Eastern District of New York
Press releases recorded for this federal judicial district.
Former Massapequa High School Teacher Sentenced to Five Years in Prison for Transporting Child PornographyRead the Press Release
Joseph Zanco, a former Massapequa High School teacher, was sentenced today at the federal courthouse in Central Islip to five years’ imprisonment by United States Circuit Court Judge Joseph F. Bianco for transporting child pornography in interstate and foreign commerce. As part of his sentence, Zanco must serve seven years of supervised release following his imprisonment during which time he must register as a sex offender and may not have unsupervised contact with minors. Zanco pleaded guilty in April 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 sentence.
In April 2018, Zanco began uploading hundreds of images of child pornography to the cloud-based Google Drive storage feature of his Google account. After receiving notification from Google, law enforcement authorities obtained search warrants and recovered child pornography from his Google account. Additional images and videos containing child pornography were recovered from Zanco’s cell phone and laptop computer.
“As a licensed teacher, Zanco had a mandatory obligation to report crimes against children, and today he was punished for doing just the opposite: perpetuating their victimization by his transportation and possession of child pornography,” stated United States Attorney Donoghue. “The protection of children will always be a priority of this Office.”
“Zanco, a man who was entrusted to teach our youth, violated that trust by engaging in the transmission and possession of child pornography,” stated HSI Special Agent-in-Charge Fitzhugh. “We expect our teachers to educate and care for our children and when one violates that position of trust by sharing these alarming depictions, HSI and our law enforcement partners will stop at nothing to put an end to the facilitation and creation of children being victimized. One of HSI’s priorities will continue to be centered around child exploitation investigations to protect our most innocent – our children
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 handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Michael Maffei is in charge of the prosecution.
The Defendant:
JOSEPH M. ZANCO
Age: 45
Massapequa, New YorkE.D.N.Y. Docket No. 18-CR-412 (JFB)
Brooklyn Woman Charged with Federal Hate Crimes for Anti-Semitic Attacks During HanukkahRead the Press Release
A criminal complaint was unsealed yesterday in federal court in Brooklyn charging Tiffany Harris with committing three separate anti-Semitic attacks against Orthodox Jewish women while they were walking on public streets in Brooklyn, New York, during Hanukkah. Harris will make her initial appearance at a later date.
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 charges.
As set forth in the complaint, the first attack occurred on December 27, 2020, at approximately 12:40 a.m., at the corner of Eastern Parkway and Kingston Avenue in Crown Heights. Harris approached a woman who was walking alone and, without warning, slapped her in the face with an open hand. Five minutes later at the corner of President Street and Kingston Avenue, Harris approached a woman who was walking with a group of people – two of whom were visibly Orthodox Jewish – and slapped the victim in the back of her head with an open hand while stating, “F—k the Jews.” Several minutes later at the same intersection, Harris approached a third victim who was walking alongside another visibly Orthodox Jewish woman, and slapped her in the face with an open hand. Harris was arrested by NYPD officers near the scene of the assaults, and was positively identified by the three victims.
“As alleged in the criminal complaint, the defendant attacked three women solely because they were Jewish, striking not only at the innocent victims, but also at our country’s founding principles of tolerance and respect for civil rights,” stated United States Attorney Donoghue. “The use of violence, or the threats of violence, against anyone based on the victim’s religion will not be tolerated, and those who engage in such conduct will learn that under federal law there are serious consequences for hate crimes.” Mr. Donoghue commended the NYPD officers who quickly responded and apprehended the defendant.
“Any offensive physical assault is a crime of violence, and it should be obvious that perpetrators need to be held accountable,” stated FBI Assistant Director-in-Charge Sweeney. “When one’s actions are motivated by their hatred of another group and supported by anti-Semitic sentiments, however, it opens up the possibility of federal criminal charges, which are hard to walk away from. Tiffany Harris now faces up to 10 years in prison for her alleged actions. The lesson to others thinking of behaving as we allege Ms. Harris did—knock it off now or we are going to lock you up. The anti-Semitic attacks in this city and elsewhere have been outrageous, and the FBI will use the full extent of the laws at our disposal to protect the community.”
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 10 years in prison.
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorney Gillian Kassner is in charge of the prosecution.
The Defendant:
TIFFANY HARRIS
Age: 30
Brooklyn, New YorkE.D.N.Y. Docket No. 20-MJ-10
Former Mexican Federal Police Commander Arrested for Drug-Trafficking ConspiracyRead the Press Release
An indictment was filed yesterday in federal court in Brooklyn charging Ivan Reyes Arzate, a former Mexican Federal Police Officer and Commander of the Mexican Federal Police’s Sensitive Investigative Units (“SIU”), with three counts of cocaine trafficking conspiracy. Reyes Arzatel allegedly received bribes in exchange for assisting El Seguimiento 39, a Mexican Cartel associated with the Sinaloa Cartel, the Beltran Leyva Organization and other Mexican cartels, ship cocaine from Mexico to the United States. Earlier today, federal agents arrested Reyes Arzate in Brooklyn, and he was arraigned this morning before United States Magistrate Judge Cheryl L. Pollak. Reyes Arzate was remanded pending trial.
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 charges.
“By choosing to align himself with drug traffickers instead of the people of Mexico that he was sworn to protect, Reyes Arzate’s corruption ensured the safe passage of massive quantities of illegal narcotics into the United States,” stated United States Attorney Donoghue. “This Office will continue working tirelessly with our law enforcement partners to make enablers of drug cartels answer for their crimes, whoever they are and wherever they operate.” Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Offices for the Southern District of California and the Northern District of Illinois for their assistance on the case.
“Collective law enforcement efforts to cut off drug cartels’ supply chain into the United States has led to worldwide arrests, including Ivan Reyes Arzate,” stated DEA Special Agent-in-Charge Donovan. “I applaud our federal, state, local and international law enforcement partners for their diligent work on this significant investigation.”
“As a Commander in the Mexican Federal Police, Arzate allegedly offered protection of the cartel’s criminal activities in exchange for hundreds of thousands of dollars in bribes,” stated HSI Special Agent-in-Charge Fitzhugh. “Arzate’s corruption as the highest-ranking officer in the MFP’s Sensitive Investigative Unit allowed violent cartels to continue the flow of drugs through the region without consequence, but it is clear today that no one is exempt from justice.”
"This case shows no one is exempt from the law, and those who choose a life of crime, no matter their rank or employment, will be brought to justice,” stated NYSP Superintendent Corlett. “This suspect gave in to greed, putting people and communities at risk, when he should have been doing his job to protect them. I commend the great work of the New York Strike Force in this case. We will continue to make it our priority to find and dismantle violent enterprises and partnerships to make our streets safer.”
According to the indictment and other court filings, Mexican SIU officers routinely work with U.S. law enforcement to combat narcotics trafficking, money laundering and other criminal activities. From 2003 to 2016, Reyes Arzate was a Mexican Federal Police Officer assigned to SIU. In 2008, he was appointed SIU Commander, making him the its highest ranking officer and principal point of contact for information sharing between U.S. and Mexican law enforcement personnel assigned to the SIU.
From approximately September 2016 to November 2016, while serving as SIU commander, Reyes Arzate received hundreds of thousands of dollars in bribes from El Seguimiento 39 in exchange for providing protection for the cartel’s drug trafficking. Specifically, in exchange for a $290,000 bribe, he disclosed to the cartel’s leadership sensitive information about a pending DEA investigation. The bribe payments have been corroborated by intercepted communications obtained pursuant to judicially-authorized wiretaps.
Earlier, in the mid-2000s, in exchange for cash bribes, Reyes Arzate allegedly provided sensitive law enforcement information to other Mexican drug cartels, including the Beltran Leyva Organization, which was then a faction of the Sinaloa Cartel led by Joaquin Guzman Loera, also known as “El Chapo.” As a result, these criminal enterprises operated without significant interference from Mexican law enforcement, and imported multi-ton quantities of cocaine and other drugs into the United States.
If convicted of the drug conspiracy charge, Reyes Arzate faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment.
This 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 DEA 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, NYPD, NYSP, HSI, 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, United States 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 indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section and the Public Integrity Section. Assistant United States Attorneys Michael P. Robotti, Ryan Harris and Erin Reid are in charge of the prosecution.
The Defendant:
IVAN REYES ARZATE
Age: 57
Mexico City, MexicoE.D.N.Y. Docket No. 20-CR-30 (ERK)
Former Long Island Broker Pleads Guilty to Participating in a $147 Million Stock Manipulation SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Stephanie Lee, a former broker who worked in conjunction with Plainview-based Elite Stock Research and Melville-based My Street Research and related companies (“My Street Research”), pleaded guilty to conspiracy to commit securities fraud, securities fraud, money laundering and money laundering conspiracy, wire fraud conspiracy and obstruction of an official proceeding in connection with the sale of the stock of two publicly traded companies, CES Synergies, Inc. (CESX), and National Waste Management Holdings, Inc. (NWMH). The top count to which Lee pleaded guilty carries a maximum sentence of 20 years’ imprisonment. The plea proceeding took place before United States District Judge Joanna Seybert.
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), announced the guilty plea. Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation.
As alleged in court papers, between August 2013 and July 2017, Lee and her co-defendants engaged in a scheme to defraud investors, many of them elderly, through the use of high-pressure call centers located at Elite and My Street Research. Lee and her co-defendants artificially controlled the trading price and volume of publicly traded companies by, among other things, retaining Elite and My Street Research to use pressure tactics, material misrepresentations and omissions to induce victims from around the country to purchase stock. Although the victims believed they were buying stock on the open market, Lee and her co-defendants secretly coordinated the trading so that the victims purchased shares at inflated prices that were owned and controlled by Lee and certain co-defendants. Following her arrest, Lee gave false information to the FBI agents who interviewed her in connection with the alleged fraud.
Lee is among 16 defendants who were charged in July 2017 in connection with the $147 million illegal stock manipulation scheme, and she is the thirteenth defendant to plead guilty. A fourteenth defendant, Michael Watts, was convicted after trial in October 2019. 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 Defendant:
STEPHANIE LEE
Age: 48
St. Petersburg, FloridaE.D.N.Y. Docket No. 17-CR-372 (S-3)(JS)
The Defendants Who Were Previously Convicted:
RONALD HARDY
Age: 44
Port Jefferson, New YorkMCARTHUR JEAN, also known as “John McArthur”
Age: 37
Dix Hills, New YorkERIK 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, TexasE.D.N.Y. Docket No. 17-CR-372 (JS)
Defendant Pleads Guilty in Brooklyn Federal Court to Attempted Obstruction of Justice MurderRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Luis Taveras pleaded guilty to attempt to commit obstruction of justice murder. The plea proceeding took place before United States District Judge Roslynn R. Mauskopf. When sentenced, Taveras faces up to 30 years in prison.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York Field Office, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Keith M. Corlett, Superintendent, New York State Police (NYSP), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
“The defendant’s crime was not only an attack on an individual victim, it was also an attack on our system of justice,” stated United States Attorney Donoghue. “The message of this prosecution is clear – anyone who carries out such a crime, wherever committed, is not beyond the reach of U.S. law enforcement.”
“In his attempt to stop a man from providing information to the U.S. by leading a hitman right to him, Taveras now stands to serve time for his role in this conspiracy,” stated HSI Special Agent-in-Charge Fitzhugh “HSI’s partnerships domestically and internationally directly enhances our ability to arrest and prosecute those who seek to obstruct justice to hide from the truth.”
“In our investigations, it has become apparently clear that violence doesn’t travel far from drug trafficking,” stated DEA Special Agent-in-Charge Donovan. “I commend the men and women responsible for investigating and prosecuting Luis Alfredo Taveras who allegedly would stop at nothing to protect his drug distribution network.”
“This plea is proof that we will aggressively seek to hold criminals accountable for their actions. I commend the members of the task force for their efforts in this case, and their ongoing partnership to cut off the flow of illegal narcotics into our communities,” stated NYSP Superintendent Corlett.
“Our reach in this case stretched overseas, to bring to justice a criminal who put innocent people in danger in the name of illegal drug trafficking. It highlights the success our combined federal and local efforts have in continuing to eradicate violence and keep narcotics out of New York City neighborhoods,” stated NYPD Commissioner Shea.
As detailed in the superseding indictment, other court filings and the defendant’s statements at his guilty plea proceeding, Taveras participated in the attempted murder of an individual he knew from prior narcotics transactions and believed to be cooperating with U.S. law enforcement. On June 21, 2016, Tavares entered a restaurant in Cali, Colombia, and sat down at a table with the victim. Shortly thereafter, Taveras stood up, walked to the back of the restaurant, and watched as a co-conspirator entered the restaurant and fired eight shots – wounding the victim in the shoulder and arm, and also wounding two family members of the victim, including a five-year-old child. Taveras and his co-conspirator then fled. The three victims survived their wounds. The harrowing attack was captured on videotape in the restaurant.
At today’s guilty plea proceeding, Tavares admitted that he identified the intended target to his co-conspirator, and that he wanted to prevent that individual from providing information to U.S. law enforcement
On February 21, 2019, Taveras was arrested by federal law enforcement agents in Miami.
Taveras’s arrest and guilty plea are the results of an ongoing investigation conducted by the Organized Crime Drug Enforcement Task Force (OCDETF), led by the United States Attorney’s Office for the Eastern District of New York and the DEA. 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.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Soumya Dayananda and Erin Reid are in charge of the prosecution.
The Defendant:
LUIS TAVERAS
Age: 30
Miami, FloridaE.D.N.Y. Docket No. 19-CR-180 (S-2) (RMM)
Queens Pharmacist Indicted for Illegal Distribution of Oxycodone and Filing False Tax ReturnsRead the Press Release
A 12-count indictment was unsealed today in federal court in Brooklyn charging Daniel E. Russo, a pharmacist, with conspiracy to distribute and possess with intent to distribute oxycodone, distribution and possession of oxycodone, distribution of oxycodone by a pharmacist without legitimate prescription and filing false tax returns. Russo was arrested this morning by federal agents and arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak. The defendant was released on a $1.5 million bond.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI), announced the charges.
As set forth in the indictment and other court documents, Russo owns and operates Russo’s Pharmacy in Far Rockaway, Queens. Between March 2011 and June 2014, Russo allegedly conspired with others, including medical professionals and employees of a physician, to fill fraudulent prescriptions for oxycodone and dispense thousands of oxycodone pills in return for hundreds of thousands of dollars in cash. Russo then filed false corporate income tax returns for his pharmacy for the years 2013 through 2016, omitting the proceeds of his scheme, and false individual income tax returns for the years 2012 through 2016. In total, Russo is charged with failing to report over $1 million in cash earnings, most of it generated from his oxycodone distribution scheme.
More than a dozen physicians for whom Russo filled prescriptions have since been convicted of crimes related to the distribution of oxycodone.
“We can count the hundreds of thousands of dollars Russo allegedly pocketed from the charged scheme, but the resulting human misery in our communities is incalculable,” stated United States Attorney Donoghue. “This Office will continue working with federal and local law enforcement partners to investigate and prosecute medical professionals who seek to profit from the opioid epidemic.”
“It is a misconception that pharmacists can hide their role in illegal drug distribution by blindly following what doctors have prescribed for their patients,” stated DEA Special Agent-in-Charge Donovan. “By law, pharmacists must practice due diligence, and take their corresponding responsibility seriously. If diversion of prescriptions is suspected, and merely cast aside to make a quick dollar, the pharmacist is no better than a dealer on the street. Today’s arrest reemphasizes law enforcement’s commitment to identifying and arresting all of those responsible for furthering drug abuse and overdose deaths throughout our hometowns.”
“Income earned from the sale of prescription drugs is taxable regardless if those sales are legal or illegal,” stated IRS Special Agent-in-Charge Larsen. “Mr. Russo allegedly failed to report the illegal income on his corporate tax returns in conjunction with concealing how the income was derived.”
If convicted of the drug charges, Russo faces up to 20 years’ imprisonment. If convicted of the tax charges, he faces up to three years’ imprisonment for each count.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, comprising agents and officers of the DEA, Nassau County Police Department, Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the U.S. Department of Health & Human Services’ Office of the Inspector General and New York City Department of Investigation.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, the New York State Police and other key federal, state and local government partners launched the initiative to mount a comprehensive response to what the United States Department of Health and Human Services Center for Disease Control and Preventions called an epidemic increase in the abuse of so-called opioid analgesics. To date, the initiative has brought over 160 federal and local criminal prosecutions including the prosecution of 20 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by Assistant United States Attorney Nomi D. Berenson and Trial Attorney Michael C. Vasiliadis of the Tax Division.
The Defendant:
DANIEL E. RUSSO
Age: 40
Cedarhurst, New YorkE.D.N.Y. Docket No. 20-CR-23 (DLI)
Medical Doctor Settles Civil Fraud Allegations in Adult Homes InvestigationRead the Press Release
Dr. Rajendra Bhayani, an otolaryngologist, has agreed to pay the United States $1,109,000 to resolve civil allegations that he and his practice – New York Otolaryngology & Aesthetic Surgery, P.C. in Brooklyn and Queens – paid kickbacks and submitted false claims to federal healthcare programs for services provided to residents in adult homes in violation of the False Claims Act.
