Eastern District of New York
Press releases recorded for this federal judicial district.
Head of New York Medical Clinics Found Guilty in Nearly $100 Million Money Laundering and Health Care Kickback SchemeRead the Press Release
The manager in control of multiple medical clinics in Brooklyn and Queens, New York, was found guilty today for his role in a nearly $100 million health care kickback and money laundering scheme.
After a two-week trial, Aleksandr Pikus, 44, of Brooklyn, was found guilty of one count of conspiracy to commit money laundering, two counts of money laundering, one count of conspiracy to receive and pay health care kickbacks and one count of conspiracy to defraud the United States by obstructing the IRS. Sentencing has been set for April 8, 2020.
“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,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “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.”
“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,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “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.”
“Mr. Pikus brazenly participated in a greed-fueled scheme that stole millions from Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “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 Special Agent in Charge Jonathan D. Larsen of the IRS Criminal Investigation’s (IRS-CI) New York Office. “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.”
According to evidence presented at trial, Pikus and his co-conspirators operated a series of medical clinics in Brooklyn and Queens over the course of nearly a decade that submitted approximately $96 million in medical claims. The clinics employed doctors, physical and occupational therapists, and other medical professionals who were enrolled in the Medicare and Medicaid programs. In return for illegal kickbacks, Pikus and his co-conspirators referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs, the evidence showed. Pikus then laundered a substantial portion of those proceeds through companies he and his co-conspirators controlled, including by cashing checks at several New York City check-cashing businesses; he and his co-conspirators then failed to report that cash income to the IRS. Pikus used that cash to enrich himself and others and to pay kickbacks to patient recruiters, including ambulette drivers, who, in turn, paid beneficiaries to receive treatment at the defendant’s medical clinics. The evidence further established that Pikus used shell companies and fake invoices to conceal his illegal activities.
More than 25 other individuals have pleaded guilty to or been convicted of participating in the scheme, including physicians, physical and occupational therapists, ambulette drivers, and the owners of several of the sham shell companies used to launder the stolen money.
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 Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Edward Ambrosino, Former Town of Hempstead Councilman, Sentenced to Prison for Tax EvasionRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Edward Ambrosino, a former Town of Hempstead Councilman, was sentenced to six months’ imprisonment for tax evasion, to be followed by three years’ supervised release. The Court also ordered Ambrosino to pay $700,000 in restitution to his former employer and $254,628 in restitution to the Internal Revenue Service (IRS). Ambrosino pleaded guilty in April 2019. The sentencing proceeding was held before United States District Judge Joanna Seybert.
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, IRS-Criminal Investigation, New York (IRS-CI), announced the sentence.
“Ambrosino, a licensed attorney and elected official charged with levying taxes, abused his positions of trust and was himself a tax cheat,” stated United States Attorney Donoghue. “This is yet another example of a public official on Long Island breaking the law, this time by failing to pay his fair share of taxes like every other citizen.” Mr. Donoghue expressed his thanks to IRS-CI and the FBI for their help during the investigation.
“The tax evasion perpetuated by Mr. Ambrosino impacts various services provided by the income taxes collected by the IRS on behalf of all of our citizens,” stated IRS-CI Special Agent-in-Charge Larsen.
As detailed in court filings, Ambrosino was an attorney licensed to practice in New York State, specializing in economic and industrial development and financings, and formerly was “Of Counsel” at a law firm based in Uniondale, New York (the “Law Firm”). In addition, Ambrosino served as a Councilman for the Town of Hempstead, New York, from March 2003 until he resigned last April.
In 2011, Ambrosino incorporated Vanderbilt Consulting Group, Inc. (“Vanderbilt”). Ambrosino was the sole shareholder of Vanderbilt. In September 2012, Ambrosino opened a bank account in the name of Vanderbilt (the “Vanderbilt Bank Account”); he was the sole authorized signer on the Vanderbilt Bank Account.
From 2013 through 2015, Ambrosino diverted to the Vanderbilt Bank Account more than $800,000 in legal fees from clients, including the Nassau County Industrial Development Agency (NCIDA) and the Nassau County Local Economic Assistance Corporation (NCLEAC), that were due as revenue to the Law Firm. While the defendant neither admitted nor denied wrongdoing with regard to his conduct related to the Law Firm, as part of his sentence, the Court ordered the defendant to pay $700,000 in restitution to the Law Firm.
Ambrosino also evaded substantial income tax and filed false and fraudulent corporate tax returns on behalf of Vanderbilt for the 2011, 2012 and 2013 tax years. Ambrosino evaded the assessment of income tax by claiming false and fraudulent business expense deductions and failing to report funds he diverted from the Law Firm. Specifically, Ambrosino claimed as a business expense rent for a Manhattan apartment that he paid for on behalf of a third-party. In addition, for the 2013 tax year, Ambrosino failed to claim approximately $335,000 in funds he diverted from the Law Firm on either his personal income tax return or the Vanderbilt corporate tax return. With respect to the 2014 tax year, Ambrosino did not timely file his personal tax return or the corporate tax return for Vanderbilt. As a result of Ambrosino’s conduct, the IRS suffered a tax loss of approximately $254,628 and the New York State Tax Department suffered a tax loss of approximately $56,517. At the time of sentencing, Ambrosino had substantially paid his tax debt to the IRS and the New York State Tax Department.
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:
EDWARD AMBROSINO
Age: 55
North Valley Stream, NYE.D.N.Y. Docket No. 17-CR-162 (JS)
Hempstead Man Sentenced to More Than 15 Years’ Imprisonment for Armed Robbery Conspiracy and Brandishing a Firearm During a Crime of ViolenceRead the Press Release
Earlier today, at the federal courthouse in Central Islip, James Rogers was sentenced to 184 months in prison by United States District Judge Denis R. Hurley for conspiring to commit gunpoint robberies of retail stores in Nassau and Suffolk Counties between August 10, 2015 and December 21, 2015, and brandishing a firearm during the robbery of a Petco Pet store in Hicksville, New York, on August 20, 2015. Rogers pleaded guilty to the charges in April 2017.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
At his guilty plea proceeding, Rogers admitted his role in 15 robberies of retail businesses during a four-month period in 11 different towns in Nassau and Suffolk Counties, including the gunpoint robbery of the Petco store, women’s clothing stores and a Babies R’ Us. On most occasions, Rogers committed the robberies at or near opening or closing times, his face covered with a mask, brandishing a handgun, threatening employees and customers and restraining them using toy handcuffs or plastic zip-tie restraints. Rogers also stole cash, jewelry and other personal items from his victims before fleeing in a vehicle driven by his co-conspirator.
“The defendant terrorized his victims during a violent crime spree, fully justifying today’s lengthy prison sentence. Our communities are safer as a result of his incarceration,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the Nassau County Police Department, the Suffolk County Police Department and the U.S. Drug Enforcement Administration for their outstanding work on the case.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles N. Rose is in charge of the prosecution.
The Defendant:
JAMES ROGERS
Age: 49
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-530 (DRH)
Former Deutsche Bank Executive to Pay $500,000 in Civil Penalties to Resolve Claims for Fraud in Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
BROOKLYN, NY – The United States has reached agreement with Paul Mangione, a former Deutsche Bank executive, to settle a civil action filed in September 2017 in which the United States sought civil penalties for Mangione’s conduct in connection with Deutsche Bank’s marketing and sale of two residential mortgage-backed securities (RMBS) in 2007. The agreement provides for payment of $500,000 in civil penalties in exchange for dismissal of the complaint.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the settlement.
“This Office’s settlement with a bank executive in connection with RMBS fraud reflects our commitment to holding individuals accountable for their role in corporate fraud,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Federal Housing Finance Agency’s Office of the Inspector General for its assistance in conducting the investigation in this matter.
The complaint in the action, United States v. Paul Mangione, alleged that Mangione, a former Managing Director and head of subprime trading at Deutsche Bank, engaged in a scheme to defraud investors in two Deutsche Bank RMBS, ACE 2007-HE4 and ACE 2007-HE5, by misrepresenting the characteristics of the loans backing the two securities and misleading potential investors about the loan origination practices of Deutsche Bank’s wholly-owned subsidiary, DB Home Lending LLC (f/k/a Chapel Funding, LLC), which originated a number of the loans backing the two RMBS. The complaint stated claims for relief under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud and wire fraud.
The settlement agreement does not constitute an admission by Mangione of any of the facts or of liability or wrongdoing by Mangione, and there has been no trial or adjudication or judicial finding of any issue of fact or law.
The government’s case was handled by Assistant United States Attorney Edward Newman.
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.
E.D.N.Y. Docket No. 17-CV-5305 (NMG/RL)
Staten Island Man Pleads Guilty to Sexual Exploitation of a ChildRead the Press Release
Earlier today, after a jury had been selected for trial, Blaise Caroleo pleaded guilty in federal court in Brooklyn to sexual exploitation of a child. The proceeding took place before United States District Judge Eric N. Vitaliano. When sentenced, Caroleo faces a statutory minimum sentence of 15 years’ imprisonment and a maximum of 30 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
Between approximately January 24, 2016 and October 12, 2016, Caroleo enticed a 14-year-old girl to produce sexually explicit images of herself, and to send these images to him using an Internet application called Kik. The account name for the application on Caroleo’s cell phone was “Nimfeater.” A review of Nimfeater’s Kik account revealed a series of messages in which Caroleo requested sexually explicit photos of Kik users who have been identified as minors.
“The defendant is a dangerous predator who, armed with a phone app, targeted young girls for sexual exploitation,” stated United States Attorney Donoghue. “Protecting children from harm will always be a priority of this Office.” Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), and the FBI’s Human Trafficking and Child Exploitation Task Force for their work on the case.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
The government’s case is being prosecuted by Assistant United States Attorneys Erin E. Argo and Alicia N. Washington.
The Defendant:
BLAISE CAROLEO (also known as “Nimfeater”)
Age: 55
Staten Island, NYE.D.N.Y. Docket No. 17-CR-177 (S-1) (ENV)
Father and Son Members of Brooklyn Gang Sentenced to Prison for Racketeering and Marijuana DistributionRead the Press Release
Earlier today, in federal court in Brooklyn, Tammeco Cargill, an armed enforcer for the Nineties Crew street gang, was sentenced to 121 months’ imprisonment by United States District Judge Raymond J. Dearie for racketeering and racketeering conspiracy, including predicate acts of drug trafficking and passport fraud. Previously, on August 13, 2019, Winston “Pops” Cargill, a drug supplier for the gang and Tammeco Cargill’s father, was sentenced to 36 months’ imprisonment for racketeering and racketeering conspiracy, to run consecutively to a term of 96 months of imprisonment he is currently serving for a separate federal conviction. The defendants were convicted in December 2018 following an eight-day 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), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentences.
“With these sentences, defendants Tammeco and Winston Cargill will pay the price for contributing to their street gang’s corrosive impact on the quality of life and public safety in the Canarsie and Flatbush neighborhoods in Brooklyn,” stated United States Attorney Donoghue. “Eliminating violent street gangs is a priority of this Office and our law enforcement partners.”
“This sentencing marks the end of the Cargill family business in which violence and drug trafficking played pivotal roles,” stated DEA Special Agent-in-Charge Donovan. “I applaud the collaboration between law enforcement agencies and the work by the U.S. Attorney’s Office for the Eastern District of New York. By investigating and arresting drug traffickers, we are taking away sources of supply from the street and saving people’s lives.”
For more than a decade, the defendants were members of the Nineties Crew, a violent gang that operated as a criminal enterprise and sold narcotics in the Flatbush and Canarsie neighborhoods of Brooklyn. During that period, the gang trafficked thousands of pounds of marijuana, earned hundreds of thousands of dollars, operated numerous stash houses and relied upon firearms to protect and further the operations of their enterprise. Tammeco Cargill acted as an enforcer, and Winston Cargill served as one of the gang’s principal marijuana suppliers. The defendants also fraudulently obtained passports to travel to Jamaica and then illegally re-enter the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Hiral Mehta and Ryan Harris are in charge of the prosecution.
The Defendants:
TAMMECO CARGILL
Age: 36
Brooklyn, New YorkWINSTON CARGILL (also known as “Pops”)
Age: 57
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-330 (RJD)
Long Island Doctor Indicted for Illegal Distribution of OxycodoneRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Tameshwar Ammar, a medical doctor in Roslyn, New York, with writing prescriptions for oxycodone, a Schedule II controlled substance, without a legitimate medical purpose. Ammar was arrested this morning, and is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven I. Locke.
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 indictment.
As set forth in the indictment and other court documents, between 2013 and 2019, Ammar illegally prescribed more than 19,000 highly addictive oxycodone pills to two individuals identified in the indictment as John Doe 1 and John Doe 2. According to a review of Ammar’s medical files for the two individuals, Ammar wrote the prescriptions without any diagnostic proof that either had a legitimate medical necessity. Ammar prescribed approximately 8,400 oxycodone pills to John Doe 1, knowing that he intended to sell the pills to others. Ammar prescribed 11,525 30 milligram oxycodone pills to John Doe 2. After learning that John Doe 2 had been admitted to a psychiatric facility in March 2018, Ammar continued to prescribe John Doe 2 with oxycodone and also prescribed methadone.
In July 2019, John Doe 2 died of a drug overdose caused by oxycodone, methadone and ketamine. A search warrant executed at Ammar’s office in October 2017 resulted in the recovery of ketamine.
“As alleged, Ammar prescribed thousands of highly addictive opioids without a legitimate medical purpose, which makes him a drug dealer and, sadly, in this case one of his customers lost their life,” stated United States Attorney Donoghue. “This Office and our partners at the DEA are working tirelessly to combat the opioid epidemic on Long Island and elsewhere by prosecuting medical professionals who contribute to the crisis.” Mr. Donoghue also thanked the U.S. Department of Health and Human Services, Office of Inspector General, New York Region, for their assistance during the investigation.
“The illegal and unethical way Dr. Ammar conducted his medical practice paved a way for patients’ opioid addiction and overdoses,” said DEA Special Agent-in-Charge Donovan. “The fact that Dr. Ammar prescribed over 8,000 oxycodone pills to one patient for street resale shows his disregard to public health and safety, which are both a good doctor’s main concerns. I applaud the DEA Long Island Tactical Diversion Squad and the U.S. Attorney’s Office for the Eastern District of New York for their diligent work.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Ammar faces up to 20 years in prison.
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 (NCPD), 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 19 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 handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution.
The Defendant:
Tameshwar ammar
Age: 51
Amityville, New YorkE.D.N.Y. Docket No. 19-CR-516 (DRH)
Aventura Technologies, Inc. and its Senior Management Charged with Fraud, Money Laundering and Illegal Importation of Equipment Manufactured in ChinaRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging surveillance and security equipment company Aventura Technologies, Inc. (Aventura), located in Commack, New York, and seven current and former employees with selling Chinese-made equipment with known cybersecurity vulnerability to government and private customers while falsely representing that the equipment was made in the United States and concealing that the products were manufactured in the People’s Republic of China (PRC). Aventura has generated more than $88 million in sales revenue since November 2010, and the charged scheme has been ongoing since 2006.
In addition to Aventura, the individual defendants charged in the complaint are Jack Cabasso, Aventura’s Managing Director and de facto owner and operator; Frances Cabasso, his wife and Aventura’s purported owner and Chief Executive Officer; senior executives Jonathan Lasker, Christine Lavonne Lazarus and Eduard Matulik; current employee Wayne Marino; and recently retired employee Alan Schwartz.
Four of the individual defendants are also charged with defrauding the U.S. government by falsely claiming that Frances Cabasso was the owner and operator of the company in order to obtain access to valuable government contracts reserved for women-owned businesses when, in fact, Aventura was actually controlled by her husband, Jack Cabasso. The Cabassos are also charged with laundering the monetary proceeds of these fraudulent schemes.
Six of the defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. Law enforcement agents executed search warrants at Aventura’s headquarters in Commack, New York, and at the home of Jack and Frances Cabasso in Northport, New York. The government has also seized the Cabassos’ 70-foot luxury yacht, and has frozen approximately $3 million in 12 financial accounts that contain proceeds from the defendants’ unlawful conduct.
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); Joseph P. Dattoria, Special Agent-in-Charge, U.S. General Services Administration, Office of Inspector General (GSA-OIG); Leigh-Alistair Barzey, Special Agent-in-Charge, Defense Criminal Investigative Service, Northeast Field Office (DCIS); J. Russell George, Treasury Inspector General for Tax Administration (TIGTA); Troy Miller, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); Jason T. Hein, Special Agent-in-Charge, U.S. Air Force Office of Special Investigations, Office of Procurement Fraud Investigations, Detachment Six (AFOSI); Leo Lamont, Special Agent-in-Charge, Naval Criminal Investigative Service (NCIS); and Teri L. Donaldson, Inspector General, U.S. Department of Energy, Office of Inspector General (DOE-OIG), announced the charges.
“As alleged, the defendants falsely claimed for years that their surveillance and security equipment was manufactured on Long Island, padding their pockets with money from lucrative contracts without regard for the risk to our country’s national security posed by secretly peddling made-in-China electronics with known cyber vulnerabilities,” stated United States Attorney Donoghue. “With today’s arrests, the defendants’ brazen deceptions and fraud schemes have been exposed, and they will face serious consequences for slapping phony ‘Made in the U.S.A.’ labels on products that our armed forces and other sensitive government facilities depended upon.” Mr. Donoghue expressed his appreciation to U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit for their work on the case.
“Greed is at the heart of this scheme, a reprehensible motive when the subjects in this case allegedly put into question the security of men and women who don uniforms each day to protect our nation,” stated FBI Assistant Director-in-Charge Sweeney. “There is no mistaking the cyber vulnerabilities created when this company sold electronic surveillance products made in the PRC, and then using those items in our government agencies and the branches of our armed forces. I cannot stress enough that we will do everything we can to search out and stop any other company willing to cut corners and pocket profits that endanger the lives of Americans, and make this country less safe.”
“The laws in place regulating government contracts ensure both the taxpayer and government receive quality goods and services at competitive prices. In addition, they provide a fair opportunity and level playing field for all businesses seeking government contracts. The General Services Administration’s Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate allegations of fraud against the United States Government,” stated GSA-OIG Special Agent-in-Charge Dattoria.
“The arrests and other enforcement operations that occurred today were the direct result of a joint investigative effort,” stated DCIS Special Agent-in-Charge Barzey. “The introduction of counterfeit parts and materials into the U.S. Defense Department’s supply chain poses a significant risk and impacts America’s military readiness and our national security. The DCIS is committed to working with its law enforcement partners and the U.S. Attorney's Office, Eastern District of New York, to ensure that individuals and companies who engage in fraudulent activity, at the expense of the U.S. military, are investigated and prosecuted.”
“TIGTA’s mission includes investigating allegations of waste, fraud or abuse involving the Internal Revenue Service (IRS),” stated TIGTA Inspector General George. “Mr. Cabasso and his co-conspirators secured products from outside of the U.S. while purporting that these products were made in America. They then sold these products to the U.S. Government, including the IRS and other Government agencies. TIGTA is committed to investigating and working with our law enforcement partners to root out this type of fraud from the Government contracting and procurement process. I want to thank U.S. Attorney Donoghue for the steadfast support that he and his talented prosecutors gave to this investigation.”
“U.S. Customs and Border Protection provided the critical link to an ongoing investigation that resulted in the takedown of an elaborate criminal enterprise,” stated CBP Director of Field Operations Miller. “This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle criminal enterprises that seek to defraud the United States government for personal gain while jeopardizing our national defense and causing economic harm to their competitors.”
“In today’s global economy, ‘Made in the USA’ is too sacred of a mark to fraudulently use for one’s self interest,” stated IRS-CI Special Agent-in-Charge Larsen. “IRS-Criminal Investigation works diligently with our law enforcement partners to uncover con artists devising elaborate schemes to become independently wealthy. These allegations have serious national security implications that go beyond shameless attempts at personal enrichment.”
“Product substitution is a serious crime that puts our men and women in uniform at greater risk,” stated NCIS Special Agent-in-Charge Lamont. “Our Sailors, Marines, and other armed services personnel deserve to have equipment that meets the highest standards for safety and performance, which will not fail them when it matters most. Substandard and counterfeit parts simply cannot be depended upon. Investigating product substitution and mitigating risks to the Department of the Navy supply chain is a top priority for the Naval Criminal Investigative Service. NCIS has a cadre of Special Agents trained in all aspects of economic crime, tirelessly fighting fraud in the procurement process.”
