Eastern District of New York
Press releases recorded for this federal judicial district.
United States Attorney Richard P. Donoghue Announces Project Safe Neighborhoods Achievements on the One-Year Anniversary of the Revitalization of the ProgramRead the Press Release
One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Jeff Sessions has made the centerpiece of the Department’s nationwide violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in communities and to develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally-based prevention and reentry programs for lasting reductions in crime.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Sessions said in marking the anniversary. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives and restore safety to our communities.”
“Over the past year, the Eastern District of New York has arrested and prosecuted dozens of gang members, gun traffickers and other violent offenders who have committed hundreds of serious crimes in our District. The charged crimes include racketeering, murders, aggravated assaults, armed robberies, drug trafficking, firearms trafficking, and the possession of firearms by convicted felons and illegal aliens. These prosecutions are a testament to the Project Safe Neighborhoods targeted enforcement strategies, which we have pursued with our federal and local law enforcement partners,” stated United States Attorney Donoghue. “We and our partners remain completely committed to identifying those who are most responsible for violence in our District and prosecuting them to the fullest extent of the law, while continuing to support vital outreach programs for young people at risk.”
The PSN efforts of the U.S. Attorney’s Office for the Eastern District of New York over the last year include:
MS-13 Enforcement
Over the last year, this Office has continued its decade-long enforcement efforts against the MS-13 street gang. For example, in 2018, more than two dozen Long Island MS-13 gang members were charged in a single superseding indictment with racketeering offenses, including 16 murders and numerous attempted murders. Additional racketeering charges were brought against other Long Island MS-13 defendants in additional indictments throughout the year. Numerous defendants, including juvenile defendants, have already pleaded guilty to serious charges, including several murders. The investigations that led to those indictments were conducted with the Federal Bureau of Investigation’s (FBI) Long Island Gang Task Force, which includes the FBI, the Suffolk County Police Department (SCPD), the Nassau County Police Department (NCPD), the Nassau County Sheriff’s Department (NCSD), the Suffolk County Sheriff’s Department (SCSD) and other partners.Also, in August of 2018, four MS-13 gang members were charged with murder conspiracy and attempted murder in Queens. Those MS-13 defendants are charged with aiding and abetting co-conspirators who shot and paralyzed a 16-year-old suspected rival gang member. The investigation was conducted with the FBI’s Safe Streets Gang Task Forces in Queens and on Long Island, which includes the FBI, the New York City Police Department (NYPD) and other partners.
Coney Island Gang Enforcement
The Office’s Organized Crime and Gangs Section has increased its enforcement efforts in the Coney Island area. The number of shooting victims in the NYPD’s 60th Precinct is down 70 percent year-to-date, and the number of shooting incidents is down 66 percent year-to-date, according to the NYPD.
In June 2018, a Brooklyn gang member was convicted of racketeering and two murders. The defendant, a member of the Coney Island-based Rival Impact gang, gunned down the victims in a gang war with the Thirty-O gang. The investigation was conducted with the FBI and the NYPD.
In November 2017, five members of a Coney Island street gang were indicted for murder, racketeering conspiracy and unlawful use of firearms. Three of the defendants are charged with a fatal shooting outside the Mermaid Houses in Brooklyn. The investigation was conducted with the FBI, the New York City Department of Investigation and the NYPD.
Other Street Gang Enforcement
In April 2018, four 18th Street gang members and associates were indicted for murder conspiracy and the murder of an MS-13 gang rival in Queens. The investigation was conducted with the Queens County District Attorney’s Office and the FBI’s New York Metro Safe Streets Task Force, including the NYPD.
Also in April 2018, a Long Island Bloods gang member was indicted for murder and racketeering. The defendant is charged with fatally shooting a victim at the Illusions Gentlemen’s Club in Deer Park. The investigation was conducted with the Suffolk County District Attorney’s Office and the FBI’s Long Island Gang Task Force, which includes the FBI, the Suffolk County Police Department (SCPD), the Nassau County Police Department (NCPD), the Nassau County Sheriff’s Department (NCSD), the Suffolk County Sheriff’s Department (SCSD) and other partners.
In March 2018, three members and associates of the 18th Street gang were indicted for the murder of a fellow gang member they suspected of being an informant. The defendants video recorded the murder and mutilation of the victim before burying the corpse in Turkey Point State Forest in Saugerties, New York. A fourth defendant is charged with helping a co-defendant evade capture by law enforcement authorities after the murder. The investigation was conducted with the Ulster County District Attorney’s Office and the FBI.
Since October of 2017, the Office has prosecuted over more than two dozen felon in possession of a weapon cases and more than 30 Hobbs Act robbery cases.
Firearms Trafficking Enforcement
In September 2018, two defendants were arrested for trafficking firearms from Virginia to Queens and Long Island. The defendants are charged with selling an assault rifle, high-caliber handguns and several other firearms. The investigation was conducted with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the FBI and the NCPD.
In June 2018, three defendants were arrested for trafficking firearms from Virginia to New York. The defendants allegedly used Facebook to market and sell firearms illegally obtained by straw purchasers. The investigation was conducted with the ATF and the NYPD.
Additional Federal Prosecutors Assigned
In June 2018, Attorney General Sessions announced 311 new Assistant United States Attorney (AUSA) positions throughout the country. This was the largest increase in AUSAs in decades and, as part of that increase, the Attorney General allocated nine new prosecutors to the EDNY to focus on violent crime, civil enforcement and immigration crimes.
In addition, in January 2018, Attorney General Sessions selected the EDNY to receive two new AUSA positions to combat violent crime on Long Island. The two additional federal prosecutors enhanced the Office’s ability to prosecute violent crimes committed by members and associates of MS-13 and other violent gangs such as the Crips, Bloods, Latin Kings, 18th Street gang and Outlaw motorcycle gangs, all of which have a significant presence in the district.
Community Partnerships and Grants
PSN funding has also been made available to provide direct support to local law enforcement agencies as well as prevention, education and awareness programs for at-risk young people and parents. Presentations regarding gang awareness, internet safety and monitoring your child’s electronic devices all provide students and parents with necessary tools to more effectively avoid the dangers of violent crime.
In September 2018, a federal award of $1,036,044 was granted to Suffolk County to oversee and implement various violent crime reduction strategies in Suffolk County, Nassau County and throughout the district. Resources will be dedicated to enforcement and prevention efforts including, but not limited to, funding for prosecutors and police, providing technical training, promoting community outreach efforts and supporting existing gun and gang violence reduction programs.
In addition, in October 2017, the Justice Department awarded a $500,000 grant to the Suffolk County Police Department for a violent gang and gun crime reduction program. The grant supported enforcement strategies targeting individuals responsible for a disproportionate amount of violent crime and expanded community outreach programs for at-risk youth.
Charges in complaints and indictments are allegations, and defendants are presumed innocent unless and until proven guilty.
Eight Therapists Arrested in Scheme to Defraud Program for Developmentally Disabled ChildrenRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Kaderrah Doyle, Cara Steinberg, Marina Golfo, Ego Onaga, Lyubov Beylina, Danielle Scopinich, Patricia Hakim and Enock Mensah with stealing more than $600,000 in funds from Medicaid and the New York City Department of Health and Mental Hygiene through fraudulent billing practices in connection with the New York State Early Intervention Program (EIP). The EIP is a New York State program that provides remedial services to developmentally delayed children from birth to age three. The defendants, all EIP therapists, were arrested earlier today and are scheduled to make their initial appearance this afternoon before United States Magistrate Judge Sanket J. Bulsara.
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 Mark G. Peters, Commissioner, New York City Department of Investigation (DOI), announced the charges.
“As alleged in the complaint, the defendants defrauded government agencies out of hundreds of thousands of dollars in public funds designated for therapeutic care for developmentally disabled children,” stated United States Attorney Donoghue. “The victims of this fraud include not only the children and their families who were deprived of the therapeutic care that these defendants claimed to have performed, but ultimately the taxpayers whose taxes support Medicaid. This Office and our law enforcement partners are committed to ensuring that those who defraud benefit programs will be held accountable.” Mr. Donoghue also expressed his appreciation to the New York City Department of Health and Mental Hygiene for its assistance during the investigation.
“As we allege today, these defendants stole hundreds of thousands of government dollars from a program designed to aid some of our city’s most vulnerable residents,” stated FBI Assistant Director-in-Charge Sweeney. “Rather than provide honest services, they chose to line their own pockets at the expense of taxpayers and the developmentally-delayed children and their families for whom these funds were targeted. Today’s arrests should serve as a reminder that the FBI will continue to be vigilant in our effort to root out fraud and abuse in programs intended to serve the public when these programs are corrupted by greed.”
“These eight therapists shamefully benefited by stealing hundreds of thousands of dollars in public funds while developmentally disabled and delayed children in their care were denied thousands of crucial therapy sessions, according to the charges,” stated DOI Commissioner Peters. “DOI thanks the U.S. Attorney’s Office for the Eastern District of New York for its prosecution of these crimes.”
According to the complaint, between approximately 2012 and 2018, the defendants submitted thousands of fraudulent session notes and accompanying invoices for non-existent EIP therapy sessions. As a direct result of their fraudulent submissions, the defendants received hundreds of thousands of dollars in reimbursements from Medicaid and the New York City Department of Health and Mental Hygiene. On many occasions, the defendants were not present at the place where the therapy sessions supposedly occurred, including instances in which they were outside of New York State or even outside of the United States. For example, Beylina allegedly submitted approximately 51 fraudulent invoices for EIP therapy sessions that purportedly occurred when she was in the Dominican Republic. On other occasions, the defendants submitted documentation containing the forged signatures of the children’s caretakers, including parents, guardians, teachers and daycare providers. In other instances, the defendants falsely claimed to have performed EIP therapy sessions for two different children at two different locations at the exact same time. Many of the defendants also falsely claimed to have performed EIP therapy sessions when they were, in fact, at work elsewhere, including as full-time teachers with the New York City Department of Education.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted, the defendants face a statutory maximum of 10 years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Ryan Harris and Erin Reid are in charge of the prosecution.
The Defendants:
KADERRAH DOYLE
Age: 41
Bronx, New YorkCARA STEINBERG
Age: 40
Old Bridge, New JerseyMARINA GOLFO
Age: 44
North Pelham, New YorkEGO ONAGA
Age: 45
Staten Island, New YorkLYUBOV BEYLINA
Age: 30
Brooklyn, New YorkDANIELLE SCOPINICH
Age: 35
Ozone Park, New YorkPATRICIA HAKIM
Age: 54
Forest Hills, New YorkENOCK MENSAH
Age: 58
Mount Olive, New JerseyE.D.N.Y. Docket No. 18-MJ-927
AmerisourceBergen Corporation Agrees to Pay $625 Million to Resolve Allegations That it Illegally Repackaged Cancer–Supportive Injectable Drugs to Profit from OverfillRead the Press Release
The Department of Justice announced today that AmerisourceBergen Corporation and its subsidiaries AmerisourceBergen Specialty Group (ABSG), AmerisourceBergen Drug Corporation (ABDC), Oncology Supply Company (OSC), and Medical Initiatives Inc. (MII) (collectively, “ABC”) have agreed to pay $625 million to resolve allegations arising from its operation of a facility that improperly repackaged oncology-supportive injectable drugs into pre-filled syringes and improperly distributed those syringes to physicians treating vulnerable cancer patients. ABC is one of the nation’s largest wholesale drug companies and ranked number 11 on the Fortune 500 list. The drugs involved in ABC’s scheme were Procrit®, Aloxi®, Kytril® and its generic form granisetron, Anzemet® and Neupogen®.
Last year, AmerisourceBergen Specialty Group, a wholly-owned subsidiary of AmerisourceBergen Corporation, pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for its distribution of these drugs from a facility that was not registered with the Food and Drug Administration (FDA). The settlement announced today resolves ABC’s civil liability to the United States under the False Claims Act for causing false claims for the drugs it repackaged to be submitted to federal health care programs.
“The $885 million combined civil and criminal resolution with ABC underscores our determination to utilize all tools at our disposal to pursue illicit schemes that seek to profit from circumvention of important safeguards designed to protect the nation’s drug supply,” said Assistant Attorney General Joseph H. Hunt of the Department of Justice’s Civil Division. “We will continue to be particularly vigilant where these schemes put the health and safety of vulnerable patients at risk.”
“ABC placed corporate profits over patients’ needs, endangering the health of vulnerable cancer patients,” stated United States Attorney Donoghue. “This settlement, and the substantial penalty ABC has agreed to pay, reflect this Office’s firm commitment to protecting those in need of healthcare and holding to account those who put the health and safety of patients at risk.” Mr. Donoghue expressed his appreciation to the Department of Veterans Affairs and the National Association of Medicaid Fraud Control Units for their assistance.
The United States contends that ABC sought to profit from the excess drug product or “overfill” contained within the original FDA-approved sterile vials for these cancer supportive injectable drugs by establishing a pre-filled syringe program through a subsidiary that it claimed was a pharmacy. The United States alleged that the “pharmacy” was in reality a repackaging operation that created and shipped millions of pre-filled syringes to oncology practices for administration to cancer-stricken patients. As part of this operation, ABC purchased original vials from their respective manufacturers, broke their sterility, pooled the contents, and repackaged the drugs into pre-filled syringes.
The United States alleged that ABC never submitted any safety, stability, or sterility data to the FDA to show that its operation ensured the safety and efficacy of the repackaged drug products. It further alleged that, at times, these pre-filled syringes were prepared in non-sterile conditions, contaminated with bacteria and other unknown particles, and lacked the required quality and purity.
In addition, by harvesting the overfill, ABC was able to create more doses than it bought from the original vial manufacturers. The United States alleged that ABC’s scheme enabled it to bill multiple health care providers for the same exact same vial of drug, causing some of those providers to bill the Federal Health Care Programs for the same vial more than once. The scheme also allegedly enabled ABC to increase its market share by offering various product discounts, which it leveraged to obtain new customers and to keep existing customers buying its entire portfolio of oncology drugs.
The settlement also resolves allegations that ABC gave kickbacks to physicians to induce them to purchase Procrit through the pre-filled syringe program. The alleged kickbacks were in the form of general pharmacy credits provided to customers, but which were not identifiable as specific to Procrit on the invoice.
Through these actions, the United States contended that ABC caused false claims to be submitted to the Centers for Medicare and Medicaid Services (“CMS”), the Department of Defense’s Defense Health Agency, which administers TRICARE, the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, and the United States Department of Veterans Affairs (collectively, the “Federal Healthcare Payors”). Under the terms of today’s settlement, ABC will pay $581,809,006 plus accrued interest to the federal government and $43,190,994 plus accrued interest to state Medicaid programs.
“Drug companies such as ABC that seek to boost profits at the expense of cancer patients unnecessarily put the health and safety of this vulnerable population at risk,” stated HHS-OIG Special Agent-in-Charge Lampert. “Greed must never be a part of medical decision making. HHS-OIG, along with our law enforcement partners, is committed to protecting patient quality of care, and this settlement should serve as a warning to drug companies that are tempted to shortchange patient well-being.”
The settlement resolves allegations contained in three separate actions filed against ABC under the qui tam, or whistleblower, provisions of the False Claims Act. Under the act, private parties may sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The relator share of the federal portion of the civil settlement will be $93,089,441.
The settlement was the result of close cooperation between the U.S. Attorney’s Office for the Eastern District of New York, the Civil Division, Commercial Litigation Branch, the Office of Inspector General of the Department of Health and Human Services, the Food and Drug Administration, the Department of Defense, the Office of Personnel Management, the Department of Veterans Affairs, and the state attorneys general and Medicaid Fraud Control Units. The three cases are captioned United States ex rel. Michael Mullen v. AmerisourceBergen Corporation, et al., Civil Action No. CV-10-4856 (E.D.N.Y); United States ex rel. Omni Healthcare Inc. v. AmerisourceBergen, et al., Civil Action No. CV-12- 1178 (E.D.N.Y); United States ex rel. Daniel Sypula and Kelly Hodge v. AmerisourceBergen Drug Corporation, et al., Civil Action No. CV-14-5278 (E.D.N.Y.).
Excepted as otherwise admitted as part of its guilty plea or the statement of facts accompanying the civil settlement agreement, the claims resolved by the civil settlement are allegations only, and there has been no admission of liability.
AmerisourceBergen Corp. to Pay $625 Million to Settle Civil Fraud Allegations Resulting from Its Repackaging and Sale of Adulterated Drugs and Unapproved New Drugs, Double Billing and Providing KickbacksRead the Press Release
AmerisourceBergen Corporation (ABC), one of the nation’s largest wholesale drug companies, and its subsidiaries AmerisourceBergen Specialty Group (ABSG), AmerisourceBergen Drug Corporation (ABDC), Oncology Supply Company (OSC), and Medical Initiatives, Inc. (MII) (collectively, “ABC” or “the Company”), entered into a settlement with the United States in which it agreed to pay $625 million to resolve civil liability under the False Claims Act, 31 U.S.C. § 3730 et seq. The claims against ABC arise from its repackaging and distributing of Pre-Filled Syringes (PFS) that were not approved for sale or use by the U.S. Food and Drug Administration (FDA). The drugs involved in the scheme were Procrit®, Aloxi®, Kytril® and its generic form granisetron, Anzemet® and Neupogen®, all supportive drugs for cancer patients undergoing chemotherapy treatment (the PFS Drugs).
As part of the civil settlement, ABC admitted that between January 2001 and January 2014, MII and OSC operated a program that created, packed and shipped millions of PFS to oncology practices for administration to vulnerable cancer patients (the PFS Program). At MII, an ABC subsidiary located in Alabama, the drug product was removed from the original glass vials and multiple vials of the product were pooled in untested plastic containers. Then the drug, including the overfill[1], was extracted and repackaged into syringes. By harvesting the overfill, ABC was able to create more doses than it bought from the original vial manufacturers and avoid opening some of the vials. ABC retained the unopened vials and sold them to other customers and to its subsidiary ABDC for resale. During the 13 years the PFS Program was in operation, MII manufactured thousands of syringes daily, and eventually over one million syringes per year. These syringes were sold throughout the United States. Approximately 57% of the patients who were injected with the PFS were Federal Health Care Program beneficiaries. The profit from the PFS Program was between $2.3 and $14.4 million annually for a total profit of at least $99.6 million.
ABC’s scheme enabled it to bill multiple health care providers for the same vial of drug, causing some of those providers to bill the Federal Health Care Programs for the same vial more than once. The scheme also enabled ABC to increase its market share by offering various product discounts, which it leveraged to obtain new customers and to keep existing customers who purchased its entire portfolio of oncology drugs. ABC excluded the entire PFS Program from its standard regulatory audit and pedigree compliance programs.
This civil settlement brings to $885 million the total penalties that ABC has paid to resolve liability resulting from the PFS Program. Previously, in September 2017, ABSG pleaded guilty to a criminal violation of 21 U.S.C. §§ 33l(a) and 333(a)(l) for the introduction of misbranded drugs into interstate commerce, as such drugs were manufactured and prepared at MII, an establishment not registered with the FDA pursuant to 21 U.S.C. § 360. In connection with that guilty plea, ABSG paid $260 million in criminal fines and forfeiture.
Richard P. Donoghue, U.S. Attorney for the Eastern District of New York; Joseph H. Hunt, Assistant Attorney General for the Civil Division of the Department of Justice; Mark S. McCormack, Special Agent-in-Charge, U.S. Food and Drug Administration, Office of Criminal Investigations (FDA-OCI); Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), New York Region; Bret D. Mastronardi, Special Agent-in-Charge, U.S. Office of Personnel Management, Office of the Inspector General (OPM-OIG); and Leigh-Alistair Barzey, Special Agent-in-Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office, announced the settlement.
“ABC placed corporate profits over patients’ needs, endangering the health of vulnerable cancer patients,” stated United States Attorney Donoghue. “This settlement, and the substantial penalty ABC has agreed to pay, reflect this Office’s firm commitment to protecting those in need of healthcare and holding to account those who put the health and safety of patients at risk.” Mr. Donoghue also expressed his appreciation to the Department of Veterans Affairs and the National Association of Medicaid Fraud Control Units for their assistance.
“The $885 million combined civil and criminal resolution with ABC underscores our determination to utilize all tools at our disposal to pursue illicit schemes that seek to profit from circumvention of important safeguards designed to protect the nation’s drug supply,” said Assistant Attorney General Hunt. “We will continue to be particularly vigilant where these schemes put the health and safety of vulnerable patients at risk.”
“U.S. patients rely on the FDA to ensure that injectable chemotherapy drugs are safe and effective. When companies attempt to avoid FDA’s oversight authority, they endanger these vulnerable patients’ health,” stated FDA-OCI Special Agent-in-Charge McCormack. “We will continue to pursue and bring to justice those who violate the public’s trust.”
