Eastern District of New York

An indictment was unsealed today in federal court in Brooklyn charging Darin Hamilton, also known as “Satch,” and Jerome Jones, also known as “Sha,” for their participation in the 1992 murders of Anthony Lloyd and Robert Arroyo.  Specifically, Hamilton is charged with the intentional murder of Anthony Lloyd while engaged in narcotics trafficking, and both defendants are charged with the murder of Robert Arroyo while engaged in narcotics trafficking, as well as conspiracy to do the same.  Hamilton was arrested this morning and is scheduled to be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.  Jones is in federal 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), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the arrests.

As detailed in the indictment and the government’s detention memorandum, Hamilton and Jones were members of a Queens-based crew that called itself “Black Rain,” and sold narcotics at several locations on Rockaway Boulevard in the early 1990s.  Specifically, the crew sold heroin under the brand name “Black Rain,” cocaine under the brand name “White Lightning” and crack cocaine under the brand name “Thunder.”  The gang committed acts of violence, including murder, to protect its profitable operation.

Both murders took place in the vicinity of 128th Street and Rockaway Boulevard in South Ozone Park, where Hamilton and Jones managed a drug spot.  As alleged, in June 1992, Hamilton shot and killed Anthony Lloyd, whom he believed had stolen from Black Rain.   

Two months later, in August 1992, Hamilton and Jones recruited and paid two members of Black Rain to murder Robert Arroyo, whom they believed was a police informant.  In their first attempt, the recruits mistakenly shot another man they incorrectly believed to be Arroyo.  The victim survived his wounds.  On September 8, 1992, at Hamilton and Jones’s direction, the two recruits located Arroyo on a crowded street and shot him multiple times, killing him. 

 “As today’s charges make clear, we will not let the passage of time deter us from bringing murderers to justice.  It is our hope that this prosecution will bring some measure of consolation to the families of the victims,” stated United States Attorney Donoghue.  Mr. Donoghue praised the extraordinary investigative efforts of the FBI and NYPD. 

“Investigations grow cold with the passage of time, but investigators don’t stop searching for evidence they need to bring the suspects involved to justice,” stated FBI Assistant Director-in-Charge Sweeney.  “Anthony Lloyd and Robert Arroyo were murdered nearly three decades ago, and their killers may have believed they were in the clear.  However, the FBI New York Metro Safe Streets Task Force and our partners at the NYPD want this case to serve as a warning for those who believe they can let their guard down, we are still on the case and we won’t give up.”

“Today’s charges prove that the best investigators in the world do not ever forget victims, and they do not ever forget the justice that is owed to those victims’ families,” stated NYPD Commissioner O’Neill.  “All New Yorkers deserve to be safe, and to feel safe. The NYPD and our colleagues at the U.S. Attorney’s Office for the Eastern District and the FBI will stop at nothing until every street, in every neighborhood of New York City, is as safe as our safest streets are today.”

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Tanya Hajjar, Moira Kim Penza and Penelope J. Brady are in charge of the prosecution. 

The Defendants:

JEROME JONES (also known as “Sha”)
Age: 54
West Virginia

DARIN HAMILTON (also known as “Satch”)
Age: 60
South Ozone Park, Queens

E.D.N.Y. Docket No. 19-CR-54 (NGG)

 

Earlier today in federal court in Central Islip, New York, Edward E. Bohm, President of Sales and an undisclosed owner of Long Island mortgage lender Vanguard Funding, LLC (Vanguard), pleaded guilty to conspiring to commit wire fraud and bank fraud in connection with the illegal diversion of more than $8.9 million of warehouse loans that Vanguard had obtained to fund mortgages.  The guilty plea was entered before United States District Judge Sandra J. Feuerstein.  When sentenced, Bohm faces up to 30 years in prison, as well as restitution, criminal forfeiture and a fine.

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, and Linda A. Lacewell, Acting Superintendent, New York State Department of Financial Services, announced the guilty plea.

According to court filings and the facts presented at the plea proceedings, between August 2015 and March 2017, Bohm engaged in a scheme in which he and others obtained warehouse, or short-term, loans for Vanguard by falsely representing that Vanguard would use the proceeds of those loans to fund mortgages or provide mortgage refinancing for Vanguard’s clients.  Once Vanguard received the loans, however, Bohm, along with others diverted the monies to pay personal expenses and compensation, and to pay off loans they had previously obtained with fraudulent loan submissions for improper purposes. 

Earlier, in 2018, Vanguard’s Chief Operating Officer and the Chief Financial Officer entered guilty pleas in connection with this fraud and were sentenced to terms of incarceration.

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 Elizabeth Losey Macchiaverna are handling the prosecution with assistance from Assistant United States Attorney Laura Mantell of the Office’s Asset Forfeiture Section.

The Defendant:

EDWARD E. BOHM
Age: 41
Residence: Nissequogue, New York

E.D.N.Y. Docket No. 18-CR-036 (SJF)

BROOKLYN, N.Y. – Ingrid Innes, the former chief executive officer, and Alex Tasker, a former senior vice president of Insurance Corporation of Barbados Limited (ICBL), a Barbados-based insurance company, were charged in a superseding indictment unsealed on January 18, 2019, with laundering bribes to the former Minister of Industry of Barbados in exchange for his assistance in securing government contracts for ICBL.  Innes and Tasker are not in U.S. custody.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

Innes and Tasker were charged with one count of conspiracy to launder money and two counts of money laundering in the superseding indictment.  The former Minister of Industry of Barbados, Donville Inniss, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was charged with the same crimes in an indictment unsealed on August 6, 2018, and as a co-defendant of Innes and Tasker in the superseding indictment.  Inniss is scheduled for trial on June 24, 2019, before United States District Judge Kiyo A. Matsumoto.

The superseding indictment alleges that in 2015 and 2016, Innes and Tasker participated in a scheme to launder into the United States approximately $36,000 in bribes that they paid to Inniss, who at the time was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce and Small Business Development of Barbados. 

The charges in the superseding indictment are allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

ICBL voluntarily disclosed to the government the payments to Inniss and received a prosecution declination under the FCPA Corporate Enforcement Policy.  ICBL disgorged to the government $93,940.19 in illicit profits that it earned from the scheme.

The FBI’s New York Field Office and International Corruption Squad is investigating the case.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. 

Assistant United States Attorney Sylvia Shweder of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Gerald M. Moody, Jr., of the Criminal Division’s Fraud Section are in charge of the prosecution.

The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters.  Additional information about the Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.   

The Defendants:

DONVILLE INNISS
Age:  52
Barbados

INGRID INNES
Age:  63
Canada

ALEX TASKER
Age:  58
Barbados

E.D.N.Y. Docket No. 18-CR-134 (S-1) (KAM)

A criminal complaint was unsealed today in federal court in Brooklyn charging William Jacobsen and his wife Marta Medvedeva with conspiring, and aiding and abetting others, to enter into sham marriages with foreign nationals for the purpose of obtaining lawful permanent residency in the United States.  The defendants were also charged with evading United States immigration laws by making materially false statements in immigration applications, affidavits and other documents.  The defendants’ initial appearances were held this afternoon before United States Magistrate Judge Vera M. Scanlon. 

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.

“Our immigration process is not for sale.  The defendants’ scheme to game the system and reap ill-gotten profits by promoting sham marriages is not only criminal, it is an affront to those individuals who abide by the rules to obtain permanent residency in the United States lawfully,” stated United States Attorney Donoghue.  “Today’s charges send the clear message that this Office and our partners at the FBI will not tolerate such activity.”

As alleged in the complaint, between approximately November 2016 and January 2019, Jacobsen and Medvedeva identified and recruited U.S. citizens who were willing to enter into sham marriages with foreign nationals.  The foreign nationals paid the defendants approximately $30,000 for their services, and a portion of the fee was then passed on to the U.S. citizen spouses for their participation in the fraud.  The defendants also coached the couples on how to successfully pass immigration interviews and provided misleading or false documentation needed during various steps in the immigration process.

During several recordings and communications, Jacobsen and Medvedeva discussed the details of their scheme, including the number of participants they had available to participate in the “fake” marriages (as characterized by Jacobsen), payment of approximately $10,000 to the U.S. citizens for their services, and the coaching and training the couples would receive to pass the required immigration interviews.  In one recorded conversation, Jacobsen explained to a confidential source posing as a potential U.S. citizen spouse:    

The hardest part is getting married.  The easy part is the [immigration] interview, because I know the questions they’re gonna ask you.  That’s why everyone comes here, because they want training.   Everybody’s looking for training.  When I do it, it’s a five minute interview.  You go with the lawyer, you’re in there for an hour, hour and a half.  I’ve been doing it for fifteen years ….  This is the easy part. The hardest part is the marriage, cause both sides are nervous, they have to go there and kiss each other.  Interview is nothing, that’s the easy part.

The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, Jacobsen and Medvedeva each face a maximum sentence of 10 years’ imprisonment.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Maria Cruz Melendez and Elizabeth Macchiaverna are in charge of the prosecution.

The Defendants:

WILLIAM JACOBSEN
Age: 60
Brooklyn, New York

MARTA MEDVEDEVA
Age: 68
Queens, New York

EDNY Docket No. 19-MJ-57

BROOKLYN, N.Y. – A 13-count indictment was unsealed earlier today in federal court in Brooklyn, New York, charging four defendants,[1] all of whom are affiliated with Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, with headquarters in the People’s Republic of China (PRC) and operations around the world.  The indicted defendants include Huawei and two Huawei subsidiaries — Huawei Device USA Inc. (Huawei USA) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).

The defendants Huawei and Skycom are charged with bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, conspiracy to defraud the United States, conspiracy to violate and substantive violations of the International Emergency Economic Powers Act (IEEPA), and conspiracy to commit money laundering.  Huawei and Huawei USA are charged with conspiracy to obstruct justice related to the Grand Jury investigation in the Eastern District of New York.  Meng is charged with bank fraud, wire fraud, and conspiracy to commit bank and wire fraud.

Matthew G. Whitaker, Acting United States Attorney General, Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department's Criminal Division, John C. Demers, Assistant Attorney General of the Justice Department’s National Security Division, Christopher A. Wray, Director, Federal Bureau of Investigation (FBI),  Kirstjen Nielsen, Secretary, U.S. Department of Homeland Security, and Wilbur Ross, Secretary, U.S. Department of Commerce, announced the charges.

“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes,” stated Acting Attorney General Whitaker.  “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law.  I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity.”

“As charged in the indictment, Huawei and its subsidiaries, with the direct and personal involvement of their executives, engaged in serious fraudulent conduct, including conspiracy, bank fraud, wire fraud, sanctions violations, money laundering and the orchestrated obstruction of justice,” stated United States Attorney Donoghue.  “For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business.  This Office will continue to hold accountable companies and their executives, whether here or abroad, that commit fraud against U.S. financial institutions and their international counterparts and violate U.S. laws designed to maintain our national security.”  Mr. Donoghue thanked the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Department of Commerce Office of Export Enforcement and the Defense Criminal Investigative Service agents who are investigating this case for their tireless work and dedication.

“These charges lay bare Huawei’s blatant disregard for the laws of our country and standard global business practices,” stated FBI Director Wray.  “Companies like Huawei pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat. Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.”

“As charged in the indictment, Huawei and its Chief Financial Officer broke U.S. law and have engaged in a fraudulent financial scheme that is detrimental to the security of the United States,” stated U.S. Department of Homeland Security Secretary Nielsen.  “They willfully conducted millions of dollars in transactions that were in direct violation of the Iranian Transactions and Sanctions Regulations, and such behavior will not be tolerated.  The Department of Homeland Security is focused on preventing nefarious actors from accessing or manipulating our financial system, and we will ensure that legitimate economic activity is not exploited by our adversaries.  I would like to thank ICE Homeland Security Investigations for their exceptional work on this case.”

“For years, Chinese firms have broken our export laws and undermined sanctions, often using the U.S. financial systems to facilitate their illegal activities,” stated U.S. Department of Commerce Secretary Ross.  “This will end.  The Trump Administration continues to be tougher on those who violate our export control laws than any administration in history. I commend the Department’s Office of Export Enforcement, and our partners in the FBI, Justice Department, Department of Defense, and Department of Homeland Security for their excellent work on this case.”

* * * *

Overview of the Indictment

The charges in this case relate to a long-running scheme by Huawei, its CFO, and other employees to deceive numerous global financial institutions and the United States government regarding Huawei’s business activities in Iran.  Beginning in 2007, Huawei employees misrepresented Huawei’s relationship to an unofficial subsidiary in Iran called Skycom, and as a result falsely claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran.  Most significantly, after news publications in late 2012 and 2013 disclosed that Huawei operated Skycom as an unofficial subsidiary in Iran and that Meng had served on the board of directors of Skycom, Huawei employees, and in particular Meng, continued to lie to Huawei’s banking partners about Huawei’s relationship with Skycom, falsely claiming that Huawei had sold its interest in Skycom to an unrelated third party in 2007 and also that Skycom was merely Huawei’s local business partner in Iran.  In reality, Skycom was Huawei’s longstanding Iranian subsidiary, and Huawei orchestrated the 2007 sale to appear as an arm’s length transaction between two unrelated parties although Huawei actually controlled the company that purchased Skycom. 

As part of this scheme to defraud, Meng personally made a presentation in August 2013 to an executive of one of Huawei’s major banking partners in which she repeatedly lied about the relationship between Huawei and Skycom. 

Huawei relied on its global banking partners for banking services that included processing U.S.-dollar-denominated transactions through the United States.  U.S. laws and regulations generally prohibited these banks from providing U.S.-dollar transactions related to Iran through the United States.  The banks could have faced civil or criminal penalties for processing transactions that violated U.S. laws or regulations.  Relying on the repeated misrepresentations by Huawei, banking partners continued their banking relationships with Huawei.  One banking partner cleared more than $100 million worth of Skycom-related transactions through the United States between 2010 and 2014.

As a further part of this scheme to defraud, Huawei and its principals repeatedly lied to U.S. government authorities about the relationship between Huawei and Skycom in submissions to the U.S. government, and in responses to government inquiries.  For example, Huawei provided false information to the U.S. Congress regarding whether Huawei’s business in Iran violated any U.S. law.  Similarly, as indicated in the indictment, in 2007 — months before Huawei orchestrated the purported sale of Skycom to another Huawei-controlled entity — Huawei’s founder falsely stated to FBI agents that Huawei did not have any direct dealings with Iranian companies and that Huawei operated in compliance with all U.S. export laws. 

After one of Huawei’s major global banking partners (identified as Financial Institution 1 in the indictment) decided to exit the relationship in 2017 because of Huawei’s risk profile, Huawei allegedly made additional misrepresentations to several of its remaining banking partners in an effort to maintain and expand those relationships.  Huawei and its principals are alleged to have repeatedly and falsely claimed that Huawei had decided to separate from Financial Institution 1, and not that Financial Institution 1 had decided to cause the separation.  On the basis of these misrepresentations, those other banking partners continued their banking relationships with Huawei.

In 2017, when Huawei became aware of the government’s investigation, Huawei and its subsidiary Huawei USA tried to obstruct the investigation by making efforts to move witnesses with knowledge about Huawei’s Iran-based business to the PRC, and beyond the jurisdiction of the U.S. government, and by destroying and concealing evidence of Huawei’s Iran-based business that was located in the United States.

In December 2018, Canadian authorities apprehended Meng in Vancouver pursuant to a provisional arrest warrant issued under Canadian law.  The U.S. government is seeking Meng’s extradition to the United States.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The indictment unsealed today is assigned to U.S. District Judge Ann M. Donnelly of the Eastern District of New York.

The government’s investigation is ongoing.  Individuals and companies with information about additional misconduct by these defendants or their related entities and principals should contact their local FBI field office.

The investigation is being jointly conducted by the FBI’s New York Field Office, HSI’s New York Field Office, OEE’s New York Field Office, and DCIS’s New York Resident Agency.  Agents from the FBI, HSI, OEE, and DCIS offices in Dallas provided significant support and assistance.  The government’s case is being handled by the National Security and Cybercrime and Business and Securities Fraud Sections of the U.S. Attorney’s Office for the Eastern District of New York, Justice Department’s Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), and Justice Department’s National Security Division’s Counterintelligence and Export Control Section (CES). 

Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Kaitlin Farrell, and Sarah Evans, MLARS Trial Attorneys Laura Billings and Christian Nauvel, and CES Trial Attorneys Thea D. R. Kendler and David Lim are in charge of the prosecution, with assistance provided by Assistant U.S. Attorney Mark Penley of the Northern District of Texas, Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Trial Attorneys Andrew Finkelman and Margaret O’Malley of DOJ’s Office of International Affairs.  Additional Criminal Division and National Security Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Northern District of Texas, the Eastern District of Texas, and the Northern District of California have provided valuable assistance with various aspects of this investigation.

The Defendants:

Huawei Technologies Co. Ltd.

Huawei Device USA Inc.

Skycom Tech Co. Ltd.

Meng Wanzhou, also known as “Cathy Meng” and “Sabrina Meng”
Age: 46

Residence: People’s Republic Of China

E.D.N.Y. Docket No. 18-CR-457 (AMD)

 

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[1] The indictment charges other individuals who have not yet been apprehended and whose names will not be publicly released at this time.

Huawei Device USA Inc. and Huawei’s Iranian Subsidiary Skycom Also Named Defendants  

Other Charges Include Money Laundering, Conspiracy to Defraud the United States, Obstruction of Justice and Sanctions Violations

A 13-count indictment was unsealed earlier today in federal court in Brooklyn, New York, charging four defendants,[1] including Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, with headquarters in the People’s Republic of China (PRC) and operations around the world.  The indicted defendants include Huawei and two Huawei affiliates — Huawei Device USA Inc. (Huawei USA) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).

The defendants Huawei and Skycom are charged with bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate IEEPA, and conspiracy to commit money laundering.  Huawei and Huawei USA are charged with conspiracy to obstruct justice related to the grand jury investigation in the Eastern District of New York.  Meng is charged with bank fraud, wire fraud, and conspiracies to commit bank and wire fraud.

Acting U.S. Attorney General Matthew G. Whitaker, Secretary Kirstjen Nielsen of the U.S. Department of Homeland Security, Secretary Wilbur Ross of the U.S. Department of Commerce, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, FBI Director  Christopher A. Wray, Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division and Assistant Attorney General John C. Demers of the National Security Division, announced the charges.

“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes," said Acting Attorney General Whitaker.  "As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law.  I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward.  They are helping us uphold the rule of law with integrity.”

“As charged in the indictment, Huawei and its Chief Financial Officer broke U.S. law and have engaged in a fraudulent financial scheme that is detrimental to the security of the United States,” said Secretary Nielsen.  “They willfully conducted millions of dollars in transactions that were in direct violation of the Iranian Transactions and Sanctions Regulations, and such behavior will not be tolerated.  The Department of Homeland Security is focused on preventing nefarious actors from accessing or manipulating our financial system, and we will ensure that legitimate economic activity is not exploited by our adversaries.  I would like to thank ICE Homeland Security Investigations for their exceptional work on this case.”

“For years, Chinese firms have broken our export laws and undermined sanctions, often using U.S. financial systems to facilitate their illegal activities,” said Secretary Ross. “This will end.  The Trump Administration continues to be tougher on those who violate our export control laws than any administration in history.  I commend the Commerce Department’s Office of Export Enforcement, and our partners in the FBI, Justice Department, Department of Defense, and Department of Homeland Security for their excellent work on this case.”

“As charged in the indictment, Huawei and its subsidiaries, with the direct and personal involvement of their executives, engaged in serious fraudulent conduct, including conspiracy, bank fraud, wire fraud, sanctions violations, money laundering and the orchestrated obstruction of justice,” stated U.S. Attorney Donoghue.  “For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business.  This Office will continue to hold accountable companies and their executives, whether here or abroad, that commit fraud against U.S. financial institutions and their international counterparts and violate U.S. laws designed to maintain our national security.”  Mr. Donoghue thanked the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), U.S. Department of Commerce Office of Export Enforcement (OEE) and the Defense Criminal Investigative Service (DCIS) agents who are investigating this case for their tireless work and dedication.

