Eastern District of New York
Press releases recorded for this federal judicial district.
June 15, 2020 Update: The complaint against Michael Rodriguez was dismissed at the government’s request on June 14, 2020 and he has been released from custody. the investigation into the June 2, 2020 arson of the NYPD vehicle is ongoing.Read the Press Release
PRESS RELEASE
INDIVIDUAL CHARGED WITH SETTING NYPD VEHICLE ON FIRE IN BROOKLYN
A criminal complaint was filed Thursday in federal court in Brooklyn charging Michael Rodriguez with setting an unoccupied New York City Police Department vehicle on fire on June 2, 2020 in Williamsburg. Rodriguez was arrested Thursday morning and was ordered detained pending trial this afternoon by United States Magistrate Judge Roanne L. Mann.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Daniel Nigro, Commissioner, Fire Department of New York (FDNY), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrest and charges.
“Under the cover of pre-dawn darkness, Rodriguez allegedly set fire to a vehicle bearing an NYPD placard on a residential block in Brooklyn, endangering innocent residents of the area and first responders to the blaze and damaging a second vehicle,” stated United States Attorney Donoghue. “The defendant’s actions have no place in civil society, and this Office will vigorously prosecute him and others who commit such acts of violence in our community.”
“As charged, Rodriguez’s deliberate actions put not only the lives of New York City Police officers at risk, but also those of the FDNY first responders and civilians. Thanks to the dedicated work of the ATF/FDNY/NYPD Arson and Explosives Task Force, this suspect was quickly apprehended. I would like to thank to the United States Attorney’s Office for their work in prosecuting this case,” stated ATF Special Agent-in-Charge DeVito.
“Beyond the dangerous torching of an NYPD vehicle, these allegations represent an attack on the peace and good order that all New Yorkers deserve. I commend our detectives, and law enforcement partners, for their swift and diligent work in this case,” stated NYPD Commissioner Shea.
“Using fire as a weapon to hurt others or destroy property puts innocent lives in danger and will never be tolerated in our city,” stated FDNY Commissioner Nigro. “I’m grateful for the outstanding collaboration of our Fire Marshals with the NYPD and ATF to apprehend this dangerous individual.”
As alleged in the complaint, at approximately 4:30 a.m., Rodriguez approached a vehicle parked on Devoe Street bearing an NYPD placard on the dashboard. The vehicle, assigned to an NYPD captain, was parked at the location for the night. Rodriguez was captured on video surveillance footage pouring liquid on the vehicle’s windshield, placing cardboard on the windshield, and then setting the cardboard on fire. With the vehicle ablaze, Rodriguez pointed a cellular phone toward the vehicle and appeared to either record or take photographs of the fire. The defendant then fled the scene on foot. Another vehicle parked near the NYPD vehicle was also damaged by fire.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Michael J. Bushwack is in charge of the prosecution.
The Defendant:
MICHAEL RODRIGUEZ
Age: 32
UndomiciledE.D.N.Y. Docket No. 20-MJ-431
Two Brooklyn Residents and a Greene County Resident Charged in Connection with Molotov Cocktail Attacks on the NYPDRead the Press Release
Two criminal Complaints were filed Saturday evening in federal court in Brooklyn charging two women and a man with using and attempting to use improvised incendiary devices commonly known as “Molotov Cocktails” to damage and destroy New York City Police Department (NYPD) vehicles. Defendants Colinford Mattis and Urooj Rahman, both residents of Brooklyn, were arrested in a van early Saturday morning while allegedly in possession of explosive device components shortly after Rahman hurled a Molotov cocktail at an NYPD vehicle before fleeing with Mattis. A separate complaint charges Samantha Shader, a resident of Catskill, New York, who was arrested after allegedly throwing a Molotov cocktail at an NYPD vehicle occupied by four police officers. The defendants charged in each of the complaints will make their initial appearances via teleconference on Monday, June 1, 2020, before United States Magistrate Judge Steven M. Gold.
Richard P. Donoghue, 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, NYPD, announced the arrests and charges.
“These defendants are charged with attacking the New York City Police Department while its Police Officers are risking their lives to protect the Constitutional rights of protesters and the safety of us all,” stated United States Attorney Donoghue. “No rational human being can ever believe that hurling firebombs at Police Officers and vehicles is justified. The Eastern District of New York will do everything in its power to protect those who protect us all, and we will ensure that criminals who use the camouflage of lawful protest to launch violent attacks against Police Officers face justice.”
“When you conduct a violent attack that breaks federal law, the FBI New York office, along with our NYPD and Department of Justice partners, will move with speed to hold you accountable. Behavior like the attacks charged here puts our entire community - protestors and first responders alike - in danger, and we will simply not allow it to go unaddressed. The consequences for conducting this alleged attack, and any similar activity planned for the future, will be severe,” stated FBI Assistant Director-in-Charge Sweeney.
“Molotov Cocktails are violent tools of individuals looking to inflict harm and damage our city. Crimes like these are devastating to their targets and also to the protestors and their right to free speech that police are working hard to protect. It is reassuring that the U.S. Attorney in Brooklyn has taken this case. I’m confident that the severest penalties under the law will be sought,” stated NYPD Commissioner Shea.
As detailed in the complaint charging Mattis and Rahman, an NYPD surveillance camera recorded Rahman tossing a Molotov Cocktail at an unoccupied NYPD vehicle parked near the 88th Precinct in Brooklyn, New York and then fleeing in a tan minivan. Officers pursued the minivan and arrested Rahman and Mattis, who was the vehicle’s driver. The NYPD recovered several precursor items used to build Molotov Cocktails, including a lighter, a bottle filled with toilet paper and a liquid suspected to be gasoline in the vicinity of the passenger seat and a gasoline tank in the rear of the vehicle.
As detailed in the complaint charging Shader, a video recorded by a witness captured her igniting a Molotov Cocktail and throwing it at an NYPD vehicle occupied by four police officers, shattering two of its windows. Police officers pursued Shader as she attempted to flee and apprehended her. In a post-arrest statement, Shader later admitted to police that she had thrown the Molotov Cocktail at the NYPD vehicle.
The charges in the Complaints are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, each defendant faces a mandatory-minimum sentence of 5 years and up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Ian C. Richardson and Jonathan Algor are in charge of the prosecution.
The Defendants:
COLINFORD MATTIS
Age: 32
Brooklyn, New YorkUROOJ RAHMAN
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 20-MJ-403
SAMANTHA SHADER
Age: 27
Catskill, New YorkE.D.N.Y. Docket No. 20-MJ-402
United States Files Civil Action to Forfeit Rare Cuneiform Tablet Bearing Portion of the Epic of GilgameshRead the Press Release
Earlier today, the United States filed a civil complaint to forfeit a rare cuneiform tablet bearing a portion of the epic of Gilgamesh, a Sumerian epic poem considered one the world’s oldest works of literature. Known as the Gilgamesh Dream Tablet, it originated in the area of modern-day Iraq and entered the United States contrary to federal law. The tablet was later sold by an international auction house (the “Auction House”) to Hobby Lobby Stores, Inc. (“Hobby Lobby”), a prominent arts-and-crafts retailer based in Oklahoma City, Oklahoma for display at the Museum of the Bible (the “Museum”). Despite inquiries from the Museum and Hobby Lobby, the Auction House withheld information about the tablet’s provenance. The tablet was seized from the Museum by law enforcement agents in September 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the civil action and stipulation.
“Whenever looted cultural property is found in this country, the United States government will do all it can to preserve heritage by returning such artifacts where they belong,” stated United States Attorney Donoghue. “In this case, a major auction house failed to meet its obligations by minimizing its concerns that the provenance of an important Iraqi artifact was fabricated, and withheld from the buyer information that undermined the provenance’s reliability.” Mr. Donoghue thanked the U.S. Attorney’s Office for the District of Columbia and the Justice Department’s Money Laundering and Asset Forfeiture Section (MLARS) for their assistance.
“We are proud of our investigation that led to this reclaiming of a piece of Iraq’s cultural history. This rare tablet was pillaged from Iraq and years later sold at a major auction house, with a questionable and unsupported provenance,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI New York’s Cultural Property, Arts and Antiquity Investigations program will continue to work with prosecutors to combat the looting of antiquities and ensure those who would attempt to profit from this crime are held accountable.”
The government’s investigation revealed that in 2003, a U.S. antiquities dealer (the “Antiquities Dealer”) purchased an encrusted cuneiform tablet from a Middle Eastern antiquities dealer in London. After the tablet was imported and cleaned, experts in cuneiform recognized it as a portion of the Gilgamesh epic in which the protagonist describes his dreams to his mother (hence, the “Gilgamesh Dream Tablet”). The protagonist’s mother interprets the dreams as foretelling the arrival of a new friend. She tells her son, “You will see him and your heart will laugh.”
As alleged in the complaint, in 2007, the Antiquities Dealer sold the Gilgamesh Dream Tablet with a false provenance letter that stated the tablet had been inside a box of miscellaneous bronze fragments purchased in a 1981 auction. This false provenance letter traveled with the tablet and was provided to the Auction House by a later owner. As part of its due diligence, the Auction House’s antiquities director spoke with the Antiquities Dealer. The Antiquities Dealer advised the Auction House that the provenance would not withstand scrutiny and should not be used in connection with a public sale. The Auction House nevertheless represented to Hobby Lobby that the tablet was purchased in the 1981 auction. Hobby Lobby purchased the tablet in a private sale in 2014. In response to Hobby Lobby’s request for more details in connection with the purchase and the Museum’s expression of discomfort with the provenance in 2017, the Auction House advised both that the Antiquities Dealer had confirmed the details of the provenance. However, the Auction House withheld the false provenance letter and the Antiquities Dealer’s name from Hobby Lobby and the Museum.
The Museum cooperated with the government’s investigation.
The government’s case is being prosecuted by Assistant United States Attorney and Cultural Property Coordinator Karin Orenstein of the Office’s Civil Division, with assistance from Trial Attorney Ann Brickley of MLARS and Assistant U.S. Attorney Zia Faruqui of the U.S. Attorney’s Office for the District of Columbia.
E.D.N.Y. Docket No. 20-CV-2222 (AMD)
U.S. Attorney Richard P. Donoghue Requests Public to Report Sexually Predatory Housing Practices Amid COVID-19 PandemicRead the Press Release
Richard P. Donoghue, United States Attorney for the Eastern District of New York, today emphasized his Office’s commitment to fighting sexual harassment in housing during the current pandemic. In a letter sent to housing advocacy groups and other community organizations, Mr. Donoghue invited their assistance in identifying anyone who has witnessed or experienced sexual harassment by a landlord, property manager, maintenance worker or anyone with control over housing.
Mr. Donoghue makes this announcement in response to reports of landlords who have responded to requests to defer rent payments with demands for sexual favors and other acts of unwelcome sexual conduct. Such behavior is illegal under the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familiar status, national origin and disability. Sexual harassment is a form of sex discrimination prohibited by the Fair Housing Act.
“Tenants who find themselves unemployed and in dire financial straits due to the COVID-19 crisis are protected from discrimination under the Fair Housing Act. No tenant should ever be expected to provide sexual favors in order to keep a roof over their head,” stated United States Attorney Donoghue. “We will use all available enforcement tools to protect tenants from such unscrupulous and predatory conduct.”
In coordination with the Attorney General, U.S. Attorneys’ Offices across the country are investigating reports of housing-related sexual harassment resulting from the current COVID-19 pandemic. The Attorney General has reaffirmed the commitment that the Department of Justice made when it launched its Sexual Harassment in Housing Initiative in October 2017. The goal of the Initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing.
Anyone who is aware of sexual harassment in housing on Long Island, Brooklyn, Queens or Staten Island is requested to contact this office, by email to [email protected] or by calling this office at 718-254-7000.
Ten Alleged MS-13 Members and Associates Charged with Three Murders, Attempted Murder, Murder Conspiracy and Firearms OffensesRead the Press Release
Four complaints were unsealed today in federal court in Brooklyn variously charging 10 members and associates of the Indios Locos Salvatruchas clique of La Mara Salvatrucha, also known as MS-13, a transnational criminal organization, with murder in-aid-of racketeering, attempted murder, murder conspiracy, related firearms offenses and marijuana distribution conspiracy. One defendant was arrested on Wednesday, May 13, 2020, in Maryland. Five defendants were arrested today in New York and California. On May 15, 2020, four defendants will be arrested and transferred to federal custody from detention facilities where they are currently held.
Richard P. Donoghue, 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), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges and arrests.
“The murders and crimes of violence allegedly committed by these defendants are trademark MS-13 offenses – cold-blooded, senseless and brutally violent – and pose a grave danger to the residents of our communities,” stated United States Attorney Donoghue. “Thanks to the hard work of federal and local law enforcement officers, the defendants will now face prosecution for the charged crimes. No matter what obstacles may arise, this Office will not rest until our mission to eradicate the MS-13 threat is accomplished.” Mr. Donoghue expressed his grateful appreciation to the Queens County District Attorney’s Office, the NYPD's Queens North Homicide Squad and 109th Precinct Detective Squad and the New York City Department of Investigation for their assistance in the investigation.
“MS-13 members do all they can to propagate a violent, deadly image as a gang. Their calculation that shouting the gang's name out in front of people on a subway platform will prevent anyone from interfering with a man being brutally beaten and murdered boggles the mind. Thanks to the work of the FBI Metro Safe Streets Task Force and the Organized Crime Drug Enforcement Task Force (OCDETF), their violent reputation won't protect them from going to federal prison,” stated FBI Assistant Director-in-Charge Sweeney.
“Public executions are just another sobering example of the savagery that MS-13 engages in with the alleged criminal mayhem caused by those charged today,” stated HSI Special Agent-in-Charge Fitzhugh. “This multi-agency investigation by the OCDETF is an excellent example of how law enforcement at all levels will continue to use all available resources, aggressively exploit all available intelligence, and work as a unified team with a simple and singular goal - ridding the scourge of MS-13 from our communities.”
“It is only through our joint efforts to relentlessly disrupt and dismantle this kind of senseless criminality that we can continue to keep New Yorkers safe. I applaud our NYPD detectives and our federal and local law enforcement partners for investigating and prosecuting this case,” stated NYPD Commissioner Shea.
Murder of Andy Peralta
As detailed in the complaints and the government’s detention letter filed earlier today, alleged MS-13 associate Juan Amaya-Ramirez is charged with the murder of 17-year-old Andy Peralta. On the night of April 23, 2018, Amaya-Ramirez and two others lured Peralta to Kissena Park in Flushing, Queens where they confronted him. Peralta had a tattoo of a crown on his chest which Amaya-Ramirez and the others mistakenly believed to be a symbol of the rival Latin Kings gang. The assailants fatally beat, stabbed and strangled Peralta. The victim’s tattoo was also slashed. Peralta’s assailants used Amaya-Ramirez’s iPhone to photograph Peralta’s corpse, while they displayed MS-13 gang signs with their hands. The photograph was found in Amaya-Ramirez’s iCloud account during a court-authorized search of the account.
Murder of Victor Alvarenga
Alleged MS-13 associates Douglas Melgar-Suriano and Jairo Martinez-Garcia are charged with the murder of Victor Alvarenga, who was shot and killed near his home in Flushing, Queens. In the early morning of November 4, 2018, the two defendants and a third individual laid in wait for Alvarenga. The men approached Alvarenga, who was walking down the street. After walking with him briefly, Melgar-Suriano allegedly shot Alvarenga multiple times in the head and body. As Alvarenga writhed on the pavement, Martinez-Garcia also shot him.
Murder of Abel Mosso
Alleged MS-13 member Ramiro Gutierrez and alleged gang associates Tito Martinez-Alvarenga and Victor Lopez are charged with the murder of Abel Mosso on a subway platform in Queens. In the early afternoon of February 3, 2019, Lopez and Martinez-Alvarenga followed Mosso, who they believed to be a member of the rival 18th Street gang, onto the No. 7-train at the Main Street station in Flushing, trailed by Gutierrez. Lopez and Martinez-Alvarenga assaulted Mosso inside the subway car and then dragged him out onto the platform at the 90th Street station in Jackson Heights. The defendants produced a gun, but Mosso wrestled it away. Gutierrez shouted in Spanish, “Nobody get involved, we’re MS-13, we’re going to kill him.” Gutierrez then grabbed the gun from Mosso and shot him multiple times, killing him. Law enforcement recovered a video posted on Facebook depicting the murder.
Conspiracy to Murder and Attempted Murder
Alleged MS-13 members Marlon Saracay-Lopez and Ismael Santos-Novoa, and alleged gang associate Emerson Martinez-Lara, are charged with conspiring between May 2019 and July 2019 to murder an MS-13 associate who failed to kill a rival gang member as ordered by Saracay-Lopez and Santos-Novoa. Saracay-Lopez, Santos-Novoa and alleged gang associate Victor Ramirez are also charged with attempting to murder an 18th Street gang member. During the resulting shooting on August 25, 2019 in Jackson Heights, Queens, a co-conspirator wounded an innocent bystander in the leg.
Martinez-Garcia, Melgar-Suriano, Ramirez and Santos-Novoa are scheduled to make their initial appearances this afternoon via teleconference before United States Magistrate Judge Robert M. Levy. Saracay-Lopez’s initial appearance will take place in United States District Court for the Central District of California. Martinez-Lara’s initial appearance will take place in the United States District Court in Maryland.
The charges in the complaints are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted of the murders, Amaya-Ramirez, Melgar-Suriano, Martinez-Garcia, Gutierrez, Martinez-Alvarenga and Lopez face mandatory sentences of life in prison and are eligible for the death penalty. If convicted of the firearms and attempted murder charges, Saracay-Lopez, Santos-Novoa and Ramirez face a mandatory minimum sentence of 10 years in prison and a maximum of life in prison. If convicted, Martinez-Lara faces up to 15 years in prison for marijuana distribution conspiracy and murder conspiracy.
This case was investigated as part of the ongoing efforts by the OCDETF, a partnership that brings together the combined expertise of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Today’s charges are 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 and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. 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 45 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 our law enforcement partners.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia E. Moore, Nadia Shihata and Phil Selden are in charge of the prosecution.
The Defendants:
MARLON SARACAY-LOPEZ (also known as “Plocky”)
Age: 33
Compton, CaliforniaJUAN AMAYA-RAMIREZ (also known as “Cadaver”)
Age: 22
Fresh Meadows, New YorkRAMIRO GUTIERREZ (also known as “Cara de Malo”)
Age: 27
Flushing, New YorkVICTOR LOPEZ (also known as “Curioso”)
Age: 21
Flushing, New YorkTITO MARTINEZ-ALVARENGA (also known as “Imprudente”)
Age: 20
Flushing, New YorkJAIRO MARTINEZ-GARCIA (also known as “Colmillo”)
Age: 21
Flushing, New YorkEMERSON MARTINEZ-LARA (also known as “Fugitivo”)
Age: 21
College Point, New YorkDOUGLAS MELGAR-SURIANO (also known as “Clemencia”)
Age: 24
Flushing, New YorkVICTOR RAMIREZ (also known as “Curioso”)
Age: 20
Elmhurst, New YorkISMAEL SANTOS-NOVOA (also known as “Profe” and “Travieso”)
Age: 31
Flushing, New YorkE.D.N.Y. Docket Nos. 20-MJ-347, 20-MJ-348, 20-MJ-349 and 20-MJ-350
Two Queens Men Charged After Buying Three Illegally Defaced Firearms and Two Assault RiflesRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging Daniel Jou and Joseph Miner with receiving and possessing multiple firearms with obliterated serial numbers. The defendants were arrested Tuesday night and made their initial appearances via teleconference this afternoon before United States Magistrate Judge Robert M. Levy. The defendants were ordered detained pending trial.
Richard P. Donoghue, 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), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and charges.
“As alleged, after Joseph Miner praised extremist violence and expressed racist and anti-Semitic hatred on the internet, he and his co-defendant bought a collection of illegal firearms capable of inflicting mass bloodshed,” stated United States Attorney Donoghue. “What the defendants did not know was that they were buying the guns from an undercover federal agent who had been investigating their plan to buy weapons that would be impossible to trace. This Office, together with our law enforcement partners, will continue to exercise extreme vigilance to protect our communities by preventing individuals from purchasing illegal weapons.”
“As alleged, Joseph Miner and Daniel Jou sought to acquire illegal firearms with serial numbers that were known to have been removed. The social media posts from one of the defendants expressing support of a racial civil or holy war make the behavior alleged here even more alarming. The actions of the subjects presented a clear danger to the community. The FBI is focused on preventing violent acts before they occur, and I would like to thank the dedicated members of the New York Joint Terrorism Task Force who moved swiftly in addressing the threat posed by these individuals,” stated FBI Assistant Director-in-Charge Sweeney.
“Seeking to buy illegal weapons after one defendant has at times advocated for racially motivated violence constitutes a very real threat to the citizens of New York,” stated NYPD Commissioner Shea. “I commend the work of the agents and detectives of the Joint Terrorism Task Force on this investigation. The case demonstrates again that we will seek out those advocating violent extremism no matter what the brand or twisted ideology.”
