Eastern District of New York
Press releases recorded for this federal judicial district.
Queens Drug Trafficker Sentenced to 84 Months’ Imprisonment for Distributing “Batman” Branded HeroinRead the Press Release
Earlier today, in federal court in Brooklyn, Lamont Moran was sentenced by United States District Judge I. Leo Glasser to 84 months’ imprisonment to be followed by four years of supervised release, after his conviction for conspiring to distribute more than 100 grams of heroin. The defendant ran a heroin distribution operation near the Baisley Park Houses in South Jamaica, Queens from 2015 until his arrest in September 2016. Moran pled guilty to the charge in April 2017.
Bridget M. Rohde, Acting 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 Division (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“The defendant Lamont Moran promoted and profited from the opioid epidemic in our District,” stated Acting United States Attorney Rohde. “Today he was held accountable. Together with our law enforcement partners, this Office will continue to investigate and prosecute those like the defendant who seek to line their own pockets by selling these dangerous drugs and harming our community.”
According to court filings, the defendant was affiliated with the violent street gang “Get it in Stacks” (also known as “GI$”), a subset of the nationwide Bloods gang operating near the Baisley Park Houses in South Jamaica, Queens. The defendant supervised street-level dealers near the Baisley Park Houses—including at least one GI$ member and several elderly heroin addicts—who distributed heroin and fentanyl labeled with brand names such as “Batman,” “Call of Duty” and “Sleepys.” The defendant also sold heroin and fentanyl directly to users. From March 2016 to August 2016, for example, the defendant made more than 15 drug sales to a confidential FBI source. On many of these occasions, the defendant sold the source fentanyl instead of heroin—without ever revealing this fact to the source.
The defendant acknowledged in post-arrest statements that he personally did not use heroin: “I don’t use this [expletive]. I don’t touch this [expletive]. . . . I don’t view it as drugs, I view it as money.” A search of the defendant’s phone revealed more evidence of gang affiliation, plus photographs of the defendant with wads of cash and multiple firearms.
Four other defendants have been charged with heroin distribution crimes in this case, and each has pleaded guilty. On August 8, 2017, co-defendant Michael Singletary was sentenced to a year and a day of imprisonment for a single incident of heroin distribution. On October 3, 2017, co-defendant David Young—one of the defendant’s street-level dealers—was sentenced to 36 months’ imprisonment. On October 27, 2017, co-defendant William Parker—a career offender and another one of the defendant’s street-level dealers—was sentenced to 96 months’ imprisonment. Co-defendant Dennis Pristell—a street-level dealer who worked for the defendant—is awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Matthew Jacobs is in charge of the prosecution.
Defendant Sentenced Today:
LAMONT MORAN
Age: 30
Residence: Queens, New YorkDefendants Previously Sentenced:
WILLIAM PARKER
Age: 53
Residence: Queens, New YorkMICHAEL SINGLETARY
Age: 43
Residence: Baldwin Harbor, New YorkDAVID YOUNG
Age: 66
Residence: Queens, New YorkDefendant Awaiting Sentencing:
DENNIS PRISTELL
Age: 57
Residence: Queens, New York
E.D.N.Y. Docket No. 16-CR-506 (S-1) (ILG)
Staten Island Lawyer and Three Others Charged in Fraud, Kidnapping and Extortion SchemeRead the Press Release
An 11-count indictment was unsealed today in federal court in Brooklyn charging Richard Luthmann, George Padula III, and Michael Beck with kidnapping and kidnapping conspiracy, extortionate collection of credit, conspiracy to commit extortionate collection of credit and brandishing a firearm during the commission of those crimes. Luthmann and Padula were also charged with conspiracy to commit wire fraud, money laundering, money laundering conspiracy and aggravated identity theft, and Luthmann was additionally charged with access device fraud and a second count of aggravated identity theft. A fourth defendant, Stephen Cotogno, was charged by complaint with participating in the same wire fraud conspiracy as Luthmann, Padula and Beck. Luthmann, Padula, Beck and Cotogno were arrested earlier today and will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan Carson, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office (Commerce), announced the charges.
“As alleged, Richard Luthmann crossed the line from attorney to violent criminal and fraudster,” stated Acting United States Attorney Rohde. “Luthmann and his coconspirators cheated scrap metal customers in order to make easy money for themselves, took advantage of a disabled man to conceal their fraud, and used gunpoint extortion to collect a purported debt. Whether such crimes are committed on the street or in a law office, this Office and our law enforcement partners will investigate and prosecute them to the fullest extent of the law.” Ms. Rohde expressed her grateful appreciation to the FBI and Commerce, who are responsible for leading the investigation, and thanked the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department and the Social Security Administration for their assistance.
“After allegedly devising a scheme to cheat potential business partners, an attorney and his cohorts threatened using a purported organized crime syndicate to manage those who disagreed with the fraud,” stated FBI Assistant Director-in-Charge Sweeney. “They are even accused of forcing a blind man to take part in their criminal attempt at profiting in business without working for it. The FBI Organized Crime Task Force will continue going after those who think the law doesn't apply to them.”
The Fraud Scheme
According to court documents, beginning in the summer of 2015, Luthmann, who is a practicing lawyer on Staten Island, New York, along with Padula and another co-conspirator
(“Co-Conspirator 1”) agreed to defraud companies seeking to purchase scrap metal. In part, the scheme involved contracting with victims to ship them containers of valuable scrap metal, but then filling the shipping containers primarily with cheap filler material. Luthmann had encouraged Co-Conspirator 1 to involve Padula in the fraud because Padula claimed that his father was a member of a New York-based organized crime family and that his uncle was a high-ranking member of that crime family. Luthmann said Padula could use his organized crime connections to settle any disputes that arose with disgruntled victims. Cotogno participated in the scheme by renting his warehouse to the co-conspirators at an above-market price, making suggestions for filler material and helping procure filler material.To facilitate the fraud, Luthmann registered fake companies, including one called Omni Metal Corporation (“Omni”), with the New York Department of State, and recruited a client of his law practice (the “client”), who was blind and living on public assistance, to be the nominal president of Omni. When the client expressed concern that he could face criminal exposure or lose his public assistance if the government learned about the arrangement, Luthmann assured the client that the government would not find out.
Luthmann, Padula and Co-Conspirator 1 agreed to have the client open bank accounts to facilitate the fraud, and between October 2015 and December 2015, victims wired over half-a-million dollars into these accounts. That money was then transferred into accounts controlled by Luthmann or Co-Conspirator 1, including Luthmann’s attorney trust account, or was withdrawn in cash and split among Luthmann, Padula and Co-Conspirator 1.
The Kidnapping and Extortion
On December 5, 2016, Luthmann asked Co-Conspirator 1 to meet him at his law office to sign some paperwork and said that they would then go out together for the evening. When Co-Conspirator 1 arrived at the office, Luthmann was not there. Co-Conspirator 1 contacted Luthmann, who told him to wait inside a conference room in the office. While
Co-Conspirator 1 was waiting, Padula and Beck entered the room and blocked him from exiting. Beck pulled out a gun, aimed it at Co-Conspirator 1’s head and knee and said he (Beck) was owed $10,000 because he had purchased a $7,000 debt that Co-Conspirator 1 owed Padula, and had added a $3,000 “vig,” or interest payment. Co-Conspirator 1 was eventually allowed to leave, but Padula told him not to contact the police.Padula and Luthmann had previously told Co-Conspirator 1 that Beck was an enforcer for the organized crime family to which Padula’s family members belonged, and that he was “muscle” for Padula. Moreover, in August 2016, Luthmann and Padula told
Co-Conspirator 1 that they had arranged for Beck to conduct a “sit down” with members of Chinese organized crime to resolve a conflict that arose out of the scrap metal fraud.The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted of the charges, defendants Luthmann, Padula, and Beck each face up to life imprisonment. Cotogno faces up to 20 years’ imprisonment if convicted of wire fraud conspiracy.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Moira Kim Penza is in charge of the prosecution.
The Defendant:
RICHARD LUTHMANN
Age: 38
Residence: Staten Island, New YorkGEORGE PADULA III
Age: 29
Residence: Staten Island, New YorkMICHAEL BECK
Age: 59
Residence: Staten Island, New YorkSTEPHEN COTOGNO
Age: 48
Residence: Holmdel, New JerseyE.D.N.Y. Docket No. 17-CR-664 (JBW)
Queens Man Convicted of Enticing 16-Year-Old Girl to Travel from Abroad to Engage in Sexual ActivityRead the Press Release
A federal jury in Brooklyn returned a guilty verdict today against Sean Price on four counts of a superseding indictment charging him with interstate and foreign enticement to engage in sexual activity, interstate and foreign transportation of a minor to engage in sexual activity, a Mann Act violation, and attempted sexual exploitation of a child. The verdict came after a four-day trial before United States District Judge Nicholas G. Garaufis.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations New York (HSI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the verdict.
“The jury has held defendant Sean Price accountable for his predatory conduct, which included luring a teenage girl from her home in Australia across the world to the United States so that he could engage in an illicit sexual relationship with her,” stated Acting United States Attorney Rohde. “Today’s verdict should send a strong message that this Office, together with our law enforcement partners, will work tirelessly to identify those who would sexually exploit minors and prosecute those abusers to the fullest extent of the law.” Ms. Rohde expressed her appreciation to the New South Wales Police Force and the Australian Federal Police for their assistance in the investigation and prosecution of this matter, and commends the Australian authorities and the NYPD on the investigation and cooperation that ultimately led to the recovery of the missing girl.
“Price lured a teenage girl across the globe to satisfy his own sordid desires, taking advantage of her youth and preying on her vulnerability,” stated HSI Special Agent-in-Charge Melendez. “These cases are a harsh reminder of the importance of educating our young people on the dangers of sexual predators on the internet. HSI New York’s Trafficking in Persons Unit maintains an unwavering commitment to investigate these crimes around the world, targeting and arresting predators who transport minors for sex. And we continue to collaborate with our global partners, like the Australian Federal Police, while relying on local partnerships as with the NYPD.”
The evidence at trial established that in the fall of 2016, Price established an online relationship with a 16-year-old girl who lived in Australia. By January 2017, they were communicating with each other daily through messages on Facebook, with much of the discussion concerning Price’s desire to engage in sex with the girl, and how she could travel from Australia to join Price in New York City without law enforcement or her parents finding out. The Facebook chat messages demonstrated that Price, who was 39-years-old at the time, openly discussed the girl’s age with her, and Price told her repeatedly that he wanted to be sexually intimate with her.
Price and the girl also discussed obtaining a fake passport so the girl could travel internationally, and Price offered to impersonate her father to help her get through airport security in the United States. In chat messages, Price told the girl that they would soon be laughing at her parents and when she told Price that she did not need parental permission to fly internationally, Price responded: “So you coming to papa?” After months of planning, Price wired the girl over $900 to purchase a plane ticket to fly to Los Angeles in late March of this year. Shortly afterwards, on April 11, 2017, the girl flew on a roundtrip ticket from Sydney, Australia to Los Angeles, California, where Price was waiting for her arrival. Price hired a rental car, and he drove across the country to Price’s home in Jamaica, Queens.
Price admitted in a post-arrest statement that he and Jane Doe were involved sexually during their cross-country trip, and while they were living in Queens until she was found by law enforcement in his home four weeks later. Following her successful recovery by officers of the NYPD, Jane Doe was returned to her family in Australia.
When sentenced, Price faces up to life in prison.
The government’s case is being prosecuted by Assistant United States Attorneys Taryn A. Merkl and Monica K. Castro.
The Defendant:
SEAN PRICE
Age: 39
Residence: Queens, New YorkE.D.N.Y. Docket No. 17-CR-301 (NGG)
Investment Fund Manager Sentenced in Brooklyn Federal Court to 55 Months’ Imprisonment for Orchestrating Multi-Million Dollar Fraud SchemesRead the Press Release
Earlier today, John R. Lakian, a manager of Capital L Financial Group, LLC (Capital L) and Aegis Capital Fund, LLC (Aegis Capital Fund), was sentenced to 55 months’ imprisonment, having pleaded guilty to two counts of securities fraud for defrauding investors out of millions of dollars in two separate schemes. The Court also ordered Lakian to pay restitution to the victims in the amount $15,640,582.46. The sentencing took place before United States District Judge Frederic Block at the federal courthouse in Brooklyn.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Lakian and his co-defendant stole millions of dollars entrusted to them by investors, many of them hard-working individuals who have been robbed of financial security in their retirement years by the defendants’ fraudulent scheme,” stated Acting United States Attorney Rohde. “This Office, together with our partners at the FBI, is committed to bringing to justice those who deceive the investing public in order to line their own pockets.”
“While Lakian and his co-defendant were living in the lap of luxury, those who invested not only their money with him, but their faith in him, were unwittingly funding this lavish lifestyle,” stated FBI Assistant Director-in-Charge Sweeney. “Today's sentencing should remind all investment fund managers of their obligation to put the interests of their clients ahead of their own. If you don't, we won't let you get away with it.”
Between 2009 and 2013, Lakian was involved in two schemes to steal investors’ money. In the first, he and his co-defendant, Diane Lamm, obtained more than $11 million by promising Capital L investors that their money would be used to purchase, consolidate, and sell registered investment advisory businesses. Instead, Lakian and his co-defendant diverted more than $3 million to themselves and to entities, including hospitality businesses, that they owned and controlled. In the second scheme, Lakian and his co-defendant embezzled money through their management of Aegis Capital Fund, a North Carolina-based investment fund that was placed into liquidation in 2011. Prior to the liquidation, Lakian and his co-defendant directed more than $2.4 million of Fund assets into hospitality businesses without informing the Fund’s investors that Lakian and his co-defendant owned and controlled these businesses. More than $1.9 million of the $2.4 million of fund assets was never recovered by the investors. Additionally, following the Fund’s liquidation, instead of returning investment proceeds to investors, Lakian and his co-defendant diverted more than $2 million of investors’ money to themselves and to their hospitality businesses. The government has identified credit card charges and company expenses or purposes unrelated to the purchase, consolidation and sale of registered investment advisers. Charges were incurred, for example, for clothing, furniture and fine art from luxury stores such as Bergdorf Goodman, Gucci, and Paul Stewart; stays at the Palace and Waldorf Astoria hotels in New York City; getaways at luxury resorts; and items for Lakian and his co-defendant’s restaurant business.
Lakian’s co-defendant, Diane Lamm, pleaded guilty in February 2016 to two counts of securities fraud and is scheduled to be sentenced on January 25, 2018.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman G.S. Knapp is in charge of the prosecution. Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is responsible for the forfeiture of assets.
The Defendants:
JOHN R. LAKIAN
Age: 74
New York, New York
E.D.N.Y. Docket No. 15-CR-0043 (FB)
Investment Adviser Sentenced in Brooklyn Federal Court to 42 Months’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Marc Broidy, the founder, Principal, and Chief Executive Officer of Broidy Wealth Advisors, LLC, was sentenced by United States District Judge Eric N. Vitaliano to 42 months’ imprisonment for committing investment adviser fraud, to be followed by three years of supervised release. The Court also ordered Broidy to pay $1,694,464.00 in restitution to his victims.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
According to court filings and facts presented at his guilty plea proceeding, from November 2010 to July 2016, Broidy engaged in a scheme to defraud his clients both by taking $640,000 in management fees to which he was not entitled, and also by stealing more than $865,000 worth of stock held in trusts, over which he was trustee, to repay a client who discovered his fraudulent overbilling scheme. Broidy used the money he stole to pay for personal expenses such as his home mortgage, overseas travel and car payments. To cover up his theft, Broidy falsified tax records and invoices, and lied to an accountant for one victim. When one of the victims discovered Broidy’s theft and demanded repayment, Broidy stole from the trust accounts of another client’s children, over which Broidy was trustee, to make the payments. Broidy also failed to disclose to his clients, as required by law, that he was receiving commissions from companies whose stock he caused his clients to purchase.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Matthew Amatruda is in charge of the prosecution. Ms. Rohde thanked the U.S. Securities and Exchange Commission, New York Regional Office (SEC), for their assistance during the investigation.
The Defendant:
MARC BROIDY
Age: 43
Residence: Los Angeles, CaliforniaE.D.N.Y. Docket No. 17-CR-64 (ENV)
Former Washington D.C.-Based Internal Revenue Service Attorney Pleads Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Jack Vitayanon pleaded guilty to conspiring with others to distribute over 500 grams of methamphetamine. According to court filings and facts presented during the plea proceeding, at the time of his February 2017 arrest in Washington, D.C., Vitayanon was employed as an Attorney-Advisor by the United States Treasury Department, Internal Revenue Service, Office of Professional Responsibility.
Bridget M. Rohde, Acting 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 New York (HSI), announced the guilty plea.
Ms. Rohde also expressed her grateful appreciation to the United States Treasury Department Inspector General, HSI’s High Intensity Drug Trafficking Area group in Washington, D.C. and the United States Attorney’s Office for the District of Columbia.
As detailed in the complaint, Vitayanon conspired with others in Arizona and on Long Island to distribute methamphetamine for several years. Vitayanon negotiated and consummated the sales of distribution quantities of methamphetamine to undercover HSI special agents on Long Island. The negotiations occurred via recorded internet-based video chats and text messages, and the defendant shipped the methamphetamine from his apartment in Washington D.C. to Long Island via Federal Express.
The recipient of the package, acting at the direction of law enforcement, recorded a video chat with Vitayanon over the internet on Dec. 15, 2016, and, during the recorded conversation, Vitayanon was observed in his residence smoking what appeared to be methamphetamine from a glass pipe, according to the complaint.
A search of the Vitayanon’s Washington D.C. apartment executed pursuant to a court-authorized search warrant led to the seizure of additional quantities of suspected methamphetamine, drug paraphernalia, packaging materials and drug ledgers.
Today’s proceeding took place before United States District Judge Joanna Seybert. When sentenced, Vitayanon faces up to life in prison, as well as forfeiture and a fine of up to $10 million.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles N. Rose is in charge of the prosecution.
The Defendant:
JACK VITAYANON
Age: 42
Washington, D.C.E.D.N.Y. Docket No. 17-CR-80 (JS)
Long Island Woman Indicted for Bank Fraud and Money Laundering to Support TerroristsRead the Press Release
A five-count indictment was unsealed earlier today in federal court in Central Islip, New York, charging Zoobia Shahnaz with bank fraud, conspiracy to commit money laundering and three substantive counts of money laundering. As alleged in the indictment and court filings, the defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies. She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization. After consummating the scheme, the defendant attempted to leave the United States and travel to Syria. Shahnaz, a U.S citizen, was arrested yesterday, and her initial arraignment is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, the defendant Zoobia Shahnaz engaged in a bank fraud scheme, purchased Bitcoin and other cryptocurrencies and laundered money overseas, intending to put thousands of dollars into the coffers of terrorists,” stated Acting United States Attorney Rohde. “The indictment reflects the resolve of this Office, together with our law enforcement partners, to investigate and prosecute anyone who would seek to support terrorists, including those who would perpetrate financial crimes to do so.” Ms. Rohde extended her grateful appreciation to the FBI’s Joint Terrorism Task Force comprising a large number of federal, state and local agencies from the region.
“Syria is a perilous and violent war-torn country, but the subject in this investigation was allegedly so determined to assist ISIS that she planned a covert, illegal entry into Syria,” stated FBI Assistant Director-in-Charge Sweeney. “On top of which, she allegedly tried to launder virtual currency to bolster terrorists’ dwindling financial support. The FBI New York Joint Terrorism Task Force kept this woman from her dangerous and potentially deadly goal. We will do all we can to stop the next person hoping to do the same. We want to thank our law enforcement partners Suffolk County Police Department, with whom we worked this case side-by-side.”
As set forth in the indictment and court filings, in or about and between March 2017 and the date of her attempted travel to Syria on July 31, 2017, the defendant engaged in a scheme to defraud numerous financial institutions. Specifically, Shahnaz obtained a loan for approximately $22,500 by way of materially false representations. She also fraudulently applied for over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online. She then engaged in a pattern of financial activity, culminating in several wire transactions, totaling over $150,000, to individuals and apparent shell entities in Pakistan, China and Turkey. These transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS.