“These charges lay bare Huawei’s alleged blatant disregard for the laws of our country and standard global business practices,” said FBI Director Wray.  “Companies like Huawei pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat.  Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.”

* * * *

Overview of the Indictment

The charges in this case relate to a long-running scheme by Huawei, its CFO, and other employees to deceive numerous global financial institutions and the U.S. government regarding Huawei’s business activities in Iran.  As alleged in the indictment, beginning in 2007, Huawei employees lied about Huawei’s relationship to a company in Iran called Skycom, falsely asserting it was not an affiliate of Huawei.  The company further claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran.  Most significantly, after news publications in late 2012 and 2013 disclosed that Huawei operated Skycom as an unofficial affiliate in Iran and that Meng had served on the board of directors of Skycom, Huawei employees, and in particular Meng, continued to lie to Huawei’s banking partners about Huawei’s relationship with Skycom.  They falsely claimed that Huawei had sold its interest in Skycom to an unrelated third party in 2007 and that Skycom was merely Huawei’s local business partner in Iran.  In reality, Skycom was Huawei’s longstanding Iranian affiliate, and Huawei orchestrated the 2007 sale to appear as an arm’s length transaction between two unrelated parties, when in fact Huawei actually controlled the company that purchased Skycom. 

As part of this scheme to defraud, Meng allegedly personally made a presentation in August 2013 to an executive of one of Huawei’s major banking partners in which she repeatedly lied about the relationship between Huawei and Skycom. 

According to the indictment, Huawei relied on its global banking relationships for banking services that included processing U.S.-dollar transactions through the United States.  U.S. laws and regulations generally prohibited these banks from processing transactions related to Iran through the United States.  The banks could have faced civil or criminal penalties for processing transactions that violated U.S. laws or regulations.  Relying on the repeated misrepresentations by Huawei, these banks continued their banking relationships with Huawei.  One bank cleared more than $100 million worth of Skycom-related transactions through the United States between 2010 and 2014.

In furtherance of this scheme to defraud, and as alleged in the indictment, Huawei and its principals repeatedly lied to U.S. government authorities about Huawei’s business in Iran in submissions to the U.S. government, and in responses to government inquiries.  For example, Huawei provided false information to the U.S. Congress regarding whether Huawei’s business in Iran violated any U.S. law.  Similarly, as indicated in the indictment, in 2007 — months before Huawei orchestrated the purported sale of Skycom to another Huawei-controlled entity — Huawei’s founder falsely stated to FBI agents that Huawei did not have any direct dealings with Iranian companies and that Huawei operated in compliance with all U.S. export laws. 

After one of Huawei’s major global banking partners (identified as Financial Institution 1 in the indictment) decided to exit the Huawei relationship in 2017 because of Huawei’s risk profile, Huawei allegedly made additional misrepresentations to several of its remaining banking partners in an effort to maintain and expand those relationships.  Huawei and its principals are alleged to have repeatedly and falsely claimed that Huawei had decided to terminate its banking relationship with Financial Institution 1, when in fact it was Financial Institution 1 that had decided to terminate the banking relationship.  Through these misrepresentations, Huawei was able to continue its banking relationships with its other banks.

In 2017, when Huawei became aware of the government’s investigation, Huawei and its subsidiary Huawei USA allegedly tried to obstruct the investigation by making efforts to move witnesses with knowledge about Huawei’s Iran-based business to the PRC, and beyond the jurisdiction of the U.S. government, and by concealing and destroying evidence of Huawei’s Iran-based business that was located in the United States.

In December 2018, Canadian authorities apprehended Meng in Vancouver pursuant to a provisional arrest warrant issued under Canadian law.  The U.S. government is seeking Meng’s extradition to the United States.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The indictment unsealed today is assigned to U.S. District Judge Ann M. Donnelly of the Eastern District of New York.

The government’s investigation is ongoing. 

The investigation is being jointly conducted by the FBI’s New York Field Office, HSI’s New York Field Office, OEE’s New York Field Office, and DCIS’s Southwest and Northeast Field Offices.  Agents from the FBI, HSI, and OEE offices in Dallas provided significant support and assistance.  The government’s case is being handled by the National Security and Cybercrime and Business and Securities Fraud Sections of the U.S. Attorney’s Office for the Eastern District of New York, the Justice Department’s Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), and the Justice Department’s National Security Division’s Counterintelligence and Export Control Section (CES). 

Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler, Kaitlin Farrell, and Sarah Evans, MLARS Trial Attorneys Laura Billings and Christian Nauvel, and CES Trial Attorneys Thea D. R. Kendler and David Lim are in charge of the prosecution, with assistance provided by Assistant U.S. Attorney Mark Penley of the Northern District of Texas, Assistant U.S. Attorneys Brian Morris and Brendan King of the Eastern District of New York’s Civil Division and Trial Attorneys Andrew Finkelman and Margaret O’Malley of DOJ’s Office of International Affairs.  Additional Criminal Division and National Security Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Northern District of Texas, the Eastern District of Texas, and the Northern District of California have provided valuable assistance with various aspects of this investigation.

The Defendants:

Huawei Technologies Co. Ltd.

Huawei Device USA Inc.

Skycom Tech Co. Ltd.

Meng Wanzhou, also known as “Cathy Meng” and “Sabrina Meng”
Age: 46

Residence: People’s Republic Of China

E.D.N.Y. Docket No. 18-CR-457 (AMD)

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[1] The indictment charges other individuals who have not yet been apprehended and whose names will not be publicly released at this time.

Earlier today, at the federal courthouse in Central Islip, William Castellanos, also known as “Dizzy” and “Satanico,” a member of La Mara Salvatrucha, also known as the MS-13, a violent transnational criminal organization, was sentenced by United States District Judge Joseph F. Bianco to 27 years’ imprisonment.  The sentencing followed Castellanos’s February 2018 guilty plea to firearms-related murder charges in connection with the June 30, 2015 murder of 16 year-old Jonathan Cardona-Hernandez in Central Islip, New York. 

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.

“Castellanos brutally murdered Jonathan Cardona-Hernandez simply because he believed Cardona-Hernandez was a member of a rival gang,” stated United States Attorney Donoghue.  “With today’s sentence, Castellanos will pay for this senseless crime.  The defendant’s conviction and punishment reflects the commitment of this Office and our law enforcement partners to vigorously investigate, prosecute and dismantle MS-13 and any other gang that terrorizes our communities.”

“The success of our collaborative efforts with our law enforcement partners is evident in today’s sentencing — the latest in a series holding MS-13 members accountable for their despicable crimes,” stated SCPD Commissioner Hart. “The Suffolk County Police Department will continue to focus our resources on halting the violence that surrounds MS-13, and I would like to thank the Eastern District of New York and the Long Island Gang Task Force for their unwavering commitment to dismantling this violent street gang.”

“The arrest, conviction and sentencing of defendant William Castellanos in connection with the 2015 murder of 16 year-old Jonathan Cardona-Hernandez is an excellent example of the professionalism and dedication of numerous law enforcement agencies that have worked tirelessly and collaborated on this case,” stated NCPD Commissioner Ryder.  “Our residents and communities will be safer with defendant Castellanos incarcerated. Gangs and their heinous crimes can never be tolerated in any community and we are taking a proactive approach to keep our residents and police safe.”

Castellanos, who was a member of the Karlington Locos Salvatruchas clique of MS-13 (“KLS”) based in Central Islip, and two MS-13 co-conspirators targeted Cardona-Hernandez because they suspected that he was associated with a rival gang, known as “L-Block.”  In the early morning hours of June 30, 2015, Castellanos and his co-conspirators drove Cardona-Hernandez to the vicinity of Nicoll Avenue and Messina Street in Central Islip. When Cardona-Hernandez exited the car, Castellanos approached him from behind and shot him multiple times with a 9mm semi-automatic handgun.  The co-conspirators then took turns shooting Cardona-Hernandez with a second 9mm semi-automatic handgun.  Cardona-Hernandez was struck by at least 10 bullets and was found dead in the street.  The shooters fled the crime scene, met with an MS-13 leader and telephoned MS-13 leaders in El Salvador to report that the murder had been successfully carried out.  By the time of his arrest by the FBI’s Long Island Gang Task Force in May 2016, Castellanos had risen to the position of leader of the KLS clique.  

Today’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of MS-13.  MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  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 45 murders in the district, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by 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, the New York State Police, and the 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, Raymond A. Tierney, Michael T. Keilty and Justina L. Geraci are in charge of the prosecution.

The Defendant:

WILLIAM CASTELLANOS (“Dizzy” and “Satanico”)
Age: 22
Central Islip, New York

E.D.N.Y. Docket No. 16-CR-403 (JFB)

Earlier today, at the federal courthouse in Brooklyn, John Santos was sentenced by United States District Judge Frederic Block to 121 months’ imprisonment, to be followed by five years’ supervised release, following his December 2017 guilty plea to participating in a conspiracy to distribute a kilogram or more of heroin, five kilograms or more of cocaine, and marijuana. 

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), Angel M. Melendez, Special Agent-in-Charge, Homeland Security Investigation, New York (HSI), Keith M. Corlett, Acting Superintendent, New York State Police (NYSP), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.

“With today’s sentence, Santos will serve a significant prison term for his role as the leader of a large-scale drug trafficking ring,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners are responding to the opioid epidemic by vigorously investigating and prosecuting those like the defendant who seek to line their own pockets by selling dangerous drugs in our communities.”

“This sentencing is one of many successes in law enforcement’s battle against opioid abuse because it serves as a reminder that we are dedicated to identifying, investigating and dismantling drug trafficking organizations,” stated DEA Special Agent-in-Charge Donovan.  “Enforcement is a key factor in fighting opioid abuse and in stopping fatal overdoses in our cities because it takes away their means to wreak havoc.”

“Running the full gamut of drug trafficking, John Santos ran a criminal organization that flooded the streets on New York City with cocaine, heroin and marijuana,” stated HSI Special Agent-in-Charge Melendez.  “Today’s sentencing proves once again that being employed as a drug dealer in this city comes with severe consequences.”

 “The sentencing of Santos sends a clear message that we will not tolerate this kind of activity anywhere in New York State,” stated NYSP Acting Superintendent Corlett.  “Santos had no regard for the damage his actions inflicted upon the communities where he trafficked narcotics. The State Police will continue to work aggressively with our federal and local partners to stop the flow of illegal and dangerous drugs onto our streets.”

 “The NYPD’s efforts to combat the far-reaching opioid crisis by ridding New York City streets of drug traffickers are greatly strengthened by our close partnerships with the U.S. Attorney for the Eastern District and the Drug Enforcement Administration,” stated NYPD Commissioner O’Neill.  “Anyone who deals in illegal narcotics should understand that the nation’s best investigators will stop at nothing to fight crime and keep safe all the people we serve.”

Between July 2016 and March 2017, Santos led a Bronx-based drug trafficking ring that distributed large amounts of heroin, cocaine and marijuana throughout New York City, including to out-of-state customers.  At the time of Santos’s arrest, DEA special agents seized quantities of those controlled substances, a kilogram press and other drug paraphernalia in his Bronx apartment.  Santos also served as the principal point of contact for the narcotics source of supply based in the Dominican Republic.

Two co-defendants, Robert Santos and Kevin Brito, previously pleaded guilty and are awaiting sentencing.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorney Ryan C. Harris is in charge of the prosecution.  

The Defendant:

JOHN SANTOS
Age:  36
Bronx, New York

E.D.N.Y. Docket No. 17-CR-147 (FB)

Earlier today, an indictment was unsealed in federal court in Brooklyn charging five defendants for their participation in a heroin distribution ring operating in the East New York section of Brooklyn and elsewhere.  A sixth defendant was arrested and charged in a complaint with possessing heroin as part of the operation.  The defendants were arrested this morning in Brooklyn, Queens and Long Island and will be arraigned this afternoon before Chief United States Magistrate Judge Roanne L. Mann.

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 indictment and complaint, these defendants distributed high purity heroin in our communities, with life-threatening consequences,” stated United States Attorney Donoghue.  “With today’s arrests, their drug trafficking operation has been dismantled, and the defendants will now face justice for their crimes.”

According to the indictment, complaint and other court filings, the defendants regularly acquired kilograms of heroin to process, repackage and distribute on the streets of Brooklyn and elsewhere.  The defendants routinely tested the quality of the heroin to ensure it was sufficiently potent.  On one occasion, as captured in court-authorized messages, defendant Dino Sanchez texted co-defendant Melvin Sanabria using coded terms to indicate he had a “bentley” and a “phantom” for Sanabria.  Thereafter, in a court-authorized intercepted call, Sanabria complained that a subsequent sample Sanchez provided was inferior quality, stating, “I don’t rent hondas or acuras … around here we drive benz and lambos.” 

Earlier this morning, law enforcement executed search warrants at three of the defendants’ residences, two additional stash houses and two vehicles, and seized over four kilograms of heroin, three firearms (including one with a defaced serial number), more than $100,000 in U.S. currency and various drug paraphernalia, including over 10,000 glassine envelopes.

The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face mandatory minimum sentences of 10 years’ imprisonment and up to life imprisonment.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Keith D. Edelman is in charge of the prosecution.   

The Defendants:  

DINO SANCHEZ (also known as “Dinito”)
Age: 40
East New York, Brooklyn

ALEX AYBAR
Age: 47
Bayside, Queens

RALIEK BROWN (also known as “Burger”)
Age: 36
East New York, Brooklyn

MELVIN SANABRIA (also known as “Mel”)
Age: 42
East Rockaway, New York

ROGELIO VARGAS (also known as “Macho”)
Age: 43
East New York, Brooklyn

E.D.N.Y. Docket No. 19-CR-14 (AMD)

RAMON SANABRIA (also known as “Junior”)
Age: 48
South Ozone Park, Queens

E.D.N.Y. Docket No. 19-MJ-36

A nine-count indictment was unsealed today in federal court in Central Islip charging Dylan Cruz, also known as “L Banga,” an alleged member of the Red Lane Gorillas set of the Bloods street gang, with racketeering, conspiring to murder rival gang members, murder in-aid-of racketeering, armed robbery and related firearms counts.  The indictment was returned under seal by a federal grand jury on December 12, 2018.  The defendant is scheduled to be arraigned this morning before United States District Judge Joseph F. Bianco. 

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), Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

“The charges in the indictment reflect the extreme danger Cruz posed to communities on Long Island and in Brooklyn as he allegedly killed a man mistakenly thought to have betrayed a gang member, shot and paralyzed a suspected rival gang member and wounded two bystanders in furtherance of the Bloods’ criminal enterprise,” stated United States Attorney Donoghue.  “Cruz will now be brought to justice for his charged crimes, and this Office will continue working tirelessly with federal, state and local law enforcement partners to eradicate violent street gangs.”  Mr. Donoghue thanked the FBI Long Island Gang Task Force, the NCPD Gang Investigation Squad, NCPD Homicide Squad, NYPD Gun Violence Suppression Division, Violence Reduction Task Force and the NYPD Firearm Investigation Unit, for their assistance in the ongoing investigation.

Between 2010 and 2016, Cruz and other members of the Red Lane Gorillas allegedly engaged in a violent gang war against rival gangs, including the Crips and the 5-9 Brims set of the Bloods, in Nassau County and Brooklyn.  The indictment charges Cruz with the July 2012 murder in Baldwin Harbor of Anthony Richard, whom Cruz and fellow gang members wrongly suspected of betraying the Bloods.  Cruz and others followed Richard’s car until it was parked. Cruz then approached the car and fired more than a dozen shots, killing Richard and severely wounding a passenger. 

Cruz is also charged with the attempted murder of a suspected rival gang member in Roosevelt in November 2010, in which the victim was shot in the back and paralyzed; the attempted murder of a second rival gang member in January 2013, in which a bystander was shot in the foot; and a gun-point robbery at a used car dealership in North Merrick in June 2016, in which an employee was pistol-whipped by Cruz and a co-conspirator.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

Several other members of the Red Lane Gorillas set of the Bloods are charged in a separate indictment with conspiracy to commit murder, attempted murder in-aid-of racketeering, assault in-aid-of racketeering and related firearms charges. 

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 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 Defendant:

Dylan Cruz (also known as “L Banga”)          
Age:  27
Brooklyn, New York

E.D.N.Y. Docket No. 18-CR-664 (JFB)

WASHINGTON – Five members of an international criminal organization known as the Rendon-Reyes Trafficking Organization (the “Organization”) were sentenced last week in federal court in Brooklyn to prison terms of 15 to 25 years by United States District Court Judge Edward R. Korman.  The amount to be paid in restitution will be announced at a later date.  Three additional defendants are scheduled to be sentenced on January 15, 2019.  The defendants previously pled guilty to racketeering, sex trafficking and other federal charges following their arrests in Mexico and the United States.  Between December 2004 and November 2015, the Organization, based in Tenancingo, Tlaxcala, Mexico, smuggled numerous young women and girls from Mexico and Central America into the United States, and forced them to engage in prostitution for the Organization’s profit, generating hundreds of thousands of dollars that were then laundered back to Mexico.

Acting Attorney General Matthew Whitaker, United States Attorney Richard P. Donoghue of the Eastern District of New York, Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division, and Homeland Security Investigations Executive Associate Director Derek Benner (HSI), announced the sentences.

“These well-deserved sentences reflect the gravity of the human trafficking crimes these defendants committed,” stated Acting Attorney General Whitaker. “The defendants operated an extensive sex trafficking enterprise that preyed on vulnerable young women and girls, deceiving them with false promises, coercing their compliance, and compelling them into submission through beatings, threats, isolation, and intimidation. This prosecution is the result of strong partnerships among the Eastern District of New York, the Civil Rights Division’s Human Trafficking Prosecution Unit, the New York Office of the Department of Homeland Security’s Homeland Security Investigations, and our Mexican law enforcement counterparts. The sentences imposed in this case demonstrate our unwavering commitment to working across international borders to dismantle transnational trafficking networks and seek justice on behalf of victims and survivors.”

“These sentencings are the latest chapter in this Office’s long-term commitment to eradicate human trafficking and all forms of modern-day slavery,” stated United States Attorney Donoghue.  “The crimes committed by the members of the Rendon-Reyes Trafficking Organization were brutal and shocking, and I hope that the sentences give the victims in this case some sense of justice.  We will not tolerate the exploitation of women and girls for profit or sexual servitude.”

“These individuals will now face the consequences of their callous criminal actions exploiting women and girls whom they forced into sex slavery for profit. The investigation and prosecution that led to today’s sentencings speak to the strong bilateral relationship between the United States and Mexico, in which both nations are committed to holding accountable those engaged in the ruthless act of human trafficking,” said Homeland Security Investigations Executive Associate Director Derek Benner.  “Investigating human trafficking remains a priority for HSI, whose primary focus is to rescue victims and release them from the grip of their captors. HSI will continue leveraging all of its investigative capabilities to disrupt human trafficking syndicates no matter where in the world they operate.”