“Drug companies such as ABC that seek to boost profits at the expense of cancer patients unnecessarily put the health and safety of this vulnerable population at risk,” stated HHS-OIG Special Agent-in-Charge Lampert. “Greed must never be a part of medical decision making. HHS-OIG, along with our law enforcement partners, is committed to protecting patient quality of care, and this settlement should serve as a warning to drug companies that are tempted to shortchange patient well-being.”
“Ensuring that Federal employees, retirees, and their families are protected from the adulteration of drugs and other harmful practices is of the utmost importance to the OPM-OIG,” stated OPM-OIG Special-Agent-in-Charge Mastronardi. “We will continue to aggressively investigate and prosecute all individuals who pursue profit at the expense of patient safety. I’d like to thank our criminal investigators and their law enforcement partners for their hard work and dedication on this case.”
“Ensuring the integrity of TRICARE, the U.S. Department of Defense's health care plan, is of paramount importance to the Defense Criminal Investigative Service (DCIS),” stated DCIS Special Agent-in-Charge Barzey. “Today’s settlement is the result of a joint agency effort to investigate pharmaceutical companies that manufacture and sell adulterated drugs that could threaten U.S. military members, retirees and their dependents.”
In its investigation, the United States determined that for each of the drugs that were converted into PFS, ABC failed to submit a New Drug Application or a Biologics License Application demonstrating the safety and efficacy of the PFS and did not receive FDA approval to manufacture the PFS. For this reason, the PFS, distributed throughout the United States for 13 years, were unapproved new drugs. In addition, ABC did not register MII with the FDA as a repackager. By avoiding registration, ABC also evaded FDA inspection and important safety and sterility safeguards, including current good manufacturing practices (“cGMP”), required of repackagers to ensure that their drug products are safe and effective. The United States contends that ABC was aware of the requirements to register, submit to inspection and prepare drugs in accordance with cGMP, but chose not to comply. Instead, the government’s investigation revealed that ABC falsely represented to physician customers that MII was a pharmacy. Through this claim, ABC sought to avoid FDA regulations because certain pharmacy practices are regulated under applicable state pharmacy laws. However, MII did not comport itself as a pharmacy. For example, MII did not obtain valid prescriptions, check for harmful potential drug interactions, or see or counsel patients. As ABC admitted, on many occasions, MII assigned the name of an individual to a set of PFS, and OSC subsequently shipped PFS that were in a bag labeled with that individual’s name, despite the fact that the individual was not in fact a patient who was to be administered a PFS. In some instances, the individual's name assigned to the set of PFS was a staff member at a physician customer (such as a nurse or office manager); in others, the individual was no longer a patient of the physician customer, either because the individual was no longer receiving treatment and/or because the individual was deceased. In addition, MII often filled orders that had been submitted with a single patient name, and/or assigned a single individual’s name to an order of PFS, far in excess of plausible and/or safe use of the drug product contained in the syringes. In addition, the United States contends that ABC represented to physicians that its repackaging procedures followed aseptic technique and complied with all applicable laws. The United States determined that the PFS were prepared in an unclean environment, were contaminated with actual filth, and were not of the quality or purity that ABC represented.
The settlement also resolves allegations that ABC gave kickbacks to physicians to induce them to purchase drugs through the PFS program. The alleged kickbacks were in the form of general pharmacy credits provided to the customer, which were not identifiable on an invoice as specific to Procrit®. OSC billed customers for Procrit® at full price and at the end of the week or month added a “general credit” to the customers’ account. Credits were not given for other drugs. The pharmacy rebate was not listed on the invoice as related to Procrit®; it was listed as a pharmacy rebate for pharmacy sales.
With the exception of the facts contained in the Statement of Facts attached to the settlement agreement, the settlement is not an admission of wrongdoing by ABC.
The settlement is the culmination of a multi-year parallel civil and criminal investigation by this Office into allegations contained in three qui tam actions filed against ABC in the United States District Court for the Eastern District of New York.[2] On August 31, 2017, the United States intervened in those actions, which were unsealed today. The cases are U.S. ex rel Michael Mullen v. AmerisourceBergen, et al. No. 1:10-4856; U.S. ex rel Omni Healthcare Inc. v. AmerisourceBergen, et al. No. 12-CV-1178; and U.S. ex rel Daniel Sypula, RPH and Kelly Hodge v. AmerisourceBergen, et al., No. 1:14-5278. All of the cases are pending before the Honorable Nina Gershon. The criminal case was resolved through a plea agreement in September 2017. United States v. AmerisourceBergen Specialty Group, LLC, CR. No. 17-507 (NG). In connection with the settlement, ABC also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”). In addition, ABC and 43 States have an agreement in principle to resolve claims under the States’ false claims acts.
The civil investigation and settlement with ABC were handled by the Office’s Civil Division. Assistant United States Attorneys Deborah B. Zwany and Matthew Silverman are in charge of these cases and were assisted by former Affirmative Civil Enforcement Coordinator Emily Rosenthal. The Office of Criminal Investigation at FDA, the Offices of the Inspector General at the Department of Health and Human Services, the Department of Defense, the Office of Personnel Management and the Department of Veterans Affairs assisted in the investigation of these cases. Sanjay Bhambhani, Department of Justice, Civil Frauds Section, and Jay Speers and Elizabeth Silverman, New York State Medicaid Fraud Control Unit assisted in the settlement of these cases. The criminal case against ABC was prosecuted by Assistant United States Attorneys Alixandra E. Smith and Ameet B. Kabrawala of the Office’s Business and Securities Fraud Section.
[1] The term “overfill” is a frequently used term in the pharmaceutical industry generally meaning the amount of extra drug above and beyond the labeled dose that is contained in an FDA-approved vial of drug. The overfill is not listed on the FDA-approved drug label. The reason manufacturers put overfill in each vial of drug is to ensure that the health care provider administering the drug will be able to extract the full labeled dose from the vial to give to the patient. See, e.g., 75 Fed. Reg. 73170, 73466-67 (Nov 29, 2010). It is also not included in the price of the vial.
[2] United States ex rel. Daniel Sypula v. AmerisourceBergen Corp., was originally filed in the Eastern District of Michigan and transferred to the Eastern District of New York.
Three Individuals Charged with Distributing over 100 Kilograms of Fentanyl, Fentanyl Analogues and Heroin on Long IslandRead the Press Release
Gary Davis, Joel Lee Faison and Tamien Trent were arraigned late yesterday afternoon before United States District Court Judge Joseph F. Bianco at the federal courthouse in Central Islip on a 13-count indictment charging them with conspiring to distribute and possess with intent to distribute controlled substances, including heroin and fentanyl, using firearms in connection with these drug trafficking crimes and related charges. At their initial appearances on September 27, 2018, each defendant was ordered permanently detained.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York; Timothy D. Sini, District Attorney for Suffolk County; and Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), announced the charges.
“As alleged in the indictment, these defendants sold tremendous amounts of heroin, fentanyl and fentanyl analogues throughout Long Island, flooding our streets with life-threatening drugs and enriching themselves at the expense of those suffering from addiction,” stated United States Attorney Donoghue. “The Eastern District and our partners will continue the fight to protect our communities from those who deal heroin and other deadly drugs seeking to profit from the opioid epidemic.” Mr. Donoghue extended his grateful appreciation to the New York National Guard Counter Drug Task Force for their assistance in the investigation.
“We know these mixtures of fentanyl and heroin are killing people every day in our communities,” stated FBI Assistant Director-in-Charge Sweeney. “One of the subjects in this case actually bragged about how potent the drugs were that he was selling. The FBI and the agencies we’ve partnered with on the FBI Long Island Gang Task Force work each day to stop the proliferation of these deadly drugs, and we won’t stop until we round up every dealer who looks to make money on the pain and suffering of people.”
“The charges against the defendants illustrate the law enforcement community’s shared and unwavering commitment to ridding the community of deadly drugs and bringing to justice those who distribute this poison in our communities,” stated HSI Special Agent-in-Charge Melendez.
“What is particularly sickening about these defendants is that they used as a selling point the fact that the drugs were causing overdoses. They did so by selling fentanyl analogs – synthetic narcotics that are specifically designed by drug dealers to evade law enforcement,” stated Suffolk County District Attorney Sini. “The message here is clear: we will not tolerate individuals peddling this poison in our communities and no matter what steps they take to evade law enforcement, we will find them. I thank our partners in the FBI, ICE, and the Suffolk County Police Department for continuing to partner with my office to target drug dealers and help end our community's opioid crisis. Most of all, I appreciate the outstanding work done by the United States Attorney's Office for the Eastern District of New York and its great prosecutors.”“Taking these three high-level suppliers off the streets will make a significant impact on the amount of drugs that are available for sale,” stated SCPD Commissioner Hart. “These three unabashedly fed the addictions of countless individuals, ruining the lives of not only those addicted, but of their families as well. We should all be proud of the work of everyone involved in not only this case but all the detectives and investigators who dedicate their efforts to fighting the drug epidemic that’s impacting our communities.”
According to the indictment and court filings, from approximately September 2014 until their arrests on September 27, 2018, the defendants distributed in excess of 100 kilograms of heroin, fentanyl and fentanyl analogues, as well as crack cocaine across Long Island. Trent boasted to a government witness that the narcotics he was selling were rendering people unconscious and, on at least one occasion, he forwarded photographs to another person of unconscious drug customers to demonstrate the potency of the drugs. The government’s investigation revealed that the defendants used firearms to protect their organization and distribution chain from rivals. Search warrants executed at the time of the defendants’ arrests resulted in the recovery of a substance that field-tested positive for heroin, a handgun, two shotguns and United States currency.
If convicted, the defendants face a maximum sentence of lifetime imprisonment.
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 Division. Assistant United States Attorneys Christopher C. Caffarone and Mark E. Misorek, and Special Assistant United States Attorney Jacob T. Kubetz are in charge of the prosecution.
The Defendants:
GARY DAVIS (also known as “G”)
Age: 38
Residence: Mastic Beach, New YorkJOEL LEE FAISON (also known as “Face”)
Age: 42
Residence: Mastic Beach, New YorkTAMIEN TRENT (also known as “Taim”)
Age: 36
Residence: Mastic Beach, New YorkEDNY Docket No. 18-CR-1221 (JFB)
Colombian Veterinarian Pleads Guilty in Brooklyn Federal Court to Heroin Importation ConspiracyRead the Press Release
Andres Lopez Elorez pleaded guilty today before United States Magistrate Judge Robert M. Levy in federal court in Brooklyn to conspiring to import heroin into the United States.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, announced the guilty plea.
Elorez and his co-conspirators, based in Colombia, smuggled heroin into the United States using various methods to conceal narcotics from law enforcement, including the surgical implantation of liquid heroin into the bellies of puppies. When the puppies arrived in the United States from Colombia, the heroin was surgically removed from their bodies. Between September 8, 2004 and January 1, 2005, Elorez and his co-conspirators imported one kilogram or more of heroin into the United States. Elorez was extradited from Spain to the United States in May 2018.
When sentenced, Elorez faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment. Upon completion of his sentence, Elorez faces deportation from the United States.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nathan D. Reilly and Alicia N. Washington are in charge of the prosecution.
The Defendant:
ANDRES LOPEZ ELOREZ
Age: 39
Country of Birth: ColombiaE.D.N.Y. Docket No. 5-CR-835 (S-1) (SJ)
Former Owner of Long Island Catering Hall Pleads Guilty to Forced LaborRead the Press Release
Earlier today, in federal court in Central Islip, Ralph Colamussi pled guilty before United States District Judge Denis R. Hurley to forced labor of employees at the Thatched Cottage, a catering and wedding venue in Centerport, New York. When sentenced, Colamussi faces up to 20 years in prison, as well as restitution and a fine of up to $250,000.
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; Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York; and Thomas M. Cioppa, District Director, United States Citizenship and Immigration Services (USCIS), announced the guilty plea.
Colamussi formerly owned and operated the Thatched Cottage. At the plea proceeding, Colamussi admitted that workers were brought from the Philippines to the United States on H-2B visas that expired shortly after their arrival here. Once their H-2B visas expired, Colamussi coached workers how to apply for student visas by fraudulently representing that they intended to attend school full-time and had sufficient resources to support themselves during school. Colamussi admitted that at times, he deposited funds into the workers’ bank accounts to give the appearance of ample resources and then withdrew the funds once the student visas were approved. Colamussi further admitted that when workers objected to performing certain jobs, working consecutive shifts or not being paid promptly, he threatened to report them to immigration authorities.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
RALPH COLAMUSSI
Age: 64
Huntington, New York,E.D.N.Y. Docket No. 17-0592 (DRH)
Brooklyn Man, Banned for Life from Commodities Trading, Indicted for Defrauding InvestorsRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Yehuda Belsky, also known as “Jay Bell,” the owner of Brooklyn-based Y Trading, LLC, with mail fraud, failure to register as a commodities trading advisor, and misappropriation of customer funds. Belsky was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the charges.
According to the indictment, in 2008 Belsky was permanently barred by the CFTC from trading in commodity futures transactions and options. Nonetheless, from March 2014 to June 2018 Belsky presented himself as an experienced commodities trader and promised investors he would invest their money in binary options, a type of investment in which investors are promised an opportunity to be paid predetermined amounts based upon the particular price of securities, commodities or other investments at particular points in time. Belsky further enticed investors by showing them fraudulent monthly account statements from the North American Derivatives Exchange that purported to show his successful history of commodities trading. Instead, he stole the investors’ money for his personal use and to repay other customers who he had fraudulently induced to trust him with investment funds.
“As alleged in the indictment, Belsky lured commodities investors with false promises of his trading success, and then betrayed them by embezzling their money,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, is committed to vigorously investigating and prosecuting those who seek to use commodities markets as a means to illegally enrich themselves at the expense of investors.”
“Investors often turn to an advisor when they don’t know the ins and outs of the market trusting that the advisor will honestly assist investing their money. Unfortunately, that was not the case with Mr. Belsky who was already barred from trading, but nevertheless allegedly continued to defraud unsuspecting investors,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI and our law enforcement partners investigate cases each day hoping to stop the next scheme from impacting investors who have to put faith in traders.”
“This action shows the CFTC’s continued commitment to working in parallel with our law enforcement partners to identify, investigate, and hold accountable bad actors in our markets,” stated CFTC Director McDonald.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of mail fraud, Belsky faces up to 20 years’ imprisonment.
The government’s case is being prosecuted by Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section under the supervision of the United States Attorney’s Office for the Eastern District of New York’s Business and Securities Fraud Section.
The Defendant:
YEHUDA BELSKY (also known as “Jay Bell”)
Age: 46
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-504 (ARR)
Queens Man Pleads Guilty to Armed Bank Robbery and Weapons PossessionRead the Press Release
Earlier today, in federal court in Central Islip, Troy Tavares pleaded guilty before United States District Judge Joanna Seybert to armed bank robbery and a firearms possession charge related to his role as the getaway driver in the gunpoint robbery of the Bridgehampton Savings Bank in Hewlett, New York. When sentenced, Tavares faces up to 25 years’ imprisonment for the bank robbery and a minimum of seven years’ imprisonment and up to life in prison for the firearms charge.
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 guilty plea.
According to court filings and prior public proceedings in the case, on August 21, 2017, Tavares drove a coconspirator, Pedro Benitez, to the Bridgehampton Savings Bank. While Tavares waited outside in the vehicle, Benitez entered the bank and ordered customers and employees of the bank to the floor at gunpoint and demanded money from bank employees. After Benitez fled the bank with over $12,000, Tavares drove him to a nearby location where they met with other conspirators to split the proceeds. At his guilty plea, Tavares admitted that he had also participated in two additional robberies that the crew committed during the summer of 2017, one in Nassau County and one in Queens. In each of those robberies, Tavares had acted as the getaway driver for Benitez, who entered the banks and robbed the bank employees of the banks’ cash. In total, the robbery crew stole over $70,000 from four banks between July and September of 2017.
In March 2018, Benitez pleaded guilty to armed bank robbery and brandishing a firearm. He has been sentenced to 130 months’ imprisonment. Two other members of the bank robbery crew also pleaded guilty and are awaiting sentence. One other member of the robbery crew is awaiting trial.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Michael Maffei is in charge of the prosecution.
The Defendant:
TROY TAVARES
Age: 22
Far Rockaway, New YorkE.D.N.Y. Docket No. 17-572 (S-1) (JS)
Queens Attorney and Second Individual Indicted for Scheme to Bribe a Witness in Double Homicide Trial on Long IslandRead the Press Release
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman 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 Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
The Defendants:
JOHN SCARPA, JR.
Age: 65
Queens, New YorkCharles gallman (also known as “t.a.”)
Age: 56
Queens, New YorkE.D.N.Y. Docket No. 18-CR-123 (S-1) (CBA)
Owner of Queens Pharmacies Charged in Scheme to Defraud Medicare and MedicaidRead the Press Release
Aleah Mohammed, the owner of four pharmacies in Queens, New York, will be arraigned today in federal court in Brooklyn on an indictment charging her with submitting millions of dollars in claims as part of a scheme to defraud Medicare and Medicaid. The proceeding will take place before United States Magistrate Judge Steven L. Tiscione at 11:00 a.m.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Scott J. Lampert, Special Agent-in-Charge, the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, New York Region (HHS-OIG), announced the indictment.
“As alleged in the indictment, Mohammed used her pharmacies to steal from publicly funded health care programs and fund her lavish lifestyle,” stated United States Attorney Donoghue. “This Office and our law enforcement partners are committed to holding accountable fraudsters who seek to enrich themselves at the expense of vital taxpayer-funded programs upon which so many Americans rely.”
“According to the allegations in the indictment announced today, Aleah Mohammed defrauded the taxpayer-funded Medicare and Medicaid programs by submitting millions of dollars of phony reimbursement claims, and then used the stolen money to purchase luxury items such as cars and jewelry,” stated Assistant Attorney General Benczkowski. “This case is another example of the outstanding work of the Department’s Medicare Fraud Strike Forces, which are focused on safeguarding federally funded health care programs and vigorously prosecuting those who seek to defraud them.”
“These investigations matter because the subjects are stealing money each and every one of us pays in taxes to fund these programs,” stated FBI Assistant Director-in-Charge Sweeney. “What adds insult to injury, defrauding the government and stealing money is rarely about anything more than spending money on frivolous things like pricy jewelry and fast cars. Our ultimate goal is to stop these fraudsters from wasting the millions they steal so it can go to the patients and taxpayers who depend on it.”
“Ms. Mohammed’s alleged fraud scheme was motivated by nothing more than personal greed,” stated HHS-OIG Special Agent-in-Charge Lampert. “This indictment should serve as a warning to any health care provider daring to use Medicare and Medicaid as a vehicle to steal money. We will continue to work with our law enforcement partners to aggressively pursue those who seek to undermine taxpayer-funded health care programs intended for our most vulnerable Americans.”As alleged in the indictment, Aleah Mohammed, also known as “Aleah Haniff,” was the owner and operator of Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc. and S&A Superdrugs II Inc. Beginning in approximately May 2015 and continuing through June 2018, Mohammed executed a scheme in which she and others submitted fraudulent claims to Medicare Part D plans and Medicaid for reimbursement for prescription drugs that were not dispensed, prescribed as claimed or medically necessary. The fraudulent claims included claims for prescription drugs for the treatment of the human immunodeficiency virus (HIV). Through this scheme, Mohammed’s pharmacies received approximately $7.9 million in reimbursements from Medicare and Medicaid. The indictment further alleges that Mohammed used the proceeds of the scheme to purchase, among other things, luxury items including a Porsche and jewelry.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted of health care fraud, Mohammed faces a maximum sentence of 10 years’ imprisonment.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.
The Defendant:
ALEAH MOHAMMED (also known as “Aleah Haniff”)
Age: 33
Residence: Queens, New YorkE.D.N.Y. Docket No. 18-CR-509 (ENV)
Owner of New York City Pharmacies Charged in Scheme to Defraud Medicare and MedicaidRead the Press Release
The owner of four pharmacies in Queens, New York, will be arraigned later today in federal court in Brooklyn on an indictment charging her with submitting millions of dollars in claims as part of a scheme to defraud Medicare and Medicaid. The proceeding will take place before U.S. Magistrate Judge Steven L. Tiscione at 11:00 a.m.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI New York Field Office and Special Agent in Charge Scott J. Lampert of U.S. Department of Health and Human Services Office of Inspector General New York Region (HHS-OIG), announced the indictment.
As alleged in the indictment, Aleah Mohammed, aka “Aleah Haniff,” 33, of Queens, New York, was the owner and operator of Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc. and S&A Superdrugs II Inc. Beginning in approximately May 2015 and continuing through June 2018, Mohammed executed a scheme in which she and others submitted fraudulent claims to Medicare Part D plans and Medicaid for reimbursement for prescription drugs that were not dispensed, prescribed as claimed, or medically necessary. The allegedly fraudulent claims included claims for prescription drugs for the treatment of the human immunodeficiency virus (HIV). From approximately May 2015 through January 2018, Mohammed’s pharmacies received approximately $7.9 million in reimbursements from Medicare and Medicaid. The indictment further alleges that Mohammed used the proceeds of the scheme, among other things, to purchase luxury items such as a Porsche and jewelry. Mohammed was previously arrested on a complaint in July 2018.