As alleged in public filings, law enforcement authorities began investigating Miner in late 2019 when he posted on social media accounts his interest in obtaining assault weapons and other firearms for a racial civil war or racial holy war. For example, Miner posted on his Instagram account the following content in December 2019 and January 2020:
• A photograph of himself giving a Nazi salute and writing, “God I hate women jews and n-----rs.” In another post, Miner is depicted giving a Nazi salute as he displays a large knife and adds, “overthrowing [Jews] is our Christian duty;”
• In response to a bloody crime scene photograph from the December 2019 machete attack at a synagogue in Monsey, New York, Miner commented, “ngl [not gonna lie] this is pretty f-----g exciting;”
• A photograph of a Planned Parenthood location being blown up by the comic book character The Joker.
• On or about January 22, 2020, Miner posted a photograph of the entrance to a Jewish community center in Queens.
Although Miner at times disavowed interest in conducting an attack himself, he also posted Instagram messages displaying suicidal ideations and fantasizes about “martyring” himself and “go[ing] out in a blaze of glory” in a mass shooting.
In April 2020, Miner initiated contact with an undercover law enforcement agent posing as a firearms dealer and reviewed with the agent a list of handguns and a shotgun that he wanted to purchase for himself and Jou. Thereafter, Miner and Jou purchased numerous firearms from the undercover agent knowing that the serial numbers that would allow the weapons to be traced had been removed. On April 26, 2020, the defendants met the undercover agent at a hotel in Queens and indicated they were willing to spend thousands of dollars to purchase firearms and ammunition, including AR-15 assault rifles
In the days following the April 26, 2020 meeting, the defendants used an encrypted messaging service to request additional firearms from the undercover agent. For example, Jou offered to spend up to $5,000 to purchase eight firearms, including a Colt M4 assault style rifle and multiple handguns. Similarly, Minor offered $2,000 to purchase two handguns, a shotgun and a “Ghost AR” – an assault-style firearm made from different gun parts and without serial numbers or other identifying markings – and a “suppressor,” or silencer.
On the evening of May 12, 2020, Jou and Miner met the undercover agent at a hotel in Queens. During the meeting, the undercover agent showed Jou and Miner several firearms, many with the serial numbers obliterated. Jou purchased a Glock 19 handgun with an obliterated serial number and a fully automatic assault rifle with a silencer attachment and high capacity magazine. Jou also expressed his interest in buying additional firearms from the undercover agent at a later date. Miner purchased a handgun and shotgun, both with obliterated serial numbers, and an AR-15 style assault rifle “ghost” gun with a silencer attachment and high capacity magazine. Miner also bought more than 200 rounds of ammunition, which he planned to share with Jou.
The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Josh Hafetz are in charge of the prosecution.
The Defendants:
DANIEL JOU
Age: 40
Bayside, QueensJOSEPH MINER
Age: 29
Bayside, QueensE.D.N.Y. Docket No. 20-MJ-368
United States Attorney Richard P. Donoghue Recognizes National Police WeekRead the Press Release
BROOKLYN, NY— In honor of National Police Week, U.S. Attorney Richard P. Donoghue salutes the service and sacrifice of federal, state and local law enforcement. The week will be observed Sunday, May 10 through Saturday, May 16, 2020.
“There is no more noble profession than serving as a police officer,” stated Attorney General William P. Barr. “The men and women who protect our communities each day have not just devoted their lives to public service, they’ve taken an oath to give their lives in order to ensure our safety. And they do so not only in the face of hostility from those who reject our nation’s commitment to the rule of law, but also in the face of evolving adversity – such as an unprecedented global health pandemic. This week, I ask all Americans to join me in saying ‘thank you’ to our nation’s federal, state, local and tribal law enforcement officers. Their devotion and sacrifice to our peace and security will not be taken for granted.”
“During National Police Week, I join the staff of the United States Attorney’s Office for the Eastern District of New York in extending our thanks and deepest appreciation to the members of law enforcement who perform extraordinary and selfless service by protecting our communities from every threat imaginable, including an invisible virus,” stated United States Attorney Donoghue. “We will never forget those brave men and women who made the ultimate sacrifice, and we remember, too, their families who have suffered the profound loss of a parent, child or sibling who chose a vocation to serve their fellow New Yorkers.”
In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices. Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.
Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty and commitment to keeping our communities safe. This year the COVID-19 pandemic has underscored law enforcement officers’ courage and unwavering devotion to the communities they swore to serve.
- Based on data collected and analyzed by the FBI’s Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 89 law enforcement officers died nationwide in the line of duty in 2019, including New York City Police Department Detective Brian Simonsen in the Eastern District of New York. At least 41 members of the New York City Police Department, one member of the Sands Point Police Department and one volunteer with the Suffolk County Auxiliary Police have died from the Coronavirus.
Comprehensive data tables about these incidents and brief narratives describing most of the fatal attacks are included in the sections of Law Enforcement Officers Killed and Assaulted, 2019.
The names of the fallen officers who have been added in 2020 to the wall at the National Law Enforcement Memorial will be read on Wednesday, May 13, 2020, during a Virtual Annual Candlelight Vigil. Because public events have been suspended as a result of COVID-19, the vigil will be livestreamed to the public at 8:00 pm (EDT). The candlelight vigil can be viewed here: https://www.youtube.com/user/TheNLEOMF.
To learn more about National Police Week and the virtual candlelight vigil, please visit www.policeweek.org.
- Based on data collected and analyzed by the FBI’s Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 89 law enforcement officers died nationwide in the line of duty in 2019, including New York City Police Department Detective Brian Simonsen in the Eastern District of New York. At least 41 members of the New York City Police Department, one member of the Sands Point Police Department and one volunteer with the Suffolk County Auxiliary Police have died from the Coronavirus.
Alleged International Narcotics Trafficker Extradited from Dominican RepublicRead the Press Release
Melvin Martinez was arraigned earlier today at the federal courthouse in Brooklyn on an international cocaine distribution conspiracy charge. Martinez was arrested in the Dominican Republic in January 2020 and extradited to the United States yesterday. He was arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon and remanded pending trial.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the extradition.
“As alleged, the defendant operated the levers of a cocaine pipeline from abroad, but not beyond the reach of U.S. law enforcement committed to bringing international drug traffickers to justice for the harm they have caused in our communities,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Office of International Affairs of the Justice Department’s Criminal Division for its assistance with the extradition of the defendant.
“When Martinez was arrested in the Dominican Republic in January 2020, HSI and its law enforcement partners dealt a blow to his cocaine trafficking enterprise. His extradition is a major step forward after the detrimental impact Martinez’ organization had on the people of the United States and the greater New York City region,” stated HSI Special Agent-in-Charge Fitzhugh. “Through this multi-year, complex investigation, HSI New York and our partners at the United States Attorney’s Office, Eastern District of New York, have proceeded in bringing the full force of the American Justice system to combat Martinez and his organization.”
According to court filings, between January 2015 and April 2015, Martinez and members of an international cocaine trafficking conspiracy organized shipments of cocaine in Venezuela, Mexico, Jamaica and the Dominican Republic for importation into the United States for distribution. In one instance, Martinez coordinated a 188 kilogram shipment of cocaine on a commercial airline flight from Venezuela to the Dominican Republic that was intended to be unlawfully distributed in the United States. In February 2015, law enforcement authorities in the Dominican Republic seized the cocaine at the airport in Santo Domingo.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Martinez faces a mandatory minimum sentence of 10 years’ imprisonment.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Philip Pilmar and Nomi D. Berenson are in charge of the prosecution.
The Defendant:
MELVIN MARTINEZ (also known as “La Fuerza” and “Yo Mismo”)
Age: 38
Santo Domingo, Dominican RepublicE.D.N.Y. Docket No. 16-CR-48 (AMD)
Bank Hapoalim Agrees to Pay More Than $30 Million for its Role in Money Laundering Conspiracy Involving FIFA Bribery SchemeRead the Press Release
BROOKLYN, NY – Bank Hapoalim B.M. (“BHBM”), an Israeli bank with international operations, and its wholly owned subsidiary, Hapoalim (Switzerland) Ltd. (“BHS”), have agreed to forfeit $20,733,322 and pay a fine of $9,329,995 to resolve an investigation into their involvement in a money laundering conspiracy that fueled an international soccer bribery scheme. Specifically, BHBM and BHS have admitted that they, through certain of their employees, conspired to launder over $20 million in bribes and kickbacks to soccer officials with Fédération Internationale de Football Association (“FIFA”) and other soccer federations.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS-CI), made the announcement.
“Today’s resolution marks another successful chapter in this District’s effort to hold accountable those corporations and individuals who participated in a bribery scheme that corrupted international soccer,” stated United States Attorney Donoghue. “This Office, along with our law enforcement partners, will continue to identify wrongdoers who manipulate international soccer in order to reap illicit profits and bring them to justice.”
“For nearly five years, Bank Hapoalim employees used the U.S. financial system to launder tens of millions of dollars in bribe payments to corrupt soccer officials in multiple countries,” stated AAG Benczkowski. “Today’s announcement demonstrates the Department’s commitment to holding financial institutions to account when they knowingly facilitate corruption and other criminal conduct.”
“This announcement illustrates another aspect in the spider web of bribery, corruption and backroom deals going on behind the scenes as soccer games were played on the field. Bank Hapoalim admits executives looked the other way, and allowed illicit activity to continue even when employees discovered the scheme and reported it. The New York FBI Eurasian Organized Crime Task Force and our law enforcement partners have doggedly pursued every strand uncovered in this criminal investigation, and will keep at it until they root out all of the bad actors,” stated FBI Assistant Director-in-Charge Sweeney.
“This forfeiture sends a clear message that no matter how complex or far reaching the conspiracy, justice will prevail. Bank Hapoalim B.M. and its subsidiary, Hapoalim Ltd., participated in a conspiracy that corrupted international soccer, its confederations, and member associations,” stated IRS-CI Special Agent-in-Charge Korner. “IRS-CI is proud to work alongside our international law enforcement partners, the FBI, and the United States Attorney’s Office to bring closure to this egregious international scandal that corrupted the sport of soccer.”
According to admissions in the statement of facts stipulated to by BHBM and BHS as part of the agreement, from approximately December 10, 2010 to February 20, 2015, BHBM and BHS personnel conspired with sports marketing executives, including executives associated with Full Play Group S.A. (“Full Play”), a sports media and marketing business based in Argentina, and others, to launder at least $20,733,322 in bribes and kickbacks to soccer officials. In exchange for those bribes and kickbacks, the soccer officials awarded or steered broadcasting rights for soccer matches and tournaments to the sports marketing executives and their companies. Full Play allegedly executed the illegal payments from accounts held at BHS and BHBM’s branch in Miami, Florida, which were held in the names of Full Play subsidiaries and affiliates.
BHBM and BHS admitted they, through BHS and BHBM’s Miami branch, conspired to launder money for Luis Bedoya, who at various times served as the president of the Federación Colombiana de Futbol, a vice president of the Confederación Sudamericana de Fútbol (CONMEBOL), and a member of FIFA’s executive committee. BHBM and BHS allowed accounts controlled by Bedoya to be used to receive illicit bribe and kickback payments. In November 2015, Bedoya pleaded guilty to racketeering conspiracy and wire fraud conspiracy in the Eastern District of New York. He is awaiting sentencing.
Despite BHS compliance personnel repeatedly raising concerns about certain payments made to soccer officials from the accounts associated with Full Play, BHBM and BHS failed to take action. Instead, the banks’ relationship managers continued executing illicit bribe and kickback payments on behalf of Full Play.
As outlined in the agreement, the government’s decision to enter into a three-year, non-prosecution agreement with BHBM and BHS was premised upon the banks’ thorough and complete cooperation, BHBM’s pledge to review and improve its anti-money laundering program, and the banks’ other substantial remedial efforts, which include closing Bank Hapoalim (Latin America) S.A. and BHBM’s branch in Miami. BHS is also in the process of closing its operations.
The agreement announced today is part of an investigation led by the U.S. Attorney’s Office for the Eastern District of New York, the Bank Integrity Unit in the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division in Washington, D.C., the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. Assistant U.S. Attorneys Sam Nitze, Lauren Howard Elbert and Brian Morris of the U.S. Attorney’s Office and Trial Attorney Michael P. Grady of the Bank Integrity Unit are responsible for the matter on behalf of the U.S. Department of Justice. The government of Switzerland provided significant assistance in this matter, as did the Criminal Division’s Office of International Affairs.
The Defendants:
BANK HAPOALIM B.M.
BANK HAPOALIM (SWITZERLAND) LTD.
Bank Hapoalim Agrees to Pay More Than $30 Million for Its Role in FIFA Money Laundering ConspiracyRead the Press Release
Bank Hapoalim B.M. (BHBM), an Israeli bank with international operations, and its wholly owned subsidiary, Hapoalim (Switzerland) Ltd. (BHS), have agreed to forfeit $20,733,322 and pay a fine of $9,329,995 to resolve an investigation into their involvement in a money laundering conspiracy that fueled an international soccer bribery scheme.
Specifically, BHBM and BHS have admitted that they, through certain of their employees, conspired to launder over $20 million in bribes and kickbacks to soccer officials with Fédération Internationale de Football Association (FIFA) and other soccer federations.
“For nearly five years, Bank Hapoalim employees used the U.S. financial system to launder tens of millions of dollars in bribe payments to corrupt soccer officials in multiple countries,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s announcement demonstrates the department’s commitment to holding financial institutions to account when they knowingly facilitate corruption and other criminal conduct.”
“Today’s resolution marks another successful chapter in this district’s effort to hold accountable those corporations and individuals who participated in a bribery scheme that corrupted international soccer,” stated U.S. Attorney Richard P. Donoghue of the Eastern District of New York. “This office, along with our law enforcement partners, will continue to identify wrongdoers who manipulate international soccer in order to reap illicit profits and bring them to justice.”
“This announcement illustrates another aspect in the spider web of bribery, corruption and backroom deals going on behind the scenes as soccer games were played on the field,” said Assistant Director in Charge William F. Sweeney of the FBI’s New York Field Office. “Bank Hapoalim admits executives looked the other way, and allowed illicit activity to continue even when employees discovered the scheme and reported it. The New York FBI Eurasian Organized Crime Task Force and our law enforcement partners have doggedly pursued every strand uncovered in this criminal investigation, and will keep at it until they root out all of the bad actors.”
“This forfeiture sends a clear message that no matter how complex or far reaching the conspiracy, justice will prevail. Bank Hapoalim B.M. and its subsidiary, Hapoalim Ltd., participated in a conspiracy that corrupted international soccer, its confederations, and member associations,” said Special Agent in Charge Ryan L. Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “IRS-CI is proud to work alongside our international law enforcement partners, the FBI, and the United States Attorney’s Office to bring closure to this egregious international scandal that corrupted the sport of soccer.”
According to admissions in the statement of facts stipulated to by BHBM and BHS as part of the agreement, from approximately Dec. 10, 2010, to Feb. 20, 2015, BHBM and BHS personnel conspired with sports marketing executives, including executives associated with Full Play Group S.A. (Full Play), a sports media and marketing business based in Argentina, and others, to launder at least $20,733,322 in bribes and kickbacks to soccer officials. In exchange for those bribes and kickbacks, the soccer officials awarded or steered broadcasting rights for soccer matches and tournaments to the sports marketing executives and their companies. Full Play allegedly executed the illegal payments from accounts at BHS and BHBM’s branch in Miami, Florida, which were held in the names of Full Play subsidiaries and affiliates. On March 18, 2020, Full Play was charged along with others in a superseding indictment in the Eastern District of New York with racketeering conspiracy, wire fraud, wire fraud conspiracy, and money laundering conspiracy.
BHBM and BHS also admitted they conspired to launder money for Luis Bedoya, who at various times served as the president of the Federación Colombiana de Futbol, a vice president of the Confederación Sudamericana de Fútbol (CONMEBOL), and a member of FIFA’s executive committee. BHBM’s Miami branch and BHS allowed accounts controlled by Bedoya to be used to receive illicit bribe and kickback payments. Bedoya pleaded guilty to racketeering conspiracy and wire fraud conspiracy on Nov. 12, 2015, in the Eastern District of New York.
Notwithstanding the repeated concerns raised by BHS compliance personnel about certain payments made to soccer officials from the accounts associated with Full Play, BHS failed to take action. Instead, the banks’ relationship managers continued executing illicit bribe and kickback payments on behalf of Full Play.
Under the agreement, BHBM and BHS will jointly pay a criminal penalty of $9,329,995. The banks will additionally forfeit funds totaling $20,733,322.
As outlined in the agreement, the government’s decision to enter into a non-prosecution agreement with BHBM and BHS was premised upon the banks’ thorough and complete cooperation and the banks’ other substantial remedial efforts, which have included closing Bank Hapoalim (Latin America) S.A. and BHBM’s branch in Miami. BHS is also in the process of closing its operations.
The agreement announced today is part of an investigation led by the FBI’s New York Field Office and the IRS-CI’s Los Angeles Field Office. Trial Attorney Michael P. Grady of the Bank Integrity Unit of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Lauren Howard, Brian D. Morris, and Samuel P. Nitze of the U.S. Attorney’s Office for the Eastern District of New York prosecuted the case. Former MLARS attorneys Kendrack D. Lewis of the Justice Department’s Civil Division and Maria K. Vento of the U.S. Attorney’s Office for the Western District of North Carolina, the Criminal Division’s Office of International Affairs, and the government of Switzerland provided significant assistance in this matter.
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.
Franchisee of Long Island 7-Eleven Store Pleads Guilty to Harboring Illegal AliensRead the Press Release
Earlier today, in federal court in Central Islip, Yong Min Choe pleaded guilty before United States District Judge Joanna Seybert to conspiracy to conceal and harbor illegal aliens by employing undocumented immigrants at his 7-Eleven franchise in Brentwood, New York. When sentenced, Choe faces up to 10 years’ imprisonment as well as a fine of up to twice the value of the gross gain. Additionally, Choe agreed to forfeit more than $1.3 million in assets that represent proceeds of the offense.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and John Grasso, Special Agent-in-Charge, Social Security Administration, Office of the Inspector General (SSA-OIG) announced the guilty plea.
In March 2004, Choe began operating the 7-Eleven store and, as part of the franchise agreement, agreed to abide by state and local labor laws. Between 2004 and November 2019, Choe hired individuals who did not have authorization to work in the United States and allowed those employees to use false social security numbers and other personal identifying information. As a result, Choe was able to pay his employees sub-standard wages and enrich himself.
“The defendant conveniently used his convenience store to harbor and exploit alien employees and steal wages,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, is committed to vigorously enforcing immigration and labor laws that protect our borders as well as the workplace.”
“Over the course of 15 years, Choe knowingly hired individuals who had no legal authorization to work in the U.S., then took advantage of their illegal status by paying them inadequate wages with long hours,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI and its law enforcement partners are committed to protecting our communities from the abuses of corrupt business owners seeking to gain an illegal advantage and make a steep profit off the backs of others.”
“Today’s guilty plea illustrates our commitment to pursuing those who intentionally misuse Social Security numbers to circumvent immigration and employment law,” stated SSA-OIG Special Agent-in-Charge Grasso. “I want to thank the other participating agencies for their efforts in investigating and prosecuting this case, and their partnership in our work to protect the integrity of the Social Security system.”
The government’s case is being handled by the Office’s Public Integrity Section. Special Assistant United States Attorney Virginia Nguyen is in charge of the prosecution together with Assistant United States Attorney Elliot M. Schachner of the Office’s Asset Forfeiture Unit.
The Defendant:
YONG MIN CHOE (also known as “Jason Choe”)
Age: 55
Northport, New YorkE.D.N.Y. Docket No. 20-CR-153 (JS)
Brooklyn Man Arrested for Stealing U.S. Mail, Including Government Stimulus ChecksRead the Press Release
A criminal complaint was filed today in federal court in Brooklyn charging Feng Chen with theft of mail, including credit cards, multiple checks and nine Economic Impact Payments (“EIP”) from the United States Treasury Department, otherwise known as “stimulus payments.” Chen was arrested yesterday and will make his initial appearance via videoconference this afternoon before United States Chief Magistrate Judge Cheryl L. Pollak.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), J. Russell George, Treasury Office of Inspector General for Tax Administration (TIGTA), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrest.
"For many families, these stimulus checks are a lifeline in these difficult times and anyone who tries to cut that lifeline will face the full weight of the law,” stated United States Attorney Donoghue. “This Office will vigorously prosecute all those who seek to take advantage of the public health crisis. I commend the NYPD police officers for their truly outstanding work and service under difficult conditions.”
Mr. Donoghue urged the public to report suspected fraud related to COVID-19 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or to the NCDF e-mail address [email protected]. For information on how to identify or report fraud involving Economic Impact Payments, visit tips.tigta.gov.
“The COVID-19 crisis has placed tremendous stress on underserved communities across this country. The Economic Impact Payments are, in many cases, the lifeline needed by these individuals to stay afloat during this crisis. When Mr. Chen stole these checks, he robbed recipients of these much needed funds. Postal Inspectors and their law enforcement partners have no tolerance for the theft of mail, especially during these unprecedented times”, stated USPIS Inspector-in-Charge Bartlett.
“The Treasury Inspector General for Tax Administration (TIGTA) is the agency responsible for protecting the integrity of the Internal Revenue Service, including the theft of Economic Impact Payments. We are committed to working with our law enforcement partners to investigate any individual that engages in criminal activity to victimize taxpayers and exploit this national crisis for their own benefit,” stated TIGTA George.