The defendants were sentenced to the following prison terms:

• Jovan Rendon-Reyes, aka Jovani, 32, of Mexico, was sentenced to 20 years in prison.  According to court documents, the defendant forced a minor to perform countless commercial sex acts for a substantial period using violence, manipulation and fear.  Among other abusive acts, he raped the victim, and he repeatedly and severely beat her when she did not earn enough money.  He also contributed directly to the Organization’s victimization of other women and girls.
• Saul Rendon-Reyes, aka Satanico, 41, of Mexico, was sentenced to 15 years in prison.  According to court documents, the defendant forced a victim to perform  commercial sex acts for a substantial period, including shortly after she gave birth, using violence, manipulation and fear.  Among other abusive acts, he severely and repeatedly beat the victim, and deprived her of food.  He also contributed directly to the Organization’s victimization of other women and girls, on one occasion depriving a victim of food to force her to have sex with him.
• Felix Rojas, 48, of Mexico, was sentenced to 25 years in prison.  According to court documents, the defendant forced two victims to perform countless commercial sex acts for substantial periods using violence, manipulation and fear. Among other abusive acts, he kidnapped the first victim and her child, bringing them to Tenancingo.  He then left the child with other members of the Organization, and smuggled the victim into the United States.  While in the United States, he threatened to harm the victim’s child to force her to prostitute.  On one occasion, when he learned that the victim was pregnant, he severely beat her until he caused a miscarriage, terminating the pregnancy.  With respect to the second victim, he withheld food for her and her newborn if she refused to prostitute, and he severely and repeatedly beat her.  He also contributed directly to the victimization of other women and girls.
• Odilon Martinez-Rojas, aka Chino or Saul, 47, of Mexico, was sentenced to 293 months in prison.  According to court documents, the defendant forced three victims to perform countless commercial sex acts for substantial periods, using violence, manipulation and fear.  Among other abusive acts, he raped the first victim, and severely and repeatedly beat her, including with a bat, when she did not earn enough money.  With respect to the second victim, he threated to force her friend, who was a virgin, to prostitute, and he beat her when she tried to protect her friend.  With respect to the third victim, when he learned that she was pregnant, he forced her to take pills to induce a miscarriage, terminating the pregnancy, and then violently and brutally beat her, dragging her by the hair, throwing her down stairs and stomping on her face when she did not immediately return to prostituting.  In addition, when he was arrested in 2013 as part of a separate case in the Northern District of Georgia, he and Severiano Martinez-Rojas obstructed the investigation by causing the victim to refuse to cooperate with law enforcement.  He also contributed directly to the Organization’s victimization of other women and girls.  Odilon Martinez-Rojas previously was sentenced to 262 months in prison in a separate Northern District of Georgia case.  The sentence imposed last week will run concurrent with his prior sentence.
• Severiano Martinez-Rojas, 53, of Mexico, was sentenced to 293 months in prison. According to court documents, the defendant forced a victim to perform countless commercial sex acts for a substantial period using violence, manipulation and fear.  Among other abusive acts, he severely and repeatedly beat her when she refused to prostitute or tried to leave.  In addition, he operated a brothel out of a trailer in Alabama, where many victims of the Organization were forced to prostitute.  He also contributed directly to the Organization’s victimization of other women and girls, raped one of the victims, and threatened another victim to prevent her from cooperating with law enforcement after Odilon
• Martinez-Rojas was charged in a separate case in the Northern District of Georgia.  Severiano was likewise charged in the Northern District of Georgia, which case was transferred to the Eastern District of New York for entry of his guilty plea, and the cases were consolidated for last week’s sentencing proceeding.

The investigation, prosecution, bilateral enforcement action and extraditions of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative.  Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice and restore the rights and dignity of human trafficking victims.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 170 defendants in multiple cases in New York, Georgia, Florida and Texas, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers.  The convictions in this case are also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 80 defendants, assisted more than 150 victims, including 45 minors, reunited 19 victims’ children with their mothers and secured restitution orders of over $4 million on behalf of trafficking victims.

The investigation of the Rendon-Reyes Trafficking Organization was led by HSI New York’s Trafficking in Persons Unit, the U.S. Attorney’s Office for the Eastern District of New York and the Department of Justice’s Human Trafficking Prosecution Unit, with assistance from HSI Mexico City Attaché Office, the Department of Justice’s Office of International Affairs, the State Department, Interpol and the New York City Police Department.  Assistance was also provided by the FBI’s Atlanta Division and the U.S. Attorney’s Office for the Northern District of Georgia.  The government of Mexico, including Mexico’s Procuraduría General de la República (“PGR”) and the Mexican Federal Police, also played a prominent role in advancing the bilateral anti-trafficking enforcement efforts in this case.  Non-governmental victim service providers and advocates also dedicated efforts to restore and improve the lives of survivors of trafficking and their families.  The case is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director for Litigation Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

 

 

 

Last week in federal district court in Brooklyn, New York, five members of a notorious international criminal organization, known as the Rendon-Reyes Trafficking Organization, were sentenced to prison terms of 15 to 25 years by United States District Court Judge Edward R. Korman. The amount to be paid in restitution will be announced at a later date. Three other defendants are set to be sentenced on Jan. 15. The defendants previously pled guilty to racketeering, sex trafficking, and other federal charges following their arrests in Mexico and the United States, where they were residing illegally. For over a decade, the Rendon-Reyes Trafficking Organization, based in Tenancingo, Tlaxcala, Mexico, smuggled numerous young women and girls from Mexico and Central America into the United States and forced them to engage in prostitution for the Organization’s profit, generating hundreds of thousands of dollars in criminal proceeds that were then laundered back to Mexico. The U.S. Attorney’s Office for the Eastern District of New York and the Department of Justice’s Civil Rights Division prosecuted this case.

“These well-deserved sentences reflect the gravity of the human trafficking crimes these defendants committed,” said Acting Attorney General Whitaker. “The defendants operated an extensive sex trafficking enterprise that preyed on vulnerable young women and girls, deceiving them with false promises, coercing their compliance, and compelling them into submission through beatings, threats, isolation, and intimidation. This prosecution is the result of strong partnerships among the Eastern District of New York, the Civil Right Division’s Human Trafficking Prosecution Unit, the New York Office of the Department of Homeland Security’s Homeland Security Investigations, and our Mexican law enforcement counterparts. The sentences imposed in this case demonstrate our unwavering commitment to working across international borders to dismantle transnational trafficking networks and seek justice on behalf of victims and survivors.”

“These sentencings are the latest chapter in this Office’s long-term commitment to eradicate human trafficking and all forms of modern-day slavery,” stated United States Attorney Donoghue.  “The crimes committed by the members of the Rendon-Reyes Trafficking Organization were brutal and shocking, and I hope that the sentences give the victims in this case some sense of justice.  We will not tolerate the exploitation of women and girls for profit or sexual servitude.”

“These individuals will now face the consequences of their callous criminal actions exploiting women and girls whom they forced into sex slavery for profit. The investigation and prosecution that led to today’s sentencings speak to the strong bilateral relationship between the United States and Mexico, in which both nations are committed to holding accountable those engaged in the ruthless act of human trafficking,” said Homeland Security Investigations Executive Associate Director Derek Benner.  “Investigating human trafficking remains a priority for HSI, whose primary focus is to rescue victims and release them from the grip of their captors. HSI will continue leveraging all of its investigative capabilities to disrupt human trafficking syndicates no matter where in the world they operate.”

The defendants were sentenced to the following prison terms: Jovan Rendon-Reyes, aka Jovani, 32, of Mexico, was sentenced to 20 years in prison; Saul Rendon-Reyes, aka Satanico, 41, of Mexico, was sentenced to 15 years in prison; Felix Rojas, 48, of Mexico, was sentenced to 25 years in prison; Odilon Martinez-Rojas, aka Chino or Saul, 47, of Mexico, was sentenced to over 24 years in prison; and Severiano Martinez-Rojas, 53, of Mexico, was sentenced to over 24 years in prison. Severiano Martinez-Rojas was also sentenced in a related case in the Northern District of Georgia. Those proceedings were transferred to the Eastern District of New York for entry of the defendant’s guilty plea last year, and the cases were consolidated for last week’s sentencing. Defendants Jose Rendon-Garcia, aka Gusano, 35, of Mexico, Guillermina Rendon-Reyes, 48, of Mexico, and Francisco Rendon-Reyes, aka Pancho, 30, of Mexico, will be sentenced on Jan. 15.

According to documents filed in court, between December 2004 and November 2015, members of the Rendon-Reyes Organization, including the defendants, enriched themselves by forcing multiple young women and girls, including the 12 referenced in court documents, to perform countless commercial sex acts throughout the United States and Mexico. The Organization targeted vulnerable women and girls, some as young as 14, from impoverished areas of Mexico and Central America. Male members of the Organization typically used false promises of love and marriage to lure the victims into fraudulent romantic relationships. In some instances, they forcibly abducted the victims, and on one occasion, a victim’s child. Members of the Organization frequently arranged for others to smuggle the victims across the border and into the United States. Once in the United States, members of the Organization utilized different methods to force the victims to engage in prostitution, including severe and repeated beatings, sexual assaults, forced abortions, threats to the victims, their families and children, and psychological harm. Members of the Organization forced the victims to perform as many as 45 sex acts a night and took all of the prostitution proceeds, funneling the money back to Mexico.

The investigation, prosecution, bilateral enforcement action, and extraditions of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative. Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, and restore the rights and dignity of human trafficking victims. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 170 defendants in multiple cases in New York, Georgia, Florida, and Texas, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers. The convictions in this case are also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 80 defendants, assisted more than 150 victims, including 45 minors, reunited 19 victims’ children with their mothers, and secured restitution orders of over $4 million on behalf of trafficking victims.

The investigation of the Rendon-Reyes Trafficking Organization was led by HSI New York’s Trafficking in Persons Unit, the U.S. Attorney’s Office for the Eastern District of New York, and the Department of Justice’s Human Trafficking Prosecution Unit, with assistance from HSI Mexico City Attaché Office, the Department of Justice’s Office of International Affairs, the State Department, Interpol and the New York City Police Department. Assistance was also provided by the FBI’s Atlanta Division, and the U.S. Attorney’s Office of the Northern District of Georgia. The government of Mexico, including Mexico’s Procuraduría General de la República and Policía Federal, also played a prominent role in advancing the bilateral anti-trafficking enforcement efforts in this case.  Non-governmental victim service providers and advocates also dedicated efforts to restore and improve the lives of survivors of trafficking and their families.

Acting Attorney General Matthew Whitaker, Assistant Attorney General Eric Dreiband for the Civil Rights Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Executive Associate Director Derek Benner made the announcement today.

The case against the Rendon-Reyes Trafficking Organization was investigated by HSI New York’s Trafficking in Persons Unit, and is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director for Litigation Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Earlier today at the federal courthouse in Brooklyn, Edgar Veytia, the former Attorney General for the State of Nayarit, Mexico, pleaded guilty before United States District Judge Carol Bagley Amon to one count of international conspiracy to manufacture and distribute heroin, cocaine, methamphetamine and marijuana, in violation of Title 21, United States Code, Sections 963, 960(b)(1)(A), 960(b)(1)(B)(ii), 960(b)(1)(G), 960(b)(1)(H) and 959(d), for his involvement in a 2013 to 2017 scheme to import illegal drugs from Mexico into the United States.  When sentenced, Veytia faces up to life in prison.

Richard P. Donoghue, United States Attorney for the Eastern District of New York (EDNY), Brian Benczkowski, Assistant Attorney General for the Criminal Division of the U.S. Department of Justice, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), David J. Downing, Special Agent-in-Charge, Los Angeles Division (DEA), Angel M. Melendez, Special Agent-in-Charge, Homeland Security Investigation, New York (HSI), and Matt DeSarno, Special Agent-in- Charge, Federal Bureau of Investigation, Washington, D.C. Field Office (FBI), announced the guilty plea.

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.

Veytia pleaded guilty to Count One of the Indictment, charging him with an international drug trafficking conspiracy to distribute heroin, cocaine, methamphetamine and marijuana from Mexico into the United States.  According to court filings and facts presented during the plea proceeding, from January 2013 until February 2017, Veytia used his official position as State Attorney General to assist and abet drug trafficking organizations operating in the Mexican State of Nayarit in exchange for bribes.  Veytia, who was responsible for Mexican state law enforcement authorities charged with investigating crime in Nayarit, used his official position to protect drug trafficking activities related to distribution into and within the United States and obstructed legitimate investigations and prosecutions of drug trafficking members in Mexico, for example by preventing the arrest of drug traffickers or unlawfully releasing those who had been arrested by Mexican law enforcement authorities.

The government’s case is being handled by Assistant United States Attorneys Craig Hereen, Ryan Harris, Alicia Washington and Temidayo Aganga-Williams of the EDNY, together with Deputy Chief of Litigation Amanda Liskamm and Trial Attorneys Jason Ruiz and Anthony Aminoff of the Narcotic and Dangerous Drug Section of the Justice Department’s Criminal Division.

The Defendant:

Edgar Veytia  
Age: 48

EDNY Docket No. 17-CR-115 (CBA)

The U.S. District Court for the Eastern District of New York has permanently barred 10 individuals and businesses from operating an alleged multi-million dollar international mail-fraud scheme.  The consent decrees entered by United States District Judge Brian M. Cogan resolve civil fraud claims brought by the United States Attorney’s Office for the Eastern District of New York.  Five of the defendants – Kimberly Anne Stamps of Gilbert, Arizona and her companies, KPS Productions, LLC, KPS Promotions, LLC, JKS Ventures, LLC and JJMK Enterprises, LLC – also agreed to pay a $726,539.20 penalty, the largest civil penalty ever collected in the EDNY for a violation of a United States Postal Service (USPS) cease and desist order against a mass mailer. 

The United States alleged that beginning as early as 2012, the defendants operated a multi-million dollar mass-mailing scheme that preyed upon elderly and vulnerable individuals.  From May 2015 to January 2018, the defendants mailed over 4.8 million solicitation letters to recipients in New York, throughout the United States and abroad falsely indicating that the recipients had won large cash prizes ranging from hundreds of thousands of dollars to millions of dollars, but were required to return processing fees of $20 to $50 to receive payment.  The solicitations were sent on behalf of fictitious organizations and departments, such as “Global Servicing Center,” “Premium Award Center,” “Notification Committee” and “Winners Search Advisory,” and included fake signatures from fictitious corporate officers.  The victims who paid the processing fees never received the promised cash prizes.

In one month alone, the defendants received over 16,000 responses to their schemes from victims worldwide.  One victim of the defendants’ scheme, who resides in Brooklyn, returned more than 400 responses to defendants’ fraudulent solicitations, with total payments exceeding $10,000.   The United States estimates that before the scheme was shut down, the defendants received more than $3 million in victim payments annually.

The foregoing are allegations, which the defendants dispute, and there has been no trial or any permanent judicial finding of fact or law.

“The defendants misled elderly and vulnerable victims by promising life-changing cash prizes that never arrived,” stated United States Attorney Donoghue.  “The court-ordered injunctions permanently stop these schemes, and the civil penalty should serve as a warning to other fraudulent mass-mailers that we are committed to protecting the public from these schemes, and will hold the perpetrators and enablers of such schemes accountable.”  Mr. Donoghue thanked the United States Postal Inspection Service for its investigatory support.

“Sweepstakes mailers thought they were winning the big prize.  That is, until Postal Inspectors learned of the misleading solicitations being sent to unsuspecting victims,” stated Melisa Llosa, USPS, Inspector in Charge of the Phoenix Division.  “As the law enforcement branch of the Postal Service, the U.S. Postal Inspection Service has a long history of successfully investigating these fraud schemes.  Postal Inspectors work tirelessly to protect the American public from exploitation through the U.S. Mail.”

The case is being handled by Assistant U.S. Attorneys Evan P. Lestelle and John Vagelatos. 

Additional information on the original enforcement actions and mass mailing schemes is available at: https://www.justice.gov/usao-edny/pr/justice-department-coordinates-nationwide-elder-fraud-sweep-more-250-defendants.  Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

The Defendants:

KIMBERLY ANNE STAMPS
Age: 42
Gilbert, Arizona

YURIKO ESPINO RAMOS
Age: 30
Mesa, Arizona

BARBARA TRICKLE
Age: 74
Las Vegas, Nevada

KPS Productions, LLC

KPS Promotions, LLC

JJMK Enterprises, LLC

JKS Ventures, LLC

YR Mail Services, LLC

Western Mailing Services

Cyber Solutions, Inc. 

E.D.N.Y. Docket No. 18-CV-1106 (BMC)

Earlier today, an indictment was unsealed in federal court in Central Islip charging Alexis Laguerra, Raymond Soto, also known as “Rambo,” and his father, Raymond Soto, also known as “Razor,” with bank larceny in connection with the theft of $510,000 from an armored car in Valley Stream on November 2, 2018.  Raymond Soto (Sr.) was arrested this morning, and is scheduled to be arraigned this afternoon before Magistrate Judge A. Kathleen Tomlinson.  Laguerra was previously arrested on a complaint, and was released on bail.   Raymond Soto (Jr.) is a fugitive.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the charges.

“As alleged, Laguerra was a trusted employee of GardaWorld who used his knowledge of the armored car company’s operations to steal more than $500,000,” stated United States Attorney Donoghue.  “I commend our partners in the FBI and Nassau County Police Department for their work bringing the defendants to justice and proving once again that crime does not pay.”

“As alleged, Alexis Laguerra broke his employer’s trust, conspiring with the Sotos to steal an armored car and more than half a million dollars,” stated FBI Assistant Director-in-Charge Sweeney.  “As today’s arrests indicate, the FBI and our law enforcement partners are committed to finding those responsible for committing theft and ensuring that they face justice for their crimes.”

“The arrest of defendants Soto, Laguerra and Soto is another example of exceptional investigative work by multiple law enforcement agencies to bring closure to a major case,” stated NCPD Commissioner Ryder.  “These defendants showed little regard for the safety of our residents, the bank and Garda employees, thus stealing over $500,000 from an armored car in a calculated heist.  I would like to congratulate all members and agencies on a job well done.”

As alleged in the indictment and complaint, the defendants stole bank funds contained in three bags inside the GardaWorld armored car.  Two employees of GardaWorld, Laguerra and John Doe #1, were working as the driver of the armored car and messenger, respectively.  Their assignment that night was to empty ATM machines at bank branches and refill each ATM machine with “fresh money” of between $99,800 to $275,000.  On November 2, 2018, upon arrival at a bank on Sunrise Highway in Valley Stream at 2:22 a.m., Laguerra and John Doe #1 exited the armored car and entered the bank.  The unoccupied armored car was then stolen and later recovered nearby.  Additionally, Laguerra and Raymond Soto (Jr.) had an agreement to destroy text messages they had exchanged setting up the theft.  Earlier this morning, law enforcement officers executed a search warrant at the Sotos’ residence, and recovered an undetermined amount of cash believed to be proceeds of the theft.

The charges in the complaint and indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face up to 10 years’ imprisonment on the bank larceny count.  Defendants Laguerra and Raymond Soto (Jr.) also face up to 20 years’ imprisonment on the conspiracy to obstruct justice charge. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution. 

The Defendants:

ALEXIS LAGUERRA
Age:  30
Brooklyn, New York

RAYMOND SOTO, also known as “Rambo”
Age:  48
Richmond Hill, Queens

RAYMOND SOTO, also known as “Razor”
Age:  28
Richmond Hill, Queens

E.D.N.Y. Docket Nos. 18-MJ-1229 and 18-CR-678 (SJF)

A criminal complaint was unsealed today in federal court in Brooklyn charging Douglas Marra, also known as “Dougie,” and Joseph McClean, also known as “Max B,” with conspiracy to distribute and possess with intent to distribute heroin and fentanyl in Queens between January 2018 and September 2018.  McClean and Marra were arrested earlier today, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Sanket J. Bulsara.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI), 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 charges.

“As alleged, the defendants repeatedly sold heroin and fentanyl, seeking to profit from these highly addictive and potentially lethal drugs,” stated United States Attorney Donoghue.  “With today’s arrests, the defendants will be held accountable for contributing to the opioid epidemic plaguing our communities.” 

“It is not shocking that drug traffickers lure customers by linking their product to overdoses; but the blatant disregard to human life is unconscionable,” stated DEA Special Agent-in-Charge Donovan.  “Today’s arrests sends a message to dealers that at some point we will catch you and in some cases the charges will be more than just distribution.”

“Our communities have been plagued with fentanyl related deaths, and it is because of individuals like those arrested today, those who prey on vulnerabilities with no regard for life,” stated HSI Special Agent-in-Charge Melendez.  “McClean and Marra are now in custody, unable to keep pushing these deadly drugs as alleged, and law enforcement will continue working opioid investigations and removing relentless drug dealers from our city streets.”

As alleged in the complaint, in January 2018, HSI and NYPD began investigating a heroin and fentanyl drug trafficking organization in Queens.  Following a drug overdose death in Queens, law enforcement interviewed an individual who stated that the overdose victim had obtained heroin from “Dougie” and that “Dougie” works with “Max B.”  A subsequent search of the victim’s cellphone by law enforcement revealed contact information for Marra and McClean.  Law enforcement then initiated a series of undercover drug transactions with Marra.  During one of those transactions, Marra told an undercover police officer, “This stuff is hot.  My friend died off of it.”  Ultimately, when Marra was not able to provide drugs, McClean directed other suppliers to complete the narcotics transaction.    

The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of the charges, the defendants face a mandatory minimum of 10 years’ imprisonment and a maximum of life imprisonment.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Marcia M. Henry and Penelope J. Brady are in charge of the prosecution.