“According to the allegations in the indictment announced today, Aleah Mohammed defrauded the taxpayer-funded Medicare and Medicaid programs by submitting millions of dollars of phony reimbursement claims, and then used the stolen money to purchase luxury items such as cars and jewelry,” said Assistant Attorney General Benczkowski. “This case is another example of the outstanding work of the Department’s Medicare Fraud Strike Forces, which are focused on safeguarding federally funded health care programs and vigorously prosecuting those who seek to defraud them.”
“As alleged in the indictment, Mohammed used her pharmacies to steal from publicly funded health care programs and fund her lavish lifestyle,” said U.S. Attorney Donoghue. “This Office and our law enforcement partners are committed to holding accountable fraudsters who seek to enrich themselves at the expense of vital taxpayer-funded programs upon which so many Americans rely.”
“These investigations matter because the subjects are stealing money each and every one of us pays in taxes to fund these programs,” said FBI Assistant Director-in-Charge Sweeney. “What adds insult to injury, defrauding the government and stealing money is rarely about anything more than spending money on frivolous things like pricy jewelry and fast cars. Our ultimate goal is to stop these fraudsters from wasting the millions they steal so it can go to the patients and taxpayers who depend on it.”
“Ms. Mohammed’s alleged fraud scheme was motivated by nothing more than personal greed,” stated HHS-OIG Special Agent-in-Charge Lampert. “This indictment should serve as a warning to any health care provider daring to use Medicare and Medicaid as a vehicle to steal money. We will continue to work with our law enforcement partners to aggressively pursue those who seek to undermine taxpayer-funded health care programs intended for our most vulnerable Americans.”
The charges in the indictment are allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of New York. Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Board Certified Ophthalmologist Agrees to Civil Fraud Settlement in Medicare Fraud InvestigationRead the Press Release
The United States has entered into an agreement to settle civil fraud claims with Dr. Mark Fleckner, a Board Certified Ophthalmologist who maintains a practice in Garden City, New York. The agreement resolves allegations that, in contravention of Medicare regulations and in violation of the federal False Claims Act, Dr. Fleckner administered certain pharmaceutical products that he had purchased overseas, which the U.S. Food and Drug Administration (“FDA”) had not evaluated nor approved for use in the United States (“Unapproved Drugs”). These products included aflibercept (“Eylea”) and ranibizumab (“Lucentis”), which Dr. Fleckner used to treat patients who had wet, age-related macular degeneration or other diseases and conditions of the eye. The United States contends that the Unapproved Drugs were not eligible for reimbursement by Medicare. Under the terms of the civil settlement agreement, Dr. Fleckner will pay a total of $6,955,240.80.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Jeffrey J. Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), New York Field Office; and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), New York Region, announced the settlement.
“Dr. Fleckner bypassed the FDA’s regulatory authority by purchasing and administering unapproved pharmaceutical products in violation of Medicare regulations,” stated United States Attorney Donoghue. “The settlement holds Dr. Fleckner accountable for his actions and ensures that Medicare funds will only be used for FDA-approved pharmaceuticals.”
“FDA’s oversight of prescription drugs protects consumers from illicit medicines obtained from unauthorized foreign sources,” stated FDA-OCI Special Agent-in-Charge Ebersole. “We will continue to pursue and bring to justice those who place profits over their patients’ safety.”
“FDA approval provides confidence to millions of patients that drugs are safe when prescribed appropriately,” stated HHS-OIG Special Agent-in-Charge Lampert. “Those administering unapproved medications – as contended in this case – put patients at risk and burden taxpayers.”
The government’s investigation revealed that from at least July 1, 2014 to June 27, 2017, Dr. Fleckner purchased the Unapproved Drugs because they were less expensive than drugs that were approved by the FDA for marketing in the United States. Medicare reimburses physician-administered drugs at a set rate based on the average sales price of the respective FDA approved, physician-administered drug in the United States. Dr. Fleckner was thus able to profit from the “spread” between the reimbursement rates he received based on FDA-approved drugs and the lower amounts he paid for the Unapproved Drugs. The United States contends that the Unapproved Drugs were not eligible for reimbursement by Medicare. The settlement is not an admission of wrongdoing by Dr. Fleckner.
The United States’ investigation was handled by former Assistant U.S. Attorney Kenneth M. Abell of the Office’s Civil Division.
The Defendant:
DR. MARK FLECKNER
Garden City, New YorkTwo Men Plead Guilty to Violent Armed Robbery of Jewelry Store in Downtown BrooklynRead the Press Release
Earlier today, in federal court in Brooklyn, Darryl Odom and Lashawn Williams pleaded guilty to Hobbs Act Robbery and brandishing a firearm during a crime of violence in connection with the May 25, 2017 gunpoint robbery of a jewelry store located at 60 Court Street in Brooklyn. Odom also pleaded guilty to the February 10, 2017 Hobbs Act Robbery of Eleven, another jewelry store located in Brooklyn. The plea proceeding took place before Magistrate Judge Lois Bloom. Previously, co-defendant Kenneth Davis pleaded guilty to Hobbs Act Robbery and use of a firearm during a crime of violence, and Shaka Davis pleaded guilty to Hobbs Act Robbery, for their roles in the 60 Court Street robbery.
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), New York Field Division, and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.
At approximately 5:15 p.m. on May 25, 2017, Williams and Odom entered the 60 Court Street store disguised as construction workers. Kenneth Davis, also disguised as a construction worker, stood watch outside, and Shaka Davis waited in a getaway car. Inside the store, one of the robbers pistol-whipped the store owner, and the robbers stole hundreds of thousands of dollars in cash and jewelry.
When sentenced, Odom and Williams each face a mandatory minimum of seven years in prison and up to life in prison. Kenneth Davis faces a mandatory minimum of five years in prison and up to life in prison. Shaka Davis faces up to 20 years’ imprisonment.
The case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Josh Hafetz is in charge of the prosecution.
The Defendants:
DARRYL ODOM
Age: 54
Residence: Bronx, New YorkLASHAWN WILLIAMS (also known as “Ron Johnson”)
Age: 50
Residence: Bronx, New YorkKENNETH DAVIS
Age: 53
Residence: Brooklyn, New YorkSHAKA DAVIS
Age: 30
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-432 (S-1)
Queens Man Sentenced to 35 Years’ Imprisonment for Enticing 16-Year-Old Girl to Travel from Abroad to Engage in Sexual ActivityRead the Press Release
Earlier today in federal court in Brooklyn, Sean Price was sentenced to 35 years’ incarceration and 10 years’ supervised release by United States District Judge Nicholas G. Garaufis, following his conviction after trial in December 2017 on four charges: interstate and foreign enticement to engage in sexual activity, interstate and foreign transportation of a minor to engage in sexual activity, a Mann Act violation and attempted sexual exploitation of a child. Restitution to Jane Doe’s guardians will be determined at a later date.
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.
“Sean Price preyed upon the vulnerabilities of a young teenage girl, luring her across the world and away from her home for his own illicit purposes. With today’s sentence Price has been accountable for that predatory conduct,” stated United States Attorney Donoghue. “The Price case sends the message that this Office, together with our law enforcement partners, will work tirelessly to identify abusers like Price and prosecute those who would sexually exploit minors to the fullest extent of the law.” Mr. Donoghue expressed his appreciation to the Australian Federal Police, the New South Wales Police Force and the NYPD for their assistance in the investigation and prosecution of this matter, and commends the Australian authorities and the NYPD on the investigation and cooperation that ultimately led to the recovery of the missing girl.
“Now a convicted sexual predator, Sean Price admittedly lured a teenage girl from Australia to Queens, taking advantage of her young spirit and susceptibility,” stated HSI Special Agent-in-Charge Melendez. “Today’s sentencing should send a strong message to those who seek to sexually exploit children – borders and oceans will not impede the efforts of the global law enforcement community in safeguarding our children and bringing predators to face justice.”
As established during court proceedings, in the fall of 2016, Price established an online relationship with a 16-year-old girl who lived in Australia. By January 2017, they were communicating with each other daily through messages on Facebook, with much of the discussion concerning Price’s desire to engage in sex with the girl, and how she could travel from Australia to join Price in New York City without law enforcement or her parents finding out. The Facebook chat messages demonstrated that Price, who was 39-years-old at the time, openly discussed the girl’s age with her, and Price told her repeatedly that he wanted to be sexually intimate with her.
Price and the girl also discussed obtaining a fake passport so the girl could travel internationally, and Price offered to impersonate the girl’s father to help her get through airport security in the United States. In chat messages, Price told the girl that they would soon be laughing at her parents and when she told Price that she did not need parental permission to fly internationally, Price responded: “So you coming to papa?” After months of planning, Price wired the girl over $900 to purchase a plane ticket to fly to Los Angeles in late March of 2017. Shortly afterwards, on April 11, 2017, the girl flew on a roundtrip ticket from Sydney, Australia to Los Angeles, California, where Price was waiting for her arrival. Price hired a rental car, and drove across the country to Price’s home in Jamaica, Queens.
Price admitted in a post-arrest statement that he and Jane Doe were involved sexually during their cross-country trip and while they were living in Queens until she was found by law enforcement in his home four weeks later. Following her successful recovery by officers of the NYPD, Jane Doe was returned to her family in Australia. In a recent submission to the Court, Jane Doe’s mother recounted the trauma Jane Doe and her family continue to struggle with in the aftermath of the defendant’s actions.
The government’s case is being prosecuted by Assistant United States Attorneys Taryn A. Merkl and Monica K. Castro. Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is in charge of the forfeiture.
The Defendant:
SEAN PRICE
Age: 40
Residence: Queens, New YorkE.D.N.Y. Docket No. 17-CR-301 (NGG)
MS-13 Gang Member Pleads Guilty to April 2017 Quadruple MurderRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Freiry Martinez, a member of the Herndon City Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, pleaded guilty to racketeering charges in connection with his participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos. The guilty plea was entered 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), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the guilty plea.
Martinez, who is now 17 years old and was 15 years and 11 months old at the time of the April 11 murders, initially was charged by a juvenile information that was filed under seal in the Eastern District of New York on July 10, 2017. Martinez fled from New York to Virginia and later to Maryland after the April 11 murders, and remained a fugitive until November 21, 2017, when he was arrested in Montgomery County, Maryland. Martinez, an illegal alien from El Salvador, subsequently was turned over to the Federal Bureau of Investigation and removed to the Eastern District of New York in custody by the United States Marshals Service. Following the government’s application to transfer Martinez to adult status for prosecution, the motion was granted today by Judge Bianco.
“Prosecution by prosecution, defendant by defendant, we are dismantling the MS-13 through an effort that will not end until they are ended,” stated United States Attorney Donoghue. “The unwavering resolve of the Eastern District, the FBI’s Long Island Gang Task Force and all our law enforcement partners will bring justice for the victims and the perpetrators alike.” Mr. Donoghue extended his sincere appreciation to the United States Marshals Service Fugitive Task Force, United States Attorney’s Office for the Eastern District of Virginia, United States Attorney’s Office for the District of Maryland, Montgomery County Police Department and Montgomery County State’s Attorney’s Office for assisting in this investigation.
“Most 15-year-olds are worried about a chemistry test at school or making the football team, not plotting a grotesque attack and murder of four other teenagers,” stated FBI Assistant Director-in-Charge Sweeney. “Our work with our law enforcement partners on the FBI Long Island Gang Task Force is proof a combined and concentrated effort to combat the evil that is MS-13 will work to stop more senseless murders. We want to assure the community we won’t let up in our pursuit of rounding up these gang members and stopping them from terrorizing neighborhoods on Long Island.”
“This guilty plea is a result of the dedicated work and collaboration of the Suffolk County Police Department, the Long Island Gang Task Force and the Eastern District,” stated SCPD Commissioner Hart. “We applaud the effort of prosecutors to ensure that Martinez would be tried as an adult to face the stiffest penalties possible. The deaths of these four young men committed at the hands of MS-13 gang members is incomprehensible and we hope today’s plea will send a clear message to gang members that we will not waver or tire from our commitment to dismantle gangs in Suffolk County. It is our hope that holding these perpetrators accountable will bring some measure of comfort and healing to the victims’ friends and families.”
“Due to the exceptional work by all of the law enforcement investigators involved and their agencies, Defendant Freiry Martinez will not be able to terrorize our communities and residents any longer,” stated NCPD Commissioner Ryder. “We have four families that have lost loved ones to the hands of MS-13 in these brutal and senseless killings. Rest assured, we will continue to engage this violence with our zero tolerance approach and will continue to remove these offenders from our streets.”
According to court filings and statements by the defendant at the guilty plea proceeding, on the evening of April 11, 2017, two female associates of the MS-13 lured five young men, including the four victims, to a community park in Central Islip at the direction of Martinez and other MS-13 members. The MS-13 members believed the victims to be members of a rival gang who were disrespectful toward the MS-13. Martinez and several MS-13 members and associates met in a wooded area behind the park where they distributed weapons, discussed the plan to kill the victims and then awaited their arrival. Once the female MS-13 associates arrived at the park, they led the victims to a wooded area and sent the MS-13 members a text message describing their location. Pursuant to their previously devised plan, Martinez and the other MS-13 members and associates surrounded the victims and killed Llivicura, Lopez, Tigre and Villalobos using machetes, knives and wooden clubs. The fifth intended victim escaped. After the attack, Martinez and his associates dragged the victims’ bodies to a more secluded spot and fled. The victims’ bodies were discovered the following evening.
When sentenced, Martinez faces a maximum of life in prison. Upon completion of his sentence, he faces deportation from the United States.
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 the MS-13, a violent international criminal organization. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. 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 this 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 this 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, New York State Police and Bureau of Alcohol, Tobacco, Firearms and Explosives.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Michael T. Keilty and Raymond A. Tierney are in charge of the prosecution.
The Defendant:
FREIRY MARTINEZ (also known as “Discreto,” “Sovietico” and “Freddy”)
Age: 17
Brentwood, New YorkE.D.N.Y. Docket No. 17-CR-364 (S-1)(JFB)
Most Wanted Fugitive Arraigned on Multi-Million Dollar Health Care FraudRead the Press Release
Etienne Allonce is scheduled to be arraigned today before United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip on charges of health care fraud and conspiracy, for allegedly defrauding Medicare and Medicaid out of millions of dollars. Allonce was expelled from Haiti to face the charges in the indictment pending here, and turned over to the custody of law enforcement agents. Prior to his return to the United States, Allonce was placed on the Most Wanted list of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).
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 Scott J. Lampert, Special Agent-in-Charge, HHS-OIG, Office of Investigations, New York Region, announced the charges.
According to the indictment returned in 2007, Allonce and his wife, Helen Michel, were co-owners and operators of Medical Solutions Management, Inc. (MSM), a medical equipment company located in Hicksville, New York. MSM provided durable medical equipment and supplies to nursing homes. Between April 2003 and March 2007, Allonce and Michel allegedly submitted $10 million in false claims to Medicare and Medicaid seeking payment for medical supplies purportedly provided to patients at nursing homes, when those medical supplies had not been provided. Allonce fled the United States hours before federal agents arrested Michel. Michel was tried and convicted by a jury in August 2012 and she was sentenced in April 2013 to 12 years’ imprisonment and ordered to forfeit $1.3 million that had been seized by the government. Michel served her sentence and was released from prison in December 2017.
“Today begins the process of holding Allonce responsible for his crimes, more than a decade after he was indicted for healthcare fraud and left the United States,” stated United States Attorney Donoghue. “The prosecution of Allonce demonstrates the resolve of this Office and our law enforcement partners to bring to justice those who defraud vital benefit programs relied upon by millions of Americans.”
“Mr. Allonce allegedly thought he could escape his crimes by leaving the United States, and hiding as a fugitive for more than a decade, leaving his wife behind to answer for their defrauding American taxpayers,” stated Assistant Director-in-Charge Sweeney. “Regardless of the crime, be it healthcare fraud or bank robbery, if criminals break the law and are charged, they will be held accountable.”
“We are committed to investigating those responsible for health care fraud, including this former HHS-OIG Most Wanted fugitive, who stole scarce taxpayer money intended to pay for legitimate patient care,” stated HHS-OIG Special Agent-in-Charge Lampert. “The pursuit and arrest of Mr. Allonce is a reflection of our determination, and that of our law enforcement partners, to hold fraudsters accountable for their crimes no matter where they run or try to hide.”
The charges in the indictment are allegations, and the defendant Etienne Allonce is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Charles P. Kelly, Burton T. Ryan, Jr. and Madeline O’Connor.
The Defendant:
ETIENNE ALLONCE
Age: 55
Port au Prince, HaitiE.D.N.Y. Docket No. 07-889(JFB)
Former Chief Operating Officer of Long Island Federal Credit Union Arrested for EmbezzlementRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Suzanne Silva with embezzling over $465,000 during her seven-year tenure as Chief Operating Officer of Winthrop University Hospital Employees Federal Credit Union located in Mineola, New York (hereinafter Winthrop). Silva was arrested today, and her initial appearance is scheduled for this afternoon before United States Magistrate Judge Arlene R. Lindsay.
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, Silva abused her authority as Chief Operating Officer and stole hundreds of thousands of dollars from the credit union, which she used to fund an extravagant lifestyle,” stated United States Attorney Donoghue. “Today’s arrest demonstrates that this Office will hold executives at financial institutions accountable for abrogating their duties and using their access to line their pockets.”
“Greed surfaces at all levels when criminals see a payday, and they think no one is watching,” stated FBI Assistant Director-in-Charge Sweeney. “In this investigation, someone noticed nearly half a million dollars was gone and now the COO faces criminal charges. This should serve as an example to others who believe their title enables them to escape notice when engaging in illegal behavior.”
As alleged in the indictment and court filings, between March 2011 and June 2018, Silva took advantage of her position at Winthrop to make unauthorized transfers totaling hundreds of thousands of dollars from operating accounts of Winthrop to personal accounts in her name and the names of family members. Silva used the funds to take Caribbean cruises, travel to Cancun and pay thousands of dollars a month for purchases from Amazon and Etsy. Silva’s employment was terminated by Winthrop in June 2018.
If convicted, Silva faces a maximum of 30 years’ imprisonment.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor.
The Defendant:
Suzanne Silva
Age: 35
Carle Place, New York,E.D.N.Y. Docket No. 18-CR-507 (DRH)
Brooklyn Man Charged with Additional Count for Improvised Explosive Device Found in His ResidenceRead the Press Release
Earlier today, a grand jury returned a superseding indictment against Victor Kingsley, a Brooklyn resident, adding a charge of attempted use of a weapon of mass destruction based on a fully assembled explosive device that police found in his apartment when he was arrested in February 2018. The new indictment includes the original charges for the use of a weapon of mass destruction that resulted in the death of a Queens resident on July 28, 2017, and for the unlawful transportation of explosive materials. Kingsley will be arraigned at a later date in federal court in Brooklyn.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for the National Security Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and James P. O’Neill, Commissioner, New York City Police Department, announced the charges.
As alleged in court filings, Kingsley built the explosive device used in the July 28, 2017 murder as part of his broader effort to retaliate violently against several police officers who were part of an NYPD unit that had arrested him in January 2014. Despite the 2014 arrest eventually resulting in the dismissal of charges, Kingsley sought revenge against the officers. Ultimately, he arranged for the explosive device to be placed outside of the Queens residence where Kingsley mistakenly believed one of his target officers resided. The building owner inadvertently detonated the device when he tried to open it, and he died as a result of his injuries. Thereafter, Kingsley continued to acquire explosive device parts.
Kingsley was arrested at his Brooklyn residence on February 28, 2018. During the search of his residence, agents seized another fully assembled destructive device contained in a mailing tube identical to the one used for the July 2017 device, as well as large quantities of incendiary powder. This additional destructive device is the basis for the new charge in the superseding indictment.
If convicted on all counts, Kingsley faces a maximum sentence of life in prison or death. 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 National Security & Cybercrime Section. Assistant United States Attorneys Margaret Lee and Michael Keilty are in charge of the prosecution.
The Defendant:
Victor C. Kingsley
Age: 37
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-128 (S-1) (SJ)
Brooklyn High School Teacher Charged with Production of Child PornographyRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Jonathan Deutsch, a teacher at Leon M. Goldstein High School for the Sciences, with five counts of sexual exploitation of a child. The charges relate to sexually explicit images and videos of children that the defendant allegedly requested and received from minors who he targeted on Facebook. Deutsch was arrested today, and will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged, Jonathan Deutsch, a Brooklyn high school teacher, solicited and received sexually explicit material from minors he contacted on Facebook,” stated United States Attorney Donoghue. “The protection of innocent children is an utmost priority for this Office and our law enforcement partners. We will continue to make every effort to ensure that those who contribute to the exploitation and victimization of children will be brought to justice.” Mr. Donoghue extended his grateful appreciation to the FBI New York Child Exploitation and Human Trafficking Task Force, which is made up of FBI and New York City Police Department investigators, for its investigative work and assistance in the case.