After conducting these financial transactions, the defendant sought to travel to Syria herself. She was questioned by law enforcement at John F. Kennedy International Airport when she attempted to board a flight to Islamabad, Pakistan. Her itinerary included a multi-day layover in Istanbul, Turkey – a common point of entry for individuals travelling from Western countries to join ISIS in Syria.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Shahnaz faces a maximum of 30 years for the bank fraud charge and 20 years on each money laundering count.
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:
Zoobia Shanaz
Age: 27
Brentwood, NYE.D.N.Y. Docket No. 17-CR-0690
Drug Trafficker Sentenced in Brooklyn Federal Court to 97 Months’ Imprisonment for Distributing FentanylRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Johnnie Monroe, also known as “Nut,” was sentenced by United States District Judge Brian M. Cogan to 97 months’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release. The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015. Judge Cogan also ordered forfeiture in the amount of $150,000.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“The death of a woman in West Virginia after ingesting fentanyl pills distributed by defendant Johnnie Monroe did not deter him from shortly thereafter shipping another package of pills containing fentanyl to West Virginia,” stated Acting United States Attorney Rohde. “Today’s sentence holds Monroe accountable for contributing to the deadly opioid epidemic facing this country. This Office, together with our law enforcement partners, will continue to identify and prosecute those who contribute to and would seek to profit from this epidemic. Through these efforts, lives will be saved by reducing the availability of opioids and preventing new addictions.”
“There are no words to express our sorrow for lives lost as a result of drug overdose; but DEA strives to bring justice to the victims’ families by identifying those responsible for distributing the poison,” stated DEA Special Agent in Charge Hunt. “Heroin and fentanyl are poison and have been the cause of record breaking numbers of overdoses throughout the U.S. This sentencing is a reminder that DEA and our law enforcement partners will continue to investigate opioid trafficking organizations and put them in jail.”
According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50. Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA. The recent rise 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. Opioids have been a particular problem in West Virginia, where the defendant and his co-conspirators trafficked substantial amounts of fentanyl. One of the victims of these trends was a young mother, who Monroe and his co-conspirators believed they killed with their fentanyl pills. Upon learning of the young mother’s death, Monroe was intercepted over a judicially authorized wiretap stating, “The girl went out.” When a co-conspirator asked Monroe what he meant by “went out,” Monroe left no ambiguity that a young woman had overdosed: “Went out! OD, OD!” Nonetheless, two weeks later, Monroe mailed another package containing hundreds of pills containing fentanyl to a co-conspirator in West Virginia.
According to the government’s sentencing memorandum, the defendant traveled to West Virginia to sell fentanyl, and, in addition, supplied a significant amount of the crack cocaine that was sold by street-level dealers in the Queensbridge community. The defendant himself sold crack on 20 separate occasions in deals monitored by the NYPD. The defendant also agreed to commit an armed robbery of an individual believed to be traveling with $110,000, and went to a bus station in Manhattan to look for the individual. The failed robbery plot was not for a lack of effort—the targeted victim never arrived. The next day, Monroe was intercepted over a wiretap bragging to a co-conspirator that they were in position, armed and ready to commit the robbery: “We had biscuits [i.e., firearms], stun guns . . . we would a taken him down.”
On December 5, 2017, co-defendant Edward Carrillo was sentenced to 126 months’ imprisonment for the same charge of conspiring to distribute fentanyl. For conspiring to distribute crack-cocaine in Queensbridge, co-defendant Terrell Carmichael was sentenced on November 16, 2017 to 51 months’ imprisonment and co-defendant Kyle Williams was sentenced on December 12, 2017 to 42 months’ imprisonment. Three additional co-defendants are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution.
Defendant Sentenced Today:
JOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New YorkDefendants Previously Sentenced:
TERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New YorkEDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New YorkKYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New YorkDefendants Awaiting Sentencing:
LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West VirginiaDARRYL KNOWLES
Age: 29
Bronx, New YorkMICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New YorkE.D.N.Y. Docket No. 16-CR-617 (BMC)
Member of Eastern European Organized Crime Syndicate Sentenced to 46 Months’ Imprisonment for RacketeeringRead the Press Release
Earlier today, in federal court in Brooklyn, Igor Krugly was sentenced by United States District Judge Brian M. Cogan to 46 months’ imprisonment following his conviction for racketeering, including illegal gambling and extortion conspiracy as predicate acts. Krugly was a prominent member of a violent, Brooklyn-based, Eastern European criminal syndicate linked to high-ranking members of the Eastern European mafia. Krugly also agreed to pay criminal forfeiture in the amount of $25,000. Krugly pleaded guilty to the charge in June 2017.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Angel M. Melendez, Special Agent-in-Charge, Immigration and Customs Enforcement, Homeland Security Investigations New York (ICE-HSI), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, (IRS-CI), James P. O’Neill, Commissioner, New York City Police Department (NYPD), and George Beach, Superintendent, New York State Police (NYSP), announced the sentence.
“As a member of an Eastern European organized crime syndicate, Krugly engaged in traditional and pernicious rackets, operating illegal high stakes poker games and perpetuating a related, international extortion conspiracy,” stated Acting United States Attorney Rohde. “Krugly’s conviction and sentence demonstrate the resolve of this Office and our law enforcement partners to use all available tools to root out the destructive influence of organized crime groups wherever they operate.”
“Krugly was a leader of a criminal enterprise operating in New York that profited from illegal gambling, drug trafficking and other criminal acts,” stated DEA Special Agent-in-Charge Hunt. “Throughout the investigation, our Strike Force identified Krugly’s role in violent crimes committed in other countries including Russia and Israel. This conviction is a true testament to law enforcement’s tenacity and successful collaboration between federal, state, local and international law enforcement.”
“This criminal organization has been connected to arson, assault, illegal gambling and extortion, including using threats for repayment of a gambling debt,” stated HSI Special Agent-in-Charge Melendez. “Today’s sentencing is the result of the hard work of the men and women from multiple agencies on the DEA’s Strike Force, and we are committed to working with our law enforcement partners and bringing these criminals to justice.”
“When defendants take extreme measures to continue their criminal activity, IRS-CI will add our financial expertise to strengthen these multi-agency investigations,” said IRS-CI Special Agent-in-Charge Robnett. “Today’s sentence is a direct result of the contributions from our law enforcement partners and prosecutors of the Eastern District of New York, who are committed to combating violations of federal law.”
“Today’s sentencing is a direct result of the hard work and cooperation among law enforcement at all levels, and I applaud all of our partners for their dedication to fighting organized crime,” stated NYSP Superintendent Beach. “The disruption of this illegal operation serves as a strong reminder that activities such as racketeering, illegal gambling and the violence that is perpetuated by such crimes will not be tolerated.”
According to court filings, members of the syndicate engaged in a wide range of organized criminal activities, including arson, assault, drug trafficking, extortion, illegal gambling and loansharking. Krugly co-owned and operated some of the syndicate’s high-stakes poker games in Brooklyn, and he used threats of violence to collect debts. In mid-2016, after a poker player who owed Krugly tens of thousands of dollars fled the country, Krugly and his co-defendants devised a plan to extort the player with the help of high-ranking members of Eastern European organized crime, known as “Thieves-in-Law” or “Thieves.” Court-authorized wiretaps captured Krugly planning to track down the player’s family in Russia to find out where he had fled: “This [expletive] is not [expletive] calling me. Right now, we need to find him or his father, that’s it . . . . they will approach the father, the wife of the father or his people there in Moscow.” Krugly and his co-defendants ultimately located the player in Israel and enlisted the help of the Thieves to confront him there. Less than an hour after being approached in Israel, the player contacted Krugly to arrange repayment of his debt.
Krugly was also the co-owner of a high-stakes poker game located inside a storefront at 2663 Coney Island Avenue in Brooklyn, which displayed a large poster bearing the name of the defendant’s private security business, “Pitbull Security,” in the window. Inside, however, was a professional poker room where Krugly was involved in every aspect of the business including recruiting players, paying out money to winners and collecting debts from losers, and hiring dealers and “massage girls.”
Eleven other members of the syndicate have been charged with racketeering crimes in this case. One defendant remains a fugitive, and seven have pled guilty to racketeering and related crimes. On November 13, 2017, co-defendant Isok Aronov was sentenced to a year and a day of imprisonment for unlawful debt collection. Defendants Leonid Gershman, Aleksey Tsvetkov and Artiom Pocinoc are awaiting trial. The remaining defendants are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Matthew Jacobs and Andrey Spektor are in charge of the prosecution.
Defendant Sentenced Today:
IGOR KRUGLY
Age: 38
Residence: Brooklyn, New YorkDefendant Previously Sentenced:
ISOK ARONOV
Age: 32
Residence: Brooklyn, New YorkDefendants Awaiting Trial:
LEONID GERSHMAN
Age: 34
Residence: Brooklyn, New York
ARTIOM POCINOC
Age: 28
Residence: Brooklyn, New York
ALEKSEY TSVETKOV
Age: 39
Residence: Brooklyn, New York
Defendants Awaiting Sentencing:
ERIC BOBRITSKY
Age: 32
Residence: BrooklynVYACHESLAV MALKEYEV
Age: 33
Residence: Manhattan, New York
YUSIF PARDILOV
Age: 52
Residence: Brooklyn, New YorkLIBRADO RIVERA
Age: 36
Residence: Brooklyn, New York
RENAT YUSUFOV
Age: 38
Residence: Brooklyn, New YorkFugitive:
VIKTOR ZELINGER
Age: 38
Residence: Brooklyn, New York
E.D.N.Y. Docket No. 16-CR-553 (S-2) (BMC)
Seven Members and Associates of the Gambino and Bonanno Crime Families Indicted for Racketeering and Related ChargesRead the Press Release
Earlier today, in federal court in Central Islip, New York, a 13-count superseding indictment was unsealed charging six members and associates of the Gambino organized crime family of La Cosa Nostra and a member of the Bonanno organized crime family of La Cosa Nostra with racketeering conspiracy, including predicate acts of loansharking, operating illegal gambling businesses, narcotics distribution conspiracy and obstruction of justice conspiracy. The superseding indictment relates to the defendants’ alleged criminal activities on Long Island, in Brooklyn, and elsewhere between January 2014 and December 2017. The defendants – John “Johnny Boy” Ambrosio, an acting captain in the Gambino family, Frank “Frankie Boy” Salerno, a soldier in the Bonanno family, and Thomas Anzaone, Alessandro “Sandro” Damelio, Joseph Durso, Anthony Rodolico and Anthony Saladino, associates of the Gambino family, were arrested earlier today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown in federal court in Central Islip.
Bridget M. Rohde, Acting 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 Division (FBI), Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations New York (HSI), Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“Today’s arrests represent a major disruption of La Costra Nostra’s activities on Long Island,” stated acting United States Attorney Rohde. “As alleged, the defendants engaged in a wide range of illegal and violent conduct in furtherance of their criminal enterprise. The superseding indictment sends a message that this Office, together with our law enforcement partners, remains committed to diminishing these organized crime families and their deleterious effect on our communities. Ms. Rohde also praised the exceptional investigative efforts and collaboration of the FBI, HSI, SCPD, and the NYPD.
“The arrests in this case prove organized crime families haven’t gone away, and continue to plague our communities with their general disregard for anything other than their own greed,” stated FBI Assistant Director-in-Charge Sweeney. “The overt deadly attacks that used to make headlines aren’t as prevalent, but their violent tactics haven’t changed. Members of these families should take heed that the FBI Organized Crime Task Force and our law enforcement partners haven’t gone away, and we dedicate resources each and every day to putting these criminals in jail.”
“From operating an illegitimate casino and an illegal loan shark operation to distributing cocaine and marijuana, the charges against these individuals are extensive,” stated HSI Special Agent-in-Charge Melendez. “We remain committed to working with our law enforcement partners in investigating nefarious criminal organizations like La Cosa Nostra and dismantling their operations.”
“Building this solid case against these ruthless criminals took years of dedicated and collaborative work on behalf of the men and women of the Suffolk County Police Department and our law enforcement partners,” SCPD Commissioner Sini said. “I am extremely proud of our officers and investigators, grateful for the continued partnership between this department and the, NYPD, FBI, HSI and appreciative of the United States Attorney for the Eastern District of New York to bring these criminals to justice.”
Loan Sharking Offenses
As alleged in the indictment and court filings, Ambrosio, also known as “Johnny Boy,” conducted a lucrative loansharking operation in which he, Anzalone, Rodolico, Saladino and others extended extortionate loans to, and used extortionate means to collect from numerous individuals, often charging exorbitant interest rates and employing violent collection methods. For instance, in an intercepted conversation between Saladino and Anzalone, the two discussed various “gambling debts” owed by other parties, Saladino stated that he would give a debtor “something to be scared about”, but that he did not want a “beef” – a physical altercation – at his “club”, because he was “responsible to John [Ambrosio] for what happen[ed] there.” In that same call, Saladino offered to “fix” another gambling debtor, saying “by the time we’re done…he’s not going to have an office to play anywhere.” In another conversation with Ambrosio, an individual asked for Ambrosio’s help collecting a debt and recounted telling the debtor, “I don’t know if you know who I am and where I come from, but I promise you, you will never walk again.” Ambrosio and Rodolico also allegedly attempted to obstruct the federal grand jury proceeding into their criminal activities by intimidating a loanshark victim into lying to law enforcement.Illegal Gambling Offenses
According to the indictment and other court filings, Ambrosio also was involved with a variety of gambling operations, including illegal poker games, electronic gaming machines and internet sports betting, with Damelio, Durso, Salerno and Saladino being responsible for many of the day-to-day operations. In one intercepted call, Ambrosio stated that there was no need to travel to a casino – “you can play right here” and “save gas money.”Narcotics Trafficking Offenses
As also alleged in the indictment and court filings, defendants Anzalone, Damelio, Durso, Saladino and Salerno distributed a variety of narcotics, including cocaine, marijuana and alprazolam, which is commonly known as Xanax. Significantly, Saladino and Salerno engaged in the distribution of wholesale quantities of cocaine, including 12 separate sales to an undercover member of law enforcement totaling over half a kilogram.The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted, Ambrosio, Anzalone, Damelio, Durso and Rodolico face a maximum of 20 years in prison. Saladino and Salerno each face a mandatory minimum sentence of 10 years and a maximum sentence of life imprisonment for the cocaine conspiracy offenses.
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 Defendants:
JOHn AMBROSIO (“Johnny Boy”)
Age: 74
Huntington, NYTHOMAS ANZALONE
Age: 44
Queens, NYALESSANDRO DAMELIO (“Sandro”)
Age: 49
Queens, NYJOSEPH DURSO
Age: 26
Glen Cove, NYANTHONY RODOLICO
Age: 46
Huntington, NYANTHONY SALADInO
Age: 67
Glen Cove, NYFRANK SALERNO (“Frankie Boy”)
Age: 43
Queens, NYE.D.N.Y. Docket No. 17-CR-522 (S-1)(SJF)
Former Owner and Manager of Long Island Catering Hall Indicted for Forced Labor and Visa FraudRead the Press Release
A six-count indictment was unsealed today in federal court in Central Islip, New York, charging Ralph Colamussi and Roberto Villanueva with conspiring to engage in forced labor of immigrants and visa fraud, as well as related substantive counts, fraud in foreign labor contracting and fraudulent inducement of aliens to enter and remain in the United States in violation of law. Both defendants were arrested this morning and will be arraigned this afternoon before United States Magistrate Judge Anne Y. Shields.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Thomas M. Cioppa, District Director, United States Citizenship and Immigration Services (USCIS), and Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General (DOL-OIG), announced the charges.
“As alleged, Colamussi and Villanueva lured immigrants from the Philippines to the United States with false promises regarding jobs and overtime pay in order to line their own pockets at the expense of the victims,” stated Acting United States Attorney Rohde. “This Office, together with our law enforcement partners, will hold accountable those who engage in such illegal, exploitive behavior.”
“This case is an example of ruthless labor trafficking hiding in plain sight. These individuals allegedly committed visa fraud while forcing people to work in their catering hall under horrible conditions, in what seemed to be an inescapable situation,” stated HSI Special Agent-in-Charge Melendez. “It is important for anyone who may believe they are a victim of trafficking to know that our investigations are victim-centered, focusing on keeping the victim safe while bringing their traffickers to justice.”
“USCIS played a meaningful role in bringing suspects of this inhumane criminal activity to face justice,” said USCIS New York District Director Cioppa. “Supporting cases like these is an important way USCIS fulfills key parts of our mission: safeguarding the integrity of our immigration system and securing the homeland.”
“An important function of the Office of Inspector General is to investigate allegations of fraud related to the Department of Labor's administration of the H-2B Visa program,” stated DOL-OIG Special Agent-in-Charge Mikulka. “We will continue to proactively work with our law enforcement partners to investigate these types of allegations.”
At the time of the events alleged in the indictment, Colamussi was the owner and operator of Thatched Cottage, a popular catering and wedding venue in Centerport, New York, as well as the owner and operator of the Jellyfish Restaurant, a popular bar located next door to the Thatched Cottage. As alleged in the indictment, between approximately August 2008 and March 2013, Villanueva and Colamussi recruited prospective employees in the Philippines with false promises of jobs with overtime pay, as waiters, servers, cooks, chefs and food preparation. The prospective employees were illegally made to pay the defendants money in advance in order to qualify for the visa interview in the United States and directed to conceal such payments from the United States Department of State during visa interviews. Workers were not only brought to the United States by means of fraudulent promises of specific employment, but upon arrival, were forced to work at lower than promised wages without overtime. The workers were also forced to care for Colamussi’s relatives, including his father, and to perform construction work at the Jellyfish Restaurant.
Workers were brought to the United States on H-2B visas that expired shortly after their arrival in the United States. Once their H-2B visas expired, workers were allegedly told by Colamussi and Villanueva to apply for student visas and to fraudulently represent that they intended to attend school full-time and had sufficient resources to support themselves during school. Colamussi and Villanueva, at times, deposited funds in the workers’ bank accounts to give the appearance of resources and then withdrew the funds once the student visas were approved. The workers continued to work for Colamussi and Villanueva during the term of their student visas, attending school one day a week.
When the workers objected to performing certain jobs or working consecutive shifts, Colamussi and Villanueva threatened to report them to immigration authorities. Colamussi had many workers whose visas had expired living in the basement of his home in East Northport, New York, and working for him off the books.
The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
If convicted, Colamussi and Villanueva face a maximum term of imprisonment of 20 years for forced labor and conspiracy to commit forced labor, 10 years for visa fraud and fraud in foreign labor contracting, and five years for conspiracy to commit visa fraud and inducement of an alien to illegally enter and reside in the United States. Defendants also face forfeiture of all proceeds and the house in East Northport where the immigrants lived in the basement.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division, which is responsible for the forfeiture of assets.
Majority Shareholder of Sham Company Sentenced to Five Years’ Imprisonment for Defrauding Investors in Penny Stock SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, George Trevor Porrata was sentenced to five years’ imprisonment for conspiring to commit securities fraud. The Court also ordered $1,046,385.50 in restitution to victims and $400,000 in forfeiture. According to court filings and facts presented during his guilty plea proceeding, Porrata led a scheme to induce people to invest in Halberd Corporation, a publicly traded corporation whose shares traded on the over-the-counter exchange under the ticker symbol HALB. The proceeding took place before United States Chief District Judge Dora L. Irizarry.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
According to public filings, from March 2010 to September 2013, Porrata directed press releases to be issued with false information to induce people to invest in Halberd, a company that purportedly produced aerial drones but, in fact, existed primarily on paper. Among other things, Porrata caused press releases to be issued about Halberd opening a sales and marketing office, owning a mass production facility and submitting a bid for a government contract. Contrary to these representations, this information was false and it caused unsuspecting victims to invest in Halberd and also caused the company’s stock price to be artificially inflated. Porrata and his co-conspirators sold their own shares of the company at the inflated price and caused investor losses of more than $1 million.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Sylvia Shweder and Matthew Amatruda are in charge of the prosecution. Assistant United States Attorney Karin Orenstein is in charge of the forfeiture.
The Defendant:
GEORGE TREVOR PORRATA
Age: 46
Residence: West New York, New JerseyE.D.N.Y. Docket No. 16-CR-93 (DLI)
Drug Trafficker Sentenced in Brooklyn Federal Court to 10 ½ Years’ Imprisonment for Distributing FentanylRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Edward Carrillo, also known as “Super Ed,” was sentenced by United States District Judge Brian M. Cogan to 10 ½ years’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release. The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015. The judge also ordered forfeiture in the amount of $150,000.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“The defendant peddled fentanyl from New York City to West Virginia with callous disregard for the human consequences of this dangerous drug,” stated Acting United States Attorney Rohde. “Carrillo’s sentence should serve as a message that fentanyl dealers who promote and profit from this deadly epidemic will be held accountable for their crimes.”