The Defendants:

Douglas Marra (also known as “Dougie”)
Age:  34
Glendale, Queens

Joseph McClean (also known as “Max B”)
Age:  34
Glendale, Queens

E.D.N.Y. Docket No. 18-MJ-1236

An indictment was unsealed today in federal court in Central Islip charging John Ficarra and his wife Mara Ficarra with conspiracy to commit mail, wire and bank fraud and conspiracy to commit money laundering.  The Ficarras were arrested this morning, and will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the charges.

“The defendants preyed upon some of the most vulnerable members of our community, stealing their personal information and defrauding financial institutions,” stated United States Attorney Donoghue.  “Protecting the elderly from financial fraud remains a priority of the Department of Justice.”  Mr. Donoghue also expressed his appreciation to the Southampton Town Police Department for its assistance with the investigation and today’s arrests.

“The Ficarra’s exploited victims by fraudulently using their bank routing numbers and bank account number to produce counterfeit checks,” stated USPIS Inspector-in-Charge Bartlett.  “The checks were then deposited into accounts they controlled. Once the checks cleared, they withdrew the funds to the tune of more than $1 million.”

 The Ficarras owned, operated and held senior management positions in various companies, including Remington Biographies, Inc., Remington Bookkeepers, Inc., and Mentorship America1, Inc. (collectively, the “Remington Entities”).  The Remington Entities purported to publish reference publications containing biographical information of individuals across the country.  Those publications included “Inspiring the Youth of America” and “The Remington Registry of Outstanding Professionals.”

As alleged in the indictment, from 2013 to the present, the Ficarras caused letters and pamphlets to be mailed to victims, primarily the elderly, indicating that the victim’s biography would be published in one of the reference publications.  The letters, addressed “Dear Nominee,” indicated, “Your 2 books and your plaque are paid for in full and ready for delivery.  Please send a check for $14.00 dollars for shipping and handling.”  The pamphlet described the publication and stated in part, “The Remington Registry of Outstanding Professionals is more than a website, more than a book, more than a Biographical index and certainly more than a who’s who.  It is the ultimate expression of achievements, hardships, and dedication that professionals have made in their lives and careers….  Sit back and be ready for a wonderful experience.”  The mailings induced thousands of victims to send checks as payment for inclusion in the reference publications.  The Ficarras then used the routing and bank account information on those checks to produce fraudulent checks for larger dollar amounts, which they then deposited into bank accounts they controlled at Citibank, Everbank, HSBC, JP Morgan Chase and Wells Fargo, among other financial institutions.  The Ficarras promptly withdrew cash from the accounts, stealing more than $1 million dollars from the victim subscribers and financial institutions. 

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Catherine M. Mirabile is in charge of the prosecution, with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendants:

JOHN FICARRA
Age:  53
Southampton, NY

MARA FICARRA
Age:  54
Southampton, NY

E.D.N.Y. Docket No. 18-CR-679 (JS)

Earlier today, at the federal courthouse in Central Islip, Gershon Barkany was sentenced by United States District Judge Joseph F. Bianco to 56 months’ imprisonment to be followed by three years’ supervised release for orchestrating a Ponzi scheme over four years that caused investors to lose approximately $62 million.  Barkany was also ordered to pay restitution in an amount to be determined later and forfeiture of $62 million.  Barkany pled guilty to wire fraud on June 26, 2013.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence. 

“Today’s sentence is the very real consequence for all the lies, forgeries and fabrications that Barkany used to steal from investors who thought they were putting their money into safe real estate deals,” stated United States Attorney Donoghue.  “This Office will vigorously prosecute those who betray their clients’ trust for their own financial self-interest.”  Mr. Donoghue expressed his appreciation to the Federal Bureau of Investigation, New York Field Office for its outstanding investigative work during the investigation.

Between December 2009 and March 2013, Barkany induced more than 10 victims to invest approximately $62 million by promising to use their money in “risk-free” deals to purchase, and then immediately re-sell at a profit, commercial real estate properties located in New York City and New Jersey.  No such deals existed, and the investors lost their entire investments.  Relying on Barkany’s representations, one victim invested $46.5 million as a down payment on an office building in Manhattan, a hotel in Atlantic City and properties in the Bronx and Queens.  In fact, those real estate deals did not exist, and the investments were lost.

Shortly after Barkany’s arrest on March 28, 2013, two additional victims contacted the FBI and reported that they had been defrauded by Barkany.  Barkany induced those investors to give him approximately $7.5 million by promising to use their money in a “risk-free” deal to purchase, and then immediately re-sell at a profit, an office building in Manhattan.  In furtherance of the scheme, Barkany created fraudulent documents, including a purchase agreement purportedly signed by the seller of the office building and an escrow agreement allegedly signed by a third-party escrow agent.  Once again, the promised deal did not exist, and the investment was lost. 

Barkany diverted some of the funds he received to pay victims whom he had earlier defrauded, and used approximately $7.8 million of investors’ monies for personal expenses and gambling. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Christopher Caffarone and Diane Leonardo are in charge of the prosecution.

The Defendant:

GERSHON BARKANY
Age: 34
Woodmere, New York

E.D.N.Y. Docket No. 13-CR-362 (JFB)

Earlier today, at the federal courthouse in Central Islip, Edward Sypher, Jr., formerly the Chief Financial Officer of Long Island mortgage lender Vanguard Funding, LLC (Vanguard), was sentenced by United States District Judge Sandra J. Feuerstein to 18 months’ imprisonment to be followed by three years’ supervised release.  The amount of restitution will be determined by the Court at a later date.  Sypher was also ordered to pay $22,150.45 in forfeiture.  In February 2018, Sypher pleaded guilty to conspiring to commit wire and bank fraud in connection with the diversion of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing.  

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 Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.

“Edward Sypher, Jr., has been punished for deceiving his banking partners in order to divert millions of dollars to his own benefit and that of other Vanguard executives,” stated United States Attorney Donoghue.  “This Office, working hand-in-hand with our law enforcement partners, will continue to vigorously investigate and prosecute business executives who choose to commit fraud as a means of getting ahead at the expense of the businesses and residents of our district.”

“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” stated FBI Assistant-Director-in-Charge Sweeney.  “Thanks to the diligent work of the FBI and our partners, Sypher will be held accountable for his crimes.”

“DFS is proud to have worked with the U.S. Attorney’s office and other law enforcement partners to bring this defendant to justice,” said DFS Superintendent Vullo.  “We will continue to combat the serious issue of fraud in order to safeguard the industry and protect consumers.”

Vanguard was a 33-branch, mortgage lending institution licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania and Washington.  Between August 2015 and March 2017, Sypher and his co-conspirators at Vanguard engaged in a multi-million dollar fraud scheme by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients.  Instead, Sypher and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through fraudulent loan applications. 

On December 10, 2018, Matthew T. Voss, Vanguard’s former Chief Operating Officer, was sentenced to 24 months’ imprisonment for his role in the scheme.

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 Elizabeth Losey Macchiaverna are in charge of the prosecution.

The Defendant:

EDWARD SYPHER, JR.
Age: 41
Scarsdale, New York

E.D.N.Y. Docket No. 18-CR-028 (SJF)

Earlier today, at the federal courthouse in Central Islip, Elmer Alexander Lopez, a member of the Centrales Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, was sentenced by United States District Judge Joseph F. Bianco to 25 years’ imprisonment.  The sentencing follows Lopez’s guilty plea to racketeering charges relating to his participation in the June 3, 2016 murder of Jose Pena and the July 3, 2016 attempted murder of a suspected rival gang member.  Upon completion of his sentence, Lopez, an illegal alien from El Salvador, 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, Elmer Lopez has been held responsible for the brutal acts of violence he committed on behalf of MS-13 to enforce its vicious rules,” stated United States Attorney Donoghue.  “The defendant’s conviction, and the ongoing prosecutions of dozens of other MS-13 members by our Office working with the FBI’s Long Island Gang Task Force, reflects the ongoing commitment to eliminate this lawless criminal organization.”

“At just 21 years old, Elmer Lopez is already responsible for the vicious murder of a fellow MS-13 member and the attempted murder of a rival. Our communities are safer when criminals like Lopez are behind bars,” stated FBI Assistant Director-in-Charge Sweeney. “As today’s sentence demonstrates, the FBI Long Island Gang Task Force and our law enforcement partners will continue to put pressure on MS-13 until we reach our ultimate goal of eradicating this deadly gang from our community.”

“This sentencing will ensure that yet another violent member of MS-13 will be imprisoned for his part in a vicious murder and an attempted murder,” stated SCPD Commissioner Hart. “This case highlights the malicious nature of MS-13 and the department’s dedication to ridding our communities of their violence. I would like to thank the Eastern District and the Long Island Gang Task Force for their partnership and perseverance in holding gang members accountable for their incomprehensible crimes.”

“The sentencing of defendant Lopez on murder and attempted murder charges speaks volumes regarding the Long Island Gang Task Force, its affiliated law enforcement agencies and its dedicated investigators,” stated NCPD Commissioner Ryder.  “All too often this gang violence spills into our neighborhoods and places our families and communities at risk.  MS-13 and their criminal tactics can never be tolerated as law enforcement is working tirelessly to keep our communities safe and free from their violence.”

Lopez and several MS-13 co-conspirators who have been charged in this district decided to kill Pena, also a member of the MS-13, because he was suspected of violating gang rules by cooperating with law enforcement after his arrest and because he might be homosexual.  On June 3, 2016, after consulting with MS-13 leadership in El Salvador, Lopez and his co-conspirators lured Pena into a car and drove to a secluded wooded area in Brentwood where they attacked him, taking turns stabbing and slashing him with knives until he was dead.  Pena’s body was discovered on October 17, 2016, more than four months after his murder. 

At his guilty plea proceeding, Lopez admitted that approximately one month after murdering Pena, he and other MS-13 members attempted to kill a suspected member of the Goon Squad, rival gang in Brentwood.  On July 3, 2016, a man identified as John Doe #4 in the indictment was playing basketball with others on Lukens Avenue.  Lopez and two MS-13 co-conspirators saw the group and suspected they were members of the Goon Squad.  One of the MS-13 co-conspirators shot at the group, striking John Doe #4 in the shoulder.  Wounded, John Doe #4 received medical treatment and survived.

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, a violent transnational criminal organization.  MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” 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.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the 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, the New York State Police and the 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, Michael T. Keilty, Raymond A. Tierney and Justina L. Geraci are in charge of the prosecution.

The Defendant:

ELMER ALEXANDER LOPEZ (also known as “Smiley”)
Age:  21
Central Islip, New York

E.D.N.Y. Docket No. 16-CR-403 (S-4) (JFB)

Earlier today, at the federal courthouse in Central Islip, Jermaine Jackson was sentenced by United States District Judge Sandra J. Feuerstein to 365 months’ imprisonment, to be followed by five years’ supervised release, for the murder of Edwin Lopez, an employee of a convenience store in Valley Stream, New York.  Jackson pleaded guilty to the charge in December 2017.   

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence. 

“Jackson senselessly murdered a hard-working man who was just trying to support his wife and teenage daughter. While this sentence cannot return Mr. Lopez to his family and community, it will ensure that others will be protected from Jackson for decades to come and it will make other criminals think twice before taking a life,” stated United States Attorney Donoghue.  “It is my hope that today’s sentence brings some measure of closure for the Lopez family.” 

“The actions of Mr. Jackson brought an unknowable grief to the Lopez family that will be felt for years to come,” stated ATF Special Agent-in-Charge Benedict.  “Today’s sentence provides some semblance of closure to a family that never deserved to be touched by this senseless violence. May Mr. Jackson spend every minute of his sentence pondering his grievous actions and the toll they took on an innocent family.  I would like to thank our partners in the NCPD and NYPD that stand shoulder to shoulder with ATF in the fight against violent criminals like Mr. Jackson.  I would also like to thank the United States Attorney’s Office for their work in prosecuting the case.”

“The sentencing today of defendant Jermaine Jackson for murder and robbery is a clear example of how unjust criminal activity will be dealt with by law enforcement,” stated NCPD Commissioner Ryder.  “Although no sentence is ever enough, hopefully this will bring some closure to the Lopez family.  I would also like to credit all of the agencies and members involved during this investigation on a job well done.”

On December 16, 2016, Jackson and a coconspirator entered the Al Mini Market wearing a mask over the lower portion of his face and brandishing a semi-automatic handgun.  Jackson held the store’s employees at gunpoint while the coconspirator attempted to steal money from the cash register.  Lopez, a store employee, grabbed a bottle and resisted the robbery at which point Jackson shot him once.  Jackson then attempted to leave the store but Lopez chased him.  Jackson turned around and shot Lopez several more times, killing him.  Jackson and his coconspirator fled, empty-handed.   

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Christopher Caffarone is in charge of the prosecution.

The Defendant:

JERMAINE JACKSON
Age: 25
Queens Village, New York

E.D.N.Y. Docket No. 17-CR-140 (SJF)

Earlier today, in federal court in Central Islip, Jamal Brown was sentenced by United States District Judge Joseph F. Bianco to 90 months’ imprisonment for distributing and possessing with intent to distribute more than 40 grams of fentanyl between July 2017 and February 2018.  Brown pleaded guilty to the charge in May 2018.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, U.S. Drug Enforcement Administration, New York Division (DEA), announced the sentence.

“Brown preyed on vulnerable addicts to enrich himself, exposing them to significant risk of overdose with fentanyl, a drug that is a leading factor in the opioid crisis plaguing Long Island and the United States,” stated United States Attorney Donoghue.  “To facilitate his illegal drug distribution, Brown even involved his teenage brother. Thanks to the outstanding work of our prosecutors and law enforcement partners, Brown has now been held accountable.” Mr. Donoghue also expressed his grateful appreciation to the Bureau of Alcohol, Tobacco, Firearms and Explosives for its assistance during the investigation and the DEA’s Long Island Heroin Task Force, which is comprised of the Nassau County Police Department, Suffolk County Police Department and New York State Police.

“Drug trafficking is inevitably linked to corruption, crime and addiction,” stated DEA Special Agent-in-Charge Donovan.  “Jamal Brown turned his younger brother into a drug dealer, exposed his newborn child to fentanyl and encouraged drug use by addicts seeking treatment. Today’s sentencing is a result of the hard work and collaboration between the Heroin Enforcement Team, ATF and the U.S. Attorney’s Office EDNY.”

According to court filings, sentencing submissions and facts presented during court proceedings, between July 2017 and February 2018, Brown possessed and sold more than 40 grams of fentanyl, along with quantities of cocaine, which he stored at locations in Bay Shore and Huntington Station, New York.  As part of his drug-trafficking operation, Brown used his 17-year-old brother to sell fentanyl and cocaine for him and to store sale proceeds, which he gave to Brown.  Telephone calls intercepted over a court-authorized wiretap revealed that Brown also relied on an individual – who had told Brown of his struggles with addiction and of his plan to enter a rehabilitation facility – to transport narcotics and pick up drug sale proceeds. 

On February 27, 2018, search warrants executed at Brown’s Long Island drug locations resulted in the recovery of more than 76 grams of fentanyl, more than 150 grams of cocaine, a .32 caliber Smith and Wesson handgun, ammunition and other evidence of drug trafficking.  At the time of the execution of the search warrants, Brown’s newborn child was inside the Huntington Station location where approximately 10 grams of fentanyl were recovered. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Bradley T. King is in charge of the prosecution.

The Defendant:

JAMAL BROWN
Age:  26
Huntington Station, New York
E.D.N.Y. Docket No. 18-CR-182 (JFB)

Earlier today, in federal court in Central Islip, Anthony Vassallo, a former broker-dealer who was a manager at Plainview-based Elite Stock Research (ESR) and who subsequently worked at Melville-based My Street Research and related companies (the “boiler room”), pleaded guilty to conspiracy to commit securities fraud in connection with the sale of the stock of two publicly traded companies, CES Synergies, Inc. (CESX), and First Choice Health Care Solutions, Inc. (FCHS).  When sentenced, Vassallo faces a maximum of 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 guilty plea.  Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation.

As alleged in court papers, between May 2013 and June 2016, Vassallo and his co-defendants engaged in a scheme to defraud investors and potential investors in CESX  and FCHS by artificially controlling the price and volume of their traded shares by generating price movements and by material misrepresentations and omissions in communications with investors.  Vassallo and his co-defendants also fraudulently concealed their control of shares of CESX and FCHS that were held in brokerage accounts in the names of other individuals or entities.

Vassallo is among 16 defendants who were charged in July 2017 in connection with a $147 million illegal stock manipulation scheme, and he is the 11th defendant to plead guilty.  The defendants who have pleaded guilty are awaiting sentencing.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Alicyn L. Cooley, Patrick T. Hein and Whitman G.S. Knapp are in charge of the prosecution.  Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Section is handling the forfeiture matters. 

The Defendant:

ANTHONY VASSALLO
Age:  55
Farmingdale, New York

E.D.N.Y. Docket No. 17-CR-372 (S-1)

The Defendants Who Previously Pleaded Guilty:

RONALD HARDY
Age:  42
Port Jefferson, New York

MCARTHUR JEAN, also known as “John McArthur”
Age:  34
Dix Hills, New York

ERIK MATZ
Age:  44
Mt. Sinai, New York

BRIAN HEEPKE, also known as “Brian Targis”
Age:  36
Farmingdale, New York

DENNIS VERDEROSA
Age:  67
Coram, New York

EMIN L. COHEN, also known as “Ian Grant”
Age:  33
Coram, New York

PAUL EWER
Age:  36
Massapequa, New York

ASHLEY ANTOS
Age:  26
Central Islip, New York

SERGIO RAMIREZ
Age:  44
East Meadow, New York

ROBERT GILBERT
Age:  51
Cold Spring Harbor, New York

E.D.N.Y. Docket No. 17-CR-372

Carlos Andres Gallo Rodriguez was arraigned today in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione on an indictment charging him with conspiring to import and distribute cocaine into the United States. The defendant was arrested in Colombia on a provisional arrest request from the United States and subsequently extradited from Colombia to the United States on December 13, 2018.  Magistrate Judge Tiscione ordered Gallo Rodriguez detained pending trial.

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 extradition and charges.

 “As alleged, the defendant conspired with others to import a massive amount of cocaine that would be distributed in the United States, endangering countless lives,” stated United States Attorney Donoghue.  “This Office is committed to working closely with our partners here and abroad to dismantle drug networks and bring traffickers to justice.”  Mr. Donoghue extended his grateful appreciation to the DEA offices on Long Island and in Mexico City, the United States Department of State, and the Homeland Security Investigations (HSI) Office in Tucson, Arizona.  Mr. Donoghue also expressed his appreciation to the United States Marshals Service (USMS), the DEA Cartagena Country Office, the Colombian National Police and the Government of Colombia.

 “Drug traffickers’ ingenuity in smuggling methods never ceases to amaze me,” stated DEA Special Agent-in-Charge Donovan.  “DEA has seen drugs concealed in hundreds of ways, for example: furniture, machinery, produce, wheelchairs, puppies and in this case rubber-encased steel bumpers.  This arrest and extradition is a message to drug suppliers overseas that law enforcement is committed to bringing to justice those responsible for flooding our streets with illegal drugs.” 

According to the extradition affidavit, Gallo Rodriguez organized the shipment of   approximately two tons of cocaine from Colombia to Mexico, with its ultimate distribution to be in the United States.  In December 2016, law enforcement authorities seized the cocaine at a warehouse owned by Gallo Rodriguez in Sibate, Colombia.  The cocaine was hidden inside rubber-encased steel bumpers, which are commonly used on shipping vessels.  Gallo Rodriguez oversaw the importation of rubber from Mexico and the preparation of the steel bumpers containing the cocaine.  He also documented the shipment to appear to be a legitimate commercial import-export transaction.      

 The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, HSI, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, USMS, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.

The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty.  If convicted of the crimes charged, the defendant faces a mandatory minimum sentence of 10 years’ imprisonment and up to life imprisonment.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  The Justice Department’s Office of International Affairs handled the extradition in this matter.  Assistant United States Attorneys Soumya Dayananda and Erin Reid are in charge of the prosecution.

