Eastern District of New York
Press releases recorded for this federal judicial district.
District Court Enters Permanent Injunctions Against New York Companies and Individuals Banning Importation of Dangerous Children's Products and ToysRead the Press Release
The Department of Justice announced that the U.S. District Court for the Eastern District of New York entered two separate consent decrees of permanent injunction against New York company Everbright Trading Inc., its owner Yuan Xiang Gao, and its operator/manager Rong Qing Xu, and New York companies Lily Popular Varieties & Gifts Inc., Great Great Corporation, and their owners and operators Li Jing and Cheng Feng You. The injunctions generally prohibit the defendants from importing and selling toys and other children’s products until certain remedial measures are implemented.
On June 21, the Department filed two separate civil actions in the U.S. District Court for the Eastern District of New York at the request of the U.S. Consumer Product Safety Commission (CPSC). The complaints in each case alleged that the defendants were responsible for importing children’s products containing, among other things, lead, phthalates and small parts posing a choking hazard for children under the age of three.
According to the complaints, the CPSC found that the defendants in both cases imported toys and other children’s products in violation of the Consumer Product Safety Act and the Federal Hazardous Substances Act. Since March 2013, the CPSC has collected from the Everbright defendants 97 samples of toys and other non-compliant children’s products from their import shipments at the Port of New York/Newark and the Port of Los Angeles/Long Beach. Since December 2013, the CPSC has collected from the Lily Popular Varieties & Gifts defendants 72 samples of non-compliant toys and other children’s products from their facility in Maspeth, New York, and import shipments at the Ports of New York/Newark and Los Angeles. The violations in both cases include toys with illegal levels of lead, illegal levels of phthalates, and small parts that present a choking hazard for children under the age of three, as well as toys for small children that contain accessible batteries. Based on their findings, the CPSC has issued 41 letters to the Everbright defendants and 13 letters to the Lily Popular Varieties & Gifts defendants notifying them that their products violated federal standards.
“Companies who do not comply with CPSC’s statutes and regulations regarding toys put American children at risk,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Parents have a right to expect that the toys their children play with are safe.”
“Consumers across the country rely on our agency to protect their children from unsafe and dangerous children’s products,” said CPSC Acting Chairman Ann Marie Buerkle. “We take this responsibility very seriously and will take the necessary action to keep unsafe products out of the hands of our children. I appreciate and value the support from and collaboration with the Department of Justice.”
“There is no greater responsibility of the Department of Justice than to protect our nation’s children,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “The actions demonstrate the Department’s commitment to keeping our children safe from potentially harmful products.”
The consent decrees resolve both cases brought by the Department. The decrees generally require the defendants to stop importing, selling, or distributing toys and other children’s products until they implement numerous remedial measures that will bring their operations into compliance with the law. These include, among other measures, implementing a product safety and testing program, hiring a product safety coordinator, having products tested by accredited testing bodies, and submitting to monitoring by the CPSC. In general, the defendants will be permitted to resume selling toys and other children’s products only after implementing these measures and demonstrating that their operations fully comply with the law.
The case against Everbright Trading Inc., Yuan Xiang Gao, and Rong Qing Xu is being handled by Trial Attorney Timothy T. Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Renee McCune of the CPSC’s Office of the General Counsel.
The case against Lily Popular Varieties & Gifts Inc., Great Great Corporation, Li Jing, and Cheng Feng You is being handled by Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Amy Colvin of the CPSC’s Office of the General Counsel.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
District Court Enters Permanent Injunctions Against New York Companies and Individuals Banning Importation of Dangerous Children's Products and ToysRead the Press Release
WASHINGTON - The Department of Justice announced today that the U.S. District Court for the Eastern District of New York entered two separate consent decrees of permanent injunction against New York company Everbright Trading Inc., its owner Yuan Xiang Gao, and its operator/manager Rong Qing Xu, and New York companies Lily Popular Varieties & Gifts Inc., Great Great Corporation, and their owners and operators Li Jing and Cheng Feng You. The injunctions generally prohibit the defendants from importing and selling toys and other children’s products until certain remedial measures are implemented.
On June 21, the Department filed two separate civil actions in the U.S. District Court for the Eastern District of New York at the request of the U.S. Consumer Product Safety Commission (CPSC). The complaints in each case alleged that the defendants were responsible for importing children’s products containing, among other things, lead, phthalates and small parts posing a choking hazard for children under the age of three.
According to the complaints, the CPSC found that the defendants in both cases imported toys and other children’s products in violation of the Consumer Product Safety Act and the Federal Hazardous Substances Act. Since March 2013, the CPSC has collected from the Everbright defendants 97 samples of toys and other non-compliant children’s products from their import shipments at the Port of New York/Newark and the Port of Los Angeles/Long Beach. Since December 2013, the CPSC has collected from the Lily Popular Varieties & Gifts defendants 72 samples of non-compliant toys and other children’s products from their facility in Maspeth, New York, and import shipments at the Ports of New York/Newark and Los Angeles. The violations in both cases include toys with illegal levels of lead, illegal levels of phthalates, and small parts that present a choking hazard for children under the age of three, as well as toys for small children that contain accessible batteries. Based on their findings, the CPSC has issued 41 letters to the Everbright defendants and 13 letters to the Lily Popular Varieties & Gifts defendants notifying them that their products violated federal standards.
