Office’s Civil Division comprised of seven Assistant U.S. Attorneys and led by Assistant U.S. Attorney Silverman, the Chief of Environmental Litigation. The Environmental Justice Team’s focus is the protection of the rights of residents of the Eastern District of New York who are disproportionately burdened by environmental and health hazards.
E.D.N.Y. Docket No.: 21-CV-5338 (PKC)
Brooklyn-Based “Rival Impact” Gang Member Sentenced to Two Life Sentences Plus 20 Years’ Imprisonment for Racketeering, Gang War-Related Double Murder and Narcotics OffensesRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, United States District Judge Frederic Block sentenced Frank Smith, also known as “Fresh,” a leader of the Coney Island-based gang Rival Impact, to two mandatory life sentences plus an additional 20 years’ imprisonment for racketeering, including predicate acts of murder conspiracy and narcotics offenses, as well as two counts of murder-in-aid-of racketeering for the murder of rival gang members Terrance Serrano and Rashawn Washington. These sentences also include two counts of causing a death through the use of a firearm. Smith was convicted by a jury in June 2018 following a three-week trial.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today’s sentence brings a measure of justice to the families of the victims of these calculated murders and holds Frank Smith accountable not only for the lives he snuffed out, but also for the devastation he and the other members of his street gang caused for years in Coney Island and elsewhere with their drug trafficking and senseless violence,” stated Acting United States Attorney Kasulis. “This Office, together with our federal and local law enforcement partners, will continue to use all available tools to disrupt and dismantle violent street gangs that wreak havoc on our communities.” Ms. Kasulis expressed her appreciation to the Manhattan District Attorney’s Office for its assistance in the case.
Between January 2000 and January 2014, Smith was a member—ultimately rising to become one of the leaders—of the Rival Impact street gang, a criminal enterprise based in the Mermaid Houses in Coney Island. For more than a decade, Smith and other members of Rival Impact distributed heroin, crack and other narcotics in Brooklyn, New York, and several other states. Smith and other Rival Impact members also engaged in multiple acts of violence in connection with their drug trafficking, including murders, attempted murders, armed robberies and assaults. By the late 2000s, Rival Impact was engaged in a war with members of Thirty-O, a rival street gang based around the Coney Island Houses. After a high-ranking Rival Impact member was slain, purportedly by Thirty-O crew members, Smith and other members of Rival Impact plotted retaliatory murders of Thirty-O members, including Serrano and Washington, who Smith and his gang believed were responsible for the killing of their Rival Impact member. On October 4, 2010, after learning that Serrano and Washington were at a nightclub near Union Square in Manhattan, Smith and another Rival Impact member drove from Coney Island to Manhattan, where they laid in wait to ambush Serrano and Washington. Once Serrano and Washington entered their car, Smith and his co-conspirator opened fire, killing both men.
This case was brought as 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. As part of the program, U.S. Attorneys’ Offices work in partnership with federal, state, local and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Maria Cruz Melendez, Jennifer M. Sasso and Josh Hafetz are in charge of the prosecution.
The Defendant:
FRANK SMITH (also known as “Fresh”)
Age: 36
Brooklyn, New YorkEDNY Docket No. 16-CR-346 (S-1)
Two Former Employees at New York Branch of Major Bank and an Accountant Charged with Cares Act Loan FraudRead the Press Release
Earlier today, in federal court in Brooklyn, a criminal complaint was unsealed and two criminal informations were filed yesterday charging Anuli Okeke, Charlene Wint and Hashim Campbell, respectively, for their participation in a conspiracy to commit bank and wire fraud in connection with a scheme to fraudulently obtain more than $3 million from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, both of which were created by Congress as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Wint and Campbell pleaded guilty on Thursday to conspiracy to commit bank and wire fraud before United States Magistrate Judge Roanne L. Mann. Okeke was arrested this morning and made her initial appearance this afternoon before United States Magistrate Judge Robert M. Levy who released the defendant on a $100,000 bond.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); John Grasso, Special Agent-in-Charge, Social Security Administration, Office of the Inspector General (SSA-OIG); Jay N. Lerner, Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); Stephen Donnelly, Acting Special Agent-in-Charge, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Eastern Region (FRS-OIG); and Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG) announced the charges.
“As alleged, the defendants plotted to steal millions in funds that were specifically earmarked by Congress to provide emergency assistance to small businesses and vulnerable workers during a global pandemic and time of great economic hardship,” stated Acting U.S. Attorney Kasulis. “Together with our law enforcement partners, this Office will vigorously prosecute defendants who shamelessly seek to enrich themselves by taking advantage of government programs that are designed to help those in need during the COVID crisis.”
“Fraudulent schemes exploiting the Paycheck Protection Program are unfortunately all too commonplace. Okeke, Wint, and Campbell, as charged today, join the ranks of others before them who took it upon themselves to personally and illegally benefit from the protections offered to small businesses during a global pandemic. They are likely not the last, however, and the FBI and our partners will continue to uncover more schemes of this nature and being their perpetrators to justice,” stated FBI Assistant Director-in-Charge Driscoll.
“Our office will relentlessly investigate fraud schemes and pull them out by the roots,” stated SBA-OIG Special Agent-in-Charge McCall-Brathwaite. “SBA’s PPP and EIDL programs are intended to provide assistance to the nation’s small businesses struggling with the pandemic challenges. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“The defendants in this case – two bank officials at a major financial institution and an accountant – are charged with misusing the bank’s operations for their personal benefit, in order to fraudulently obtain Government-guaranteed loans [which were intended to help small businesses during the current pandemic]. We remain committed to working with our law enforcement partners in investigating such cases where individuals seek to exploit Federal relief programs and threaten to undermine the integrity of our nation's banks,” stated FDIC Inspector General Lerner.
“We are fully committed to holding accountable any wrongdoers whose fraudulent actions impact the Federal Reserve Board’s ability to assist small businesses under the Paycheck Protection Program Liquidity Facility,” stated FRS-OIG Special Agent-in-Charge Donnelly.
The CARES Act is a federal law enacted on March 29, 2020 to provide emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. The PPP provided for forgiveness of the loan if recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.
Another source of relief provided by the CARES Act was the EIDL program, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. Under the program, EIDL recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance). The amount of an EIDL Advance was determined based on the number of employees working for the applicant. The EIDL Advance did not have to be repaid.
As alleged in the charging documents, Okeke, a branch manager at a large financial institution, Wint, a supervisor at the same branch, and Campbell, a tax preparer, along with their co-conspirators, provided false tax documents and helped borrowers to complete and submit PPP applications that contained fraudulent information. Despite knowing that the PPP applications contained false statements, Okeke signed each PPP loan application on behalf of the bank and submitted them for approval. Once the loan proceeds were disbursed to the borrowers, Okeke, Wint, Campbell and their co-conspirators received kickbacks from the loan proceeds. Moreover, Okeke, Wint, Campbell and their co-conspirators were involved in preparing fraudulent EIDL applications that fabricated borrower’s financials, and at times sought loans for individuals who were not legitimate business owners.
The charges in the complaint are allegations, and Okeke is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section. Assistant United States Attorneys Julia Nestor, Chand Edwards-Balfour, and Lindsay Gerdes of the Eastern District of New York, and Trial Attorney Michael McCarthy of the Fraud Section are in charge of the prosecution, with assistance from Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Section.
The Defendants:
ANULI OKEKE
Age: 49
Bronx, New YorkCHARLENE WINT
Age: 54
Bronx, New YorkHASHIM CAMPBELL
Age: 41
New York, New YorkE.D.N.Y. Docket Nos. 21-CR-477 (FB), 21-CR-478 (FB), and 21-CR-477 (FB)
Huawei CFO Wanzhou Meng Admits to Misleading Global Financial InstitutionRead the Press Release
Earlier today, Wanzhou Meng, Chief Financial Officer of Huawei Technologies Co., Ltd. (Huawei), appeared before U.S. District Judge Ann M. Donnelly in federal district court in Brooklyn, New York, for an arraignment on charges of conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud, after she entered into a deferred prosecution agreement (DPA) with the United States Attorney’s Office for the Eastern District of New York, the Counterintelligence and Export Control Section of the Justice Department’s National Security Division (CES), and the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division (MLARS) to resolve those charges.
Nicole Boeckmann, Acting United States Attorney for the Eastern District of New York, Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, and Alan Kohler, Assistant Director, Federal Bureau of Investigation, Counterintelligence Division (FBI), announced the deferred prosecution agreement.
“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” stated Acting U.S. Attorney Boeckmann. “Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution. The truth about Huawei’s business in Iran, which Meng concealed, would have been important to the financial institution’s decision to continue its banking relationship with Huawei. Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud—that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government, and the public about Huawei’s activities in Iran.”
“This Deferred Prosecution Agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” stated Acting Assistant Attorney General Lesko for the Justice Department’s National Security Division. “We are enormously grateful to Canada’s Department of Justice for its dedicated work on this extradition and for its steadfast adherence to the rule of law.”
“Financial institutions are our first line of defense in maintaining the safety and security of the U.S. financial system,” said Assistant Attorney General Polite of the Justice Department’s Criminal Division. “That is why the law requires that companies who avail themselves of the U.S. financial system provide financial institutions with truthful information about their business operations. Meng Wanzhou, CFO of Huawei Technologies, admitted today that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of U.S. law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court.”
“Meng's admissions are evidence of a consistent pattern of deception to violate U.S. law. The FBI will continue to aggressively investigate companies doing business in the United States when there are signs they behave with contempt for our laws,” stated FBI Assistant Director Kohler.
The Scheme to Defraud Financial Institutions
According to court filings, and as agreed to by Meng in the DPA’s statement of facts, Skycom Tech. Co. Ltd. (“Skycom”) was a Hong Kong company that primarily operated in Iran. As of February 2007, Skycom was wholly owned by a subsidiary of Huawei Technologies Co., Ltd. (“Huawei”), Hua Ying Management (“Hua Ying”). In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings (“Canicula”). At the time Hua Ying transferred its Skycom shares to Canicula, Meng was the Secretary of Hua Ying.
In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Meng joined Skycom’s Board of Directors, which was comprised of Huawei employees. She served on the Board until April 2009. After Meng departed from Skycom’s Board, Skycom’s Board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei. As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.
Between 2010 and 2014, Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei. All significant Skycom business decisions were made by Huawei. Moreover, Skycom’s country manager—the head of the business—was a Huawei employee. Individuals employed by Skycom believed they worked for Huawei.
During the same time period, Huawei employees engaged with a U.K. staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers. Negotiations and contracting on behalf of Skycom were conducted by Huawei employees. To pay for these contractors, Huawei sent at least $7.5 million to the U.K. staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (“Financial Institution 1”), to the U.K. staffing company’s account in the United Kingdom. The transactions were denominated in U.S. dollars and cleared through the United States.
In December 2012 and January 2013, various news organizations, including Reuters, reported that Skycom offered to sell “embargoed” equipment from a U.S. computer equipment manufacturer in Iran in potential violation of U.S. export controls law, and that Huawei had close ties with Skycom. In a statement to Reuters published in a December 2012 article, Huawei claimed that Skycom was one of its “major local partners” in Iran. Reuters reported that Huawei had further stated that “Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U. This commitment has been carried out and followed strictly by our company. Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”
In January 2013, a subsequent Reuters article reported that Meng had served on the Board of Directors of Skycom between February 2008 and April 2009 and identified other connections between Skycom directors and Huawei. The article also quoted the following statement from Huawei: “The relationship between Huawei and Skycom is a normal business partnership. Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the UN. We also require our partners, such as Skycom, to make the same commitments.” This statement was incorrect, as Huawei operated and controlled Skycom; Skycom was therefore not Huawei’s business “partner.”
After these articles were published, Financial Institution 1 and other global financial institutions that provided international banking services to Huawei (collectively, the “Financial Institutions”), including U.S. dollar-clearing, made inquiries to Huawei in response to the above-described press reports. In early 2013, Huawei employees represented to the Financial Institutions that Skycom was just a local business partner of Huawei in Iran and that Skycom had not conducted Iran-related transactions using its accounts at the Financial Institutions.
To address the allegations in the news reports, Huawei requested an in-person meeting with a senior Financial Institution 1 employee. That meeting occurred on August 22, 2013 in Hong Kong, at which time Meng met with an executive of Financial Institution 1 responsible for operations in the Asia Pacific region. During the meeting, Meng delivered a PowerPoint presentation written in Chinese, which was translated by an interpreter into English. Meng stated that she was using an interpreter to be precise in her language.
In her presentation, Meng stated, among other things, that Huawei’s relationship with Skycom was “normal business cooperation” and “normal and controllable business cooperation,” and she described Skycom as a “partner,” a “business partner of Huawei,” and a “third party Huawei works with” in Iran. Those statements were untrue because, as Meng knew, Skycom was not a business partner of, or a third party working with, Huawei; instead, Huawei controlled Skycom, and Skycom employees were really Huawei employees. It would have been material to Financial Institution 1 to know that Huawei controlled Skycom.
In addition, Meng stated that Huawei “was once a shareholder of Skycom” but had “sold all its shares in Skycom.” Those statements were untrue, because, as Meng knew, Huawei had “sold” its shares to an entity that Huawei controlled. Specifically, Huawei transferred Skycom shares from a Huawei subsidiary (Hua Ying) to another entity that was controlled by Huawei (Canicula). It would have been material to Financial Institution 1 to know that Skycom was transferred from one Huawei-controlled entity to another.
Finally, Meng stated that Huawei “operates in Iran in strict compliance with applicable laws, regulations and sanctions” and that “there has been no violation of export control regulations” by “Huawei or any third party Huawei works with.” These statements were untrue because Huawei’s operation of Skycom, which caused the Financial Institutions to provide prohibited services, including banking services, for Huawei’s Iran-based business while Huawei concealed Skycom’s link to Huawei, was in violation of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560. Moreover, between 2010 and 2014, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran.
At no point during or after the meeting did Meng, who was aware of Huawei’s public statements about Skycom in Reuters, retract or amend any of those statements. Moreover, Huawei’s Treasurer, who also attended the August Meeting, did not correct or amend any of the statements made by Meng.
Shortly after the meeting between Meng and Financial Institution 1, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request. Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive she had met with in September 2013. The representations in the English version of the PowerPoint presentation closely tracked the ones Meng had made during the meeting.
After the meeting and subsequent to receipt of Meng’s PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei. The other Financial Institutions similarly continued their respective relationships with Huawei.
The DPA
Under the terms of the DPA, Meng has agreed to the accuracy of a four-page statement of facts that details the knowing false statements she made to Financial Institution 1. Meng also has agreed not to commit other federal, state, or local crimes. If Meng breaches the agreement, she will be subject to prosecution of all of the charges against her in the third superseding indictment filed in this case. The government also agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Sarah M. Evans, and Meredith A. Arfa, MLARS Trial Attorneys Laura Billings and Christian Nauvel, and CES Trial Attorneys Thea D. R. Kendler, David Lim and R. Elizabeth Abraham are in charge of the prosecution, with assistance provided by Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Trial Attorneys Andrew Finkelman, Margaret O’Malley, and John Reisenberg of DOJ’s Office of International Affairs.
The Defendant:
WANZHOU MENG
Age: 49
People’s Republic of ChinaE.D.N.Y. Docket No. 18-CR-457 (S-3) (AMD)
Huawei CFO Wanzhou Meng Admits to Misleading Global Financial InstitutionRead the Press Release
The Chief Financial Officer of Huawei Technologies Co. Ltd., Wanzhou Meng, 49, of the People’s Republic of China (PRC), appeared today in federal district court in Brooklyn, entered into a deferred prosecution agreement (DPA) and was arraigned on charges of conspiracy to commit bank fraud and conspiracy to commit wire fraud, bank fraud and wire fraud.
“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” said Acting U.S. Attorney Nicole Boeckmann for the Eastern District of New York. “Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution. The truth about Huawei’s business in Iran, which Meng concealed, would have been important to the financial institution’s decision to continue its banking relationship with Huawei. Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud — that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei’s activities in Iran.”
“This Deferred Prosecution Agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” said Acting Assistant Attorney General Mark J. Lesko for the Justice Department’s National Security Division. “We are enormously grateful to Canada’s Department of Justice for its dedicated work on this extradition and for its steadfast adherence to the rule of law.”
“Financial institutions are our first line of defense in maintaining the safety and security of the U.S. financial system,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “That is why the law requires that companies who avail themselves of the U.S. financial system provide financial institutions with truthful information about their business operations. Meng Wanzhou, CFO of Huawei Technologies, admitted today that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of U.S. law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court.”
“Meng's admissions are evidence of a consistent pattern of deception to violate U.S. law,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “The FBI will continue to aggressively investigate companies doing business in the United States when there are signs they behave with contempt for our laws.”
The Scheme to Defraud Financial Institutions
According to court documents, and as agreed to by Meng in the DPA’s statement of facts, Skycom Tech. Co. Ltd. (Skycom) was a Hong Kong company that primarily operated in Iran. As of February 2007, Skycom was wholly owned by a subsidiary of Huawei Technologies Co., Ltd. (Huawei), Hua Ying Management (Hua Ying). In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings (Canicula). At the time Hua Ying transferred its Skycom shares to Canicula, Meng was the Secretary of Hua Ying.
In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Meng joined Skycom’s Board of Directors, which was comprised of Huawei employees. She served on the Board until April 2009. After Meng departed from Skycom’s Board, Skycom’s Board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei. As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.
Between 2010 and 2014, Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei. All significant Skycom business decisions were made by Huawei. Moreover, Skycom’s countrymanager – the head of the business – was a Huawei employee. Individuals employed by Skycom believed they worked for Huawei.
During the same time period, Huawei employees engaged with a U.K. staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers. Negotiations and contracting on behalf of Skycom were conducted by Huawei employees. To pay for these contractors, Huawei sent at least $7.5 million to the U.K. staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (Financial Institution 1), to the U.K. staffing company’s account in the United Kingdom. The transactions were denominated in U.S. dollars and cleared through the United States.
In December 2012 and January 2013, various news organizations, including Reuters, reported that Skycom offered to sell “embargoed” equipment from a U.S. computer equipment manufacturer in Iran in potential violation of U.S. export controls law, and that Huawei had close ties with Skycom. In a statement to Reuters published in a December 2012 article, Huawei claimed that Skycom was one of its “major local partners” in Iran. Reuters reported that Huawei had further stated that “Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U. This commitment has been carried out and followed strictly by our company. Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”
In January 2013, a subsequent Reuters article reported that Meng served on the Board of Directors of Skycom between February 2008 and April 2009 and identified other connections between Skycom directors and Huawei. The article also quoted the following statement from Huawei: “The relationship between Huawei and Skycom is a normal business partnership. Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the UN. We also require our partners, such as Skycom, to make the same commitments.” This statement was incorrect, as Huawei operated and controlled Skycom; Skycom was therefore not Huawei’s business “partner.”
