Eastern District of New York
Press releases recorded for this federal judicial district.
Massapequa High School Teacher Charged with Transportation and Possession of Child PornographyRead the Press Release
An indictment was unsealed today in federal court in Central Islip charging Joseph Zanco with transportation and possession of child pornography. The charges relate to images and videos of child pornography in Zanco’s Google account and on electronic devices found in his residence when members of law enforcement executed a search warrant. Zanco was arrested today and will be arraigned this afternoon before United States Magistrate Judge Anne Y. Shields.
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 charges.
“As alleged, Zanco possessed and transported hundreds of images of child pornography, crimes that contribute to the victimization of minor children, while he was employed in a position of trust as a teacher,” stated United States Attorney Donoghue. “The protection of innocent children is a priority for this Office and our law enforcement partners. We will continue to make every effort to ensure that those who contribute to the victimization of children will be brought to justice.” Mr. Donoghue extended his grateful appreciation to ICE-HSI’s Child Exploitation Group for its investigative work and assistance.
“This case is particularly troubling because the defendant allegedly committed these crimes while employed as a teacher,” stated HSI Special Agent-in-Charge Melendez. “HSI actively works with our law enforcement partners in the shared fight against those who are engaged in the spread of this content, especially those who have been entrusted with the education of our youth.”
According to court filings, beginning on April 13, 2018, Zanco, a teacher at Massapequa High School, began uploading hundreds of images of child pornography to the Google Drive storage feature of his Google account. Google, in accordance with its policies and federal law, flagged these uploads, suspended Zanco’s account and notified law enforcement. Thereafter, law enforcement obtained search warrants for Zanco’s residence and his Google account. The search of the Zanco’s Google account uncovered child pornography, and the search of his laptop computer and cell phone revealed additional images and videos of child pornography.
If convicted of the transportation of child pornography count, Zanco faces a mandatory minimum of five years’ imprisonment and a maximum of 20 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 Long Island Criminal Division. Assistant United States Attorney Michael R. Maffei is in charge of the prosecution.
The Defendant:
JOSEPH M. ZANCO
Age: 43
Massapequa, New YorkE.D.N.Y. Docket No. 18-CR-412 (JFB)
Queens Man Sentenced to More than 10 Years in Prison for Armed Bank Robbery and Weapons PossessionRead the Press Release
Earlier today at the federal courthouse in Central Islip, United States District Judge Joanna Seybert sentenced Pedro Benitez to 130 months’ imprisonment for his role in the September 20, 2017 gunpoint robbery of the Queens County Savings Bank in Fresh Meadows, Queens. Benitez had previously pleaded guilty on March 20, 2018 to armed bank robbery and brandishing a firearm in furtherance of a crime of violence. The sentence also included a term of three years of supervised release and $71,395 in restitution.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.
On September 20, 2017, Benitez entered the Queens County Savings Bank, ordered customers and employees of the bank to the floor at gunpoint and gained access to the area behind the tellers’ counter. Once in the tellers’ area, Benitez stole over $50,000 in cash that had been delivered to the bank earlier in the day and was laid out on a table in a room adjacent to the teller’s area. At his guilty plea, Benitez admitted that he had also participated in three additional robberies in Nassau County during the summer of 2017. In each of those robberies, Benitez was the gunman who entered the banks and robbed the employees of the banks’ cash. In total, Benitez and the crew stole over $70,000 from four banks between July and September of 2017.
“Pedro Benitez thought committing armed bank robberies was a good way to get money, but he learned that it is just a good way to end up in prison,” stated United States Attorney Donoghue. “The cooperative efforts of federal and local law enforcement agencies brought this crew to justice and prevented them from endangering other bank employees, customers, law enforcement officers and innocent bystanders.”
“The value of a dollar was worth more to Benitez than the value of someone’s safety. For the sake of quick and easy cash, Benitez placed bank customers and employees in grave danger, displaying a gun at each robbery,” stated FBI Assistant Director-in-Charge Sweeney. “After stealing over $70,000 with his crew, Benitez may have believed his actions proved him successful, but his prison sentence clearly proves otherwise. The FBI New York Joint Violent Crimes Task Force will rigorously investigate bank robberies, ensuring these robbers reap what they sow.”
“The arrest and conviction of defendant Pedro Benitez is a classic example of the effective cooperation and information sharing between numerous law enforcement agencies,” stated NCPD Commissioner Ryder. “Through our diligence, we have taken a violent felon off the streets, thus making our communities safer. Defendant Benitez showed no regard for the safety of our residents and will now spend many years behind bars.”
Two other members of the bank robbery crew previously pled guilty and are awaiting sentence. Two additional members of the robbery crew are 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:
PEDRO BENITEZ
Age: 21
Far Rockaway, New YorkE.D.N.Y. Docket No. 17-CR-572 (JS)
Former JP Morgan Chase Bank Employee Sentenced to Four Years in Prison for Selling Customer Account InformationRead the Press Release
Earlier today, in federal court in Brooklyn, Peter Persaud, a former personal banker at JP Morgan Chase Bank, was sentenced by United States District Judge Eric N. Vitaliano to 48 months’ imprisonment for aggravated identity theft in connection with access device fraud. Persaud pleaded guilty to these charges on March 7, 2017.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.
“Persaud abused his position by victimizing unsuspecting customers, and will now pay the penalty for his fraudulent conduct,” stated United States Attorney Donoghue. “This Office will continue to work closely with our law enforcement and industry partners to vigorously prosecute those who undermine the integrity of the financial system.” Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office and the New York City Police Department, which jointly investigated the case.
According to the publicly filed documents and facts presented at sentencing, from 2011 to 2015, Persaud sold personal identifying information and account information that belonged to bank customers to others, or used it himself, in order to make unauthorized withdrawals from the accounts. Persaud’s scheme was exposed when he sold this information to a confidential informant in 2014 and to an undercover law enforcement officer in 2015. Persaud told the undercover officer that he had to “take it easy” because Chase might notice he had accessed all of the bank accounts that “got hit.” Persaud offered to sell the undercover officer identifying information for a client’s bank account that contained more than $180,000.
The case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Tiana Demas and Andrey Spektor are in charge of the prosecution.
The Defendant:
PETER PERSAUD
Age: 28
Queens, New YorkE.D.N.Y. Docket No. 15-CR-0462 (ENV)
Queens Man Charged in Superseding Indictment with Distributing Fentanyl Causing the Deaths of Two PersonsRead the Press Release
A 10-count superseding indictment was unsealed today in federal court in Brooklyn charging David Wickham with distributing fentanyl thereby causing the deaths of a man and a woman, distributing heroin and fentanyl thereby causing serious bodily injury to a man, and being a felon in possession of a firearm. The indictment charges Katelyn Trampler with possessing with intent to distribute, conspiring to distribute and distributing fentanyl and heroin. Wickham and newly added defendant Crystal Roberts are also charged with money laundering conspiracy. Roberts was arrested today and was ordered detained. Wickham and Trampler were previously arrested and are currently in custody. The defendants were arraigned this afternoon before United States District Judge Allyne R. Ross.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, United States 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, Wickham’s distribution of dangerous opioids resulted in the deaths of a man and a woman and the near-death of a second man,” stated United States Attorney Donoghue. “The defendants sought to profit from other people’s addictions and put their own greed ahead of the public’s health and safety. This Office and our law enforcement partners will not rest until drug dealers and their associates are stopped and brought to justice for their crimes.” Mr. Donoghue expressed his grateful appreciation to the United States Bureau of Alcohol, Tobacco, Firearms and Explosives for its assistance in the investigation.
“These alleged criminals operated out of greed with no regard for the safety, or even life, of those they dealt fentanyl,” stated HSI Special Agent-in-Charge Melendez. “HSI understands the seriousness of the opioid epidemic and will continue to work with our partners to investigate and arrests those dealing this highly addictive and deadly drug within our communities.”
“The NYPD’s efforts to combat the opioid crisis took a step forward today with this indictment,” stated NYPD Commissioner O’Neill. “Our detectives, along with the professionals at HSI and the Eastern District of New York, will stop at nothing to keep New Yorkers safe by identifying, aggressively investigating and arresting anyone who traffics in illegal narcotics and the violence so often associated with such criminal behavior.”
As alleged in the superseding indictment and other court filings, between January 2017 and February 2018, Wickham and Trampler distributed fentanyl and heroin. On several occasions, Wickham represented the narcotics to be heroin—a much less potent narcotic—when he was actually distributing fentanyl. On or about July 30, 2017, Wickham distributed fentanyl which resulted in the overdose deaths of a man and a woman. Later, on December 13, 2017, Wickham distributed heroin and fentanyl, which resulted in the overdose of a man, who was seriously injured but revived with Narcan. At the time of his arrest on February 27, 2018, Wickham, a convicted felon, possessed a Cobra Enterprises FS380 semi-automatic pistol. Between approximately October 2017 and February 2018, Wickham and Roberts conspired to wire money from the United States to Panama to further their narcotics trafficking and conceal the true nature and ownership of the drug money.
As part of the government’s investigation, agents recovered cellular telephones from the defendants, including Roberts’ telephone which contained several videos. In one video dated February 20, 2018, after speaking with a customer Roberts and Wickham engaged in the following conversation:
ROBERTS: He’s gonna end up dying. He’s gonna kill himself.
WICKHAM: Yeah, you see it in his face?
ROBERTS: Yup. You ever known, you ever seen death in the face?
Later in the conversation, Roberts stated: “I’m saying before he tries to kill himself, he’s going to give me some bread. I don’t have time for that. You can kill yourself if you want to, I don’t want you to, but this is the game we play, and you’re going to have to give me some bread cause you took too much and your man’s took too much.”
According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50. The increase in overdose deaths has been driven in large part by fentanyl—a drug that has been described as 50 to 100 times more potent than morphine. In New York, from 2014 to 2015, fentanyl overdose deaths rose 135 percent, while heroin overdose deaths rose 28 percent. According to the CDC’s latest report analyzing overdose deaths nationally, in 2016 synthetic opioid deaths—which includes fentanyl—more than doubled from 9,580 in 2015 to 19,413 in 2016.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Wickham faces a mandatory minimum sentence of 20 years’ imprisonment for both the death-resulting and the serious bodily injury-resulting charges and up to life imprisonment. Roberts faces up to 20 years’ imprisonment and Trampler up to 40 years’ imprisonment.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorney Nomi D. Berenson is in charge of the prosecution.
The Defendants:
DAVID WICKHAM (also known as “Wick” and “Dogg”)
Age: 35
Queens, New YorkKATELYN TRAMPLER
Age: 27
Queens, New YorkCRYSTAL ROBERTS (also known as “Crystal Wickham”)
Age: 28
Queens, New YorkE.D.N.Y. Docket No. 18-CR-72 (S-1) (ARR)
Former Member of Barbados Parliament and Minister of Industry Indicted for Money LaunderingRead the Press Release
A three-count indictment was unsealed today in federal court in Brooklyn charging Donville Inniss, a former member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce and Small Business Development of Barbados, with conspiracy to launder money and money laundering. The charges stem from Inniss’s acceptance of bribes from a Barbadian insurance company in 2015 and 2016 when he was a public official. Inniss was arrested Friday and was arraigned today before United States Magistrate Judge Julie Sneed in the Middle District of Florida at the federal courthouse in Tampa. Inniss was released on a $50,000 bond.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the indictment.
According to the indictment, between August 2015 and April 2016, Inniss engaged in a scheme to accept approximately $36,000 in bribes from high-level executives of an insurance company headquartered in Barbados (“the Barbados Company”) and launder that money through the United States. In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable the Barbados Company to obtain two government contracts. Inniss concealed the bribes by arranging to receive them through a dental company and a bank located in Elmont, New York. Barbados Company executives transferred the funds to the dental company using an invoice falsely claiming that the payments were for consulting services. During the time of the charged conspiracy, Inniss was a legal permanent resident of the United States residing in Tampa, Florida and Barbados.
“As charged in the indictment, Inniss abused his position of trust as a government official by taking bribes from a Barbadian company, then laundered the illicit funds through a bank and a dental company located in the Eastern District of New York,” stated United States Attorney Donoghue. “The Department of Justice will continue to hold accountable corrupt government officials here or abroad who use the U.S. financial system to facilitate their criminal conduct.”
“Donville Inniss allegedly used the U.S. financial system to launder bribes he received while serving as a government official in Barbados,” said Assistant Attorney General Benczkowski. “These charges demonstrate the commitment of the Department and our law enforcement partners to hold accountable anyone who seeks to use our financial system to promote or launder the corrupt proceeds of their crimes.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Assistant United States Attorney Sylvia Shweder of the Eastern District of New York’s Business and Securities Fraud Section, and Trial Attorney Gerald M. Moody, Jr., of the Criminal Division’s Fraud Section, are in charge of the prosecution.
The Defendant:
DONVILLE INNISS
Age: 52
BarbadosE.D.N.Y. Docket No. 18-CR-134 (KAM)
Former Member of Barbados Parliament and Minister of Industry Charged with Laundering Bribes from Barbadian Insurance CompanyRead the Press Release
The former Minister of Industry of Barbados was arrested Friday and had his initial court appearance today in connection with an indictment charging him with laundering bribes that he allegedly received from a Barbadian insurance company in exchange for official actions he took to secure government contracts for the insurance company.
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 and Assistant Director-in-Charge William F. Sweeney Jr. of the FBI New York Field Office made the announcement.Donville Inniss, 52, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was charged in an indictment with one count of conspiracy to launder money and two counts of money laundering. The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York, on March 15.
“Donville Inniss allegedly used the U.S. financial system to launder bribes he received while serving as a government official in Barbados,” said Assistant Attorney General Benczkowski. “These charges demonstrate the commitment of the Department and our law enforcement partners to hold accountable anyone who seeks to use our financial system to promote or launder the corrupt proceeds of their crimes.”
“As charged in the indictment, Inniss abused his position of trust as a government official by taking bribes from a Barbadian company, then laundered the illicit funds through a bank and a dental company located in the Eastern District of New York,” said U.S. Attorney Donoghue. “The Department of Justice will continue to hold accountable corrupt government officials here or abroad who use the U.S. financial system to facilitate their criminal conduct.”
The indictment alleges that in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he received from high-level executives of a Barbadian insurance company. At the time, Inniss was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados. In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable the Barbadian insurance company to obtain two government contracts. To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of a dental company, which had an address in Elmont, New York.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s New York Field Office is investigating the case. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.
Trial Attorney Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sylvia Shweder of the Eastern District of New York are prosecuting the case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
MS-13 Gang Members Charged with Murder Conspiracy and Attempted Murder in QueensRead the Press Release
Earlier today, Melvi Amador-Rios, Santos Amador-Rios, Yan Carlos Ramirez and Antonio Salvador were charged in a four-count indictment with assault, murder conspiracy and attempted murder in-aid-of racketeering, along with a related firearms offense. The defendants were arrested today and will be arraigned this afternoon before United States Magistrate Judge Marilyn D. Go at the federal courthouse in Brooklyn.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the indictment.
“As alleged, the defendants are members of MS-13, an international gang known for its culture of violence and murder,” stated United States Attorney Donoghue. “They used their positions to direct, instruct and assist lower-level gang members to shoot and kill a suspected rival on the streets of Jamaica, Queens. We will continue to work with our law enforcement partners to hold accountable those who spread fear in our communities by participating in such acts of violence.” Mr. Donoghue thanked the Queens District Attorney’s Office for its assistance in the investigation.
“Since January 2016, the FBI Safe Streets Gang Task Forces in Queens and Long Island have arrested more than 45 of the most violent MS-13 members in the area and charged them with murder, attempted murder, arson, and assault,” stated FBI Assistant Director-in-Charge Sweeney. “Today’s operation is a continuation of this coordinated and sustained effort. The task force will not stand by while this gang engages in meaningless violence in an attempt to use fear to poison and control our communities.”
“Through close collaboration with our law enforcement partners at the FBI and the Eastern District of New York, the NYPD will continue to conduct aggressive, precisely-directed investigations into criminal groups like this,” stated NYPD Commissioner O’Neill. “Such cases result in strong indictments that ultimately send these criminals to prison. And this important work stanches the violence – which is an essential step toward healing gang-plagued communities and fulfilling our duty to work with and protect all New Yorkers, in every neighborhood.”
According to court filings, the defendants are members of the La Mara Salvatrucha, or MS-13. Melvi Amador-Rios is the leader of the Centrales Locos Salvatruchas (CLS) clique of MS-13, which operates in Jamaica, Queens. On October 22, 2016, Amador-Rios directed a low-level CLS member, known as a “chequeo,” to obtain a firearm from his brother, Santos Amador-Rios, and use the firearm to murder a rival gang member. The CLS chequeo obtained the firearm and enlisted two other CLS chequeos to assist in the murder. Yan Carlos Ramirez and Antonio Salvador instructed the three CLS chequeos how to use the firearm to carry out the murder. During the early morning hours of October 23, 2016, in Jamaica, Queens, the three CLS chequeos confronted the suspected member of the rival 18th Street gang, beat the victim and shot him in the head. The victim survived the attack, but is now a paraplegic.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Today’s 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, 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. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the district, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by our law enforcement partners including the FBI’s Safe Streets Task Force, comprising agents and officers of the FBI and NYPD.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia E. Moore and Nadia I. Shihata are in charge of the prosecution.
The Defendants:
MELVI AMADOR-RIOS (also known as “Letal” and “Pinky”)
Age: 27
Briarwood, New YorkSANTOS AMADOR-RIOS (also known as “Rayo”)
Age: 31
Jamaica, New YorkYAN CARLOS RAMIREZ (also known as “Demente”)
Age: 28
Jamaica, New YorkANTONIO SALVADOR (also known as “Pantro”)
Age: 30
Jamaica, New YorkE.D.N.Y. Docket No. 18-CR-398 (RRM)
Former NYPD Detective Pleads Guilty to Committing Perjury in a Federal ProsecutionRead the Press Release
Earlier today, in federal court in Brooklyn, Michael Foder, a former detective employed by the New York City Police Department (NYPD) at the time of the charged conduct, pleaded guilty to one count of perjury in connection with false statements he made under oath during a criminal proceeding. The guilty plea was entered before United States District Judge Pamela K. Chen. When sentenced, Foder faces a statutory maximum of five years in prison and a fine of up to $250,000. Foder was arrested in February 2018 and resigned from the NYPD in August 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 P. O’Neill, Commissioner, NYPD, announced the guilty plea.
“The defendant admitted that he falsely testified at a pre-trial proceeding in federal court, a gross violation of the oath he took as a sworn witness and as a law enforcement officer who must be held to the highest standard of integrity,” stated United States Attorney Donoghue. “As demonstrated by Foder’s prosecution, this Office and our law enforcement partners are committed to holding accountable those who fail to respect the bedrock principle of truthful testimony upon which our justice system must depend.”
“As a former sworn NYPD detective, Michael Foder understood the solemnity of taking an oath,” stated FBI Assistant Director-in-Charge Sweeney. “Whether vowing to protect his community or vowing to tell the whole truth, both oaths held mutual significance. Yet, Foder blatantly disregarded this by committing perjury during a criminal proceeding. Upholding the rule of law, the FBI will equally investigate those who break federal laws, irrespective of their profession.”
“It is imperative that New Yorkers are able to trust their police to tell the truth,” stated NYPD Commissioner O’Neill. “Police officers swear an oath to hold themselves accountable to the highest standards of ethics and integrity. And when they intentionally violate that promise, they tarnish the reputation of all good cops, make their jobs much more difficult, and erode the trust we have worked so hard to earn in all of our communities.”
According to court filings and facts presented during the guilty plea proceeding, Foder, then assigned to the 70th Precinct in Brooklyn, falsely testified under oath at a December 29, 2016 hearing in connection with a federal prosecution about when and how he showed photographs of two robbery suspects to a victim of a carjacking. Following the hearing, the government identified discrepancies in the photo array identifications, including when the identifications had occurred. Handwritten notations indicated that the photo arrays had been completed on November 27, 2015 and February 14, 2016, as Foder had testified. However, the photographs of fillers depicted in the photo arrays had been taken on dates subsequent to the dates Foder claimed he had shown them to the victim witness. Foder acknowledged during his plea allocution that his testimony about when he had administered the photo arrays was false.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Nathan Reilly is in charge of the prosecution.
The Defendant:
MICHAEL FODER
Age: 42
Staten Island, NYE.D.N.Y. Docket No. 18-CR-97 (PKC)
Owner of Long Island Commercial Check Cashing Companies Indicted for Financial FraudRead the Press Release
An eight-count indictment was unsealed today in federal court in Central Islip charging John Drago, the owner and compliance officer of the Kayla Companies, with multiple criminal violations of the Bank Secrecy Act, including failure to file required Currency Transaction Reports (“CTRs”) for customers receiving in excess of $10,000. Drago is also charged in the indictment with failure to collect and pay taxes. Drago was arrested today, and arraigned this afternoon before United States Magistrate Judge A. Kathleen Tomlinson. Drago was released on a $500,000 bond.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Justin Campbell, Assistant Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the indictment.
“As alleged in the indictment, Drago flagrantly violated his obligations as the owner of check cashing businesses to follow federal regulations designed to prevent such businesses from being used to facilitate money laundering; he also failed to fulfill his responsibility as an employer to pay the proper taxes,” stated United States Attorney Donoghue. “This Office and our law enforcement partners are committed to ensuring the integrity of financial institutions, including check cashing businesses.”
“Check cashers provide a valuable service to our community,” stated IRS-CI Assistant Special Agent-in-Charge Campbell. “However, when they commit tax fraud, IRS-CI will aggressively investigate and seek prosecution of those involved.”
