Eastern District of New York
Press releases recorded for this federal judicial district.
Long Island Car Wash Owner Pleads Guilty to Tax EvasionRead the Press Release
A Coram, New York, car wash owner pleaded guilty today to tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York.
According to court documents and statements made in court, Nicholas Pascullo, 56, operated a car wash and detailing business called H2O Car Wash & Exotic Detailing LLC (H2O), based in Lindenhurst, New York. From 2012 to 2017, Pascullo attempted to evade income and employment taxes owed by him and H2O for calendar years 2012 through 2016. As part of the scheme, Pascullo filed false partnership and individual income tax returns with the IRS that underreported the gross receipts earned by H2O and the flow-through income received by Pascullo and his partners.
Pascullo also concealed assets and sources of income by manipulating H2O’s books and records, including its point-of-sale system, by failing to file certain reports with the IRS, and by making unreported cash payments to H2O’s employees and to himself. In 2012 and 2013, Pascullo willfully filed false quarterly employment tax returns (Forms 941) that underreported H2O’s payroll tax liabilities for these years, including the extent of its cash payroll. In total, Pascullo caused a combined tax loss to the IRS of approximately $315,000.
Sentencing will be held before U.S. District Judge Denis R. Hurley. At sentencing, Pascullo faces a statutory maximum sentence of five years. Pascullo also faces a period of supervised release, restitution, and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney DuCharme commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Eric Powers of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Owner of Queens Carting Company Pleads Guilty to Bribery SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, George Kalergios, the owner of several companies that operated in the New York City area, including Zeus Waste Management Inc. (“Zeus Waste Management”), a carting business in Queens, pleaded guilty via videoconference before United States District Judge Pamela K. Chen to bribery and conspiracy to commit bribery in connection with a scheme to secure waste management contracts from a local college. When sentenced, Kalergios faces up to 15 years’ imprisonment. In addition, Kalergios agreed to pay forfeiture in the amount of $110,955.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“The defendant’s bribery scheme deprived a local college of the honest services of its contractors and employees,” stated Acting United States Attorney DuCharme. “Today’s guilty plea demonstrates that those who engage in criminal corruption to enrich themselves at the expense of institutions in our communities will be held accountable.” Mr. DuCharme expressed his grateful appreciation to the United States Attorney’s Office for the District of Massachusetts, and the FBI, Boston Field Office, for their assistance on the case.
“Instead of providing the best possible services to his clients with no strings attached, Kalergios participated in a quid-pro-quo arrangement that served to advance his selfish interests. Corrupt behavior has no place in the business of honest services, and today’s guilty plea highlights that basic truth,” stated FBI Assistant Director-in-Charge Sweeney.
As set forth in public filings, in June 2018, Kalergios agreed to bribe the facilities director of a college located in New York City (“College”) to grant Zeus Waste Management the exclusive right to remove non-hazardous waste from the College’s campus. Specifically, Kalergios agreed to pay the facilities director 10 percent of any payments that the College made to Zeus Waste Management under any contracts directed to the company. In July 2018, the facilities director awarded a three-year contract to Zeus Waste Management that gave it the exclusive right to remove non-hazardous waste from the College’s campus. Between July 2018 and March 2019, pursuant to their agreement, Kalergios made multiple cash payments to the facilities director totaling approximately $11,095.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Robert Polemeni and Special Assistant United States Attorney Virginia Nguyen are in charge of the prosecution.
The Defendant:
GEORGE KALERGIOS
Age: 57
Queens, N.Y.E.D.N.Y. Docket No. 21-CR-34 (PKC)
New York City Department of Buildings Inspector Charged in Queens Bribery SchemeRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging New York City Department of Buildings (DOB) Inspector Francesco Ginestri with solicitation and receipt of a bribe in exchange for his agreement to ensure that DOB would not issue a fine in connection with a stop work order. Ginestri was arrested this morning and made his initial appearance via videoconference this afternoon before United States Magistrate Lois Bloom. The defendant was released on a $150,000 bond.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the arrest and charge.
“As alleged, Ginestri, a buildings inspector who was entrusted with protecting public safety at city construction sites, instead exploited his position to line his pockets with a cash bribe,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute those who would betray their public trust for personal gain.”
Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, U.S. Department of Labor, Office of Inspector General, and the New York City Department of Investigation, for their exemplary work on the case.
According to the complaint, on July 31, 2020, Ginestri re-inspected a construction site in Flushing, New York, after a stop work order was issued for safety violations earlier in the month. After learning that construction had continued during the pendency of the stop work order, Ginestri solicited a $1,200 cash bribe from an employee of the construction company in exchange for the defendant’s agreement to ensure that DOB would not issue a $25,000 fine to the company. In August 2020, an employee of the construction company met Ginestri at a bakery and provided him with the $1,200 bribe payment. The meeting was recorded under the supervision of federal law enforcement agents.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of five years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Tanya Hajjar and Alicia N. Washington are in charge of the prosecution.
The Defendant:
FRANCESCO GINESTRI
Age: 36
Queens, New YorkE.D.N.Y. Docket No. 21-MJ-169
Former Investment Adviser Charged with Stealing Client FundsRead the Press Release
A criminal complaint was unsealed today in federal court in Central Islip charging Apostolos Pitsironis, a former registered investment advisor and broker, with defrauding his former clients of more than $400,000 that he used to pay his personal debts and expenses, including casino gambling debts and credit card bills. Pitsironis was arrested earlier today in Dix Hills, New York, and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge Steven I. Locke.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“As alleged, the defendant stole hundreds of thousands of dollars from investors to pay his personal debts, violating the trust they had placed in him to manage their money safely and honestly,” stated Acting United States Attorney DuCharme. “This Office is committed to protecting the investing public from corrupt financial advisors like the defendant who put greed before their clients’ best interests.”
“Pitsironis, as alleged, transferred more than $400,000 from the investment account of a couple who trusted him to manage their portfolio directly into bank accounts he controlled. He later used this money to pay his family’s personal expenses, all the while deceiving both his victims and the financial services firm for whom he worked. Financial advisors have a significant responsibility to appropriately manage the life savings of those who put their faith in them. Anyone who falls short on this front by engaging in illegal practices should, and will, be held accountable to the fullest extent of the law,” stated FBI Assistant Director-in-Charge Sweeney.
In approximately 2009, Pitsironis, who worked in the Melville office of a financial services firm (“Financial Services Firm”), began managing the investments of Victim-1 and Victim-2, a married couple who lived on Long Island (the “Victims”). Between May 2, 2019 and June 11, 2019, Pitsironis initiated 22 transfers totaling approximately $411,000 from one of the Victims’ investment accounts at the Financial Services Firm to a bank account in the defendant’s own name at another financial institution. Pitsironis falsely told the Financial Services Firm that Victim-2 owned the bank account receiving the funds and that Victim-2 had authorized the transfer of funds to that account. Pitsironis then transferred the stolen funds to other bank accounts that he controlled and used the stolen money to pay for his family’s personal expenses, including casino gambling debts, credit card bills and the lease for a luxury car.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of wire fraud, Pitsironis faces up to 20 years in prison.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Mathew S. Miller and Elizabeth Macchiaverna are in charge of the prosecution.
The Defendant:
APOSTOLOS PITSIRONIS
Age: 52
Dix Hills, New YorkE.D.N.Y. Docket No. 21-MJ-162
GPB Capital Founder and CEO Among Three Individuals Indicted in Private Equity Investment FraudRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging three individuals affiliated with GPB Capital Holdings, LLC (“GPB”) with securities fraud, wire fraud and conspiracy. Defendants David Gentile, the founder, owner and Chief Executive Officer (“CEO”) of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC (“Ascendant”); and Jeffrey Lash, a former managing partner of GPB, are charged with engaging in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distribution payments to them and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP and GPB Automotive Portfolio, LP. The defendants were arrested today, and Gentile will appear this afternoon in federal court in Boston, Massachusetts, Schneider will appear in federal court in Austin, Texas, and Lash in federal court in Fort Myers, Florida.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged, by paying investors from an undisclosed and improper source such as investor capital, the defendants repeatedly misled investors about the health and performance of their investments,” stated Acting United States Attorney DuCharme. “This Office is committed to ensuring honesty and integrity in the management of investment funds.”
Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance during the investigation, and thanked the Business Integrity Commission and the New York City Police Department and for their support during the investigation.
“As alleged, the defendants misrepresented the holdings of GPB Capital through deceptive marketing practices, luring investors with promises of monthly distributions that would be covered by funds from the investments and not drawn from underlying invested capital. As we allege today, however, this was all a lie. In truth, a significant portion of GPB’s distributions were paid directly from investor funds. Investment fraud schemes are not only problematic for the victims they claim, but for the overall investing public who loses faith in a free-market system every time they hear of crimes like this. Along with our partners, we’re committed to exposing these frauds whenever and wherever we find them—and holding the fraudsters accountable,” stated FBI Assistant Director-in-Charge Sweeney.
As detailed in the indictment and other court documents, GPB, founded by Gentile in or around 2013, was a New York-based investment advisor registered with the SEC. GPB served as the general partner of several investment funds, including GPB Holdings, LP (“Holdings I”), GPB Holdings II, LP (“Holdings II”), GPB Automotive Portfolio, LP (“Automotive Portfolio”), GPB Waste Management, LP (“Waste Management”) and GPB Cold Storage, LP (“Cold Storage”) (collectively, the “GPB Funds”). The business of GPB Capital was to manage the GPB Funds, which raised and invested capital in a portfolio of private equity investments. Gentile and Schneider worked closely together on the founding, development, operation and marketing of the GPB Funds. From 2013 through early 2018, Lash was responsible for overseeing the GPB Funds’ investments in car dealerships, which made up a sizable percentage of GPB’s portfolio companies.
Between August 2015 and December 2018, the defendants, together with others, allegedly engaged in a scheme to defraud investors and prospective investors in the GPB Funds through material misrepresentations and omissions.
Specifically, Gentile and Schneider, both individually and through employees at Ascendant, represented to investors in Holdings I, Holdings II and Automotive Portfolio that the GPB funds would make a monthly distribution payment to investors that would be fully covered by funds from operations, meaning that the companies purchased by the funds would be sufficiently profitable for the monthly payments to be made from the companies’ cash flow, without drawing from capital raised by investors.
In reality, despite the defendants’ representations, investor capital was used to pay for a significant portion of the distributions made to investors in each of these funds. Gentile and Schneider were aware that the GPB Funds were underperforming, and authorized repeated distribution payments that used investor funds to cover income shortfalls, to the obvious detriment of investors.
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 Business & Securities Fraud Section. Assistant United States Attorneys Lauren Howard Elbert, Artie McConnell and Garen Marshall are in charge of the prosecution.
The Defendants:
DAVID GENTILE
Age: 54
Manhasset, New YorkJEFFREY LASH
Age: 51
Naples, FloridaJEFFRY SCHNEIDER
Age: 52
Austin, TexasE.D.N.Y. Docket No. 21-CR-54 (DG)
U.S.-Based Promoter of Foreign Cryptocurrency Companies Charged in over $11 Million Securities Fraud SchemeRead the Press Release
A California man was charged in a complaint unsealed today for his alleged participation in a coordinated cryptocurrency and securities fraud scheme that used purported digital currency platforms and foreign-based financial accounts.
John DeMarr, 55, of Santa Ana, was charged in a complaint filed in the Eastern District of New York with one count of conspiracy to commit securities fraud. DeMarr made his initial appearance this afternoon before U.S. Magistrate Judge John D. Early of the Central District of California. Judge Early referred the case to the Eastern District of New York for further proceedings.
“The indictment alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”
“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.”
“Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage costing investors millions,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”
“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” said Special Agent in Charge Ryan Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “John DeMarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ DeMarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”
As alleged in the complaint, between 2017 and 2018, DeMarr conspired with others to defraud numerous victims of $11.4 million 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.”
According to the allegations, however, both Start Options and B2G were fraudulent. 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 could purportedly withdraw their money at a significant profit.
Among other things, 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 renovations to DeMarr’s home in California.
Similarly, according to the complaint, Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, as alleged in the indictment, the athlete had no involvement 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.
As alleged, in or about 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.
According to the complaint, 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.
As alleged in the complaint, DeMarr staged his own disappearance to avoid facing disgruntled B2G investors. DeMarr instructed others to release statements asserting that DeMarr had been assaulted and went missing in Montenegro, and telling B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. In truth, however, DeMarr did not disappear in Montenegro and instead was believed to be residing in California.
The charge in the complaint is based on allegations, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI and IRS-CI. 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 Department of Justice’s fight against white collar crime around the country.
U.S.-Based Promoter of Foreign Cryptocurrency Companies Charged in over $11 Million Securities Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, a complaint was unsealed charging John DeMarr with conspiracy to commit securities fraud for his alleged participation in a cryptocurrency and securities fraud scheme. DeMarr was arrested this morning in Santa Ana, California, and will make his initial appearance this afternoon in U.S. District Court for the Central District of California.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Kristi Koons Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the arrest and charge.
“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” stated Acting U.S. Attorney DuCharme. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.” Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.
“The complaint alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” stated Acting Assistant Attorney General McQuaid. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”
"Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage, costing investors millions," stated FBI Assistant Director-in-Charge Johnson. "Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”
“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” stated IRS-CI Special Agent-in-Charge Korner. “John Demarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ Demarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”
As alleged in the complaint, DeMarr, a promoter of several digital asset-related companies, conspired with others to defraud victims by inducing them to invest in two of his companies, “Start Options” and “B2G,” that purported to be online investment platforms providing digital asset trading services. Investments were accepted in Bitcoin, U.S. dollars or Euros for a specified contract period based on DeMarr’s false and misleading representations of significant profits, which he bolstered with bogus celebrity endorsements, false press releases and fabricated account statements. Instead of investing the funds in “Start Options” and” B2G,” DeMarr diverted the funds into other accounts he controlled and spent the money on a lavish lifestyle he maintained, which included the purchase of expensive jewelry, a Porsche and the remodeling of his California home.
Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, in fact, the athlete had no involvement 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.
According to the complaint, DeMarr and others paid various promoters, including an actor famous for appearing in martial arts films of the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate a massive return for investors within one year, and that he was a participant in the ICO.
In May 2018 to avoid facing disgruntled B2G investors, DeMarr attempted to feign his disappearance by directing others to release statements claiming that he had been assaulted to avoid facing disgruntled B2G investors. DeMarr directed others to release statements claiming that DeMarr had been assaulted and was missing in Montenegro, and instructing B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. Since his alleged disappearance, DeMarr has been residing in California.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI and IRS-CI. Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta, and David C. Pitluck of the Eastern District of New York, assisted by EDNY Criminal Investigator Martin Sullivan, with Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section are prosecuting the case, Assistant U.S. Attorney Laura D. Mantell of the Eastern District’s Civil Division is handling forfeiture matters.
The Defendant:
JOHN DEMARR
Age: 55
Santa Ana, CaliforniaE.D.N.Y. Docket No.: 21-MJ-128
New York City Police Officer Charged with Production of Child PornographyRead the Press Release
A criminal complaint was filed today in federal court in Central Islip charging Carmine Simpson with the sexual exploitation of children. The charges relate to sexually explicit images and videos of children that the defendant requested and received from minors who he targeted on Twitter. Simpson was arrested today and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“Instead of protecting the community as a sworn police officer, the defendant has preyed upon and sexually exploited the most vulnerable members,” stated Acting United States Attorney DuCharme. “The protection of innocent children is a priority for the Department of Justice and this Office will continue to make every effort to ensure that those who contribute to the victimization of children will be brought to justice.” Mr. DuCharme extended his grateful appreciation to the FBI Violent Crimes Against Children Squad for its investigative work and the New York City Police Department (NYPD) for its assistance on the case.
“As a law enforcement officer, Mr. Simpson swore an oath to protect the public he served. We allege he chose instead to manipulate some of our society's most vulnerable citizens when he repeatedly enticed children to create sexually explicit videos and photos,” stated FBI Assistant Director-in-Charge Sweeney. “Much of this activity occurs through popular social media sites, so I'd ask parents and guardians to take some time to talk with your children about their online activities. You are the first line of defense in protecting our youth from predators. A moment of your time can save a lifetime of trauma. If you believe someone is trying to entice or sexually exploit your child, please report it to us by calling 1-800-CALL-FBI or going to tips.fbi.gov."
According to court filings, Simpson, a police officer with the NYPD, allegedly targeted vulnerable children on Twitter for the purpose of having them create sexually exploitative photos and videos of themselves for the defendant. Simpson often represented to his victims that he was 17 years-old, and he sent them pictures of himself where he applied a filter to alter his own appearance so that he appeared younger. Simpson communicated with at least 46 children who appear to have been between the ages of 13 and 17. On Twitter alone, Simpson obtained at least 18 photographic images and 33 videos containing sexually exploitative material from children
If convicted of sexual exploitation of a child, Simpson faces a mandatory minimum of 15 years’ imprisonment. The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Department of Justice Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Megan E. Farrell is in charge of the prosecution.
The Defendant:
CARMINE SIMPSON
Age: 26
Holbrook, New YorkE.D.N.Y. Docket No. 21-MJ-119
Social Media Influencer Charged with Election Interference Stemming from Voter Disinformation CampaignRead the Press Release
BROOKLYN, NY – A criminal complaint was unsealed today in federal court in Brooklyn charging Douglass Mackey, also known as “Ricky Vaughn,” with conspiring with others in advance of the 2016 United States Presidential Election to use various social media platforms to disseminate misinformation designed to deprive individuals of their constitutional right to vote. Mackey was arrested this morning in West Palm Beach, Florida and will make his initial appearance via videoconference today before United States Magistrate Judge Bruce Reinhart at the federal courthouse in West Palm Beach.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.
“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote.” stated Acting United States Attorney DuCharme. “With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes. They will be investigated, caught and prosecuted to the full extent of the law.”
“According to the allegations in the indictment, the defendant exploited a social media platform to infringe one the of most basic and sacred rights guaranteed by the Constitution: the right to vote,” stated Acting Assistant Attorney General McQuaid. “This indictment underscores the department’s commitment to investigating and prosecuting those who would undermine citizens’ voting rights.”
“Protecting every American citizen’s right to cast a legitimate vote is a key to the success of our republic. What Mackey allegedly did to interfere with this process—by soliciting voters to cast their ballots via text—amounted to nothing short of vote theft. It is illegal behavior and contributes to the erosion of the public’s trust in our electoral processes. He may have been a powerful social media influencer at the time, but a quick Internet search of his name today will reveal an entirely different story,” stated FBI Assistant Director-in-Charge Sweeney.
In 2016, Mackey established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as the 107th most important influencer of the then-upcoming Election, ranking it above outlets and individuals, among others, such as NBC News (#114), Stephen Colbert (#119) and Newt Gingrich (#141).
As alleged in the complaint, between September 2016 and November 2016, in the lead up to the November 8, 2016, United States Presidential Election, Mackey conspired with others to use social media platforms, including Twitter, to disseminate fraudulent messages designed to encourage supporters of one of the presidential candidates (the “Candidate”) to “vote” via text message or social media and thus to fail to cast their ballots in a legally valid manner.
For example, on November 1, 2016, Mackey tweeted an image that featured an African American woman standing in front of an “African Americans for [the Candidate]” sign. The image included the following text: “Avoid the Line. Vote from Home. Text ‘[Candidate’s first name]’ to 59925[.] Vote for [the Candidate] and be a part of history.” The fine print at the bottom of the image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by [Candidate] for President 2016.” The tweet included the typed hashtags “#Go [Candidate]” and another slogan frequently used by the Candidate. On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “[Candidate’s first name]” or some derivative to the 59925 text number, which was used in multiple deceptive campaign images tweeted by the defendant and his co-conspirators.
If convicted of the charge, conspiracy against rights, Mackey faces up to 10 years in prison. 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 Erik Paulsen and Nathan Reilly are in charge of the prosecution, with Trial Attorney James Mann from the Department of Justice’s Public Integrity Section.
The Defendant:
DOUGLASS MACKEY
Age: 31
West Palm Beach, FloridaSocial Media Influencer Charged with Election Interference Stemming from Voter Disinformation CampaignRead the Press Release
A Florida man was arrested this morning on charges of conspiring with others in advance of the 2016 U.S. Presidential Election to use various social media platforms to disseminate misinformation designed to deprive individuals of their constitutional right to vote.
Douglass Mackey, aka Ricky Vaughn, 31, of West Palm Beach, was charged by criminal complaint in the Eastern District of New York. He was taken into custody this morning in West Palm Beach and made his initial appearance before U.S. Magistrate Judge Bruce E. Reinhart of the Southern District of Florida.
“According to the allegations in the complaint, the defendant exploited a social media platform to infringe one the of most basic and sacred rights guaranteed by the Constitution: the right to vote,” said Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “This complaint underscores the department’s commitment to investigating and prosecuting those who would undermine citizens’ voting rights.”
“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote,” said Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York. “With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes. They will be investigated, caught and prosecuted to the full extent of the law.”
“Protecting every American citizen’s right to cast a legitimate vote is a key to the success of our republic,” said William F. Sweeney Jr., Assistant Director in Charge of the FBI’s New York Field Office. “What Mackey allegedly did to interfere with this process – by soliciting voters to cast their ballots via text – amounted to nothing short of vote theft. It is illegal behavior and contributes to the erosion of the public’s trust in our electoral processes. He may have been a powerful social media influencer at the time, but a quick Internet search of his name today will reveal an entirely different story.”
The complaint alleges that in 2016, Mackey established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as the 107th most important influencer of the then-upcoming Election, ranking his account above outlets and individuals such as NBC News (#114), Stephen Colbert (#119) and Newt Gingrich (#141).
As alleged in the complaint, between September 2016 and November 2016, in the lead up to the Nov. 8, 2016, U.S. Presidential Election, Mackey conspired with others to use social media platforms, including Twitter, to disseminate fraudulent messages designed to encourage supporters of one of the presidential candidates (the “Candidate”) to “vote” via text message or social media, a legally invalid method of voting.
For example, on Nov. 1, 2016, Mackey allegedly tweeted an image that featured an African American woman standing in front of an “African Americans for [the Candidate]” sign. The image included the following text: “Avoid the Line. Vote from Home. Text ‘[Candidate’s first name]’ to 59925[.] Vote for [the Candidate] and be a part of history.” The fine print at the bottom of the image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by [Candidate] for President 2016.”
The tweet included the typed hashtags “#Go [Candidate]” and another slogan frequently used by the Candidate. On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “[Candidate’s first name]” or some derivative to the 59925 text number, which was used in multiple deceptive campaign images tweeted by the defendant and his co-conspirators.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Assistant U.S. Attorneys Erik Paulsen and Nathan Reilly of the Eastern District of New York, and Trial Attorney James Mann of the Criminal Division’s Public Integrity Section are prosecuting the case.
Brooklyn Attorney Charged with Defrauding Real Estate InvestorsRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Shimon Rosenfeld, an attorney admitted to practice law in the State of New York since 1987, with defrauding multiple investors of at least $4 million by falsely claiming he was investing their funds in real estate opportunities. Rosenfeld was arrested this morning and made his initial appearance this afternoon via videoconference before United States Chief Magistrate Judge Cheryl. L. Pollak. The defendant was released on a $200,000 bond.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Freaney, Deputy Special Agent-in-Charge, United States Secret Service, New York Field Office (USSS), announced the charge.
“Through this alleged scheme, Rosenfeld abused his position as an attorney and betrayed his victims’ trust for his own selfish gain,” stated Acting United States Attorney DuCharme. “Those who commit fraud, including lawyers, must be brought to justice, and this Office will continue to work tenaciously to ensure integrity in the practice of law.”
“As alleged, Rosenfeld solicited investments based on his stated intent to purchase various real estate and 'flip' it for substantial profit. In reality, he didn't buy any properties, so there were none to sell. Rather, Rosenfeld used the money he received to make his own financial trades and investments. Today, we’ve flipped the script on him and held him accountable for his fraudulent actions,” stated FBI Assistant Director-in-Charge Sweeney.