After these articles were published, Financial Institution 1 and other global financial institutions that provided international banking services to Huawei (collectively, the “Financial Institutions”), including U.S. dollar-clearing, made inquiries to Huawei in response to the above-described press reports. In early 2013, Huawei employees represented to the Financial Institutions that Skycom was just a local business partner of Huawei in Iran and that Skycom had not conducted Iran-related transactions using its accounts at the Financial Institutions.
To address the allegations in the news reports, Huawei requested an in-person meeting with a senior Financial Institution 1 employee. That meeting occurred on Aug. 22, 2013 in Hong Kong, at which time Meng met with an executive of Financial Institution 1 responsible for operations in the Asia Pacific region. During the meeting, Meng delivered a PowerPoint presentation written in Chinese, which was translated by an interpreter into English. Meng stated that she was using an interpreter to be precise in her language.
In her presentation, Meng stated, among other things, that Huawei’s relationship with Skycom was “normal business cooperation” and “normal and controllable business cooperation,” and she described Skycom as a “partner,” a “business partner of Huawei,” and a “third party Huawei works with” in Iran. Those statements were untrue because, as Meng knew, Skycom was not a business partner of, or a third party working with, Huawei; instead, Huawei controlled Skycom, and Skycom employees were really Huawei employees. It would have been material to Financial Institution 1 to know that Huawei controlled Skycom.
In addition, Meng stated that Huawei “was once a shareholder of Skycom” but had “sold all its shares in Skycom.” Those statements were untrue, because, as Meng knew, Huawei had “sold” its shares to an entity that Huawei controlled. Specifically, Huawei transferred Skycom shares from a Huawei subsidiary (Hua Ying) to another entity that was controlled by Huawei (Canicula). It would have been material to Financial Institution 1 to know that Skycom was transferred from one Huawei-controlled entity to another.
Finally, Meng stated that Huawei “operates in Iran in strict compliance with applicable laws, regulations and sanctions” and that “there has been no violation of export control regulations” by “Huawei or any third party Huawei works with.” These statements were untrue because Huawei’s operation of Skycom, which caused the Financial Institutions to provide prohibited services, including banking services, for Huawei’s Iran-based business while Huawei concealed Skycom’s link to Huawei, was in violation of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560. Moreover, between 2010 and 2014, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran.
At no point during or after the meeting did Meng, who was aware of Huawei’s public statements about Skycom in Reuters, retract or amend any of those statements. Moreover, Huawei’s Treasurer, who also attended the August meeting, did not correct or amend any of the statements made by Meng.
Shortly after the meeting between Meng and Financial Institution 1, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request. Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive she had met with in September 2013. The representations in the English version of the PowerPoint presentation closely tracked the ones Meng had made during the meeting.
After the meeting and subsequent to receipt of Meng’s PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei. The other Financial Institutions similarly continued their respective relationships with Huawei.
The DPA
Under the terms of the DPA, Meng has agreed to the accuracy of a four-page statement of facts that details the knowingly false statements she made to Financial Institution 1. Meng also has agreed not to commit other federal, state or local crimes. If Meng breaches the agreement, she will be subject to prosecution of all the charges against her in the third superseding indictment filed in this case. The government also agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Sarah M. Evans and Meredith A. Arfa for the Eastern District of New York; Trial Attorneys Laura Billings and Christian Nauvel for the Criminal Division’s Money Laundering and Asset Recovery Section; and Trial Attorneys Thea D. R. Kendler, David Lim and R. Elizabeth Abraham of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. Valuable assistance was provided by Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Associate Director John Riesenberg, Attaché Andrew Finkelman of U.S. Embassy Paris and former Trial Attorney Margaret O’Malley of the Justice Department’s Office of International Affairs.
United States Returns to Iraq Rare Cuneiform Tablet Bearing Portion of the Epic of GilgameshRead the Press Release
Today, the United States has returned to the Republic of Iraq a rare cuneiform tablet bearing a portion of the epic of Gilgamesh, a Sumerian poem considered one of the world’s oldest works of literature, at a repatriation ceremony at the Smithsonian Institution’s Museum of the American Indian in Washington, D.C. Known as the Gilgamesh Dream Tablet, the artifact originated in the area of modern-day Iraq and entered the United States contrary to federal law. An international auction house (the “Auction House”) later sold the tablet to Hobby Lobby Stores, Inc. (“Hobby Lobby”), a prominent arts-and-crafts retailer based in Oklahoma City, Oklahoma, for display at the Museum of the Bible (the “Museum”). Law enforcement agents seized the tablet from the Museum in September 2019.
Acting Executive Associate Director Steve K. Francis of the Department of Homeland Security, Homeland Security Investigations (HSI) and Iraq’s Ambassador to the United States Fareed Yasseen signed a ceremonial certificate transferring ownership of the artifact from the United States to Iraq. Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting Principal Deputy Assistant Secretary Stacy White of the State Department’s Bureau of Educational and Cultural Affairs; Principal Deputy Assistant Secretary of State for Near Eastern Affairs Joey Hood; Minister of Culture, Tourism and Antiquities Hassan Nadhem; Director-General Audrey Azoulay of the United Nations Educational, Scientific and Cultural Organization; and Ambassador-at-large Richard Kurin for the Smithsonian Institution also participated in the repatriation ceremony.
The U.S. Attorney’s Office for the Eastern District of New York and the Department of Justice’s Money Laundering and Asset Recovery Section (MLARS) worked with HSI to forfeit the tablet in July 2021.
“This Office is proud to have played a central role in making this rare and ancient cuneiform tablet available for repatriation to its country of origin and the people of Iraq,” stated Jacquelyn M. Kasulis, Acting U.S. Attorney for the Eastern District of New York. “We will continue to use our civil forfeiture laws to combat the illegal sale of cultural treasures so that they may be restored to their rightful place in a country’s history.”
“We hope that returning the Gilgamesh Dream Tablet to the Republic of Iraq is a message to the people of Iraq, and to the world, that the United States government will take action to seize and repatriate antiquities and other significant items of cultural heritage that have been unlawfully brought into the United States,” stated Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
“Today, Iraq is reclaiming a piece of its cultural history,” stated HSI New York Special Agent-in-Charge Peter C. Fitzhugh. “We are honored to have played a role in the repatriation of this rare tablet that was pillaged from Iraq, only to be sold without a valid provenance and any regard for his cultural value. HSI New York’s Cultural Property, Arts and Antiquity Investigations program will continue to work tirelessly to interrupt the criminal activities of those who loot antiquities and seek to profit off the theft of a country’s rich history.”
Background
As alleged in the government’s amended complaint, in 2003, a U.S. antiquities dealer (“the Antiquities Dealer”) purchased the Gilgamesh Dream Tablet, encrusted with dirt and unreadable, from a family member of a coin dealer in London. The Antiquities Dealer and a U.S. cuneiform expert shipped the Gilgamesh Dream Tablet to the United States without declaring formal entry. After it was imported and cleaned, experts in cuneiform recognized it as bearing a portion of the Gilgamesh epic in which the protagonist describes his dreams to his mother. The protagonist’s mother interprets the dreams as foretelling the arrival of a new friend. She tells her son, “You will see him and your heart will laugh.” The names of the hero, Gilgamesh, and the character who becomes his friend, Enkidu, are replaced in the Gilgamesh Dream Tablet with the names of deities Sin and Ea. The Gilgamesh Dream Tablet measures approximately 6-inches by 5-inches and is written in the Akkadian language, which was spoken in ancient Mesopotamia.
In 2007, the Antiquities Dealer sold the Gilgamesh Dream Tablet with a false provenance letter that stated that the tablet had been among miscellaneous ancient bronze fragments purchased in a 1981 auction. This false letter traveled with the Gilgamesh Dream Tablet as it was sold several times in different countries, and a later owner provided the letter to the Auction House in London. In 2014, the Auction House sold the Gilgamesh Dream Tablet to Hobby Lobby in a private sale and an Auction House employee carried it on a flight from London to the United States and then transferred it to New York. Hobby Lobby consented to the tablet’s forfeiture based on the tablet’s illegal importation into the United States in 2014.
The government’s case was handled by Assistant United States Attorney Sylvia Shweder and Senior Trial Attorney Ann Brickley of MLARS.
E.D.N.Y. Docket No.: 20-CV-2222 (AMD)
Long Island MS-13 Gang Member Pleads Guilty to Murdering a 15-Year-Old Boy in FreeportRead the Press Release
Earlier today, in federal court in Central Islip, Eduardo Portillo, also known as “Firuli” and “Tito” (Portillo), a member of the violent transnational criminal organization La Mara Salvatrucha, also known as the “MS-13,” pleaded guilty to racketeering charges relating to his participation in the murder of 15-year-old Javier Castillo, and to conspiring to distribute cocaine and marijuana. The guilty plea was entered before United States Circuit Judge Joseph F. Bianco.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Stuart Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
“With today’s guilty plea, the defendant, an MS-13 gang member, admits to an utterly depraved and heinous crime, of taking turns with a machete to hack a teenage boy to death, simply because he believed the boy belonged to a rival gang,” stated Acting U.S. Attorney Kasulis. “This Office and its law enforcement partners in New York and El Salvador are committed to stopping the violence of MS-13 gang members and bringing an end to their reign of brutality and murder in this district. It is my hope that today’s plea brings some measure of closure to the family members of the young victim.” Ms. Kasulis expressed her grateful appreciation to the investigators and analysts from the FBI’s Transnational Anti-Gang (TAG) Unit in El Salvador, the FBI’s Long Island Gang Task Force for their outstanding collaboration in locating and apprehending this fugitive, as well as the Justice Department’s Office of International Affairs for their partnership in this case.
“Eduardo Portillo violently participated in taking the life of another teen as well as fed the drug epidemic plaguing our community,” stated SCPD Acting Commissioner Cameron. “This guilty plea is another step in the fight against gang violence and drug addiction in our county. Members of the department will continue to work with the Eastern District of New York and our law enforcement partners to put violent criminals behind bars and bring justice to the victims and their families.”
As set forth in prior court filings and the defendant’s statements during his guilty plea, Portillo and his fellow MS-13 members targeted Castillo because he was believed to be a member of the 18th Street gang, one of MS-13’s principal rivals. On October 10, 2016, Portillo and other Brentwood-based members of the Sailors Locos Salvatruchas Westside (Sailors) clique of the MS-13 convinced Castillo, who lived in Central Islip, to go with them to Freeport – approximately 30 miles away – to smoke marijuana. They lured Castillo to an isolated marsh area in Cow Meadow Park in Freeport, where they attacked him, taking turns hacking the victim with a machete. Afterwards, the MS-13 members dug a hole and buried Castillo’s body, which was not recovered until one year later, in October 2017.
Portillo also pleaded guilty to participating in a drug trafficking conspiracy, admitting that between April 2016 and March 2017, he and other members of the Sailors clique conspired to distribute cocaine and marijuana in the Brentwood area to raise money for the MS-13 and fund its operations.
Portillo was arrested in Morazán, El Salvador on February 23, 2019 and extradited to the United States on November 6, 2020.
Today’s conviction is the latest 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, comprised primarily of immigrants from Central America. 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 60 murders in the Eastern District of New York and has convicted 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.
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, Megan E. Farrell, and John J. Durham are in charge of the prosecution.
The Defendant:
EDUARDO PORTILLO (“Firuli” and “Tito”)
Age: 24
Residence: San Francisco Gotera, Morazán, El Salvador; formerly of Central Islip and Brentwood, New YorkLong Island MS-13 Gang Member Pleads Guilty to 2016 Murder in BrentwoodRead the Press Release
Earlier today, in federal court in Central Islip, Nelson Argueta-Quintanilla, a member of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to racketeering charges relating to his participation in the murder of Oscar Acosta, the attempted murder of suspected rival gang members and a conspiracy to distribute cocaine and marijuana. The guilty plea was entered before United States Circuit Judge Joseph F. Bianco.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Stuart Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.
“With today’s guilty plea, the defendant, a member of the notorious MS-13, admits to being an active participant in a brutal murder in which the victim was viciously stabbed with a machete after being beaten, bound and thrown in the trunk of a car. In addition, compounding his wanton disregard for human life, the defendant also admits to attempting to murder rival gang members by approaching the outside of a home where they were standing and opening fire on them,” stated Acting U.S. Attorney Kasulis. “This Office and the Long Island Gang Task Force are deeply committed to dismantling the MS-13 and eliminating the threat of their senseless violence from our communities.”
“This guilty plea will ensure that yet another violent member of MS-13, who has no regard for human life, will be imprisoned for his senseless, brutal crimes,” stated SCPD Acting Commissioner Cameron said. “I would like to commend the Long Island Gang Task Force and Eastern District of New York for their unwavering commitment to holding gang members accountable and keeping our residents safe. We will continue to combine resources to rid our communities of gang violence.”
As set forth in prior court filings and the defendant’s statements during his guilty plea, Argueta-Quintanilla and other MS-13 members decided to kill Acosta in 2016 because they suspected that he was associating with the rival 18th Street gang. The Sailors clique leader assigned roles as to which members would take the lead in planning and carrying out the murder. On April 29, 2016, Argueta-Quintanilla and other MS-13 members encountered Acosta in a wooded area near an elementary school in Brentwood where he was lured under the guise of smoking marijuana. Argueta-Quintanilla and the other MS-13 members brutally beat Acosta with tree limbs, knocking him unconscious. Then they tied Acosta’s hands and feet, wrapped an article of clothing around his mouth, to prevent him from making noise and summoned other MS-13 members. The MS-13 members loaded Acosta into the trunk of a car and drove to a more secluded area in Brentwood near an abandoned psychiatric hospital. They took Acosta, who was still alive, out of the car and carried him into the woods where they stabbed and slashed him to death with a machete. The MS-13 members buried Acosta’s body in a shallow grave, which was discovered in September 2016.
In addition, on August 10, 2016, Argueta-Quintanilla and other MS-13 members attempted to kill suspected rival gang members in Brentwood. Argueta-Quintanilla and another MS-13 member, both of whom were armed with handguns, approached a house on Lukens Avenue where the suspected rival gang members were standing outside and fired numerous shots in their direction. No one was struck, but a stray bullet entered a neighbor’s house and struck the headboard of a bed in which the neighbor was sleeping. Argueta-Quintanilla also pleaded guilty to participating in a drug conspiracy, admitting that between April 2016 and October 2017, he and other members of the Sailors clique conspired to distribute cocaine and marijuana to raise money for the MS-13.
Today’s conviction is the latest 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, comprised primarily of immigrants from Central America. 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 60 murders in the Eastern District of New York and has convicted 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.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution.
The Defendant:
NELSON ARGUETA-QUINTANILLA (also known as “Mendigo”)
Age: 24
Brentwood, New YorkE.D.N.Y. Docket No. 16-CR-403 (S-7)(JFB)
Patient Recruiter and Physician Plead Guilty in Bribery and Kickback Scheme in Connection with Transvaginal Mesh LitigationRead the Press Release
Earlier today, in federal court in Brooklyn, Christopher Walker, a licensed urogynecologist, pleaded guilty to participating in a scheme involving the payment of bribes and kickbacks to obtain referrals of female patients across the United States for surgeries to remove transvaginal mesh (TVM) implants. Wesley Blake Barber, an owner of Surgical Assistance Inc., pleaded guilty on September 14, 2021 to participating in the same scheme. Both proceedings took place before United States District Judge Raymond J. Dearie.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty pleas.
“With these guilty pleas, both defendants have admitted to participating in a reprehensible bribery and kickback scheme to exploit women across the country in connection with costly transvaginal mesh removal surgeries,” stated Acting United States Attorney Kasulis. “This Office, the Department of Justice and the FBI are committed to investigating and prosecuting medical professionals and others who take advantage of vulnerable victims for their own illegal gain and personal profit.”
According to court filings and facts presented at the plea proceeding, Barber and Walker sought to profit in connection with lawsuits filed throughout the United States relating to alleged harm that TVM implants had caused female patients. The scheme sought to take advantage of the fact that female patients who had their TVM implants surgically removed were entitled to receive larger settlements than female patients whose inserts remained implanted. As part of the scheme, Walker and others paid kickbacks and bribes to Barber in exchange for the referral of female patients for these surgeries, including patients who traveled across the United States to undergo the surgeries.
When sentenced, Walker faces up to 10 years in prison and has agreed to forfeit approximately $800,000. Barber faces up to 5 years in prison and has agreed to forfeit approximately $1.1 million.
The government’s case is being prosecuted by Assistant United States Attorneys Elizabeth Geddes and Sarah Evans and Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.
The Defendants:
WESLEY BLAKE BARBER
Age: 51
Detroit, MichiganCHRISTOPHER WALKER
Age: 49
Windermere, FloridaE.D.N.Y. Docket No. 19-CR-239 (RJD)
Three Employees of a Long Island Information Technology Company Plead Guilty to Criminal Copyright InfringementRead the Press Release
Michael Calabria, Joseph Keegan and Casey Silver pleaded guilty yesterday in federal court in Central Islip to criminal copyright infringement. Calabria and Keegan were principals of Constructure Technologies, LLC (“Constructure”), located in Melville, New York, and Silver was a Constructure employee. The charge relates to the defendants’ installing unlicensed versions of software by using “cracking” programs or “key generators,” which allowed Constructure employees to activate copies of the software without paying for a license and obtaining a key. In addition to the guilty pleas, Constructure itself is charged with a felony violation of the Digital Millennium Copyright Act (“DMCA”) and agreed to pay a $60,000 fine. The fine is part of a deferred prosecution agreement that Constructure has entered into with the United States Attorney’s Office for the Eastern District of New York. The relevant portion of the DMCA prohibits the criminal circumvention of copyright protection systems, including encryption systems.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas and deferred prosecution agreement.
“With the guilty pleas and deferred prosecution agreement, Constructure and the individual defendants admit to committing a high-tech theft by installing unlicensed software they didn’t pay for, and cheating software companies of license fees they were owed,” stated Acting U.S. Attorney Kasulis. “Protecting intellectual property rights is an important priority of this Office, and we will continue to investigate and prosecute those who ignore those rights for their own profit.” Ms. Kasulis also thanked the Suffolk County Police Department and VMWare for their valuable assistance with the case.