“Ensuring the integrity of the US Air Force procurement process and the quality of the products provided to our warfighters is a top investigative priority of the Air Force Office of Special Investigations,” stated AFOSI Special Agent-in-Charge Hein. “Those who seek to conduct business with the Air Force must be candid and truthful. AFOSI will aggressively investigate those who attempt to defraud the Air Force, and will work with our law enforcement partners to identify and prosecute those who would take advantage of the USAF and its interests. The victims are not just our men and women in uniform, but every American taxpayer.”
“The Department of Energy’s Office of Inspector General remains committed to ensuring the integrity and security of the Department’s vendors, especially given the serious nature of the Department’s mission,” stated DOE Inspector General Donaldson. “We take allegations of conspiracy against the U.S. Government very seriously and will aggressively investigate these matters to protect the Department and the American taxpayers. We appreciate the collaborative efforts of the DOJ and our other law enforcement partners.”
The Country of Origin Fraud and Unlawful Importation Scheme
As charged in the criminal complaint and in court documents filed today,[1] for over a decade Aventura lied to its customers, including the U.S. military, the federal government and private customers in the United States and abroad. Under federal government procurement laws and regulations a product’s country of origin can impact a procurement officer’s decision to purchase a product. A product’s country of origin also matters to some private sector customers. In addition, all products imported into the United States must be marked with their country of origin. Over the past decade, Aventura made upwards of $88 million, including over $20 million in federal government contracts, while claiming that it was manufacturing its products at its headquarters in Commack. In fact, Aventura does not manufacture anything in the United States. Instead, since at least 2006, Aventura has been importing products primarily from the PRC, then reselling them as American-made or manufactured in a small number of other countries.
Notably, Aventura imported networked security products from PRC manufacturers with known cybersecurity vulnerabilities, and resold them to U.S. military and other government installations while claiming that they were American-made. Aventura similarly deceived private customers in the United States and abroad who paid a premium for what they believed to be American-made goods. As a result, Aventura not only defrauded its customers, but also exposed them to serious, known cybersecurity risks, and created a channel by which hostile foreign governments could have accessed some of the government’s most sensitive facilities.
For this conduct, Aventura and the seven individual defendants are charged with unlawful importation and conspiracy to commit wire and bank fraud.
In the course of its investigation, the government intercepted and covertly marked numerous shipments from PRC sources to Aventura’s Commack headquarters. In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase “Made in USA,” accompanied by an American flag. In many instances, the items were later resold to government agencies to whom the defendants falsely represented that the products were American-made.
For example, in March 2019 the U.S. Navy ordered from Aventura a $13,500 laser-enhanced night vision camera that was specified as American-made on Aventura’s U.S. General Services Administration (GSA) price list. (In fact, no item on Aventura’s GSA price list is listed as being made in the PRC.) In April 2019, at a shipping facility in Jamaica, Queens, a team led by CBP officers intercepted a shipment from a PRC manufacturer (“PRC Manufacturer-3”) to Aventura that contained a camera matching the Navy’s order and surreptitiously marked it for later identification using a method that would not be apparent to a casual observer.[2] Two weeks later, that same camera was delivered to Naval Submarine Base New London in Groton, Connecticut.
In another instance, in September 2018, the Department of Energy (DOE) ordered approximately $156,000 worth of networked automated turnstiles from Aventura, to be installed at a facility in Tennessee. Aventura’s GSA price list described the turnstiles as American-made. In January 2019, turnstiles matching DOE’s order were intercepted in a shipment from a PRC manufacturer and marked by CBP; one month later, they arrived at the DOE facility in Tennessee. The crates shipped by Aventura to the DOE appeared identical to those that the CBP-led team had inspected, except that the shipping labels from the PRC directing the crates to Aventura had been peeled off, leaving behind visible traces of paper and glue. A special agent with the DOE-OIG placed a call to Lazarus regarding the turnstile shipment in May 2015. During the call, Lazarus falsely stated that the turnstiles were “U.S. made [in] New York.”
As a third example, in 2018, Aventura sold the U.S. Air Force 25 body cameras for use by Air Force security personnel at an Air Force base. Aventura was contractually required to provide goods from a limited set of countries that did not include the PRC. In August 2018, however, an Air Force service member observed Chinese characters on the built-in screen of one of the body cameras. The body camera was sent for analysis to a specialist, who downloaded its firmware and found numerous indications that the camera was manufactured in PRC. The camera contained multiple preloaded images that were apparently designed to display on the built-in screen—including the U.S. Air Force logo, the logo of the PRC Ministry of Public Security and the logo of PRC Manufacturer-1. All three logos had been saved to the camera’s firmware using the same software, on a computer that was set to a time zone in the PRC—indicating that the camera’s manufacturer in the PRC had been aware that the U.S. Air Force was a likely end user of the camera.
The defendants, working with counterparts in the PRC, took extraordinary steps to conceal this scheme. In November 2018, Jack Cabasso exchanged emails with an employee of a PRC manufacturer of surveillance equipment (PRC Manufacturer-2), identifying the need to “hide” the name of PRC Manufacturer-2 from Aventura’s customers. Cabasso wrote that Schwartz was “putting together a list” of steps to be taken. One week later, Cabasso stressed the need to take steps so that “they cannot trace” the product to PRC Manufacturer-2, adding, “The housings are a problem since you publish them on your website but nothing we can do about that.” Cabasso added that “the biggest problem” was that PRC Manufacturer-2’s initials were marked on its circuit boards, and said that he had “lost several potential customers” because of similar practices by another PRC manufacturer (PRC Manufacturer-1). The employee responded that the company’s initials would be removed from all circuit boards shipped to Aventura. Lasker was copied on all of the emails in this sequence.
Similarly, in December 2018, Jack Cabasso and Marino exchanged emails with employees of another PRC-based digital video equipment manufacturer (PRC Manufacturer-4). Marino complained to the employees that “communication from the server to the client contains [PRC Manufacturer-4’s name] visible in clear text. This should be changed.” When one of the employees wrote that this could not be changed, Cabasso responded: “WE CANNOT HAVE CUSTOMERS ABLE TO SEE” PRC Manufacturer-4’s name, later adding, “we also sent a sample to a customer and he found [PRC Manufacturer-4]. . . branding in the [operating system] which is a problem.” Schwartz and Lasker, among others, were included on these communications.
On or about November 23, 2016, Jack Cabasso sent an email to a GSA representative accusing 12 other GSA contractors of selling products to the U.S. Government that were manufactured by a PRC manufacturer of surveillance equipment (PRC Manufacturer-1). Cabasso asserted that this was a “big problem” and “doesn’t get any worse,” because PRC Manufacturer-1 was “actually the Communist Chinese Government and ha[d] ‘significant’ cybersecurity issues aside from” compliance with U.S. laws specifying country-of-origin requirements for government purchases. Cabasso stated that PRC Manufacturer-1 “will acknowledge they manufacture no products outside of China,” and appended an article about the removal of cameras manufactured by PRC Manufacturer-1 from the U.S. Embassy in Afghanistan.
Notably, Aventura was importing security equipment from PRC Manufacturer-1 while Jack Cabasso was complaining to GSA about other contractors’ supposed dealings with the company. For example, bank records show that Aventura wired funds to PRC Manufacturer-1 in the PRC on or about October 31, 2016 and November 29, 2016. And, law enforcement records show that on or about December 13, 2016, Aventura imported from PRC Manufacturer-1 in PRC an approximately 1,800-pound shipment of goods manifested as “digital video.”
In November 2018, Jack Cabasso and Matulik communicated with a potential distributor in Qatar, who asked for assurance that Aventura’s cameras were American made. Cabasso responded: “I believe Ed confirmed that they are made in the Aventura factory here in New York and [anyone] may visit at any time.” Cabasso attached what purported to be a photograph of Aventura’s assembly line, depicting a row of seated individuals in blue lab coats and protective hairnets working at laboratory benches—a photograph that also appears on Aventura’s website. In reality, this photograph first appeared in a trade publication article recounting a reporter’s visit to PRC Manufacturer-1’s manufacturing facility in Hangzhou, PRC, and it depicts PRC Manufacturer-1’s assembly line, not Aventura’s.
The Scheme to Misrepresent Aventura as a Woman-Owned Small Business
Jack and Frances Cabasso, along with Lasker and Lazarus, falsely represented on numerous occasions that Frances Cabasso was the chief executive of Aventura. In fact, the true chief executive officer of Aventura was Jack Cabasso, and Frances Cabasso played a minimal role at the company. This misrepresentation gave Aventura access to government contracts that were set aside for women-owned small businesses, a category that is legally defined to include only those businesses owned by women, where management and daily operations are also controlled by one or more women.
In order to win these set-asides, the defendants represented to the public that Frances Cabasso controlled Aventura. Aventura’s website and its GSA webpage identify Aventura as a woman-owned business, and the defendants repeatedly certified to the GSA and stated to government procurement officers that Aventura is a woman-owned business. For example, on or about January 13, 2014, a GSA employee emailed Frances Cabasso to “verify if Aventura Technologies, Inc. is a Woman-Owned business.” She replied: “Yes we are still a certified women-owned business.” Aventura has won numerous contracts from the federal government on the strength of its status as a woman-owned business.
As Jack Cabasso repeatedly admitted, he was the true chief executive officer of Aventura. In 2017, Jack Cabasso emailed an Air Force procurement officer, stating in part, “I am the Managing Director of Aventura Technologies and the senior most person within the organization.” Similarly, in a 2018 deposition, Cabasso said that his job responsibilities were to “oversee all operations of the company.” By contrast, Frances Cabasso has worked as a bookkeeper at an unrelated accounting firm since 2011 and is rarely present at Aventura’s offices. At times, emails sent to Frances Cabasso’s email address appear to have been auto-forwarded to Jack Cabasso who sometimes signed his responses in Frances’s name. The defendants joked about the fact that Frances Cabasso did not work at Aventura. For example, in an instant message exchange on December 5, 2016 between Jack Cabasso and Lazarus, both defendants discussed moving another employee into “Fran’s” office—the office of the purported owner of the company—putting the name “Fran’s” in quotation marks.
The Money Laundering Scheme
Jack and Frances Cabasso siphoned Aventura’s illegal profits out of the company through a network of shell companies and intermediaries. The funds were then directed to investments owned by the Cabassos or controlled for their benefit.
Between 2016 and 2018, Aventura transferred approximately $2 million to an attorney escrow account belonging to a Long Island, New York-based law firm (Law Firm-1), some of which appears to have been intended to conceal the source of the funds. For example, on or about May 24, 2016, Aventura transferred $450,000 to Law Firm-1. On the same day, Law Firm-1 paid a total of $435,000 towards the purchase of a new home for a relative of Jack and Frances Cabasso.
Similarly, in early 2018, Aventura transferred $675,000 to Law Firm-1. Those funds were loaned out to a separate company for use in purchasing a house. When that company repaid the loan to Law Firm-1, the proceeds, totaling approximately $682,000, were transferred to Frances Cabasso.
In addition to the transactions through Law Firm-1, Aventura has transferred at least $2.75 million to shell companies owned by Frances Cabasso. Those funds were then transferred to a number of accounts, including Frances Cabasso’s personal bank account and the business account of a lawyer retained by Jack Cabasso. Some of these funds were returned to Aventura’s bank accounts, in transactions having no discernible economic purpose.
In addition to these and other transfers, Aventura has made approximately $1 million in payments since 2013 related to the Cabassos’ 70-foot luxury yacht, known as the Tranquilo, which is moored in the gated community where the Cabassos reside. Although Aventura is the purported owner of the Tranquilo, the yacht appears to have no connection with Aventura’s corporate business, and its rental income flows to the Cabassos, not to Aventura.
***
The defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face up to 20 years’ imprisonment on each charge in the complaint.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Ian C. Richardson, Alexander Mindlin, Kayla Bensing and Claire Kedeshian are in charge of the prosecution.
The FBI has established an email hotline for potential victims. If you have information regarding Aventura’s crimes or believe that you may be a victim, please send an email to [email protected]
The Defendants:
AVENTURA TECHNOLOGIES, INC.
Commack, New YorkFRANCES CABASSO
Age: 59
Northport, New YorkJACK CABASSO
Age: 61
Northport, New YorkJONATHAN LASKER
Age: 34
Port Jefferson Station, New YorkCHRISTINE LAVONNE LAZARUS
Age: 45
Shirley, New YorkWAYNE MARINO
Age: 39
Rocky Point, New YorkEDUARD MATULIK
Age: 42
North Massapequa, New YorkALAN SCHWARTZ
Age: 70
Smithtown, New YorkE.D.N.Y. Docket No. 19-MJ-1035
[1] As the introductory phrase signifies, the entirety of the text of the complaint and the description of the complaint set forth herein, constitute only allegations and every fact described should be treated as an allegation.
[2] The numerals used to identify the manufacturers in this press release correspond to the way they are referred to in the criminal complaint.
United States Attorney Richard P. Donoghue Announces Project Safe Neighborhoods Achievements on the Two-Year Anniversary of the Revitalization of the ProgramRead the Press Release
Two years ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), the centerpiece of the Department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders, and partners with locally based prevention and reentry programs for lasting reductions in crime.
“The revitalized Project Safe Neighborhoods program is a major success,” stated Attorney General William P. Barr. “It packs a powerful punch by combining advanced data with local leadership, further reducing violence in communities across the country and improving overall public safety. U.S. Attorneys continue to focus their enforcement efforts against the most violent criminals and work in partnership with federal, state, local and tribal police. The Justice Department’s relationships across the board have never been stronger.”
“The arrests, guilty pleas and sentencings of more than 60 gang members and associates prosecuted by the Eastern District of New York for violent crimes and drug trafficking have made our neighborhoods safer,” stated United States Attorney Donoghue. “Working closely with our federal and local law enforcement partners, we will continue to target violent street gangs.”
The PSN initiatives in the EDNY over the last year include:
MS-13 Enforcement
MS-13 on Long Island
In October 2019, an MS-13 gang member was sentenced to 25 years in prison for his participation in the fatal attack with machetes and a baseball bat on a man in Brentwood on October 13, 2016.
In September 2019, an MS-13 gang member was sentenced to 50 years in prison for his participation in the murders of four young men with knives, wooden clubs and an axe in a park in Central Islip on April 11, 2017.
In July 2019, an MS-13 member pleaded guilty to racketeering charges for his participation in the murder of a fellow gang member in Brentwood on June 3, 2016 and the attempted murder of a suspected rival outside the Brentwood public library on January 15, 2016.
In June 2019, an MS-13 gang member was sentenced to 55 years in prison for his participation in the murders of four young men with knives, wooden clubs and an axe in a park in Central Islip on April 11, 2017.
In May 2019, an MS-13 gang associate was convicted at trial of racketeering, murder, assault and firearms charges in connection with the January 30, 2017 murder of a man suspected of being a member of a rival gang and the wounding of a female employee in a deli in Central Islip.
In January 2019, an MS-13 gang member was sentenced to 27 years in prison for the June 30, 2015 murder in Central Islip of a teenager suspected of being associated with a rival gang.
The investigations that led to these prosecutions and convictions were conducted by the Federal Bureau of Investigation’s (FBI) Long Island Gang Task Force.
MS-13 in Queens
In September 2019, three MS-13 gang members were charged in a superseding indictment with racketeering offenses, including the murder of a teenager in Alley Pond Park.
In June and July 2019, three MS-13 gang members from Queens and the Bronx pleaded guilty to assault in aid of racketeering charges for beating and stabbing an inmate who they believed was a member of a rival gang inside a pre-trial detention facility.
In May 2019, an MS-13 gang member was sentenced to more than 25 years in prison for shooting a teenager suspected of being a member of the rival 18th Street gang in Jamaica. The victim was left paralyzed.
The investigations that led to these prosecutions and convictions were conducted by the FBI/New York City Police Department (NYPD) Safe Streets Task Force.
Coney Island Gang Enforcement
In September 2019, three members of the West End Enterprise, a Coney Island-based street gang, pleaded guilty to a racketeering conspiracy involving their participation in a murder outside the Mermaid Houses. The victim was shot to death in retaliation for what the defendants believed was his role in setting up the murder of a high-ranking member of the West End Enterprise. The investigation was conducted with the FBI and NYPD.
Bloods Gang Enforcement
In October 2019, six members and associates of the Red Stone Gorillas set of the Bloods street gang on the east end of Long Island were charged in a superseding indictment with racketeering, murder, robberies, narcotics trafficking and firearms offenses. The investigation was conducted with the FBI’s Long Island Gang Task Force, Suffolk County District Attorney’s Office (SCDA) and the Suffolk County East End Drug Task Force.
In September 2019, a member of the Bloods street gang on Long Island was indicted for racketeering and the September 2, 2016 murders of two individuals. The investigation was conducted by the FBI, Homeland Security Investigations and the Suffolk County Police Department (SCPD).
In August 2019, six members of the Bloods street gang on Long Island were indicted for trafficking heroin, fentanyl, fentanyl analogues, cocaine and crack cocaine in and around Babylon. The investigation was conducted by the FBI, the Drug Enforcement Administration, SCDA and SCPD.
In July 2019, 17 members and associates of the Makk Balla Brims set of the Bloods street gang in Jamaica, Queens, were indicted for racketeering, including violent predicate acts related to their participation in a robbery crew. The investigation was conducted by the FBI and NYPD.
Between February and June 2019, 13 members and associates of the Makk Balla Brims set of the Bloods street gang have pleaded guilty to conspiring to distribute crack cocaine and heroin, as participants in a drug-trafficking network that operated in the Bronx, Brooklyn and Maine. The investigation, which initially focused on criminal activity in a New York City Housing Authority complex in East New York, Brooklyn, led to the recovery of two firearms and was conducted by the FBI and NYPD.
In February 2019, a member of the Bloods street gang on Long Island was sentenced to 15 years in prison for the attempted murder of a rival whom the defendant believed was responsible for the murder of a Bloods gang member. The investigation was conducted by the FBI and Nassau County Police Department (NCPD).
In January 2019, a member of the Brooklyn-based Red Lane Gorillas set of the Bloods gang was indicted for racketeering, including a murder and an attempted murder on Long Island. The investigation was conducted by the FBI, NCPD and NYPD.
Other Street Gang Enforcement
In the past eight months, eight defendants charged in connection with the criminal activities of the Bushwick Crew, a Brooklyn-based enterprise comprised of high-level heroin traffickers and members of the Young Gunners street gang, pleaded guilty to various crimes including murder, using and carrying firearms in relation to drug trafficking and crimes of violence, and heroin trafficking. The investigation was conducted by the FBI and NYPD.
In February 2019, a member of the street gang G’z Up, based in Bedford Stuyvesant, Brooklyn, was convicted following a jury trial of two murders. The investigation was conducted by the FBI.
Community Partnerships and Grants
PSN funding provides direct support to local law enforcement agencies as well as prevention, education and awareness programs for at-risk young people and parents. Presentations regarding gang awareness, internet safety and monitoring your child’s electronic devices all provide students and parents with necessary tools to effectively avoid the dangers of violent crime.
In October 2019, a PSN award of $500,447 was granted to Suffolk County to oversee and implement various violent crime reduction strategies in Suffolk County, Nassau County and throughout the district. Resources will be dedicated to enforcement and prevention efforts including funding for prosecutors and police, providing technical training, promoting community outreach efforts and supporting existing gun and gang violence reduction programs.
To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
Former Executive Director of Central United Talmudic Academy Sentenced to 24 Months in Prison for School Meals Fraud SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, United States District Judge Nicholas G. Garaufis sentenced the defendant Elozer Porges to 24 months’ imprisonment and 1,000 hours of community service for his leadership role in a multi-million dollar fraud scheme. The Court also ordered Porges to pay more than $3.2 million in restitution to the United States Department of Agriculture and a $150,000 fine. Porges committed this fraud while serving as the Executive Director of the Central United Talmudic Academy (Central UTA), located in Williamsburg, Brooklyn.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), and Bethanne M. Dinkins, Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General (USDA-OIG), announced the sentence.