“The U.S. Secret Service remains dedicated to investigating those who commit financial fraud and would like to recognize the efforts of our law enforcement partners in helping bring them to justice,” stated USSS Deputy Special Agent-in-Charge Freaney. “This investigation exemplifies the success that law enforcement can achieve when working in a collaborative manner. In this instance, the defendant allegedly perpetrated a scheme to defraud and misappropriated funds from numerous victims for his own personal gain.”
According to the complaint, between May 2014 and March 2018, Rosenfeld allegedly perpetrated a fraudulent scheme by soliciting and receiving approximately at least $4 million from various individuals (collectively, the “Victims”) based on fraudulent misrepresentations. Specifically, Rosenfeld induced the Victims to invest their money with the defendant based, in part, on representations that he would purchase real estate and sell it to a prospective buyer at a higher price, also referred to as “flipping” the property. Rosenfeld further told the Victims that he would split the profits from the real estate transactions with the Victims. In reality, Rosenfeld misappropriated the investors’ money by directing the funds into bank accounts he controlled and using the money to trade securities out of his brokerage account. Rosenfeld falsely told the Victims that there were problems with the real estate transactions, such as title or appraisal issues, to explain why no properties had been purchased.
If convicted of wire fraud, Rosenfeld faces up to 20 years’ imprisonment. The charge 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 Business & Securities Fraud Section. Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution.
The Defendant:
SHIMON ROSENFELD
Age: 59
Brooklyn, New YorkE.D.N.Y. Docket No. 21-MJ-96
Internal Revenue Service Agent Charged with Identity Theft and Wire FraudRead the Press Release
A 10-count indictment was unsealed today in federal court in Brooklyn charging Bryan Cho, also known as “Yong Hee Cho,” with possession of a fake foreign passport; aggravated identity theft; making false statements during a background check and wire fraud in connection with the purchase of an Upper East Side co-op apartment. Cho was arrested this morning and is scheduled to be arraigned via videoconference this afternoon before United States Chief Magistrate Judge Cheryl L. Pollak.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA), announced the charges.
“As alleged, the defendant repeatedly betrayed the trust placed in him as a federal law enforcement officer to further his own schemes by misusing information to which he had access by virtue of his official assignments,” stated Acting United States Attorney DuCharme. “Today’s charges show that no one is above the law, and that this Office remains committed to rooting out corruption wherever it lurks.”
“The public places a great deal of trust in those who carry a shield, but when sworn federal officers use this as a free pass instead of a badge of honor, things go awry. As alleged, that’s what happened in this case when Cho used, to his benefit, proprietary information belonging to an individual he once investigated as part of his official duties. Today’s charges are a reminder that no one is beyond the reach of our corruption laws,” stated FBI Assistant Director-in-Charge Sweeney.
“The Treasury Inspector General for Tax Administration aggressively investigates Internal Revenue Service employees who violate the public’s trust,” stated Treasury Inspector General George. “Our mission at TIGTA is to protect the integrity of our Nation’s system of tax administration. We are committed to working with our law enforcement partners to ensure those who endeavor to corrupt Federal tax administration are prosecuted to the fullest extent of the law. I would like to thank the U.S. Department of Justice and the Federal Bureau of Investigation for their support in this effort.”
As set forth in the indictment, Cho has been employed as a Special Agent with Internal Revenue Service Criminal Investigation since 2008. During the course of his employment, Cho worked on an investigation through which he obtained identifying information for an individual described in the indictment as “John Doe.” The investigation was eventually closed, but Cho retained items he obtained during the investigation and used John Doe’s identifying information to create false identification documents and open a corporate entity overseas in John Doe’s name. The fraudulent documents included purported identification cards for the Philippines and the Republic of Marshall Islands in the name of John Doe, but bearing photos of the defendant, and a purported passport in the name of John Doe for the Republic of Guinea-Bissau.
Cho later made false statements during a background investigation, including denying that he possessed any foreign identification documents. Cho also denied any contacts with foreign officials even though law enforcement from the Republic of South Korea had communications with him regarding allegations that South Korean government personnel had paid bribes to the defendant in exchange for information about ongoing U.S. criminal investigations. Cho also submitted multiple false documents in connection with the purchase of a co-op apartment on the Upper East Side of Manhattan, including forged tax returns and bank statements that inflated his income and assets to secure the co-op board’s approval for the purchase, and funneled hundreds of thousands of dollars from a foreign bank account associated with an entity the defendant created using John Doe’s identity to fund the purchase.
If convicted of the top count, wire fraud, Cho faces up to 20 years’ imprisonment. The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Elizabeth Geddes and Turner Buford are in charge of the prosecution.
The Defendant:
BRYAN CHO (also known as “Yong Hee Cho”)
Age: 49
New York, N.Y.E.D.N.Y. Docket No. 21-CR-40 (AMD)
Queens Man Pleads Guilty to Purchasing Illegally Defaced FirearmRead the Press Release
Earlier today, in federal court in Brooklyn, Joseph Miner pleaded guilty via videoconference before United States District Judge William F. Kuntz, II, to possessing a firearm with obliterated serial numbers. When sentenced, Miner faces a maximum of five years’ imprisonment.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Miner has been held accountable and faces a prison sentence for possessing an illegal firearm with obliterated serial numbers that he purchased from an undercover agent,” stated Acting United States Attorney DuCharme. “This Office, together with our federal and local partners, is working tirelessly to prevent illegal firearms from endangering our community.” Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, for its outstanding work on the case.
As set forth in public filings, law enforcement began investigating Miner’s interest in illegally purchasing firearms in late 2019 when he posted on social media accounts his desire to obtain assault weapons and other firearms for a racial civil war or racial holy war. Miner expressed support on social media for racially and ethnically motivated violence, including celebrating the August 2017 white supremacist rally in Charlottesville, Virginia, and the December 2019 machete attack at a synagogue in Monsey, New York. Although the defendant at times disavowed interest in conducting an attack himself, on multiple occasions he posted social media messages in which he displayed suicidal ideations and fantasized about “martyring” himself and “go[ing] out in a blaze of glory” in a mass-shooting attack.
In April 2020, Miner initiated contact with an undercover law enforcement agent who was posing as a firearms dealer. Miner requested firearms from the undercover agent knowing that the serial numbers were removed from the guns that the undercover agent was offering for sale. On May 12, 2020, Miner met the undercover agent at a Queens hotel and purchased a Glock 19 9mm semi-automatic handgun with an obliterated serial number.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Josh Hafetz are in charge of the prosecution.
The Defendant:
JOSEPH MINER
Age: 30
Bayside, QueensE.D.N.Y. Docket No. 21-CR-554 (WFK)
Department of Justice and Federal Trade Commission Announce First Enforcement Actions for Violations of the Better Online Ticket Sales ActRead the Press Release
CENTRAL ISLIP, NY – The Department of Justice and the United States Attorney Office for the Eastern District of New York, together with the Federal Trade Commission (FTC), today announced three settlements resolving alleged violations of the Better Online Ticket Sales (BOTS) Act. These are the first enforcement actions that the Department and the FTC have brought under the BOTS Act.
Enacted in 2016, the BOTS Act aims to prevent ticket brokers from buying large numbers of event tickets and reselling them to interested customers at inflated prices. The BOTS Act prohibits a person from circumventing access controls or measures used by online ticket sellers (such as Ticketmaster) to enforce ticket-purchasing limits. It also prevents the resale of tickets obtained by knowingly circumventing access controls.
As alleged in the three complaints filed by the United States in the Eastern District of New York, the defendants—Just In Time Tickets, Inc. and its owner Evan Kohanian; Concert Specials, Inc. and its owner Steven Ebrani; and Cartisim Corp. and its owner Simon Ebrani—committed violations of the BOTS Act to purchase from Ticketmaster thousands of tickets they then resold for millions of dollars in revenues, often at significant markups. The defendants allegedly circumvented Ticketmaster’s restrictions on users holding multiple accounts by creating accounts in the names of family members, friends, and fictitious individuals and using hundreds of credit cards. They also allegedly used ticket bots to fool tests designed to prevent nonhuman visitors. In addition, the complaints assert that the defendants used programs to conceal the IP addresses of the computers they used to make purchases.
“Those who violate the BOTS Act cheat fans by forcing them to pay inflated prices to attend concerts, theater performances and sporting events,” stated Acting U.S. Attorney Seth D. DuCharme. “This Office will spare no effort in prohibiting deceptive practices that harm consumers.”
“These defendants are alleged to have cheated the system to the detriment of consumers,” stated Acting Assistant Attorney General Brian Boynton of the Department of Justice’s Civil Division. “Today’s filing serves notice that the Department of Justice will enforce the Better Online Ticket Sales Act in appropriate cases. We are pleased to work with our partners at the Federal Trade Commission on this and other matters important to consumers.”
The three stipulated orders entered by the court assess civil penalties of $11.2 million against Just In Time Tickets, Inc. and Kohanian, $16 million against Concert Specials, Inc. and Steven Ebrani, and $4.4 million against Cartisim Corp. and Simon Ebrani. The orders further provide for the suspension of the remainder of such civil penalties if the defendants pay $1,642,658.96, $1,565,527.41, and $499,147.12, respectively, and satisfy certain additional terms. The stipulated orders also contain terms to prohibit the defendants from using ticket bots or other computer programs to defeat access controls, from concealing the IP addresses of computers they use to make ticket purchases and from purchasing tickets from any credit or debit account in the name of anyone other than the defendants or their corporate officers and employees. Under the terms, the defendants must also maintain records and provide compliance reports to the government.
The claims resolved by the settlements in these cases are allegations only, and there has not been any final determination of liability or wrongdoing.
This matter was handled by Assistant United States Attorneys Bonni J. Perlin and Kevin Yim of the Eastern District of New York, with Trial Attorney Benjamin A. Cornfeld of the Civil Division’s Consumer Protection Branch. Christine M. Todaro and Frances L. Kern represented the FTC.
E.D.N.Y. Civil Docket Nos: 21-CV-212 (GRB); 21-CV-214 (DRH); 21-CV-215 (GRB
College of Staten Island Agrees to Settle Claims Related to Research MisconductRead the Press Release
The College of Staten Island (“CSI”), a college within the City University of New York (“CUNY”), has agreed to repay $98,237.86 in federal assistance awarded by the United States to perform research with the United States National Oceanic and Atmospheric Administration (“NOAA”), to resolve a federal investigation concerning alleged fabricated research results.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Duane E. Townsend, Special Agent-in-Charge, U.S. Department of Commerce, Office of the Inspector General, announced the resolution.
“Maintaining the highest levels of integrity and accuracy must be the bedrock of scientific research. This resolution demonstrates how research institutions should respond upon learning of alleged misconduct or fraud in connection with federally funded projects,” stated Acting U.S. Attorney DuCharme. “When a federal award recipient fully cooperates with the government’s investigation, our Office will work with them to arrive at a fair and just resolution.”
“This investigation demonstrates the government's resolve to protect the integrity of federally funded research and ensure taxpayer money is not wasted on dishonesty. We greatly appreciate the efforts of the U.S. Attorney's Office and the cooperation of the college in resolving this matter,” stated U.S. Department of Commerce Special Agent-in-Charge Townsend.
NOAA is a component of the United States Department of Commerce. In 2015, the Research Foundation of CUNY, on behalf of CSI, applied for and was awarded federal assistance pursuant to a cooperative agreement with NOAA to conduct a component of a research project to study the role of ocean eddies on the productivity of certain fish stock. The principal investigator for CSI was a professor who is no longer employed by the school. The work was required to be performed between September 2015 and August 2017. As a condition for receiving the funds, CSI certified, in part, that it was capable of managing the research project and ensuring that the required work was done.
In 2018, NOAA notified CSI that the principal investigator had not conducted the work required under the cooperative agreement and allegedly had fabricated research results submitted to NOAA. CSI then conducted an internal investigation and concluded, in part, that the principal investigator had committed research misconduct. After receiving CSI’s findings, the United States Attorney’s Office, with the support of the U.S. Department of Commerce, Office of the Inspector General, independently investigated NOAA’s allegations regarding the fabrication of research results. CSI cooperated fully throughout the investigation, providing documents and responding to government inquiries. The United States concluded that CSI failed to ensure proper management and completion of the research required under the cooperative agreement, and negotiated the resolution.
In addition to repayment of the $98,237.86 that CSI received under the cooperative agreement, CSI has agreed to modify its current policies and procedures concerning the supervision of federal funded research projects to ensure that the work required under federal awards is completed and to safeguard against research misconduct and fraud.
The government’s case is being handled by Assistant United States Attorney Bonni J. Perlin.
Brooklyn Man Sentenced to 33 Months’ Imprisonment for Witness RetaliationRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Kysheeq Randolph was sentenced to 33 months’ imprisonment by United States District Judge Sterling Johnson, Jr., for making threatening hand gestures at a government witness who was testifying in a federal criminal trial. Randolph pleaded guilty in February 2020 to a superseding criminal information charging him with witness retaliation.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York announced the sentence.
“It is a solemn duty of law enforcement to protect witnesses who testify at trial and attempts to brazenly intimidate or terrorize them will never be tolerated.” stated Acting United States Attorney DuCharme. “Today the defendant learned that such flagrant disregard for the rule of law will be punished with incarceration.” Mr. DuCharme thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division, and the United States Marshals Service, Eastern District of New York, for their work in the case.
In October 2019, Devone Jefferys, a relative of the defendant, was on trial at the federal courthouse in Brooklyn for his role in a home invasion armed robbery. During the trial, while a witness who had participated in the robbery was testifying, Randolph was seated in the public gallery of the courtroom in the witness’s line of sight. Randolph began making gestures with his hand to mimic the shape of a gun and pointed it to his head and then to his chin in an upward movement to threaten the witness.
The government’s case is being prosecuted by Assistant United States Attorney Genny Ngai.
The Defendant:
KYSHEEQ RANDOLPH
Age: 24
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-545 (SJ)
Queens Man Arrested for Threatening to Murder Members of CongressRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging Brendan Hunt, also known as “X-Ray Ultra,” with threatening to murder United States officials. Hunt was arrested this morning in Queens and made his initial appearance this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr., who ordered the defendant detained pending trial.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., 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 arrest and charge.
“Our democracy depends on the legislators who shoulder the responsibility of government. By allegedly threatening to murder and intimidate elected officials, Hunt is striking at the core of our government,” stated Acting United States Attorney DuCharme. “This Office will aggressively disrupt such conduct and prosecute offenders like the defendant to the fullest extent of the law.”
“Before the assault on the Capitol building, and again after, Hunt’s alleged online commentary directly called for the assassination of members of Congress. This is not a hard message to understand –threats of violence against our public officials won’t be tolerated. Mr. Hunt was arrested this morning by the FBI’s New York Joint Terrorism Task Force. To others from this area who still don’t get it – if you are considering a similar path to ‘take up arms’ like Mr. Hunt did, that road leads nowhere except a reservation at our building downtown,” stated FBI Assistant Director-in-Charge Sweeney.
Mr. DuCharme and Mr. Sweeney praised the outstanding work of the FBI’s New York Joint Terrorism Task Force on the case.
As alleged in the complaint, on January 8, 2021, two days after the riot in the U.S. Capitol in Washington, D.C., Hunt posted a video to an Internet-based video sharing site in which he exhorted his viewers to violence, urging them that “[w]e need to go back to the U.S. Capitol when all of the Senators and a lot of the Representatives are back there, and this time we have to show up with our guns. And we need to slaughter these m-----f------.” The video was one in a series of statements by Hunt posted on social media since at least December 6, 2020, in which he called for violence and “public execution” against members of Congress.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Hunt faces a maximum sentence of 10 years in prison.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys David K. Kessler, Ian C. Richardson and Francisco J. Navarro are in charge of the prosecution.
The Defendant:
BRENDAN HUNT (also known as “X-Ray Ultra”)
Age: 37
Ridgewood, QueensE.D.N.Y. Docket No. 21-MJ-57
Political Scientist Author Charged with Acting as an Unregistered Agent of the Iranian GovernmentRead the Press Release
BROOKLYN, NY – A criminal complaint was unsealed today in federal court in Brooklyn charging Kaveh Lotfolah Afrasiabi, also known as “Lotfolah Kaveh Afrasiabi,” with acting and conspiring to act as an unregistered agent of the Government of the Islamic Republic of Iran, in violation of the Foreign Agents Registration Act (FARA). Afrasiabi was arrested yesterday at his home in Watertown, Massachusetts, and will make his initial appearance this morning in federal court in Boston, Massachusetts, before United States Magistrate Judge Jennifer C. Boal.
Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Joseph Bonavolonta, Special Agent-in-Charge, FBI, Boston Field Office announced the arrest and charges.
“Afrasiabi allegedly sought to influence the American public and American policymakers for the benefit of his employer, the Iranian government, by disguising propaganda as objective policy analysis and expertise,” stated Acting U.S. Attorney DuCharme. “This Office is committed to the robust enforcement of the Foreign Agents Registration Act, which provides the American people the tools they need to evaluate opinions and arguments in the marketplace of ideas by requiring foreign agents to declare their paymasters. Those, like the defendant, who conceal the full extent of their work for a foreign government when the law requires disclosure will face consequences for their actions.”
“For over a decade, Kaveh Afrasiabi pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran," stated Assistant Attorney General Demers. “However, all the while, Afrasiabi was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda. In doing so, he intentionally avoided registering with Department of Justice as the Foreign Agents Registration Act required. He likewise evaded his obligation to disclose who was sponsoring his views. We now begin to hold him responsible for those deeds.”
“Anyone working to advance the agenda of a foreign government within the United States is required by law to register as an agent of that country,” stated FBI Assistant Director-in-Charge Sweeney. “Mr. Afrasiabi never disclosed to a Congressman, journalists or others who hold roles of influence in our country that he was being paid by the Iranian government to paint an untruthfully positive picture of the nation. Our laws are designed to create transparency in foreign relations, and they are not arbitrary or malleable. As today's action demonstrates, we will fully enforce them to protect our national security.”
“Our arrest of Kaveh Afrasiabi makes it clear that the United States is not going to allow undeclared agents of Iran to operate in our country unchecked. For more than a decade, Mr. Afrasiabi was allegedly paid, directed, and controlled by the Government of Iran to lobby U.S. government officials, including a Congressman; and to create and disseminate information favorable to the Iranian government,” stated FBI Special Agent-in-Charge Bonavolonta. “The FBI will continue to do everything it can to uncover these hidden efforts and hold accountable those who work for our adversaries to the detriment of our national security.”
According to the complaint, Afrasiabi is a citizen of the Islamic Republic of Iran and a lawful permanent resident of the United States. Afrasiabi holds a PhD, and frequently publishes books and articles, and appears on English-language television programs discussing foreign relations matters, particularly Iran’s relations with the United States. Afrasiabi has identified or portrayed himself as a political scientist, a former political science professor or as an expert on foreign affairs.
Since at least 2007 to the present, Afrasiabi has also been secretly employed by the Iranian government and paid by Iranian diplomats assigned to the Permanent Mission of the Islamic Republic of Iran to the United Nations in New York City (IMUN). Afrasiabi has been paid approximately $265,000 in checks drawn on the IMUN’s official bank accounts since 2007 and has received health insurance through the IMUN’s employee health benefit plans since at least 2011.
In the course of his employment by the Iranian government, Afrasiabi has lobbied a U.S. Congressman and the U.S. Department of State to advocate for policies favorable to Iran, counseled Iranian diplomats concerning U.S. foreign policy, made television appearances to advocate for the Iranian government’s views on world events, and authored articles and opinion pieces espousing the Iranian government’s position on various matters of foreign policy. Afrasiabi has long known that FARA requires agents of foreign principals to register with the U.S. Department of Justice and has discussed information obtained from FARA disclosures with others. Nevertheless, Afrasiabi did not register as an agent of the Government of Iran.
For example, in January 2020, Afrasiabi emailed Iran’s Foreign Minister and Permanent Representative to the United Nations with advice for “retaliation” for the U.S. military airstrike that killed Major General Qasem Soleimani, the head of the Quds Force, the external operations arm of the Iranian government’s Islamic Revolutionary Guard Corps, proposing that the Iranian government “end all inspections and end all information on Iran’s nuclear activities pending a [United Nations Security Council] condemnation of [the United States’] illegal crime.” Afrasiabi claimed that such a move would, among other things, “strike fear in the heart of [the] enemy.”
Afrasiabi has admitted in his own communications that his extensive body of published works and television appearances, in which he has consistently advocated perspectives and policy positions favored by the Iranian government, has been attributable to the funding he receives from the Iranian government. For example, in a July 28, 2020 email to Iran’s Foreign Minister, Afrasiabi included “links for many of [his] works, including books, hundreds of articles in international newspapers and academic journals,” telling Iran’s Foreign Minister “Without support none of this would have been possible! This has been a very productive relationship spanning decades that ought not to be interrupted.”
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of both charged offenses, Afrasiabi faces a maximum sentence of 10 years in prison.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Ian C. Richardson and Michael T. Keilty are in charge of the prosecution, with assistance from Trial Attorney David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.
The Defendant:
KAVEH LOTFOLAH AFRASIABI (also known as “Lotfolah Kaveh Afrasiabi”)
Age: 63
Watertown, MassachusettsE.D.N.Y. Docket No. 21-MJ-50
Political Scientist Author Charged with Acting as an Unregistered Agent of the Iranian GovernmentRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Kaveh Lotfolah Afrasiabi, also known as Lotfolah Kaveh Afrasiabi, with acting and conspiring to act as an unregistered agent of the Government of the Islamic Republic of Iran, in violation of the Foreign Agents Registration Act (FARA). Afrasiabi was arrested yesterday at his home in Watertown, Massachusetts, and will make his initial appearance this morning in federal court in Boston, Massachusetts, before U.S. Magistrate Judge Jennifer C. Boal.
John C. Demers, Assistant Attorney General for National Security; Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Joseph Bonavolonta, Special Agent in Charge, FBI, Boston Field Office, announced the arrest and charges.
“For over a decade, Kaveh Afrasiabi pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran,” said John C. Demers, Assistant Attorney General for National Security. “However, all the while, Afrasiabi was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda. In doing so, he intentionally avoided registering with the Department of Justice as the Foreign Agents Registration Act required. He likewise evaded his obligation to disclose who was sponsoring his views. We now begin to hold him responsible for those deeds.”
“Afrasiabi allegedly sought to influence the American public and American policymakers for the benefit of his employer, the Iranian government, by disguising propaganda as objective policy analysis and expertise,” said Acting U.S. Attorney DuCharme. “This Office is committed to the robust enforcement of the Foreign Agents Registration Act, which provides the American people the tools they need to evaluate opinions and arguments in the marketplace of ideas by requiring foreign agents to declare their paymasters. Those, like the defendant, who conceal the full extent of their work for a foreign government when the law requires disclosure will face consequences for their actions.”
“Anyone working to advance the agenda of a foreign government within the United States is required by law to register as an agent of that country,” said FBI Assistant Director in Charge Sweeney. “Mr. Afrasiabi never disclosed to a congressman, journalists or others who hold roles of influence in our country that he was being paid by the Iranian government to paint an untruthfully positive picture of the nation. Our laws are designed to create transparency in foreign relations, and they are not arbitrary or malleable. As today's action demonstrates, we will fully enforce them to protect our national security.”
“Our arrest of Kaveh Afrasiabi makes it clear that the United States is not going to allow undeclared agents of Iran to operate in our country unchecked. For more than a decade, Mr. Afrasiabi was allegedly paid, directed, and controlled by the Government of Iran to lobby U.S. government officials, including a congressman; and to create and disseminate information favorable to the Iranian government,” said FBI Special Agent in Charge Bonavolonta. “The FBI will continue to do everything it can to uncover these hidden efforts and hold accountable those who work for our adversaries to the detriment of our national security.”
According to the complaint, Afrasiabi is a citizen of the Islamic Republic of Iran and a lawful permanent resident of the United States. Afrasiabi holds a PhD, and frequently publishes books and articles, and appears on English-language television programs discussing foreign relations matters, particularly Iran’s relations with the United States. Afrasiabi has identified or portrayed himself as a political scientist, a former political science professor or as an expert on foreign affairs.