According to the indictment, Drago owned and operated check cashing businesses on Long Island, including Kayla Check Cashing Corp., North Island Check Cashing Corp., South Island Check Cashing Corp., East Island Check Cashing Corp., Bay Shore Check Cashing Corp. and Brentwood Check Cashing Corp. (collectively, the “Kayla Companies”). The operation was administered from the offices of Kayla Check Cashing Corp. in Farmingdale, New York. Hogwarts, Inc., was a management company owned by Drago through which employees of the Kayla Companies were paid.
Financial institutions are required to file a CTR for each transaction in cash in excess of $10,000. In addition, a CTR is required to be filed by the financial institution when multiple checks, the total value of which exceeds $10,000, are cashed in a single day.
As alleged in the indictment, from January 2010 to October 31, 2013, Drago instructed employees to cash multiple checks in excess of $10,000 in a single day for certain customers without filing required CTRs. Between August 1, 2010 and October 31, 2013, Drago directed employees to deposit and cash, over the course of several days, checks that had been submitted together on a single day in amounts in excess of $10,000. Drago also instructed employees to tell certain customers who presented individual checks in amounts exceeding $10,000 to return with multiple checks in amounts that were less than $10,000 to avoid the reporting requirement for such financial transactions. As a result of these practices, Drago is also charged with failing to file CTRs and failing to develop, implement and maintain an effective anti-money laundering program for the Kayla Companies.
In addition, between April 1, 2012 and July 31, 2013, Drago paid overtime wages and commissions to employee of the Kayla Companies in cash and failed to inform the IRS of the payment of these cash wages. Drago falsely underreported to the IRS the gross wages paid to his employees in order to avoid paying the full amount of Federal Insurance Contribution Act taxes that the Kayla Companies owed.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Drago faces a maximum sentence of 10 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Burton T. Ryan, Jr., is in charge of the prosecution.
The Defendant:
JOHN DRAGO
Age: 54
St. James, New YorkE.D.N.Y. Docket No. 18-CR-394 (SJF)
Former Suffolk County Legislator Fred Towle, Jr., Pleads Guilty to Making a False Tax ReturnRead the Press Release
Earlier today, in federal court in Central Islip, Fred Towle, Jr., pleaded guilty to making and subscribing a false tax return for the calendar year 2012 that underreported business income in order to avoid paying the proper tax owed. The guilty plea was entered before United States Magistrate Judge A. Kathleen Tomlinson. When sentenced, Towle faces a statutory maximum of three years in prison and a fine of up to $250,000. As part of his plea, Towle has agreed to pay $307,427 in restitution, the full amount of his tax liabilities.
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 Justin Campbell, Assistant Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the guilty plea.
“By his guilty plea, Fred Towle, Jr., has admitted cheating the United States out of hundreds of thousands of dollars owed in taxes by filing a false tax return that concealed a considerable amount of income he had earned from his businesses,” stated United States Attorney Donoghue. “This Office, together with our partners at the FBI and the IRS, recognizes that tax evasion victimizes every law-abiding, taxpaying American and we will vigorously prosecute those like the defendant who believe they’re above the law.”
“Despite his attempt to evade tax payments, Towle could not evade the inevitable repercussions of his actions, as he will now have to repay everything he owes,” stated FBI Assistant Director-in-Charge Sweeney. “For anyone under the misguided notion that our government can be successfully manipulated, today’s guilty plea evidently says otherwise. While maintaining a consistent partnership with the IRS, the FBI will not cease to investigate such manipulative individuals.”
“Federal income tax compliance should be equally shared among all Americans, especially those who have held a public trust position,” stated IRS-CI Assistant Special Agent-in-Charge Campbell. “Mr. Towle’s plea today, serves as an important reminder that IRS-CI is committed along with the United States Attorney’s Office and our law enforcement partners in bringing to justice those who skirt their tax responsibilities.”
During the relevant time period, Towle was the sole owner of a company called East Coast Marketing, which was utilized by Towle to, among other things, consult with political candidates and assist homeowners in expediting approvals for permits made to various governmental entities in Suffolk County. According to court documents filed in connection with the case, in 2012, Towle falsely reported no taxable income from businesses controlled by him, including East Coast Marketing, despite earning approximately $246,000 in taxable corporate income for that year. In total, between tax years 2012 and 2014, Towle failed to declare approximately $1.2 million in income, resulting in a tax loss to the United States of approximately $307,427.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Raymond A. Tierney and Catherine M. Mirabile are in charge of the prosecution.
The Defendant:FRED TOWLE, Jr.
Age: 52
Shirley, New YorkE.D.N.Y. Docket No. 18-CR-368 (JMA)
Two Former Senior Executives of “Major World” Automotive Dealerships Plead Guilty to Filing False Corporate Tax ReturnRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Harold Bendell and Bruce Bendell, the former senior managers of Major Automotive Companies, Inc., doing business as “Major World,” pleaded guilty to filing a false corporate tax return for the calendar year 2009 that underreported income and inflated expenses in order to avoid paying the proper taxes owed. Major World operated automobile dealerships in Queens, New York, and throughout the New York Metropolitan area. Prior to their guilty pleas, the defendants paid over $3,888,267 in restitution to the Internal Revenue Service and resigned from Major World. The guilty pleas were entered before United States District Judge Joanna Seybert.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the guilty pleas.
“By their pleas, Harold and Bruce Bendell admitted that they concealed millions of dollars of their company’s income and avoided paying their fair share of taxes to the United States government,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue to work together to ensure that individuals who attempt to evade their responsibilities as taxpayers are held responsible.”
“This great country of ours relies on a tax system based on voluntary compliance,” stated IRS-CI Special Agent-in-Charge Robnett. “Harold and Bruce Bendell took unlawful advantage of the system that financially impacts all Americans. Our special agents along with the U.S. Attorney’s Office are committed to protecting the system that contributes to our way of life.”
As stated in the charging and plea documents, on or about August 10, 2010, both defendants filed a corporation tax return Form 1120 for the calendar year 2009 that failed to report approximately $1,417,814 in gross receipts that Major Automotive had received and approximately $2,116,000 in cash payroll expense for which Major Automotive did not pay payroll taxes.
When sentenced, each defendant faces a maximum of three years in prison.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Burton T. Ryan, Jr. is in charge of the prosecution.
The Defendants:
HAROLD BENDELL
Age: 69
Englewood Cliffs, New JerseyBRUCE BENDELL
Age: 64
Roslyn, New YorkE.D.N.Y. Docket 17-CR-585 (JS)
Staten Island Resident Pleads Guilty to Disaster Relief FraudRead the Press Release
Earlier today, Nagwa Elsilimy pleaded guilty at the federal courthouse in Brooklyn to disaster relief fraud in connection with obtaining more than $750,000 in disaster relief from New York City’s Build It Back program and the Federal Emergency Management Agency in the aftermath of Hurricane Sandy. Today’s proceeding took place before United States District Judge Raymond J. Dearie.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Christina Scaringi, Special Agent-in-Charge, United States Department of Housing and Urban Development, Office of Inspector General (HUD OIG); Mark Tasky, Special Agent-in-Charge, Department of Homeland Security, Office of Inspector General, Washington Field Office (DHS OIG); and Mark G. Peters, Commissioner, New York City Department of Investigation, announced the guilty plea.
According to court filings and facts presented during the guilty plea proceeding, in the days and months following Hurricane Sandy, which struck New York and New Jersey on October 29, 2012, Elsilimy obtained and attempted to obtain federal funds appropriated for Sandy disaster relief by submitting material misrepresentations in her applications for relief. Specifically, Elsilimy misrepresented that a home in Staten Island, which her family had abandoned months before the storm, was her primary residence at the time the hurricane devastated parts of New York and New Jersey. In fact, she had been residing at a different address since at least March 2012. Evidence obtained in the investigation established that Elsilimy fraudulently obtained federal and city aid totaling more than $750,000.
When sentenced, Elsilimy faces up to 30 years in prison, as well as a fine of up to $1,500,000.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Elizabeth Losey Macchiaverna is in charge of the prosecution.
The Defendant:
NAGWA ELSILIMY
Age: 60
Staten Island, NYE.D.N.Y. Docket No. 17-CR-563
Serial Bank Robber Indicted for Robbing and Attempting to Rob Nine Banks in Brooklyn, Queens and ManhattanRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Richard Wardell Johnson with nine counts of bank robbery. Johnson, who was arrested on May 29, 2018 on a criminal complaint, is in federal custody and will be arraigned on a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, Richard Wardell Johnson robbed and attempted to rob nine banks across three New York City boroughs in less than a month,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will ensure that criminals who endanger bank employees and members of our communities will be held responsible.”
“Over the course of nearly 30 days, Johnson allegedly carried out a string of robberies, accompanied with threats of violence,” stated FBI Assistant Director-in-Charge Sweeney. “Focusing merely on a quick and easy profit, Johnson put innocent lives around him in danger. Now that his chain of robberies has come to an end, Johnson will rightfully be brought to justice.”
“Shortly after Mr. Johnson’s last attempt to get some quick cash, our patrol cops got him – and he’s no longer a menace running around our neighborhoods,” stated NYPD Commissioner O’Neill. “By working closely with our federal partners at the FBI and the Eastern District of New York, the NYPD will continue to aggressively investigate and pursue all bank robbery cases to minimize the threat criminals like Mr. Johnson pose in our community.”As detailed in publicly filed documents, between April and May of 2018, Johnson robbed six banks, and attempted to rob three others in Brooklyn, Queens and Manhattan. During the May 18, 2018 robbery he entered an M&T Bank branch, on Atlantic Avenue in Brooklyn and presented a note to the teller, stating “DON’T TOUCH THAT ALARM! $2000.00 NO DUMMY PACK. IF I SHOOT SOMEONE ITS ON YOU!” The teller notified a security guard at the bank and pointed out the defendant. The security guard exited the bank, followed Johnson on foot while he called 9-1-1 and reported the crime. The NYPD apprehended Johnson nearby a short time later.
The indictment charges Johnson with the following robberies and attempted robberies:
- Chase Bank branch in Queens, New York, on April 23, 2018 (attempted);
- Chase Bank branch in Brooklyn, New York, on April 23, 2018;
- Chase Bank branch in Queens, New York, on April 30, 2018;
- Chase Bank branch in Brooklyn, New York, on May 2, 2018;
- Chase Bank branch in Manhattan, New York, on May 7, 2018;
- Citibank branch in Brooklyn, New York, on May 12, 2018;
- Chase Bank branch in Brooklyn, New York, on May 15, 2018 (attempted);
- HSBC Bank branch in Manhattan, New York, on May 17, 2018; and
- M&T Bank branch in Brooklyn, New York on May 18, 2018 (attempted).
The government’s case is being handled by the Office’s General Crimes Section. Special Assistant United States Attorney Andrew D. Grubin is in charge of the prosecution.
The Defendant:
RICHARD WARDELL JOHNSON
Age: 63EDNY Docket No.: 18-CR-386 (DLI)
Long Island Man Indicted in Multi-Million Dollar Ponzi SchemeRead the Press Release
A nine-count indictment was unsealed today in federal court in Central Islip, charging Steven Pagartanis, a formerly licensed financial advisor and affiliate of a registered broker-dealer, with securities fraud, mail and wire fraud conspiracies, as well as money laundering, for orchestrating a Ponzi scheme over the course of more than 18 years. Pagartanis was arrested today, and will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.
According to the indictment and other court documents, from January 2000 to March 2018, Pagartanis solicited elderly victims to invest in real estate-related investments, including those affiliated with a publicly traded Canadian company. Pagartanis promised the victims that their principal would be secure and earn a fixed return, which he typically claimed to be between 4.5 to 8 percent annually. At Pagartanis's direction, the victims wrote checks payable to an entity that was secretly controlled by Pagartanis. Pagartanis utilized a network of bank accounts to launder the stolen funds, which he then used to pay personal expenses, buy luxury items and make the guaranteed “interest” or “dividend” payments to other victims. Pagartanis created fictitious account statements reflecting ownership interests in the purported investments to induce investment and conceal the scheme. In all, the victims invested over $13 million and sustained actual losses of over $8 million. Many lost substantial portions of their life savings as a result of the scheme.
“As alleged, Pagartanis conned vulnerable members of the community who had entrusted him with their hard-earned savings,” stated United States Attorney Donoghue. “Protecting the elderly and the community at large from predators like the defendant is a priority of this Office and the Department of Justice and with our law enforcement partners we will continue to pursue that mission.” Mr. Donoghue also thanked the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority for their assistance in the investigation.
“The elderly are among the most vulnerable members of society, as they are common targets of fraudulent schemes,” stated FBI Assistant Director-in-Charge Sweeney. “As alleged, Pagartanis preyed on the elderly with his own interests in mind. While causing significant financial loss to his victims, Pagartanis experienced significant financial gain – allegedly paying personal expenses and making extravagant purchases. As we persistently investigate bogus Ponzi schemes, we aim to protect all targeted citizens from the threat of financial loss.”
“The agents of IRS-CI along with our law enforcement partners will vigorously pursue fraudsters who allegedly victimize the elderly,” stated IRS-CI Special Agent-in-Charge Robnett. “We will gladly dedicate our specialized skillset to such investigations to ensure those responsible are brought to justice.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Pagartanis faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 58
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (DRH)
Queens Man Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
Earlier today, Ali Saleh, a U.S. citizen, pleaded guilty at the federal courthouse in Brooklyn to two counts of attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS). The proceeding took place before United States District Judge William F. Kuntz, II. When sentenced, Saleh faces up to 35 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John C. Demers, Assistant Attorney General for National Security, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
“Ali Saleh attempted to travel to the Middle East to become an ISIS fighter, funded other foreign fighters, posted instructions to make explosive devices and transported explosive materials,” stated United States Attorney Donoghue. “The defendant’s persistent efforts to aid ISIS were defeated by the outstanding work of law enforcement officers who stopped him before he could do harm. This Office will continue to work closely with the FBI’s Joint Terrorism Task Force in New York to keep our city safe from terrorists and prevent extremists from travelling abroad to join foreign terrorist organizations.”
“Saleh was undeterred in his many attempts to travel to join ISIS, and although he failed in these efforts, he turned his attention to assisting others online to join ISIS’s murderous mission in Syria,” said Assistant Attorney General Demers. “I am grateful to our partners in federal law enforcement and the prosecutors who were able to apprehend and charge Saleh before he could do more damage or harm innocent Americans.”
“Ali Saleh was persistent in his efforts to become a foreign fighter, but his persistence did not exceed the diligence of law enforcement,” stated FBI Assistant Director-in-Charge Sweeney. “The defendant went to great lengths to attempt to travel to the Middle East, while funding other foreign fighters in the process. As the FBI’s Joint Terrorism Task Force continuously strives to protect citizens from potential terrorist threats, today’s plea depicts one of the many efforts to achieve this goal.”
“New Yorkers continue to benefit from the NYPD’s robust counterterrorism capabilities and strong working relationships with our law enforcement partners on the Joint Terrorism Task Force,” stated NYPD Commissioner O’Neill. “Today’s guilty plea shows that in collaboration with the FBI and the Eastern District of New York, our skilled investigators and analysts will stop at nothing to further the critical mission of defending society from acts of terrorism wherever and however, they are being planned.”
According to court filings, Saleh was arrested after repeatedly attempting to travel to the Middle East to become a foreign fighter for ISIS. In 2013 and thereafter, Saleh became interested in the conflict in Syria, swore an oath of allegiance to ISIS and decided to travel to the Middle East in support of ISIS. On August 25, 2014, Saleh stated online, “I’m ready to die for the Caliphate, prison is nothing.” On August 28, 2014, Saleh stated online, “Lets be clear the Muslims in the khilafah [caliphate] need help, the one who is capable to go over and help the Muslims must go and help.” That same day, Saleh made an airline reservation to travel from New York to Turkey, a country bordering Syria. The defendant was ultimately prevented from traveling because his parents took away his passport.
Saleh then redirected his efforts to facilitating others’ support of ISIS. In October 2014, the defendant communicated with an ISIS supporter in Mali through an online messaging platform and sent a wire transfer in the amount of $500 to fund that person’s travel to Syria. Around the same time period, the defendant communicated with several other individuals in an effort to facilitate their support of ISIS, including known ISIS supporters in the United Kingdom and Australia.
In July 2015, the defendant purchased fireworks containing explosive powder, hid them in a concealed compartment in the trunk of his car, and drove from Indiana towards New York City. The fireworks contained approximately 1,196 grams of low explosive powder, consisting of both pyrotechnic material and black powder. Law enforcement agents located a cellphone belonging to Saleh during the time frame when he acquired the explosive powder and discovered on the phone an electronic pamphlet titled, “Muslim Gangs: The Future of Muslims in the West (Ebook 1: How to Survive in the West).” The pamphlet provided detailed instructions regarding how to create a bomb using explosive powder from fireworks. Saleh posted online the pamphlet’s image of a soda can hand grenade with instructions on how to build an improvised explosive device. When Saleh’s car broke down on the way to New York City, he abandoned it.
Subsequently, on July 24, 2015, the defendant made a reservation to travel from New York to Egypt, a country bordering Libya, and went to JFK International Airport. The defendant was ultimately denied boarding. The defendant subsequently visited three additional international airports in Newark, Philadelphia and Indianapolis, but continued to encounter travel restrictions. The defendant attempted to circumvent air travel restrictions by taking a train from Cleveland to Canada and flying to the Middle East. After law enforcement intervention, however, the defendant did not board the train and instead returned to New York.
After his encounters with law enforcement, Saleh changed his online social media moniker and expressed his support for ISIS under new usernames. On August 24, 2015, the defendant stated online, “I am a terrorist.” On September 1, 2015, the defendant stated online, “If they aren’t implementing shariah [Islamic law] grab ur gun and implement shariah and see how fast the world turns against u.” That same day, the defendant also stated online, “Akhi [brother] if implementing sharia [Islamic law] is easy do it in ur neighborhood and defend it from kuffar [the infidels] and give bayah [an oath of allegiance] to IS.”
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Saritha Komatireddy, Margaret E. Lee and Alexander F. Mindlin are in charge of the prosecution, with assistance provided by Trial Attorneys Lolita Lukose and Jacqueline Barkett of the Justice Department’s Counterterrorism Section.
The Defendant:
ALI SALEH
Age: 25
Queens, New YorkE.D.N.Y. Docket No. 15-CR-517
Founder of “Nxivm,” a Purported Self-Help Organization, and Five Others Charged in Superseding Indictment with Racketeering ConspiracyRead the Press Release
A superseding indictment was unsealed today in federal court in Brooklyn charging Keith Raniere, Clare Bronfman, Allison Mack, Kathy Russell, Lauren Salzman and Nancy Salzman with racketeering conspiracy involving an array of crimes, including identity theft, extortion, forced labor, sex trafficking, money laundering, wire fraud and obstruction of justice. Bronfman, Russell, Lauren Salzman and Nancy Salzman were arrested this morning. Bronfman will be arraigned this afternoon before United States District Judge Nicholas G. Garaufis in Brooklyn. Russell and the Salzmans will be arraigned before United States Magistrate Judge David J. Stewart in Albany, New York. Raniere and Mack were previously arrested on the original indictment and will be arraigned on the superseding indictment tomorrow before Judge Garaufis in Brooklyn.
Raniere, who founded several pyramid-structured organizations including Nxivm, a purported self-help organization for women, and various related entities, and Mack, a high-ranking member of Nxivm, were previously charged with sex trafficking and forced labor conspiracy in an indictment filed April 20, 2018. Bronfman, a member of Nxivm’s executive board; Russell, Nxivm’s former bookkeeper; Lauren Salzman, a member of Nxivm’s executive board; and Nancy Salzman, the president of Nxivm, were charged for the first time in the superseding indictment.
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 superseding indictment.
“As alleged in the superseding indictment, for over a decade, Keith Raniere was the leader of a racketeering conspiracy in which he and members of his inner circle committed a broad range of serious crimes from identity theft and obstruction of justice to sex trafficking, all to promote and protect Raniere and Nxivm,” stated United States Attorney Donoghue. “This Office and the FBI will continue to investigate and prosecute those who prey on others to such destructive effect.” Mr. Donoghue expressed his grateful appreciation to the FBI for leading the investigation, and thanked the New York State Police, the FBI Albany Field Office, the New York State Office of the Attorney General, the New York State Department of Health, the Internal Revenue Service Criminal Investigation, New York Field Office, and the United States Attorney’s Office for the Northern District of New York for their assistance with the investigation.
“As alleged, this long-running conspiracy crossed multiple avenues of criminal activity, which included, among other things, electronic monitoring; identity theft; extortion; victim smuggling; and illegal trafficking of a victim after a period of unlawful confinement. The details of these alleged crimes become more and more grim as we continue to dig deeper into the conduct of this organization and its intended mission,” stated FBI Assistant Director-in-Charge Sweeney. “Today’s superseding indictment highlights our commitment to bringing justice to Nxivm’s many victims.”
The superseding indictment alleges that from at least 2003 through the present, Raniere and his inner circle of co-defendants comprised an organized racketeering enterprise engaged in criminal activities with the aim of promoting, enhancing and protecting Raniere and members of the enterprise by recruiting others into Nxivm and DOS for financial and personal benefits. Those criminal activities included the following:
- Raniere and Bronfman conspired to commit identity theft arising out of a scheme to obtain the e-mail usernames and passwords of perceived enemies and critics of Raniere in order to monitor their electronic communications.
- Raniere and Bronfman participated in an identity theft conspiracy involving the use of credit card and banking information belonging to one of Raniere’s sexual partners after her death in November 2016. Bronfman sent Raniere regular emails documenting expenses charged to the woman’s credit card for Raniere’s “review and approval.” Those expenses included payments to a chiropractor for Raniere’s benefit, as well as thousands of dollars’ worth of clothing and shoe purchases for the mother of Raniere’s child.