“Our children deserve to grow up in a world where they don't have to face overcoming the horrors and scars of sexual abuse,” stated FBI Assistant Director-in-Charge Sweeney. “The fact that this suspect was a teacher makes this crime even more egregious. Parents, working with law enforcement, are the first line of defense against sexual predators who can now reach into your child's bedroom from anywhere in the world. The FBI New York Child Exploitation and Human Trafficking Task Force encourages anyone who may believe their child could be a victim to call our office at 212-384-1000.”
According to court filings, beginning around January 2017, Deutsch targeted Facebook users who appeared from their profiles to be minors, and then contacted them using Facebook messenger in an attempt to develop a relationship. As part of his broader effort to groom these minors for sexual exploitation, Deutsch often disclosed his status as a teacher. Deutsch contacted hundreds of apparent minors on Facebook and had communications of a sexual nature with at least 45 of them. Deutsch requested and received sexually explicit images or videos from at least four minors, whom the FBI has identified. Those victims range in age from 10 to 16 years old. Deutsch often instructed minors to perform sexually explicit acts and to send him videos and photos of those acts. Deutsch also sent minors sexual photos that he represented to be of himself.
If convicted of any of the five counts of sexual exploitation of a child, Deutsch faces a mandatory minimum of 15 years’ imprisonment.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Department of Justice Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Megan E. Farrell is in charge of the prosecution.
The Defendant:
Jonathan Deutsch
Age: 34
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-502
Bloods Gang Members Arrested for Opioid Distribution Conspiracy on Staten IslandRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Keith Wyche, Allen O’Neil and Kyron Graham, alleged members of the Bloods street gang, with conspiracy to distribute and possession with intent to distribute heroin and fentanyl on Staten Island. Wyche and O’Neil were also charged with distribution of narcotics that caused death and serious bodily injury. The defendants were arrested today and are scheduled to make their initial appearances this afternoon before United States Magistrate Judge Robert M. Levy.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Gregory W. Ehrie, Special Agent-in-Charge, Federal Bureau of Investigation, Newark Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the arrests. Mr. Donoghue thanked the United States Attorney’s Office for the District of New Jersey for their substantial assistance in the investigation, as well as the Richmond County District Attorney’s Office.
“As alleged, the defendants sold large amounts of dangerous narcotics, including pure fentanyl to unsuspecting buyers, for their own profit and without concern for the deadly consequences of their actions,” stated United States Attorney Donoghue. “Together with the FBI and the NYPD, our Office is working tirelessly to identify and prosecute those drug traffickers responsible for the opioid crisis.”
“Today's arrests are a direct result of the hard work and dedication shared between state, local and federal authorities in their efforts to combat gang members who distribute dangerous drugs like heroin and fentanyl in our communities,” stated FBI Special Agent-in-Charge Ehrie. “This was a tragic incident which caused the death of one individual and seriously injured another. The FBI and our partners will continue to pursue investigations into individuals and groups who have furthered the scourge of opioids in our communities.”
“Abuse of heroin and the deadly additive fentanyl has cut a wide swath across our nation, affecting neighborhoods throughout New York City and people in every walk of life,” stated NYPD Police Commissioner O’Neill. “To combat this scourge, we look to not just make arrests, but to shut down the supply and, ultimately, to save lives. NYPD detectives investigate every overdose to determine how the drugs were obtained, and it was those efforts that led to today’s charges. I commend the investigators in this case, and the strong collaboration of the NYPD and our law enforcement partners, all of whom are helping stem the opioid crisis.”
As alleged in court documents, between February 2017 and the present, Wyche and O’Neil sold heroin and fentanyl on Staten Island almost daily. Wyche and Graham shared a cell phone from which they sent messages to buyers in the morning notifying them who was selling narcotics that day. In some instances, even though the buyer had sought to purchase heroin, Wyche and O’Neil sold glassine envelopes containing a mixture of heroin and fentanyl and, on occasion, only fentanyl. They regularly traveled to the Bronx to meet Graham to pick up supplies of narcotics
Wyche and O’Neil sold drugs to at least two victims who experienced overdoses shortly after purchasing the drugs, including an April 2017 sale that resulted in the death of a Staten Island resident and the near fatal overdose of a second victim in October 2017 in which medical personnel resuscitated the victim who had stopped breathing.
The arrests were the result of a series of long-term investigations by the NYPD’s Drug Overdose Task Force.
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted, Wyche and O’Neil face a mandatory minimum sentence of 20 years’ imprisonment and Graham faces up to 20 years’ imprisonment.
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 Defendants:
KEITH WYCHE
Age: 34
Union, New JerseyALLEN O’NEIL
Age: 27
Somerset, New JerseyKYRON GRAHAM
Age: 27
Bronx, New YorkE.D.N.Y. Docket No. 18-MJ-862
Long Island Chiropractor Arrested for Multi-Million Dollar Health Care FraudRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging chiropractor Raymond R. Pellegrino with health care fraud. The indictment alleges that Pellegrino billed Anthem Blue Cross Blue Shield over $2 million for health care services that were never performed. Pellegrino was arrested today in Texas, and will be arraigned at a later date in the Eastern District of New York.
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.
“Pellegrino abused his position as a licensed medical professional by brazenly stealing millions of dollars in fraudulent billings,” stated United States Attorney Donoghue. “Today’s arrest demonstrates the resolve of this Office and the FBI to hold accountable health care fraudsters who line their pockets at the expense of insurance companies and, ultimately, consumers, who pay the cost of higher premiums.” Mr. Donoghue expressed his grateful appreciation to the New York State Department of Financial Services for its assistance in the case.
“Defrauding our healthcare system, regardless of the amount of money stolen or nature of the crime, eventually harms all of us,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI and our law enforcement partners are aggressively searching out practitioners, suppliers and fraudsters to stop their illegal behavior, and keep the bills we each pay from ballooning out of control.”
As alleged in the indictment and court filings, Pellegrino operated chiropractic offices in West Hempstead and Hicksville, New York. Pellegrino hired medical doctors for part-time work and then billed Anthem Empire Blue Cross Blue Shield under the taxpayer identification numbers of those doctors for osteopathic manipulation and other services purportedly provided to beneficiaries. Between December 2003 and September 2014, Pellegrino was paid over $2 million for fraudulent claims filed with Anthem Blue Cross/Blue Shield, billing for medical services that he knew the doctors had not provided.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
If convicted of health care fraud, Pellegrino faces up to 10 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
RAYMOND R. PELLEGRINO
Age: 50
McKinney, TexasE.D.N.Y. Docket No. 18-CR-496 (JFB)
Convicted Felon Found Guilty in Brooklyn Federal Court of Conspiring to Sell Three Kilos of Heroin and Possession of a Loaded FirearmRead the Press Release
Earlier today, following a three day trial, a federal jury in Brooklyn returned a guilty verdict against Clyde Miller on charges of conspiring to distribute and possess with intent to distribute heroin, possessing a firearm during a drug trafficking crime and being a felon in possession of a firearm. Miller and others had agreed to sell three kilograms of heroin to an undercover police office for over $170,000. When sentenced by United States District Judge Margo K. Brodie, Miller faces a mandatory minimum sentence of 15 years’ imprisonment and maximum sentence of life imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the guilty verdict.
“As the jury found, Clyde Miller was armed with a gun when he showed up for a heroin deal at a hotel near JFK International Airport,” stated United States Attorney Donoghue. “Through the outstanding work of our prosecutors and law enforcement officers, a source for dangerous drugs was shut down and a deadly weapon was taken out of the hands of a convicted felon and off the street.” Mr. Donoghue expressed his grateful appreciation to the Broward County Sheriff’s Office in Florida for their assistance in the investigation.
“It is estimated that 70,000 people died as a result of drug abuse last year in the United States,” stated DEA Special Agent-in-Charge Hunt. “This conviction sends a message to traffickers that law enforcement is committed to bringing opioid traffickers to justice. I commend the agents and prosecutors on their hard work.”
Evidence presented at trial, including undercover recordings and physical surveillance, established that on April 17, 2017, Miller and his co-conspirators drove to the Hilton Hotel near JFK International Airport to complete the sale of three kilograms of heroin for more than $170,000. Unbeknownst to Miller, the purchaser of the heroin was an undercover police officer. At approximately 3:00 p.m., Miller and his co-conspirators arrived in the hotel parking lot in a 2013 white Dodge Durango. A co-conspirator approached the undercover officer and handed him a black bag, which contained a brick of heroin. DEA agents observing the transaction moved in and arrested Miller and his co-conspirators. A loaded .380-caliber semi-automatic handgun was found tucked in the back of Miller’s waistband. Miller had previously been convicted of a felony.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Temidayo Aganga-Williams is in charge of the prosecution.
The Defendant:
CLYDE MILLER (also known as “Quan Miller”)
Age: 41
Oil City, PennsylvaniaE.D.N.Y. Docket No. 17-CR-415 (S-1) (MKB)
Staten Island-Based Health Care Service Agrees to Pay More than $1.6 Million to Settle False Claims Act Suit Alleging Fraudulent Billing PracticesRead the Press Release
Centers Plan for Healthy Living (“Centers Plan”), a Staten Island-based company that provides services to people who are chronically ill or who need long-term health care services, has agreed to pay $1,650,000 to settle civil fraud allegations that Centers Plan billed the Medicaid Program for services that it did not provide to Medicaid beneficiaries. The settlement agreement, which resolved claims under both the Federal and New York State False Claims Acts, was approved yesterday by United States District Judge Eric N. Vitaliano.
“When health care providers engage in fraudulent billing practices to improperly obtain Medicaid funds, they jeopardize the very integrity of Medicaid, a critical program that provides health coverage to millions of Americans,” stated United States Attorney Donoghue. “This Office will continue to vigorously prosecute those who seek to exploit Medicaid for their own enrichment.” Mr. Donoghue thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General and the Office of the Inspector General of the U.S. Department of Health and Human Services for their assistance in the investigation.
The government’s investigation revealed that, from April 2013 through December 2015, Centers Plan fraudulently enriched itself at the expense of Medicaid by knowingly and systematically submitting false claims for payment to Medicaid. In one scheme, Centers Plan improperly enrolled into its managed long-term health care plan individuals who were actually only eligible for Social Adult Day Care or transportation services. In another scheme, Centers Plan failed to disenroll members from its managed long-term health care plan who were no longer receiving qualified community-based long-term care services.
The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.
The United States’ case is being handled by Assistant United States Attorney Joseph A. Marutollo of the Office’s Civil Division.
E.D.N.Y. Docket No. 14-CV-6129 (ENV)
Former Executive of Loyal Bank Ltd Pleads Guilty to Conspiring to Defraud the United States by Failing to Comply with Foreign Account Tax Compliance Act (FATCA)Read the Press Release
Earlier today in federal court in Brooklyn, Adrian Baron, the former Chief Business Officer and former Chief Executive Officer of Loyal Bank Ltd, an off-shore bank with offices in Budapest, Hungary and Saint Vincent and the Grenadines, pleaded guilty to conspiring to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA). Baron was extradited to the United States from Hungary in July 2018. The guilty plea was entered before United States District Judge Kiyo A. Matsumoto.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the guilty plea. Mr. Donoghue thanked the U.S. Securities and Exchange Commission (SEC), both the New York Regional Office and the Washington, D.C. Office; the City of London Police; the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation for their significant cooperation and assistance during the investigation.
FATCA is a federal law enacted in 2010 that requires foreign financial institutions to identify their U.S. customers and report information (FATCA Information) about financial accounts held by U.S. taxpayers either directly or through a foreign entity. FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses.
According to court documents, in June 2017, an undercover agent met with Baron and explained that he was a U.S. citizen involved in stock manipulation schemes and was interested in opening multiple corporate bank accounts at Loyal Bank. The undercover agent informed Baron that he did not want to appear on any of the account opening documents for his bank accounts at Loyal Bank, even though he would be the true owner of the accounts. Baron responded that Loyal Bank could open such accounts and provide debit cards linked to them.
In July 2017, the undercover agent again met with Baron and described how his stock manipulation scheme operated, including the need to circumvent the IRS’s reporting requirements under FATCA. During the meeting, Baron stated that Loyal Bank would not submit a FATCA declaration to regulators unless the paperwork indicated “obvious” U.S. involvement. Subsequently, in July and August 2017, Loyal Bank opened multiple bank accounts for the undercover agent. At no time did Baron or Loyal Bank request or collect FATCA Information from the undercover agent.
Baron’s guilty plea represents the first-ever conviction for failing to comply with FATCA. When sentenced, Baron faces a maximum of five years in prison.
Baron is the second defendant to plead guilty in this case. On July 26, 2018, Arvinsingh Canaye, formerly the General Manager of Beaufort Management Services Ltd. in Mauritius, pleaded guilty to conspiracy to commit money laundering.
The case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis, Michael T. Keilty and David Gopstein are in charge of the prosecution. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.The Defendant:
ADRIAN BARON
Age: 63
Residence: Budapest, HungaryE.D.N.Y. Docket No. 18-CR-102 (S-1) (KAM)
Suspended Attorney Indicted for Securities FraudRead the Press Release
Today, before United States Magistrate Judge Vera M. Scanlon, suspended attorney Christopher Davies was arraigned on a four-count indictment charging securities fraud, conspiracy to commit securities fraud, wire fraud, and aggravated identity theft in connection with a market manipulation scheme. A federal grand jury in Brooklyn returned the indictment on August 30, 2018. Davies was previously arrested on a complaint in April 2018.
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 Edward Gallashaw, Assistant Postal Inspector-in-Charge of the New York Division of the U.S. Postal Inspection Service (USPIS), announced the indictment.
“As alleged in the indictment, Davies used both sophisticated means and some of the oldest tricks in the book, including backdating documents and forging signatures, to deceive the investing public and manipulate the price and ownership of a public company’s stock,” stated United States Attorney Donoghue. “The defendant’s scheme ultimately failed as a result of the outstanding investigative work by our prosecutors and our law enforcement partners, who are committed to protecting the integrity of public markets.” Mr. Donoghue also expressed his gratitude to the New York Office of the United States Securities and Exchange Commission for its assistance during the investigation.
“Criminals take what isn’t theirs and have no regard for victims they harm in the process,” stated FBI Assistant Director-in-Charge Sweeney. “Mr. Davies allegedly pumped up the price of the stock for a public company because he controlled the information being made public, he knew exactly when to sell to make the most money, leaving other investors in the lurch. Instead of enjoying the large sum of money he made, he now faces time in prison.”
“This is a classic case of greed overcoming honest business practices,” stated USPIS Assistant Postal Inspector-in-Charge Gallashaw. “Mr. Davies allegedly used his knowledge of the market to ‘increase’ the value of stock he knew was worth pennies, taking money from investors he knew would result in a loss. While Mr. Davies tried to cover his illegal tracks with bogus documents, he couldn’t cover-up his crimes from Postal Inspectors and their law enforcement partners.”
Davies, an attorney whose law license was suspended, controlled a publicly traded company, American Transportation Holdings Inc. (“ATHI”), and manipulated the price of its stock in a pump-and-dump scheme. Beginning in 2012, Davies exercised secret control over ATHI and its predecessor companies (collectively “ATHI” or the “company”) through a series of nominal Chief Executive Officers. As a part of his scheme, Davies accumulated a large number of shares in the company by fraudulently converting corporate debt into stock at no cost. To effect these fraudulent debt-to-stock conversions, Davies forged the signatures of purported ATHI board members and backdated documents. After accumulating large amounts of ATHI stock, Davies artificially increased the price of ATHI’s stock through false and misleading press releases claiming that ATHI had developed proprietary gaming and live-streaming app technology. Although ATHI’s stock had historically traded for pennies, its price rose to $12 per share at the height of the pump, resulting in a market capitalization of over $3 billion. Davies’ coconspirators then dumped ATHI stock at a profit, causing heavy losses to investors.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of wire fraud, the top count in the indictment, Davies faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Kaitlin Farrell and Mark Bini are in charge of the prosecution.
The Defendant:
CHRISTOPHER DAVIES
Parkland, Florida
Age: 50E.D.N.Y. Docket No. 18-CR-479 (FB)
Former Chief Executive Officer of BioCube, Inc. Sentenced to Three Years in Prison for Securities FraudRead the Press Release
Earlier today, in federal court in Brooklyn, Boris Rubizhevsky, the former Chief Executive Officer (“CEO”) of BioCube, Inc. (“BioCube”), was sentenced by Judge Roslynn R. Mauskopf to 36 months’ imprisonment for conspiracy to commit securities fraud. Rubizhevsky’s conviction arose out of his participation in a scheme to pump and dump BioCube’s stock, which traded under the ticker symbol BICB. The defendant and his co-conspirators planned to acquire BioCube stock at a low price, artificially inflate its price through manipulative and deceptive means, and then sell it at a higher price—all to the detriment of BioCube’s other stockholders. Rubizhevsky was arrested in April 2017 and pleaded guilty in January 2018.
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 sentence.
“With today’s sentence, Boris Rubizhevsky has been held responsible for abusing his former position as CEO of BioCube to help devise a pump and dump of the company’s stock designed to defraud BioCube’s own stockholders,” stated United States Attorney Donoghue. “This Office is committed to protecting the investing public and the integrity of the financial market from fraudulent schemes.” Mr. Donoghue also expressed his thanks to the United States Securities and Exchange Commission (“SEC”), New York Regional Office, for its assistance in the case.
“Rubizhevsky defaced his former official title as CEO when he aimed to defraud those who invested their money and trust in Biocube, Inc.,” stated FBI Assistant Director-in-Charge Sweeney. “Fraudulent conspiracies and schemes are not a route to success – but a gateway to prison, as manifested by today’s sentence. Still, the work of the FBI and our law enforcement partners does not stop here, as we will be relentless in investigating those who deviously plot against the securities industry.”
“The stock market is a crucial component to our economy and investors must have faith in the CEO’s of those publicly traded companies,” stated IRS-CI Special Agent-in-Charge Robnett. “The special agents of IRS-CI are proud to lend their financial expertise with investigations that protect the integrity of our financial systems.”
According to court documents, Rubizhevsky engaged in a scheme to defraud BioCube’s investors and potential investors by concealing a co-conspirator’s beneficial ownership and control of BioCube shares, so that the co-conspirator could exercise control over the price and trading volume of BioCube’s stock. Rubizhevsky’s co-conspirator had a history of being sanctioned by regulatory authorities and being banned from the securities industry by the SEC. The plans to pump and dump BioCube’s stock after the co-conspirator gained control of the stock were captured in conversations between Rubizhevsky and the co-conspirator on a wiretap recording. The scheme was thwarted by law enforcement before investors could suffer significant losses.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alicyn L. Cooley, Tyler Smith, and Kaitlin T. Farrell are in charge of the prosecution.
The Defendant:
BORIS RUBIZHEVSKY
Age: 67
Closter, New JerseyE.D.N.Y. Docket No. 17-CR-339
Nine Members of a Violent Drug Crew Charged with Racketeering Conspiracy and Four MurdersRead the Press Release
A 19-count superseding indictment was unsealed today in federal court in Brooklyn charging five new defendants, and four previously charged defendants, for their participation in a drug-trafficking enterprise based in Brooklyn and Queens, referred to in the indictment as the “Bushwick Crew.” Eight defendants are charged with racketeering conspiracy, including predicate acts of murder, kidnapping, robbery, extortion conspiracy and heroin distribution conspiracy, and a ninth defendant is charged with murder in aid of racketeering.
Maurice Brown, Jaquan Cooper and Tyquan Griem were arrested yesterday and today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Peggy Kuo at the Brooklyn federal courthouse. Norman Marrero was arraigned earlier today before United States Magistrate Judge Martin C. Carlson at the federal courthouse in Harrisburg, Pennsylvania, and ordered detained. Lance Goodwin was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Dennis L. Howell at the federal courthouse in Asheville, North Carolina.
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 were part of a violent crew that beat, tortured and killed in furtherance of their heroin trafficking,” stated United States Attorney Donoghue. “These charges demonstrate the commitment by this Office and our law enforcement partners to rid our community of the extreme violence associated with drug dealing.” Mr. Donoghue expressed his appreciation to the New York Metropolitan Safe Streets Task Force, which is comprised of FBI special agents and NYPD detectives, for their participation and assistance in the investigation.
“Not only are these gang members pushing deadly drugs in our most vulnerable communities, they’re allegedly killing rivals and bystanders in their attempts to maintain power and control,” stated FBI Assistant Director-in-Charge Sweeney. “We’ve stated before the FBI Metro Safe Streets Task Force will continue our pursuit of the leadership in these gangs, and stop their violent and illegal trafficking enterprise before more and more people die from either addiction or at the hands of the gang members.”