“The NYPD recognizes how the COVID-19 pandemic presents an opportunity for a variety of malicious, criminal scams. In this case, I applaud our alert detectives and federal partners for interrupting an alleged scheme to victimize New Yorkers by stealing important mail and stimulus money meant to aid them during this unprecedented crises,” stated NYPD Commissioner Shea.
According to the complaint and statements made in court, in the early morning hours of April 28, 2020 in Sunset Park, New York, NYPD police officers observed Chen look inside the medical collection bin at a closed medical office and then walk to a nearby residential building and examine mail left at the door. Chen then walked into the gated area of a second residential building and left carrying what appeared to be mail. Chen saw the police officers and tossed mail on the sidewalk. The officers exited their vehicle and observed a bulge in Chen’s jacket pocket. The officers searched Chen and recovered checks, EIPs totaling more than $12,000, credit cards, opened envelopes and letters bearing the names of various individuals and mail addresses.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Chen faces a maximum of five years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Andrew D. Grubin is in charge of the prosecution.
The Defendant:
FENG CHEN
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 20-MJ-337
Two Individuals Arrested for Conspiring to Violate the Defense Production ActRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Kent Bulloch and William Young, Sr., with conspiracy to violate the Defense Production Act by seeking to resell one million KN95 protective masks in New York City at a 50 percent mark-up. Bulloch, an attorney, was arrested Monday night in California and will make his initial appearance via teleconference in federal court in San Francisco and Young will appear via teleconference in federal court in Phoenix.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Craig Carpenito, head of the Department of Justice’s nationwide COVID-19 Hoarding and Price Gouging Task Force, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York Field Office (IRS-CI), announced the charges.
On March 18, 2020, in response to the COVID-19 pandemic, President Donald Trump issued Executive Order 13909 invoking the Defense Production Act making it illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services (HHS) as scarce in order to hoard them or sell them for excessive prices.
According to court filings, between March 2020 and April 2020, Bulloch and Young sought out potential investors to sell one million KN95 respirator masks for double or triple the purchase price. To conceal their exorbitant markup on the masks, Bulloch created and signed an escrow agreement for a purported investor that falsely stated that the profits on the re-sale of the masks would not exceed 10 percent. Unbeknownst to the defendants, the purported investor was a federal law enforcement agent.
“As alleged, the defendants conspired to turn a huge profit from the urgent need for surgical masks in New York during the pandemic,” stated United States Attorney Donoghue. “When the Attorney General said that those engaged in price gouging should expect a knock on the door, he meant it and when we knock with one hand, we usually have a warrant in the other.” Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Offices in New Jersey, the Northern District of California and the District of Arizona, and the San Francisco and Phoenix Field Offices of the FBI and IRS-CI for their invaluable assistance in this case.
“This is precisely the type of price gouging for which Attorney General Barr created our nationwide task force,” stated Carpenito. “The Department of Justice will not allow greedy profiteers to take advantage of the public during this health crisis.”
“While the need for an influx of medical equipment and supplies continued to mount as a result of the COVID-19 crisis, Young and Bulloch allegedly claimed they could acquire approximately one million highly sought after KN95 masks. As detailed in the complaint, the next phase of their plan was pretty straightforward--find investors who would sell these masks for far more than their purchase price, in turn earning the defendants a 50 percent mark-up on the sale. It's hard to believe anyone could take advantage of a situation like this, but this case clearly proves that theory wrong. The FBI is proud to work with all of our partners as we confront the threats posed by those who are looking to game the system in this current environment,” stated FBI Assistant Director-in-Charge Sweeney.
“The invocation of the Defense Production Act was implemented to protect our healthcare workers, the heroes of 2020,” stated IRS-CI Special Agent-in-Charge Larsen. “As alleged, Bulloch and Kent attempted to personally enrich themselves by preying on potential investors during this pandemic.”
The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to one year in prison.
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected].
The government’s case is being handled by the Office’s Public Integrity and Business & Securities Fraud Sections. Assistant United States Attorneys Nathan Reilly and Hiral Mehta are in charge of the prosecution.
The Defendants:
KENT BULLOCH
Age: 56
Santa Rosa, CaliforniaWILLIAM YOUNG, SR. (also known as “Bill”)
Age: 64
Phoenix, ArizonaE.D.N.Y. Docket No. 20-MJ-327
Two Individuals Arrested for Conspiring to Defraud Purported Purchasers of Personal Protective EquipmentRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Donald Allen and Manuel Revolorio with conspiracy to commit wire fraud by seeking more than $4 million from a purported purchaser of personal protective equipment (“PPE”) that the defendants did not own nor otherwise have authorization to sell. The defendants were arrested today in California, and their initial appearance is scheduled for this afternoon before United States Magistrate Judge Pedro V. Castillo in federal court in Los Angeles.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Craig Carpenito, head of the Department of Justice’s nationwide COVID-19 Hoarding and Price Gouging Task Force, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York Field Office (IRS-CI), announced the charges.
According to court filings, as part of their fraudulent scheme, Allen and Revolorio misrepresented the nature of their business experience, their inventory of PPE and their right to resell PPE to purported purchasers of PPE. For example, the defendants created a website for their company, International Commerce and Investment Group (ICIG), falsely representing that since 2014 ICIG had worked closely with global traders, medical institutions and other companies to supply PPE. The defendants also falsely claimed that ICIG had contracts and agreements in place to resell millions of masks, and attempted to pressure a potential purchaser to wire more than $4 million to secure those masks. To reinforce their claim to have large supplies of PPE available for sale, the defendants displayed sealed and shrink-wrapped empty boxes at their office, which they represented were filled with masks. The defendants also displayed to an individual, posing as a representative of an investor, more than one million masks that were owned by an unrelated third party – unbeknownst to the defendants, the “representative” was actually a federal law enforcement agent.
“As alleged in the complaint, the defendants sought to take advantage of the urgent national need for life-saving personal protective equipment through a fraudulent scheme designed to line their own pockets,” stated United States Attorney Donoghue. “This Office, together with the Department’s COVID-19 Hoarding and Price Gouging Task Force, is working tirelessly to ensure that scam artists who seek to capitalize on the worldwide pandemic will be brought to justice.” Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Offices in New Jersey and the Central District of California, and the Los Angeles Field Offices of the FBI and IRS-CI for their invaluable assistance in this case.
“The defendants in this case allegedly created an elaborate scam to defraud their victim, going as far as to wrap and label empty boxes and try to pass them off as containing actual personal protective equipment,” stated COVID-19 Hoarding and Price Gouging Task Force head Carpenito. “The public should be on guard against these types of schemes, and the perpetrators of them should know that the Department of Justice and its partners are working all the time to disrupt their attempts to prey on the public.”
"The alleged behavior here is nothing short of a betrayal of fellow citizens – both those serving on the front lines, and the communities who need those essential workers able to safely serve,” stated FBI Assistant Director-in-Charge Sweeney. “At this critical time, Allen and Revolorio allegedly deceived potential investors and purchasers into thinking they were running a legitimate business with resell rights to more than three million of these highly sought-after items. The FBI will continuously work to identify and hold accountable any company, individual, or entity whose intention it is to unlawfully take advantage of the current pandemic.”
“At a time when we should be coming together to help one another and support our healthcare professionals who are working heroically to save lives, Donald Allen and Manuel Revolorio allegedly decided to take advantage of the Covid-19 pandemic for their own personal benefit,” stated IRS-CI Special Agent-in-Charge Larsen. “IRS-CI is committed to not only protecting the tax system, but also protecting all taxpayers from unscrupulous individuals who attempt to take advantage of them.”
The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty.
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected].
The government’s case is being handled by the Office’s Public Integrity and Business & Securities Fraud Sections. Assistant United States Attorneys Nathan Reilly and Hiral Mehta are in charge of the prosecution.
The Defendants:
DONALD LEE ALLEN
Age: 62
Riverside, CaliforniaMANUEL REVOLORIO
Age: 37
Rancho Cucamonga, CaliforniaE.D.N.Y. Docket No. 20-MJ-318
Long Island Man Charged Under Defense Production Act with Hoarding and Price-Gouging of Scarce Personal Protective EquipmentRead the Press Release
A criminal complaint was filed today in federal court in Central Islip charging Amardeep Singh with violating the Defense Production Act of 1950 by hoarding personal protective equipment (“PPE”) at a warehouse in Brentwood, New York, amid the COVID-19 pandemic, and price-gouging customers of his retail store in Plainview, New York. If convicted, Singh faces up to one year in prison.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Craig Carpenito, head of the Department of Justice’s nationwide COVID-19 Hoarding and Price Gouging Task Force, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the filing of the complaint
“As charged in the complaint, Singh’s amassing of critical personal protective equipment during a public health crisis and reselling at huge markups places him squarely in the cross-hairs of law enforcement armed with the Defense Production Act,” stated United States Attorney Donoghue. “This Office is working tirelessly in coordination with the COVID-19 Hoarding and Price Gouging Task Force to prevent a pandemic of greed by profiteers.”
“The criminal complaint describes a defendant who allegedly saw the devastating COVID-19 pandemic as an opportunity to make illegal profits on needed personal protective equipment,” stated Carpenito. “The Department of Justice and its partners will intervene whenever profiteers and scammers break the law by capitalizing on the public’s fear to enrich themselves.”
“The Coronavirus has created challenging times for all Americans, especially those living in the New York metropolitan area,” stated USPIS Inspector-in-Charge Bartlett. “During a crisis of this magnitude, we must come together as a country to fight this common enemy. Unfortunately, Mr. Singh allegedly chose to use this opportunity to make money by hoarding and price gouging PPE. The conduct charged in the complaint is reprehensible and against our most fundamental American values.”
On March 18, 2020, in response to the COVID-19 pandemic, President Donald Trump issued Executive Order 13909 invoking the Defense Production Act making it illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services (HHS) as scarce in order to hoard them or sell them for excessive prices.
According to the complaint, beginning in mid-March 2020, Singh — who operates a retail store selling sneakers and apparel — began accumulating that merchandise at his store and a nearby warehouse. At the same time, he set aside a section of his store for so-called “COVID-19 Essentials,” which he then sold to the public at inflated prices, including but not limited to N-95 filtering face piece respirators, PPE face masks, PPE surgical masks, PPE face shields, PPE gloves, PPE coveralls, medical gowns and clinical-grade sanitizing and disinfecting products.
Between March 25, 2020 and April 8, 2020, Singh allegedly received deliveries at his retail store and warehouse of 40 shipments of disposable face masks weighing more than 1.6 tons, 14 shipments of disposable surgical gowns weighing more than 2.2 tons, six shipments of hand sanitizer weighing more than 1.8 tons and seven shipments of digital thermometers weighing approximately 253 pounds. These and other items — some of which had been officially designated as scarce — were advertised and sold at Singh’s retail store at prices far in excess of prevailing market prices. For example, records obtained during a judicially-authorized search of the store indicate that three-ply disposable face masks that Singh purchased for a per-unit price of $0.07 were resold by Singh for a per-unit price of $1.00 — a markup of approximately 1,328 percent. The seized records also reveal that Singh completed bulk sales at inflated prices to organizations serving vulnerable senior citizens and children battling the virus.
On April 14, 2020, Postal Inspectors executed a search warrant at Singh’s retail store and a consensual search of the warehouse and seized 23 pallets containing more than 100,000 face masks, 10,000 surgical gowns, nearly 2,500 full-body isolation suits and more than 500,000 pairs of disposable gloves.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected].
The government’s case is being handled by the Office’s Long Island Criminal Division, with assistance from the Department of Justice’s Hoarding and Price-Gouging Task Force. Assistant United States Attorney Anthony Bagnuola is in charge of the prosecution.
The Defendant:
AMARDEEP SINGH (also known as “Bobby Singh” and “Bobby Sidana”)
Age: 45
Woodbury, New YorkE.D.N.Y. Docket No.: 20-MJ-326
United States Files Injunction Action Against Long Island-Based Lead Paint Removal ContractorRead the Press Release
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter D. Lopez, Regional Administrator of the U.S. Environmental Protection Agency, Region 2 (EPA), announced today that the United States has filed a civil lawsuit against Precision Consulting Inc., in New Hyde Park, New York and its principal, Wayne Gladney, of Queens Village, New York, for violating the Toxic Substances Control Act. The suit seeks preliminary and permanent injunctive relief preventing the defendants from performing lead-based paint abatements and renovations in the New York City area in violation of federal law.
Congress enacted the Toxic Substances Control Act (“TSCA”) in 1976 in response to a finding that people and the environment are exposed each year to a large number of potentially harmful chemical substances, including lead. Lead is commonly found in paints used in residences built prior to 1977. Its ingestion, even in small quantities, can cause serious health problems, including hypertension, kidney failure and infertility. Children six years and younger are the most vulnerable to the harmful effects of lead. Lead poisoning in that age group can lead to intelligence quotient deficiencies, reading and learning disabilities, impaired hearing, reduced attention span, hyperactivity and behavior problems. In adults, lead exposure can cause a decrease in renal function, spontaneous abortions and preterm birth. Lead dust may also be a trigger for asthma.
Property owners and managing agents typically hired the defendants to perform lead-based paint abatements or renovations following notification from the New York Department of Health and Mental Hygiene (“Department of Health”) when a child residing at the property had an elevated blood lead level.
As alleged in the complaint, since 2012, Precision and Gladney have repeatedly performed lead-based paint abatements and renovations in the New York City metropolitan area in violation of TSCA and its implementing regulations.
The complaint further alleges that the defendants have performed more than two dozen unlawful abatements at residences in New York City since 2012. Between March 2017 and March 2020, defendants repeatedly violated TSCA and its implementing regulations, the Abatement Rule and Renovation, Repair and Painting Rule, by failing to assign a certified supervisor to oversee the abatements; failing to follow post-abatement clearance procedures; failing to ensure that a certified abatement worker perform the abatements; and failing to obtain EPA certification prior to performing at least one renovation. Defendants continue to perform abatements and host websites promoting their abatement business in which they represent that they have expertise in compliance with laws and regulations related to abatement.
In performing unlawful abatements and renovations, defendants have placed the public, and particularly children, at risk of lead exposure.
“The United States filed this action to protect children and their families from defendants’ improper and unsafe lead-based paint abatements and renovations,” stated United States Attorney Donoghue. “This Office seeks an injunction to end these practices, demonstrating its commitment to protecting the public’s health from those who act outside the law.”
“Holding businesses and individuals accountable for flouting lead paint laws can serve as an effective deterrent to those who may otherwise seek to cut corners,” stated EPA Regional Administrator Lopez. “By not complying with EPA rules designed to ensure that lead paint activities are conducted by properly trained workers, the defendants put the public, including young children with documented elevated blood lead levels, at risk in their own homes.”
The case is being handled by Assistant U.S. Attorney Shana Priore of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Assistant Regional Counsel Stuart Keith of EPA’s Regional Office, and Demian Ellis, Acting Chief of Toxics Compliance Section in the Pesticides and Toxic Substances Compliance Branch of EPA's Enforcement and Compliance Assurance Division.
The Defendants:
PRECISION CONSULTING INC.
New Hyde Park, New YorkWAYNE GLADNEY
Queens Village, New YorkE.D.N.Y. Docket No: 20-CV-1794
Rite Aid to Pay $4.75 Million to Resolve Allegations that it Violated Federal Law in the Sale of Pseudoephedrine TabletsRead the Press Release
ALBANY, NEW YORK – Retail drugstore chain Rite Aid, which operates more than 2,000 pharmacies in 18 states, will pay the United States a $4.75 million penalty to resolve allegations that its employees, in violation of the Controlled Substances Act, recorded false or incomplete information about customers who purchased tens of thousands of products containing pseudoephedrine. Pseudoephedrine, an ingredient found in many cough and cold medicines, is used by some to illegally manufacture the drug methamphetamine.
Grant C. Jaquith, United States Attorney for the Northern District of New York, Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, U.S. Drug Enforcement Administration (DEA), New York Division, and Todd Scott, Special Agent-in-Charge, DEA, Louisville Division, made the announcement.
In order to prevent the illicit use of pseudoephedrine, the Controlled Substances Act requires Rite Aid and other retail sellers to create and maintain a logbook that contains, among other things, the name and address of each customer who makes a purchase of a pseudoephedrine product. In the settlement agreement, Rite Aid admitted that, between August 2009 and January 2014, certain Rite Aid employees entered into Rite Aid’s logbook inaccurate or incomplete name and address information for customers. The United States alleged that this misconduct occurred in connection with tens of thousands of sales during that time period. Shortly after the United States brought these violations to Rite Aid’s attention, the company voluntarily devised and implemented a number of enhancements to its process for sales of pseudoephedrine products to better ensure Rite Aid’s compliance with federal law.
“Rite Aid had a moral and a legal obligation to keep track of its pseudoephedrine sales to help ensure that the regulated drug was purchased for legitimate reasons, and not for the illegal manufacture of methamphetamine,” stated United States Attorney Jaquith. “We are committed to enforcing that obligation with aggressive action and appropriate penalties that also reflect acceptance of responsibility, implementation of compliance measures, and ability to pay.”
“Pseudoephedrine products are regulated under federal law because they have been used in the production of a highly addictive and highly dangerous drug, methamphetamine,” stated United States Attorney Donoghue. “The settlement with Rite Aid sends a clear message to all those engaged in the manufacture, distribution and sale of those products: you must comply with federal laws enacted to prevent the illegal use of your products.”
“Companies that do not comply with the Controlled Substances Act are violating the law,” stated DEA Special Agent-in-Charge Donovan. “Regulatory laws are put in place for a reason – to ensure public health and safety. Companies that turn a blind eye to regulations concerning the purchase of products containing pseudoephedrine enable illicit methamphetamine production. Rite Aid’s disregard to compliance made it personal to us – whose job it is to save lives.”
“What Rite Aid learned today is that no one is above the law, not even large companies,” stated DEA Special Agent-in-Charge Scott. “It is vitally important that pharmacies meet their record-keeping obligations to account for the safe flow of medications, to include pseudoephedrine, which carries the potential for methamphetamine abuse.”
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York, the U.S. Attorney’s Office for the Eastern District of New York, and DEA. The United States was represented by Assistant U.S. Attorneys Adam J. Katz of the Northern District of New York and Elliot M. Schachner of the Eastern District of New York.
Rite Aid to Pay $4.75 Million to Resolve Allegations That It Violated Federal Law in the Sale of Pseudoephedrine Tablets, Which Can Be Used in the Manufacture of MethamphetamineRead the Press Release
Retail drugstore chain Rite Aid, which operates more than 2,000 pharmacies in 18 states, will pay the United States a $4.75 million penalty to resolve allegations that its employees, in violation of the Controlled Substances Act, recorded false or incomplete information about customers who purchased tens of thousands of products containing pseudoephedrine. Pseudoephedrine, an ingredient found in many cough and cold medicines, is used by some to illegally manufacture the drug methamphetamine.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Grant C. Jaquith, United States Attorney for the Northern District of New York, Ray Donovan, Special Agent-in-Charge, U.S. Drug Enforcement Administration, New York Division (DEA), and Todd Scott, Special Agent-in-Charge, DEA, Louisville Division, made the announcement.
In order to prevent the illicit use of pseudoephedrine, the Controlled Substances Act requires Rite Aid and other retail sellers to create and maintain a logbook that contains, among other things, the name and address of each the customer who makes a purchase of a pseudoephedrine product. In the settlement agreement, Rite Aid admitted that, between August 2009 and January 2014, certain Rite Aid employees entered into Rite Aid’s logbook inaccurate or incomplete name and address information for customers. The United States alleged that this misconduct occurred in connection with tens of thousands of sales during that time period. Shortly after the United States brought these violations to Rite Aid’s attention, the company voluntarily devised and implemented a number of enhancements to its process for sales of pseudoephedrine products to better ensure Rite Aid’s compliance with federal law.
“Pseudoephedrine products are regulated under federal law because they have been used in the production of a highly addictive and highly dangerous drug, methamphetamine,” stated United States Attorney Donoghue. “The settlement with Rite Aid sends a clear message to all those engaged in the manufacture, distribution and sale of those products: you must comply with federal laws enacted to prevent the illegal use of your products.”
“Rite Aid had a moral and a legal obligation to keep track of its pseudoephedrine sales to help ensure that the regulated drug was purchased for legitimate reasons, and not for the illegal manufacture of methamphetamine,” said United States Attorney Jaquith. “We are committed to enforcing that obligation with aggressive action and appropriate penalties that also reflect acceptance of responsibility, implementation of compliance measures, and ability to pay.”
“Companies that do not comply with the Controlled Substances Act are violating the law,” stated DEA Special Agent-in-Charge Donovan. “Regulatory laws are put in place for a reason – to ensure public health and safety. Companies that turn a blind eye to regulations concerning the purchase of products containing pseudoephedrine enable illicit methamphetamine production. Rite Aid’s disregard to compliance made it personal to us – whose job it is to save lives.”
“What Rite Aid learned today is that no one is above the law, not even large companies,” stated DEA Special Agent-in-Charge Scott. “It is vitally important that pharmacies meet their record-keeping obligations to account for the safe flow of medications, to include pseudoephedrine, which carries the potential for methamphetamine abuse.”
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Attorney’s Office for the Northern District of New York, and DEA. The United States was represented by Assistant U.S. Attorneys Elliot M. Schachner of the Eastern District of New York and Adam J. Katz of the Northern District of New York.