- Bronfman encouraged and induced the illegal entry into the United States of an alien for Bronfman’s financial gain, engaging in international wire transfers to make it fraudulently appear that the victim had the financial resources to obtain an investor visa.
- Raniere and Lauren Salzman trafficked a victim, who was once a sexual partner of Raniere’s, for labor and services. The victim was confined to a room in Clifton Park, New York, for nearly two years as punishment for having romantic feelings for a man who was not Raniere. The victim was told that if she left the room she would be sent to Mexico without any identification documents. As threatened, she was driven to Mexico and her family was instructed by co-conspirators, including Lauren Salzman, not to send the victim her identification documents.
- Raniere and Lauren Salzman obtained property and services from their slaves through fraud and extortion. After DOS was exposed, Salzman was one of the leaders of a disinformation campaign designed to spread lies about DOS and Nxivm members in order to discredit victims.
- Nancy Salzman, in her role as second-in-command to Raniere within Nxivm, conspired with Raniere and others to obstruct justice by altering records in connection with a civil lawsuit initiated by Nxivm against a former Nxivm student. As part of the discovery in the former student’s countersuit, Nancy Salzman was ordered to turn over videos of courses the student had taken. Nancy Salzman engaged in a scheme to edit videos of courses she had taught to remove materials that she and her co-conspirators believed would have supported the former student’s claims.
- Raniere and Russell conspired to commit identity theft as part of a scheme to smuggle an alien into the United States through Canada after the alien was denied entry. Russell provided the alien with an identification card bearing the last name and birthday of a dead woman.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years’ imprisonment for racketeering conspiracy, forced labor conspiracy and wire fraud conspiracy charges, as well as a maximum of 15 years’ imprisonment for the identity theft conspiracy charge. In addition, Raniere and Mack each face mandatory minimum sentences of 15 years’ imprisonment, and up to life imprisonment, on related charges of sex trafficking and sex trafficking conspiracy.
The government’s investigation is ongoing.
The government’s case is being handled by the office’s Organized Crime and Gangs Section. Assistant United States Attorneys Moira Kim Penza and Tanya Hajjar are in charge of the prosecution. Assistant United States Attorney Karin Orenstein is in charge of forfeiture proceedings in connection with the case.
The Defendants:
KEITH RANIERE (also known as “Vanguard”)
Age: 57
Waterford, New YorkCLARE BRONFMAN
Age: 39
Clifton Park, New YorkALLISON MACK
Age: 35
Brooklyn, New YorkKATHY RUSSELL
Age: 60
Clifton Park, New YorkLAUREN SALZMAN
Age: 42
Clifton Park, New YorkNANCY SALZMAN (also known as “Prefect”)
Age: 64
Clifton Park, New YorkE.D.N.Y. Docket No. 18-CR-204 (NGG) (S-1)
Long Island Bloods Gang Member Pleads Guilty to Attempted Murder of RivalRead the Press Release
Earlier today, in federal court in Central Islip, Bloods gang member Billy McLen, also known as “Rizo,” pleaded guilty to attempted murder in aid of racketeering and a weapons possession charge in connection with a shooting that occurred on October 21, 2014 in Hempstead, New York. The proceeding took place before United States Magistrate Judge Arlene R. Lindsay.
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 facts presented during the guilty plea proceeding, in October 2014, the Bloods street gang was at war with members of the Crips street gang from the Parkside section of Hempstead. On October 21, 2014, McLen obtained a handgun from a Bloods leader, Jonathan Mayzick, and later met with Bloods members Naree Barnes and Khalil Brown. Together they proceeded to Peninsula Boulevard near Hempstead High School where they encountered a Crips gang member. McLen, Brown and Barnes pulled out handguns and shot at their rival, firing numerous times across a major roadway during the late afternoon. McLen and his associates then ran to the home of another Bloods member, and McLen placed several phone calls to Mayzick, reporting the shooting. The calls were intercepted by members of law enforcement who were monitoring a court-authorized wiretap of Mayzick’s cell phone. While these calls were taking place, McLen and his associates were located and arrested, and the guns used in the shooting were recovered.
“McLen participated in a premeditated attack in furtherance of the Bloods’ violent feud with the Crips, with the intention of taking another human being’s life,” stated United States Attorney Donoghue. “The defendant now faces a lengthy prison term for the choices he made and the actions he took – attempting to kill his victim and endangering other residents of the community.” Mr. Donoghue extended his appreciation to the FBI’s Long Island Gang Task Force which investigated this case.
"Motivated by futile gang rivalry, McLen allowed violence to determine his actions, which in turn determined his fate, as he will now spend more than 10 years in prison for attempting to take someone’s life,” stated FBI Assistant Director-in-Charge Sweeney. “Gang violence continues to be the dividing wedge in several of our communities, and the FBI’s Long Island Gang Task Force will not cease until this wedge is permanently removed.”
“The guilty plea of Bloods gang member Billy McLen, AKA Rizo, is a stark reminder of the violence that takes place between rival gangs,” stated NCPD Commissioner Ryder. “The Nassau County Police, the United States Attorney’s Office and the FBI have worked tirelessly to ensure that these gang members are brought to justice and that our residents enjoy safe communities. I would like to thank and congratulate all of the members who played an important role in this conviction”
When sentenced, McLen faces a mandatory minimum of 10 years in prison and a maximum sentence of life, as well as forfeiture and a fine of up to $250,000. Barnes and Brown previously pled guilty to discharging firearms in furtherance of a crime of violence and were sentenced to 10 years’ imprisonment. Mayzick was convicted of conspiracy to distribute crack cocaine and sentenced to 162 months in prison.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.
The Defendant:
BILLY MCLEN (also known as “Rizo”)
Age: 19
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-429 (S-1) (SJF)
Defendants Previously Sentenced:
NAREE BARNES
Age: 22
Hempstead, New YorkKHALIL BROWN
Age: 22
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-428 (SJF)
JONATHAN MAYZICK
Age: 30
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-28 (DRH)
Leader of Queens-Based Methamphetamine Distribution Organization ArrestedRead the Press Release
Earlier today, Anthony “Ant” Pineda was arrested on charges related to methamphetamine distribution in Queens, New York, and California. Pineda was arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak and ordered detained pending trial. Fourteen additional defendants were previously arrested and arraigned on four indictments unsealed last month in federal court in Brooklyn.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), James P. O’Neill, Commissioner, New York City Police Department (NYPD), and Thomas Decker, Field Office Director, U.S. Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO), announced the indictments.
“Drug dealers are trying to turn New York into the next methamphetamine wasteland,” stated United States Attorney Donoghue. “The Eastern District will work tirelessly with our partners on long-term investigations such as this to prosecute those who poison our communities with this highly addictive and dangerous drug.” Mr. Donoghue expressed his thanks to ICE Homeland Security Investigations and the United States Postal Inspection Service for their assistance during the investigation.
“Using his illegal gambling business as a foundation, Pineda allegedly orchestrated an illicit methamphetamine enterprise,” stated FBI Assistant Director-in-Charge Sweeney. “Distributing on both a large scale and street level, Pineda and his co-defendants carelessly endangered our communities. These individuals operated on opposite sides of the nation – but with the help of our fellow law enforcement agencies, today’s arrests show that expansiveness never inhibits justice.”
“The indictments show law enforcement’s resolve to arrest those involved in dealing drugs in our city,” said ERO Field Office Director Decker in New York. “We will continue to assist our law enforcement partners in providing any information that will lead to an eventual criminal arrest.”
“The behavior outlined in these indictments, and the violence so often associated with such acts, will never be tolerated by the NYPD or any of our law enforcement partners,” stated NYPD Commissioner O'Neill. “As we demonstrate time and again, we are patient and our collaborative forces have a long reach. We will be relentless in removing these criminals from our streets, because New Yorkers expect and deserve nothing less than our very best efforts to not only keep them safe, but to ensure they feel safe too.”
According to the indictments, court documents and statements made in court, Anthony Pineda led a methamphetamine distribution organization from his illegal gambling parlors located in Flushing, Queens. Pineda obtained large quantities of methamphetamine in California and transported the drugs to New York for wholesale and retail distribution. His co-defendants include large-scale and street-level methamphetamine distributors, as well as Pineda’s partners in the illegal gambling operation.
Pineda allegedly protected his illegal operations with threats and violence. For example, in 2017, he threatened a competing gambling parlor owner with a gun and referred to a “high voltage cattle prod” that a co-conspirator could use to collect a debt. When Pineda was arrested today at an apartment where he was staying, law enforcement officers recovered one pound of methamphetamine and approximately $27,000 in cash.
Pineda, Yunfeng Gao, Ting “Ting Ting” Li, Ivan Kaleda, Marco Rescino, Guanghua “Mao Mao” Shen, Jin Wang, Joung Hwa Yun, Lu “Chinese Ivan” Zhai and Nan Zhang are charged with conspiracy to distribute and possess with intent to distribute methamphetamine and methamphetamine distribution. Min Li and Steven Torres are charged with conspiracy to distribute methamphetamine. Davoud Haghighy is charged with methamphetamine distribution and firearms trafficking. Si En Li is charged with operating an illegal gambling parlor. Yuan Li is charged with extortion. In addition, Pineda and Rescino are charged with money laundering conspiracy.
The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the maximum sentences range from five years’ to life imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia E. Moore and Drew Rolle are in charge of the prosecution with assistance provided by Assistant United States Attorney Claire Kedeshian of the Office’s Asset Forfeiture Unit.
The Defendants:
ANTHONY PINEDA
Age: 36
Queens, New York/San Francisco, CaliforniaYUNFENG GAO
Age: 33
Queens, New YorkIVAN KALEDA
Age: 28
Queens, New YorkSI EN LI
Age: 45
Brooklyn, New YorkTING LI
Age: 30
Queens, New YorkYUAN LI
Age: 34
Queens, New YorkMARCO RESCINO
Age: 22
San Francisco, CaliforniaGUANGHUA SHEN
Queens, New York
Age: 45JIN WANG
Age: 33
Queens, New York
JOUNG HWA YUN
Age: 40
Queens, New YorkLU ZHAI
Age: 30
Queens, New YorkNAN ZHANG
Age: 32
Queens, New York – E.D.N.Y. Docket No. 18-CR-302 (MKB)MIN LI
Age: 40
Queens, New York – E.D.N.Y. Docket No. 18-CR-292 (MKB)DAVOUD HAGHIGHY
Age: 33
Queens, New York – E.D.N.Y. Docket No. 18-CR-301 (ILG)STEVEN TORRES
Age: 28
Queens, New York – E.D.N.Y. Docket No. 18-CR-300 (MKB)Medical Doctor Convicted in Brooklyn Federal Court of Causing Overdose Death of a PatientRead the Press Release
A federal jury in Brooklyn today, following two weeks of trial, convicted Dr. Martin Tesher of 10 counts of unlawful distribution of oxycodone without legitimate medical purpose to five patients, one of whom died as a result two days after his last visit with the defendant. When sentenced by United States District Judge Raymond J. Dearie, Dr. Tesher faces a mandatory minimum sentence of 20 years’ imprisonment and a maximum of life in prison.
Attorney General Jeff Sessions, 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 verdict.
“It is incredible but true that some medical professionals have chosen to violate their oaths and exploit our nation's drug epidemic for profit, even at the cost of human lives,” stated Attorney General Sessions. “This doctor knowingly took advantage of drug addicts and even contributed to the death of a young man. The Department of Justice is relentlessly pursuing criminals like him: we have charged more than 200 doctors with opioid-related crimes since the beginning of last year. We are going to keep pursuing these cases because they help cut off the supply of drugs and stop fraudsters from exploiting vulnerable people. I want to thank the DEA, our partners at IRS, four local police departments and especially our fabulous prosecutors Jennifer Sasso and Penelope Brady for their hard work in this case. I believe that they have helped prevent many more New Yorkers from falling into addiction and death.”
“Dr. Tesher dispensed opioids to patients whom he knew were abusing illegal drugs and the tragic result was an overdose death,” stated United States Attorney Donoghue. “Today, the jury held Dr. Tesher responsible for the part he played in fueling the opioid epidemic by abandoning his responsibilities as a medical professional and for acting as a drug dealer with a prescription pad. This Office and our law enforcement partners will continue to work tirelessly to combat the opioid epidemic on all fronts, including prosecuting corrupt doctors who disregard the well-being of their patients by prescribing highly addictive drugs without legitimate medical purpose.”
“DEA doesn’t tell doctors how to practice medicine, DEA is a watchdog to ensure doctors’ prescriptions are written for the right reason and betterment of their patient’s health,” stated DEA Special Agent-in-Charge Hunt. “This trial brings to light how opioid traffickers can hide in plain sight, like Dr. Tesher; and how heartbreaking drug addiction is to families and friends of substance abusers. I commend the U.S. Attorney’s Office for the Eastern District of New York and the DEA’s Long Island District Office Tactical Diversion Squad on their diligent work throughout this investigation. DEA will continue to work with our federal, state and local law enforcement partners to battle opioid traffickers and suppliers at all levels.”
The evidence at trial established that between June 2013 and January 2017, Dr. Tesher, a medical doctor specializing in general family care, prescribed oxycodone and fentanyl on a continuing basis without a legitimate medical purpose to patients after he learned, or had reason to believe, that these patients were addicted to drugs. The five patients either told Dr. Tesher that they had a drug addiction, had previously been treated for drug addiction, or tested positive for illegal drugs such as cocaine or heroin during the course of their treatment by the defendant. While under Dr. Tesher’s care, Nicholas Benedetto, 27, tested positive for cocaine, heroin and methadone in addition to oxycodone and fentanyl. Dr. Tesher continued to prescribe oxycodone and fentanyl to Benedetto despite indicators that he was abusing those drugs. Benedetto was found dead of a fatal combination of oxycodone and fentanyl on March 5, 2016, two days after he had been prescribed oxycodone and fentanyl patches by Dr. Tesher. According to a government expert witness, none of the patients for whom Tesher is charged in the superseding indictment had verified medical conditions that would require the prescription of Schedule II opioids.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, which is comprised of agents and officers of the DEA, Internal Revenue Service, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the New York City Police Department, Criminal Enterprise Investigations, the Department of Health & Human Services, Office of Inspector General, the New York City Department of Investigation and NCPD’s Asset Forfeiture and Intelligence Bureau.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department and the New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Jennifer M. Sasso and Penelope Brady are in charge of the prosecution.
The Defendant:
DR. MARTIN TESHER
Age: 82
Manhattan, New YorkE.D.N.Y. Docket No. 17-CR-523 (RJD)
Federal District Court in Brooklyn Enters Permanent Injunction Requiring Staten Island Food Distributors to Comply with Food Safety RequirementsRead the Press Release
The United States District Court for the Eastern District of New York entered a consent decree and permanent injunction against defendants Euroline Foods, LLC, Royal Seafood Baza, Inc., the companies’ owner/operators Eduard Shnayder, Syoma Shnayder and Albert Niyazov, and operator Oleg Polischouk to prevent insanitary conditions at a food distribution facility, including practices that increase the risk of contamination with Listeria monocytogenes (L. mono), the Department of Justice announced today.
The consent decree approved by U.S. District Judge Brian M. Cogan follows a May 2018 civil complaint the Department filed at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants’ food preparation at their facility at 175 Lake Avenue, Staten Island, New York (“Defendants’ Facility”) violated the Federal Food, Drug and Cosmetic Act (FDCA) by processing and distributing ready-to-eat fish and fishery products, vegetable salads and cheese products in a facility with chronic insanitary conditions. The complaint alleged that FDA inspections found L. mono at the companies’ facility and that the defendants failed to put in place adequate measures to reduce the risk of health hazards such as L. mono, Clostridium botulinum and scombrotoxin.
The defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction. As part of the settlement, the defendants represented that they currently receive, hold and distribute only food that remains enclosed in a container while at the Defendants’ Facility. If the defendants intend to resume food processing and preparation of any non-prepackaged food at the Defendants’ Facility, they must first notify FDA in writing at least 90 days in advance of resuming such operations, comply with specific remedial measures set forth in the injunction and permit FDA to inspect the facility. The injunction also provides safeguards in the event that, in the future, the defendants engage in food processing at another food preparation facility.
“In response to the government’s lawsuit, the defendants have ceased their at-risk processing operations and destroyed affected food preparation equipment,” stated United States Attorney Richard P. Donoghue for the Eastern District of New York. “Going forward, they are permanently barred by the consent decree from processing any foods, other than prepackaged foods that will remain in their original containers, at their Staten Island facility, and any foods that might present a Listeria monocytogenes hazard at any other facility until they establish that they can comply with all applicable laws and regulations. This Office is committed to protecting the public from the dangers of food exposed to bacterium like L. mono or otherwise contaminated.”
“The Department of Justice is committed to ensuring that food processors adhere to laws enacted to protect consumers,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice and the FDA will continue to work together to make sure that the food that consumers receive is safe.”
According to the complaint, the defendants failed to adequately implement effective sanitation controls to comply with current Good Manufacturing Practice (CGMP) requirements. In addition, the complaint alleged that the defendants failed to comply with seafood Hazard Analysis and Critical Control Point (HACCP) regulations, which are designed to mitigate food safety hazards associated with the processing of fish and fishery products.
This matter is being handled by Assistant U.S. Attorney Gail A. Matthews of the United States Attorney’s Office for the Eastern District of New York, and Trial Attorney James T. Nelson of the Civil Division’s Consumer Protection Branch, with the assistance of Associate General Counsel for Enforcement Jennifer C. Argabright of the FDA’s Office of the Chief Counsel.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny .
District Court Orders New York Food Distributors to Comply with Food Safety RequirementsRead the Press Release
A federal court in Brooklyn entered a permanent injunction against defendants Euroline Foods, LLC, Royal Seafood Baza, Inc., the companies’ owner/operators Eduard Shnayder, Syoma Shnayder, and Albert Niyazov, and operator Oleg Polischouk to prevent insanitary conditions, including practices that increase the risk of contamination with Listeria monocytogenes (L. mono), the Department of Justice announced today.
The entered consent decree of permanent injunction follows a May 2018 complaint filed by the Department for the U.S. Food and Drug Administration (FDA) in the U.S. District Court for the Eastern District of New York. The complaint alleged that the defendants’ food preparation at their Lake Avenue, Staten Island, New York facility (“Defendants’ Facility”), violated the Federal Food, Drug and Cosmetic Act (FDCA) by processing and distributing ready-to-eat fish and fishery products, vegetable salads, and cheese products in a facility with chronic insanitary conditions. Specifically, the complaint alleged that FDA inspections found L. mono at the companies’ facility and that the defendants lacked adequate measures to reduce the risk of health hazards such as L. mono, Clostridium botulinum, and scombrotoxin. The complaint also alleged that the defendants failed to comply with current Good Manufacturing Practice (CGMP) requirements or with seafood Hazard Analysis and Critical Control Point (HACCP) regulations, which are designed to mitigate food safety hazards associated with the processing of fish and fishery products.
The defendants agreed to settle the litigation by the entered consent decree of permanent injunction. As part of the settlement, the defendants represented that they currently receive, hold, and distribute only food that remains enclosed in a container while at Defendants’ Facility. Under the permanent injunction, if the defendants intend to resume food processing and preparation of any non-prepackaged food at Defendants’ Facility, they must first notify FDA in writing at least ninety days in advance of resuming such operations, comply with specific remedial measures set forth in the injunction, and permit FDA to inspect the facility. The injunction also provides safeguards in the event that, in the future, the defendants engage in food processing at another food preparation facility.
“The Department of Justice is committed to ensuring that food processors follow laws that protect consumers,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice and the FDA will continue to work to ensure that prepared food sold to consumers is safe.”
“In response to the government’s lawsuit, the defendants have ceased their at-risk processing operations and destroyed affected food preparation equipment,” stated United States Attorney Richard P. Donoghue for the Eastern District of New York. “Going forward, they are permanently barred by the consent decree from processing any foods, other than prepackaged foods that will remain in their original containers, at their Staten Island facility, and any foods that might present a Listeria monocytogenes hazard at any other facility until they establish that they can comply with all applicable laws and regulations. This Office is committed to protecting the public from the dangers of food exposed to bacterium like L. mono or otherwise contaminated.”
Trial Attorney James T. Nelson of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Gail A. Matthews of the U.S. Attorney’s Office for the Eastern District of New York represented the United States along with the assistance of Associate Chief Counsel for Enforcement Jennifer A. Kang of the FDA’s Office of the Chief Counsel.
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.
City of New York Agrees to Pay $20.8 Million to Settle Federal Discrimination Charges Made by Registered NursesRead the Press Release
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and John Gore, Acting Assistant Attorney General for Civil Rights, today announced a proposed settlement with the City of New York to compensate City-employed registered nurses and midwives who were subjected to discrimination because they are women. The United States Attorney’s Office for the Eastern District of New York filed the proposed settlement along with a complaint in federal district court. According to the allegations of the complaint, the City failed to recognize that the work of predominantly-female registered nurses and midwives was “physically taxing,” while deeming other predominantly-male occupations, including in the health care field, physically taxing. As a result, City employees in the predominantly-male physically taxing jobs were allowed to retire with full pensions as early as age 50, while registered nurses and midwives, who are predominantly female, could not retire with full pensions until age 55 or 57.
“City nurses and midwives care for sick and injured adults, juveniles and infants through long days and nights under difficult circumstances, and rightfully should be recognized as doing physically taxing work,” said U.S. Attorney Donoghue. “Equal treatment under law means just that, equal treatment and this Office is committed to ensuring that women are treated fairly and equitably in the workplace.” He also thanked the Equal Employment Opportunity Commission (“EEOC”) for its investigative work prior to referring this matter to the U.S. Attorney’s Office.