“We install software on our computers to protect us from hackers and criminals. Software companies are constantly updating and fixing programs with patches to stay one step ahead of the bad actors who work non-stop to exploit vulnerabilities. The three employees who are pleading guilty in this investigation only saw the profit they could make if they gamed the system. Users paying for security software should be able to rely on the legitimacy of it,” stated FBI Assistant Director-in-Charge Driscoll.
The Scheme to Circumvent Copyright Protection Systems
According to court filings, Constructure provided information technology services, helping install, manage and service various networks and other technology products for small and medium sized businesses. Calabria was Constructure’s President, Keegan was the Chief Technology Officer, and Silver was a Project Manager.
Between 2011 and 2018, Constructure sold, installed and provided services for computer programs that were copyrighted and then sold by software companies (“Victim Software Companies”), including VMWare, a global cloud computing software company. Some of those computer programs were designed so that they could not be activated until a user paid the company for a “license” to use that software. In purchasing a license, the user received a “key”—a string of letters, numbers and symbols—that, when entered into the copy of software obtained by the user, activated the software. Constructure’s clients generally paid Constructure to purchase licenses for such computer programs and to activate those programs with a legitimate license key.
Starting in or about 2011, Calabria, Keegan, and Silver helped to operate Constructure’s business in part by installing unlicensed versions of software from Victim Software Companies by using cracking programs or key generators, which allowed Constructure to activate copies of the software without paying for a license and obtaining a key. Constructure employees, often at the express direction of Calabria or Keegan, used cracking programs or key generators to install software from multiple Victim Software Companies.
Constructure employees, including Keegan, obtained license keys and cracking programs from the Internet. They also tested those programs on a computer server located in the basement of Constructure’s office in Melville and on a file-sharing site controlled by Constructure, so that the programs could be used remotely by Constructure employees.
By installing working, but unlicensed, versions of software, Constructure was able to bill a customer for the software, under the pretense that Constructure purchased a copy on behalf of the customer, while not actually paying for it. Constructure employees did not inform Constructure’s clients or the Victim Software Companies that Constructure employees used “cracks” to install those programs.
From approximately 2011 to approximately 2018, Constructure employees installed cracked software programs for multiple clients, including clients located in Hicksville, New York; Mineola, New York; Manhattan, New York; and Bridgewater, New Jersey.
When sentenced, each defendant faces up to one year in prison and a fine.
The Deferred Prosecution Agreement and Criminal Information as to Constructure
Under the terms of the deferred prosecution agreement, Constructure will pay a criminal penalty of $60,000 and maintain a compliance and ethics program designed to prevent and detect violations of the DMCA and other applicable laws. If the company breaches the agreement, it will be subject to prosecution for the charge in the criminal information that was filed today, charging Constructure with a criminal violation of the DMCA.
The government’s case is being handled by the Office’s the National Security and Cybercrime Section and the Cybercrime Task Force. Assistant United States Attorney David K. Kessler is in charge of the prosecution.
The Eastern District of New York’s Cybercrime Task Force was formed in May 2021 to combat cybercrime, which is proliferating in the United States, including in this district, as well as internationally. The Task Force’s goals are to initiate cybercrime investigations and prosecutions, disseminate information about emerging cybercrime issues and trends, and heighten awareness about a wide variety of cybercrime schemes. The Task Force works with our traditional law enforcement partners, including the FBI, the United States Secret Service, Homeland Security Investigations and the Cybersecurity and Infrastructure Security Agency, as well as the Drug Enforcement Administration. The Task Force also coordinates with regulatory partners, including the U.S. Securities & Exchange Commission and the Federal Trade Commission, as well as state and local counterparts, such as the New York State Department of Financial Services, New York City Cyber Command and the New York City Police Department.
The Defendants:
CONSTRUCTURE TECHNOLOGIES, LLC
MICHAEL CALABRIA
Age: 49
Manorville, New YorkJOSEPH KEEGAN
Age: 46
Merrick, New YorkCASEY SILVER
Age: 36
Stamford, ConnecticutE.D.N.Y. Docket No. 21-CR-368 (JS)
Brooklyn Gang Member Indicted for Multiple Shootings and Firearms OffensesRead the Press Release
A nine-count superseding indictment was filed today in federal court in Brooklyn charging Darrius Sutton, also known as “Blizz Meecho,” with violent crimes in-aid-of racketeering — including attempted murder and related firearms offenses. Sutton is already in federal custody following his arrest in July 2020 on charges of being a felon in possession of ammunition. He will be arraigned on the superseding indictment at a later date.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.
“As alleged in the superseding indictment, the defendant terrorized the East New York neighborhood of Brooklyn by engaging in armed warfare with rival gangs, and innocent bystanders were caught in the crossfire,” stated Acting U.S. Attorney Kasulis. “This Office is working tirelessly with our law enforcement partners to take violent gang members off the street and put an end to senseless violence plaguing communities in the district.”
“Members of criminal gangs often don’t fear the consequences of their actions, but Mr. Sutton now faces a long stay in federal prison for his alleged crimes. Our FBI Metro Safe Streets Task Force and law enforcement partners haven’t backed off our pursuit of these groups and stopping the chaos gangs create,” stated FBI Assistant Director-in-Charge Driscoll.
“This case highlights the NYPD’s and our law enforcement partners relentless pursuit of those few individuals who drive the worst kinds of violence and disorder in the city. I want to thank our colleagues at the FBI and the United States Attorney’s Office for the Eastern District of New York for their commitment in bringing this individual to justice,” stated NYPD Commissioner Shea.
As set forth in court filings, Sutton is a member of an East New York-based gang called “Bamalife,” which has ongoing and violent rivalries with other gangs in East New York and elsewhere in Brooklyn. The charges in the superseding indictment relate to three non-fatal shootings in East New York in which four individuals were wounded.
The August 11, 2019 Shooting
As alleged, on August 11, 2019, Sutton attended a party at a rental hall located at 2529 Atlantic Avenue in East New York, Brooklyn. Surveillance video and other evidence established that shortly after Sutton left the party, he confronted a member of a rival gang who was also leaving the party. Sutton demanded to know if the victim was a member of the rival gang; Sutton began shooting and pursuing the intended victim as the victim attempted to flee. In addition to striking his intended victim in the forearms and groin, Sutton’s gunfire also wounded an innocent bystander in the leg.
The April 20, 2020 Shooting
As alleged, on April 20, 2020, Sutton ambushed a victim in the vicinity of 375 Sheffield Avenue in East New York, Brooklyn. Surveillance video shows Sutton approaching the victim undetected from behind, drawing his weapon, firing several shots and striking the male in the chest, thigh and wrist.
The May 16, 2020 Shooting
As alleged, on May 16, 2020, Sutton shot a member of a rival gang in the vicinity of 2211 Pitkin Avenue in East New York, Brooklyn. Surveillance video shows two cars pulling up to a location approximately four blocks from the scene of the shooting. Sutton exited one of the cars and walked to 2211 Pitkin Avenue, where members of a rival gang are known to congregate. Sutton entered the lobby of the building with a firearm in his hand. Moments later, Sutton shot the victim in the courtyard of the building.
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 charges in the indictments are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Kevin Trowel and Nicholas Axelrod are in charge of the prosecution.
The Defendant:
DARRIUS SUTTON (also known as “Blizz Meecho”)
Age: 24
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-323 (AMD)
Colombian Narcotrafficker Sentenced to 18 Years’ Imprisonment for Transporting More Than 50,000 Kilograms of Cocaine to the United StatesRead the Press Release
Earlier today, in federal court in Brooklyn, Alvaro Vivero Rendon was sentenced to 18 years’ imprisonment by United States District Judge Edward R. Korman for conspiracy to internationally distribute cocaine. As part of the sentence, the Court entered a forfeiture money judgment of $20 million. Vivero pleaded guilty to the charge in March 2017.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Kevin P. Bruen, Acting Superintendent, New York State Police (NYSP), announced the sentence.
“With today’s lengthy prison sentence and entry of a $20 million forfeiture money judgment, Vivero is prevented from profiting from his crimes while being held accountable for leading an international drug-trafficking conspiracy that transported massive quantities of cocaine into the United States through Central America and Mexico,” stated Acting United States Attorney Kasulis. “This Office and its law enforcement partners are committed to tracking down international narcotics traffickers like the defendant and stopping the pipeline of drugs coming into our communities from abroad.”
Ms. Kasulis expressed her appreciation to DEA’s Bogota Country Office Group 2 (BCO2) and the Colombian National Police (CNP) Direccion de Investigacion Criminal e Interpol (DIJIN) Sensitive Investigative Unit (SIU) for their assistance.
“Vivero played a vital role in international cocaine trafficking, pushing multi-million dollar loads into America,” stated DEA Special Agent-in-Charge Donovan. “Evident in his plea and $20 million forfeiture, Vivero bypassed laws, bribed corrupt law enforcement, and concealed contraband in order to profit off the sale of poison.”
“Alvaro Vivero Rendon is responsible for flooding American streets with tens of thousands of pounds of cocaine over a six-year period,” stated HSI Special Agent-in-Charge Fitzhugh. “The continued cooperation between law enforcement ensures Vivero and individuals like him can no longer profit from the poison he trafficked and will now have to face the consequences.”
According to court filings, from 2009 until his arrest in October 2014, Vivero led a massive international drug trafficking conspiracy responsible for trafficking tens of thousands of kilograms of cocaine from Colombia to intermediary locations in Central America and Mexico by air and by sea, before the cocaine was transported to the United States. Vivero shipped much of this cocaine through San Andres Island off the coast of Nicaragua, which he used as a strategic transshipment point. Vivero’s air drug route through San Andres relied on bribing corrupt law enforcement officials at airports in both mainland Colombia and on San Andres. From San Andres, Vivero’s workers usually sent the cocaine to Honduras via fast boats. After the fast boats unloaded the cocaine in Honduras, they were typically loaded with drug proceeds, usually in the form of U.S. dollars, which they transported back to San Andres before couriers brought suitcases full of drug proceeds back to mainland Colombia.
Vivero received an estimated $20 million for his role in the conspiracy. Vivero was arrested in Colombia in October 2014 and he was extradited to the United States in April 2016.
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 International Narcotics and Money Laundering Section. Assistant United States Attorney Nomi D. Berenson is in charge of the prosecution. The Justice Department’s Office of International Affairs provided significant assistance in this matter.
The Defendant:
ALVARO VIVERO RENDON (also known as “Jhon Francisco Melo Barrera,” “John Francisco Melo Barrera,” “El Ingeniero,” “Felipe,” “Francisco Melo,” “La Policia,” “Principe,” “Profe” and “Alberto Ramos”)
Age: 56
Buga, ColombiaE.D.N.Y. Docket No. 14-CR-153 (S-1) (ERK)
14 Defendants Indicted, Including the Entire Administration of the Colombo Organized Crime FamilyRead the Press Release
Earlier today, in federal court in Brooklyn, a 19-count indictment was unsealed charging 14 defendants, including 10 members and associates of the Colombo crime family of La Cosa Nostra and a member of the Bonanno organized crime family, with various offenses including labor racketeering involving multiple predicate acts of extortion conspiracy, attempted extortion and extortion, extortionate collection of credit conspiracy, extortionate collection of credit and money laundering conspiracy. The charges in the indictment against the Colombo crime family members relate to multiple charged schemes in a long-running effort by the crime family to infiltrate and take control of a Queens-based labor union (the “Labor Union”) and its affiliated health care benefit program (the “Health Fund”) that provides medical benefits, including dental, optical and pharmacy benefits, to the members of the Labor Union, and to a conspiracy to commit fraud in connection with workplace safety certifications.
Among those charged with racketeering are Andrew “Mush” Russo, the boss of the Colombo crime family, Benjamin “Benji” Castellazzo, the underboss, and Ralph DiMatteo, the consigliere. Alleged Colombo crime family captains Theodore Persico, Jr., Richard Ferrara and Vincent Ricciardo are charged with racketeering, along with soldier Michael Uvino and associates Thomas Costa and Domenick Ricciardo. In addition, alleged Bonanno family soldier John Ragano is charged with loansharking, fraud and drug trafficking offenses.
Thirteen defendants were arrested today in New York and New Jersey and are scheduled to be arraigned via videoconference this afternoon before United States Magistrate Judge Taryn A. Merkl at the federal courthouse in Brooklyn. Vincent Ricciardo was arrested in North Carolina and will be arraigned before United States Magistrate Judge David C. Keesler in federal court in Charlotte. DiMatteo remains at large.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Michael Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Jonathan Mellone, Special Agent-in-Charge, U.S. Department of Labor Office of Inspector General, New York Region (DOL-OIG); Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the charges and arrests.
“Today’s charges describe a long-standing, ruthless pattern by the administration of the Colombo crime family, its captains, members and associates, of conspiring to exert control over the management of a labor union by threatening to inflict bodily harm on one of its senior officials and devising a scheme to divert and launder vendor contract funds from its health care benefit program. In addition, for their own enrichment, the defendants conspired to engage in extortionate loansharking, money laundering and fraud, as well as drug trafficking,” stated Acting U.S. Attorney Kasulis. “This Office and its law enforcement partners are committed to dismantling organized crime families, eliminating their corrupt influence in our communities and protecting the independence of labor unions.”
Ms. Kasulis also thanked the U.S. Department of Labor, Employee Benefits Security Administration, Atlanta and New York Offices (DOL-EBSA), the Nassau County District Attorney’s Office, the Waterfront Commission of New York Harbor and the Department of Justice’s Organized Crime and Gang Section for their valuable assistance in the investigation.
“Everything we allege in this investigation proves history does indeed repeat itself. The underbelly of the crime families in New York City is alive and well. These soldiers, consiglieres, under bosses, and bosses are obviously not students of history, and don't seem to comprehend that we're going to catch them. Regardless of how many times they fill the void we create in their ranks, our FBI Organized Crime Task Force, and our law enforcement partners, are positioned to take them out again, and again,” stated FBI Assistant Director-in-Charge Driscoll.
“An important mission of the Office of Inspector General is to investigate criminal allegations relating to organized crime and their illicit influence over labor unions and their affiliated employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated DOL-OIG Special Agent-in-Charge Mellone.
“The indictment of 14 defendants, including members of the Columbo crime family on labor racketeering, extortion and money laundering charges should send a clear and concise message that these types of crimes will never be tolerated by law enforcement. By infiltrating and taking control of a Queens-based labor union and its affiliated health care benefit program these defendants were able to extort a substantial amount of money which should have been used for the members of the union. These benefits included medical, dental, optical and pharmaceutical. Congratulations to all of the investigators and their affiliated agencies on a job well done during this extensive investigation,” stated NCPD Commissioner Ryder.
“This indictment is another example of the NYPD’s long-term commitment, working with its law enforcement partners, in making sure those accused of organized crime are held accountable. I commend those who carried out the investigation as well as the office of the United States Attorney for the Eastern District in New York for its work in ensuring there is justice in this case,” stated NYPD Commissioner Shea.
“Every time construction certifications are faked, every time bogus records are created and used to manipulate the facts, building in this City is undermined and New Yorkers' safety is compromised. This investigation is evidence of how corruption can erode the integrity of construction in New York City. And these charges reveal how DOI is working with its law enforcement partners to uncover and stop the illegal conduct,” stated DOI Commissioner Garnett. “DOI thanks the City Department of Buildings for reporting allegations related to this conduct, and the Office of the United States Attorney for the Eastern District of New York, the FBI, and the Office of Inspector General for the U.S. Department of Labor for their partnership.”
As set forth in the indictment and other court documents, the defendants and their co-conspirators committed a variety of crimes – including extortion, loansharking, fraud and drug trafficking – on behalf of the Colombo organized crime family. First, the Colombo crime family’s administration, including Russo, Castellazzo and Dimatteo, as well captains Persico, Ferrara and Vincent Ricciardo, used extortionate means, including direct threats of bodily harm, to control the management of the Labor Union and caused it to make decisions that benefitted the Colombo crime family. Since approximately 2001, Colombo captain Vincent Ricciardo and his cousin, associate Domenick Ricciardo, have collected a portion of the salary of a senior official in the Labor Union (“John Doe #1”) by threatening to harm John Doe #1 and his family. At the direction of the Colombo crime family’s leadership, beginning in late 2019, the defendants broadened the extortion effort to force John Doe #1 and others at the Labor Union and its affiliated Health Fund to make decisions that benefitted the Colombo crime family, including by forcing them to select vendors for contracts who were associated with the Colombo crime family. The defendants sought to divert more than $10,000 per month from the Health Fund’s assets to the administration of the Colombo crime family.
For example, on June 21, 2021, in a consensually recorded conversation, Vincent Ricciardo threatened to kill John Doe #1 if he did not comply with Vincent Ricciardo’s demands. He explained that John Doe #1 knows, “I’ll put him in the ground right in front of his wife and kids, right in front of his f-----g house, you laugh all you want pal, I’m not afraid to go to jail, let me tell you something, to prove a point? I would f-----g shoot him right in front of his wife and kids, call the police, f--k it, let me go, how long you think I’m gonna last anyway?”
Further, Colombo crime family members Russo, Castellazzo, Dimatteo, Ferrara, Persico, Vincent Ricciardo, Uvino joined with defendants Thompkins and Bellantoni, among others, to devise a scheme to launder money from Health Fund contracts and payments through third parties and eventually to the Colombo crime family’s leaders. The defendants attempted to re-bid Health Fund vendor contracts for claims administration, pharmaceuticals and other health services to persons and companies affiliated with the defendant Joseph Bellantoni. Bellantoni and others agreed that in exchange for the new vendor contracts, they would pay kickbacks to the Colombo crime family and would use various intermediaries to hide the payments.
The indictment also charges Bonanno organized crime family soldier John Ragano with leading a scheme to issue fraudulent workplace safety training certifications. As alleged, Ragano operated two workplace safety schools in the New York area that claimed to provide Occupational Safety and Health Administration’s (“OSHA”) training courses and certifications, along with various New York state certifications, to construction industry workers. Rather than provide training, Ragano along with his business partner John Glover and Domenick Ricciardo, falsified paperwork to the U.S. Department of Labor and other government agencies which represented that hundreds of workers had completed required safety courses when in reality they had not. Instead, various defendants used Ragano’s “schools” to conduct meetings involving members of La Cosa Nostra and to store illegal drugs and fireworks.
Vincent Ricciardo, Uvino, Ragano and Costa are also charged with loansharking. As alleged, these defendants participated in extending and collecting on extortionate loans totaling $250,000 to an individual identified as “John Doe #2.” The defendants charged and collected a weekly 1.5% interest rate that did not reduce the principal owed and divided the proceeds between themselves. Further, Vincent Ricciardo, Ragano, Costa, Glover and Vincent Martino were charged with conspiracy to distribute marijuana by transporting large shipments of marijuana in vehicles from New York to Florida. Vincent Ricciardo and Costa were also charged, as previously convicted felons, with possessing and transporting ammunition, and Persico, who is currently on federal supervised release following his release for a prior racketeering conviction, was charged with lying to federal court officers about his dealings with other Colombo crime family members.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys James P. McDonald and Devon Lash are in charge of the prosecution.