“What started as a local investigation targeting a crack cocaine distribution organization turned into a murder mystery upon the death of a young pregnant mother in West Virginia,” DEA Special Agent in Charge James Hunt stated. “Fentanyl doesn’t discriminate against users, nor do drug dealers whose only concern is profit. Law Enforcement will continue to identify dealers and traffickers responsible for fueling opioid abuse and the rising number of fentanyl-related overdoses.”
According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50. Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA. The recent rise 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. Opioids have been a particular problem in West Virginia where the defendant and his co-conspirators trafficked substantial amounts of fentanyl. One of those deaths was a young mother, whom Carrillo and his co-conspirators believed they killed with their fentanyl pills. Upon learning of the young mother’s death, Carrillo’s co-conspirator was intercepted over a judicially authorized wiretap stating, “the girl went out.” When Carrillo asked what the co-conspirator meant by “went out,” the co-conspirator left no ambiguity that a young woman had died: “Went out! OD, OD,” with ‘OD’ referring to a drug overdose.
According to the government’s sentencing memorandum, in addition to his involvement in the fentanyl conspiracy, the defendant supplied a significant amount of the cocaine that was converted to crack and sold in the Queensbridge community. He also agreed to commit an armed robbery of an individual believed to be traveling with $110,000. When Carrillo was arrested in December 2016, law enforcement officers recovered a loaded gun at his apartment, which he used as a grow house for marihuana.
On November 16, 2017, co-defendant Terrell Carmichael was sentenced to 51 months’ imprisonment for conspiring to distribute crack-cocaine. The other defendants are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution.
The Defendants:
LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West VirginiaTERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New YorkEDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New YorkDARRYL KNOWLES
Age: 29
Bronx, New YorkJOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New YorkKYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New YorkMICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New YorkE.D.N.Y. Docket No. 16-CR-617 (BMC)
Owner of New York Tax Preparation Firm Pleads Guilty to Preparing Fraudulent Tax ReturnsRead the Press Release
A Brooklyn, New York, resident pleaded guilty today to aiding and assisting in the preparation of a fraudulent tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Bridget Rohde for the Eastern District of New York.
According to documents and information provided to the court, Maria Munoz, 45, owned and operated a Brooklyn-based tax preparation business called Munoz Multiservices Corporation. From 2010 through 2012, Munoz prepared fraudulent income tax returns for clients that included inflated or fictitious deductions for gifts to charity, unreimbursed employee expenses, personal property taxes and other expenses. Munoz agreed that she caused a tax loss of $136,789.
Sentencing is scheduled for April 26, 2018 before U.S. District Court Judge Kiyo A. Matsumoto. Munoz faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Rhode thanked special agents of the Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Carl F. Brooker of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Two Brooklyn Men Charged in Violent Extortion SchemeRead the Press Release
A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Ruslan Reizin and Mark Krivoi with extortion conspiracy. The charges stem from the defendants’ alleged extortion and violent assault of a teenage victim who started an awning-cleaning business in Brooklyn that competed with a similar business operated by Reizin. Reizin was arrested last night and Krivoi was arrested earlier today and will make their initial appearances this afternoon before United States Chief Magistrate Judge Roanne L. Mann.
Bridget M. Rohde, Acting 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), Leon Hayward, Acting Director, New York Field Office, U.S. Customs and Border Protection (CBP), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, the defendants sought to eliminate a business competitor by beating and intimidating him; they also lined their pockets with thousands of dollars in extortionate payments,” stated Acting United States Attorney Rohde. “This is no way to ensure a competitive edge. We will not abide this method of trying to assure a competitive edge.”
“This case illustrates a text book extortion, the suspects allegedly threatening violence because the victim decided to open his own business,” stated FBI Assistant Director-in-Charge Sweeney. “Our country thrives on a free market, and the ability of people to go out and start their own company is part of the American dream. The FBI and our law enforcement partners will always pursue those who think to bully others into submission, and threaten free commerce.”
“U.S. Customs and Border Protection is proud of the expertise we provide in support of investigations that result in the takedown of criminal enterprises,” said CBP Acting Director Hayward. “It is through interagency partnerships and collaborative efforts, like the one leading to today’s arrests, that law enforcement successfully combats today’s criminal organizations.”
According to the criminal complaint and other court filings, in May 2017, Reizin learned that the victim—who formerly worked for Reizin’s awning-cleaning company—had started a similar business in Brooklyn. Reizin and Krivoi brought the victim to a secluded location in Sheepshead Bay where Reizin allegedly grabbed the victim by the throat, brandished a knife and gave him the choice of having his ear cut off or his throat slashed. Krivoi allegedly suggested that they should kill the victim. Reizin then demanded that the victim shut down his business and pay $10,000 to Reizin and a local motorcycle club to which Reizin belongs, and which Reizin claimed supported the extortion. When the victim replied that he could not afford to pay, Reizin instructed Krivoi to hit the victim, which Krivoi did, repeatedly. Reizin then offered the victim a “discount,” requiring him to pay $5,000 in monthly installments. Reizin also told the victim that he and his family would suffer if the victim reported the assault to law enforcement. Over the next several months, the victim made regular payments to Reizin. During that period, in a recorded call with the victim, Reizin spoke about “cut[ting] out” the ear of one of the victim’s family members and “forc[ing him] to chew and swallow it.”
The charges contained in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andrey Spektor and Matthew J. Jacobs are in charge of the prosecution.
The Defendants:
RUSLAN REIZIN
Age: 50
Brooklyn, New YorkMARK KRIVOI
Age: 54
Brooklyn, New YorkE.D.N.Y. Docket No. 17-MJ-1013
Brooklyn Leader of Violent Gang Sentenced to Nine Years’ Imprisonment for RacketeeringRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Qian Zheng, also known as “Cash,” was sentenced by United States District Judge Carol Bagley Amon to nine years’ imprisonment for racketeering based on his role as the leader of the Zheng Organization, a violent criminal enterprise that operated in the Sunset Park section of Brooklyn and the Flushing section of Queens for nearly a decade and engaged in violent assaults, extortions and drug distribution. In January 2017, Zheng pleaded guilty to Count One of the indictment charging that between January 2007 and September 2015, the defendant, together with others, conducted and participated in the affairs of the Zheng Organization through a pattern of racketeering activity. The Court also ordered Zheng to pay $30,550 in restitution.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas Decker, Field Office Director, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Qian Zheng was the leader of a criminal enterprise responsible for a variety of rackets including the repeated use of violence to collect extortionate debts,” stated Acting U.S. Attorney Rohde. “His conviction, and the convictions of other members and associates of his criminal organization, reflects the strong commitment of this Office, along with our partners in law enforcement, to dismantling organized crime groups that spread fear throughout communities of this District.”
“The subjects in this case terrorized a community with their criminal enterprise and violent tactics,” stated FBI Assistant Director-in-Charge Sweeney. “No one should dread leaving their homes, and going about their daily lives in fear of being harassed or brutally beaten by criminals who believed stealing is easier than making an honest living. The FBI’s goal has been and always will be to stop these groups from developing and maintaining a stranglehold on local communities.”
“Zheng was ruthless in his lead role in this criminal organization, with multiple assaults and extortions over nearly a decade,” said ERO Field Office Director Decker. “ERO will continue to work with the FBI and NYPD on these cases in an effort to remove these criminals from New York City streets.”
According to court filings and evidence presented at trials of Zheng Organization members and associates, in 2007 Zheng began running a criminal enterprise that engaged in various criminal activity and numerous acts of violence, specifically as alleged:
In August 2013, Zheng tasked two of his underlings with assaulting both the ex-boyfriend of a woman who hired him to arrange that assault and the ex-boyfriend’s wife. Zheng provided his underlings with the victims’ home and work addresses, their daily schedule and a photograph of the male victim, and pointed out the victims’ home and car. Zheng was recorded instructing his underlings to “beat him every time he is seen” and to “break his leg” and “scar the woman’s face.” Zheng was paid at least $6,000 to carry out the vicious assault. The victims were ultimately alerted to Zheng’s plan and were not injured.
In December 2013, Zheng attempted to extort a man in New Rochelle, New York. A recording captured Zheng explaining that his underlings “will bring the guns, fire two gunshots” into the victim’s family’s restaurant and then leave. Zheng was also recorded explaining that the victim “needs to be punched first. Otherwise, he won’t pay any money.” Zheng and three associates went to the victim’s home, but the victim noticed the men and called the police.
In the fall of 2014, Zheng Organization member Guifu Gao, also known as “Chicken Feather,” had a financial dispute that he wanted resolved with violence. Zheng instructed one of his underlings to carry out an assault. Gao instructed the underling to cripple the victim and make him handicapped. Gao further explained that he wanted the victim beaten and his legs broken. Zheng echoed Gao’s demands and was recorded instructing his underling to “follow [the victim] home and beat him in front of his house at night. Beat him hard!” Gao paid the underling $5,000 to carry out the assault but the victim was alerted to Zheng and Gao’s plan and was not injured.
In May 2015, Zheng instructed a number of his underlings, including co-defendants Xin Lin, also known as “Blackie,” Kai Huan Huang, also known as “Shen Shen,” and Xue Jiang Gao, also known as “Xue Zhang,” to extort the owner of a gambling parlor. Lin, Huang, Jiang Gao and others went to the victim’s parlor, surrounded him and demanded money. When the victim explained that he did not owe any money, Lin, Huang and Gao beat him with their fists and wooden stools. The victim was left battered and bruised, with a fractured bone and a permanent deformity. Zheng’s underlings also destroyed the victim’s gambling parlor, causing thousands of dollars in damage. Zheng then sent more of his underlings to pressure the victim not to report the incident to law enforcement.
In addition to these acts of violence, Zheng and his underlings regularly distributed narcotics, including ketamine and MDMA, and in January 2014, Zheng operated an illegal high-stakes gambling parlor, run by Zheng Organization members, which grossed more than $60,000 in approximately 36 hours.
Other Zheng Organization members and associates who were charged in this case have previously been convicted and sentenced for various crimes that they committed with Zheng or at his behest. Guifu Gao was sentenced on January 24, 2017 to 70 months’ imprisonment for an extortionate collection of credit conspiracy. Kai Huan Huang, who was convicted after trial, was sentenced on April 6, 2017 to 70 months’ imprisonment for an attempted extortion and extortion conspiracy. Jiyao Jiang, who was convicted after trial, was sentenced on March 21, 2017 to 28 months’ imprisonment for an extortion conspiracy. Xue Jiang Gao was sentenced on November 9, 2017 to 60 months’ imprisonment for racketeering. Xin Lin was sentenced on March 9, 2017 to 78 months’ imprisonment for an extortion conspiracy.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia E. Moore, Maria Cruz Melendez, Ameet Kabrawala and Mathew Miller are in charge of the prosecution.
The Defendants:
QIAN ZHENG, also known as “Cash”
Age: 46
Brooklyn, New YorkXIN LIN, also known as “Blackie”
Age: 35
Queens, New YorkGUIFU GAO, also known as “Chicken Feather”
Age: 37
Brooklyn, New YorkKAI HUAN HUANG, also known as “Shen Shen”
Age: 28
Brooklyn, New YorkXUE JIANG GAO, also known as “Xue Zhang”
Age: 32
Brooklyn, New YorkJIYAO JIANG, also known as “Yi Qiang”
Age: 45
Queens, New YorkALLEN HUI CHEN, also known as “Yi Hui”
Age: 45
Brooklyn, New YorkE.D.N.Y. Docket No. 15-CR-628 (CBA)
District Court Enters Permanent Injunctions Shutting Down Two Groups of International Defendants Responsible for Multi-Million Dollar Mail Fraud SchemesRead the Press Release
The U.S. District Court for the Eastern District of New York entered four consent decrees in two civil actions, permanently barring 14 individuals and entities from operating alleged multi-million dollar international mail-fraud schemes. The defendants, located around the globe, include: Swiss corporation BDK Mailing GmbH; Singapore companies Mailing Force Pte. Ltd. and Only Three Pte. Ltd; Chantal Seguy of France; Marion Elchlepp of France; Aurora Jouffroy-Brandtner of Switzerland; U.S. corporation Macromark Inc.; Macromark employee Mary Ellen Meyer; Indian corporation Mail Order Solutions India Pvt. Ltd. (MOSI), and MOSI’s owners, Dharti B. Desai of New York, New York, and Mehul A. Desai of India; and Ercan Barka, a resident of Turkey and New Jersey, Ryan Young of New Jersey, and True Vision LLC, a Delaware-based corporation.
Both schemes followed a similar pattern, involving a complicated web of actors located across the world. Fraudulent “direct mailers” created letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee. The letters appeared to come from legitimate sources, typically on official-looking letterhead, but were in fact fictitious individuals and organizations including “Baroness de Rothman,” “DNF Funds Office,” “Finkelstein & Partner,” the “Harrison Institute,” and Marie de Fortune. Moreover, even though the solicitations are in reality identical form letters sent to thousands or tens of thousands of recipients – the letters appear to be personally addressed.
“The Department of Justice is committed to protecting all Americans from fraud and exploitation,” Associate Attorney General Rachel Brand said. “This exploitation is repugnant and the Justice Department will pursue those who target our nation’s seniors and other vulnerable American consumers for financial gain. These consent decrees are just one example of the department’s broad efforts to protect seniors—and every American—from mail fraud.”
“The defendants’ preyed on the elderly and other vulnerable citizens through fictitious lotteries and other exploitive games, unfairly enriching themselves at the expense of these victims,” stated Acting U.S. Attorney Bridget Rohde for the Eastern District of New York. “These consent decrees put the defendants out of the exploitation business. This Office is committed to pursuing the perpetrators and enablers of such schemes, in New York and abroad, to hold them accountable and to protect others from being swindled.”
“These actions are an important step in dismantling the many components of this fraudulent mass-mailing industry,” said Inspector in Charge Regina Faulkerson. “The Postal Inspection Service will continue to aggressively investigate everyone involved in facilitating these predatory mailings.”
United States v. BDK, et al.
The first case, in which consent decrees were entered on November 21, 2017, alleges that the defendants’ fraud scheme victimized hundreds of thousands of Americans and targeted primarily the elderly and vulnerable. According to the complaint, the victims sent the defendants payments totaling $50 to $60 million annually between 2005 and 2016.
The consent decrees entered yesterday resolve the litigation. As part of the consent decrees, defendants BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively BDK) admit that they acted as “direct mailers” responsible for mailing millions of advertisements, solicitations, or promotional materials on behalf of dozens of fictitious psychics, sweepstakes, lotteries, and other wealth-building programs (collectively “covered direct mailings”) to hundreds of thousands of potential victims throughout the United States each year between 2005 and 2016. BDK further admits that the solicitations falsely promised that recipients would receive large sums of money, and guaranteed money-making methods or powerful talismans in return for payment of $50 to $55. In reality, however, the purported senders and the promised winnings were fictitious. Although victims sent requested payments by cash, check, and credit card, they received nothing in return. Defendants Macromark, Inc. and Mary Ellen Meyer do not dispute that they facilitated BDK’s rental of numerous “customer lists” containing hundreds of thousands of consumer names used for BDK’s direct mailing campaigns. Defendant Mail Order Solutions Inc., in turn, printed millions of copies of BDK’s covered direct mailings and delivered them via air cargo and international post into the United States for delivery to unwitting U.S. consumers.
United States v. Ercan Barka, et al.
The second case, in which consent decrees were entered on October 5, names defendants Barka, Young, and True Vision LLC. The United States’ amended complaint, filed in May 2017, alleges that Barka and Young worked together as “direct mailers,” sending fraudulent solicitations to hundreds of thousands of American victims through an international web of shell companies. The complaint alleges that Barka and Young’s mailings informed recipients that they had won prizes including millions of dollars in cash and luxury cars, and that recipients would receive delivery of the prizes upon payment of a fee. Victims allegedly received nothing in return for their payments, while Young and Barka collected an estimated $29 million from American victims from 2012 through 2016.
Under the consent decrees entered in both cases, the defendants may not use the U.S. mail to distribute fraudulent mailings or any mailings promoting similar schemes. The consent decrees also prevent the defendants from printing, receiving, handling, opening, forwarding, or processing any such direct mailings. The defendants are also prohibited from creating, renting, or selling any lists of demographic information relating to consumers who have responded to defendants’ or other certain direct mailings. Nor may the defendants process any payments received in response to certain direct mailings. Finally, the consent decrees authorize the U.S. Postal Inspection Service to return any victim money or personal checks sent to the defendants and detained by the Postal Inspection Service.
The United States’ case is being handled by Chief of Affirmative Civil Enforcement John Vagelatos and Assistant U.S. Attorney Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorneys Ann Entwistle and Gabriel Scannapieco of the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Postal Inspection Service.
Additional information on the original enforcement actions and mass mailing schemes is available at: https://www.justice.gov/opa/pr/justice-department-and-law-enforcement-partners-announce-civil-and-criminal-actions-dismantle . Additional information about the Consumer Protection Branch and its enforcement efforts can 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 .
The Defendants:
BDK MAILING GMBH
MAILING FORCE PTE. LTD.
ONLY THREE PTE. LTD.
CHANTAL SEGUY
Age: 59
Paris, France
MARION ELCHLEPP
Age: 26
Paris, France
AURORE JOUFFROY-BRANDTNER
Age: 40
Zurich, Switzerland
MACROMARK, INC.
MARY ELLEN MEYER
Age: 45
Mahopac, New York
MAIL ORDER SOLUTIONS INDIA PVT. LTD.
DHARTI B. DESAI
Age: 50
New York, New York
MEHUL A. DESAI
Age: not available
Mumbai, India
E.D.N.Y. Docket No. 16-CV-5264 (NGG)
ERCAN BARKA
Age: 35
Paramus, New Jersey
RYAN YOUNG
Age: 35
Upper Saddle River, New Jersey
TRUE VISION LLC.
E.D.N.Y. Docket No. 16-CV-5266 (ENV)
Download Young Consent Decree and Final Judgment
Download Barka Consent Decree and Final Judgment
Download BDK Consent Decree and Final Judgment
Download Macromark Consent Decree and Final Judgment
Download Mosi Consent Decree and Final Judgment
District Court Enters Permanent Injunctions Shutting Down Two Groups of International Defendants Responsible for Multi-Million Dollar Mail Fraud SchemesRead the Press Release
A federal court in New York entered consent decrees in two civil actions, permanently barring 14 individuals and entities from operating alleged multi-million dollar international mail-fraud schemes.
Both schemes followed a similar pattern, involving a complicated web of actors located across the world. Fraudulent “direct mailers” created letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee. The letters appeared to come from legitimate sources, typically on official-looking letterhead, but were in fact fictitious individuals and organizations including “Baroness de Rothman,” “DNF Funds Office,” “Finkelstein & Partner,” the “Harrison Institute,” and Marie de Fortune. Moreover, even though the solicitations are in reality identical form letters sent to thousands or tens of thousands of recipients – the letters appear to be personally addressed.
"The Department of Justice is committed to protecting all Americans from fraud and exploitation,” Associate Attorney General Rachel Brand said. “This exploitation is repugnant and the Justice Department will pursue those who target our nation’s seniors and other vulnerable American consumers for financial gain. These consent decrees are just one example of the department’s broad efforts to protect seniors—and every American—from mail fraud."
“The defendants preyed on the elderly and other vulnerable citizens through fictitious lotteries and other exploitive games, unfairly enriching themselves at the expense of these victims,” said Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York. “These consent decrees put the defendants out of the exploitation business. This Office is committed to pursuing the perpetrators and enablers of such schemes, in New York and abroad, to hold them accountable and to protect others from being swindled.”
“These actions are an important step in dismantling the many components of this fraudulent mass-mailing industry,” said Inspector in Charge Regina Faulkerson. “The Postal Inspection Service will continue to aggressively investigate everyone involved in facilitating these predatory mailings.”
United States v. BDK, et al.