“The behavior this crew engaged in will never be tolerated by New Yorkers, and I thank our federal partners at the FBI and the Eastern District for strengthening the NYPD’s efforts to rid our streets of these criminals,” stated NYPD Commissioner O’Neill. “We will remain relentless in our mission to dismantle groups like this by precisely focusing on the drivers of violence in our city, and we will see their cases through to appropriate and meaningful prison sentences – those who live and work in all of our neighborhoods deserve nothing less.”
As alleged in the superseding indictment and court filings by the government,
the Bushwick Crew was involved in a large-scale heroin trafficking organization with Mexican cartel connections. Various members of the crew served as enforcers to protect its interests by arming themselves to escort drug traffickers, forcibly collecting drug debts and committing acts of violence against anyone who interfered with the crew’s operations or offended its members. The crimes alleged include:
Murder of Donte Williams
On August 18, 2012, defendant Lance Goodwin and other members of the crew were involved in a street altercation in Bushwick. During the fight, Goodwin fatally shot Donte Williams in the stomach to advance his own standing within the crew. When arrested one week later, Goodwin was carrying the murder weapon.
Murders of Gary Lopez and Rudy Superville
On March 5, 2013, Gary Lopez and Rudy Superville attempted to rob one of the Bushwick Crew’s main heroin distributors at the distributor’s apartment. Lopez and Superville were shot and wounded by the distributor. Defendants Maurice Brown, Peter Vasquez, Luis Lopez, Jason Pantojas and his brother Miguel Pantojas were summoned by the distributor to the apartment where they beat and tortured Gary Lopez and Superville. Gary Lopez called 911 to plead for help and was shot dead by Brown. Superville attempted to flee the apartment and was fatally stabbed by Jason Pantojas. The bodies were doused with bleach and ammonia, wrapped in plastic and driven to a field in Queens by defendants Brown, Luis Lopez and Vasquez, as well as other crew members. At the field, the bodies were soaked with gasoline and ignited.
Murder of Kelvin Johnson
On September 20, 2014, defendant Tyquan Griem and the above-mentioned heroin distributor went to a nightclub in Queens where a fight broke out. Griem retrieved a handgun stashed in a secret trap in the distributor’s car and opened fire, killing Kelvin Johnson.
Other Violent Crimes
Defendant Norman Marrero is charged with participating in the shooting of a drug customer to extort him for a drug debt owed to the Bushwick Crew. Defendant Jaquan Cooper is charged with committing a gunpoint robbery at a barbershop in Queens as customers were getting their hair cut.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted of the murder charges, defendants Brown, Goodwin, Griem, Lopez, Jason Pantojas, Miguel Pantojas and Vasquez face mandatory life sentences. If convicted of the drug and gun-related charges, defendants Cooper and Marrero face mandatory minimum sentences of 17 years’ and 20 years’ imprisonment, respectively, and a maximum of life imprisonment.
The superseding indictment is the product of an ongoing investigation into gang and narcotics-related violence in Brooklyn and Queens, among other locations, which has resulted in the filing of federal narcotics-and weapons-related charges in this district against more than 25 individuals in the past three years.
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes, Jennifer M. Sasso and Andrey Spektor are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit.
The New Defendants:
MAURICE BROWN (also known as “Spaz”)
Age: 27
Brooklyn, New YorkJAQUAN COOPER (also known as “J-Gunna”)
Age: 30
Brooklyn, New YorkLANCE GOODWIN (also known as “Ty Mucka”)
Age: 29
Brooklyn, New YorkTYQUAN GRIEM (also known as “Ty Goon”)
Age: 28
Brooklyn, New YorkNORMAN MARRERO (also known as “Tito”)
Age: 35
Harrisburg, PennsylvaniaPreviously Charged Defendants Facing New Charges:
LUIS LOPEZ (also known as “Lou”)
Age: 36
Brooklyn, New YorkJASON PANTOJAS (also known as “Tuli”)
Age: 30
Brooklyn, New YorkMIGUEL PANTOJAS (also known as “Miggs”)
Age: 31
Brooklyn, New YorkPETER VASQUEZ (also known as “Pete”)
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-390 (S-3) (RJD)
Managing Director of A Broker-Dealer Pleads Guilty to Participating in a $86 Million Market Manipulation SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Michael Morris, a registered broker and managing director of Halcyon Cabot Partners, Ltd. (“Halcyon”), pleaded guilty to one count of conspiracy to commit securities fraud for his participation in an $86 million market manipulation scheme involving the publicly traded company CodeSmart Holdings, Inc. (“CodeSmart”), which traded under the ticker symbol ITEN. The proceeding was before United States District Judge Eric N. Vitaliano.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
In early May 2013, Morris’s co-conspirators engineered a reverse merger of CodeSmart, a private company, with a public shell company. After gaining control of CodeSmart’s three million purportedly unrestricted shares, Morris and his co-conspirators fraudulently inflated CodeSmart’s share price and trading volume, and then sold their shares at a profit when the price reached desirable levels—a scheme commonly referred to as a “pump and dump.” The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013. During this period, Morris’s co-conspirators manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94, before causing it to drop to $2.19. The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013. During this period, Morris and his co-conspirators manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60, before causing it to drop to $2.13.
On July 12, 2013, when CodeSmart’s inflated share price was at its highest, CodeSmart’s market capitalization was $86,347,800. However, that same day, CodeSmart filed with the U.S. Securities and Exchange Commission an amended Form 10-K, in which it listed only $6,000 in total assets, $7,600 in revenue, and a net loss of $103,141. By December 30, 2013, CodeSmart’s stock was trading at merely $0.66 per share and, on July 9, 2014, its stock closed at $0.01 per share.
When sentenced, Morris faces a maximum of five years in prison.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Shannon C. Jones, Patrick T. Hein and Mark Bini are in charge of the prosecution with assistance provided by Assistant United States Attorney Claire Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.
The Defendant:
MICHAEL MORRIS
Age: 65
Residence: Merrick, New YorkE.D.N.Y. Docket No. 14-CR-399 (S-2) (ENV)
Former CFO of Long Island Real Estate Company Arrested for Multi-Million Dollar Embezzlement SchemeRead the Press Release
A criminal complaint was unsealed today in federal court in Central Islip charging Kwesi T. Bovell with wire fraud during his tenure as chief financial officer of The Mulholland Group, a real estate company located in Manhasset, Long Island (hereinafter Mulholland). The complaint alleges that Bovell stole over $3.5 million from Mulholland during his three years there. Bovell was arrested today, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
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 court filings, Bovell had signature authority over multiple bank accounts of Mullholland, and since December 2015, fraudulently transferred more than $3.5 million from those accounts to his own corporate entity, Southgate Holding L.L.C. Bovell used the stolen funds to purchase two homes, including an apartment in Manhattan, and luxury goods. The government’s investigation was prompted, in part, by complaints from Mulholland that between January 2018 and August 2018, Bovell spent approximately $145,000 on unauthorized personal expenditures using Mulholland’s Platinum American Express Card.
“As alleged in the complaint, Bovell abused his authority as a CFO, using the company like an ATM machine to fund a lavish lifestyle,” stated United States Attorney Donoghue. “Today’s arrest should put fraudsters like the defendant on notice that this Office will hold them accountable for such criminal conduct.”
“We all want to win the lottery and live lavish lifestyles. However, Mr. Bovell allegedly decided he would rather just take millions of dollars that wasn’t his, and buy the lifestyle he wanted,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI works tirelessly to track down criminals regardless of how high up the thief sits in a company, and to serve justice on those who believe no one is watching.”
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.
The Defendant:
KWESI T. BOVELL
Age: 35
Valley Stream, New York,E.D.N.Y. Docket No. MJ-18-813
Two Defendants Arrested for Trafficking Firearms from Virginia to Queens and Long IslandRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Derrick Hughes and Ronald Robinson with a gun trafficking conspiracy involving the sale of at least 19 firearms, including an AR-15 multi-caliber rifle. The defendants were arrested today. Hughes was arraigned this afternoon in federal court in Central Islip before United States Magistrate Judge A. Kathleen Tomlinson. Robinson was arraigned this afternoon at the federal courthouse in Norfolk, Virginia. Both defendants were ordered detained pending bail hearings.
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, New York Field Division (ATF), 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 indictment.
“As alleged in the indictment, the defendants’ illegal trafficking of firearms brought deadly weapons to the streets of Long Island,” stated United States Attorney Donoghue. “These arrests demonstrate the commitment by this Office and our law enforcement partners to save lives by stopping the flow of illegal firearms into New York.” Mr. Donoghue thanked the Nassau County Sheriff’s Department, Suffolk County Sheriff’s Department, New York State Police and the Hempstead Police Department for their assistance during this investigation.
“Many gangs rely on illegal weapons to carry out criminal acts because they’re harder to trace,” stated FBI Assistant Director-in-Charge Sweeney. “The two subjects in this investigation were allegedly trafficking illegal weapons along the 95 interstate corridor that leads directly onto Long Island. We are doing more and more every day with our law enforcement partner agencies to stop this pipeline, and keep deadly weapons out of the hands of people who shouldn’t have them.”
“The defendants as alleged were part of a scheme that put illegal firearms onto the streets of their community,” stated ATF Special Agent-in-Charge Benedict. “ATF works with our federal, state and local counterparts to disrupt the flow of guns to our streets and prevent violent crime. I would like to thank all of our partners that made this case possible. I would also like to thank the United States Attorney’s Office for prosecuting the case.”
“The indictments of both defendants Hughes and Robinson for illegal firearms trafficking conspiracy is a clear example of the high level of interagency cooperation during this investigation,” stated NCPD Commissioner Ryder. “Not only are we taking criminals off the streets, we are also decreasing the amount of illegal firearms that enter our state and county. Every illegal firearm that we confiscate is another positive step on how we protect our residents and Police Officers. I would like to congratulate all of the investigative agencies and their dedicated members who played a role in this case.”
According to the indictment, the gun-trafficking operation involved at least seven illegal firearms transactions on Long Island between January 2018 and April 2018, with transactions taking place in Rosedale and Valley Stream. Robinson allegedly purchased two to three firearms at a time in Virginia, and within days, transported them for distribution in New York. Hughes arranged meetings with customers for the illegal sale of the firearms.
If convicted, Hughes and Robinson face a maximum sentence of five years’ imprisonment. The charges in the indictment 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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Monica K. Castro is in charge of the prosecution.
The Defendants:
RONALD ROBINSON
Age: 43
Hampton, VirginiaDerrick Hughes
Age: 47
Queens, New YorkE.D.N.Y. Docket No. 18-CR-385 (JMA)
Long Island Man Sentenced to 18 Years’ Imprisonment for Cocaine Trafficking and ArsonRead the Press Release
Earlier today, in federal court in Central Islip, Matthew Aichroth was sentenced by United States District Judge Denis R. Hurley to 18 years’ imprisonment for conspiring to possess and distribute cocaine and committing an arson in furtherance of that conspiracy. The Court also ordered Aichroth to forfeit approximately $3.4 million as proceeds of the cocaine trafficking conspiracy. Aichroth pleaded guilty to the charges in July 2017.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA) New York Division; Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD); Errol D. Toulon, Jr., Suffolk County Sheriff; and Paul Johnson, Chief of Police, Hempstead Police Department (HPD), announced the sentence.
“Aichroth used arson, guns and threats of violence to perpetrate his crimes while he poured dangerous drugs into our communities,” stated United States Attorney Donoghue. “Thanks to the outstanding work of our prosecutors and law enforcement partners, it’s his freedom and future that have now gone up in flames.” Mr. Donoghue thanked the Suffolk County Police Department for their assistance during this investigation.
“This sentencing summarizes the gravity of Aichroth’s crimes,” stated DEA Special Agent-in-Charge Hunt. “By heading a bi-coastal drug trafficking operation, Aichroth pushed product into Long Island communities and users’ hands.”
“Today’s sentencing is an example of the ongoing effort by the Suffolk County Police Department and our law enforcement partners, including the Eastern District of New York, to protect our residents from drug and firearm trafficking," stated SCPD Commissioner Hart. "The Suffolk County Police Department has a zero tolerance policy towards this behavior, and those involved should know if they commit crimes in the county that they will be arrested and prosecuted to the fullest of the law. Today’s news provides closure to those who been affected by Mr. Aichroth’s actions as he is being held accountable for his crimes.”
“This defendant utilized violence in furtherance of his drug trafficking activities,” stated Suffolk County Sheriff Toulon. “The Suffolk County Sheriff’s Office is committed to continuing to work with our law enforcement partners in support of these types of investigations to help rid the community of the problems that have been plaguing our neighborhoods and our nation.”
“The defendant’s arrest demonstrates the hard work and dedication of our law enforcement officers,” stated HPD Chief Johnson. “Keeping dangerous individuals off the street and protecting our citizens is our interminable mission.”
According to court filings and facts presented during court proceedings, between February 1, 2015 and September 26, 2016, Aichroth engaged in a bi-coastal cocaine trafficking conspiracy. As part of the investigation, law enforcement officers tracked Aichroth and his associates from Long Island to California and observed a rental car that Aichroth used being loaded onto a car carrier in Downey, California. The officers tracked that car to a shipping lot in New Jersey, where they observed Aichroth retrieve a duffle bag containing more than 10 kilograms of cocaine from the vehicle. The cocaine was then transported by a co-conspirator to a residence in Islip, New York, where it was seized by law enforcement. During the execution of a search warrant at the Islip location, law enforcement recovered seven firearms, ammunition, drug packaging material, numerous pills and approximately 200 grams of cocaine. A search of an apartment that Aichroth used in California yielded 234 grams of cocaine, a 9-millimeter pistol and ammunition.
During the conspiracy, Aichroth set fire to a vehicle parked in front of the residence of an associate in an attempt to intimidate the associate and prevent him from cooperating with law enforcement. The fire also caused extensive damage to the associate’s residence.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution.
The Defendant:
MATTHEW AICHROTH
Age: 35
East Islip, New YorkE.D.N.Y. Docket No. 16-CR-605 (S-1) (DRH)
Former Postal Worker Charged with Making False Statements to Obtain More than $160,000 in Disability BenefitsRead the Press Release
A complaint was unsealed earlier today in federal court in Brooklyn charging Joseph Penatello, a former motor vehicle operator for the United States Postal Service (USPS), with making false statements to obtain federal employees’ compensation. Penatello was arrested today and will make his initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Matthew Modafferi, Special Agent-in-Charge, United States Postal Service, Office of the Inspector General (USPS-OIG), announced the arrest.
“As alleged, the defendant was employed at flea markets at the same time he falsely claimed to be incapable of working for the Postal Service due to a medical condition,” stated United States Attorney Donoghue. “Such disability scams are nothing less than stealing from our taxpayers and will not be ignored.”
“The federal Workers’ Compensation program was created to help those who are recovering from injuries obtained on-the-job,” stated USPS-OIG Special Agent-in-Charge Modafferi. “When a Postal Service employee defrauds the Workers' Compensation program, the Special Agents of the U.S. Postal Service Office of Inspector General will work tirelessly with the U.S. Attorney’s Office to protect the integrity of this federal benefit program.”
According to the complaint, Penatello began receiving workers’ compensation benefits in 2001, after he sustained a neck and back injury while working for the USPS. In order to continue receiving those benefits, between March 2014 and April 2018, Penatello submitted documents to the Department of Labor falsely claiming that he was totally disabled and unable to work due to his medical condition. Penatello also falsely claimed that he was not earning any income. Unbeknownst to Penatello, on over 20 occasions between 2014 and 2018, USPS-OIG special agents video-recorded him working as an organizer at flea markets in Brooklyn and Manhattan. The video also showed Penatello engaging in strenuous activities, such as carrying heavy objects, standing for long periods of time and driving a motor vehicle. On one occasion, Penatello told an undercover special agent that he runs flea markets five days-a-week and up to 12 hours per day. During the relevant time period, Penatello received more than $160,000 in workers’ compensation benefits.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a statutory maximum of five years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Erin Reid is in charge of the prosecution.
The Defendant:
JOSEPH PENATELLO
Age: 64
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 18-MJ-807
Former FIFA Executive, President of CONMEBOL and Paraguayan Soccer Official Sentenced to Nine Years in Prison for Racketeering and Corruption OffensesRead the Press Release
Juan Ángel Napout, a high-level figure in international soccer, was sentenced today in federal court in Brooklyn by United States District Judge Pamela K. Chen to nine years’ imprisonment following his trial convictions of conspiratorial racketeering and two counts of wire fraud conspiracy. The crimes of conviction related to Napout’s participation in schemes to accept millions of dollars in bribes in exchange for the media and marketing rights to various soccer tournaments. The Court also ordered Napout to pay $3,374,025.88 in forfeiture and imposed a fine of $1 million. A hearing on victim restitution is scheduled for October 4, 2018.
At the time of his arrest in December 2015, Napout was the president of CONMEBOL, the confederation responsible for soccer in South America, a FIFA Vice President and a member of the FIFA Executive Committee. He had previously served as the president of the Paraguayan Soccer Federation, known as the Asociación Paraguaya de Fútbol, or APF. Napout was convicted following a six-week trial in November and December of 2017.
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 R. Damon Rowe, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS CI), announced the sentence.
“Napout rose to the highest ranks of soccer, holding FIFA executive positions and running a powerful continental confederation, only to turn his back on the institutions and people he was entrusted to serve,” stated United States Attorney Donoghue. “For years, Napout fed his greed, joining and furthering a rampant and deep-rooted culture of corruption in the sport. Napout’s conviction, as well as the successful prosecution of other high-level soccer officials, has struck at the core of corruption in soccer and underscores the need for continued vigilance against fraud and bribery in the sport.” Mr. Donoghue expressed his grateful appreciation to the governments of Switzerland, Brazil and Paraguay for their significant assistance in this case. Mr. Donoghue also thanked the Office of International Affairs and the Organized Crime and Gang Section of the U.S. Department of Justice’s Criminal Division in Washington, D.C., for their assistance in this prosecution.
“Soccer officials spent years gleefully pocketing money handed to them by companies and agencies hoping to further their own agendas, and they did it thinking no one was looking,” stated FBI Assistant Director-in-Charge Sweeney. “Now Mr. Napout, and other co-conspirators, are paying for their crimes in federal prisons, and the money they took must be repaid. Each investigation the FBI New York and our law enforcement partners brings to an end, we hope will restore a little piece of the game stolen by greed and arrogance.”
“Juan Ángel Napout abused his position of trust and authority in the world of soccer and allowed his appetite for money to lead him into a life of crime,” said IRS-CI Special Agent-in-Charge Rowe. “Soccer fans worldwide will be delighted to see their game cleansed of the exploitation that has marred it for years.”As proved at trial, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal, and entirely legitimate, purpose of the enterprise is to regulate and promote the sport of soccer worldwide. The enterprise financed its efforts in significant part by commercializing the media and marketing rights associated with various soccer events and tournaments, often through the sale of multi-year contracts covering multiple editions of the tournaments.
Evidence presented at trial, publicly filed documents and statements made in court established that Napout and his co-conspirators engaged in a conspiracy to corrupt the enterprise through racketeering activity. Specifically, Napout and his co-conspirators corrupted the FIFA enterprise through the offer and receipt of tens of millions of dollars in bribes and kickbacks paid by sports marketing companies to soccer officials in exchange for the media and marketing rights to: (a) multiple editions of the CONMEBOL-sponsored Copa América soccer tournament played periodically by South American national teams, including the Copa América Centenario, a special edition of the tournament played in the United States in 2016; (b) multiple editions of the CONMEBOL-sponsored Copa Libertadores soccer tournament played annually by South American club teams and (c) two cycles of World Cup qualifying matches played by the Paraguayan national team and administered by the APF.
The government’s investigation is ongoing.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant United States Attorneys Samuel P. Nitze, M. Kristin Mace and Keith D. Edelman are in charge of the trial prosecution, with assistance from Assistant U.S. Attorneys Kaitlin T. Farrell and Brian D. Morris.
The Defendant:
JUAN ÁNGEL NAPOUT
Age: 60
Citizenship: ParaguayE.D.N.Y. Docket No. 15-CR-252 (S-2) (PKC)
Members of Eastern European Organized Crime Syndicate Convicted of Racketeering and Other Violent CrimesRead the Press Release
Earlier today, following more than three weeks of trial, a federal jury in Brooklyn returned guilty verdicts against Leonid “Lenny” Gershman and Aleksey Tsvetkov on charges of racketeering, including predicate acts of illegal gambling, loansharking, extortion, arson and marijuana distribution. The charges arose out of the defendants’ membership in an Eastern European organized crime syndicate that operated predominantly in the Sheepshead Bay, Brighton Beach and Coney Island neighborhoods in Brooklyn. Gershman was also convicted of conspiring to traffick firearms, and Tsvetkov of wire fraud for an insurance scheme at Aces Auto Bodyshop, which he co-owned. When sentenced by United States District Court Judge Brian M. Cogan, the defendants each face up to life in prison.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the verdicts.