“This Settlement Agreement will provide significant relief to a class of female nurses and midwives employed by the City of New York who were harmed by the City’s discriminatory employment practices,” said Acting Assistant Attorney General John Gore. “We applaud the United States’ Attorney’s Office for the Eastern District of New York for prosecuting this matter and acknowledge the City of New York’s commendable efforts in ensuring that this matter was brought to resolution without protracted litigation.”
Beginning in 1968, the City allowed certain City employees with 25 years of service the option of retiring with full pensions beginning at the age of 50, if the employees worked in jobs the City deemed physically taxing. At that time, the City refused to recognize the work of registered nurses and midwives, which was performed mostly by women, as physically taxing, but did recognize as physically taxing work performed mostly by men in occupations such as Emergency Medical Specialist - EMT, Exterminator, Motor Vehicle Dispatcher, Window Cleaner, Foremen and Plumbers.
Beginning in 2004, the New York State Nurses Association (NYSNA), a labor union representing City-employed registered nurses and midwives, began requesting that the City recognize the work of registered nurses and midwives as physically taxing and also allow NYSNA’s qualifying members the option of retiring as early as age 50. The City denied that request in 2004, and again in 2006 and 2008. Thereafter, NYSNA and four of its members filed complaints with the EEOC. The EEOC determined there was reason to believe that the City had discriminated against the nurses when it failed to recognize registered nurse and midwife occupational titles as “physically taxing” in 1968, and again when NYSNA made its requests in 2004, 2006 and 2008. The EEOC then referred the matter to the U.S. Attorney’s Office.
The settlement applies to a proposed class of approximately 1,665 registered nurses and midwives hired by the City from September 15, 1965, through March 31, 2012. Subject to court approval, the City would pay these registered nurses and midwives, who would otherwise have been eligible to retire at an earlier age, between $1,000 and $99,000, depending upon their years of qualifying service and the number of years earlier they would have been eligible to retire. The settlement also provides for the City to pay attorney’s fees and an additional $100,000 to the four nurses who initiated the EEOC complaint which led to today’s result.
This matter was handled by Eastern District of New York Assistant United States Attorneys John Vagelatos and Michael J. Goldberger.
E.D.N.Y. Docket No. 18-CV-4100 (WFK)
Owner of Queens Construction Company Indicted for Tax EvasionRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Rafal Ziolkowski, the owner of Oliwa Construction, Inc., in Queens, with seven counts of willfully failing to collect and pay taxes, one count of conspiracy to defraud the United States and one count of making false statements to federal agents. Ziolkowski was arrested earlier today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the charges.
“As alleged in the indictment, Ziolkowski defrauded the United States by not reporting cash wages paid to his company’s employees,” stated United States Attorney Donoghue. “Today’s indictment serves as notice that this Office is committed to prosecuting those who seek to profit at the expense of the United States and honest taxpayers.”
“As alleged, evading Employment Taxes has an impact on all taxpayers not only in the present but the future as well,” stated IRS-CI Special Agent-in-Charge Robnett. “Both retired citizens and some dependent children depend on this assistance, which plays a critical role in the financial security of all Americans.”
According to the indictment, between January 2010 and December 2013, Ziolkowski failed to pay a total of approximately $650,000 in Federal Insurance Contributions Act (FICA) taxes by understating the wages paid to Oliwa employees. To avoid his tax liability, Ziolkowski paid Oliwa’s workers millions of dollars in cash obtained by cashing commercial checks. When the IRS confronted Ziolkowski about his scheme, he falsely denied having ever visited a check cashing establishment.
If convicted of these charges, Ziolkowski faces a maximum sentence of 45 years’ imprisonment.
The charges in the indictment are merely 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 Nicholas J. Moscow is in charge of the prosecution.
The Defendant:
Rafal Ziolkowski
Age: 41
Ridgewood, New YorkE.D.N.Y. Docket No. 18-CR-347 (FB)
Long Island Man Pleads Guilty to Conspiring to Distribute Crack Cocaine and Illegally Possessing 10 FirearmsRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Ronald Bishop pleaded guilty to conspiring to distribute crack cocaine on Long Island between 2014 and 2016 and illegally possessing 10 firearms in furtherance of his narcotics trafficking operation. The proceeding took place before United States Magistrate Judge Gary R. Brown.
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, and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the guilty plea.
According to court filings and facts presented during the plea proceeding, in January 2016 the NCPD Gang Investigation Squad executed a search warrant at a residence Bishop operated as a stash house and recovered 10 firearms, including four pistols, three revolvers, a shotgun, two assault rifles, high capacity magazines, hundreds of rounds of ammunition, over seven grams of crack cocaine, assorted pills, drug paraphernalia and cash.
“Ronald Bishop’s stash house contained an arsenal of firearms as well as illegal drugs, posing a great danger to the community,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue to work tirelessly to bring to justice armed drug dealers who put our communities at risk.” Mr. Donoghue expressed his thanks to the NCPD for their efforts in the investigation and the ATF for their assistance in the prosecution of the case.
“Ronald Bishop conspired to deal in deadly illegal narcotics and possessed illegal firearms,” stated ATF Special Agent-in-Charge Benedict. “ATF and its law enforcement partners stand united in the fight to keep communities safe from those who seek to do harm to their fellow residents. I would like to thank the Special Agents and Task Force Officers of the ATF Long Island Field Office and the NCPD for their collaborative efforts on this case. I would also like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting the case.”
When sentenced, Bishop faces up to life in prison with a mandatory minimum of 10 years in prison, as well as forfeiture and a fine of up to $5,000,000.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Michael R. Maffei is in charge of the prosecution.
The Defendant:
RONALD BISHOP
Age: 36
Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-494 (SJF)
Queens Man Pleads Guilty to Six Gunpoint RobberiesRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Sean Jack pleaded guilty to a Hobbs Act robbery conspiracy and multiple Hobbs Act robberies as well as to brandishing firearms during the commission of robberies. The charges arise from Jack’s role in robbing six gas stations and convenience stores in Queens, New York. Today’s plea took place before United States Magistrate Judge Vera M. Scanlon.
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), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the plea.
“As he has now admitted, Sean Jack participated in numerous armed robberies including one in which an employee of a gas station was pistol-whipped,” stated United States Attorney Donoghue. “Combatting gun-related crime is a priority of this Office and, together with our law enforcement partners, we will work tirelessly to prosecute criminals like the defendant who terrorize hard-working citizens of our community.”
Each of the robberies followed the same pattern. The defendant and a co-conspirator would enter the store or gas station and shop for various items. After bringing their selections to the counter, one of the robbers would brandish a firearm while the second robber would take money from the cash register. In each of the robberies, one or both of the robbers wore a wig.
When sentenced, Jack faces up to life and a minimum of seven years in prison.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Nicholas Moscow and Erin Reid are in charge of the prosecution.
The Defendant:
SEAN JACK
Age: 36
Jamaica, New YorkE.D.N.Y. Docket No. 17-CR-569 (RRM)
Three Long Island Residents Arrested in Elder Fraud SchemeRead the Press Release
A 12-count indictment was unsealed today in federal court in Central Islip charging Tully Lovisa, Shaun Sullivan and Lorraine Chalavoutis with mail fraud and money laundering for their participation in a fraudulent mass-mailing scheme that tricked hundreds of thousands of consumers, many of them elderly, into paying at least $30 million in fees for falsely promised cash prizes. The defendants were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
Attorney General Jeff Sessions, Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter R. Rendina, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the indictment.
“Earlier this year, when we announced the largest elder fraud sweep in history, we sent a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are,” said Attorney General Jeff Sessions. “When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today’s indictment shows we are following through on this promise, and fraudsters everywhere should take note of it.”
“As alleged in the indictment, the defendants perpetrated a cruel hoax on their victims, many of them elderly and vulnerable, by sending promotional mailings that falsely claimed they would receive tens of thousands of dollars in prize money if they paid a fee,” stated United States Attorney Donoghue. “In so doing, Lovisa violated prior court orders directing him to stop engaging in mass mailing operations and his co-conspirators were well aware of prior enforcement action to stop this conduct. Protecting the elderly from brazen predators like the defendants is a priority of this Office and the Department of Justice.”
“These defendants showed a willingness to stop at nothing to bilk unwitting victims of their hard earned cash; many who were deliberately targeted because of their vulnerability,” stated USPIS Inspector-in-Charge Rendina. “Postal Inspectors remind you, if you have to pay to play, it’s a scam.”
According to the indictment, the defendants’ prize-promotion mailings claimed that recipients could receive a large cash prize in exchange for paying a modest fee and, in fact, none of them did. The scheme began after the Federal Trade Commission (“FTC”) sued Lovisa in 2010 for sending deceptive prize-promotion mailings. In response to that suit, a federal court in the Northern District of California enjoined Lovisa in December 2010 and April 2012 from any involvement with prize-promotion mailings. Despite these orders, Lovisa conspired with Sullivan and Chalavoutis to set up numerous prize-promotion companies using straw owners and aliases to continue defrauding consumers. Chalavoutis, who provided operational services, including opening companies and bank accounts in the name of straw owners, helped conceal the involvement of Lovisa and Sullivan in controlling the operation.
The indictment also charges Lovisa with perjury for submitting a false compliance report to the FTC in which he claimed not to be involved in prize-promotion mailings. The additional wire fraud and money laundering charges involve Lovisa’s further deception of the FTC related to the court-ordered sale of a house he owned in Las Vegas. According to the indictment, Lovisa arranged a sham sale of the house for $155,500 in September 2012 that allowed him to maintain control of it and only give the FTC proceeds of that sale. Lovisa sold the house in April 2015 for $540,000.
If convicted, the defendants face up to 20 years’ imprisonment for mail fraud, wire fraud and conspiracy. Each charge also carries a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The case is being prosecuted by Assistant United States Attorney Charles P. Kelly of the Office’s Long Island Criminal Division, with Trial Attorneys Daniel Zytnick and Timothy Finley of the Justice Department’s Consumer Protection Branch.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
The Defendants:
LORRAINE CHALAVOUTIS
Age: 61
Greenlawn, New YorkTULLY LOVISA
Age: 55
Huntington Station, New YorkSHAUN SULLIVAN
Age: 37
Merrick, New YorkFive Alleged Members and Associates of La Cosa Nostra Indicted for Racketeering and Related ChargesRead the Press Release
A 32-count indictment was unsealed today in federal court in Brooklyn charging two inducted members and two associates of the Colombo organized crime family (the “Colombo family”) with racketeering, including predicate acts of extortion, extortionate collection, money laundering and illegal gambling. The indictment also charges one inducted member of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”) with extortionate collection and a related conspiracy. The indictment relates to the defendants’ alleged criminal activities in Brooklyn, Staten Island and elsewhere between December 2010 and June 2018.
The defendants—Jerry Ciauri, also known as “Fat Jerry,” a member of the Colombo family, Vito Difalco, also known as “Victor” and “The Mask,” a member of the Colombo family, Salvatore Disano, also known as “Sal Heaven,” an associate of the Colombo family, Anthony Licata, also known as “Anthony Suits,” a member of the Gambino family, and Joseph Maratea, an associate of the Colombo family—were arrested today and are scheduled to be arraigned this afternoon before Magistrate Judge Ramon E. Reyes, Jr.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“This investigation shows that members of La Cosa Nostra continue to prey on members of our community, enriching themselves and their criminal network by making extortionate loans and using threats of violence to collect,” stated United States Attorney Donoghue. “Rooting out traditional organized crime’s dangerous and corrupting influence continues to be a high priority for this Office and our law enforcement partners.”
“As alleged in the indictment, these defendants instilled fear in the hearts of their victims through threats of violence,” stated FBI Assistant Director-in-Charge Sweeney. “These extortionate threats are the trademark of the mafia’s power, but in the end all it does is expose their weakness. While criminal organizations such as La Costa Nostra continue to work hard to imbed fear and danger within our communities, the FBI New York Joint Organized Crime Task Force is working even harder to ensure the public’s safety and security.”
“The mob is certainly diminished, but it is not dead,” stated NYPD Police Commissioner O’Neill. “These groups require our constant vigilance. By working in close collaboration with our law enforcement partners in the FBI and the Eastern District, the NYPD will continue to ensure public safety through aggressive investigation and the dismantling of these types of organized-crime organizations.”
As alleged in the indictment and court filings, Ciauri is charged with making extortionate loans and with using extortionate means to collect debts from six victims, as well as laundering the proceeds of his loansharking business in order to conceal his involvement.
Disano is charged with using extortionate means to collect debts from three victims and with assisting Ciauri in laundering the proceeds. On one occasion, Ciauri threatened to shoot a loansharking partner who had fallen behind making payments to Ciauri. He subsequently recruited another associate to stalk that partner. On another occasion, Ciauri enlisted an associate to slash a victim’s tires in the middle of the night.
Difalco is charged with making extortionate loans and with using extortionate means to collect debts from eight victims. In one conversation, Difalco threatened a loansharking victim by telling him that he had a past history of setting on fire the cars of those who failed to make timely payments; Difalco told the victim, “Good things happen to me when I stay calm see like I was by your house the other day…. Four years ago, I would have put the Benz on fire.”
Maratea is charged with using extortionate means to collect debts from five victims. To ensure that Maratea and Difalco could find their debtors, Difalco and Maratea required debtors to provide a copy of their driver’s licenses and contact information.
Each of the defendants faces a maximum of 20 years’ imprisonment on the racketeering, money laundering and extortionate collection offenses. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Elizabeth A. Geddes and Mathew S. Miller are in charge of the prosecution.
The Defendants:
JERRY CIAURI (also known as “Fat Jerry”)
Age: 59
Brooklyn, New YorkVITO DIFALCO (also known as “Victor” and “The Mask”)
Age: 63
Brooklyn, New YorkSALVATORE DISANO (also known as “Sal Heaven”)
Age: 48
Brooklyn, New YorkANTHONY LICATA (also known as “Anthony Suits”)
Age: 49
Brooklyn, New YorkJOSEPH MARATEA
Age: 42
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-337 (KAM)
Florida Media Company Pleads Guilty to Bribing Soccer Officials | Spanish Parent Company Enters into Non-Prosecution AgreementRead the Press Release
Earlier today, in federal court in Brooklyn, US Imagina, LLC (“Imagina US”) pleaded guilty to a criminal information (the “Information”) charging it with two counts of wire fraud conspiracy in connection with the participation of two of its senior executives in schemes to pay more than $6.5 million in bribes to high-ranking officials of the Caribbean Football Union (“CFU”) and four Central American national soccer federations to secure media and marketing rights to those federations’ World Cup qualifier matches. Imagina US, which was previously known as MediaWorld, is a privately held Florida corporation engaged in the businesses of media content creation and audiovisual production, and also has a unit devoted to buying and selling the media and marketing rights to sports events, principally soccer matches. Imagina US is majority-owned by Imagina Media Audiovisual SL (“Imagina Media”), a privately held company based in Barcelona, Spain that is engaged worldwide in the businesses of media content creation, audiovisual production and the purchase and sale of media and marketing rights to sporting events. Also today, Imagina Media, which is also known as MediaPro, entered into a non-prosecution agreement with the government in connection with one its three co-Chief Executive Officers’ (“co-CEOs”) participation in this criminal conduct.
Pursuant to a plea agreement with the government, Imagina US agreed to forfeit $5,279,000 in criminal proceeds from these schemes. Imagina US was also sentenced to pay $3 million in restitution to the CFU, $1.7 million in restitution to the Honduran soccer federation (“FENAFUTH”), $790,000 in restitution to the Guatemalan soccer federation (“FENAFUTG”), $600,000 in restitution to the Costa Rican soccer federation (“FEDEFUT”), and $565,000 in restitution to the Salvadoran soccer federation (“FESFUT”). Imagina US was further sentenced to pay a fine of $12,883,320, which Imagina Media agreed to pay on behalf of Imagina US pursuant to the non-prosecution agreement. Today’s guilty plea and sentencing proceedings took place before United States District Judge Pamela K. Chen.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and R. Damon Rowe, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS CI), announced the guilty plea and non-prosecution agreement.
“Corporations that operate in the United States have a responsibility to ensure that their officers do not engage in corrupt conduct and to take steps to root out corrupt conduct as soon as they are put on notice of it,” stated U.S. Attorney Donoghue. “Those that fail to do so will face significant consequences, while those that effectively remediate will receive positive consideration.”
“Using bribery as part of your business plan is a well-known red flag, and this behavior has no place as part of any legitimate business strategy,” stated FBI Assistant Director-in-Charge Sweeney. “US Imagina, LLC is paying the penalty for their activity which only contributes to the erosion of trust between businesses and their clients. We will continue to bring dishonest companies to justice, and hope this plea serves as an example to other corporations who think they can operate using similar moves.”
“Today’s guilty plea is a clear demonstration of IRS Criminal Investigation’s continued commitment to dismantling the corruption that has plagued the world of international soccer,” stated IRS-CI Special Agent-in-Charge Rowe. “Working with our partners at the Department of Justice, we will continue to investigate corporate entities that profit from crooked practices and use the U.S. financial system in the process.”
The Criminal Schemes
According to facts presented during court proceedings in this case and in related cases, the Imagina US and Imagina Media senior executives bribed soccer officials in the Confederation of North, Central America and Caribbean Association Football (“CONCACAF”) region in exchange for the media and marketing rights to World Cup qualifier matches. The executives often used false invoices and contracts to disguise the true nature of the bribe payments and, for the same reason, they often transmitted the bribes through bank accounts held by intermediaries in third countries.
With respect to the bribery scheme related to the CFU’s World Cup qualifier rights, one of Imagina Media’s three co-CEOs (identified as Co-Conspirator #1 in the Information) agreed that Imagina Media would be responsible for paying half of a $3 million bribe that Imagina US’s then-partner, the Miami-based sports marketing company Traffic USA, had previously agreed to pay Jeffrey Webb, a senior official of the CFU and the president of CONCACAF. The $3 million bribe was in exchange for a contract awarding Traffic USA the media and marketing rights to CFU members’ home World Cup qualifier matches for the 2018 and 2022 qualification cycles. Co-Conspirator #1 and Imagina US’s CEO, Roger Huguet, then made a $500,000 payment towards Imagina US’s $1.5 million share of the bribe by having an intermediary send a false invoice from a Panamanian shell company to Imagina Media’s Portuguese subsidiary, Medialuso. Co-Conspirator #1 then directed senior executives at Imagina Media and Medialuso, both of whom reported to Co-Conspirator #1, to make the payment.
Many of the executives and soccer officials who paid or received the bribes described in the Information, and their intermediaries, have already pleaded guilty to participating in these bribery schemes, including Roger Huguet, Fabio Tordin, Miguel Trujillo, Jeffrey Webb, Costas Takkas, Alfredo Hawit, Rafael Callejas, Brayan Jiménez, Héctor Trujillo and Eduardo Li. Reynaldo Vasquez of the Salvadoran soccer federation has been indicted for receiving bribes as part of this scheme but has not yet appeared before the Court. Traffic USA has also pleaded guilty.
Imagina Media’s Initial Failure to Conduct an Internal Investigation
On May 27, 2015, an indictment in the Eastern District of New York captioned United States v. Jeffrey Webb et al., 15-CR-252 (PKC) (the “First Indictment”) was unsealed. The First Indictment charged Webb and others with participating in the CFU World Cup qualifiers scheme and also alleged that additional, anonymized co-conspirators were involved in the scheme. According to the non-prosecution agreement, within days after the First Indictment was unsealed, Imagina Media’s senior management knew that these additional anonymized co-conspirators were Co-Conspirator #1 and Huguet, and that Imagina Media had been anonymously identified in the First Indictment as “Sports Marketing Company C.” Co-Conspirator #1 denied to other members of Imagina Media’s senior management that he had been involved in a scheme to pay bribes to Webb or anyone else.
For months after the First Indictment was unsealed, Imagina Media’s management did not conduct an internal investigation or make any serious inquiry to determine whether any of the allegations in it relating to Co-Conspirator #1 or Huguet were true. In July 2015, Imagina Media issued a press release, in English and Spanish, in which it denied that there was any evidence that it was the “Sports Marketing Company C” named in the First Indictment, even though it knew that it was in fact Sports Marketing Company C. In the same press release, Imagina Media denied that it paid any bribes.
In December 2015, promptly after a superseding indictment and the guilty pleas of Huguet and Imagina US executive Fabio Tordin were unsealed, Imagina Media suspended and then terminated Co-Conspirator #1, Huguet, and Tordin, and retained counsel to conduct an internal investigation.
The Non-Prosecution Agreement
Pursuant to the non-prosecution agreement it entered today, Imagina Media has accepted responsibility for its criminal conduct and that of its subsidiary Imagina US, and has also accepted responsibility for its failure to conduct a prompt internal investigation upon learning of the allegations against its agents in the First Indictment. Imagina Media has accepted responsibility by, among other things: (a) causing Imagina US to plead guilty to the two counts in the Information and honor all of the terms of Imagina US’s plea agreement with the government, and (b) agreeing to pay the criminal penalty of $12,883,320 imposed on Imagina US as part of its sentence. In consideration of this acceptance of responsibility, Imagina Media’s remedial actions to date, including the termination of Co-Conspirator #1, Roger Huguet and Fabio Tordin and the hiring of a new CEO, Chief Financial Officer and General Counsel, among others, at Imagina US, and its commitment to, among other things: (a) accept and acknowledge responsibility for its conduct; (b) continue its cooperation; (c) implement enhanced internal controls and a rigorous corporate compliance program that includes policies and procedures at Imagina US, Imagina Media and Imagina Media’s other subsidiaries and affiliates designed to detect and deter violations of all applicable federal, state and foreign anti-corruption laws, the government entered a non-prosecution agreement with Imagina Media and agreed to a 10 percent reduction from the low end of the applicable Sentencing Guidelines fine range. If Imagina Media violates the non-prosecution agreement, it is subject to full criminal prosecution.