“Porges now stands convicted and sentenced as a felon for abusing his position to defraud government programs and steal millions of dollars in taxpayer funds designated to feed needy children,” stated United States Attorney Donoghue. “Such criminal conduct will not go unpunished.”
“The Child and Adult Care Food Program (CACFP) was created to provide food and nutrition to those who truly need this assistance. Those who are involved in fraud and abuse of USDA feeding programs will be investigated by our office to the fullest extent,” stated USDA-OIG Special Agent-in-Charge Dinkins. “Our joint investigation with the Federal Bureau of Investigation and the New York City Department of Investigation is identifying those who sought to profit from the CACFP through illegal schemes. The USDA Office of Inspector General will continue to dedicate investigative resources, working with our law enforcement and prosecutorial partners, in order to protect the integrity of these programs and bring to justice those who commit fraud.”
“School children throughout New York City rely on funding from government programs for their meals every day,” stated DOI Commissioner Garnett. “This defendant aimed to defraud those vital programs, inflating the number of meals he claimed to need for low-income students, and receiving millions of dollars in subsidies to which Central UTA was not entitled. Today's prison sentence demonstrates the enduring commitment of DOI and the U.S. Attorney's Office to protecting taxpayer dollars and ensuring those funds go to children in need.”
Between October 2013 and December 2015, Porges and his co-defendant, Joel Lowy, submitted false and misleading monthly claim forms to the New York State Department of Health (NYSDOH) for reimbursement from the federal government for thousands of meals purportedly served to students attending Central UTA schools at three locations. The claims were submitted pursuant to the CACFP, a program operating under the authority of the United States Department of Agriculture that provides funding to qualifying institutions. The fraudulent forms resulted in NYSDOH reimbursing Central UTA more than $3 million for meals that had not been served to students. Instead, the funds were largely spent on non-qualifying evening events attended by adults at a Central UTA facility on Wythe Street.
Lowy pleaded guilty in March 2018 and is awaiting sentencing.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Erik Paulsen and Maria Cruz Melendez are in charge of the prosecution.
The Defendant:
ELOZER PORGES
Age: 46
New York, NYE.D.N.Y. Docket No. 17-CR-431 (NGG)
Former Chief Operating Officer of Long Island Federal Credit Union Sentenced to 18 Months in Prison for EmbezzlementRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Suzanne Silva, the former Chief Operating Officer of Winthrop University Hospital Employees Federal Credit Union, was sentenced to 18 months in prison for embezzling credit union funds during her employment and ordered to pay $465,172 in restitution to the credit union. Silva pleaded guilty to the embezzlement scheme in March 2019. The sentencing proceeding was held before United States District Judge Denis R. Hurley.
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.
Between March 2011 and June 2018, Silva transferred hundreds of thousands of dollars from operating accounts of the credit union to accounts in her name and the names of family members. She used the funds to take Caribbean cruises, travel to Cancun and pay thousands of dollars a month for purchases from the Amazon and Etsy websites.
Silva’s employment was terminated by Winthrop University HEFCU in June 2018.
“For years, Silva plundered the credit union, abusing her position as its Chief Operating Officer to commit serious crimes – all to serve herself,” stated United States Attorney Donoghue. “For the next 18 months, she will pay the price for her greed.”
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
SUZANNE SILVA
Age: 35
Carle Place, New YorkE.D.N.Y. Docket No. 18-CR-507 (DRH)
United States Seeks Forfeiture of Real Estate in Mexico Purchased by Cartel Leader Rafael Caro Quintero with Proceeds of His Drug Trafficking OrganizationRead the Press Release
A civil complaint against eight real properties located in and around Guadalajara, Mexico was unsealed today in federal court in Brooklyn. The properties described in the complaint are alleged to have been purchased by Rafael Caro Quintero with drug proceeds obtained through his leadership of the Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel.
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 complaint.
“Today’s efforts to seize properties Caro Quintero purchased with blood money reaped from the drug trafficking, addiction and violence he sowed in the United States and Mexico is just the latest step in our pursuit of justice,” stated United States Attorney Donoghue. “We will never forget that Caro Quintero is responsible for the murder of Special Agent Camarena and he now faces a stark choice between the only available endings - an American prison or a Mexican grave, and now is the time to choose.” Mr. Donoghue extended his grateful appreciation to the DEA New York Division Organized Crime and Drug Enforcement Strike Force, as well as the DEA Raleigh Resident Office and DEA Mexico City Country Office for their assistance with the case.
“The atrocities of Rafael Caro Quintero are not forgotten, and the history of the terror that he has inflicted serves as a constant reminder to the DEA that we will never stop the pursuit for justice,” stated DEA Special Agent-in-Charge Donovan. “We are proud to show the world, with the unsealing of this civil complaint, that DEA’s commitment to uncover Caro Quintero’s infrastructure and criminal associates is unwavering. DEA will never forget. We will not relent.”
According to the forfeiture complaint, between January 1980 and March 2015, the Caro Quintero drug trafficking organization was involved in the transportation of multi-ton quantities of marijuana, multi-kilogram quantities of methamphetamine and multi-kilogram quantities of cocaine from Mexico to the United States. As part of its investigation, law enforcement learned that Caro Quintero used proceeds from the sale of illegal narcotics to purchase real estate in and around his home area of Guadalajara. Caro Quintero allegedly placed the properties in the names of family members to conceal his ownership of the properties and use of illegal proceeds to purchase them, and to prevent Mexican authorities from seizing them.
Caro Quintero is a fugitive from several indictments in the United States, and is on the FBI’s list of “Ten Most Wanted” criminals. In April 2018, an indictment was unsealed in federal court in Brooklyn charging Caro Quintero with leading a continuing criminal enterprise and other crimes, including his participation in the 1985 kidnapping, torture and murder of DEA Special Agent Enrique “Kiki” Camarena. A $20 million reward provided by the United States Department of State is being offered for information leading to his capture.
The government’s case is being prosecuted by Assistant United States Attorney Brendan G. King of the Office’s Asset Forfeiture Unit, and Gina M. Parlovecchio, Michael P. Robotti, Erin Reid and Patricia E. Notopoulos of the Office’s International Narcotics and Money Laundering Section.
E.D.N.Y. Docket No. 19-CV-5748 (ENV)
Managing Director and Chief Compliance Officer of Private Equity Firm Indicted for Obstruction of JusticeRead the Press Release
A superseding indictment was unsealed today in federal court in Central Islip charging Michael S. Cohn, Managing Director and Chief Compliance Officer of GPB Capital Holdings, LLC (GPB), with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information. Cohn, a former employee of the Securities and Exchange Commission (SEC), was arraigned this morning before United States Circuit Judge Joseph F. Bianco and released on a $250,000 bond.
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 Carl W. Hoecker, Inspector General of the SEC Office of Inspector General, announced the charges.
“As alleged in the superseding indictment, the defendant abused the trust placed in him as an SEC employee, obstructing an active investigation,” stated United States Attorney Donoghue. “No one gets a pass for breaching the security of government computer networks and misusing sensitive and confidential information for their own benefit.” Mr. Donoghue expressed his appreciation to the New York City Business Integrity Commission and the New York City Police Department for their assistance during the investigation.
“When Cohn left the SEC to join GPB, he left with more than his own career ambitions. The proprietary information he allegedly retrieved—from databases he wasn’t authorized to access—included compromising information about a GPB investigation and sensitive details related to the same. The charges announced today demonstrate the FBI’s commitment to protect the securities industry, in addition to guarding the confidential information that is essential to the success of our investigations,” stated FBI Assistant Director-in-Charge Sweeney.
“The charges announced by the U.S. Attorney’s Office reflect the Office of Inspector General’s commitment to investigate individuals who obstruct SEC enforcement activities,” stated SEC Inspector General Hoecker.
As set forth in the superseding indictment and other court documents, Cohn previously worked as a Securities Compliance Examiner and Industry Specialist in the SEC’s Enforcement Division, where he assisted investigations into violations of securities laws. In approximately October 2018, Cohn left the SEC to join GPB, a private equity firm based in Manhattan and Garden City, New York, that manages over $1.5 billion in assets. However, prior to leaving the SEC, Cohn accessed information on SEC servers relating to an Enforcement Division investigation into GPB. Cohn was not authorized to access this highly sensitive material, which included confidential information, privileged attorney-client work product and contacts with law enforcement and other regulatory agencies. During discussions with GPB personnel about obtaining a job there, Cohn advised them that he had inside information about the SEC’s investigation, and on several occasions he disclosed information to members of GPB’s senior management about that investigation.
The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Cohn faces a maximum sentence of 20 years’ imprisonment on the obstruction of justice count, a maximum of five years’ imprisonment on the unauthorized computer access count and a maximum of one year imprisonment on the unauthorized computer disclosure count.
The government’s case is being handled by the Office’s Business and Securities Fraud and National Security & Cybercrime Sections. Assistant United States Attorneys Artie McConnell and Lauren Howard Elbert are in charge of the prosecution.
The Defendant:
MICHAEL S. COHN
Age: 59
Norwalk, ConnecticutE.D.N.Y. Docket No. 19-CR-97 (S-1) (JFB)
Corporate Insider Convicted of Conspiring with Others at Long Island Boiler Room to Pump and Dump Stock on Unsuspecting Elderly InvestorsRead the Press Release
A federal jury in Central Islip returned a guilty verdict on all counts this afternoon against Michael Watts, a former registered broker, for his role in a conspiracy to promote and manipulate the price of shares in Hydrocarb Energy Corp. (Hydrocarb) and other companies. Specifically, Watts was convicted of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and money laundering. The verdict followed a three-week trial before United States District Judge Joanna Seybert. When sentenced, Watts faces a maximum sentence of more than 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.
“With today’s verdict, the jury has delivered a measure of closure to the victims, many of them elderly and vulnerable, who were preyed upon by Watts and his co-conspirators,” stated United States Attorney Donoghue. “The defendant will face another reckoning when he is sentenced for his crimes.”
As proven at trial, from 2014 to 2016, Watts and his co-conspirators at a Melville-based boiler room artificially inflated the price and trading volume of Hydrocarb stock. They did so through an illegal cold-calling campaign that used lies and high-pressure sales tactics to lure victim investors, including many elderly victims, into purchasing stock. Watts, who was one of the largest shareholders in Hydrocarb and knew that the business was failing, also used the boiler room to dump more than $2 million worth of Hydrocarb shares that he owned or controlled on unsuspecting investors in the months leading to the company’s April 2016 bankruptcy. The government has alleged that the conspiracy’s market manipulation fraudulently inflated the stock price of Hydrocarb and four other companies by more than $147 million.
Watts is the 13th defendant convicted in this case. Three others are scheduled for trial in January 2020. 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.
United States Attorney Donoghue thanked the Federal Bureau of Investigation, New York Field Office, for its hard work and dedication in leading the investigation, and expressed his appreciation to the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group for their cooperation and assistance.
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.
The Defendant:
MICHAEL WATTS
Age: 63
Sugarland, TexasE.D.N.Y. Docket No. 17-CR-372 (JS)
Brooklyn Man Pleads Guilty to Stealing More Than $80,000 from New York State Assemblyman’s Campaign AccountRead the Press Release
Earlier today in federal court in Brooklyn, Maruf Alam, the former chief of staff for a New York State assemblyman, pleaded guilty to wire fraud for stealing more than $80,000 of donor contributions from the assemblyman’s campaign account for his own personal use. Alam admitted that, as part of the scheme, he filed false reports to the New York State Board of Elections (NYSBOE) to conceal his years-long theft. The proceeding took place before United States District Judge Ann M. Donnelly. When sentenced, Alam faces up to 20 years in prison.
The guilty plea was announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York.
“Alam was caught with his hand in the till, and now he must face the consequences,” stated United States Attorney Donoghue. “Those who corrupt the political campaign contribution process to enrich themselves will be caught and prosecuted.” Mr. Donoghue extended his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and to the enforcement staff at the NYSBOE for their assistance during the investigation.
Alam was employed by a New York State assemblyman in various capacities since 2008, including as chief of staff. He also acted, on a voluntary basis, as treasurer for the assemblyman’s campaign account, and was responsible for filing periodic disclosure reports with the NYSBOE that reported contributions received and expenditures made by the assemblyman’s campaign committee. Between approximately January 2012 and January 2019, Alam stole a total of approximately $80,000 from that account, which were funds that had been contributed to support the assemblyman’s candidacy, and deposited the cash into his personal account.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Nathan Reilly and Maria Cruz Melendez are in charge of the prosecution
The Defendant:
MARUF ALAM
Age: 29
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-342 (AMD)
11 Eastern District of New York Employees and Two Former Assistant U.S. Attorneys Receive Attorney General AwardsRead the Press Release
WASHINGTON – Eight Assistant United States Attorneys (AUSA), three paralegal specialists and two former AUSAs from the Eastern District of New York (EDNY) were among the 295 department employees recognized by Attorney General William P. Barr for their distinguished public service today at the 67th Annual Attorney General’s Awards Ceremony. Sixty-two other individuals outside of the department were also honored for their work. This annual ceremony recognizes employees and other individuals who have demonstrated exceptional achievements, leadership and service to the Department of Justice and the American people.
“Our greatest strength in our fight for Justice is our people – the thousands of men and women who have dedicated their careers, often at great personal sacrifice, to working for Justice in America, said Attorney General William P. Barr. “As we reflect on the contributions of each of 357 individuals we honor today, we should hold them up as examples of excellence that continue to inspire our own commitment, and also as reminders of the professionalism and the qualities exhibited throughout the Department.”
“The EDNY honorees, together with our law enforcement partners, successfully litigated extremely complex cases on a world stage, prosecuting Joaquin “El Chapo” Guzman for his countless crimes against the people of the United States and Mexico as a leader of the Sinaloa drug cartel, uncovering corruption and financial crimes at the French multinational bank Société Générale S.A., and dismantling a transnational human trafficking enterprise responsible for the sexual slavery of women trapped in its clutches,” stated United States Attorney Richard P. Donoghue. “This Office is proud of the far-reaching justice the honorees achieved as a result of their exceptional work.”
This year’s program honors individuals across the department and our federal, state, local and tribal partners for their self-less efforts protecting our national security and civil rights, addressing rising violent crime in our communities, interdicting gangs and those trafficking in dangerous narcotics and human beings. The awards also honor civil and environmental litigation, which enforces the rule of law and upholds our Constitution. They also recognize employees whose ideas and efforts save taxpayer dollars and help our government operate more effectively and efficiently, among other contributions to public safety and good governance.
The Attorney General’s David Margolis Award for Exceptional Service.
United States v. Joaquin "El Chapo" Guzman
The recipients of the Department of Justice’s highest award are Assistant United States Attorneys Gina Parlovecchio, Andrea Goldbarg, Hiral Mehta, Patricia Notopoulos and Michael Robotti; Paralegal Specialists Huda Abouchaer, Melissa Bennett and Eileen Rosado, and the members of their team from the United States Attorney's Office, Southern District of Florida, Department of Justice Criminal Division, Federal Bureau of Investigation, Homeland Security Investigations and Drug Enforcement Administration were also recognized for their exceptional achievements in the investigation and prosecution of Joaquin “El Chapo” Guzman. Guzman was a principal leader of the Sinaloa Cartel, a Mexico-based international drug trafficking organization responsible for importing and distributing staggering quantities – 10s of thousands of tons - of narcotics from Central and South America into the United States over a 25-year period. The cartel controlled significant portions of Mexico and relied upon violence and corruption to maintain its power. Guzman directed his hitmen to kidnap, interrogate, torture and kill members of rival drug organizations, and at times he personally carried out acts of violence. Guzman utilized a sophisticated encrypted communications network to operate the global narcotics trafficking operation. To maintain his grip on parts of Mexico and further the interests of the cartel, Guzman took advantage of a vast network of corrupt government officials, from local law enforcement officers, prison guards and state officials, to high ranking members of the armed forces, as well as politicians. Although indicted in multiple U.S. districts, Guzman was ultimately extradited to EDNY to face the most comprehensive case against him, alleging a 25-year continuing criminal enterprise (CCE), plus multiple substantive international narcotics trafficking and weapons charges. Following a 12-week trial that included testimony from 56 witnesses, l4 cooperating witnesses, narcotics seizures totaling over 130,000 kilograms of cocaine and heroin, weapons, ledgers, text messages, letters, videos and intercepted recordings detailing the drug trafficking activity of Guzman and his co-conspirators, on February 12, 2019, Guzman was convicted of all counts of the superseding indictment. On July 17, 2019, Guzman was sentenced to life imprisonment plus 30 years for his role as a leader of a CCE, a charge that included 26 drug-related violations and one murder conspiracy. The Court also ordered Guzman to pay $12.6 billion in forfeiture. This successful prosecution was the capstone to a decades-long effort to bring Guzman to justice.
The Attorney General’s Award for Distinguished Service
United States v. Société Générale S.A.
The recipients of the Department of Justice’s second highest award are Assistant United States Attorneys David Pitluck and James McDonald, former Assistant United States Attorney Matthew Amatruda and the members of their team from the DOJ Criminal Division, Federal Bureau of Investigation and Internal Revenue Service were recognized for their outstanding work in a multi-year (2012 - 2018) investigation that uncovered significant financial crimes at French multinational bank Société Générale S.A. (“SGA”), and led to a successful criminal prosecution of the bank resulting in penalties of more than $860 million. When combined with regulatory penalties imposed in a parallel Commodity Futures Trading Commission case, the total penalties paid by SGA exceeded $l billion. The team found and reviewed voluminous electronic and documentary material establishing violations of the Foreign Corrupt Practices Act (FCPA), as well as commodities fraud through the manipulation of LIBOR. The investigation required identifying and obtaining foreign bank records and reviewing thousands of audio recordings made by SGA employees. In addition, the team conducted multiple international interviews and coordinated with witnesses and law enforcement authorities from an array of foreign countries to obtain the evidence that led to the successful prosecution. As part of the FCPA case, SGA Société Générale Acceptance N.V, a subsidiary of SGA, pled guilty to conspiracy to violate the FCPA. SGA entered into a deferred prosecution agreement to resolve the FCPA and LIBOR charges. Notably, the FCPA prosecution team provided significant assistance to French criminal authorities to facilitate the first simultaneous resolution of an FCPA case with the French government. These cases demonstrate the value of robust and coordinated criminal enforcement, both within the Department and with its law enforcement partners in the U.S. and abroad, and the Department's commitment to holding accountable large financial institutions that engage in corruption and manipulation in the financial markets.
United States v. Rendon Reyes
Assistant United States Attorney Maggie Lee, former Assistant United States Attorney Taryn Merkl and the members of their team from the Civil Rights Division, Criminal Section, and Homeland Security Investigations were recognized for their outstanding work in dismantling a transnational human trafficking enterprise that operated for over a decade, compelling multiple young women and girls into prostitution through deception, manipulation, sexual assault, physical violence, psychological coercion, forced abortions and threats against the victims, their families and their children. The Rendon-Reyes prosecution team led an extensive investigation, spanning multiple U.S. and Mexican jurisdictions, utilizing victim-centered strategies to identify, stabilize and protect the victims of the trafficking organization. The team of prosecutors, victim specialists, paralegals and special agents coordinated extensively with Mexican anti-trafficking authorities, through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative, to execute an enforcement action carried out simultaneously on both sides of the border, resulting in the arrests of all eight members of this notorious human trafficking organization. The team went on to secure rapid extraditions of the defendants apprehended in Mexico, and convictions of all defendants charged in a 27-count indictment with multiple counts of racketeering and racketeering conspiracy, involving predicate acts of sex trafficking, money laundering and related violations. In January 2019, the prosecutions culminated in sentences of 15 to 25 years’ imprisonment for the lead defendants and restored the lives of multiple victims.
District Court Permanently Enjoins 15 Individuals and Companies from Involvement in Elder-Fraud Mail SchemesRead the Press Release
A federal judge in the Eastern District of New York has ordered 15 individuals and companies to permanently cease their involvement with fraudulent mailings. According to a complaint filed by the United States in November 2018, the defendants mailed, or assisted the mailing of, thousands of solicitations stylized as individualized notices, which falsely stated recipients had won large sums of money or valuable prizes, but needed to pay a fee to claim the winnings. Yesterday’s order ends defendants’ involvement in these multi-million dollar mail fraud schemes. These cases are part of the Department of Justice’s Elder Fraud Initiative.