“Today’s verdicts hold Gershman and Tsvetkov responsible for years of using intimidation, violence and their association with Russian organized crime to inflict crimes on our local communities, including carrying out beatings in broad daylight and committing arson in the dead of night, endangering the lives of tenants and New York City firefighters,” stated United States Attorney Donoghue. “This Office and our partners on the DEA Strike Force have dismantled the defendants’ criminal syndicate and will continue to work tirelessly to prevent organized crime elements from flourishing in the Eastern District of New York at the expense of our residents.” Mr. Donoghue expressed his grateful appreciation to the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the Immigration and Customs Enforcement, Homeland Security Investigations, New York, the New York City Police Department, and the New York State Police for their roles in the investigation. Mr. Donoghue also thanked the New York City Fire Department for its investigation of the arson and its heroic efforts in rescuing residents who were trapped in the building.
“This investigation and trial illuminated clues that solved international and domestic crimes committed by members of an Eastern European organized crime syndicate operating in Brooklyn, NY,” stated DEA Special Agent-in-Charge Hunt. “Gershman and Tsvetkov relied on their associates in Russian organized crime known as “Thieves in Law” for some of their criminal acts, which included violence. The Strike Force and the Eastern District of New York should be commended for their professionalism that resulted in today’s convictions.”
“Today’s conviction is a decisive blow against this transnational organized crime syndicate,” stated IRS-CI Special Agent-in-Charge Robnett. “IRS-CI is committed, with our OCDETF partners, to disrupt the flow of ill-gotten gains that is the life-blood for these criminals and unravel their complex networks.”
As proven at trial, between 2011 and May 2017, Gershman and Tsvetkov, together with co-conspirators from states of the former Soviet Union, operated as a racketeering enterprise, committing a host of crimes to enrich themselves. Members of the criminal syndicate were linked to high-level members of Russian organized crime known as “thieves in law.” The “Thieves” authorized syndicate members to use violence to protect their criminal activities.
Beginning in 2016, the defendants partnered in an illegal high-stakes poker game on Coney Island Avenue. The Coney Island poker spot, where the bets wagered on a given night could exceed $800,000, generated substantial illicit profits for the defendants’ criminal syndicate. In the spring of 2016 the defendants and other syndicate members agreed to eliminate a competing poker spot by having two co-conspirators, both of whom testified at trial, set fire to a residential building on Voorhies Avenue where the rival game took place on the ground floor. Two residents of the building, including a young boy, were trapped in their apartment by the resulting fire and had to be rescued by firefighters. Both residents and firefighters suffered smoke inhalation, and one firefighter’s injuries required surgeries.
Additionally, the defendants’ criminal syndicate preyed upon numerous extortion victims in the Eastern District of New York and elsewhere. For example, as the evidence at trial proved, Gershman enlisted the help of “Thieves” in Russia who tracked down the father of an extortion victim in Moscow in order to determine where his son, who owed the syndicate more than $40,000, was living. After locating the victim, Gershman was recorded on a wiretap stating, the “Thieves have found him . . . in Israel,” and “they were at [his] place today.” As another example, Tsvetkov attacked a victim outside Aces Auto Bodyshop. The assault was captured on Aces’ surveillance video, and showed Tsvetkov punching the victim in the face, and continuing to attack him in the middle of the street as the victim lay on the ground. After the videotaped beating, which Tsvetkov saved to his cell phone, he boasted to a co-conspirator about putting the victim “to sleep.” Gershman and Tsvetkov were convicted of pistol-whipping an individual they suspected to have stolen marijuana from their stash house, shattering his teeth with the firearm.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Matthew J. Jacobs, Andrey Spektor and Sarah Evans are in charge of the prosecution.
The Defendants:
LEONID GERSHMAN (also known as “Lenny”)
Age: 35
Brooklyn, New YorkALEKSEY TSVETKOV
Age: 39
Brooklyn, New YorkE.D.N.Y. Docket No. 16-CR-553 (S-4) (BMC)
Defendant Charged with Attempted Possession with Intent to Distribute Imitation Designer DrugRead the Press Release
Alfredo Rodriguez was arraigned this morning before United States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn on a two-count indictment charging him with conspiring to distribute, and with attempting to possess with the intent to distribute, N-ethylpentylone, a Schedule I controlled substance analogue. The indictment was filed on August 17, 2018, and the case is assigned to United States District Judge Nicholas G. Garaufis. Rodriguez was arrested on August 2, 2018, and at his initial appearance in court on August 3, 2018 was ordered detained.
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 (ICE), Homeland Security Investigations (HSI), New York, and Frank Russo, Acting Director, New York Field Office, U.S. Customs and Border Protection (CBP), announced the charges.
“The proactive efforts of our law enforcement partners slammed the door shut on the defendant’s efforts to obtain this dangerous drug, shipped by mail from China, to be sold on our streets,” stated United States Attorney Donoghue. “This indictment demonstrates the commitment by the Department of Justice and our partners in law enforcement to combat the drug epidemic in our nation, enforcing zero tolerance for controlled substances, whether they are grown in a field or created in a laboratory.” Mr. Donoghue extended his grateful appreciation to ICE-HSI’s Border Enforcement Task Force and the U.S. Postal Inspection Service (USPIS) for their investigative work and assistance in the case.
“This is another case where interagency cooperation has stopped the attempted international distribution of a dangerous ‘designer’ drug, in this case one mimicking Ecstasy,” stated ICE HSI Special Agent-in-Charge Melendez. “Whether via the Internet or regular mail, HSI and cooperating agencies are penetrating these operations, no matter how big or how small, on a regular basis and bringing the individuals involved to justice.”
“This case serves as a great example of collaborative law enforcement efforts to combat international narcotics trafficking conspirators,” stated CBP Acting Director Russo. “U.S. Customs and Border Protection thanks our partners at HSI and ICE for their continued cooperation.”
According to the indictment and other court filings, Rodriguez purchased what he believed to be “Molly” – the street name for 3,4-methylenedioxymethamphetamine, also commonly referred to as “MDMA” or “ecstasy” – from a supplier in China, which he intended to sell to another individual for distribution. CBP intercepted the package when it arrived in the United States in July 2018, and upon examination found over 2,000 grams of N-ethylpentylone, a controlled substance analogue. N-ethylpentylone can resemble Molly in appearance and has been sold on the street as such.
After removing the N-ethylpentylone from the package and replacing it with a product that resembled the controlled substance, law enforcement personnel, including agents of the USPIS, delivered the package to an address in Jamaica, Queens, where Rodriguez was arrested after accepting the package.
If convicted, Rodriguez faces a maximum sentence of 20 years’ imprisonment on each count of the indictment.
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 General Crimes Section. Assistant United States Attorney Justina L. Geraci is in charge of the prosecution.
The Defendant:
Alfredo Rodriguez
Age: 33
Carteret, New JerseyE.D.N.Y. Docket No. 18-CR-444 (NGG)
New York Man Pleads Guilty to Extensive Cyberstalking CampaignRead the Press Release
A New York man pleaded guilty today in U.S. District Court in the Southern District of New York to one count of cyberstalking, stemming from his extensive cyberstalking campaign that targeted a woman he dated for several months in 2013 and 2014. The victim’s name is being withheld to protect her privacy.
Assistant Attorney Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Geoffrey S. Berman of the Southern District of New York made the announcement.
David Waldman, 49, of Inwood, New York, was initially arrested and charged by complaint and then indicted by a grand jury on June 14, with one count of cyberstalking and six counts of sending interstate threats. Waldman has been detained pending trial. At his change of plea hearing today before U.S. District Court Magistrate Judge Robert W. Lehrburger, Waldman pleaded guilty to one count of cyberstalking. His sentencing hearing is scheduled for Nov. 22, 2018.
According to the indictment to which Waldman pleaded guilty, Waldman engaged in an extensive cyberstalking campaign targeting a woman he briefly dated. The campaign began in April 2014, shortly after Waldman and the victim ended their relationship, and continued intermittently until the date of Waldman’s arrest. Over the course of almost four years, Waldman sent the victim hundreds of text messages, voicemail messages, and e-mail messages, and made voluminous posts on a variety of online platforms, in which he claimed, among other assertions, that she had been diagnosed with bipolar and narcissistic personality disorder, used drugs, and fabricated claims that she had been a victim of child sexual abuse. In his online communications, Waldman also repeatedly threatened to show up at the victim’s apartment and office and threatened to injure, torture, and sexually assault her. Waldman also sent email messages to the victim’s employers, accusing her of being a “habitual drug user” and claiming that he would sue her for defamation, theft, illegal trespass, violating HIPAA, and engaging in other “illegal behaviors.”
Over the course of the alleged cyberstalking campaign, the victim obtained multiple state court orders of protection against Waldman.
Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Nicholas Chiuchiolo of the Southern District of New York are prosecuting the case.
Manager and Employee of Long Island Boiler Room Plead Guilty in $147 Million Stock Manipulation SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Ronald Hardy and McArthur Jean pleaded guilty for their roles in connection with a $147 million scheme to defraud investors in publicly traded companies. Hardy, who was a manager at My Street Research and its predecessors (collectively, the “boiler room”), pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and five counts of securities fraud. Jean, a cold-caller at the boiler room, pleaded guilty to one count of conspiracy to commit securities fraud and agreed to forfeit more than $110,000. When sentenced, Hardy faces a maximum of 20 years’ imprisonment on the top count of conviction and Jean 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 pleas. Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for their significant cooperation and assistance in the investigation.
Between January 2014 and July 2017, Hardy and Jean, together with their 14 co-defendants and others, engaged in a scheme to defraud investors and potential investors in publicly traded companies, including National Waste Management Holdings, Inc., trading under the ticker symbol NWMH; CES Synergies, Inc., trading under the ticker symbol CESX; Grilled Cheese Truck, trading under the ticker symbol GRLD; Hydrocarb Energy Corporation, trading under the ticker symbol HECC; and Intelligent Content Enterprises, Inc., trading under the ticker symbol ICEIF (collectively, the “manipulated public companies”). The defendants executed this scheme by (a) artificially generating price movements and trading volume in the shares, (b) causing material misrepresentations and omissions in their communications with victim investors about the advisability of purchasing the shares and (c) fraudulently concealing their control of shares of the manipulated public companies that were held in brokerage accounts in the names of other individuals or entities. In addition, Hardy and other defendants conspired to launder approximately $14,714,493 in proceeds of the stock manipulation scheme.
Hardy and Jean are among 16 defendants charged in this case, and the ninth and tenth defendants, respectively, to plead guilty. The eight defendants who previously pleaded guilty to various charges for their participation in this scheme are Erik Matz, a manager at the Boiler Room, Boiler Room cold-callers Brian Heepke, Dennis Verderosa, Emin L. Cohen, Paul Ewer, Ashley Antos and Sergio Ramirez, and Robert Gilbert, a cold-caller operating from his own company.
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 Defendants:
RONALD HARDY
Age: 42
Residence: Port Jefferson, New YorkMCARTHUR JEAN, also known as “John McArthur”
Age: 34
Residence: Dix Hills, New YorkERIK MATZ
Age: 44
Residence: Mt. Sinai, New YorkBRIAN HEEPKE, also known as “Brian Targis”
Age: 36
Residence: Farmingdale, New YorkDENNIS VERDEROSA
Age: 67
Residence: Coram, New YorkEMIN L. COHEN, also known as “Ian Grant”
Age: 33
Residence: Coram, New YorkPAUL EWER
Age: 36
Residence: Massapequa, New YorkASHLEY ANTOS
Age: 26
Residence: Central Islip, New YorkSERGIO RAMIREZ
Age: 44
Residence: East Meadow, New YorkROBERT GILBERT
Age: 51
Residence: Cold Spring Harbor, New YorkE.D.N.Y. Docket No. 17-CR-372
Former Brazilian Soccer Official Sentenced to Four Years’ Imprisonment for Racketeering and Corruption OffensesRead the Press Release
Former Brazilian soccer federation president José Maria Marin was sentenced today, in federal court in Brooklyn, by United States District Judge Pamela K. Chen to four years’ imprisonment following his trial convictions of conspiratorial racketeering, wire fraud and money laundering offenses. The crimes of conviction related to Marin’s participation in schemes to accept millions of dollars in bribes in exchange for the media and marketing rights to various soccer tournaments. The Court also ordered Marin to pay $3,335,593 in forfeiture and imposed a fine of $1,200,000. A hearing on victim restitution is scheduled for October 4, 2018.
At the time of his arrest in May 2015, Marin was the former head of the Brazilian soccer federation, known as the Confederação Brasileira de Futebol, or CBF, a member of various FIFA standing committees, and a representative to CONMEBOL, the confederation responsible for soccer in South America. Marin was convicted of racketeering conspiracy, three counts of wire fraud conspiracy and two counts of money laundering conspiracy following a six-week trial in November and December of 2017.
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 R. Damon Rowe, Special-Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS CI), announced the sentence.
“Marin, like his co-conspirators, sold out the sport he was meant to serve to satisfy his own greed,” stated United States Attorney Donoghue. “Now he has been brought to justice and punished for his criminal conduct. Today’s sentence shows that for all their power and prestige, the soccer officials who corrupted ‘the beautiful game’ are not above the law.” Mr. Donoghue expressed his grateful appreciation to governments around the world, particularly the governments of Switzerland, Brazil and Paraguay for their significant assistance in this case. Mr. Donoghue also thanked the Office of International Affairs and the Organized Crime and Gang Section of the U.S. Department of Justice’s Criminal Division in Washington, D.C., for their assistance in this prosecution.
“At each point along the food chain, these soccer officials had their fingers in the pot because they made millions of dollars, thinking no one noticed,” stated FBI Assistant Director-in-Charge Sweeney. “But they’ve each reached the point where they got caught, and now they’re facing justice for their crimes. Today’s sentencing of Mr. Marin is just one step in a wide-ranging investigation of these corrupt officials, and shows the FBI and our law enforcement partners are continuing our pursuit of those who used the game of soccer to pad their bank accounts.”
“Jose Maria Marin’s brazen attempts to hide the bribes he received while serving as a FIFA official, have come back full circle as he finds himself facing a prison sentence,” stated IRS-CI Special Agent-in-Charge Rowe. “As these sports officials are sentenced one-by-one, we are finally purging the game of soccer of the corruption that engulfed it for decades. IRS Criminal Investigation continues to investigate financial crimes and join their fellow national and international law enforcement partners to follow the money wherever it may lead.”As proved at trial, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal, and entirely legitimate, purpose of the enterprise is to regulate and promote the sport of soccer worldwide. The enterprise financed its efforts in significant part by commercializing the media and marketing rights associated with various soccer events and tournaments, often through the sale of multi-year contracts covering multiple editions of the tournaments.
Evidence presented at trial, publicly filed documents and statements made in court established that Marin and his co-conspirators engaged in a conspiracy to corrupt the enterprise through racketeering activity. Specifically, Marin and his co-conspirators corrupted the FIFA enterprise through the offer and receipt of tens of millions of dollars in bribes and kickbacks paid by sports marketing companies to soccer officials. Marin accepted, or agreed to accept, millions of dollars in bribes in exchange for the media and marketing rights to: (a) multiple editions of the CONMEBOL-sponsored Copa América soccer tournament played periodically by South American national teams, including the Copa América Centenario, a special edition of the tournament played in the United States in 2016; (b) multiple editions of the CONMEBOL-sponsored Copa Libertadores soccer tournament played annually by South American club teams and (c) multiple editions of the Copa do Brasil, a soccer tournament sponsored by the CBF for Brazilian soccer clubs.
The government’s investigation is ongoing.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant United States Attorneys Samuel P. Nitze, M. Kristin Mace and Keith D. Edelman are in charge of the trial prosecution, with assistance from Assistant U.S. Attorneys Kaitlin T. Farrell and Brian D. Morris.
The Defendant:
JOSÉ MARIA MARIN
Age: 86
Citizenship: BrazilE.D.N.Y. Docket No. 15-CR-252 (S-2) (PKC)
Former Nazi Labor Camp Guard Jakiw Palij Removed to GermanyRead the Press Release
Jakiw Palij, a former Nazi labor camp guard in German-occupied Poland and a postwar resident of Queens, New York, has been removed by U.S. Immigration and Customs Enforcement (ICE) to Germany, Attorney General Jeff Sessions of the U.S. Department of Justice, Secretary Kirstjen M. Nielsen of the U.S. Department of Homeland Security, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and ICE Deputy Director and Acting Director Ronald D. Vitiello announced today. ICE removed Palij based on an order of removal obtained by the Department of Justice in 2004.
“The United States will never be a safe haven for those who have participated in atrocities, war crimes, and human rights abuses,” said Attorney General Sessions. “Jakiw Palij lied about his Nazi past to immigrate to this country and then fraudulently become an American citizen. He had no right to citizenship or to even be in this country. Today, the Justice Department—led by Eli Rosenbaum and our fabulous team in the Human Rights and Special Prosecutions Section, formerly the Office of Special Investigations—successfully helped remove him from the United States, as we have done with 67 other Nazis in the past. I want to thank our partners at the State Department and the Department of Homeland Security for all of their hard work in removing this Nazi criminal from our country.”
“Nazi war criminals and human rights violators have no safe haven on our shores,” said Secretary Kirstjen M. Nielsen of the U.S. Department of Homeland Security. “We will relentlessly pursue them, wherever they may be found, and bring them to justice. The arrest and removal of Jakiw Palij to Germany is a testament to the dedication and commitment of the men and women of ICE, who faithfully enforce our immigration laws to protect the American people.”
Palij, 95, was born in a part of Poland that is situated in present-day Ukraine, immigrated to the United States in 1949 and became a U.S. citizen in 1957. He concealed his Nazi service by telling U.S. immigration officials that he had spent the war years working until 1944 on his father’s farm in his hometown, which was previously a part of Poland and is now in Ukraine, and then in a German factory.
As Palij admitted to Justice Department officials in 2001, he was trained at the SS Training Camp in Trawniki, in Nazi-occupied Poland, in the spring of 1943. Documents subsequently filed in court by the Justice Department showed that men who trained at Trawniki participated in implementing the Third Reich’s plan to murder Jews in Poland, code-named “Operation Reinhard.” On Nov. 3, 1943, some 6,000 Jewish men, women and children incarcerated at Trawniki were shot to death in one of the largest single massacres of the Holocaust. By helping to prevent the escape of these prisoners during his service at Trawniki, Palij played an indispensable role in ensuring that they later met their tragic fate at the hands of the Nazis.
On May 9, 2002, the Criminal Division’s then-Office of Special Investigations (OSI) and the U.S. Attorney’s Office of the Eastern District of New York filed a four-count complaint in the U.S. District Court for the Eastern District of New York, to revoke Palij’s citizenship. The complaint was based primarily upon his wartime activities as an armed guard of Jewish prisoners at Trawniki, who were confined there under inhumane conditions. Palij’s U.S. citizenship was revoked in August 2003 by a federal judge in the Eastern District of New York based on his wartime activities and postwar immigration fraud. In November 2003, the government placed Palij in immigration removal proceedings.
In decisions issued on June 10 and Aug. 23, 2004, U.S. Immigration Judge Robert Owens ordered Palij’s deportation to Ukraine, Poland or Germany, or any other country that would admit him, on the basis of his participation in Nazi-sponsored acts of persecution while serving during World War II as an armed guard at the Trawniki forced-labor camp in Nazi-occupied Poland under the direction of the government of Germany and his subsequent concealment of that service when he immigrated to the United States. As Judge Owens wrote in his decision ordering Palij’s deportation, the Jews massacred at Trawniki “had spent at least half a year in camps guarded by Trawniki-trained men, including Jakiw Palij.” In December 2005, the Board of Immigration Appeals denied Palij’s appeal.
The removal of Palij to Germany was effectuated through close cooperation between the Departments of Justice, Homeland Security and State. For nearly four decades, the Justice Department has vigorously pursued its mission to expel Nazi persecutors from the United States. The Palij case was the product of the Department’s longtime efforts to identify, investigate and take legal action against participants in Nazi crimes of persecution who reside in the United States. Since OSI began operations in 1979, that office and its successor, the Human Rights and Special Prosecutions Section (HRSP) of the Justice Department’s Criminal Division, have won cases against 108 individuals who participated in Nazi crimes of persecution. In addition, attempts to enter the United States by more than 180 individuals implicated in wartime Axis crimes have been prevented as a result of the “Watch List” program initiated by OSI and enforced in cooperation with the Departments of State and Homeland Security.
This removal was supported by ICE’s Enforcement and Removal Operations and Office of the Principal Legal Advisor as well as the Human Rights Violators and War Crimes Center (HRVWCC). The HRVWCC is comprised of ICE HSI’s Human Rights Violators and War Crimes Unit, ICE’s Human Rights Law Section, FBI’s International Human Rights Unit and HRSP. Established in 2009, the HRVWCC furthers the government’s efforts to identify, locate and prosecute human rights abusers in the United States, including those who are known or suspected to have participated in persecution, war crimes, genocide, torture, extrajudicial killings, female genital mutilation and the use or recruitment of child soldiers. The HRVWCC leverages the expertise of a select group of agents, lawyers, intelligence and research specialists, historians and analysts who direct the government’s broader enforcement efforts against these offenders.