The guilty plea and non-prosecution agreement announced today are part of an investigation into corruption in international soccer led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.
The government’s case is being handled by the Office’s FIFA Task Force and the Business and Securities Fraud Section. Assistant United States Attorneys Paul Tuchmann, David Pitluck, Samuel P. Nitze and Brian D. Morris of the Eastern District of New York are in charge of the prosecution.
The government’s investigation is ongoing.
The Defendant:
US IMAGINA, LLC
Place of Organization: FloridaE.D.N.Y. Docket No. 18-CR-311 (PKC)
Two Defendants Convicted on All Counts for International Computer Hacking and Securities Fraud SchemeRead the Press Release
Vitaly Korchevsky, a former hedge fund manager, and Vladislav Khalupsky, a securities trader, were convicted today in federal court in Brooklyn of conspiracy to commit wire fraud, conspiracy to commit securities fraud and computer intrusion, conspiracy to commit money laundering and two counts of securities fraud in connection with their roles in an international scheme to hack into three business newswires and steal yet-to-be published press releases containing non-public financial information, which was then used to make trades that generated approximately $30 million in illegal profits. The verdicts followed a four-week trial before United States District Judge Raymond J. Dearie. When sentenced, each defendant faces a maximum of 20 years’ imprisonment.
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 Michael Breslin, Deputy Assistant Director, United States Secret Service, Office of Investigations (USSS), announced the verdict.
“The defendants teamed up with cybercriminal co-conspirators to hack pre-distribution press releases and then traded in the stock market based on that stolen information, making massive profits as a result,” stated United States Attorney Donoghue. “Today’s verdict sends a powerful message that this Office, together with our law enforcement partners, will work tirelessly to disrupt any scheme, no matter how sophisticated, that threatens the integrity and fairness of our markets.” Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Office for the District of New Jersey (USAO-DNJ), the Department of Homeland Security (DHS) and the U.S. Securities and Exchange Commission (SEC) for their significant cooperation and assistance in this case.
“Conspiring with hackers overseas, Korchevsky and Khalupsky worked swiftly to trade on stolen press releases, illegally profiting millions of dollars,” stated FBI Assistant Director-in-Charge Sweeney. “Such a massive criminal operation called for massive cover-ups, but their attempts to cover their tracks were done in vain. Devoting much time to the execution of this sneaky scheme, upon sentencing, the defendants will now rightfully face time in prison.”
“This case represents the core of the U.S. Secret Service’s commitment and strategy to aggressively pursue cyber-enabled financial criminal enterprises through our proven taskforce model of global partnerships,” stated USSS Deputy Assistant Director Breslin. “The guilty verdict delivered today represents a win for the country and for all law enforcement agencies who worked together to ensure that justice was served.”
The evidence at trial established that between February 2010 and August 2015, computer hackers based in the Ukraine gained unauthorized access into the computer networks of Marketwired L.P., PR Newswire Association LLC, and Business Wire, via a series of sophisticated cyberattacks. At one point, one of the hackers sent an online chat message in Russian to another individual stating, “hacking prnewswire.com.” The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, revenues and other material non-public information. Over the course of the scheme, the hackers stole more than 100,000 press releases.
In order to monetize the material non-public information in the stolen press releases, the hackers shared those stolen press releases with a network of traders, including Korchevsky and Khalupsky, via overseas computer servers controlled by the hackers and/or through secure email accounts. Once they received the stolen press releases, Korchevsky and Khalupsky generally traded ahead of the public distribution of the stolen releases. In order to execute their trades before the releases were made public, Korchevsky and Khalupsky often had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared information, and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets. As a result, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release. The defendants traded on stolen press releases containing material nonpublic information about publicly traded companies that included, among hundreds of others: Align Technology Inc.; CA Technologies; Caterpillar Inc.; Hewlett Packard; Home Depot; Panera Bread Co.; and Verisign Inc.
The illegal trading by the criminal network resulted in gains of more than $30 million, much of which was routed back to the hackers. Korchevsky traded on the stolen press releases both in accounts that benefited the criminal network as well as in his own personal accounts, and ultimately netted more than $15 million in profits over the course of the scheme. Khalupsky primarily traded in accounts that benefited the criminal network, and received a percentage of the profits he generated by trading on the stolen press releases, totaling at least $500,000 over the course of the scheme.
The evidence at trial also demonstrated that the defendants went to great lengths to conceal their roles in the criminal scheme. The conspirators used separate phones, computers and hotspots to conduct their illegal trading activity, and routinely deleted emails and/or destroyed hardware that contained evidence of their crimes. The conspirators also directed that payments received for the illegal profits they generated for the criminal network be made to offshore shell companies.
The charges against Korchevsky and Khalupsky were set forth in an indictment that was unsealed in August 2015 in connection with a broader investigation conducted by this Office, the USAO-DNJ, the FBI, the USSS and the DHS, as well as a parallel investigation by the SEC. In total, nine defendants were charged criminally for their roles in the scheme. All those defendants have either pleaded guilty or been convicted at trial except for three, who remain at large.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and National Security and Cybercrime Section. Assistant United States Attorneys Richard M. Tucker, Julia Nestor and David Gopstein are in charge of the prosecution.
The Defendants:
VITALY KORCHEVSKY
Age: 53
Glen Mills, PennsylvaniaVLADISLAV KHALUPSKY
Age: 47
Brooklyn, New York and Odessa, UkraineE.D.N.Y. Docket No. 15 CR 381 (RJD)
Credit Suisse’s Investment Bank in Hong Kong Agrees to Pay $47 Million Criminal Penalty for Hiring Scheme That Violated the Foreign Corrupt Practices ActRead the Press Release
WASHINGTON – Credit Suisse (Hong Kong) Limited (Credit Suisse Hong Kong or CSHK), a Hong Kong-based subsidiary of Credit Suisse Group AG (Credit Suisse or CSAG), a Swiss-based issuer of publicly traded securities in the United States, has agreed to pay a $47 million criminal penalty for its role in a scheme to corruptly win banking business by awarding employment to friends and family of Chinese officials in violation of the Foreign Corrupt Practices Act.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), made the announcement.
“Credit Suisse Hong Kong’s practice of employing friends and family members of Chinese government officials as a quid pro quo for lucrative business opportunities was both profitable and corrupt and now the company will pay the price for that corruption,” stated United States Attorney Donoghue. “This Office is committed to holding companies that conduct business in the United States accountable when they or their subsidiaries corruptly influence foreign government officials for financial gain.”
“Bribery, in all its forms, must be stopped,” said Acting Assistant Attorney General Cronan. “Thanks to the prosecutors and investigators in this case, the Department has placed banks and other companies on notice that we will hold them accountable for all types of corrupt payments, including corrupt hiring practices.”
“In the banking industry, not every undertaking is fair game,” said FBI Assistant Director-in-Charge Sweeney. “Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest. The criminal penalty imposed today provides explicit insight into the level of corruption that took place at the hands of Credit Suisse Group AG’s Hong Kong-based subsidiary.”
According to CSHK’s admissions, between 2007 and 2013, several senior CSHK managers in the Asia Pacific (APAC) region engaged in a practice to hire, promote, and retain candidates referred by or related to Chinese government officials and executives of Chinese state-owned entities (SOE). The employment of these “relationship” or “referral hires” was part of a quid pro quo with the officials who referred the candidates for employment, whereby CSHK bankers sought and obtained business from the referral sources. Employees of other subsidiaries of CSAG were aware of the referral hires and facilitated the conduct.
According to admissions made in connection with the resolution, CSHK bankers discussed and approved the hiring of close friends and family of Chinese officials in order to secure business for CSHK. For example, one SOE executive emailed a senior CSHK banker to refer a candidate who had a “very good and close relationship” with senior management at the SOE, and wrote that hiring the referral hire would “bring [CSHK] the big surprise in the near future if [CSHK] could … arrange a position in CS team in Beijing.” The senior CSHK banker later told a colleague about an impending deal that the SOE was pursuing and explained that the referring SOE official “was focused on having us make a relationship hire and said it was very important for us to win future business with [the SOE].” In another email to colleagues, a CSHK employee explained that “[r]elationship hires have to translate to $” or “the relationship is worthless to our organization.”
CSHK further admitted that referral hires were less qualified than other employees hired at the same level, they were less stringently vetted, and were given benefits throughout the course of their employment due to the provision of business to CSHK by their referral sources. For example, in relation to the interview process for one referral hire, a senior CSHK banker cautioned colleagues “not too many interviews,” as this referral hire was “a princess [who was] not used to too many rounds of interview.” CSHK employees also noted that they had to “be a bit ‘creative’ in filling” in this referral hire’s resume, before sending it to other CSHK employees. In another example, when a CSHK banker asked a high-ranking executive of a client SOE to “push for [CSHK’s] incentive,” the high-ranking executive “reminded [the CSHK banker] that [CSHK] need[ed] to pay [the SOE’s] relationship hire … well at the year end bonus.”
The corrupt scheme netted CSHK at least $46 million in profits from business mandates with Chinese SOEs.
CSHK entered into a non-prosecution agreement and agreed to pay a criminal penalty of $47,029,916 to resolve the matter. As part of the agreement, CSHK and its parent company Credit Suisse AG also agreed to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the conduct, to enhance their compliance programs, and to report to the Department on the implementation of their enhanced compliance programs. The Department reached this resolution based on a number of factors, including that CSHK did not voluntarily and timely disclose the conduct at issue. CSHK received partial credit for its and its parent company’s cooperation with the criminal investigation, including making foreign-based employees available for interviews in the United States and producing documents to the government from foreign countries in ways that did not implicate foreign data privacy laws. However, CSHK did not receive additional cooperation credit because its cooperation was reactive and not proactive. Additionally, CSHK did not receive full credit for remediation because it failed to sufficiently discipline employees who were involved in the misconduct. Based on these considerations, the company received a non-prosecution agreement and an aggregate discount of 15 percent off of the bottom of the U.S. Sentencing Guidelines fine range.
In related proceedings, Credit Suisse Group AG also settled with the U.S. Securities and Exchange Commission (SEC). Under the terms of its resolution with the SEC, Credit Suisse Group AG agreed to a total of $24,989,843 in disgorgement of profits and $4,833,961 in prejudgment interest.
The FBI’s New York Field Office investigated the case. Assistant U.S. Attorneys Alicyn Cooley, Alixandra Smith and James P. McDonald of the Eastern District of New York’s Business and Securities Fraud Section, and Trial Attorney Katherine Nielsen and former Trial Attorney Allison Westfahl-Kong of the Criminal Division’s Fraud Section prosecuted the case. The U.S. Attorney’s Office and the Fraud Section appreciate the significant cooperation and assistance provided by the SEC in this matter.
Attachment(s):
Download Credit Suisse NPA with Statement of Facts
Credit Suisse’s Investment Bank in Hong Kong Agrees to Pay $47 Million Criminal Penalty for Corrupt Hiring Scheme that Violated the FCPARead the Press Release
Credit Suisse (Hong Kong) Limited (CSHK), a Hong Kong-based subsidiary of Credit Suisse Group AG (CSAG), a Swiss-based issuer of publicly traded securities in the United States, reached a resolution with the Department of Justice and agreed to pay a $47 million criminal penalty for its role in a scheme to corruptly win banking business by awarding employment to friends and family of Chinese officials.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York and Assistant Director-in-Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.
“Credit Suisse (Hong Kong) Limited engaged in a corrupt scheme to win business with Chinese state-owned entities by hiring friends and family of Chinese government officials, generating the bank at least $46 million in profits,” said Acting Assistant Attorney General Cronan. “These ‘relationship hires’ often lacked necessary technical skills, and offered fewer qualifications and significantly less relevant banking experience than other candidates for the jobs. The Department of Justice remains steadfast in our commitment to combatting bribery and corruption in all its many forms, including where companies engage in corrupt hiring practices to gain the favor of foreign officials to generate improper business advantages and increase profits.”
“Credit Suisse Hong Kong’s practice of employing friends and family members of Chinese government officials as a quid pro quo for lucrative business opportunities was both profitable and corrupt and now the company will pay the price for that corruption,” said U.S. Attorney Donoghue. “This Office is committed to holding companies that conduct business in the United States accountable when they or their subsidiaries corruptly influence foreign government officials for financial gain.”
“In the banking industry, not every undertaking is fair game,” said Assistant Director-in-Charge Sweeney. “Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest. The criminal penalty imposed today provides explicit insight into the level of corruption that took place at the hands of Credit Suisse Group AG’s Hong Kong-based subsidiary.”
According to CSHK’s admissions, between 2007 and 2013, several senior CSHK managers in the Asia Pacific (APAC) region engaged in a practice to hire, promote and retain candidates referred by or related to government officials and executives of clients that were state-owned entities (SOEs). The employment of these “relationship hires” or “referral hires” was part of a quid pro quo with the officials who referred the candidates for employment, whereby CSHK bankers sought to and did win business from the referral sources. Employees of other subsidiaries of CSAG were aware of the referral hires and facilitated the conduct.
According to admissions made in connection with the resolution, CSHK bankers discussed and approved the hiring of close friends and family of Chinese officials in order to secure business for CSHK. For example, one SOE executive emailed a senior CSHK banker to refer a candidate who had a “very good and close relationship” with senior management at the SOE, and wrote that hiring the referral hire would “bring [CSHK] the big surprise in the near future if [CSHK] could … arrange a position in CS team in Beijing.” The senior CSHK banker later told a colleague about an impending deal that the SOE was pursuing and explained that the referring SOE official “was focused on having us make a relationship hire and said it was very important for us to win future business with [the SOE].” In another email to colleagues, a CSHK employee explained that “[r]elationship hires have to translate to $” or “the relationship is worthless to our organization.”
CSHK further admitted that referral hires were less qualified than other employees hired at the same level, they were less stringently vetted and they were given benefits throughout the course of their employment due to the provision of business to CSHK by their referral sources. For example, in relation to the interview process for one referral hire, a senior CSHK banker cautioned colleagues “not too many interviews,” as this referral hire was “a princess [who was] not used to too many rounds of interview.” CSHK employees also noted that they had to “be a bit ‘creative’ in filling” in this referral hire’s resume, before sending it to other CSHK employees. In another example, when a CSHK banker asked a high-ranking executive of a client SOE to “push for [CSHK’s] incentive,” the high-ranking executive “reminded [the CSHK banker] that [CSHK] need[ed] to pay [the SOE’s] relationship hire … well at the year-end bonus.”
The corrupt scheme netted CSHK at least $46 million in profits from business mandates with Chinese SOEs, CSHK admitted.
The Department and CSHK entered into a non-prosecution agreement, and CSHK agreed to pay a criminal penalty of $47,029,916 to resolve the matter. As part of the agreement, CSHK and its parent company Credit Suisse AG also agreed to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the conduct, to enhance their compliance programs and to report to the Department on the implementation of their enhanced compliance programs. The Department reached this resolution based on a number of factors, including that CSHK did not voluntarily and timely disclose the conduct at issue. CSHK received partial credit for its and its parent company’s cooperation with the criminal investigation, including making foreign-based employees available for interviews in the United States and producing documents to the government from foreign countries in ways that did not implicate foreign data privacy laws. However, CSHK did not receive additional cooperation credit because its cooperation was reactive and not proactive. Additionally, CSHK did not receive full credit for remediation because it failed to sufficiently discipline employees who were involved in the misconduct. Based on these considerations, the company received a non-prosecution agreement and an aggregate discount of 15 percent off the bottom of the U.S. Sentencing Guidelines fine range.
In related proceedings, Credit Suisse Group AG also settled with the U.S. Securities and Exchange Commission (SEC). Under the terms of its resolution with the SEC, Credit Suisse Group AG agreed to pay a total of $24,989,843 in disgorgement of profits and $4,833,961 in prejudgment interest.
The FBI’s New York Field Office investigated the case. Trial Attorney Katherine Nielsen and former Trial Attorney Allison Westfahl-Kong of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Alicyn Cooley, Alixandra Smith and James P. McDonald of the Eastern District of New York’s Business and Securities Fraud Section prosecuted the case. The Fraud Section and U.S. Attorney’s Office appreciate the significant cooperation and assistance provided by the SEC in this matter.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
United States Files Civil Complaint against Two Companies for Environmental Cleanup Cost of Nassau County Superfund SiteRead the Press Release
The United States filed a civil complaint today in federal court in Brooklyn against IMC Eastern Corporation (“IMC”) and Island Transportation Corporation (“ITC”), seeking to recover the costs associated with the investigation and cleanup of groundwater contamination at the New Cassel/Hicksville Groundwater Contamination Superfund Site (“the Site”) in the towns of Hempstead, North Hempstead and Oyster Bay, in Nassau County, New York. The Site is approximately 6.5 square miles and includes residential, commercial and industrial areas.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter D. Lopez, Regional Administrator, United States Environmental Protection Agency, Region 2 (EPA), announced the filing.
“Maintaining the safety of public water supply wells is essential to the health and well-being of our communities,” stated United States Attorney Donoghue. “Today’s filing serves as a warning to those who pollute our environment but refuse to take financial responsibility for their actions. This Office will seek the recovery of costs, and civil monetary penalties where appropriate, from those who cause or contribute to environmental contamination.”
“Superfund is a cornerstone of EPA’s core mission. This action is necessary to advance cleanup efforts and protect public health,” stated EPA Regional Administrator Lopez. “The Superfund program is intended to make sure that those who contributed to contamination help pay for its cleanup. Simply stated, the complaint will help EPA seek reimbursement from the responsible parties for the taxpayer money it spent investigating the site.”
According to the complaint, IMC and ITC operated facilities within the New Cassel Industrial Area, an approximately 170-acre industrial and commercial area located north (hydrologically upgradient) of the part of the Site designated by EPA as Operable Unit 1 (OU1). Specifically, IMC was a tenant at 570 Main Street, and ITC was a tenant at 299 Main Street, both located in Westbury, New York.
As alleged, IMC and ITC used hazardous substances called volatile organic compounds (VOCs) in connection with their businesses. These hazardous substances, which include tetrachloroethylene (PCE), trichloroethylene (TCE), and 1,1,1-trichloroethane (1,1,1-TCA), were released at IMC’s and ITC’s facilities and have migrated south (hydrologically downgradient) of these facilities, impacting Long Island’s sole source drinking water aquifer. Exposure to high levels of VOCs such as PCE, TCE, and 1,1,1-TCA can cause a variety of adverse human health effects, such as damage to the nervous system, liver, kidneys, and reproductive system. VOCs may also be harmful to unborn children and are considered possible carcinogens. Consistent with the Safe Drinking Water Act that protects public drinking water supplies throughout the nation, the public water suppliers in the area of the Site monitor water quality regularly and have previously installed treatment systems to remove VOCs from groundwater prior to distribution to the public.
From 1953 through March 1992, IMC manufactured and sold motors and air movers, and used PCE, TCE, and 1,1,1-TCA in its manufacturing processes. Soil and sediment sampling conducted in 1993, and groundwater sampling conducted in 1998 and 1999, each revealed VOC contamination, including PCE, TCE, and 1,1,1-TCA, at the 570 Main Street property. From at least 1971 to 1979, ITC used its facility to wash and repair its trucks and to refuel them with gasoline. ITC used TCE as part of its truck maintenance activities. Groundwater sampling conducted in 2000, and soil sampling conducted in 2001, each revealed TCE contamination at the 299 Main Street property.
According to the complaint, contamination from defendants’ respective properties contributed to the groundwater contamination at the OU1 portion of the Site.
The complaint asserts claims under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the Superfund statute. The Superfund statute protects human health and the environment while safeguarding taxpayer dollars by holding parties that contributed to contamination responsible for cleaning it up. Since 1980, EPA’s Superfund program has managed the cleanup of the nation’s high-priority hazardous sites and has responded to environmental emergencies, oil spills and natural disasters.
The government’s case is being handled by the Office’s Civil Division. Assistant United States Attorney Alex S. Weinberg is in charge of the litigation with assistance from Sharon Kivowitz, Assistant Regional Counsel, EPA Region 2.
E.D.N.Y. Docket No. 18-CV-3818
Commodity Pool Operator Indicted for Defrauding Investors and Attempting to Obstruct JusticeRead the Press Release
A four-count indictment was unsealed today in federal court in Brooklyn, New York, charging commodity pool operator Harris Landgarten with commodities fraud, wire fraud and attempting to obstruct an official proceeding by the Commodity Futures Trading Commission (the “CFTC”) into his fraudulent conduct. Landgarten was arrested on Saturday and is scheduled to be arraigned this afternoon before United States Magistrate Judge Sanket J. Bulsara. If convicted of these charges, Landgarten faces a maximum sentence of 25 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter R. Rendina, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), and James McDonald, Director, Division of Enforcement, Commodity Futures Trading Commission (CFTC), announced the charges.
“As alleged in the indictment, Landgarten defrauded commodities investors by using their money to pay personal bills, and then compounded his crime by pressuring a victim investor to lie in an attempt to make the investigation go away,” stated United States Attorney Donoghue. “Our message is clear, those who engage in such crimes will be prosecuted to the fullest extent of the law.”
“Mr. Landgarten devised an audacious scheme to swindle his clients who placed their trust in him, then further victimized an investor by allegedly only returning funds if a complaint against him was withdrawn, a classic case of greed to fund his own personal lifestyle,” stated USPIS Inspector-in-Charge Rendina. “Postal Inspectors will never tolerate abuse of the public trust, and will bring those to justice who violate the laws that protect the investing public.”