Since at least 2007 to the present, Afrasiabi has also been secretly employed by the Iranian government and paid by Iranian diplomats assigned to the Permanent Mission of the IMUN. Afrasiabi has been paid approximately $265,000 in checks drawn on the IMUN’s official bank accounts since 2007, and has received health insurance through the IMUN’s employee health benefit plans since at least 2011.
In the course of his employment by the Iranian government, Afrasiabi has lobbied a U.S. congressman and the U.S. Department of State to advocate for policies favorable to Iran, counseled Iranian diplomats concerning U.S. foreign policy, made television appearances to advocate for the Iranian government’s views on world events, and authored articles and opinion pieces espousing the Iranian government’s position on various matters of foreign policy. Afrasiabi has long known that FARA requires agents of foreign principals to register with the U.S. Department of Justice and has discussed information obtained from FARA disclosures with others. Nevertheless, Afrasiabi did not register as an agent of the Government of Iran.
For example, in January 2020, Afrasiabi emailed Iran’s Foreign Minister and Permanent Representative to the United Nations with advice for “retaliation” for the U.S. military airstrike that killed Major General Qasem Soleimani, the head of the Quds Force, the external operations arm of the Iranian government’s Islamic Revolutionary Guard Corps, proposing that the Iranian government “end all inspections and end all information on Iran’s nuclear activities pending a [United Nations Security Council] condemnation of [the United States’] illegal crime.” Afrasiabi claimed that such a move would, among other things, “strike fear in the heart of [the] enemy.”
Afrasiabi has admitted in his own communications that his extensive body of published works and television appearances, in which he has consistently advocated perspectives and policy positions favored by the Iranian government, has been attributable to the funding he receives from the Iranian government. For example, in a July 28, 2020, email to Iran’s Foreign Minister, Afrasiabi included “links for many of [his] works, including books, hundreds of articles in international newspapers and academic journals,” telling Iran’s Foreign Minister, “Without support none of this would have been possible! This has been a very productive relationship spanning decades that ought not to be interrupted.”
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of both charged offenses, Afrasiabi faces a maximum sentence of 10 years in prison.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant U.S. Attorneys Ian C. Richardson and Michael T. Keilty are in charge of the prosecution, with assistance from Trial Attorney David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.
Líderes de Alto Rango de la MS-13 Son Acusados por Delitos de Terrorismo en los Estados UnidosRead the Press Release
Este día, en Central Islip, Nueva York, se presentó una acusación contra 14 de los líderes de mayor rango de la MS-13 en el mundo, conocidos como la Ranfla Nacional, la cual funcionaba como la Junta Directiva de la Organización y dirigió la violencia y la actividad delictiva de la MS-13 en todo el mundo durante casi dos décadas.
Concretamente, según el acta presentada, se les acusa de conspiración para prestar y ocultar apoyo material a terroristas, conspiración para cometer actos de terrorismo que trascienden las fronteras nacionales, conspiración para financiar el terrorismo y conspiración de narcoterrorismo en relación con la dirección de los acusados de la organización delictiva transnacional durante las últimas dos décadas en El Salvador, Estados Unidos, México y otros lugares.
El acusado Borromeo Enrique Henríquez, alias “Diablito de Hollywood,” es ampliamente reconocido como el miembro más poderoso de la Ranfla Nacional. Tres de los acusados, Fredy Iván Jandres-Parada, alias “Lucky de Park View” y “Lacky de Park View;” César Humberto López-Larios, alias “El Greñas de Stoners” y “Oso de Stoners” y Hugo Armando Quinteros-Mineros, alias “Flaco de Francis,” siguen en libertad y deben ser considerados como armados y peligrosos. Se exhorta a los ciudadanos que tengan información sobre su paradero que se pongan en contacto con la línea telefónica gratuita de información MS-13 del Buró Federal de Investigaciones (FBI), 1-866-STP-MS13 (1-866-787-6713), o con el Servicio de Investigaciones de Seguridad Nacional (HSI) del Servicio de Inmigración y Aduanas de los Estados Unidos, en el (866) 347-2423, o en https://www.ice.gov/webform/ice-tip-form. Juntos, el FBI y HSI han ofrecido $20,000 en recompensa por información que lleve al arresto y condena de cada uno de los tres fugitivos. Henríquez y otros 10 acusados están en custodia en El Salvador. Estados Unidos, en conjunto con el Gobierno de El Salvador, estudiarán las opciones para su extradición a los Estados Unidos.
El fiscal general en funciones, Jeffrey A. Rosen; el fiscal en funciones del Distrito Este de Nueva York (EDNY), Seth D. DuCharme; el director de la Fuerza de Tarea Conjunta Vulcano (JTFV), John J. Durham; el director del FBI, Christopher A. Wray, y el director ejecutivo asociado de HSI, Derek Benner, anunciaron la acusación.
El fiscal general en funciones Rosen dijo, “La acusación anunciada hoy es la más amplia y de mayor alcance que se ha hecho en la historia de los EE.UU. contra la MS-13 y su estructura de mando y control. Cuando el fiscal general Barr anunció la creación de la JTFV en agosto de 2019, previó un enfoque transversal que combinaría herramientas procesales ya probadas con estrategias innovadoras diseñadas específicamente para eliminar la capacidad de los líderes de la MS-13 de operar la banda y dirigir su actividad terrorista. Esta acusación refleja un importante paso hacia el logro de ese objetivo. Al trabajar codo a codo con nuestros socios de la aplicación de la ley de EE. UU. y con nuestros socios en El Salvador, hemos acusado a los líderes de más alto rango de la MS-13 de operar una organización criminal transnacional que utiliza el terror para imponer su voluntad en los barrios, negocios y sobre civiles inocentes en Estados Unidos y América Central.”
“La MS-13 es responsable de una ola de muerte y violencia que ha aterrorizado a las comunidades, dejando a los barrios de Long Island y a todo el Distrito Este de Nueva York inundados de sangre,” dijo el fiscal en funciones del Distrito Este de Nueva York (EDNY), Seth D. DuCharme. “Incluso desde la cárcel, la Ranfla Nacional continuó dirigiendo las operaciones globales de la MS-13, reclutando nuevos miembros en la MS-13, incluyendo niños, y orquestando asesinatos y caos en todo el mundo. La innovadora acusación de hoy busca demoler la MS-13 apuntando a su estructura de mando y control y haciendo responsable a la Junta Directiva de la MS-13 por sus acciones terroristas.”
“El FBI está comprometido a combatir todas las formas de terrorismo que amenazan al pueblo estadounidense así como a nuestros socios internacionales,” dijo el director del FBI, Christopher Wray. “En colaboración con nuestros socios federales, estatales, locales e internacionales, tomamos medidas agresivas para atacar y perseguir algunos de los más altos niveles de liderazgo de la MS-13. Esta operación es una clara señal para otros que participan en este tipo de actividad delictiva transnacional: el FBI trabajará incansablemente para llevarlos ante la justicia dondequiera que tengan su base.”
“Por más de una década, HSI se ha mantenido firme en nuestra resolución de desmantelar las pandillas transnacionales como la MS-13,” dijo el director ejecutivo asociado de HSI, Derek Benner. “Como una de las organizaciones criminales más violentas y peligrosas, la MS-13 y la Ranfla Nacional fueron directamente responsables de una violencia y actividad criminal impensables en comunidades a lo largo de los Estados Unidos y Centroamérica. Como resultado de la ardua labor y los considerables recursos dedicados a la Fuerza de Tarea Conjunta Vulcano por nuestros socios en la aplicación de la ley, tanto nacionales como internacionales, esta acusación tendrá un efecto negativo duradero en las futuras actividades ilícitas mundiales de esta organización delictiva transnacional.”
Como se alega en la acusación, la Ranfla Nacional comprende el más alto nivel de liderazgo del MS-13. Aproximadamente en 2002, los acusados y otros dirigentes del MS-13 comenzaron a establecer una estructura de mando y control altamente organizada y jerárquica como medio para llevar a cabo sus decisiones y hacer cumplir sus órdenes, incluso mientras estaban en prisión. Dirigieron actos de violencia y asesinato en El Salvador, Estados Unidos y otros lugares; establecieron campamentos de entrenamiento de tipo militar para sus miembros y obtuvieron armas militares como rifles, pistolas, granadas, artefactos explosivos improvisados (IED) y lanzacohetes. Como líderes de la MS-13, los acusados controlaban franjas de territorio y participaban en actividades de relaciones públicas en nombre de la organización delictiva transnacional. Además, los acusados utilizaban la gran cantidad de miembros de la MS-13 en los Estados Unidos para participar en actividades delictivas, como el tráfico de drogas y la extorsión para recaudar fondos en apoyo de las actividades terroristas de la MS-13 en El Salvador y en otros lugares, y dirigían a sus miembros en los Estados Unidos a cometer actos de violencia, incluidos asesinatos, para promover sus objetivos.
Como se alega también en la acusación, un tema central de las normas aplicadas por la Ranfla Nacional era el requisito de lealtad a la MS-13, o al “barrio.” El requisito de lealtad era fundamental en todos los aspectos de la vida de los miembros del MS-13. Los miembros que desobedecían las reglas, mostraban deslealtad a la banda o a sus líderes, cooperaban con las fuerzas del orden o faltaban al respeto a otros miembros eran sometidos a severos castigos, incluso la muerte. Las normas establecidas por la Ranfla Nacional permitieron que la banda prosperara en algunas partes de los Estados Unidos, incluso dentro del EDNY, donde, bajo el mando de los acusados, la MS-13 ha cometido numerosos actos de violencia, entre ellos asesinatos, intentos de asesinato, asaltos, secuestros, tráfico de drogas, extorsión de personas y empresas, obstrucción de la justicia y envío de las cuotas y el producto de la actividad delictiva por transferencia electrónica a los líderes de la MS-13 en El Salvador.
Como se expone más adelante en el acta de acusación, la Ranfla Nacional ha ejercido su poder sobre el Gobierno de El Salvador cometiendo actos de violencia e intimidación contra funcionarios del gobierno, los organismos de represión y la población de El Salvador en general. Al hacerlo, el Ranfla Nacional ha ordenado el asesinato de funcionarios de los organismos de represión y del Gobierno de El Salvador, así como la “luz verde”, o el asesinato, de un agente especial del FBI destacado en El Salvador que investigaba la MS-13 y sus miembros. Además, al controlar el nivel de violencia del MS-13, la Ranfla Nacional ejerció influencia sobre el Gobierno de El Salvador. Por ejemplo, como se alega en el acta de acusación, desde aproximadamente 2012 hasta aproximadamente 2015, la Ranfla Nacional entró en una “tregua” con el entonces Gobierno de El Salvador. Como parte de ese acuerdo, la Ranfla Nacional ordenó a la MS-13 que redujera los homicidios en El Salvador a cambio de mejores condiciones carcelarias, prestaciones y pagos en efectivo. En 2015, cuando este acuerdo se derrumbó, la Ranfla Nacional culpó a los Estados Unidos, creyendo que el gobierno de los Estados Unidos presionó al gobierno de El Salvador para que pusiera fin a la “tregua” como condición para recibir fondos de cooperación. A partir de entonces, a principios de 2016, la Ranfla Nacional comenzó a planificar una importante campaña de violencia coordinada en El Salvador en represalia por las medidas más severas impuestas a sus miembros tras el fin de la “tregua.” Como se alega en la acusación, los acusados ordenaron a todas las clicas de El Salvador que crearan una unidad especializada de miembros de la MS-13 para atacar a los agentes de policía, los militares y los funcionarios gubernamentales de El Salvador. Estos miembros se sometieron a entrenamiento militar en los campamentos de entrenamiento militar de la MS-13 en El Salvador. Los acusados también ordenaron a todas las clicas, incluidas las de los Estados Unidos y el EDNY, que proporcionarán los beneficios de sus actividades delictivas relacionadas con la MS-13 para que se utilizaran en la compra de armas para los ataques previstos contra la policía en El Salvador. En total, los acusados recaudaron más de $600,000 para este fondo que se utilizó para comprar armas, incluyendo ametralladoras M-16 y M-60, granadas, IED y lanzacohetes. Además, los acusados ordenaron un aumento de la violencia, incluyendo asesinatos, en el EDNY y en otras partes de los Estados Unidos, que vieron un dramático aumento de la violencia con las MS-13 en 2016 y 2017.
Por último, como se alega en la acusación, la Ranfla Nacional dirigió la expansión de las actividades de la MS-13 en todo el mundo, sobre todo en México, donde se envió a varios dirigentes de alto rango para que organizaran operaciones. En México, los líderes de la MS-13 establecieron conexiones para obtener narcóticos y armas de fuego, hicieron negocios con los cárteles mexicanos de la droga, como los Zetas, el Cártel del Golfo, el Cártel de Jalisco Nueva Generación (CJNG) y el Cártel de Sinaloa, y se dedicaron a la trata y el contrabando de personas.
En agosto de 2019, el fiscal general William P. Barr creó la JTFV para llevar a cabo las recomendaciones del Subcomité MS-13 formado en el marco del Grupo de Trabajo del fiscal general sobre la Delincuencia Organizada Transnacional. El Grupo de Tarea del fiscal general fue el resultado de la Orden Ejecutiva del presidente Donald J. Trump, de febrero de 2017, en la que se ordenaba a los Departamentos de Justicia, Estado y Seguridad Nacional y a la Oficina del Director de Inteligencia Nacional que coordinaran un enfoque de todo el gobierno para desmantelar las organizaciones delictivas transnacionales, como la MS-13, y aumentar la seguridad del pueblo estadounidense.
Desde su creación, la JTFV ha aplicado con éxito un enfoque de todo el gobierno para combatir la MS-13, que incluye el aumento de la coordinación y la colaboración con asociados extranjeros en la aplicación de la ley, entre ellos El Salvador, México, Honduras y Guatemala; la designación de programas, camarillas y líderes de la MS-13 prioritarios, que tienen el mayor impacto en los Estados Unidos, para enjuiciamientos selectivos; y la coordinación de acusaciones importantes de la MS-13 en las oficinas de los fiscales de los Estados Unidos en todo el país, incluido el primer uso de cargos de seguridad nacional contra los líderes de la MS-13.
La JTFV ha estado compuesta por miembros de la División de Seguridad Nacional y de la División Penal del Departamento de Justicia, así como de la División de los Estados Unidos Fiscalías de todo el país, incluyendo el EDNY; el Distrito de Nueva Jersey; el Distrito Norte de Ohio; el Distrito de Utah; el Distrito Este de Virginia; el Distrito de Massachusetts; el Distrito Este de Texas; el Distrito Sur de Nueva York; el Distrito de Alaska; el Distrito Sur de Florida; el Distrito Sur de California; el Distrito de Nevada, y el Distrito de Columbia. Además, todos los organismos de aplicación de la ley del Departamento de Justicia participan en el esfuerzo, incluidos el FBI, la Administración de Lucha contra las Drogas de los Estados Unidos, la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos, el Servicio de Alguaciles de los Estados Unidos y la Oficina de Prisiones de los Estados Unidos. Además, HSI también desempeña un papel fundamental en el JTFV.
El fiscal general, en funciones, Jeffrey A. Rosen, expresó su sincero agradecimiento al fiscal general de El Salvador, Raúl Melara, por la asistencia de su oficina, así como a los investigadores de la Policía Nacional Civil de El Salvador, unidad del Centro Transnacional Antipandillas, por su inestimable cooperación. Además, numerosos componentes del Departamento de Justicia contribuyeron a esta acusación, entre ellos: la Sección de Lucha contra el Terrorismo de la División de Seguridad Nacional; la Oficina de Asuntos Internacionales del Departamento de Justicia; la Oficina de Desarrollo, Asistencia y Capacitación del Ministerio Público en el Extranjero de la División Penal; la Sección de Lucha contra la Delincuencia Organizada y las Pandillas; y la Oficina Ejecutiva de los Grupos de Tareas para la Lucha contra la Delincuencia Organizada contra las Drogas. Por último, en consonancia con la Orden Ejecutiva del presidente Trump y el enfoque de todo el gobierno del fiscal general, el Departamento de Estado ha prestado un apoyo fundamental a la misión de la JTFV.
Los cargos anunciados hoy son acusaciones y los acusados se presumen inocentes a menos y hasta que se demuestre su culpabilidad más allá de toda duda razonable en un tribunal de justicia. Si son declarados culpables, los acusados se enfrentan a una sentencia máxima de cadena perpetua.
El caso del gobierno está siendo procesado por los fiscales adjuntos James Donnelly, Matthew Shepherd y Stewart Young de JTFV, y los fiscales adjuntos Paul G. Scotti, Justina L. Geraci y Megan E. Farrell de la División Criminal de Long Island del EDNY.
Para saber más sobre los esfuerzos del Departamento de Justicia en la lucha contra la MS-13 de 2016 a 2020, véase el informe en: /media/1120601/dl?inline.
Una copia de la acusación y los carteles de buscados en español haciendo clic en: acusación, Fredy Ivan Jandres-Parada póster buscado en español, Cesar Humberto Lopez-Larios póster buscado en español, y Hugo Armando Quinteros-Mineros Wanted póster buscado en español.
Los Acusados:
BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Edad: 42 años
ELMER CANALES-RIVERA (“Crook de Hollywood”)
Edad: 44 años
EFRAIN CORTEZ (“Tigre de Park View” y “Viejo Tigre de Park View”)
Edad: 51 años
RICARDO ALBERTO DIAZ (“Rata de Sotavento” y “Ratón de Sotavento”)
Edad: 47 años
EDUARDO ERAZO-NOLASCO (“Colocho de Western” y “Mustage de Western”)
Edad: 48 años
EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Edad: 46 años
JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Edad: 46 años
FREDY IVAN JANDRES-PARADA (“Lucky de Park View” y “Lacky de Park View”)
Edad: 45 años
LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Edad: 40 años
CESAR HUMBERTO LOPEZ-LARIOS (“El Greñas de Stoners” y “Oso de Stoners”)
Edad: 42 años
JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” y “Viejo Pavas de 7-11”)
Edad: 56 años
HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Edad: 48 años
SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Edad: 42 años
ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Edad: 42 años
Captain and 10 Members and Associates of Gambino Crime Family Plead Guilty to Crimes Including Racketeering Conspiracy, Wire Fraud, Money Laundering and Obstruction of JusticeRead the Press Release
Earlier today, and throughout the past week in federal court in Brooklyn, 11 members and associates of the Gambino organized crime family of La Cosa Nostra pleaded guilty to multiple crimes, including racketeering conspiracy, fraud, obstruction of justice and related offenses for criminal activities throughout the New York metropolitan area committed as part of the illicit activities of the Gambino family. One additional defendant pleaded guilty to filing a false tax return. The proceedings were held before United States Magistrate Judge Roanne L. Mann.
Today, Andrew Campos, a captain in the Gambino organized crime family, and Vincent Fiore, a Gambino family soldier, pleaded guilty to racketeering conspiracy, variously admitting their participation in predicate acts of wire fraud, money laundering and obstruction of justice offenses.
Previously, Richard Martino, a Gambino family soldier, and Frank Tarul, a Gambino crime family associate, pleaded guilty to conspiracy to obstruction justice; Mark Kocaj, Benito DiZenzo and Carlos Cobos, Sr., Gambino family associates, pleaded guilty to wire fraud conspiracy; James Ciaccia and George Campos, Gambino family soldiers, and Renato Barca, Jr. and Michael Tarul, Gambino family associates, pleaded guilty to making false statements in connection with their fraudulently obtaining safety cards from the Occupational Safety and Health Administration (“OSHA”). John Simonlacaj, a former managing director of a construction company, pleaded guilty to submitting a false tax return.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty pleas.
“With these guilty pleas, a dozen members and associates of the Gambino crime family are held accountable for committing a litany of crimes in the construction industry that enriched the Mafia at the expense of the American taxpayer, construction companies harmed by their pernicious presence and the U.S. government,” stated Acting United States Attorney DuCharme. “The defendants will now have to pay the consequences for their corrupt activities.” Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the Internal Revenue Service- Criminal Investigation, the New York City Police Department and the Department of Labor for their exemplary work on the case. Mr. DuCharme also thanked the Queens County District Attorney’s Office, the United States Probation Departments for the Eastern and Southern Districts of New York and the Waterfront Commission of New York Harbor for their assistance during the investigation.
According to court filings and facts presented during the guilty plea proceedings, Andrew Campos and members of his crew carried out fraudulent schemes to infiltrate the construction industry and earn millions of dollars in criminal proceeds, in part through their operation of a carpentry company, CWC Contracting Corp. (“CWC”). Campos, Fiore and Cobos, among others, defrauded the U.S. government by paying CWC employees millions of dollars in cash without making the required payroll tax withholdings and payments. Further, Campos, Fiore and others laundered money, causing checks to be made from CWC, purportedly for work performed in connection with CWC construction projects where, in fact, no services were performed. The proceeds of these scheme were used to, among other things, construct Andrew Campos’s residence. Further, when Fiore became aware of the government’s investigation, he tried to obstruct it by asking another person to lie about his and Campos’s misconduct.
Between June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes and kickbacks to employees of a real estate development company (described in the indictment as “Construction Company #1”), including John Simonlacaj, the company’s former Managing Director of Development. CWC paid the bribes in the form of hundreds of thousands of dollars’ worth of free labor and materials used for renovations on Simonlacaj’s residence, which Simonlacaj failed to report as taxable income and which Kocaj had fraudulently paid for by billing them to a CWC project for Construction Company #1. Kocaj was recorded stating the work “should have been pro bono” because Construction Company #1 “do[es] 50 million a year in business.” DiZenzo and Fiore performed tens of thousands of dollars of work at a gym for the benefit of an employee of another real estate development company (described in the indictment as “Construction Company #2”), which they agreed would be fraudulently paid for by billing the work to an unrelated project for Construction Company #2.
In addition to these schemes, Martino was convicted in the Eastern District of New York in 2005 for his role in a scheme to defraud users of adult entertainment services. Martino was ordered by the Court to pay $9.1 million in forfeiture. After his release from prison, Martino, together with Frank Tarul and others, concealed Martino’s substantial income in order to avoid him paying the more than $300,000 forfeiture balance owed by falsely reporting that Martino had limited assets and worked for Tarul’s flooring company. In reality, Martino operated companies that earned millions of dollars.
Finally, Barca, George Campos, Ciaccia and Michael Tarul, along with others, fraudulently procured safety cards from the United States Department of Labor indicating the completion of certain OSHA training courses when, in fact, the courses were not completed.
When sentenced, Andrew Campos, Cobos, DiZenzo, Fiore, Kocaj, Martino and Frank Tarul each face up to 20 years in prison. Barca, George Campos, Ciaccia and Michael Tarul each face up to 5 years in prison. Simonlacaj faces up to 3 years in prison
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Keith D. Edelman and Kayla C. Bensing are in charge of the prosecution, assisted by EDNY Special Agent Erik Nesbitt. Assistant United States Attorney Claire S. Kedeshian of the Office’s Civil Division is handling forfeiture matters.
The Defendants:
RENATO BARCA, JR. (also known as “Ronny”)
Age: 33
Bronx, New YorkANDREW CAMPOS
Age: 51
Scarsdale, New YorkGEORGE CAMPOS
Age: 73
Peekskill, New YorkJAMES CIACCIA
Age: 52
Bronx, New YorkCARLOS COBOS, SR.