The first case, in which consent decrees were entered on Nov. 21, 2017, names defendants located around the globe, including Swiss corporation BDK Mailing GmbH; Singapore companies Mailing Force Pte. Ltd. and Only Three Pte. Ltd; Chantal Seguy of France; Marion Elchlepp of France; Aurora Jouffroy-Brandtner of Switzerland; U.S. corporation Macromark Inc., Macromark employee Mary Ellen Meyer; Mail Order Solutions India Pvt. Ltd. (MOSI), an Indian corporation; and MOSI’s owners, Dharti B. Desai of New York, New York, and Mehul A. Desai of India. The United States’ complaint, filed in September 2016, alleges that the defendants’ fraud scheme victimized hundreds of thousands of Americans, and targeted primarily the elderly and vulnerable. According to the complaint, the victims sent the defendants payments totaling $50 to $60 million annually between 2005 and 2016.
The consent decrees, entered yesterday in the U.S. District Court for the Eastern District of New York, resolve the litigation. As part of the consent decrees, defendants BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively “BDK”) admit that they acted as “direct mailers” responsible for mailing millions of advertisements, solicitations, or promotional materials on behalf of dozens of fictitious psychics, sweepstakes, lotteries and other wealth-building programs (collectively “covered direct mailings”) to hundreds of thousands of potential victims throughout the United States each year between 2005 and 2016. BDK further admits that the solicitations falsely promised that recipients would receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55. In reality, however, BDK admits the purported senders and the promised winnings were fictitious. Although victims sent the requested fees by cash, check or credit card, they received nothing in return. Defendants Macromark Inc. and Mary Ellen Meyer do not dispute that they facilitated BDK’s rental of numerous “customer lists” containing hundreds of thousands of consumer names that would be used to address BDK’s direct mailing campaigns. Defendant Mail Order Solutions Inc., in turn, would print millions of copies of BDK’s covered direct mailings and deliver them via air cargo and international post into the United States for delivery to unwitting U.S. consumers.
United States v. Ercan Barka, et al.
The second case, in which consent decrees were entered Oct. 5, 2017, names defendants Ercan Barka, a resident of Turkey and New Jersey, Ryan Young of New Jersey, and True Vision LLC, a Delaware-based corporation. The United States’ amended complaint, filed in May 2017, alleges that Barka and Young worked together as “direct mailers,” sending fraudulent solicitations to hundreds of thousands of American victims through an international web of shell companies. The complaint alleges that Barka and Young’s mailings informed recipients that they had won prizes including millions of dollars in cash and luxury cars, and that recipients would receive delivery of the prizes upon payment of a fee. Victims allegedly received nothing in return for their payments, while Young and Barka collected an estimated $29 million from American victims from 2012 through 2016.
Under the consent decrees entered in both cases, the defendants may not use the U.S. mail to distribute fraudulent mailings or any mailings promoting similar schemes. The consent decrees also prevent the defendants from printing, receiving, handling, opening, forwarding, or processing any such direct mailings. The defendants are also prohibited from creating, renting, or selling any lists of demographic information relating to consumers who have responded to defendants’ or other certain direct mailings. Nor may the defendants process any payments received in response to certain direct mailings. Finally, the consent decrees authorize the U.S. Postal Inspection Service to return any victim money or personal checks sent to the defendants and detained by the Postal Inspection Service.
The United States’ cases are being handled by Trial Attorneys Gabriel Scannapieco and Ann Entwistle of the Civil Division’s Consumer Protection Branch, and Chief of Affirmative Civil Enforcement John Vagelatos and Assistant U.S. Attorney Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York, in coordination with the U.S. Postal Inspection Service.
Additional information on the original enforcement actions and mass mailing schemes is at: https://www.justice.gov/opa/pr/justice-department-and-law-enforcement-partners-announce-civil-and-criminal-actions-dismantle. 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.
Operator of Purported Durable Medical Equipment Providers Pleads Guilty to Health Care Fraud Charges for Role in Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Suzanna Meliksetyan, an operator of multiple purported durable medical equipment (DME) companies pleaded guilty to one count of conspiracy to commit health care fraud for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administers Medicare Advantage plans and New York Medicaid Managed Care plans. The proceeding was held before United States District Judge Allyne R. Ross.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Kenneth A. Blanco, 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), and Scott J. Lampert, Special Agent-in-Charge, United States Department of Health and Human Services Office of Inspector General’s (HHS OIG), Office of Investigations, announced the guilty plea.
As part of her guilty plea, Meliksetyan admitted that she operated a series of purported DME companies that did not in fact provide equipment to any beneficiaries. The defendant further admitted that she and others called Healthfirst, pretending to represent vendors in Healthfirst’s network. The companies Meliksetyan operated submitted almost $1 million in false claims to Healthfirst.
This case was investigated by the FBI and HHS OIG. Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section is prosecuting the case.
Defendant:
SUZANNA MELIKSETYAN
Age: 28
Residence: Gaithersburg, Maryland
E.D.N.Y. Docket No. 17-CR-351 (ARR)
Operator of Purported Durable Medical Equipment Providers Pleads Guilty to Health Care Fraud Charges for Role in Durable Medical Equipment Fraud SchemeRead the Press Release
An operator of multiple purported durable medical equipment (DME) companies pleaded guilty today to fraud charges for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administers Medicare Advantage plans and New York Medicaid Managed Care plans.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.
Suzanna Meliksetyan, 28, of Gaithersburg, Maryland, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Alynne R. Ross of the Eastern District of New York. Sentencing has been scheduled for March 21, 2018 before Judge Ross.
As part of her guilty plea, Meliksetyan admitted that she operated a series of purported DME companies that did not in fact provide equipment to any beneficiaries. She further admitted that she and others called Healthfirst, falsely representing themselves as vendors in Healthfirst’s network. The companies Meliksetyan operated submitted almost $1 million in false claims to Healthfirst, and she admitted to receiving more than $300,000 in connection with those false claims.
This case was investigated by the FBI and HHS-OIG. Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Members of Coney Island Street Gang Indicted for Murder, Racketeering Conspiracy and Unlawful Use of FirearmsRead the Press Release
Four members and one associate of the West End Enterprise, a street gang based in three apartment complexes in Coney Island, New York, will be arraigned this afternoon in federal court in Brooklyn on an indictment charging them with crimes including murder in aid of racketeering, racketeering conspiracy, unlawful use of firearms, witness tampering and robbery. The 12-count superseding indictment relates to the defendants’ alleged criminal activities between 2011 and 2017. The defendants, Tysheen Cooper, also known as “Billz,” Maurice Washington, also known as “Moe” and “Flaco,” Sharod Liburd, also known as “Pop,” and Gabriale Herbert are scheduled to be arraigned this afternoon before United States Magistrate Judge Lois Bloom. The defendant Michael Liburd, also known as “Mike Mike” and “Mitty,” is scheduled to be arraigned Tuesday, November 21, 2017, before Magistrate Judge Bloom.
Bridget M. Rohde, Acting 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), Mark G. Peters, Commissioner, New York City Department of Investigation (DOI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
As detailed in the superseding indictment and other filings, Cooper, Michael Liburd, Sharod Liburd and Washington were members of the West End Enterprise, a street gang composed of individuals residing in and around the Sea Rise Apartments, the Gravesend Houses and Surfside Gardens, also known as the “Mermaid Houses,” located in the western end of Coney Island. During that time, Cooper, Michael Liburd, Washington and other coconspirators allegedly engaged in narcotics distribution, witness intimidation and acts of violence, including retaliatory shootings against members of a rival gang, known as “Sex Money Murder,” and the January 17, 2016 murder of Antwon Flowers. Flowers was shot to death as he left an apartment building in the Mermaid Houses development in retaliation for the murder of a West End Enterprise leader, who had been killed in the East New York section of Brooklyn less than a day earlier. Herbert, Cooper and Sharod Liburd are also charged with a gun-point Hobbs Act robbery.
“As alleged, the defendants and other members of their street gang have subjected the residents of Coney Island to violent conduct, including murder, over a period of years,” stated Acting United States Attorney Rohde. “The indictment sends a clear message that this Office, together with our federal and local law enforcement partners, will use every available resource to rid our communities of gangs, and the crimes they commit, by prosecuting gang members to the fullest extent of the law.” Ms. Rohde extended her thanks to the Drug Enforcement Administration for its assistance in the investigation.
“People usually think of Coney Island as a fun place to ride the rides, and have a hot dog on the beach. The men charged in this case created a dirty underbelly in a family oriented place, accused of murder, violence and criminal behavior,” stated FBI Assistant Director-in-Charge Sweeney. “Not only did they allegedly commit these crimes, they did their best to make sure no one would testify against them. These dangerous gangs don’t have a place on Coney Island, or in any community, and the FBI won’t relent in pursuing cases targeting their leadership.”
“Ridding drugs, gangs and violence from New York City public housing is essential and this joint investigation resulted in just that,” stated DOI Commissioner Peters. “Public housing tenants deserve what all New Yorkers want: a safe home for themselves and their children. DOI is proud to work with our federal and city law enforcement partners to expose and stop these crimes.”
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a sentence of life imprisonment.
The superseding indictment is the fifth indictment in the government’s ongoing investigation into gang violence in Brooklyn’s Coney Island neighborhood. The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Rena Paul and Mathew S. Miller are in charge of the prosecution.
The Defendants:
TYSHEEN COOPER (“Billz”)
Age: 26
Residence: Brooklyn, New YorkGABRIALE HERBERT
Age: 20
Residence: Brooklyn, New YorkMICHAEL LIBURD (“Mike Mike” and “Mitty”)
Age: 27
Residence: Brooklyn, New YorkSHAROD LIBURD (“Pop”)
Age: 20
Residence: Brooklyn, New YorkMAURICE WASHINGTON (“Moe” and “Flaco”)
Age: 28
Residence: Brooklyn, New YorkEDNY Docket No. 17-CR-296 (PKC)
Long Island-Based Telephonics Corporation Pays $4.25 Million to Settle Overbilling Claims on Army & Navy ContractsRead the Press Release
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, today announced that Telephonics Corporation, based in Farmingdale, New York, has agreed to pay $4,250,000 to the United States to settle claims that Telephonics overbilled the federal government under certain contracts to provide vehicle-mounted counter-improvised explosive device systems (Warlock Systems) to the Army and multi-mode radar systems (LAMPS Systems) to the Navy.
The settlement announced today is the result of a joint investigation conducted by the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command and the Naval Criminal Investigative Service (NCIS).
“Defense contractors who enrich themselves at taxpayers’ expense by failing to accurately represent the costs of their goods and services will be held fully accountable. Taxpayers deserve no less,” stated Acting United States Attorney Rohde. Ms. Rohde praised the successful partnership between the United States Attorney’s Office, DCIS, NCIS, and the U.S. Army Criminal Investigation Command in detecting and preventing fraud and overbilling.
“The civil settlement announced today is the end result of a successful joint case conducted by DCIS, the U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service, the Defense Contract Audit Agency and the U.S. Attorney’s Office, Eastern District of New York,” stated Leigh-Alistair Barzey, Special Agent-in-Charge, DCIS Northeast Field Office. “DCIS and its law enforcement partners will continue to investigate violations of the False Claims Act in order to protect U.S. military members and prevent defense contractors from profiting at the expense of the American taxpayer.”
“This settlement further demonstrates the resolve of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and our law enforcement partners to protect and defend the assets of the United States Army,” stated Special Agent-in-Charge L. Scott Moreland.
“Fraud is never a victimless crime,” stated NCIS Northeast Field Office Special Agent-in-Charge Leo Lamont. “In this case, involving the intentional mischarging of the Navy for critical equipment during a time of war, the victims are not just our men and women in uniform, but all American taxpayers. NCIS will continue to tirelessly pursue all those who seek to take advantage of the Department of the Navy and its interests.”
Between 2004 and 2007, Telephonics, a corporation that provides services, products and technology to the Department of Defense, subcontracted to provide work and materials for the assembly of the Army’s Warlock Systems and the Navy’s LAMPS Systems. The Warlock Systems are installed in vehicles to interrupt wireless systems designed to trigger improvised explosive devices and are used in Afghanistan and Iraq. The LAMPS Systems are used on Navy helicopters.
The government contends that Telephonics did not provide accurate cost data in connection with certain contracts for the Warlock and LAMPS Systems. Specifically, Telephoncs improperly billed the Army and Navy by calculating invoices using: 1) inflated “estimates” when then-current available information showed lower actual costs; and 2) different labor rates than those set forth in relevant contracts. There was no allegation about the quality of Telephonics’ products or services. The settlement is not an admission of wrongdoing by Telephonics.
The United States’ investigation was handled by Assistant United States Attorneys John Vagelatos and Robert W. Schumacher.
Former United States Merchant Marine Academy Employee Sentenced to Nine Months’ Imprisonment for Receiving BribesRead the Press Release
Earlier today, in federal court in Central Islip, New York, Frank DeCarlo, a former supervisory carpenter for the Department of Public Works of the United States Merchant Marine Academy, located in Kings Point, New York, was sentenced by United States District Judge Arthur D. Spatt to nine months’ imprisonment, to be followed by three years of supervised release, for receiving a bribe as a public official. The Court also imposed a $10,000 fine and a forfeiture order of $48,000 for funds illegally received by DeCarlo as part of the scheme. DeCarlo pleaded guilty on April 20, 2017, in connection with his participation in a scheme to defraud the United States by steering maintenance and repair contracts to favored contractors in exchange for bribes.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Douglas Shoemaker, Regional Special-Agent-in-Charge, United States Department of Transportation, Office of the Inspector General (DOT-OIG) and James Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the sentence.
According to court filings, between 2003 and 2016 while DeCarlo was employed in the Department of Public Works of the United States Merchant Marine Academy, he solicited and submitted fake bids on contracts he supervised in order to steer the awarding of maintenance and repair contracts to favored contractors who paid him bribes. Using his position, DeCarlo arranged, supervised or effected a majority of construction contracts at the Academy.
“DeCarlo’s solicitation of bribes in exchange for the awarding of government contracts compromised the integrity of the procurement system,” stated Acting U.S. Attorney Rohde. “This Office will continue to work with our law enforcement partners to vigorously investigate and prosecute to the fullest extent of the law those corrupt public employees who abuse their positions for their own enrichment.”
“The prosecution of Mr. Frank DeCarlo for bribery at the U.S. Merchant Marine Academy sends a clear signal that those entrusted with the stewardship of taxpayer dollars will be held responsible for maintaining the highest level of integrity,” stated DOT-OIG Regional Special-Agent-in-Charge Shoemaker. “Accountability is a priority of the Secretary and OIG, and working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to protect the taxpayers’ investment in our nation’s transportation system from fraud, waste, abuse and violations of law.”
“Serving the public is a privilege,” stated IRS CI Special Agent-in-Charge Robnett. “This sentence sends a message to all those who abuse the public trust that investigators for IRS-CI will uncover these schemes and protect taxpayers and the U.S. Treasury.”
The government's case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Burton T. Ryan, Jr., and Madeline O’Connor are in charge of the prosecution.
The Defendant:
FRANK DeCARLO
Age: 67
Residence: Franklin Square, New YorkE.D.N.Y. Docket No. 17-CR-35 (ADS)
Owner and Manager of New York Medical Equipment Provider Charged in $3.5 Million Scheme to Defraud Government-Funded Health PlansRead the Press Release
Earlier today, an indictment was unsealed in federal court in Brooklyn charging Ikechukwu Udeokoro and Ayodeji Fasonu for their roles in an alleged scheme to submit over $3.5 million in fraudulent claims to private insurers, which included government-sponsored managed care organizations. Udeokoro and Fasonu were the owner and manager, respectively, of Meik Medical Equipment and Supply LLC, a purported durable medical equipment (DME) company in Bronx, New York. The defendants were arrested this morning and their initial appearance is scheduled for this afternoon before United States Magistrate Judge James Orenstein.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Kenneth A. Blanco, 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) and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, New York Region (HHS OIG), announced the charges.
According to the indictment, beginning in approximately December 2010 and continuing through at least February 2014, Udeokoro and Fasonu executed a scheme in which they submitted fraudulent claims to private insurers, including those that participated in Medicare Part C, for reimbursement for DME that was purportedly provided to the insurers’ members, many of whom were elderly or disabled and had insurance through Medicare Advantage plans or New York Medicaid Managed Care plans. As part of the scheme, the defendants allegedly submitted claims to the private insurers for reimbursement for DME such as multi-positional patient support systems and combination sit-to-stand systems, when the defendants in fact provided the insurers’ members either nothing or a far less expensive product, such as a lift chair/recliner. As alleged in the indictment, Meik Medical Equipment & Supply submitted more than $3.5 million in fraudulent claims.
The charges in the indictment are merely allegations, and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI and HHS OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.
The Defendants:
IKECHUKWU UDEOKORO
Age: 41
Residence: West New York, New Jersey
AYODEJI FASONU
Age: 51
Residence: Stamford, Connecticut
E.D.N.Y. Docket No. 17-CR-629 (AMD)
Owner and Manager of New York Medical Equipment Provider Charged for Their Roles in Alleged $3.5 Million Scheme to Defraud Government-Funded Health PlansRead the Press Release
The owner and the manager of a purported durable medical equipment (DME) company in the Bronx, New York, were charged in an indictment unsealed today for their roles in an allegedly fraudulent scheme that involved submitting over $3.5 million in claims to private insurers, which included government-sponsored managed care organizations.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.
Ikechukwu Udeokoro, 41, of West New York, New Jersey, and Ayodeji Fasonu, 51, of Stamford, Connecticut, the owner and manager, respectively, of Meik Medical Equipment and Supply LLC of the Bronx, were charged with one count of health care fraud in an indictment filed in the Eastern District of New York on Nov. 13. The indictment was unsealed upon the arrest of the defendants this morning, and the defendants are expected to be arraigned this afternoon before U.S. Magistrate Judge James Orenstein of the Eastern District of New York at the federal courthouse in Brooklyn. The case has been assigned to U.S. District Judge Ann M. Donnelly.
According to the indictment, beginning in approximately December 2010 and continuing through at least February 2014, Udeokoro and Fasonu executed a scheme in which they submitted fraudulent claims to private insurers, including those that participated in Medicare Part C, for reimbursement for DME that was purportedly provided to the insurers’ members, many of whom were elderly or disabled and had insurance through Medicare Advantage plans or New York Medicaid Managed Care plans. As part of the scheme, the defendants allegedly submitted claims to the private insurers for reimbursement for DME such as multi-positional patient support systems and combination sit-to-stand systems, when the defendants in fact provided the insurers’ members either nothing or a far less expensive product, such as a lift chair/recliner.
As alleged in the indictment, Meik Medical Equipment & Supply submitted more than $3.5 million in claims.
The charges in the indictment are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Trial Attorney Andrew Estes of the Fraud Section is prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Defendants Charged in Armed Robbery of Jewelry Store in Downtown BrooklynRead the Press Release
Earlier today, Darryl Odom was arrested in connection with the May 25, 2017 armed robbery of Court Street Jewelers located at 60 Court Street in Brooklyn, New York. Odom and three coconspirators who were previously arrested – Kenneth Davis, Shaka Davis and Lashawn Williams – are charged in a superseding indictment in the Eastern District of New York with Hobbs Act robbery, Hobbs Act robbery conspiracy and brandishing a firearm during the commission of the robbery. Odom and another coconspirator, Leonard Hinton, are also charged in the indictment with the robbery at knifepoint of a jewelry store at 98 Smith Street in Brooklyn on February 10, 2017. Odom is scheduled to be arrigned this afternoon before United States Magistrate Judge James Orenstein.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge, New York Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.
According to the court documents, at approximately 5:15 p.m., Odom and his coconspirators entered the jewelry store at 60 Court Street disguised as construction workers while another perpetrator waited outside as a lookout. Once inside the store, one of the robbers pistol-whipped the store owner with a gun, causing lacerations to his head. Odom and the other perpetrators grabbed several hundred thousand dollars in cash and jewelry during the robbery. They fled to a nearby subway station where their images were recorded by surveillance cameras. Law enforcement officers collected numerous pieces of evidence dropped by the perpetrators in the subway station, including gloves worn during the robbery, a hardhat and an envelope containing approximately $10,000 in cash.
“As alleged, the defendant and his co-conspirators engaged in a violent gunpoint robbery in broad daylight, then tied-up and beat the store owner,” stated Acting United States Attorney Rohde. “Thanks to the relentless investigative efforts by our law enforcement partners at the ATF and the NYPD, the defendants will now he held to account for their crimes.”