“The Department will vigorously pursue those who peddle false promises of wealth,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “I look forward to the day when American consumers no longer find fraudulent mailings in their mailboxes.”
According to the complaint, the 15 defendants participated in the schemes in a variety of ways, including coordinating the mailings, opening and processing victims’ responses to the fraudulent solicitations, managing lists of recipients and respondents, and processing victim payments. Working together, the defendants mailed thousands of solicitations each week that trumpeted the recipients’ supposed good fortune and gave the false impression that the recipients were approved to receive large cash payments. The solicitations were mailed to victims throughout the world. Victims returned their payments to mailboxes located in the United States, but received nothing of value in return. The complaint alleged that, in the last year, the schemes collectively grossed an estimated $4.8 million in fraudulent proceeds.
“These permanent injunctions stop unscrupulous individuals and companies from conducting fraudulent solicitation schemes that targeted the elderly in our district and throughout the country and the world,” said U. S. Attorney Richard P. Donoghue of the Eastern District of New York. “This office will continue to use all available resources to protect victims of get-rich-quick schemes.”
“The U.S. Postal Inspection Service has a long history of investigating fraud schemes and protecting customers from scammers. These defendants were making misleading promises of easy money,” said Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group. “Anyone who engages in deceptive practices like this should know they will not go undetected and will be held accountable, regardless of where they are.”
The enjoined defendants reside in the United States, specifically in New York and Arizona, as well as in Canada and Germany. The complaint alleged that defendants Charles Kafeiti of Scottsdale, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven L. Diaz of Mt. Sinai, New York, coordinated the schemes. Drew Wilson, of Vancouver, Canada, provided the Kafeitis and Diaz with logistical support. Dennis Hunsaker, of North Las Vegas, Nevada, and his company, Digital Matrix International Inc., enabled the mailings by providing tools that managed lists of recipients and lists of respondents. Carmine Maietta and Elizabeth Maietta, of Westbury, New York, opened and processed victim returns. A German corporation, SixEvolution GmbH, and its operator, David Anthony, processed victim payments.
The permanent injunctions were issued after the District Court granted the government’s request for a temporary restraining order. The permanent injunctions prohibit defendants from, among other things, sending fraudulent solicitations; receiving, handling, or opening any victim mail responding to solicitations; and using or benefiting from lists of victims who previously responded to solicitations. The defendants are also required to notify the government of any interest or participation in any entity involved in mass-mail marketing and of their use of any U.S.-based mailboxes. The orders also authorize the U.S. Postal Inspection Service to open mail that was detained by law enforcement and return payments to the schemes’ victims.
The government is represented by Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Seth Eichenholtz and John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York. The United States Postal Inspection Service provided investigative support.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at 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 www.justice.gov/usao-edny.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep. The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act. More information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
District Court Enters Permanent Injunctions Against 15 Individuals and Companies Involved in Elder Fraud Mail SchemesRead the Press Release
CENTRAL ISLIP – The United States District Court for the Eastern District of New York entered permanent injunctions against 15 individuals and companies to cease their involvement with fraudulent mailings. According to a complaint filed by the United States in November 2018, the defendants mailed, or assisted the mailing of, thousands of solicitations stylized as individualized notices that falsely stated recipients had won large sums of money or valuable prizes, but had to pay a fee to claim the winnings. Today’s order ends defendants’ involvement in these multi-million dollar mail fraud schemes. These cases are part of the Department of Justice’s Elder Fraud Initiative.
“These permanent injunctions stop unscrupulous individuals and companies from conducting fraudulent solicitation schemes that targeted the elderly in our district and throughout the country and the world,” stated United States Attorney Donoghue. “This Office will continue to use all available resources to protect victims of get-rich- quick schemes.”
“The Department will vigorously pursue those who peddle false promises of wealth,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “I look forward to the day when American consumers no longer find fraudulent mailings in their mailboxes.”
“The U.S. Postal Inspection Service has a long history of investigating fraud schemes and protecting customers from scammers. These defendants were making misleading promises of easy money,” stated Delany De Leon-Colon, Inspector in Charge, U.S. Postal Inspection Service Criminal Investigations Group. “Anyone who engages in deceptive practices like this should know they will not go undetected and will be held accountable, regardless of where they are.”
The 15 defendants participated in the schemes in a variety of ways, including facilitating the mailing of fraudulent solicitations related to three mail fraud schemes that primarily victimized the elderly or vulnerable. The solicitations informed recipients throughout the world that they had won multi-million dollar cash prizes but needed urgently to pay a fee to claim their winnings. Although victims sent in the requested fees by cash, check or credit card, they did not receive large cash prizes in return. The complaint alleged that, in the last year, the schemes collectively grossed an estimated $4.8 million in fraudulent proceeds.
The complaint alleged that defendants Charles Kafeiti of Scottsdale, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven L. Diaz of Mt. Sinai, New York, coordinated the schemes. Drew Wilson, a resident of Vancouver, Canada, provided the Kafeitis and Diaz with logistical support. Dennis Hunsaker, a resident of North Las Vegas, Nevada, and his company, Digital Matrix International Inc., provided tools that managed lists of recipients and lists of respondents. Carmine Maietta and Elizabeth Maietta, of Westbury, New York, opened and processed victim returns. A German corporation, SixEvolution GmbH, and its operator, David Anthony, processed victim payments.
The permanent injunctions were issued after the District Court granted the government’s request for a temporary restraining order in November 2018. They prohibit defendants from sending fraudulent solicitations; receiving, handling, or opening any victim mail responding to solicitations; and using or benefiting from lists of victims who previously responded to solicitations. The defendants are required to notify the government of any interest or participation in any entity involved in mass-mail marketing, and of their use of any U.S.-based mailboxes. The injunction also authorizes the U.S. Postal Inspection Service to open mail that was detained by law enforcement and return payments to the victims of the schemes.
This matter is being handled by Assistant U.S. Attorneys Seth Eichenholtz and John Vagelatos of the United States Attorney’s Office for the Eastern District of New York, and Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch. The United States Postal Inspection Service provided investigative support.
Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
E.D.N.Y. Docket No. 18-CV-6581 (JMA)
Brooklyn Man Convicted of Home Invasion Armed Robbery ConspiracyRead the Press Release
A federal jury in Brooklyn returned a guilty verdict today against Devone Jefferys for Hobbs Act robbery conspiracy, attempted robbery of heroin and cash and unlawful use and possession of a firearm. The verdict followed a six-day trial before United States District Judge Kiyo A. Matsumoto. When sentenced, Jefferys faces a mandatory minimum sentence of five years in prison and a maximum of life imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.
“For years, the defendant was on the run and in hiding, trying to avoid paying the consequences for the violence and terror he inflicted. But with today’s verdict, justice has caught up to him,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division, for their outstanding work in the case.
On July 31, 2015, Jefferys and a co-conspirator, posing as NYPD police officers, entered an apartment in Williamsburg, Brooklyn, to steal heroin and cash from a drug dealer who lived there with his mother. They pointed their guns at those present in the apartment – including a pregnant woman and the drug dealer’s sister – ordered them to lie on the floor and bound them with duct tape. Jefferys then ransacked the apartment searching for drugs and cash, with his and co-conspirator’s guns fixed on the victims’ heads and the pregnant woman’s stomach. When Jefferys learned that the drug dealer’s sister had thrown a bag of drugs out a window, he forcibly took her to an outside alleyway, where he assaulted her after he was unable to locate the heroin. Jefferys was captured on multiple video cameras in the apartment building.
At the trial, Jefferys’ former girlfriend testified that he told her that he was a fugitive from the police, described the robbery and lived in her car to avoid capture.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nathan Reilly and Ryan Harris are in charge of the prosecution.
The Defendant:
DEVONE JEFFERYS (also known as “Moneybags”)
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-359 (KAM)
Armenian National Pleads Guilty in Brooklyn Federal Court for His Role in Visa Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Hrachya Atoyan pleaded guilty to conspiring with the operator of a Queens-based non-profit organization, Big Apple Music Awards Foundation Inc. (BAMA), to bring Armenian nationals illegally into the United States, and to committing visa fraud. The guilty plea was entered before United States Magistrate Judge Sanket J. Bulsara.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Todd J. Brown, Director, U.S. Department of State Diplomatic Security Service (DSS), announced the guilty plea.
“Atoyan’s guilty plea brings down the curtain on an elaborate visa fraud scheme to falsely portray applicants as artists and entertainers in order to circumvent our country’s P-3 visa program,” stated United States Attorney Donoghue.
“Exploiting the P-3 non-immigrant visa classification system for culturally unique artist and entertainers makes a mockery out of the legitimate performers for whom that visa was intended,” stated Assistant Attorney General Benczkowski. “We will work hand in hand with our law enforcement partners to rid the system of fraudsters, like Mr. Atoyan and his co-conspirators, who seek to take advantage of and profit from our immigration system.”
“The Diplomatic Security Service builds strong teams overseas and in the United States to protect the integrity of all U.S. visas and travel documents -- especially those, like the P-3 visa, which allow for entertainers to visit the United States to perform in culturally unique events and deepen our understanding of different cultures,” stated DSS Director Brown. “DSS values our partnership with the U.S. Attorney’s Office and other law enforcement agencies around the world to prevent and jointly combat U.S. passport and visa fraud. Deterring, detecting and investigating U.S. passport and visa fraud is essential to safeguarding our national security.”
Between January 2013 and December 2014, Atoyan and Stella Boyadjian, the operator of BAMA, engaged in a widespread visa fraud scheme to bring foreign nationals illegally into the United States by falsely representing to the United States Citizenship and Immigration Services (USCIS) that they were members of a traditional Armenian performance group and thus qualified for P-3 visas as “culturally unique” artists or entertainers.
In furtherance of the scheme, the conspirators solicited foreign nationals and, in exchange for fees of up to $10,000, prepared and filed fraudulent P-3 visa applications. The conspirators acquired fraudulent documentation to support the applications, including fake dance certificates and staged photo sessions where the foreign nationals wore Armenian dance costumes to make it appear as though they were traditional Armenian musicians, singers and performers.
When sentenced, Atoyan faces up to 10 years’ imprisonment. Boyadjian pleaded guilty to conspiring to bring aliens unlawfully into the United States, visa fraud and aggravated identity theft in March 2019, and also awaits sentencing.
This case was investigated by the DSS Criminal Fraud Investigations and Overseas Criminal Investigations Division, with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations, Vermont.
The government’s case is being prosecuted by Assistant United States Attorney David Gopstein and Trial Attorney Sasha N. Rutizer of the Criminal Division’s Human Rights and Special Prosecutions Section.
The Defendant:
HRACHYA ATOYAN
Age: 32
Glendale, CaliforniaE.D.N.Y. Docket No. 18-CR-57 (MKB)
Armenian Citizen Pleads Guilty for His Role in For-Profit U.S. Visa Fraud SchemeRead the Press Release
A man residing in Glendale, California, pleaded guilty today to conspiracy to unlawfully bring in aliens and visa fraud for his role in a multi-year visa fraud scheme that brought Armenian citizens into the United States for profit.
Hrachya Atoyan, 32, pleaded guilty before U.S. Magistrate Judge Sanket J. Bulsara in the Eastern District of New York. Sentencing is scheduled for Feb. 20, 2020, before U.S. District Judge Margo K. Brodie. According to the indictment, Atoyan allegedly participated in a transnational network of co-conspirators who engaged in a widespread visa fraud scheme to bring Armenian citizens into the United States by fraudulently claiming to the U.S. Citizenship and Immigration Services (USCIS) that the Armenians were members of performance groups, and thus qualified for P-3 “Culturally Unique Artist” visas.
“Exploiting the P-3 non-immigrant visa classification system for culturally unique artist and entertainers makes a mockery out of the legitimate performers for whom that visa was intended,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “We will work hand in hand with our law enforcement partners to rid the system of fraudsters, like Mr. Atoyan and his co-conspirators, who seek to take advantage of and profit from our immigration system.”
“Atoyan’s guilty plea brings down the curtain on an elaborate visa fraud scheme to falsely portray applicants as artists and entertainers in order to circumvent our country’s P-3 visa program,” said U.S. Attorney Richard P. Donoghue of the Eastern District of New York.
“The Diplomatic Security Service builds strong teams overseas and in the United States to protect the integrity of all U.S. visas and travel documents – especially those, like the P-3 visa, which allow for entertainers to visit the United States to perform in culturally unique events and deepen our understanding of different cultures,” said Todd J. Brown, Director of the Diplomatic Security Service. “DSS values our partnership with the U.S. Attorney’s Office and other law enforcement agencies around the world to prevent and jointly combat U.S. passport and visa fraud. Deterring, detecting, and investigating U.S. passport and visa fraud is essential to safeguarding our national security.”
“The elaborate scheme devised in this case demonstrates just how far criminals will go to cheat our already generous immigration system,” said U.S. Citizenship and Immigration Services Acting Director Ken Cuccinelli. “This transnational criminal conspiracy was taken down thanks to the hard work of officers with USCIS’ Fraud Detection and National Security directorate and our valued law enforcement partners. Thank you for bringing these perpetrators to justice.”
The P-3 nonimmigrant visa classification allows foreign nationals to temporarily travel to the United States to perform, teach or coach as artists or entertainers, under a program that is culturally unique. A U.S. employer or sponsoring organization is required to submit a USCIS Form I-129 Petition for a Non-Immigrant Worker, along with supporting documentation, attesting that the performances in the United States are culturally unique.
In February 2018, Stella Boyadjian of Rego Park, New York; Atoyan; and Diana Grigoryan, aka “Dina Akopovna,” 42, of the Republic of Armenia were charged in a 15-count indictment with visa fraud and with conspiracy to: defraud the United States, commit visa fraud, and illegally bring aliens into the United States. Boyadjian and Grigoryan were also charged with related money laundering charges, and Boyadjian was charged with aggravated identity theft. Boyadjian previously pleaded guilty on March 4, 2019 in the Eastern District of New York.
As alleged in the indictment, Boyadjian ran a non-profit organization called Big Apple Music Awards Foundation (BAMA) based in Rego Park, New York. Boyadjian used the Big Apple Music Awards Foundation as well as formal and informal music industry contacts in the United States and Armenia to perpetuate the scheme. Atoyan, Boyadjian, and others solicited Armenian citizens who wanted to come to the United States and charged them between $3,000 and $10,000 to be included on the Form I-129 Petitions. Boyadjian and other associates in Armenia then acquired fraudulent performer certificates and organized staged photo sessions where the aliens wore traditional Armenian folk outfits to make it appear as though they were traditional Armenian performers. After being trained how to defeat U.S. visa interviews, the individual aliens presented these certificates and photos to U.S. consular officers during their visa interviews. Once the Armenians entered the United States, some would pay Boyadjian and her associates additional money to be included in another fraudulent petition asking for P-3 visa extensions. As alleged in the indictment, Atoyan himself came to the United States on a P-3 visa obtained in connection with a Form I-129 submitted by BAMA.
This case was a joint investigation by the DSS’s Criminal Fraud Investigations and Overseas Criminal Investigations Division with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations - Vermont. Trial Attorney Sasha N. Rutizer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney David Gopstein of the Eastern District of New York are prosecuting the case.
Long Island Chiropractor Sentenced to 18 Months’ Imprisonment for Multi-Million Dollar Health Care Fraud SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Raymond R. Pellegrino, a chiropractor with offices in West Hempstead and Hicksville, New York, was sentenced by United States District Judge Joanna Seybert to 18 months’ imprisonment for committing health care fraud. The Court also ordered Pellegrino to forfeit $504,444 and to pay restitution of $2,427,101.13 to Anthem Blue Cross/Blue Shield (BC/BS).
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
Between December 2013 and September 2014, Pellegrino used the National Provider identification numbers of medical doctors who worked for him on a part-time basis to submit fraudulent claims for medical services to BC/BS. The claims falsely indicated that osteopathic manipulation and other services had been provided to patients by the doctors. As a result, Pellegrino received more than $2.4 million in payments from BC/BS for services that he knew had not been provided.
“Pellegrino abused his chiropractic license by manipulating insurance claims instead of patients’ muscles, and now will pay the price for stealing millions of dollars from an insurance company,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the U.S. Department of Health and Human Services and the New York State Department of Financial Services for their assistance with the case.
The government’s case is being handled by the Office’ Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
RAYMOND R. PELLEGRINO
Age: 50
McKinney, Texas,E.D.N.Y. Docket No. 18-CR-496 (JS)
A Leader of Brooklyn Eight Trey Cowboy Crips Gang Pleads Guilty to Narcotics Trafficking and Firearms ChargesRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Rahmel Smith, a leader of the Eight Trey Cowboy Crips gang that operates in Flatbush, pleaded guilty to conspiracy to distribute cocaine base, heroin and marijuana, and use of a firearm in relation to a drug trafficking crime. When sentenced, he faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum of life imprisonment. The guilty plea was entered before United States District Judge Allyne R. Ross.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“The defendant is now facing a significant prison sentence for endangering the Flatbush community not only by dealing dangerous drugs, but also by using firearms in connection with his gang’s drug trafficking,” stated United States Attorney Donoghue. “This Office will continue to working tirelessly with our law enforcement partners to dismantle and eradicate violent street gangs like the Eight Trey Cowboy Crips.” Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and the New York City Police Department for their outstanding work on the case.
Between May 2018 and February 2019, Smith directed fellow gang members to sell crack cocaine, heroin and marijuana on a daily basis. As part of the government’s investigation, law enforcement agents and officers intercepted numerous telephone communications during which Smith discussed narcotics transactions with fellow gang members. Between May 10, 2018 and December 18, 2018, under the supervision of law enforcement, a confidential informant made 12 crack cocaine purchases from Smith in the total amount of approximately 280 grams.
As part of his plea agreement with the government, Smith will forfeit three firearms he used in furtherance of the gang’s drug trafficking, specifically, a .25 caliber Lorcin pistol, a Jimenez 9mm pistol and a Romarm Cugir rifle, commonly referred to as an AK-47.
Two co-defendant gang members, Michael Martin and Shakim Carr, pleaded guilty in May 2019 and October 2019, respectively, to conspiracy to distribute and possess with intent to distribute cocaine base, heroin and marijuana, and are awaiting sentencing.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
This case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Erin Reid and Temidayo Aganga-Williams are in charge of the prosecution.
The Defendant:
RAHMEL SMITH (also known as “Mello”)
Age: 30
Brooklyn, New YorkDefendants Who Previously Pleaded Guilty:
SHAKIM CARR (also known as “Sha”)
Age: 39
Brooklyn, New YorkMICHAEL MARTIN (also known as “Scooter”)
Age: 26
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-137 (ARR)
NYC Department of Environmental Protection Employee Pleads Guilty to Using Long Island Residence to Manufacture Ecstasy and Cultivate MarijuanaRead the Press Release
Joseph Guida, an employee of New York City Department of Environmental Protection, pleaded guilty today to using a stash house in Mastic, Long Island to produce ecstasy (MDMA) and grow marijuana. The plea was entered before United States District Judge Joan M. Azrack at the federal courthouse in Central Islip. When sentenced, Guida faces up to 20 years in prison. As part of his guilty plea, Guida agreed to forfeit his interest in the Mastic residence and a Dodge Durango that he used in connection with his drug operation.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), and Troy Miller, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP), announced the guilty plea.
“Guida turned a house in a residential neighborhood into a drug factory, with total disregard for the danger posed to his neighbors by the volatile chemicals used to manufacture ecstasy,” stated United States Attorney Donoghue. “Today’s guilty plea is the result of swift action taken by this Office, working closely with our law enforcement partners, to safely shut down the defendant’s illegal drug operation.” Mr. Donoghue expressed his grateful appreciation to the Drug Enforcement Administration, New York State Police Contaminated Crime Scene Emergency Response Team, Suffolk County Police Department and New York City Police Department for their assistance during the investigation.
“Guida created a clandestine lab in his home to manufacture synthetics drugs and grow illegal marijuana. He sought to make a profit from his criminal business while endangering those in his community,” stated HSI Special Agent-in-Charge Fitzhugh. “It was the seamless collaboration with our partners at CBP, DEA and New York State Police before and during this investigation that allowed law enforcement to shut down Guida and his illicit enterprise.”