Age: 57
Brentwood, New YorkBENITO DIZENZO (also known as “Benny”)
Age: 54
New Rochelle, New YorkVINCENT FIORE
Age: 58
Briarcliff, New YorkMARK KOCAJ (also known as “Chippy”)
Age: 50
Tuckahoe, New YorkRICHARD MARTINO
Age: 61
Rye, New YorkJOHN SIMONLACAJ (also known as “John Si” and “Smiley”)
Age: 51
Scarsdale, New YorkFRANK TARUL (also known as “Bones”)
Age: 46
Bronx, New YorkMICHAEL TARUL (also known as “Perkins”)
Age: 44
Bronx, New YorkE.D.N.Y. Docket No. 19-CR-575 (FB)
MS-13’s Highest-Ranking Leaders Charged with Terrorism Offenses in the United StatesRead the Press Release
Earlier today, an indictment was unsealed in Central Islip, New York charging 14 of the world’s highest-ranking MS-13 leaders who are known today as the Ranfla Nacional, which operated as the Organization’s Board of Directors, and directed MS-13’s violence and criminal activity around the world for almost two decades.
Specifically, the indictment charges the defendants with conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism and narco-terrorism conspiracy in connection with the defendants’ leadership of the transnational criminal organization over the past two decades from El Salvador, the United States, Mexico and elsewhere.
Defendant Borromeo Enrique Henriquez, aka “Diablito de Hollywood,” is widely recognized as the most powerful member of the Ranfla Nacional. Three of the indicted defendants, Fredy Ivan Jandres-Parada, aka “Lucky de Park View” and “Lacky de Park View,” Cesar Humberto Lopez-Larios, aka “El Grenas de Stoners” and “Oso de Stoners,” and Hugo Armando Quinteros-Mineros, aka “Flaco de Francis,” remain at large and should be considered armed and dangerous. Members of the public with information concerning their whereabouts are strongly encouraged to contact the Federal Bureau of Investigation’s (FBI) toll-free MS-13 tip line, 1-866-STP-MS13 (1-866-787-6713), or U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at (866) 347-2423 or https://www.ice.gov/webform/ice-tip-form. Together, FBI and HSI have offered $20,000 in rewards for information leading to the arrest and conviction of each of the three fugitives. Henriquez and 10 other defendants are in custody in El Salvador. The United States will explore options for their extradition to the United States with the Government of El Salvador.
Acting Attorney General Jeffrey A. Rosen, Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York (EDNY), Director of Joint Task Force Vulcan (JTFV) John J. Durham, FBI Director Christopher A. Wray, and Executive Associate Director Derek Benner of HSI, announced the unsealing of the indictment.
Acting Attorney General Rosen said, “The indictment announced today is the highest-reaching and most sweeping indictment targeting MS-13 and its command and control structure in U.S. history. When Attorney General Barr announced the creation of JTFV in August 2019, he envisioned a whole-of-government approach that would combine proven prosecution tools from the past with innovative strategies designed specifically to eliminate MS-13 leadership’s ability to operate the gang and direct its terrorist activity. This indictment reflects an important step toward achieving that goal. By working side-by-side with our U.S. law enforcement partners and with our partners in El Salvador, we have charged MS-13’s highest-ranking leaders with operating a transnational criminal organization that utilizes terror to impose their will on neighborhoods, businesses and innocent civilians across the United States and Central America.”
“MS-13 is responsible for a wave of death and violence that has terrorized communities, leaving neighborhoods on Long Island and throughout the Eastern District of New York awash in bloodshed,” said Acting U.S. Attorney Seth D. DuCharme. “Even when incarcerated, the Ranfla Nacional continued to direct MS-13’s global operations, recruit new members, including children, into MS-13, and orchestrate murder and mayhem around the world. Today’s ground-breaking indictment seeks to demolish MS-13 by targeting its command and control structure and holding MS-13’s Board of Directors accountable for their terroristic actions.”
“The FBI is committed to combatting all forms of terrorism that threaten the American people as well as our international partners,” said FBI Director Christopher Wray. “In collaboration with our federal, state, local and international partners, we took aggressive steps to target and pursue some of the highest levels of leadership of MS-13. This operation is a clear signal to others who engage in this type of transnational criminal activity: the FBI will work tirelessly to bring them to justice wherever they are based.”
“For over a decade, HSI has remained steadfast in our resolve to dismantle transnational gangs like MS-13,” said HSI Executive Associate Director Benner. “As one of the most violent and dangerous criminal enterprises, MS-13 and Ranfla Nacional were directly responsible for unthinkable violence and criminal activity in communities across the United States and throughout Central America. As a result of the hard work and substantial resources dedicated to Joint Task Force Vulcan by our domestic and international law enforcement partners, this indictment will have a lasting disruptive effect on the future global illicit activities of this transnational criminal organization.”
Courtesy of the FBIAs alleged in the indictment, the Ranfla Nacional comprises the highest level of leadership of MS-13. In approximately 2002, the defendants and other MS-13 leaders began establishing a highly organized, hierarchical command and control structure as a means to effectuate their decisions and enforce their orders, even while in prison. They directed acts of violence and murder in El Salvador, the United States, and elsewhere, established military-style training camps for its members and obtained military weapons such as rifles, handguns, grenades, improvised explosive devices (IED) and rocket launchers. As leaders of MS-13, the defendants controlled swaths of territory and engaged in public relations efforts on behalf of the transnational criminal organization. Further, the defendants used MS-13’s large membership in the United States to engage in criminal activities, such as drug trafficking and extortion to raise money to support MS-13’s terrorist activities in El Salvador and elsewhere, and directed members in the United States to commit acts of violence, including murders, to further its goals.
As further alleged in the indictment, a central theme of the rules implemented by the Ranfla Nacional was the requirement of loyalty to MS-13, or to the “barrio.” The requirement for loyalty was central to all aspects of life for MS-13 members. Members who disobeyed the rules, showed disloyalty to the gang or to its leaders, cooperated with law enforcement, or disrespected other members were subject to severe punishment, including death. The rules put in place by the Ranfla Nacional allowed the gang to flourish in parts of the United States, including within the EDNY where, under the defendants’ command, MS-13 has committed numerous acts of violence—including murders, attempted murders, assaults, kidnappings, drug trafficking, extortion of individuals and businesses, obstructed justice and sent dues and the proceeds of criminal activity by wire transfer to MS-13 leaders in El Salvador.
As further outlined in the indictment, the Ranfla Nacional has exercised its power over the Government of El Salvador by committing acts of violence and intimidation over government officials, law enforcement and the population of El Salvador at large. In doing so the Ranfla Nacional has ordered the killing of law enforcement and government officials in El Salvador as well as ordering a “green light,” or killing, of a FBI Special Agent detailed to El Salvador investigating MS-13 and its members. Moreover, by controlling the level of MS-13’s violence, the Ranfla Nacional exercised leverage with the Government of El Salvador. For example, as alleged in the indictment, from approximately 2012 until approximately 2015, the Ranfla Nacional entered into a “truce” with the then-Government of El Salvador. As part of this agreement, the Ranfla Nacional directed MS-13 to reduce homicides in El Salvador in exchange for improved prison conditions, benefits and cash payments. In 2015, when this agreement collapsed, the Ranfla Nacional blamed the United States, believing that the U.S. government pressured the government of El Salvador to end the “truce” as a condition of receiving funds from the United States. Thereafter, in early 2016, the Ranfla Nacional began planning for a major campaign of coordinated violence in El Salvador in retaliation for the harsher measures imposed on its members after the end of the “truce.” As alleged in the indictment, the defendants ordered all cliques in El Salvador to create a specialized unit of MS-13 members to target police officers, military members, and government officials in El Salvador. These members underwent military training at MS-13 military training camps in El Salvador. The defendants also ordered all cliques, including those in the United States and in the EDNY, to provide profits from their MS-13-related criminal activity to be used to purchase weapons for the planned attacks on police in El Salvador. In total, the defendants collected over $600,000 U.S. dollars for this fund which was used to purchase weapons, including M-16s and M-60 machine guns, grenades, IEDs, and rocket launchers. Furthermore, the defendants ordered increased violence, including murders, in the EDNY and other parts of the United States, which saw a dramatic increase in MS-13 violence in 2016 and 2017.
Finally, as alleged in the indictment, the Ranfla Nacional directed the expansion of MS-13 activities around the world, most significantly into Mexico, where several high-ranking leaders were sent to organize operations there. In Mexico, MS-13 leaders made connections to obtain narcotics and firearms, conducted business with Mexican drug cartels such as the Zetas, Gulf Cartel, Cártel de Jalisco Nueva Generación (CJNG) and Sinaloa Cartel, and engaged in human trafficking and smuggling.
In August 2019, Attorney General William P. Barr created JTFV to carry out the recommendations of the MS-13 Subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force (TOC Task Force). The Attorney General’s TOC Task Force resulted from President Donald J. Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and increase the safety of the American people.
Since its creation, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras and Guatemala; designating priority MS-13 programs, cliques and leaders, who have the most impact on the United States, for targeted prosecutions; and coordinating significant MS-13 indictments in U.S. Attorney’s Offices across the country, including the first use of national security charges against MS-13 leaders.
JTFV has been comprised of members from the Department of Justice’s National Security Division and the Criminal Division, as well as U.S. Attorney’s Offices across the country, including the EDNY; the District of New Jersey; the Northern District of Ohio; the District of Utah; the Eastern District of Virginia; the District of Massachusetts; the Eastern District of Texas; the Southern District of New York; the District of Alaska; the Southern District of Florida; the Southern District of California; the District of Nevada; and the District of Columbia. In addition, all Department of Justice law enforcement agencies are involved in the effort, including the FBI; the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons. In addition, HSI also plays a critical role in JTFV.
Acting Attorney General Rosen expressed his sincere thanks to Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policía Nacional Civil, Centro Antipandilla Transnacional unit for their invaluable cooperation. Additionally, numerous Department of Justice components contributed to this indictment, including: the National Security Division’s Counterterrorism Section; the Justice Department’s Office of International Affairs; the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training; and Organized Crime and Gang Section; and the Organized Crime Drug Enforcement Task Forces Executive Office. Finally, consistent with President Trump’s Executive Order and the Attorney General’s whole of government approach, the Department of State has provided critical support for JTFV’s mission.
The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, the defendants face a maximum sentence of life in prison.
The government’s case is being prosecuted by Assistant U.S. Attorneys James Donnelly, Matthew Shepherd, and Stewart Young from JTFV, and Assistant U.S. Attorneys Paul G. Scotti, Justina L. Geraci, and Megan E. Farrell from the EDNY’s Long Island Criminal Division.
To learn more about the Justice Department’s efforts in combating MS-13 from 2016 to 2020, see report at https://www.justice.gov/ag/page/file/1329776/download.
A copy of the indictment and wanted posters in English and Spanish can be downloaded by clicking on: indictment, Fredy Ivan Jandres-Parada Wanted poster in English and Spanish, Cesar Humberto Lopez-Larios Wanted poster in English and Spanish, and Hugo Armando Quinteros-Mineros Wanted poster in English and Spanish.
The Defendants:
BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age: 42ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age: 44EFRAIN CORTEZ (“Tigre de Park View” and “Viejo Tigre de Park View”)
Age: 51RICARDO ALBERTO DIAZ (“Rata de Leewards” and “Mousey de Leewards”)
Age: 47EDUARDO ERAZO-NOLASCO (“Colocho de Western” and “Mustage de Western”)
Age: 48EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Age: 46JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Age: 46FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age: 45LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Age: 40CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age: 42JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” and “Viejo Pavas de 7-11”)
Age: 56HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age: 48
SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age: 42ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age: 42MS-13’s Highest-Ranking Leaders Charged with Terrorism Offenses in the United StatesRead the Press Release
CENTRAL ISLIP, NY - Earlier today, an indictment was unsealed in Central Islip, New York charging 14 of the world’s highest-ranking MS-13 leaders who are known today as the Ranfla Nacional, which operated as the Organization’s Board of Directors, and directed MS-13’s violence and criminal activity around the world for almost two decades.
Specifically, the indictment charges the defendants with conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism and narco-terrorism conspiracy in connection with the defendants’ leadership of the transnational criminal organization over the past two decades from El Salvador, the United States, Mexico and elsewhere.
Defendant Borromeo Enrique Henriquez, aka “Diablito de Hollywood,” is widely recognized as the most powerful member of the Ranfla Nacional. Three of the indicted defendants, Fredy Ivan Jandres-Parada, aka “Lucky de Park View” and “Lacky de Park View,” Cesar Humberto Lopez-Larios, aka “El Grenas de Stoners” and “Oso de Stoners,” and Hugo Armando Quinteros-Mineros, aka “Flaco de Francis,” remain at large and should be considered armed and dangerous. Members of the public with information concerning their whereabouts are strongly encouraged to contact the Federal Bureau of Investigation’s (FBI) toll-free MS-13 tip line, 1-866-STP-MS13 (1-866-787-6713), or U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at (866) 347-2423 or https://www.ice.gov/webform/ice-tip-form. Together, FBI and HSI have offered $20,000 in rewards for information leading to the arrest and conviction of each of the three fugitives. Henriquez and 10 other defendants are in custody in El Salvador. The United States will explore options for their extradition to the U.S. with the government of El Salvador.
Jeffrey A. Rosen, Acting Attorney General; Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York (EDNY); John J. Durham, Director of Joint Task Force Vulcan (JTFV); Christopher A. Wray, Director, FBI; and Derek Benner, Executive Associate Director, HSI, announced the unsealing of the indictment.
“The indictment announced today is the highest-reaching and most sweeping indictment targeting MS-13 and its command and control structure in U.S. history. When Attorney General Barr announced the creation of JTFV in August 2019, he envisioned a whole-of-government approach that would combine proven prosecution tools from the past with innovative strategies designed specifically to eliminate MS-13 leadership’s ability to operate the gang and direct its terrorist activity. This indictment reflects an important step toward achieving that goal. By working side-by-side with our U.S. law enforcement partners and with our partners in El Salvador, we have charged MS-13’s highest-ranking leaders with operating a transnational criminal organization that utilizes terror to impose their will on neighborhoods, businesses and innocent civilians across the United States and Central America,” stated Acting Attorney General Rosen.
“MS-13 is responsible for a wave of death and violence that has terrorized communities, leaving neighborhoods on Long Island and throughout the Eastern District of New York awash in bloodshed,” said Acting U.S. Attorney DuCharme. “Even when incarcerated, the Ranfla Nacional continued to direct MS-13’s global operations, recruit new members, including children, into MS-13, and orchestrate murder and mayhem around the world. Today’s ground-breaking indictment seeks to demolish MS-13 by targeting its command and control structure and holding MS-13’s Board of Directors accountable for their terroristic actions.”
“The FBI is committed to combatting all forms of terrorism that threaten the American people as well as our international partners,” stated FBI Director Wray. “In collaboration with our federal, state, local and international partners, we took aggressive steps to target and pursue some of the highest levels of leadership of MS-13. This operation is a clear signal to others who engage in this type of transnational criminal activity: the FBI will work tirelessly to bring them to justice wherever they are based.”
“For over a decade, HSI has remained steadfast in our resolve to dismantle transnational gangs like MS-13, stated HSI Executive Associate Director Benner. “As one of the most violent and dangerous criminal enterprises, MS-13 and La Ranfla Nacional were directly responsible for unthinkable violence and criminal activity in communities across the United States and throughout Central America. As a result of the hard work and substantial resources dedicated to Joint Task Force Vulcan by our domestic and international law enforcement partners, this indictment will have a lasting disruptive effect on the future global illicit activities of this transnational criminal organization.”
As alleged in the indictment, the Ranfla Nacional comprises the highest level of leadership of MS-13. In approximately 2002, the defendants and other MS-13 leaders began establishing a highly-organized, hierarchical command and control structure as a means to effectuate their decisions and enforce their orders, even while in prison. They directed acts of violence and murder in El Salvador, the United States, and elsewhere, established military-style training camps for its members and obtained military weapons such as rifles, handguns, grenades, improvised explosive devices (IED) and rocket launchers. As leaders of MS-13, the defendants controlled swaths of territory and engaged in public relations efforts on behalf of the transnational criminal organization. Further, the defendants used MS-13’s large membership in the United States to engage in criminal activities, such as drug trafficking and extortion to raise money to support MS-13’s terrorist activities in El Salvador and elsewhere, and directed members in the United States to commit acts of violence, including murders, to further its goals.
As further alleged in the indictment, a central theme of the rules implemented by the Ranfla Nacional was the requirement of loyalty to MS-13, or to the “barrio.” The requirement for loyalty was central to all aspects of life for MS-13 members. Members who disobeyed the rules, showed disloyalty to the gang or to its leaders, cooperated with law enforcement, or disrespected other members were subject to severe punishment, including death. The rules put in place by the Ranfla Nacional allowed the gang to flourish in parts of the United States, including within the EDNY where, under the defendants’ command, MS-13 has committed numerous acts of violence—including murders, attempted murders, assaults, kidnappings, drug trafficking, extortion of individuals and businesses, obstructed justice and sent dues and the proceeds of criminal activity by wire transfer to MS-13 leaders in El Salvador.
As further outlined in the indictment, the Ranfla Nacional has exercised its power over the Government of El Salvador by committing acts of violence and intimidation over government officials, law enforcement and the population of El Salvador at large. In doing so the Ranfla Nacional has ordered the killing of law enforcement and government officials in El Salvador as well as ordering a “green light,” or killing, of a FBI Special Agent detailed to El Salvador investigating MS-13 and its members. Moreover, by controlling the level of MS-13’s violence, the Ranfla Nacional exercised leverage with the Government of El Salvador. For example, as alleged in the indictment, from approximately 2012 until approximately 2015, the Ranfla Nacional entered into a “truce” with the then-Government of El Salvador. As part of this agreement, the Ranfla Nacional directed MS-13 to reduce homicides in El Salvador in exchange for improved prison conditions, benefits and cash payments. In 2015, when this agreement collapsed, the Ranfla Nacional blamed the United States, believing that the U.S. government pressured the government of El Salvador to end the “truce” as a condition of receiving funds from the United States. Thereafter, in early 2016, the Ranfla Nacional began planning for a major campaign of coordinated violence in El Salvador in retaliation for the harsher measures imposed on its members after the end of the “truce.” As alleged in the indictment, the defendants ordered all cliques in El Salvador to create a specialized unit of MS-13 members to target police officers, military members, and government officials in El Salvador. These members underwent military training at MS-13 military training camps in El Salvador. The defendants also ordered all cliques, including those in the United States and in the EDNY, to provide profits from their MS-13-related criminal activity to be used to purchase weapons for the planned attacks on police in El Salvador. In total, the defendants collected over $600,000 U.S. dollars for this fund which was used to purchase weapons, including M-16s and M-60 machine guns, grenades, IEDs, and rocket launchers. Furthermore, the defendants ordered increased violence, including murders, in the EDNY and other parts of the United States, which saw a dramatic increase in MS-13 violence in 2016 and 2017.
Finally, as alleged in the indictment, the Ranfla Nacional directed the expansion of MS-13 activities around the world, most significantly into Mexico, where several high-ranking leaders were sent to organize operations there. In Mexico, MS-13 leaders made connections to obtain narcotics and firearms, conducted business with Mexican drug cartels such as the Zetas, Gulf Cartel, Cártel de Jalisco Nueva Generación (CJNG) and Sinaloa Cartel, and engaged in human trafficking and smuggling.
In August 2019, Attorney General William P. Barr created JTFV to carry out the recommendations of the MS-13 Subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force (TOC Task Force). The Attorney General’s TOC Task Force resulted from President Donald J. Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and increase the safety of the American people.
Since its creation, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras and Guatemala; designating priority MS-13 programs, cliques and leaders, who have the most impact on the United States, for targeted prosecutions; and coordinating significant MS-13 indictments in U.S. Attorney’s Offices across the country, including the first use of national security charges against MS-13 leaders.
JTFV has been comprised of members from the Department of Justice’s National Security Division and the Criminal Division, as well as U.S. Attorney’s Offices across the country, including the EDNY; the District of New Jersey; the Northern District of Ohio; the District of Utah; the Eastern District of Virginia; the District of Massachusetts; the Eastern District of Texas; the Southern District of New York; the District of Alaska; the Southern District of Florida; the Southern District of California; the District of Nevada; and the District of Columbia. In addition, all Department of Justice law enforcement agencies are involved in the effort, including the FBI; the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons. In addition, HSI also plays a critical role in JTFV.
Acting Attorney General Rosen expressed his sincere thanks to Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policía Nacional Civil, Centro Antipandilla Transnacional unit for their invaluable cooperation. Additionally, numerous Department of Justice components contributed to this indictment, including: the National Security Division’s Counterterrorism Section; the Justice Department’s Office of International Affairs; the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training; and Organized Crime and Gang Section; and the Organized Crime Drug Enforcement Task Forces Executive Office. Finally, consistent with President Trump’s Executive Order and the Attorney General’s whole of government approach, the Department of State has provided critical support for JTFV’s mission.
The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, the defendants face a maximum sentence of life in prison.
The government’s case is being prosecuted by Assistant U.S. Attorneys James Donnelly, Matthew Shepherd and Stewart Young from JTFV, and Assistant U.S. Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell from the EDNY’s Long Island Criminal Division.
To learn more about the Justice Department’s efforts in combating MS-13 from 2016 to 2020, see report at /media/1120601/dl?inline.
The Defendants:
BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age: 42ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age: 44EFRAIN CORTEZ (“Tigre de Park View” and “Viejo Tigre de Park View”)
Age: 51RICARDO ALBERTO DIAZ (“Rata de Leewards” and “Mousey de Leewards”)
Age: 47EDUARDO ERAZO-NOLASCO (“Colocho de Western” and “Mustage de Western”)
Age: 48EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Age: 46JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Age: 46FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age: 45LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Age: 40CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age: 42JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” and “Viejo Pavas de 7-11”)
Age: 56HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age: 48
SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age: 42ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age: 42E.D.N.Y. Docket No.: 20-CR-577 (JFB)
Defendant Sentenced to More Than 12 Years in Prison for Conspiring to Provide Material Support to ISISRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Azizjon Rakhmatov, a citizen of Uzbekistan and a resident of New Haven, Connecticut, was sentenced to 12 ½ years’ imprisonment by United States District Judge William F. Kuntz, II, for conspiring to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS). In August 2019, Rakhmatov pleaded guilty to the charge. The U.S. government intends to seek the defendant’s removal to Uzbekistan upon completion of his sentence of imprisonment.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, New York City Police Department (NYPD), announced the sentence.
“Today’s sentence demonstrates that there are significant consequences for those who support terrorism.” stated Acting United States Attorney DuCharme. “The investigation and prosecution of Rakhmatov and his co-conspirators are the result of this Office’s unwavering commitment, along with our outstanding partners on the New York Joint Terrorist Task Force, to detect, disrupt and neutralize any individual or group that is under the mistaken impression that violence is a legitimate means to effect political change, here or abroad. Once again, we have rooted out ISIS’s supporters, methods and means, and prevented ISIS from carrying out its abhorrent extremist agenda.”
According to court filings, in 2014, Rakhmatov’s co-defendants Abdurasul Juraboev and Akhror Saidakhmetov planned to travel to Syria to fight on behalf of ISIS. Rakhmatov and co-defendant Abror Habibov discussed providing their own money to cover Saidakhmetov’s travel expenses and to purchase a firearm for Saidakhmetov once he arrived in Syria. Rakhmatov also agreed to collect money from others to fund Saidakhmetov’s travel. On the day before Saidakhmetov’s scheduled departure, Rakhmatov transferred $400 into co-defendant Akmal Zakirov’s personal bank account to facilitate Saidakhmetov’s travel to and expenses in Syria. Co-conspirator Dilkhayot Kasimov also agreed to fund Saidakhmetov’s travel and brought the group’s money to Saidakhmetov at John F. Kennedy International Airport.
Juraboev, Saidakahmetov, Habibov and Zakirov have previously pleaded guilty, and Kasimov was convicted at trial in September 2019. Juraboev and Saidakahmetov each were sentenced to 15 years’ imprisonment. Kasimov, Habibov and Zakirov are awaiting sentencing.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, David K. Kessler, and J. Matthew Haggans are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
The Defendant:
AZIZJON RAKHMATOV
Age: 33
New Haven, ConnecticutE.D.N.Y. Docket No. 15-CR-95 (S-3)
Woman Charged in For-Profit Visa Fraud and Alien Smuggling SchemeRead the Press Release
A Nevada woman was arrested today for her alleged role in a multi-year scheme to commit visa fraud and money laundering, and to illegally bring Chinese nationals into the United States for financial gain.