“Darryl Odom is alleged to have participated in an armed robbery of a jewelry store during which the store owner was violently assaulted and injured as a result. The defendants are alleged to have escaped with jewelry, gold and cash,” stated ATF Special Agent-in-Charge Benedict. “This was a carefully organized crime, even going so far as to have a participant wait outside wearing a disposable hazmat suit hold a sign that asbestos work was underway in order to prevent others from entering the store while the robbery took place. I would like to extend my gratitude to the Special Agents and NYPD Detectives on the ATF/NYPD SPARTA Joint Robbery Task Force and the U.S. Attorney’s Office for their work in swiftly bringing the defendants to justice.”
“Thanks to the NYPD and our law enforcement partners these individuals were apprehended following an armed robbery that played out in a local business and on the streets of New York City,” stated Police Commissioner O’Neill. “I commend the investigators involved who worked diligently to ensure these individuals were held accountable for this act of violence.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face a mandatory minimum of seven years in prison.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Josh Hafetz and Special Assistant United States Attorney Benjamin Saltzman are in charge of the prosecution.
The Defendants:
DARRYL ODOM
Age: 53
Residence: Bronx, New YorkKENNETH DAVIS
Age: 52
Residence: Brooklyn, New YorkSHAKA DAVIS
Age: 29
Residence: Brooklyn, New YorkLASHAWN WILLIAMS (“Ron Johnson”)
Age: 48
Residence: Bronx, New YorkLEONARD HINTON (“Bebe”)
Age: 54
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 17-MJ-668; 17-CR-432 (BMC)
Queens Man Charged with Conspiracy to Produce Child PornographyRead the Press Release
A criminal complaint was unsealed earlier today in federal court in Brooklyn, New York, charging Keith Liwanag with conspiracy to produce child pornography. Liwanag was arrested today and is scheduled to make his initial appearance this afternoon before United States Magistrate Judge Cheryl L. Pollak.
Bridget M. Rohde, Acting 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, the defendant victimized vulnerable children abroad by soliciting photographs and videos of their sexual abuse in exchange for money,” stated Acting United States Attorney Rohde. “The safety and protection of children is a priority for this Office and our law enforcement partners and we will pursue those who would endanger children to the fullest extent of the law.” Ms. Rohde extended her grateful appreciation to INTERPOL’s Crimes Against Children Unit for its investigative work and assistance in the investigation.
“This individual is alleged to have convinced women overseas to commit sexual acts with children in return for payment,” stated ICE-HSI Special Agent-in-Charge Melendez. “His version of a ‘show,’ among other criminal acts against children, allegedly included enticing a mother to sexually abuse her own son for his pleasure. We will be relentless in our pursuit of child predators to ensure they face justice for their unfathomable acts.”
According to the complaint, in September and October 2016, Liwanag used a Facebook account to direct women in the Philippines to engage in sexual acts with children in exchange for money, and to produce and send child pornography over Facebook’s private messaging service. On September 8, 2016, the defendant sent several messages to a woman asking her to sexually abuse a six-year-old boy as part of a “show” in exchange for money. On September 11, 2016, the defendant sent and received messages from another woman about a “show” with the woman’s son and offered her money to perform a sex act on him. On October 12, 2016, the defendant sent a message to a third woman soliciting photographs of the sexual abuse of her child. In response, on October 27, 2016, the woman sent the defendant two images depicting child abuse. As set forth in court filings, the evidence obtained during the course of the investigation includes 10 recorded video conferences between the defendant and women engaged in the sexual abuse of children.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
This prosecution was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Tanya Hajjar and Erin Reid are in charge of the prosecution.
The Defendant:
KEITH LIWANAG
Age: 26
Residence: Queens, New YorkMembers and Associates of Gambino and Bonanno Organized Crime Families Arrested in Coordinated U.S.-Canadian TakedownRead the Press Release
Earlier today, three indictments were unsealed in United States District Court for the Eastern District of New York charging four defendants with narcotics trafficking, loansharking and firearms offenses. The defendants—Damiano Zummo, an acting captain in the Bonanno crime family; Salvatore Russo, an associate of the Bonanno crime family; Paul Semplice, a member of the Gambino crime family; and Paul Ragusa, an associate of the Bonanno and Gambino crime families—were arrested yesterday and are scheduled to be arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn. In a coordinated operation, Canadian law enforcement authorities today arrested nine organized crime members and associates in Canada, including members of the Todaro organized crime family, who are charged with, among other crimes, narcotics trafficking.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“Today’s arrests send a powerful message that this Office and our law enforcement partners here and abroad are committed to dismantling organized crime groups wherever they are located — whether local or international in scope,” stated Acting United States Attorney Rohde. “The recording of a secret induction ceremony is an extraordinary achievement for law enforcement and deals a significant blow to La Cosa Nostra.” Ms. Rohde praised the exceptional investigative efforts of the FBI, and extended special thanks to U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), and the New York City Police Department (NYPD). Ms. Rohde also expressed her thanks to the Office’s law enforcement partners in Canada, including the Royal Canadian Mounted Police and the GTA Combined Forces Special Enforcement Unit Public Prosecution Service of Canada, Ontario Regional Office.
“Criminal enterprises, both national and international, contribute to the breakdown of a lawful society,” stated FBI Assistant Director-in-Charge Sweeney. “And yet, the allure of this gangland culture is often embraced and glamorized in movies and on television, where the threats posed to our economic and national security are seldom displayed. Dismantling and disrupting major international and national organized criminal enterprises is a longstanding area of FBI expertise, which is significantly enhanced through collaboration with our law enforcement partners and our Canadian partners. While we have more work to do, this operation is a giant step in the right direction.”
The coordinated investigation lasted more than two years and revealed criminal activity spanning the United States and Canada. As detailed in court filings, in 2015, one of the defendants sponsored a confidential informant to become a full-fledged member of the Bonanno crime family and as part of the investigation, law enforcement secretly video- and audio-recorded the induction ceremony, which occurred in Canada.
As detailed in the indictment and other court filings, Zummo, an acting captain in the Bonanno crime family, engaged in a cocaine trafficking conspiracy with Bonanno associate Salvatore Russo and others introduced by the confidential informant. In one transaction, on September 14, 2017, Zummo and Russo sold over a kilogram of cocaine inside a Manhattan gelato store. Zummo is also charged with laundering over $250,000 in cash by providing business checks issued to a fictitious consulting company that purported to bill the company for consulting services. Zummo took a fee of approximately 10 percent for each money laundering transaction.
As also detailed in the indictments and other court filings, Semplice, a member of the Gambino crime family, is charged with conducting a loansharking scheme in which he and others extended extortionate loans with interest rates of up to 54% per year. The alleged scheme generated thousands of dollars per week for Semplice and others. Paul Ragusa, a long-standing associate of the Bonanno and Gambino organized crime families, is charged with being a felon in possession of nine firearms, including three automatic assault rifles and one silencer. As alleged, Ragusa transported the firearms in exchange for $2,000 in cash.
If convicted, Zummo and Russo each face a mandatory minimum sentence of 10 years and a maximum sentence of life imprisonment; Semplice faces a maximum sentence of 20 years’ imprisonment on each of three loansharking charges; and Ragusa faces a mandatory minimum sentence of 15 years and a maximum sentence of life imprisonment under the Armed Career Criminal Act.
The charges in the indictments 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 and Gangs Section. Assistant United States Attorneys M. Kristin Mace, Tanya Hajjar and Drew Rolle are in charge of the prosecution.
The Defendants:
DAMIANO ZUMMO
Age: 44
Residence: Roslyn Heights, New YorkSALVATORE RUSSO
Age: 45
Residence: Bellmore, New YorkPAUL SEMPLICE
Age: 54
Residence: Brooklyn, New YorkPAUL RAGUSA
Age: 46
Residence: Brooklyn, New YorkE.D.N.Y. Docket Nos. 17-CR-601 (ENV); 17-CR-612 (PKC); and 17-CR-613 (PKC)
Federal Correctional Officer Pleads Guilty to Bribery, Narcotics and Sexual Abuse ChargesRead the Press Release
Earlier today, Armando Moronta pled guilty at the federal courthouse in Brooklyn to bribery, narcotics conspiracy and four counts of sexual abuse of a ward. At the time of the offenses, Moronta was a federal correctional officer employed by the United States Bureau of Prisons (BOP) at the Metropolitan Detention Center in Brooklyn, New York (MDC); he was suspended by the BOP after his initial arrest on bribery and narcotics charges. The charges stem from two separate indictments. When sentenced, Moronta faces up to 20 years in prison on the narcotics conspiracy charge and 15 years in prison on each of the bribery and sexual abuse charges. Moronta has also agreed to forfeiture of $15,000 in bribe payments and is required to register as a sex offender. The proceeding took place before United States District Judge Roslynn R. Mauskopf.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ronald G. Gardella, Special Agent-in-Charge, United States Department of Justice, Office of the Inspector General, New York Field Office (DOJ OIG), and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the plea.
“In a fundamental breach of his duties as a public servant, former federal correctional officer Moronta compromised the safety of the MDC by allowing inmates to have prohibited goods and abusing inmates sexually,” stated Acting United States Attorney Rohde. “This case serves as a reminder that correctional officers who would so compromise the well-being of their colleagues and charges will be held accountable to the fullest extent of the law.”
“Corruption and abuse of power have no place in our federal correctional system and will not be tolerated,” stated DOJ OIG Special Agent-in-Charge Gardella. “Moronta’s conduct shattered the safety of his victims and imperiled the security of the MDC. The OIG will continue to work closely with the BOP and our law enforcement partners to ensure that individuals who abuse the public’s trust in this manner are brought to justice.”
“While the vast majority of law enforcement officers carry out their duties with honor and dignity, Moronta did not,” stated Assistant Director-in-Charge Sweeney. “May this case serve as an example to anyone who dares to threaten the integrity of the law enforcement profession—just because you’re awarded a badge of honor, it doesn’t mean you can hide behind the shield.”
According to court filings and facts presented during the plea proceeding, between March and December 2016, on approximately 12 occasions, Moronta smuggled cellular telephones and narcotics, including the synthetic narcotic “K2” and Suboxone, into the MDC for use and distribution by male inmates in exchange for thousands of dollars in bribe payments. Separately, between May and June 2016, Moronta engaged in criminal sexual contact and acts with three female inmates, including fondling a female inmate and causing inmates to perform oral sex on him while he was assigned to guard their unit.
The government’s bribery and narcotics case is being handled by the Office’s Public Integrity and International Narcotics and Money Laundering Sections. Assistant United States Attorneys Nadia Shihata and Andrew Gilman are in charge of that prosecution. The government’s sexual abuse case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Nadia Shihata is in charge of that prosecution.
The Defendant:
ARMANDO MORONTA
Age: 39
Brooklyn, NYE.D.N.Y. Docket Nos. 17-CR-036 (RRM) and 17-CR-279 (RRM)
Day Trader Indicted in Computer Hacking and Securities Fraud Scheme Targeting Online Brokerage AccountsRead the Press Release
A four-count indictment was returned today charging a self-described day trader with conspiracy to commit wire fraud, conspiracy to commit securities fraud and computer intrusions, securities fraud and conspiracy to commit money laundering.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde 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.
As alleged in the indictment, between September 2014 and May 2017, Joseph Willner, 42, of Ambler, Pennsylvania, and others conspired to hack into victims’ online securities brokerage accounts and used them to place unauthorized trades, at times fraudulently liquidating existing positions in the victims’ accounts in order to fund the unauthorized trades.
The indictment further alleges that, as a part of the conspiracy, the defendant used brokerage accounts in his name to place “short sale” offers for publicly-traded companies’ stock at artificially high, above-market prices. Simultaneously, Willner’s co-conspirators hacked into victims’ online brokerage accounts and used them to place buy orders for the stock at the artificially high prices, matching Willner’s short sale offers. After using the victims’ accounts to purchase the stock, Willner and his co-conspirators then re-purchased the stock from the victims’ accounts at market or below-market prices. This series of fraudulent trades usually took place within minutes, and Willner immediately profited based on the difference between his artificially high short sale price, and the lower price at which he subsequently re-purchased the stock.
According to the indictment, while discussing the scheme in private messages on Twitter, one of Willner’s co-conspirators said: “legal trading too hard.” Willner responded that he would be a “good trading partner.” As a result of Willner and his co-conspirators’ alleged actions, the affected brokerage firms lost more than $2 million.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s New York field office investigated the case. Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section, Securities and Financial Fraud Unit, and Assistant U.S. Attorneys Tiana A. Demas, Mark E. Bini and David Kessler of the U.S. Attorney’s Office, Business and Securities Fraud and National Security and Cybercrime Sections, are prosecuting the case. The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission provided significant assistance in the investigation.
Day Trader Indicted in Computer Hacking and Securities Fraud Scheme Targeting Online Brokerage AccountsRead the Press Release
Earlier today, a four-count indictment was returned by a federal grand jury in the Eastern District of New York, charging Joseph P. Willner, a self-described day trader, with Conspiracy to Commit Wire Fraud, Conspiracy to Commit Securities Fraud and Computer Intrusions, Securities Fraud and Conspiracy to Commit Money Laundering. As alleged in the indictment and other court filings, between September 2014 and May 2017, Willner engaged in a computer intrusion and securities fraud scheme, illegally profiting from a series of coordinated trades involving more than 50 hacked online brokerage accounts. The defendant laundered the proceeds of his crimes using Bitcoin, a cryptocurrency. Willner was arrested on a criminal complaint on June 13, 2017 in Ambler, Pennsylvania.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Kenneth A. Blanco, Acting Assistant Attorney General for the Justice Department’s Criminal Division and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.
“Cybercriminals continue to come up with innovative ways to steal money from victims using the Internet, as in this case where defendant Willner’s co-conspirators allegedly hacked into the victims’ accounts in order to execute fraudulent short sales,” stated Acting United States Attorney Rohde. “Regardless of what innovative ways fraudsters come up with, this Office, together with our law enforcement partners, will prosecute them to the fullest extent of the law.” Ms. Rohde expressed her grateful appreciation to the United States Securities and Exchange Commission and the United States Commodity Futures Trading Commission for their significant assistance in the investigation.
“This case involves a 21st Century cyber boiler room, except the buyers were not even aware they were purchasing shares of stock,” stated FBI Assistant Director-in-Charge Sweeney. “As alleged, the scheme involved hacking into victims’ online securities brokerage accounts to make unauthorized trades that would benefit the defendant through the use of short sales. The scheme ultimately led to a loss of over $2 million to victim accounts. The FBI will continue to investigate and bring to justice those who commit securities fraud in an effort to ensure the fairness and integrity of our financial markets.”
As alleged in the indictment and other court filings, between September 2014 and May 2017, Willner and others conspired to hack into victims’ online securities brokerage accounts and used them to place unauthorized trades. As a part of the conspiracy, Willner used brokerage accounts in his name to place “short sale” offers for publicly-traded companies’ stock at artificially high, above-market prices. Simultaneously, Willner’s co-conspirators hacked into victims’ online brokerage accounts and used them to place buy orders for the stock at the artificially high prices, matching Willner’s short sale offers. After using the victims’ accounts to purchase the stock, Willner and his co-conspirators then re-purchased the stock from the victims’ accounts at market or below-market prices. This series of fraudulent trades usually took place within minutes, and Willner immediately profited based on the difference between his artificially high short sale price, and the lower price at which he subsequently re-purchased the stock. While discussing the scheme in private messages on Twitter, one of Willner’s co-conspirators stated: “legal trading too hard.” Willner responded that he would be a “good trading partner.”
As a result of Willner’s and his co-conspirators’ alleged actions, the affected brokerage firms lost more than $2 million. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment.
The charges announced today are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the U.S. Attorney’s Office’s Business and Securities Fraud and National Security and Cybercrime Sections, and the Securities and Financial Fraud Unit of the Department of Justice, Fraud Section. Assistant United States Attorneys Tiana A. Demas, Mark E. Bini and David Kessler and Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section are in charge of the prosecution.
The Defendant:
JOSEPH P. WILLNER
Age: 42
Ambler, PennsylvaniaE.D.N.Y. Docket No. 17-CR-620 (LDH)
Long Island Convenience Store Owner and Clerks Plead Guilty to Drug TraffickingRead the Press Release
Earlier today, Osman Ak and Murat Ak pleaded guilty to drug trafficking charges before United States Magistrate Judge Steven I. Locke in federal court in Central Islip, New York. A third defendant in the indictment, Mehmet Akpinar, previously pled guilty to drug trafficking. The three defendants were arrested on September 28, 2017 in connection with a four-count indictment. The defendants admitted to selling K-2, an illegal controlled substance, out of Eyup Gas & Convenience Store, Inc., d/b/a VS Food Mart, in Medford, New York.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and George Beach, Superintendent, New York State Police (NYSP), announced the pleas.
According to court documents, the defendants trafficked K-2 or “spice” from the convenience store owned and operated by Osman Ak. The sales were made out of a cigar boxes hidden behind the cash register. The K-2 was packaged in glitter bags with cartoon and cartoon-like characters including “Dopey,” one of Disney’s Seven Dwarfs, and names like “OMG,” “Hayze Peachy King,” “Joker” and “Hayze Hawaiian Ultra.” K-2 is an illegal and dangerous DEA Schedule 1 drug with no medicinal use.
When they are sentenced, each of the defendants face up to 20 years’ imprisonment on the drug trafficking charge to which they pled guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.
The Defendant:
OSMAN AK
Holbrook, New York
Age: 45MURAT AK
Holbrook, New York
Age: 35MEHMET AKPINAR
Nesconset, New York
Age: 51E.D.N.Y. Docket No. 17-CR- 527 (DRH)(SIL)
Brooklyn Man Sentenced to 15 Years’ Imprisonment for Carjacking SpreeRead the Press Release
Earlier today at the federal courthouse in Brooklyn, John Howard was sentenced to 181 months’ imprisonment, to be followed by three years of supervised release, by United States District Judge Ann M. Donnelly for his participation in three violent carjackings. Howard and his co-defendant, Donald Warren, previously pleaded guilty to carjacking and related firearms charges. Warren was sentenced to 18 years’ imprisonment on September 14, 2017.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge, New York Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“John Howard attacked innocent members of communities in Queens and Nassau Counties as they went about their daily lives, terrorizing them with the threat and use of lethal force,” stated Acting United States Attorney Rohde. “With this sentence, Howard is being held accountable for his numerous violent crimes.” Ms. Rohde also thanked the Nassau County Police Department, the Nassau County District Attorney’s Office and the Queens County District Attorney’s Office for their assistance during the investigation.
Carjacking, December 18, 2015
According to court filings and facts presented during the plea proceeding, on December 18, 2015, Howard approached a woman who was sitting in a parked Volkswagen Jetta in Valley Stream, New York. As the woman leaned over to retrieve her purse from the passenger side, Howard pressed a hard object against her back and said, “You know what this is. If you want to see your family and not be on the news, give me your money.” Howard stole the woman’s car and drove away in it.
Carjacking, December 28, 2015
Howard and Warren confronted the driver of a Mercedes Benz in front of a Best Western hotel in Jamaica, New York. Warren threatened the driver with a handgun and demanded his wallet. Warren and Howard beat the man over the head, stole his wallet, and drove away in the Mercedes.
Carjacking and Shooting, January 21, 2016
Howard participated in another carjacking with Warren in which they stole a car parked outside a Hampton Inn hotel in South Ozone Park, New York. A young woman was waiting for her mother in the passenger seat of a Hyundai parked in front of the hotel when Warren, armed with a loaded handgun, entered the vehicle and drove it around the hotel parking lot. When the young woman’s mother left the hotel a few minutes later, Warren exited the vehicle and demanded the mother’s purse. Warren shot the woman in the chest when she resisted. Howard and Warren then fled the scene.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar and Moira Kim Penza are in charge of the prosecution.