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), announced the settlement.
“The disabled and elderly residents of adult homes are among the most vulnerable members of our society, and doctors who treat these residents as commodities by paying kickbacks so they can administer medically unnecessary services at taxpayer expense will be held accountable by this Office,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for their assistance with the case.
“Elderly citizens without the means to care for themselves should be given the best treatment possible by everyone involved in their care. Exposing them to unnecessary medical testing and services because they’re deemed an easy target is disgraceful behavior,” stated FBI Assistant Director-in-Charge Sweeney. “Putting one’s self interests above the welfare of others isn’t the way to do business, and in this case it came with a hefty penalty.”
Adult homes are privately owned residential facilities licensed by the State of New York to provide long-term care and supervision to adults with disabilities or mental illnesses. An investigation by the FBI revealed that from 2012 through 2016, Bhayani allegedly paid cash tips, excessive rent and other improper remuneration to medical management companies in adult homes in the Eastern District of New York to obtain exclusive access to bill for allergy testing and other medical services to residents in violation of the Anti-Kickback Statute. Bhayani then obtained payment for these services from Medicare and the Federal Employees’ Health Benefits Program, although the services were actually performed by his nurse practitioner, and some of the services performed were medically unnecessary.
HHS-OIG has concurrently entered into an Integrity Agreement with Bhayani and New York Otolaryngology & Aesthetic Surgery, P.C. Among other things, the Integrity Agreement requires compliance training that specifically addresses the Anti-Kickback Statute and a quarterly claims review to be conducted by an Independent Review Organization.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The government’s case is being handled by Assistant United States Attorney Lisa Kutlin of the Office’s Civil Division.
Statement by United States Attorney Richard P. DonoghueRead the Press Release
For the last four days, Special Agents of the Federal Bureau of Investigation (FBI) and detectives of the New York City Police Department (NYPD) have sought to arrest Gerod Woodberry pursuant to a federal arrest warrant charging him with bank robbery.[1] That effort was necessary because, as set forth in the federal Complaint and related documents filed in court today, Woodberry was released after his January 8, 2020 state arrest following four bank robberies he allegedly committed between December 30, 2019 and January 8, 2020. Earlier this afternoon, Woodberry surrendered.
As alleged in court documents, Gerod Woodberry robbed or attempted to rob six New York City banks in 16 days. Those robberies and attempted robberies were committed on December 30, 2019, January 3, 2020, January 6, 2020, January 8, 2020, January 10, 2020 and January 14, 2020. This robbery spree is unprecedented and it is made all the more so by the fact that he was actually arrested and released in the midst of his crimes. The January 10, 2020 robbery in Brooklyn was committed less than four hours after his release on the January 8, 2020 arrest, a release required under recently-enacted bail reform legislation.
No sound, rational and fair criminal justice system requires the pre-trial release of criminal defendants who demonstrate such determination to continuously commit serious crimes. Prior to the recently-enacted reforms, New York judges weighing pre-trial release could consider the flight risk, but not the dangerousness, posed by a charged defendant. The recent reforms have made a bad situation worse by entirely excluding classes of purportedly “non-violent” felonies – like the bank robberies here – from pre-trial confinement eligibility. Preventing judges from considering the danger a charged defendant poses to the public when making a pre-trial confinement decision defies common sense and endangers all New Yorkers.
The recently-enacted bail reforms have dramatically altered the New York criminal justice system and even more dramatic criminal justice proposals are under consideration in New York and across the country. While we must ensure that all criminal justice systems are open to scrutiny and reform, we must also guard against the outright dismantling of criminal justice systems masquerading as criminal justice reform.
I thank and commend the FBI and the NYPD for the exemplary work they do every day to keep the people of New York City safe.
[1] The charges in the complaint are allegations, the defendant is presumed innocent unless and until proven guilty.
Long Island Man Sentenced to 10 Years in Prison for Conspiring to Distribute Crack Cocaine in Riverhead AreaRead the Press Release
Earlier today, in federal court in Central Islip, Tramaine Brown was sentenced by United States District Judge Joanna Seybert to 10 years’ imprisonment for conspiring to distribute and possess with intent to distribute crack cocaine and powder cocaine. Brown pleaded guilty in June 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
“The Riverhead area is safer with Tramaine Brown sent to prison for running an armed and dangerous drug trafficking operation that endangered residents, including Brown’s own family members,” stated United States Attorney Donoghue. “We will continue to work tirelessly with our federal and local law enforcement partners to take drugs and drug traffickers off our streets.” Mr. Donoghue also extended his grateful thanks to the Suffolk County East End Drug Task Force, which partnered with the FBI in the investigation.
In January 2018, the FBI and the Suffolk County East End Drug Task Force began an investigation into narcotics trafficking and gang activity on the East End of Long Island, including the Riverhead area. As part of that investigation, agents and officers purchased more than 300 grams of crack cocaine from Brown at his home in Jamesport, where he resided with his wife and his children. During one purchase, Brown was captured on video “cooking” powder cocaine into crack in his kitchen, while a child was present. A backpack containing fentanyl, an extremely dangerous opioid, was in close proximity to the child. On November 14, 2018, a search warrant was executed at Brown’s residence, and large quantities of narcotics, cash and a .223 caliber assault rifle, a .308 caliber rifle and a .45 caliber pistol were seized. In total, during the investigation of Brown’s drug trafficking operation, law enforcement recovered quantities of crack cocaine, powder cocaine, fentanyl, marijuana, narcotics packaging materials, a kilogram press, eight cellular telephones and over $10,000 in cash.
This case was investigated as part of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (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.
This case is also 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 Michael Maffei and Nicole Boeckmann are in charge of the prosecution.
The Defendant:
TRAMAINE BROWN
Age: 30
Jamesport, New YorkE.D.N.Y. Docket No. 18-CR-604 (JS)
Gerod Woodberry Arrested for Bank RobberyRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Gerod Woodberry with the robbery of a Chase Bank in downtown Brooklyn on January 10, 2020. Woodberry was arrested today, and will make his initial appearance at the United States Courthouse for the Eastern District of New York on Sunday morning.
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 arrest. United States Attorney Donoghue issued a statement today noting some of the facts of the case.
As detailed in court filings, at approximately 5:35 p.m., Woodberry, wearing a baseball cap with a Chicago Bulls logo, entered a Chase Bank branch at 20 Flatbush Avenue and presented a hand-written note to a teller, stating in red ink, “THIS IS A ROBBERY BIG BILLS ONLY NO DYE PACKS.” The teller handed Woodberry approximately $1,000 in U.S. currency, and the defendant fled the bank. In a detention memorandum filed with the court today seeking a Permanent Order of Detention, prosecutors indicated that Woodberry robbed or attempted to rob six New York City banks in 16 days. Those robberies and attempted robberies were committed on December 30, 2019, January 3, 2020, January 6, 2020, January 8, 2020, January 10, 2020 and January 14, 2020. The memorandum further noted that Woodberry was arrested by the NYPD hours after the January 8, 2020 robbery, but that he was released on January 10, 2020 because the crime charged did not qualify for pre-trial detention under New York State law. The memorandum also reported that the January 10, 2020 robbery in Brooklyn was committed less than four hours after his release on the January 8, 2020 arrest.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Woodberry faces up to 20 years in federal prison.
The government’s case is being prosecuted by Assistant United States Attorney Jack Dennehy, Senior Litigation Counsel and Director of the Rapid Approach to Strategic Prosecutions in the Office’s Criminal Division.
The Defendant:
GEROD WOODBERRY
Age: 42
Walterboro, South CarolinaE.D.N.Y. Docket No. 20-MJ-52
Staten Island Man Sentenced to 33 Months’ Imprisonment for Defrauding Investors in Virtual CurrencyRead the Press Release
Earlier today, in federal court in Brooklyn, Patrick McDonnell was sentenced by United States District Judge Nicholas G. Garaufis to 33 months’ imprisonment for wire fraud related to a scheme to defraud investors in virtual currency. In addition, McDonnell was ordered to pay $224,352 in restitution. McDonnell pleaded guilty in June 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the sentence.
“Patrick McDonnell is headed to prison for deceiving investors, using an alias, false promises and false balance statements for one purpose only—so that he could steal their money,” stated United States Attorney Donoghue. “This Office will continue to vigorously prosecute white-collar criminals who defraud the investing public.” Mr. Donoghue expressed his grateful appreciation to the Commodity Futures Trading Commission for its assistance with the investigation.
“Mr. McDonnell used his knowledge of virtual currencies to scam investors. While he thought he could outsmart law enforcement, his arrest and today’s sentence shows, no matter where you are, what’s done in the dark will be brought to the light,” stated USPIS Inspector-in-Charge Bartlett.
Between approximately November 2014 and January 2018, McDonnell portrayed himself on social media as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf. Beginning in approximately May 2016, McDonnell made similar representations and promises to investors through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets. However, neither McDonnell nor CabbageTech provided investment services. Instead, McDonnell sent investors false financial statements showing that their investments had been profitable, and stole their money for his personal use. In total, McDonnell defrauded at least 10 victims of at least $194,000 in U.S. currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge currency, for a total loss of $224,350.32. In addition to lying to investors about his company’s prowess, McDonnell also solicited customers using a false alias, “Jason Flack,” an individual that did not actually exist.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution.
The Defendant:
PATRICK MCDONNELL (also known as “Jason Flack”)
Age: 47
Staten Island, New YorkE.D.N.Y. Docket No. 19-CR-148 (NGG)
Malian Terrorist Leader Charged with the Death of U.S. Citizen Michael J. Riddering and Providing Material Support to Al-Qaeda in the Islamic Maghreb and Al-MurabitounRead the Press Release
A criminal complaint was filed yesterday in federal court in Brooklyn charging Mimi Ould Baba, a citizen of Mali, with the murder of United States citizen Michael J. Riddering, and conspiring to provide and attempting to provide material support, including personnel, to al-Qaeda in the Islamic Maghreb (“AQIM”) and al-Murabitoun, designated foreign terrorist organizations. The defendant is currently in custody in Mali.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; John 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 charges.
“The Eastern District of New York and our partners in U.S. law enforcement will continue to work tirelessly with foreign counterparts to identify, incapacitate and prosecute terrorists who target American citizens anywhere in the world,” stated United States Attorney Donoghue. “Counter-terrorism remains our number one priority.” Mr. Donoghue expressed his grateful appreciation to the governments of Burkina Faso, Cote D’Ivoire and Mali for their continued support and assistance throughout this investigation
“The charges allege that Mimi Ould Baba played a central role in the planning of two separate terrorist attacks directed at Westerners in Burkina Faso and Côte d’Ivoire in early 2016. Those attacks resulted in the murder of American citizen Michael Riddering and 48 other innocent victims from numerous countries,” said Assistant Attorney General Demers. “Baba is currently in Malian custody for his terrorism-related activities. We fully support the Malian investigation and prosecution of Baba and will continue to work with the authorities there to pursue our shared goal of holding Baba accountable for his crimes. At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad. We will continue to pursue justice for Mr. Riddering and for all American victims of terrorism. Our memories are long and our commitment to justice is unending.”
“There’s nothing we could ever do to take away the pain felt by the families of those Baba killed during his 2016 terrorist attack in Burkina Faso, but four years later, we take some comfort in the fact that he will be held accountable for his egregious crime. I can only hope that as time goes on, we will remember the victims’ names instead of the attacker's, especially our own American citizen Michael Riddering, who was killed that day,” stated FBI Assistant Director-in-Charge Sweeney.
“Among the 30 killed in the attack four years ago was an American, Michael Riddering. Michael was in charge of an orphanage and a women’s crisis center in Burkina Faso. This case is another reminder that when terrorists kill an American, even half a world away, the FBI Special Agents and New York City Police Detectives of the JTTF will work as long as it takes, and go as far as it takes to bring justice,” stated NYPD Commissioner Shea.
As alleged in the complaint, Baba and the operations chief of al-Murabitoun planned and executed the January 15, 2016 terrorist attack at the Café Cappuccino and Hotel Splendid in Ouagadougou, Burkina Faso. The attack resulted in the deaths of 30 individuals, including Riddering. Prior to the attack, Baba surveilled attack locations in Ouagadougou, arranged the transport of AK-47 machine guns and hand grenades to be used in the attack, and transported the three suicide attack operatives to the Café Cappuccino. Riddering, a patron at the Café Cappuccino, was shot multiple times by the attackers and died at the scene. Following the attack, AQIM issued a public statement claiming responsibility for the attacks on behalf of AQIM and al-Murabitoun.
Baba also allegedly participated in the planning and execution of the March 13, 2016 resort attack in Grand Bassam, Cote d’Ivoire. Following the attacks in Ouagadougou, Baba once again met with the operations chief of al-Murabitoun to plan an additional attack against western targets in Cote d’Ivoire. Thereafter, Baba identified an individual to further plan and execute the operation, and assisted in identifying three suicide operatives. Baba also procured the vehicle used to transport the weapons for the attack. On March 13, 2016, three individuals armed with AK-47s and grenades attacked resort patrons along the beach of Grand Bassam, Cote d’Ivoire, killing 19 individuals and wounding many others. Subsequently, AQIM issued a public statement claiming responsibility for the attack.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Margaret E. Lee and Michael T. Keilty are in charge of the prosecution, with assistance provided by Trial Attorney Stephanie Sweeten of the Counterterrorism Section of the National Security Division of the Department of Justice. The Criminal Division’s Office of International Affairs of the Justice Department also assisted in the investigation.
The Defendant:
Mimi Ould Baba
Age: 32
MaliE.D.N.Y. Docket No. 20-MJ-56
Malian National Charged with the Overseas Murder of a U.S. Citizen and Providing Material Support to Two Foreign Terrorist OrganizationsRead the Press Release
A criminal complaint was filed yesterday in federal court in Brooklyn, New York, charging Mimi Ould Baba, 32, a citizen of Mali, with the murder of U.S. citizen Michael J. Riddering and conspiring to provide material support, including personnel (including himself), services, and property to two designated foreign terrorist organizations, al-Qaeda in the Islamic Maghreb (AQIM) and al-Murabitoun. The defendant is currently in custody in Mali pending investigation and prosecution by Malian authorities.
“The charges filed allege that Mimi Ould Baba played a central role in the planning of two separate terrorist attacks directed at Westerners in Burkina Faso and Côte d’Ivoire in early 2016. Those attacks resulted in the murder of American citizen Michael Riddering and 48 other innocent victims from numerous countries,” said Assistant Attorney General for National Security John C. Demers. “Baba is currently in Malian custody for his terrorism-related activities. We fully support the Malian investigation and prosecution of Baba and will continue to work with the authorities there to pursue our shared goal of holding Baba accountable for his crimes. At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad. We will continue to pursue justice for Mr. Riddering and for all American victims of terrorism. Our memories are long and our commitment to justice is unending.”
“The Eastern District of New York and our partners in U.S. law enforcement will continue to work tirelessly with foreign counterparts to identify, incapacitate and prosecute terrorists who target American citizens anywhere in the world,” said United States Attorney Richard P. Donoghue for the Eastern District of New York. “Counter-terrorism remains our number one priority.” Mr. Donoghue expressed his grateful appreciation to the governments of Burkina Faso, Cote D’Ivoire and Mali for their continued support and assistance throughout this investigation.
“There’s nothing we could ever do to take away the pain felt by the families of those Baba killed during his 2016 terrorist attack in Burkina Faso, but four years later, we take some comfort in the fact that he will be held accountable for his egregious crime. I can only hope that as time goes on, we will remember the victims’ names instead of the attacker's, especially our own American citizen Michael Riddering, who was killed that day,” said FBI Assistant Director-in-Charge William F. Sweeney.
“Among the 30 killed in the attack four years ago was an American, Michael Riddering. Michael was in charge of an orphanage and a women’s crisis center in Burkina Faso. This case is another reminder that when terrorists kill an American, even half a world away, the FBI Special Agents and New York City Police Detectives of the JTTF will work as long as it takes, and go as far as it takes to bring justice,” said NYPD Commissioner Dermot F. Shea.
As alleged in the complaint, Baba, along with the operations chief of al-Murabitoun and others, planned the Jan. 15, 2016, terrorist attack at the Café Cappuccino and Hotel Splendid in Ouagadougou, Burkina Faso. Baba assisted in the planning and preparation for the attack by conducting surveillance of potential targets frequented by Westerners, facilitating the transportation and storage of AK-47 assault rifles and hand grenades to be used in the attack, conducting a walk-through of the attack with the three suicide operatives, and driving the armed operatives to the attack site on the day of the attack. Thirty people were killed in the terrorist attack, including American Michael J. Riddering and numerous victims from other Western countries and Burkina Faso. Riddering, a patron at the Café Cappuccino, was shot multiple times by the attackers and died at the scene. Following the attack, AQIM issued a public statement claiming responsibility for the attacks on behalf of AQIM and al-Murabitoun.