Haiyan Liao, 43, of Las Vegas, is charged in an indictment obtained in the Eastern District of New York and unsealed today in the U.S. District Court for the District of Nevada. She is charged with conspiracy to commit visa fraud and to unlawfully bring aliens into the U.S. for financial gain, bringing aliens into the U.S. for financial gain, and money laundering conspiracy.
“The United States benefits from the rich diversity of culture and experience which results from lawful immigration into our country,” said David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “This defendant, however, is charged with submitting false applications for visitor visas to the U.S. Consulate in Guangzhou and engaging in money laundering as part of a multi-year alien smuggling business that brought Chinese nationals into the United States illegally. This indictment underscores that those who seek to thwart our system of legal immigration to line their own pockets will be prosecuted.”
“As alleged in the indictment, Liao aided and abetted aliens who paid thousands of dollars for her fraudulent immigration services,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The defendant provided fake documents and coached her accomplices regarding how to lie during visa interviews and customs checks. Our office and our law enforcement agency partners remain vigilant and committed to protecting the integrity of the immigration process and our border security and preventing criminals from seeking profit in the subversion of the rule of law.”
“The Diplomatic Security Service (DSS) is firmly committed to protecting the integrity of all U.S. visas and travel documents,” said Jeffrey A. Thomas, Deputy Assistant Director for the Office of Investigations. “This case is the result of a strong partnership among federal law enforcement agencies and DSS’ global network of special agents working together to stop visa and passport crimes, and to stop criminals from earning illegal income by exploiting U.S. visas, passports, and foreign nationals.”
According to the indictment, Liao, with others, fraudulently obtained visitor visas by submitting applications containing false statements to the U.S. Consulate in Guangzhou, China as part of a scheme to assist aliens from China to enter the U.S. For the aliens whose applications were approved, Liao would facilitate the aliens’ travel to the U.S., including accompanying them on commercial flights to Queens and Brooklyn, New York. The aliens and their families paid thousands of dollars in exchange for the visitor visas and travel to the U.S. Liao’s co-defendant in the indictment, Ned Michael Moriearty, was recently deceased.
This case is being investigated by the DSS, Criminal Fraud Investigations Unit Branch.
The case is being prosecuted by Trial Attorneys Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Nomi Berenson of the Eastern District of New York.
The charges contained in the indictment are merely allegations and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Queens Felon Charged with Illegal Possession of AmmunitionRead the Press Release
A criminal complaint was filed today in federal court in Broolyn charging Eduard Florea with being a felon in possession of ammunition. Florea was arrested yesterday at his home in Queens, New York, and made his initial appearance this afternoon before United States Magistrate Judge Sanket J. Bulsara who ordered the defendant detained pending trial.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“This Office will dutifully and responsibly enforce our nation’s gun and ammunition laws and will act swiftly and decisively where an individual who violates such laws threatens our institutions with acts of violence,” stated Acting United States Attorney DuCharme. “Respectful of our citizens’ rights and our obligation to protect their safety and their liberties, we will ensure the orderly functioning of our country’s democratic institutions and the safety of those we are sworn to protect through our diligent investigations and, where appropriate, federal prosecution.” Mr. DuCharme expressed his grateful appreciation to the United States Attorney’s Office for the Southern District of New York for their assistance on the case.
“As alleged, Florea, a previously convicted felon, made various social media posts about his plan to travel to Washington D.C. to engage in acts of violence. We saved him a trip and paid him a visit instead. Yesterday evening members of the FBI’s Joint Terrorism Task Force, to include our partners at the New York City Police Department, placed him under arrest for illegally possessing ammunition. For those of you out there with similar intentions, heed this warning—knock it off, or expect to see us at your door,” stated FBI Assistant Director-in-Charge Sweeney.
According to the complaint and statements made in court, Florea operated a social media account on Parler using the name “LoneWolfWar.” Florea who was previously convicted of a New York state firearms-related felony, posted threatening statements online about killing a United States Senator-elect and about intending to travel to Washington D.C. as part of a group armed with firearms ready to engage in violence. For example, on January 6, 2021, Florea posted “dead men can’t pass [expletive] laws” in response to a post about a United States Senator-elect. Additionally, Florea posted on social media:
- “Let’s go . . . I will be reaching out to patriots in my area so we can come up with a game plan . . . Here in New York we are target rich[] . . . . Dead men can’t pass [expletive] law. . . . I will fight so help me god.”
- “The time for peace and civility is over . . . ./3 cars full of armed patriots are enroute from NY / 3 cars of armed patriots heading into DC from NY / Guns cleaned loaded . . . got a bunch of guys all armed and ready to deploy . . . we are just waiting for the word.”
- “Its time to unleash some violence.”
n 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. Law enforcement recovered over 1,000 rounds of ammunition.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Florea faces up to 10 years’ imprisonment.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorney Francisco J. Navarro is in charge of the prosecution.
The Defendant:
EDUARD FLOREA
Age: 40
Middle Village, New YorkE.D.N.Y. Docket No. 21-MJ-35
Defendant Charged in Brooklyn Federal Court with For-Profit Visa Fraud and Alien Smuggling SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Haiyan Liao in connection with a scheme to commit visa fraud, money laundering and illegally bring Chinese nationals into the United States for financial gain. Liao was arrested this morning in Las Vegas, Nevada and will make her initial appearance tomorrow in United States District Court, District of Nevada before U.S. Magistrate Judge Elayna Youchah.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Jeffrey A. Thomas, Deputy Assistant Director of Investigations, U.S. Department of State’s Diplomatic Security Service, announced the arrest and charges.
“As alleged in the indictment, Liao aided and abetted aliens who paid thousands of dollars for her fraudulent immigration services,” stated Acting United States Attorney DuCharme. “The defendant provided fake documents and coached her accomplices regarding how to lie during visa interviews and customs checks. Our Office and our law enforcement agency partners remain vigilant and committed to protecting the integrity of the immigration process and our border security and preventing criminals from seeking profit in the subversion of the rule of law.”
The United States benefits from the rich diversity of culture and experience which results from lawful immigration into our country,” stated Acting Assistant Attorney General Burns. “This defendant, however, is charged with submitting false applications for visitor visas to the U.S. Consulate in Guangzhou and engaging in money laundering as part of a multi-year alien smuggling business that brought Chinese nationals into the United States illegally. This indictment underscores that those who seek to thwart our system of legal immigration to line their own pockets will be prosecuted.”
“The Diplomatic Security Service (DSS) is firmly committed to protecting the integrity of all U.S. visas and travel documents,” stated DSS Deputy Assistant Director Thomas. “This case is the result of a strong partnership among federal law enforcement agencies and DSS’ global network of special agents working together to stop visa and passport crimes, and to stop criminals from earning illegal income by exploiting U.S. visas, passports, and foreign nationals.”
According to the indictment, between January 2014 and December 2015, Liao conspired with others in a scheme to fraudulently obtain visitor visas for aliens from China by submitting applications containing false statements to the U.S. Consulate in Guangzhou, China. In addition, Liao and her co-conspirators obtained fraudulent documents for aliens to present to the Department of State Bureau of Consular Affairs, including fake birth certificates, marriage certificates, national identity cards, property deeds and employment verification purportedly to show they had strong ties to China and were likely to return to their homeland. Liao and her co-conspirators allegedly met with alien applicants and instructed them to falsely answer questions during their visa interviews. For the aliens whose applications were approved, Liao and her co-conspirators facilitated their travel to the United States by purchasing airline tickets, accompanying them on commercial flights and instructing them how to clear customs after they arrived in the United States. The aliens and their families paid the defendant thousands of dollars to obtain the fraudulent visas. Liao and her co-conspirators allegedly wired proceeds of the scheme from China to the United States. Liao’s co-defendant in the indictment, Ned Michael Moriearty, was recently deceased.
The charges contained in the indictment are allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Liao faces up to 20 years’ imprisonment.
This case is being investigated by the Diplomatic Security Service, Criminal Fraud Investigations Unit.
The case is being prosecuted by Assistant U.S. Attorney Nomi Berenson of the Eastern District of New York and Trial Attorney Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section.
The Defendant:
HAIYAN LIAO
Age: 43
Las Vegas NevadaE.D.N.Y. Docket No.: 20-CR-500 (SJ)
Associate of Gambino Organized Crime Family Pleads Guilty to Arson in QueensRead the Press Release
Earlier today, in federal court in Brooklyn, Peter Tuccio pleaded guilty before United States Magistrate Judge Steven L. Tiscione to using fire to commit the felony crime of extortion. When sentenced, Tuccio faces a mandatory sentence of 10 years’ imprisonment, as well as forfeiture, restitution and a fine of up to $250,000.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Tuccio has been convicted of an offense arising from his efforts to extort a local businessman by brazenly chasing him through the streets and then setting his car ablaze,” stated Acting United States Attorney DuCharme. “This Office, together with our partners at the FBI, will continue to vigorously investigate and prosecute members and associates of organized crime to eradicate the danger they pose to our community.” Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, the New York City Police Department and the New York City Fire Department’s Bureau of Fire Investigation for their outstanding work on the case.
In 2015, a businessman who had been extorted by a captain in the Gambino Organized Crime Family (referred to in court filings as “Co-Conspirator 1”) for many years, began avoiding Co-Conspirator 1 in an effort to stop making the $400 annual payment. On December 3, 2015, Tuccio, co-defendants Jonathan Gurino and Gino Gabrielli, who were charged in a separate indictment, observed the businessman leave a smoke shop in Howard Beach, New York and drive away in his 2014 Mercedes Benz. The three men then followed the businessman at a high rate of speed through the streets of Queens and confronted him outside a pizzeria, where Tuccio mentioned Co-Conspirator 1 and commented on the businessman’s car. Tuccio and his co-defendants schemed to set the businessman’s car on fire, sending a message that he had to continue making the extortion payments to Co-Conspirator 1. Later that night, the businessman heard a loud noise and saw that his car was on fire outside of his residence. The businessman’s security video system recorded Gabrielli pouring a substance on the car, the car erupting in flames, and Gabrielli running away with his pant leg on fire. Shortly thereafter, Gabrielli and Tuccio were caught on surveillance video entering Jamaica Hospital. After the arson, the businessman paid more than $5,000 to Co-Conspirator 1.
In August 2016, Gabrielli pleaded guilty to the arson. In June 2020, Gurino pleaded guilty to extortionate collection of credit and extortion. They are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nadia E. Moore and Nicholas Moscow are in charge of the prosecution.
The Defendant:
PETER TUCCIO
Age: 27
Queens, New YorkE.D.N.Y. Docket No. 18-CR-610 (S-1) (LDH)
Deutsche Bank Agrees to Pay over $130 Million to Resolve Foreign Corrupt Practices Act and Fraud CaseRead the Press Release
Deutsche Bank Aktiengesellschaft (Deutsche Bank or the Company) has agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.
The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and $43,329,622 to be paid to the U.S. Securities & Exchange Commission in a coordinated resolution.
Deutsche Bank is a multi-national financial services company headquartered in Frankfurt, Germany. The charges arise out of a scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, as well as related internal accounting control violations, and a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.
Deutsche Bank entered into a three-year deferred prosecution agreement (DPA) with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and with the U.S. Attorney’s Office for the Eastern District of New York. The criminal information was filed today in the Eastern District of New York charging Deutsche Bank with one count of conspiracy to violate the books and records and internal accounting controls provisions of the FCPA and one count of conspiracy to commit wire fraud affecting a financial institution in relation to the commodities conduct.
“Deutsche Bank engaged in a seven-year course of conduct, during which it failed to implement a system of internal accounting controls regarding the use of company funds and falsified its books and records to conceal corrupt and improper payments,” said Acting Deputy Assistant Attorney General Robert Zink of the Justice Department’s Criminal Division. “Separately, Deutsche Bank traders on three continents sought to manipulate our public financial markets through fraud for five years. This resolution exemplifies the department’s commitment to help ensure that publicly traded companies devise and implement appropriate and proper systems of internal accounting controls and maintain accurate and truthful corporate documentation. It also stands as an example of the department’s efforts to police the public U.S. markets so that all may continue to trust, and rely upon, the integrity of our public financial systems.”
“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” stated Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”
“The U.S. Postal Inspection Service takes pride in investigating complex fraud and corruption cases that impact American investors,” said Inspector in Charge Delany De Léon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group. “This type of deceptive activity can cause immeasurable economic losses to competitive markets around the world. The combined efforts of our partners at the FBI and Department of Justice helped to bring today’s significant action which illustrates our efforts to protect the United States and the international marketplace.”
The FCPA Case
According to admissions and court documents, between 2009 and 2016, Deutsche Bank, acting through its employees and agents, including managing directors and high-level regional executives, knowingly and willfully conspired to maintain false books, records, and accounts to conceal, among other things, payments to a business development consultant (BDC) who was acting as a proxy for a foreign official and payments to a BDC that were actually bribes paid to a decisionmaker for a client in order to obtain lucrative business for the bank. In some instances, Deutsche Bank made payments to BDCs that were not supported by invoices or evidence of any services provided. In other cases, Deutsche Bank employees created or helped BDC’s create false justifications for payments.
In relation to a Saudi BDC, Deutsche Bank admitted that its employees conspired to contract with a company owned by the wife of a client decisionmaker to facilitate bribe payments of over $1 million to the decisionmaker. Deutsche Bank approved the BDC relationship despite Deutsche Bank employees knowing about the relationship between the Saudi BDC and the decisionmaker, and approved the corrupt payments despite Deutsche Bank employees openly discussing the need to pay the Saudi BDC in order to incentivize her husband to continue to do business with Deutsche Bank. In requesting approval of one payment, Deutsche Bank employees cautioned that the “client and [the Saudi BDC] are intimately linked and . . . any cessation of payment to the [the Saudi BDC] will certainly prompt a significant outflow of [business]” from the client.
Deutsche Bank also contracted with an Abu Dhabi BDC to obtain a lucrative transaction, despite Deutsche Bank employees knowing that the Abu Dhabi BDC lacked qualifications as a BDC, other than his family relationship with the client decisionmaker, and that the Abu Dhabi BDC was in fact acting as proxy for the client decisionmaker. Deutsche Bank paid the Abu Dhabi BDC over $3 million without invoices.
By agreeing to misrepresent the purpose of payments to BDCs and falsely characterizing payments to others as payments to BDCs, Deutsche Bank employees conspired to falsify Deutsche Bank’s books, records, and accounts, in violation of the FCPA. Additionally, Deutsche Bank employees knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA by, among other things, failing to conduct meaningful due diligence regarding BDCs, making payments to certain BDCs who were not under contract with Deutsche Bank at the time, and making payments to certain BDCs without invoices or adequate documentation of the services purportedly performed.
Deutsche Bank will pay a total criminal penalty of $79,561,206 in relation to the FCPA scheme. In a related matter with the U.S. Securities & Exchange Commission, Deutsche Bank will also pay $43,329,622 in disgorgement and prejudgment interest.
The Commodities Fraud Case
According to admissions and court documents, between 2008 and 2013, Deutsche Bank precious metals traders engaged in a scheme to defraud other traders on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore, and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts.
On Sept. 25, 2020, a Chicago federal jury found two former Deutsche Bank precious metals traders, James Vorley, 42, of the United Kingdom, and Cedric Chanu, 40, of France and the United Arab Emirates, guilty of wire fraud affecting a financial institution for their respective roles in the commodities scheme. A third former Deutsche Bank trader, David Liew, 35, of Singapore, pleaded guilty on June 1, 2017, to conspiracy to commit wire fraud affecting a financial institution and spoofing. A fourth former Deutsche Bank trader, Edward Bases, 58, of New Canaan, Connecticut, was charged in a third superseding indictment on Nov. 12, 2020, and awaits trial on fraud and conspiracy charges. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Deutsche Bank has agreed to pay a total criminal amount of $7,530,218 in relation to the commodities scheme. This amount includes criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and a criminal penalty of $5,625,000, which will be fully credited against Deutsche Bank’s payment of a civil monetary penalty of $30 million to the U.S. Commodity Futures Trading Commission in January 2018 in connection with substantially the same commodities conduct.
The department reached this resolution with Deutsche Bank based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department and the nature and seriousness of the offense, which included corrupt payments, willful violations of the FCPA accounting provisions, and commodities trading violations in three countries. Deutsche Bank received full credit for its cooperation with the department’s investigations and for its significant remediation. Penalties associated with both the FCPA and wire fraud conspiracies reflect a discount of 25 percent off the middle of the otherwise-applicable U.S. Sentencing Guidelines fine range, to account for Deutsche Bank’s 2015 resolution in connection with its manipulation of the London Interbank Offered Rate.
The FCPA investigation is being conducted by the U.S. Postal Inspection Service, and is being prosecuted by the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, and the U.S. Attorney’s Office for the Eastern District of New York. Trial Attorneys Katherine Nielsen, Elizabeth S. Boison and Nikhila Raj, and Assistant U.S. Attorneys Alixandra Smith and Whitman Knapp. The Justice Department’s Office of International Affairs provided assistance in this case.
The commodities case is being investigated by the FBI’s New York Field Office, and is being prosecuted by the Fraud Section. Deputy Chief Brian R. Young, Assistant Chief Avi Perry, and Trial Attorney Leslie S. Garthwaite of the Fraud Section are prosecuting the case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
Individuals who believe that they may be a victim in the commodities case should visit the Fraud Section’s Victim Witness website for more information.
Deutsche Bank Agrees to Pay over $130 Million to Resolve Foreign Corrupt Practices Act and Fraud CaseRead the Press Release
BROOKLYN, NY – Deutsche Bank Aktiengesellschaft (Deutsche Bank or the Company) has agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.
The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and $43,329,622 to be paid to the U.S. Securities & Exchange Commission in a coordinated resolution.
Deutsche Bank is a multi-national financial services company headquartered in Frankfurt, Germany. The charges arise out of a scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, as well as related internal accounting control violations, and a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.
Earlier today, in federal court in Brooklyn, Deutsche Bank entered into a three-year deferred prosecution agreement (DPA) with United States Attorney’s Office for the Eastern District of New York and the Department of Justice Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS). The criminal information was filed in U.S. District Court for the Eastern District of New York charging Deutsche Bank with one count of conspiracy to violate the books and records and internal accounting controls provisions of the FCPA and one count of conspiracy to commit wire fraud affecting a financial institution in relation to the commodities conduct. The case is assigned to U.S. District Judge Rachel P. Kovner.
Seth DuCharme, Acting United States Attorney for the Eastern District of New York, Robert Zink, Acting Deputy Assistant Attorney General of the Justice Department’s Criminal Division, and Delany De Léon-Colón, Inspector-in-Charge, United States Postal Inspection Service (USPIS), made the announcement.
"Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” stated Acting United States Attorney DuCharme. “This Office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”
“Deutsche Bank engaged in a seven-year course of conduct, during which it failed to implement a system of internal accounting controls regarding the use of company funds and falsified its books and records to conceal corrupt and improper payments,” stated Acting Deputy Assistant Attorney General Zink. “Separately, Deutsche Bank traders on three continents sought to manipulate our public financial markets through fraud for five years. This resolution exemplifies the department’s commitment to help ensure that publicly traded companies devise and implement appropriate and proper systems of internal accounting controls and maintain accurate and truthful corporate documentation. It also stands as an example of the department’s efforts to police the public U.S. markets so that all may continue to trust, and rely upon, the integrity of our public financial systems.”
“The U.S. Postal Inspection Service takes pride in investigating complex fraud and corruption cases that impact American investors,” stated USPIS Inspector-in-Charge De Léon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group. “This type of deceptive activity can cause immeasurable economic losses to competitive markets around the world. The combined efforts of our partners at the FBI and Department of Justice helped to bring today’s significant action which illustrates our efforts to protect the United States and the international marketplace.”
The FCPA Case
According to admissions and court documents, between 2009 and 2016, Deutsche Bank, acting through its employees and agents, including managing directors and high-level regional executives, knowingly and willfully conspired to maintain false books, records, and accounts to conceal, among other things, payments to a business development consultant (BDC) who was acting as a proxy for a foreign official and payments to a BDC that were actually bribes paid to a decisionmaker for a client in order to obtain lucrative business for the bank. In some instances, Deutsche Bank made payments to BDCs that were not supported by invoices or evidence of any services provided. In other cases, Deutsche Bank employees created or helped BDC’s create false justifications for payments.
In relation to a Saudi BDC, Deutsche Bank admitted that its employees conspired to contract with a company owned by the wife of a client decision maker to facilitate bribe payments of over $1 million to the decision maker. Deutsche Bank approved the BDC relationship despite Deutsche Bank employees knowing about the relationship between the Saudi BDC and the decision maker, and approved the corrupt payments despite Deutsche Bank employees openly discussing the need to pay the Saudi BDC in order to incentivize her husband to continue to do business with Deutsche Bank. In requesting approval of one payment, Deutsche Bank employees cautioned that the “client and [the Saudi BDC] are intimately linked and . . . any cessation of payment to the [the Saudi BDC] will certainly prompt a significant outflow of [business]” from the client.
Deutsche Bank also contracted with an Abu Dhabi BDC to obtain a lucrative transaction, despite Deutsche Bank employees knowing that the Abu Dhabi BDC lacked qualifications as a BDC, other than his family relationship with the client decision maker, and that the Abu Dhabi BDC was in fact acting as proxy for the client decision maker. Deutsche Bank paid the Abu Dhabi BDC over $3 million without invoices.
By agreeing to misrepresent the purpose of payments to BDCs and falsely characterizing payments to others as payments to BDCs, Deutsche Bank employees conspired to falsify Deutsche Bank’s books, records, and accounts, in violation of the FCPA. Additionally, Deutsche Bank employees knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA by, among other things, failing to conduct meaningful due diligence regarding BDCs, making payments to certain BDCs who were not under contract with Deutsche Bank at the time, and making payments to certain BDCs without invoices or adequate documentation of the services purportedly performed.
Deutsche Bank will pay a total criminal penalty of $79,561,206 in relation to the FCPA scheme. In a related matter with the U.S. Securities & Exchange Commission, Deutsche Bank will also pay $43,329,622 in disgorgement and prejudgment interest.
The Commodities Fraud Case
According to admissions and court documents, between 2008 and 2013, Deutsche Bank precious metals traders engaged in a scheme to defraud other traders on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore, and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts.
On Sept. 25, 2020, a Chicago federal jury found two former Deutsche Bank precious metals traders, James Vorley, of the United Kingdom, and Cedric Chanu, of France and the United Arab Emirates, guilty of wire fraud affecting a financial institution for their respective roles in the commodities scheme. A third former Deutsche Bank trader, David Liew, of Singapore, pleaded guilty on June 1, 2017, to conspiracy to commit wire fraud affecting a financial institution and spoofing. A fourth former Deutsche Bank trader, Edward Bases, of Connecticut, was charged in a third superseding indictment on Nov. 12, 2020, and awaits trial on fraud and conspiracy charges. An indictment is an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Deutsche Bank has agreed to pay a total criminal amount of $7,530,218 in relation to the commodities scheme. This amount includes criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and a criminal penalty of $5,625,000, which will be fully credited against Deutsche Bank’s payment of a civil monetary penalty of $30 million to the U.S. Commodity Futures Trading Commission in January 2018 in connection with substantially the same commodities conduct.
The department reached this resolution with Deutsche Bank based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department and the nature and seriousness of the offense, which included corrupt payments, willful violations of the FCPA accounting provisions, and commodities trading violations in three countries. Deutsche Bank received full credit for its cooperation with the department’s investigations and for its significant remediation. Penalties associated with both the FCPA and wire fraud conspiracies reflect a discount of 25 percent off the middle of the otherwise-applicable U.S. Sentencing Guidelines fine range, to account for Deutsche Bank’s 2015 resolution in connection with its manipulation of the London Interbank Offered Rate.