Three Media Executives and Sports Marketing Company Indicted in FIFA CaseRead the Press Release
A 53-count third-superseding indictment (the “Indictment”) was unsealed today in federal court in Brooklyn charging sports marketing executives Hernan Lopez and Carlos Martinez, formerly of 21st Century Fox, Inc. (“Fox”); Gerard Romy, former co-CEO of Spanish media company Imagina Media Audiovisual SL (“Imagina”); and Uruguayan sports marketing company Full Play Group S.A. (“Full Play”) (collectively, the “New Defendants”) with wire fraud, money laundering and related offenses – including, as to Romy and Full Play, racketeering conspiracy – in connection with the government’s long-running investigation and prosecution of corruption in organized soccer. The Indictment, returned under seal by a federal grand jury on March 18, 2020, includes additional charges against certain defendants located overseas who were previously indicted and have yet to be extradited to the United States.
Defendants Lopez, Martinez and Full Play are scheduled to be arraigned on April 9, 2020, before United States District Judge Pamela K. Chen in Brooklyn.
Richard P. Donoghue, 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 Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the charges.
“The charges unsealed today reflect this Office’s ongoing commitment to rooting out corruption at the highest levels of international soccer and at the businesses engaged in promoting and broadcasting the sport,” stated United States Attorney Donoghue. “Companies and individuals alike should understand that, regardless of their wealth or power, they will be brought to justice if they use the U.S. financial system to further corrupt ends.” Mr. Donoghue extended his thanks to the agents and other investigative personnel at the FBI New York Eurasian Joint Organized Crime Squad, the FBI’s Integrity in Sport and Gaming Initiative and the IRS-CI Los Angeles Field Office, as well as their colleagues in the United States and abroad, for their continuing effort in this case.
“The profiteering and bribery in international soccer have been deep-seated and commonly known practices for decades. These men, along with the general public, have known the FBI New York and our many law enforcement partners are investigating the illicit handshakes and backroom deals hidden in the infrastructure of soccer events, venues and marketing contracts. The first public charges date back to 2015. This should illustrate to everyone still hoping to score millions corruptly, we're going to find you,” stated FBI Assistant Director-in-Charge Sweeney.
“As charged in the Indictment, over a period of many years, the defendants and their co-conspirators corrupted the governance and business of international soccer with bribes and kickbacks, and engaged in criminal fraudulent schemes that caused significant harm to the sport of soccer. Their schemes included the use of shell companies, sham consulting contracts and other concealment methods to disguise the bribes and kickback payments and make them appear legitimate. IRS-CI is proud to have worked alongside our partners at the FBI to unravel this trail of deception,” stated IRS-CI Special Agent-in-Charge Korner.
As alleged in the Indictment, FIFA and its six continental confederations – including the Confederation of North, Central American and Caribbean Association Football (“CONCACAF”), headquartered in the United States, and the Confederación Sudamericana de Fútbol (“CONMEBOL”), the confederation governing soccer in South America – together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide. Consistent with previous indictments returned in the case, the Indictment alleges that over a period of more than two decades, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering.
As set forth in the Indictment, the New Defendants used their positions in the world of international soccer to engage in schemes involving the solicitation, offer, acceptance, payment and receipt of bribes and kickbacks, principally to obtain lucrative broadcast rights to various international soccer tournaments and events. For example, as alleged:
- Lopez and Martinez, formerly high-ranking executives of Fox subsidiaries responsible for developing and carrying out Fox’s sports broadcasting businesses in Latin America, joined Full Play and other co-conspirators in a scheme involving the annual payment of millions of dollars in bribes to officials of CONMEBOL in exchange for the lucrative broadcasting rights to the Copa Libertadores, the region’s most popular club tournament, among other events. Lopez and Martinez also relied on loyalty secured through the payment of bribes to certain CONMEBOL officials to advance the business interests of Fox, including to obtain confidential bidding information for the rights to broadcast the 2018 and 2022 World Cup tournaments in the United States, rights that Fox successfully obtained.
- Romy was a high-ranking executive and shareholder of Imagina, a privately held, multinational media conglomerate based in Barcelona, Spain, that owned various subsidiaries around the world, including in the United States. Romy participated in schemes to pay millions of dollars to high-ranking officials of the Caribbean Football Union (“CFU”) and of federations within the Central American Football Union (“UNCAF”), both regional soccer unions operating under the CONCACAF umbrella, to secure the media and marketing rights to FIFA World Cup qualifier matches organized by federations within the CFU and UNCAF. In connection with the CFU scheme, Romy and his co-conspirators agreed to pay Jeffrey Webb, a senior official of the CFU and the president of CONCACAF, a $3 million bribe in exchange for a share of a contract awarding the media and marketing rights to CFU members’ home World Cup qualifier matches for the 2018 and 2022 qualification cycles.
- Full Play, a sports marketing company incorporated in Uruguay, based in Buenos Aires, Argentina, and owned by father-and-son defendants Hugo Jinkis and Mariano Jinkis, participated in numerous schemes to pay bribes to officials of CONMEBOL and CONCACAF in exchange for media and marketing rights to various soccer events, including World Cup qualifier and friendly matches, the Copa Libertadores, and multiple editions of the Copa América, a national team tournament administered by CONMEBOL. Hugo and Mariano Jinkis, charged in the first indictment in the case unsealed on May 27, 2015, are among the defendants charged in the Indictment and remain fugitives.
In connection with the above schemes, the Indictment charges Romy and Full Play with RICO conspiracy and all four New Defendants with wire fraud and money laundering offenses. Each of the offenses carries a maximum of 20 years’ imprisonment, and, if convicted, each defendant faces mandatory restitution, forfeiture and a fine.
Other schemes alleged in the Indictment relate to the payment and receipt of bribes and kickbacks in connection with, among other things, contracts for the media and marketing rights to additional soccer events and FIFA’s selection of the countries to host various editions of the World Cup, including the World Cup hosted by Russia in 2018 and the World Cup scheduled to be hosted by Qatar in 2022.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, Patrick T. Hein, Kaitlin T. Farrell, David C. Pitluck and Brian D. Morris, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
The New Defendants:
HERNAN LOPEZ
Age: 49
Los Angeles, CaliforniaCARLOS MARTINEZ
Age: 51
Doral, FloridaGERARD ROMY
Age: 65
Barcelona, SpainFULL PLAY GROUP S.A.
Buenos Aires, ArgentinaE.D.N.Y. Docket No. 15-CR-252 (S-3) (PKC)
- Lopez and Martinez, formerly high-ranking executives of Fox subsidiaries responsible for developing and carrying out Fox’s sports broadcasting businesses in Latin America, joined Full Play and other co-conspirators in a scheme involving the annual payment of millions of dollars in bribes to officials of CONMEBOL in exchange for the lucrative broadcasting rights to the Copa Libertadores, the region’s most popular club tournament, among other events. Lopez and Martinez also relied on loyalty secured through the payment of bribes to certain CONMEBOL officials to advance the business interests of Fox, including to obtain confidential bidding information for the rights to broadcast the 2018 and 2022 World Cup tournaments in the United States, rights that Fox successfully obtained.
District Court Orders Injunctions against Two Telecom Carriers Who Facilitated Hundreds of Millions of Fraudulent Robocalls to Consumers in the United StatesRead the Press Release
The U.S. District Court for the Eastern District of New York entered orders in two separate civil actions, barring eight individuals and entities from continuing to facilitate the transmission of massive volumes of fraudulent robocalls to consumers in the United States, the Department of Justice announced today.
In one of the matters, United States v. Nicholas Palumbo, et al., the District Court entered a preliminary injunction that bars two individuals and two entities from operating as intermediate voice-over-internet-protocol (VoIP) carriers during the pendency of the civil action. In the other matter, United States v. John Kahen, et al., the District Court entered consent decrees that permanently bar an individual and three entities from operating as intermediate VoIP carriers conveying any telephone calls into the U.S. telephone system.
“These massive robocall fraud schemes target telephones of residents across our country, many of whom are elderly or are otherwise potentially vulnerable to such schemes,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The department is committed to stopping this unlawful conduct and pursuing those who knowingly facilitate these schemes for their own financial gain.”
“This office will take all appropriate measures to stop fraudulent robocalling schemes responsible for causing catastrophic losses to victims, including seeking to permanently shut down the U.S.-based enablers of such schemes,” said United States Attorney Richad P. Donoghue for the Eastern District of New York. “Protecting elderly and vulnerable individuals from being conned by foreign call center scammers remains a priority of this office and the Department of Justice.”
As alleged in the complaints, the defendants in both cases operated as VoIP carriers, receiving internet-based calls from other entities, often located abroad, and transmitting those calls first to other carriers within the United States and, ultimately, to the phones of individuals. Numerous foreign-based call centers are alleged to have used the defendants’ VoIP carrier services to pass fraudulent government- and business-imposter robocalls to victims in the United States. The defendants also sold U.S. phone numbers to foreign entities, which were used as victim call-back numbers as part of massive robocalling fraud schemes.
As also alleged, the defendants were warned numerous times that they were carrying fraudulent robocalls — including calls impersonating government agencies, such as the Social Security Administration, the IRS, and legitimate businesses, such as Microsoft — and yet continued to carry those calls and facilitate fraud schemes targeting individuals in the United States. Many of the robocalls were made by foreign fraudsters impersonating government investigators and conveying alarming messages, such as: the recipient’s social security number or other personal information has been compromised or otherwise connected to criminal activity; the recipient faces imminent arrest; the recipient’s assets are being frozen; the recipient’s bank and credit accounts have suspect activity; the recipient’s benefits are being stopped; the recipient faces imminent deportation; or combinations of these threats. Each of these claims was a lie, designed to scare the call recipient into paying large sums of money. These calls led to massive financial losses to elderly and other vulnerable victims throughout the United States.
“The court’s decision sends a clear message to gateway carriers who knowingly do business with scammers targeting Americans from overseas,” said Gail S. Ennis, Inspector General for the Social Security Administration. “We will continue to pursue those who facilitate these scam calls by allowing them into the U.S. telephone network. I want to thank the Department of Justice for its support throughout this investigation and its commitment to protecting Americans from this insidious form of fraud and theft.”
United States v. Nicholas Palumbo, et al.
In the first case, the District Court issued a preliminary injunction against spouses Nicholas and Natasha Palumbo of Scottsdale, Arizona, and the Arizona companies they own and operate, Ecommerce National LLC d/b/a TollFreeDeals.com and SIP Retail d/b/a sipretail.com. The District Court held, in a written opinion, that the evidence presented by the United States demonstrated probable cause to conclude that the defendants were engaged in “widespread patterns of telecommunications fraud, intended to deprive call recipients in the Eastern District of New York and elsewhere of money and property.”
The preliminary injunction issued by the court bars those defendants from carrying any VoIP calls destined for phones in the United States and providing any U.S. telephone numbers (often used as call-back numbers in the fraudulent robocalling schemes) to any individuals or entities during the pendency of this litigation. The court noted that though defendants had been warned more than 100 times of specific instances of fraudulent calls being transmitted through their network, they never severed their business relationship with any entity they learned was associated with fraudulent call traffic, prior to the United States’ filing of its lawsuit. The court further noted that “the telecommunications ‘intermediary’ industry is set up perfectly to allow fraudulent operators to rotate telephone numbers endlessly and blame other parties for the fraudulent call traffic they carry,” that the United States “demonstrat[ed] probable cause to conclude that defendants’ business is permeated with fraud,” that “multiple individual victims in the United States suffered significant fraud losses,” and that “[e]very day that the defendants’ actions in this vein continue, the public is at risk of harm in the form of additional high-dollar fraud losses.”
The claims in the United States v. Nicholas Palumbo, et al. matter are allegations only, and there has not been any final determination of liability or wrongdoing.
United States v. John Kahen, et al.
In the second case, the District Court entered consent decrees permanently resolving the matter against five individuals and entities who were also operating intermediary VoIP carriers. The court entered a consent decree on March 2, 2020 against Jon Kahen, a/k/a Jon Kaen of New York, and New York corporations Global Voicecom Inc. and Global Telecommunication Services Inc., permanently barring those defendants from, among other things, using the U.S. telephone system to: deliver prerecorded messages through automatic means, carry calls to the United States from foreign locations, and provide calling and toll-free services for calls originating in the United States. In addition, the defendants are permanently barred from serving as employees, agents, or consultants to any person or entity engaged in these activities. In a second consent decree, entered on March 24, 2020, the District Court barred KAT Telecom Inc., a New York corporation, from conveying or causing any other person or entity from conveying fraudulent telephone calls, fraudulent recordings, and unauthorized “spoofed” telephone calls. In the event that KAT Telecom, Inc. resumes operations, it must also implement strong anti-fraud measures, including anti-fraud monitoring, mitigation, and know-your-customer measures.
The claims resolved by the settlement in the United States v. Jon Kahen, et al. matter are allegations only, and there has not been any final determination of liability or wrongdoing.
These cases are being handled by Trial Attorneys Ann F. Entwistle and Charles B. Dunn of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Bonni Perlin, Dara Olds, and Evan Lestelle of the U.S. Attorney’s Office for the Eastern District of New York, in coordination with the Social Security Administration Office of the Inspector General and the U.S. Postal Inspection Service. Investigative support was also provided by the U.S. Treasury Inspector General for Tax Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force and U.S. Secret Service. The Federal Trade Commission and the Federal Communications Commission also provided pertinent data.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
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.
District Court Enters Injunctions Against U.S. Based Telecommunications Carriers Facilitating Hundreds of Millions of Fraudulent Robocalls to ConsumersRead the Press Release
WASHINGTON – The Department of Justice announced that the U.S. District Court for the Eastern District of New York entered orders in two separate civil actions barring eight individuals and entities from continuing to facilitate the transmission of massive volumes of fraudulent robocalls to consumers in the United States. In one of the matters, United States v. Nicholas Palumbo, et al., the court entered a preliminary injunction that bars defendants Nicholas and Natasha Palumbo and two entities from operating as intermediate voice-over-internet-protocol (VoIP) carriers during the pendency of the civil action. In the other matter, United States v. Jon Kahen, et al., the court entered consent decrees that permanently bar defendants Jon Kahen and three entities from operating as intermediate VoIP carriers conveying fraudulent robocalls into the U.S. telephone system.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Jody H. Hunt, Assistant Attorney General of the Justice Department’s Civil Division, and Gail S. Ennis, Inspector General, Social Security Administration (SSA), made the announcement.
“This Office will take all appropriate measures to stop fraudulent robocalling schemes responsible for causing catastrophic losses to victims, including seeking to permanently shut down the U.S.-based enablers of such schemes,” stated United States Attorney Donoghue. “Protecting elderly and vulnerable individuals from being conned by foreign call center scammers remains a priority of this office and the Department of Justice.”
“These massive robocall fraud schemes target telephones of residents across our country, many of whom are elderly or are otherwise potentially vulnerable to such schemes,” stated Assistant Attorney General Hunt. “The Department is committed to stopping this unlawful conduct and pursuing those who knowingly facilitate these schemes for their own financial gain.”
“The Court’s decisions send a clear message to gateway carriers who knowingly do business with scammers targeting Americans from overseas,” stated SSA Inspector General Ennis. “We will continue to pursue those who facilitate these scam calls by allowing them into the U.S. telephone network. I want to thank the Department of Justice for its support throughout this investigation and its commitment to protecting Americans from this insidious form of fraud and theft.”
As alleged in the complaints, the defendants in both cases operated as intermediate VoIP carriers, receiving internet based calls from other entities, often located abroad, and transmitting those calls first to other carriers within the United States, and ultimately to the phones of individuals. Numerous foreign-based call centers are alleged to have used the defendants’ VoIP carrier services to pass fraudulent government and business imposter robocalls to victims in the United States. The defendants also sold U.S. phone numbers to foreign entities, which were used as victim call-back numbers as part of massive robocalling fraud schemes.
As also alleged, despite numerous warnings that they were carrying fraudulent robocalls—including calls impersonating government agencies such as the Social Security Administration, the Internal Revenue Service and businesses such as Microsoft—the defendants continued carrying those calls and facilitating fraud schemes targeting individuals in the United States. Many of the robocalls were made from foreign-based call centers by individuals impersonating government investigators and conveying alarming messages, such as: the recipient’s social security number or other personal information has been compromised or otherwise connected to criminal activity; the recipient faces imminent arrest; the recipient’s assets are being frozen; the recipient’s bank and credit accounts have suspect activity; the recipient’s benefits are being stopped; the recipient faces imminent deportation; or combinations of these threats. Each of these claims was false and designed to scare the call recipient into paying large sums of money. Many times the numbers that appeared as the originating or caller-ID numbers for these calls were “spoofed” to make it appear that they originated from legitimate government or business offices in the United States, when in reality the calls were made by overseas scammers, often located in India. The defendants also sold toll-free and other U.S. numbers to foreign call centers that were left in fraudulent robocall messages on victims’ phones to further deceive them into believing that the calls were legitimate and originated in the United States. These calls led to massive financial losses to elderly and other vulnerable victims throughout the United States.
United States v. Nicholas Palumbo, et al.
In the first case, the court issued a preliminary injunction against spouses Nicholas and Natasha Palumbo of Scottsdale, Arizona, and the Arizona companies they own and operate, Ecommerce National LLC d/b/a TollFreeDeals.com and SIP Retail d/b/a sipretail.com. The court held, in a written opinion, that the evidence presented by the United States demonstrated probable cause to conclude that the defendants were engaged in “widespread patterns of telecommunications fraud, intended to deprive call recipients in the Eastern District of New York and elsewhere of money and property.”
The preliminary injunction bars the defendants from carrying any VoIP calls destined for phones in the United States and providing any U.S. telephone numbers (often used as call-back numbers in the fraudulent robocalling schemes) to any individuals or entities during the pendency of this litigation. The court noted that, although the defendants had been warned more than 100 times of specific instances of fraudulent calls being transmitted through their network, they never severed their business relationship with any entity they learned was associated with fraudulent call traffic prior to the United States filing of its lawsuit. The court further noted that “the telecommunications ‘intermediary’ industry is set up perfectly to allow fraudulent operators to rotate telephone numbers endlessly and blame other parties for the fraudulent call traffic they carry,” that the United States “demonstrat[ed] probable cause to conclude that Defendants’ business is permeated with fraud,” that “multiple individual victims in the United States suffered significant fraud losses” and that “[e]very day that the Defendants’ actions in this vein continue, the public is at risk of harm in the form of additional high-dollar fraud losses.”
United States v. Jon Kahen, et al.
In the second case, the court entered consent decrees permanently resolving the matter against five individuals and entities who were also operating intermediary VoIP carriers. The consent decree entered on March 2, 2020 against Jon Kahen, a/k/a Jon Kaen of New York, and New York corporations Global Voicecom, Inc. and Global Telecommunication Services Inc., permanently barred those defendants from, among other things, using the U.S. telephone system to: deliver prerecorded messages through automatic means, carry calls to the United States from foreign locations, and provide calling and toll-free services for calls originating in the United States. In addition, the defendants are permanently barred from serving as employees, agents, or consultants to any person or entity engaged in these activities. In a second consent decree entered on March 24, 2020, the court barred KAT Telecom, Inc., a New York corporation, from conveying or causing any other person or entity from conveying fraudulent telephone calls, fraudulent recordings and unauthorized “spoofed” telephone calls. In the event that KAT Telecom, Inc. resumes operations, it must also implement strong anti-fraud measures, including anti-fraud monitoring, mitigation and know-your-customer measures.
The claims resolved by the settlement in United States v. Jon Kahen, et al. are allegations only, and there has not been any final determination of liability or wrongdoing. The claims in United States v. Nicholas Palumbo, et al. are allegations only, and there has not been any final determination of liability or wrongdoing.
The government is represented by Assistant U.S. Attorneys Bonni Perlin, Evan Lestelle and Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorneys Ann Entwistle and Bart Dunn of the Civil Division’s Consumer Protection Branch. The SSA’s Office of Inspector General, the USPIS, the Office of Inspector General for Tax Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force provided investigative support. The Federal Trade Commission and the Federal Communications Commission provided pertinent data.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
The Defendants:
NICHOLAS PALUMBO et al.
Scottsdale, ArizonaE.D.N.Y. Docket No. 20-CV-473 (EK)
JON KAHEN et al.
Great Neck, New YorkE.D.N.Y. Docket No. 20-CV-474 (BMC)
U.S. Attorney Richard P. Donoghue Urges the Public to Report Suspected Covid-19 FraudRead the Press Release
BROOKLYN, NY – Richard P. Donoghue, United States Attorney for the Eastern District of New York, today urged the public to report suspected fraud schemes related to COVID-19 (the Coronavirus) by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or to the NCDF e-mail address [email protected].
In coordination with the Department of Justice, Attorney General William Barr has directed U.S. Attorneys to prioritize the investigation and prosecution of Coronavirus fraud schemes. The NCDF Hotline can receive and enter complaints into a centralized system that can be accessed by all U.S. Attorneys, as well as Justice Department litigating and law enforcement components to identify, investigate and prosecute fraud schemes.
“Any individual or company despicably seeking to enrich themselves by taking advantage of the Coronavirus emergency facing our country will face the full force of the U.S. Justice Department, and I expect they will not be happy with the outcome,” stated United States Attorney Donoghue.
Some examples of these schemes include:
- Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud.
- Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
- Malicious websites and apps that appear to share Coronavirus-related information to gain and lock access to your devices until payment is received.
- Seeking donations fraudulently for illegitimate or non-existent charitable organizations.
- Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.
In a memorandum to U.S. Attorneys issued March 19, Deputy Attorney General Jeffrey Rosen also directed each U.S. Attorney to appoint a Coronavirus Fraud Coordinator to lead each office’s efforts to investigate and prosecute Coronavirus-related crimes, and to conduct outreach and awareness activities.
The NCDF coordinates complaints with 16 additional federal law enforcement agencies, as well as state Attorneys General and local authorities.
Ex-Stockbrokers Convicted of Conspiring with Long Island Boiler Rooms to Dump Stock on Unsuspecting InvestorsRead the Press Release
Following a six-week trial, a federal jury in Central Islip, New York returned a guilty verdict today on all counts against former registered stock brokers Jeffrey Chartier and Lawrence Isen for their roles in a conspiracy to manipulate and fraudulently promote shares of publicly traded companies Hydrocarb Energy Corp. (HECC), CES Synergies, Inc. (CESX), National Waste Management Holdings, Inc. (NWMH) and Intelligent Content Enterprises, Inc. (ICEIF). Specifically, the defendants were convicted of money laundering conspiracy, wire fraud conspiracy, securities fraud conspiracy, securities fraud and money laundering. Chartier was additionally convicted of attempted obstruction of an official proceeding based upon lies he told to the Federal Bureau of Investigation (FBI) after his arrest in this case.
When sentenced by United States District Judge Joanna Seybert, the defendants each face a maximum sentence of more than 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.
“Chartier, Isen and their co-conspirators lied to investors, including elderly victims, but the jurors here saw the truth – that these defendants were brazenly stealing money through fraudulent investment schemes,” stated United States Attorney Donoghue. Mr. Donoghue thanked the FBI for leading the investigation, and expressed his appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance.
From 2013 to 2017, Chartier, Isen and two boiler rooms located in Plainview and Melville, New York – known as, among other names, Elite Stock Research and Power Traders Press – artificially inflated the price and trading volume of the four stocks. They did so through a cold-calling campaign that used lies and high-pressure sales tactics to lure victims, many of whom were elderly, into purchasing stock. The conspiracy’s market manipulation fraudulently inflated the stock price of the four stocks by more than $147 million.
Chartier, who became a major shareholder in CESX and NWMH after persuading those companies to retain him to help take them public, used the boiler rooms to dump nearly $2 million worth of those companies’ shares on unsuspecting victims. He also sold stock to individuals in private transactions without telling them that the stock had been manipulated to trade at an artificially high price and volume. Using some of the proceeds from his fraudulent scheme, he purchased a $350,000 luxury RV equipped with a flat screen television and a fireplace, which he used as a traveling office.
After Chartier was arrested in July 2017, and after waiving his Miranda rights, he lied to FBI Special Agents about his and others’ involvement in the scheme, including that he sold NWMH shares only via purchase agreements.
Isen, who was barred from acting as a broker by FINRA in 1996 and convicted of wire fraud conspiracy in the Southern District of New York in 2000, orchestrated the manipulation of stock belonging to, among others, major HECC shareholder Michael Watts and major ICEIF shareholders located in India. Watts was previously convicted in October 2019 for his role in the stock manipulation scheme following a month-long jury trial and is awaiting sentencing.
Chartier and Isen are the 15th and 16th defendants convicted in this case. Four defendants have been sentenced for their roles in the scheme: Ronald Hardy was sentenced to 10 years’ imprisonment; Dennis Verderosa was sentenced to six years’ imprisonment; McArthur Jean was sentenced to four years’ imprisonment; and Emin Cohen was sentenced to two years’ imprisonment.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution. Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Section is handling the forfeiture matters.
The Defendants:
JEFFREY CHARTIER
Age: 56
Los Angeles, CaliforniaLAWRENCE ISEN
Age: 66
San Diego, CaliforniaDefendants Who Were Previously Convicted:
RONALD HARDY
Age: 44
Port Jefferson, New YorkMCARTHUR JEAN (also known as “John McArthur”)
Age: 37
Dix Hills, New YorkSTEPHANIE LEE
Age: 48
St. Petersburg, FloridaERIK MATZ
Age: 46
Mt. Sinai, New YorkBRIAN HEEPKE (also known as “Brian Targis”)
Age: 39
Farmingdale, New YorkDENNIS VERDEROSA
Age: 79
Coram, New YorkEMIN L. COHEN (also known as “Ian Grant”)
Age: 36
Coram, New YorkPAUL EWER
Age: 39
Massapequa, New YorkASHLEY ANTOS
Age: 28
Central Islip, New YorkSERGIO RAMIREZ
Age: 46
East Meadow, New YorkROBERT GILBERT
Age: 53
Cold Spring Harbor, New YorkANTHONY VASSALLO
Age: 56
Farmingdale, New YorkMICHAEL WATTS
Age: 63
Sugarland, TexasDocket No. 17-CR-372 (S-3) (JS)
Five Defendants Convicted of Sex Trafficking, Alien Smuggling and Money LaunderingRead the Press Release
Following two weeks of trial, a federal jury in Brooklyn last night returned guilty verdicts convicting Jose Miguel Melendez-Rojas, Francisco Melendez-Perez, Abel Romero-Melendez, Jose Osvaldo Melendez-Rojas and Rosalio Melendez-Rojas, all members of the Melendez-Rojas Organization, of sex trafficking, sex trafficking conspiracy, sex trafficking of minors, interstate prostitution, alien smuggling and money laundering conspiracy. When sentenced by United States District Judge Allyne R. Ross, the defendants each face a maximum sentence of life imprisonment on the most serious charge. A sixth co-defendant, Fabian Reyes-Rojas, pleaded guilty to sex trafficking conspiracy and sex trafficking on December 27, 2019. Jose Osvaldo Melendez-Rojas and Rosalio Melendez-Rojas were extradited to the United States from Mexico in October 2018.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the verdicts.
Between 2006 and July 2017, the defendants transported women and girls, including minors, to the United States and coerced them to work in prostitution. The defendants used false promises of love, marriage and a better life to lure their victims into romantic and sexual relationships, and then isolated them from their families by bringing them to live with the defendants in Tenancingo, Mexico. Upon arrival in the United States, the defendants resorted to brutal beatings, threats of violence, forced abortions and psychological manipulation to compel their victims to work in prostitution in New York City, Long Island, New Jersey, Connecticut and Delaware. The defendants took the proceeds generated from the victims’ prostitution, and laundered it to conceal its source.
At the trial, a victim identified as “Delia” testified that she was forced into prostitution by Melendez-Perez and his uncle Rosalio Melendez-Rojas when she was only 14 years old. When she refused to work, Melendez-Perez beat her, and when he thought she might be pregnant, he tried to force her to have a miscarriage. During their six to seven-hour working shifts, the victims were typically forced to have sex with 15 to 20 men. The defendants confirmed the number of customers by counting the number of unused condoms returned at the end of the victims’ shifts.
“The crimes committed by the members of the Melendez-Rojas Trafficking Organization were horrific,” stated United States Attorney Donoghue. “It is my hope that today’s verdicts bring some measure of closure to the young women who bravely testified during the trial and who suffered greatly while under the control of the defendants. We will not tolerate the sexual exploitation of women and girls by brutal criminals like these defendants.”
“The atrocities this organization committed against young women, robbing them of their youth and forcing them to work as prostitutes, are disgraceful,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI and our partners work tirelessly to gain the trust of those who are forced into this reprehensible crime, ensuring these victims and their families are given an opportunity once they are rescued from sex traffickers. This conviction does not just point to the outstanding work of the investigative team, it serves as a testament to the will and courage of those victims to tell their stories.”
The investigation, prosecution, bilateral enforcement action and extradition of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative. Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in the bilateral initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims and reunite victims with their children. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 170 defendants in multiple cases in Georgia, New York, Florida and Texas, in addition to numerous federal and state prosecutions of associated sex traffickers in Mexico. The extraditions in this case are the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 80 defendants for sex trafficking; assisted more than 150 victims, including over 40 minors; reunited 19 victims’ children with their mothers; and secured restitution orders of over $4 million on behalf of trafficking victims.
The government’s case is being prosecuted by Assistant United States Attorneys Tanya Hajjar, Erin Argo and Gillian Kassner.
The Defendants:
JOSE MIGUEL MELENDEZ-ROJAS
Age: 43
MexicoFRANCISCO MELENDEZ-PEREZ (also known as “Paco” and “El Mojarra”)
Age: 25
Queens, New YorkABEL ROMERO-MELENDEZ (also known as “La Borrega” and “Borrego”)
Age: 33
Queens, New YorkJOSE OSVALDO MELENDEZ-ROJAS
Age: 43
MexicoROSALIO MELENDEZ-ROJAS (also known as “Leonel, “Wacho” and “El Guacho”)
Age: 38
MexicoCo-Defendant Who Previously Pleaded Guilty:
FABIAN REYES-ROJAS
Age: 40
MexicoE.D.N.Y. Docket No. 17-CR-434 (ARR)
Long Island Woman Sentenced to 13 Years’ Imprisonment for Providing Material Support to ISISRead the Press Release
Earlier today, in federal court in Central Islip, Zoobia Shahnaz was sentenced to 13 years’ imprisonment by United States District Judge Joanna Seybert for providing material support to a foreign terrorist organization, specifically more than $150,000 to the Islamic State of Iraq and al-Sham (ISIS), and attempting to travel to Syria to join ISIS. Shahnaz pleaded guilty in November 2018.
John C. Demers, Assistant Attorney General for National Security, Richard P. Donoghue, 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 sentence.
As set forth in court filings and facts presented at the sentencing hearing, between March 2017 and July 2017, Shahnaz defrauded numerous financial institutions to obtain money for ISIS, including a loan for approximately $22,500. Shahnaz also fraudulently obtained more than a dozen credit cards and used them to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online. Shahnaz then made multiple wire transfers totaling more than $150,000 to individuals and entities in Pakistan, China and Turkey that were fronts for ISIS.
Shahnaz accessed ISIS violent jihad-related websites and message boards, and social media and messaging pages of known ISIS recruiters, facilitators and financiers. She also performed numerous internet searches for information that would facilitate her entry into Syria. Court-authorized search warrants executed at Shahnaz’s residence on Long Island resulted in the seizure of terrorist and jihad-related propaganda, including a photograph of a suicide belt of explosives and a night vision scope.
On July 31, 2017, Shahnaz was arrested at John F. Kennedy International Airport in Queens, New York, while attempting to board a flight with a layover in Istanbul, Turkey – a common point of entry for individuals travelling from western countries to join ISIS in Syria.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution, with assistance provided by Trial Attorney Joseph Attias of the National Security Division’s Counterterrorism Section.
Long Island Woman Sentenced to 13 Years‘ Imprisonment for Providing Material Support to ISISRead the Press Release
Earlier today, in federal court in Central Islip, Zoobia Shahnaz was sentenced to 13 years’ imprisonment by United States District Judge Joanna Seybert for providing material support to a foreign terrorist organization, specifically more than $150,000 to the Islamic State of Iraq and al-Sham (ISIS), and attempting to travel to Syria to join ISIS. Shahnaz pleaded guilty in November 2018.
Richard P. Donoghue, United States 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 Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today, the defendant learned the consequences of seeking to join ISIS and funneling thousands of dollars into the terrorist organization’s coffers,” stated United States Attorney Donoghue. “There is no higher priority of the Department of Justice and this Office than protecting our country from those who support violent, hate-filled terrorist organizations.” Mr. Donoghue praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force which consists of investigators and analysts from the FBI, the NYPD and over 50 other federal, state and local agencies.
“Financing terrorist organizations shouldn’t be viewed as any less dangerous of a crime than actually carrying out an act of terror itself. Make no mistake about it, Shahnaz funneled a significant amount of money into the hands of those who intended to use it in furtherance of ISIS objectives, and she set out to travel overseas with similar goals in mind. Today’s sentencing is a welcome end to this case as the FBI, along with our partners on the JTTF, continues to pursue other like-minded individuals,” stated FBI Assistant Director-in-Charge Sweeney.
As set forth in court filings and facts presented at the sentencing hearing, between March 2017 and July 2017, Shahnaz defrauded numerous financial institutions to obtain money for ISIS, including a loan of approximately $22,500. Shahnaz also fraudulently obtained more than a dozen credit cards and used them to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online. Shahnaz then made multiple wire transfers totaling more than $150,000 to individuals and entities in Pakistan, China and Turkey that were fronts for ISIS.
Shahnaz accessed ISIS violent jihad-related websites and message boards, and social media and messaging pages of known ISIS recruiters, facilitators and financiers. She also performed numerous internet searches for information that would facilitate her entry into Syria. Court-authorized search warrants executed at Shahnaz’s residence on Long Island resulted in the seizure of terrorist and jihad-related propaganda, including a photograph of a suicide belt of explosives and a night vision scope.
On July 31, 2017, Shahnaz was stopped at John F. Kennedy International Airport in Queens, New York, while attempting to board a flight with a layover in Istanbul, Turkey – a common point of entry for individuals travelling from western countries to join ISIS in Syria.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution, with assistance provided by Trial Attorney Joseph Attias of the National Security Division’s Counterterrorism Section.
The Defendant:
ZOOBIA SHAHNAZ
Age: 30
Brentwood, New YorkE.D.N.Y. Docket No. 17-CR-522 (JS)
Brooklyn Man Convicted of Robberies and Attempted Robbery of Four Convenience Stores in QueensRead the Press Release
Following two weeks of trial, a federal jury in Brooklyn today convicted Elgin Brack of Hobbs Act robbery conspiracy and related crimes for his participation in the gunpoint robberies and attempted robbery of four convenience stores in Queens in November 2018. During the attempted robbery of a Duane Reade store, Brack shot the store’s clerk in the head and hand. When sentenced by United States District Judge Eric N. Vitaliano, Brack faces a mandatory minimum of 31 years’ imprisonment.
Brack’s uncle and co-defendant, Scott Brack, pleaded guilty to Hobbs Act robbery conspiracy in November 2019 and is awaiting sentencing.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the verdict.
“The defendant has been held responsible by the jury for his crime spree that left bloodshed and terrorized victims in its wake,” stated United States Attorney Donoghue. “Today’s verdict ensures that Elgin Brack will face substantial punishment. I commend the NYPD detectives and ATF Special Agents for quickly apprehending the defendants and preventing further mayhem.”
“Today’s verdict ensures that Elgin Brack will pay a price for the violence and terror that he perpetrated on the streets of New York,” stated ATF Special Agent-in-Charge DeVito. “The reckless violence the defendant left in his wake will be met with years in prison contemplating his crimes and harm done to his fellow citizens. The robust partnership between the ATF Special Agents and NYPD detectives of the ATF/ NYPD Joint Robbery Task Force that worked this case led to quick arrests preventing additional violence and harm to the community. I would like to thank the United States Attorney’s Office for their work in prosecuting this case.”
“Today’s conviction assures a measure of justice for the victims of these violent robberies. I commend our detectives, working with our federal partners, for vigorously investigating this case from the moment these crimes occurred,” stated NYPD Commissioner Shea.
On November 26, 2018, between approximately 3:35 a.m. and 5:45 a.m., defendant Elgin Brack attempted to rob a Duane Reade store in Woodside, and completed three robberies of a 7-Eleven store in Long Island City, a Rite Aid store in Astoria and a second Rite Aid store in Jamaica, together with Scott Brack, who served as the getaway driver.
As proven at trial, at approximately 3:30 a.m., Elgin Brack entered the Duane Reade store, pretended to make a purchase, then pointed a gun at the store clerk. When the clerk did not respond quickly, Brack shot him in the hand and the head as he resisted. Brack fled the store empty handed and, together with Scott Brack, drove to the 7-Eleven store, where he robbed the store of $300 at gunpoint from a store employee. The defendants then drove to the first Rite Aid store, where Elgin Brack approached a store clerk and asked to purchase chewing gum. When the store clerk opened the cash register, Brack pointed a gun at the clerk and demanded money. The store clerk handed Elgin Brack $802. Finally, at approximately 5:45 a.m., Elgin Brack entered the second Rite Aid store, pointed a gun at the store clerk and robbed the store of $200.
Later that day, at approximately 9:00 p.m., detectives and Special Agents from the ATF-NYPD Joint Robbery Task Force, Strategic Pattern Armed Robbery Technical Apprehension team, located the getaway vehicle in the Bronx and arrested the defendants. The law enforcement officers recovered clothing from the back seat of the car that matched the clothes Elgin Brack wore during the robberies and attempted robbery, and a backpack containing a .357 revolver that was later determined to have Elgin Brack’s DNA on it. Elgin Brack’s cell phone contained Internet searches for 24-hour stores made shortly before the defendants’ crimes occurred.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. 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 Phil Selden, Jonathan Siegel and Jonathan Lax are in charge of the prosecution. Assistant United States Attorney Tanisha R. Payne of the Office’s Civil Division is handling the forfeiture matters.
The Defendant Convicted Today:
ELGIN BRACK
Age: 24
Brooklyn, New YorkThe Co-Defendant Who Previously Pleaded Guilty:
SCOTT BRACK
Age: 51
Bronx, New YorkE.D.N.Y. Docket No. 18-CR-684 (ENV)
Brooklyn Tax Preparer Sentenced to Prison for Preparing Fraudulent ReturnsRead the Press Release
A Brooklyn, New York, tax return preparer was sentenced to 15 months in prison today for preparing false returns for his clients and himself, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Richard P. Donoghue for the Eastern District of New York.
According to court documents and statements made in court, Emerson Gamory owned and operated Emerson Gamory Income Tax Services Inc. (Gamory Tax), a tax preparation business in Brooklyn. From 2013 through 2017, Gamory falsified client returns by fraudulent claiming deductions for gifts to charity, unreimbursed employee expenses, and education expenses in order to inflate his clients’ refunds. Gamory also prepared false returns for Gamory Tax that underreported its gross receipts and returns for himself that underreported net profits. In total, Gamory caused a tax loss of more than $550,000 to the United States.
On June 25, 2019, Gamory pleaded guilty to aiding and assisting in the preparation of false tax returns and filing a false return for himself.
In addition to the term of imprisonment, U.S. District Judge Carol Bagley Amon ordered Gamory to serve one year of supervised release and to pay $574,565 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Donoghue commended special agents of IRS-CI, who investigated the case, and Assistant Chief Jorge Almonte and Trial Attorney Christopher P. O’Donnell of the Tax Division, and Assistant U.S. Attorney John Vagelatos, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Brooklyn Man Pleads Guilty to Money Laundering ConspiracyRead the Press Release
Earlier today, before United States District Court Judge Dora L. Irizarry in Brooklyn, Andrew Tepfer pleaded guilty to participating in a money laundering conspiracy designed to avoid paying a multi-million dollar court-ordered restitution judgment compensating victims of a securities fraud scheme. When sentenced, Tepfer faces up to 20 years in prison and a fine in an amount to be determined by the court.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Tepfer has been held responsible for his participation in a money laundering scheme to hide funds derived from a brazen shakedown,” stated United States Attorney Donoghue. “This Office will vigorously prosecute those who flout court orders and exploit victims.” Mr. Donoghue thanked the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation for their assistance with the investigation.
According to court filings, in 2011 and 2012, Tepfer and another individual (“John Doe”) pleaded guilty in federal court in Brooklyn to securities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. At their sentencing proceedings in 2014, they were ordered to pay approximately $12.7 million in restitution to the victims of the scheme. Thereafter, in February 2017, Tepfer’s co-conspirator Mark Weissman told John Doe that incriminating information about him would be provided to law enforcement unless he paid $6 million to Tepfer. Weissman and his co-conspirators then planned how to have John Doe make the payment in a manner that would prevent it from being seized by law enforcement authorities seeking to enforce the court’s restitution order. In June 2019, Weissman pleaded guilty to conspiring to obstruct an official proceeding and was sentenced in January 2020 to four years’ probation, 300 hours of community service and a $45,000 fine.
At his guilty plea proceeding today, Tepfer admitted that he conspired with others to conduct international financial transactions designed both to funnel funds that he believed were the proceeds of the earlier securities fraud back to himself, and to conceal the source of those funds.
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:
ANDREW TEPFER (also known as "Avi Tepfer")
Age: 56
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-524 (DLI)
Queens Pharmacy Owner Found Guilty of Health Care Fraud and Money Laundering Charges for Role in Billing SchemeRead the Press Release
BROOKLYN, NY – A federal jury in Brooklyn returned a guilty verdict last night against pharmacy owner Yuriy Barayev on one count of health care fraud and seven counts of money laundering for his role in a scheme to defraud Medicare by billing for prescription medications that were not provided to patients. The verdict followed a four-day trial before United States District Judge Edward R. Korman. When sentenced, Barayev faces up to 10 years in prison for health care fraud and up to 20 years in prison on each of the money laundering counts.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI), announced the verdict.
As proven at trial, from November 2013 to December 2015, Barayev engaged in a scheme to defraud Medicare by submitting claims for hundreds of medications that were never dispensed through his pharmacy, Woodhaven Rx. The evidence further showed that Barayev laundered the proceeds of his health care fraud scheme through a shell company owned by his wife, and then spent the money on himself, his family and friends.