Baba also participated in the planning and preparation for the March 13, 2016, resort attack in Grand Bassam, Cote d’Ivoire. Following the attack in Ouagadougou, Baba met with the operations chief of al-Murabitoun to plan another attack against Westerners, this one in Cote d’Ivoire. Thereafter, Baba identified an individual to assist with the preparations for the attack and in identifying three suicide operatives to conduct the attack. Baba also procured the vehicle that was used to transport the weapons that were used in the attack. On March 13, 2016, three suicide operatives armed with AK-47s and grenades attacked resort patrons along the beach of Grand Bassam, Cote d’Ivoire, killing 19 people from a number of countries and wounding many others. Following the attack, AQIM issued a public statement claiming responsibility for the attack.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Margaret E. Lee and Michael T. Keilty are in charge of the prosecution, with assistance provided by Trial Attorney Katie Sweeten of the Counterterrorism Section of the National Security Division of the Department of Justice. The Criminal Division’s Office of International Affairs of the Justice Department assisted in the investigation.
Former Member of Barbados Parliament and Minister of Industry Found Guilty of Receiving and Laundering Bribes from Barbadian Insurance CompanyRead the Press Release
A former member of the Barbados Parliament, who also served as the Minister of Industry of Barbados, was found guilty today by a federal jury for his role in a scheme to launder bribes paid to him by executives of the Insurance Corporation of Barbados Limited (ICBL).
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 and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.
Following a one-week trial and two hours of jury deliberations, Donville Inniss, 54, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was found guilty of two counts of money laundering and one count of conspiracy to commit money laundering. Sentencing has not yet been scheduled.
According to the evidence presented at trial, in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he received from high-level executives of ICBL. At the time, Inniss was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados. The trial evidence demonstrated that, in exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain two insurance contracts from the Barbados government to insure over $100 million worth of government property. To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of his friend’s dental company, which had an address in Elmont, New York. The trial evidence further showed that Inniss used a personal email account to communicate with an executive from ICBL in connection with the bribe payments and the laundering of the money through the dental company in New York.
The FBI’s International Corruption Squad in New York City investigated the case. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Trial Attorney Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Gopstein and Sylvia Shweder of the Eastern District of New York prosecuted the case. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The Department appreciates the cooperation provided by its law enforcement colleagues in Barbados during this investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
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.
Former Member of Barbados Parliament Convicted of Money Laundering ChargesRead the Press Release
Donville Inniss, a former member of the Barbados Parliament and Minister of Industry, International Business, Commerce and Small Business Development of Barbados, was convicted today by a jury in federal court in Brooklyn of money laundering conspiracy and two counts of money laundering relating to bribe payments the defendant received from Insurance Corporation of Barbados Limited (ICBL) to secure government contracts for ICBL. The verdict followed a one-week trial before United States District Judge Kiyo A. Matsumoto. When sentenced, Inniss faces up to 20 years’ imprisonment.
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, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the verdict.
The evidence at trial established that between August 2015 and April 2016, Inniss accepted approximately $36,000 in bribes from high-level executives of ICBL and laundered that money through banks on Long Island. In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain government contracts. Inniss concealed the bribes by arranging to receive them through a friend’s dental company and a bank located in Elmont, New York. ICBL executives transferred the funds to the dental company using an invoice falsely claiming that the payments were for consulting services.
During the time of the charged conspiracy, Inniss was a legal permanent resident of the United States residing in Tampa, Florida and Barbados.
“As a government official, Inniss was responsible for improving the economic development and quality of life for Barbados and its people. But as proven at trial, he corruptly abused his position and the U.S. financial system to enrich himself,” stated United States Attorney Donoghue. “With today’s verdict, the defendant will face the consequences.” Mr. Donoghue thanked the FBI’s New York Office for its outstanding investigative work on the case.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Sylvia Shweder and David Gopstein, and Trial Attorney Gerald M. Moody, Jr., of the Department of Justice Criminal Division’s Fraud Section are in charge of the prosecution.
The Defendant:
DONVILLE INNIS
Age: 54
BarbadosE.D.N.Y. Docket No. 18-134 (KAM)
ResMed Corp. to Pay the United States $37.5 Million for Allegedly Causing the Filing of False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related DisordersRead the Press Release
WASHINGTON – The Department of Justice announced today that ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers.
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.
The settlement resolves allegations that ResMed: (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea; (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines; (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME suppliers acquired from third-party financial institutions for the purchase of ResMed equipment; and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”
“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills. This case rights that alleged wrong by ResMed,” stated United States Attorney for the Eastern District of New York Richard P. Donoghue. “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”
“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on illegal payments from equipment manufacturers.”
The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. The whistleblowers will collectively receive a roughly $6.2 million share of the settlement.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the Eastern District of New York, the District of South Carolina, the Southern District of California and the Northern District of Iowa; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.
The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Six New York City Correction Officers and 15 Others Charged with Conspiring to Accept Bribes and Smuggle Contraband into Rikers Island FacilitiesRead the Press Release
Three criminal complaints were unsealed today in federal court in Brooklyn, New York, charging 21 defendants with conspiring to bribe correction officers employed by the New York City Department of Corrections (“DOC”) as part of narcotics smuggling conspiracies. Three defendants remain at large. The initial appearances for 12 of the defendants are scheduled for this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.
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 Margaret M. Garnett, Commissioner, New York City Department of Investigation (DOI), announced the charges.
“The corruption of correction officers presents a security risk to the entire jail population, and a potential danger to the residents of our communities,” stated United States Attorney Donoghue. “We will continue to aggressively investigate and prosecute those who place their personal enrichment over the public duties they have sworn to perform.” Mr. Donoghue thanked Homeland Security Investigations, New York, and the New York City Police Department for their assistance in the investigations.
“The correction officers charged today allegedly accepted bribes to sneak contraband onto Rikers Island—propagating behavior that has the potential to harm other officers and prisoners alike. The smuggling of contraband into our jails is a common Hollywood storyline, but while there’s an element a fiction in many a screenplay, there’s nothing fake about this real-life threat to our correctional facilities. Along with our partners at the DOI, we are dedicated to confronting this issue head-on,” stated FBI Assistant Director-in-Charge Sweeney.
"Contraband smuggling enterprises have long plagued City jail facilities. The arrests today are another example of a pattern in which inmates and outside conspirators identify correction officers vulnerable to corruption, and use them to carry drugs and other illegal substances into the jails,” stated DOI Commissioner Garnett. “These schemes threaten the safety of fellow officers and other inmates, and undermine order and discipline in the City’s jails. DOI will continue to prioritize safety and integrity in the jails, and continue to relentlessly pursue those who threaten it. DOI thanks its partners at the Office of the U.S. Attorney for the Eastern District of New York and the FBI for their partnership in the pursuit of these individuals charged today in our shared effort to root out criminal activity in the City's correction system."
Since early 2019, the FBI and DOI have been investigating contraband rings involving the payment and receipt of bribes by DOC officers in exchange for transporting marijuana, the narcotic Suboxone and K2 (a synthetic cannabinoid) and an unauthorized smart phone into the George R. Vierno Center and the Otis Bantum Correctional Center on Rikers Island.
As set forth in the complaints, the defendants conspired to smuggle the contraband into Rikers Island facilities with the assistance of New York City Correction Officers Darrington James, Patrick Legerme, Aldrin Livingston, Michael Murray, Angel Rodriguez and Christopher Walker. Defendants James Albert, Clarence Brooks, Kyle Charles, John Mohammed and Christopher Rivas, who were incarcerated for unrelated offenses, arranged for marijuana and other contraband to be packaged and secretly delivered to those correction officers by defendants Celena Burgess, Veronica Jagdeo, Jorcetta King, Aboudou Krigger, Jonathan Medina, Styles Shephard and Tony West. The defendant correction officers allegedly received thousands of dollars in bribes to smuggle the drugs past DOC security, for distribution inside the Rikers Island facilities.
As a part of their investigations, law enforcement officers reviewed financial records related to online money transfer tools, such as CashApp, conducted surveillance and reviewed recorded telephone calls made by defendants who used coded language in their conversations. For example, on February 19, 2019, an inmate at the Vierno facility called a co-conspirator to discuss supplying the inmate and Albert with marijuana: “I’m trying to get, um four ‘Oakland Raider jerseys’ [code for marijuana]. “…’Got Pink Panties’ [code for correction officer] on the line right now, you heard? Gangsta. You just gotta make it to the ‘Jungle’ [code for Brooklyn] to drop it off to them and, more or less, we lit from there.” In recorded telephone calls between Rivas and a co-conspirator in October 2019, Rivas requested a ‘joint’ [code for a cellular telephone] with a Facetime application. In a subsequent telephone conversation, Rivas asked West whether the joint is a Size 5 or Size 6 [code for iPhone 5 or iPhone 6], and West replied that it was a Size 6, referring to an iPhone 6 that was delivered to the Vierno facility the previous night.
On October 25, 2019, a DOC Special Search Team seized an iPhone 6 and an iPhone charger from Rivas’s laundry bag and 12 clear plastic bags containing marijuana from his person.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a maximum sentence of five years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Nathan Reilly, Margaret Gandy, Drew Rolle, Alicia Washington and Virginia Nguyen are in charge of the prosecution.
The Defendants:
JAMES ALBERT
Age: 43
Comstock, New YorkCLARENCE BROOKS
Age: 39
Bronx, New YorkCELENA BURGESS
Age: 43
New York, New YorkKYLE CHARLES
Age: 32
Brooklyn, New YorkVERONICA JAGDEO
Age: 24
Freeport, New YorkDARRINGTON JAMES
Age: 30
Queens, New YorkJORCETTA KING
Age: 33
Bronx, New YorkABOUDOU KRIGGER
Age: 25
Bronx, New YorkPATRICK LEGERME
Age: 29
Queens, New YorkALDRIN LIVINGSTON
Age: 31
Queens, New YorkJONATHAN MEDINA
Age: 29
Queens, New YorkJOHN MOHAMMED
Age: 27
Rome, New YorkMICHAEL MURRAY
Age: 28
Brooklyn, New YorkCHRISTOPHER RIVAS
Age: 32
New York, New YorkANGEL RODRIGUEZ
Age: 23
Bellport, New YorkSTYLES SHEPHARD
Age: 24
New York, New YorkCHRISTOPHER WALKER
Age: 28
Brooklyn, New YorkTONY WEST
Age: 24
Brooklyn, New YorkE.D.N.Y. Docket Nos.: 20-MJ-25; 20-MJ-26; and 20-MJ-31.
Former Stony Brook University Professor Pleads Guilty to Stealing Cancer Research FundsRead the Press Release
Earlier today, in federal court in Central Islip, Geoffrey Girnun, a former Associate Professor in the Department of Pathology and Director of Cancer Metabolomics at the Renaissance School of Medicine at Stony Brook University (SBU), pleaded guilty to theft of government funds from cancer-related research grants issued by the National Institutes of Health (NIH). The plea proceeding was held before United States District Judge Denis R. Hurley. Girnun resigned his position at SBU in December 2019. When sentenced, Girnun faces up to 10 years in prison, as well as restitution, forfeiture and a fine to be determined.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“With today’s guilty plea, Girnun has been held accountable for his unconscionable scheme to embezzle for his personal use hundreds of thousands of dollars in government funds that were intended to help find a cure for cancer,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Federal Bureau of Investigation, New York Field Office, and the Department of Health and Human Services, Office of Inspector General, for their investigative work on the case.
Between December 2013 and December 2017, Girnun stole approximately $78,000 in NIH funds that were earmarked for cancer research. He then used those funds to pay for personal expenses, including payments on his home mortgage. At his guilty plea proceeding today, Girnun agreed to pay restitution in the amount of $225,000, which includes the NIH funds and approximately $147,000 from SBU’s foundation and state-sponsored grants.
Girnun has a doctorate degree in cancer biology and while employed at SBU, served as a principal investigator for various research projects.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Erin E. Argo and Madeline O’Connor are in charge of the prosecution.
The Defendant:
GEOFFREY GIRNUN
Age: 49
Woodmere, New YorkE.D.N.Y. Docket No. 19-CR-416 (DJH)
Stock Promoter Pleads Guilty to Accepting Kickbacks from CEO of Public CompanyRead the Press Release
Earlier today, in federal court in Brooklyn, Jeffrey Auerbach, a former registered representative for various broker-dealers, pled guilty to conspiracy to commit securities fraud for his role in a scheme to take kickbacks from the former Chief Executive Officer (CEO) of NXT-ID, a publicly listed company on NASDAQ, in exchange for promoting NXT-ID stock to investors and potential investors. Today’s plea proceeding took place before United States District Judge Pamela K. Chen. When sentenced, Auerbach faces up to five years in prison, as well as forfeiture and a fine of up to $250,000.
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), announced the guilty plea.
“Auerbach exploited his position as a former registered representative for broker-dealers to enrich himself to the detriment of investors,” stated United States Attorney Donoghue. “We will continue to investigate and prosecute stock promoters, brokers and others in the securities industry who exploit the trust of investors and distort the public markets.” Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance.
According to court filings and facts presented during the plea proceeding, between July 2014 and September 2015, Auerbach conspired with others to defraud investors and potential investors in NXT-ID, a company that purported to provide a comprehensive platform of technology products and services that enable the Internet of Things (“IoT”). As part of this scheme, Auerbach allegedly accepted secret payments from the CEO of NXT-ID in exchange for promoting NXT-ID stock to investors, and making payments to a broker to purchase shares of NXT-ID stock in the accounts of the broker’s clients.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Mark Bini and Hiral Mehta are in charge of the prosecution.
The Defendant:
Jeffrey Auerbach
Age: 49
New York, New YorkE.D.N.Y. Docket No. 19-CR-607 (PKC)
Two Defendants Posing as Booking Agents for Famous Entertainers Arrested for Fraudulent SchemeRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Nancy Jean and Carissa Scott with a scheme to defraud concert investors by falsely claiming to act as booking agents for well-known entertainers, including Justin Timberlake and Bruno Mars. The defendants were arrested yesterday at John F. Kennedy International Airport in Queens, New York, and their initial appearance is scheduled for this afternoon before United States Magistrate Judge Sanket J. Bulsara.
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), announced the arrests.
As alleged in the complaint, in September 2019, Jean and Scott were contacted by an investor who was organizing a concert at the Alamodome in San Antonio, Texas, to benefit the Sandy Hook Promise Foundation. The defendants falsely represented that they could book top-tier musical acts to perform at the concert, and provided the investor with a contract for a total fee of $500,000 that purported to commit Timberlake to perform. One of the investors then wired a $100,000 deposit to the defendants. Subsequently, when Timberlake’s social media account failed to mention or promote the event, the investor requested confirmation that Timberlake was booked. In response, the investor received a telephone call from an unidentified individual who falsely claimed to be Timberlake’s manager. The unidentified individual stated that Timberlake would perform at the concert, but that the fee would have to be raised to between $800,000 and $1 million. In November 2019, the defendants sent the investor an agreement stating that Mars would perform at the concert as an alternative to Timberlake for a fee of $600,000. The investor agreed that Mars could be the headliner, but did not send an additional deposit to the defendants.
Within a month of receiving the original $100,000 deposit, approximately half of the money was used by the defendants for personal expenses or withdrawn as cash.
“As alleged, the defendants viewed a fundraiser for a charity formed to protect children from gun violence as an opportunity to commit fraud and line their own pockets,” stated United States Attorney Donoghue. “Simple stealing is bad enough, this is worse.”
“Nancy Jean and Carissa Scott may have been able to realize a quick profit as a result of their alleged fraudulent booking scheme, but not long after their illegal activity took off, they landed in New York to face federal criminal charges. It’s discouraging to think these defendants were willing to defraud an investor supporting a charity foundation. Fortunately, the FBI doesn’t entertain such activity,” stated FBI Assistant Director-in-Charge Sweeney.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by the Office’s Business & Securities Fraud Section. Assistant United States Attorney Lauren Howard Elbert is in charge of the prosecution, and Assistant United States Attorney Brian Morris of the Office’s Civil Division is handling matters relating to forfeiture.
The Defendants:
NANCY JEAN
Age: 51
Riverdale, GeorgiaCARISSA SCOTT
Age: 41
Fayette, MississippiE.D.N.Y. Docket No. 20-MJ-16
Queens Woman Sentenced to 15 Years’ Imprisonment for Teaching and Distributing Information About Weapons of Mass DestructionRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States. Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on August 23, 2019 to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, and weapon of mass destruction in furtherance of a planned federal crime of violence. Velentzas is awaiting sentencing.
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.
“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” stated United States Attorney Donoghue. “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”
“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes. Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” stated Assistant Attorney General Demers. “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution. For this, we are grateful.”
“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” stated FBI Assistant Director-in-Charge Sweeney.
“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” stated NYPD Commissioner Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”
Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States. They taught each other chemistry and electrical skills directly related to creating explosives and building detonating devices; conducted research on how to make plastic explosives and build a car bomb; shopped for materials for use in an explosive device; and discussed explosive devices used in past terrorist incidents, including the Boston Marathon bombing, Oklahoma City bombing and 1993 World Trade Center attack. They then researched potential targets for an attack, focusing on law enforcement and military-related targets.
Siddiqui’s long-term interest in violent terrorist-related activities was demonstrated in her written submissions to a radical jihadist magazine edited by Samir Khan – a prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula. In a poem titled “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats,” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.”
At the time of the defendants’ arrests, law enforcement agents searched their residences and seized tools of the trade for terrorists, including propane gas tanks, soldering tools, car bomb instructions, machetes, knives and jihadist literature.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.