The case was investigated, litigated and supervised over the years by a host of attorneys and historians in OSI, the U.S. Attorney’s Office in the Eastern District of New York, and HRSP, including Director Eli M. Rosenbaum, Senior Trial Attorney Susan L. Siegal and Chief Historian Dr. Jeffrey Richter, all of whom have served with HRSP since its 2010 creation.
[[{"fid":"1088406","view_mode":"default","attributes":{"data-delta":"1"},"fields":{"format":"default"},"type":"media","field_deltas":{"1":{"format":"default"}},"link_text":false}]]United States Files Complaint to Stop Queens, New York Company and its Officers from Distributing Adulterated Seafood ProductsRead the Press Release
The United States filed a civil complaint against Foo Yuan Food Products Company, Inc. (Foo Yuan) of Long Island City, New York, its Owner and President Hsing Chang, and its Secretary Susan Chang, to stop them from preparing and distributing adulterated seafood products in violation of federal law, the Department of Justice announced today.
The Department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).
According to the complaint, defendants prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls. The complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that defendants failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products.
“The Department of Justice is committed to ensuring that food processors comply with laws designed to ensure food safety,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to ensure that Americans are protected from potentially unsafe food.”
“When food processors ignore federal laws concerning the preparation of food, they subject the public to serious health risks,” stated United States Attorney Richard P. Donoghue for the Eastern District of New York. “The Department of Justice has asked the Court to stop the defendants from processing, packaging or distributing any more food until they establish that they can comply with federal laws and regulations designed to avert those health risks. Today’s action demonstrates our commitment to protecting the public from potentially contaminated food.”
FDA inspected Foo Yuan’s facility in 2014, 2016 and from December 2017 to January 2018. According to the complaint, at each inspection, FDA documented significant deficiencies. For example, as alleged in the complaint, during the most recent inspection, FDA observed a failure to maintain the cleanliness of food contact sources, and a failure to ensure that all persons working in direct contact with food, food contact surfaces and food-packing materials conform to hygienic practices to protect against food contamination.
The complaint notes that, following the October 2014 inspection, FDA issued a warning letter notifying Foo Yuan and Hsing Chang that they were in violation of seafood Hazard Analysis and Critical Control Point and current Good Manufacturing Practice regulations, causing their products to be adulterated under the law.
The complaint alleges that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce. It also alleges that the defendants further violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce.
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate Chief Counsel for Enforcement Tara Boland of the FDA, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
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.
United States Files Complaint to Stop Queens Company and its Officers from Distributing Adulterated Seafood ProductsRead the Press Release
The United States filed a civil complaint today in federal court in Brooklyn against Foo Yuan Food Products Company, Inc. (Foo Yuan) of Long Island City, New York, its Owner and President Hsing Chang, and its Secretary Susan Chang, seeking to permanently enjoin them from preparing and distributing adulterated seafood products in violation of federal law, the Department of Justice announced today.
According to the complaint filed at the request of the U.S. Food and Drug Administration (FDA), the defendants prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls. The United States alleges that defendants failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products.
“When food processors ignore federal laws concerning the preparation of food, they subject the public to serious health risks,” stated United States Attorney Richard P. Donoghue. “The Department of Justice has asked the Court to stop the defendants from processing, packaging or distributing any more food until they establish that they can comply with federal laws and regulations designed to avert those health risks. Today’s action demonstrates our commitment to protecting the public from potentially contaminated food.”
“The Department of Justice is committed to ensuring that food processors comply with laws designed to ensure food safety,” stated Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to ensure that Americans are protected from potentially unsafe food.”
The FDA inspected Foo Yuan’s facility in 2014, 2016 and from December 2017 to January 2018. According to the complaint, at each inspection, the FDA documented significant deficiencies. For example, during the most recent inspection, FDA observed a failure to maintain the cleanliness of food contact sources, and a failure to ensure that all persons working in direct contact with food, food contact surfaces and food-packing materials conformed to hygienic practices to protect against food contamination.
The complaint alleges that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce. It also alleges that the defendants further violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce.
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate Chief Counsel for Enforcement Tara Boland of the FDA, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
MS-13 Gang Member Pleads Guilty to the Murders of Four Young Men in a Central Islip Park in 2017Read the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Josue Portillo, a member of the Leeward Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, pleaded guilty to racketeering charges without a plea agreement with the government, relating to his participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos. The guilty plea was entered 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), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the guilty plea.
Portillo, who was 15 years and 11 months old at the time of the April 11 murders and is now 17 years old, was initially charged by a juvenile information that was filed under seal in the Eastern District of New York on July 10, 2017. Portillo, an illegal alien from El Salvador, was in immigration custody in Virginia when charged, and he was subsequently transferred to the custody of the FBI’s Long Island Gang Task Force and transported to this district. Thereafter, the government filed a motion to transfer Portillo to adult status for prosecution. Following an evidentiary hearing, on August 6, 2018, Judge Bianco issued a Memorandum and Order granting the government’s transfer motion and ordering that Portillo be prosecuted as an adult.
“Josue Portillo’s guilty plea today marks a milestone in the investigation of MS-13’s brutal murders of four young men lured to their violent deaths in a park on Long Island,” stated United States Attorney Donoghue. “We hope the victims’ families can find some measure of solace in knowing that the perpetrators of these murders are now being held responsible for their crimes. The Eastern District, together with our partners on the FBI’s Long Island Gang Task Force, will never tire nor relent in our efforts to dismantle MS-13 and bring to justice their members who have no respect for human life.” Mr. Donoghue expressed his appreciation to the U.S. Attorney’s Office for the Western District of Virginia for their assistance in the case.
“Whether young or old, the savagery of MS-13 gang members remains the same. Portillo and other members of MS-13 brutally beat and killed four young men, leaving them in an isolated wooden area,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI’s Long Island Gang Task Force’s continuous effort to eliminate the threat of MS-13 is shown today, as Portillo has now pled guilty for the cruel crime he committed. We hope today's news provides some measure of comfort to the families of the victims and the community as a whole.”
“The Suffolk County Police Department thanks the Eastern District of New York for their steadfast commitment to prosecute violent MS-13 gang members,” stated SCPD Commissioner Hart. “Today’s news is an example of the ongoing effort by the Suffolk County Police Department and our law enforcement partners to protect the residents of Suffolk County from the scourge of gang violence. Ridding our community of gangs is a long term commitment and one that we are strongly committed to. Gang members should know that if they commit crimes in this county that they will be arrested and prosecuted to the fullest extent of the law.”
“This investigation is a clear example of the important partnership and dedicated investigators that exist within the Long Island Gang Task Force,” stated NCPD Commissioner Ryder. “These arrests are taking violent criminals off our streets, which equates to safer communities for our residents. We will never tolerate murder, gang violence and drug dealing, thus making these crimes a priority. I would like to congratulate all of the individuals who assisted with this lengthy and complex investigation.”
According to court filings and statements by the defendant at the guilty plea proceeding, on the evening of April 11, 2017, two female associates of the MS-13 lured five young men, including the four victims, to a community park in Central Islip at the direction of Portillo and other MS-13 members. The victims were believed to be members of a rival gang who had disrespected the MS-13. Portillo and several MS-13 members and associates met in a wooded area behind the park where they distributed weapons and discussed the plan to kill the victims. The female MS-13 associates then arrived at the park, led the victims to a wooded area and sent Portillo a text message describing their location. Portillo and the other MS-13 members and associates surrounded the victims and killed Llivicura, Lopez, Tigre and Villalobos using machetes, knives and wooden clubs. The fifth intended victim escaped. Portillo and his associates dragged the victims’ bodies to a more secluded spot and fled. The victims’ bodies were discovered the following evening.
When sentenced, Portillo, faces a maximum sentence of life in prison. Upon completion of his sentence, he faces deportation from the United States.
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 the MS-13, a violent international criminal organization. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. 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 this 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 this 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, Michael T. Keilty and Raymond A. Tierney are in charge of the prosecution.
The Defendant:
JOSUE PORTILLO (“Sparky” and “Curioso”)
Age: 17
Central Islip, New YorkE.D.N.Y. Docket No. 17-CR-366 (S-1) (JFB)
New York Attorney Sentenced to 18 Months’ Imprisonment for Securities Fraud and Wire Fraud Conspiracies, and Ordered to Pay More Than $10 Million in RestitutionRead the Press Release
Earlier today, in federal court in Brooklyn, Evan Greebel, a former partner at the New York office of Katten Muchin Rosenman LLP who served as outside counsel to Retrophin, Inc., a biopharmaceutical company, was sentenced by Judge Kiyo A. Matsumoto to 18 months’ imprisonment for conspiracy to commit wire fraud and conspiracy to commit securities fraud, to be followed by three years’ supervised release. The Court also ordered Greebel to pay $116,462.03 in forfeiture and $10,447,979 in restitution. Greebel was convicted by a federal jury in December 2017, following an 11-week trial, for his role in two interrelated fraud schemes with Retrophin CEO Martin Shkreli and others, in which Greebel, Shkreli and others stole millions of dollars in cash and stock from Retrophin and manipulated the price and trading volume of Retrophin stock.
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.
“Today’s sentence reinforces our message that attorneys who facilitate crimes will be held accountable for their actions,” stated United States Attorney Donoghue. “Evan Greebel leveraged his legal training and the trust placed in him by Retrophin’s Board of Directors to commit serious crimes, including the theft of millions of dollars in cash and stock from the very company he was hired to represent. In doing so, Greebel broke the law and violated the ethical duties he owed to his client.” Mr. Donoghue expressed his thanks to the United States Securities and Exchange Commission (SEC), New York Regional Office, and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their significant cooperation and assistance in this case.
“As an attorney well-versed in the law, Greebel was expected to abide by it – not violate it,” stated FBI Assistant Director-in-Charge Sweeney. “Instead he used his professional expertise to prepare illegitimate agreements, allowing him and others to carry out their illegal activity. His sentencing today serves as a reminder to others that there are consequences for this type of behavior.”
Between 2011 and 2014, Greebel conspired with Shkreli and others to misappropriate Retrophin’s assets in order to pay off defrauded investors in Shkreli’s hedge funds, MSMB Capital Management LP (MSMB Capital) and MSMB Healthcare Management LP (MSMB Healthcare). Specifically, Greebel negotiated and prepared so-called settlement agreements with various of the defrauded investors, causing Retrophin to reimburse them more than $2 million in cash and stock. Greebel also arranged for other defrauded investors to enter into sham consulting agreements with Retrophin as a means to settle liabilities owed by Shkreli and the hedge funds.
In addition, between 2012 and 2014, Greebel and Shkreli schemed to defraud investors in Retrophin by attempting to control illegally the price and trading volume of Retrophin’s stock. As part of the scheme, they concealed Shkreli’s beneficial ownership and control of most of Retrophin’s free-trading shares, recruited associates of Shkreli to be nominee holders of those shares and prevented the nominees from selling the shares. Some of the shares were used to settle liabilities owed by the MSMB hedge funds and Shkreli.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alixandra Smith, David Pitluck and David K. Kessler are in charge of the prosecution.
The Defendant:
EVAN GREEBEL
Age: 45
Scarsdale, New YorkE.D.N.Y. Docket No. 15-CR-637 (KAM)
Long Island Convenience Store Owner Sentenced to Prison for Selling K2 Drug from His Convenience StoreRead the Press Release
Earlier today, in federal court in Central Islip, Osman Ak was sentenced by United States District Judge Denis R. Hurley to a year and one day in prison, to be followed by three years’ supervised release, for selling the illegal drug K2, also known as “spice” and synthetic marijuana, from his convenience store in Medford, New York. Ak pleaded guilty in November 2017.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and George Beach II, Superintendent, New York State Police (NYSP), announced the sentence.
“Osman Ak is going from his convenience store to prison for selling dangerous drugs over the counter, placing the community at risk to the dangers associated with this synthetic hallucinogen and its unpredictable side effects,” stated United States Attorney Donoghue. “This Office is working tirelessly with our law enforcement partners to prosecute drug traffickers and dealers at all levels and hold them responsible for their crimes.”
“Ingesting K2 is like playing Russian roulette, and Osman AK was the person responsible for enticing the young people of Long Island to play,” stated DEA Special Agent-in-Charge Hunt. “Today AK is being held accountable for peddling this extremely dangerous and potentially life threatening synthetic cannabinoid into our communities. I commend the agents and officers assigned to our DEA Long Island District Office, our partners at the New York State Police, and the prosecution team at the Eastern District of New York for their hard work on this investigation.”
"As we have seen time and again, synthetic drugs endanger the health of users and have no place being sold in our neighborhoods,” stated NYSP Superintendent Beach. “This case sends a strong message that we will not tolerate the sale of synthetic drugs anywhere in New York State, and those who sell these illegal substances at the detriment of our communities will be held fully accountable.”
The defendant owned and operated the convenience store, Eyup Gas & Convenience Store, Inc. d/b/a US Food Mart in Medford where, between April 2017 and May 29, 2017, he sold the illegal drugs during business hours. According to court filings, the K2 was packaged in glitter bags bearing cartoon characters and brand names such as “OMG,” “AK47,” “Joker” and “Hayze Peachy King.” The drugs were kept in cigar boxes hidden behind the cash register. Store videotapes seized by law enforcement for the relevant time period showed bags of K2 being sold to customers, most of whom appeared to be young adults.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
OSMAN AK
Age: 45
Holbrook, New YorkE.D.N.Y. Docket No. 17-CR-527 (DRH)
Heroin Trafficker for Mexican Drug Cartel Sentenced in Brooklyn Federal Court to 68 Months’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Francisco Canizales-Ramirez, who transported heroin for a violent Mexican drug trafficking organization known as “H-2,” was sentenced by United States District Judge Carol Bagley Amon to 68 months’ imprisonment. In April 2018, Canizales-Ramirez pleaded guilty to conspiring to distribute and possess with intent to distribute heroin. Upon completion of his sentence, the defendant will be deported to Mexico.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
“With today’s sentence, Canizales-Ramirez has been held responsible for his role as a smuggler for a large-scale Mexican drug trafficking organization that relies on criminals like the defendant to receive imported heroin and distribute it into our country,” stated United States Attorney Donoghue. “This Office and our law enforcement partners are responding to the opioid epidemic by vigorously investigating and prosecuting all traffickers, large and small.” Mr. Donoghue extended his grateful appreciation to the United States Attorney’s Office for the Southern District of Ohio; Las Vegas District Office, Columbus District Office and New York Division of the U.S. Drug Enforcement Administration; Ohio State Highway Patrol; and a number of Ohio police departments, specifically, the Columbus Division of Police, Narcotics Bureau, Franklin County Sheriff’s Office, Westerville Police Department and Upper Arlington Police Department, for their assistance in the investigation and prosecution.
According to court filings and facts presented during court proceedings, the defendant agreed to receive and transport a kilogram of heroin on behalf of “H-2,” which is based in Nayarit and Sinaloa, Mexico. The defendant subsequently received the heroin from a drug courier in Columbus, Ohio, and transported the drugs to Brooklyn for distribution.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Alicia N. Washington, G. Karthik Srinivasan, Ryan C. Harris, Craig R. Heeren and Michael P. Robotti are in charge of the prosecution.
The Defendant:
FRANCISCO CANIZALES-RAMIREZ
Age: 35
Columbus, OhioE.D.N.Y. Docket No. 16-CR-658 (CBA)
Long Island MS-13 Gang Members Face Additional Racketeering Charges, Including Murder and Attempted MurderRead the Press Release
Five members of La Mara Salvatrucha (also known as MS-13), Ruendy Jhonatan Hernandez-Vasquez, Jhonny Contreras, Reynaldo Lopez-Alvarado, Jeffrey Amador and Ronald Catalan, are scheduled to be arraigned this morning before United States District Judge Joseph F. Bianco, at the federal courthouse in Central Islip, New York. The 75-count sixth superseding indictment was unsealed on August 8, 2018 and charges more than two dozen members of MS-13, a transnational criminal organization, with racketeering and related offenses.
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 charges.
The superseding indictment adds one new defendant, Hernandez-Vasquez, in connection with the October 10, 2016 murder of Javier Castillo in Freeport, and a conspiracy to distribute cocaine and marijuana. The indictment also adds racketeering offenses and related charges of murder and conspiracy to commit murder in aid of racketeering against previously charged defendants Contreras, Lopez-Alvarado and Amador in connection with the November 19, 2015 murder of Cesar Rivera-Vasquez in Babylon, and racketeering offenses against Catalan for a June 23, 2009 shooting in Brentwood. In total, 16 murders committed by MS-13 members have been charged in this superseding indictment and underlying indictments in this case.
In addition, INTERPOL issued a Red Notice for Hernandez-Vasquez relating to an arrest warrant for a murder he allegedly committed in El Salvador before he illegally entered the United States.
“The MS-13’s mission to commit senseless and vicious acts of violence, terrorizing our communities in the process, is evident from the charges announced today,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue our unyielding pursuit to ensure that all members of this brutal gang are held accountable for every crime they have committed and that neighborhoods on Long Island are kept safe and free from gang violence.” Mr. Donoghue expressed his sincere thanks to all the members of the FBI’s Long Island Gang Task Force for their work on the investigation.
“MS-13 members feed on brutal, ruthless attacks threatening the safety of our communities,” stated FBI Assistant Director-in-Charge Sweeney. “With such a violent gang tormenting the neighborhoods of Long Island, it is essential that we work closely with our fellow law enforcement agencies to continue to round up the individuals committing these violent crimes. The persistence of the FBI’s Long Island Gang Task Force will never weaken—our investigations into MS-13 will not cease until this gang is eradicated.”
“The Suffolk County Police Department continues to work with all our partners and serves on the Long Island FBI Gang Task Force to eradicate MS-13,” stated SCPD Commissioner Hart. “This indictment sends another strong message to MS-13 members that their actions will not be tolerated and justice will be served. We applaud the Eastern District of New York for their ongoing and relentless commitment to prosecute violent gang members and will continue to work together to ensure that our communities are safe.”
“Today’s indictment of MS-13 member Ruendy Jhonatan Hernandez-Vasquez on charges of murder, conspiracy to commit murder and distribution of cocaine and marijuana clearly shows how the work of our law enforcement agencies is a constant in our relentless efforts to remove gang members from our streets,” stated NCPD Commissioner Ryder. “Our determined and dedicated approach keeps our communities safe and I would like to thank all involved in the FBI Long Island Task Force for bringing these gang members to justice.”
2009 Attempted Murder of John Doe #1 in Brentwood
As set forth in court filings, including a detention memorandum filed earlier today, on June 23, 2009, Catalan and two other MS-13 members, all of whom were new members of the Brentwood Locos Salvatruchas clique, armed themselves with handguns and drove through Brentwood, hunting for rival gang members to attack and kill in order to increase their standing and solidify their membership in the MS-13 gang. They observed a group of males on Barleau Street, whom they believed to be members of the Bloods street gang. The MS-13 members got out of their car, approached the group and started firing. John Doe #1 was struck in the armpit and back as he tried to run. Catalan and the others ran back to the car and fled the scene. John Doe #1 underwent surgery and ultimately survived the attack.
2015 Murder of Cesar Rivera-Vasquez in Babylon
Contreras, Lopez-Alvarado and Amador are charged in this indictment with the November 19, 2015 murder of Cesar Rivera-Vasquez, who was killed because the MS-13 members suspected that he was a member of a rival Mexican gang, Raza Loca. The MS-13 members convinced the victim to go with them to a secluded area adjacent to the Long Island Railroad station in Babylon to smoke marijuana. Once there, Contreras, Lopez-Alvarado, Amador and two other MS-13 members attacked Rivera-Vasquez with knives and a baseball bat before Lopez-Alvarado took a knife and cut the victim’s throat. The MS-13 members buried his body near a large mound of dirt, and the body was not discovered until April 2018.
2016 Murder of Javier Castillo in Freeport
Hernandez-Vasquez has been added to previously charged offenses in this case in connection with the October 10, 2016 murder of Javier Castillo. The MS-13 members suspected Castillo of being a member of the rival 18th Street gang and convinced him to go with them to Cow Meadow Park in Freeport. Once there, they attacked and killed him with a machete and buried his body in a shallow grave near a saltwater marsh. Castillo’s body was not recovered until October 2017. The sixth superseding indictment also adds marijuana and cocaine conspiracy charges against Hernandez-Vasquez.