“This case serves as a great example of collaborative law enforcement efforts to combat international narcotics trafficking conspirators,” stated CBP Director Miller. “U.S. Customs and Border Protection thanks our partners at HSI and DEA for their continued cooperation.”
According to court filings and facts presented at the guilty plea proceeding, between November 2013 and December 2018, Guida used a house in Mastic to manufacture MDMA and marijuana for resale. In December 2018, CBP officers intercepted a package containing PMK methyl-glycidate (PMK), a MDMA precursor, that was mailed from China to Guida’s apartment in Queens. HSI agents then interviewed Guida, and he admitted that he ordered the PMK from China and used the Mastic residence as an MDMA lab and marijuana grow-house.
A subsequent search of the Mastic residence by law enforcement agents, some wearing protective hazmat suits, revealed chemicals and laboratory equipment for manufacturing MDMA, as well as approximately 36 marijuana plants and approximately 1.3 kilograms of processed marijuana.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline M. O’Connor are in charge of the prosecution.
The Defendant:
JOSEPH GUIDA
Age: 45
Queens, New YorkE.D.N.Y. Docket No. 19-CR-12 (DRH)
Long Island Man Sentenced to 10 Years in Prison for Possession of Cocaine, Crack and FirearmsRead the Press Release
Earlier today, in federal court in Central Islip, Daniel Harris was sentenced by United States District Judge Arthur D. Spatt to 10 years’ imprisonment for possession with intent to distribute more than 500 grams of cocaine and 28 grams of cocaine base, as well as possession of multiple firearms in furtherance of a drug trafficking crime. Harris pleaded guilty to the charges on April 8, 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
“With today’s sentence, the defendant is deservedly punished for endangering the residents of eastern Long Island with his drug dealing and arming himself to the teeth to protect his illicit business,” stated United States Attorney Donoghue. “This Office will continue working relentlessly with our federal and local law enforcement partners to address the dangerous combination of narcotics and firearms.” Mr. Donoghue thanked the Federal Bureau of Investigation, New York Field Office (FBI), and the Suffolk County East End Drug Task Force for their outstanding work on the case.
As part of an investigation into narcotics trafficking in and around Riverhead, New York, law enforcement agents and officers made multiple purchases of crack cocaine from Harris at his home in Flanders. On November 14, 2018, Harris was arrested, and a search warrant was executed at his home resulting in the seizure of more than one kilogram of powder cocaine and over 50 grams of cocaine base, $10,073 in cash, a shotgun, a .38 caliber revolver and a 9mm. handgun. At his guilty plea proceeding, Harris admitted that he kept the firearms to protect his drug trafficking business.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement, and the local community, to develop effective, locally based strategies to reduce violent crime.
The government’s case is being prosecuted by Assistant United States Attorney Michael Maffei.
The Defendant:
DANIEL HARRIS
Age: 36
Flanders, New YorkE.D.N.Y. Docket No. 18-CR-628 (ADS)
Leaders and Members of Outlaw Gangsta Crips and Shoota Gang Sentenced to up to 210 Months’ ImprisonmentRead the Press Release
Yesterday, at the federal courthouse in Brooklyn, Lenard Barletto, a member of the Outlaw Gangsta Crips (“OGC”) and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, conspiracy to distribute crack cocaine and conspiracy to murder two gang rivals. Barletto pleaded guilty to the charges in June 2018. He is the final gang member to be sentenced in this case, in which 23 defendants, including the gangs’ leaders, were charged and convicted of racketeering conspiracy, murder conspiracy, attempted murder, narcotics trafficking conspiracy and bank fraud, among other crimes. The sentencing proceedings were held before United States District Judge William F. Kuntz II.
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 James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentences.
“With Outlaw Gangsta Crips and Shoota Gang leaders and members now serving well-deserved prison terms, the East Flatbush community is a much safer place,” stated United States Attorney Donoghue. “We warn all violent street gang members, in no uncertain terms, to expect a similar fate for menacing our communities.”
“Violent street gangs, and the crews and subsets that splinter off from them, remain a focus of law enforcement wherever their illegal trade in narcotics and brutal rivalries threaten the safety of our city’s neighborhoods and residents,” stated NYPD Commissioner O’Neill. “We applaud our federal partners for working together in this case to eradicate a criminal franchise and ensure justice for the East Flatbush community with the culmination of this successful prosecution.”
OGC and the Shoota Gang were based in the East Flatbush neighborhood of Brooklyn. OGC was a violent set of the nationwide Crips street gang, and the Shoota Gang was a local offshoot of OGC that included members of OGC, the Eight Trey Gangsta Crips, the Bosses in Business (“BIB”) and the Bloods. Between August 9, 2013 and May 12, 2015, members of OGC and the Shoota Gang committed multiple acts of violence, sold drugs and guns, committed robberies and bank fraud and promoted prostitution. Among the crimes of conviction were the following:
Attempted Murder
On June 3, 2014, Conell Brogdon, a leader of both OGC and the Shoota Gang, and Malik Campbell, a member of the Bloods and the Shoota Gang, attempted to murder a victim identified as John Doe #1. Brogdon, Campbell and three other Shoota Gang members surrounded John Doe #1 inside the Big Boy Deli on Nostrand Avenue and attempted to steal his necklace. During the confrontation, Brogdon handed Campbell a gun, and Campbell shot John Doe #1, who survived.
Murder Conspiracy
In January 2014, OGC member Kareem Mitchell, also known as “Pop,” was murdered, and OGC and the Shoota Gang believed BIB was responsible. In a series of phone calls intercepted pursuant to judicially authorized wiretaps, Parris Desuze, a leader of both OGC and the Shoota Gang, and Lenard Barletto and Courtney Coy, both members of OGC and the Shoota Gang, confirmed that they had firearms and would meet at the location identified by Solomon Artis, another OGC member, to attack two BIB members. The plan was thwarted by FBI agents and NYPD detectives monitoring the wiretaps, and Artis, Barleto, Coy and Desuze were arrested. Subsequently, co-conspirator Andre Holman, a member of the Eight Trey Gangsta Crips, was also arrested.
Assault
On July 19, 2014, Cordero Passley, a member of the Eight Trey Gangsta Crips and associate of OGC, assaulted and stabbed a victim on Lenox Road. The confrontation began when Passley ordered a woman to stop playing a song recorded by an alleged rival gang member and rapper. When the victim defended the woman, Passley and others attacked him.
Drug Trafficking
Between August 9, 2013 and May 12, 2015, members of OGC and the Shoota gang conspired to sell crack cocaine in Brooklyn, Connecticut, West Virginia and elsewhere.
Bank Fraud Conspiracy
Between January 6, 2014 and January 20, 2015, members and associates of OGC, and members of the Eight Trey Gangsta Crips, conspired to defraud Bank of America, JPMorgan Chase, Citibank and TD Bank. The conspirators obtained paychecks issued to others and used the information on the checks to create fraudulent checks that appeared to be written by business entities. Those checks were then deposited into bank accounts, and the deposits were promptly withdrawn.
Convictions and Sentences
- Conell Brogdon, a leader of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of attempted murder and conspiracy to distribute crack cocaine.
- Parris Desuze, a leader of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
- Lenard Barletto, a member of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
- Malik Campbell, a member of the Bloods and the Shoota Gang, was sentenced to 188 months’ imprisonment for racketeering conspiracy, including predicate acts of attempted murder and conspiracy to distribute crack cocaine.
- Courtney Coy, a high-ranking member of both OGC and the Shoota Gang, was sentenced to 168 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
- Solomon Artis, a member of OGC, was sentenced to 121 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
- Steven Cherenfant, Stanley Cherenfant and Stephon Rene, brothers and members of the Eight Trey Gangsta Crips and the Shoota Gang, were sentenced to 135, 121 and 121 months’ imprisonment, respectively, for conspiracy to distribute crack cocaine with OGC.
- Aikiam Floyd, a member of the Bloods and the Shoota Gang, was sentenced to 121 months’ imprisonment for conspiracy to distribute crack cocaine with OGC.
- Andre Holman, a member of the Eight Trey Gangsta Crips and associate of OGC, was sentenced to 87 months’ imprisonment for conspiracy to murder.
- Cordero Passley, a member of the Eight Trey Gangsta Crips and an associate of OGC, was sentenced to 46 months’ imprisonment for assault in aid of racketeering.
The government’s case was handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Allon Lifshitz is in charge of the prosecution.
The Defendant Sentenced Yesterday:
LENARD BARLETTO
Age: 31
Brooklyn, New YorkDefendants Previously Sentenced:
SOLOMON ARTIS
Age: 30
Brooklyn, New YorkDERRICK BIENAIME
Age: 24
Brooklyn, New YorkCONELL BROGDON
Age: 32
Brooklyn, New YorkDAVON BROWN
Age: 21
Brooklyn, New YorkMALIK CAMPBELL
Age: 32
Brooklyn, New YorkSTANLEY CHERENFANT
Age: 24
Brooklyn, New YorkSTEVEN CHERENFANT
Age: 28
Brooklyn, New YorkCOURTNEY COY
Age: 32
Brooklyn, New YorkPARRIS DESUZE
Age: 31
Brooklyn, New YorkBRANDON GREENIDGE
Age: 34
Brooklyn, New YorkCORY HARRIS
Age: 41
Brooklyn, New YorkJAMAR HARRY
Age: 30
Brooklyn, New YorkANDRE HOLMAN
Age: 31
Brooklyn, New YorkJEFFREY JOSEPH
Age: 34
Brooklyn, New YorkSILBERT NICHOLSON
Age: 27
Brooklyn, New YorkCORDERO PASSLEY
Age: 25
Brooklyn, New YorkGABRIEL PATTERSON
Age: 24
Brooklyn, New YorkSTEPHON RENE
Age: 23
Brooklyn, New YorkAKEEM WATSON
Age: 27
Brooklyn, New YorkE.D.N.Y. Docket No. 15-CR-287 (S-1) (WFK)
- Conell Brogdon, a leader of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of attempted murder and conspiracy to distribute crack cocaine.
Queens Woman Charged in Superseding Indictment with Causing Overdose Death of Second Male VictimRead the Press Release
Defendant Angelina Barini will be arraigned this afternoon in federal court in Brooklyn on a superseding indictment charging her with distributing and possessing with intent to distribute fentanyl, methamphetamine and cocaine that resulted in the fatal overdose of a second Queens man, this one on August 5, 2019. The arraignment will be held before United States District Judge Brian M. Cogan. Barini is detained pending trial.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the new charges.
“The defendant Angelina Barini now stands charged with dispensing deadly doses of narcotic drugs to two victims,” stated United States Attorney Donoghue. “Every life lost to the opioid crisis is of the utmost importance to this Office and our law enforcement partners, and we will work relentlessly to uncover the evidence proving who is responsible for each opioid death.”
“Barini has shown little regard for the life of another, and with the drugs laced with fentanyl that she allegedly peddled, she offered her victims an experience they would never survive,” stated HSI Special Agent-in-Charge Fitzhugh. “This is a painful reminder to anyone looking to satisfy a high, that their life is not worth anything to those offering deadly drug cocktails for a profit. The opioid crisis continues to devastate families and take lives, but HSI, with its law enforcement partners, remains committed in investigating overdose related deaths and will hold accountable those who benefit from the addiction of others, some of whom pay the ultimate price.”
The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of causing the death of an overdose victim, Barini faces a mandatory minimum of 20 years’ imprisonment, and a maximum of life imprisonment.
The government’s investigation is continuing.
Assistant United States Attorneys Soumya Dayananda, Andrew Grubin and Andrew Wang are in charge of the prosecution.
The Defendant:
ANGELINA BARINI
Age: 41
Queens, New YorkE.D.N.Y. Docket No. 19-428(S-2) (BMC)
MS-13 Gang Member Sentenced to 25 Years’ Imprisonment for Murder on Long IslandRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Marlon Guevara, also known as “Mosquito,” a member of the Sailors Locos Salvatruchas Westside clique of La Mara Salvatrucha, also known as the MS-13 (MS-13), a transnational criminal organization, was sentenced by United States Circuit Judge Joseph F. Bianco to 25 years’ imprisonment for his participation in the October 13, 2016 murder of Dewann Stacks, and conspiracy to distribute marijuana. Guevara pleaded guilty to the charges in January 2019. Upon completion of his sentence, Guevara faces deportation from the United States.
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), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.
“With today’s sentence, Guevara will now pay for participating in the execution of Dewann Stacks as part of MS-13’s warped mission to attack and kill perceived rivals,” stated United States Attorney Donoghue. “The brutality of this murder is a reminder of the necessity of the Eastern District’s and the FBI’s Long Island Gang Task Force’s commitment to eradicate the MS-13.”
“While today’s sentence might not salve the pain this man inflicted on Mr. Stack’s family, and the community terrorized by the violence going on around them, it does send a message to others they will be held accountable for their murderous and criminal actions,” stated FBI Assistant Director-in-Charge Sweeney. “Our FBI Long Island Gang Task Force is doing all we can to stop MS-13 from further harming anyone, and we’ve made a truly significant impact. Having said that, we still need the community members to know they can come forward with information so we can continue the progress.”
“The senseless homicide of Dewann Stacks, who was brutally attacked in an incomprehensible manner, is a reminder of the ruthlessness and violence committed at the hands of MS-13,” stated SCPD Commissioner Hart. “Our commitment to dismantling MS-13 has led to today’s sentencing, and I would like to thank the Eastern District of New York and the FBI’s Long Island Gang Task Force for their dedication to holding these gang members accountable for their heinous crimes.”
“Today’s sentencing in the brutal murder of Dewann Stacks by MS-13 gang member Marlon Guevara shows that law enforcement is working together with our state and federal partners. We will expand every resource to arrest those offenders of these horrific crimes and follow through until conviction and sentencing. Our combined zero tolerance approach will continue to keep our residents and communities safe,” stated NCPD Commissioner Ryder.
According to court filings and facts presented during the sentencing proceeding, on October 13, 2016, Guevara and other MS-13 co-conspirators drove around the streets of Central Islip and Brentwood hunting for rival gang members to attack and kill. They spotted Stacks on American Boulevard in Brentwood and, believing him to be a rival gang member, decided to kill him. Guevara, wielding a machete, and two other MS-13 members, one armed with a machete and the other a baseball bat, attacked Stacks, beating and hacking him to death. The victim sustained severe sharp and blunt force trauma to the face and head, rendering him nearly unrecognizable.
From April 2016 to March 2017, Guevara and members and associates of the Sailors clique sold street-level quantities of marijuana in and around Brentwood. The profits were turned over to the clique leaders, who purchased more marijuana and firearms and wired money to MS-13 leaders in El Salvador
Guevara was 17 years of age at the time of the murder, and was initially charged by a juvenile information. He subsequently agreed to be transferred to adult status for trial and, in January 2019, he waived indictment and pleaded guilty.
Today’s sentencing is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, and they are primarily immigrants from Central America. With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 50 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, NCPD, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, New York State Police and Bureau of Alcohol, Tobacco, Firearms and Explosives.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti and Justina L. Geraci are in charge of the prosecution.
The Defendant:
MARLON GUEVARA (also known as “Mosquito”)
Age: 20
Brentwood, NEW YORKE.D.N.Y. Docket No. 18-CR-275 (S-1) (JFB)
Long Island Man Sentenced to More Than 10 Years in Prison for Supplying Heroin to Queens-Based Bloods GangRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Stanley Fuller was sentenced to 10 years and one month in prison following his guilty plea to two separate heroin distribution conspiracies. The sentencing was held before United States District Court Judge Jack B. Weinstein. Fuller pleaded guilty to the charges in April 2019.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentencing.
“Fuller had a lucrative business selling lethal heroin to gang members, but ultimately all he earned for his efforts was a significant prison sentence,” stated United States Attorney Donoghue. Mr. Donoghue thanked the Department of Homeland Security, New York, the Drug Enforcement Administration, New York Division, and the New York City Police Department for their outstanding work on the case.
Between April 2013 and July 2015, Fuller supplied large quantities of heroin to a “set” of the Bloods street gang known as the Paper Chasing Goons, or POV City, based in Jamaica, Queens. As part of the government’s investigation, members of law enforcement intercepted numerous telephone conversations with Fuller and gang members discussing heroin sales, demand and prices, as well as the quality of heroin sold under the brand names “Sweet Dreams,” “Pepsi” and “First Take,” and feedback from his distributors about those brands. Fuller distributed heroin to the gangs’ street-level dealers who, in turn, sold the heroin in the vicinity of Liberty Park, a park in South Jamaica.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Alicia N. Washington, Erin Reid and Jonathan Algor are in charge of the prosecution.
The Defendant:
STANLEY FULLER (also known as “Webo” and “Morty”)
Age: 43
Valley Stream, New YorkE.D.N.Y. Docket Nos. 15-CR-382 (S-2) (JBW) and 19-CR-21 (JBW)
Bloods Gang Members and Associates Indicted for Racketeering and Violent Crimes on East End of Long IslandRead the Press Release
Earlier today, a superseding indictment was unsealed in federal court in Central Islip variously charging six members and associates of the Red Stone Gorillas “set” of the Bloods street gang with racketeering, murder, robberies, narcotics trafficking and firearms offenses. The superseding indictment adds five new defendants, Jimmy Dean, Roger Foster, Corey Belcher, Willie Belcher and Eric Ross. Those defendants were arrested this morning in various locations on the East End of Long Island, and will be arraigned this afternoon before United States District Judge Joanna Seybert. Two defendants, the gang’s alleged leader Jimmy Dean and Terrill Latney, were already in custody, and will be arraigned 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), Timothy Sini, District Attorney, Suffolk County District Attorney’s Office (SCDA), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), Keith M. Corlett, Superintendent, New York State Police (NYSP), and David J. Hegermiller, Chief, Riverhead Police Department, announced the charges.
“Through murder, assaults and drug sales, these members and associates of the Bloods’ Red Stone Gorillas posed a grave danger to communities on eastern Long Island,” stated United States Attorney Donoghue. “This Office, together with our federal and local law enforcement partners, will continue working tirelessly to prosecute defendants like these and eradicate violent street gangs throughout Long Island.” Mr. Donoghue expressed his grateful appreciation to the FBI’s Long Island Gang Task Force and the Suffolk County East End Drug Task Force for their work on the case.
“These arrests are the culmination of several years of intensive investigation to take out the worst-of-the-worst gang members terrorizing Eastern Long Island communities,” stated FBI Assistant Director-in-Charge Sweeney. “These subjects have allegedly created such a violent environment in parts of the town where they operate that they were dealing out in the open, without fear. We put a huge dent in that practice with the first round of arrests in this case, and today's action shows our FBI Long Island Gang Task Force and our law enforcement partners won’t stop until all of them are rounded up.”
“These are extremely dangerous gang members who are responsible not only for conspiring to commit murder, but for consistently driving crime on the East End through drug dealing and illegal firearm offenses,” stated Suffolk County District Attorney Sini. “Eradicating violent street gangs from our community is a top priority for my office. I thank all of our federal and local law enforcement partners for their continued partnership in the investigation and prosecution of gang members.”
“These Blood gang members and their associates engaged in violence and trafficked large quantities of narcotics for years on the East End of Long Island. Thanks to the diligent work of the FBI’s Long Island Gang Task Force and the Suffolk County East End Drug Task Force— they have been stopped and will be held accountable for their heinous crimes,” stated SCPD Commissioner Hart. “The department will continue to work with our law enforcement partners to rid our communities of violent street gangs.”
“I commend our federal, state, and local law enforcement partners for their commitment to Project Safe Neighborhoods,” stated NYSP Superintendent Corlett. “The arrests of these criminals are proof that, together, we are making our neighborhoods safer. Through our collaborative efforts, we will continue to target and apprehend gang members like the Blood Gang so they can no longer endanger the lives of New Yorkers through their heinous activities.”
“We truly appreciate the unprecedented cooperation and assistance from our federal, state and county law enforcement partners in helping us to remove these criminals from our local communities here on the east end of Long Island,” stated Riverhead Police Chief Hegermiller.