The Defendants:
ANDREW RUSSO (also known as “Mush”)
Age: 87
Glen Head, New YorkJOSEPH BELLANTONI
Age: 39
Massapequa, New YorkBENJAMIN CASTELLAZZO (also known as “Benji”)
Age: 83
Manahawkin, New JerseyTHOMAS COSTA
Age: 52
West Islip, New YorkRALPH DIMATTEO
Age: 66
Merrick, New YorkRICHARD FERRARA
Age: 59
Brooklyn, New YorkJOHN GLOVER
Age: 62
Queens, New YorkVINCENT MARTINO
Age: 43
Medford, New YorkTHEODORE PERSICO, JR. (also known as “Teddy”)
Age: 58
Brooklyn, New YorkJOHN RAGANO (also known as “Bazoo” and “Maniac”)
Age: 59
Franklin Square, New YorkDOMENICK RICCIARDO
Age: 56
Franklin Square, New YorkVINCENT RICCIARDO (also known as “Vinny Unions”)
Age: 75
Franklin Square, New YorkERIN THOMPKINS
Age: 53
Franklin Square, New YorkMICHAEL UVINO
Age: 56
Garden City, New YorkE.D.N.Y. Docket No. 21-CR-466 (ARR)
Three Operators of Financial Services Firm Indicted for $155 Million Investment FraudRead the Press Release
BROOKLYN, NY – An indictment was unsealed yesterday in federal court in Brooklyn charging three former operators of financial services firm Biscayne Capital with conspiring to defraud investors and financial institutions in an international fraud scheme that caused more than $155 million in investor losses. Roberto Gustavo Cortes Ripalda (“Cortes”), Fernando Haberer Bergson (“Haberer”) and Ernesto Heraclito Weisson Pazmino (“Weisson”) are charged with conspiracy to commit wire fraud, bank fraud and money laundering. Weisson was arrested yesterday in Florida, made his initial appearance yesterday afternoon in federal court in Miami and was ordered held pending a detention hearing. Cortes and Haberer were arrested yesterday in Spain and Argentina, respectively.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Kenneth A. Polite Jr., Assistant Attorney General of the Justice Department’s Criminal Division, Darrell J. Waldon, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office (IRS-CI), and Raymond Villanueva, Special Agent in-Charge, Homeland Security Investigations, Washington, D.C. Field Office (HSI), announced the arrests and charges.
“As alleged, the defendants orchestrated a complex and fraudulent scheme to repeatedly mislead investors about the nature and performance of their investments. The defendants enriched themselves with millions of dollars in investor funds while making misrepresentations that caused more than $155 million in investor losses,” stated Acting United States Attorney Kasulis. “The charges demonstrate this Office’s commitment to ensuring integrity in the management of investor funds and prosecuting those who commit fraud to enrich themselves at their investors’ expense.” Ms. Kasulis also expressed her appreciation to the IRS-CI Boston Field Office for their assistance with the case.
“The charges unsealed yesterday reflect the seriousness of criminal activities carried out by the defendants. Our agency, and particularly the D.C. based Global Illicit Financial Team, remains dedicated to rigorously investigating criminal organizations that jeopardize the integrity of our financial system,” stated IRS-CI Acting Special Agent-in-Charge Waldon.
“Financial schemes like the one alleged here not only damage the lives of those victimized by the fraud, but the international money laundering involved poses a direct threat to the security of the U.S. financial system,” stated HSI Special Agent-in-Charge Villanueva. “HSI is committed to working with its law enforcement and private sector partners to investigate these criminal enterprises and stop them in their tracks.”
As alleged in the indictment, Biscayne Capital was a financial services company founded in approximately 2005 and maintained offices in Florida, Ecuador, Argentina, the Bahamas and Uruguay. Between approximately 2013 and 2018, Cortes, Haberer and Weisson, together with others, orchestrated a scheme to defraud Biscayne Capital clients and financial institutions through a series of material misrepresentations and omissions about how Biscayne Capital client funds would be used. The defendants and their co-conspirators used the funds they fraudulently obtained from clients and financial institutions to pay other investors, cover Biscayne Capital expenses and pay themselves millions of dollars.
The indictment further alleges that the defendants and their co-conspirators falsely represented to some Biscayne Capital clients that the clients’ investments in certain private investment products (referred to in the indictment as “Proprietary Products”) would be used to finance the development of real estate projects. In reality, the defendants and their co-conspirators used clients’ investments to pay other Biscayne Capital clients. In some cases, the defendants and their co-conspirators invested in Proprietary Products without the clients’ knowledge and provided clients with fraudulent account statements that showed fake investments. The defendants and others also conspired to fraudulently induce financial institutions to extend short-term credit to help further the scheme. Haberer then generated fake letters of authorization to repay the banks out of Biscayne Capital clients’ accounts without those clients’ authorization.
In approximately September 2018, the scheme collapsed, and Biscayne Capital went into liquidation, resulting in more than $155 million in losses to Biscayne Capital clients.
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 Business and Securities Fraud Section and the Criminal Division’s Money Laundering and Asset and Recovery Section (“MLARS”) and Fraud Section. Assistant United States Attorneys David Gopstein and Benjamin Weintraub of the Eastern District of New York, MLARS Trial Attorneys Randall Warden and Shaunik R. Panse and Fraud Section Trial Attorney John (Fritz) Scanlon are in charge of the prosecution. The Justice Department’s Office of International Affairs provided significant assistance in this matter.
The Defendants:
ROBERTO GUSTAVO CORTES RIPALDA
Age: 54
Madrid, SpainFERNANDO HABERER BERGSON
Age: 48
ArgentinaERNESTO HERACLITO WEISSON PAZMINO
Age: 53
Miami, FloridaE.D.N.Y. Docket No. 21-CR-458 (DG)
Owner of Long Island Commercial Check Cashing Companies Pleads Guilty to Financial FraudRead the Press Release
Earlier today, in federal court in Central Islip, John Drago, the former owner/operator of several check cashing businesses on Long Island, pleaded guilty to illegally structuring financial transactions and payroll tax evasion. The proceeding took place before United States District Judge Gary R. Brown. When sentenced, Drago faces up to 10 years in prison, has agreed to forfeit approximately $253,000 and to pay restitution of approximately $593,000. As part of his plea, Drago is required to surrender his check cashing licenses, his federal money services business registrations and he is barred from applying for any such licenses or registrations in the future.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and Shirin Emami, Acting Superintendent, New York State Department of Financial Services (DFS), announced the guilty plea.
“Drago’s guilty plea makes clear that running a check cashing business is not a license to evade financial reports to cheat the IRS or a blank check for committing fraud,” stated Acting United States Attorney Kasulis. “This Office will prosecute and hold to account defendants like Drago who, under the guise of running a legitimate business, are actually engaging in egregious schemes to avoid paying taxes.”
“Drago’s plea today acknowledges his egregious misuse of Kayla Companies as a conduit to circumvent mandatory CTR filing requirements and evade employment taxes of Kayla Company employees. Greedy tax evasion schemes such as those facilitated by Drago, critically impair the integrity of our financial system and directly impact employees, who may see future benefits such as Social Security, Medicare or Unemployment Compensation reduced or eliminated because of Drago’s willful disregard of the law. IRS Criminal Investigation works tirelessly to protect the American taxpayer and maintain public confidence in our system of taxation,” stated IRS-CI Acting Special Agent-in-Charge Fattorusso.
“John Drago breached the public trust by using his licensed check-cashing businesses to engage in illegal structuring transactions,” said Shirin Emami, Acting Superintendent of Financial Services. “DFS applauds the Eastern District of New York’s prosecution and is pleased to have been able to coordinate with the EDNY on this matter.”
According to court filings and facts presented at the plea proceeding, Drago owned and operated check cashing businesses on Long Island, including Kayla Check Cashing Corp., North Island Check Cashing Corp., South Island Check Cashing Corp., East Island Check Cashing Corp., Bay Shore Check Cashing Corp. and Brentwood Check Cashing Corp. (collectively, the “Kayla Companies”). Financial institutions are required to file a Currency Transaction Report (“CTR”) for each cash transaction in excess of $10,000. In addition, a CTR is required to be filed by the financial institution when multiple checks, the total value of which exceeds $10,000, are cashed in a single day.
From January 2010 to October 31, 2013, Drago instructed employees to cash multiple checks in excess of $10,000 in a single day for certain customers without filing required CTRs. In addition, to avoid the required CTR filings, Drago directed employees to deposit and cash checks that had been submitted together on a single day in amounts in excess of $10,000. Drago also instructed employees to tell certain customers who presented individual checks in amounts exceeding $10,000 to return with multiple checks in amounts that were less than $10,000 to avoid the reporting requirement for such financial transactions. As a result of Drago’s scheme, more than $9.5 million in check cashing transactions were concealed from the IRS.
Between April 1, 2012 and July 31, 2013, Drago paid overtime wages and commissions to employees of the Kayla Companies in cash and failed to inform the IRS of the payment of these cash wages. Drago falsely underreported to the IRS the gross wages paid to his employees to avoid paying the full amount of Federal Insurance Contribution Act taxes that the Kayla Companies owed.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Burton T. Ryan, Jr., Bradley T. King and Madeline O’Connor are in charge of the prosecution.
The Defendant:
JOHN DRAGO
Age: 57
Central Islip, New YorkE.D.N.Y. Docket No. 18-CR-394 (S-1) (GRB)
Dark Web Narcotics Traffickers Plead Guilty to Conspiracy to Distribute Illegal Drugs in Exchange for CryptocurrencyRead the Press Release
Earlier today, in federal court in Brooklyn, Gilberto Melgarejo pleaded guilty to conspiracy to distribute and possess with intent to distribute illegal drugs over the “dark web.” Co-defendant Brooke Gray pleaded guilty to the same charge on August 10, 2021. Melgarejo and Gray participated in dozens of transactions on the dark web in which they sold an array of illegal drugs including methamphetamines, fentanyl, heroin, LSD and MDMA, and took payment in the form of cryptocurrency. Both defendants pleaded guilty before United States Chief District Judge Margo K. Brodie. They were arrested on November 14, 2019 in Albuquerque, New Mexico.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the guilty pleas.
“With today’s guilty plea, the defendants have admitted to peddling potentially lethal narcotics on the dark web in a failed effort to hide their illegal and dangerous activity from law enforcement,” stated Acting United States Attorney Kasulis. “As these defendants have learned, drug dealers who push their poison online cannot evade prosecution by hiding in the dark corners of the internet. This Office, together with its law enforcement partners, will continue to aggressively prosecute narcotics traffickers who contribute to the opioid epidemic and harm our communities.”
“This investigation proves that there is no place to hide in the dark web when it comes to law enforcement’s efforts to save lives. Their selling point was anonymity, but law enforcement followed ‘THEQUEENSHIVE’ trail to the defendants’ base of operations in Albuquerque, New Mexico. With overdoses on the rise, it is our goal to shut down as many drug trafficking organizations online and on the streets,” stated DEA Special Agent-in-Charge Donovan.
The internet contains online marketplaces for narcotics and other contraband on the “dark web,” a part of the internet located beyond the reach of traditional internet browsers and accessible only through networks designed to conceal user identities. The “Wall Street Market” and “Empire Market” were global dark web marketplaces that required their users to trade in digital currencies, primarily Bitcoin.
Between March 2019 and September 2019, Melgarejo and Gray advertised and sold illegal narcotics on Wall Street Market and Empire Market, using the moniker “THEQUEENSHIVE.” Customers were directed to pay for illegal narcotics with cryptocurrency and contact Melgarejo and Gray through encrypted email and messaging services. Melgarejo and Gray claimed to sell “the highest quality product at the best price on the market…our packaging is covert as seal team six to ensure we avoid interception.” Beginning in March 2019, Melgarejo and Gray unknowingly made multiple sales of narcotics, including methamphetamine, heroin, fentanyl, LSD and MDMA to undercover DEA agents. Melgarejo and Gray used fake address labels and shipping materials designed to disguise the narcotics, then mailed the narcotics using United States Postal Service mailboxes located in multiple gas stations in the Albuquerque area in a futile effort to evade detection. The investigation further revealed that after receiving Bitcoin in exchange for the narcotics, Melgarejo and Gray converted the Bitcoin to cash and shared the proceeds. Melgarejo and Gray participated in over 90 transactions on Wall Street Market and Empire Market.
When they are sentenced, Melgarejo and Gray each face up to life in prison.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorney Francisco J. Navarro is in charge of the prosecution.
The Defendants:
GILBERTO MELGAREJO (also known as “THEQUEENSHIVE”)
Age: 27
Albuquerque, New MexicoBROOKE GRAY (also known as “THEQUEENSHIVE”)
Age: 23
Albuquerque, New MexicoE.D.N.Y. Docket No. 19-CR-586 (MKB)
NXIVM President Nancy Salzman Sentenced to 42 Months’ Imprisonment for Racketeering ConspiracyRead the Press Release
Earlier today, in federal court in Brooklyn, Nancy Salzman, also known as “Prefect,” the former president and co-founder of Nxivm, was sentenced to 42 months’ imprisonment and ordered to pay a $150,000 fine by United States District Judge Nicholas G. Garaufis for racketeering conspiracy, including predicate acts of conspiracy to commit identity theft and conspiracy to obstruct justice. Salzman agreed to forfeit several real properties, more than $500,000 in cash and a Steinway grand piano. Salzman pleaded guilty in March 2019.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI) announced the sentence.
“In her misguided loyalty and blind allegiance to Keith Raniere, the defendant engaged in a racketeering conspiracy designed to intimidate Nxivm’s detractors and that inflicted harm on Nxivm’s members,” stated Acting U.S. Attorney Kasulis. “Today’s sentence holds the defendant accountable for her crimes and we hope that it brings some measure of closure to the vulnerable women who were victimized and abused.” Ms. Kasulis also expressed her appreciation to the New York State Police and the United States Attorney’s Office for the Northern District of New York for their assistance during the investigation and prosecution.
“Serving as Raniere’s right hand for more than a decade, Nancy Salzman’s conduct supported Nxivm’s objectives to recruit victims, stave off critics and alter evidence connected to a federal lawsuit. Today’s sentence does little to erase the suffering of Nxivm’s victims, but it serves as another reminder of the government’s commitment to seeing this case through to the end,” stated FBI Assistant Director-in-Charge Driscoll.
“Today, Nancy Salzman was held accountable for the role she played in this devious criminal enterprise,” stated IRS-CI Acting Special Agent-in-Charge Fattorusso. “As with many conspiracies, the financial aspects of this investigation required the expertise of IRS Criminal Investigation to unravel the layers of falsehood and deceit.”
“Salzman was essential to the NXIVM criminal enterprise, not merely a peripheral co-defendant. As the co-founder with Keith Raniere, Salzman had immense influence on NXIVM, which included conspiracy to commit identity theft and conspiracy to alter records,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI New York’s strong relationship with its federal partners allows for the seamless and effective investigations that lead to the arrest, prosecution, and sentencing of those involved.”
For more than a decade and until her arrest in July 2018, Nancy Salzman was a high-ranking member of a criminal enterprise led by her co-defendant Keith Raniere. The primary purpose of the enterprise was to promote Raniere and recruit individuals into various purported self-help organizations that Raniere founded, including Nxivm and affiliated programs, and a secret society within Nxivm called “DOS.”
Between August 2005 and November 2008, Nancy Salzman, along with Raniere, participated in the unlawful surveillance and investigation of perceived critics and enemies of Raniere and Nxivm. As part of the scheme, Nancy Salzman agreed to unlawfully surveil these perceived enemies in an attempt to gain advantage over them and stop them from criticizing the company. On March 27, 2018, a search warrant was executed on Salzman’s residence. Law enforcement agents recovered a box containing purported private banking information of many individuals perceived to be critics and enemies of Raniere, including journalists, judges and an expert on cults.
The defendant also conspired to obstruct justice by altering videotapes that were to be produced in discovery in a federal lawsuit in New Jersey. In 2003, Nxivm and affiliated entities filed a copyright infringement suit against a former Nxivm student, her parents and a cult deprogrammer. In 2008, attorneys representing the former student filed counterclaims against Nxivm alleging that the defendant had misrepresented the nature and effectiveness of Nxivm’s programs. During the course of the pending litigation, the defendant and others agreed to alter the videotapes to remove segments that they believed would have supported the former student’s claims and to make it look as if the videos were unedited. These altered videotapes were then produced in discovery by Nxivm’s attorneys with the false claim that they were provided in “unedited fashion.”
Raniere was convicted by a federal jury of racketeering and racketeering conspiracy, sex trafficking, attempted sex trafficking and sex trafficking conspiracy, forced labor conspiracy and wire fraud conspiracy. On October 27, 2020, Raniere was sentenced to 120 years’ imprisonment. On September 30, 2020, Nxivm executive board member Clare Bronfman was sentenced to 82 months’ imprisonment for identity theft and immigration offenses. On April 19, 2019, Kathy Russell, a bookkeeper for Nxivm, pleaded guilty to visa fraud and is awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar and Kevin Trowel are in charge of the prosecution. Assistant United States Attorney Tanisha Payne of the Criminal Division’s Asset Recovery Section is handling forfeiture matters.
The Defendant:
NANCY SALZMAN (also known as “Prefect”)
Age: 67
Clifton Park, New YorkDefendants Previously Sentenced:
KEITH RANIERE (also known as “Vanguard” and “Grandmaster”)
Age: 61
Waterford, New YorkCLARE BRONFMAN
Age: 42
Clifton Park, New YorkALLISON MACK
Age: 39
Brooklyn, New YorkLAUREN SALZMAN
Age: 45
Clifton Park, New YorkDefendant To Be Sentenced:
KATHY RUSSELL
Age: 63
Clifton Park, New YorkE.D.N.Y. Docket No. 18-CR-204 (S-2) (NGG)
Long Island Businessmen Plead Guilty to Hoarding and Price-Gouging of Scarce Personal Protective EquipmentRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Allen Goldmeirer and his brother Steven Goldmeier, owners of a toy company called Millennium Products Group (MPG), pleaded guilty to hoarding personal protective equipment (“PPE”) amid the Covid-19 pandemic and price-gouging customers that purchased three-ply surgical masks from them in violation of the Defense Production Act of 1950. The proceeding took place before United States Magistrate Judge James M. Wicks.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.