The Defendant:

CARLOS ANDRES GALLO RODRIGUEZ
Age:  39
Colombia

E.D.N.Y. Docket No. 17-CR-213 (MJB)

Earlier today, in federal court in Central Islip, Frank “Frankie Boy” Salerno, a soldier in the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”), was sentenced to 60 months’ imprisonment for racketeering conspiracy.  Previously, on December 6, 2018, John “Johnny Boy” Ambrosio, an acting captain in the Gambino organized crime family of La Cosa Nostra (the “Gambino family”), and Anthony Saladino, an associate of the Gambino family, were sentenced to 51 and 63 months’ imprisonment, respectively, for racketeering conspiracy.  Ambrosio, Saladino and Salerno were the last of seven defendants to be sentenced on a superseding indictment charging Gambino and Bonanno members and associates with racketeering conspiracy, including predicate acts of drug trafficking, loan sharking, gambling and obstruction of justice.  The sentencing proceedings were held before United States District Judge Sandra J. Feuerstein.   

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); Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI); and Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), announced the sentencings.

“With these sentences, each of the seven defendants has now been punished for continuing organized crime’s corrosive influence on Long Island,” stated United States Attorney Donoghue.  “There should be no doubt that putting a stop to the criminal activities of La Cosa Nostra continues to be a priority of this Office and our law enforcement partners.”  Mr. Donoghue expressed his grateful appreciation to the New York City Police Department for its assistance in the investigation. 

“Organized crime continues to plague our communities with violence, coercion, and intimidation,” stated FBI Assistant Director-in-Charge Sweeney.  “The mobsters grow richer while their victims live in fear as they struggle to make payments while dealing with daily threats. Today’s sentences demonstrate that the shirt button of a ‘made man’ is no match for a badge – the FBI/NYPD Joint Organized Crime Task Force is committed to investigating and rooting out organized crime wherever it occurs, and the perpetrators will be brought to justice.”

“These individuals were caught up in an elaborate racketeering conspiracy; acting as loan sharks, operating underground gambling rings and trafficking narcotics,”  stated HSI Special Agent-in-Charge Melendez.  “Today’s sentencing should serve as notice to those pursue this criminal lifestyle, that law enforcement is diligently investigating these cases and you will be caught and serve time for your actions.”

“This case is yet another example of the dedicated collaboration among law enforcement agencies in the region to send a message that law enforcement is working together to halt the operations of La Cosa Nostra and their illegal activities,” stated SCPD Commissioner Hart. “I commend the Eastern District of New York for ensuring these individuals pay for their crimes.”

Between January 2014 and December 2017, Ambrosio and his co-defendants engaged in a racketeering conspiracy.  Salerno routinely collected payments from extortionate loans and gambling-related debts, often at the direction of Ambrosio.  In one intercepted conversation, Saladino and Thomas Anzalone discussed unpaid gambling debts, during which Saladino said he would give the debtor “something to be scared about.”  On another occasion, Saladino admitted to an undercover agent that he and Salerno were involved in organized crime, stating that Salerno “has got that thing (pointing to his shirt button),” indicating membership in organized crime.  In another intercepted call, Saladino recounted for Ambrosio a collection effort in which he threatened an individual, saying “when I get my hands around your your f-----g neck, everything is going to pop out of your ears.”  Ambrosio also was involved with a variety of gambling operations, including illegal poker games, electronic gaming machines and internet sports betting, with Salerno, Saladino, Alessandro Damelio and Joseph Durso being responsible for many of the day-to-day operations.  Anzalone, Damelio, Durso, Saladino and Salerno distributed a variety of narcotics, including cocaine, marijuana and Xanax. When Ambrosio and his co-conspirators were arrested on December 12, 2017, law enforcement agents executed search warrants at various locations, including a storage facility in Nassau County, and recovered gambling and loan sharking records, electronic gaming machines, narcotics and drug paraphernalia and numerous firearms, including two AR-15 rifles, a .38 caliber revolver and a sawed-off shotgun.

As part of his sentence, Ambrosio will forfeit $100,000, including $66,116 in cash that was seized from his residence in Huntington, New York.

Previously, co-defendant  Anzalone was sentenced on July 24, 2018 to 34 months’ imprisonment, Anthony Rodolico was sentenced on November 5, 2018 to one year in prison and Damelio and Durso were sentenced on July 11, 2018 and November 5, 2018 respectively to two months’ imprisonment. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Artie McConnell is in charge of the prosecution.

Defendant:

FRANK SALERNO (also known as “Frankie Boy”)
Age: 43
Queens, New York

Previously Sentenced Defendants:

JOHN AMBROSIO (also known as “Johnny Boy”)
Age: 74
Huntington, New York

ANTHONY SALADINO
Age: 67
Glen Cove, New York

THOMAS ANZALONE
Age: 44
Queens, New York

ALESSANDRO DAMELIO (also known as “Sandro”)
Age: 49
Queens, New York

JOSEPH DURSO
Age: 26
Glen Cove, New York

ANTHONY RODOLICO
Age: 46
Huntington, New York

E.D.N.Y. Docket No. 17-CR-522 (S-1) (SJF)

An indictment was unsealed today in federal court in Brooklyn charging Joseph Harris with sex trafficking, brandishing firearms in furtherance of sex trafficking, promoting prostitution and being a felon in possession of a firearm.  The defendant’s arraignment is scheduled for this afternoon before United States Magistrate Judge Steven L. Tiscione.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neil, Commissioner, New York City Police Department (NYPD), announced the charges.

“As alleged, Joseph Harris engaged in sex trafficking of adult and minor victims, forcing them to prostitute themselves to line his pockets,” stated United States Attorney Donoghue.  “This Office will continue to work diligently with the FBI and our local law enforcement partners to prosecute those who force their victims into sexual slavery.”  Mr. Donoghue expressed his grateful appreciation to the Kings County District Attorney’s Office for their assistance in the case.

“As alleged, Harris’s vile actions dehumanized his victims, stripping them of their innocence and forcing them into a life of brutality and neglect – and putting them at risk of further harm from sexual exploitation and narcotics addiction,” stated FBI Assistant Director-in-Charge Sweeney.  “Today’s indictment demonstrates the FBI’s commitment to working with our law enforcement partners to ensure justice for our most vulnerable victims, and to pursue and apprehend those who abuse and exploit children for their own personal gain.”

“Today’s charges further affirm the NYPD’s unwavering commitment to protecting the survivors of sex trafficking and gun violence,” stated NYPD Commissioner O’Neill.  “These crimes – especially those involving minors – are among the most heinous in our society.  Our job is to ensure that anyone who would seek to profit through the abuse and exploitation of another human being be brought to justice swiftly and successfully.  To that end, I thank and commend the U.S. Attorney’s Office for the Eastern District, the FBI and the Brooklyn District Attorney’s Office for contributing to this critical case.  Together, we will continue to make the safest large city in the nation even safer.”

As alleged in the indictment and court documents, from July 2017 until his arrest in May 2018, Harris used violence and threats to force women and young girls into prostitution, promoting and managing his business over the Internet and on social media.  On May 5, 2018, NYPD officers responded to 911 calls reporting that “girls” were being held against their will by a male later identified as the defendant at an apartment building on St. Marks Avenue in Brooklyn.  At the apartment, officers found two adult women and a 16-year-old girl in a basement apartment.  Subsequent investigation revealed that Harris had been sex-trafficking numerous victims, including the three females in the apartment basement and another minor female, age 14.  Harris regularly carried a firearm and demanded that his victims give him all the money they made.  Harris also engaged in sexual intercourse with his victims, including the minors, and provided them with narcotics.  A handgun was recovered from the defendant’s residence shortly before his arrest.   

If convicted, Harris faces a mandatory minimum term of 15 years’ imprisonment and a maximum of life on the sex trafficking charge, and a mandatory consecutive term of seven years’ imprisonment on the charge of brandishing a firearm during a crime of violence. 

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 Civil Rights Unit, in collaboration with the Brooklyn Human Trafficking Task Force and Kings County District Attorney’s Office.  Assistant United States Attorney Erin Reid and Assistant District Attorney Sherman Jones from the Kings County District Attorney’s Office are in charge of the prosecution.

The Defendant:

JOSEPH HARRIS (also known as “Luis Santana” and “Joey Moscato”)
Age: 37
Brooklyn, New York

E.D.N.Y. Docket No. 18-CR-616 (LDH)

Following six days of trial, a federal jury in Brooklyn returned a guilty verdict today against Allison Aytes on both counts of an indictment charging her with theft of government property in the possession of the Federal Deposit Insurance Corporation (FDIC).  When sentenced by United States District Judge Sterling Johnson, Jr., Aytes faces up to 20 years’ imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Jay N. Lerner, Inspector General, FDIC, announced the verdict.

“Aytes embezzled sensitive and confidential information about banks that was the property of the United States government shortly before she resigned from the FDIC to seek job opportunities at those very same banks,” stated United States Attorney Donoghue.  “With today’s verdict, Aytes has been held accountable for abusing her position of trust for personal gain.”  

“This case makes clear that those who compromise sensitive FDIC information will be held accountable for their actions,” stated FDIC Inspector General Lerner.  “We are committed to investigating such breaches of public trust, and to protecting the integrity of confidential data maintained by the agency.”

At the time of her resignation in September 2015, Aytes was a senior employee in the FDIC’s Office of Complex Financial Institutions in New York.  The Office was created after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee and conduct, if necessary, an orderly bankruptcy of the world’s largest banks and financial institutions.  Each of these banks and financial institutions is required to file resolution plans, referred to as “living wills,” with the FDIC.  The plans contain confidential information about the bank, including its assets, business operations, data center locations, critical vendors, agreements with other banks and potential weaknesses or other deficiencies that pose risk during a time of financial crisis.

In August 2015, Aytes used her office computer to review listings for and apply for jobs with financial institutions that filed living wills with the FDIC.  On August 27, 2015, one day after being contacted about a possible position at one of the banks, Aytes logged on to a secure FDIC database and printed living will information for that bank.  On September 16, 2015, Aytes resigned her position at the FDIC.  A review of FDIC Data Loss Prevention software revealed that on her last day of work, Aytes copied numerous electronic files from the FDIC network to external USB drives, including living wills for U.S. banks where Aytes had been seeking employment.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney James P. McDonald is in charge of the prosecution.

The Defendant:

ALLISON AYTES
Age: 41 
Brooklyn, New York

E.D.N.Y. Docket No. 18-CR-132 (SJ)

Earlier today, in federal court in Central Islip, Steven Pagartanis pleaded guilty before United States District Judge Joseph F. Bianco to conspiracy to commit mail and wire fraud for orchestrating a Ponzi scheme over the course of 18 years.  

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.

“Pagartanis perpetrated his fraud scheme against elderly investors who could least afford to lose their life savings,” stated United States Attorney Donoghue.  “Protecting older Americans from financial predators like the defendant is a priority of the Department of Justice.”

As admitted at his guilty plea and as detailed in court documents, from January 2000 to March 2018, Pagartanis, a formerly licensed financial advisor and affiliate of a registered broker-dealer, solicited elderly victims to invest in real estate-related investments, including those affiliated with publicly traded entities, a Canadian company and an international hotel conglomerate.  Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually.  At Pagartanis’s direction, the victims wrote checks payable to an entity secretly controlled by Pagartanis.  Pagartanis utilized a network of bank accounts to launder the stolen funds, which he used to pay personal expenses, buy luxury items and make the guaranteed “interest” or “dividend” payments to other victims.  Pagartanis created fictitious account statements reflecting ownership interests in the purported investments to induce investment and conceal the scheme.  In all, the victims invested over $13 million and sustained actual losses of over $9 million.  Many lost substantial portions of their life savings as a result of the scheme.

When sentenced, Pagartanis faces up to 20 years’ imprisonment.  The SEC has filed a civil case against Pagartanis, which was stayed pending resolution of the criminal case. 

The government’s criminal case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Artie McConnell is in charge of the prosecution. 

The Defendant:

STEVEN PAGARTANIS
Age:  58
East Setauket, New York

E.D.N.Y. Docket No. 18-CR-374 (DRH)

Earlier today, at the federal courthouse in Central Islip, Matthew T. Voss, formerly the Chief Operating Officer of Long Island mortgage lender Vanguard Funding, LLC (Vanguard), was sentenced by United States District Judge Sandra J. Feuerstein to 24 months’ imprisonment to be followed by three years’ supervised release.  The amount of restitution will be ordered by the Court at a later date.  In February 2018, Voss pleaded guilty to conspiring to commit wire and bank fraud in connection with the diversion of more than $8.9 million of warehouse loans that Vanguard had fraudulently obtained purportedly to fund home mortgages and mortgage refinancing.  

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 Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.

“With today’s sentence, Matthew Voss has been held accountable for using his extensive knowledge of the mortgage industry to deceive banks that trusted and relied upon him as a business partner and divert money for his personal use,” stated United States Attorney Donoghue.  “This Office, together with our law enforcement partners, will vigorously investigate and prosecute those who commit fraud to advance their own financial interests at the expense of businesses and residents of our community.”

“A compromised banking system threatens economic stability and the safety of the mortgage industry, which puts communities and the American institution of homeownership at risk,” stated FBI Assistant-Director-in-Charge Sweeney.  “Thanks to the dedicated work of our law enforcement partners, today’s sentence proves that those who use their expertise to deceive others for their own financial gain will be held accountable to the fullest extent of the law.”

“As New York’s financial services regulator, DFS is proud to have worked with the U.S. Attorney’s Office and other law enforcement partners to hold this defendant accountable for his actions,” stated DFS Superintendent Vullo.  “DFS will continue to combat fraud and bring criminals to justice in order to safeguard the industry and protect consumers.”

Between August 2015 and March 2017, Voss and his co-conspirators at Vanguard engaged in a scheme whereby they obtained more than $8.9 million in short-term loans, referred to as warehouse loans, by falsely representing that the loan proceeds would fund specific mortgages, or refinance specific mortgages, for Vanguard clients.  Instead, Voss and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through false loan applications. 

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 Elizabeth Losey Macchiaverna are in charge of the prosecution.

The Defendant:

MATTHEW T. VOSS
Age: 43
Northport, New York

E.D.N.Y. Docket No. 18-CR-027 (SJF)

 

Following eight days of trial, a federal jury in Brooklyn today returned guilty verdicts against Tammeco Cargill and his father, Winston Cargill, convicting them of racketeering and racketeering conspiracy, including predicate acts of distribution and possession of marijuana and passport fraud.  When sentenced by United States District Judge Raymond J. Dearie, Tammeco Cargill and Winston Cargill each face up to 20 years’ imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray P. 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 verdicts.

“Nineties Crew members Tammeco Cargill and his father Winston Cargill have been held to account for the drug crimes inflicted on their neighborhood,” stated United States Attorney Donoghue.  “I commend our prosecutors, the DEA Special Agents and the NYPD detectives for their outstanding work in this case.”

“This trial demonstrated the scope of the Cargills’ drug operation and this conviction is a testament to the diligent work by U.S. Attorney’s Office EDNY and the DEA’s New York Division, Group D-22,”  stated DEA Special Agent-in-Charge Donovan.

Winston Cargill and Tammeco Cargill were long-standing members of the Nineties Crew, a Brooklyn-based street gang that between January 2003 and December 2014 operated as a criminal enterprise in the Flatbush and Canarsie neighborhoods of Brooklyn.  The gang engaged in marijuana trafficking, earning hundreds of thousands of dollars, operating numerous stash houses and using firearms.  Winston Cargill and Tammeco Cargill also fraudulently procured United States passports in order to travel back and forth from Jamaica as part of their criminal scheme. 

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 York

WINSTON CARGILL (also known as “Pops”)
Age:  56
Brooklyn, New York

E.D.N.Y. Docket No. 17-CR-330 (RJD)

 

A criminal complaint was filed today in federal court in Brooklyn charging Ronell Watson with attempting to murder a Federal Bureau of Investigation (FBI) Special Agent and with using, carrying and discharging a firearm during and in relation to a crime of violence.  A separate criminal complaint was also filed today charging Molissa Gangapersad with making false statements to the FBI.  At their initial appearances this afternoon before United States Magistrate Judge Steven L. Tiscione, Watson was ordered detained and Gangapersad was released on a $500,000 bond.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, New York Field Office (FBI), announced the charges.

“Watson showed an utter disregard for human life when he fired multiple shots without provocation at an on-duty FBI Special Agent,” stated United States Attorney Donoghue.  “Despite sustaining a serious gunshot wound, the agent courageously returned fire, hitting Watson, which ultimately led to the defendant’s capture when he sought medical treatment.  Gangapersad will be prosecuted for lying to federal agents after she witnessed her boyfriend’s cold-blooded attack.  The shooting on Saturday should serve as a reminder to all about the danger members of law enforcement face in the course of performing their duties and the debt of gratitude they are owed for putting their lives on the line to protect the community from violent criminals.”  Mr. Donoghue expressed his grateful appreciation to the FBI and the New York City Police Department for its assistance during the investigation and thanked the skilled medical professionals who treated the agent.

“The unprovoked assault of a law enforcement officer is a grievous crime that threatens the safety and security of our communities.  As alleged, Watson demonstrated callous disregard for life when he targeted and then deliberately opened fire on a fellow citizen.  In this instance, that citizen was an FBI Special Agent who fought back.  Today’s charges demonstrate that the FBI and our partners will identify and apprehend anyone and everyone who participated in this violent attack – whether you are the person who pulled the trigger or helped cover up after the fact.  We will pursue every possible investigative lead and legal charge to ensure justice is served,” stated FBI Assistant Director-in-Charge Sweeney.  “I also wanted to personally thank our fellow citizens who called 911 in order to get aid dispatched for our agent, and we are very appreciative of the talented medical team who worked on him.  The FBI New York office is tremendously grateful for the superb NYPD response out in Brooklyn, where our agent was treated like one of their own, and for the swift and decisive action by EDNY to bring charges in this case.  Thank you for your professionalism and partnership.”    

As alleged in the complaints and other court documents, on December 8, 2018, an FBI Special Agent was on-duty and parked in an unmarked car on Canarsie Road, a one way street, in Brooklyn.  Watson, a member of the Crips street gang, drove his vehicle the wrong way on Canarsie Road and partially blocked the agent’s car.  Watson approached the driver side door of the agent’s car with one hand inside the front pocket of his hooded sweatshirt.  As the agent maneuvered his car around Watson’s vehicle, Watson pulled out a gun and began firing at the agent as he drove away.  The agent was hit in the torso by one bullet.  The agent then exited his car, drew his firearm and fired at Watson striking him in the hand.  Watson fled the scene in his car and drove to a nearby auto body shop where he left the vehicle.  Watson then sought treatment for his wounds at Kingsbrook Jewish Medical Center where he falsely claimed that he had been a bystander victim of a gunfight between other individuals.  Law enforcement officers at the hospital then overheard the defendant telephone a female, believed to be Gangapersad, and tell her to go to the house and “get the jewelry and get rid of it.” 

Law enforcement officers responded to Watson’s and Gangapersad’s shared residence.  Gangapersad agreed to a voluntary interview and falsely told FBI agents that she had not seen the shooting.  After being confronted with surveillance video showing that she was on her front porch during the shooting and in a position to observe it, Gangapersad admitted that she had witnessed the incident.  Members of law enforcement searched the residence and found approximately 1.5 pounds of marijuana, $15,000 in cash and a large amount of jewelry in the defendants’ bedroom.  Both defendants were arrested that evening.

The charges in the complaints are allegations, and the defendants are presumed innocent unless and until proven guilty.

 If convicted of using and carrying a firearm during and in relation to a crime of violence, Watson faces a mandatory minimum of 10 years’ imprisonment and a maximum of life imprisonment.  If convicted of lying to the FBI, Gangapersad faces up to five years’ imprisonment.

Assistant United States Attorney Francisco J. Navarro is in charge of the prosecution. 