This case was investigated by HHS-OIG and IRS-CI. Trial Attorneys Sarah Wilson Rocha and Debra Jaroslawicz, and Assistant Chief A. Brendan Stewart of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception, Strike Force prosecutors filed more than 1,750 cases charging more than 3,800 defendants who collectively billed the Medicare program approximately $15 billion; 2,643 defendants pleaded guilty and 338 others were convicted in jury trials; and 2,424 defendants were sentenced to imprisonment for an average term of approximately 50 months. Medicare payment trends demonstrate the positive impact of Strike Force enforcement and prevention efforts.
The Defendant:
YURIY BARAYEV
Age: 45
Queens, New YorkE.D.N.Y. Docket No. 18-CR-318 (ERK)
Queens Pharmacy Owner Found Guilty of Health Care Fraud and Money Laundering Charges for Role in Billing SchemeRead the Press Release
A federal jury found a New York pharmacy owner guilty Wednesday of health care fraud and money laundering charges for his role in a scheme to defraud Medicare by billing for prescription medications that were not provided to patients.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations and Acting Special Agent in Charge Jonathan Larsen of Internal Revenue Service Criminal Investigation’s (IRS-CI) New York Field Office made the announcement.
After a four-day trial, Yuriy Barayev, 45, of Queens, New York, was found guilty of one count of health care fraud and seven counts of money laundering. U.S. District Judge Edward R. Korman of the Eastern District of New York, who presided over the trial, will sentence Barayev at a later date.
According to evidence presented at trial, from November 2013 to December 2015, Barayev engaged in a scheme to defraud Medicare by submitting claims for prescription medications that were not actually dispensed to patients. Barayev billed Medicare for hundreds of medications that were never dispensed through his pharmacy, Woodhaven Rx, the evidence showed. The evidence further showed that Barayev laundered the proceeds of his health care fraud scheme by transferring money to a shell company owned by his wife and then spending the money to benefit himself, his family and others close to him.
This case was investigated by HHS-OIG and IRS-CI. Trial Attorneys Sarah Wilson Rocha and Debra Jaroslawicz and Assistant Chief A. Brendan Stewart of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare 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.
Member of Eastern European Organized Crime Syndicate Sentenced to 198 Months’ Imprisonment for Racketeering and Other Violent CrimesRead the Press Release
Aleksey Tsvetkov, a leader of a violent, Brooklyn-based Eastern European organized crime syndicate that operated primarily in the Sheepshead Bay, Brighton Beach and Coney Island neighborhoods, was sentenced today in federal court in Brooklyn to 198 months’ imprisonment and ordered to pay $1,145,339.90 in restitution following his conviction for racketeering – including predicate acts of illegal gambling, extortion, arson and marijuana distribution – and wire fraud and pistol-whipping. Tsvetkov and co-defendant Leonid Gershman were convicted following a three-week jury trial in August 2018. Today’s proceeding was held before United States District Judge Brian M. Cogan.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.
“Today’s sentence appropriately punishes Tsvetkov, whose crime syndicate inflicted violence on three Brooklyn communities, including an arson that destroyed an occupied building and endangered its residents and New York City firefighters,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, will continue to deploy all resources necessary to rid our neighborhoods of violent organized crime groups.”
“Last summer, Aleksey Tsvetkov and his co-defendant Leonid Gershman were convicted for a litany of violent crimes and racketeering that reached from Brooklyn to abroad,” stated DEA Special Agent-in-Charge Donovan. “This sentence exemplifies law enforcement’s commitment to saving lives by arresting and prosecuting members of criminal organizations who place neighborhoods in peril through violence, drug trafficking and criminal threats.”
“Organized criminal organizations like the one led by Tsvetkov negatively impact the standard of living for the citizens living in those areas where they operate, causing harm and fear in their neighborhoods,” stated IRS-CI Special Agent-in-Charge Larsen. “IRS Criminal Investigation and our law enforcement partners will continue to be relentless in our resolve to dismantle organized criminal groups and bring the criminals who run them to justice.”
Between 2011 and May 2017, Tsvetkov and his co-conspirators, born in states of the former Soviet Union, including Russia, Ukraine and Moldova, operated as a racketeering syndicate. The syndicate members were linked to high-level members of Russian organized crime, known as “thieves in law,” or “thieves,” who authorized syndicate members to use violence in the United States and abroad to protect their criminal activities.
As established at trial, in 2016, Tsvetkov partnered in an illegal high-stakes poker game on Coney Island Avenue that generated substantial profits for the syndicate. In the spring of 2016, Tsvetkov and other syndicate members enlisted two co-conspirators to set fire to a mixed-use a building on Voorhies Avenue that housed a rival poker game on the ground floor. Two residents of the building, including a young boy, were trapped inside by the resulting fire, and had to be rescued by firefighters. Both residents and firefighters suffered smoke inhalation, and one firefighter’s injuries required multiple surgeries. The families living in the building were displaced due to fire damage.
The syndicate also preyed upon extortion victims. For example, to find an extortion victim who owed the syndicate more than $40,000, a co-conspirator enlisted the help of “thieves” in Russia to track down the victim’s father in Moscow. Subsequently, after locating the victim, a co-conspirator was recorded on a wiretap stating, the “Thieves have found him . . . in Israel,” and “they were at [his] place today.” The co-conspirators regularly reported to Tsvetkov as debt payments were collected from the victim.
In connection with a separate extortion, the government recovered Tsvetkov’s cell phone and found a video of Tsvetkov beating the extortion victim into near unconsciousness. Tsvetkov kept the video as a souvenir.
In July 2012, Tsvetkov, Gershman and a co-conspirator beat a member of a rival criminal organization, known as the “Kafkaz Crew,” whom they suspected of stealing marijuana and thousands of dollars from the syndicate’s stash house on Ocean Avenue. Tsvetkov grabbed a handgun from the co-conspirator and jammed it in the victim’s mouth, knocking out several of his teeth. On December 3, 2019, Gershman was sentenced to 198 months’ imprisonment for racketeering.
Mr. Donoghue expressed his grateful appreciation to the members of DEA’s New York Organized Crime Drug Enforcement Strike Force, comprising agents and officers of the DEA; New York City Police Department; New York State Police; Immigration and Customs Enforcement – Homeland Security Investigations; IRS-CI; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; U.S. Marshals Service; New York National Guard; Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision for their roles in the investigation, and thanked the New York City Fire Department for its investigation of the arson and its heroic efforts in rescuing the residents who were trapped in the building during the fire.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Sarah Evans are in charge of the prosecution.
The Defendant:
ALEKSEY TSVETKOV (also known as “Pelmin,” “Pulya,” “Lesha” and “Lyosha”)
Age: 40
Brooklyn, New YorkE.D.N.Y. Docket No. 16-CR-553 (S-4) (BMC)
Village of Northport Agrees to Settle Federal Complaint by Complying with Clean Water Act RequirementsRead the Press Release
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter D. Lopez, Regional Administrator of the United States Environmental Protection Agency, Region 2 (EPA), announced today that the United States filed suit under the Clean Water Act (CWA) against the Village of Northport, New York (Northport) to address illegal and persistent discharges of pollutants and for failure to comply with the municipal separate storm sewer system (MS4) permit and EPA’s administrative orders that required Northport to prevent pollutants discharged from its sewer system from entering the waters of the United States. The parties agreed to enter into a Consent Decree, which was also filed today with the court, and it requires Northport to conduct inspections and sampling of its outfalls, and to implement rehabilitation work to eliminate any illicit discharges. The Consent Decree also requires Northport to pay civil penalties of $125,000. The State of New York is a plaintiff in this matter and a party to the Consent Decree. Following a 30-day public comment period, the United States will review any comments and, if appropriate, ask the court to enter the Consent Decree.
The lawsuit and Consent Decree were filed in the United States District Court for the Eastern District of New York, in Central Islip, New York.
“The United States brought this action to ensure that Northport meets its obligation to protect water quality by developing and enforcing a program to eliminate the discharge of unpermitted pollutants from its storm sewer system,” stated United States Attorney Donoghue. “Specifically, the resolution of this case is designed to prevent pollutants, such as raw sewage travelling through Northport’s storm sewers, from discharging into Northport Harbor and Northport Bay, which flow into the Long Island Sound. This Office is committed to vigorously enforcing the CWA against parties who discharge pollutants into the waters of the United States.”
“When not properly managed, storm water often carries pollution and sediment into local waterways that can impair streams, lakes and beaches,” stated EPA Regional Administrator Lopez. “Before Northport began to take steps several years ago to address these issues, storm water from Northport impaired local waterways and there were instances of beach closings due to contamination in Northport Harbor. EPA takes these violations seriously, and the Village has come a long way to protect their valuable natural resources and improve the community’s quality of life.”
Northport owns and operates an MS4 permitted storm sewer system that comprises numerous catch basins in which storm water is collected and discharged through connecting pipe segments to 19 outfalls. Northport’s outfalls discharge into Northport Harbor and Northport Bay and flow into the Long Island Sound. As alleged in the complaint, following inspections by EPA in 2011, EPA determined that Northport’s storm sewer system discharged illicit contaminants, including raw sewage, into Northport Harbor. To address these discharges, Northport and EPA entered into three administrative orders from 2012 through 2013 to bring Northport into compliance with the CWA and the MS4 permit. The administrative orders required Northport to complete rehabilitation projects, inspection and sampling. In addition, Northport’s MS4 permit required it to implement and enforce a program to detect and eliminate illicit discharge flowing into its storm sewer system. The deadlines in EPA’s orders and the MS4 permit were not achieved, resulting in today’s lawsuit. The Consent Decree will require Northport to comply with the CWA, preventing future illicit sewage discharges into waters of the United States.
The civil negotiations and settlement were handled by the Office’s Civil Division. Assistant United States Attorney Deborah B. Zwany is in charge of this matter, working with Phyllis Kaplan Feinmark and Kara Murphy, Regional Counsel’s Office, U.S. EPA Region 2, Douglas McKenna, Chief of the Water Compliance Branch, U.S. EPA Region 2, Justine Modigliani, P.E. Chief of the Clean Water Act Compliance Section, U.S. EPA Region 2 and Katherine Green, Physical Scientist, Clean Water Act Compliance Section, U.S. EPA Region 2.
Armored Car Employee and Two Co-Defendants Sentenced to Prison for Theft of over $500,000 on Long IslandRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Alexis Laguerra, Raymond Soto, Jr. and Raymond Soto, Sr. were sentenced by United States District Judge Sandra J. Feuerstein to 30 months, 33 months and 18 months in prison, respectively, for bank larceny in connection with the theft of over $500,000 from an armored car on November 2, 2018 in Valley Stream, New York. Laguerra was an employee of GardaWorld, the owner of the armored car. The defendants were also ordered to pay forfeiture of $300,000, and restitution of $510,000 to GardaWorld. The defendants pleaded guilty in April 2019.
Richard P. Donoghue, 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. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentences.
As set forth during the prior guilty plea proceedings and in court filings, Laguerra used his insider’s knowledge of GardaWorld to plot and carry out the theft. Laguerra was the assigned GardaWorld driver for the overnight shift and left the armored car unoccupied and unguarded outside a bank. Soto Jr. entered the armored car, drove a short distance from the bank, and removed three bags of cash totaling $510,000 from the vehicle. Soto Sr., driving a getaway car, picked up Soto Jr. and the cash and fled. Law enforcement authorities later recovered $130,000 of the stolen money from Soto Sr.’s residence in Queens.
“This inside job has landed the defendants inside prison where they can contemplate what a foolhardy idea this crime was,” stated United States Attorney Donoghue. “I commend the FBI and the Nassau County Police Department for quickly solving this crime and demonstrating, once again, that crime doesn’t pay.”
“Today’s sentencing of defendants Laguerra, Soto Jr and Soto Sr. is a clear example of how numerous law enforcement agencies working together brought these three defendants to justice in an expeditious manner. I would like to congratulate all of the investigators and their respective agencies for a job well done,” stated NCPD Commissioner Ryder.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendants:
ALEXIS LAGUERRA
Age: 32
Brooklyn, New YorkRAYMOND SOTO, SR. (also known as “Razor”)
Age: 49
Richmond Hill, QueensRAYMOND SOTO, JR. (also known as “Rambo”)
Age: 29
Richmond Hill, QueensE.D.N.Y. Docket No. 18-CR-678 (SJF)
Eastern District of New York U.S. Attorney’s Office Collects over $1.1 Billion in Criminal and Civil Actions in Fiscal Year 2019Read the Press Release
United States Attorney Richard P. Donoghue announced today that the Eastern District of New York collected over $1.1 billion in criminal and civil actions in fiscal year 2019. Of this amount, $24,687,372 was collected in criminal actions, and $1,093,836,145 was collected in civil actions handled solely by the Eastern District. Additionally, $1,012,187 resulted from cases handled in conjunction with other U.S. Attorney’s Offices and litigating divisions of the Department of Justice, including the forfeiture of $215,491,403 in assets tainted by crime.
“The Eastern District’s recoveries in fiscal year 2019 are notable for having achieved economic justice on behalf of those who were harmed by individuals and corporate entities that put profits ahead of individuals and their well-being,” stated United States Attorney Donoghue. “This Office is committed to vigorously pursuing civil and criminal penalties from wrongdoers.”
FY 2019 Collections Highlights
In October 2018, the Eastern District of New York recovered $480 million in civil penalties from Nomura Holding America Inc. and several of its affiliates to resolve claims that Nomura misled investors in connection with the marketing, sale and issuance of residential mortgage-backed securities between 2006 and 2007.
Also in October 2018, AmerisourceBergen Corporation, one of the nation’s largest wholesale drug companies, and its subsidiaries AmerisourceBergen Specialty Group, AmerisourceBergen Drug Corporation, Oncology Supply Company and Medical Initiatives, Inc. (collectively “ABC”), entered into a settlement agreement with the United States in which ABC agreed to pay $625 million to resolve civil liability under the False Claims Act. The claims against ABC arose from its repackaging and distributing of pre-filled syringes that were not approved for sale or use by the U.S. Food and Drug Administration. The drugs involved in the scheme were supportive drugs for cancer patients undergoing chemotherapy treatment.
Collections Overview
The U.S. Attorneys’ Offices, along with the Department of Justice litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victims, criminal fines and felony assessments are paid to the Department of Justice Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund, and are used to restore funds to crime victims and for a variety of law enforcement purposes.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Brooklyn Man Pleads Guilty to Drive-By ShootingRead the Press Release
Earlier today, in federal court in Brooklyn, Steven Bynum pleaded guilty before United States District Judge Ann M. Donnelly to firing a handgun into a group of people in furtherance of a drug distribution dispute, wounding a pregnant innocent bystander. When sentenced, Bynum faces up to life in prison.
Richard P. Donoghue, 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 Division (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
According to court filings and facts presented during court proceedings, in early 2017, Bynum and his co-conspirators stole drugs from another drug dealer (“John Doe”) and then distributed those drugs at the Kingsborough Houses in Crown Heights, Brooklyn. In June 2017, “John Doe” retaliated by assaulting and pistol-whipping Bynum. On September 10, 2017, Bynum drove to Dean Street in East New York, where he spotted “John Doe” standing with a group of people. Bynum fired multiple shots at the group, but missed “John Doe” and instead hit a five-month pregnant bystander twice in the head. The victim still suffers from partial paralysis and permanent cognitive damage from the bullet wounds.
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 is handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Francisco J. Navarro and Temidayo Aganga-Williams are in charge of the prosecution.
The Defendant:
STEVEN BYNUM (also known as “Nitty”)
Age: 38
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-0255 (AMD)
11 Members of Brooklyn-Based 5-9 Brims Gang Charged with Racketeering Conspiracy, Murder, Murder Conspiracy and FraudRead the Press Release
A superseding indictment and criminal complaint were unsealed today in federal court in Brooklyn charging 11 members of the 5-9 Brims, a violent set of the Bloods street gang, with crimes related to their participation in a criminal enterprise that made money through narcotics trafficking and financial scamming, and maintained its power through acts of violence, including murder. The arraignments and initial appearances of six defendants arrested today are scheduled for this afternoon before United States Magistrate Judge Vera M. Scanlon.
Richard P. Donoghue, 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), John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.
“The 5-9 Brims is a violent criminal organization that has terrorized residents of Brooklyn and Queens by committing brutal acts of violence in public places, trafficking narcotics on the streets and defrauding victims through financial schemes,” stated United States Attorney Donoghue. “This Office is working closely with our federal and local partners to dismantle criminal street gangs and prosecute their members to the fullest extent of the law.” Mr. Donoghue thanked Homeland Security Investigations, New York, and the New York City Department of Investigation for their work on the case.
“These violent street gangs simply want to make money with as little effort as possible, which is why they’re venturing into unique criminal territory for gangs such as credit card fraud while maintaining their tried and true drug trafficking and murder activity,” stated FBI Assistant Director-in-Charge Sweeney. “The work our FBI New York Metro Safe Streets Task Force is doing is extremely important to the communities where these gangs are terrorizing people. Those people don’t deserve to fear bullets flying by their homes while they sleep, or seeing people killed in the streets. They deserve peaceful neighborhoods and safe places to live.”
“The members of the 5-9 Brims are alleged to have engaged in a host of illegal activity including acts of violence and murder,” stated ATF Special Agent-in-Charge DeVito. “Thanks to great coordination and leveraging of resources with our local, state and federal partners these individuals will be brought to justice. I would like to thank the United States Attorney’s Office for their diligent work in prosecuting this case.
“Today’s takedown highlights our relentless work in stopping the violence carried out by large, established gangs and their ruthless offshoots. I commend our detectives, and federal partners, for their sustained focus on this case until all the major defendants could be arrested,” stated NYPD Commissioner Shea.
According to the indictment and other court filings, the 5-9 Brims is a set of the Bloods street gang that operates in Brooklyn, Queens, Manhattan, the Bronx and elsewhere. Gang members have committed acts of violence, including murder, robbery and assault, and engaged in drug-trafficking and fraud. Between January 2012 and December 2019, the defendants committed crimes to further the interests of the gang, including earning money for the gang’s members, and enhancing the gang’s position with respect to rival criminal organizations.
During the charged period, the 5-9 Brims were feuding with a rival faction of the 5-9 Brims, known as the “Real Ryte,” whose members also operated in Brooklyn. The feud led to a series of violent confrontations and, as alleged, during this period several members of the 5-9 Brims conspired to murder members of Real Ryte. Defendant Marvin Pippins, a 5-9 Brims member, allegedly shot and killed Sean Peart, a Real Ryte member, on December 19, 2015 in broad daylight while the victim was sitting in his car in Bedford Stuyvesant, Brooklyn.
On August 15, 2018, members of the 5-9 Brims carried out a violent assault against a bartender at Angels night club in Flushing, Queens, who had not shown proper respect for another member of the gang. Defendant Yonette Respass, who was serving a sentence in a federal prison at the time, commissioned her younger female members, referred to as “drops,” to “pop that bottle” on the bartenders, stating “I want hands put on them. I don’t even want no talking.” That night, Defendants Jeffrey Bush, Louis Love, Rodolfo Zambrano and three of Respass’s “drops” met at Angels where they lured one of their bartender targets across the bar, and, while holding her by the hair, beat her head and threw a bottle at her. Bush recorded the assault on his cell phone, and the video was sent to the gang member on behalf of whom Respass allegedly ordered the attack.
Throughout the period charged in the superseding indictment, members of the gang supplemented their illegal drug business by committing numerous financial frauds, including possession and use of stolen identities, fraudulent checks and access devices such as credit cards and bank account information.
Defendants Jeffrey Bush, Tyshawn Atkins, Louis Love, Marvin Pippins, James Sease, Montel Shuemake and Rodolfo Zambrano are charged in the superseding indictment with racketeering conspiracy for agreeing to commit crimes on behalf of the gang, including drug trafficking, identification and access device fraud, as well as multiple acts involving murder. Defendant Marvin Pippins is also charged with murder in-aid-of racketeering in a retaliatory act of gang-related violence for killing Sean Peart; Marvin Pippins, James Sease and Montel Shuemake are charged with conspiring to murder additional members of a rival faction of the gang. Defendants Jeffrey Bush, Louis Love, Rondolfo Zambrano, India Lane and Yonette Respass are charged with conspiracy to commit assault in-aid-of racketeering. A number of the defendants are variously charged with narcotics and firearms-related offenses. Pippins is a fugitive.
Two additional 5-9 Brims members, Jose Battle and Brian Jackson, were arrested on a complaint charging them with financial fraud.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Jennifer M. Sasso, Drew G. Rolle and Nicholas J. Moscow are in charge of the prosecution.
The Defendants:
JEFFREY BUSH (also known as “Chuck” and “Chuck Taylor”)
Age: 35
Brooklyn, New YorkTYSHAWN ATKINS (also known as “Breeze”)
Age: 25
Brooklyn, New YorkINDIA LANE (also known as “Gorgeous Gangsta”)
Age: 29
Brooklyn, New YorkLOUIS LOVE (also known as “Scoobz” and “Scoobie”)
Age: 29
Brooklyn, New YorkMARVIN PIPPINS (also known as “Mukk”)
Age: 29
Brooklyn, New YorkJAMES SEASE (also known as “Chop Whop”)
Age: 32
Brooklyn, New YorkMONTEL SHUEMAKE (also known as “Buzzo”)
Age: 29
Brooklyn, New YorkRODOLFO ZAMBRANO (also known as “Latinn Dinero”)
Age: 26
Brooklyn, New YorkJOSE BATTLE (also known as “Strizzy”)
Age: 25
Brooklyn, New YorkBRIAN JACKSON (also known as “Grape” and “Maxx Millii”)
Age: 29
Brooklyn, New YorkYONETTE RESPASS
Age: 28
Bronx, New YorkE.D.N.Y. Docket No. 19-CR-378 (S-1)(DLI)
Chinese Telecommunications Conglomerate Huawei and Subsidiaries Charged in Racketeering Conspiracy and Conspiracy to Steal Trade SecretsRead the Press Release
WASHINGTON – A superseding indictment was returned yesterday in federal court in Brooklyn, New York, charging Huawei Technologies Co., Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, and two U.S. subsidiaries with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO).