“As this case shows, the CFTC will work vigilantly to root out fraud from our markets, and we will not be deterred by those who attempt to obstruct our investigations,” stated CFTC Director of Enforcement McDonald. “To ensure both that our markets are protected from fraud and that wrongdoers are held accountable, we will continue to work in parallel with our law enforcement partners, and I am grateful for the work of the United States Attorney’s Office in this case.”
According to court papers, Landgarten operated a commodity pool known as Tradeanedge Members Fund, L.P. The fund’s three investors invested a total of approximately $150,000. From approximately July 2014 to March 2017, Landgarten prepared and sent the investors balance statements that hid the fact that he had spent more than $100,000 of the investors’ money, including on personal expenses such as a home security alarm, cable television and internet service, cell phone, online book subscription and $1,250 monthly payments to himself. After the CFTC initiated an investigation, Landgarten pressured a defrauded investor to submit a false statement to the CFTC and to withdraw the complaint the investor filed with the agency. Landgarten conditioned the return of what remained of the investor’s money upon the investor’s withdrawal of his complaint.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud section. Assistant United States Attorney Hiral Mehta is in charge of the prosecution.
The Defendant:
HARRIS LANDGARTEN
Age: 66
Glen Head, New YorkE.D.N.Y. Docket No. 18-CR-328 (NGG)
Five Doctors and Eight Healthcare Professionals Charged as Part of National Healthcare Fraud TakedownRead the Press Release
Thirteen individuals, including five doctors, a chiropractor, three licensed physical and occupational therapists and two pharmacy owners have been charged for their participation in fraudulent schemes in connection with which Medicare and Medicaid programs were billed more than $163 million. The charges filed in federal court in Brooklyn and Central Islip, New York, are part of a nationwide health care fraud takedown, led by the Medicare Fraud Strike Force, which resulted in criminal charges against 601 individuals for their alleged participation in health care fraud schemes involving approximately $2 billion in fraudulent claims.
The charges were announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York; John P. Cronan, Acting 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); Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services - Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG); James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); and Dennis Rosen, Inspector General, New York State Office of the Medicaid Inspector General (OMIG). The results of the nationwide takedown were announced today by Attorney General Jeff Sessions; Alex M. Azar II, Secretary, HHS; Christopher Wray, Director, FBI; Robert W. Patterson, Acting Administrator, Drug Enforcement Administration (DEA); Daniel Levinson, Inspector General, HHS-OIG; Don Fort, Chief, IRS-CI; Seema Verna, Administrator, Centers for Medicare and Medicaid Services.
“As alleged, the defendants charged throughout the Eastern District of New York as a part of the nationwide health care takedown abused their positions to enrich themselves, while bilking Medicare and Medicaid. They did so without regard to the elderly and vulnerable citizens whose health depends upon these essential programs. Licensed medical professionals and others who cheat the system will be investigated and prosecuted to the full extent of the law,” stated United States Attorney Donoghue. Mr. Donoghue extended his grateful appreciation to the U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the New York City Police Department (NYPD), the New York Attorney General’s Medicaid Fraud Control Unit (MFCU), the New York City Human Resources Administration and the New York City Health and Hospitals Corporation, Office of Inspector General, for their assistance in the investigations in this district.
“Turning a blind eye to the needs of Medicare and Medicaid recipients,
these medical officials set their sights on personal gain,” stated FBI Assistant Director-in-Charge Sweeney. “Our doctors and healthcare professionals are entrusted to serve those in need, but these individuals used their occupations as leverage to fulfill their fraudulent scheme. By allegedly billing Medicare and Medicaid more than $163 million, the defendants selfishly diverted funds allocated to our most vulnerable citizens. Devoted to protecting the welfare of our citizens, we will continue to uproot those who blatantly take advantage these programs.”
“Health care fraud depletes funds intended to provide care for our most vulnerable citizens,” stated HHS-OIG Special Agent-in-Charge Lampert. “This takedown sends a clear message that criminals who engage in health care fraud schemes will be caught and face consequences for their actions.”
“Medical doctors and medical professionals should be some of the most trusted people in our lives,” stated IRS-CI Special Agent-in-Charge James Robnett. “The financial expertise of IRS-Special Agents is needed to not only decipher the tax violations, but is necessary to unravel the sophisticated widespread financial fraud perpetrated against the safety net millions of Americans rely upon on a daily basis.”
“Medicaid fraud is not a victimless crime. Those engaged in schemes like this prey on the most vulnerable New Yorkers, rob the health care system of vital resources, and waste taxpayer dollars,” stated OMIG Inspector General Rosen. “My office will continue to work closely with our federal partners to hold wrongdoers fully accountable.”
The schemes charged in the Eastern District of New York, detailed in eight indictments and one criminal information, are as follows:
United States v. Wael Bakry, et al.: The superseding indictment charges five health care professionals for their role in a wide-ranging health care fraud scheme in Brooklyn and Queens that billed the Medicare program for more than $116 million. Wael Bakry, a physical therapist, Abraham Demoz, a physician, Victor Genkin, an occupational therapist, Mayura Kanekar, an occupational therapist, and Alexander Khavash, a chiropractor, were each charged with conspiracy to commit health care fraud, conspiracy to commit money laundering, conspiracy to pay health care kickbacks, conspiracy to defraud the United States by obstructing the lawful functions of the Internal Revenue Service, and subscribing to a false and fraudulent tax return. Additionally, Bakry, Kanekar and Khavash were each separately charged with two false claims counts. The charges stem from the defendants’ involvement in a scheme, run through multiple medical practices, in which the defendants paid illegal kickbacks for the referral of patients to their clinics. These patients, in turn, subjected themselves to purported physical and occupational therapy and other services in return for kickbacks. The superseding indictment was filed on June 20, 2018. The case, which is pending before United States District Judge Sterling Johnson, Jr., is being prosecuted by Assistant Chief A. Brendan Stewart and Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.
United States v. Artem Ashirov: The indictment charges Artem Ashirov, a pharmacist and sole proprietor of ABO Pharmacy in Brooklyn, with five counts of violating the Anti-Kickback Statute. The charges stem from a scheme in which Ashirov paid and offered to pay kickbacks for prescriptions filled at his pharmacy. Between 2015 and 2018, Ashirov, through ABO Pharmacy, billed more than $14.9 million to Medicare and Medicaid. Ashirov was arrested, and arraigned earlier today before United States Magistrate Judge Ramon E. Reyes, Jr., at the federal courthouse in Brooklyn. The case is being prosecuted by Assistant United States Attorney Erin E. Argo of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Gary Peresiper: The indictment charges Gary Peresiper, a medical clinic business manager, with conspiracy to pay health care kickbacks. The charge stems from Peresiper’s role at two Brooklyn clinics, Pulmonary Solutions, P.C., and Multi Care Medical NY PLLC. Peresiper and co-conspirators submitted claims through these clinics for purported diagnostic testing and other services for beneficiaries who had been directed to the clinics in return for kickbacks. From November 2010 to June 2013, the clinics billed Medicare approximately $10.2 million in claims, and were paid approximately $4.7 million on those claims. Peresiper was arrested, and arraigned before United States Magistrate Judge Peggy Kuo at the federal courthouse in Brooklyn on June 4, 2018. The case is being prosecuted by Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section.
United States v. Iouri Winogradov: Iouri Winogradov, the operator of Brooklyn ambulette company Ambulette Star Trans, was charged with one count of conspiracy to violate the Anti-Kickback Statute and one count of conspiracy to commit money laundering. The charges stem from Winogradov’s role in a kickback and money laundering scheme in which Winogradov and co-conspirators received and paid illegal kickbacks for the referral of patients to medical clinics. The patients, who were transported to and from the clinics by Ambulette Star Trans, subjected themselves to purported physical and occupational therapy and other services. Between 2010 and 2014, Ambulette Star Trans was paid approximately $7 million as a result of claims submitted to Medicaid. The indictment was unsealed on June 27, 2018, and the defendant remains at large. The case is being prosecuted by Andrew Estes of the Criminal Division’s Fraud Section.
United States v. Yuriy Barayev: Yuriy Barayev, a pharmacy owner, was indicted on one count of health care fraud. The charge stems from Barayev’s ownership of a Queens pharmacy, Woodhaven Rx Inc., through which he submitted claims for medications that were purportedly dispensed by his pharmacy, but in fact were never dispensed to beneficiaries. From November 2013 to December 2015, Medicare reimbursed the pharmacy approximately $6.6 million for pharmaceutical claims. Barayev was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 26, 2018. The case is being prosecuted by Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section.
United States v. Yong Jun Kim: The indictment charges Yong Jun Kim, a medical doctor who operated My Health Wellness Center in Flushing, New York, with one count of conspiracy to commit health care fraud and one count of violating the Anti-Kickback Statute. The charges stem from Dr. Kim’s role in a scheme in which claims were submitted to Medicare for physical therapy services that were not medically necessary, not provided, or otherwise did not qualify for reimbursement. Between 2012 and 2015, Dr. Kim billed Medicare approximately $5.6 million and was paid approximately $3.5 million on those claims. Dr. Kim was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 27, 2018. The case is being prosecuted by Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Yekaterina Kleydman: The indictment charges Yekaterina Kleydman, a medical doctor, with one count of health care fraud and three counts of making false claims. The charges stem from a scheme in which Dr. Kleydman fraudulently billed Medicare and Medicaid for cosmetic dermatological procedures that did not qualify for reimbursement. Between January 2015 and March 2018, Dr. Kleydman billed Medicare and Medicaid approximately $2.5 million and was paid approximately $700,000 on those claims. Dr. Kleydman was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 25, 2018. The case is being handled by Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section.
United States v. Harold Bendelstein: The indictment charges Harold Bendelstein, a medical doctor, with one count of health care fraud and two counts of making false claims. The charges stem from a scheme in which Dr. Bendelstein billed Medicare and Medicaid for incision procedures to patients’ ears, when, in fact, Dr. Bendelstein either did not perform the procedure specified or performed no procedure at all. Between January 2014 and February 2018, Dr. Bendelstein billed Medicare and Medicaid approximately $585,000 and was paid approximately $200,000 on those claims. Dr. Bendelstein was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 27, 2018. The case is being prosecuted by Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section.
United States v. Hal Abrahamson: The information charges Hal Abrahamson, a licensed podiatrist, with one count of health care fraud. The charges stem from a scheme in which Dr. Abrahamson submitted claims to Medicare and private insurance companies for procedures he did not perform, including skin grafts and wound packing, among other false billings. Between 2013 and 2017, Dr. Abrahamson caused a loss of approximately $869,000 to the Medicare program and other insurers. Dr. Abrahamson was arraigned and pleaded guilty before United States District Judge Denis R. Hurley at the federal courthouse in Central Islip on June 26, 2018. The case is being prosecuted by Assistant United States Attorney Charles Kelly of the U.S. Attorney’s Office for the Eastern District of New York.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendants:
WAEL BAKRY
Age: 46
Staten Island, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Dr. Abraham Demoz
Age: 58
Oceanside, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Victor Genkin
Age: 49
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Mayura Kanekar
Age: 43
Bayside, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Alexander Khavash
Age: 41
Parkland, FloridaE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Artem Ashirov
Age: 42
Rego Park, New YorkE.D.N.Y. Docket No. 18-CR-0321 (WFK)
Gary Peresiper
Age: 52
East Rockaway, New YorkE.D.N.Y. Docket No. 18-CR-0280 (SJ)
Iouri Winogradov
Age: 51
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-0317 (JBW)
Yuriy Barayev
Age: 43
Briarwood, New YorkE.D.N.Y. Docket No. 18-CR-0318 (FB)
Dr. Yong Jun Kim
Age: 48
Roslyn, New YorkE.D.N.Y. Docket No. 18-CR-0320 (ARR)
Dr. Yekaterina Kleydman
Age: 35
Staten Island, New YorkE.D.N.Y. Docket No. 18-CR-0310 (NGG)
Dr. Harold Bendelstein
Age: 57
Far Rockaway, New YorkE.D.N.Y. Docket No. 18-CR-0309 (SJ)
Dr. Hal Abrahamson
Age: 55
Melville, New YorkE.D.N.Y. Docket No. 18-CR-0314 (DRH)
CVS Pharmacy, Inc. to Pay $1.5 Million to Settle Civil Penalty Claims for Violations of the Controlled Substances ActRead the Press Release
CVS Pharmacy, Inc. (“CVS”) has agreed to pay $1.5 million to resolve the United States’ investigation that certain of its pharmacy stores located in Nassau and Suffolk counties on Long Island violated the federal Controlled Substances Act (“CSA”) by failing to timely report the loss or theft of controlled substances, including hydrocodone, an opioid that is one of the most commonly diverted controlled substances. The CSA requires pharmacies, such as CVS, to timely report the loss or theft of controlled substances so that DEA can promptly investigate.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, U.S. Drug Enforcement Administration, New York Division (DEA), announced the settlement.
“The failure to promptly report the loss or theft of prescription drugs as required by law contributes to the opioid epidemic, which has caused devastating harm to individuals and our community,” stated United States Attorney Donoghue. “The settlement with CVS demonstrates the resolve by this Office and the DEA to use all available tools to address this crisis at every level and reduce the availability of highly addictive, dangerous drugs.”
“This year, it is estimated that more than two million Americans will suffer from opioid addiction,” stated DEA Special Agent-in-Charge Hunt. “Law enforcement, treatment professionals and educators are arming ourselves with strategies and actions to combat this growing crisis. Through regulatory actions, DEA Diversion investigators and the EDNY identified that CVS violated the Controlled Substances Act. This settlement is significant because it shows that big chain pharmacies, like CVS, are taking responsibility for violating federal law, which is a step in the right direction for curbing the opioid epidemic.”
CVS is a Rhode Island corporation with its corporate headquarters in Woonsocket, Rhode Island. CVS, directly or through its retail pharmacy subsidiaries and affiliates, operates retail pharmacies in the State of New York that dispense prescription drugs, including controlled substances, to retail consumers.
Opioid abuse has reached epidemic proportions throughout the United States. According to the United States Department of Health & Human Services Centers for Disease Control and Prevention (“CDC”), on average 46 Americans died every day from an overdose involving prescription opioids in 2016. In response to the overwhelming number of prescriptions, and the mounting number of overdoses and deaths, two months ago the CDC issued new guidelines recommending that doctors prescribe less addictive and less powerful pain relievers before prescribing highly addictive drugs, and that they prescribe limited amounts.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA’s Long Island District Office Diversion Group D-11, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department and New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to the increase in opioid abuse. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 22 health care professionals. The Initiative also has resulted in civil enforcement actions against a hospital, a pharmacy and a pharmacy chain, the removal of prescription authority from numerous doctors and the expansion of information sharing among enforcement agencies to better target and pursue drug traffickers.
The United States’ case is being handled by Assistant United States Attorney Diane C. Leonardo of the Office’s Civil Division.
Today, the Department of Justice also announced a national healthcare fraud takedown that resulted in charges against 601 individuals responsible for over $2 billion in fraud losses, which can be viewed at: https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-601-individuals-responsible-over.
Serial Bank Robber Pleads Guilty in Brooklyn Federal CourtRead the Press Release
Earlier today, in federal court in Brooklyn, Sergey Demidenko pleaded guilty to six counts of bank robbery before United States District Court Judge Pamela K. Chen. When he is sentenced, Demidenko faces a statutory maximum sentence of 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“Sergey Demidenko committed a string of robberies across Brooklyn, Long Island and New Jersey and then brazenly gambled away the stolen cash in Atlantic City,” stated U.S. Attorney Donoghue. “Thanks to the efforts of the FBI and our state and local partners, Demidenko had no luck in getting away with these crimes, for which he has now pleaded guilty and will be held responsible.”
“After their month-long robbery spree, the defendants will now be brought to justice. Demidenko and his co-defendant strategically planned these robberies, just to gamble with their illegal proceeds in the end,” stated FBI Assistant Director-in-Charge Sweeney. “As shown by their guilty plea, they will now face the consequences of their self-driven actions.”
According to court filings and statements made during the guilty plea proceedings, between January 16, 2018 and January 26, 2018, Demidenko and his co-defendant James Boccanfusco robbed four banks, and attempted to rob two others in Brooklyn, Long Island and New Jersey. In each instance, Demidenko presented a note demanding money from the tellers. Demidenko’s co-defendant, Boccanfusco, waited outside the banks in a getaway car. After the robberies, the two drove to Atlantic City, New Jersey, where they used the robbery proceeds to gamble at various casinos.
The indictment charged Demidenko and Boccanfusco with the following robberies:
- Capital One Savings Bank branch in Brooklyn, New York, on January 16, 2018;
- Chase Bank branch in Manahawkin, New Jersey, on January 18, 2018;
- Wells Fargo Bank branch in Galloway Township, New Jersey, on January 24, 2018;
- Roslyn Savings Bank branch in Massapequa, New York, on January 25, 2018;
- Chase Bank branch in Brooklyn, New York, on January 25, 2018 (attempted), and
- Wells Fargo Bank branch in Manahawkin, New Jersey, on January 26, 2018 (attempted).
Demidenko’s co-defendant, Boccanfusco, previously pleaded guilty before Judge Chen on May 24, 2018 to four counts of bank robbery and two counts of attempted bank robbery.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney David Lizmi is in charge of the prosecution.
The Defendants:
SERGEY DEMIDENKO
Age: 39JAMES BOCCANFUSCO
Age: 41E.D.N.Y. Docket No. 18-CR-104
Long Island Man Pleads Guilty in Scheme to Loot Dead Woman’s EstateRead the Press Release
Earlier today, in federal court in Central Islip, John Derounian pleaded guilty to mail fraud in connection with a scheme to steal more than $1.2 million from the estate of the elderly victim (“Jane Doe”) by transferring Jane Doe’s assets into accounts controlled by the defendant. Derounian also pleaded guilty to possessing child pornography. The proceeding was held before United States Magistrate Judge Gary R. Brown.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Phillip Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division, announced the guilty plea.
As detailed in prior court proceedings and the superseding indictment, on November 12, 2015, Derounian claimed to have found the body of Jane Doe, Derounian’s tenant, at her apartment in his Sea Cliff home. Subsequent to Jane Doe’s death, Derounian placed a series of telephone calls and sent emails to Morgan Stanley in an effort to drain Jane Doe’s financial accounts of over $200,000.
In an effort to perpetuate the fraud, Derounian created a forged will naming himself as the executor and sole beneficiary of Jane Doe’s estate, aside from a comparatively small charitable donation. Derounian then used the authority of the forged will to cremate Jane Doe’s body and sell her real property for over $1 million, which he transferred into bank accounts he controlled. As a result of the investigation to date, funds totaling over $1.2 million have been seized from Derounian, and the indictment seeks forfeiture of those funds.
Derounian was arrested on June 26, 2016, and law enforcement officers recovered various electronic devices from his home that contained approximately 50 images of child pornography.
When sentenced, Derounian faces up to 20 years’ imprisonment for mail fraud and 20 years’ imprisonment for possession of child pornography.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Mark E. Misorek is in charge of the prosecution. Assistant United States Attorney Robert W. Schumacher of the Office’s Civil Division is handling matters relating to forfeiture.
The Defendant:
JOHN DEROUNIAN
Age: 53
Sea Cliff, New YorkE.D.N.Y. Docket No. 16-cr-412 (JMA)
Leader of Large-Scale Brooklyn Drug Trafficking Operation Sentenced to Nine Years’ ImprisonmentRead the Press Release
Earlier today, in federal court in Brooklyn, Tyriek Hankins was sentenced to nine years’ imprisonment by United States District Judge Ann M. Donnelly for his role in a cocaine and crack distribution conspiracy operating in and around the Cypress Hills Houses (“Cypress”), a large New York City Housing Authority complex located in East New York. Hankins pleaded guilty on April 20, 2017 to conspiring to distribute 500 grams or more of cocaine. He was the last of the 10 defendants in this case to be sentenced.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“By supplying large amounts of cocaine to distributors, Hankins and his co-conspirators contributed to the destructive impact that drug abuse has had on their own community in Brooklyn,” stated United States Attorney Donoghue. “This Office is committed to dismantling drug organizations that endanger our community and the residents of public housing.”
“Hankins and his co-conspirators had major influence over the deadly cycle of drugs, circulating cocaine and crack throughout the Cypress Hills Houses,” stated FBI Assistant Director-in-Charge Sweeney. “As illustrated by both the current and previous investigations, the FBI NY Metro Safe Streets Task Force will continue to work closely with our law enforcement partners to rid our communities of the gang and drug-related threats.”
“In close collaboration with our federal partners at the FBI and the Eastern District, the NYPD will remain relentless in our precise targeting of gangs and crews and the illegal behavior they engage in, in all of our neighborhoods,” stated NYPD Police Commissioner O’Neill. “It remains our duty to dismantle criminal enterprises like this one as we keep striving to make the safest large city in the nation even safer.”
As alleged in public documents and presented at hearings, Cypress had long been plagued by gang and drug-related violence. In response to the criminal activity, the FBI, the NYPD, and the U.S. Attorney’s Office conducted an investigation that revealed Hankins was at the center of a large-scale drug trafficking operation, which sold cocaine and other drugs in Cypress, upstate New York and in Maine. Hankins and co-conspirators Anthony Brown and Isiah Sadler were suppliers of powder cocaine to mid-level distributors. Other co-conspirators cooked and sold that cocaine as crack. Brown, who pleaded guilty to charges in three separate federal cases for his role in heroin- and cocaine-trafficking, and Sadler, who pleaded guilty to conspiracy to distribute and possess with intent to distribute cocaine, were previously sentenced to, respectively, 192 months and 168 months’ imprisonment.