“The defendants selfishly sought to make millions of dollars in profits during an unprecedented public health crisis by hoarding and selling at exorbitant prices personal protective equipment that was desperately needed by the State of Oklahoma to protect the public health and safety, and save lives,” stated Acting United States Attorney Kasulis. “This Office will continue to do everything in its power to enforce the Defense Production Act and ensure that opportunists like the defendants are held accountable for their indiscriminate acts of greed.” Ms. Kasulis also expressed her appreciation to the United States Attorney’s Office for the District of New Jersey and the Justice Department’s Covid-19 Hoarding and Price Gouging Task Force for their assistance with the case.
“During the height of the pandemic, cases in which people sought to capitalize on the situation at the expense of others were, unfortunately, an all-too-common occurrence. More than a year later, the FBI continues to work to identify and hold accountable any company, individual, or entity whose intention it was to do so. The Goldmeirer brothers pleaded guilty today for their role in a price-gouging scheme, and they’ll now await sentencing for their crimes,” stated FBI Assistant Director-in-Charge Driscoll.
On March 18, 2020, in response to the Covid-19 pandemic, the Defense Production Act was invoked making it illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services as scarce in order to hoard them or sell them for excessive prices.
According to statements in court today, in March and April 2020, the defendants used their toy company, MPG, to obtain millions of three-ply surgical masks from China for between approximately $0.18 and $0.60 per mask. Almost immediately thereafter, the defendants sold 1,227,500 of these masks to the State of Oklahoma, among others, at a price of $1.65 per mask – a markup of over 900% in many cases. Pursuant to their agreement with the government, the defendants will pay $1 million in restitution to the State of Oklahoma prior to sentencing in this matter. In addition, the defendants face up to one year in jail and a maximum fine of $10,000.
On May 17, 2021, the Attorney General established the Covid-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus
Anyone with information about allegations of attempted fraud involving Covid-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The government’s case is being handled by the Office’s Long Island Criminal Division, with assistance from the Justice Department’s Covid-19 Hoarding and Price-Gouging Task Force. Assistant United States Attorney Megan E. Farrell is in charge of the prosecution.
The Defendants:
ALLEN GOLDMEIER
Age: 68
Oyster Bay, New YorkSTEVEN GOLDMEIER
Age: 64
Plainview, New YorkE.D.N.Y. Docket No. 21-CR- 399 (JMW)
Former CFO of Long Island Real Estate Company Sentenced to 60 Months in Prison for Multi-Million Dollar FraudRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Kwesi Bovell, the former chief financial officer (CFO) of The Mulholland Group, a real estate company in Manhasset (“Mulholland”), was sentenced by United States District Judge Joan M. Azrack to 60 months’ imprisonment and ordered to pay restitution of $3.45 million for embezzling millions of dollars from his employer over the course of three years.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“To fund a lifestyle of extravagance and opulence, the defendant plundered his employer’s company from the time he was hired until his fraud was discovered three years later, and with today’s sentence, he is punished for his avarice and betrayal,” stated Acting United States Attorney Kasulis. Ms. Kasulis thanked the FBI for its investigative work on the case.
According to court filings, Bovell began embezzling funds shortly after he was hired in 2015 to be the CFO of Mulholland. As CFO, Bovell had signature authority over numerous bank accounts of Mulholland and its subsidiaries. Over the next three years, Bovell fraudulently transferred over $3.5 million from Mulholland to Southgate Holdings, a company controlled by Bovell.
Bovell spent most of the stolen funds on luxury purchases for himself and others. Those expenses included a $66,000 ring, vacations, $500,000 to a woman with whom he was in a relationship, an additional $500,000 into a laundromat business operated, in part, by that woman, approximately $90,000 to another woman for whom he rented an apartment in Manhattan, $722,000 on a failed gym, Evolution Fitness, in Suffolk County, as well as purchases at Brooks Brothers, Cartier, Chanel and Gucci. According to Mulholland, at least $1.5 million remains unaccounted for.
The government’s case is handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
KWESI BOVELL
Age: 36
Valley Stream, New YorkE.D.N.Y. Docket No. 18-571 (JMA)
Long Island Man Pleads Guilty to Mortgage Fraud SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, former unlicensed mortgage broker Brent Kaufman pleaded guilty before United States District Judge Kiyo A. Matsumoto to a criminal information charging him with stealing $4.7 million in mortgage refinancing proceeds that were meant to pay off the existing mortgages of his clients. When sentenced, Kaufman faces up to 30 years in prison, as well as forfeiture and a fine of up to $1 million.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Robert W. Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), and Darnell D. Edwards, Acting Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.
“With today’s guilty plea, Kaufman admits to stealing millions of dollars in a brazen mortgage fraud scheme that defrauded numerous lenders and left his homeowner-clients in danger of losing their homes to foreclosure,” stated Acting U.S. Attorney Kasulis. “This Office is committed to prosecuting defendants like Kaufman who are driven by greed to abuse the trust of innocent homeowners.” Ms. Kasulis expressed her grateful appreciation to the FBI, FHFA-OIG and the USPIS for their outstanding work and assistance in this investigation and prosecution.
“Not only did Kaufman steal his victims’ money, but he also violated their trust, leaving them financially vulnerable and at risk of significant financial complications,” stated FBI Assistant Director-in-Charge Driscoll. “Collectively, his victims suffered millions of dollars in losses. Today’s guilty plea reminds us of the threat posed by those who prioritize their own financial interests above all else.”
“Brent Kaufman betrayed the trust of unsuspecting homeowners by stealing millions of dollars in mortgage payoffs and failing to repay lenders. As demonstrated by these charges, FHFA-OIG and its law enforcement partners will investigate and hold accountable those who seek to victimize Fannie Mae and Freddie Mac and misuse the lending process to unjustly enrich themselves,” stated FHFA-OIG Special Agent-in-Charge-Manchak.
“This is a classic case of greed overcoming honest business practices, as Mr. Kaufman took advantage of his access to clients funds to enrich his own lifestyle. His actions left many in financial ruin, holding two mortgages and facing the threat of foreclosure. Law enforcement will always work tirelessly to bring individuals to justice for their crimes against the American public,” stated USPIS Acting Inspector-in-Charge Edwards.
According to court filings and facts presented during the plea proceeding, Kaufman worked as an unlicensed mortgage broker and often assisted clients in Queens and Long Island with refinancing their mortgages. At the closing for a mortgage refinancing, the money from the new mortgage is supposed to be wired to the financial institution that holds the existing mortgage so that it can be paid off. Between 2016 and 2019, Kaufman, together with others, engaged in a scheme to defraud Home Point Financial Corporation, LoanDepot.com LLC and United Wholesale Mortgage and other mortgage lenders (the “Lenders”) by obtaining, and attempting to obtain, monies and funds from the Lenders by means of materially false representations. Specifically, Kaufman provided incorrect wire routing information to the Lenders for the existing mortgages. Instead of wiring the funds to the correct financial institution, the funds were instead transferred to bank accounts controlled by Kaufman. As a result, the existing mortgages were not paid off—leaving the clients with two mortgages on their homes—and Kaufman stole the funds for his own personal use.
During the period of the charged conduct, Kaufman stole more than over $4.7 million, some of which he used to make mortgage payments on the existing mortgages or to eventually pay off those mortgages to avoid detection of his scheme. When Kaufman stopped paying the existing mortgages, several of his clients’ homes were foreclosed on. Victims of the scheme ultimately suffered a loss of approximately $2.5 million.
The government’s case is being prosecuted by Assistant United States Attorneys Jonathan Siegel and Laura Mantell.
The Defendant:
BRENT KAUFMAN
Age: 50
Commack, New YorkE.D.N.Y. Docket No. 21-CR-425 (KAM)
Brooklyn Woman Pleads Guilty to Unauthorized Intrusion into Credit Union’s Computer SystemRead the Press Release
Earlier today, in federal court in Brooklyn, Juliana Barile pleaded guilty to one count of computer intrusion arising from the defendant’s unauthorized intrusion into, and destruction of data on, the computer system of a New York credit union (the “Credit Union”) following her termination as an employee of the Credit Union. The guilty plea took place before United States District Judge Eric N. Vitaliano. When sentenced, Barile faces up to 10 years’ imprisonment and a fine.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“In an act of revenge for being terminated, Barile surreptitiously accessed the computer system of her former employer, a New York Credit Union, and deleted mortgage loan applications and other sensitive information maintained on its file server,” stated Acting U.S. Attorney Kasulis. “Protecting private financial data from being compromised or destroyed by unauthorized computer intrusions is an important priority of this Office.” Ms. Kasulis also thanked New York City Police Department for their valuable assistance with the case.
“Ms. Barile may have thought she was getting back at her employer by deleting files, however she did just as much harm to customers. Her petty revenge not only created a huge security risk for the bank, but customers also depending on paperwork and approvals to pay for their homes were left scrambling,” stated FBI Assistant Director-in-Charge Driscoll. “An insider threat can wreak just as much havoc, if not more, than an external criminal. The bank and customers are now faced with the tremendous headache of fixing one employee's selfish actions.”
According to court filings, Barile was fired from her position as a part-time employee with the Credit Union on May 19, 2021. Two days later, on May 21, 2021, Barile remotely accessed the Credit Union’s file server and deleted more than 20,000 files and almost 3,500 directories, totaling approximately 21.3 gigabytes of data. The deleted data included files related to mortgage loan applications and the Credit Union’s anti-ransomware protection software. Barile also opened confidential files. After she accessed the computer server without authorization and destroyed files, Barile sent text messages to a friend explaining that “I deleted their shared network documents,” referring to the Credit Union’s share drive. To date, the Credit Union has spent approximately $10,000 in remediating Barile’s unauthorized intrusion and destruction of data.
The government’s case is being handled by the Office’s Cybercrime Task Force and the National Security and Cybercrime Section. Assistant United States Attorneys David K. Kessler and Meredith A. Arfa are in charge of the prosecution.
The Eastern District of New York’s Cybercrime Task Force was formed in May 2021 to combat cybercrime, which is proliferating in the United States, including in this district, as well as internationally. The Task Force’s goals are to initiate cybercrime investigations and prosecutions, disseminate information about emerging cybercrime issues and trends, and heighten awareness about a wide variety of cybercrime schemes. The Task Force works with our traditional law enforcement partners, including the FBI, the United States Secret Service, Homeland Security Investigations and the Cybersecurity and Infrastructure Security Agency, as well as the Drug Enforcement Administration. The Task Force also coordinates with regulatory partners, including the U.S. Securities & Exchange Commission and the Federal Trade Commission, as well as state and local counterparts, such as the New York State Department of Financial Services, New York City Cyber Command and the New York City Police Department.
Defendant:
JULIANA BARILE
Age: 35
Brooklyn, New YorkE.D.N.Y. Docket No. 21-CR-441 (ENV)
Queens Woman Pleads Guilty to Distributing Narcotics That Caused Two Fatal OverdosesRead the Press Release
Earlier today, in federal court in Brooklyn, Angelina Barini pleaded guilty before United States Magistrate Judge Ramon E. Reyes, Jr. to distributing narcotics and causing the deaths of two victims. Specifically, she pleaded guilty to two counts of distributing narcotics that caused the deaths of a person; one count of distributing fentanyl, methamphetamine and cocaine; and one count of conspiring to distribute gamma-butyrolactone (GBL). When sentenced, Barini faces a minimum of 20 years’ imprisonment and a maximum term of life imprisonment.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
“With today’s guilty plea, Barini takes responsibility for her actions in distributing lethal doses of opioids that caused the overdose deaths of unsuspecting victims, shattering the lives of their families,” stated Acting U. S. Attorney Kasulis. “This Office is committed to ending the opioid epidemic and prosecuting defendants like Barini who cause senseless, drug-related deaths in our communities.”
“The scourge of addiction takes many forms, but one of its most devastating effects is that beyond the direct victims of drug overdoses are the families who lose loved ones too soon. Fentanyl is deadly regardless of social status, age, gender or ethnicity,” stated HSI Special Agent-in-Charge Fitzhugh. “Barini had no regard for her victims, but has made the right choice by taking responsibility for her actions. HSI and its partners remain resolute in pursuing those who profit from this lethal opioid epidemic.”
As set forth in court filings and at today’s proceeding, between July and August of 2019, Barini provided narcotics to her victims while sometimes conducting business as a sex worker. On multiple occasions, those narcotics contained lethal doses of fentanyl. On July 11, 2019, Barini met with a victim at a motel in Woodside, Queens and gave him fentanyl-laced drugs, causing the victim’s overdose death. On August 5, 2019, Barini met another victim at a residence in College Point, Queens and gave him fentanyl-laced drugs which caused his overdose death. On July 4, 2019, Barini distributed and possessed with intent to distribute controlled substances containing fentanyl, methamphetamine and cocaine. Additionally, between August 16, 2019 and August 18, 2019, Barini conspired with another person to distribute and possess with intent to distribute a substance containing GBL, a Schedule I controlled substance analogue, commonly referred to as a “date rape” drug.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Temidayo Aganga-Williams, Andrew Grubin and Andrew Wang are in charge of the prosecution.
The Defendant:
ANGELINA BARINI
Age: 43
Queens, New YorkE.D.N.Y. Docket No. 19-CR-428 (S-2) (BMC)
Long Island Dentist Arrested for Distributing Prescription Drugs to Women in Exchange for SexRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Dr. Barry Arnold, a practicing dentist with an office in Valley Stream, New York, with writing illegal prescriptions to women for oxycodone, a Schedule II controlled substance, and alprazolam (“Xanax”), a Schedule IV controlled substance, in exchange for sex acts. Arnold was arrested yesterday and will be arraigned this afternoon before United States Magistrate Judge James M. Wicks.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Stuart Cameron, Acting Police Commissioner, Suffolk County Police Department (SCPD), announced the arrest and indictment.
“As alleged, Dr. Arnold abused his position as a dentist and preyed upon vulnerable, drug-addicted women, trading prescriptions for sex acts,” stated Acting U.S. Attorney Kasulis. “We are committed to vigorous prosecution of medical professionals who abdicate their Hippocratic Oath and contribute to the rise of drug abuse and addiction in our communities."
“With a clear disregard for medical integrity, Dr. Arnold allegedly exchanged prescriptions for sex in his office and home. This investigation focused on a dentist abusing his position by proliferating drug abuse and endangering the lives and safety of several women,” stated DEA Special Agent-in-Charge Donovan. “I commend the men and women at the DEA Long Island District Office Tactical Diversion Group, HSI, Suffolk County Police Department Human Trafficking Investigations Unit, Suffolk County Sheriff’s Office and the US Attorney’s Office Eastern District of New York for their expedient and diligent work on this investigation.”
“It’s alleged that Dr. Arnold took advantage of vulnerable, addicted women for his own benefit. He is ethically and legally responsible for every prescription, but he broke his oath with his alleged misconduct, and he is really no different than a street dealer,” stated HSI Special Agent in Charge Fitzhugh. “HSI’s continued partnership with the DEA will ensure that drug-dealing dentists are arrested for their criminal acts.”
“During the course of close to four years, Dr. Arnold used his ability to write prescriptions to take advantage of those struggling with addiction for his own personal indulgences,” stated Acting SCPD Commissioner Cameron. “While this doctor should have held himself to a higher standard, our officers on the DEA’S Long Island Tactical Diversion Squad will continue to hold those in medical practice accountable for illegal actions and I would like to commend the Eastern District of New York for making a difference in the opioid epidemic.”
As set forth in court filings, between October 2016 and August 2020, Dr. Arnold allegedly prescribed oxycodone, Percocet and Xanax to numerous drug-addicted victims in exchange for sex acts. The sex acts occurred after business hours at his former dental office in Lynbrook and current office in Valley Stream. Arnold also prescribed controlled substances in exchange for sex acts at his home in Williston Park. The victims were not Arnold’s dental patients and the prescriptions were not for legitimate medical purposes.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Dr. Arnold faces up to 20 years in prison.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, which is comprised of agents and officers of the DEA, SCPD, Nassau County Police Department, HHS-OIG and Port Washington Police Department In addition, HSI, SCPD Human Trafficking Investigations Unit and Suffolk County Sheriff’s Office assisted with the investigation of the case.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Michael J. Bushwack is in charge of the prosecution.
The Defendant:
DR. BARRY ARNOLD
Age: 70
Willison Park, New YorkE.D.N.Y. Docket No. 21-CR-436 (GRB)
Long Island Chiropractor Settles Federal Fraud AllegationsRead the Press Release
Gary Stein, a licensed chiropractor in Levittown, New York, has paid the United States $290,197.24 to resolve civil allegations that he submitted false claims to the U.S. Department of Labor’s (DOL) Office of Workers’ Compensation Programs (OWCP) for services that he did not provide to a federal employee receiving Federal Employees Compensation Act (FECA) program benefits.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Matthew Modafferi, Special Agent-in-Charge, U.S. Postal Service, Office of the Inspector General (USPS-OIG), Jonathan Mellone, Special Agent-in-Charge, U.S. Department of Labor Office of Inspector General, New York Region (DOL-OIG), and Christopher Godfrey, Director, OWCP, announced the settlement.
“In billing for medical services he didn’t provide to his patient, the defendant defrauded a taxpayer-funded program designed to assist federal employees who are disabled by on-the-job injuries,” stated Acting U.S. Attorney Kasulis. “This Office and its law enforcement partners are committed to protecting taxpayer-funded programs from fraud and abuse.”
“The Special Agents of the U.S. Postal Service Office of Inspector General will vigorously investigate those who commit frauds against federal benefit programs and the U.S. Postal Service,” stated USPS-OIG Special Agent-in-Charge Modafferi. “I’d like to thank the U.S. Attorney’s Office and the Office of Inspector General at the U.S. Department of Labor for their continued support in our agency’s mission.”
“Investigating health care fraud offenses against U.S. Department of Labor programs is an important mission of the Office of Inspector General. We will continue to work diligently with our law enforcement partners to hold accountable those who seek to defraud DOL programs and siphon taxpayer funds for personal gain,” stated DOL-OIG Special Agent-in-Charge Mellone.
“This settlement allows OWCP to recover $290,197.24 in medical bill payments under the Federal Employees’ Compensation Act and return those funds to the U.S. Postal Service,” stated OWCP Director Godfrey. “The Department of Labor’s Office of Inspector General, as well as various other agencies’ offices of inspector general, devote significant investigative resources to detecting cases of possible abuse within the FECA program, and this settlement demonstrates the commitment of the DOL and its OIG in helping to ensure that funds issued through the program are paid appropriately.”