The FCPA investigation is being conducted by the U.S. Postal Inspection Service and is being prosecuted by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section. Assistant U.S. Attorneys Alixandra Smith and Whitman Knapp of the Eastern District of New York and Trial Attorneys Katherine Nielsen, Elizabeth S. Boison and Nikhila Raj are prosecuting the case. The Justice Department’s Office of International Affairs provided assistance in this case.
The commodities case is being investigated by the FBI’s New York Field Office and is being handled by the Fraud Section. Deputy Chief Brian R. Young, Assistant Chief Avi Perry, and Trial Attorney Leslie S. Garthwaite of the Fraud Section are prosecuting the case.
E.D.N.Y. Docket No. 20-CR-584 (RPK)
United States Files Civil Fraud Suit Against Three Individuals and Multiple Real Estate Companies Alleging Mortgage Fraud SchemeRead the Press Release
The United States has filed a civil complaint in federal court in Brooklyn seeking damages and penalties against three individuals and multiple companies alleged to have engaged in a wide-ranging mortgage fraud scheme to defraud the government. The complaint, unsealed this afternoon by United States District Judge Margo K. Brodie, alleges that Iskyo Aronov, Ron Borovinsky, Michael Konstantinovskiy, and companies that they owned or controlled, engaged in fraudulent short sales of residential properties insured by the Federal Housing Administration (FHA) of the United States Department of Housing and Urban Development (HUD). The suit is brought pursuant to the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Region (HUD-OIG), and Robert Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region (FHFA-OIG), announced the filing.
Pursuant to HUD’s Pre-Foreclosure Sale Program, qualifying homeowners with defaulted, FHA-insured mortgages may sell their properties in a “short sale” for less than the balance of the mortgage if the sale is for the fair market value of the property. If a homeowner obtains approval for a short sale, the lender releases the mortgage after the short sale and submits an FHA insurance claim to HUD to cover the outstanding mortgage balance net of the short sale proceeds, plus approved costs and interest. HUD, in turn, pays the lender’s claim from federal funds.
Aronov was the founder, Chief Executive Officer and President of defendants My Ideal Property Inc., My Ideal Property Group LLC and MIP Management Inc., and also controlled other affiliated corporate entities that he allegedly established to help him fraudulently acquire residential properties. Borovinsky identified himself as a co-founder with Aronov of My Ideal Property. Konstantinovskiy worked as an agent for My Ideal Property where he allegedly conspired with others to fraudulently obtain properties.
As alleged in the complaint, from at least 2013 through 2016, the defendants defrauded HUD by manipulating the short sale process to acquire residential properties from numerous distressed homeowners for below-fair market value prices in non-arm’s-length transactions. The individual defendants used various corporate entities in furtherance of the fraudulent scheme. In the process, defendants made a host of material misrepresentations in critical transaction documents. As a result, defendants not only acquired the properties for below-fair market value prices, but obtained broker fees in the transactions and induced lenders to release the FHA-insured mortgages at a loss. In turn, HUD paid the lenders’ claims for FHA insurance from federal funds. These payments by HUD were artificially inflated as a result of the defendants’ fraudulent conduct.
“As alleged, these defendants fraudulently obtained homes at depressed prices at the expense of a taxpayer-funded program designed to assist borrowers seeking the American Dream of home ownership,” stated Acting U.S. Attorney Seth DuCharme. “This Office is committed to protecting the integrity of the FHA insurance program from those who try to enrich themselves through predatory mortgage fraud schemes.”
“The defendants allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, homeowners, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners. In addition, the artificial devaluation of residential properties will slow the recovery of market values at a time of economic challenge when affordable housing is at a premium,” stated HUD-OIG Special Agent-in-Charge Scaringi.
“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA. We are proud to have partnered with the U.S. Attorney’s Office for the Eastern District of New York in this case,” stated FHFA-OIG Special Agent-in-Charge Manchak.
The government’s complaint intervenes in a lawsuit originally brought by under the qui tam provisions of the FCA. Under the FCA, private citizens with knowledge of fraud against the government can bring a lawsuit on behalf of the United States and share in the recovery. The act also permits the government to intervene in such actions, as the government has done in this case. The government’s case is being handled by Assistant United States Attorney Michael J. Castiglione, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.
The Defendants:
ISKYO ARONOV (also known as “Isaac Aronov”)
Middle Village, New YorkRON BOROVINSKY
Hollis Hills, New YorkMICHAEL KONSTANTIOVSKI
Roslyn Heights, New York175 VERNON AVE. INC.
308 LINDE ST. LLC
725 MANAGEMENT LLC
1021 B HOLDINGS LLC
1083 LAFAYETTE AVE. LLC
1178 GATES AVE. INC.
2320 BAEUMONT AVE UNIT 3D LLC
1S8C HOLDINGS LLC
AG2 EQUITIES, INC.
ARBIE MANAGEMENT INC.
BEDSTUY GROUP LLC
BERT HOLDINGS LLC
BNE MANAGEMENT LLC
ETUY EQUITIES LLC
IA INVESTORS LLC
IJ DEVELOPMENT LLC
LL FUND INC.
LL ORGANIZATION INC.
MI 1 HOLDINGS LLC
MIP MANAGEMENT INC.
MY IDEAL PROPERTY GROUP LLC
MY IDEAL PROPERTY ROCKAWAY BLVD. LLC
NATIONAL HOMEOWNERS ASSISTANCE INC.
PHASE 2 DEVELOPMENT LLC
PIM EQUITIES INC.
SETTLE NY CORP
ZOR EQUITIES LLC
ZT EQUITIES LLC
E.D.N.Y. Docket No. 16-CV-4853 (MKB)
Ticketmaster Pays $10 Million Criminal Fine for Intrusions into Competitor’s Computer SystemsRead the Press Release
Earlier today in federal court in Brooklyn, Ticketmaster L.L.C. (Ticketmaster or the Company) agreed to pay a $10 million fine to resolve charges that it repeatedly accessed without authorization the computer systems of a competitor. The fine is part of a deferred prosecution agreement that Ticketmaster has entered with the United States Attorney’s Office for the Eastern District of New York to resolve a five-count criminal information filed today charging computer intrusion and fraud offenses. Previously, on October 18, 2019, Zeeshan Zaidi, the former head of Ticketmaster’s Artist Services division, pled guilty in a related case to conspiring to commit computer intrusions and wire fraud based on his participation in the same scheme. Both cases are assigned to U.S. District Judge Margo K. Brodie.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation’s New York Field Office, made the announcement.
“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” stated Acting U.S. Attorney DuCharme. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic. Today’s resolution demonstrates that any company that obtains a competitor’s confidential information for commercial advantage, without authority or permission, should expect to be held accountable in federal court.”
"When employees walk out of one company and into another, it's illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist - to protect consumers from being cheated in what should be a fair market place,” stated FBI Assistant Director-in-Charge Sweeney.
The Scheme to “Choke Off” the Victim Company
According to Ticketmaster’s admissions and publicly filed court documents, Ticketmaster, a wholly owned subsidiary of Live Nation Entertainment, Inc. (Live Nation), was primarily engaged in the business of selling and distributing tickets to events and concerts. The victim company offered artists the ability to sell presale tickets – sold in advance of general ticket sales – on an online ticketing platform. It also offered artists an Artist Toolbox (the Toolbox), which was a password-protected app that provided real-time data about tickets sold through the victim company.
Instrumental to the criminal scheme was Coconspirator-1, a former senior employee of the victim company, who worked in the company’s Brooklyn, New York offices from approximately May 2010 to July 2012. In approximately July 2012, Coconspirator-1 signed a separation agreement with the victim company, in which he agreed to maintain the confidentiality of that company’s confidential information. He then joined Live Nation in approximately August 2013.
In November 2013, while employed by Live Nation, Coconspirator-1 shared with Zaidi and another Ticketmaster employee the URLs for draft ticketing web pages that the victim company had built for an artist, but had not disseminated to the public. In response to a Ticketmaster executive explaining that the goal was to “choke off [victim company]” and “steal back one of [victim company]’s signature clients,” Coconspirator-1 offered that Ticketmaster could “cut [victim company] off at the knees” if they could win back presale ticketing business for a second major artist that was a client of the victim company.
Ticketmaster’s Intrusions Into the Victim Company’s Password-Protected Artist Toolboxes
In January 2014, Coconspirator-1 emailed Zaidi and a second Ticketmaster executive multiple sets of usernames and passwords for Toolboxes. Coconspirator-1 encouraged the executives to “screen-grab the hell out of the system,” but also warned, “I must stress that as this is access to a live [victim company] tool I would be careful in what you click on as it would be best not [to] giveaway that we are snooping around.” (Emphasis in original.) The information from the Toolboxes was then used to prepare a presentation for other senior executives that was intended to “benchmark” Ticketmaster’s offerings against those of the victim company.
In early May 2014, a senior executive of Live Nation (Corporate Officer-1) asked Zaidi and others how Ticketmaster’s presale online offering compared with the Toolbox. Coconspirator-1 was then asked to “do a screenshare/demo” at an upcoming “Artist Services Summit.” Coconspirator-1 agreed to “pull together a list of the log-ins and URL’s that I still have access to for this so I can give the team as much insight as possible.” At least 14 Live Nation and Ticketmaster employees attended the Artist Services Summit, in San Francisco. There, in front of those employees, Coconspirator-1 used a username and password he had retained from his employment at the victim company to log in to a Toolbox, and provided a demonstration. Coconspirator-1 later also provided Zaidi and other Ticketmaster executives with internal and confidential financial documents he had retained from his employment at the victim company.
In January 2015, Coconspirator-1 was transferred to the Artist Services division, promoted to Director of Client Relations, and given a raise. Following the promotion, Coconspirator-1 emailed another Artist Services employee, “Now we can really start to bring down the hammer on [Victim Company].” Ticketmaster employees continued to access password-protected victim company Toolboxes through December 2015.
Ticketmaster’s Surveillance of the Victim Company’s Draft Ticketing Web Pages
Between approximately July 2014 and June 2015, Coconspirator-1 and others monitored draft ticketing web pages created by the victim company. Although these pages were not password-protected, they were not indexed in search engines, and therefore could not be located without determining the exact URLs, which included a series of numbers. Until the victim company or artist publicly disseminated a URL, the victim company intended to restrict access to itself and the artist.
After joining Live Nation, Coconspirator-1 explained to Zaidi and others how the “store ID” numbers in the URLs were numbered sequentially, enabling Ticketmaster employees to monitor new pages and to learn which artists planned to use the victim company to sell tickets. Coconspirator-1 used this information to search for new victim company ticketing web pages, and sent the URLs to Ticketmaster executives. In or about January 2015, a Ticketmaster employee was assigned to learn about this system from Coconspirator-1, and maintained a spreadsheet listing every victim company ticketing web page that could be located, so that Ticketmaster could identify the victim company’s clients and attempt to dissuade them from selling tickets through the victim company. Zaidi explained that “we’re not supposed to tip anyone off that we have this view into [the victim company’s] activities.”
The Deferred Prosecution Agreement and Criminal Information
Under the terms of the deferred prosecution agreement, Ticketmaster will pay a criminal penalty of $10 million and will maintain a compliance and ethics program designed to prevent and detect violations of the Computer Fraud and Abuse Act and other applicable laws, and to prevent the unauthorized and unlawful acquisition of confidential information belonging to its competitors. Ticketmaster will also report to the United States Attorney’s Office annually during the three-year term of the agreement regarding these compliance measures. If the Company breaches the agreement, it will be subject to prosecution for the charges in the criminal information that was filed today, charging the Company with one count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.
The investigation is being conducted by the FBI’s New York Field Office. The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Allon Lifshitz, Craig R. Heeren and Ian C. Richardson are in charge of the prosecution.
The Defendants:
TICKETMASTER L.L.C.
E.D.N.Y. Docket No. 20-CR-563 (MKB)
ZEESHAN ZAIDI
Age: 46
New York, New YorkE.D.N.Y. Docket No. 19-CR-450 (MKB)
Jewelry Wholesaler Pleads Guilty in $200 Million Ponzi SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Gregory Altieri pleaded guilty to wire fraud for running a two-year $200 million Ponzi scheme based on false statements to investors about inflated returns for nonexistent wholesale jewelry deals. As part of the plea, Altieri also admitted to committing securities fraud in connection with the scheme. When sentenced, Altieri faces up to 20 years in prison. Today’s proceeding took place before United States District Judge Brian M. Cogan.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Altieri is held accountable for duping dozens of investors, including retirees living off their pensions,” stated Acting United States Attorney DuCharme. “The defendant’s lies have caught up to him and he will now face the consequences of his fraudulent scheme.” Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, for its exemplary work on the case, and to the Securities and Exchange Commission, New York Regional Office, for their assistance.
Beginning in August 2017, Altieri solicited between $75 million to $85 million in investments in his entity, LNA Associates, from over 80 investors located in Queens, Staten Island, Long Island and elsewhere. Altieri told investors that their money would be used to purchase jewelry at “closeout” prices, which would then be resold at a high profit yielding returns on those investments of between 30 and 70 percent in a matter of months. While Altieri initially purchased some jewelry with investors’ money, since approximately May 2018, he used money from new investors to pay earlier investors, representing to the latter group that they were receiving returns on their investments. These purported “returns” were used by Altieri to convince the earlier investors to keep their money with LNA Associates by “rolling over” their funds into new investments based on false promises to use this money to purchase additional jewelry. By January 2020, when Altieri stopped making payments to investors, he owed them approximately $200 million based on the falsely inflated promised returns.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit and by a Special Agent of the Office’s Business & Securities Fraud Section.
The Defendant:
GREGORY ALTIERI
Age: 53
Melville, New YorkE.D.N.Y. Docket No. 20-CR-249 (BMC)
Two Owners of New York Pharmacies Charged in a $30 Million COVID-19 Health Care Fraud and Money Laundering CaseRead the Press Release
The owners of over a dozen New York-area pharmacies were charged in an indictment unsealed today for their roles in a $30 million health care fraud and money laundering scheme, in which they exploited emergency codes and edits in the Medicare system that went into effect due to the COVID-19 pandemic in order to submit fraudulent claims for expensive cancer drugs that were never provided, ordered, or authorized by medical professionals.
Peter Khaim, 40, and Arkadiy Khaimov, 37, both of Forest Hills, New York, each were charged with one count of conspiracy to commit health care fraud and wire fraud, and one count of conspiracy to commit money laundering. Khaim was separately charged with two counts of concealment money laundering and one count of aggravated identity theft. Khaimov was separately charged with two counts of concealment money laundering.
“These defendants allegedly lined their own pockets by exploiting Medicare flexibilities that were designed to ensure that patients obtained access to needed medications during the COVID-19 crisis,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Together with our law enforcement partners, the Criminal Division is working to aggressively identify, investigate, and prosecute scammers who seek to take advantage of the COVID-19 crisis to defraud our public health care programs.”
“As alleged in the indictment, the defendants manipulated information in over a dozen pharmacies to defraud the Medicare program, including by taking advantage of systems that were intended to assist patients during the COVID-19 pandemic, and then went to great lengths to hide their ill-gotten gains through a network of sham companies,” said Acting U.S. Attorney Set D. DuCharme of the Eastern District of New York. “This office and our law enforcement partners are committed to holding accountable those who seek to enrich themselves at the expense of vital taxpayer-funded health care programs upon which so many rely.”
“We allege Mr. Khaim and Khaimov used the COVID-19 pandemic as cover to exploit changes in the Medicare system,” said Acting Director in Charge William F. Sweeney Jr of the FBI’s New York Field Office. “The changes to this program, funded by taxpayers, were put in place to help fellow citizens obtain needed medications during the pandemic, not line the pockets of fraudsters. Those who attempt to illegally profit from our public funded healthcare programs should remember taxpayers also fund courts and jails, and behavior like the type announced today will be met with swift action from the FBI and our law enforcement partners. If you are aware of frauds like the one announced today, please contact us at 1-800-CALL-FBI.”
“Fraudsters who target the Federal health care system attempt to undermine the integrity of programs that serve millions of individuals. When they leverage a public health emergency to perpetrate schemes, their wanton disregard for the programs and beneficiaries is glaringly clear,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We are responding aggressively with our law enforcement partners to pursue bad actors and to warn the public about these ongoing scams.”
“The defendants allegedly carried out a $30 million health care fraud and money laundering scheme, siphoning funds meant for patients during the COVID-19 pandemic,” said Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation (IRS-CI). “While Americans across the country are in dire need of medical and financial assistance, the defendants allegedly used the stolen proceeds to purchase real estate and luxury items. IRS-CI and our law enforcement partners will continue to work tirelessly to expose COVID-19 schemes and bring those responsible to justice.”
“This indictment describes allegations of crimes that are especially egregious and caused significant harm to the programs designed to protect the most medically vulnerable, jeopardizing the health of our Medicare system and then using our nation’s financial system to launder proceeds of the fraud,” said Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG). “We appreciate the cooperation of our fellow law enforcement partners as we work to identify and investigate fraud of this type.”
According to the indictment, the defendants used COVID-19 emergency override billing codes in order to submit fraudulent claims to Medicare, for which they were allegedly paid over $30 million for expensive cancer medication Targretin Gel 1% that, in fact, never was purchased by the pharmacies, prescribed by physicians, or dispensed to patients, often during periods when pharmacies were non-operational, and using doctors’ names on prescriptions without their permission.
The indictment alleges that the defendants acquired control over dozens of New York pharmacies by paying others to pose as the owners of the pharmacies and hiring pharmacists to pretend to be supervising pharmacists at the pharmacies, for the purpose of obtaining pharmacy licenses and insurance plan credentialing. As the effects of the COVID-19 pandemic began to be felt in the United States, the defendants used the COVID-19 pandemic as an opportunity to capitalize on a national emergency for their own financial gain by using the COVID-19 “emergency override” billing codes to submit fraudulent claims for Targretin Gel 1%, which has an average wholesale price of approximately $34,000 for each 60 gram tube.
The indictment also alleges that, with the proceeds of the fraud, the defendants engaged in a complex money laundering conspiracy where they created sham pharmacy wholesale companies, which they named after pre-existing pharmacy wholesalers, and fabricated invoices to make it appear that funds transferred from the pharmacies to the sham pharmacy wholesale companies were for legitimate pharmaceutical drug purchases.
In the first phase of the money laundering conspiracy, the defendants conspired with an international money launderer who arranged for funds to be wired from the sham pharmacy wholesale companies to companies in China for distribution to individuals in Uzbekistan. In exchange, the defendants received cash provided by members of the Uzbekistani immigrant community to an unlicensed money transfer business for remittance to their relatives in Uzbekistan, minus a commission that was deducted by the money launderer.
In the second phase of the money laundering conspiracy, when the amount of fraudulent proceeds exceeded the amount of cash available in the Uzbekistani immigrant community, the defendants directed the international money launderer to transfer funds back from the sham wholesale companies to the defendants, their relatives, or their designess, in the form of certified cashier’s checks and bags of cash that were dropped at their house in the middle of the night. The defendants used the proceeds of the scheme to purchase real estate and other luxury items.
A federal criminal indictment is merely an accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
HHS-OIG’s New York Field Office; the FBI’s New York Field Office; the IRS-CI’s New York Field Office; and the FDIC-OIG investigated the case. Assistant Chief Jacob Foster of the Criminal Division’s Fraud Section’s National Rapid Response Strike Force and Trial Attorney Andrew Estes and Assistant Chief Brendan Stewart of the Fraud Section’s Brooklyn Strike Force are prosecuting the case. Former Fraud Section Trial Attorney Patrick Mott previously worked on the investigation.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Two Owners of New York Pharmacies Charged in $30 Million Covid-19 Health Care Fraud and Money Laundering SchemeRead the Press Release
BROOKLYN, NY – An indictment was unsealed in federal court in Brooklyn today charging the two owners of over a dozen pharmacies in New York City and on Long Island, for their roles in a $30 million health care fraud and money laundering scheme in which they exploited emergency codes and edits in the Medicare system that went into effect due to the COVID-19 pandemic in order to submit fraudulent claims for expensive cancer drugs that were never provided, ordered or authorized by medical professionals. Peter Khaim and Arkadiy Khaimov are charged with one count of conspiracy to commit health care fraud and wire fraud, and one count of conspiracy to commit money laundering. Khaim was separately charged with two counts of concealment money laundering and one count of aggravated identity theft. Khaimov was separately charged with two counts of concealment money laundering. The defendants were arrested this morning and will be arraigned this afternoon before Magistrate Judge Vera M. Scanlon.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Brian Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Scott Lampert, Special Agent-in-Charge, Health and Human Services-Office of Inspector General, New York Region (HHS-OIG); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); and Patricia Tarasca, Special Agent-in-Charge, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), announced the arrests and indictment.
“As alleged in the indictment, the defendants manipulated information in over a dozen pharmacies to defraud the Medicare program, including by taking advantage of systems that were intended to assist patients during the COVID-19 pandemic, and then went to great lengths to hide their ill-gotten gains through a network of sham companies,” stated Acting United States Attorney DuCharme. “This Office and our law enforcement partners are committed to holding accountable those who seek to enrich themselves at the expense of vital taxpayer-funded health care programs upon which so many rely.”
“These defendants allegedly lined their own pockets by exploiting Medicare flexibilities that were designed to ensure that patients obtained access to needed medications during the COVID-19 crisis,” stated Acting Assistant Attorney General Rabbitt. “Together with our law enforcement partners, the Criminal Division is working to aggressively identify, investigate and prosecute scammers who seek to take advantage of the COVID-19 crisis to defraud our public health care programs.”
“We allege Mr. Khaim and Mr. Khaimov used the COVID-19 pandemic as cover to exploit changes in the Medicare system,” stated FBI Assistant Director-in-Charge Sweeney. “The changes to this program, funded by taxpayers, were put in place to help fellow citizens obtain needed medications during the pandemic, not line the pockets of fraudsters. Those who attempt to illegally profit from our public funded healthcare programs should remember that taxpayers also fund courts and jails, and behavior like the type announced today will be met with swift action from the FBI and our law enforcement partners. If you are aware of frauds like the one announced today, please contact us at 1-800-CALL-FBI.”
“Fraudsters who target the Federal health care system attempt to undermine the integrity of programs that serve millions of individuals. When they leverage a public health emergency to perpetrate schemes, their wanton disregard for the programs and beneficiaries is glaringly clear,” stated HHS-OIG Special Agent-in-Charge Lampert. “We are responding aggressively with our law enforcement partners to pursue bad actors and to warn the public about these ongoing scams.”
“The defendants allegedly carried out a $30 million health care fraud and money laundering scheme, siphoning funds meant for patients during the COVID-19 pandemic,” stated IRS-CI Special Agent-in-Charge Larsen. “While Americans across the country are in dire need of medical and financial assistance, the defendants allegedly used the stolen proceeds to purchase real estate and luxury items. IRS-CI and our law enforcement partners will continue to work tirelessly to expose COVID-19 schemes and bring those responsible to justice.”
“This indictment describes allegations of crimes that are especially egregious and caused significant harm to the programs designed to protect the most medically vulnerable, jeopardizing the health of our Medicare system and then using our nation’s financial system to launder proceeds of the fraud,” stated FDIC-OIG Special Agent-in-Charge Tarasca. “We appreciate the cooperation of our fellow law enforcement partners as we work to identify and investigate fraud of this type.”
According to the indictment, the defendants used COVID-19 emergency override billing codes in order to submit fraudulent claims to Medicare, for which they were paid over $30 million for cancer medication Targretin Gel 1% including for claims where the medication never was purchased by the pharmacies, prescribed by physicians or dispensed to patients – often during periods when pharmacies were non-operational – and using doctors’ names on prescriptions without their permission. The defendants allegedly acquired control over more than a dozen New York pharmacies by paying others to pose as the owners of the pharmacies and hiring pharmacists to pretend to be supervising pharmacists at the pharmacies for the purpose of obtaining pharmacy licenses. Targretin Gel 1% has an average wholesale price of approximately $34,000 for each 60 gram tube.