The Defendant:
ASIA SIDDIQUI
Age: 35
Queens, New YorkE.D.N.Y. Docket No. 15-CR-213 (SJ)
Queens Woman Sentenced to 15 Years’ Imprisonment for Teaching and Distributing Information About Weapons of Mass DestructionRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States. Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on Aug. 23, 2019, to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, or weapon of mass destruction in furtherance of a planned federal crime of violence. Velentzas is awaiting sentencing.
“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes. Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” said Assistant Attorney General for National Security John C. Demers. “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution. For this, we are grateful.”
“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”
“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” said FBI Assistant Director-in-Charge William F. Sweeney.
“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” said NYPD Commissioner Dermot F. Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”
Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States. In furtherance of their plan, the defendants taught each other chemistry and electrical skills related to creating explosives and building detonating devices, conducted research on how to make plastic explosives and how to build a car bomb, and shopped for and acquired materials to be used in an explosive device. They discussed similar devices used in past terrorist incidents like the Boston Marathon bombing, Oklahoma City bombing, and 1993 World Trade Center attack and researched potential targets of an attack, focusing on law enforcement and military-related targets.
Siddiqui’s interest in violent terrorist-related activities was reflected in her written submissions to a radical jihadist magazine edited by Samir Khan — a now- deceased prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula (AQAP). In a poem called “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.”
When the defendants were arrested, law enforcement officers seized propane gas tanks, soldering tools, car bomb instructions, jihadist literature, machetes and several knives from their residences.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.
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.
Former Long Island Investment Advisor Sentenced to 170 Months in Prison for Multi-Million Dollar Securities Fraud and Ponzi SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Steven Pagartanis was sentenced by United States District Judge Joan M. Azrack to 170 months’ imprisonment and ordered to pay more than $6.5 million in restitution. Pagartanis, a former registered investment advisor based on Long Island, pleaded guilty in December 2018 to conspiracy to commit mail and wire fraud for orchestrating a securities fraud scheme over the course of 18 years.
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 sentence.
“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” stated United States Attorney Donoghue. “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this Office and the Department of Justice.” Mr. Donoghue thanked the Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their cooperation and assistance during the investigation.
“Steven Pagartanis deceived investors from New York to California with the selfish goal of enriching himself at the expense of innocent elderly victims,” stated IRS-CI Special Agent-in-Charge Larsen. “We at IRS-CI welcome the opportunity to lend our financial expertise to uncover such callous criminality and protect the innocent from being swindled out of their life savings.”
From January 2000 to March 2018, Pagartanis, then an affiliate of a registered broker-dealer, solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an eight percent return. At Pagartanis’s direction, the victims wrote checks payable to an entity he secretly controlled. Pagartanis then laundered the victims’ investments through a series of bank accounts, and used the money to pay personal expenses, purchase luxury items, fund failed business ventures including his wife’s pet store and make the guaranteed “interest” or “dividend” payments to other victims. The defendant’s victims invested over $13 million and sustained losses of over $9 million. Many lost substantial amounts of their life savings, including funds set aside to help ill family members, pay college expenses and maintain their homes.
Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 60
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (JMA)
Owner of Tax Return Preparation Business Sentenced to PrisonRead the Press Release
A New York tax return preparer was sentenced to 36 months in prison today for wire fraud, aggravated identity theft, and assisting in the preparation and filing of false returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents and statements made in court, Oyeniyi Jaiyesimi was the owner of Pace Financial Services, a tax preparation business located in Springfield Gardens, New York. From 2014 through 2016, Jaiyesimi used stolen identities to file fraudulent tax returns with the Internal Revenue Service (IRS) in order to obtain refunds to which he was not entitled. Jaiyesimi also filed false tax returns on behalf of his clients that claimed fraudulent dependent exemptions in order to obtain larger refunds for them.
In addition to the prison term, U.S. District Judge Edward R. Korman ordered Jaiyesimi to serve two years of supervised release and to pay approximately $58,000 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman commended the special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Eric Powers of the Tax Division, who are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Two Members of the Brooklyn-Based “Insane Crip Gangsters” Charged with Sex TraffickingRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging brothers Gladimir Thomas and Ronald Thomas, members of the Brooklyn-based “Insane Crip Gangsters,” a subset of the Crips street gang, with sex trafficking, sex trafficking conspiracy and promoting prostitution. The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.
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 charges.
“As alleged, over a period of years the defendants forced a woman to prostitute herself, while they enriched themselves at her expense,” stated United States Attorney Donoghue. “This Office will continue to work with the FBI and our local law enforcement partners to put an end to the criminal acts of those who seek to profit from sexual slavery.”
As alleged in the indictment and court filings, from 2014 through 2018, the defendants used violence and threats of violence to force their victim into prostitution. As part of their coercion, they plied her with drugs and deprived her of food and sleep, and demonstrated their control over their victim by tattooing their names on her body. The defendants then brazenly promoted their criminal acts on the internet and social media.
If convicted of sex trafficking, both defendants face a mandatory minimum term of 15 years’ imprisonment, and a maximum of life in prison.
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 Attorney Phil Selden is in charge of the prosecution.
The Defendants:
GLADIMIR THOMAS (also known as “Sleep,” “Sleep Boss” and “Daddy”)
Age: 31
Brooklyn, New YorkRONALD THOMAS (also known as “Roco,” “Roco Da Boss” and “Daddy”)
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No. 20-CR-0001 (RRM)
Alleged Dark Web Narcotics Trafficker Indicted for Distributing Heroin and Methamphetamine in Exchange for BitcoinRead the Press Release
Defendant Joanna De Alba, a U.S. citizen, will be arraigned this afternoon in federal court in Brooklyn on an indictment charging her with conspiring to distribute and possess with intent to distribute heroin and methamphetamine, and distribution of heroin and methamphetamine via the “dark web.” De Alba was detained on October 24, 2019 at the U.S.-Mexico border while attempting to enter the United States. The arraignment will be held before United States Magistrate Judge Steven L. Tiscione.
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, De Alba dispensed heroin and methamphetamine from the shadowy corners of the internet, believing that it provided anonymity to her and her customers,” stated United States Attorney Donoghue. “But thanks to the outstanding work by this Office’s prosecutors and DEA special agents, a bright light has been shined on her activities, and she will now be held to account for her charged criminal acts.”
“Anonymity is what drug dealers rely on in the dark web, but this case proves it’s a false security. Law enforcement is committed to tracking down drug traffickers’ distribution networks everywhere,” stated DEA Special Agent-in-Charge Donovan.
The internet contains online marketplaces for narcotics and other contraband on the “dark web,” a part of the internet located beyond the reach of traditional internet browsers and accessible only through networks designed to conceal user identities. As alleged, the “Wall Street Market” was a global dark web marketplace that required its users to trade in digital currencies, primarily Bitcoin.
Between June 2018 and May 2019, De Alba allegedly advertised and sold illegal narcotics on the Wall Street Market, using the moniker “RaptureReloaded.” Customers were directed to pay her in Bitcoin, and contact her through encrypted email and messaging services. De Alba offered customers free shipping to addresses in the United States, and “stealth” delivery options ranging from “Basic Stealth” and “Better Stealth,” to “Super Stealth 360.” These options featured measures to conceal the external and internal packaging of illegal narcotics to evade detection by law enforcement, and to inform buyers if law enforcement had intercepted, tampered with, or was monitoring the shipment.
On January 3, 2019, an undercover DEA agent accessed the RaptureReloaded listing on the Wall Street Market and purchased 30 grams of heroin for a total of $1,810. Later that day, the undercover agent purchased 10 grams of methamphetamine from the RaptureReloaded listing for a total of $160. As requested, the undercover agent paid for the drugs with Bitcoin. On January 14, 2019, the undercover agent retrieved a package shipped by RaptureReloaded via the U.S. postal service to a mailbox in Queens, New York. The package contained a small plastic container containing approximately 30 grams of a substance that tested positive for heroin, and a clear plastic bag containing approximately 10 grams of a substance that tested positive for methamphetamine. Between August 2018 and January 2019, law enforcement agents intercepted five packages containing methamphetamine pills and fentanyl that were shipped from the Netherlands and Canada and addressed to De Alba’s deceased husband at an apartment in southern California. Allegedly, since her husband’s death in March 2018, De Alba used his identity and credit cards to fund her narcotics business on the Wall Street Market.
If convicted of all counts, De Alba faces a mandatory minimum term of five years’ imprisonment and a maximum sentence of up to 100 years in prison.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Saritha Komatireddy and Francisco J. Navarro.
The Defendant:
JOANNA DE ALBA (also known as “RaptureReloaded”)
Age: 39
Tijuana, MexicoE.D.N.Y. Docket No. 19-CR-563 (DLI)
Federal District Court Orders New York Company to Stop Distributing Adulterated and Misbranded Dietary SupplementsRead the Press Release
The U.S. District Court for the Eastern District of New York permanently enjoined ABH Nature’s Products, Inc., ABH Pharma, Inc., StockNutra.com, Inc. (together, "ABH"), each of Edgewood, New York, and their owner, Mohammed Jahirul Islam ("Islam") of Flushing, New York from distributing adulterated and misbranded dietary supplements in violation of the Federal Food, Drug, and Cosmetic Act, the Department of Justice announced today.
The injunction requires ABH and Islam to destroy, within 15 days, dietary supplements that are in their possession, custody, or control. The injunction also orders ABH and Islam to implement several consumer safety measures before resuming the manufacturing or distributing of dietary supplements. Those measures include hiring an independent expert to inspect ABH’s facility and certify that the facility has corrected all deficiencies and implemented current good manufacturing practices. It also mandates that the defendants engage a labeling expert to review their product labeling and certify that claims on their products comply with the law.
"Today’s injunction reflects the Department of Justice’s commitment to protect consumers from adulterated and misbranded dietary supplements," said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. "The Department of Justice will work with the FDA to ensure that dietary supplements are manufactured according to food safety laws and accurately describe their ingredients."
"As demonstrated by today’s consent decree, this office and the FDA will work tirelessly to protect consumers who take dietary supplements, ensuring that manufacturers comply with good manufacturing practices and do not distribute unapproved and misbranded drugs in violation of the Food, Drug, and Cosmetic Act," said U.S. Attorney for the Eastern District of New York Richard P. Donoghue.
"Manufacturers of products labeled as dietary supplements have an obligation to evaluate the safety and labeling to ensure their products are manufactured correctly to meet all federal requirements and are not misleading to consumers," said Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs. "Americans expect and deserve products that meet appropriate standards, and the FDA remains committed to taking action against companies and owners who place the health of American consumers at risk."
The injunction stems from a complaint the Department filed on Nov. 21, 2019, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, ABH and Islam manufactured, prepared, labeled, packed, held, and distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations. In particular, the complaint alleged that the FDA had observed several critical deviations from current good manufacturing practice regulations during its inspections of ABH’s manufacturing facility, including failures to verify that certain dietary supplements met the product’s specifications for identity, purity, strength, and composition; to implement a production system that ensured the quality of the supplements; to include necessary information in its production records; and to properly review and investigate a consumer complaint.
In addition, the complaint alleged that ABH and Islam further violated the Federal Food, Drug, and Cosmetic Act by distributing unapproved and misbranded "new drugs" into interstate commerce. For instance, as alleged in the complaint, ABH made claims on product labeling that such products could be used to treat such medical conditions as cancer, heart disease, HIV and AIDS, even though the FDA had not approved those products for such purported uses, nor were there any published adequate and well-controlled investigations showing that such products are generally recognized as safe and effective for any use.
The defendants agreed to resolve the complaint and be bound by a consent decree of permanent injunction. The court adopted the agreement and entered the injunction.
The government is represented by Trial Attorney Joshua Fowkes of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Evan Lestelle of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of William Thanhauser of the FDA’s Office of Chief Counsel.
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.
District Court Orders Three Long Island Companies and Their Owner to Stop Distributing Adulterated and Misbranded Dietary Supplements and Unapproved and Misbranded DrugsRead the Press Release
BROOKLYN, NY – The United States District Court for the Eastern District of New York has entered a consent decree barring three corporations, ABH Nature’s Products, Inc., ABH Pharma, Inc., and StockNutra.com, Inc. (together, “ABH”), each of Edgewood, New York, and their owner, Mohammed Jahirul Islam (“Islam”), from distributing adulterated and misbranded dietary supplements and unapproved and misbranded drugs, and requiring them to take remedial action.
The consent decree approved by United States District Judge LaShann DeArcy Hall requires ABH and Islam to destroy, within 15 days, all dietary supplements and drugs in their possession, custody or control. The injunction also requires ABH and Islam to implement consumer safety measures before resuming the manufacturing or distributing of dietary supplements. This includes hiring an independent expert to perform a comprehensive inspection of ABH’s facility, and requiring the expert to certify that defendants are complying with current good manufacturing practices.
The consent decree resolves a suit filed on November 21, 2019, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, ABH and Islam manufactured, prepared, labeled, packed, held and/or distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations.
“As demonstrated by the consent decree, this Office and the FDA will work tirelessly to protect consumers who take dietary supplements, ensuring that manufacturers comply with good manufacturing practices and do not distribute unapproved and misbranded drugs in violation of the Food, Drug, and Cosmetic Act,” stated U.S. Attorney for the Eastern District of New York Richard P. Donoghue.
“Today’s injunction reflects the Department of Justice’s commitment to protect consumers from adulterated and misbranded dietary supplements,” stated Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice will work with the FDA to ensure that dietary supplements are manufactured according to food safety laws and accurately describe their ingredients.”
“Manufacturers of products labeled as dietary supplements have an obligation to evaluate the safety and labeling to ensure their products are manufactured correctly to meet all federal requirements and are not misleading to consumers,” said Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs. “Americans expect and deserve products that meet appropriate standards, and the FDA remains committed to taking action against companies and owners who place the health of American consumers at risk.”
According to the complaint, the FDA documented numerous significant deviations from current good manufacturing practice regulations during at least six inspections of ABH’s facilities conducted over the past several years, including failures to: conduct at least one appropriate test to verify the identity of a dietary ingredient; verify that finished batches of dietary supplements meet product specifications for identity, purity, strength and composition; include required information in batch production records; and properly review and investigate a consumer complaint.
In addition, the complaint alleged that ABH and Islam further violated the federal Food, Drug, and Cosmetic Act by distributing unapproved and misbranded “new drugs” into interstate commerce. For instance, as alleged in the complaint, ABH made claims on product labeling that such products could be used to treat such medical conditions as cancer, heart disease, HIV and AIDS, even though the FDA had not approved those products for such purported uses, nor were there any published adequate and well-controlled investigations showing that such products are generally recognized as safe and effective for any use.
ABH and Islam agreed to resolve the complaint and be bound by the consent decree of permanent injunction.
The government is represented by Assistant U.S. Attorney Evan Lestelle of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Joshua Fowkes of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Litigation William Thanhauser of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
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. Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
The Defendants:
ABH NATURE’S PRODUCTS, INC.
Edgewood, New YorkABH PHARMA, INC.
Edgewood, New YorkSTOCKNUTRA.COM, INC.
Edgewood, New YorkMOHAMMED JAHIRUL ISLAM
E.D.N.Y. Docket No. 19-CV-6589 (LDH) (RLM)
Defendant Charged in Conspiracy to Transport 13 Kilos of Highly Toxic Fentanyl from Texas to New YorkRead the Press Release
Aurora Betancourt, a Canadian citizen, will be arraigned today in federal court in Brooklyn before United States Magistrate Judge Steven M. Gold on an indictment charging her with conspiring to distribute, and distribution of, fentanyl. Betancourt was arrested in Colombia on December 28, 2018, and extradited to the United States on December 18, 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), 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 extradition and indictment.
“As alleged in the indictment, Betancourt arranged the transportation of what she and her co-conspirators referred to as heroin, but what was in fact fentanyl, a synthetic opioid substitute even more potent than heroin,” stated United States Attorney Donoghue. “Thanks to the outstanding work by law enforcement officers, Betancourt’s alleged plan to flood our streets with this extremely dangerous drug was thwarted, and she will now face justice for her actions.” Mr. Donoghue extended his grateful appreciation to Drug Enforcement Administration Galveston, Texas office and the United States Marshals Service.
“Narcotics such as fentanyl and heroin are destroying lives and terrorizing communities across the United States, as well as here in New York. As alleged, the defendant showed a flagrant disregard for human life and public safety, by arranging with her associates to have a significant amount of fentanyl transported to New York,” stated FBI Assistant Director-in-Charge Sweeney. “Today’s arrest demonstrates the commitment of the FBI and our law enforcement partners to holding accountable anyone who would perpetuate the cycle of addiction contributing to the opioid crisis.”
“Allegedly responsible for attempting to transport 13 kilos of highly addictive fentanyl onto the streets of New York City, Betancourt will now have to answer for her actions that could have resulted in overdoses and deaths in our city,” stated HSI Special Agent-in-Charge Fitzhugh. “Fentanyl has claimed the lives of far too many Americans, and so seizures and arrests like this are an important step to help rid the streets of this deadly epidemic.”