The Defendant:
JOHN HOWARD
Age: 50
Residence: Brooklyn, New YorkDONALD WARREN
Age: 55
Residence: Queens, New YorkE.D.N.Y. Docket No. 16-CR-102 (AMD)
New York Resident Charged with Providing Material Support to ISIS, Extradited to United StatesRead the Press Release
An indictment was unsealed today charging Mirsad Kandic, 36, a legal permanent resident of the United States who left the United States in 2013, with one count of conspiring to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, resulting in death, and five counts of providing and attempting to provide material support and resources to ISIS, including personnel, equipment and false documentation and identification, including one count resulting in death. The defendant was extradited to the United States from Bosnia and Herzegovina yesterday and is scheduled to be arraigned at 2:00 p.m. before U.S. District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn, New York.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr., of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD announced the extradition and charges.
“As part of his support for ISIS, the defendant traveled overseas and, while abroad, recruited and facilitated the travel of foreign fighters to join the terrorist organization,” said Acting Assistant Attorney General Boente. “The National Security Division will continue to use all its tools to disrupt the flow of foreign fighters and bring to justice those who provide material support to foreign terrorist organizations.”
“As alleged, defendant Kandic abandoned the United States, his adopted country, and joined ISIS, a violent terrorist organization opposed to the U.S. and its interests,” stated Acting U.S. Attorney Bridget M. Rohde. “From Turkey, he proceeded to recruit others to join ISIS, swelling their ranks and helping them commit terrorist acts such as suicide bombings. Together with our law enforcement partners, we will continue to prosecute ISIS members, as well as other terrorists, to the fullest extent of the law.” Ms. Rohde thanked the authorities of Bosnia and Herzegovina, the FBI Legal Attaché’s Office in Sarajevo, and the Department of Justice’s Office of International Affairs, for their assistance in the investigation and effecting the defendant’s extradition.
“As alleged, at the same time Kandic lived freely among us in New York, he expressed a desire to travel overseas to kill or maim U.S. military forces,” stated Assistant Director in Charge Sweeney. “Kandic eventually put his desire in action when he traveled to Turkey to join ISIS, and from there he set about recruiting others, including Jake Bilardi, to support his cause. Just prior to Bilardi successfully detonating a suicide bomb in Ramadi, Kandic told Bilardi he hoped Bilardi’s victims’ organs would ‘implode,’ and just after the attack, Kandic publicized it on Twitter. Kandic is now back in New York, no longer living freely among us, but rather in federal custody to face justice. ”
As alleged in the indictment and other court filings, prior to November 2013, while living in the Bronx and Brooklyn, Kandic expressed the desire to travel overseas to engage in “jihad” against U.S. military forces to obtain martyrdom. In December 2013, Kandic traveled to Istanbul, Turkey, and joined ISIS. From there, Kandic recruited individuals from the United States, the United Kingdom, Australia and elsewhere, to travel to ISIS-controlled territory in Syria and Iraq and serve as foreign fighters. In online communications with an associate, Kandic stated he worked in ISIS’s Border Office in Turkey and was part of a team that conducted background checks of foreign fighters seeking to join ISIS in Syria. Kandic told associates that he traveled to and from ISIS-controlled territory, including Raqqa, Syria, in connection with his work with ISIS. In a recorded voice memo from Kandic to an associate, Kandic stated, “I have a lot of Mujahideen in Europe, a lot,” and “I sent out over 20,000 brothers . . . to Sham.” “Mujahideen” refers to fighters. “Sham” is frequently used by ISIS members to refer to the region of the Levant, including Syria.
One of the individuals Kandic assisted was Jake Bilardi, an 18-year-old Australian citizen who traveled from Melbourne, Australia, to Istanbul, Turkey, in August 2014. A few days before Bilardi flew to Turkey, Kandic sent Twitter messages instructing Bilardi to stand in a particular section of an airport in Istanbul. Kandic informed Bilardi that he would send someone to meet him there. From Turkey, Bilardi traveled to ISIS-controlled territory in Syria and Iraq. Kandic continued to communicate with Bilardi and encouraged him to follow through with his plan to commit a suicide attack in Iraq. In early March 2015, Bilardi informed Kandic via Twitter that he “just went to look at my target today for my operation.” Kandic replied, “May Allah reward you immensely.” Kandic later added: “May Allah make there [sic] inner organs implode.” On March 11, 2015, Bilardi committed a suicide bombing in Ramadi, Iraq. Kandic publicized the attack via Twitter.
Kandic also worked to further ISIS’s media and propaganda operations. Kandic set up and used over 100 Twitter accounts to provide updates about ISIS attacks and territorial gains, which announcements were close in time to when the events occurred.
If convicted, Kandic faces a maximum sentence of life imprisonment. The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Trial Attorneys Jennifer Levy and Jolie Zimmerman of the National Security Division’s Counterterrorism Section, and Assistant U.S. Attorneys Saritha Komatireddy, Tiana A. Demas and J. Matthew Haggans of the Eastern District of New York are prosecuting this case.
Brooklyn Resident Charged with Providing Material Support to ISIS Extradited to United StatesRead the Press Release
Earlier today, an indictment was unsealed in federal court in Brooklyn, New York, charging Mirsad Kandic, a legal permanent resident of the United States, with one count of conspiring to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS), a foreign terrorist organization, resulting in death, and five counts of providing and attempting to provide material support and resources to ISIS, including personnel, equipment and false documentation and identification. The defendant was extradited to the United States from Bosnia and Herzegovina yesterday and is scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr., at the federal courthouse in Brooklyn.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Dana J. Boente, Acting Assistant Attorney General for National Security, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the extradition and charges.
“As alleged, defendant Kandic abandoned the United States, his adopted country, and joined ISIS, a violent terrorist organization opposed to the U.S. and its interests,” stated Acting U.S. Attorney Bridget M. Rohde. “From Turkey, he proceeded to recruit others to join ISIS, swelling its ranks and helping it commit terrorist acts such as suicide bombings. Together with our law enforcement partners, we will continue to prosecute ISIS members, as well as other terrorists, to the fullest extent of the law.” Ms. Rohde thanked the authorities of Bosnia and Herzegovina, the FBI Legal Attaché’s Office in Sarajevo, and the Department of Justice’s Office of International Affairs, for their assistance in the investigation and effecting the defendant’s extradition.
“As part of his support for ISIS, the defendant traveled overseas and, while abroad recruited, and facilitated the travel of foreign fighters to join the terrorist organization,” said Acting Assistant Attorney General Boente. “The National Security Division will continue to use all its tools to disrupt the flow of foreign fighters and bring to justice those who provide material support to foreign terrorist organizations.”
“As alleged, at the same time Kandic lived freely among us in New York, he expressed a desire to travel overseas to kill or maim U.S. military forces,” stated FBI Assistant Director-in-Charge Sweeney. “Kandic eventually put his desire in action when he traveled to Turkey to join ISIS, and from there he set about recruiting others, including Jake Bilardi, to support his cause. Just prior to Bilardi successfully detonating a suicide bomb in Ramadi, Kandic told Bilardi he hoped Bilardi’s victims’ organs would ‘implode,’ and just after the attack, Kandic publicized it on Twitter. Kandic is now back in New York, no longer living freely among us, but rather in federal custody to face justice. ”
As alleged in the indictment and other court filings, prior to November 2013, while living in the Bronx and Brooklyn, Kandic expressed the desire to travel overseas to engage in “jihad” against U.S. military forces to obtain martyrdom. In December 2013, Kandic traveled to Istanbul, Turkey and joined ISIS. From there, Kandic recruited individuals from the United States, the United Kingdom, Australia, and elsewhere to travel to ISIS-controlled territory in Syria and Iraq and serve as foreign fighters. In online communications with an associate, Kandic stated he worked in ISIS’s Border Office in Turkey and was part of a team that conducted background checks of foreign fighters seeking to join ISIS in Syria. Kandic told associates that he traveled to and from ISIS-controlled territory, including Raqqa, Syria, in connection with his work with ISIS. In a recorded voice memo from Kandic to an associate, Kandic stated, “I have a lot of Mujahideen in Europe, a lot,” and “I sent out over 20,000 brothers . . . to Sham.” “Mujahideen” refers to fighters. “Sham” is frequently used by ISIS members to refer to the region of the Levant, including Syria.
One of the individuals Kandic assisted was Jake Bilardi, an 18-year-old Australian citizen who traveled from Melbourne, Australia, to Istanbul, Turkey in August 2014. A few days before Bilardi flew to Turkey, Kandic sent Twitter messages instructing Bilardi to stand in a particular section of an airport in Istanbul. Kandic informed Bilardi that he would send someone to meet him there. From Turkey, Bilardi traveled to ISIS-controlled territory in Syria and Iraq. Kandic continued to communicate with Bilardi and encouraged him to commit a suicide attack in Iraq. In early March 2015, Bilardi informed Kandic via Twitter that he “just went to look at my target today for my operation.” Kandic replied, “May Allah reward you immensely.” Kandic later added: “May Allah make there inner organs implode.” On March 11, 2015, Bilardi committed a suicide bombing in Ramadi, Iraq. Kandic publicized the attack via Twitter.
Kandic also worked to further ISIS’s media and propaganda operations. Kandic set up and used over 100 Twitter accounts to provide updates about ISIS attacks and territorial gains, which announcements were close in time to when the events occurred.
If convicted, Kandic faces a maximum sentence of life imprisonment. The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Saritha Komatireddy, Tiana A. Demas and J. Matthew Haggans are in charge of the prosecution, with assistance provided by Trial Attorneys Jennifer Levy and Jolie Zimmerman of the National Security Division’s Counterterrorism Section.
The Defendant:
MIRSAD KANDIC
Age: 36E.D.N.Y. Docket No. 17-CR-449 (NGG)
Brooklyn Businessman Charged with Fraud in Connection with Two Initial Coin OfferingsRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Maksim Zaslavskiy with securities fraud conspiracy in connection with engaging in illegal unregistered securities offerings and fraudulent conduct and misstatements designed to deceive investors as part of two Initial Coin Offerings (ICOs). Zaslavskiy conducted these ICOs through two of his companies, REcoin Group Foundation, LLC (REcoin) and DRC World, Inc., which was also known as Diamond Reserve Club (Diamond). Zaslavskiy marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently touted Diamond as an “exclusive and tokenized membership pool” that was hedged by physical diamonds. The defendant was arrested this morning and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. In a separate action, the United States Securities and Exchange Commission (SEC) filed civil charges against Zaslavskiy.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged, Zaslavskiy and his associates enticed investors by promising returns using novel ICOs even though Zaslavskiy knew that no real estate or diamonds were actually backing the investments,” stated Acting United States Attorney Rohde. “This Office and our partners at the FBI are committed to protecting investors and ensuring that the securities markets are free from manipulation.” Ms. Rohde extended her grateful appreciation to the Securities and Exchange Commission, New York Regional Office, for their assistance in this case.
“As alleged, Zaslavskiy and associates led their victims to believe they were hedging their bets on cryptocurrency secured by real estate and diamond investments,” stated Assistant Director-in-Charge Sweeney. “Much like a diamond, however, their promises were flawed, and the investments didn't exist. Today’s charges are a reminder that we intend to prosecute those who exploit our markets by engaging in corrupt behavior.”In connection with the two ICOs, Zaslavskiy, with the help of others working with him, allegedly sold virtual tokens or coins to investors under the pretense that the coins were backed by investments in real estate and diamonds, even though no such investments existed. Virtual currency, such as that promoted in these ICOs, is a digital representation of value that can be digitally traded but does not have legal tender status, and functions only by agreement with the community of users of that particular currency. Zaslavskiy and his cohorts promised substantial returns to investors even though neither company had any real operations. With respect to REcoin, Zaslavskiy advertised that the company had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO into real estate when in fact no such employees had ever been hired or even consulted, and no real estate investments were made. Similarly, Zaslavskiy told prospective investors in Diamond that their investment in Diamond tokens was “hedged by physical diamonds,” even though Diamond had not actually purchased any diamonds or engaged in any business operations.
If convicted, the defendant faces up to five years’ imprisonment and a fine. The charges in the complaint 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 Julia Nestor is in charge of the prosecution.
The Defendant:
MAKSIM ZASLAVSKIY
Residence: Brooklyn, New York
Age: 38E.D.N.Y. Docket No. 17-MJ-934
United States Announces Settlement with New York City Board of Elections Resolving Improper Removal of Voters from Registration RollsRead the Press Release
The Department of Justice and the United States Attorney’s Office for the Eastern District of New York announced today that it has entered into a settlement with the Board of Elections in the City of New York (NYCBOE), resolving the Department’s claims that the NYCBOE improperly removed New York City voters from voter registration rolls in violation of Section 8 of the National Voter Registration Act of 1993 (NVRA). Under the terms of the settlement, the NYCBOE will ensure that the names of affected voters will be restored to the City’s voter registration list.
The Justice Department’s investigation found that the NYCBOE removed approximately 117,000 voters from the voter registration list solely due to the voters’ failure to vote, something that federal law forbids. The NYCBOE also failed to follow NVRA procedures designed to protect voters from wrongful removal from the voter registration list.
The NVRA includes requirements for maintaining voter registration lists in elections for federal office. The NVRA requires that states make a reasonable effort to remove voters who may have become ineligible due to having died or moved. At the same time, the NVRA has protections against wrongful removal, including specific procedures for voters who may have moved and a requirement that voters cannot be removed solely because he or she has not voted.
The settlement also requires the NYCBOE to develop and implement voter registration list maintenance procedures that comply fully with federal law and protect New York City voters from improper removal from voter registration lists in the future. The parties will submit the settlement to a federal judge for court approval.
“Complete and accurate voter registration lists strengthen our democracy,” said Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division. “The Civil Rights Division commends the Board of Elections for working with the Division to ensure that New York City’s voter registration list accurately reflects its eligible registrants, as envisioned by the National Voter Registration Act.”
“The improper removal of voters from the rolls deprives voters of their voice in choosing their elected representatives,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “The settlement in this case restores that voice and ensures that eligible voters will be heard in the future.”
More information about the National Voter Registration Act and other federal voting laws is available on the Department of Justice website at https://www.justice.gov/crt/voting-section. Complaints about voter registration practices may be reported to the Civil Rights Division at 1-800-253-3931.
United States Announces Settlement with New York City Board of Elections Resolving Improper Removal of Voters from Registration RollsRead the Press Release
BROOKLYN – The Department of Justice and the United States Attorney’s Office for the Eastern District of New York announced today that it has entered into a settlement with the Board of Elections in the City of New York (NYCBOE), resolving the Department’s claims that the NYCBOE improperly removed New York City voters from voter registration rolls in violation of Section 8 of the National Voter Registration Act of 1993 (NVRA). Under the terms of the settlement, the NYCBOE will ensure that the names of affected voters will be restored to the City’s voter registration list.
The Justice Department’s investigation found that the NYCBOE removed approximately 117,000 voters from the voter registration list solely due to the voters’ failure to vote, something that federal law forbids. The NYCBOE also failed to follow NVRA procedures designed to protect voters from wrongful removal from the voter registration list.
The NVRA includes requirements for maintaining voter registration lists in elections for federal office. The NVRA requires that states make a reasonable effort to remove voters who may have become ineligible due to having died or moved. At the same time, the NVRA has protections against wrongful removal, including specific procedures for voters who may have moved and a requirement that a voter cannot be removed solely because he or she has not voted.
The settlement also requires the NYCBOE to develop and implement voter registration list maintenance procedures that comply fully with federal law and protect New York City voters from improper removal from voter registration lists in the future. The parties will submit the settlement to a federal judge for court approval.
“The improper removal of voters from the rolls deprives voters of their voice in choosing elected representatives,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “The settlement in this case restores that voice and ensures that eligible voters will be heard in the future.”
“Complete and accurate voter registration lists strengthen our democracy,” said Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division. “The Civil Rights Division commends the Board of Elections for working with the Division to ensure that New York City’s voter registration list accurately reflects its eligible registrants, as envisioned by the National Voter Registration Act.”
More information about the National Voter Registration Act and other federal voting laws is available on the Department of Justice website at https://www.justice.gov/crt/voting-section. Complaints about voter registration practices may be reported to the Civil Rights Division at 1-800-253-3931.
Former Soccer Official Costas Takkas Sentenced to 15 Months in Prison for Laundering Millions of Dollars in BribesRead the Press Release
Earlier today, in federal court in Brooklyn, former Cayman Islands soccer official Costas Takkas was sentenced to 15 months of incarceration by United States District Judge Pamela K. Chen following his money laundering conspiracy guilty plea on May 24, 2017. Takkas was convicted of this offense in connection with his agreement to launder $3 million in bribes to be paid by sports marketing companies to Jeffrey Webb, the former president of CONCACAF, $2 million of which reached Webb through Takkas. Takkas was also ordered to pay $3 million in restitution to the Caribbean Football Union, known as CFU, as part of his sentence.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and R. Damon Rowe, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS-CI) announced the sentence.
“The defendant Costas Takkas has now been held to account for using the U.S. financial system to launder millions of dollars in bribes as part of the corruption of international soccer,” stated Acting United States Attorney Rohde. “This Office, together with our law enforcement partners at the FBI and IRS-CI, will continue to bring to justice those who seek to use the U.S. financial system to hide criminal conduct and its proceeds.” Ms. Rohde also thanked the United States Department of Justice Office of International Affairs, Organized Crime and Gang Section and Money Laundering and Asset Recovery Section for their assistance in the case, and expressed her appreciation to the governments of the Cayman Islands, Switzerland, and St. Vincent and the Grenadines for their cooperation.
“The soccer officials involved in all aspects of FIFA take an oath to adhere to a code of ethics, and they accept a responsibility to make sure monies go to the groups they represent, not to line their own pockets,” stated FBI Assistant Director-in-Charge Sweeney. “The game of soccer will continue to be played in small neighborhood parks and in lavish stadiums around the world, but the FBI’s wide-ranging and vast investigation won’t end until everyone involved in every aspect of corruption and bribery are brought to justice.”
“Over a three-year period, Takkas undermined the process of fair and open competition when he conspired to secretly funnel bribe money to Webb through a series of transactions involving international wire transfers and U.S. financial institutions,” stated IRS-CI Special Agent-in-Charge Rowe. “IRS Criminal Investigation is committed to aggressively investigating individuals who use offshore entities, foreign bank accounts, and wire transfer systems based in the U.S. to facilitate the laundering of illicit funds. Working with our partners at the Department of Justice, we will continue to unmask money laundering intermediaries who enable corrupt practices to flourish.”
Background[1]
The sport of soccer is governed worldwide by the Féderation Internationale de Football Association (FIFA), FIFA’s constituent continental confederations (including CONCACAF, the confederation covering North America, Central America and the Caribbean), and FIFA’s constituent national member associations (which are also known as federations). Some confederations, such as CONCACAF, include regional football subgroups within them, including the Caribbean Football Union (CFU), which is composed of federations from the Caribbean region. Since 2004, soccer officials have been bound by FIFA’s code of ethics, which, among other things, imposes a fiduciary duty on soccer officials in favor of the soccer organizations they represent.
The CFU member federations owned the media and marketing rights to soccer matches played in their home territories during the qualifying stages for the men’s World Cup tournament. Rather than sell portions of these rights separately as individual federations, the CFU federations agreed to bundle portions of their rights together for sale. The CFU, like many other soccer governing bodies, typically sold these rights to sports marketing companies that served as middlemen, which in turn sold different portions of the rights to different broadcasters and media companies around the world.
The CFU Rights Bribery and Laundering Scheme
The defendant was a longtime associate of Jeffrey Webb, who in 2012 was the president of the Cayman Islands Football Association (CIFA, which was a member of the CFU), a high-ranking official of the CFU, and the president of CONCACAF. Around that time, an executive of Traffic USA, a sports marketing company based in Miami, began negotiations with Webb to purchase the bundled media and marketing rights to the CFU federations’ World Cup qualifier matches for the 2018 and 2022 cycles. The defendant communicated on Webb’s behalf to the Traffic executive that Webb wanted a $3 million bribe in exchange for awarding these rights to Traffic. The Traffic executive agreed, and a few months later, after Webb had appointed the Traffic executive to serve as secretary general of CONCACAF, Traffic and the CFU entered into a contract for the sale of these rights. Meanwhile, the defendant began to work with the Traffic executive to determine how Traffic could pay Webb this bribe while disguising the true nature of the payments.