Certain federal employees who become disabled due to occupational injuries sustained during the performance of their official duties qualify for OWCP benefits. When health care providers bill OWCP for services rendered to FECA beneficiaries, they use Current Procedural Terminology (CPT) codes that specify what services have been provided. In doing so, they signify that the services were performed as described and properly billed in accordance with accepted industry standards. Applicable industry standards preclude billing for an extended medical appointment when a FECA beneficiary actually received only a routine service.
An investigation by the DOL-OIG and USPS-OIG revealed that, from March 6, 2014 through April 14, 2019, Stein routinely used CPT codes which falsely indicated to OWCP that he had conducted detailed examinations of the patient when in fact he had not done so. The settlement resolves potential claims that Stein’s alleged conduct violated the False Claims Act. The claims resolved by the settlement are allegations only.
The United States’ case was handled by Assistant U.S. Attorney Jolie Apicella of the Office’s Civil Division with assistance from Civil Investigator Joseph Giambalvo.
Justice Department Approves Remission of over $32 Million in Forfeited Funds to Victims in the FIFA Corruption CaseRead the Press Release
BROOKLYN, NY - The Department of Justice announced today that it will begin the process of remitting forfeited funds to FIFA, the world organizing body of soccer; CONCACAF, the confederation responsible for soccer governance in North and Central America, among other regions; CONMEBOL, the confederation responsible for soccer governance in South America; and various constituent national soccer federations (collectively, the “Victims”). The Department granted a joint petition for remission filed by the Victims, recognizing losses and granting remission up to a total of more than $201 million, of which $32.3 million in forfeited funds has been approved for an initial distribution. In total, well over the amount granted has been seized and has been or is expected to be forfeited to the United States in the Eastern District of New York as part of the government’s long-running investigation and prosecution of corruption in international soccer.
To date, the prosecutions have resulted in charges against more than 50 individual and corporate defendants from more than 20 countries, primarily in connection with the offer and receipt of bribes and kickbacks paid by sports marketing companies to soccer officials in exchange for the media and marketing rights to various soccer tournaments and events.
This announcement is the beginning of the process for returning funds to the victims of the FIFA bribery scandal and marks the Department’s continued commitment to ensuring justice for those victims harmed by this scheme.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, made the announcement.
“Today’s announcement confirms that money stolen by corrupt soccer officials and sports marketing executives through fraud and greed will be returned to where it belongs and used to benefit the sport,” stated Acting United States Attorney Kasulis. “From the start, this investigation and prosecution have been focused on bringing wrongdoers to justice and restoring ill-gotten gains to those who work for the benefit of the beautiful game. Our Office, together with our law enforcement partners, will always work to compensate victims of crime.”
“The approval of this remission of funds illegally obtained in the FIFA scandal marks another important milestone in these prosecutions and the department’s commitment to use all tools at its disposal to prosecute corruption and to deprive perpetrators of ill-gotten gains,” stated Assistant Attorney General Polite. “This remission highlights the importance of asset forfeiture as a critical tool for the recovery of criminal proceeds and the pursuit of justice.”
“Kickbacks and bribes have a way of spreading like a disease through corrupt groups; pure and simple greed keeps the graft going. Not one official in this investigation seemed to care about the damage being done to a sport that millions around the world revere. The only silver lining is the money will now help underprivileged people who need it, not the wealthy executives who just wanted it to get richer. Our work isn’t finished, and our promise to those who love the game – we won’t give up until everyone sees justice for what they’ve done,” stated FBI Assistant Director-in-Charge Driscoll.
“For years, corrupt soccer officials and greedy sports marketing executives engaged in dozens of multimillion-dollar bribe and kickback schemes,” said Special Agent-in-Charge Ryan L. Korner of the IRS-Criminal Investigation (IRS-CI). “These individuals and companies lined their pockets with millions that were supposed to be used for the development and betterment of soccer worldwide. Agents with IRS-CI and their partners at the U.S. Attorney’s Office and the FBI relentlessly pursued this corruption and seized these ill-gotten gains. Now these funds can be used as they were intended, to promote and develop the world’s most popular game.”
On May 27, 2015, an indictment was unsealed charging 14 FIFA officials and sports marketing executives with racketeering, honest services wire fraud and money laundering offenses, among others. On December 3, 2015, a superseding indictment was unsealed charging an additional 16 FIFA officials with similar crimes. Additional defendants were later charged by indictment and information. During the course of the prosecutions to date, 26 individual defendants have pleaded guilty for their roles in the charged crimes. In December 2017, two former FIFA officials, Juan Ángel Napout of Paraguay and José Maria Marin of Brazil, were convicted after trial of racketeering conspiracy and related offenses. Four corporate entities have pleaded guilty and others, including banking institutions, have acknowledged their roles in criminal conduct through deferred prosecution or non-prosecution agreements. The government’s prosecutions and investigation are ongoing.
As part of these proceedings, many of the defendants were ordered to forfeit assets obtained through their criminal activity. Under federal law, the Department of Justice has the authority to distribute the proceeds of forfeited assets through the remission process to victims of crimes, including to the soccer organizations that employed and were defrauded by the corrupt soccer executives.
FIFA, CONCACAF and CONMEBOL have committed to distributing funds received through the remission process to and through a newly created World Football Remission Fund (the “Fund”), to be established under the FIFA Foundation, an independent foundation focused on youth programs, community outreach and humanitarian needs. The terms of the Fund provide for oversight and independent audit measures to ensure remitted funds are distributed appropriately.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant U.S. Attorneys Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, Brian D. Morris, and Kaitlin T. Farrell are in charge of the prosecution and coordination of the victim remission process. The Justice Department, through the Asset Forfeiture Program, works diligently to restore lost funds to victims of crime. The victim compensation payments in the FIFA case would not have been possible without the extraordinary efforts of the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section, the FBI’s New York Field Office and the IRS-CI.
Brooklyn Business Owner Charged with Bank Fraud, Identity Theft and Witness TamperingRead the Press Release
A complaint was unsealed today in federal court in Brooklyn charging David Motovich, principal of a lumber and construction materials business, with bank fraud, aggravated identity theft and witness tampering. Motovich was arrested this morning and will make his initial appearance before United States Magistrate Judge Roanne L. Mann this afternoon.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the arrest and charges.
“As alleged, the defendant used a seemingly legitimate, family-run business as a front for engaging in a $55 million check cashing scheme that deliberately flouted federal banking and anti-money laundering laws. Further, as law enforcement was closing in on his schemes, Motovich attempted to derail the government's investigation by tampering with witnesses,” stated Acting U.S. Attorney Kasulis. “Today's arrest demonstrates that this Office will take down and vigorously prosecute defendants like Motovich, who circumvent compliance with federal financial laws out of greed, just to line his own pockets and live a life of luxury.” Ms. Kasulis also expressed her appreciation to the U.S. Attorney’s Office for the District of New Jersey for their assistance with the case.
“Federal banking laws exist to protect the industry from fraud and the general public from money laundering schemes that often further criminal activity. Motovich, as alleged, broke these laws in order to advance his own monetary interests,” stated FBI Assistant Director-in-Charge Driscoll. “To make matters worse, he’s also accused of tampering with government witnesses. Rest assured this type of illegal behavior will be aggressively pursued by the FBI and our partners.”
“The multiple schemes Mr. Motovich allegedly devised has great impact on both his clients and the United States treasury,” stated IRS-CI Acting Special Agent-in-Charge Fattorusso. “In our current environment, the services provided by federal and local governments are sorely needed. The allegations in this complaint require the financial expertise IRS-CI provides in order to unravel the complexities of such crimes.”
As alleged in the complaint, since at least 2012, Motovich has operated an illegal check cashing business from his office at his family-run lumber business located in the Midwood section of Brooklyn. The customers of Motovich’s illegal check cashing business are primarily the owners and operators of construction companies who pay their employees in cash to avoid having to pay state and federal employment taxes, including taxes owed under the Federal Income Contributions Act. As part of the scheme, Motovich cashed millions of dollars of checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between four and 10 percent. Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check cashing businesses because the customers understood that Motovich would not file Currency Transaction Reports for cash transactions in amounts greater than $10,000 or Suspicious Activity Reports, as required by federal anti-money laundering statutes. Motovich supplied his check cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.
In furtherance of his scheme, Motovich created shell companies for the sole purpose of facilitating his illegal check cashing business and instructed his customers to issue checks drawn against their business accounts and make the checks payable to one of the companies. Motovich then deposited the checks into bank accounts that he created at several financial institutions. To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.
In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus luxury vehicles; pay premiums on multi-million dollar life insurance policies for himself, his wife and others; make renovations to his penthouse apartment; and to fund other business ventures.
When Motovich became aware of the government’s investigation, he tampered with witnesses by encouraging them not to cooperate with the government, including encouraging them to fire their attorneys and retain attorneys that he had handpicked for them, and by paying at least one witness and that witness’s family members so that the witness would not cooperate with law enforcement.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni, Erik Paulsen and Kaitlin T. Farrell are in charge of the prosecution, with assistance from EDNY Special Agents George Dietz and Martin Sullivan.
The Defendant
DAVID MOTOVICH
Age: 46
New York, New YorkE.D.N.Y. Docket No. 21-MJ-979
Former FIFA Official Pleads Guilty to Racketeering ConspiracyRead the Press Release
Earlier today, in federal court in Brooklyn, Reynaldo Vasquez, the former president of the El Salvadorean soccer federation (the “Federation”), pleaded guilty to racketeering conspiracy in connection with his participation in schemes to accept hundreds of thousands of dollars in bribes and kickbacks. Part of the money Vasquez received was wired through a U.S. bank account. Vasquez also agreed to forfeit $360,000 and multiple bank accounts. When sentenced, Vasquez faces a maximum sentence of 20 years in prison. Today’s plea proceeding took place via videoconference before United States District Judge Pamela K. Chen.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles (IRS-CI), announced the guilty plea.
“With today’s guilty plea, Vasquez admits to engaging in a decades-long racketeering conspiracy to accept hundreds of thousands of dollars in bribes and kickbacks that corrupted the game of soccer,” stated Acting United States Attorney Kasulis. “Together with our law enforcement partners, this Office is committed to rooting out fraud and corruption in international soccer and to protecting the integrity of the U.S. financial system.”
“From the beginning of this intense and sprawling investigation, our goal has been to root out corrupt officials who thought no one noticed their illegal activities,” stated FBI Assistant Director-in-Charge Driscoll. “Mr. Vasquez didn’t achieve his dream of wealth and power, and now he faces the possibility of many years in federal prison. Today's plea should demonstrate to others who attempt to corrupt international soccer - we play to win.”
“Today’s guilty plea is the culmination of years of investigative work by IRS-CI Agents and their law enforcement partners,” stated IRS-CI Special Agent-in-Charge Korner. “Over a period of many years, Reynaldo Vasquez corrupted the business of international soccer by requesting hundreds of thousands of dollars in bribes and kickbacks. IRS CI is committed to ending these practices and bringing corrupt officials to justice.”
According to court filings and facts presented during the plea proceeding, Vasquez and his co-conspirators participated in and corrupted an enterprise comprising soccer organizing bodies and sports marketing companies. As part of his association with that enterprise, Vasquez and others solicited and received bribes and kickbacks in exchange for awarding lucrative media and marketing contracts. In 2012, Vasquez, together with other current and former officials of the federation, received approximately $350,000 in bribes in connection with the sale of media and marketing rights to El Salvador World Cup qualifying matches to be played in advance of the 2018 World Cup. This bribe payment was wired from a sports marketing company’s bank account in the United States. Vasquez ultimately received a portion of his bribe money through a wire transfer sent through the United States. In 2014 and 2015, Vasquez and others agreed to receive tens of thousands of dollars in bribes in connection with the participation of the Salvadorean national team in friendly matches to be played in the United States. Vasquez was extradited from El Salvador to the United States on January 29, 2021.
The guilty plea announced today is part of a long-running investigation into corruption in international soccer led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. To date, the prosecution has resulted in 27 individual guilty pleas, 4 corporate guilty pleas, and 2 convictions at trial, among other resolutions. The prosecutors in Brooklyn have received considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.Assistant U.S. Attorneys Samuel P. Nitze, Keith D. Edelman, Kaitlin T. Farrell, Patrick T. Hein, Victor Zapana and Brian D. Morris of the Eastern District of New York are in charge of the prosecution.
Defendant:
REYNALDO VASQUEZ
Age: 65
El SalvadorE.D.N.Y. Docket No. 15-CR-252 (S-3) (PKC)
Brooklyn Federal Jury Convicts U.S. Citizen of Attempting to Provide Material Support to ISISRead the Press Release
Earlier today, a federal jury in Brooklyn convicted Bernard Raymond Augustine, a U.S. citizen and California resident, of attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS” or “the Islamic State”). The verdict followed a one-week trial before United States District Judge Sterling Johnson, Jr. When sentenced, Augustine faces up to 20 years in prison.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Mark J. Lesko, Acting Assistant Attorney General of the Justice Department’s National Security Division, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the verdict.
“The defendant’s unvarnished testimony at trial demonstrates his ongoing support for ISIS and its glorification of barbaric acts of terrorism, including attacks on U.S. soldiers, the enslavement of Yazidi women and mass killings, which he described as ‘cool,’” stated Acting U.S. Attorney Kasulis. “Today’s guilty verdict underscores the strong commitment of this Office and its law enforcement partners to combatting terrorism and protecting the United States from potentially dangerous threats to its national security.”
The evidence at trial established that in February 2016, the defendant traveled from San Francisco, California to Northern Africa, with the goal of joining ISIS, a designated foreign terrorist organization. In the months leading up to his travel, the defendant watched ISIS propaganda, including videos glorifying ISIS’s violence, such as “The Flames of War.” The defendant conducted internet searches for, among other things, “how to safely join ISIS,” and reviewed websites related to ISIS recruitment practices, including one titled “How does a Westerner join ISIS? Is there a recruitment or application process?”
Augustine also posted numerous statements in support of ISIS and violent extremism on the internet. He posted statements such as “the Islamic State is the true Islam,” “Muslims who leave the west . . . answer the call for the struggle, and march until they are victorious or martyred are the true believers,” and the ISIS caliphate “can’t be established and maintained except through the blood of the mujahideen who practice the true belief.”
Augustine then purchased a one-way airplane ticket and traveled to Tunisia so that he could present himself as a willing participant in ISIS’s terrorist activity. After arriving in Tunisia, Augustine was detained by local authorities before he could make it to ISIS-controlled territory across the border in Libya. He was subsequently returned to the United States in 2018, where he was brought to the Eastern District of New York for prosecution.
Augustine represented himself at trial with the assistance of standby counsel. The defendant took the witness stand in his own defense and his testimony included the following statements:
- “I just want to tell the jury that I do not regret my decision, I’m proud of my decision and if I could go back and start over I would do it again, and if I became a free man tomorrow I would do it again, I would leave and I would do that again. I have no regrets about it and I’m proud of it. And I believe that all Muslims must immigrate to the Islamic State upon its establishment, especially ones living in the west.”
- Augustine testified that he was aware that Islamic State fighters slaughtered members of the Yazidi ethnic group, and that he understood that the Islamic State enslaved Yazidi women.
- Augustine described the Islamic State propaganda film “Flames of War,” which he acknowledged contains mass killings, as “a really cool video. You should watch the whole thing.”
- Augustine testified that Islamic State propaganda showing holy warriors fighting and engaging in martyrdom and suicide bombings was “cool” and “hell, yeah, it was cool.”
he government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Craig R. Heeren, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorneys Phil Viti and George Kraehe of the Counterterrorism Section of the Department of Justice. The Justice Department’s Office of International Affairs provided assistance.
The Defendant:
BERNARD RAYMOND AUGUSTINE
Age: 25
Keyes, CaliforniaE.D.N.Y. Docket No. 18-CR-383 (SJ)
Queens Man Pleads Guilty to Posting Threats to Kill Members of Congress and Illegally Possessing AmmunitionRead the Press Release
Earlier today, in federal court in Brooklyn, Eduard Florea pleaded guilty before United States Chief Magistrate Judge Cheryl L. Pollak to one count of transmitting threats to injure and one count of possessing ammunition after having been convicted of a felony. When sentenced, Florea faces up to 15 years in prison.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Jacqueline Maguire, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“With today’s guilty plea, Florea admits to threatening the life of a successful candidate for the U.S. Senate and to urging others to take up arms to unleash violence at the Capitol on January 6, 2021 to thwart the results of the Presidential election.” stated Acting U.S. Attorney Kasulis. “This Office is deeply committed to protecting our democratic institutions and to using all available tools to preserve the public safety, uphold the rule of law and support the peaceful transfer of power.”
As set forth in the court filings and today’s proceeding, Florea posted threatening statements online about killing elected officials, including now-United States Senator Raphael Warnock and committing other acts of violence in Washington, D.C. in connection with the certification of the results of the 2020 Presidential Election. For example, on January 5, 2021, at approximately 8:40 p.m., Florea posted, “We need to all come to an agreement . . . and go armed . . . and really take back Washington.” A few minutes later, Florea posted, “Tomorrow may very [well] be the day war kicks off . . .” At 11:53 p.m. the same day, Florea posted, “Warnock is going to have a hard time casting votes for communist policies when he’s swinging with the f***ing fish.” In the early morning hours of January 6, 2021, at approximately 12:42 a.m., Florea referenced Senator Warnock and stated, “Dead men can’t pass sh*t laws . . .”
On January 6, 2021, after the assault on the United States Capitol had begun, Florea posted that he intended to travel to Washington, D.C. as part of a group armed with firearms ready to engage in additional violence. Between approximately 2:00 p.m. and 6:00 p.m.—while the Capitol was under siege—Florea posted the following messages, among others:
- “Mine are ready….I am ready…. we need to regroup outside of DC and attack from all sides… talking to some other guys….I will keep watching for the signal.”
- “I am awaiting my orders…armed and ready to deploy….”
- “Guns cleaned loaded . . . got a bunch of guys all armed and ready to deploy . . . we are just waiting for the word”
- “There 3 car full of armed patriots heading in from NY….”
- “Me and some guys are gearing up to head in. . . . where are you . . . 3 cars already are enroute . . . .all armed.”
- “It’s time to unleash some violence.”
On January 12, 2021, FBI Special Agents and Task Force Officers with the New York Joint Terrorism Task Force executed a search warrant at Florea’s home in Middle Village, Queens. The search revealed that Florea, who had been previously convicted of a New York state firearms-related felony, illegally possessed more than 1,000 rounds of ammunition.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Francisco J. Navarro and Andrew P. Wenzel are in charge of the prosecution.