According to court documents, at a meeting in Queens, New York, in July 2017, Betancourt conspired with others to transport narcotics from Houston, Texas, for distribution in the New York metropolitan area. The conspirators referred to the narcotics as “grasa,” a code for heroin. DEA agents seized the narcotics in Texas before they could be transported. Subsequent laboratory testing revealed that the narcotics were actually fentanyl, a highly potent synthetic opioid that can serve as a substitute for heroin and frequently results in overdoses by users. The total weight of the seizure was approximately 13 kilos, at the time the second largest seizure of fentanyl by the DEA. DEA estimated the street value of the fentanyl in New York at approximately $800,000.
If convicted of either count of the indictment, Betancourt faces a mandatory minimum of 10 years’ imprisonment and a maximum of life imprisonment.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering section. Assistant United States Attorney Alicia N. Washington is in charge of the prosecution.
The Defendant:
AURORA BETANCOURT
Age: 35
CanadaE.D.N.Y. Docket No. 18-CR-623 (ARR)
Long Island Man Indicted for Causing Overdose Death in Suffolk CountyRead the Press Release
Marlon Thompson was arraigned this afternoon in federal court in Central Islip before United States Magistrate Judge A. Kathleen Tomlinson on an indictment charging him with conspiracy to distribute cocaine base and heroin from April 2018 through May 2019, and distribution of a controlled substance containing fentanyl resulting in the fatal overdose of a Fredrick Koenig of Selden, New York, on December 26, 2018. Thompson was ordered detained pending trial.
Thompson was previously detained on state charges and was transferred into federal custody today.
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.
“Marlon Thompson showed no regard for human life when he allegedly sold a lethal dose of fentanyl to the victim,” stated United States Attorney Donoghue. “This Office will continue to work tirelessly with our law enforcement partners to prosecute those who contribute to the opioid epidemic.” Mr. Donoghue thanked the Suffolk County District Attorney’s Office and the Suffolk County Police Department for their assistance on the case.
“Drug trafficking trends indicate that poly-drug doses are being sold on the street without customers’ knowledge of its potency,” said DEA Special Agent-in-Charge Donovan. “Case in point, a toxic cocktail containing fentanyl resulted in a fatal overdose. I applaud our law enforcement partners on their diligent work throughout this investigation.”
If convicted of distributing a controlled substance causing the death of Koenig, the defendant faces a mandatory minimum term of 20 years’ imprisonment and up to a maximum of life in prison.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. The government’s investigation is continuing.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Catherine M. Mirabile is in charge of the prosecution.
The Defendant:
MARLON THOMPSON
Age: 38
Selden, New YorkE.D.N.Y. Docket No. 19-CR-596 (DRH)
Former Suffolk County District Attorney Thomas J. Spota and Government Corruption Bureau Chief Christopher McPartland Convicted of Obstructing a Federal Civil Rights InvestigationRead the Press Release
Former Suffolk County District Attorney Thomas J. Spota and Christopher McPartland, the former Chief of Investigations and Chief of the Government Corruption Bureau of the Suffolk County District Attorney’s Office (SCDAO), were convicted today by a federal jury in Central Islip, New York, of all four counts of the indictment charging them with conspiracy to tamper with witnesses and obstruct an official proceeding, witness tampering, obstruction of justice, and being accessories after-the-fact to former Suffolk County Police Department (SCPD) Chief of Department James Burke’s deprivation of a prisoner’s civil rights. The verdict followed a six-week trial before United States District Judge Joan M. Azrack. When sentenced, Spota and McPartland each face up to 20 years’ imprisonment.
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), announced the verdicts.
“When a sitting District Attorney and the Chief of the Government Corruption Bureau attempt to obstruct a federal grand jury investigation, it is nothing short of an attack on the justice system itself, and it will not be tolerated by the Justice Department. As prosecutors, the defendants were obligated to support the law they enforce, but the criminal actions taken by these men made a mockery of that obligation. Thankfully, the rule of law has prevailed, and the defendants now must face the consequences of their actions, just like any other defendant who has broken the law,” stated United States Attorney Donoghue.
“Spota and McPartland violated the law by obstructing a federal investigation into the assault on an individual’s civil rights,” stated FBI Assistant Director-in-Charge Sweeney. “Today they are reminded that positions of power come with a great responsibility to respect both the law and public trust. Any abuse of this privilege will be prosecuted to the fullest extent.”
As proven at trial, Spota and McPartland, the top prosecutors in Suffolk County, abused their leadership positions and authority within the SCDAO to obstruct and attempt to obstruct the FBI and federal grand juries investigating the assault of a SCPD prisoner, Christopher Loeb, in order to protect then-Chief Burke. On December 14, 2012, Loeb was arrested on larceny charges, among other offenses, in connection with his burglarizing Burke’s department-issued vehicle and stealing Burke’s gun belt and ammunition, as well as a duffel bag containing cigars, sex toys, a pornographic video and a bottle of Viagra. Loeb was transported to the Fourth Precinct in Hauppauge, New York, where he was assaulted by Burke and other members of the SCPD, while handcuffed and shackled to the floor.
The evidence at trial consisted of SCPD and SCDAO documents and records, voluminous telephone records, cell site records and testimony from 30 witnesses, including multiple cooperating witnesses. One such witness was James Hickey, a retired SCPD Lieutenant who was part of the “Inner Circle” that included Spota, McPartland and Burke. Hickey and several other cooperating and immunized witnesses detailed the defendants’ use of intimidation and threats to pressure witnesses to withhold information, refuse to cooperate with law enforcement, and lie under oath in order to thwart the federal investigation of the Loeb assault. Hickey supervised the SCPD’s elite Criminal Intelligence Unit, which Burke referred to as his “Palace Guards.” Three detectives from this unit participated with Burke in the assault of Loeb. Hickey testified that Burke told him the Intel guys “did themselves proud,” they “beat the hell” out of Loeb, and it was “just like the good old days.”
Loeb’s case was handled by the SCDAO’s Government Corruption Bureau, supervised by McPartland, although the charges would not typically be handled by that bureau, in an attempt to control the flow of information and cover-up the assault. In February 2013, after Loeb’s attorney disclosed that her client had been assaulted at the Fourth Precinct, Hickey testified that McPartland advised him to “keep the guys quiet and tight … it’s imperative we keep Jimmy [Burke] out of jail, so we needed to keep the guys quiet and in line.” Hickey testified that Spota regularly pressured him to keep the Intel detectives quiet by repeatedly inquiring – “Are they holding up?” “Are they towing the line?” – conveying the message that they should refuse to cooperate with the federal investigation and, if necessary, lie to protect Burke.
In April 2013, the United States Attorney’s Office for the Eastern District of New York and the FBI initiated a federal grand jury investigation into the assault of Loeb.
On June 25, 2013, FBI Special Agents served members of the SCPD with federal grand jury subpoenas. That same day, defendants Spota and McPartland learned of the existence of the federal investigation. McPartland instructed Hickey to debrief his Intel detectives and learn what was said by the FBI agents serving the subpoenas, and find out who might be cooperating with them. However, because of the threats and intimidation, none of the Intel detectives cooperated with the investigation, and it was closed eight months later, in December 2013. Through the efforts of the defendants and Burke, the initial grand jury investigation of Burke’s civil rights violation was successfully derailed.
In or about mid-2015, Spota and McPartland learned that the federal investigation had been reopened, and that its scope had expanded to include an investigation of the obstruction of justice and witness tampering offenses. The defendants reacted swiftly to obstruct it. Hickey testified that at a meeting with the defendants in Spota’s office on June 4, 2015, Spota asked him, “Who do you think has flipped?” In discussing which of the detectives might be a “rat,” cooperating with federal investigators, Spota said about one of the likely cooperators, “If he talks, he’s dead. He will never work in Suffolk County again.” In that same meeting, McPartland told Hickey to pass along a message to the Intel detectives, threatening them with prosecution if they cooperated with the investigation.
The defendants’ efforts to thwart the grand jury investigations ultimately failed. In early December 2015, a federal grand jury in the Eastern District of New York indicted Burke. Burke pleaded guilty approximately two months later, admitting to his involvement in both the deprivation of Loeb’s civil rights and the conspiracy to obstruct justice. In November 2016, he was sentenced to 46 months’ in prison.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann, Lara Treinis Gatz, Justina L. Geraci and Michael R. Maffei are in charge of the prosecution, and were assisted by Assistant United States Attorney John Durham and Investigator William Hessle.
The Defendants:
THOMAS J. SPOTA
Age: 78
Mount Sinai, New YorkCHRISTOPHER McPARTLAND
Age: 54
Northport, New YorkE.D.N.Y. Docket No. 17-CR-587 (JMA)
CEO of Staten Island Technology Company Indicted for Stealing Hundreds of Thousands of Dollars Earmarked for Internet Access at Catholic Schools in the Diocese of BrooklynRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging John Comito, Chief Executive Officer of Staten Island-based AutoExec Computer Systems, Inc. (AutoExec) with mail and wire fraud in connection with the federal program known as E-rate. Comito was arrested this morning, and was arraigned this afternoon before United States Magistrate Judge Steven M. Gold. Comito was released on a $500,000 bond.
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), and David L. Hunt, Inspector General, Federal Communications Commission (FCC-OIG), announced the charges.
“Comito allegedly overbilled the E-rate program and schools for equipment and services in order to enrich himself at the expense of the children the program was designed to serve,” stated United States Attorney Donoghue. “This Office will vigorously prosecute those who defraud taxpayer-supported programs for personal gain.”
“Instead of completing the work he was trusted and contracted to perform, the defendant allegedly chose to bilk the government and steal from those less fortunate. Society will swiftly denounce this type of criminal behavior, and Comito will now he held accountable,” stated USPIS Inspector-in-Charge Bartlett.
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the E-rate Program,” stated FCC Inspector General Hunt. “We will continue to work with our law enforcement partners to investigate these matters, where the allegation involves a service provider seeking to take advantage of the program by retaining funds for his own purposes rather than providing equipment and services to needy schoolchildren.”
As set forth in the indictment and other court documents, the E‑rate program distributes funds to schools and libraries serving economically disadvantaged children to purchase telecommunication services, internet access and related equipment. In order to qualify, educational institutions must certify that they are purchasing equipment and services from a private vendor. The vendor must certify that it is providing the services and equipment as ordered, and is otherwise in compliance with the requirements of the program. If approved, the E-rate program defrays the cost by up to 90 percent.
From 2013 to 2017, 26 elementary, middle and high schools located in the Diocese of Brooklyn contracted with AutoExec to provide telecommunications equipment and services. At least eight schools received no equipment or services, and the remaining schools received partial, substandard or non-approved equipment and services. In total, Comito overbilled the E-rate program, and defrauded the program and schools, in the amount of approximately $426,000.
The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
If convicted, Comito faces a maximum sentence of 20 years’ imprisonment on each count of mail fraud and wire fraud.
Assistant United States Attorneys Francisco J. Navarro and Philip Pilmar are in charge of the prosecution.
The Defendant:
JOHN COMITO
Age: 68
Staten Island, New YorkE.D.N.Y. Docket No. 19-CR-593 (RMM)
Social Worker Convicted of Defrauding Program for Developmentally Delayed ChildrenRead the Press Release
A federal jury in Brooklyn yesterday returned a guilty verdict for public benefits theft and healthcare fraud against Enock Mensah, a social worker participating in the New York State Early Intervention Program (EIP) that provides remedial services to developmentally delayed children. When sentenced by United States District Judge Sterling Johnson, Jr., the defendant faces up to 10 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 (FBI), and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the verdict.
“Mensah was more interested in lining his pockets than serving the developmentally delayed children and their families who depend on social work services,” stated United States Attorney Donoghue. “With today’s verdict, the defendant faces the consequences for abusing the trust placed in him, which should also serve as a deterrent to those who would attempt to defraud public benefit programs.”
“Early intervention therapies are essential to the progress of young developmentally disabled and delayed children. The defendant, convicted today of fraud and other charges, chose greed over honesty – accepting public money as if he had provided these crucial services and pocketing those funds for himself, denying children and their families care that would help them reach important developmental milestones. DOI thanks the U.S. Attorney’s Office for the Eastern District of New York for its prosecution of and partnership in this important investigation,” stated DOI Commissioner Garnett.
From August 2013 to October 2018, Mensah fraudulently billed Medicaid and EIP for more than 1,700 therapy sessions that never occurred, resulting in the theft of more than $145,000 in Medicaid funds and more than $29,000 in New York City Department of Health and Mental Hygiene funds. At trial, several parents of special needs children testified that Mensah did not provide therapy sessions to their children. This was despite documents showing that he claimed to have done so and submitted claims forms for payment to the health care agencies. One parent testified that she was in the Dominican Republic with her autistic child when Mensah billed for two purported therapy sessions with them. In some cases, Mensah forged the parents’ signatures on these claims forms; in others, he persuaded them to sign blank forms.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Ryan Harris, Anthony Bagnuola, Oren Gleich and Erin Reid are in charge of the prosecution.
The Defendant:
ENOCK MENSAH
Age: 60
Fort Lee, New JerseyE.D.N.Y. Docket No. 19-CR-60 (S-1) (SJ)
18th Street Gang Leader Indicted for Ordering Murder of 15-Year-Old Victim on Long IslandRead the Press Release
Junior Zelaya-Canales, a regional leader of the 18th Street gang, will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy in federal court in Brooklyn on a fourth superseding indictment charging him with murder in aid of racketeering in connection with the September 2016 fatal shooting of 15-year-old Josue Guzman in Hempstead, New York; conspiracy to murder rival gang members; and attempted murder of rival gang members. The superseding indictment also charged 18th Street gang members Jonathan Zelaya-Diaz with conspiracy to commit murder and attempted murder in aid of racketeering, and Eric Chavez with attempted murder and assault in aid of racketeering. Chavez was arrested on Tuesday and ordered detained pending trial. Zelaya-Diaz remains at large.
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), announced the charges.
As alleged in the superseding indictment and other court filings, the 18th Street gang is a violent street gang with members and associates in Jamaica, Queens, and in various locations across the United States.
“The superseding indictment and arrests announced today are a significant step in dismantling a violent street gang in our district,” stated United States Attorney Donoghue. “This Office, with the assistance of local and federal law enforcement partners, will not relent until violent street gangs that endanger communities have been eradicated.” Mr. Donoghue expressed his grateful appreciation to the Nassau County District Attorney’s Office, Nassau County Police Department, Queens District Attorney’s Office and the New York City Police Department (NYPD) for their assistance with the investigations.
"It defies comprehension these gang members are allegedly murdering and attempting to murder human beings for respect in their gang or in retaliation for some perceived slight,” stated FBI Assistant Director-in-Charge Sweeney. “Josue Guzman was just 15-years-old when he was shot and killed because someone deemed him to be disrespectful. We may never be able to change the mindlessness of a teenager being killed for no reason, but we can certainly make sure anyone who commits such a grotesque act will suffer the consequences.”
The Guzman Murder
In September 2016, Zelaya-Canales allegedly directed two lower-level gang members to kill Josue Guzman to demonstrate their allegiance to 18th Street gang. The murder was ordered, in part, because Guzman was believed to have offended 18th Street gang members. On September 12, 2016, at approximately 1:00 a.m., the Hempstead Police Department responded to a report of shots fired near the intersection of Linden Avenue and Laurel Avenue in Hempstead. There, the police officers found Guzman’s body lying near the curb, shot once in the back of the head. Guzman was pronounced dead at the scene.
Attempted Murder of Rival Gang Members
On July 9, 2017, Zelaya-Canales, Zelaya-Diaz and another 18th Street gang member allegedly directed the shooting of rival gang members over a turf dispute in Woodhaven, Queens. At approximately 10:30 p.m., NYPD officers responded to a 911 call about shots fired in the vicinity of 86th Road in Woodhaven. There, the police officers recovered nine 9-millimeter shell casings.
On August 9, 2017, NYPD detectives investigating the shooting executed a search warrant at Zelaya-Canales’s apartment and recovered a 9-millimeter Ruger handgun with a defaced serial number, four rounds of 9-millimeter ammunition, 56 rounds of .357 magnum ammunition, 34 rounds of .380 caliber ammunition and 23 rounds of .38 ammunition. Ballistic tests subsequently revealed that the Ruger handgun was the weapon that fired the 9-millimeter shell casings found at the scene of the shooting in Woodhaven.
Attempted Murder of “John Doe”
On September 20, 2017, in Jamaica, Queens, Eric Chavez allegedly shot “John Doe” for the purpose of maintaining and increasing his own position in the 18th Street gang, incorrectly suspecting that “Doe” was a member of the rival MS-13 gang. Chavez and another gang member approached “Doe” with guns drawn and searched him for MS-13 gang tattoos, but discovered none. Nevertheless, they shot and wounded “Doe” as he fled.
The charges in the superseding 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 Soumya Dayananda and Jonathan P. Lax.