As detailed in the superseding indictment and other court filings by the government, the defendants’ gang committed acts of violence and distributed large quantities of crack cocaine, powder cocaine and heroin in the Riverhead area on Long Island for nearly a decade. On November 17, 2015, while attempting to carry out Dean’s order to kill an individual, Latney, and others fatally shot Thomas Lacolla as he sat in the intended victim’s car. On August 1, 2015, Foster and others shot and wounded a suspected member of the rival Crips gang and a female bystander. Following Dean’s arrest in 2016, Latney, Foster and others assumed control of the gang’s drug distribution operations.
The charges in the indictment are allegations, and the defendants are presumed to be innocent unless and until proven guilty. If convicted, the defendants face maximum sentences of up to life imprisonment.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer. The Department of Justice reinvigorated PSN in 2017 as part of the its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.
The Defendants:
Terrill Latney (also known as “Motis” and “Mo”)
Age: 39
Riverhead, New YorkCorey Belcher (also known as “Dot”)
Age: 34
Riverhead, New YorkWillie Belcher (also known as “Thug”)
Age: 33
Flanders, New YorkJImmy Dean (also known as “Jim Dick”)
Age: 41
Calverton, New YorkRoger Foster (also known as “RJ” and “YG”)
Age: 22
Baiting Hollow, New YorkEric Ross (also known as “Smurks”)
Age: 27
Flanders, New YorkE.D.N.Y. Docket No. 18-CR-606 (S-2) (JS)
20 Defendants Charged with Crimes, Including Racketeering, Extortion, LoansharkingRead the Press Release
Three indictments were unsealed today in federal court in Brooklyn variously charging 20 defendants with racketeering, extortion, loansharking, stalking, attempted sports bribery and related offenses. Among those charged with racketeering were Joseph Amato, an alleged captain in the Colombo organized crime family of La Cosa Nostra (“the Colombo family”); Daniel Capaldo and Thomas Scorcia, alleged Colombo family members; and Joseph Amato, Jr. and Anthony Silvestro, alleged Colombo family associates. An additional alleged Colombo family member, Vincent Scura, was also indicted. The indictments relate to the defendants’ charged criminal activities in Staten Island and elsewhere since January 2014.
The defendants were arrested this morning, and are scheduled to be arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
As alleged in the indictments and the government’s detention letters, the investigation began in November 2016 when a GPS tracking device was found concealed on an MTA bus. Amato had earlier obtained the device to surveil his then-girlfriend and boasted about the resources at his disposal to keep her under close surveillance. In one email, Amato stated, “This is my island. Not yours. I have eyes all over[.]” In another email, Amato stated, ‘I’m a MANS MAN!!!” His then-girlfriend discovered the device on her vehicle and removed it, and it was subsequently attached to and recovered from the MTA bus at a depot n Staten Island. Thereafter, the government obtained court-authorization to intercept communications over various cellular telephones used by the defendants.
As detailed in the government’s court filings, Amato and members of his crew used violence and threats of violence to earn illegal proceeds and solidify the crew’s reputation and standing. On one occasion, an individual confronted Amato Jr. for insulting a woman in a bar. Amato Jr. told the individual to back off, and threatened, “Do you know who my father is?” The following day, the individual was lured to a location where Amato, Amato Jr. and other members of Amato’s crew brutally beat the victim, leaving him bloodied and in need of staples in his scalp. On other occasions, court-authorized intercepts captured: (1) Scorcia boasting, “I told the guy sit in the car, and the kid had the tears,” (2) Silvestro advising Scorcia, “[Y]ou send him a smack. If he raises his hand back to you, we beat the bricks off him, that’s it” and (3) following the commission of one of the charged crimes of violence, Amato Jr. described the crime and the victim’s reaction, “[W]e abused him so bad. Yo I had, bro, me and Pap (Silvestro), bro, had him shaking bro. He was in tears, he was crying.”
The court-authorized wiretaps also captured the defendants’ scheme to fix an NCAA college basketball game. To further the scheme, defendant Benjamin Bifalco offered members of a college basketball team thousands of dollars to intentionally lose the game.
Two firearms, two stun guns, a canister of purported tear gas and thousands of dollars in U.S. currency were recovered during court-authorized searches of residences of Amato and Scorcia.
“The mafia is not the criminal threat it once was, but we remain vigilant and will vigorously investigate and prosecute members and associates who engage in violence and extortion to intimidate victims and enrich themselves and their crime family,” stated United States Attorney Donoghue. Mr. Donoghue extended his grateful appreciation to the Drug Enforcement Administration’s New York Drug Enforcement Task Force for its assistance during the investigation.
“One of the stunning things revealed in this investigation, it seems members of the mafia families that were once almost romanticized by Hollywood and pop culture, have resorted to acting like playground bullies. As alleged, they are still up to their old extortion and bribery schemes, and terrorizing their victims, but they are also still getting caught. The FBI New York Joint Organized Crime Task Force wants to send a clear message to members of the families in our communities who continue to operate, we will do all we can to stop a true resurgence from ever happening,” stated FBI Assistant Director-in-Charge Sweeney.
“The successful outcome of this investigation shows our continued efforts to target and hold responsible organized criminal syndicates,” stated NYPD Commissioner O’Neill. “I thank our investigators and law enforcement counterparts whose cooperation was vital to bringing these individuals to justice.”
The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Elizabeth A. Geddes and Megan E. Farrell are in charge of the prosecution.
The Defendants:
E.D.N.Y. Docket No. 19-CR-442 (S-1)(ILG)
JOSEPH AMATO
Age: 60
Colts Neck, New JerseyJOSEPH AMATO, JR.
Age: 26
Staten Island, New YorkJOHN CAHILL
Age: 27
Staten Island, New YorkDANIEL CAPALDO (also known as “The Wig” and “Shrek”)
Age: 54
Staten Island, New YorkPRIMO CASSARINO
Age: 31
Staten Island, New YorkCHRISTOPHER COFFARO
Age: 21
Staten Island, New YorkJOHN DUNN
Age: 30
Staten Island, New YorkPHILIP LOMBARDO
Age: 61
Staten Island, New YorkJOSEPH MARRA (also known as “Joe Fish”)
Age: 58
Brooklyn, New YorkALBERT MASTERJOSEPH
Age: 57
Brooklyn, New YorkDOMINICK RICIGLIANO (also known as “The Lion”)
Age: 30
Staten Island, New YorkTHOMAS SCORCIA
Age: 52
Staten Island, New YorkVINCENT SCURA (also known as “Vinny Linen”)
Age: 58
Staten Island, New YorkANTHONY SILVESTRO (also known as “Bugz”)
Age: 28
Staten Island, New YorkKRENAR SUKA
Age: 26
Staten Island, New YorkJOHN TUCCIARONE
Age: 39
Staten Island, New YorkE.D.N.Y. Docket No. 19-CR-443 (CBA)
ANTHONY BOSCO
Age: 26
Staten Island, New YorkNICHOLAS BOSCO
Age: 30
Staten Island, New YorkJOSEPH BOSCO
Age: 55
Staten Island, New YorkE.D.N.Y. Docket No. 19-CR-444 (ARR)
BENJAMIN BIFALCO
Age: 25
Staten Island, New YorkStaten Island Brothers Plead Guilty to Opioid Distribution ConspiraciesRead the Press Release
Earlier today, in federal court in Brooklyn, Joseph Calabria pleaded guilty to conspiring to distribute and possess with intent to distribute oxycodone, and to being a felon in possession of a firearm. Last week, on September 23, 2019, his brother, Michael Calabria, pleaded guilty to conspiring to distribute and possess with intent to distribute heroin. When sentenced, the defendants each face up to 20 years’ imprisonment for the drug conspiracies, and Joseph Calabria faces up to 10 years’ imprisonment for the firearms offense. Both guilty pleas were entered before United States Magistrate Judge Steven L. Tiscione.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York, and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.
“Using their Staten Island homes as opioid supermarkets, the defendants distributed highly addictive and potentially lethal drugs on a daily basis,” stated United States Attorney Donoghue. “The Eastern District and our law enforcement partners will continue working tirelessly to hold drug dealers accountable for contributing to the opioid epidemic, which has caused profound human suffering on Staten Island and elsewhere.” Mr. Donoghue expressed his grateful appreciation to the United States Department of Health and Human Services, Office of Inspector General, for its assistance during the investigation.
Beginning in September 2016, with court authorization, law enforcement agents intercepted narcotics-related telephone communications between the defendants and others. In his conversations, Michael Calabria conspired with others to distribute heroin, and then distributed it from his residence. Some of the heroin seized during the investigation contained fentanyl. During Joseph Calabria’s intercepted conversations, he conspired with others to distribute oxycodone, negotiated the purchase of thousands of oxycodone pills and distributed oxycodone pills from his residence.
The government’s case is being prosecuted by Assistant United States Attorney Alicia N. Washington.
The Defendants:
JOSEPH CALABRIA
Age: 55
Staten Island, New YorkMICHAEL CALABRIA
Age: 51
Staten Island, New YorkE.D.N.Y. Docket No. 17-CR-91 (SJ)
Alleged Mexican Drug Kingpin Charged with Leading a Continuing Criminal Enterprise and Other Drug-Related ChargesRead the Press Release
A superseding indictment was filed today in federal court in Brooklyn charging Vicente Carrillo Fuentes with running a continuing criminal enterprise, as well as firearms offenses, money laundering and other drug-related crimes through his leadership of the Juarez Cartel, a violent drug trafficking organization. Carrillo Fuentes was arrested by Mexican authorities in October 2014 and is presently incarcerated in Mexico.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York Field Office, James P. O’Neill, Commissioner, New York City Police Department (NYPD), and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the charges.
“As alleged, Vicente Carrillo Fuentes was responsible for importing thousands of kilograms of poisonous cocaine into the United States, conspiring to murder his organization’s rivals and reaping tens of millions of dollars in drug trafficking profits,” stated United States Attorney Donoghue. “This indictment and our determination to bring him to justice demonstrates, once again, that if you are ruthless enough and dumb enough to run a Mexican drug cartel, we have an American jail cell waiting for you.”
“Like dominoes, another alleged leader of a Mexican drug cartel has fallen for his role in leading a continuing criminal enterprise that fueled drug addiction and drug-related deaths,” stated DEA Special Agent-in-Charge Donovan. “The American judicial system’s reach goes beyond borders to bring international drug traffickers to justice. I applaud the Government of Mexico, the United States Attorney’s Office for the Eastern District of New York and our law enforcement partners for their mutual partnership in drug trafficking investigations.”
“Carillo Fuentes, the leader of the Juarez Drug Cartel, allegedly funneled vast amounts of addictive drugs into the United States for more than 20 years, and threatened to kill anyone who challenged his position or organization,” stated HSI Special Agent-in-Charge Fitzhugh. “HSI’s patience and resolve in investigating drug cartels has led to the arrests of narco-traffickers at the highest levels and the systematic dismantlement of their infrastructure, brick by brick.”
“This investigation is yet another example of law enforcement partners working collaboratively to get dangerous individuals and deadly drugs off our streets. I want to thank our federal, state and local partners for their ongoing hard work and collaboration on this case, which has resulted in disruption of a major drug trafficking operation and removal of a dangerous criminal who profited at the expense of our communities,” stated NYSP Superintendent Corlett.
According to the superseding indictment, between January 1990 and October 2014, Carrillo Fuentes was responsible for the importation into the United States, and distribution of, hundreds of tons of cocaine. To ensure the success of his cartel, he employed individuals to obtain transportation routes and warehouses to import and store narcotics, and “sicarios,” or hit men, to carry out kidnappings and murders in Mexico to retaliate against rivals who threatened the cartel. Until 2004, Carrillo Fuentes and the Juarez Cartel were closely aligned with the Sinaloa Cartel, led by Joaquin Guzman Loera, also known as, “El Chapo,” and Ismael Zambada Garcia, also known as, “El Mayo.” Those cartels shared investments in drug shipments, transportation infrastructure and contacts with corrupt government officials to facilitate the transfer of drugs through Mexico. The millions of dollars generated from the drug sales were then transported back to Mexico.
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 Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Michael P. Robotti, Patricia Notopoulos and David J. Lizmi are in charge of the prosecution.
The Defendant:
VIcente Carrillo Fuentes (also known as "El Viceroy")
Age: 56
MexicoE.D.N.Y. Docket No. 09-CR-522 (SJ)
Queens Woman Indicted for Causing Overdose Death of Victim in Motel RoomRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Angelina Barini with distributing and possessing with intent to distribute fentanyl that resulted in the fatal overdose of a Queens man on July 11, 2019. Barini was arrested on a criminal complaint on August 25, 2019, and was arraigned on the indictment this morning before United States Magistrate Judge Steven M. Gold. Barini was ordered detained pending trial.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Peter Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, without regard for the potentially lethal consequences of her actions and despite the enormous body count attributed to dangerous opioids, the defendant provided fentanyl to the victim, causing his death,” stated United States Attorney Donoghue. “This Office will continue working tirelessly with our law enforcement partners to hold accountable those like the defendant who contribute to the opioid epidemic.”
“In her course of business as a prostitute, it is alleged that Barini gave her client a fatal dose of fentanyl resulting in his death,” stated HSI Special Agent-in-Charge Fitzhugh. “It is well known that the opiod epidemic is very real and present in the New York City area, and with the hope of preventing future opioid related deaths, law enforcement at all levels continue to collaborate, investigate and arrest the dealers and traffickers who bring these deadly drugs into our area.”
As alleged in court filings, on July 11, 2019, the victim was found dead in a motel room in Woodside, Queens. Video surveillance from earlier that day captured a female, who appeared to be Barini, and the victim, entering the motel together. Subsequent to her arrest, Barini was interviewed by law enforcement authorities and admitted supplying the drugs to the victim.
The Office of the Chief Medical Examiner determined the victim’s cause of death was fentanyl intoxication. The investigation is continuing.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, she faces a mandatory minimum of 20 years’ imprisonment, and a maximum of life imprisonment.
Assistant United States Attorneys Soumya Dayananda, Andrew Grubin and Andrew Wang are in charge of the prosecution.
The Defendant:
ANGELINA BARINI
Age: 41
Queens, New YorkE.D.N.Y. Docket No. 19-CR-428 (BMC)
Former Mexican State Attorney General Sentenced to 20 Years in Prison for Participation in International Narcotics Distribution ConspiracyRead the Press Release
A dual citizen of the United States and Mexico, and the former State Attorney General for the State of Nayarit, Mexico, was sentenced to 20 years’ imprisonment followed by five years of supervised release, following his guilty plea to an international heroin, cocaine, methamphetamine and marijuana manufacture and distribution conspiracy.
Edgar Veytia, 48, was sentenced today by U.S. District Judge Carol Bagley Amon, who also ordered Veytia to forfeit $1 million, following a conspiracy charge relating to a scheme to import illegal drugs from Mexico to the United States.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Richard P. Donoghue of the Eastern District of New York; Special Agent in Charge Ray Donovan of the Drug Enforcement Administration (DEA) New York Division; Special Agent in Charge David J. Downing of DEA Los Angeles Division; Special Agent in Charge Matt DeSarno of the FBI’s Washington D.C. Field Office and Special Agent in Charge Peter C. Fitzhugh of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) New York Field Office made the announcement.
As established at the defendant’s sentencing, U.S. law enforcement has been investigating a violent Mexican drug trafficking organization, known as the H-2 Cartel that was previously lead by Juan Francisco Patron Sanchez, also known as “H-2,” and was based in Nayarit and Sinaloa, Mexico. The H-2 Cartel had numerous distribution cells in the United States, including in Los Angeles, Las Vegas, Ohio, Minnesota, North Carolina and New York. The government estimates that, during the relevant time period of the conspiracy, the H-2 Cartel distributed on a monthly basis approximately 500 kilograms of heroin, 100 kilograms of cocaine, 200 kilograms of methamphetamine and 3,000 kilograms of marijuana and earned millions of dollars in illegal proceeds. Additionally, the H-2 Cartel was involved in the possession and use of firearms, and substantial violence, including torture and dozens of homicides.
Between January 2013 and February 2017, the defendant conspired with the H-2 Cartel to distribute thousands of kilograms of heroin, cocaine, methamphetamine and marijuana, from Mexico into the United States, and distributed those narcotics in the New York area, including in the Eastern District of New York. Veytia used his position as the top law enforcement officer in his region to assist and abet drug trafficking organizations in Mexico. Veytia received bribes on a monthly basis and provided official sanction for the H-2 Cartel to engage in drug trafficking in Nayarit. Vetyia directed other corrupt Mexican law enforcement officers he oversaw to assist the H-2 Cartel, released members and associates of the H-2 Cartel from prison after they had been arrested for drug trafficking-related crimes, instructed corrupt Mexican law enforcement officers to target rival drug traffickers in Nayarit for wiretaps and arrests and assisted the H-2 Cartel with murders and other acts of violence, all of which helped the H-2 Cartel’s illegal drug enterprise flourish.
The DEA, FBI and HSI as part of the Organized Crime Drug Enforcement Task Forces (OCDETF) investigated the case. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. 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 Office’s International Narcotics and Money Laundering Section of the United States Attorneys with the Narcotic and Dangerous Drug Section of the Department of Justice are handling the government’s case. Trial Attorneys Jason Ruiz and Anthony Aminoff of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys Michael P. Robotti, Craig R. Heeren and Ryan C. Harris of the Eastern District of New York are prosecuting the case.
Former Mexican State Attorney General Sentenced to 20 Years in Prison for Participation in International Narcotics Distribution ConspiracyRead the Press Release
Edgar Veytia, a dual citizen of the United States and Mexico, and the former State Attorney General for the State of Nayarit, Mexico, was sentenced today to 20 years’ imprisonment and ordered to pay $1 million in forfeiture following his guilty plea to participating in an international heroin, cocaine, methamphetamine and marijuana manufacturing and distribution conspiracy responsible for importing illegal drugs from Mexico to the United States. The sentencing was held before United States District Judge Carol Bagley Amon in federal court in Brooklyn
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; William D. Bodner, Special Agent-in-Charge, Drug Enforcement Administration, Los Angeles Division (DEA); Timothy M. Dunham, Special Agent-in-Charge, Federal Bureau of Investigation, Washington, D.C. Field Office (FBI); and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), announced the sentence.
“When Joaquin ‘El Chapo’ Guzmán was sentenced to life imprisonment, we warned that there were more days of reckoning to come. The sentence imposed on this corrupt Mexican government official makes this just such a day,” stated United States Attorney Donoghue. “Neither Mexican cartel leaders nor corrupt officials who assist them should sleep well tonight. We are coming for you.” Mr. Donoghue thanked the DEA New York Field Office for its assistance on the case.
“Today’s sentencing of Mr. Veytia shows DEA’s strong commitment to the rule of law and collaboration with other Government agencies,” said DEA Special Agent-in-Charge Bodner. “Our agents will continue to be relentless in the worldwide pursuit of drug traffickers and the corrupt government officials who protect them.”
“Veytia abused his position in the government and protected drug traffickers who brought dangerous drugs through his country to the U.S. on behalf of a violent Mexican drug cartel," stated FBI Special Agent-in-Charge Dunham. “The FBI stands for fair and honest law enforcement and will continue to investigate any individual who places greed over the rule of law and commits such crimes that bring harmful drugs and corruption to our communities.”
“Working with the cartel, Veytia used Mexican law enforcement to protect drug loads, intimidate and harm rival drug traffickers. He also used his role as Attorney General to obstruct justice when cartel members were arrested,” stated HSI Special Agent-in-Charge Fitzhugh. “Law enforcement partnerships in investigating this case is what brought this individual who used his position of power for criminal gains to now face justice for his actions.”
U.S. law enforcement has been investigating the H-2 Cartel, a violent Mexican drug trafficking organization based in Nayarit and Sinaloa, Mexico, that was previously led by Juan Francisco Patron Sanchez. The H-2 Cartel had numerous distribution cells in the United States, including in Los Angeles, Las Vegas, Ohio, Minnesota, North Carolina and New York. The DEA estimates that between January 2013 and February 2017, the H-2 Cartel distributed on a monthly basis approximately 500 kilograms of heroin, 100 kilograms of cocaine, 200 kilograms of methamphetamine and 3,000 kilograms of marijuana into the United States and earned millions of dollars in illegal proceeds. In furtherance of its drug trafficking operation, the H-2 Cartel used firearms and physical violence, including torture and dozens of homicides.