The Defendant:
EDUARD FLOREA
Age: 41
Queens, New YorkE.D.N.Y. Docket No. 21-CR-037 (EK)
Member of Brooklyn-Based “KavKaz Nation” Crime Syndicate Indicted for Extortion and Other ChargesRead the Press Release
A five-count indictment was filed yesterday in federal court in Brooklyn charging Roman Nikoghosyan, a member of a violent, Brooklyn-based Eurasian organized crime syndicate that operated primarily in the Manhattan Beach and Brighton Beach neighborhoods, with two counts of Hobbs Act extortion conspiracy, one count of Hobbs Act extortion, interstate transportation of stolen property and being a convicted felon in possession of a firearm. Nikoghosyan was arrested in Los Angeles, California on July 20, 2021 and ordered detained pending trial. He will be arraigned in the Eastern District of New York at a later date.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Jacqueline Maguire, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the indictment.
“As alleged, the defendant is an extortionist who uses threats of violence and intimidation to coerce his victims into making extortionate payments to him for refusing to participate in his life of crime, which also includes illegally possessing a Hi-point 995 rifle despite his having a prior felony conviction,” stated Acting United States Attorney Kasulis. “Together with our law enforcement partners, this Office is working tirelessly to dismantle violent criminal organizations like KavKaz that threaten the safety of communities in the Eastern District.” Ms. Kasulis thanked the FBI and NYPD for their contributions to date in the investigation.
“Crime syndicates thrive on creating a deep fear in the communities where they operate, and members of these syndicates instill this fear through a range of criminal tactics to include violence, extortion, and narcotics trafficking,” stated FBI Assistant Director-in-Charge Maguire. “Forcing someone against their will to transport drugs through threats of violence, as alleged done by the defendant, is criminal behavior. Our FBI Eurasian Organized Crime Task Force, together with our NYPD partners, have made great strides in ridding local neighborhoods of these violent offenders, and we won’t stop our pursuit of them until they are stopped.”
“The NYPD remains vigilant in its work to prevent the violence so often associated with gangs and crews that tear at the fabric of life in New York. I commend our NYPD investigators, federal partners and prosecutors in the United States Attorney’s Office in the Eastern District of New York for their relentless work in this case,” stated NYPD Commissioner Shea.
As set forth in court filings, KavKaz is a criminal enterprise that operates in the Eastern District of New York and elsewhere, with Brooklyn as its largest base of operation. Members of KavKaz refer to their membership as the “KWAY” or “K WAY,” and often wear jewelry or articles of clothing emblazoned with the word “KavKaz.” Brooklyn-based members of KavKaz draw on ties to the Caucus region of Eurasia, namely Armenia, Uzbekistan, parts of Southern Russia and Azerbaijan, in furtherance of accomplishing their criminal goals, including extortion and narcotics trafficking.
In early 2021, Nikoghosyan was operating a narcotics distribution scheme in which he employed the victim of one of his extortionate schemes to transport packages containing marijuana. When the victim discovered the illicit content of the packages and refused to continue distributing the narcotics, Nikoghosyan, with the assistance of coconspirators, demanded $10,000 in extortionate payments from the victim, threatening to stab him or break his legs if he did not comply.
In addition, Nikoghosyan and co-conspirators plotted to transport luxury vehicles acquired by fraud from California to New York. Finally, Nikoghosyan, having been previously convicted of a felony, was charged with possessing a firearm, a Hi-point 995 rifle found during the execution of a search warrant on July 20, 2021 at a stash house in Brooklyn that was allegedly used by Nikoghosyan. During that search, law enforcement also recovered ammunition and a quantity of marijuana.
The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Matthew Galeotti and Dana Rehnquist are in charge of the prosecution.
The Defendants:
ROMAN NIKOGHOSYAN
Age: 32
Brooklyn, New YorkE.D.N.Y. Docket No. 21-cr-421 (RJD)
Produce Importer Sentenced in Brooklyn Federal Court to 13 Years’ Imprisonment for Conspiring to Import Cocaine in a Shipment of Chili PeppersRead the Press Release
Earlier today, in federal court in Brooklyn, Humberto Baez, a produce importer based in Pennsylvania, was sentenced by United States District Judge Allyne R. Ross to 13 years’ imprisonment for conspiring to import and distribute cocaine, and for possessing with intent to distribute cocaine. Baez was convicted by a jury in February 2019 following a two-week trial before the late United States District Judge Jack B. Weinstein.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today’s sentence demonstrates that this Office and its law enforcement partners are committed to stopping the flow of dangerous drugs into this country and to bringing drug traffickers like Baez to justice,” stated Acting United States Attorney Kasulis. Ms. Kasulis expressed her grateful appreciation to the New York Organized Crime Drug Enforcement Strike Force for their work on the long-term investigation, the DEA’s Santo Domingo Country Office (SDCO) and the Sensitive Investigative Unit (SIU) for their assistance.
“Concealing drug shipments with produce is one way drug traffickers try to elude law enforcement. This cat and mouse game evolves over time resulting in law enforcement recovering drugs in various places; such as inside coconuts, wheelchairs, animals, people, tombstones, etc. just to name a few. I applaud the members of the New York Strike Force and the U.S. Attorney’s Office Eastern District of New York for their dedicated work throughout this investigation,” stated DEA Special Agent-in-Charge Donovan.
“By conspiring to import cocaine hidden in a carton of chili peppers, Humberto Baez was fueling a violent trade that victimizes New Yorkers. His conviction and sentencing today sends a clear message that the NYPD and our law enforcement partners will stop at nothing to track these kinds of schemes and protect the public from the impact of illegal narcotics,” stated NYPD Commissioner Shea.
Between August 2016 and March 2018, Baez conspired with others to import cocaine hidden inside a shipping container into the United States. Baez had contacted an importing company to use as a front to transport cocaine from Baez’s source of supply in the Dominican Republic. Baez and his co-conspirators then arranged for two “dry run” shipments containing only produce into the Red Hook Terminal in Brooklyn to establish the appearance of a legitimate business relationship between the exporter and importer, thereby avoiding scrutiny when subsequently shipping cocaine. In late February 2018, a third shipment arrived in Miami, Florida with approximately 16 kilograms of cocaine concealed in the flaps of cardboard boxes containing chili peppers. Baez relayed information that a third shipment contained “ripe tomatoes,” using agreed upon code words for cocaine that would be transported by truck to Baez’s warehouse in Pennsylvania. On March 1, 2018, members of law enforcement searched the container and seized the hidden cocaine.
The Strike Force is a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the New York/New Jersey High Intensity Drug Trafficking Area. It is housed at the DEA’s New York Division and includes agents and officers of the DEA; the NYPD; the New York State Police; HSI; the U.S. Internal Revenue Service Criminal Investigation Division; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; the U.S. Marshals Service; New York National Guard; the Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nomi D. Berenson and Erin M. Reid are in charge of the prosecution.
The Defendant:
HUMBERTO BAEZ
Age: 52
Lancaster, PennsylvaniaE.D.N.Y. Docket No. 18-CR-168 (S-1) (ARR)
Four Defendants Arrested in Multimillion-Dollar Counterfeit Goods Trafficking SchemeRead the Press Release
A 14-count indictment was unsealed yesterday in federal court in Brooklyn charging seven defendants with participating in a counterfeit goods scheme in which they imported generic goods into the United States from China, applied brand labels to those goods in workshops, some of which were controlled by the defendants, and then sold those counterfeit-branded goods to retail and wholesale purchasers. The charges against the defendants include conspiracy to traffic and trafficking in counterfeit goods and money laundering. Four defendants were arraigned yesterday before United States Magistrate Judge Sanket J. Bulsara and each was released on a $200,000 bond. Three additional defendants remain at large.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Dermot Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and indictment.
“As alleged, the defendants trafficked in counterfeit merchandise that they fraudulently branded as genuine to pass off to purchasers in the United States at a purported retail value of more than $130 million,” stated Acting United States Attorney Kasulis. “This Office and its law enforcement partners are committed to protecting consumers from paying retail prices for phony merchandise and to holding defendants accountable for their greed.” Ms. Kasulis extended her grateful appreciation to the HSI Intellectual Property Group, the HSI Border Enforcement Security Task Force and the NYPD. Ms. Kasulis also extended her thanks to U.S. Customs and Border Protection for its assistance.
“HSI New York’s Border Enforcement Security Taskforce stands at the forefront of the fight against criminal organizations who identify weaknesses in our supply chain and infiltrate them for their personal financial gain,” stated HSI Special Agent-in-Charge Fitzhugh. “In addition to their detrimental effect to our economy, counterfeiting networks such as this one poses a threat to our national security and public safety by introducing products that often contain harmful materials and substances. HSI and CBP are uniquely positioned to combat these organizations and, along with our partners at the New York City Police Department, will work tirelessly to protect New York City and the Homeland.”
As alleged in the indictment, between October 2019 and July 2021, the defendants participated in an international scheme to traffic counterfeit goods. The defendants first imported the goods in generic form from China into the Port of New York and New Jersey. The goods were then delivered to workshops and storage facilities controlled by some of the defendants in Queens and on Long Island. In those workshops, insignias, emblems, trademarks and other brand signifiers were applied to the generic goods, converting them into purported brand name merchandise. These counterfeit goods were then sold as a part of the scheme directly to consumers and to wholesale buyers. The estimated retail value of the counterfeit-branded goods, had they been genuine, was in excess of $130 million.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Dylan A. Stern and Benjamin L. Weintraub are in charge of the prosecution. Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters in the case.
The Defendants:
HAI LONG ZHOU (also known as “Zangkun Zhou”)
Age: 53
Queens, New YorkSAIYIN HOU
Age: 25
Brooklyn, New YorkYAN XUE HUANG (also known as “Yan Xue Zhou” and “Yan Xue Li Ming”)
Age: 50
Queens, New YorkJIAN FEN YANG
Age: 57
Queens, New YorkE.D.N.Y. Docket No. 21-CR-417 (SJ)
Former Suffolk County District Attorney Thomas J. Spota and Government Corruption Bureau Chief Christopher McPartland Each Sentenced to Five Years in PrisonRead the Press Release
Former Suffolk County District Attorney Thomas J. Spota and Christopher McPartland, the former Chief of Investigations and Chief of the Government Corruption Bureau of the Suffolk County District Attorney’s Office (SCDAO), were each sentenced today by United States District Judge Joan M. Azrack, to five years in prison. Additionally, Spota was ordered to pay a $100,000 fine.
The sentences stem from the defendants’ December 17, 2019 convictions, following a six-week federal jury trial, on all four counts of the Indictment; specifically, of conspiracy to tamper with witnesses and obstruct an official proceeding, witness tampering, obstruction of justice, and being accessories after-the-fact to former Suffolk County Police Department (SCPD) Chief of Department James Burke’s deprivation of a prisoner’s civil rights.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Jacqueline Maguire, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentences.
“When a sitting District Attorney and one of his top prosecutors are corrupt and use their power to intimidate witnesses and cover up a brutal assault by a high-ranking law enforcement official, they not only jeopardize the safety of citizens who are entitled to the protection of the law, they also undermine confidence in the integrity and fairness of our criminal justice system,” stated Acting U.S. Attorney Kasulis. “Instead of serving the people of Suffolk County, these defendants brazenly abused their exceptional positions of power and public trust to protect their friends and hurt their enemies. With today’s sentences, justice has been served and the defendants have learned the consequences of their crimes, just like anyone else who has broken the law. I commend the tenacity and skill of this Office's prosecutors and the FBI special agents in toppling the defendants from their undeserved positions of prominence and in holding them to account for their reprehensible violations of the public trust.”
“With great power comes great responsibility – and, as we’ve proven throughout the course of this investigation, Mr. Spota and Mr. McPartland abused their power to skirt their responsibility to comply with a federal civil rights investigation. They placed fear of retaliation inside the minds of those who may otherwise have been willing to cooperate, and they interfered with efforts of federal investigators who were trying to get to the bottom of a heinous crime. Their behavior was outrageous, and their sentences today prove as much. There is absolutely no place for this type of behavior within our criminal justice system. Those who abuse their power and subject others to cruel and unnecessary punishment must be removed from serving in any official capacity and must pay the price for their conduct. Only then, and with today's sentences, the earned trust and confidence of the citizens of Suffolk County can be justly restored, stated FBI Acting Assistant Director-in-Charge Maguire.
In December 2012, then-Chief of the SCPD, James Burke – the highest-ranking uniformed police official in Suffolk County – physically and verbally assaulted a shackled prisoner, Christopher Loeb, who was under arrest and being held in an interrogation room at the 4th Precinct in Hauppauge, New York. Loeb had broken into Burke’s official police vehicle and stolen his gun belt and ammunition, and a duffel bag containing cigars, sex toys, prescription Viagra and pornography. After the assault, Burke ordered high-ranking lieutenants of the SCPD to ensure that the detectives and officers who had witnessed the assault would never reveal what they had observed. Burke also enlisted the help of his long-time mentor, then-District Attorney Spota, and McPartland, his personal friend and then-Chief of both Investigations and the Government Corruption Bureau, to ensure that the witnesses kept quiet. Having served as the Suffolk County D.A. for over a decade, Spota had successfully helped Burke avoid legal trouble regularly during their decades-long friendship. McPartland, who worked directly under Spota, also had built a close friendship with Burke, and was the first person who Burke called the morning he discovered that his vehicle had been burglarized.
A federal grand jury investigation into the Loeb assault as a civil rights deprivation was opened by the U.S. Attorney’s Brooklyn Office, with the assistance of the FBI, in the spring of 2013. Burke, Spota and McPartland used the power and influence of their official positions, and the threat of retaliatory arrest and prosecution, to keep anyone from cooperating with that investigation. Because of their obstructive efforts, the federal investigation was unsuccessful and was closed approximately eight months later. Local law enforcement eyewitnesses had been frightened into silence, as they feared retaliation against themselves and their families from within the Suffolk County Police Department and the District Attorney’s Office. Approximately one year later, prosecutors from U.S. Attorney’s Long Island Criminal Division reopened the investigation. As certain key witnesses were then compelled to testify before the grand jury under a grant of immunity, the truth about Burke assaulting Loeb finally emerged.
Burke pleaded guilty to a civil rights violation and conspiracy to obstruct justice in February 2016 and was sentenced to 46 months’ imprisonment. Spota and McPartland both resigned from the District Attorney’s Office in light of the charges against them and have since been disbarred.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann, Lara Treinis Gatz, Justina L. Geraci and Michael R. Maffei are in charge of the prosecution.
The Defendants:
THOMAS J. SPOTA
Age: 79
Mount Sinai, New YorkCHRISTOPHER McPARTLAND
Age: 55
Northport, New YorkE.D.N.Y. Docket No. 17-CR-587 (JMA)
11 Members and Associates of the Folk Nation Gangster Disciples Charged with Multiple Shootings and Related Firearms Offenses in BrooklynRead the Press Release
A 20-count superseding indictment was unsealed today in federal court in Brooklyn charging Oluwagbenga Agoro, Lorenzo Bailey, Quincy Battice, Davon Brown, Hans Destine, Jean Fremont, Ricardo Hepburn, McKoy Lima, Triston Lawrence, Deryck Thompson and Michael Williams with violent crimes in-aid-of racketeering — including attempted murder and related firearms offenses. As alleged in the indictment, the defendants are members and associates of the Folk Nation Gangster Disciples, also known as “GD.” Bailey, Destine, Fremont, and Thompson are leaders of the No Love City (“NLC”) subset of GD, with Destine and Fremont serving on NLC’s five-member “Steering Committee” — its top leadership. Additionally, during the execution of search warrants this morning, investigators recovered three firearms at Destine’s residence, one firearm at Lawrence’s residence, one from Thompson’s residence and one from Bailey’s residence in Georgia.
Destine, Fremont, Hepburn, Lawrence, Lima, Thompson and Williams were arrested this morning in Brooklyn and are scheduled to be arraigned this afternoon before United States Magistrate Judge Sanket J. Bulsara. Bailey and Battice were arrested this morning in Atlanta, Georgia, and are scheduled to be arraigned this afternoon before United States Magistrate Judge Catherine M. Salinas at the federal courthouse in Atlanta. Agoro and Brown were already in federal custody on prior charges and will be arraigned at a later date.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Jacqueline Maguire, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Eric Gonzalez, District Attorney, Kings County District Attorney’s Office (KCDA), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and charges.
“As the indictment makes clear, violent street gangs like the Folk Nation Gangster Disciples can commit a shocking amount of violence and inflict a tremendous amount of harm, which endangers entire communities if left unchecked,” stated Acting United States Attorney Kasulis. “This Office and its federal, state and local law enforcement partners will spare no effort in targeting and prosecuting violent individuals and street gangs that intentionally wreak havoc in our communities by possessing and wantonly discharging loaded weapons with no regard for human life. Street gangs in Brooklyn should be on notice that we will use every resource available to rid our communities of this needless violence.” Ms. Kasulis expressed her grateful appreciation to the FBI/NYPD Metro Safe Streets Task Force, the NYPD’s Gun Violence Suppression Division, and the Kings County District Attorney’s Office for their outstanding work and assistance in this investigation and prosecution.
“Two gang takedowns over the past two days demonstrates our commitment to pursue the violent criminals who choose to terrorize our communities,” stated FBI Acting Assistant Director-in-Charge Maguire. “The litany of crimes we allege in this case is demonstrative of the fear and frustration facing far too many New York City communities. Our work through the FBI/NYPD Metro Safe Streets Task Force will continue relentlessly until residents can feel safe again.”
“This important takedown is part of our multi-pronged and ongoing strategy of focusing on the most violent offenders in our community, who are largely responsible for the surge in shootings we experienced last summer. With today’s arrests, leaders of a dangerous street gang have been incapacitated, which I believe will have a positive impact on public safety in Brooklyn. I’m grateful to the U.S. Attorney’s Office, the FBI, the NYPD and my prosecutors for their outstanding work on this investigation. We will continue to work together in partnership and use every law enforcement resource available to us to help drive down gun and gang violence,” stated KCDA Gonzalez.
“Targeting and dismantling gangs and crews, and preventing the violence so often associated with their illegal activities, continues to be among the highest priorities for the NYPD and our law enforcement partners. We remain relentless in our efforts to identify, arrest, and prosecute anyone who involves themselves in violence on our streets,” stated NYPD Commissioner Shea.
As alleged in the indictment and other court filings, the charges relate to seven non-fatal shootings committed in Brooklyn over the course of 2020 in which six individuals were wounded.