The Defendants: 

Ronell Watson
Age:  31
Brooklyn, New York

E.D.N.Y. Docket No. 18-MJ-1191

Molissa Gangapersad
Age:  30
Brooklyn, New York

E.D.N.Y. Docket No. 18-MJ-1192

A complaint has been unsealed in federal court in Brooklyn against Billy Harmon Dunn, Jr., for transporting a 15-year-old girl from Brooklyn, New York to Kosse, Texas, for the purpose of engaging in illegal sexual activity with her.  Dunn is also charged with producing child pornography.  Dunn was arrested Tuesday in Texas and will make his initial appearance  today at the federal courthouse in Waco.  The government will seek Dunn’s removal to the Eastern District of New York for prosecution.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

As alleged in the complaint and other court filings, beginning in August 2018, Dunn began an online relationship with a 15-year-old girl (the “victim”) who lived in Brooklyn.  Dunn and the victim communicated regularly, and much of the discussion concerned Dunn’s desire to engage in sex with her.  Dunn also persuaded the victim to take sexually explicit photographs of herself and send them to him.  Initially, Dunn discussed purchasing a bus ticket for the victim to travel to Texas, but abandoned that plan upon learning she was too young to travel unaccompanied without permission from her parents, according to bus company rules.  Dunn then rented a car, drove to Brooklyn and transported the victim back to a trailer park in Kosse, Texas.  The victim’s mother notified law enforcement that her daughter was missing, and officers located the victim at the trailer park.

“We stand firm in our commitment to stop online predators from exploiting children,” stated United States Attorney Donoghue.  “I commend the dedicated members of law enforcement who quickly collaborated across the country to locate the victim and apprehend the defendant.”  Mr. Donoghue expressed his appreciation to the Kings County District Attorney’s Office, the New York City Police Department, the Brooklyn Human Trafficking Task Force, the Limestone County (Texas) Sheriff’s Office, the Kosse (Texas) Police Department, the Limestone County District Attorney’s Office and the National Human Trafficking Resource Center for their assistance in the investigation of this case.

“Child predators take advantage of children’s youth and inexperience for their own gratification. As alleged, Dunn preyed on a young girl, enticing her into an online ‘relationship’ with him all the while knowing that she was underage. He then allegedly drove more than 1600 miles to pick up the victim here in New York and transport her to his home in Texas,” stated FBI Assistant Director-in-Charge Sweeney. “Thanks to the quick work of our law enforcement partners across the country, the victim was recovered and returned to her family. We take crimes like those alleged in this complaint very seriously, and we will work tirelessly to investigate and bring to justice those who would harm our children.”

The charges are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of transporting a minor interstate to engage in illegal sexual activity, the defendant faces a mandatory minimum of 10 years in prison and a maximum of life in prison.  If convicted of producing child pornography, he faces a mandatory minimum of 15 years in prison and a maximum of 30 years in prison.

The government’s case is being handled by the Office’s Civil Rights Section, in collaboration with the Brooklyn Human Trafficking Task Force and Kings County District Attorney’s Office.  Assistant United States Attorney Francisco J. Navarro and Assistant District Attorney Vanessa McEvoy from the Kings County District Attorney’s Office are in charge of the prosecution.

The Defendant:

BILLY HARMON DUNN, JR.
Age:  48
Kosse, Texas

E.D.N.Y. Docket No. 18-MJ-1133

Earlier today, in federal court in Brooklyn, Ray Lazier Lengend was sentenced by United States District Judge LaShann DeArcy Hall to 18 years and 10 months in prison, to be followed by three years’ supervised release, for perpetrating hate crimes in Queens, New York.  Lengend pleaded guilty in December 2017 to two counts of hate crimes through the use of fire and explosives.

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.

 “Lengend’s firebombing of houses of worship out of hatred of certain religions and races is the antithesis of what this country is all about,” stated United States Attorney Donoghue.  “Such hate-filled crimes, through which he spread fear and endangered the lives of first responders and others, will never be tolerated by the Justice Department or the American people.  I commend the law enforcement officers who quickly apprehended the defendant and restored a sense of security to our community.” 

“In 2012, Lengend, motivated by hate, fire-bombed five buildings in Queens with the intent to kill or maim innocent people simply because of their religion or national origins,” stated FBI Assistant Director-in-Charge Sweeney. “Today, he learned the consequences of his despicable actions.  His sentence should serve as a reminder the FBI will never waver in its commitment to protecting and preserving the rights of all Americans, including the free exercise of one’s chosen religion.”

On January 1, 2012, the defendant went on a firebombing spree, attacking five buildings in Queens with Molotov cocktails, including a Shiite mosque, the Imam Al-Khoei Foundation and a private residence that housed a Hindu temple.  He was arrested the next day.  Following the defendant’s arrest, he stated that he hated Arabs, Muslims and Middle Easterners.  With respect to the mosque bombing, the defendant stated that he had intended to “take out as many Arabs as possible.”  No one was injured by the defendant’s attacks.

Lengend was prosecuted in a parallel proceeding in State Supreme Court in Queens, and pleaded guilty to attempted arson as a hate crime and was sentenced to 20 years’ imprisonment in October 2017.  Today’s sentence will run concurrent with the state sentence.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorneys Taryn A. Merkl and Nomi Berenson are in charge of the prosecution. 

The Defendant:

RAY LAZIER LENGEND
Age:  46
Queens, New York

E.D.N.Y. Docket No. 12-CR-188  (LDH)

Earlier today, at the federal courthouse in Brooklyn, Anthony Grado, a member of the Luchese organized crime family, and Lawrence Tranese, an associate of the Colombo organized crime family, were sentenced by United States District Judge Carol B. Amon to 12 years’ and 40 months’ imprisonment respectively for conspiring to distribute oxycodone that they obtained through fraudulent prescriptions. The Court also ordered Grado to pay $70,000 in forfeiture and Tranese $12,000 in forfeiture.

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 sentence.

“Today’s sentence punishes the defendants for ruthlessly endangering our community through their organized crime-backed distribution of highly-addictive opioid drugs,” stated United States Attorney Donoghue.  “This Office, working together with our law enforcement partners, will continue our relentless efforts against those responsible for the opioid epidemic.” Mr. Donoghue thanked the Richmond County District Attorney’s Office for its assistance during this investigation.

“Opioid and prescription drug abuse affects communities and families in New York and across the country. Grado and Tranese’s conspiracy to distribute oxycodone contributed to this nationwide crisis, and even worse, they threatened a doctor with violence in order to coerce him into providing fraudulent prescriptions,” stated FBI Assistant Director-in-Charge Sweeney.  “Today’s sentence should stand as a warning to organized crime families, their associates, and anyone else who would commit similar acts in order to further the scourge of opioid addiction for their own benefit: you will be found out and brought to justice.”

 “Dismantling criminal enterprises, in all their forms, will always be a priority for the NYPD and our law-enforcement partners at the Eastern District and the FBI,” stated NYPD Commissioner O’Neill. “Collectively, we have a very long reach and we will not tire in our mission of fighting crime and keeping people safe – which includes removing from our streets anyone who adds to our nation’s opioid crisis by dealing illegal narcotics.”

Grado and Tranese, together with their coconspirators, gave a Brooklyn-based doctor the names of people for whom the doctor should write prescriptions, and the doctor complied, usually without conducting any physical examinations.  The defendants then filled the prescriptions and sold the pills.  Alternatively, the defendants and their coconspirators used violence and threats of violence to force the doctor to write the prescriptions, or seized the doctor’s prescription pad and Grado completed the prescription.  In one recorded conversation, Grado told the doctor that he would make the doctor write “a thousand scripts a day and [expletive] feed you to the [expletive] lions” if the doctor wrote prescriptions without Grado’s approval.  In the same conversation, Grado told the doctor that if newly ordered prescription pads “go in anybody’s hands” besides Grado’s, “I’ll put a bullet right in your head.”  During the course of the conspiracy, one of Grado’s associates stabbed the doctor in a dispute over the doctor’s prescription pads.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Mathew S. Miller and Matthew J. Jacobs are in charge of the prosecution.

The Defendants:

ANTHONY GRADO
Age:  54
Monroe Township, New Jersey

LAWRENCE TRANESE (also known as “Fat Larry”)
Age:  55
Brooklyn, New York

E.D.N.Y. Docket No. 17-559 (CBA)

Earlier today, a complaint was unsealed in federal court in Brooklyn charging seven defendants for their participation in an opioid distribution ring operating in the Williamsburg section of Brooklyn, the Bronx, and Hawaii.  Five defendants were arrested in Brooklyn, the Bronx, Queens and Manhattan this morning, and will make their initial appearances this afternoon before United States Magistrate Judge Robert M. Levy.  A sixth defendant was arrested in Hawaii and will appear later today at the federal courthouse in Honolulu.

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, the defendants distributed opioids day after day in our community, feeding addiction without regard for the potentially lethal consequences of their actions,” stated United States Attorney Donoghue.  “With today’s arrests, the drug ring has been dismantled, and the defendants will now be held to account in a court of law.” 

“The epidemic of opioid abuse is a public health crisis.  Those who choose to profit from trafficking in these potent narcotics show a flagrant disregard not just for the law, but for the safety of their communities,” said FBI Assistant Director-in-Charge Sweeney.  “As alleged, these defendants enabled the cycle of addiction with their narcotics distribution enterprise spanning the country.  The FBI will continue to work with our federal, state and local partners to get drug traffickers and their dangerous products off the streets.”  

As detailed in the complaint, since the autumn of 2017, FBI agents and NYPD detectives have been investigating the defendants’ drug trafficking ring.  The investigation included physical surveillance, pen registers and communications intercepted pursuant to judicially authorized wiretaps.  The pattern of the intercepted communications and the pen register data established that the defendants were in frequent contact nearly 2,000 times during one six-month period, and that the those contacts were primarily narcotics-related.  During this time, the defendants regularly transported, repackaged and distributed heroin on the streets of New York City.  The ring was also responsible for shipping at least $7,000 worth of heroin to be sold in Hawaii over the course of several months.  In total, the defendants distributed well over a kilogram of heroin and bragged about its potency, referring to it as “fever” and “fire.”  

Earlier this morning, law enforcement executed search warrants at five of the defendants’ residences and, in total, recovered approximately 150 grams of heroin including at least 350 glassines packaged for sale on the streets; more than five pounds of marijuana; more than $20,000 in U.S. currency, more than 150 pairs of luxury sneakers valued at tens of thousands of dollars; and drug paraphernalia including a kilogram press, multiple scales, hundreds of empty glassines and stamps used to mark the glassines for sale.  Law enforcement also recovered a stolen loaded .40 caliber Glock firearm and more than 80 rounds of additional ammunition from defendant Robert Martinez.

The charge announced today is an allegation, and the defendants are presumed innocent unless and until proven guilty.  If convicted, defendants Martinez, Victor Cruz, Jeffrey Caamano, Jason Reyes and Jason Garcia face mandatory minimum sentences of 10 years’ imprisonment and up to life imprisonment.  Alanna Kelly faces a mandatory minimum of five years and up to 40 years’ imprisonment.  

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Jennifer M. Sasso is in charge of the prosecution.   

The Defendants:  

VICTOR CRUZ (also known as “Vic” and “VI”)
Age: 29
Brooklyn, New York

ROBERT MARTINEZ (also known as “Rob”)
Age: 34
Maspeth, New York

JEFFREY CAAMANO (also known as “Jefe”)
Age: 30
Bronx, New York

JASON REYES
Age: 34
Brooklyn, New York

JASON GARCIA (also known as “Jay”)
Age: 27
Brooklyn, New York

ALANNA KELLY
Age: 31
The Big Island, Hawaii

E.D.N.Y. Docket No. 18-MJ-1157  

Earlier today, in federal court in Brooklyn, Raul Granados-Rendon, a member of the Granados family sex trafficking ring based in Tenancingo, Tlaxcala, Mexico, was sentenced by United States District Judge Kiyo A. Matsumoto to eight years’ imprisonment following his guilty plea in December 2017 to trafficking young Mexican women into the United States and forcing them into prostitution.  As part of his sentence, the defendant was ordered to pay $1,305,393.80 in restitution to Jane Doe.    

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, announced the sentence.

“With today’s sentence, Raul Granados-Rendon is the latest member of his family’s Mexican sex trafficking operation to be held responsible for preying upon countless women, and profiting from their exploitation and dehumanization,” stated United States Attorney Donoghue.  “This prosecution and sentence mark another important outcome in a nearly decade-long commitment by this Office and our law enforcement partners to obtain justice for the victims.”   

“The victims of this man were forced into prostitution after being lured to the U.S. with false promises then threatened, beaten and sexually assaulted,” stated HSI Special Agent-in-Charge Melendez.  “This man was on our agency’s top 10 fugitive list before being extradited and taken into custody early last year.  It has been a long road, but now he will face the consequences of his reprehensible actions.”

From October 1998 to December 2011, Raul Granados-Rendon participated in a sex trafficking conspiracy with other members of the Granados family, to smuggle numerous young women from Mexico to New York and force them to work as prostitutes in New York City and elsewhere.  The male members of the conspiracy used false promises of romance and marriage to lure the victims into relationships and convince them to travel to the United States to make money so that they could build homes for themselves in Mexico.   Once in the United States, the victims were subjected to violence, threats and sexual assaults by the defendants.  Raul Granados-Rendon directed one of his victims to teach another victim “Jane Doe” how to prostitute.  When Jane Doe did not produce as much income as other Granados family victims, the defendant physically abused her, dragging her by her hair into a bathroom and forcing her head into a sink.  The defendant also helped transport another victim back to Mexico after his brother impregnated her and failed at his efforts to induce an abortion. 

The investigation, prosecution, bilateral enforcement action and extraditions of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative. Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in the Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims and reunite victims with their children.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 175 defendants in cases in Georgia, New York, Florida and Texas, in addition to numerous federal and state prosecutions in Mexico of associated sex traffickers.  The convictions in this case are also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 80 defendants and assisted more than 150 victims, including 44 minors.  In addition, through the District’s anti-trafficking program, 19 children have been reunited with their victim-mothers.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorney Jennifer M. Sasso is in charge of the prosecution.   

The Defendant:

RAUL GRANADOS-RENDON
Age:  31
Tenancingo, Mexico

E.D.N.Y. Docket No. 11-CR-557 (KAM)

A criminal complaint was filed today in federal court in Brooklyn charging Scott Brack and Elgin Brack with the armed robberies of four convenience stores in Queens.  Elgin Brack was also charged with brandishing a firearm in furtherance of a crime of violence and discharging a firearm in furtherance of a crime of violence.  Both defendants were arrested yesterday evening, made their initial appearances this afternoon before United States Magistrate Judge Steven M. Gold and were ordered detained.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the arrests.

“As alleged, the defendants struck four all-night commercial businesses in Queens in a span of fewer than three hours, including a Duane Reade store in Woodside where an employee was callously shot in the head simply for resisting the robbery,” stated United States Attorney Donoghue.  “While most people slept through this night of terror, members of the ATF/NYPD Joint Robbery Task Force were working tirelessly to identify and quickly apprehend the perpetrators who will now face justice for their multiple crimes.”

“The aforementioned individuals are alleged to have committed brazen acts of violence terrorizing business owners in their community,” stated ATF Special Agent-in-Charge Benedict.  “In one of their acts, a store manager was shot during a robbery attempt. If not for the work of multiple NYPD units and the ATF/NYPD Joint Robbery Task Force, they would be out on the streets continuing to reign terror on the innocent. ATF will continue to work with our partners to send a strong message to individuals that seek to spread violence in their community that all law enforcement resources will be used to apprehend and prosecute them for their violent actions. I would like to thank the United States Attorney’s office for their work in prosecuting this case.”

“New York City has achieved historic reductions in crime over the past two decades, but some outliers continue to traffic in violence and fear,” stated NYPD Commissioner O’Neill.  “That is why the men and women of the NYPD must continue to be the very best at what we do: fighting crime and keeping people safe.  Today’s charges highlight their exemplary work, and I commend the ATF investigators who work daily with our detectives on the Strategic Pattern Armed Robbery and Technical Apprehensions Task Force, or SPARTA.  By so efficiently pursuing and strengthening high-profile armed-robbery cases like this, we – together with the U.S. Attorney’s Office for the Eastern District and all of our law-enforcement partners – are making the safest large city in the nation even safer.”

As detailed in the complaint, on November 26, 2018, at approximately 3:36 a.m., Elgin Brack entered a Duane Reade store at 60-02 Roosevelt Avenue in Woodside and pointed a gun at the store clerk.  Brack then moved behind the store counter, attempted to force the clerk to turn over money and shot the clerk in the hand and the head as he resisted.  Brack fled the Duane Reade and together with Scott Brack, traveled by car to a 7-Eleven store located at 50-92 Northern Boulevard in Long Island City where, at approximately 3:58 a.m., Elgin Brack demanded money at gunpoint and took $300 from an employee.  Next, the defendants drove to a Rite Aid store located at 33-01 30th Avenue in Astoria at approximately 4:20 a.m., where Elgin Brack approached a store clerk and asked to purchase chewing gum.  When the store clerk opened the cash register, Brack pointed a gun and demanded money.  The store clerk handed over $802.  Immediately outside the Rite Aid store, video surveillance captured Scott Brack discarding an item consistent in size and shape with the cash register tray taken from the prior 7-Eleven armed robbery.  Finally, at approximately 5:45 a.m., Elgin Brack entered a second Rite Aid store located at 115-10 Merrick Boulevard in Jamaica, approached a store clerk, pointed a gun and demanded money.  The store clerk complied and gave Elgin Brack $200. 

 The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, each defendant faces a minimum of seven years in prison.

Assistant United States Attorney Phil Selden is in charge of the prosecution. 

The Defendant:

SCOTT BRACK
Age:  50
Bronx, New York

ELGIN BRACK
Age:  22
Brooklyn, New York

 

A 13-count indictment was unsealed today in federal court in Brooklyn charging Aleksandr Zhukov, Boris Timokhin, Mikhail Andreev, Denis Avdeev, Dmitry Novikov, Sergey Ovsyannikov, Aleksandr Isaev and Yevgeniy Timchenko with criminal violations for their involvement in perpetrating widespread digital advertising fraud.  The charges include wire fraud, computer intrusion, aggravated identity theft and money laundering.  Ovsyannikov was arrested last month in Malaysia; Zhukov was arrested earlier this month in Bulgaria; and Timchenko was arrested earlier this month in Estonia, all pursuant to provisional arrest warrants issued at the request of the United States. They await extradition.  The remaining defendants are at large.     

Also unsealed today in federal court in Brooklyn were seizure warrants authorizing the FBI to take control of 31 internet domains, and search warrants authorizing the FBI to take information from 89 computer servers, that were all part of the infrastructure for botnets engaged in digital advertising fraud activity.  The FBI, working with private sector partners, redirected the internet traffic going to the domains (an action known as “sinkholing”) in order to disrupt and dismantle these botnets. 

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 and domain seizures.

“As alleged in court filings, the defendants in this case used sophisticated computer programming and infrastructure around the world to exploit the digital advertising industry through fraud,” stated United States Attorney Donoghue.  “This case sends a powerful message that this Office, together with our law enforcement partners, will use all our available resources to target and dismantle these costly schemes and bring their perpetrators to justice, wherever they are.”  Mr. Donoghue thanked the FBI Cyber Division for its extraordinary efforts in carrying out the multi-year investigation.

 “As alleged, these individuals built complex, fraudulent digital advertising infrastructure for the express purpose of misleading and defrauding companies who believed they were acting in good faith, and costing them millions of dollars. This kind of exploitation undermines confidence in the system, on the part of both companies and their customers,” stated FBI Assistant Director-in-Charge Sweeney. “Thanks to the hard work of our legal attachés and law enforcement partners overseas, with the cooperation of our international and U.S.-based private sector partners, the defendants will face justice for their alleged crimes.”

“This investigation highlights public- and private-sector collaboration across the globe, and again confirms the absolute necessity for interagency information-sharing. Criminals – especially those operating via the internet – do not concern themselves with jurisdictional boundaries, so it is critical that the law-enforcement community works together to achieve our shared goal of protecting the people we serve,” stated NYPD Commissioner O’Neill.  “I thank and commend the U.S. Attorney for the Eastern District, and all the investigators with the FBI Cyber Division and the NYPD. Together, we are ensuring that the vital systems and technologies of our economy are kept safe.”   