Veytia used his position as the top law enforcement officer in the State of Nayarit to assist and sanction the cartel’s operations in Mexico, in exchange for bribes on a monthly basis. Vetyia also directed other corrupt Mexican law enforcement officers under his supervision to assist the H-2 Cartel, released members and associates of the cartel from prison after they had been arrested for drug trafficking-related crimes, instructed corrupt Mexican law enforcement officers to target rival drug traffickers for wiretaps and arrests and assisted the H-2 Cartel in carrying out murders and other acts of violence. In addition, Veytia assisted the H-2 Cartel in covering up the murder of a rival drug trafficker in October 2015.
The case was investigated by the DEA, FBI and HSI as part of the Organized Crime Drug Enforcement Task Forces (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation and prosecution of major drug trafficking organizations. 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 and the Narcotics and Dangerous Drug Section of the Department of Justice. Assistant U.S. Attorneys Michael P. Robotti, Craig R. Heeren and Ryan C. Harris of the Eastern District of New York are prosecuting the case, together with Trial Attorneys Jason Ruiz and Anthony Aminoff of the Narcotics and Dangerous Drug Section.
The Defendant:
Edgar Veytia
Age: 48
EDNY Docket No. 17-CR-115 (CBA)Five Defendants, Including Two Medical Doctors, Charged as Part of Northeast Regional Health Care Fraud TakedownRead the Press Release
Four individuals, including two doctors, a pharmacist who had previously lost his license and been excluded from participating in the Medicaid and Medicare programs and a pharmacy owner have been charged for their participation in schemes in which the Medicare and Medicaid programs were fraudulently billed more than $17 million. A fifth individual, a registered nurse, pleaded guilty to possession of fentanyl that he stole from his employer, a hospital on Long Island. The charges filed in federal court in Brooklyn and Central Islip are part of a coordinated health care fraud enforcement action across seven federal districts in the northeast United States, led by the Medicare Fraud Strike Force, that resulted in criminal charges against 48 defendants for their alleged participation in health care fraud schemes involving more than $800 million in false and fraudulent claims.
The charges were announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York; Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG).
“As alleged, defendants charged in the Eastern District of New York used fraud and deceit to steal Medicaid and Medicare funds meant to protect our elderly and most vulnerable residents,” stated United States Attorney Donoghue. “As this initiative demonstrates, we will continue to bring to justice those that defraud our nation’s health care programs.”
“Physicians and other medical professionals who fraudulently bill our federal health care programs are stealing from taxpayers and robbing vulnerable patients of necessary medical care. The medical professionals and others engaging in criminal behavior by peddling opioids for profit continue to fuel our nation’s drug crisis,” stated Assistant Attorney General Benczkowski. “The Department of Justice will continue to use every tool at our disposal, including data analytics and traditional law enforcement techniques, to investigate, prosecute, and punish this reprehensible behavior and protect federal programs from abuse.”
“As alleged today, the defendants took advantage of programs established for the benefit of those less fortunate, allowing themselves to profit by defrauding the government of public money. May today’s charges remind those who tear holes in the government safety net that they will face the error of their ways,” stated FBI Assistant Director-in-Charge Sweeney.
“There is no difference between the diversion of prescription medication to street drug trafficking,” stated DEA Special Agent-in-Charge Donovan. “Allegedly, Kevin McMahon abused his position as a registered nurse diverting fentanyl for his personal use. The DEA and our law enforcement partners’ goal is to keep our citizens safe by guarding against health care fraud and the illegal diversion of prescription medication.”
“Healthcare fraud is not a victimless crime—with unscrupulous providers preying on Medicare beneficiaries and taxpayers alike. Especially insidious is the fraud committed by healthcare professionals who are trusted to provide needed, quality services to patients,” stated HHS-OIG Special Agent-in-Charge Lampert. “With our law enforcement partners, our agency will continue to thoroughly investigate medical providers and others involved in healthcare fraud.”
The schemes charged in the Eastern District of New York, detailed in two indictments, one complaint and one criminal information, are as follows:
United States v. Anna Steiner: The superseding indictment charges Anna Steiner, a licensed anesthesiologist, was charged for her role in an alleged $17.4 million health care fraud scheme related to the payment of kickbacks in return for prescribing and ordering durable medical equipment, prescription drugs and diagnostic tests that were neither medically necessary nor resulted from an examination by or consultation with a physician. Steiner was charged with conspiracy to commit health care fraud and health care fraud in a superseding indictment filed on September 19, 2019. The case is being prosecuted by Department of Justice Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.
United States v. Denny Martin: Denny Martin, a licensed neurologist who was the sole owner of AM PM Medical P.C., was charged with health care fraud for his role in a scheme to falsely bill Medicare for treatments that were never performed. Between 2015 and 2019, AM PM Medical P.C. submitted more than 3,000 in fraudulent claims for home health and podiatry visits to the Medicare program. Martin was arrested this morning and arraigned before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn. The case is being prosecuted by Assistant United States Attorney William P. Campos of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Andrew Barrett and Phyllis Pincus: Andrew Barrett, a pharmacist who had been previously convicted of healthcare fraud in 2016 and excluded from the Medicare and Medicaid programs, and Phyllis Pincus, the sole proprietor of two New York-based pharmacies, were indicted on September 24, 2019 for health care fraud, false claims and conspiracy to defraud the United States by submitting fraudulent claims to Medicare and Medicaid for medications that were not actually dispensed to patients. The case is being prosecuted by Assistant United States Attorney William P. Campos of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Kevin McMahon: Kevin McMahon, a registered nurse, was charged with possession of fentanyl, a Schedule II controlled substance. The charge stem from McMahon’s theft of a synthetic opioid fentanyl while employed at Nassau University Medical Center. McMahon was arraigned and pleaded guilty to a criminal information at the federal courthouse in Central Islip on September 25, 2019. The case is being prosecuted by Assistant United States Attorney Erin E. Argo of the U.S. Attorney’s Office for the Eastern District of New York.
The Eastern District of New York’s Healthcare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section, was created in 2009 and since its inception has charged well over 100 defendants, many of which were medical professionals.
The charges are allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendants:
DR. ANNA STEINER
Age: 63
Valatie, New York
E.D.N.Y. Docket No. 19-CR-295 (ILG)DR. DENNY MARTIN
Age: 46
New York, New York
E.D.N.Y. Docket No. 19-MJ-847ANDREW BARRETT
Age: 60
New City, New YorkE.D.N.Y. Docket No. 19-CR-436 (RJD)PHYLLIS PINCUS
Age: 58
New City, New York
E.D.N.Y. Docket No. 19-CR-0436 (RJD)KEVIN McMAHON
Age: 31
Seaford, New York
E.D.N.Y. Docket No. 19-CR-422 (ARL)Two Kazakh Cybercriminals Plead Guilty in Global Digital Advertising Fraud Involving Tens of Millions of Dollars in LossesRead the Press Release
Sergey Ovsyannikov and Yevgeniy Timchenko, citizens of the Republic of Kazakhstan, pleaded guilty yesterday and today, respectively, in federal court in Brooklyn to conspiring to commit wire fraud and related charges, for their involvement in a widespread digital advertising fraud. Ovsyannikov was arrested in October 2018 in Malaysia and extradited to the United States in March 2019. Timchenko was arrested in November 2018 in Estonia and extradited to the United States in February 2019. Both plea proceedings took place before United States Magistrate Judge Steven M. Gold. When sentenced, Ovsyannikov faces up to 42 years in prison, and Timchenko faces up to 40 years in prison.
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 pleas.
Background on Digital Advertising
The internet is, in large part, freely available to users worldwide because it runs on digital advertising, where website owners display advertisements on their sites and are compensated by intermediaries representing businesses that advertise goods and services to human customers. In general, digital advertising revenue is based on how many users click, or view, the advertisements on those websites. As alleged in court filings, the defendants in this case represented that they ran legitimate companies that delivered advertisements to human internet users, who accessed real internet webpages. In fact, the defendants faked both the users and the webpages they programmed computers they controlled to load advertisements on fabricated webpages, via an automated program, and fraudulently obtained digital advertising revenue.
The Botnet-Based Criminal Scheme (“3ve.2 Template A”)
Between December 2015 and October 2018, Ovsyannikov and Timchenko were involved in operating a purported advertising network and carried out a digital advertising fraud scheme, referred to in the advertising industry as “3ve.2 Template A.” In this scheme, the defendants used a global “botnet”¾ a network of malware-infected computers operated without the true owner’s knowledge or consent to perpetrate their fraud. The defendants developed an intricate infrastructure of command-and-control servers to direct and monitor the infected computers, and to detect whether a particular infected computer had been flagged by cybersecurity companies as being associated with fraud. By using this infrastructure, the defendants accessed more than 1.7 million infected computers belonging to individuals and businesses in the United States and elsewhere, and used hidden browsers on those infected computers to download fabricated webpages and load advertisements onto those fabricated webpages. Meanwhile, the owners of the infected computers were unaware that this process was running in the background on their computers. As a result of this scheme, the defendants falsified billions of advertisement views and caused businesses to pay more than $29 million for advertisements that were never actually viewed by human internet users.
The Defendants’ Roles
Ovsyannikov led the development of the 3ve.2 scheme, and was a principal and owner of the advertisement network used to carry out the scheme. Ovsyannikov set out the infrastructure of the scheme in a spreadsheet titled “[Ad Network] Structure. Hosting and Domains.” The spreadsheet listed many of the command-and-control servers and other servers involved in the scheme, including several designated as repositories of “spoof” webpages. Ovsyannikov maintained lists of webpages to fabricate (or “spoof”) in his cloud storage account and on servers that he controlled, including more than 86,000 webpages associated with online publishers, including the webpages of thousands of businesses in the United States. In communications with co-conspirators, Ovsyannikov explained how different aspects of the infrastructure worked together to perpetrate the fraud, such that a “bot” in the botnet would “set itself” to visit a “spoofed domain” and cause a falsified advertisement view. Ovsyannikov directed proceeds of the fraud to bank accounts in Switzerland, among other locations. As part of his guilty plea, Ovsyannikov will forfeit those Swiss bank accounts, which contain more than eight million dollars.
Timchenko worked for Ovsyannikov and handled logistical and administrative aspects of the 3ve.2 scheme. Timchenko assisted in creating the infrastructure of command-and-control servers and other servers that were instrumentalities of the scheme. Timchenko deliberately chose certain U.S. service providers because they had the “coolest processors” and a “larger” cache (for temporary data storage) than competing providers. Timchenko also researched webpages to fabricate, deliberately targeted webpages for businesses in the United States, and placed those webpages on a running list that both defendants kept that was titled “New companies for spoofing.”
Separately, Ovsyannikov provided technical assistance to the operators of another digital advertising fraud scheme, referred to in the advertising industry as “Methbot.” In the Methbot scheme, the perpetrators used computers housed in commercial datacenters, instead of in a botnet, to carry out the digital advertising fraud. Ovsyannikov helped the Methbot operators program the datacenter computers to mimic human behavior, disguise the computers’ automated browsers, and evade fraud detection software. The Methbot operators falsified billions of advertisement views and caused businesses to pay more than $7 million for advertisements that were never actually viewed by human internet users.
The Botnet Takedown
Following the arrest of Ovsyannikov by Malaysian authorities in October 2018, U.S. law enforcement authorities, in conjunction with various private sector companies, began the process of dismantling the criminal cyber infrastructure utilized in the botnet-based scheme, which involved computers infected with malicious software known “Kovter.” The FBI executed seizure warrants to redirect the internet traffic going to 23 internet domains used to further the charged botnet-based scheme or otherwise used to further the Kovter botnet (an action known as “sinkholing”), in order to disrupt and dismantle the botnet. The FBI also executed search warrants at 11 different U.S. server providers for 89 servers related to the charged botnet-based scheme or Kovter.
In addition, as part of its investigation, the FBI discovered an additional cybercrime infrastructure committing digital advertising fraud through the use of datacenter servers located in Germany, and a botnet of computers in the United States infected with malicious software known in the cybersecurity community as “Boaxxe.” The FBI executed seizure warrants to sinkhole eight domains used to further this scheme and thereby disrupt yet another botnet engaged in digital advertising fraud.
Finally, the United States, with the assistance of its foreign partners, executed seizure warrants for multiple international bank accounts in Switzerland and elsewhere that were associated with the schemes.
For technical details on the malware and botnets referenced in this case, please see US-CERT Alert TA18-331A: https://www.us-cert.gov/ncas/alerts/TA18-331A
The government’s case is being prosecuted by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Saritha Komatireddy, Michael T. Keilty, Alexander F. Mindlin and Karin K. Orenstein are in charge of the prosecution.
The Defendants:
SERGEY OVSYANNIKOV
Age: 30
Republic of KazakhstanYEVGENIY TIMCHENKO
Age: 31
Republic of KazakhstanE.D.N.Y. Docket No. 18-CR-633 (ERK)
Three Members of Coney Island Street Gang Plead Guilty to Murder as Part of Racketeering ConspiracyRead the Press Release
Tysheen Cooper, Michael Liburd and Maurice Washington, members of the West End Enterprise, a Coney Island-based street gang, pleaded guilty in federal court in Brooklyn on September 24 and September 25, 2019 to a racketeering conspiracy involving their participation in the murder of Antwon Flowers. The guilty pleas were entered before United States District Court Judge Pamela K. Chen.
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 James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.
As detailed in the superseding indictment, other public court filings and statements in court, the defendants were members of the West End Enterprise, a street gang comprising individuals residing in and around the Sea Rise Apartments, the Gravesend Houses and Surfside Gardens, also known as the “Mermaid Houses,” located in Coney Island. Between approximately 2011 and October 2017, the gang committed various criminal acts, including narcotics distribution, robbery, extortion and murder.
On January 17, 2016, the defendants agreed to murder Antwon Flowers in retaliation for what they believed was his role in setting up the killing of a West End Enterprise leader the previous day. As captured on surveillance video, Liburd and Cooper followed Flowers as he walked out of the Mermaid Houses, at which point they pulled out firearms and shot at Flowers, with Liburd’s shot striking Flowers in the head and killing him. Liburd and Cooper then fled in a getaway car that Washington had parked nearby.
“Families living in apartment buildings and public housing deserve to feel as safe, and to be as safe, as those living in mansions,” stated United States Attorney Donoghue. “We and our law enforcement partners will continue to prosecute gang members who inflict mindless violence not only on one another, but on the community.” Mr. Donoghue thanked the Drug Enforcement Administration and the New York City Housing Authority, Office of the Inspector General, for their assistance in the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Mathew S. Miller, Jennifer M. Sasso and Kayla Bensing are in charge of the prosecution.
The Defendants:
TYSHEEN COOPER (also known as “Billz”)
Age: 28
Brooklyn, New YorkMICHAEL LIBURD (also known as “Mike Mike” and “Mitty”)
Age: 33
Brooklyn, New YorkMAURICE WASHINGTON (also known as “Moe” and “Flaco”)
Age: 30
Brooklyn, New YorkEDNY Docket No. 17-CR-296 (PKC)
Jury Finds Brooklyn Man Guilty of Conspiracy and Attempting to Provide Material Support to ISISRead the Press Release
A jury in Brooklyn returned a verdict yesterday finding Dilkhayot Kasimov, 31, a citizen of Uzbekistan and resident of Brooklyn, New York, guilty of conspiracy and of attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS). The verdict followed a one-week trial before United States District Judge William F. Kuntz, II. When sentenced, Kasimov faces up to 30 years’ imprisonment.
“Dilkhayot Kasimov worked to support ISIS, including by collecting and giving money to another individual to fund his travel to join the terrorist group. The jury has held Kasimov accountable for his crimes,” said Assistant Attorney General for National Security John C. Demers. “The National Security Division is committed to help defend the nation against foreign terrorist groups and those who support them. I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“As found by the jury, Kasimov was part of a conspiracy in which he willingly and eagerly sought to help fund a foreign fighter’s travel and expenses in Syria to wage violent jihad,” stated United States Attorney Richard P. Donoghue for the Eastern District of New York. “The Department of Justice and our law enforcement partners will continue working relentlessly to protect our country from those who would provide support of any kind to terrorists seeking to harm the United States and its allies.”
“This verdict should serve as a warning to those who provide support of any kind to foreign terrorist organizations and their sympathizers,” stated FBI Assistant Director-in-Charge Sweeney. “Kasimov joins a growing list of individuals facing significant jail time for their efforts to fund or carry out acts of terror. The public should know that the FBI continues to make every effort to protect Americans at home and abroad, and we’ll continue to work with our international partners to mitigate the threat posed by terrorists and would-be terrorists worldwide.”
“This case highlights how vital our work is in intercepting and halting those among us who remain willing to support the terrorism that threatens innocent lives,” stated NYPD Commissioner O’Neill. “It shows our commitment to remaining vigilant, with our law enforcement partners, against all forms of terrorist threats around the world and here at home.”
The evidence at trial established that Kasimov’s co-conspirators, Abdurasul Juraboev and Akhror Saidakhmetov, planned to travel to Syria to fight on behalf of ISIS, and Kasimov provided money – his own and cash collected by others – to help fund Saidakhmetov’s travel and expenses. On the evening of Saidakhmetov’s scheduled departure in February 2015, Kasimov drove to John F. Kennedy International Airport, met Saidakhmetov at Terminal 7 and handed him $1,600 in cash on behalf of himself, co-conspirator Abror Habibov and others.
Co-conspirators Juraboev, Saidakahmetov and Habibov, as well as co-conspirators Akmal Zakirov and Azizjon Rakhmatov, have previously pleaded guilty. Juraboev and Saidakahmetov were each sentenced to 15 years’ imprisonment. Habibov, Zakirov and Rakhmatov are awaiting sentencing.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, David K. Kessler, and J. Matthew Haggans are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
Brooklyn Man Who Set Fire in Kings Plaza Parking Garage Sentenced to Five Years’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Evon Stephens was sentenced by United States District Judge I. Leo Glasser to five years’ imprisonment following his guilty plea to setting fire to a vehicle in the parking garage attached to the Kings Plaza Shopping Center on September 17, 2018. 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 John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Daniel A. Nigro, Commissioner, New York City Fire Department (FDNY), announced the sentence.
In the early morning hours of September 17, 2018, Stephens was inside the parking garage before it was open to the public, attempting to get inside vehicles stored there by automobile dealerships. At approximately 8:15 a.m., Stephens entered a Mercedes Benz and set fire to its interior. The fire soon spread to vehicles throughout the parking garage, ultimately damaging 135 vehicles and injuring more than 25 individuals. Surveillance cameras captured Stephens setting fire to the Mercedes Benz, and later running from the parking garage, stopping to make an obscene gesture with his hand toward the camera.
“With the prison sentence he received today, the defendant will be punished for setting a fire that spread to engulf over 100 vehicles, injuring innocent people in its path and endangering the first responders who brought it under control at risk to their own lives,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to members of the New York City Police Department (NYPD) for their work on the case.
“The actions of the defendant caused massive amounts of damage to property and numerous injuries to first responders,” stated ATF Special Agent-in-Charge DeVito. “Thanks to the great work of the ATF, NYPD and FDNY Arson and Explosive Task Force, this individual was quickly apprehended and punished for his crime. I would also like to thank the United States Attorney’s Office for their work in prosecuting this case.”
“This crime senselessly endangered the lives of FDNY members and the public, and caused tremendous property damage,” stated FDNY Commissioner Nigro. “I commend our Fire Marshals, and their colleagues at the ATF, for their outstanding investigative work that led to the apprehension and sentencing of this dangerous arsonist.”
Assistant United States Attorney Temidayo Aganga-Williams is in charge of the prosecution.
The Defendant:
EVON STEPHENS
Age: 23
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-539 (ILG)
Two Defendants Charged in Scheme to Sell Fraudulently Misbranded Beef ProductsRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Howard Mora and Alan Buxbaum with conspiring to commit wire fraud in connection with a scheme to use counterfeit United States Department of Agriculture (USDA) stamps to misbrand USDA “Choice” beef products as higher quality USDA “Prime” and sell those products at inflated prices. The defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Bethanne M. Dinkins, Special Agent-in-Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), announced the charge.