Hankins’ co-defendants also pleaded guilty to conspiracy to distribute cocaine and were sentenced as follows: Anthony Keitt, to 36 months’ imprisonment; Michael Vailes, to 78 months’ imprisonment; Renee Belardo, to probation; Cherena Swain, to probation; Rafael Perez, to 41 months’ imprisonment; Ronald Jackson, to 70 months’ imprisonment; and Dimas Perez, to 60 months’ imprisonment.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. 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 prosecuted by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Margaret Gandy, Andrey Spektor and David Gopstein are in charge of the prosecution.
Defendant Sentenced Today:
TYRIEK HANKINS
Age: 31
Brooklyn, New YorkDefendants Previously Sentenced:
RENEE BELARDO
Age: 32
Brooklyn, New YorkANTHONY BROWN
Age: 34
Brooklyn, New YorkRONALD JACKSON
Age: 39
Utica, New York
ANTHONY KEITT
Age: 38
Brooklyn, New YorkDIMAS PEREZ
Age: 40
Brooklyn, New YorkRAFAEL PEREZ
Age: 52
Brooklyn, New YorkISIAH SADLER
Age: 33
Brooklyn, New YorkCHERENA SWAIN
Age: 31
Brooklyn, New YorkMICHAEL VAILES
Age: 31
Brooklyn, New YorkE.D.N.Y. Docket No. 16-CR-297 (AMD)
Illegal Alien Sentenced in Brooklyn Federal Court to 25 Years’ Imprisonment for MurderRead the Press Release
Earlier today, in federal court in Brooklyn, Kensil Dexter Fender, also known as “English,” was sentenced by United States District Judge Kiyo A. Matsumoto to 25 years’ imprisonment for the murder of Rowan Clarke. Fender previously pleaded guilty on December 14, 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, James P. O’Neill, Commissioner, New York City Police Department (NYPD) and George P. Beach II, Superintendent, New York State Police (NYSP) announced the sentence.
“More than a decade ago, Fender murdered a man while trying to commit a home invasion drug robbery. With today’s sentence, he learns that justice does not forget and does not rest,” stated United States Attorney Donoghue. “I commend our federal, state and local partners for working together to take this dangerous criminal off the street.” Mr. Donoghue expressed his thanks to the United States Postal Inspection Service for their assistance during the investigation.
“This drug investigation demonstrates the inevitable link between drug trafficking and violent crime,” stated DEA Special Agent-in-Charge Hunt. “In most of our cases, greed is the underlying force behind drug trafficking, and it is ironic that a piece of jewelry and DNA were key factors in bringing Rowan Clarke’s killer to justice.”
“Today’s sentencing has been a long time in coming and is an appropriate, meaningful penalty for this career criminal,” stated NYPD Commissioner O’Neill. “In partnership with the DEA and the Eastern District, the NYPD has a long memory and an even longer reach. I commend everyone involved in this case for seeing it through to its successful conclusion.”
“Good police work and invaluable partnerships at the federal, state and local level were key in bringing this murderer to justice,” stated NYSP Superintendent Beach. “State Police and our partners will continue to work together to keep our communities safe from such criminals and the dangerous drug activity and violence that they perpetuate.”
According to court filings and statements made in court, on April 2, 2007, Fender and a co-conspirator attempted to rob Clarke, who they believed had illegal drugs and drug proceeds at his apartment in northern Manhattan. As Fender and his co-conspirator attempted to push their way into the apartment, they struggled with Clarke and fatally shot him. Law enforcement agents were able to identify Fender based on DNA on a piece of jewelry left behind at the murder scene. In addition to his role in the murder, Fender was a drug distributor, buying and selling large amounts of marijuana.Upon completion of his sentence, Fender, an illegal alien from Jamaica, 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 Craig R. Heeren and Nathan D. Reilly are in charge of the prosecution.
Defendant:
KENSIL DEXTER FENDER
Age: 36
Woodmere, New YorkE.D.N.Y. Docket No. 16-124-(ENV)
Queens Resident Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
Earlier today, in federal court in Brooklyn, Parveg Ahmed pleaded guilty before United States District Judge Ann M. Donnelly to one count of attempting to provide material support or resources to the Islamic State of Iraq and al Sham (“ISIS”), a designated foreign terrorist organization. When he is sentenced, Ahmed faces a statutory maximum of 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, John C. Demers, Assistant Attorney General for National Security, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the guilty plea.
As detailed in publicly filed court documents, Ahmed is a United States citizen who traveled to Saudi Arabia in June 2017, purportedly to celebrate an Islamic religious holiday. Upon his arrival in Saudi Arabia, the defendant attempted to travel to Syria to join ISIS. The defendant was detained in a Middle Eastern country during his attempted travel to ISIS-controlled territory and was deported back to the United States on August 28, 2017, where he was arrested at John F. Kennedy International Airport.
Prior to his travel, the defendant had repeatedly expressed support on social media for ISIS and for individuals who provided support to the foreign terrorist organization’s mission of violent extremism. On July 17, 2017, JTTF agents obtained a search warrant for the defendant’s personal computer, and learned, among other things, that the defendant had viewed or listened to recordings of radical Islamic clerics Anwar al-Awlaki and Abdullah el-Faisal. Al-Awlaki was a United States-born cleric and prominent leader of the foreign terrorist organization al Qaeda in the Arabian Peninsula who was killed on or about September 30, 2011. El-Faisal, a Jamaican-born cleric, was found guilty in the United Kingdom of, among other things, solicitation to commit murder, for preaching to followers to kill individuals, including Americans, because he deemed them to be enemies of Islam. Additionally, agents learned that, on the same day the defendant left the United States for the Middle East, the defendant researched how to erase the data on his computer.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Craig R. Heeren and Margaret E. Lee are in charge of the prosecution, with assistance from Trial Attorney Joshua Champagne of the National Security Division’s Counterterrorism Section.
The Defendant:
PARVEG AHMED
Age: 22
Queens, New YorkE.D.N.Y. Docket No. 17-CR-378 (AMD)
Long Island Man and Queens Rabbi Arrested in $7 Million Extortion AttemptRead the Press Release
A complaint was unsealed earlier today in federal court in Brooklyn charging Igal Haimoff, a rabbi, and Mark Weissman with engaging in a scheme to extort $7 million from an individual in exchange for not providing purportedly incriminating information to law enforcement authorities. Haimoff and Weismann were arrested today and made their initial appearance this afternoon before United States Magistrate Judge Cheryl L. Pollak. The defendants were each released on a $250,000 bond.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the charges.
“As alleged, Haimoff and Weissman attempted to characterize the millions of dollars they expected to receive from their extortionate threat as a charitable donation,” stated United States Attorney Donoghue. “This Office, along with our law enforcement partners, will vigorously investigate and prosecute those who seek to hide their criminal conduct behind the cloak of a charity.”
“Charity of all kinds, especially related to children, is esteemed to be noble, honest, and true,” stated FBI Assistant Director-in-Charge Sweeney. “By allegedly attempting to extort and blackmail this victim in the name of charity, Haimoff and Weissman gravely undermined these values. By the arrests of these individuals, it is clear that regardless of cunning cover-ups, all injustices will ultimately be revealed.”
“IRS Criminal Investigation takes criminal actions that undermine confidence in the Internal Revenue Code seriously. Disguising illegally obtained funds as charitable donations is disgraceful,” stated IRS-CI Special Agent-in-Charge Robnett. “The allegations outlined in this criminal complaint are serious and we are obligated to use our financial expertise to unravel the scheme devised by Rabbi Haimoff and Mr. Weissman.”
According to the complaint, beginning in early 2017, Weissman advised the Victim that unless he paid $6 million, another individual (Person A) would provide incriminating information to law enforcement. Weissman enlisted Rabbi Haimoff to allow his charity to receive the extorted funds, as a way to disguise the purpose of the transaction. Haimoff and Weissman ultimately created and transmitted a fraudulent charitable donation letter to the individual they believed would be sending the extorted funds from overseas. The letter, on the charity’s letterhead from Haimoff, stated:
Thank you so much for your pledge of $6,000,000 towards our building campaign. Your generous donation will enable us to complete the construction of our Yeshiva building which is so vital for the continued growth of our Queens community. It is the generosity of donors such as yourself that provide us with the strength and ability to continue being there for the community. Thank you for being our partner in this most important endeavor. For your convenience, you can fire (sic) the funds to our bank account as follows [bank account details].
In fact, when transmitting the letter, Haimoff and Weissman were actually communicating with an FBI agent acting in an undercover capacity.
Haimoff later indicated that Person A was increasing the demand to $7 million. The victim indicated that he could provide these funds and Haimoff requested to be provided with a letter indicating why the “donation” was increasing to $7 million. On or about June 6, 2018, Haimoff and the undercover FBI agent, exchanged the following emails, which read in part:
Undercover FBI Agent: Dear Rabbi Haimoff, I have learned that there is additional structural work required for the construction of the Yeshiva building for the Charity. As such I would like to increase my pledge from $6,000,000 to $7,000,000 to assist you with the project…Kind regards…
Haimoff: …Thank you very much … that you doing with our yeshiva because of your good heart open hart (sic) for mitzvahs we will be able to expand our bldg to the maximum capacity now we don't have any more space for new kid’s (sic) to come after the construction will be done we will be able to double the amount of children!!...thank you so much. Rabbi haimoff.
The charges in the complaint are merely allegations, and the defendants are presumed to be innocent unless and until proven guilty. If convicted, Haimoff and Weissman each face up to 5 years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Nathan Reilly is in charge of the prosecution.
The Defendants:
IGAL HAIMOFF
Age: 67
Flushing, New YorkMARK WEISSMAN
Age: 54
Lawrence, New YorkE.D.N.Y. Docket No. 18-MJ-54
Long Island Man Pleads Guilty to Distributing Heroin That Caused Death of A College StudentRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Richard Jacobellis pleaded guilty to distributing heroin, further admitting that he distributed heroin that resulted in the death of 20-year-old Nicholas Weber in 2016 and serious bodily injury to Frances Theiling in 2015. As part of his guilty plea, Jacobellis agreed to a specific sentence of 192 months’ imprisonment, to be followed by five years of supervised release, subject to the Court’s approval. Today’s proceeding was held before United States District Judge Joanna Seybert.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“Jacobellis admitted to poisoning people on Long Island by distributing heroin for years, even after his drugs took one life and nearly took another,” stated United States Attorney Donoghue. “The defendant’s conviction in this case will not bring back Nicholas Weber, but it will send a message to others who may consider selling drugs that this Office will bring to justice those who contribute to the opioid epidemic and hold them accountable for the harm they cause.” Mr. Donoghue thanked the Drug Enforcement Administration and the Suffolk County Police Department (“SCPD”) for their partnership and outstanding work on the case.
According to court filings and the defendant’s statements during his guilty plea, Jacobellis was selling narcotics as early as 2012. In 2015, the defendant provided heroin that nearly killed then-18-year-old Frances Theiling, who was saved by SCPD officers. One year later, knowing that he had almost killed Theiling, Jacobellis sold the heroin that killed Nicholas Weber, a 20-year-old student. Although Jacobellis was aware that his heroin had killed Weber, the defendant continued to sell heroin until shortly before his arrest in February 2017.
Weber, a graduate of Kings Park High School, was a champion wrestler who attended Suffolk County Community College. Before his death in May 2016, Weber had been admitted to Stony Brook University, where he intended to study physics, for the fall 2016 semester.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Christopher C. Caffarone and Nicholas Moscow are in charge of the prosecution.
The Defendant:
RICHARD JACOBELLIS
Age: 24
Ridge, New YorkE.D.N.Y. Docket No. 17-CR-052 (S-1)(JS)
11 Assistant United States Attorneys and Two Federal Agent Partners Recognized by Deputy Attorney General at Department of Justice Director’s Awards CeremonyRead the Press Release
WASHINGTON – Eleven Assistant United States Attorneys from the Eastern District of New York and two federal agent partners were among those recognized by Deputy Attorney General Rod Rosenstein and Director James Crowell, IV, of the Executive Office for U.S. Attorneys (EOUSA), at the 34th Director’s Awards Ceremony today, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Rosenstein told the awardees, “Today’s honorees earned the esteem of their colleagues. But most importantly, they earned the gratitude of our fellow citizens — the people whose communities you made safer, whose lives you improved, and whose trust you rewarded. Today, we pause to honor and recognize a small portion of your work.
U.S. v. Deutsche Bank
Assistant United States Attorneys Matthew R. Belz, Edward K. Newman and Jeremy Turk, as well as former Assistant United States Attorney Ryan M. Wilson and Special Agent Jeffrey Fata, Federal Housing Finance Agency, Office of Inspector General, received the award for their exemplary performance in bringing about an historic $7.2 billion settlement against Deutsche Bank for its material misrepresentations in the sale of residential mortgage backed securities (RMBS).U.S. v. Paul Rivera, et al.
Criminal Division Deputy Chief Taryn A. Merkl, Business and Securities Fraud Section Deputy Chief Alixandra E. Smith and Assistant United States Attorney Michael Robotti received the award for their outstanding performance in the investigation and prosecution of United States v. Paul Rivera, et al. In Rivera, the two leaders of the “TF Mafia,” a violent Brooklyn gang, were convicted after an 11-week trial of racketeering conspiracy; racketeering involving predicate acts of sex trafficking, sex trafficking of children, murder, narcotics trafficking, money laundering and witness tampering; and substantive offenses, including murder-in-aid-of racketeering and firearms charges.
Disruption and Early Engagement Program
Criminal Division Chief Seth D. DuCharme, Assistant United States Attorney Melody Wells and Special Agent Joseph Rudnick of the Federal Bureau of Investigation’s New York Field Office, were recognized for their outstanding work in the development and implementation of the Disruption and Early Engagement Program (“DEEP”) counterterrorism and prevention initiative launched here in 2016 to meet growing challenges facing the New York Joint Terrorism Task Force and other law enforcement partners due largely to the rise of ISIS.
Hobby Lobby
Cultural Property Coordinator Karin Orenstein was recognized for her outstanding accomplishments in using civil forfeiture to combat illicit cultural property trafficking, as well as her efforts to return smuggled antiquities to their country of origin through repatriation. In United States v. 450 Ancient Cuneiform Tablets, she negotiated the forfeiture of thousands of Iraqi artifacts that were improperly imported by retailer Hobby Lobby Stores, Inc., including 3,450 cuneiform tablets and clay bullae, and an additional 144 cylinder seals that were forfeited as substitute assets.
Operation Fallen Hero
Senior Litigation Counsel Andrea Goldbarg and her team members at the Narcotics and Dangerous Drugs Section in the Department of Justice’s Criminal Division were recognized for successfully investigating and prosecuting members of Los Zetas cartel who brutally murdered Homeland Security Investigations (HSI) Special Agent Jaime Zapata and wounded HSI Special Agent Victor Avila in February 2011 during an attempted carjacking in Mexico.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao. For more information about the United States Attorney’s Office for the Eastern District of New York, visit www.justice.gov/usao/nye.
Montana Man Sentenced to 36 Months in Prison for Designing Fraudulent Mail Solicitations for Use in Transnational Elder Fraud SchemeRead the Press Release
On June 12, 2018, Thomas Ressler, 66, of Whitehall, Montana, was sentenced by the U.S. District Court in Helena to serve 36 months in prison for designing dozens of fraudulent solicitations used in an international mail-fraud scheme. On February 22, 2018, Ressler pleaded guilty to conspiracy to commit mail fraud.
“This defendant used his artistic abilities to advance a scheme that defrauded thousands of elderly victims,” said Acting Assistant Attorney General Chad Readler, head of the Justice Department’s Civil Division. “The Department of Justice will continue to hold accountable those who knowingly facilitate fraud against America’s seniors.”
Ressler created more than 200 fraudulent sweepstakes and prize-notification letters that falsely informed recipients they could claim cash or other valuable prizes by submitting a processing or delivery fee. The letters appeared to come from official-sounding but fictitious entities with names like Cash Payout Disbursement Advisors, Progressive Winners Guarantors, and Vehicle Transport Company. Many of the letters included the name and signature of a purported officer or representative of the fictitious entity.
Ressler’s co-conspirators, Ryan Young and Ercan Barka, used the solicitations Ressler created to perpetrate their large-scale scheme, sending Ressler’s designed solicitations to victims throughout the United States and numerous foreign countries. Although the solicitations appeared personally directed to each recipient, Barka and Young actually sent them to thousands of recipients identified on mailing lists bought from list brokers and corporate entities. No victim who submitted a fee in response to a solicitation ever received the large cash prize or other valuable items touted in the solicitations. At most, some victims received a report listing unrelated sweepstakes or a worthless piece of jewelry.
Ercan Barka and Ryan Young previously pleaded guilty in the Eastern District of New York to conspiracy to commit mail fraud. They are awaiting sentencing.
The United States Postal Inspection Service investigated this case. Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch is prosecuting it.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
MS-13 Gang Member Pleads Guilty to Attempted Murder in QueensRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Kevin Paniagua (“Stomper”), a member of the Centrales Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to attempted murder and firearms charges in connection with his participation in the October 23, 2016 attempted murder of a then-16-year-old in Jamaica, Queens. The proceeding was held before United States Magistrate Judge James Orenstein.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.
“Paniagua, a member of the MS-13 gang, admitted that he participated in the execution-style attempted murder of a sixteen-year-old youth, whom he left paralyzed,” stated United States Attorney Donoghue. “MS-13 spreads fear throughout the community by killing suspected rival gang members and others who cross their path. We will continue to work with our law enforcement partners to eradicate violent gangs and prevent our streets from turning into battlegrounds.” Mr. Donoghue thanked the Federal Bureau of Investigation and the New York City Police Department for their partnership and outstanding work on the case.
According to court filings and the defendant’s statements during his guilty plea, Paniagua and other MS-13 members and associates orchestrated and attempted to murder a then sixteen-year-old boy because they suspected he was a member of the rival 18th Street gang. In the early morning hours of October 23, 2016, Paniagua and his coconspirators sought out the victim and laid in wait to intercept him as he walked through the streets of Queens. When the victim walked past Paniagua and his coconspirators, they beat him. Paniagua then pulled out a gun and shot the victim in the face. He then attempted to shoot the victim a second time, as he lay motionless on the ground. The gun jammed, and Paniagua was not able to execute the victim, who was left paralyzed from his injuries.
Paniagua faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum sentence of life in prison when sentenced by United States District Judge Roslynn R. Mauskopf. Upon completion of his sentence, the defendant 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. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the district, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by our law enforcement partners including the FBI’s Safe Streets Task Force, comprising agents and officers of the FBI and NYPD.
The government’s case is being handled by the Office’s Organized Crime and Gangs section. Assistant United States Attorneys Nadia E. Moore and Keith D. Edelman are in charge of the prosecution.
The Defendant:
KEVIN PANIAGUA (also known as “Stomper”)
Age: 19
Queens, New YorkE.D.N.Y. Docket No. 17-CR-307 (RRM)
Crips Gang Member Sentenced to Life in Prison for Murder in-Aid-of Racketeering and Other CrimesRead the Press Release
Earlier today, in federal court in Central Islip, Eric Smith, also known as “Esama” and “Esco,” a member of the Long Island-based Rollin’ 60s Crips street gang, was sentenced by United States District Judge Joanna Seybert to four consecutive terms of life in prison plus 30 years. Smith was convicted by a federal jury on June 15, 2017, following five weeks of trial, on 11 counts including murder in-aid-of racketeering, racketeering, Hobbs Act robbery and conspiracy to commit murder. These charges arose out of Smith’s participation in the Rollin’ 60s set of the Crips that for more than a decade engaged in violent criminal activity in Roosevelt, New York.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Madeline Singas, Nassau County District Attorney; and Patrick Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.
“Eric Smith took a life for his gang, and now he will be serving life in prison,” stated United States Attorney Donoghue. “The violence committed by this defendant harmed not only his murder and shooting victims, but also the larger community, which is now significantly safer as a result of the efforts by this Office and our law enforcement partners to dismantle the Rollin’ 60 Crips. We will continue to work tirelessly to prosecute violent gangs that plague Long Island communities like Roosevelt with violence, drugs and fear.” Mr. Donoghue extended his grateful appreciation to the law enforcement agencies involved in the investigation, in particular, the FBI’s Long Island Gang Task Force and the Gang Investigations Squad of the NCPD.
“Eric Smith showed no regard for the life of his victim, and he’ll now pay for his actions by spending the rest of his life in prison,” stated FBI Assistant Director-in-Charge Sweeney. “Members of the community in Roosevelt, and neighboring communities, should be able to live in a safe environment, and not fear the endless violence this gang inflicted on them. The FBI Long Island Gang Task Force has been dogged and diligent in successfully eradicating these criminals from communities that deserve better.”
“The brutal Rollin’ 60s Crips terrorized the Roosevelt community, and our neighborhoods are safer with this murderer behind bars for life,” stated Nassau County District Attorney Singas. “Law enforcement at the federal, state, and local levels is united in our commitment to rid Long Island of the violent gangs that have destroyed so many lives, and we will continue our unprecedented collaboration and partnership to keep our communities safe from these predators.”
“The initial arrest and subsequent sentencing of defendant Smith is a clear sign that this type of gang activity will never be tolerated,” stated NCPD Commissioner Ryder. “The Roosevelt community is a safer place with this arrest and we will continue our efforts to keep all communities safe. I would also like to thank all of the associated agencies and their investigators on a job well done.”