The Criminal Scheme

The internet is, in large part, freely available to users worldwide because it runs on digital advertising: website owners display advertisements on their sites and are compensated for doing so by intermediaries representing businesses seeking to advertise their goods and services to real human customers.  In general, digital advertising revenue is based on how many users click or view the ads on those websites.  As alleged in court filings, the defendants in this case represented to others that they ran legitimate companies that delivered advertisements to real human internet users accessing 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, in order to fraudulently obtain digital advertising revenue. 

The Datacenter-Based Scheme (Methbot)

As alleged in the indictment, between September 2014 and December 2016, Zhukov, Timokhin, Andreev, Avdeev and Novikov operated a purported advertising network (“Ad Network #1”) and, with Ovsyannikov’s assistance, carried out a digital ad fraud scheme.  Ad Network #1 had business arrangements with other advertising networks whereby it received payments in return for placing advertising placeholders (“ad tags”) on websites.  Rather than place these ad tags on real publishers’ websites, however, Ad Network #1 rented more than 1,900 computer servers housed in commercial datacenters in Dallas, Texas and elsewhere, and used those datacenter servers to load ads on fabricated websites, “spoofing” more than 5,000 domains.  To create the illusion that real human internet users were viewing the advertisements loaded onto these fabricated websites, the defendants programmed the datacenter servers to simulate the internet activity of human internet users: browsing the internet through a fake browser, using a fake mouse to move around and scroll down a webpage, starting and stopping a video player midway, and falsely appearing to be signed into Facebook.  Furthermore, the defendants leased more than 650,000 Internet Protocol (“IP”) addresses, assigned multiple IP addresses to each datacenter server, and then fraudulently registered those IP addresses to make it appear that that the datacenter servers were residential computers belonging to individual human internet users who were subscribed to various residential internet service providers.  As a result of this scheme, Ad Network #1 falsified billions of ad views and caused businesses to pay more than $7 million for ads that were never actually viewed by real human internet users.

The Botnet-Based Scheme (3ve.2 Template A)

As also alleged in the indictment, between December 2015 and October 2018, Ovsyannikov, Timchenko and Isaev operated a purported advertising network (“Ad Network #2”) and carried out another digital ad fraud scheme.  In this scheme, the defendants used a global “botnet”¾a network of malware-infected computers operated without the true owner’s knowledge or consent¾to perpetrate their fraud.  The defendants developed an intricate infrastructure of command-and-control servers to direct and monitor the infected computers and check whether a particular infected computer had been flagged by cybersecurity companies as associated with fraud.  By using this infrastructure, the defendants accessed more than 1.7 million infected computers, belonging to ordinary individuals and businesses in the United States and elsewhere, and used hidden browsers on those infected computers to download fabricated webpages and load ads 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, Ad Network #2 falsified billions of ad views and caused businesses to pay more than $29 million for ads that were never actually viewed by real human internet users.     

The Botnet Takedown

Following the arrest of Ovsyannikov by Malaysian authorities, 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 in the cybersecurity community as “Kovter.”  The FBI executed seizure warrants to sinkhole 23 internet domains used to further the charged botnet-based scheme or otherwise used to further the Kovter 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. 

The charges in the indictment are merely allegations and the defendants are presumed innocent unless and until proven guilty. 

The government’s case is being prosecuted by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Saritha Komatireddy, Alexander F. Mindlin, Michael T. Keilty and Karin K. Orenstein are in charge of the prosecution. 

The Justice Department’s Office of International Affairs, the FBI’s Legal Attachés abroad and foreign authorities in multiple countries provided critical assistance in this case.  The Office extends its appreciation to the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian National Central Bureau of Interpol, the Supreme Cassation Prosecution Office of Bulgaria, the Regional Prosecution Office of Varna, the Cybercrime Department of the Bulgarian General Directorate for Combating Organized Crime, the Bulgarian Ministry of Interior Regional Directorate of Varna, the Office of the Prosecutor General of Estonia, the Estonian Police and Border Guard Board and the FBI’s Legal Attaché Offices in Malaysia, Bulgaria and Estonia for their assistance in apprehending defendants in this case.  The Office also extends its appreciation to the German Bundeskriminalamt Cybercrime Intelligence Operations Department and Polizei Sachsen Polizeidirektion Zwickau Criminal Investigation Department, the Dutch National Police, the United Kingdom National Crime Agency, the French Police Cybercrime Central Bureau, the Swiss Federal Office of Justice, FBI’s Legal Attaché Offices in those countries, and Europol for their assistance in various aspects of the investigation and botnet takedown.    

Multiple private sector organizations also provided critical assistance in this case.  The Office extends its appreciation to White Ops, Inc. and Google LLC for their assistance in the investigation and botnet takedown.  The Office also extends its appreciation to Proofpoint, Inc, Fox IT B.V., Microsoft Corporation, ESET, Trend Micro Inc., Symantec Corporation, CenturyLink, Inc, F-Secure Corporation, Malwarebytes, MediaMath, the National Cyber-Forensics and Training Alliance and The Shadowserver Foundation for their assistance in the botnet takedown.   

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 Defendants:

ALEKSANDR ZHUKOV
Age:  38
Russian Federation

BORIS TIMOKHIN
Age:  39
Russian Federation

MIKHAIL ANDREEV
Age:  34
Russian Federation and Ukraine

DENIS AVDEEV
Age:  40
Russian Federation

DMITRY NOVIKOV
Age:  Unknown
Russian Federation

SERGEY OVSYANNIKOV
Age:  30
Republic of Kazakhstan

ALEKSANDR ISAEV
Age:  31
Russian Federation

YEVGENIY TIMCHENKO
Age:  30
Republic of Kazakhstan

E.D.N.Y. Docket No. 18-CR-633 (ERK)

WASHINGTON - A Springfield Gardens, New York, resident pleaded guilty yesterday to an indictment charging him with nine counts of wire fraud, nine counts of aggravated identity theft, and 17 counts of aiding or assisting in the preparation and filing of false returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Richard P. Donoghue for the Eastern District of New York.

According to court documents, Oyeniyi Jaiyesimi, the owner of Pace Financial Services, a tax preparation business located in Springfield Gardens, New York used stolen IDs to file fraudulent tax returns with the Internal Revenue Service and to obtain refunds to which he was not entitled.  In addition, from 2013 through 2015, Jaiyesimi filed multiple false tax returns for clients that fraudulently claimed dependent exemptions.

Magistrate Judge James Orenstein scheduled sentencing for April 3, 2019, before District Court Judge Edward R. Korman.  Jaiyesimi faces a maximum sentence of 20 years in prison for each count of wire fraud, a mandatory minimum sentence of two years in prison for each count of aggravated identity theft, and a maximum sentence of three years in prison for each count of aiding or assisting in the preparation of false returns. He also faces a period of supervised release, restitution, forfeiture, and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Richard P. Donoghue commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Eric Powers of the Tax Division, who are prosecuting the case.

Zoobia Shahnaz, 27, of Brentwood, New York, pleaded guilty to providing material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. 

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. for the FBI’s New York Field Office, and Commissioner James P. O’Neill for the NYPD announced the guilty plea.  The guilty plea was entered before U.S. District Judge Joanna Seybert.

According to court filings and facts presented at the plea hearing, between March 2017 and the date of her attempted travel to Syria on July 31, 2017, the defendant engaged in a scheme to defraud numerous financial institutions.  Specifically, Shahnaz obtained a loan for approximately $22,500 by way of materially false pretenses, representations and promises.  She also fraudulently applied for and used over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online.  She then engaged in a pattern of financial activity, culminating in several wire transactions totaling over $150,000 to individuals and shell entities in Pakistan, China and Turkey that were fronts for ISIS.

During the time she was committing bank fraud and laundering money overseas, the defendant was accessing ISIS propaganda online, including violent jihad-related websites and message boards, and social media and messaging pages of known ISIS recruiters, facilitators and financiers.  Additionally, the defendant conducted numerous internet searches for information that would facilitate her entry into Syria, but ultimately was intercepted by the Joint Terrorism Task Force (JTTF) at John F. Kennedy International Airport (JFK) in Queens, New York, while attempting to board a flight with a multi-day layover in Istanbul, Turkey – a common point of entry for individuals travelling from Western countries to join ISIS in Syria. 

As part of her plea agreement with the government, Shahnaz admitted to defrauding numerous financial institutions and laundering the stolen proceeds out of the country with the intent to support a specified unlawful activity, namely the provision of material support to ISIS, after which she attempted to leave the United States and travel to Syria. 

When she is sentenced, Shahnaz faces up to 20 years in prison, as well as restitution, criminal forfeiture and a fine.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes.  Any sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Mr. Demers and Mr. Donoghue extended their grateful appreciation to the FBI’s JTTF, which comprises a number of federal, state and local agencies from the region.

The government’s case is being handled by Assistant U.S. Attorney Artie McConnell of the Eastern District of New York and Trial Attorney Joseph Attias of the National Security Division’s Counterterrorism Section. 

Earlier today, in federal court in Central Islip, Zoobia Shahnaz pleaded guilty to providing material support to a foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization.  As part of her plea agreement with the government, Shahnaz admitted defrauding numerous financial institutions, and then laundering and transferring the stolen proceeds out of the country with the intent to support a specified unlawful activity, namely the provision of material support to ISIS, after which she attempted to leave the United States and travel to Syria.  When sentenced, Shahnaz faces up to 20 years in prison, as well as restitution, criminal forfeiture and a fine.  The guilty plea was entered before United States District Judge Joanna Seybert.

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 guilty plea.

“With today’s guilty plea, Shahnaz, a resident of our district, admitted to engaging in a complex scheme using cryptocurrencies designed to put thousands of dollars into the coffers of ISIS, a foreign terrorist organization dedicated to murder and destruction,” stated United States Attorney Donoghue.  “Counterterrorism is the highest priority of the Department of Justice and our law enforcement partners, and together we will continue to hold accountable those who abet terrorists seeking to harm the United States and its allies.” 

Mr. Demers and Mr. Donoghue expressed their grateful appreciation to the FBI’s Joint Terrorism Task Force (JTTF), which comprises a number of federal, state and local agencies from the region.

“In the interest of empowering and enriching a terrorist organization whose aim is to harm America, Zoobia Shahnaz turned her back on her country and her fellow citizens,” stated FBI Assistant Director-in-Charge Sweeney. “Thanks to the diligent work of the FBI New York Joint Terrorism Task Force, her crimes were uncovered, and she was unable to succeed in her ultimate goal of traveling to Syria to join ISIS. This conviction sends a message to anyone who seeks to manipulate our financial systems to provide support to our adversaries: you too will be discovered, investigated, and brought to justice.”

According to court filings and facts presented at the guilty plea proceeding, between March 2017 and the date of her attempted travel to Syria on July 31, 2017, Shahnaz engaged in a bank fraud scheme to raise money for ISIS.  In furtherance of that scheme, she obtained a loan for approximately $22,500 through materially false representations, used more than a dozen fraudulently obtained credit cards to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online and then wired over $150,000 to individuals and shell entities in Pakistan, China and Turkey that were fronts for ISIS. 

At the same time, Shahnaz accessed ISIS propaganda at various violent jihad-related websites and message boards, and social media and messaging pages of known ISIS recruiters, facilitators and financiers.  She also searched the internet for information to facilitate her travel into  Syria, but ultimately was intercepted by the JTTF at John F. Kennedy International Airport.    

The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Artie McConnell of the Eastern District of New York and Trial Attorney Joseph Attias of the National Security Division’s Counterterrorism Section are in charge of the prosecution.

The Defendant:

Zoobia Shahnaz 
Age: 27
Brentwood, NY

E.D.N.Y. Docket No. 17-CR-690 (JS)

A federal court in Central Islip, New York entered a temporary injunction today against individuals and corporations allegedly responsible for operating three international mail fraud schemes, the Department of Justice announced. These cases are part of the Department of Justice’s Elder Justice Initiative.

In a complaint filed today, the United States alleged that the 15 defendants mailed, or facilitated the mailing of, fraudulent solicitations related to three mail fraud schemes that primarily victimized the elderly or vulnerable. The solicitations purported to be personalized notices informing recipients that they had won a large cash prize but needed urgently to pay a fee to claim their winnings. The solicitations targeted victims throughout the world, and victims returned their payments to mailboxes located in the United States. Although victims sent in the requested fees by cash, check, or credit card, they did not receive large cash prizes in return. The complaint further alleges that the defendants were aware that the mailings deceived consumers into paying a fee and believing they had already won a valuable prize. The complaint alleges that victims sent thousands of dollars each week in response to the defendants’ fraudulent solicitations. The complaint alleged that in the last year, the three mail fraud schemes collectively mailed over half a million fraudulent letters, grossing an estimated $4.8 million in fraudulent proceeds.

Along with the complaint, the United States sought a temporary restraining order against the defendants to prevent them from continuing to send fraudulent solicitations during the pendency of the action. The district court found probable cause to believe that those defendants are engaged in mail fraud and entered the order. A preliminary injunction hearing is scheduled for December 3, 2018.

“We will not tolerate fraud, and we will not allow the U.S. Mail to be used as a conduit for fraudulent conduct,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Illegal schemes that prey on people’s hopes are reprehensible, and we will continue to vigorously pursue the operators of such schemes.”

“These fraudulent solicitation schemes target elderly and vulnerable residents in our district, around the country and around the world with a promise of cash prizes that never arrive,” stated Richard P. Donoghue, United States Attorney for the Eastern District of New York. “We are committed to protecting our residents, and victims everywhere, from these cruel schemes.”

“The U.S. Postal Inspection Service has been at the forefront of protecting consumers from fraud schemes for many years,” said Inspector in Charge Delany De Leon-Colon for the U.S. Postal Inspection Service’s Criminal Investigations Group.  “Deceptive solicitations take advantage of the American public with promises of easy money, when in reality, the scammers are the only ones making money. Investigations like this one let the American public – especially our vulnerable population – know that Postal Inspectors are working hard to protect them and ensure their confidence in the U.S. Mail.” 

The complaint alleged that defendants Charles Kafeiti of Phoenix, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven Diaz of Mt. Sinai, New York, operate fraud schemes that lead victims to believe a large cash awards awaits them. The three schemes were assisted by Drew Wilson, a resident of Vancouver, Canada, who provided logistical support. Other named defendants, Dennis Hunsaker, a resident of Las Vegas Nevada, and his company, Digital Matrix International Inc., assisted the direct mailers with online tools to manage their mailings, lists of recipients, lists of respondents, and fulfillments. Carmine Maietta and Elizabeth Maietta, residents of Westbury, New York, opened and processed victim returns. The suit also named a German corporation that processed victim payments for the scheme, SixEvolution GmbH, and its operator, David Anthony. 

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 February the Attorney General announced the largest elder fraud enforcement action in American history, charging more than 200 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.    

Last week, the Department of Justice and the Department of Agriculture hosted an inaugural Rural and Tribal Elder Justice Summit in Des Moines, Iowa. The Summit focused on supporting the efforts of elder justice professionals to combat elder abuse and financial exploitation in rural and tribal communities, and included remarks from Acting Attorney General Matthew Whitaker.

In the matter filed today, 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. 

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.

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. Information about the Department of Justice’s Elder Fraud Imitative is available at www.justice.gov/elderjustice.

CENTRAL ISLIP – A federal court in Central Islip, New York, entered a temporary injunction yesterday against 15 individuals and corporations allegedly responsible for operating three international mail fraud schemes, the Department of Justice announced. The Department of Justice alleges that, in 2018 alone, the three schemes collectively mailed over half a million fraudulent letters and grossed an estimated $4.8 million in fraudulent proceeds.  The case is part of the Department of Justice’s Elder Fraud Initiative.

In a complaint filed yesterday, the United States alleged that defendants mailed, or facilitated the mailing of, fraudulent solicitations related to three mail fraud schemes that primarily victimized the elderly or vulnerable. The solicitations purported to be personalized notices informing recipients that they had won multi-million dollar cash prizes but needed urgently to pay a fee to claim their winnings. The solicitations targeted victims throughout the world, and victims returned their payments to mailboxes located in the United States, primarily on Long Island. Although victims sent in the requested fees by cash, check or credit card, they did not receive large cash prizes in return. The complaint further alleges that the defendants were aware that the mailings deceived consumers into paying a fee and believing they had already won a valuable prize. The complaint alleges that victims sent thousands of dollars each week in response to the defendants’ fraudulent solicitations.

Along with the complaint, the United States sought a temporary restraining order against the defendants to prevent them from continuing to send fraudulent solicitations during the pendency of the action. The District Court found probable cause to believe that the defendants are engaged in mail fraud and entered the order. A preliminary injunction hearing is scheduled for December 3, 2018.

“These fraudulent solicitation schemes target elderly and vulnerable residents in our district, around the country and around the world with a promise of cash prizes that never arrive,” stated Richard P. Donoghue, United States Attorney for the Eastern District of New York. “We are committed to protecting our residents, and victims everywhere, from these cruel schemes.”

“We will not allow the U.S. Mail to be used as a conduit for fraud,” stated Joseph H. Hunt, Assistant Attorney General for the Department of Justice’s Civil Division. “Schemes that prey on people’s hopes are reprehensible. We will continue to pursue the operators of such schemes.”

“These individuals thought they would get away with a crime targeting the elderly and vulnerable who in many cases gave away money needed for day to day necessities. The victims were told they had won the lottery and needed to pay fees to receive their winnings,” stated Philip R. Bartlett, Inspector-in-Charge of the United States Postal Inspection Service, New York Division.  “Postal Inspectors remind consumers that paying to play a lottery is a telltale sign it’s a scam. If you prey on the elderly and vulnerable, you will be brought to justice for your crimes.”

According to the complaint, Charles Kafeiti of Scottsdale, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven Diaz of Mt. Sinai, New York, operate fraud schemes that lead victims to believe that large cash awards await them. Those defendants were assisted by Drew Wilson, a resident of Vancouver, Canada, who provided logistical support. Other named defendants, Dennis Hunsaker, a resident of Las Vegas Nevada, and his company, Digital Matrix International Inc., assisted the direct mailers with online tools to manage their mailings, lists of recipients, lists of respondents and fulfillments. Carmine Maietta and Elizabeth Maietta, both residents of Westbury opened and processed victim returns. The lawsuit also named a German corporation, SixEvolution GmbH and its operator, David Anthony, that processed victim payments for the scheme. 

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. 

The claims made in the complaint are allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.

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. Information about the Department of Justice’s Elder Fraud Imitative is available at www.justice.gov/elderjustice.

E.D.N.Y. Docket No. 18-CV-6581 (JMA)

Earlier today, at the federal courthouse in Central Islip, Alton Gore, also known as “A-Murder,” the leader of the Outlaws street gang, was sentenced by United States District Judge Joseph F. Bianco to 15 years’ imprisonment following his April 6, 2018 guilty plea to assault in aid of racketeering and discharging a firearm in connection with a crime of violence.     

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.

“Gore earned today’s sentence by blindly shooting into a house, permanently disabling one man and injuring another,” stated United States Attorney Donoghue.  “Violence in the name of a street gang jeopardizes the safety of the entire community and will not be tolerated.  We will continue working tirelessly with our law enforcement partners to rid Long Island of the Outlaws and every other street gang.” 

“Violent street gangs endanger public safety and paralyze communities through fear and intimidation,” stated FBI Assistant Director-in-Charge Sweeney. “Gore showed a flagrant disregard for the safety of others in opening fire on that home – two rival gang members were shot, one gravely injured, and his reckless actions could have endangered the lives of many others. The FBI’s Long Island Safe Streets Gang Task Force will continue to pursue justice for gang members who act outside the boundaries of the law.”

“The sentence of Defendant Gore is a clear example of how these violent crimes will not be tolerated in Nassau County,” stated NCPD Commissioner Ryder.  “These street rival gangs exiting their violence place our residents and communities in harm’s way and injured two others.  It is a testament of the hard work of dedicated professionals that the combined effort of law enforcement was able to bring this defendant to justice to further show that he will be punished for his actions.”

On September 11, 2013, Outlaws gang member Pedro Merchant shot and killed 17-year-old Dante Quinones in Hempstead over gang allegiances.  Following Quinones’ murder, Gore led Outlaws members in a year-long gang war between the Outlaws and the Bloods, which included multiple shootings.  On September 14, 2014, Gore and two Outlaws members staked out a house in Hempstead where Bloods members were watching a boxing match.  Gore and his co-conspirators opened fire into the house, hitting one gang member in the leg and a second gang member in the head, causing him to lose an eye.   