Between September 2011 and October 2014, Mora and Buxbaum were co-owners of A. Stein Meat Products, Inc., a wholesale meat processing and distribution business located in Brooklyn. As alleged in the indictment, the defendants purchased beef that had been graded “Choice” quality by graders employed by the USDA Agricultural Marketing Service and directed their employees to carve off the “Choice” markings and re-stamp them as “Prime,” using counterfeit stamps. The meat was then sold at inflated prices to customers in the New York City metropolitan area.
“Customers and consumers are entitled to get what they pay for, especially when the product is food on their tables,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will remain vigilant in enforcing laws that ensure the grade and quality of food products.”
“The integrity of USDA’s food processing systems and the security of the nation’s food supply is of the utmost importance to the Office of Inspector General, and we will continue to dedicate resources to the investigation of matters where it is called into question.” Stated USDA-OIG Special Agent-in-Charge Dinkins.
The charge in the indictment is an allegation, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a maximum of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Ryan Harris and Turner Buford are in charge of the prosecution.
The Defendants:
HOWARD MORA
Age: 67
Westbury, New YorkALAN BUXBAUM
Age: 65
Monroe, New JerseyE.D.N.Y. Docket No. 19-CR-425 (KAM)
Jury Finds Brooklyn Man Guilty of Conspiracy and Attempt to Provide Material Support to ISISRead the Press Release
Today, a jury in Brooklyn returned a verdict finding Dilkhayot Kasimov, a citizen of Uzbekistan and resident of Brooklyn, guilty of conspiracy and of attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS). The verdict followed a one-week trial before United States District Judge William F. Kuntz, II. When sentenced, Kasimov faces up to 30 years’ imprisonment.
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 James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the verdict.
“As found by the jury today, Kasimov was part of a conspiracy in which he sought to help fund a foreign fighter’s travel and expenses in Syria to wage violent jihad,” stated United States Attorney Donoghue. “The Department of Justice and our law enforcement partners will continue working relentlessly to protect our country from those who would provide support to terrorists seeking to harm the United States and its allies.” Mr. Donoghue expressed his grateful appreciation to Homeland Security Investigations, New York Field Office, for its assistance during the investigation.
“Dilkhayot Kasimov worked to support ISIS, including by collecting and giving money to another individual to fund his travel to join the terrorist group,” stated Assistant Attorney General Demers. “The jury has held Kasimov accountable for his crimes. The National Security Division is committed to help defend the nation against foreign terrorist groups and those who support them. I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“This verdict should serve as a warning to those who provide support of any kind to foreign terrorist organizations and their sympathizers,” stated FBI Assistant Director-in-Charge Sweeney. “Today, Kasimov joins a growing list of individuals facing significant jail time for their efforts to fund or carry out acts of terror. The public should know that the FBI continues to make every effort to protect Americans at home and abroad, and we’ll continue to work with our international partners to mitigate the threat posed by terrorists and would-be terrorists worldwide.”
“This case highlights how vital our work is in intercepting and halting those among us who remain willing to support the terrorism that threatens innocent lives,” stated NYPD Commissioner O’Neill. “It shows our commitment to remaining vigilant, with our law enforcement partners, against all forms of terrorist threats around the world and here at home.”
The evidence at trial established that Kasimov’s co-conspirators, Abdurasul Juraboev and Akhror Saidakhmetov, planned to travel to Syria to fight on behalf of ISIS, and Kasimov provided money – his own and cash collected by others – to help fund Saidakhmetov’s travel and expenses. On the evening of Saidakhmetov’s scheduled departure in February 2015, Kasimov drove to John F. Kennedy International Airport, met Saidakhmetov at Terminal 7 and handed him $1,600 in cash on behalf of himself, co-conspirator Abror Habibov and others.
Co-conspirators Juraboev, Saidakahmetov and Habibov, as well as co-conspirators Akmal Zakirov and Azizjon Rakhmatov, have previously pleaded guilty to the conspiracy to provide material support to ISIS. Juraboev and Saidakahmetov were each sentenced to 15 years’ imprisonment. Habibov, Zakirov and Rakhmatov are awaiting sentencing.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, David K. Kessler and J. Matthew Haggans are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
The Defendant:
DILKHAYOT KASIMOV
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 15-CR-95 (S-3)(WFK)
Queens Attorney Sentenced to 30 Months’ Imprisonment for Bribing a Witness in Double Homicide Trial on Long IslandRead the Press Release
John Scarpa, Jr., a criminal defense attorney, was sentenced today in federal court in Brooklyn to 30 months’ imprisonment and fined $10,000 by United States District Judge Carol Bagley Amon for bribing a witness to commit perjury in a double homicide trial in Suffolk County Supreme Court. Scarpa was convicted following a four-day trial in May 2019. Scarpa, who will be disbarred, had been practicing law in New York since 1982, and was a prosecutor at three district attorneys’ offices in the metropolitan area before entering private practice in 2003.
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.
“As a defense attorney and former prosecutor, Scarpa was sworn to uphold the law he so egregiously subverted,” stated United States Attorney Donoghue. “Scarpa went from practicing law to breaking the law and will now pay a price for his crime.” Mr. Donoghue thanked the Queens County District Attorney’s Office for its assistance during the investigation.
As proven at trial, Scarpa plotted with co-conspirator Charles Gallman to bribe a convicted murderer, Luis Cherry, to testify in support of Scarpa’s client, who was charged with the execution-style murders of two men. Cherry then falsely testified at trial that he alone committed the second of the two murders, and that Scarpa’s client was innocent. In exchange for his testimony, Scarpa and Gallman promised to help Cherry with the appeal of his own murder conviction, and to spread word in the prison system that Cherry was not a government informant. Despite the false testimony, the trial judge found Scarpa’s client guilty of both murders.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor, Lindsay K. Gerdes and Keith D. Edelman are in charge of the prosecution.
The Defendant:
JOHN SCARPA, JR.
Age: 66
Hauppauge, New YorkE.D.N.Y. Docket No. 18-CR-123(S-1) (CBA)
Chief Executive Officer and Stock Promoter Indicted for Multi-Million Dollar Stock Manipulation SchemeRead the Press Release
Earlier today, in federal court in Central Islip, an indictment was unsealed charging Benjamin Conde, Chief Executive Officer of Essex Global Investments and President of Facultas Capital Management, and Lawrence Isen, the owner of Marketbyte, LLC, a purported stock promotion firm, with conducting a “pump and dump” scheme to defraud investors in Renewable Energy and Power, Inc. (RBNW). The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and substantive securities fraud. The defendants were arrested this morning and Conde will be arraigned this afternoon before United States District Judge Joanna Seybert at the United States Courthouse in Central Islip. Isen’s appearance for removal to the Eastern District of New York is scheduled for this afternoon at the federal courthouse in San Diego, California.
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, Conde and Isen joined forces with a ‘boiler room’ crew to defraud investors, many of them elderly, and enrich themselves at the expense of their victims,” stated United States Attorney Donoghue. “The Department of Justice has made it a priority to hold accountable those who use our financial markets as a venue to lie, cheat and steal.” Mr. Donoghue expressed his grateful appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation.
As alleged in the indictment, between March 2017 and July 2017, Conde and Isen hired a purported financial services business in Melville, New York, known by a number of names including My Street Research, that operated as a high pressure “boiler room.” The boiler room engaged in a pump and dump scheme to defraud investors in RBNW. As part of the scheme, the defendants and their co-conspirators artificially controlled the price and volume of traded shares and made misrepresentations to victim investors, many of whom were senior citizens, relating to the advisability of purchasing RBNW stock and its profitability. The scheme generated over $3.1 million in trading profits for the defendants and their co-conspirators and losses for the victim investors when the stock price plummeted.
The defendants attempted to conceal the scheme by laundering approximately $2.8 million in fraudulently obtained proceeds.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Conde and Isen each face up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Erin E. Argo is in charge of the prosecution.
The Defendants:
BENJAMIN CONDE
Age: 56
Fairfield, New JerseyLAWRENCE ISEN
Age: 66
San Diego, CaliforniaE.D.N.Y. Docket No. 19-CR-432 (JS)
Brooklyn Man Indicted for Threatening Former State Court ProsecutorRead the Press Release
Scott Allan Smith was arraigned today before United States District Judge Raymond J. Dearie on an indictment charging him with threatening to murder the former state prosecutor who handled his criminal case. Smith was arrested on a complaint on August 6, 2019, and was remanded pending trial. If convicted, Smith faces up to five 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 charges.
“As alleged, six months after he was released from prison, the defendant began threatening to kill the former state prosecutor who had handled a criminal case against him,” stated United States Attorney Donoghue. “Threats against members of the criminal justice system who work to protect our communities will never be tolerated and those who commit such crimes will face the consequences.”
“A threat against anyone's life is unacceptable. However, when you threaten the life of an official who was representing the public and enforcing the law on behalf of law abiding citizens, as we allege Mr. Smith did here, you are attacking all of society,” stated FBI Assistant Director-in-Charge Sweeney. “The consequence is prison, something Mr. Smith knows all too well.”
As alleged in court filings and proceedings, Smith was sentenced in Missouri to seven years in prison in October 2015 after pleading guilty to assault and felony restraint. Smith was released from the custody of the Missouri Department of Corrections on February 22, 2019.
On or about August 3, 2019, Smith called the former Callaway County, Missouri prosecutor in his criminal case and stated, in sum and substance, “You remember me, don’t you? I just want to tell you, you are about to die.”
Later that day, Smith sent the victim a series of threatening text messages, stating, in part, “5 years I’ve been waiting for what’s about to happen. I’ve fantasized about it every single night for years… My life for your life” and “I am a martyr for this.”
The defendant then concluded with a voicemail left on the victim’s telephone, stating he would “get the needle,” make “national news” and “every prosecutor in the United States would think twice about telling a lie in this country.”
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney John Vagelatos is in charge of the prosecution.
The Defendant:
SCOTT ALLAN SMITH
Age: 38
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-421 (RJD)
Alleged Colombian Drug Kingpin Extradited to the United States to Face Charges of Operating a Continuing Criminal EnterpriseRead the Press Release
Santos Roman Narvaez Ansazoy will be arraigned this afternoon before United States Magistrate Judge Steven M. Gold at the federal courthouse in Brooklyn on charges of leading a continuing criminal enterprise. The defendant was arrested in Colombia on a provisional arrest warrant and was extradited yesterday from Colombia to the United States.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Raymond P. Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, James P. O’Neill, Commissioner, New York City Police Department (NYPD), and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the extradition.
“The defendant will now face charges in an American courtroom for leading a major Colombian drug trafficking organization that imported huge quantities of cocaine into the United States,” stated United States Attorney Donoghue. “We will cooperate with law enforcement here and abroad to dismantle drug rings that flood our streets and neighborhoods with lethal drugs.” Mr. Donoghue extended his grateful appreciation to the assistance provided by DEA’s offices in Bogota, the United States Marshals Service, the United States Department of State, the Department of Justice’s Office of International Affairs, the Colombian National Police and the Government of Colombia.
“For years, Roman Narvaez Ansazoy allegedly participated in a conspiracy to facilitate the distribution of multi-ton quantities of cocaine throughout the United States,” stated DEA Special Agent-in-Charge Donovan. “Ansazoy’s arrest and extradition demonstrate the commitment of the United States and our partners in Colombia to bring to justice drug traffickers who fuel narco-terrorism and seek to flood our streets with addictive and deadly poisons.”
“I commend the members of the Task Force for their outstanding work on this case. All of the agencies involved are committed to taking down any criminal enterprise that imports these dangerous drugs into our county, and we will continue to collaborate on that mission. We simply will not tolerate this type of activity,” stated NYSP Superintendent Corlett.
According to the indictment, Narvaez was a founder and principal leader of a drug trafficking organization in Colombia responsible for producing multi-ton quantities of cocaine, on a monthly basis, in jungle laboratories in the Cauca region of Colombia. The cocaine was then transported to Colombian ports on the Pacific coastline under the protection of paramilitary groups paid by Narvaez, including the Revolutionary Armed Forces of Colombia (FARC), a designated Foreign Terrorist Organization. The cocaine was then shipped by sea, primarily to the United States.
The extradition of Narvaez is the result of an ongoing investigation 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 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 Francisco J. Navarro is in charge of the prosecution. The Justice Department’s Office of International Affairs handled the extradition in this matter.
The Defendant:
SANTOS ROMAN NARVAEZ ANSAZOY (also known as “Roman Narvaez Ansazoy”)
Age: 45
Cauca, ColombiaE.D.N.Y. Docket No. 14-CR-048 (S-1) (BMC)
Two Arrested for Extortion of Startup Cryptocurrency CompanyRead the Press Release
A complaint was unsealed earlier today in federal court in Brooklyn charging Steven Nerayoff and Michael Hlady with extortion. Nerayoff, an attorney, and Hlady threatened to destroy a startup cryptocurrency company if they were not paid millions of dollars in the cryptocurrency Ether (ETH). Nerayoff was arrested this morning, and will make his initial appearance this afternoon before United States Magistrate Judge Steven L. Tiscione. Hlady was arrested this morning in Rhode Island, and will make his initial appearance this afternoon in federal court in Providence.
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 (FBI), New York Field Office, announced the charges.
“As alleged, Nerayoff and Hlady carried out an old-fashioned shakedown, to be paid off with 21st century cryptocurrency,” stated United States Attorney Donoghue. “This Office and our partners at the FBI are committed to protecting businesses from extortion, whether the demands are for U.S. dollars or cryptocurrency.”
“When you peel back the layers of this case, an age-old extortion scheme is revealed with a modern day twist,” stated FBI Assistant Director-in-Charge Sweeney. “Imposing forceful demands on a company for personal gain is risky business, whether one's preference is to be paid off with cryptocurrency or cold hard cash. The FBI will continue to seek justice for victims who businesses have been targeted by these types of scams.”
The victim company, headquartered in Seattle, Washington, is a startup mobile-based business that specializes in generating user traffic to clients’ products by issuing its own cryptocurrency tokens as loyalty rewards. In November 2017, the company planned an Initial Coin Offering (ICO) to raise capital, and signed an agreement with an entity operated by Nerayoff. Under the agreement, Nerayoff agreed to help the company complete a successful ICO in return for 22.5% of all funds raised, and 22.5% of the issued cryptocurrency tokens. Just days before the ICO was to occur, Nerayoff told executives of the company that his compensation would have to be increased by approximately 17,000 ETH to 30,000 ETH (worth approximately $8.75 million at the time), or he would sabotage the ICO and destroy the company. The company paid Nerayoff as demanded, despite not receiving any additional services.
Subsequently, Nerayoff introduced the executives to Hlady, who used the alias “Michael Peters” and who Nerayoff described as his “operations guy.” Hlady told the executives that he had been part of the Irish Republican Army, the National Security Agency, the Central Intelligence Agency and the FBI, and that he had “taken down” a head of state. In March 2018, Nerayoff and Hlady threatened one of the executives with destruction of the company if not paid additional funds and company tokens. Later that month, Nerayoff demanded a purported loan of 10,000 ETH (worth approximately $4.45 million at the time), and Hlady followed up with a text message to the executive stating, “I promise I will destroy your community” if Nerayoff’s demands are not met. The company then transferred 10,000 ETH to Nerayoff. The “loan” was never repaid.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Nerayoff and Hlady each face up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mark E. Bini and Andrey Spektor are in charge of the prosecution.
The Defendants:
Steven Nerayoff
Age: 48
Great Neck, New YorkMichael Hlady (also known as “Michael Peters”)
Age: 47
East Greenwich, Rhode IslandE.D.N.Y. Docket No. 19-MJ-830
Former Hempstead School District Official Pleads Guilty to Credit Card FraudRead the Press Release
Timothy Gregg, the former Provisional Supervisor of Facilities for the Hempstead School District, pleaded guilty today at the federal courthouse in Central Islip to access device fraud in connection with his misuse of a school district credit card. The plea was entered before United States District Judge Joanna Seybert. When sentenced, Gregg faces up to 15 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, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas P. DiNapoli, Comptroller, Office of the New York State Comptroller, and Madeline Singas, District Attorney, Nassau County District Attorney’s Office, announced the guilty plea.
As described in court filings and the plea proceeding, Gregg was the Chief of Facilities at the Hempstead School District from 2016 to 2018. In that capacity, Gregg was authorized to use a school district credit card for purchases for the school district. Instead, Gregg allowed a local contractor to use the credit card for his own personal purchases at Home Depot, in exchange for kickbacks to Gregg of cash and materials exceeding $50,000 in value.
“Today’s guilty plea of former Hempstead School District official Timothy Gregg drives home an important lesson: corrupt officials who abuse their position to enrich themselves will be prosecuted to the fullest extent of the law,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the United States Department of Education Office of Inspector General for their assistance during the investigation.
“Mr. Gregg abused the public's trust by using taxpayer dollars to fund his personal home improvement projects. Such corruption must not be tolerated and my office assisted in exposing this abuse,” stated Comptroller DiNapoli. “Thanks to our partnership with U.S. Attorney for the Eastern District of New York Donoghue, Nassau County District Attorney Singas, Assistant Director-in-Charge Sweeney, Jr., of the FBI's New York Field Office and the U.S. Department of Education Office of Inspector General, Mr. Gregg will now have to account for his crimes.”
"The defendant used a school board-issued credit card for home improvement projects and allowed a contractor to freely utilize that credit card for kickbacks,” stated Nassau County District Attorney Singas. “This plea sends a strong message that corrupt local officials will be held accountable for stealing taxpayer money.”
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor and Special Assistant United States Attorney Joseb Gim are in charge of the prosecution.
The Defendant:
TIMOTHY GREGG
Age: 49
Uniondale, New YorkE.D.N.Y. Docket No. 19-368 (JS)
Bloods Gang Member Indicted for Racketeering and Double Homicide on Long IslandRead the Press Release
Taheem Smith, a member of the Bloods street gang, was arraigned this afternoon before United States Magistrate Judge Gary R. Brown in federal court in Central Islip on an 11-count indictment charging him with racketeering, murders in aid of racketeering of David Arzu and Janelle Curella, robbery, firearms charges and narcotics possession and distribution. Smith was arrested yesterday and was ordered remanded pending trial by Magistrate Judge Brown.
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 Field Office (HSI), and Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), announced the charges.
“As alleged, the defendant murdered an innocent man and woman to increase and maintain his own standing in the ruthless Bloods street gang,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue working unrelentingly to end the violent careers of gang members like Smith and decimate gangs like the Bloods to which they belong.” Mr. Donoghue expressed his appreciation to the FBI’s Long Island Gang Task Force for their work on the case.
"Violent gangs believe they can act with impunity, as if their actions don't impact innocent people,” stated FBI Assistant Director-in-Charge Sweeney. “Mr. Smith allegedly killed two people just to rob them. No amount of money is worth a human life. Our FBI Long Island Gang Task Force and law enforcement partners continue our determination to stop all illegal gang activity from destroying the peace in communities, and bring the members and leadership to justice.”
“It is alleged that just over three years ago, Smith murdered two during a robbery on a Bay Shore street. As a member of the Bloods gang, Smith’s proclivity for weapons, violence and drugs regularly spilled out into our Long Island neighborhoods,” stated HSI Special Agent-in-Charge Fitzhugh. “Partnerships among law enforcement continues to be paramount in gang investigations because our communities can no longer tolerate the volatility associated with criminal gangs.”
“These charges levied upon Mr. Smith today exemplify our commitment to apprehending those who act on such violence and prey on those who are vulnerable,” stated SCPD Commissioner Hart. “We will continue to work with the Eastern District of New York and our law enforcement partners on all levels to dismantle gang activity and rid our communities of illicit drugs and unlawful behavior.”
As alleged in the indictment and court filings and proceedings, on the evening of September 2, 2016, David Arzu, Janelle Curella and two friends were walking toward the Long Island Railroad Station in Bay Shore. Smith and his co-conspirator approached the group, brandished firearms, and demanded the victims’ money and valuables. During a struggle, Arzu and Curella were shot. They died of their wounds a short time later.
The charges in the indictment are allegations, and the defendant is presumed to be innocent unless and until proven guilty. If convicted, Smith faces up to a maximum sentence of life imprisonment.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the its renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Christopher C. Caffarone and Mark E. Misorek are in charge of the prosecution.
The Defendant:
TAHEEM SMITH (also known as “Ta”)
Age: 25
Farmingville, New YorkE.D.N.Y. Docket No. 19-CR-417 (ADS)