The 16-count superseding indictment also adds a charge of conspiracy to steal trade secrets stemming from the China-based company’s alleged long-running practice of using fraud and deception to misappropriate sophisticated technology from U.S. counterparts.
The indicted defendants include Huawei and four official and unofficial subsidiaries — Huawei Device Co., Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies, Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).[1] The new superseding indictment also contains the charges from the prior superseding indictment, which was unsealed in January 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; John C. Demers, Assistant Attorney General of the Justice Department’s National Security Division; and Christopher A. Wray, Director, Federal Bureau of Investigation (FBI), announced the charges.
Mr. Donoghue thanked the FBI, Homeland Security Investigations (HSI), U.S. Department of Commerce Office of Export Enforcement (OEE) and the Defense Criminal Investigative Service (DCIS) agents who are investigating this case for their tireless work and dedication.
As revealed by the government’s independent investigation and review of court filings, the new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business. The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology. Huawei, Huawei USA and Futurewei agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States.
The means and methods of the alleged misappropriation included entering into confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants. As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded.
Huawei’s efforts to steal trade secrets and other sophisticated U.S. technology were successful. Through the methods of deception described above, the defendants obtained nonpublic intellectual property relating to internet router source code, cellular antenna technology and robotics. As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage.
When confronted with evidence of wrongdoing, the defendants allegedly made repeated misstatements to U.S. officials, including FBI agents and representatives from the U.S. House Permanent Select Committee on Intelligence, regarding their efforts to misappropriate trade secrets. Similarly, the defendants engaged in obstructive conduct to minimize litigation risk and the potential for criminal investigations, including the very investigation that led to this prosecution.
The superseding indictment also includes new allegations about Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement. The defendants’ activities, which included arranging for shipment of Huawei goods and services to end users in sanctioned countries, were typically conducted through local affiliates in the sanctioned countries. Reflecting the inherent sensitivity of conducting business in jurisdictions subject to sanctions, internal Huawei documents allegedly referred to such jurisdictions with code names. For example, the code “A2” referred to Iran, and “A9” referred to North Korea.
Huawei employees also allegedly lied about Huawei’s relationship to Skycom, falsely asserting it was not a subsidiary of Huawei. The company further claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran. In fact, the indictment alleges Skycom was Huawei’s unofficial subsidiary that, among other services, assisted the Government of Iran in performing domestic surveillance, including during the demonstrations in Tehran in 2009.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The government’s investigation is ongoing. Individuals with knowledge of misconduct by Huawei, its subsidiaries, employees or agents should contact the FBI’s New York Field Office at 1-800-CALL-FBI.
The investigation is being jointly conducted by the FBI’s New York Field Office, HSI’s New York Field Office, OEE’s New York Field Office and DCIS’s Southwest and Northeast Field Offices. Agents from the FBI, HSI and OEE offices in Dallas provided significant support and assistance. The government’s case is being handled by the U.S. Attorney’s Office for the Eastern District of New York, the Justice Department Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and the Justice Department National Security Division’s Counterintelligence and Export Control Section (CES).
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler and Sarah Evans, MLARS Trial Attorneys Laura Billings and Christian Nauvel and CES Trial Attorneys Thea D. R. Kendler and David Lim are in charge of the prosecution, with assistance provided by Assistant U.S. Attorney Brendan G. King of the Civil Division of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorneys Margaret O’Malley and John Riesenberg of DOJ’s Office of International Affairs. Additional Criminal Division and National Security Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Northern District of Texas, the Northern District of Illinois, the Eastern District of Texas, the Western District of Washington and the Northern District of California have provided valuable assistance with various aspects of this investigation.
The Defendants:
Huawei Technologies Co. Ltd.
Huawei Device Co., Ltd.
Huawei Device USA Inc.
Futurewei Technologies, Inc.
Skycom Tech Co. Ltd.
E.D.N.Y. Docket No. 18-CR-457 (AMD)
[1] The superseding indictment charges other individuals who have not yet been apprehended and whose names will not be publicly released at this time.
Russian Citizen Pleads Guilty to Cyber Tax Fraud Scheme That Resulted in More Than $1.5 Million in Losses to Department of the TreasuryRead the Press Release
Earlier today, in federal court in Brooklyn, Anton P. Bogdanov, a citizen of Russia, pleaded guilty before United States Magistrate Judge Vera M. Scanlon to wire fraud conspiracy and computer intrusion in connection with a scheme in which he and others used stolen personal information to file federal tax returns and fraudulently obtain more than $1.5 million in tax refunds from the Department of the Treasury. When sentenced, Bogdanov faces up to 20 years in prison.
Richard P. Donoghue, 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 Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the guilty plea.
“Cyber criminals operating from halfway around the world might think they are beyond the reach of U.S. law enforcement, but they are mistaken – just ask Anton P. Bogdanov. This Office and our law enforcement partners will use all necessary resources to combat sophisticated computer hacking and identity theft,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation the New York County District Attorney’s Office for its assistance with the case.
“Combating cyber-attacks is one of IRS-CI’s top priorities especially when our taxpayers are victimized,” stated IRS-CI Special Agent-in-Charge Larsen. “Mr. Bogdanov used sophisticated means to enrich himself, and we will always be at the ready to tackle these global fraud schemes.”
According to court filings, between June 2014 and November 2016, Bogdanov and his co-conspirators misappropriated personally identifiable information (“PII”), such as Social Security numbers and dates of birth of identity theft victims by gaining unauthorized access to the computer systems of private tax preparation firms in the United States. He and his co-conspirators then changed the tax return information so that the refunds were paid to prepaid debit cards that they controlled. Bogdanov and his co-conspirators were able to gain access to these systems by exploiting a vulnerability in a remote access program used by the tax preparation firms’ employees to log in from home and while traveling. Bogdanov also used misappropriated PII to obtain prior tax filings of victims from the IRS Transcript System website, and filed new tax returns, purportedly on behalf of the victims, so that refunds were paid to prepaid debit cards he and his co-conspirators controlled. The debit cards were cashed out in the United States, and a percentage of the proceeds was wired to Bogdanov in Russia.
Bogdanov was arrested in Thailand in November 2018 and extradited to the United States in March 2019.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Michael T. Keilty and Jonathan E. Algor are in charge of the prosecution.
The Defendant:
ANTON P. BOGDANOV (also known as “Kusok”)
Age: 34
RussiaE.D.N.Y. Docket No. 19-CR-197 (MKB)
Reconsidering the Green Light That Stops Law EnforcementRead the Press Release
By: James P. Kennedy, Jr., U.S. Attorney for the Western District of New York
Geoffrey S. Berman, U.S. Attorney for the Southern District of New York
Richard P. Donoghue, U.S. Attorney for the Eastern District of New York
Grant C. Jaquith, U.S. Attorney for the Northern District of New York
While the New York State Green Light Law provides undocumented aliens the opportunity to obtain New York State Driver Licenses, a less heralded – though perhaps more impactful – provision of the statute prevents the New York State Department of Motor Vehicles (DMV) from sharing information with any agency that enforces immigration law. Unfortunately, this provision has a much broader adverse effect on law enforcement and public safety.
The United States Department of Homeland Security (DHS) is responsible for protecting us from terrorism, securing our borders while facilitating lawful travel and trade, and combating a host of crimes that threaten our safety and security. The Green Light Law impedes Homeland Security’s ability to conduct active criminal investigations involving citizens and non-citizens who are lawfully present in the United States, not just those who are undocumented. On a daily basis, Homeland Security agents and officers – including sworn law enforcement officers who work for Homeland Security Investigations (HSI), Customs and Border Protection, the U.S. Border Patrol and Enforcement and Removal
Operations (ERO) – use Department of Motor Vehicles information to assist them in stopping transnational criminal organizations, cybercrime, and offenses involving drug trafficking and money laundering; murder, sexual assault and other crimes of violence; racketeering and extortion; the illegal use and possession of firearms; economic espionage, telemarketing fraud and elder fraud; human trafficking; and child exploitation, as well as illegal immigration.
Like other federal, state, local, and tribal law enforcement officers, DHS agents seek New York State DMV information for a variety of purposes, including: (1) to obtain identification, address and vehicle registration information for individuals committing crimes; (2) to identify and apprehend dangerous defendants and fugitives wanted by state or federal authorities; (3) to conduct surveillance of individuals suspected or known to be engaged in the commission of crimes; (4) to establish the probable cause necessary to secure search and arrest warrants; (5) to identify crime victims and potential crime victims; (6) to identify the proceeds of crime to increase the amount of restitution recoverable for crime victims; (7) to make informed determinations regarding whether, when, where, and how to stop a vehicle, to minimize the risk to occupants, officers and others; and (8) to assist in determining whether to grant individuals presenting themselves at ports of entry admission into the United States.
The disturbing truth is that under the newly enacted statute, the Customs and Border Protection Officers working today at New York’s 13 ports of entry – which include both the busiest port on the entire northern border of the United States (the longest land border in the world), and the busiest international air passenger gateway into North America – are unable even to check the registration or the driver’s license status of individuals presenting themselves for admission into our country. Border Patrol Agents, who secure the border between the ports of entry, likewise can no longer check vehicle or driver’s license information. Forcing officers who serve as our nation’s frontline defense against dangerous criminals entering the country to make these important determinations in the dark dramatically diminishes the safety of all. Ensuring that HSI Agents and ERO officers must blindly interact with people who may be terrorists or other violent criminals, drug dealers, human traffickers, or child predators likewise poses a grave risk to the safety of the officer, the person and the public. In most instances, there simply is no time to pause the situation to obtain a court order or judicial warrant.
Prohibiting basic information sharing between New York State and federal law enforcement agencies means that more criminals will enter and roam freely in our state and nation; undermines the cooperative relationships between federal, state, local and tribal law enforcement; thwarts and curtails investigations into serious crimes; and jeopardizes the safety of all of the inhabitants of our great country. Our citizens, lawful permanent and temporary residents, visitors and undocumented immigrants deserve better, and so do those who serve and protect them. Restoring collaboration and information sharing furthers our effort to secure justice for all, preserve public safety, protect individual rights, and promote due process, bringing us ever closer to a sanctuary built on the rule of law and fairness for everyone.
New York's U.S. Attorneys: Reconsidering the Green Light that Stops Law EnforcementRead the Press Release
By: Grant C. Jaquith, U.S. Attorney for the Northern District of New York
Geoffrey S. Berman, U.S. Attorney for the Southern District of New York
Richard P. Donoghue, U.S. Attorney for the Eastern District of New York
James P. Kennedy, Jr., U.S. Attorney for the Western District of New York
While the New York State Green Light Law provides undocumented aliens the opportunity to obtain New York State Driver Licenses, a less heralded – though perhaps more impactful – provision of the statute prevents the New York State Department of Motor Vehicles (DMV) from sharing information with any agency that enforces immigration law. Unfortunately, this provision has a much broader adverse effect on law enforcement and public safety.
The United States Department of Homeland Security (DHS) is responsible for protecting us from terrorism, securing our borders while facilitating lawful travel and trade, and combating a host of crimes that threaten our safety and security. The Green Light Law impedes Homeland Security’s ability to conduct active criminal investigations involving citizens and non-citizens who are lawfully present in the United States, not just those who are undocumented. On a daily basis, Homeland Security agents and officers – including sworn law enforcement officers who work for Homeland Security Investigations (HSI), Customs and Border Protection, the U.S. Border Patrol, and Enforcement and Removal Operations (ERO) – use Department of Motor Vehicles information to assist them in stopping transnational criminal organizations, cybercrime, and offenses involving drug trafficking and money laundering; murder, sexual assault, and other crimes of violence; racketeering and extortion; the illegal use and possession of firearms; economic espionage, telemarketing fraud, and elder fraud; human trafficking; and child exploitation, as well as illegal immigration.
Like other federal, state, local, and tribal law enforcement officers, DHS agents seek New York State DMV information for a variety of purposes, including: (1) to obtain identification, address, and vehicle registration information for individuals committing crimes; (2) to identify and apprehend dangerous defendants and fugitives wanted by state or federal authorities; (3) to conduct surveillance of individuals suspected or known to be engaged in the commission of crimes; (4) to establish the probable cause necessary to secure search and arrest warrants; (5) to identify crime victims and potential crime victims; (6) to identify the proceeds of crime to increase the amount of restitution recoverable for crime victims; (7) to make informed determinations regarding whether, when, where, and how to stop a vehicle, to minimize the risk to occupants, officers, and others; and (8) to assist in determining whether to grant individuals presenting themselves at ports of entry admission into the United States.
The disturbing truth is that under the newly enacted statute, the Customs and Border Protection Officers working today at New York’s 13 ports of entry – which include both the busiest port on the entire northern border of the United States (the longest land border in the world), and the busiest international air passenger gateway into North America – are unable even to check the registration or the driver’s license status of individuals presenting themselves for admission into our country. Border Patrol Agents, who secure the border between the ports of entry, likewise can no longer check vehicle or driver’s license information. Forcing officers who serve as our nation’s frontline defense against dangerous criminals entering the country to make these important determinations in the dark dramatically diminishes the safety of all. Ensuring that HSI Agents and ERO officers must blindly interact with people who may be terrorists or other violent criminals, drug dealers, human traffickers, or child predators likewise poses a grave risk to the safety of the officer, the person, and the public. In most instances, there simply is no time to pause the situation to obtain a court order, judicial warrant, or subpoena.
Prohibiting basic information sharing between New York State and federal law enforcement agencies means that more criminals will enter and roam freely in our state and nation; undermines the cooperative relationships between federal, state, local, and tribal law enforcement; thwarts and curtails investigations into serious crimes; and jeopardizes the safety of all of the inhabitants of our great country. Our citizens, lawful permanent and temporary residents, visitors, and undocumented immigrants deserve better, and so do those who serve and protect them. Restoring collaboration and information sharing furthers our effort to secure justice for all, preserve public safety, protect individual rights, and promote due process, bringing us ever closer to a sanctuary built on the rule of law and fairness for everyone.
Indictment Unsealed in Brooklyn Federal Court Charging an Associate of a Sinaloa Cartel Leader with Drug-Trafficking Conspiracy and Firearms CrimesRead the Press Release
A superseding indictment was unsealed today in federal court in Brooklyn charging Ismael Quintero Arellanes with participating in an international conspiracy to manufacture and distribute heroin, cocaine, methamphetamine and marijuana and unlawful use of firearms as part of the Rafael Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel. The superseding indictment was returned under seal by a grand jury in July 2018. Quintero Arellanes was captured in Culiacan, Sinaloa, Mexico on January 29, 2020. The United States intends to seek his extradition to face charges in the Eastern District of New York.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the charges.
“As alleged in the superseding indictment, the defendant conspired with members of the Caro Quintero drug trafficking organization to flood the United States with large quantities of heroin, methamphetamine, cocaine and marijuana,” stated United States Attorney Donoghue. “This Office, together with our partners on the New York Strike Force, will relentlessly pursue the leadership of violent drug cartels and their associates until they are brought to justice.”
“This indictment and arrest are indicative that the walls are closing in on members of the Sinaloa Cartel, like Ismael Quintero Arellanes and DEA’s arch nemesis Rafael Caro Quintero,” stated DEA Special Agent-in-Charge Donovan. “Caro-Quintero remains at large, however we are working hand in hand with our international, local, state and federal law enforcement partners to disrupt the Sinaloa Cartel’s trafficking operations by seizing ton-quantities of heroin, fentanyl, marijuana, cocaine and methamphetamine, while focusing on those responsible, including Caro-Quintero.”
According to the superseding indictment, between January 1980 and June 2018, Caro Quintero led a drug trafficking organization responsible for importing into the United States and distributing massive amounts of illegal narcotics, and conspiring to murder persons who posed a threat to his narcotics enterprise. The charged murder conspiracy includes Caro Quintero’s kidnapping and murder of DEA Special Agent Enrique “Kiki” Camarena in Guadalajara, Jalisco, Mexico in February 1985.
As an associate of the Caro Quintero drug trafficking organization, Quintero Arellanes is charged with participating in an international heroin, methamphetamine and cocaine distribution conspiracy from February 2015 through June 2018, and an international marijuana distribution conspiracy from January 1980 through June 2018, as well as using firearms in support of the drug trafficking organization.
The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area. The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Quintero Arellanes faces a mandatory minimum sentence of 20 years’ imprisonment, and up to life imprisonment.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Gina M. Parlovecchio, Michael Robotti and Erin Reid are in charge of the prosecution.
The Defendant:
ISMAEL QUINTERO ARELLANES (also known as “Fierro”)
Age: 49
MexicoE.D.N.Y. Docket No. 15-CR-208 (S-3)(FB)
Long Island Man Pleads Guilty to Racketeering, Including a Murder in RiverheadRead the Press Release
Earlier today, in federal court in Central Islip, Terrill Latney, an associate of the Red Stone Gorilla “set” of the Bloods street gang based in Riverhead, pleaded guilty before United States Magistrate Judge A. Kathleen Tomlinson to racketeering, including conspiring to distribute narcotics and participating in the murder of Thomas Lacolla on November 17, 2015.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“As a result of the outstanding work by our prosecutors, the Federal Bureau of Investigation and the Suffolk County East End Drug Task Force, Latney has been held accountable for his role in a large-scale narcotics distribution operation and a senseless act of violence that took a man’s life,” stated United States Attorney Donoghue. “We hope today’s guilty plea begins to bring a measure of closure to the victim’s family.”
As alleged in the indictment and other court filings, Latney participated in the distribution of large quantities of crack cocaine, cocaine and heroin in the Riverhead area for nearly a decade. On November 17, 2015, Latney assisted members of the Bloods in their attempt to kill a rival gang member. Specifically, Latney drove three Bloods members to a location in Riverhead where they fired at least 39 shots into a vehicle that they erroneously believed was occupied by the rival gang member. In fact, the car was occupied by Lacolla, who was killed in the fusillade.
When sentenced, Latney faces a maximum sentence of life imprisonment.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the 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 Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.
Defendant:
TERRILL LATNEY (also known as “Motis” and “Mo”)
Age: 39
Mastic Beach, New YorkE.D.N.Y. Docket No. 18-CR-606 (S-2) (JS)
Queens Man Indicted on Sexual Exploitation and Child Pornography ChargesRead the Press Release
A 12-count indictment was filed this afternoon in federal court in Brooklyn charging Orlando Lopez with travelling across a state line with intent to commit aggravated sexual abuse of a child, sexual exploitation of a child and possession of child pornography.
Richard P. Donoghue, 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), Melinda Katz, Queens County District Attorney, and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, for years Lopez horribly victimized numerous young children, some of whom we are still endeavoring to identify,” stated United States Attorney Donoghue. “In addition to his unthinkable abuse of these young children – many of them infants – Lopez compounded his atrocities by producing thousands of photos and videos of his crime and we pledge to prosecute him to the fullest extent.” Mr. Donoghue expressed his grateful appreciation to the Queens County District Attorney’s Office for their assistance with the case.
“The conduct alleged here is horrendous. Mr. Lopez allegedly used friendships with his victims' parents as a means to access children he wouldn't generally have contact with, which leads us to believe there are more victims out there. Readers should be stunned into action by an investigation like this,” stated FBI Assistant Director-in-Charge Sweeney. “We are asking anyone who has had any contact with Mr. Lopez at any point to call 1-800-CALL-FBI. Please take a moment to make this call. The ages and numbers of victims are another warning that we must do more as a society to protect our children.”
“The defendant charged in this Federal indictment is alleged to have violated numerous children for years – and additionally recorded and took still photos of these alleged vile acts,” stated Queens District Attorney Katz. “When I was a member of the Assembly, I authored legislation to hold pedophiles accountable for sexually abusing children. Child predators will be held accountable and prosecuted as we work with our law enforcement partners to end the abuse of innocent children.”
“This defendant is accused of preying on the most vulnerable members of our communities – our children. Together with the Unites States Attorney’s office, the FBI and Queens District Attorney’s office, our NYPD investigators worked relentlessly to bring justice for victims of sexual abuse and exploitation,” stated NYPD Commissioner Shea.
According to the indictment and other court filings, for over a decade, Lopez repeatedly sexually abused more than a dozen children, many of whom lived near his Queens residence. Between approximately May 2010 and June 2018, Lopez produced thousands of explicit photos and videos of one female child who was two years-old when the abuse began. Law enforcement also recovered thousands of other photos and videos from Lopez’s residence depicting him engaging in sexual activity with children. In July 2018, Lopez transported one seven-year-old girl across state lines with the intent to sexually abuse her. In order to gain access to his victims, Lopez attempted to befriend their parents.
The government’s investigation is ongoing. Anyone with information about sexual exploitation by Lopez is asked to contact the FBI at 1-800-CALL-FBI.