This Office has prosecuted six members and associates of the Outlaws and six members of the Bloods for their participation in this violent gang war.  To date, the following individuals have been sentenced or pled guilty:

• Pedro Merchant, a member of the Outlaws in Hempstead, was sentenced to 20 years’ imprisonment for the September 11, 2013 firearm-related murder of Dante Quinones.
• Everett Brown, an associate of the Outlaws, was sentenced to 10 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in one of three shootings of rivals’ homes committed by the gang on August 19, 2014.  
• Philip Saunders, a member of the Bloods, was sentenced to 12 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in a May 9, 2014 assault of a rival gang member. 
• Khalil Brown and Naree Barnes, members of the Bloods, were each sentenced to 10 years’ imprisonment following their guilty pleas to discharging firearms during a crime of violence for shooting at a rival gang member on October 21, 2014. 
• Billy McLen, a member of the Bloods, pled guilty to attempted murder in-aid-of racketeering and discharging a firearm during a crime of violence and is awaiting sentence.  When sentenced, McLen faces a minimum of 10 years in prison and a maximum term of life. 
• Jonathan Mayzick, a member of the Bloods charged with racketeering, conspiracy to murder and assault rival gang members with dangerous weapons and attempted murder and attempted assault with dangerous weapons, is awaiting trial.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone and Michael Maffei are in charge of the prosecution.

The Defendants: ALTON GORE (also known as “A-Murder”)
Age:  27
Hempstead, New York

E.D.N.Y. Docket No. 16-CR-322 (S-1) (JFB)

Earlier today in federal court in Central Islip, Blake Kantor, who formerly operated a binary options company known as Blue Bit Banc and Blue Bit Analytics (“BBB”), pleaded guilty to conspiracy to commit wire fraud.  As part of his plea agreement, Kantor admitted to obstructing an investigation into his fraudulent scheme.  When he is sentenced, Kantor faces up to 20 years in prison, as well as restitution, criminal forfeiture and a fine.  The guilty plea was entered before United States Magistrate Judge Gary R. 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), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the guilty plea. 

“Kantor defrauded investors to enrich himself and then tried to cover his tracks by lying to the federal agents investigating the scheme,” stated United States Attorney Donoghue.  “We will continue to protect the integrity of the financial marketplace by prosecuting to the fullest extent those who deceive the investing public and obstruct the pursuit of justice.”

According to court filings and facts presented at the guilty plea proceeding, in March 2014, Kantor established BBB, which sold binary options, a type of investment in which investors are promised an opportunity to be paid predetermined amounts based upon the price of securities, commodities or other investments at particular points in time.  From approximately 2014 to 2017, Kantor and others solicited and took in approximately $1.5 million from more than 700 investors in BBB’s binary options.  Kantor told investors that they could place binary option trades, or a BBB representative could do so for them, and that the predetermined profits promised them would be based on the actual prices of securities, currencies and other investments at particular points in time.  However, Kantor did not inform the investors that a computer software program of BBB’s fraudulently altered data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors.  To further his scheme, Kantor directed that bank accounts—including one in the island nation of St. Kitts and Nevis—be opened using aliases and identifying information of others, making it more difficult to trace the funds that Kantor fraudulently took from investors.  Kantor also converted BBB investments into ATM Coin, a worthless cryptocurrency that he misleadingly told investors was worth substantial sums of money. 

In October 2017, after FBI agents informed Kantor that they were investigating his involvement in binary options, Kantor directed a co-conspirator to alter BBB customer lists.  When interviewed by the FBI, Kantor falsely stated that he had not been involved in binary options since August 2013.

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:

BLAKE KANTOR (also known as “Bill Gordon”)
Age:  42
Fort Lee, New Jersey

E.D.N.Y. Docket No. 18-CR-177 (SJF)

An indictment was unsealed today in federal court in Brooklyn charging Peter Tuccio and Jonathan Gurino with arson and arson conspiracy, extortion and extortion conspiracy and using fire to commit a felony.  The defendants were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.  

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“As alleged in the indictment, the defendants delivered a frightening message in the form of fire to force a businessman to pay protection money to a high-ranking gangster,” stated United States Attorney Donoghue.  “Today’s charges against two alleged crime family associates demonstrate that whether you are a made member or a young associate looking to advance in a crime family, the end result is the same – prosecution and prison.”  Mr. Donoghue thanked the New York City Police Department and the New York City Fire Department’s Bureau of Fire Investigation for their assistance in the investigation.

“Organized crime families have long relied on extortion and threats of violence in exchange for so-called ‘protection,’” stated FBI Assistant Director-in-Charge Sweeney.  “As alleged, the defendants set a man's car on fire to send a message, but now they are the ones feeling the heat as they face justice for their crimes. As long as organized crime families and their associates continue to act outside the law, the FBI and our partners will investigate and bring charges against them.”

As alleged in court filings, a captain in the Gambino Organized Crime Family (referred to herein as Co-Conspirator-1), had been extorting a local businessman $400 per year.  During 2015, the businessman began dodging Co-Conspirator-1 to avoid making payments.  On December 3, 2015, Tuccio, Gurino and Gino Gabrielli observed the businessman leave a smoke shop in Howard Beach and drive away.  The three men followed at a high rate of speed and confronted him outside a pizzeria.  Tuccio asked, “how’s Co-Conspirator-1?” and commented on the business owner’s car, a 2014 Mercedes Benz.  The businessman fled into the pizzeria.  Later that night, the businessman heard a loud noise and saw that his car was on fire.  Shortly thereafter, the businessman paid Co-Conspirator-1.  As detailed in court filings, the businessman’s home security video system had recorded Gabrielli pouring a substance on the Mercedes, the car erupting in flames, and Gabrielli running away with his pant leg on fire.  Shortly thereafter, Gabrielli and Tuccio were caught on surveillance video entering Jamaica Hospital. 

Gabrielli pleaded guilty to arson in August 2016.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a 15-year mandatory minimum sentence. 

The government’s case is being handled by the Office’s Organized Crime & Gangs Section.  Assistant United States Attorney Nadia E. Moore is in charge of the prosecution.

The Defendants: PETER TUCCIO
Age: 25
Queens, New York

JONATHAN GURINO
Age: 25
Queens, New York

E.D.N.Y. Docket No. 18-CR-610 (LDH)

A six-count indictment was unsealed today in federal court in Central Islip charging  Enayatullah Khwaja, Abdulrahman Khwaja, Rani Rahimi, Shikeba Rhamatzada, Roberto Saenz, Maynor Melendez-Mendoza and Naseem Bokhari with conspiracy to commit money laundering, operation of an unlicensed money transmitting business, failure to file currency transaction reports and IRS forms 8300, structuring monetary deposits, and interstate and foreign travel and transportation in aid of a racketeering enterprise.  The defendants, all owners and employees of import-export businesses located on Long Island and in Miami, were arrested this morning.

Enayatullah Khwaja, Abdulrahman Khwaja, Rahimi and Rhamatzada will be arraigned this afternoon in Central Islip before United States District Judge Joseph F. Bianco.  Saenz, Melendez-Mendoza and Bokhari, who were arrested in Florida, will be arraigned at the federal courthouse in Miami, and the government will seek their removal to the Eastern District of New York.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York, and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.   

“Money laundering is the lifeblood of international narcotics trafficking organizations and with today’s arrests the defendants’ ability to profit from illicit proceeds has been crippled,” stated United States Attorney Donoghue.  “I commend our prosecutors and the Special Agents in this case for their relentless work following the money trail here and abroad in order to disrupt this criminal scheme.”

“Those arrested today allegedly employed an international money laundering scheme relying on the complexities of global trade, and the use of their businesses here in New York and in Florida, to launder millions of dollars for transnational drug traffickers and other bad actors,” stated HSI Special Agent-in-Charge Melendez. “This investigation exemplifies HSI’s efforts in securing the integrity of our country’s trade and financial systems, and the importance of law enforcement partnerships here and abroad.”

“Special Agents of IRS-CI are experts in identifying and uncovering criminal violations with a financial aspect whether committed at home or abroad as alleged in the indictment,” stated IRS-CI Special Agent-in-Charge Robnett.

As alleged in the indictment and other court documents, family-owned businesses operated by the defendants on Long Island and in Miami were used to launder millions of dollars in illegal drug proceeds between the United States and South America.  Enayatullah Khwaja was the owner and manager of Tronix Telecom Corp., an electronics and mobile phone import-export company with an office in Miami.  Enayatullah Khwaja managed the company from his home in Farmingdale.  The defendants took in bulk cash deliveries from drug dealers and disguised the transfer of money through the actual and purported purchase and export of mobile phones.  The government’s investigation included extensive court-ordered wiretaps of the defendants, as well as undercover federal agents posing as drug dealers.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face a maximum sentence of 20 years’ imprisonment.

The government’s case is being handled by the Office’s Long Island Criminal and Civil Divisions.  Assistant U.S. Attorneys Charles P. Kelly, Burton T. Ryan, Jr. and Madeline O’Connor are in charge of the prosecution.

The Defendants:

ENAYATULLAH KHWAJA (also known as “Nat”)
Age: 45
Farmingdale, N.Y.

ABDULRAHMAN KHWAJA
Age: 62
Syosset, N.Y.

RANA RAHIMI
Age: 48
Farmingdale, N.Y.

SHIKEBA RHAMATZADA
Age: 45
Farmingdale, N.Y.

ROBERTO SAENZ
Age: 36
Miami, Florida

MAYNOR MELENDEZ-MENDOZA
Age: 33
Miami, Florida

NASEEM BOKHARI (also known as “Sammy”)
Age: 59
Miami, Florida

E.D.N.Y. Docket No. 18-CR-607(JFB)

An indictment was unsealed today in federal court in Central Islip charging  Christian Romandetti, Sr., the Chief Executive Officer of First Choice Healthcare Solutions, Inc (FCHS), a publicly traded company based in Melbourne, Florida, and his associates Frank Sarro, Jeffrey Miller and Mark Burnett, with conducting a pump and dump scheme in coordination with Elite Stock Research (ESR), a boiler room, to defraud investors in FCHS that operated in Plainview, New York.  The charges include conspiracies to commit securities fraud, wire fraud and money laundering, and substantive securities fraud. 

Miller and Burnett will be arraigned this afternoon before Magistrate Judge Anne Y. Shields, at the federal courthouse in Central Islip.  Romandetti’s and Sarro’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the federal courthouse in Orlando, Florida.      

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“As alleged, the defendants conducted a classic pump and dump scheme designed to defraud the investing public, many of whom were senior citizens, by pressuring them to purchase shares of the manipulated stock,” stated United States Attorney Donoghue.  “Today’s arrests show our continuing commitment to protect investors and hold accountable those who abuse our financial markets in order to line their own pockets.”  Mr. Donoghue expressed his grateful appreciation to the United States Securities and Exchange Commission for their significant cooperation and assistance in the investigation.

As alleged in the indictment, between May 2013 and June 2016, the defendants, together with others, engaged in a multi-million dollar scheme to defraud investors in FCHS, many of whom were elderly, by artificially controlling the price and volume of traded shares in the FCHS by artificially generating price movements and trading volume in the shares, and by including material misrepresentations and omissions in their communications with victim investors about FCHS stock.  The defendants promoted the stocks primarily through cold-call campaigns and circulation of a newsletter.  The defendants fraudulently concealed their control of FCHS shares by holding them in brokerage accounts in the names of other individuals or entities.  The defendants then laundered over $3 million in proceeds of the foregoing stock manipulation scheme.

The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.

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 Defendants:

CHRISTIAN ROMANDETTI, SR.
Age:  58
Indialantic, Florida

FRANK SARRO
Age:  63
Palm Bay, Florida

JEFFREY MILLER
Age:  63
Bellmore, New York

MARK BURNETT
Age:  59
Roslyn, New York

E.D.N.Y. Docket No. 18-CR-614 (SJF)

Earlier today, in federal court in Brooklyn, Maksim Zaslavskiy pleaded guilty before United States Magistrate Judge Ramon E. Reyes, Jr., to conspiracy to commit securities fraud in connection with two Initial Coin Offerings (ICOs) – REcoin Group Foundation, LLC (REcoin) and DRC World, Inc., also known as Diamond Reserve Club (Diamond). 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

 “The calculated lies of Zaslavskiy and others led unsuspecting investors who thought they were purchasing cryptocurrency securities to buy worthless certificates,” stated United States Attorney Donoghue.  “This Office will continue to aggressively prosecute those who exploit and defraud investors, whether through traditional means of securities fraud, or new forms – such as the use of purported cryptocurrency offerings and blockchain technology.” Mr. Donoghue extended his grateful appreciation to the Securities and Exchange Commission (SEC), New York Regional Office, for their assistance in this case.

“Criminals who manipulate and defraud the public for their own personal financial gain undermine the stability and security of our investment markets,” stated FBI Assistant Director-in-Charge Sweeney. “Investing often involves risk, but nobody should be at risk of being preyed upon by unscrupulous individuals. Zaslavskiy and his associates cloaked old-fashioned criminal schemes in the language of new currency in order to take advantage of investors, and as today’s conviction demonstrates, the FBI will continue to pursue any individual who seeks to profit by exploiting others.”

As he admitted at his guilty plea and as detailed in court documents, Zaslavskiy fraudulently marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently touted Diamond as an “exclusive and tokenized membership pool” hedged by diamonds.  In reality, Zaslavskiy bought neither real estate nor diamonds, and the certificates he sent to investors were not backed by the promised blockchain technology.  In furtherance of his scheme, Zaslavskiy falsely advertised that REcoin had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO into real estate, that 2.8 million REcoin tokens had been sold (only about 1,000 investors paid for REcoin tokens) and that the investment in Diamond tokens was “hedged by physical diamonds.”      

Earlier this year, United States District Court Judge Raymond J. Dearie denied Zaslavskiy’s motion to dismiss the indictment.  Zaslavskiy asserted that the securities laws did not apply to cryptocurrency offerings and were unconstitutionally vague.  The court upheld the validity of the laws, noting that “there can be no serious debate” that the indictment was sufficient.  The court further held that a jury was entitled to decide if REcoin and Diamond tokens were securities.  “Stripped of the 21st-century jargon,” the court wrote, referring to Zaslavskiy’s ICO marketing solicitations, the indictment described a “scam, replete with common characteristics of many financial frauds.”  The court added, “simply labeling an investment opportunity as ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract—a security—into a currency,” and does not, therefore, remove the offerings from the ambit of securities law. 

When sentenced, Zaslavskiy faces up to five years’ imprisonment.  In addition to the criminal charges filed by this Office, the SEC has filed civil charges against Zaslavskiy.  The civil case was stayed pending resolution of the criminal matter. 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Julia Nestor and Andrey Spektor are in charge of the prosecution.

The Defendant:

MAKSIM ZASLAVSKIY
Age:  39
Brooklyn, New York

E.D.N.Y. Docket No. 17-CR-647 (S-1) (RJD)

Earlier today, three separate indictments were unsealed in federal court in Central Islip charging 12 defendants as part of a coordinated federal and state takedown of several large-scale crack cocaine distribution operations in various areas of the East End of Long Island.  In addition, one defendant was charged in a complaint with possession of a firearm in furtherance of drug trafficking and possession of crack cocaine.  The defendants facing federal charges were arrested today, arraigned this afternoon before United States Magistrate Judges Anne Y. Shields and Steven I. Locke, and all ordered detained pending trial.  Two additional defendants were arrested on related New York state drug charges by members of the East End Drug Task Force.  Three federal defendants remain fugitives. 

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), George P. Beach II, Superintendent, New York State Police (NYSP), David Heggermiller, Chief, Riverhead Police Department (RPD) and Ashan M. Benedict, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field  Office (ATF), announced the charges.

“The toxic mix of street gangs, drug dealing and illegal firearms poses a direct threat to the safety of our citizens and our community,” stated United States Attorney Donoghue.  “The Eastern District and our law enforcement partners in the FBI, ATF and Suffolk County will continue to target, penetrate and destroy criminal gangs that inflict addiction, violence and grief on the people of Suffolk County.”  Mr. Donoghue expressed his grateful appreciation to the NYSP Troop L and its Commander, Major David C. Candelaria, for their assistance in the investigation.  

“The epidemic of illegal drugs and associated criminal activity negatively affects individuals and communities across the country, from every background and walk of life,” stated FBI Assistant Director-in-Charge Sweeney.  “As these arrests today demonstrate, the FBI’s Long Island Gang Task Force, along with our federal, state and local partners, will not rest until the individuals and criminal networks responsible for creating this atmosphere of lawlessness and violence are held accountable for their alleged crimes.”

“The defendants as alleged, were part of a ring made up of gang members that spread dangerous narcotics throughout their communities, stated ATF Special Agent-in-Charge Benedict.  “ATF stands with our law enforcement partners as a united front to prevent these illegal narcotics rings from harming our citizens. I would like to thank the United States Attorney’s Office and the District Attorney’s office for their work in prosecuting the case.”

“Because of the great collaboration among federal, state and local law enforcement, the East End of Long Island is safer,” stated Suffolk County District Attorney Sini. “My office will continue to work tirelessly with all of our law enforcement partners to eradicate violent street gangs from our communities. I want to particularly applaud the outstanding work done by my office’s East End Drug Task Force and the prosecutors in the Eastern District of New York.”

“The importance of working with our law enforcement partners is evident in the results of the takedown of these crack cocaine distribution operations,” stated SCPD Commissioner Hart.  “These individuals, many of whom are affiliated with the Bloods street gang, have spread narcotics in our communities and have preyed upon the addicted. We will continue to target dealers and dedicate resources to fighting this epidemic.”

“Today’s arrests are the result of an aggressive strategy to stop illegal drug trafficking and keep crack cocaine and other deadly drugs off our streets,” stated NYSP Superintendent Beach.  “Together, with our partners in federal, local and state law enforcement, we can and will stop the infiltration of harmful narcotics into our communities and we will continue to work vigilantly to put dangerous individuals like these gang members behind bars.” 

“The cooperation between agencies in this investigation is unparalleled,” stated RPD Chief Heggermiller.  “Thanks to everyone for their dedication and relentless work protecting our communities here on the East End.” 

As alleged in court filings, in early 2018, members of the FBI’s Long Island Gang Task Force and the Suffolk County East End Drug Task Force began conducting an investigation into street gangs and narcotics traffickers operating in and around Riverhead.  The defendants, many of whom were members or associates of the Bloods street gang, were involved in the large-scale distribution of crack cocaine.  Several of the defendants would “cook” powder cocaine into crack cocaine, to increase its potency and street value.  In one instance, while a defendant was cooking cocaine, a child was present in the residence.  Members of law enforcement executed search warrants at multiple locations today, recovering seven firearms, including an AR-15 rifle, three kilograms of cocaine, four pounds of marijuana, a quantity of crack cocaine and heroin and $10,000 in cash.

The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.

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. 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 federal cases are 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 York

Romaine Hopkins (also known as “Foo”)
Age: 36 
Riverhead, New York

Matthew Pittma (also known as “Pearl”)
Age:  43
Southampton, New York

Kenneth Belcher (also known as “KB”)
Age: 31
Riverhead, New York

Kotarra jackson (also known as “Red”)
Age: 36
Riverhead, New York

John Gamble (also known as “Bones”)
Age: 37
Shirley, New York

Randy Smith
Age: 33
Riverhead, New York

Deon Shorter
Age:  22
Mastic, New York

E.D.N.Y. Docket No. 18-CR-606 (JS)

Tramaine Brown (also known as “Bootsie”)
Age: 29
Jamesport, New York

Quandol Lewis
Age: 34
Riverhead, New York

Demario Weston (also known as “MK”)
Age:  34
Riverhead, New York

E.D.N.Y. Docket No. 18-CR-604 (JS)

Dayna Barrow (also known as “SI”)
Age: 35
Riverhead, New York

E.D.N.Y. Docket No. 18-CR-605 (JFB)

Daniel Harris
Age:  25
Riverhead, New York

E.D.N.Y. 18-MJ-1112