The Defendants:
JUNIOR ZELAYA-CANALES (also known as “Terco”)
Age: 23
Queens, New YorkJONATHAN ZELAYA-DIAZ (also known as “Scooby”)
Age: 25
Hempstead, New YorkERIC CHAVEZ (also known as “Lunatico”)
Age: 20
Queens, New YorkE.D.N.Y. Docket No. 18-139 (S-4) (LDH)
Former Mexican Secretary of Public Security Arrested for Drug-Trafficking Conspiracy and Making False StatementsRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Genaro Garcia Luna, the former Secretary of Public Security in Mexico from 2006 to 2012, with three counts of cocaine trafficking conspiracy and one count of making false statements. In exchange for multimillion-dollar bribes, the defendant allegedly permitted the Sinaloa Cartel to operate with impunity in Mexico. Garcia Luna was arrested yesterday by federal agents in Dallas, Texas, and the government will seek his removal to the Eastern District of New York to face these charges.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the charges.
“Garcia Luna stands accused of taking millions of dollars in bribes from ‘El Chapo’ Guzman’s Sinaloa Cartel while he controlled Mexico’s Federal Police Force and was responsible for ensuring public safety in Mexico,” stated United States Attorney Donoghue. “Today’s arrest demonstrates our resolve to bring to justice those who help cartels inflict devastating harm on the United States and Mexico, regardless of the positions they held while committing their crimes.” Mr. Donoghue thanked the Drug Enforcement Administration (DEA) offices in New York and Houston, Homeland Security Investigations, New York Field Office (HSI), New York City Police Department (NYPD) and New York State Police (NYSP) for their work on the case.
According to the indictment and other court filings by the government, from 2001 to 2012, while occupying high-ranking law enforcement positions in the Mexican government, Garcia Luna received millions of dollars in bribes from the Sinaloa Cartel in exchange for providing protection for its drug trafficking activities. From 2001 to 2005, Garcia Luna led Mexico’s Federal Investigation Agency, and from 2006 to 2012, he served as Mexico’s Secretary of Public Security, controlling Mexico’s Federal Police Force. In exchange for the payment of bribes, the Sinaloa Cartel obtained safe passage for its drug shipments, sensitive law enforcement information about investigations into the Cartel, and information about rival drug cartels, thereby facilitating the importation of multi‑ton quantities of cocaine and other drugs into the United States. On two occasions, the Cartel personally delivered bribe payments to Garcia Luna in briefcases containing between three and five million dollars. According to financial records obtained by the government, by the time Garcia Luna relocated to the United States in 2012, he had amassed a personal fortune of millions of dollars.
Garcia Luna continued to take steps in the United States to conceal his corrupt assistance to drug traffickers. Specifically, he allegedly submitted an application for naturalization in 2018, in which he lied about his past criminal acts on behalf of the Sinaloa Cartel.
If convicted of the drug conspiracy charge, Garcia Luna faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment.
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, NYPD, NYSP, HSI, 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, United States 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 indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by the Eastern District’s International Narcotics and Money Laundering Section and Public Integrity Section. Assistant United States Attorneys Michael P. Robotti, Ryan Harris and Erin Reid are in charge of the prosecution.
The Defendant:
GENARO GARCIA LUNA
Age: 51
Residence: FloridaE.D.N.Y. Docket No. 19-CR-576 (RJD)
10 Bronx and Westchester-Based Members and Associates of the Gambino Crime Family Indicted in Brooklyn Federal Court for Crimes, Including Racketeering Conspiracy, Loansharking, Obstruction of Justice and BriberyRead the Press Release
Two indictments and one complaint were unsealed today in federal court in Brooklyn variously charging 12 defendants with racketeering conspiracy, bribery, loansharking, fraud, obstruction of justice and related offenses. Those charged with racketeering conspiracy were Andrew Campos, an alleged captain in the Gambino organized crime family of La Cosa Nostra; James Ciaccia, George Campos, Vincent Fiore and Richard Martino, alleged Gambino family soldiers; and Renato Barca, Jr., Benito DiZenzo, Mark Kocaj, Frank Tarul and Michael Tarul, alleged Gambino family associates. The charges relate to the defendants’ criminal activities throughout the New York metropolitan area since February 2013.
Eleven defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. One defendant is a fugitive.
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); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.
“The outstanding investigative work by this Office’s prosecutors and our law enforcement partners uncovered a litany of crimes allegedly committed by members and associates of the Gambino organized crime family, who still don’t get it – handcuffs and a jail cell are waiting for criminals who threaten violence and commit fraud, money laundering and bribery in furtherance of their enterprise,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Queens County District Attorney’s Office, the United States Probation Departments for the Eastern and Southern Districts of New York and the Waterfront Commission of New York Harbor for their assistance during the investigation.
“The Gambino members arrested in this case ran the gamut of criminal activity. Everything from the usual thuggish behavior of beating people up, forcing people to take the fall for their crimes, all the way to defrauding the federal government,” stated FBI Assistant Director-in-Charge Sweeney. “Several suspects even went to prison, were released, and allegedly went right back to breaking the law. At some point, these crime families should realize we see what they're doing, and their actions are going to lead them right back to the same prison cells.”
“Financial gain is the primary motivation of any criminal enterprise and these allegations are no different,” stated IRS-CI Special Agent-in-Charge Larsen. “The criminal investigators of IRS-Criminal Investigation specialize in unraveling such serious charges where multiple financial frauds and extreme measures are utilized for personal enrichment.”
“The NYPD and its law enforcement partners remain committed to eradicating organized crime in New York City,” stated NYPD Commissioner Shea. “Associates of the Gambino Crime Family – or any other enterprise that seeks to enrich its members through racketeering, bribery, loansharking and fraud – should know that investigators will build strong cases against them, and they will be prosecuted. I commend the members of the NYPD, the FBI, and the U.S. Attorney’s Office for their work on this case.”
As alleged in the government’s court filings and summarized below, Andrew Campos and members of his crew used bribery, fraud and extortion schemes to infiltrate the construction industry and earn millions of dollars in criminal proceeds.
Honest Services Wire Fraud Bribery Schemes
Andrew Campos, Fiore, Kocaj and DiZenzo operated a carpentry company, CWC Contracting Corp. (“CWC”), and are charged with paying bribes and kickbacks to employees of numerous construction companies and real estate developers. In exchange, these employees took steps to benefit CWC, including awarding contracts and approving change orders to add or delete from the original scope of a contract. Specifically, between approximately June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes and kickbacks to multiple employees of a real estate development company (described in the indictment as “Construction Company #1”), including John Simonlacaj, the company’s current Managing Director of Development. CWC paid the bribes in the form of hundreds of thousands of dollars’ worth of free labor and materials used for renovations on Simonlacaj’s residence that was paid for by a fraudulently approved change order. As Kocaj stated, although the work was paid for by a change order, “it should have been pro bono” because Construction Company #1 “do[es] 50 million a year in business”, and it was “worth it to do some of the paperwork.” In another intercepted conversation, Fiore described the benefits provided by Simonlacaj, “This director, John. There’s a beautiful in there. There’s things we can do with [Kocaj] there, he whispers what he needs to whisper and we get things done.”
Obstruction of Justice – Martino’s Concealment of Financial Assets
In 2005, Andrew Campos and Martino were convicted in the Eastern District of New York for their role in a massive scheme to defraud users of adult entertainment services. Martino was ultimately sentenced to 108 months’ imprisonment and ordered by the court to pay $9.1 million in forfeiture. After his release from prison, Martino, together with Frank Tarul and others, concealed Martino’s substantial wealth and income, falsely reporting that Martino had limited assets and worked for Tarul’s flooring company. In reality, as revealed by court-authorized wiretaps, Martino operated multiple companies that earned millions of dollars, including construction work, investments in pizzerias and other business ventures.
Loansharking and Extortion
As detailed in the government’s court filings, various defendants used extortionate means to collect money. For example, Andrew Campos and Fiore used threats of violence to collect at least $100,000 from one victim. In a lawfully wiretapped phone conversation on March 13, 2019, Fiore warned the victim, “When you get punched in the face and your teeth get knocked out . . . you’re not going to laugh no more, okay? . . . At the end of the day, when you’re upside down [i.e., unable to make certain payments], you deal with him,” referring to Campos.
Kocaj and Lopez, a former professional boxer, are charged with loansharking, including Kocaj’s recovery of tens of thousands of dollars of a gambling debt on behalf of an Albanian organized crime figure. Kocaj bragged about his ability to violently collect money, stating that he could send “a couple of my Albanian guys” and have somebody “grab [a potential victim] by the f-----g neck.” Kocaj helped collect over $30,000, threatening that if the victim did not pay, “[h]e’s going to get his head split open. . . . These are not the guys to f--- around with. . . . These Albanians, you know what they’ll do.” Earlier this morning, law enforcement officers executed a search warrant at Lopez’s home and seized $25,000 in cash, brass knuckles and several large knives.
Retaliation Against Grand Jury Witness – Obstruction of Justice
Andrew Campos allegedly directed that a CWC worker believed to have testified before the grand jury be fired. Subsequently, during a lawfully recorded conversation on November 22, 2019, Fiore directed that the CWC worker be fired as “a personal favor to Andrew,” because the worker “could’ve pled the Fifth.”
Additional Charged Schemes
The indictments and complaint include additional alleged criminal schemes, including (1) laundering money by cashing checks made out to others, purportedly for work performed in connection with CWC construction projects; (2) fraudulently procuring cards from the United States Department of Labor indicating completion of certain Occupational Safety and Health Administration training courses when, in fact, the courses were never completed; (3) defrauding the U.S. government by paying CWC employees millions of dollars in cash without making the required payroll tax withholdings and payments; (4) overbilling CWC clients by causing them to pay for fraudulent or inflated work orders; and (5) evading taxes and money laundering, including by having CWC construct Andrew Campos’s residence.
The charges in the indictments and complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Keith D. Edelman and Kayla C. Bensing are in charge of the prosecution, assisted by EDNY Special Agent Erik Nesbitt. Assistant United States Attorney Claire S. Kedeshian is handling forfeiture matters.
The Defendants:
E.D.N.Y. Docket No. 19-CR-575 (FB)
RENATO BARCA, JR. (also known as “Ronny”)
Age: 32
Bronx, New YorkANDREW CAMPOS
Age: 50
Scarsdale, New YorkGEORGE CAMPOS
Age: 72
Peekskill, New YorkJAMES CIACCIA
Age: 51
Bronx, New YorkBENITO DIZENZO (also known as “Benny”)
Age: 53
New Rochelle, New YorkVINCENT FIORE
Age: 57
Briarcliff, New YorkMARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New YorkRICHARD MARTINO
Age: 60
Rye, New YorkJOHN SIMONLACAJ (also known as “John Si” and “Smiley”)
Age: 50
Scarsdale, New YorkFRANK TARUL (also known as “Bones”)
Age: 45
Bronx, New YorkMICHAEL TARUL (also known as “Perkins”)
Age: 43
Bronx, New YorkE.D.N.Y. Docket No. 19-CR-577 (FB)
MARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New YorkE.D.N.Y. Docket No. 19-MJ-1126
ADRIAL LOPEZ (also known as “Adriel Lopez” and “Andrew Lopeck”)
Age: 56
Bronx, New YorkJustice Department Awards $635,000 in Grants to Support Crime-Fighting Efforts in Nassau and Suffolk CountiesRead the Press Release
Today, the Department of Justice announced that it has awarded $360,000 to the Office of the Nassau County District Attorney and $275,000 to Suffolk County, New York, as part of more than $376 million in grant funding to enhance state, local and tribal law enforcement operations and reinforce public safety efforts in jurisdictions across the United States. The awards were made by the Department’s Office of Justice Programs (OJP).
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Katherine T. Sullivan, Principal Deputy Assistant Attorney General, OJP, announced the awards.
“DOJ’s Office of Justice Programs’ grants will provide additional support to our law enforcement and community partners in Nassau and Suffolk Counties to our collective benefit,” stated United States Attorney Donoghue.
“Crime and violence hold families, friends and neighborhoods hostage, and they rip communities apart,” stated OJP Principal Deputy Assistant Attorney General Sullivan. “These programs help restore the health and safety of crime-ravaged communities by supporting prevention activities, aiding in the apprehension and prosecution of perpetrators, facilitating appropriate sentencing and adjudication, and providing communities and their residents the means for recovery and healing.”
The awards are:
Bureau of Justice Assistance Innovative Prosecution Solutions for Combatting Violent Crime Program
The program provides prosecutors with information, resources and training, and technical assistance to develop effective strategies and programs to address and prosecute individuals who commit violent crime. Recipient: Office of the Nassau County District Attorney, $360,000.
Bureau of Justice Assistance Upholding the Rule of Law and Preventing Wrongful Convictions Program
This program supports state and local policymakers, practitioners and entities that represent individuals with post-conviction claims of innocence to review wrongful conviction claims cases and enact measures to prevent future errors and ensure justice. Recipient: Suffolk County, New York, $275,000.
The awards announced today support an array of crime-fighting initiatives, including the $250 million Edward Byrne Justice Assistance Grants Program that funds public safety efforts in 929 state, local and tribal jurisdictions. Funding also supports sex offender registration and notification, law enforcement-based victim services, the testing of sexual assault kits and programs designed to address youth with sexual behavioral problems.
The Office of Justice Programs provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
Justice Department Honors Rank-and-File Law Enforcement Officers and Deputies in Third Annual Attorney General’s Award for Distinguished Service in PolicingRead the Press Release
WASHINGTON – Attorney General William P. Barr and Justice Department leadership today announced the recipients of the Third Annual Attorney General’s Award for Distinguished Service in Policing, recognizing the exceptional work of 19 law enforcement officers and deputies from 12 jurisdictions across the country.
The Attorney General’s Award recognizes individual state, local and tribal sworn rank-and-file police officers and deputies for exceptional efforts in policing. The awarded officers and deputies have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in community policing. The Department received 199 nominations for 414 individuals, ranging from state police departments, to local police, to campus public safety agencies. This award highlights the work that troopers, officers and deputies do to prevent, intervene in and respond to crime and public safety issues.
Detective William Maldonado of the Suffolk County Police Department (SCPD) is honored for his effort in leading the criminal investigation into La Mara Salvatrucha, also known as MS-13, a transnational criminal organization. In January 2016, after the SCPD recognized an increase in MS-13-related crime, Detective Maldonado was assigned to assist in the investigation of the November 2015 disappearance of a 35-year-old man; gang involvement was suspected. During the next six months, there would be three cases of missing teenagers. Detective Maldonado gathered information that indicated the teens had been murdered by MS-13 gang members. Detective Maldonado was tasked with managing intelligence from numerous sources and engaging local police precincts to develop intelligence on targeted gang members of interest. During the course of the investigation, Detective Maldonado was battling cancer, but rarely missed work due to the illness. When he succumbed to his illness in 2018, all of the murder victims’ remains had been recovered, and multiple arrests had been made by law enforcement. As a result of the investigation, MS-13’s Sailor Clique in Suffolk County, which was responsible for most of the murders, was eliminated.
“Honoring and supporting the work of law enforcement officers and deputies is a top priority for the Trump Administration, and today is an opportunity for me to personally express my gratitude and commitment to those who risk their lives daily to protect our communities,” said Attorney General Barr. “The Attorney General’s Award for Distinguished Service in Policing honors exceptional police officers and the vital public service they provide. The brave men and women in law enforcement are engaged in an unrelenting and often unacknowledged fight to keep our communities safe each and every day. It is an honor to thank them for their service.”
“Detective Maldonado’s shining legacy is built upon his unflagging commitment to protect the people of Suffolk County and do justice for the victims brutally killed by MS-13 gang members,” stated United States Attorney Donoghue. “His tenacious work remains an inspiration to all members of law enforcement who are working to eradicate MS-13.”
“This recognition encapsulates everything Detective Maldonado was, as a person and as a detective,” stated SCPD Commissioner Geraldine Hart. “Detective Maldonado worked tirelessly as a member of the FBI Long Island Gang Task Force, where he was instrumental in the fight against MS-13 in Suffolk County. He was proud to be a cop, and we were proud to have him as a member of our SCPD family. His absence is felt every day.”
Brooklyn Man Pleads Guilty to Kidnapping ConspiracyRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Sherzod Mukumov pled guilty to conspiracy to commit kidnapping. As alleged in the indictment, Mukumov and his co-conspirators used a Taser to subdue and abduct a victim to collect a debt the victim purportedly owed to one of Mukukmov’s co-defendants. The plea proceeding was held before United States District Judge I. Leo Glasser. When sentenced, Mukumov faces up to life in prison, as well as forfeiture and a fine of up to $250,000.
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), announced the guilty plea.
In December 2018, the victim joined a pre-existing scheme of Mukumov and others to help applicants for New York State commercial driver’s licenses cheat on tests administered by the Department of Motor Vehicles, in exchange for cash. When the victim ended his involvement in the scheme after approximately two weeks, his former co-conspirators claimed he owed them money.
On the morning of March 28, 2019, Mukumov and his co-conspirators assaulted the victim outside an apartment building in Brooklyn. While the victim was clinging to the front door of the building, he was shocked multiple times by a Taser device held by one of Mukumov’s co-defendants, and lost consciousness. The victim subsequently regained consciousness inside a vehicle, with his hands bound. Mukumov and his co-defendants drove the victim to a deserted area in a parking garage, and took his telephone and other personal items. They then drove to a bank where they forced the victim to open an account and write them a check in partial payment of the purported debt. The victim was released later that day, after he was forced to surrender his driver’s license, green card and bank card.