The indictment also alleges that with the proceeds of the fraud, the defendants engaged in a money laundering conspiracy by creating sham pharmacy wholesale companies which they named after pre-existing pharmacy wholesalers, and fabricated references to invoices to make it appear that funds transferred from the pharmacies to the sham pharmacy wholesale companies were for legitimate pharmaceutical drug purchases. In the first phase of this conspiracy, the defendants conspired with an international money launderer who arranged for funds to be wired from the sham pharmacy wholesale companies to companies in China for distribution to individuals in Uzbekistan. In exchange, the defendants received cash from an unlicensed money transfer business, minus a commission that was deducted by the money launderer. In the second phase of this conspiracy, when the fraudulent proceeds exceeded the amount of cash available, the defendants caused others to transfer funds back from the sham wholesale companies to the defendants, their relatives, or their designees, in the form of certified cashier’s checks and cash that was dropped off at their residences in the middle of the night. The defendants used the proceeds of the scheme to purchase real estate and luxury items.
This case was investigated by HHS-OIG’s New York Field Office, the FBI’s New York Field Office, the IRS-CI’s New York Field Office and the FDIC. It is being handled by the Medicare Fraud Strike Force under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Assistant Chief Jacob Foster of the Criminal Division’s Fraud Section’s National Rapid Response Strike Force and Trial Attorney Andrew Estes of the Fraud Section’s Brooklyn Strike Force are in charge of the prosecution. Former Fraud Section Trial Attorney Patrick Mott previously worked on the investigation.
The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The Defendants:
PETER KHAIM
Age: 40
Forest Hills, New YorkARKADIY KHAIMOV
Age: 37
Forest Hills, New YorkEastern District Docket No.: 20-CR-580 (AMD)
Brooklyn Man Arrested for $1.9 Million Paycheck Protection Program FraudRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Leon Miles with wire fraud in connection with his scheme to obtain over $1.9 million from the Paycheck Protection Program (PPP) which Congress created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Miles was arrested this morning and will make his initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG); and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the arrest and charge.
“At a time when so many are suffering from the devastating economic effects of the ongoing pandemic, Miles allegedly enriched himself at the taxpayers’ expense, stealing funds that were intended by Congress to keep businesses afloat and workers on payroll,” stated Acting United States Attorney DuCharme. “Together with our agency partners, this Office will bring to justice those who take advantage of a global crisis to commit such crimes.”
“We continue to see people taking advantage of the Paycheck Protection Program, which was created to provide emergency financial assistance to businesses who need it during the pandemic,” stated FBI Assistant Director-in-Charge Sweeney. “ This type of criminal behavior is a slap in the face to all of those who play by the rules, especially while so many in our communities are suffering from the financial fallout of the pandemic. The FBI will continue to aggressively pursue those who are using the money from this taxpayer funded economic relief program to pad their own pockets. If you know of similar instances of fraud, please call us at 1-800-CALL-FBI.
“Fraudsters that have pursued personal gain at the expense of taxpayers will be brought to justice,” stated SBA OIG Special Agent-in-Charge McCall-Brathwaite. “Greed has no place in SBA’s programs that 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.”
“While most Americans are struggling during this pandemic, we see criminals over and over again trying to live out their dreams of a lavish lifestyle,” stated IRS-CI Special Agent-in-Charge Larsen. “Miles allegedly submitted a PPP loan application for nearly $2 million while claiming false information. He allegedly used these funds, in part, to purchase luxury vehicles. These types of actions hurt our people, our government and our country. IRS Criminal Investigation and our law enforcement partners will continue collaborating until every misappropriated PPP loan is accounted for and criminals are brought to justice.”
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.
As alleged in the complaint, in May 2020, Miles submitted an application for a $1,904,593.00 PPP loan on behalf of a limited liability company he owns in Brooklyn, New York, falsely claiming that the company had 50 employees and a total average monthly payroll of $761,838.00. In support of these claims, Miles submitted fraudulent personal and business tax returns and tax forms that were never filed with the IRS. In fact, he reported to the IRS no taxable income during the relevant period, and his company filed no tax returns and reported no wages paid to employees. The loan proceeds were disbursed to the defendant’s personal savings account, and within days he had withdrawn hundreds of thousands of dollars, a portion of which he used to purchase a 2020 Bentley Continental for approximately $250,000 and a 2020 Cadillac Escalade for approximately $100,000.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Robert M. Pollack with assistance from Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Section.
The Defendant:
LEON MILES
Age: 51
Brooklyn, New YorkE.D.N.Y. Docket No. 20-MJ-1234
China-Based Executive at U.S. Telecommunications Company Charged with Disrupting Video Meetings Commemorating Tiananmen Square MassacreRead the Press Release
A complaint and arrest warrant were unsealed today in federal court in Brooklyn charging Xinjiang Jin, also known as “Julien Jin,” with conspiracy to commit interstate harassment and unlawful conspiracy to transfer a means of identification. Jin, an employee of a U.S.-based telecommunications company (Company-1) who was based in the People’s Republic of China (PRC), allegedly participated in a scheme to disrupt a series of meetings in May and June 2020 held to commemorate the June 4, 1989 Tiananmen Square massacre in the PRC. The meetings were conducted using a videoconferencing program provided by Company-1, and were organized and hosted by U.S-based individuals, including individuals residing in the Eastern District of New York. Jin is not in U.S. custody.
“No company with significant business interests in China is immune from the coercive power of the Chinese Communist Party,” said Assistant Attorney General for National Security John C. Demers. “The Chinese Communist Party will use those within its reach to sap the tree of liberty, stifling free speech in China, the United States and elsewhere about the Party’s repression of the Chinese people. For companies with operations in China, like that here, this reality may mean executives being coopted to further repressive activity at odds with the values that have allowed that company to flourish here.”
“The FBI remains committed to protecting the exercise of free speech for all Americans. As this complaint alleges, that freedom was directly infringed upon by the pernicious activities of Communist China’s Intelligence Services, in support of a regime that neither reflects nor upholds our democratic values,” said FBI Director Christopher Wray. “Americans should understand that the Chinese Government will not hesitate to exploit companies operating in China to further their international agenda, including repression of free speech.”
“The allegations in the complaint lay bare the Faustian bargain that the PRC government demands of U.S. technology companies doing business within the PRC’s borders, and the insider threat that those companies face from their own employees in the PRC,” said Acting United States Attorney Seth D. DuCharme. “As alleged, Jin worked closely with the PRC government and members of PRC intelligence services to help the PRC government silence the political and religious speech of users of the platform of a U.S. technology company. Jin willingly committed crimes, and sought to mislead others at the company, to help PRC authorities censor and punish U.S. users’ core political speech merely for exercising their rights to free expression. The charges announced today make clear that employees working in the PRC for U.S. technology companies make those companies—and their users—vulnerable to the malign influence of the PRC government. This Office will continue working tirelessly to protect against threats to the free expression of political views and religious beliefs, regardless whether those threats come from inside or outside the United States.”
Mr. DuCharme and Mr. Demers also extended their thanks and appreciation to Company-1 for its cooperation in the government’s ongoing investigation.
According to the complaint, Jin served as Company-1’s primary liaison with PRC law enforcement and intelligence services. In that capacity, he regularly responded to requests from the PRC government for information and to terminate video meetings hosted on Company-1’s video communications platform. Part of Jin’s duties included providing information to the PRC government about Company-1’s users and meetings, and in some cases he provided information – such as Internet Protocol addresses, names and email addresses – of users located outside of the PRC. Jin was also responsible for proactively monitoring Company-1’s video communications platform for what the PRC government considers to be “illegal” meetings to discuss political and religious subjects unacceptable to the Chinese Communist Party (CCP) and the PRC government.
As alleged in the complaint, between January 2019 to the present, Jin and others conspired to use Company-1’s systems in the United States to censor the political and religious speech of individuals located in the United States and around the world at the direction and under the control of officials of the PRC government. Among other actions taken at the direction of the PRC government, Jin and others terminated at least four video meetings hosted on Company-1’s networks commemorating the thirty-first anniversary of the Tiananmen Square massacre, most of which were organized and attended by U.S.-based participants, such as dissidents who had participated in and survived the 1989 protests. Some of the participants who were unable to attend these meetings were Company-1 customers in Queens and Long Island, New York who had purchased subscriptions to Company-1’s services, and therefore entered into service agreements with Company-1 governed by its Terms of Service (TOS).
Jin, officials from the PRC government and others allegedly collaborated to identify meeting participants and to disrupt meetings hosted on Company-1’s U.S. servers, at times creating pretextual reasons to justify their actions to other employees and executives of Company-1, as well as Company-1’s users themselves. In particular, in May and June 2020, Jin and others acted to disrupt meetings held on the Company-1 platform to discuss politically sensitive topics unacceptable to the PRC government by infiltrating the meetings to gather evidence about purported misconduct occurring in those meetings. In fact, there was no misconduct; Jin and his co-conspirators fabricated evidence of TOS violations to provide justification for terminating the meetings, as well as certain participants’ accounts. Jin then tasked a high-ranking employee of Company-1 in the United States to effect the termination of meetings and the suspension and cancellation of user accounts.
As detailed in the complaint, Jin’s co-conspirators created fake email accounts and Company-1 accounts in the names of others, including PRC political dissidents, to fabricate evidence that the hosts of and participants in the meetings to commemorate the Tiananmen Square massacre were supporting terrorist organizations, inciting violence or distributing child pornography. The fabricated evidence falsely asserted that the meetings included discussions of child abuse or exploitation, terrorism, racism or incitements to violence, and sometimes included screenshots of the purported participants’ user profiles featuring, for example, a masked person holding a flag resembling that of the Islamic State terrorist group. Jin used the complaints as evidence to persuade Company-1 executives based in the United States to terminate meetings and suspend or terminate the user accounts of the meeting hosts.
PRC authorities took advantage of information provided by Jin to retaliate against and intimidate participants residing in the PRC, or PRC-based family members of meeting participants. PRC authorities temporarily detained at least one person who planned to speak during a commemoration meeting. In another case, PRC authorities visited family members of a participant in the meetings and directed them to tell the participant to cease speaking out against the PRC government and rather to support socialism and the CCP.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of both charged conspiracies, Jin faces a maximum sentence of ten years in prison.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant U.S. Attorneys Alexander A. Solomon, Richard M. Tucker, David K. Kessler and Ian C. Richardson are in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
China-Based Executive at U.S. Telecommunications Company Charged with Disrupting Video Meetings Commemorating Tiananmen Square MassacreRead the Press Release
A complaint and arrest warrant were unsealed today in federal court in Brooklyn charging Xinjiang Jin, also known as “Julien Jin,” with conspiracy to commit interstate harassment and unlawful conspiracy to transfer a means of identification. Jin, an employee of a U.S.-based telecommunications company (Company-1) who was based in the People’s Republic of China (PRC), allegedly participated in a scheme to disrupt a series of meetings in May and June 2020 held to commemorate the June 4, 1989 Tiananmen Square massacre in the PRC. The meetings were conducted using a videoconferencing program provided by Company-1, and were organized and hosted by U.S-based individuals, including individuals residing in the Eastern District of New York. Jin is not in U.S. custody.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; and Christopher Wray, Director, Federal Bureau of Investigation (FBI), announced the charges.
“The allegations in the complaint lay bare the Faustian bargain that the PRC government demands of U.S. technology companies doing business within the PRC’s borders, and the insider threat that those companies face from their own employees in the PRC,” stated Acting United States Attorney DuCharme. “As alleged, Jin worked closely with the PRC government and members of PRC intelligence services to help the PRC government silence the political and religious speech of users of the platform of a U.S. technology company. Jin willingly committed crimes, and sought to mislead others at the company, to help PRC authorities censor and punish U.S. users’ core political speech merely for exercising their rights to free expression. The charges announced today make clear that employees working in the PRC for U.S. technology companies make those companies—and their users—vulnerable to the malign influence of the PRC government. This Office will continue working tirelessly to protect against threats to the free expression of political views and religious beliefs, regardless whether those threats come from inside or outside the United States.” Mr. DuCharme and Mr. Demers also extended their thanks and appreciation to Company-1 for its cooperation in the government’s ongoing investigation.
“No company with significant business interests in China is immune from the coercive power of the Chinese Communist Party,” stated Assistant Attorney General Demers. “The Chinese Communist Party will use those within its reach to sap the tree of liberty, stifling free speech in China, the United States and elsewhere about the Party’s repression of the Chinese people. For companies with operations in China, like that here, this reality may mean executives being coopted to further repressive activity at odds with the values that have allowed that company to flourish here.”
“The FBI remains committed to protecting the exercise of free speech for all Americans. As this complaint alleges, that freedom was directly infringed upon by the pernicious activities of Communist China’s Intelligence Services, in support of a regime that neither reflects nor upholds our democratic values,” stated FBI Director Wray. “Americans should understand that the Chinese Government will not hesitate to exploit companies operating in China to further their international agenda, including repression of free speech.”
According to the complaint, Jin served as Company-1’s primary liaison with PRC law enforcement and intelligence services. In that capacity, he regularly responded to requests from the PRC government for information and to terminate video meetings hosted on Company-1’s video communications platform. Part of Jin’s duties included providing information to the PRC government about Company-1’s users and meetings, and in some cases he provided information – such as Internet Protocol addresses, names and email addresses – of users located outside of the PRC. Jin was also responsible for proactively monitoring Company-1’s video communications platform for what the PRC government considers to be “illegal” meetings to discuss political and religious subjects unacceptable to the Chinese Communist Party (CCP) and the PRC government.
As alleged in the complaint, between January 2019 to the present, Jin and others conspired to use Company-1’s systems in the United States to censor the political and religious speech of individuals located in the United States and around the world at the direction and under the control of officials of the PRC government. Among other actions taken at the direction of the PRC government, Jin and others terminated at least four video meetings hosted on Company-1’s networks commemorating the thirty-first anniversary of the Tiananmen Square massacre, most of which were organized and attended by U.S.-based participants, such as dissidents who had participated in and survived the 1989 protests. Some of the participants who were unable to attend these meetings were Company-1 customers in Queens and Long Island, New York who had purchased subscriptions to Company-1’s services, and therefore entered into service agreements with Company-1 governed by its Terms of Service (TOS).
Jin, officials from the PRC government and others allegedly collaborated to identify meeting participants and to disrupt meetings hosted on Company-1’s U.S. servers, at times creating pretextual reasons to justify their actions to other employees and executives of Company-1, as well as Company-1’s users themselves. In particular, in May and June 2020, Jin and others acted to disrupt meetings held on the Company-1 platform to discuss politically sensitive topics unacceptable to the PRC government by infiltrating the meetings to gather evidence about purported misconduct occurring in those meetings. In fact, there was no misconduct; Jin and his co-conspirators fabricated evidence of TOS violations to provide justification for terminating the meetings, as well as certain participants’ accounts. Jin then tasked a high-ranking employee of Company-1 in the United States to effect the termination of meetings and the suspension and cancellation of user accounts.
As detailed in the complaint, Jin’s co-conspirators created fake email accounts and Company-1 accounts in the names of others, including PRC political dissidents, to fabricate evidence that the hosts of and participants in the meetings to commemorate the Tiananmen Square massacre were supporting terrorist organizations, inciting violence or distributing child pornography. The fabricated evidence falsely asserted that the meetings included discussions of child abuse or exploitation, terrorism, racism or incitements to violence, and sometimes included screenshots of the purported participants’ user profiles featuring, for example, a masked person holding a flag resembling that of the Islamic State terrorist group. Jin used the complaints as evidence to persuade Company-1 executives based in the United States to terminate meetings and suspend or terminate the user accounts of the meeting hosts.
PRC authorities took advantage of information provided by Jin to retaliate against and intimidate participants residing in the PRC, or PRC-based family members of meeting participants. PRC authorities temporarily detained at least one person who planned to speak during a commemoration meeting. In another case, PRC authorities visited family members of a participant in the meetings and directed them to tell the participant to cease speaking out against the PRC government and rather to support socialism and the CCP.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of both charged conspiracies, Jin faces a maximum sentence of 10 years in prison.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Richard M. Tucker, David K. Kessler and Ian C. Richardson are in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
The Defendant:
XINJIANG JIN, also known as “Julien Jin”
Age: 39
Zhejiang Province, People’s Republic of ChinaE.D.N.Y. Docket No. 20-MJ-1103
Five Individuals Charged with Conspiracy to Commit Robberies and Related Offenses in Queens, Staten Island, Suffolk County and New JerseyRead the Press Release
A superseding indictment has been unsealed in federal court in Brooklyn charging John Martin, Brandon Daniels, Lamonte Johnson, Shi Zhen Lin and Corey Mobley with conspiring to commit robberies in Queens, Staten Island, Suffolk County and New Jersey, committing and threatening to commit physical violence in furtherance of a May 4, 2019 home-invasion robbery in Little Neck, Queens, and brandishing a firearm during the Queens robbery. Mobley is also charged with five counts relating to a March 2019 robbery of a drug dealer. Lin was arrested this afternoon and will be arraigned via videoconference tomorrow before United States District Judge Raymond J. Dearie. Daniels was arrested on December 8, 2020 and was ordered detained pending trial. Mobley and Martin, who are in federal custody, were previously arraigned and ordered detained. Johnson is in state custody and will be arraigned at a later date.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Office (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges and arrests.
“As our charges allege, the defendants targeted and terrorized numerous victims at gun point, including a family inside their home in Queens where two of the defendants sexually assaulted a woman,” stated Acting United States Attorney DuCharme. “With this prosecution, the defendants’ crime spree has been put to an end. This Office will continue to commit our people and our resources to bringing to justice those who participate in such brutal crimes.” Mr. DuCharme extended his grateful appreciation to the New York State Department of Corrections and Community Supervision, Office of Special Investigations for its assistance in the investigation.
"These defendants, as alleged, terrorized communities from eastern Long Island to New Jersey. But thanks to the dedication of the men and woman of the ATF/NYPD Joint Robbery Task Force, all five now face life sentences in federal prison,”stated ATF Special Agent-in-Charge DeVito.
As set forth in the indictment and other court filings, in May 2019 during the commission of a home invasion robbery in Little Neck, Queens, the defendants allegedly held a group of eight women and children at gunpoint. Mobley and Daniels forced the screaming occupants into a downstairs bedroom, dragging an elderly woman who could not walk and the child she was holding across the floor. Mobley threatened to kill all of the occupants if they did not reveal where money was in the house, and Mobley and Daniels sexually assaulted one of the victims. Although the defendants expected to find tens of thousands of dollars in the home, they found only a few thousand dollars that one victim had set aside as a gift to her family. Mobley and Daniels were later identified by law enforcement through DNA left at the scene. A substantial portion of the crime was recorded on surveillance cameras located inside and outside the home.
The Queens robbery was part of a string of robberies and attempted robberies allegedly committed by the defendants over a three-month period from March to May 2019. Lin’s role was to identify robbery victims for Martin, Mobley and Daniels. Johnson recruited Lin and Martin to participate in the robberies, with the expectation that he would get a share of the proceeds.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the charged offenses, the defendants face a maximum sentence of life in prison.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Jonathan Siegel and Michael W. Gibaldi are in charge of the prosecution.
The Defendants:
JOHN MARTIN (also known as “Lil John” and “LJ”)
Age: 48
Brooklyn, New YorkBRANDON DANIELS
Age: 26
Brooklyn, New YorkLAMONTE JOHNSON
Age: 52
Auburn, New YorkSHI ZHEN LIN (also known as “Kevin Lin” and “Kev”)
Age: 29
Maspeth, New YorkCOREY MOBLEY
Age: 50
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-221 (S-3)
Manager at Queens Not-For-Profit Pleads Guilty to Wire FraudRead the Press Release
Earlier today, in federal court in Brooklyn, Ingris Coronado pleaded guilty to a criminal information charging her with defrauding her former employer, Southern Queens Park Association (SQPA), a government-funded, Queens-based not-for-profit that provides educational and other social services to young adults. Today’s plea took place before United States District Judge William F. Kuntz, II. When sentenced, Coronado faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000 for submitting false invoices and cashing checks issued in the names of other individuals.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the guilty plea.
Since at least 2014, Coronado worked as a Project Manager for SQPA, which received millions of dollars annually in New York City government funding. According to court filings and facts presented during the plea proceeding, between August 2014 and September 2018, Coronado engaged in a scheme to steal money from SQPA. Specifically, in her role as the supervisor of an after-school program run by SQPA, Coronado repeatedly falsified time sheets, collected checks issued in the names of more than ten of her supervisees and deposited those checks into her own bank account. On multiple occasions, Coronado also created false invoices for vendors for SQPA and deposited the resulting payment checks into her personal account. As a result of her fraudulent conduct, Coronado stole tens of thousands of dollars from SQPA.
“For years, Coronado deceived her employer and abused her position at a not-for-profit organization by stealing funds that were meant to benefit members of the community,” stated Acting United States Attorney DuCharme. “Today’s guilty plea makes clear that individuals who engage in fraud to satisfy their own greed at the expense of the community they are supposed to be serving will be brought to justice.”
“Coronado stole money directly from a city-funded, not-for-profit program established to provide services to young adults. Today she’s admitted to her criminal activity and faces a significant jail sentence as a result of her behavior. Let this be a message to others who are currently scamming the system—there are consequences for your actions,” stated FBI Assistant Director-in-Charge Sweeney.
“This defendant falsified timesheets and vendor invoices and pocketed checks issued to employees and vendors, amounting to tens of thousands of dollars – stealing taxpayer funds meant to help residents of southern Queens who rely on this nonprofit's programming. DOI is committed to investigating these damaging crimes that attack our City's charitable organizations and diminish the impact of the City's funding of their programs. We are proud to have partnered with the office of the United States Attorney for the Eastern District of New York and the Federal Bureau of Investigation to hold this defendant accountable for her conduct,” stated DOI Commissioner Garnett.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Nathan Reilly is in charge of the prosecution.
The Defendant:
INGRIS CORONADO
Age: 46
Staten Island, New YorkE.D.N.Y. Docket No. 20-CR-189 (WFK)
Two Individuals Arrested for Human Smuggling Conspiracy and Defrauding U.S. Government AgenciesRead the Press Release
Earlier today, in federal court in Central Islip, a six-count indictment was unsealed charging Dat Tat Ho and Manh Ngoc Nguyen with conspiring to defraud U.S. government agencies and alien smuggling for financial gain, and related crimes. The defendants were arrested this morning and arraigned this afternoon before United States Magistrate Judge Anne Y. Shields. Both defendants were ordered detained pending trial.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); and Michael C. Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Region (DOL-OIG), announced the indictment and arrests.
"As alleged, Ho and Nguyen conspired to smuggle aliens into the United States, keep them under the defendants’ control and pay them illegally low wages to work in nail and hair salons,” stated Acting United States Attorney DuCharme. “As this case demonstrates, we take seriously our responsibility to maintain security at our borders and prosecute those who seek unlawful commercial advantage and financial profit through the exploitation of other human beings.”
Mr. DuCharme thanked the U.S. Citizenship and Immigration Services (USCIS), U.S. Postal Inspection Service, U.S. Customs and Border Protection, U.S. Attorney’s Office for the Southern District of New York, the New York City Police Department, Nassau County Police Department and Suffolk County Police Department for their valuable assistance during the investigation.
“This case is an example of callous labor trafficking hiding in plain sight. In what seemed to be an endless scheme, this transnational criminal organization allegedly manipulated the asylum process and profited off the plight of their nail salon employees whom they victimized,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI, through collaboration with its federal, state and local partners, methodically unraveled the vast reach of this enterprise which led to the indictment of these criminals. It is important for anyone who is a victim of human smuggling to know that these investigations prioritize ensuring the safety of the victims while bringing those responsible to justice.”
“It is reprehensible when others allegedly seek personal financial gain by smuggling persons into the United States and paying them illegally low wages,” stated IRS-CI Special Agent-in-Charge Larsen. “We will continue to work with our law enforcement partners to prevent this abuse and protect the financial integrity of our tax system.”
“Combatting labor trafficking is an important part of the mission of the Department of Labor’s Office of Inspector General. We will continue to work with our law enforcement partners to investigate all forms of labor trafficking,” stated DOL-OIG Special Agent-in-Charge Mikulka.