At trial, the government proved that Smith was a high-ranking member of the Rollin’ 60s set of the Crips, a racketeering enterprise based in Roosevelt that engaged in murder, attempted murder, narcotics trafficking and firearms trafficking to maintain control of their turf for nearly a decade. Between 2003 and 2013, the gang followed an “on-sight” rule, created by the gang’s leader Raphael Osborne, which required members to attack members of the rival Bloods street gang in the Roosevelt community. In observance of this rule, Smith participated in over a dozen shootings. The evidence at trial also established Smith’s participation in robberies with fellow gang members to acquire cash and drugs to be resold on the streets of Roosevelt. Smith was convicted for his role in two robberies that he committed in the fall of 2010 with fellow gang members.
Smith also was convicted of the December 15, 2010 murder of 19-year-old James McClenic, a member of the rival Bloods street gang. After hours of searching for McClenic, Smith found him sitting in a parked car at a gas station in Hempstead. Smith, wearing a black ski mask and armed with a .40 caliber semi-automatic pistol, crept up to McClenic and opened fire at close range killing him. In the wake of McClenic’s murder, the Bloods retaliated against Smith and other members of the Crips street gang. Smith and the leader of the Rollin’ 60s dispatched younger members of the Crips to strike back, igniting a gang war on the streets of Roosevelt.
The government’s investigation has led to the arrest and conviction of more than 20 members and associates of the Rollin’ 60s Crips. During the 10 months prior to the defendants’ arrests, Roosevelt averaged more than one shooting incident every two weeks. Following the arrests of these individuals, Roosevelt, New York went 109 days without a shooting incident. To date, 13 defendants, including Smith, have been sentenced:
- on June 21, 2016, Jahmani Hamilton was sentenced to 10 years’ imprisonment
- on August 4, 2016, Kurtis Philip was sentenced to 10 years’ imprisonment
- on August 5, 2016, Courtney Smith was sentenced to 10 years’ imprisonment
- on September 23, 2016, Merlyn Benitez was sentenced to 10 years’ imprisonment
- on October 13, 2016, Derick Hernandez was sentenced to a term of 20 years’ imprisonment that will run consecutively to a four-year state sentence he is presently serving
- on October 19, 2016, Kwame Lake was sentenced to a term of five years’ imprisonment that will run consecutively to an eight-year state sentence he is presently serving
- on November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment
- on January 13, 2017, Branden Short was sentenced to 30 months’ imprisonment
- on January 13, 2017, the gang’s leader Raphael Osborne was convicted after trial and sentenced to three life sentences plus 135 years
- on April 21, 2017, Rommel Lobban was sentenced to 15 years’ imprisonment
- on April 25, 2017, Daquanne Nunn was sentenced to 13 years’ imprisonment
- on January 12, 2018, Rudy Montour was sentenced to 15 years’ imprisonment that will run consecutively to a 13-year state sentence he is presently serving.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone and Michael Maffei are in charge of the prosecution.The Defendant
ERIC SMITH (also known as “Esama” and “Esco”)
Age: 29
Roosevelt, Long IslandE.D.N.Y. Docket No. 14-CR-264 (JS), 15-CR428 (JS)
- on June 21, 2016, Jahmani Hamilton was sentenced to 10 years’ imprisonment
More Than 2,300 Suspected Online Child Sex Offenders Arrested During Operation “Broken Heart” Including One in the Eastern District of North CarolinaRead the Press Release
RALEIGH — The Department of Justice today announced the arrest of more than 2,300 suspected online child sex offenders during a three-month, nationwide, operation conducted by Internet Crimes Against Children (ICAC) task forces. The task forces identified 195 offenders who either produced child pornography or committed child sexual abuse, and 383 children who suffered recent, ongoing, or historical sexual abuse or production of child pornography.
The 61 ICAC task forces, located in all 50 states and comprised of more than 4,500 federal, state, local and tribal law enforcement agencies, led the coordinated operation known as “Broken Heart” during the months of March, April, and May 2018. During the course of the operation, the task forces investigated more than 25,200 complaints of technology-facilitated crimes against children and delivered more than 3,700 presentations on Internet safety to over 390,000 youth and adults.
"No child should ever have to endure sexual abuse," Attorney General Jeff Sessions said. "And yet, in recent years, certain forms of modern technology have facilitated the spread of child pornography and created greater incentives for its production. We at the Department of Justice are determined to strike back against these repugnant crimes. It is shocking and very sad that in this one operation, we have arrested more than 2,300 alleged child predators and investigated some 25,200 sexual abuse complaints. Any would-be criminal should be warned: this Department will remain relentless in hunting down those who victimize our children."
The operation targeted suspects who: (1) produce, distribute, receive and possess child pornography; (2) engage in online enticement of children for sexual purposes; (3) engage in the sex trafficking of children; and (4) travel across state lines or to foreign countries and sexually abuse children.
As part of Operation “Broken Heart”, United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that on May 16, 2018, a federal grand jury sitting in Raleigh, indicted ANDRE THORPE on seven counts involving child exploitation, including four counts of production of child pornography, two counts of transporting a minor interstate with intent to engage in criminal sexual activity, and one count of possession of child pornography. The alleged conduct involves years-long sexual abuse of a minor victim, and investigators have identified other alleged minor victims of THORPE as well. If convicted of all counts, THORPE faces not less than 15 years and up to life in prison. This case was investigated by the Office of Homeland Security Investigation in Raleigh. All defendants are innocent until proven guilty beyond a reasonable doubt.
The ICAC Program is funded through the Department’s Office of Juvenile Justice and Delinquency Prevention (OJJDP). In 1998, OJJDP launched the ICAC Task Force Program to help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communication systems or computer technology to exploit children. To date, ICAC Task Forces have reviewed more than 775,000 complaints of child exploitation, which resulted in the arrest of more than 83,000 individuals. In addition, since the ICAC program's inception, more than 629,400 law enforcement officers, prosecutors and other professionals have been trained on techniques to investigate and prosecute ICAC-related cases.
For more information, visit the ICAC Task Force webpage at: https://www.icactaskforce.org/.
Former Brooklyn Assemblywoman Pleads Guilty to Multiple Fraud Schemes and Witness TamperingRead the Press Release
Earlier today, in federal court in Brooklyn, former New York State Assemblywoman Pamela Harris pleaded guilty to two counts of wire fraud, one count of making false statements to the Federal Emergency Management Administration (FEMA), and one count of witness tampering. The proceeding was held before United States Magistrate Judge Robert M. Levy. Harris was arrested on January 9, 2018 and resigned from her position in the New York State Assembly on April 2, 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 Mark G. Peters, Commissioner, New York City Department of Investigation (DOI), announced the guilty plea.
“Elected by the people of her district to serve with honesty and integrity, Pamela Harris defrauded government programs out of tens of thousands of dollars, using the money for her personal benefit,” stated United States Attorney Donoghue. “Harris stole grant money allocated for underprivileged children and young adults and lied to obtain funds set aside for those displaced by Hurricane Sandy, committing these crimes both before and after she was elected to serve in the New York State Assembly. She then compounded her criminal conduct by pressuring witnesses to lie to the FBI. The defendant’s guilty plea today clearly demonstrates that elected officials are not above the law and will be held responsible for their crimes.” U.S. Attorney Donoghue thanked the FBI and DOI for their partnership and work on the case.
“Amid the widespread destruction caused by Hurricane Sandy, former New York State Assemblywoman Pamela Harris sought to devise a destructive scheme of her own,” stated FBI Assistant Director-in-Charge Sweeney. “As FEMA dedicated themselves to aid those affected by the storm, Harris saw this as the perfect opportunity to defraud this agency of tens of thousands of dollars. By defrauding an agency solely dedicated to the assistance of those in need, Harris showed no remorse for the many victims of this storm. Instead, she falsely victimized herself for mere personal gain. In an attempt to obstruct justice, Harris caused greater destruction by coercing individuals to lie to federal agents on her behalf. Despite her unjust acts against the community, Harris’s plea shows that justice will prevail in the end.”
“This former state assemblywoman, now convicted criminal, defrauded city and federal programs out of tens of thousands of dollars, including pocketing funds designated for victims of Hurricane Sandy’s wrath, many of whom were from her district and hit hard during the storm,” stated DOI Commissioner Peters. “She continued her corrupt schemes even as she sat in the state capitol, stealing public funds while she feigned to be in the service of her constituents. Elected officials who deceive the public, break the law and steal taxpayer funds will be brought to justice. DOI thanks the United States Attorney’s Office for the Eastern District of New York and the FBI for their partnership in working together to expose and prosecute these crimes.”
Between 2012 and 2014, Harris defrauded FEMA out of nearly $25,000 by falsely claiming that she had been forced out of her storm-damaged residence and into a temporary residence in Staten Island after Hurricane Sandy. To support her claim for Hurricane Sandy funds, she submitted to FEMA fake lease agreements that she had purportedly entered into with the landlord of the Staten Island residence, as well as bogus rent payment receipts. In reality, Harris continued to live at her Coney Island residence and pocketed the FEMA payments.
Between August 2014 and July 2015, Harris, who was at the time the Executive Director of a not-for-profit organization located in Brooklyn, defrauded the New York City Council of $22,800 in discretionary funding by falsely claiming that the not-for-profit would use the funds to rent a studio space. As part of her scheme, Harris submitted to the New York City Department of Youth and Community Development, the government entity responsible for administering and disbursing the City Council’s discretionary funds, a forged lease agreement. After the not-for-profit received the funding, Harris diverted the funds to her personal checking account and used the money to pay for personal expenses.
The following year, between approximately July 2015 and January 2017, when Harris was a sitting member of the New York State Assembly, she defrauded the NYC Council by claiming that funds for the not-for-profit would be spent on rental space. After the funds were disbursed to the not-for-profit, Harris diverted an additional $22,800 for her personal use.
During her guilty plea, Harris admitted that she pressured witnesses to lie to FBI agents conducting the Grand Jury investigation into her fraudulent schemes.
When sentenced, Harris faces a maximum sentence of 30 years’ imprisonment on the charge relating to making false statements to FEMA and a maximum sentence of 20 years’ imprisonment on each of the wire fraud and witness tampering counts.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Erik Paulsen and Robert Polemeni are in charge of the prosecution.
The Defendant:
PAMELA HARRIS
Age: 57
Brooklyn New YorkE.D.N.Y. Docket No. 18-CR-11 (JBW)
Seven Members of Brooklyn Crew Led by Crips Gang Member Indicted for Drug TraffickingRead the Press Release
A seventh defendant, Tysheim Warren, was arrested today in connection with a nine-count indictment filed in federal court in Brooklyn, also charging Javier Blackett, John Paul Balcazar, David Maldonado, Hassan McClean, Kevin Raphael and Andrew Rose with crimes stemming from their participation in a drug-trafficking organization that distributed more than 400 grams of crack cocaine in the Prospect Lefferts Gardens/Flatbush neighborhoods of Brooklyn. The indictment was returned by a grand jury on May 10, 2018. Blackett, Maldonado, Raphael and Rose were arrested on May 15, 2018. Balcazar was arrested on May 18, 2018, and McClean was arrested on May 22, 2018. They were arraigned and ordered detained pending trial. Warren was arraigned this afternoon before United States Magistrate Judge Steven M. Gold and ordered 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, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
According to the indictment and court filings, the defendants’ drug-selling operations centered around several residential buildings approximately three blocks southeast of the Prospect Park ice skating rink. Since March 2017, members of law enforcement made numerous controlled purchases totaling more than 400 grams of crack cocaine from the defendants’ organization and intercepted, pursuant to court order, communications discussing their distribution of significantly more narcotics. Blackett, a member of the Eight Trey set of the Crips street gang, was the leader of the organization; Raphael was one of his principal suppliers; and Balcazar, Maldonado, McClean, Rose and Warren were workers.
“The residents of Brooklyn are entitled to streets that are free of the dangerous drugs the defendants were allegedly selling,” stated United States Attorney Donoghue. “This Office, together with our law enforcement partners, will continue to work tirelessly to put drug dealers out of business and hold them accountable for their crimes.”
“These dealers are alleged to have operated very close to a place where families go, where children play and where people find sanctuary in the city,” stated FBI Assistant Director-in-Charge Sweeney. “When doing business with gang members and drug dealers, violence inevitably follows and innocent people could have been caught up in it. The FBI Metro Safe Streets Task Force works every day to protect the community from these dangerous gang members and preventing them from proliferating their deadly drugs.”
“The NYPD’s efforts to eradicate drug trafficking are greatly strengthened by our close partnerships with the FBI and the U.S. Attorney for the Eastern District,” stated NYPD Commissioner O’Neill. “I commend everyone involved in this case, particularly the investigators who put themselves directly in harm’s way. Those who illegally deal in narcotics should be prepared for the full weight of our nation’s best law enforcement professionals to bear down upon them.”
If convicted of the conspiracy charge, the defendants face a mandatory minimum sentence of 10 years’ imprisonment and up to life in prison. The charges in the indictment are merely 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 prosecuted by Assistant United States Attorneys Mathew S. Miller and Sarah Evans.
The Defendants:
JAVIER BLACKETT (also known as “Gutta” and Cito”)
Age: 35
Brooklyn, New YorkJOHN PAUL BALCAZAR (also known as “Johnny”)
Age: 21
Brooklyn, New YorkDAVID MALDONADO
Age: 30
Brooklyn, New YorkHASSAN McCLEAN (also known as “Freak”)
Age: 19
Brooklyn, New YorkKEVIN RAPHAEL (also known as “Millz” and “M”)
Age: 39
Brooklyn, New YorkANDREW ROSE (also known as “Nice”)
Age: 29
Brooklyn, New YorkTYSHEIM WARREN (also known as “Ty”)
Age: 18
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-245 (PKC)
Two Dozen Ms-13 Gang Members Indicted on Federal Racketeering ChargesRead the Press Release
A 73-count fifth superseding indictment was unsealed today in the United States District Court for the Eastern District of New York in Central Islip, New York, charging two dozen members of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, with racketeering and related offenses. This indictment adds eight additional defendants, seven of whom are in custody, and offenses in connection with the April 29, 2016 murder of Oscar Acosta in Brentwood, the July 18, 2016 attempted murder of two suspected rival gang members in Brentwood, the August 10, 2016 attempted murder of rival gang members in Brentwood, the September 12, 2016 arson of two vehicles in Brentwood, the October 10, 2016 murder of Javier Castillo in Freeport, the October 13, 2016 murder of Dewann Stacks in Brentwood, the December 18, 2016 assault outside Super Taco restaurant in Brentwood, and a conspiracy to distribute marijuana. In total, 15 murders committed by MS-13 members have been charged in the fifth superseding indictment and underlying indictments in this case.
Seven of the newly added defendants are scheduled to be arraigned this afternoon before United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip, and the previously charged defendants will be arraigned at their next scheduled court appearances.
Attorney General Jeff Sessions, 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 Department of Justice will not allow MS-13 to terrorize our citizens or control our communities,” said Attorney General Jeff Sessions. “With more than 10,000 members across 40 states, MS-13 is one of the most dangerous groups in America. The day that I was sworn in as Attorney General, President Trump ordered me to focus on dismantling transnational criminal organizations like MS-13, which is based in El Salvador. We have followed that order, working with our allies to arrest or charge thousands of MS-13 members across the Western Hemisphere since then. When I visited Long Island last year, people told me about how the MS-13 threat was inflicting violence and fear on the community. And so I want to thank our Assistant U.S. Attorneys John Durham, Paul Scotti, Michael Keilty, and Raymond Tierney as well as our state and local law enforcement partners in New York for all of their hard work on this case and so many other MS-13 cases. Today’s indictment is our next step toward taking this despicable gang off the streets for good.”
“The charges in this indictment further demonstrate the utter brutality of the MS-13 and the havoc the gang inflicts on our communities,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will continue to combat the MS-13’s violence with relentless perseverance until the gang is dismantled and its members are brought to justice.” Mr. Donoghue expressed his sincere thanks to all the members of the FBI’s Long Island Gang Task Force, as well as the Drug Enforcement Administration for their outstanding work on the investigation.
“The charges and arrests detailed here show our relentless efforts to dismantle and eradicate MS-13 in communities on Long Island,” stated FBI Assistant Director-in-Charge Sweeney. “The unbelievable partnerships and relationships we’ve built with the law enforcement agencies on our Long Island Gang Task Force have allowed us to make a huge dent in the havoc created in recent years by MS-13. Our work isn’t over, and we won’t stop our pursuit until the community no longer fears the violence and deadly attacks by this gang.”
“MS-13 gang activity and the accompanying senseless acts of violence will not be tolerated in Suffolk County, and these developments ensure that these dangerous individuals will no longer be a threat to our communities,” stated SCPD Commissioner Hart. ”The Suffolk County Police Department will continue its partnership with the FBI’s Long Island Gang Task Force as part of its multi-pronged approach and unrelenting pursuit to dismantle MS-13.”
“This Indictment is another clear example of how the members of MS-13 have disrupted the communities that they live in,” stated NCPD Commissioner Ryder. “So many lives have been negatively affected and the loss of life at their hands will never be tolerated. I would like to congratulate all of the investigating agencies and their members for their dedication and professionalism. Every member of MS-13 that is involved in criminality and is eventually incarcerated, is another step to creating a safer environment for our residents and their children.”
As set forth in court filings, including a detention memorandum filed earlier today, a majority of the new charges pertain to a series of crimes committed by members of the Sailors Locos Salvatruchas Westside (“Sailors”) clique during 2016, including the murders of Oscar Acosta, Javier Castillo and Dewann Stacks.
Kevin Torres, the leader of the Sailors clique in New York, and Alexi Saenz, the leader of the Brentwood chapter of the Sailors clique, authorized Acosta’s murder because he was suspected of being a rival 18th Street gang member. On April 29, 2016, Nelson Argueta-Quintanilla and other MS-13 members encountered Acosta, beat him with tree limbs, tied him up, and called co-defendants Alexi Saenz, Jairo Saenz, Jonathan Hernandez and others, who met them. The gang members loaded Acosta into the trunk of a car, drove to a more isolated wooded area in Brentwood, stabbed and slashed Acosta to death with a machete and buried his body, which was not recovered until September 2016.
On October 10, 2016, Alexi Saenz, Jairo Saenz, Wilber Adalberto Fernandez-Vasquez, Frank Alexander Ventura-Ramirez, and other MS-13 members murdered Javier Castillo, who they also suspected of being a rival 18th Street gang member. The defendants lured Castillo, who lived in Central Islip, to Cow Meadow Park in Freeport, where 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.
On October 13, 2016, only three days after the Castillo murder, Alexi Saenz, Jairo Saenz, Enrique Portillo, Ever Flores and other MS-13 members murdered Dewann Stacks, who they suspected was a rival gang member. While Alexi Saenz and other members of the gang conducted surveillance from one car, Portillo, Flores and another MS-13 gang member attacked and killed Stacks with a baseball bat and machetes before returning to the getaway vehicle driven by Jairo Saenz.
Various members of the Sailors clique are newly charged with four non-fatal violent crimes that occurred during 2016. On July 18, 2016, Alexi Saenz, Jairo Saenz and Portillo attempted to murder two rival gang members in Brentwood. One of those men was shot, and the other man was both shot and repeatedly slashed with a machete, leaving him permanently disfigured. On August 10, 2016, Alexi Saenz, Jairo Saenz, Argueta-Quintanilla, Hernandez and Marlon Serrano attempted to murder rival gang members in Brentwood, where numerous shots were fired, but no one was wounded. On September 12, 2016, Alexi Saenz, Jairo Saenz, Portillo and Serrano set fire to two vehicles at the residence of an individual who had a dispute with the MS-13. On December 18, 2016, Jose Suarez and Flores assaulted two men who were disrespectful toward the MS-13 outside a Super Taco restaurant in Brentwood.
Finally, the fifth superseding indictment adds marijuana and cocaine conspiracy charges against Suarez, Argueta-Quintanilla, Fernandez-Vasquez, Flores, Hernandez, Serrano, Torres and Ventura-Ramirez, and separate marijuana conspiracy charges against Jerlin Villalta, a member of the Freeport Locos Salvatruchas clique of the MS-13.
In addition to the three new murders, 12 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 June 3, 2016 murder of Jose Pena, the September 13, 2016 murders of Kayla Cuevas and Nisa Mickens, 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 fifth superseding indictment are merely 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, 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 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, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement – Homeland Security Investigations, SCPD, NCPD, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department and the New York State Police.
The government’s case is being prosecuted 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 Defendants:
NELSON ARGUETA-QUINTANILLA (“Mendigo”)
Age: 21
Brentwood, New YorkWILBER ADALBERTO FERNANDEZ-VASQUEZ (“Asiatico”)
Age: 22
Roosevelt, New YorkEVER FLORES (“Negro” and “Grone”)
Age: 26
Brentwood, New YorkJONATHAN HERNANDEZ (“Travieso” and “Kraken”)
Age: 20
Brentwood, New YorkMARLON SERRANO (“Flaco” and “Little Extrano”)
Age: 20
Brentwood, New YorkKEVIN TORRES (“Quieto” and “Inquieto”)
Age: 22
Roosevelt, New YorkFRANK ALEXANDER VENTURA-RAMIREZ (“Olvidado”)
Age: 19
Freeport, New YorkPreviously Indicted Defendants Facing Additional Charges:
ENRIQUE PORTILLO (“Oso” and “Turkey”)
Age: 20
Central Islip, New YorkALEXI SAENZ (“Blasty” and “Plaky”)
Age: 23
Brentwood, New YorkJAIRO SAENZ (“Funny”)
Age: 21
Brentwood, New YorkJERLIN VILLALTA
Age: 21
Brentwood, New YorkJOSE SUAREZ (“Chompira”)
Age: 24
Central Islip, New YorkE.D.N.Y. Docket No. 16-403 (S-5)(JFB)