The government’s case is being handled by the Office’s Public Integrity Section. Special Assistant United States Attorney Virginia Nguyen and Assistant U.S. Attorney Turner Buford are in charge of the prosecution.
The Defendant:
Sherzod Mukumov
Age: 27
Brooklyn, NYE.D.N.Y. Docket No. 19-CR-223 (ILG)
Former Chinese Diplomat and Head of U.S. Operations for Chinese Construction Business Sentenced to 190 Months’ Imprisonment for Engaging in Forced Labor and Related ChargesRead the Press Release
Earlier today, in federal court in Brooklyn, Dan Zhong, a former diplomat of the People’s Republic of China (PRC), was sentenced by United States District Judge Ann M. Donnelly to 190 months’ imprisonment and a $50,000 fine. Zhong, the former head of U.S. operations of Chinese Liaoning Rilin Construction (Group) Co. Ltd. (also known as China Rilin) and U.S.-based subsidiaries, including U.S. Rilin, was convicted by a federal jury in March 2019 following a three-week trial on charges of conspiracy to provide forced labor, providing and benefitting from forced labor, concealing passports and immigration documents in connection with forced labor, conspiracy to commit alien smuggling and conspiracy to commit visa fraud. The Court also ordered Zhong to forfeit his interests in multiple real estate properties and pay approximately $23,000 in restitution as part of the sentence.
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, Department of Homeland Security, Homeland Security Investigations, New York (HSI), and Timothy W. Dumas, Special Agent-in-Charge, U.S. Department of State’s Diplomatic Security Service, New York Field Office (DSS), announced the sentence.
“Unlike Chinese Communist elites, Americans do not practice, condone or tolerate forced labor,” stated United States Attorney Donoghue. “Mr. Zhong, a former long-time PRC diplomat, oppressed and coerced Chinese construction workers in New York, forcing some to work for years without pay under the threat of physical harm and financial ruin. Zhong will now pay a heavy price for those crimes.” Mr. Donoghue expressed his appreciation to the Department of State’s Office of Foreign Missions and the FBI’s Field Office in Newark, New Jersey, for their assistance on the case.
“Zhong forced his workers to work 14-hour days and live in cramped, unsafe conditions, with locks on the doors so they could not escape,” stated HSI Special Agent-in-Charge Fitzhugh. “Through forced labor, Zhong took advantage of those seeking a new life in America. Today’s sentencing is a testament to law enforcement’s resolve to arrest and prosecute anyone seeking to exploit people for person gain.”
“The Diplomatic Security Service works to identify and prevent situations where vulnerable individuals are exploited in human trafficking schemes such as this,” stated DSS Special Agent-in-Charge Dumas. “This case is an especially serious abuse of the legal and immigration systems as it involved a former diplomat of the People’s Republic of China. DSS agents stationed throughout the world are well-positioned to work with U.S. and foreign partners to stop those individuals who would manipulate instruments of international travel, and profit from the selling of human beings.”
Zhong’s company performed construction work on a variety of PRC government facilities in the United States, including the Permanent Mission of the PRC to the United Nations, the Embassy of the PRC to the United States and PRC Consulates General in the United States. Zhong and his co-conspirators obtained visas for PRC workers that required them to work only at PRC diplomatic facilities. In fact, they were forced to work on private construction projects, including a commercial building in midtown Manhattan, and private residences in Queens and on Long Island. Zhong also used the workers as personal servants – preparing meals, chauffeuring him and performing yard work at his home.
Zhong and his co-conspirators required PRC workers to turn over substantial “security deposits,” including the deeds to their family homes that were subject to forfeiture if they refused to work, as a key element of the “debt bondage” contracts the workers signed. Once in the United States, the workers were forced to surrender their passports to Zhong’s co-conspirators. The workers were required to work 14-hour days, seven days a week, for years without receiving any pay. Twenty or more workers were housed in one and two-family houses in Jersey City. Inspections of these houses revealed numerous fire code violations, as well as illegal locks to prevent the workers from escaping. Zhong and his co-conspirators resorted to physical force and threats to prevent escape by the workers, including forcing the workers’ family members out of their homes in the PRC. Zhong’s co-defendant in the indictment, Landong Wang, is a fugitive who is believed to be in the PRC.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, Ian C. Richardson and Craig R. Heeren are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian Morris of the Office’s Civil Division which is handling the forfeiture aspect of the case.
The Defendant:
DAN ZHONG
Age: 49
Livingston, New JerseyE.D.N.Y. Docket No. 16-CR-614 (AMD)
Queens Man Convicted of Extortion Conspiracy and Threatening Physical ViolenceRead the Press Release
A federal jury in Brooklyn returned a guilty verdict yesterday against defendant Yuan Li for extortion conspiracy and threatening physical violence in furtherance of an extortion plan. The verdict followed a four-day trial before United States District Judge Brian M. Cogan. When sentenced, Li faces a maximum sentence of 40 years in prison.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.
“With this verdict, Li now faces punishment for his role in using fear, intimidation and threats of violence to extort a rival who dared to open a gambling parlor on his co-defendant’s turf,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), and the New York City Police Department for their work on the case.
The government’s evidence at trial established that Li’s co-defendant, Anthony Pineda, operated numerous gambling parlors from which he distributed large amounts of methamphetamine, in Flushing, Queens. In September 2017, the victim opened a gambling parlor in a building on College Point Boulevard that also housed one of Pineda’s gambling parlors. On September 28, 2019, Li and Pineda demanded that the victim pay 10 percent of his parlor’s profits. When the victim refused, Pineda brandished a gun and Li reiterated his demand for payment, but to no avail. The next day, Li and Pineda again demanded that the victim provide a percentage of his parlor’s profits. Fearing for his safety, the victim contacted the FBI.
The trial was part of a larger prosecution of 11 additional defendants who previously pleaded guilty. On August 14, 2019, lead defendant Anthony Pineda pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine, possessing a firearm in furtherance of a drug trafficking crime and threatening physical violence in furtherance of an extortion plan. On various dates between April and September 2019, co-defendants Joung Hwa Yun, Yunfeng Goa, Lu Zhai, Marco Rescino, Jing Wang, Ivan Kaleda and Guanghua Shen each pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine. In June and July 2019, co-defendants Nan Zhang and Ting Li each pleaded guilty to conspiracy to distribute five grams or more of methamphetamine. On May 21, 2019, Si En Li pleaded guilty to operating an illegal gambling business.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nadia E. Moore and Drew Rolle are in charge of the prosecution.
Defendant Convicted Yesterday:
YUAN LI (also known as “Mike”)
Age: 38
Queens, New YorkDefendants Awaiting Sentencing:
ANTHONY PINEDA
Age: 37
Queens, New York/San Francisco, CaliforniaYUNFENG GAO
Age: 34
Queens, New YorkIVAN KALEDA
Age: 29
Queens, New YorkSI EN LI
Age: 46
Brooklyn, New YorkTING LI
Age: 31
Queens, New YorkMARCO RESCINO
Age: 23
San Francisco, CaliforniaGUANGHUA SHEN
Age: 45Queens, New York
JIN WANG
Age: 35
Queens, New York
JOUNG HWA YUN
Age: 41
Queens, New YorkLU ZHAI
Age: 31
Queens, New YorkNAN ZHANG
Age: 32E.D.N.Y. Docket No. 18-CR-302 (MKB/BMC)
District Court Enters Injunction against New York Company and Corporate Officials to Prevent Adulteration of Food ProductsRead the Press Release
The Department of Justice announced today that the U.S. District Court for the Eastern District of New York entered an injunction against Foo Yuan Food Products Company Inc. (Foo Yuan) of Long Island City, New York, its owner and president Hsing Chuang, and its secretary Susan Chuang. The injunction permanently enjoins the defendants from preparing, processing, and distributing food products without first taking required remedial action designed to protect consumers from adulterated fish and fishery products.
The injunction stems from a complaint the Department filed in the U.S. District Court for the Eastern District of New York on Aug. 20, 2018, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls. According to the complaint, the defendants failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products.
“The Department of Justice is committed to enforcing federal laws designed to ensure food safety,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice works together with the FDA to ensure that Americans are protected from potentially unsafe food.”
“The defendants’ failure to respond to the serious allegations in the government’s civil complaint was in keeping with their failure to follow FDA regulations in place to protect the public from adulterated fish products,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “The injunction ensures they are out of business until they can comply with all applicable laws and regulations.”
The District Court’s order permanently enjoins defendants from preparing, processing, and distributing food products without first taking required remedial action set forth in the District Court’s order. The measures include, among other things, retaining an independent expert to assist with remedial efforts, including development and implementation of a Listeria Monitoring Program. In addition, defendants’ expert must conduct hazard analyses and develop a written Hazard Analysis and Critical Control Point plan for each type of fish or fishery product prepared, processed, or distributed by defendants to effectively control food safety hazards.
FDA inspected Foo Yuan’s facility in 2014, 2016 and from December 2017 to January 2018. According to the complaint, at each inspection, FDA documented significant deficiencies. For example, as alleged in the complaint, during the most recent inspection, FDA observed a failure to maintain the cleanliness of food contact sources, and a failure to ensure that all persons working in direct contact with food, food contact surfaces and food-packing materials conform to hygienic practices to protect against food contamination.
The complaint noted that, following the October 2014 inspection, the FDA issued a warning letter notifying Foo Yuan and Hsing Chuang that they were in violation of seafood Hazard Analysis and Critical Control Point and current Good Manufacturing Practice regulations, causing their products to be adulterated under the law.
The complaint alleged that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce. It also alleged that the defendants further violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce. The defendants did not file a response to the complaint.
“Taking steps to keep potentially unsafe food out of the U.S. food supply is at the heart of the FDA’s mission to protect public health,” said Associate Commissioner for Regulatory Affairs Melinda K. Plaisier. “When a company does not follow good manufacturing practices and fails to come into compliance, the FDA will take action to protect the health and safety of Americans.”
The government is represented by the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Michael Castiglione of the U.S. Attorney’s Office for the Eastern District of New York, with assistance from Associate General Counsel for Enforcement Tara Boland of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
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.
District Court Enters Injunction Against New York Company and Corporate Executives to Prevent Adulteration of Fish ProductsRead the Press Release
BROOKLYN, NY – The United States District Court for the Eastern District of New York entered a permanent injunction against Foo Yuan Food Products Company Inc. (Foo Yuan) of Long Island City, New York, its Owner and President Hsing Chuang, and its Secretary Susan Chuang. The injunction permanently enjoins the defendants from preparing, processing and distributing food products without first taking required remedial action designed to protect consumers from adulterated fish and fishery products.
The injunction stems from a civil complaint the Department of Justice filed on August 20, 2018, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants, who prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls, failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products. During inspections over a number of years, the FDA documented significant deficiencies, including failure to maintain clean work surfaces and to ensure that workers were conforming to hygienic practices.
The complaint further alleged that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce. It also alleged that the defendants violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce. The defendants did not file a response to the complaint.
The District Court’s order permanently enjoins defendants from preparing, processing and distributing food products without first taking required remedial action set forth in the District Court’s order. The measures include, among other things, retaining an independent expert to assist with remedial efforts, including development and implementation of a Listeria Monitoring Program. In addition, defendants’ expert must conduct hazard analyses and develop a written Hazard Analysis and Critical Control Point plan for each type of fish or fishery product prepared, processed or distributed by defendants to effectively control food safety hazards.
“The defendants’ failure to respond to the serious allegations in the government’s civil complaint was in keeping with their failure to follow FDA regulations in place to protect the public from adulterated fish products,” stated United States Attorney Richard P. Donoghue. “The injunction ensures they are out of business until they can comply with all applicable laws and regulations.”
“The Department of Justice is committed to ensuring that fish processors comply with federal laws designed to ensure food safety,” stated Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to ensure that Americans are protected from potentially unsafe food.”
“Taking steps to keep potentially unsafe food out of the U.S. food supply is at the heart of the FDA’s mission to protect public health,” stated Associate Commissioner for Regulatory Affairs Melinda K. Plaisier. “When a company does not follow good manufacturing practices and fails to come into compliance, the FDA will take action to protect the health and safety of Americans.”
The matter is being handled by Assistant United States Attorney Michael J. Castiglione of the United States Attorney’s Office for the Eastern District of New York together with the Department’s Civil Division’s Consumer Protection Branch, assisted by Associate General Counsel for Enforcement Tara Boland of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
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.
Brooklyn Man Sentenced to Nine Years in Prison for His Role in Murder-For-Hire and Marijuana Trafficking ConspiraciesRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Leon Campbell was sentenced by United States District Judge LaShann DeArcy Hall to nine years’ imprisonment for his 2013 participation in a murder-for-hire conspiracy and conspiracy to distribute marijuana in Brooklyn and Queens. Campbell pleaded guilty to the crimes in June 2019. Upon completion of his sentence, Campbell faces deportation from the United States.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, announced the sentence.
“Campbell showed a total disregard for human life, putting a price on the head of someone he suspected of being a federal informant and plotting to execute him,” stated United States Attorney Donoghue. “The vigilant work of our law enforcement partners enabled them to prevent a murder and hold the defendant responsible for his callous crimes.” Mr. Donoghue extended his grateful appreciation to the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Homeland Security, United States Marshal Service and New York City Police Department for their assistance during the investigation.
“This murder-for-hire conspiracy reminds us of the extent drug traffickers will go to evade imprisonment,” said DEA Special Agent-in-Charge Ray Donovan. “And, it underscores the violence associated with the drug trade that pervades throughout time. I applaud the U.S. Attorney’s Office for the Eastern District of New York for their diligent work on this investigation.”
On April 26, 2013, DEA agents followed Campbell as he was making a delivery of marijuana to a customer in Brooklyn. Campbell spotted the agents and fled, suspecting his customer was an informant who had provided information to federal law enforcement. On April 30, 2013, Campbell called co-defendant Williams and offered to pay him $5,000 to kill the suspected informant. Williams agreed to commit the murder and chose a gang member to carry out the contract. Subsequently, when Campbell told Williams that he would personally kill the suspected informant but needed an alibi, Williams responded that it would be better to pay someone else to do the job and “get it right.” Law enforcement agents were monitoring Campbell’s phone and disrupted the murder plot.
Williams was convicted after trial in January 2018 of murder-for-hire conspiracy. He is awaiting sentencing.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nathan D. Reilly and Hiral D. Mehta are in charge of the prosecution.
The Defendant:LEON CAMPBELL (also known as “Country”)
Age: 41
Brooklyn, New YorkE.D.N.Y. Docket No. 13-CR-419 (LDH)
Alleged Cybercriminal Charged with Unauthorized Computer Intrusion, Wire Fraud, Securities Fraud and Other CrimesRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Lithuanian national Vytautas Parfionovas with computer intrusion, securities fraud, money laundering, bank fraud and wire fraud, among other offenses. The charged crimes stem from a variety of criminal conduct between 2011 and 2018 in which Parfionovas gained access to U.S.-based computers, including email servers and computers belonging to U.S. financial institutions, in order to steal money from online bank accounts and securities brokerage accounts. Parfinovas was arrested in Ukraine on October 24, 2019, and was extradited to the United States on November 21, 2019.
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), announced the charges.
“As alleged, the defendant and his co-conspirators stole millions of dollars from U.S. victims while sitting behind keyboards thousands of miles away,” stated United States Attorney Donoghue. “Cybercriminals are hereby on notice that no amount of distance or subterfuge will protect them, and that we and our law enforcement partners are committed to unmasking, arresting and prosecuting them.” Mr. Donoghue thanked the Prosecutor Generals Office of Ukraine, the FBI Legal Attaché’s Office in Kiev, the Department of Justice’s Office of International Affairs and the National Cyber Forensic Training Alliance for their assistance in the investigation and the defendant’s extradition.
“The world has become a much smaller place with the advent of the internet, and with that shrinking globe, the days of cyber criminals thinking because they're not in our country they can escape justice are over,” stated FBI Assistant Director-in-Charge Sweeney. “Our extraordinary partnerships allow the FBI to reach into many of the dark corners where these thieves feel invincible. If you violate our laws, we will make sure you pay the price.”
As charged in the criminal complaint, starting in January 2011, Parfionovas and his co-conspirators engaged in a long-running scheme to steal money through a variety of computer intrusions.
In one part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victims’ securities brokerage accounts through various methods, including stealing that information from the server of a U.S. securities order management company to which the conspirators gained unauthorized access. The conspirators then used those accounts to steal money and conduct trades to their own benefit. Initially, conspirators accessed the victim brokerage accounts and transferred money from those accounts to other accounts under their control. After financial institutions began to block those unauthorized transfers, Parfionovas and his co-conspirators accessed other victim brokerage accounts without authorization, and placed unauthorized stock trades within those accounts while simultaneously trading profitably in the same stocks from accounts that they controlled. On or about February 22, 2016, Parfionovas explained this aspect of the scheme to a co-conspirator as follows: “I take some fraud logins. Do some s[_]t with stock . . . sometimes 2-3 in day . . . manipulation is 100%.” In this manner, Parfionovas and his co-conspirators realized financial gains while causing losses of more than $5.5 million.