According to court filings, the defendants owned or managed numerous nail and hair salons in Queens, the Bronx and on Long Island. Between January 2017 and September 2020, the defendants and others arranged for Vietnamese foreign nationals to enter the United States via illegal border crossings at the U.S. border with Mexico, as well as at other ports of entry. After the foreign nationals crossed the border, the defendants facilitated their travel to New York to work in their salons at illegally low wages and overstay their transit visas. The defendants also caused foreign nationals to make false statements to USCIS and submit fraudulent asylum applications to USCIS. The foreign nationals were housed in residences that the defendants owned or controlled.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Nguyen and Ho face a minimum of five years’ imprisonment and up to 15 years’ imprisonment.
Assistant United States Attorneys Allen Bode, Charles Rose and Andrew D. Grubin are in charge of the prosecution. Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is handling forfeiture matters.
The Defendants:
MANH NGOC NGUYEN (also known as “Peter”)
Age: 44
Hicksville, New YorkDAT TAT HO (also known as “Chris”)
Age: 33
Bronx, New YorkE.D.N.Y. Docket No. 20-CR-486 (JS)
Former Supervisor at Long Island Drug Manufacturer Pleads Guilty to Theft of Medical ProductsRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Gregory Settino pleaded guilty to theft of medical products from his employer, a drug manufacturer in Suffolk County. When sentenced, Settino faces up to 20 years in prison, restitution to his former employer and a fine of up to $250,000. Today’s proceeding took place before United States District Judge Joanna Seybert.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jeffrey Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations, New York Field Office (FDA-OCI), announced the guilty plea.
“With today’s guilty plea, Settino has been held accountable for stealing from his then-employer thousands of bottles of an injectable drug administered to horses, which he resold to trainers and vets potentially endangering the health of horses at New York racetracks because the stolen drugs were not handled properly,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute those who jeopardized drug safety.”
“The FDA works to ensure that veterinary drugs are safe and effective so that animals remain healthy. When drugs are taken out of the legitimate supply chain, there is no longer any assurance that they are safe or effective,” stated FDA-OCI Special Agent-in-Charge Ebersole. “The FDA remains committed to investigating and bringing to justice those who endanger the health of animals.”
As set forth in court filings and facts admitted in court, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York. In January 2019, Luitpold was renamed American Regent. One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States. Between 2012 and January 2020, Settino stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000. Settino’s conduct potentially endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs. At times, Settino transported the drugs in shoeboxes stored in his car. At all times, the drugs were handled in violation of the FDA regulated supply chain.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.
The Defendant:
GREGORY SETTINO
Age: 58
Bethpage, New YorkE.D.N.Y. Docket No. 20-CR-340 (JS)
Vitol Inc. Agrees to Pay over $135 Million to Resolve Foreign Bribery CaseRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to pay a combined $135 million to resolve the Justice Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and to resolve a parallel investigation in Brazil.
The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department.
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Pursuant to its agreement with the department, Vitol’s total criminal penalty is $135 million. The department will credit $45 million – approximately one third of the total criminal penalty – against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance their compliance programs; and to report to the department on the implementation of their compliance programs.
According to the company’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five other Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.”
Vitol also admitted to a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to officials in Ecuador and Mexico.
In furtherance of this bribery scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy – all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the department recently unsealed charges against a Houston-based former Petrobras official who received bribes in association with the scheme, and who pleaded guilty to one count of conspiracy to commit money laundering on Feb. 8, 2019, in the Eastern District of New York. In addition, the department recently unsealed charges against one of the intermediaries involved in the Brazil scheme, who pleaded guilty on Sept. 22, 2017, to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on Sept. 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case. The U.S. Marshals Service and Justice Department’s Office of International Affairs provided assistance in the investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Vitol Inc. Agrees to Pay over $135 Million to Resolve Charges for Bribery Schemes in Latin AmericaRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to a combined total criminal penalty of $135 million to resolve bribery charges with law enforcement authorities in the United States and Brazil. The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), made the announcement.
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” stated Acting United States Attorney DuCharme. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Rabbitt. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said FBI Assistant Director-in-Charge Johnson. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the government in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement, Vitol will pay a total criminal penalty to the United States of $135 million. The Department of Justice will credit $45 million—approximately one third of the total criminal penalty—against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to: (i) continue to cooperate with the department in any ongoing investigations and prosecutions relating to the charged conduct, including conduct of individuals, (ii) enhance their compliance programs, and (iii) report to the department on the implementation of their compliance programs.
According to the Vitol’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five additional Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye” and “Beb.”
Finally, Vitol admitted to participating in a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to those officials. In furtherance of this scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy—all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the government recently unsealed charges against Houston-based former Petrobras official Rodrigo Berkowitz, who pleaded guilty in the Eastern District of New York on February 8, 2019 to one count of conspiracy to commit money laundering. In addition, the government recently unsealed charges against one of the intermediaries involved in the Brazil scheme, Luiz Eduardo Andrade, who pleaded guilty on September 22, 2017 to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on September 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The government’s investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor of the Eastern District of New York, and Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell and Clayton P. Solomon, are prosecuting the case. The Criminal Division’s Office of International Affairs provided assistance in the investigation.
The Defendants:
VITOL INC.
RODRIGO BERKOWITZ
Age: 41
Country of Origin: BrazilJAVIER AGUILAR
Age: 46
Country of Origin: MexicoLUIZ EDUARDO ANDRADE
Age: 61
Country of Origin: BrazilSix Defendants Indicted for Fraud and Money Laundering Scheme that Operated Seven “Birth Houses” in Suffolk CountyRead the Press Release
Earlier today, at the federal courthouse in Central Islip, an indictment was unsealed charging Ibrahim Aksakal, Indicted Co-conspirator #1, Enes Burak Cakiroglu and Sarah Kaplan with conspiring to commit visa fraud, health care fraud, wire fraud and money laundering, and Fiordalisa Marte and Edgar Rodriguez with conspiring to commit health care fraud, wire fraud and money laundering, for their participation in 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.
Five of the defendants were arrested this morning and will be arraigned this afternoon before Magistrate Judge Steven I. Locke. One defendant remains at large.
Seth D. DuCharme, 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 (HSI), and Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), announced the arrests and the indictment.
As alleged in the Indictment, from at least January 2017 to the September 2020, the defendants 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. The defendants also allegedly instructed the women to conceal their pregnancies.
As alleged in the indictment and court filings, the pregnant women were housed in one of seven “birth houses” that the defendants maintained in Center Moriches, Dix Hills, East Northport, East Patchogue, Smithtown and West Babylon, New York. Defendants Aksakal, Indicted Co-conspirator #1, Cakiroglu and Kaplan facilitated the lodging and transportation of the pregnant women. Marte and Rodriguez, who were professionally trained and certified to assist individuals to apply for health coverage, obtained the purported “insurance” which was actually Medicaid benefits, by submitting fraudulent Medicaid applications on behalf of the pregnant women.
As a result of the defendants’ scheme, the indictment alleges that Medicaid disbursed more than $2.1 million in fraudulently-obtained benefits, and estimates that the defendants’ received approximately $750,000 in fees from the pregnant women, a portion of which was funneled to one or more bank accounts in Turkey.
“Using Internet ads, the defendants perpetrated an international fraud that relied upon a parade of women who paid them thousands of dollars in fees in order to enter the United States under false pretenses, to give birth here. The defendants cashed in on the desire for birthright citizenship, and the American taxpayer ultimately got stuck with the $2.1 million bill,” stated Acting United States Attorney DuCharme. “The indictment unsealed today reinforces the principle that American citizenship is not for sale, and that our benefits programs are not piggy banks for criminals to plunder.”
Mr. DuCharme expressed his grateful appreciation to the United States Department of Health and Human Services, United States Department of State, Diplomatic Security Service, New York State Department of Health and the Office of the Medicaid Inspector General for their assistance during the investigation.
“This is a brazen birth tourism scheme in which the defendants not only violated our nation's immigration laws, but went a step further, sticking the taxpayers of Suffolk County with the bill for their scam by stealing millions of dollars from the Medicaid program,” stated District Attorney Sini. “Medicaid is designed to help people in need – not to be used as a slush fund for criminals to subsidize their fraudulent schemes, which is precisely what these defendants did. Let the message be clear: federal and local law enforcement will continue to work together to protect the residents of Suffolk County.”
“This international criminal organization operated a fraud scheme to exploit women and their newborns” stated HSI Special Agent-in-Charge Fitzhugh. “Birth tourism is dangerous, inhumane and diverts precious community resources to the coffers of criminals. HSI’s collaborative efforts and extraordinary partnership with the Suffolk County District Attorney’s Office and the U.S. Attorney’s Office, Eastern District of New York, has led to multiple criminal arrests around the county today. Those arrested today are charged with fraud and money laundering, and now may instead find themselves touring the inside of a federal prison.”
“Our Suffolk County Police Department detectives uncovered a birth tourism scheme and thanks to their tenacity and the countless hours dedicated to investigating the intricacies of the scheme, a case came together and six individuals are now being held responsible for their roles in this conspiracy,” stated SCPD Commissioner Hart. “This indictment should send a message to others exploiting birth tourism—bilking the system and swindling our residents is not tolerated here in Suffolk. Together, with the Eastern District of New York, the Suffolk County District Attorney’s Office, and Homeland Security Investigations along with assistance from other state agencies, this operation has been halted and those responsible are being held accountable.”
The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face a maximum sentence of 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 Attorneys Jeremy Glicksman and Joseph Conley are in charge of the prosecution.
The Defendants:
IBRAHIM AKSAKAL (also known as “Dennis”)
Age: 48
East Patchogue, New YorkENES BURAK CAKIROGLU
Age: 24
East Patchogue, New YorkSARAH KAPLAN (also known as “Hatun Kaplan” and “Hatin Kaplan)
Age: 46
Center Moriches, New YorkFIORDALISA MARTE (also known as “Lisa”)
Age: 41
Lindenhurst, New YorkEDGAR RODRIGUEZ (also known as “Eddie”)
Age: 48
Farmingville, New YorkE.D.N.Y. Docket No. 20-CR-400 (JS)
MS-13 Gang Associate Sentenced to Life Imprisonment for Murder in Deli on Long IslandRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Jose Suarez, an associate of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, was sentenced to life in prison by United States Circuit Judge Joseph F. Bianco. In May 2019, Suarez was convicted following a three-week jury trial of murder, racketeering and assault charges in connection with the January 30, 2017 murder of Esteban Alvarado-Bonilla and the shooting of a female employee at a deli in Central Islip, and the December 18, 2016 assault of a man outside a restaurant in Brentwood.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.
“Suarez will deservedly spend the rest of his life in a federal prison for the brutal murder and mayhem he committed in the name of the MS-13 gang,” stated Acting United States Attorney DuCharme. “The investigation and trial of this case is the result of the unyielding commitment of the Office and our partners on the FBI’s Long Island Gang Task Force to eradicate the MS-13 in this district.”
“Mr. Suarez' life sentence in federal prison is simply another brick in the wall we've built around MS-13 to stop this violent gang from terrorizing people on Long Island. Agents and detectives assigned to the FBI's Long Island Gang Task Force, whose work continues to this day, have put in a tremendous amount of time and effort to dismantle this gang. The results of their labor, as well as the community's commitment to working with us to prevent a resurgence in gang activity, is commendable,” stated FBI Assistant Director-in-Charge Sweeney.
“The relentless efforts of the FBI’s Long Island Gang Task Force and the Eastern District of New York have never wavered in holding MS-13 gang members accountable for their violent, senseless crimes,” stated SCPD Commissioner Hart. “Thanks to their dedication, Suarez will spend the rest of his life behind bars for the murder and assaults that he committed. This sentence sends a message that our department along with our local and federal law enforcement partners remain determined to dismantle this transnational gang.”
“The continued efforts of the Long Island Gang Task Force continues to show positive results in their commitment to eradicate criminal gang activity. The conviction of MS-13 Gang Member Jose Suarez on charges of Murder, Racketeering and Assault charges is a clear example that this multi-agency approach is working. I would like to acknowledge the continued efforts of the dedicated investigators and their agencies for keeping residents and our communities safe,” stated NCPD Commissioner Ryder.
On January 30, 2017, a member of the Sailors clique saw Alvarado-Bonilla inside El Campesino Deli in Central Islip. Believing that Alvarado-Bonilla was a rival gang member, several members of the Sailors clique plotted to kill him. Suarez drove MS-13 member Mario Aguilar-Lopez and an MS-13 associate to a street near the deli. Aguilar-Lopez entered the deli, approached the victim from behind and shot him multiple times, killing him. One of the bullets traveled through Alvarado-Bonilla’s head and struck a female employee of the deli standing directly in front of him. Aguilar-Lopez ran out of the deli and to the car where Suarez was waiting, and the two fled the scene. The store employee survived a gunshot wound to the chest. In November 2018, Aguilar-Lopez pleaded guilty to causing Alvarado’s death and shooting the store clerk. He is awaiting sentencing.
On December 18, 2016, Suarez and several MS-13 members and associates assaulted two men outside the Super Taco facility in Brentwood, seriously injuring one of the men. The victims were attacked because one of them had disrespected the MS-13.
Today’s sentencing 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. The MS-13’s leadership is based in El Salvador, Mexico, Guatemala and Honduras, 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 largest and most violent street gang 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 district, 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, comprising agents and officers of the FBI, NCPD, SCPD, the Nassau County Sheriff’s Department, the Suffolk County Sheriff’s Office, the Suffolk County Probation 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, Michael T. Keilty, Paul G. Scotti and Justina L. Geraci are in charge of the prosecution.
The Defendant:
JOSE SUAREZ (also known as “Chompira”)
Age: 26
Central Islip, New YorkE.D.N.Y. Docket No. 16-CR-403 (JFB)
New York City Restaurateur Sentenced to Jail for Tax Evasion SchemeRead the Press Release
A New York City restaurateur was sentenced to prison for a tax evasion scheme.
Adel Kellel, 63, of New Hyde Park, New York, the owner of Raffles Bistro, formerly a restaurant located in New York City, was sentenced to 24 months in prison for tax evasion by U.S. District Court Judge Paul G. Gardephe.
“All taxpayers have an obligation to honestly report their income and pay their share of taxes,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “For those who attempt to avoid these obligations and cheat the IRS, as this sentence shows, there are serious consequences.”
“Adel Kellel cooked his books to conceal income from the IRS and his own accountants,” said Acting U.S. Attorney Audrey Strauss for the Southern District of New York. “He spent the ill-gotten gains on personal luxuries like a Mercedes, a Porsche, and a Maserati. Now he will spend two years in federal prison.”
“The accurate reporting of income is an important responsibility of all business professionals,” said IRS-Criminal Investigation Special Agent in Charge Jonathan D. Larsen. “In this case, Adel Kellel attempted to evade his taxes by diverting funds for personal use and failing to report substantial gross receipts. IRS-Criminal Investigation will continue to serve the American taxpayer by investigating individuals who hide their true income from the IRS.”
According to the allegations contained in the information to which Kellel pled guilty, documents filed in court, and statements made in court:
In 2011, Kellel was the President and a 45 percent owner of K&H Restaurant Inc. (K&H), which operated Raffles Bistro (Raffles), a coffee-shop and full service restaurant then located in a Manhattan hotel (the Hotel). From 2012 through 2015, Kellel was the 100 percent owner of K&H. From 2011 to 2015, Kellel filed false personal returns and corporate returns for K&H, and evaded his taxes by diverting and failing to report substantial gross receipts to the IRS.
For example, as part of his tax evasion scheme, Kellel diverted over 150 hotel checks, totaling over $2.1 million or approximately 43 percent of the Hotel payments K&H received by check, and then hid the gross receipts from his accountants and the IRS by depositing the checks into more than a dozen undisclosed bank accounts. These included personal accounts that Kellel held either individually or jointly with his wife, as well as accounts held in the name of K&H, some of which were opened solely to have an additional place to deposit diverted checks. Kellel also diverted substantial cash income received from Raffles’ customers, a portion of which he deposited into personal bank accounts or spent directly on personal expenses, again, without disclosing to his accountants or paying taxes.
Kellel used the diverted income for personal expenses, including overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments for his children; luxury retailers, such as Hugo Boss and Saks Fifth Avenue; Mercedes, Porsche, and Maserati vehicles; and domestic and international travel.
On Jan. 24, 2020, Kellel pled guilty to one count of tax evasion relating to the 2011 to 2015 tax years.
In total, Kellel caused a combined tax loss of at least approximately $771,195 to the IRS and the New York State Department of Taxation and Finance (NYSDTF). In addition to the sentence of imprisonment, the court ordered Kellel to pay restitution of $613,478 to the IRS and $157,717 to NYSDTF. Kellel was also ordered to serve three years of supervised release after completing his jail sentence.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Strauss praised the efforts of IRS-CI in the investigation. Trial Attorney Jorge Almonte of the Tax Division and Assistant U.S. Attorney Olga I. Zverovich are in charge of the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Long Island Man Charged with Defrauding InvestorsRead the Press Release
A criminal complaint was unsealed today in federal court in Central Islip charging Mark Lisser with wire fraud for lying to investors and potential investors to induce them to invest in what they believed were shares of several companies prior to the companies’ initial public offerings. Lisser was arrested this morning and will make his initial appearance this afternoon before United States Magistrate Judge Lois Bloom.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged, Lisser convinced investors to trust him with their money by lying about what he was selling and how much of it he would keep for himself,” stated Acting United States Attorney DuCharme. “We and our law enforcement partners will continue to vigorously investigate and prosecute those who abuse the trust of investors in order to enrich themselves.” Mr. DuCharme thanked the New York Regional Office of the Securities and Exchange Commission for its assistance in this investigation.
“As an investment firm partner, Lisser encouraged his victims to purchase pre-IPO shares of companies that weren’t his to sell, as we allege today. He purportedly used this money to make illegitimate payments, fund salaries, and satisfy his monthly mortgage payments. Padding one’s pockets at the expense of others isn’t only a bad way to do business, it’s a federal crime,” stated FBI Assistant Director-in-Charge Sweeney.
According to the complaint, between October 2018 and January 2019, Lisser was a partner in Knightsbridge Private Partners LLC (“Knightsbridge”), which operated a series of websites and call centers used to solicit investments in purported pre-IPO shares of companies. Lisser and employees of Knightsbridge solicited these investments by telling investors and potential investors that Knightsbridge owned the shares it was selling, that Knightsbridge was on the capitalization table of the pre-IPO companies and that Knightsbridge and its employees did not earn any commissions or fees until after the shares were issued to the public and the investor made money. In fact, as Lisser knew, Knightsbridge did not directly own any of these pre-IPO shares, was not on the capitalization table of any of the pre-IPO companies, and Lisser and Knightsbridge employees received money and commissions from the investments at the time they were made. As a result of this fraud scheme, Lisser misappropriated more than $700,000 in investors’ funds which he used to make payments to companies controlled by Knightsbridge employees, pay salaries and sales commissions, pay his personal credit card bill and make payments on a mortgage.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Lisser faces up to 20 years in prison.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mathew S. Miller and David Gopstein are in charge of the prosecution. Assistant United States Attorney Karin Orenstein is assisting with forfeiture matters.
The Defendant:
MARK ALAN LISSER
Age: 40
Massapequa, New YorkE.D.N.Y. Docket No. 20-MJ-1128
Lead Defendant Pleads Guilty in Long Island Federal Court to Transnational Fraud SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Ajay Sharma, a citizen of India and the director and owner of APS Technology, a telemarketing call center located in New Delhi, pleaded guilty via videoconference to conspiracy to commit wire fraud in connection with a fraudulent scheme directed at thousands of individuals in the United States. Today’s proceeding took place before United States Magistrate Judge A. Kathleen Tomlinson. When sentenced, Sharma faces up to 20 years in prison, as well as forfeiture of $1,005,421 and a fine of up to $2,500,000. Sharma has been detained since his arrest in October 2018.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.
“Ajay Sharma and his crew perpetrated a sprawling, transnational fraud scheme that preyed on unsuspecting victims’ fears that they were running afoul of the law,” stated Acting United States Attorney DuCharme. “This case makes clear that U.S. law enforcement will not stop at our borders to locate and vigorously prosecute criminals, whether foreign or domestic, who cause financial harm to others in the United States.”
Mr. DuCharme thanked the Internal Revenue Service-Criminal Investigation, Treasury Inspector General for Tax Administration, New York City Police Department and Garden City Police Department for their invaluable assistance with the case.
As alleged in the indictment and other court filings and proceedings, Sharma was a leader and organizer of the fraud scheme. Between January 2018 and September 2018, operating from call centers in India, the defendants targeted victims in the United States and falsely claimed to be employees of the Internal Revenue Service, the Social Security Administration or the Drug Enforcement Administration. The victims were informed that they owed a sum of money to the United States government or one of its agencies and that they would be arrested if the debts were not promptly paid. After the victims wired payments to bank accounts that the defendants had opened in the names of inactive and shell corporations to receive the fraud proceeds, the funds were withdrawn and laundered through additional bank accounts. The scheme is estimated to have netted over $2 million from victims across the United States.
Four of Sharma’s co-conspirators previously pleaded guilty, and two are scheduled for trial in February 2021 before United States District Judge Sandra J. Feuerstein.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Diane Leonardo are in charge of the prosecution.
The Defendant:
AJAY SHARMA
Age: 44
Mumbai, IndiaE.D.N.Y. Docket No. 19-CR-024
Defendants Who Have Previously Pleaded Guilty:
ANKUR SHARMA
Age: 25
Bellerose, New YorkHARPREET SINGH
Age: 33
Queens Village, New YorkE.D.N.Y. Docket No. 19-CR-024
JAMAL ZAFAR
Age: 48
Huntington, New YorkARMUGHANUL ASAR
Age: 68
College Point, New YorkE.D.N.Y. Docket No. 19-CR-385 (SJF)
Former Most Wanted Fugitive Sentenced to 36 Months in Prison for Multi-Million Dollar Health Care FraudRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Etienne Allonce, the former co-owner of Medical Solutions Management, Inc. (MSM), a durable medical equipment supplier in Hicksville, New York, was sentenced by United States Circuit Judge Joseph F. Bianco to 36 months’ imprisonment for health care fraud. The Court also ordered Allonce to pay $4,444,468 in restitution. Allonce pleaded guilty in April 2019. In September 2018, Allonce was expelled from Haiti where he had fled 11 years earlier shortly before his indictment in the Eastern District of New York. Prior to his return to the United States, Allonce was placed on the Most Wanted List of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Scott Lampert, Special Agent-in-Charge, Health and Human Services-Office of Inspector General, New York Region (HHS-OIG), and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Allonce ran, but ultimately could not hide from the consequences of fleecing Medicare and Medicaid out of millions of dollars at taxpayers’ expense,” stated Acting United States Attorney DuCharme. “The defendant may have delayed the inevitable, but he has now faced justice for breaking the law.”
“Our watchdog agency is dedicated to investigating those responsible for health care fraud, including this former Most Wanted health care fugitive, who stole taxpayer money meant to pay for legitimate patient care,” stated HHS-OIG Special Agent-in-Charge Lampert. “Working closely with our law enforcement partners, our agents will continue to hold such fraudsters accountable for their crimes.”
Between April 2003 and March 2007, Allonce, and his wife and MSM co-owner Michel Allonce, submitted approximately $10 million in false claims to Medicare and Medicaid, seeking payment for medical supplies never ordered by MSM and never delivered to patients at nursing homes. Etienne Allonce fled the United States just hours before federal agents arrested his wife in 2007.
Michel Allonce was tried and convicted by a jury in August 2012. She was sentenced in April 2013 to 12 years’ imprisonment, and ordered to forfeit $1.3 million seized by the government.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly, Burton T. Ryan, Jr. and Madeline O’Connor are in charge of the prosecution.
The Defendant:
ETIENNE ALLONCE
Age: 56
Port au Prince, HaitiE.D.N.Y. Docket No. 07-CR-889 (JFB)