The defendant had meetings with other Traffic executives both in Miami and in Brazil, where Traffic’s parent company was located, to make arrangements for Traffic to secretly make these bribe payments to Webb. Following these meetings, in November 2012, Traffic wired $1.2 million from a bank account in Florida to a middleman’s bank account in Hong Kong, from which $1 million of these funds were wired to an account in the Cayman Islands owned by Kosson Ventures, Limited, a company the defendant controlled. In December 2012, Traffic wired an additional $500,000 to the Caymanian bank account of CPL Limited, another company the defendant controlled. In the course of receiving these funds, the defendant made false statements about them, and the accounts receiving them, to Caymanian bank employees. The defendant also created bogus consulting contracts purportedly to justify the payments.
After receiving these funds in the Caymanian accounts, the defendant conveyed them to Webb and the Traffic executive, or spent the funds for their benefit. For example, after wiring some of the funds to a Citibank account he held in Florida in his own name, Takkas used funds in that account to pay for real estate in Georgia that Webb was purchasing, and for a swimming pool at Webb’s house in Georgia. During the course of the scheme, the defendant lied to a Citibank employee about the payment for the swimming pool, saying that the swimming pool was a wedding gift for Webb. Takkas also used these funds to pay for luxury leather goods and watches for Webb and the Traffic executive, and a kitchen remodeling and expensive painting for the Traffic executive.
Also in 2012, Traffic entered an agreement with another Miami-based sports marketing company named Media World, whereby the two companies pooled the media and marketing rights they had obtained for World Cup qualifier matches in the CONCACAF region, and shared responsibility for associated costs. As part of that agreement, Media World agreed to be responsible for half of the $3 million bribe that Traffic had agreed to pay Webb for the CFU media rights. The defendant met with a Media World executive in Miami on several occasions to discuss how Media World could pay this bribe in a hidden manner. Eventually, the defendant and Media World arranged for $500,000 to be sent from a Panamanian front company to various accounts in the United States, the Cayman Islands, and St. Vincent and the Grenadines, again using bogus consulting contracts to mask the true nature of the bribe payments. The defendant spent some of these funds to benefit Webb before the scheme was stopped, first by concerns about the government’s investigation and then by the disclosure of the scheme in May 2015 by the initial indictment in this case.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant United States Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, Kaitlin T. Farrell, and Brian D. Morris are in charge of the prosecution.
The Defendant:
COSTAS TAKKAS
Age: 60
Citizenship: United Kingdom
E.D.N.Y. Docket No. 15-CR-252 (PKC)
[1] The information described below is set forth in various court filings and statements made during court appearances in this case and related cases.
Uzbek Citizen Sentenced to 15 Years for Conspiring to Provide Material Support to TerroristsRead the Press Release
Abdurasul Hasanovich Juraboev, 27, a citizen of Uzbekistan and resident of Brooklyn, New York, was sentenced to 15 years in prison for conspiring to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Dana Boente, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD made the announcement, after sentencing by U.S. District Judge William F. Kuntz, II.
“The defendant had a clear desire to wage violence on behalf of ISIS, and was determined to do so, whether on U.S. soil or abroad,” said Acting Assistant Attorney General Boente. “Thanks to the efforts of law enforcement, the defendant was stopped at JFK International Airport before his plans came to fruition, and with this sentence he will be held accountable. Stemming the flow of foreign fighters and defending our nation against the threat of terrorism remains the highest priority of the National Security Division.”
“Today’s sentence holds Juraboev to account for his plans to join ISIS and engage in violent jihad overseas or carry out a terrorist attack in the United States if he was unable to travel to Syria,” stated Acting U.S. Attorney Rohde. “This Office will continue to work tirelessly in collaboration with the FBI’s Joint Terrorism Task Force in New York to protect our city from terrorist attacks and prevent extremists from travelling abroad to join foreign terrorist organizations.”
“As a Brooklyn resident, Abdurasul Hasanovich Juraboev posted comments on an ISIS website in August 2014 about his desire to be a martyr and his willingness to kill President Obama,” stated Assistant Director in Charge Sweeney. “Over the next few months, Juraboev and his co-conspirators continued to ramp up their allegiance to the terrorist group by discussing travel to Syria and proposals to wage violent jihad here in the United States. Juraboev ultimately purchased a plane ticket to travel to Syria, an act in furtherance of his terrorist plans and intentions. Those plans were thwarted and ended with today’s sentence, resulting in serious prison time.”
“The defendant in this case lived in Brooklyn while making plans to travel to Syria to support a designed terrorist organization,” stated Commissioner O’Neill. “If that was not successful, the defendant schemed of bombing Coney Island or killing the President of the United States. My thanks to the detectives, agents, prosecutors and federal judge whose work resulted in today’s sentence.”
According to previous court filings, in August 2014, Juraboev posted a threat on an Uzbek-language website to kill President Obama in an act of martyrdom on behalf of ISIS. In subsequent interviews by federal agents, Juraboev stated his belief in ISIS’s terrorist agenda, including the establishment by force of an Islamic caliphate in Iraq and Syria. Juraboev stated that he wanted to travel to Syria to fight on behalf of ISIS but lacked the means to travel. He added that, if he were unable to travel, he would engage in an act of martyrdom on U.S. soil if ordered to do so by ISIS, such as killing the President or planting a bomb on Coney Island.
During the next several months, Juraboev and a co-conspirator discussed plans to travel to Syria to fight on behalf of ISIS, culminating in Juraboev’s purchase on Dec. 27, 2014, of a ticket to travel from John F. Kennedy International Airport in Queens, New York, to Istanbul, Turkey, on March 29, 2015.
The U.S. government intends to seek the defendant’s removal to Uzbekistan upon completion of his sentence of imprisonment.
Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda, Peter W. Baldwin and David K. Kessler of the Eastern District of New York, and Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section are prosecuting this case.
Suffolk County Attorney Indicted for Mail Fraud, Wire Fraud and Money LaunderingRead the Press Release
A 19-count indictment was unsealed today in federal court in Central Islip, New York, charging Vincent J. Trimarco, Jr., with conspiracies to commit mail fraud and wire fraud and money laundering, as well as related substantive counts. Trimarco was arrested this morning and will be arraigned this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
As detailed in the indictment, Trimarco was an attorney licensed to practice in New York State and, at times, a part-owner of the now closed Emporium, a nightclub and music venue in Patchogue, New York. From October 2011 through August 2017, Trimarco and a Co-Conspirator orchestrated a scheme to defraud a minor, who was the Co-Conspirator’s grandchild, of more than $2 million in settlement proceeds stemming from a wrongful death action. Using the settlement proceeds, Trimarco and the Co-Conspirator purchased luxury vehicles, including a Ferrari F430 Spider for $200,000 and a Jaguar XKR convertible for $57,000, as well as numerous pieces of property in Suffolk County, and invested approximately $800,000 in the Emporium. Despite orders from the Suffolk County Surrogate’s Court in April 2012 and August 2012 restraining the disbursement of the settlement proceeds and, ultimately, directing the return of the settlement proceeds, Trimarco and the Co-Conspirator sold the assets obtained with the settlement funds and failed to return the proceeds to the rightful heir. In addition, from October 2011 to the present, Trimarco orchestrated a scheme to defraud both the Co-Conspirator and the minor of these funds. Trimarco obtained ownership interest in the vehicles, property and nightclub despite the fact that these items had been purchased with the settlement funds and Trimarco contributed little to no funds of his own.
“As alleged, by defrauding a co-conspirator’s grandchild of an inheritance from a wrongful death suit, the defendant violated the law as well as the trust placed in him as an attorney,” stated Acting United States Attorney Rohde. “Protecting the public from those who, for personal gain, would abuse that trust and betray the laws they have sworn to uphold is a priority of this office.”
“When you peel back the layers of this alleged crime, it all boils down to this: Trimarco, a licensed attorney, is believed to have defrauded a minor of millions of dollars awarded in a wrongful death settlement,” stated FBI Assistant Director-in-Charge Sweeney. “As if that wasn’t bad enough, he and a co-conspirator, whom he also defrauded, allegedly used this money to invest in a nightclub and purchase big-ticket items and pieces of property. When the scam was first uncovered, a court order was issued mandating they return the funds to their rightful owner, which they failed to do. Today, this high-speed lifestyle had been brought to an abrupt halt as Trimarco faces the consequences of his alleged actions.”
If convicted, Trimarco faces a maximum term of imprisonment for 20 years for each mail fraud, wire fraud and money laundering charge, 10 years for each money laundering unlawful monetary transactions charge, and five years for each conspiracy charge.
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 Long Island Criminal Division. Assistant United States Attorneys Catherine M. Mirabile, Raymond A. Tierney and Charles P. Kelly are in charge of the prosecution with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division, which is responsible for the forfeiture of assets.
The Defendant:
VINCENT J. TRIMARCO, JR.
Age: 48
Smithtown, NY
E.D.N.Y. Docket No. 17-CR-583 (JMA)
Former United States Merchant Marine Academy Employee Sentenced to 36 Months’ Imprisonment for Receiving BribesRead the Press Release
Earlier today, in federal court in Central Islip, John C. McCormick, a former Planner/Estimator for the Department of Public Works of the United States Merchant Marine Academy, located in Kings Point, New York, was sentenced by United States District Judge Arthur D. Spatt to 36 months’ imprisonment, to be followed by three years of supervised release, for receiving a bribe as a public official. The Court also imposed a $10,000 fine and a forfeiture order of $78,000 for funds illegally received by McCormick as part of the scheme. McCormick pleaded guilty on January 20, 2017 in connection with his participation in a scheme to defraud the United States by steering maintenance and repair contracts to favored contractors in exchange for bribes.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Douglas Shoemaker, Regional Special Agent-in-Charge, United States Department of Transportation, Office of the Inspector General (DOT-OIG), and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the sentence.
Between 2000 and 2014 while McCormick was employed in the Department of Public Works of the United States Merchant Marine Academy, he solicited and submitted fake bids on contracts he supervised in order to steer the awarding of maintenance and repair contracts to favored contractors who paid him bribes. McCormick, using his position, arranged, supervised or effected a majority of construction contracts at the Academy. He became known among contractors as “Ten Percent McCormick,” in reference to the amount of bribe payments required to do business at the Academy. McCormick accepted more than $150,000 in bribes, according to court filings.
“McCormick abused his position of trust by putting government contracts up for sale in order to line his pockets with bribe money,” stated Acting U.S. Attorney Rohde. “This Office, together with our law enforcement partners, will vigorously investigate and prosecute to the fullest extent of the law those who engage in public corruption that threatens the integrity of the contract procuring process.”
“The sentence of Mr. John McCormick for bribery at the U.S. Merchant Marine Academy is a clear signal that those entrusted with the stewardship of taxpayer dollars will be held responsible for maintaining the highest level of integrity,” stated DOT-OIG Regional Special Agent-in-Charge Shoemaker. “Accountability is a priority of the Secretary and OIG, and working with our law enforcement peers and prosecutorial colleagues, we will continue our vigorous efforts to protect the taxpayers’ investment in our nation’s transportation system from fraud, waste, abuse and violations of law.”
“The United States Merchant Marine Academy is one of the most elite institutions in the country responsible for training our young leaders of tomorrow,” stated IRS-CI Special Agent-in-Charge Robnett. “Today’s sentence today should deter other public servants from engaging in such misdeeds. IRS-CI is proud to lend our financial expertise to an investigation where the crimes harm all U.S. citizens.”
The government's case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Burton T. Ryan, Jr. is in charge of the prosecution with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division.
The Defendant:
JOHN C. McCORMICK
Age: 60
Residence: Atlantic Beach, New York
E.D.N.Y. Docket No. 15-CR-490 (ADS)
Former CFO of Not-For-Profit Organization Sentenced to 24 Months in Prison for Wire Fraud and Making a False Tax ReturnRead the Press Release
Earlier today, United States District Judge Raymond J. Dearie sentenced defendant Paul Cronin to 24 months’ imprisonment at the federal courthouse in Brooklyn, New York. In May 2017, Cronin pleaded guilty to a criminal information charging him with one count of wire fraud and one count of making and subscribing a false tax return, in connection with his conduct as Chief Financial Officer (CFO) of United States Council for International Business (USCIB), a not-for-profit organization that advocates for international business and trade. As part of the sentence imposed by the Court, Cronin was ordered to pay more than $1.3 million in restitution to USCIB and $229,364 in outstanding taxes.
Bridget M. Rohde, Acting 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 Field Office (IRS-CI), announced the sentence.
“The defendant abused his position as Chief Financial Officer of a not-for-profit by misappropriating the very funds he was charged with managing,” stated Acting U.S. Attorney Rohde. “Together with our law enforcement partners, this Office will prosecute individuals like the defendant to the fullest extent of the law.”
“Cronin didn’t serve his organization with honor; he instead engaged in criminal activity to the detriment of its cause,” stated FBI Assistant Director-in-Charge Sweeney. “Today’s sentence should send a message that this type of behavior won’t be tolerated, especially when those in positions of trust break the law.”
“Stolen money is taxable in the United States,” stated IRS-CI Special Agent-in-Charge Robnett. “Stealing money from an international business advocacy group and not paying tax on such income not only harms the citizens here at home, but has worldwide economic impact. Today Mr. Cronin has been held accountable, and the IRS is proud to share its financial expertise to such a far reaching investigation.”
As detailed in court filings, Cronin abused his position as the CFO of USCIB to misappropriate more than $1.3 million in funds to pay for personal expenses. Cronin perpetrated this scheme to defraud in several ways, specifically by using company funds to pay his personal credit card debts, writing checks from USCIB to himself, and making purchases on USCIB credit cards for personal purposes. In order to conceal his illegal scheme, the defendant falsified entries in USCIB bookkeeping records. Cronin further sought to conceal his criminal conduct by failing to report the embezzled funds as income to the Internal Revenue Service.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Alexander A. Solomon is in charge of the prosecution.
The Defendant:
PAUL CRONIN
Age: 55
Daniel Island, South Carolina
E.D.N.Y. Docket No. 17-CR-190 (RJD)
Brooklyn Man Sentenced to 15 Years in Prison for Conspiring to Provide Material Support to TerroristsRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Abdurasul Hasanovich Juraboev, a citizen of Uzbekistan and resident of Brooklyn, New York, was sentenced by United States District Judge William F. Kuntz, II, to 15 years’ imprisonment for conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and al-Sham (ISIS). The U.S. government intends to seek his removal to Uzbekistan upon completion of his sentence of imprisonment.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Dana Boente, Acting 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 sentence.
According to previous court filings, in August 2014, Juraboev posted a threat on an Uzbek-language website to kill President Obama in an act of martyrdom on behalf of ISIS. In subsequent interviews by federal agents, Juraboev stated his belief in ISIS’s terrorist agenda, including the establishment by force of an Islamic caliphate in Iraq and Syria. Juraboev stated that he wanted to travel to Syria to fight on behalf of ISIS but lacked the means to travel. He added that, if he were unable to travel, he would engage in an act of martyrdom on U.S. soil if ordered to do so by ISIS, such as killing the President or planting a bomb on Coney Island. During the next several months, Juraboev and a co-conspirator discussed plans to travel to Syria to fight on behalf of ISIS, culminating in Juraboev’s purchase on December 27, 2014, of a ticket to travel from John F. Kennedy International Airport in Queens, New York, to Istanbul, Turkey, departing on March 29, 2015.
“Today’s sentence holds Juraboev to account for his plans to join ISIS and engage in violent jihad overseas or carry out a terrorist attack in the United States if he was unable to travel to Syria,” stated Acting U.S. Attorney Rohde. “This Office will continue to work tirelessly in collaboration with the FBI’s Joint Terrorism Task Force in New York to protect our city from terrorist attacks and prevent extremists from travelling abroad to join foreign terrorist organizations.”
“The defendant had a clear desire to wage violence on behalf of ISIS, and was determined to do so, whether on U.S. soil or abroad,” said Acting Assistant Attorney General Boente. “Thanks to the efforts of law enforcement, the defendant was stopped at JFK International Airport before his plans came to fruition, and with this sentence he will be held accountable. Stemming the flow of foreign fighters and defending our nation against the threat of terrorism remains the highest priority of the National Security Division.”
“As a Brooklyn resident, Abdurasul Hasanovich Juraboev posted comments on an ISIS website in August 2014 about his desire to be a martyr and his willingness to kill President Obama,” stated FBI Assistant Director-in-Charge Sweeney. “Over the next few months, Juraboev and his co-conspirators continued to ramp up their allegiance to the terrorist group by discussing travel to Syria and proposals to wage violent jihad here in the United States. Juraboev ultimately purchased a plane ticket to travel to Syria, an act in furtherance of his terrorist plans and intentions. Those plans were thwarted and ended with today’s sentence, resulting in serious prison time.”
“The defendant in this case lived in Brooklyn while making plans to travel to Syria to support a designed terrorist organization,” stated NYPD Commissioner O’Neill. “If that was not successful, the defendant schemed of bombing Coney Island or killing the President of the United States. My thanks to the detectives, agents, prosecutors and federal judge whose work resulted in today’s sentence.”
The government’s case was handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Alexander Solomon, Douglas M. Pravda, Peter W. Baldwin, and David K. Kessler of the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
The Defendant:
ABDURASUL HASANOVICH JURABOEV
Age: 27
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 15 CR 95 (WFK)
Suffolk County District Attorney and Chief of Investigations Indicted for Obstructing Federal Civil Rights InvestigationRead the Press Release
A four-count indictment was returned this morning by a federal grand jury in the United States District Court for the Eastern District of New York charging Thomas J. Spota, the Suffolk County District Attorney, and Christopher McPartland, the Chief of Investigations and Chief of the Government Corruption Bureau of the Suffolk County District Attorney’s Office (SCDAO), with (1) Conspiracy to Tamper with Witnesses and Obstruct an Official Proceeding, (2) Witness Tampering and Obstruction of an Official Proceeding, (3) Obstruction of Justice, and (4) Accessory After the Fact to the Deprivation of Civil Rights. The defendants are scheduled to be arraigned at 3:00 p.m. this afternoon before United States District Judge Leonard D. Wexler at the United States Courthouse in Central Islip, New York.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York (USAO-EDNY), and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“Prosecutors swear oaths to pursue justice and enforce the law. Instead of upholding their oaths, these defendants allegedly abused the power of the Suffolk County District Attorney’s Office, attempted to cover up the assault of an in-custody defendant, and attempted to thwart a federal grand jury investigation,” stated Acting United States Attorney Rohde. “Abuses of power by law enforcement authorities cannot and will not be tolerated. There are serious consequences to such actions.”
“While FBI agents were working to restore justice in a civil rights investigation, District Attorney Thomas Spota and Assistant District Attorney Christopher McPartland were conspiring to obstruct it, as alleged today. The crimes they're charged with are rivaled only by the conduct they allegedly attempted to conceal. Make no mistake about it, this type of activity will not be tolerated. Today our message is clear: those seated at the highest levels of the law must still operate within its confines – there are no exceptions,” stated Assistant Director-in-Charge Sweeney.
As set forth in the indictment and a bail letter filed earlier today, on December 14, 2012, an individual (John Doe) was arrested on suspicion of burglarizing motor vehicles, including a motor vehicle issued to and possessed by Burke. Thereafter, John Doe was transported to the Fourth Precinct of the Suffolk County Police Department (SCPD), placed inside an interview room, and handcuffed to a permanent fixture inside the room. Later that day, Burke and other members of the SCPD entered the interview room and assaulted John Doe. Thereafter, John Doe confessed to the burglary of the vehicle. Initially, the Government Corruption Bureau of the SCDAO, under the supervision of defendant McPartland, who reported directly to defendant Spota, handled the prosecution of John Doe. Subsequently, John Doe alleged that his confession was involuntary because, in part, he had been assaulted by Burke, and a special prosecutor was then assigned to the prosecution.
In April 2013, the USAO-EDNY and the FBI initiated a federal grand jury investigation of the December 14, 2012 assault of John Doe. Thereafter, the scope of the federal investigation was expanded to include the investigation of obstruction and attempted obstruction of justice offenses, which investigation continued until the date of today’s indictment. On June 25, 2013, FBI special agents served members of the SCPD with federal grand jury subpoenas, and, that same day, defendants Spota and McPartland were informed of both the existence of the federal investigation and the service of the federal grand jury subpoenas, and began to attempt to obstruct that investigation.