In another part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victim email accounts and accessed those accounts without authorization. The conspirators then sent email messages from those accounts to the victims’ financial advisers and requested wire transfers from the victims’ financial institutions to overseas bank accounts that the conspirators controlled. For example, in or about May 2013, Parfionovas and his co-conspirators obtained $50,000 from an investment account that belonged to U.S. victims, and Parfionovas directed the transfer of those funds to a series of bank accounts and ultimately to an individual in Kharkov, Ukraine, where Parfionovas was located. To defraud another victim, Parfionovas and his co-conspirators obtained control over a victim’s email account and used it to send written instructions—which falsely appeared to have been signed by the victim—to transfer $225,000 from one of the victim’s accounts.
If convicted, the defendant faces up to 30 years’ imprisonment for the money laundering charge, and a mandatory consecutive two-year sentence for the charge of aggravated identity theft.
The charges in the complaint announced today are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and the Business and Securities Fraud Section. Assistant United States Attorneys David K. Kessler, Mark E. Bini and Alexander Mindlin are in charge of the prosecution. The Justice Department’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from Ukraine.
The Defendant:
VYTAUTAS PARFIONOVAS
Age: 32
Kiev, UkraineE.D.N.Y. Docket No. 19-MJ-883
Former Chief Executive Officer of a Brazilian Petrochemical Company Charged for His Role in a Scheme to Pay Bribes to Brazilian Officials and to Falsify Company Books and RecordsRead the Press Release
An indictment was unsealed today charging a former chief executive officer (CEO) of Braskem S.A. (Braskem), a publicly traded Brazilian petrochemical company, for his role in a massive bribery and money laundering scheme involving Braskem and its parent company, Odebrecht S.A. (Odebrecht), that resulted in the diversion of hundreds of millions of dollars from Braskem into a secret slush fund that was used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business.
Jose Carlos Grubisich, 62, a citizen of Brazil who served as the CEO and a member of the board of directors of Braskem, as well as in various capacities for Odebrecht, was charged with one count of conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the books and records provision of the FCPA and to fail as a corporate officer to certify financial reports and one count of conspiracy to commit international money laundering. Grubisich was arrested this morning, and is scheduled to be arraigned this afternoon before U.S. District Judge Raymond J. Dearie of the Eastern District of New York.
“Grubisich and other senior executives at Braskem and Odebrecht allegedly engaged in a massive and sophisticated international bribery and money laundering scheme, employing secret slush funds, shell companies, and false accounting,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “As demonstrated by the charges unsealed today, the Department continues to work closely with our domestic and international partners to root out and prosecute corporate fraud and corruption at the highest levels.”
“As alleged in the indictment, Jose Carlos Grubisich used his position as CEO of a major publicly traded petrochemical company to funnel hundreds of millions of dollars through offshore accounts to bribe power brokers and serve the interests of his company,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “Today’s indictment once again demonstrates the commitment of the U.S. Department of Justice to investigate and prosecute those who take advantage of the United States financial system to further their financial crimes.”
As alleged in the indictment, between approximately 2002 and 2014, Grubisich, together with other co-conspirators, including certain former Braskem and Odebrecht employees, engaged in a widespread bribery and money laundering scheme that resulted in the diversion of approximately $250 million of Braskem’s funds into a secret slush fund, which was used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business and certain business advantages for Braskem. The slush fund was allegedly generated by payments from Braskem’s bank accounts in Brazil, New York and Florida pursuant to fraudulent contracts with offshore shell companies that were secretly controlled by Braskem. These shell companies funneled the slush funds to a department within Odebrecht responsible for making bribe payments, which ultimately made corrupt payments on Braskem’s behalf, the indictment alleges.
Additionally, as alleged in the indictment, while CEO of Braskem, Grubisich was involved in negotiating and approving bribes to government officials using money from the slush fund. These included alleged payments made to ensure that Braskem could retain a contract for a significant petrochemical project in Brazil, and to ensure that Braskem could obtain favorable pricing in contract negotiations with Petroleo Brasileiro S.A. – Petrobras, Brazil’s state-owned and state-controlled oil company. Grubisich regularly discussed the bribe payments with other co-conspirators, and was kept informed about bribe payments made on behalf of Braskem, the indictment alleges. Certain of the bribe payments that were allegedly negotiated and authorized by Grubisich were ultimately paid after Grubisich left his position as CEO of Braskem in 2008, but while he continued to serve in other capacities at Odebrecht and Braskem, and while he was a stockholder of Braskem.
Furthermore, as alleged in the indictment, while CEO of Braskem, Grubisich agreed to falsify Braskem’s books and records by causing Braskem to falsely record the payments to the offshore shell companies controlled by Braskem as “commissions.” Grubisich also signed false certifications submitted to the SEC that, among other things, attested that Braskem’s annual reports fairly and accurately represented Braskem’s financial condition, and that Grubisich, as Braskem’s principal officer, had disclosed all fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting, the indictment alleges.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Braskem and Odebrecht have each pleaded guilty in the Eastern District of New York to one-count criminal informations separately charging each with conspiracy to violate the anti-bribery provisions of the FCPA for their involvement in the widespread bribery and money laundering scheme. The cases are also assigned to Judge Dearie.
The FBI’s International Corruption squad in New York investigated this case. Assistant Chief Lorinda Laryea and Trial Attorney Leila Babaeva of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Alixandra Smith and Julia Nestor of the Eastern District of New York are prosecuting the case.
The Criminal Division’s Office of International Affairs also provided substantial assistance. The U.S. Securities and Exchange Commission, the Brazilian Ministerio Publico Federal, the Brazilian Departamento de Polícia Federal and the Office of the Attorney General of Switzerland provided significant cooperation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
Former CEO of Braskem Indicted for His Role in Bribery SchemeRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Jose Carlos Grubisich, the former Chief Executive Officer (CEO) of Braskem S.A. (Braskem), a publicly traded Brazil-based petrochemical company, for his role in a massive bribery and money laundering scheme involving Braskem and its parent company, Odebrecht S.A. (Odebrecht). The scheme allegedly resulted in the diversion of hundreds of millions of dollars from Braskem to a secret slush fund used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business. Grubisich, who also served as a member of the Board of Directors of Braskem, and in various capacities for Odebrecht, was charged with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the books and records provisions of the FCPA and one count of conspiracy to commit money laundering.
Grubisich was arrested this morning, and will be arraigned this afternoon before United States District Judge Raymond J. Dearie.
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, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged in the indictment, Jose Carlos Grubisich used his position as CEO of a major publicly traded petrochemical company to funnel hundreds of millions of dollars through offshore accounts to bribe power brokers and serve the interests of his company,” stated United States Attorney Donoghue. “Today’s indictment once again demonstrates the commitment of the U.S. Department of Justice to investigate and prosecute those who take advantage of the United States financial system to further their financial crimes.”
“Grubisich and other senior executives at Braskem and Odebrecht allegedly engaged in a massive and sophisticated international bribery and money laundering scheme, employing secret slush funds, shell companies, and false accounting,” stated Assistant Attorney General Benczkowski. “As demonstrated by the charges unsealed today, the Department continues to work closely with our domestic and international partners to root out and prosecute corporate fraud and corruption at the highest levels.”
As alleged in the indictment, between approximately 2002 and 2014, Grubisich and his co-conspirators created a slush fund by making payments from Braskem’s bank accounts in Brazil, New York and Florida pursuant to fraudulent contracts with offshore shell companies secretly controlled by Braskem. The shell companies then funneled the slush funds to a department within Odebrecht that was responsible for making bribe payments on Braskem’s behalf.
As CEO of Braskem, Grubisich participated in negotiating and approving the bribes to government officials, including the payments made to ensure that Braskem retained a contract for a significant petrochemical project in Brazil and to ensure that Braskem could obtain favorable pricing in contract negotiations with Petroleo Brasileiro S.A. – Petrobras, Brazil’s state-owned and state-controlled oil company. Grubisich regularly discussed the bribe payments with his co-conspirators and was informed of bribe payments made on behalf of Braskem. Various bribe payments that were negotiated and authorized by Grubisich were ultimately paid after Grubisich left his position as CEO in 2008, but while he continued to serve in other capacities at Odebrecht and Braskem, and while he was a stockholder of Braskem.
Also while serving as CEO of Braskem, Grubisich agreed to falsify Braskem’s books and records by causing Braskem to record the payments to the offshore shell companies controlled by Braskem as “commissions.” He also signed false certifications submitted by Braskem to the United States Securities and Exchange Commission that attested to the fairness and accuracy of Braskem’s annual reports and financial condition, and to the disclosure of any fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting.
On December 21, 2016, Braskem and Odebrecht pleaded guilty in the Eastern District of New York to criminal informations separately charging each with conspiracy to violate anti-bribery provisions of the FCPA for their involvement in the bribery and money laundering scheme.
The charges in the indictment announced today are allegations, and the defendant is presumed innocent unless and until proven guilty.
The case is being prosecuted by Assistant United States Attorneys Alixandra Smith and Julia Nestor of the Office’s Business and Securities Fraud Section, and Criminal Division Fraud Section FCPA Assistant Chief Lorinda Laryea and Fraud Section Trial Attorney Leila Babaeva. The FBI’s International Corruption squad in New York investigated this case.
The Criminal Division’s Office of International Affairs also provided substantial assistance. The Securities and Exchange Commission, the Brazilian Ministerio Publico Federal and Departamento de Polícia Federal, and the Office of the Attorney General in Switzerland provided significant cooperation.
The Defendant:
JOSE CARLOS GRUBISICH
Age: 62
Sao Paulo, BrazilE.D.N.Y. Docket No. 19-CR-102 (RJD)
Former Beaufort Securities Investment Manager Pleads Guilty to Conspiracies to Commit Securities Fraud and to Defraud the United States by Failing to Comply with Foreign Account Tax Compliance ActRead the Press Release
Earlier today, in federal court in Brooklyn, Panayiotis Kyriacou, a former investment manager at Beaufort Securities Limited, a brokerage firm in London, pleaded guilty to conspiring to commit securities fraud and to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA). FATCA is a federal law that requires foreign financial institutions to identify their U.S. customers and report information about financial accounts held by U.S. taxpayers, either directly or through a foreign entity (FATCA Information). FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses. The guilty plea was entered before United States District Judge Kiyo A. Matsumoto. When he is sentenced, Kyriacou faces a maximum of 10 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; 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.
In announcing the guilty plea, Mr. Donoghue thanked the U.S. Securities and Exchange Commission’s (SEC) New York Regional Office and the Washington, D.C. Office, the City of London Police, the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation for their significant cooperation and assistance during the investigation.
In the fall of 2016, an Undercover Agent contacted Kyriacou and stated that he was a U.S. citizen interested in opening brokerage accounts at Beaufort Securities to execute trades in several multi-million dollar stock manipulation deals in stocks traded on U.S. over-the-counter markets. In furtherance of the scheme, Kyriacou and Beaufort Securities opened six brokerage accounts. Notwithstanding that a U.S. citizen would be the beneficial owner of each of the accounts, at no time did Kyriacou request FATCA Information from the Undercover Agent. The brokerage accounts were opened for the Undercover Agent in the names of various international business corporations based in Belize, with Belizean nominees listed as the beneficial owners.
In January 2018, Kyriacou facilitated the manipulation of trading in the stock of HD View 360, Inc., a publicly traded U.S. company that traded under the ticker symbol HDVW, by executing a match trade of HDVW stock. In addition, Kyriacou agreed to launder what the Undercover Agent represented to be the proceeds of securities fraud through the purchase and sale of artworks.
The case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis, David Gopstein and Michael T. Keilty are in charge of the prosecution.
The Defendant:
PETER KYRIACOU
Age: 28
London, EnglandE.D.N.Y. Docket No. 18-CR-102 (S-1) (KAM)
Brooklyn Businessman Sentenced to 18 Months’ Imprisonment for Defrauding Investors in Cryptocurrency Initial Coin OfferingsRead the Press Release
Earlier today, in federal court in Brooklyn, Maksim Zaslavskiy was sentenced by United States District Judge Raymond J. Dearie to 18 months’ imprisonment for conspiring to commit securities fraud. The conspiracy stemmed from two Initial Coin Offerings (ICOs) – REcoin Group Foundation, LLC (“REcoin”) and DRC World, Inc., also known as Diamond Reserve Club (“Diamond”) – which Zaslavskiy and others fraudulently marketed to the public. The amount of restitution will be determined by the Court at a later date.
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), announced the sentence.
“Zaslavskiy committed an old-fashioned fraud camouflaged as cutting-edge technology,” stated United States Attorney Donoghue. “This Office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency.” Mr. Donoghue extended his grateful appreciation to the Securities and Exchange Commission (SEC), New York Regional Office, for their assistance in this case.
In July 2017, Zaslavskiy marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently Diamond as an “exclusive and tokenized membership pool” hedged by diamonds. In reality, Zaslavskiy bought neither real estate nor diamonds, and the certificates he sent to investors were worthless. Zaslavskiy also falsely advertised that REcoin had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO in real estate, and that 2.8 million REcoin tokens had been sold.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Julia Nestor and Andrey Spektor are in charge of the prosecution.
The Defendant:
MAKSIM ZASLAVSKIY
Age: 39
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-647 (S-1) (RJD)
Manager of Medical Clinics in Brooklyn and Queens Convicted of Multimillion-Dollar Money Laundering and Health Care Kickback SchemesRead the Press Release
BROOKLYN, NY – A federal jury in Brooklyn returned a guilty verdict on all counts today against Aleksandr Pikus, the manager of medical clinics in Brooklyn and Queens, New York, for his role in multimillion-dollar health care kickback and money laundering schemes. Specifically, Pikus was convicted of conspiracy to commit money laundering, money laundering, conspiracy to receive and pay health care kickbacks and conspiracy to defraud the United States by obstructing the Internal Revenue Service (IRS). The verdict followed a two-week trial before United States District Judge Ann M. Donnelly. When sentenced, Pikus faces a maximum sentence of up to 70 years’ imprisonment.
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, New York Region (HHS-OIG), and Jonathan D. Larsen, Acting Special Agent-in-Charge, IRS Criminal Investigation (IRS-CI), announced the verdict.
“Pikus’s health care schemes were a toxic brew of kickbacks and money laundering that streamed millions of dollars into the pockets of the defendant and his co-conspirators at the expense of the Medicare and Medicaid programs,” stated United States Attorney Donoghue. “Today’s verdict demonstrates the resolve of this Office and our law enforcement partners to protect taxpayer-funded health care programs upon which our citizens rely.”
“Aleksandr Pikus was the architect of a massive healthcare kickback and money laundering scheme in which he and his co-conspirators stole tens of millions of dollars from the Medicare and Medicaid programs,” stated Assistant Attorney General Benczkowski. “The jury’s verdict reflects the tireless work of our dedicated prosecutors and law enforcement partners to achieve justice and protect these essential healthcare programs on behalf of American taxpayers.”
“Mr. Pikus brazenly participated in a greed-fueled scheme that stole millions from Medicare and Medicaid,” stated HHS-OIG Special Agent-in-Charge Lampert. “Along with our law enforcement partners, HHS-OIG will continue to protect the public and the taxpayer funded health care programs that serve those who need them.”
“IRS Criminal Investigation is committed to ensuring that every taxpayer is measured by the same rule of law while paying their fair share,” said IRS-CI Special Agent-in-Charge Larsen. “Our special agents play a critical role investigating criminal violations of the Internal Revenue Code and related financial crimes. Every day, we entrust medical service providers with our most valuable asset—our health. That is why healthcare kickbacks and money laundering schemes like this one are particularly disturbing. Today’s guilty verdict serves as a reminder that crimes like money laundering and tax fraud will not go unpunished.”
As proven at trial, Pikus and his co-conspirators operated a series of medical clinics for nearly a decade that employed doctors, physical and occupational therapists and other medical professionals who were enrolled in the Medicare and Medicaid programs. Pikus and his co-conspirators referred individuals to these health care providers who, in turn, submitted nearly $100 million in claims to the Medicare and Medicaid programs. In return for his referrals, Pikus received illegal kickbacks from the medical providers in the form of checks payable to shell companies that he and his co-conspirators controlled. Pikus then laundered a substantial portion of the illegal proceeds of the scheme through check-cashing businesses and failed to report that cash income to the IRS. Pikus used the cash to enrich himself and to pay patient recruiters, including ambulette drivers, who paid beneficiaries to receive treatment at the defendant’s medical clinics.
Pikus is the fifth defendant convicted in this indictment. In December 2016, Malvina Yablonskaya pleaded guilty to money laundering conspiracy and conspiracy to defraud the IRS. In November 2017, Maksim Vernik pleaded guilty to money laundering conspiracy. In December 2017, Denis Satyr pleaded guilty to money laundering conspiracy and conspiracy to defraud the IRS. In September 2019, Mark Tsyvin pleaded guilty to conspiracy to receive and pay health care kickbacks and conspiracy to defraud the IRS. The defendants are awaiting sentencing.
This case was investigated by the HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Assistant Chief A. Brendan Stewart and Trial Attorneys Sarah Wilson Rocha and Andrew Estes of the Fraud Section are prosecuting the case.
The Defendant:
ALEKSANDR PIKUS
Age: 44
Brooklyn, New YorkE.D.N.Y. Docket No. 16-CR-329 (AMD)