If convicted, Lopez faces a mandatory minimum sentence of 30 years and up to life in prison for the transportation charge, and a minimum of 15 years and up to 30 years in prison on each of the child exploitation charges.
The charges in the indictment 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, 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 prosecuted by Assistant United States Attorney Tanya Hajjar.
The Defendant:
ORLANDO LOPEZ
Age: 64
Jamaica, QueensE.D.N.Y. Criminal Docket No. 20-52 (EK)
Former Manager of Long Island Catering Hall Pleads Guilty to Forced Labor and Forced Labor ConspiracyRead the Press Release
Earlier today, in federal court in Central Islip, Roberto Villanueva pleaded guilty before United States Magistrate Judge Anne Y. Shields to forced labor conspiracy and forced labor of employees at the Thatched Cottage, a former catering and wedding venue in Centerport, New York. When sentenced, Villanueva faces up to 20 years in prison, as well as restitution and a fine of up to $250,000 on each count.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York (DOL-OIG); and Patricia A. Menges, Director, United States Citizenship and Immigration Services, New York Asylum Office (USCIS), announced the guilty plea.
Villanueva formerly worked as a recruiter and manager for the Thatched Cottage. At today’s plea proceeding, Villanueva admitted that workers were brought from the Philippines to the United States on H-2B visas that expired shortly after their arrival. Once their H-2B visas expired, Villanueva coached workers how to apply for student visas by fraudulently representing that they intended to attend school full-time and had sufficient resources to support themselves during school. Villanueva admitted that at times he deposited funds in the workers’ bank accounts to give the appearance of ample resources, and then withdrew the funds once the student visas were approved. When workers objected to performing certain jobs, working consecutive shifts or not being paid promptly, Villanueva threatened to report them to immigration authorities. Villanueva admitted that his actions were in concert and agreement with Ralph Colamussi, the former owner of Thatched Cottage. Colamussi pleaded guilty in September 2018 to forced labor of employees and is awaiting sentencing.
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, with the assistance of Assistant United States Attorney Madeline O’Connor from the Office’s Long Island Civil Division.
The Defendant:
ROBERTO VILLANUEVA
Age: 64
Huntington, New YorkE.D.N.Y. Criminal Docket No. 17-0592 (DRH)
Long Island Man Convicted of Home Invasion Armed Robbery Conspiracies, Unlawful Use of Firearms and Firearms-Related MurderRead the Press Release
A federal jury in Central Islip returned a guilty verdict today against Tyrone L. Robinson on seven counts of Hobbs Act robbery conspiracy, seven counts of robbery and attempted robbery of drugs and drug proceeds, seven counts of unlawful use, brandishing and discharge of firearm, four counts of felon in possession of firearms and ammunition and one count of firearms-related murder. The verdict followed a four-week trial before United States District Judge Sandra J. Feuerstein. When sentenced, Robinson faces a mandatory minimum sentence of 64 years in prison, and a maximum of life imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and John B. Devito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), announced the verdict.
The evidence at trial established that between August 2015 and May 2016, Robinson and his co-conspirators committed multiple armed home invasion robberies of drug dealers in Nassau and Suffolk counties. The victims were pistol-whipped, often times zip tied, threatened with death and shot. On March 25, 2016, Robinson committed an armed home invasion in Lake Grove and threatened to kill an eight-year-old girl if she did not find money for him. The following night, when Robinson returned to the scene of the Lake Grove home invasion, he dropped his cell phone and it was recovered by police responding to a call from neighbors. The cellphone was logged into Robinson’s online account which he had used to Google search for directions to his targeted locations and for news reports about the crimes he had committed. For example, after a violent robbery attack in Hempstead, Robinson Google searched, “man beaten in Hempstead.” During a home invasion robbery by Robinson on May 3, 2016 in Freeport, the victim Johnathan Isaac was fatally shot in the back. Five days before the murder, Robinson purchased the floor plans for the location of the murder using his Gmail account and, shortly after Isaac’s murder and the shooting of another victim in Freeport, Robinson Google searched “two shot Freeport” for news reports about the crimes.
“Over the course of two years, Robinson violently preyed upon multiple victims with firearms and his fists, inflicting permanent injuries and death to satisfy his greed,” stated United States Attorney Donoghue. “With today’s verdict, Robinson will now face serious punishment for terrorizing communities on Long Island.”
“Today’s verdict signals an end to a reign of terror that included brazen acts of violence and reckless disregard for human life,” stated ATF Special Agent-in-Charge Devito. “Tyrone L. Robinson is an example of the type of violent individual that presents a clear and present danger to the law abiding people in the community. ATF and our partners stand committed to identifying, arresting and prosecuting individuals like Robinson to ensure that our communities will not be further damaged by this violent scourge. I would like to thank our ATF Long Island Field Office and the United States Attorney’s Office for the Eastern District of New York for their work on this case.”
Mr. Donoghue and Special Agent-in-Charge Devito expressed their grateful appreciation to the Nassau and Suffolk Police Departments and the New York State Department of Corrections and Community Supervision for their assistance with the investigation and prosecution.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. 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 Long Island Criminal Division. Assistant United States Attorneys Allen Bode, Monica Castro and Anthony Bagnuola are in charge of the prosecution.
The Defendant:
TYRONE L. ROBINSON
Age: 34
Bay Shore, New YorkE.D.N.Y. Criminal Docket No. 16-545 (S-4)(SJF)
Member of a Violent Drug Crew Pleads Guilty to Racketeering Conspiracy Including Two Murders in BrooklynRead the Press Release
Earlier today, in federal court in Brooklyn, Maurice Brown, a member of the “Bushwick Crew,” a drug-trafficking enterprise based in Brooklyn and Queens, pleaded guilty before United States District Judge Kiyo A. Matsumoto to participating in a racketeering conspiracy and murdering Gary Lopez and Rudy Superville on March 5, 2013 at an apartment in Brooklyn used by one of crew’s heroin distributors. Brown is the last of seven defendants to plead guilty to charges in the third superseding indictment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty pleas.
“As a result of the outstanding work by the Federal Bureau of Investigation, the New York City Police Department and our Office’s prosecutors, seven members of this gang have been brought to justice for the wanton violence they carried out in furtherance of their drug trafficking enterprise,” stated United States Attorney Donoghue. “We hope this prosecution brings a measure of closure for the victims’ families.”
As detailed in the indictment and other court filings, the Bushwick Crew was a large-scale heroin trafficking organization with connections to Mexican drug cartels. Various members of the crew armed themselves to escort drug traffickers, forcibly collected drug debts and committed murders and other acts of violence against anyone who interfered with the crew’s operations or offended its members.
Previously, Luis Lopez and Peter Vasquez pleaded guilty to racketeering conspiracy for their roles in the murders of Gary Lopez and Superville; Tyquan Griem pleaded guilty to racketeering conspiracy and the murder of Kelvin Johnson at a nightclub in Queens; Jaquan Cooper pleaded guilty to brandishing a firearm during a robbery of a barbershop in Queens; Lance Goodwin pleaded guilty to causing the death of Donte Williams by discharging a firearm; and Norman Marrero pleaded guilty to brandishing a firearm during an extortion. The previous guilty plea proceedings were held before United States District Judge Raymond J. Dearie.
When sentenced, each defendant faces a maximum sentence of life imprisonment.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the 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 Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit.
Defendant Who Pleaded Guilty Today:
MAURICE BROWN (also known as “Spaz”)
Age: 28
Brooklyn, New YorkDefendants Who Have Previously Pleaded Guilty:
JAQUAN COOPER (also known as “J-Gunna”)
Age: 31
Brooklyn, New YorkNORMAN MARRERO (also known as “Tito”)
Age: 36
Harrisburg, PennsylvaniaLANCE GOODWIN (also known as “Ty Mucka”)
Age: 30
Brooklyn, New YorkTYQUAN GRIEM (also known as “Ty Goon”)
Age: 29
Brooklyn, New YorkLUIS LOPEZ (also known as “Lou”)
Age: 37
Brooklyn, New YorkPETER VASQUEZ (also known as “Pete”)
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-390 (S-3) (RJD)
Staten Island Man Sentenced to Nine Years’ Imprisonment for International Arms Trafficking and Money LaunderingRead the Press Release
Earlier today, in federal court in Brooklyn, Albert Veliu was sentenced by United States District Judge Kiyo A. Matsumoto to nine years’ imprisonment for his role in a money laundering scheme that resulted in the defendant’s purchase and sale of an anti-tank rocket launcher and AK-47s rifles in Kosovo. Veliu pleaded guilty in February 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the sentence.
“The arrest, conviction and today’s sentencing of Veliu mark an important victory for law enforcement in disrupting an international money laundering and arms trafficking network ready, willing and able to provide a pipeline of lethal weaponry to purported drug cartels in Mexico,” stated United States Attorney Donoghue. “Through our partnerships with law enforcement agencies around the world, we will continue to target and dismantle international criminal organizations.” Mr. Donoghue thanked the DEA New York Division, DEA Special Operations Division, DEA Austria Country Office, DEA Croatia Country Office, Internal Revenue Service Criminal Investigation, the New York City Department of Investigation and the Kosovo Police Force for their outstanding cooperation and assistance.
“This sentencing brings to light the multitude of offenses often linked with money laundering including extortion, arms and drug trafficking,” stated DEA Special Agent-in-Charge Donovan. “The casualties of these crimes cross all borders and I applaud the law enforcement agencies involved in the arrest and prosecution of Albert Veliu for their collaboration and partnership.”
“Veliu’s illicit business spanned the globe. By ‘cleaning’ drug money and buying and selling high powered weapons, he was able to create a dangerous and lucrative criminal enterprise,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI’s continued efforts with the DEA and other law enforcement partners allows for the arrest of those who threaten the safety and security of the public both domestically and abroad.”
“This case illustrates the great police work done by the Strike Force, putting another suspect behind bars,” stated NYSP Superintendent Corlett. “The investigation spanned continents, involved rockets, high-powered firearms and a suspect who was prepared to provide deadly, dangerous weapons to criminals. With this sentencing, law enforcement has once again put an end to a violent enterprise, and made our streets safer.”
In October 2017, Veliu and his co-conspirators met with a DEA confidential source (CS), who represented himself to be a narcotics trafficker in need of laundering his illicit drug proceeds through a shell corporation. Veliu agreed to assist the CS in exchange for a commission. Veliu then orchestrated the money laundering scheme by, among other things, exchanging the cash for purportedly “clean” checks made out to the shell corporation. The checks were supported by fraudulent paperwork, including bogus invoices and receipts. Throughout the course of the investigation, the CS gave Veliu approximately $800,000 in purported drug proceeds to be laundered.
Later in the investigation, Veliu informed another DEA confidential source (CS-2) that he had access to firearms in Kosovo and was willing to broker a sale. Veliu and CS-2 agreed that Veliu would purchase and then sell weapons he believed were bound for drug cartels operating in Mexico. After accepting payment for the weapons, Veliu traveled to Kosovo to deliver the firearms to an individual he believed to be a Kosovo-based associate of CS-2. Therafter, on two separate occasions, Veliu and his co-conspirators provided individuals with 14 AK-47s and an M80 Zolja Anti-tank Rocket Launcher equipped with a 64mm rocket. Subsequent search warrants executed by Kosovo police netted additional weapons, ammunition and over 60,000 euros.
The arrest in this case was the result of a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Strike Force, comprising agents and officers of the DEA, New York City Police Department, Homeland Security Investigations, New York State Police, U.S. Internal Revenue Service Criminal Investigation, U.S. Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Michael T. Keilty is in charge of the prosecution.
The Defendant:
ALBERT VELIU
Age: 37
Staten Island, New YorkUnited States Files Civil Complaints Seeking Temporary Restraining Orders Against Telecom Carriers Facilitating Many Millions of Fraudulent RobocallsRead the Press Release
WASHINGTON – The United States filed two civil complaints today seeking temporary restraining orders in landmark cases against five companies and three individuals allegedly responsible for carrying many millions of fraudulent robocalls from foreign call centers to individuals in the United States, the Department of Justice announced. The complaints allege that the companies were warned numerous times that they were carrying fraudulent robocalls—including government and business imposter calls—but they continued to facilitate the delivery of these calls. The calls, most of which originated in India, led to substantial financial losses suffered by elderly and vulnerable victims in the United States.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Jeffrey A. Rosen, Deputy Attorney General, Jody H. Hunt, Assistant Attorney General of the Justice Department’s Civil Division, Gary Barksdale, Chief Postal Inspector, United States Postal Inspection Service (USPIS), and Gail S. Ennis, Inspector General, Social Security Administration (SSA), made the announcement.
The two cases announced today contain similar allegations. The defendants in one case are Ecommerce National, LLC d/b/a TollFreeDeals.com, SIP Retail d/b/a sipretail.com, and their owner/operators Nicholas Palumbo and Natasha Palumbo of Scottsdale, Arizona. The defendants in the other case include Global Voicecom, Inc., Global Telecommunication Services Inc., KAT Telecom, Inc., aka IP Dish, and their principal Jon Kahen, of Great Neck, New York. In each case, the Department of Justice has sought an order immediately halting the defendants’ transmission of allegedly unlawful robocall traffic. A federal court has entered a temporary restraining order against the Global Voicecom defendants.
In the cases announced today, the United States alleges that the defendants operate voice over internet protocol (VoIP) carriers, which use a broadband internet connection rather than traditional phone lines to carry telephone calls. Numerous foreign-based call centers and VoIP carriers are alleged to have used the defendants’ VoIP carrier services to pass fraudulent robocalls to victims in the United States. The complaints specifically allege the defendants served as “gateway carriers,” making them the entry point for foreign-initiated calls into the U.S. telecommunications system and that the defendants carried many millions of robocalls. For example, the complaint against the owners/operators of Ecommerce National d/b/a TollFreeDeals.com alleges that the defendants carried 720 million calls during a sample 23-day period, and that more than 425 million of those calls lasted less than one second because the calls did not connect or the recipients immediately hung up, indicating that they were robocalls. The complaint further alleges that many of the 720 million calls were fraudulent and used “spoofed,” or faked, caller ID numbers. The calls facilitated by the defendants falsely threatened victims with a variety of catastrophic government actions, including termination of Social Security benefits, imminent arrest for alleged tax fraud and deportation for supposed failure to fill out immigration forms correctly.
“We are using all available tools and resources to stop foreign call center scammers—and for the first time their U.S.-based enablers—from conning elderly and vulnerable victims in New York and throughout the United States,” stated United States Attorney Donoghue. “Protecting individuals from schemes that result in catastrophic losses to the victims is a priority of this Office and the Department of Justice.”
“Robocalls are an annoyance to many Americans, and those that are fraudulent and predatory are a serious problem, often causing devastating financial harm to the elderly and vulnerable members of our society,” stated Assistant Attorney General Hunt. “The Department of Justice will pursue to the fullest extent of the law individuals in the United States who knowingly facilitate imposter fraud calls, using both criminal and civil tools where appropriate. And we look forward to working closely with law enforcement colleagues in India and elsewhere around the world to identify those behind these calls so that we can bring them to justice.”
“Anyone who engages in deceptive practices like imposter fraud should know, regardless of where they are, they will not go undetected and will be held accountable,” stated USPS Chief Inspector Barksdale. “We will continue to work alongside the Department of Justice and our other partners to prevent and deter ongoing harm.”
“Today’s events are the culmination of months of hard work, and a critical step in holding these and other companies accountable for being the link between overseas scammers and their victims,” said Gail S. Ennis, Inspector General for the Social Security Administration. “We will continue to pursue those who exploit the U.S. telephone system and allow scammers to deceive consumers using the good name of Social Security. I want to thank the Department of Justice’s Transnational Elder Fraud Strike Force and our law enforcement partners for their support throughout this investigation.”
The government is represented by Assistant U.S. Attorneys Bonni Perlin, Evan Lestelle and Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorneys Ann Entwistle and Bart Dunn of the Civil Division’s Consumer Protection Branch. The SSA’s Office of Inspector General, the USPIS, the Office of Inspector General for Tax Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force provided investigative support. The Federal Trade Commission and the Federal Communications Commission provided pertinent data.
The claims made in the complaints are allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2019, the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep. The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.
The Department of Justice Files Actions to Stop Telecom Carriers Who Facilitated Hundreds of Millions of Fraudulent Robocalls to American ConsumersRead the Press Release
The Department of Justice filed civil actions for temporary restraining orders today in two landmark cases against five companies and three individuals allegedly responsible for carrying hundreds of millions of fraudulent robocalls to American consumers, the Department of Justice announced. The Department of Justice alleges that the companies were warned numerous times that they were carrying fraudulent robocalls — including government- and business-imposter calls — and yet continued to carry those calls and facilitate foreign-based fraud schemes targeting Americans. The calls, most of which originated in India, led to massive financial losses to elderly and vulnerable victims across the nation.
Assistant Attorney General Jody H. Hunt of the Justice Department’s Civil Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Inspector General Gail S. Ennis of the Social Security Administration (SSA) and Chief Postal Inspector Gary Barksdale, made the announcement.
The two cases announced today contain similar allegations. The defendants in one case are Ecommerce National LLC d/b/a TollFreeDeals.com; SIP Retail d/b/a sipretail.com; and their owner/operators, Nicholas Palumbo, 38, and Natasha Palumbo, 33, of Scottsdale, Arizona. The defendants in the other case include Global Voicecom Inc., Global Telecommunication Services Inc., KAT Telecom Inc., aka IP Dish, and their owner/operator, Jon Kahen, 45, of Great Neck, New York. In each case, the Department of Justice sought an order immediately halting the defendants’ transmission of unlawful robocall traffic. A federal court has entered a temporary restraining order against the Global Voicecom defendants.
“Robocalls are an annoyance to many Americans, and those that are fraudulent and predatory are a serious problem, often causing devastating financial harm to the elderly and vulnerable members of our society,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department of Justice will pursue to the fullest extent of the law individuals in the United States who knowingly facilitate imposter fraud calls, using both criminal and civil tools where appropriate. And we look forward to working closely with law enforcement colleagues in India and elsewhere around the world to identify those behind these calls so that we can bring them to justice.”
Americans have experienced a deluge of robocalls over the past several years. Many of the robocalls originate abroad. Recently, foreign fraudsters have used robocalls to impersonate government investigators and to provide Americans with alarming messages, such as: the recipient’s social security number or other personal information has been compromised or otherwise connected to criminal activity; the recipient faces imminent arrest; their assets are being frozen; their bank and credit accounts have suspect activity; their benefits are being stopped; they face imminent deportation; or combinations of these threats. Each of these claims is a lie, designed to scare the call recipient into paying large sums of money. Social Security imposters, IRS imposters, and tech-support schemes (in which callers impersonate legitimate technology companies) have proliferated in part because of the ease with which robocalls can reach millions of potential victims every hour.
In the cases announced today, the United States alleges that the defendants operated voice over internet protocol (VoIP) carriers, which use an internet connection rather than traditional copper phone lines to carry telephone calls. Numerous foreign-based criminal organizations are alleged to have used the defendants’ VoIP carrier services to pass fraudulent government- and business-imposter fraud robocalls to American victims. The complaints filed in the cases specifically allege that defendants served as “gateway carriers,” making them the entry point for foreign-initiated calls into the U.S. telecommunications system. The defendants carried astronomical numbers of robocalls. For example, the complaint against the owners/operators of Ecommerce National d/b/a TollFreeDeals.com alleges that the defendants carried 720 million calls during a sample 23-day period, and that more than 425 million of those calls lasted less than one second, indicating that they were robocalls. The complaint further alleges that many of the 720 million calls were fraudulent and used spoofed (i.e., fake) caller ID numbers. The calls facilitated by the defendants falsely threatened victims with a variety of catastrophic government actions, including termination of social security benefits, imminent arrest for alleged tax fraud and deportation for supposed failure to fill out immigration forms correctly.
According to allegations in both complaints, the defendants ignored repeated red flags and warnings about the fraudulent and unlawful nature of the calls they were carrying.
“We are using all available tools and resources to stop foreign call center scammers — and for the first time their U.S.-based enablers — from conning elderly and vulnerable victims in New York and throughout the United States,” said U.S. Attorney Richard Donoghue. “Protecting individuals from schemes that result in catastrophic losses to the victims is a priority of this Office and the Department of Justice.”
“Today’s events are the culmination of months of hard work, and a critical step in holding these and other companies accountable for being the link between overseas scammers and their victims,” said SSA Inspector General Gail S. Ennis. “We will continue to pursue those who exploit the U.S. telephone system and allow scammers to deceive consumers using the good name of Social Security. I want to thank the Department of Justice’s Transnational Elder Fraud Strike Force and our law enforcement partners for their support throughout this investigation.”
“Anyone who engages in deceptive practices like imposter fraud should know, regardless of where they are, they will not go undetected and will be held accountable,” said Chief Inspector Gary Barksdale. “We will continue to work alongside the Department of Justice and our other partners to prevent and deter ongoing harm.”
Trial Attorneys Ann Entwistle and Bart Dunn of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Bonni Perlin, Evan Lestelle, and Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York represent the United States. The SSA’s Office of Inspector General, the U.S. Postal Inspection Service, the Office of Inspector General for Tax Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations New York El Dorado Task Force, U.S. Secret Service, New York Police Department and U.S. Customs and Border Protection collectively provided investigative support. The Federal Trade Commission and the Federal Communications Commission provided pertinent data.
The claims made in the complaint are mere allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2019, the department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
More information about the department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.