As alleged in the indictment, between December 2012 and the present, defendants Spota and McPartland, together with others including Burke and other members of the SCPD, had numerous meetings and telephone conversations discussing the assault of John Doe, John Doe’s allegations against Burke, and the federal investigation. During those meetings and telephone conversations, defendants Spota and McPartland and Burke and other members of the SCPD agreed to conceal Burke’s role in the assault and to obstruct and attempt to obstruct the federal investigation in order to protect Burke. More particularly, defendants Spota and McPartland, Burke and others used the power of their positions with the SCDAO and SCPD to obstruct and attempt to obstruct the federal investigation by, among other means, using intimidation, threats and corrupt persuasion to pressure multiple witnesses, including co-conspirators, not to cooperate with the federal investigation, to provide false information, including false testimony under oath, and to withhold relevant information from the USAO-EDNY, FBI and the federal grand jury investigating the assault of John Doe.
Ultimately, the attempts to thwart the grand jury investigation were unsuccessful and, on February 26, 2016, Burke pleaded guilty to a deprivation of John Doe’s civil rights and conspiracy to obstruct justice. Thereafter, on November 2, 2016, United States District Judge Wexler sentenced Burke to 46 months in prison, and he currently is serving that sentence.
The charges in the indictment are merely allegations, and defendants Spota and McPartland are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Lara Treinis Gatz and John J. Durham are in charge of the prosecution assisted by Financial Analyst William J. Hessle.
The Defendants:
THOMAS J. SPOTA
Age: 76
Mount Sinai, New YorkCHRISTOPHER MCPARTLAND
Age: 51
Northport, New YorkE.D.N.Y. Docket No. 17-CR-587 (LDW)
Former Guatemalan Soccer Official Sentenced to 8 Months’ Imprisonment for Pocketing Bribes and KickbacksRead the Press Release
Earlier today in federal court in Brooklyn, former Guatemalan soccer official Héctor Trujillo was sentenced by United States District Judge Pamela K. Chen to 8 months’ imprisonment following his convictions by guilty plea on June 2, 2017 of one count of wire fraud conspiracy and one count of wire fraud. Trujillo was convicted of these crimes in connection with over $400,000 in bribes and kickbacks that he and other Guatemalan soccer officials received from an American company in connection with the sale of broadcast rights to World Cup qualifier matches. Trujillo himself received nearly $200,000 of these illegal payments, and as part of his plea agreement he agreed to forfeit $175,000 to the government. Also today, Judge Chen found that Trujillo was liable for $415,000 in restitution to the Guatemalan soccer federation, known as “FENAFUTG.” Trujillo served as secretary of the FENAFUTG Executive Committee from approximately 2010 until his arrest in December 2015. At the time of his arrest he also served as a judge on the Constitutional Court of Guatemala.
Bridget M. Rohde, Acting 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), announced the sentence.
“Rather than uphold the standards of honesty and integrity expected of the leadership of international soccer, the defendant and his co-conspirators lined their pockets with hundreds of thousands of dollars in bribes,” stated Acting United States Attorney Rohde. “The defendant has now been brought to justice. This Office and its law enforcement partners at the FBI and IRS will continue to vigorously pursue those who would use leadership positions to engage in corruption, especially when it involves the U.S. banking system.” Ms. Rohde also thanked the United States Department of Justice Office of International Affairs, Organized Crime and Gang Section and Money Laundering and Asset Recovery Section for their assistance in the case, and expressed her appreciation to the government of Guatemala for its cooperation.
“It’s not hard to imagine the honest officials and businesses involved in World Cup Soccer make a lot of money because it’s the most popular sport around the world,” said FBI Assistant Director-in-Charge Sweeney. “But it seems that wasn’t enough for the subjects charged and many convicted in this sweeping corruption investigation. They used their positions and power to use bribes and kickbacks to satiate their greed. This conviction shows we’re not done with our work, and the FBI, Eastern District, IRS and our law enforcement partners won’t stop pursuing those who are abusing the system.”
“Today has seen the first sentencing in a long line of FIFA officials and sports marketing executives involved in systemic corruption in the governance of the world’s game,” stated IRS Criminal Investigation’s Special Agent-in-Charge Rowe. “This defendant used his position of trust to line his pockets and cheat the National Football Federation of Guatemala of his fair and honest services. IRS Criminal Investigation is proud to use our financial investigative expertise to root out the corruption which has plagued this sport for decades, while at the same time ensuring the integrity of the United States financial system.”
Background[1]
The sport of soccer is governed worldwide by the Féderation Internationale de Football Association (“FIFA”), FIFA’s constituent continental confederations (including CONCACAF, the confederation covering North America, Central America and the Caribbean), and FIFA’s constituent national member associations (which are also known as federations), including FENAFUTG. Since 2004, officials of these soccer governing bodies were bound by FIFA’s code of ethics, which, among other things, imposes a fiduciary duty on soccer officials in favor of FIFA, the continental confederations, and the member associations, and prohibits soccer officials from taking bribes or kickbacks.
FENAFUTG owned the media and marketing rights to soccer matches it played on its home territory during the qualifying stages for the men’s World Cup tournament. FENAFUTG, like many other soccer governing bodies, typically sold these rights to sports marketing companies that served as middlemen, which in turn sold different portions of the rights to different broadcasters and media companies around the world.
2018 World Cup Qualifier Cycle Bribes
In late 2009, Trujillo’s associate and co-defendant Brayan Jiménez was elected president of FENAFUTG, and Trujillo was selected to serve as secretary of the FENAFUTG executive committee. Soon afterwards, in February 2010, Trujillo, Jiménez and Rafael Salguero, a Guatemalan member of the FIFA executive committee, traveled from Guatemala to Miami to meet with executives of Media World, an American sports marketing company based there. During this meeting, Trujillo and Jiménez negotiated with the executives to sell Media World the overseas media and marketing rights to Guatemala’s home World Cup qualifier matches in advance of the 2018 World Cup.
Also during this meeting in Miami, Trujillo and Jiménez agreed to accept from Media World $200,000 in bribe and kickback payments in connection with selling these rights to Media World, to be split between the two of them. After Jiménez signed the contract on behalf of FENAFUTG, during the following months Media World wired a total of $195,000 from its bank account in Miami to the Panamanian bank account of an intermediary who then transferred the funds to Trujillo’s bank account in Guatemala. On some occasions, the conspirators falsely described the payments in the wire transfer instructions as legal fees for Trujillo. Trujillo distributed a little more than half of the $195,000 to Jiménez in Guatemala and kept the rest for himself. Salguero also received a disguised $20,000 payment for his role in facilitating the deal.
2022 World Cup Qualifier Cycle Bribes
In 2013, a Media World executive traveled to Guatemala for negotiations with Jiménez and Trujillo to renew the contract for the overseas media rights to FENAFUTG’s World Cup qualifier matches, this time for the matches leading up to the 2022 World Cup. Jiménez and Trujillo agreed to renew the contract, and again agreed to accept $200,000 in bribe and kickback payments in connection with selling these rights to Media World.
To facilitate the hidden payment of these bribes, Trujillo made use of an acquaintance who lived in the United States and owned an American construction business. Specifically, Trujillo directed a Media World executive to wire the $200,000 in bribe money to the construction company’s United States bank account, which Media World did, from its bank account in Miami. To hide the true nature of the bribe payment, the conspirators fabricated a sham contract for construction services between the construction company and a Media World affiliate. Trujillo’s associate transferred most of this money to a bank account in Guatemala, where Trujillo could withdraw it. Trujillo again gave about half of the money to Jiménez and kept the rest for himself.
The government’s case is being handled by the Office’s FIFA Task Force. Assistant United States Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, Kaitlin T. Farrell, and Brian D. Morris are in charge of the prosecution.
The Defendant:
HÉCTOR TRUJILLO
Age: 63
Citizenship: GuatemalaE.D.N.Y. Docket No. 15-CR-252 (PKC)
[1] The information described below is set forth in various court filings and statements made during court appearances in this case and related cases.
Cyber Criminal Pleads Guilty to Attempting to Steal More Than $3 Million from A Financial Institution and Government AgenciesRead the Press Release
Earlier today, in federal court in Brooklyn, Dwayne C. Hans pleaded guilty to one count of wire fraud and one count of computer intrusion. The charges arise from a series of frauds that Hans masterminded between July 2015 and October 2016, including by masquerading as an authorized representative of a U.S. financial institution and as a defense contractor. Hans also accessed a website run by the U.S. General Services Administration (GSA) without authorization and then redirected money intended for the financial institution to his own bank account. The guilty plea took place before United States Magistrate Judge Roanne L. Mann.
Bridget M. Rohde, Acting 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.
According to court filings, between July 2015 and December 2015, Hans submitted bids to the Defense Logistics Agency (DLA), an agency within the United States Department of Defense, for contracts in the name of two different companies he created. Hans falsely claimed that those companies had numerous employees and were capable of filling the contracts. The contracts on which Hans bid related to the provision of various items to the DLA, including electrical measurement equipment. In reality, the companies had no employees and no ability to service the contracts. The DLA awarded at least 52 contracts, worth approximately $533,209.70, to Hans’s two companies and sent at least $11,999.32 to those companies.
In early 2016, Hans created numerous bank accounts in the name of a U.S. financial institution (Financial Institution 1). In April 2016, Hans accessed a website maintained by the GSA that allowed companies that worked with the U.S. government to provide information about how the government should disburse money to those companies. Hans modified payment information in an entry associated with Financial Institution 1 in order to redirect payments to accounts he controlled. As a result, a U.S. government agency transferred approximately $1.521 million to Hans instead of to Financial Institution 1. Those transfers were ultimately detected and disrupted before the defendant withdrew or transferred the money.
In addition, between April 2016 and June 2016, Hans used a computer to initiate electronic transfers of approximately $134,000 from two corporate bank accounts held by Financial Institution 1. Hans directed these fund transfers for various purposes, including to purchase publicly traded stock, to invest in real estate in Brooklyn, New York, and to pay utility bills.
Finally, between June 2016 and October 2016, Hans accessed a website maintained by the Pension Benefit Guaranty Corporation (PBGC), a U.S. government agency that insures certain pension plans, through which the administrators of pension plans could submit claims for reimbursements. Hans, who was not the administrator of any pension plan, created an account on the PBGC website and then submitted requests to be reimbursed a total of $1.633 million for expenses related to three pension plans. The three plans for which Hans requested reimbursements did not exist, and Hans had incurred no such expenses. The PBGC detected the fraud before any payments were issued.
When sentenced, Hans faces up to 30 years’ imprisonment for the wire fraud charge and five years of prison for the computer intrusion charge, as well as a fine.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys David K. Kessler and Ian C. Richardson are in charge of the prosecution, with assistance from the DLA and PBGC Office of Inspector General.
The Defendant:
DWAYNE C. HANS
Age: 27
Residence: Richland, WashingtonE.D.N.Y. Docket No. 17-CR-256 (SJ)
United States Files Enforcement Action Against Long Island Company and Its Owner to Prevent Distribution of Adulterated and Misbranded Dietary SupplementsRead the Press Release
BROOKLYN, N.Y. – The United States filed a civil complaint against Riddhi USA Inc. of Ronkonkoma, New York, and its owner and President Mohd M. Alam to prevent the distribution of adulterated and misbranded dietary supplements in violation of federal law, the Department of Justice announced today.
The complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that dietary supplements that the defendants manufactured, prepared, packed, repacked, labeled, held and distributed were adulterated and misbranded. The complaint further alleges that these dietary supplements were prepared, packed, and held under conditions that do not comply with current good manufacturing practice regulations for these types of products.
The Department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).
“Dietary supplement manufacturers that do not comply with applicable laws and regulations designed to protect consumers put those consumers at risk,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “Today’s action demonstrates the Department’s commitment to safeguarding the public from adulterated and misbranded products.”
“The Department of Justice is committed to ensuring that dietary supplement manufacturers comply with laws designed to protect consumers,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to protect the public from adulterated and misbranded products, and to ensure that dietary supplement manufacturers provide accurate information about what is in their products.”
According to the complaint, the FDA inspected the defendants’ facility in January 2017 and found numerous significant deviations from current good manufacturing practice regulations. For example, as alleged in the complaint, the defendants failed to establish product specifications for identity, purity, strength, and composition of their finished dietary supplements, failed to conduct at least one appropriate test to verify the identity of a dietary ingredient, and failed to establish and follow written procedures for quality control operations.
The complaint further alleges that many of the current good manufacturing practice deviations observed during the FDA’s January 2017 inspection were the same or similar to those observed by the FDA during a previous inspection of the defendants’ facility that occurred in January 2016. The complaint noted that following the January 2016 inspection, the FDA issued a warning letter to the defendants detailing violations of current good manufacturing practice regulations observed during the 2016 inspection. The complaint alleges that the current good manufacturing practice violations noted in the warning letter were the same as or similar to those observed during the FDA’s subsequent 2017 inspection.
The complaint also alleges that the defendants misbranded their dietary supplements by failing to comply with the relevant labeling provisions of the federal Food, Drug, and Cosmetic Act. For example, as noted in the complaint, the defendants’ products are fabricated from two or more ingredients but fail to declare any ingredients on their product labels or labeling. Food, including dietary supplements, is also misbranded if its label or labeling fails to declare the major food allergen “soy” as defined in the law. The complaint alleges that the defendants’ Neuroxygen dietary supplement product is misbranded because it is manufactured using soy lecithin, which contains “soy,” but the defendants fail to list soy on the product label. Some of the defendants’ dietary supplement labels or labeling, including its labels or labeling for its Prenatal Formula, Osteo Gest, Neuroxygen, Inflam-Ease, and Aller-Ease products, fail to declare the place of business of the manufacturer, packer, or distributor as required by law.
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate Chief Counsel for Enforcement Roselle Oberstein of the FDA, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
United States Files Enforcement Action Against Long Island Company and Its Owner to Prevent Distribution of Adulterated and Misbranded Dietary SupplementsRead the Press Release
The United States filed a civil complaint against Riddhi USA Inc. of Ronkonkoma, New York, and its owner and President Mohd M. Alam to prevent the distribution of adulterated and misbranded dietary supplements in violation of federal law, the Department of Justice announced today.
The complaint alleges that Riddhi USA Inc. (Riddhi) and Mr. Alam engage in manufacturing, preparing, labeling, packing, repacking, holding, and distributing dietary supplements and are contract manufacturers of dietary supplements distributed under other companies’ names. The complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that dietary supplements that defendants manufactured, prepared, packed, repacked, labeled, held and distributed were adulterated and misbranded. The complaint further alleges that these dietary supplements were prepared, packed, and held under conditions that do not comply with current good manufacturing practice regulations for these types of products.
The Department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).
“The Department of Justice is committed to ensuring that dietary supplement manufacturers comply with laws designed to protect consumers,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the FDA to protect the public from adulterated and misbranded products, and to ensure that dietary supplement manufacturers provide accurate information about what is in their products.”
“Dietary supplement manufacturers that do not comply with applicable laws and regulations designed to protect consumers put those consumers at risk,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “Today’s action demonstrates the Department’s commitment to safeguarding the public from adulterated and misbranded products.”
According to the complaint, FDA inspected the defendants’ facility in January 2017 and found numerous significant deviations from current good manufacturing practice regulations. For example, as alleged in the complaint, defendants failed to establish product specifications for identity, purity, strength, and composition of their finished dietary supplements, failed to conduct at least one appropriate test to verify the identity of a dietary ingredient, and failed to establish and follow written procedures for quality control operations.
The complaint further alleges that many of the current good manufacturing practice deviations observed during FDA’s January 2017 inspection were the same or similar to those observed by FDA during a previous inspection of defendants’ facility that occurred in January 2016. The complaint noted that following the January 2016 inspection, FDA issued a warning letter to defendants detailing violations of current good manufacturing practice regulations observed during the 2016 inspection. The complaint alleges that the current good manufacturing practice violations noted in the warning letter were the same as or similar to those observed during FDA’s subsequent 2017 inspection.
The complaint also alleges that the defendants misbranded their dietary supplements by failing to comply with the relevant labeling provisions of the federal Food, Drug, and Cosmetic Act. For example, as noted in the complaint, defendants’ products are fabricated from two or more ingredients but fail to declare any ingredients on their product labels or labeling. Food, including dietary supplements, is also misbranded if its label or labeling fails to declare the major food allergen “soy” as defined in the law. The complaint alleges that defendants’ Neuroxygen dietary supplement product is misbranded because it is manufactured using soy lecithin, which contains “soy,” but defendants fail to list soy on the product label. In addition, the complaint alleges that some of the defendants’ products, including Prenatal Formula, Osteo Gest, Neuroxygen, Inflam-Ease, and All-Ease, are misbranded in that the products’ label or labeling fail to declare the place of business of the manufacturer, packer, or distributor.
The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate Chief Counsel for Enforcement Roselle Oberstein of the FDA, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
Former Global Head of HSBC's Foreign Exchange Cash-Trading Found Guilty of Orchestrating Multimillion-Dollar Front-Running SchemeRead the Press Release
The former head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), was found guilty today for his role in a scheme to defraud an HSBC client through a multimillion-dollar scheme commonly referred to as “front running.”
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC) and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.
Mark Johnson, 51, a United Kingdom citizen with residences both in the U.K. and the United States, was found guilty after a four-week jury trial of one count of conspiracy to commit wire fraud and eight counts of wire fraud. Sentencing date has not been scheduled. U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York presided over the trial. Johnson was arrested on a criminal complaint in July 2016 and indicted in August 2016.
“This verdict makes clear that the defendant corruptly manipulated the foreign exchange market for the benefit of his bank and his bonus pool, to the detriment of the bank’s client,” said Acting Assistant Attorney General Blanco. “This case demonstrates the Criminal Division’s commitment to protecting the financial system from harm, and holding corporate executives, including at the world’s largest and most sophisticated financial institutions, responsible for their crimes.”
“The jury found that former HSBC banker Mark Johnson exploited confidential information provided by a client of the bank to execute trades that were intended to generate millions of dollars in profits for him and the bank at the expense of their client,” said Acting U.S. Attorney Rohde. “This Office, together with its law enforcement partners, will continue to vigorously investigate and prosecute those who would so abuse their client relationships and, more generally, undermine public confidence in the operation of the financial markets by engaging in fraudulent schemes.”
“This case involved a complex fraud scheme to ‘front run’ a foreign exchange transaction in order to generate millions of dollars in illicit profits for HSBC, which also indirectly benefited individual traders,” said Inspector General Lerner. “Such cases are challenging, but important, to bring against bank insiders who misuse their positions and undermine the integrity of a major international financial institution.”
“Mark Johnson misused confidential information to manipulate currency prices and defrauded a client out of more than $7 million,” said Assistant Director in Charge Vale. “The American people need to be assured that we are working vigorously to ensure integrity is upheld in financial services industries. We will continue to work with our law enforcement partners to investigate and prosecute those who engage in illegal business practices.”
According to the evidence presented at trial, in November and December 2011, Johnson cheated an HSBC client out of millions of dollars by misusing information provided to him by a client that hired HSBC to execute a foreign exchange transaction related to a planned sale of one of the client’s foreign subsidiaries. HSBC was selected to execute the foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011. HSBC’s agreement with the client required the bank to keep the details of the client’s planned transaction confidential. Instead, Johnson misused confidential information he received about the client’s transaction to cheat the client out of millions of dollars, the evidence showed.
Shortly before the transaction, which occurred in December 2011, Johnson and other traders acting under his direction purchased Pound Sterling for their own benefit in their HSBC “proprietary” accounts. Johnson then caused the $3.5 billion foreign exchange transaction to be executed in a manner that was designed to “ramp,” or drive up, the price of the Pound Sterling, benefiting their proprietary positions and HSBC at the expense of their client.
As part of their scheme, Johnson and his co-conspirators made misrepresentations to the client about the transaction that concealed the self-serving nature of their actions. In total, Johnson and the traders he supervised generated HSBC profits of roughly $7.5 million from the execution of the FX transaction for the victim company.
The investigation was conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office. The Criminal Division’s Office of International Affairs provided significant support. Assistant Chiefs Carol Sipperly and Brian Young and Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Lauren Elbert of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country, focusing on cases of national significance and international scope. Fraud Section prosecutors have vast experience in investigating and prosecuting securities and financial fraud, health care fraud and foreign corruption. The Section is routinely the national leader in large, sophisticated white collar investigations and prosecutions, frequently in partnership with U.S. Attorneys’ Offices and in coordination with foreign law enforcement agencies. Learn more about the Criminal Division’s Fraud Section at: https://www.justice.gov/criminal-fraud.