The March 14, 2020 Shooting
As alleged, on March 14, 2020, Brown was involved in the shooting of a victim for perceived disrespect towards GD. An individual with the victim threw a drink inside the Gold Room Restaurant and Lounge in Prospect Lefferts Gardens, splashing a person standing with Brown. An argument ensued, and the victim, a Crips gang member, flashed a gang sign known as “dropping the rake” — a gesture intended to be insulting to GD. The argument continued outside the bar where Brown displayed a gun and fired a shot into the air. Brown then handed the gun to a coconspirator who walked behind the victim and shot the victim in the buttocks at close range. The gun was recovered by law enforcement and Brown’s DNA was found on the weapon.
The July 24, 2020 Shooting
As alleged, on July 24, 2020, Michael Williams was involved in the shooting of two individuals in Prospect Park South. On the previous evening, a member of GD had been shot and Williams and others took him to the hospital. After leaving the hospital, Williams and other members of GD retaliated against the Crips gang by driving to an area of Brooklyn they believed to be Crip territory where Williams and another gunman opened fire into a crowd of people, wounding two victims in the knee and chest.
The August 2, 2020 Shooting
On August 2, 2020, Lawrence allegedly shot at a Crips gang member in Prospect Lefferts Gardens. Prior to the shooting, the intended target of the shooting had been walking through a part of Prospect Lefferts Gardens known as GD territory while broadcasting himself on Instagram Live mocking GD. Immediately after the shooting, Lawrence sent an encrypted message to Brown using the Telegram encrypted application stating that he had just “boomed at” the intended target.
The November 2020 Shootings
As alleged, on November 7 and 9, 2020, Agoro, Bailey, Battice, Destine, Fremont, Hepburn, Lima and Thompson engaged in four separate drive-by shootings in Canarsie, Prospect Park South, and Brownsville, during which three victims were wounded. In the first November 7 shooting, Agoro, Bailey, Battice, Fremont and Thompson drove to Canarsie, where they shot at a group of individuals. The defendants then drove back to Thompson’s residence, before setting out again for a second shooting in Canarsie, during which two individuals were wounded in their legs. On November 9, 2020, Agoro, Destine, Hepburn and Thompson drove to Prospect Park South, where they shot at a group of individuals but did not hit anyone. Later that same day, Agoro, Fremont, Hepburn, Lima and Thompson drove to Brownsville for another shooting, where one victim was shot in the shoulder and grazed in her back.
These indictments are part of a coordinated effort to dismantle the Brooklyn sets of GD and their leadership by federal and state authorities, including the United States Attorney’s Office for the Eastern District of New York, the KCDA, the Joint FBI-NYPD Safe Streets Task Force, and the NYPD’s Gun Violence Suppression Division. As part of the federal-state initiative, the United States Attorney’s Office for the Eastern District of New York and the KCDA have brought multiple prosecutions against members and associates of GD.
The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.
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 and Kayla C. Bensing along with Special Assistant United States Attorneys Gillian DiPietro and James Slattery are in charge of the prosecution.
The Defendants:
OLUWAGBENGA AGORO (also known as “Gee Banga”)
Age: 21
Brooklyn, New YorkLORENZO BAILEY (also known as “Renzo” and “St. Clair Bailey”)
Age: 32
Brooklyn, New YorkQUINCY BATTICE (also known as “Hush Dinero” and “George Ayala”)
Age: 32
Brooklyn, New YorkDAVON BROWN (also known as “Chico Dinero”)
Age: 27
Brooklyn, New YorkHANS DESTINE (also known as “YL Flocks”)
Age: 30
Brooklyn, New YorkJEAN FREMONT (also known as “Juno” and “Bigga Twirl”)
Age: 30
Brooklyn, New YorkRICARDO HEPBURN (also known as “Riko Floxks”)
Age: 19
Brooklyn, New YorkTRISTON LAWRENCE (also known as “Birdy Flock”)
Age: 27
Brooklyn, New YorkMcKOY LIMA (also known as “Mak”)
Age: 26
Brooklyn, New YorkDERYCK THOMPSON (also known as “Benzo,” “DBenzo” and “Kenzie”)
Age: 22
Brooklyn, New YorkMICHAEL WILLIAMS (also known as “Mikey Floxks” and “Mikey Gzz”)
Age: 19
Brooklyn, New YorkE.D.N.Y. Docket Nos. 20-CR-293 (S-1) (WFK)
Members of Brooklyn-Based “Ninedee Gang” Indicted for Racketeering and the Murder of a Former Federal WitnessRead the Press Release
Earlier today, a nine-count superseding indictment was unsealed in federal court in Brooklyn charging four members of the Ninedee Gang, a violent street gang based at the Louis H. Pink Houses (“Pink Houses”) in East New York, with racketeering, murder in-aid-of racketeering, drug trafficking, firearms offenses and robbery. The new charges were announced against defendants Quintin Green, Chayanne Fernandez, Maliek Miller and Kevin Wint. Green and Wint were arrested this morning and will be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. Fernandez and Miller were already in federal custody as a result of prior charges and will be arraigned at later date.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Jacqueline Maguire, Acting Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and charges.
“It is our hope that today’s charges against members of the Ninedee Gang bring some solace to the family of Shatavia Walls as we seek justice for her senseless, cold-blooded murder,” stated Acting United States Attorney Kasulis. “This Office and its law enforcement partners are committed to ending the brutality that violent gangs so wantonly inflict on citizens in our communities. I commend the FBI special agents and the NYPD detectives for their relentless investigative work on the case.”
“This investigation serves as a warning to criminals who behave as if there are no consequences to their actions. We have the ability in the federal criminal justice system to put these violent gang members away for a long time, and we will persist in our efforts to get them off the streets. Our outstanding partnership with the NYPD allows us to pursue the most violent and persistent offenders and hold them accountable for their blatant disregard for human life and safe communities,” stated FBI Acting Assistant Director-in-Charge Maguire.
“The NYPD remains committed to providing every resource possible to dismantling the violent gangs and crews that prey on New Yorkers. I commend our police investigators and the prosecutors in the United States Attorney’s Office for the Eastern District of New York for leading us to justice with this federal indictment,” stated NYPD Commissioner Shea.
As detailed in the superseding indictment and court filings, the Ninedee Gang is a criminal enterprise operating in East New York, Brooklyn. The gang’s leaders, including Wint, promoted the gang on social media and in rap videos, highlighting its violence, drug sales and fraudulent activities.
The plan to kill Walls was allegedly hatched by Green, Fernandez, Miller and others following a dispute on the Fourth of July 2020 over the lighting of fireworks. During a confrontation with the victim, Miller called her a “snitch” and fired a gunshot into the air. Walls had been called as a government witness one year earlier during a federal criminal trial in Brooklyn and testified that she had been shot by another Pink Houses gang member.
On the evening of July 7, 2020, Ninedee Gang members, including Green and a juvenile male, opened fire on Walls as she walked through a courtyard at the Pink Houses. Walls was shot multiple times and succumbed to the gunshot wounds on July 17, 2020. Ballistic evidence recovered from the scene of the fatal shooting showed that one of the handguns used to kill Walls matched the firearm used by Miller on the Fourth of July. In the days following Walls’ murder, the defendants posted on Facebook a newspaper article about the murder and claimed credit on behalf of the Ninedee Gang.
Additionally, Green is charged with the Hobbs Act robbery of a Target store on Staten Island on November 3, 2020; Wint with access device fraud; Fernandez, Miller and Wint with conspiracy to distribute marijuana; and Green, Fernandez and Miller with unlawful use and possession of firearms.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted of murder in-aid-of racketeering, Green, Fernandez and Miller face a mandatory sentence of life imprisonment and are eligible for the death penalty. If convicted of racketeering, Wint faces up to 20 years’ imprisonment, and up to 15 years’ imprisonment for accessory after the fact to Walls’s murder.
The government’s case is being handled by the Office’s Organized Crime and Gang Section. Assistant United States Attorneys James P. McDonald and Emily J. Dean are in charge of the prosecution.
The Defendants:
QUINTIN GREEN (also known as “Wild Child”)
Age: 20
Brooklyn, New YorkCHAYANNE FERNANDEZ (also known as “White Boy”)
Age: 21
Brooklyn, New YorkMALIEK MILLER (also known as “Leak”)
Age: 27
Brooklyn, New YorkKEVIN WINT (also known as “Kev G”)
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-331 (S-1) (LDH)
Long Island Gang Member Pleads Guilty to Firearm-Related Murder in Connection with Shooting Death in RiverheadRead the Press Release
Earlier today, in federal court in Central Islip, Jason Langhorn, a member of the “Lowrider Brims” subset of the Bloods and an associate of the “Red Stone Gorilla” subset of the Bloods, a violent criminal enterprise operating in Riverhead, New York, pleaded guilty to firearm-related murder for his role in the slaying of Thomas Lacolla on November 17, 2015, while attempting to kill another rival of the gang. The proceeding was held before United States Magistrate Judge A. Kathleen Tomlinson.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“As a result of the outstanding and tireless work by members of the Federal Bureau of Investigation, Long Island Gang Task Force, the Suffolk County East End Drug Task Force, the Riverhead Police Department and the Suffolk County Police Department, Homicide Squad, Langhorn has been held accountable for his role in an act of senseless gang violence that resulted in a man’s death,” stated Acting United States Attorney Kasulis. “It is our hope that today’s guilty plea brings a measure of closure to the victim’s family.”
According to court filings and facts presented during the plea proceeding, on November 17, 2015, Langhorn, along with two other members of the Bloods, went to a location in the Riverside section of Riverhead looking to kill a rival gang member. They sprayed 39 shots from three firearms, including an assault rifle, into a vehicle they believed was occupied by the rival gang member, but instead was occupied by Lacolla, who was killed in the fusillade.
This case was brought as 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. As part of the program, U.S. Attorneys’ Offices work in partnership with federal, state, local and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.
Defendant:
JASON LANGHORN (also known as “Hov”)
Age: 39
Riverhead, New YorkE.D.N.Y. Docket No. 18-CR-606 (S-2) (JS)
Long Island Contractor Charged with Performing Lead-Based Paint Removal in Violation of the Toxic Substances Control ActRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Rickey Lynch with violating the Toxic Substances Control Act of 1976 (“TSCA”), making false statements and aggravated identity theft. Lynch is the first person to be charged with a felony violation of TSCA since the statute was amended in 2016 to include enhanced punishments for certain conduct posing a risk of death or serious bodily injury. Lynch was arrested this morning and will be arraigned this afternoon before United States District Judge Gary R. Brown.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Tyler Amon, Special Agent-in-Charge of the Environmental Protection Agency’s Criminal Investigation Division, New York (EPA), announced the charges.
“As alleged, the defendant placed a very young child at serious risk of continued exposure to toxic chemical hazards by deliberately disregarding federal standards that ensure the safe remediation of lead-based paint. He then compounded the risk of harm by lying and falsifying documents in a failed effort to establish his purported compliance with those standards,” stated Acting United States Attorney Kasulis. “Today’s arrest serves as a warning that those who circumvent environmental regulations that protect the community from the well-known dangers of lead-based paint will face the consequences.”
“Defendant Lynch knowingly violated the requirements of safely removing lead from a home and in so doing endangered the health of a vulnerable family,” stated EPA Special Agent-in-Charge Amon. “The EPA remains focused on holding accountable companies and individuals that cut corners and fail to put public health and safety first.”
As alleged in the indictment, in January 2020, Lynch’s company, Bright Lights Supreme Cleaning, Inc., was retained by residents of Freeport, Long Island, to remediate hazardous lead-based paint from their home after the family’s two-year-old son was found to have elevated levels of lead in his blood. Federal regulations require that lead-based paint abatement work be performed and supervised by individuals who have been certified by the EPA. The regulations also establish work practice standards to ensure that lead-based paint removal is done safely. Over the course of several days, Lynch remediated the lead-based paint himself, despite lacking the proper certification to either perform or supervise such work. Lynch also failed to comply with various work practice standards and did not use a High Efficiency Particulate Air (“HEPA”) filtration system that would have contained the spread of toxic dust and debris throughout the house. As a result of Lynch’s failure to comply with the regulations, lead dust exceeding legally permissible limits spread throughout the house.
In addition, Lynch faces charges of making false statements and aggravated identity theft related to his responses to an inquiry by the EPA. Specifically, Lynch took steps to obstruct the agency’s investigation by supplying a fake subcontractor agreement, an affidavit and other documents that contained the forged signature of an individual Lynch falsely identified as having supervised the abatement work on the Freeport residence.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. Under TSCA, the maximum sentence for conviction of a violation that places one or more individuals at risk of death or serious bodily injury is 15 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Anthony Bagnuola is in charge of the prosecution.
The Defendant:
RICKEY LYNCH
Age: 58
Arverne, New YorkE.D.N.Y. Docket No. 21-CR-405 (GRB)
Colombian Narcotrafficker Sentenced to 210 Months’ Imprisonment for Distributing More Than 30,000 Kilograms of Cocaine to the United StatesRead the Press Release
Earlier today, in federal court in Brooklyn, Carlos Gentil Ordonez Martinez was sentenced to 210 months’ imprisonment by United States District Judge Edward R. Korman for conspiracy to internationally distribute cocaine. As part of the sentence, the Court entered a forfeiture money judgment of $10 million. Ordonez pleaded guilty to the charge in November 2019.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), Dermot F. Shea, Commissioner, New York City Police Department (NYPD), and Kevin P. Bruen, Acting Superintendent, New York State Police (NYSP), announced the sentence.
“It is fitting that the defendant, who trafficked in massive amounts of cocaine to be sold at high prices in the United States, will now pay for his crimes by forfeiting his freedom for more than 17 years and forfeiting $10 million in criminal proceeds,” stated Acting United States Attorney Kasulis. “This Office and its law enforcement partners will continue to work tirelessly to bring national and international narcotraffickers to justice.”
Ms. Kasulis expressed her grateful appreciation to HSI Panama, the HSI Panama Transnational Criminal Investigative Unit (TCIU), the Panamanian National Police, DEA Bogota Country Office Group 2 (BCO2) and the Colombian National Police (CNP) Direccion de Investigacion Criminal e Interpol (DIJIN) Sensitive Investigative Unit (SIU) for their assistance.
“The real Narcos of the world are receiving justice, as evidenced by today’s sentencing,” stated DEA Special Agent-in-Charge Donovan. “Time and again, this DEA investigation has led to the arrest, extradition, and sentencing of an international drug kingpin responsible for flooding the streets of U.S. cities with multi-ton quantities of dangerous drugs. I applaud the members of the New York Drug Enforcement Task Force, HSI, and the U.S. Attorney’s Office Eastern District of New York for their diligent work throughout this investigation.”
“Today's sentencing sends a resounding message that HSI Special Agents are committed to working with our law enforcement partners to aggressively uncover, dismantle and disrupt transnational organizations who conspire to distribute cocaine,” stated HSI Special Agent-in-Charge Fitzhugh. “Ordonez Martinez’s sentencing and $10 million forfeiture reinforces local and federal law enforcement commitment to bring to justice those individuals and organizations who seek to profit from selling dangerous controlled substances that tear at the very fabric of our community.”
According to court filings and proceedings, from 2009 through 2014, Ordonez participated in a massive international drug trafficking conspiracy responsible for trafficking tens of thousands of kilograms of cocaine from laboratories in the Colombian jungle to intermediary locations in Central America and Mexico by sea, before the cocaine was transported to the United States. Ordonez supplied the conspiracy with the cocaine it trafficked and also owned a portion of the multi-ton shipments of cocaine that the organization dispatched from Colombia to intermediary locations, including Honduras, Guatemala and Mexico, before being sent to the United States where it was sold. He further increased his share of the profits by receiving payment per kilogram at the substantially higher prices yielded from selling the cocaine further north and closer to the United States. Ordonez received a conservatively estimated $10,000,000 for his involvement in the conspiracy. Ordonez was arrested in Panama in June 2018 and extradited to the United States on July 12, 2018.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorney Nomi D. Berenson is in charge of the prosecution.
The Defendant:
CARLOS GENTIL ORDONEZ MARTINEZ (also known as “Picapiedra” and “Bam Bam”)
Age: 50
Cauca, ColombiaE.D.N.Y. Docket No. 18-CR-200 (ERK)
U.S. Promoter of Foreign Cryptocurrency Companies Pleads Guilty for Role in Multimillion-Dollar Securities Fraud SchemeRead the Press Release
A California man pleaded guilty today in the Eastern District of New York for his participation in a coordinated cryptocurrency and securities fraud scheme through purported digital currency platforms and foreign-based financial accounts.
As part of his guilty plea, John DeMarr, 55, of Santa Ana, admitted that he conspired with others to defraud investor victims by inducing them to invest in their companies, “Start Options” and “B2G,” based on materially false and misleading representations. Start Options purported to be an online investment platform that provided cryptocurrency mining, trading and digital asset trading services. B2G was purportedly an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking and trade digital and fiat currencies “on a secure, comprehensive platform.” Both Start Options and B2G, however, were fraudulent.
As part of the conspiracy, in approximately December 2017, DeMarr and others began offering securities in the form of investment contracts to U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars or Euros. To participate, investors had to deposit their funds for a specified contract period, after which they were told that they could withdraw their money at a significant profit.
According to court documents, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and to remodel DeMarr’s home in California.
Similarly, Start Options also claimed to feature celebrity endorsements to promote its securities offerings. For example, Start Options falsely represented that a professional athlete had endorsed Start Options when, in fact, the athlete was not involved with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars’ worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad.
In late January 2018, rather than permitting Start Options investors to withdraw money from their accounts after the requisite time period, DeMarr and others required investors to roll over their accounts into an unregistered “initial coin offering,” or ICO, of B2G, the second of the two fraudulent companies in which DeMarr was involved. Among other fraudulent misrepresentations, DeMarr and others falsely told investors that the ICO would raise capital for the company to build an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trading. In truth, investors never actually received any digital tokens, and funds from the offering were not used to develop the B2G platform.
As part of the conspiracy, DeMarr and others also paid various promoters, including an actor famous for martial arts films made in the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate an “8000%” return for investors within one year, and that he was a participant in the ICO. DeMarr and others also created false press releases and whitepapers about B2G, fabricated B2G account statements and refused to allow investors to withdraw their money.
DeMarr pleaded guilty to one count of conspiracy to commit securities fraud and is scheduled to be sentenced on Jan. 4, 2022. DeMarr faces a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Acting U.S. Attorney Jacquelyn M. Kasulis of the Eastern District of New York, Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office, and Special Agent in Charge Ryan L. Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
The FBI and IRS-CI are investigating the case.
Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell.
The Criminal Division’s Fraud Section plays a pivotal role in the Justice Department's fight against white collar crime around the country.