In addition to the Rivera-Vasquez and Castillo murders, 14 other murders previously were charged in this case, including, the May 26, 2013 murder of Derrick Mayes, the May 28, 2013 murder of Keenan Russell, the July 14, 2014 murder of Jose Lainez-Murcia, the June 30, 2015 murder of Jonathan Cardona-Hernandez, the April 29, 2016 murder of Oscar Acosta, the June 3, 2016 murder of Jose Pena, the September 13, 2016 murders of Kayla Cuevas and Nisa Mickens, the October 13, 2016 murder of Dewann Stacks, the January 30, 2017 murder of Esteban Alvarado-Bonilla, and the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos, as well as numerous attempted murders and assaults.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Today’s superseding indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, 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 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 Office, Rockville Centre Police Department, New York State Police and Bureau of Alcohol, Tobacco, Firearms and Explosives.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Michael T. Keilty and Raymond A. Tierney are in charge of the prosecution.
New Defendant:
RUENDY JHONATAN HERNANDEZ-VASQUEZ (“Solido”)
Age: 22
Roosevelt and Freeport, New YorkPreviously Indicted Defendants Facing Additional Charges:
JHONNY CONTRERAS (“Muerte” and “Reaper”)
Age: 25
Brentwood, New YorkREYNALDO LOPEZ-ALVARADO (“Mente”)
Age: 26
Brentwood, New YorkJEFFREY AMADOR (“Cruel”)
Age: 22
Brentwood, New YorkRONALD CATALAN (“Stranger” and “Extrano”)
Age: 27
Brentwood, New YorkE.D.N.Y. Docket No. 16-403 (S-6)(JFB)
22 Charged with Smuggling Millions of Dollars of Counterfeit Luxury Goods from China into the United StatesRead the Press Release
Earlier today, in federal court in Brooklyn, six indictments and one criminal complaint were unsealed charging a total of 22 defendants with illegally bringing into the United States millions of dollars of Chinese-manufactured goods by smuggling them through ports of entry on the East and West Coasts. The defendants were arrested this morning, and their initial appearances and arraignments are scheduled this afternoon before United States Magistrate Judge Lois Bloom.
The charges include conspiracy to traffic, and trafficking, in counterfeit goods; conspiracy to smuggle, and smuggling, counterfeit goods into the United States; money laundering conspiracy; immigration fraud and unlawful procurement of naturalization. In addition, the government restrained nine real properties in Queens, Staten Island and Brooklyn, New York, belonging to the defendants.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General for the U.S. Department of Justice’s Criminal Division, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, the defendants used many forms of deception to smuggle large quantities of counterfeit luxury brand goods from China into the United States, and then profited by distributing and selling the fake merchandise,” stated United States Attorney Donoghue. “This Office, working with our law enforcement partners, is committed to securing our country’s ports of entry, as well as to protecting the integrity of intellectual property upon which free and fair international trade and markets depend.” Mr. Donoghue extended his grateful appreciation to the HSI Intellectual Property Group and the HSI Border Enforcement Security Task Force and the NYPD. Mr. Donoghue also extended his thanks to U.S. Customs and Border Protection, the New York State Police and the Brooklyn District Attorney’s Office for their assistance.
“The defendants allegedly smuggled millions of dollars of counterfeit luxury goods into our country, depriving companies of their valuable and hard-earned intellectual property,” stated Assistant Attorney General Benczkowski. “The illegal smuggling of counterfeit goods poses a real threat to honest businesses, and I commend our federal prosecutors and partners at HSI and the NYPD for their outstanding work on this important investigation. The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”
“This investigation exposed the global nature of intellectual property crimes, allegedly being executed by those arrested today. Counterfeit goods manufactured and smuggled from China with a suggested value north of half a billion dollars, were intended to make its way into U.S. markets and into the hands of unsuspecting consumers,” said HSI Special Agent-in-Charge Melendez. “This investigation should be a crystal clear message that counterfeiting and intellectual property rights violations is anything but a victimless crime as it harms legitimate businesses, consumers and governments.”
“Today’s indictments demonstrate our resolve to ensure a level playing field for all, and serve as a reminder that selling fake goods is never a victimless crime,” stated NYPD Commissioner O’Neill. “Everything about these activities undermines public trust. And the NYPD, in close collaboration with all of our local, state, and federal law enforcement partners, will continue to aggressively combat and prosecute the evasive practices of the individuals and companies who attempt to operate outside our laws and regulations.”
According to the court filings, the defendants played various roles in the trafficking of counterfeit goods manufactured in China, brought by ocean-going ships to the United States in 40-foot shipping containers, smuggled through ports of entry disguised as legitimate imports and distributed throughout the country. The counterfeit goods included items such as fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume. The defendants’ roles included:
Importers
Qi Feng Liang, Wo Qi Liu, Zhi Ming Zhang and Yu Ming Wong served as shipping container importers. They arranged to smuggle counterfeit goods into the United States through the Port of New York/New Jersey and elsewhere. They fraudulently used the names, addresses and other identifying information of legitimate import companies and falsified the descriptions of the containers’ contents on U.S. customs paperwork associated with the containers of counterfeit goods. They used “burner” phone numbers and “burner” email accounts—obtained by using false or incomplete information—in order to conceal their true identities. The counterfeit goods were transported by trucks to self-storage facilities in Brooklyn, Queens and Long Island, New York, where the goods were unloaded and stored. Qi Feng Liang, Wo Qi Liu, Zhi Ming Zhang and Yu Ming Wong smuggled or attempted to smuggle 23 40-foot shipping containers into the country loaded with counterfeit items. The estimated Manufacturers’ Suggested Retail Price of these items, had they been genuine, would have been more than $450 million.
Wholesale Distributors
Josstina Lin, Xue Wei Qu, Xi Quan Huang, Yun Lei Huang, Yun Wu Huang, Si Lung Chung, Le Wei Zheng, Xiao Ying Huang, Qiong Chan Mu, Ren Zhong Zhu, Cheng Xu Yu, Jin Hua Zhang, Jian Hua Zhu, Yong Lin Dong and Cai Ying Lin managed the receipt, storage and distribution of counterfeit goods smuggled into the United States by the importers. They resold the counterfeit items to other wholesale and retail sellers in New York, California and elsewhere in the United States.
Domestic Shippers
Wei Mei Gao, Sheng Miao Xia and Jie Mei Chen used private shipping businesses they controlled to distribute the counterfeit goods smuggled into the United States by the importers and handled by the wholesale distributors. The domestic shippers also facilitated payments by the wholesale and retail counterfeit goods sellers to the wholesale distributors.
As alleged in the indictments, some defendants additionally conspired to launder the proceeds from the sale of counterfeit goods, and others illegally concealed their involvement in the trafficking of counterfeit goods when applying for immigration benefits.
The charges in the indictments and criminal complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s cases are being prosecuted by Assistant United States Attorneys William P. Campos and Temidayo Aganga-Williams of the Eastern District of New York, Special Assistant United States Attorney Robert Kaftal of the Brooklyn District Attorney’s Office and Senior Counsel James S. Yoon of the U.S. Department of Justice, Criminal Division Computer Crime and Intellectual Property Section (CCIPS). Assistant United States Attorney Claire S. Kedeshian is handling the forfeiture aspect of this case. The investigation was previously led by Senior Counsel Evan Williams of CCIPS.
The Department of Justice’s Task Force on Intellectual Property (IP Task Force) contributed to this case. The IP Task Force is led by the Deputy Attorney General to combat the growing number of domestic and intellectual property crimes, to protect the health and safety of American consumers and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. To learn more about the IP Task Force, go to https://www.justice.gov/iptf. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
The Defendants:
QI FENG LIANG (also known as “Alex” and “Mike Sotire”)
Age: 34
Brooklyn, New YorkWO QI LIU (also known as “Louis,” “Qi,” “Woqi” and “Big Elephant”)
Age: 43
Brooklyn, New YorkZHI MING ZHANG (also known as “Jordan” and “Four B”)
Age: 43
Staten Island, New YorkJOSSTINA LIN (also known as “Tina”)
Age: 42
Brooklyn, New YorkXUE WEI QU
Age: 51
Queens, New YorkE.D.N.Y. Docket No. 18-CR-419 (WFK)
XI QUAN HUANG
Age: 58
Queens, New YorkYUN LEI HUANG
Age: 32
Queens, New YorkYUN WU HUANG
Age: 34
Queens, New YorkWEI MEI GAO
Age: 35
Queens, New YorkSHENG MIAO XIA
Age: 44
Queens, New YorkE.D.N.Y. Docket No. 18-CR-408
SI LUNG CHUNG (also known as “Allan”)
Age: 42
New York, New YorkLE WEI ZHENG
Age: 42
New York, New YorkE.D.N.Y. Docket No. 18-CR-407 (CBA)
XIAO YING HUANG (also known as “Linda”)
Age: 53
Nassau County, New YorkQIONG CHAN MU (also known as “Rosanna”)
Age: 26
Nassau County, New YorkREN ZHONG ZHU
Age: 31
Nassau County, New YorkE.D.N.Y. Docket No. 18-CR-423 (DLI)
YONG LIN DONG
Age: 43
Queens, New YorkCAI YING LIN
Age: 43
Queens, New YorkCHENG XU YU (also known as “Vic”)
Age: 29
Queens, New YorkJIAN HUA ZHU
Age: 52
Queens, New YorkJIN HUA ZHANG
Age: 55
Queens, New YorkE.D.N.Y. Docket No. 18-CR-396 (JBW)
JIE MEI CHEN (also known as “Jenny”)
Age: 33
Queens, New YorkE.D.N.Y. Docket No. 18-CR-409 (BMC)
YU MING WONG
Age: 36
Queens, New YorkE.D.N.Y. Docket No. 18-MJ-752
22 Charged with Smuggling Millions of Dollars of Counterfeit Luxury Goods from China into the United StatesRead the Press Release
Earlier today, six indictments and one criminal complaint were unsealed in federal court in Brooklyn, New York, charging a total of 22 defendants with illegally bringing into the United States millions of dollars of Chinese-manufactured goods by smuggling them through ports of entry on the East and West Coasts. One defendant is also charged with unlawful procurement of naturalization. Twenty-one defendants were arrested this morning, and their initial court appearances and arraignments are scheduled before U.S. Magistrate Judge Lois Bloom.
The charges include conspiracy to traffic, and trafficking, in counterfeit goods; conspiracy to smuggle, and smuggling, counterfeit goods into the United States; money laundering conspiracy; immigration fraud and unlawful procurement of naturalization. In addition, the government restrained nine real properties in Queens, Staten Island and Brooklyn, New York belonging to the defendants.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Special Agent in Charge Angel M. Melendez of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) New York and Commissioner James P. O’Neill of the New York City Police Department (NYPD), announced the charges.
“The defendants allegedly smuggled millions of dollars of counterfeit luxury goods into our country, depriving companies of their valuable and hard-earned intellectual property,” said Assistant Attorney General Benczkowski. “The illegal smuggling of counterfeit goods poses a real threat to honest businesses, and I commend our federal prosecutors and partners at HSI and the NYPD for their outstanding work on this important investigation. The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”
“As alleged, the defendants used many forms of deception to smuggle large quantities of counterfeit luxury brand goods from China into the United States, and then profited by distributing and selling the fake merchandise,” said U.S. Attorney Donoghue. “This Office, working with our law enforcement partners, is committed to securing our country’s ports of entry, as well as to protecting the integrity of intellectual property upon which free and fair international trade and markets depend.”
“This investigation exposed the global nature of intellectual property crimes, allegedly being executed by those arrested today. Counterfeit goods manufactured and smuggled from China with a suggested value close to half a billion dollars, were intended to make its way into U.S. markets and into the hands of unsuspecting consumers,” said HSI Special Agent-in-Charge Melendez. “This investigation should be a crystal clear message that counterfeiting and intellectual property rights violations is anything but a victimless crime as it harms legitimate businesses, consumers and governments.”
According to the court filings, the defendants played various roles in the trafficking of counterfeit goods manufactured in China, brought by ocean-going ships to the United States in 40-foot shipping containers, smuggled through ports of entry disguised as legitimate imports and distributed throughout the country. The counterfeit goods included items such as fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume. The defendants’ roles included:
Importers
Qi Feng Liang, Wo Qi Liu, Zhi Ming Zhang and Yu Ming Wong served as shipping container importers. They arranged to smuggle counterfeit goods into the United States through the Port of New York/New Jersey and elsewhere. They fraudulently used the names, addresses and other identifying information of legitimate import companies and falsified the descriptions of the containers’ contents on U.S. customs paperwork associated with the containers of counterfeit goods. They used “burner” phone numbers and “burner” email accounts—obtained by using false or incomplete information—in order to conceal their true identities. The counterfeit goods were transported by trucks to self-storage facilities in Brooklyn, Queens and Long Island, New York, where the goods were unloaded and stored. Qi Feng Liang, Wo Qi Liu, Zhi Ming Zhang and Yu Ming Wong smuggled or attempted to smuggle 23 40-foot shipping containers into the country loaded with counterfeit items. The estimated Manufacturers’ Suggested Retail Price of these items, had they been genuine, would have been more than $450 million.
Wholesale Distributors
Josstina Lin, Xue Wei Qu, Xi Quan Huang, Yun Lei Huang, Yun Wu Huang, Si Lung Chung, Le Wei Zheng, Xiao Ying Huang, Qiong Chan Mu, Ren Zhong Zhu, Cheng Xu Yu, Jin Hua Zhang, Jian Hua Zhu, Yong Lin Dong and Cai Ying Lin managed the receipt, storage and distribution of counterfeit goods smuggled into the United States by the importers. They resold the counterfeit items to other wholesale and retail sellers in New York, California and elsewhere in the United States.
Domestic Shippers
Wei Mei Gao, Sheng Miao Xia and Jie Mei Chen used private shipping businesses they controlled to distribute the counterfeit goods smuggled into the United States by the importers and handled by the wholesale distributors. The domestic shippers also facilitated payments by the wholesale and retail counterfeit goods sellers to the wholesale distributors. Jie Mei Chen is also charged with unlawful procurement of naturalization.
As alleged in the indictments, some defendants additionally conspired to launder the proceeds from the sale of counterfeit goods, and others illegally concealed their involvement in the trafficking of counterfeit goods when applying for immigration benefits.
The charges in the indictments and criminal complaint are allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by HSI Intellectual Property Group and HSI Border Enforcement Security Task Force and the NYPD Border Security Enforcement Task Force. Assistance was provided by U.S. Customs and Border Protection, the New York State Police and the Brooklyn District Attorney’s Office. The government’s cases are being prosecuted by Senior Counsel James S. Yoon of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Assistant U.S. Attorneys William P. Campos and Temidayo Aganga-Williams of the Eastern District of New York and Special Assistant U.S. Attorney Robert Kaftal of the Brooklyn District Attorney’s Office. Assistant U.S. Attorney Claire S. Kedeshian is handling the forfeiture aspect of this case. The investigation was previously led by Senior Counsel Evan Williams of CCIPS.
The Department of Justice’s Task Force on Intellectual Property (IP Task Force) contributed to this case. The IP Task Force is led by the Deputy Attorney General to combat the growing number of domestic and intellectual property crimes, to protect the health and safety of American consumers and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. To learn more about the IP Task Force, go to https://www.justice.gov/iptf.
The Defendants:
QI FENG LIANG (aka “Alex” and “Mike Sotire”)
Age: 34
Brooklyn, New YorkWO QI LIU (aka “Louis,” “Qi,” “Woqi” and “Big Elephant”)
Age: 43
Brooklyn, New YorkZHI MING ZHANG (aka “Jordan” and “Four B”)
Age: 43
Staten Island, New YorkJOSSTINA LIN (aka “Tina”)
Age: 42
Brooklyn, New YorkXUE WEI QU
Age: 51
Queens, New YorkE.D.N.Y. Docket No. 18-CR-419 (WFK)
XI QUAN HUANG
Age: 58
Queens, New YorkYUN LEI HUANG
Age: 32
Queens, New YorkYUN WU HUANG
Age: 34
Queens, New YorkWEI MEI GAO
Age: 35
Queens, New YorkSHENG MIAO XIA
Age: 44
Queens, New YorkE.D.N.Y. Docket No. 18-CR-408
SI LUNG CHUNG (aka “Allan”)
Age: 42
New York, New YorkLE WEI ZHENG
Age: 42
New York, New YorkE.D.N.Y. Docket No. 18-CR-407 (CBA)
XIAO YING HUANG (aka “Linda”)
Age: 53
Nassau County, New YorkQIONG CHAN MU (aka “Rosanna”)
Age: 26
Nassau County, New YorkREN ZHONG ZHU
Age: 31
Nassau County, New YorkE.D.N.Y. Docket No. 18-CR-423 (JBW)
YONG LIN DONG
Age: 43
Queens, New YorkCAI YING LIN
Age: 43
Queens, New YorkCHENG XU YU (aka “Vic”)
Age: 29
Queens, New YorkJIAN HUA ZHU
Age: 52
Queens, New YorkJIN HUA ZHANG
Age: 55
Queens, New YorkE.D.N.Y. Docket No. 18-CR-396 (JBW)
JIE MEI CHEN (aka “Jenny”)
Age: 33
Queens, New YorkE.D.N.Y. Docket No. 18-CR-409 (BMC)
YU MING WONG
Age: 36
Queens, New YorkE.D.N.Y. Docket No. 18-MJ-752
Acting Captain of the Bonanno Crime Family Sentenced to 14 Years’ Imprisonment for Racketeering ConspiracyRead the Press Release
Earlier today, in federal court in Brooklyn, Ronald “Ronnie G” Giallanzo, an acting captain in the Bonanno organized crime family of La Cosa Nostra, was sentenced by Chief United States District Judge Dora L. Irizarry to a total of 14 years’ imprisonment for racketeering conspiracy, including predicate acts of extortionate extension and collection of credit, as well as a related violation of the conditions of supervised release imposed for a prior racketeering conviction. As part of his plea agreement with the government, the Court also ordered Giallanzo to pay $1.25 million in forfeiture and sell his mansion in Howard Beach, Queens, which was constructed using the criminal proceeds of the defendant’s loansharking business. Giallanzo was also ordered to pay $268,000 in restitution to his victims. Giallanzo pleaded guilty in March and June 2018.
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.
“Today’s sentence punishes a violent mobster for running a massive loansharking operation that victimized a community and earned him millions in illicit profits,” stated United States Attorney Donoghue. “Giallanzo is headed to prison, forced to sell his mansion built on ill-gotten proceeds and held responsible for brazenly committing many of his crimes from behind bars while serving another organized crime-related sentence. Together with our law enforcement partners, this Office will continue to vigorously investigate and prosecute members and associates of organized crime.” Mr. Donoghue thanked the Queens County District Attorney’s Office, the New York City Police Department and the U.S. Probation Department of the Eastern District of New York for their assistance in the investigation.
“Members of these mafia families continue to prey upon the people of their communities, lining their pockets on the backs of victims through intimidation and acts of violence,” stated FBI Assistant Director-in-Charge Sweeney. “While these criminals lead lavish lifestyles, their victims struggle through years of financial distress and the constant fear of what will happen to them when they can no longer pay. The FBI New York Joint Organized Crime Task Force has been doggedly tracking members of the mafia for decades, and our work to round them up and put them in prison will not stop.”
Between 1998 and 2017, including eight years while incarcerated on a prior racketeering conviction and for nearly two years while on supervised release, Giallanzo ran a loansharking operation in which he loaned millions of dollars in cash at exorbitant weekly interest rates. Giallanzo then directed a crew of Bonanno family soldiers and associates to enforce the collection of the debts through violence and threats of physical injury. Giallanzo used more than $1 million of the extortion proceeds to purchase, reconstruct and furnish a mansion, which featured five bedrooms and five bathrooms, radiant heated floors, high-end appliances, a built-in aquarium, wine cellar, home gym, three kitchens and a salt water pool with a waterfall.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Keith D. Edelman are in charge of the prosecution.
Defendant Sentenced Today:
RONALD GIALLANZO
Age: 48
Queens, New YorkE.D.N.Y. Docket No. 17-CR-155 (S-1) and 06-CR-181 (DLI)
Defendants Previously Sentenced:
EVAN GREENBERG (also known as “The Jew”)
Age: 46
Queens, New YorkRICHARD HECK (also known as “Richie”)
Age: 46
Queens, New YorkMICHAEL HINTZE (also known as “Mike”)
Age: 52
Queens, New YorkROBERT TANICO (also known as “Chippy” and “Chip”)
Age: 50
Queens, New YorkANTHONY CUMINALE (also known as “Cubo”)
Age: 28
Queens, New YorkE.D.N.Y. Docket No. 17-CR-155 (S-1) and 06-CR-181 (DLI)
Defendants Pending Sentence:
MICHAEL PADAVONA (also known as “Mike”)
Age: 50
Queens, New YorkMICHAEL PALMACCIO (also known as “Mike”)
Age: 47
Queens, New YorkCHRISTOPHER BOOTHBY (also known as “Bald Chris”)
Age: 39
Brooklyn, New YorkNICHOLAS FESTA (also known as “Pudgie”)
Age: 40
Oceanside, New YorkROBERT PISANI (also known as “Rob”)
Age: 45
Queens, New YorkANGELO MOCCIA
Age: 44
Queens, New YorkE.D.N.Y. Docket No. 17-CR-155 (S-1) (DLI)