“There is no greater responsibility of the Department of Justice than to protect our nation’s children,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “Today’s actions demonstrate the Department’s commitment to keeping our children safe from potentially harmful products.”
“Companies who do not comply with CPSC’s statutes and regulations regarding toys put American children at risk,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Parents have a right to expect that the toys their children play with are safe.”
“Consumers across the country rely on our agency to protect their children from unsafe and dangerous children’s products,” said CPSC Acting Chairman Ann Marie Buerkle. “We take this responsibility very seriously and will take the necessary action to keep unsafe products out of the hands of our children. I appreciate and value the support from and collaboration with the Department of Justice.”
The consent decrees entered today resolve both cases brought by the Department. The decrees generally require the defendants to stop importing, selling, or distributing toys and other children’s products until they implement numerous remedial measures that will bring their operations into compliance with the law. These include, among other measures, implementing a product safety and testing program, hiring a product safety coordinator, having products tested by accredited testing bodies, and submitting to monitoring by the CPSC. In general, the defendants will be permitted to resume selling toys and other children’s products only after implementing these measures and demonstrating that their operations fully comply with the law.
The case against Everbright Trading Inc., Yuan Xiang Gao, and Rong Qing Xu is being handled by Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Timothy T. Finley of the Civil Division’s Consumer Protection Branch, with the assistance of Renee McCune of the CPSC’s Office of the General Counsel.
The case against Lily Popular Varieties & Gifts Inc., Great Great Corporation, Li Jing, and Cheng Feng You is being handled by Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch, with the assistance of Amy Colvin of the CPSC’s Office of the General Counsel.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
PHOTOS
Product collected at the Port of New York/Newark, NJ, on November 12, 2015, containing small parts violating U.S. safety regulations.
Product collected at the Port of New York/Newark, NJ, on October 3, 2016, containing accessible batteries and small parts violating U.S. safety regulations.
Product collected at the Port of New York/JFK area, NY, on September 21, 2015, containing lead and lead paint violating U.S. safety regulations.
Former Procurement Director of Staten Island District Attorney’s Office Charged with Embezzling Government FundsRead the Press Release
A ten-count indictment was unsealed today in the United States District Court for the Eastern District of New York charging William Nelson, former Director of Procurement at the Richmond County District Attorney’s Office (RCDA), with one count of theft of funds and nine counts of mail fraud. The defendant is scheduled to be arraigned before United States Magistrate Judge James Orenstein at the Brooklyn federal courthouse this afternoon.
The charges were announced by 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 Mark G. Peters, Commissioner, New York City Department of Investigation (DOI).
As alleged in the indictment, for approximately 10 years between 2006 and 2016, Nelson stole over $440,000 from the RCDA as part of a long-term scheme to defraud the RCDA of funds. Specifically, Nelson used two RCDA American Express credit cards to purchase items such as jewelry, apparel, toys, sporting goods and memorabilia, alcohol, video games and movies, electronics, household items, grocery items, books, sundries, knives, survival gear, handbags, collectibles, souvenirs, event tickets, meals, lodging, airfare, excursions, and online services that he then used for his own benefit and the benefit of others. Nelson also used the online payment system PayPal to directly transfer thousands of dollars from the RCDA credit cards to his own personal bank account. In furtherance of his scheme, Nelson took steps to conceal his embezzlement, which included concealing the itemized credit card statements, mischaracterizing the nature of the purchases, and using his authority as Director of Procurement to approve payments of his fraudulent personal expenditures.
“As alleged, Nelson abused his position as Procurement Director for the Richmond County District Attorney’s Office by engaging in a decade-long scheme to defraud the DA’s office of nearly half a million dollars,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners at the FBI and DOI, our Office will hold to account those who engage in such fraud, particularly where it disadvantages agencies tasked with safeguarding our communities.” Ms. Rohde thanked the Richmond County District Attorney’s Office for its assistance during the investigation.
“This case is a textbook example of what can happen when power goes unchecked,” stated FBI Assistant Director-in-Charge Sweeney. “Not only did Nelson allegedly steal hundreds of thousands of dollars from the RCDA, but he shamefully exploited his official position to authorize the very transactions that made this possible. Instead of using taxpayer funds for their intended purpose, he allegedly used them for his own personal intentions. Our communities place a high level of trust in those who hold these positions, and that trust should never waver. We won’t allow schemers of any kind to put the public’s trust at risk.”
“This defendant stole law enforcement funds to finance jet-setting vacations and purchase hundreds of thousands of dollars in luxury items, according to the charges,” stated DOI Commissioner Peters. “DOI has issued a report documenting how this scam was perpetrated for over a decade and recommended changes to safeguard our city’s finances. DOI thanks the United States Attorney’s Office for the Eastern District of New York for its partnership on this criminal investigation and the Richmond County District Attorney’s Office for its cooperation and swift action in implementing DOI’s recommendations.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 10 years’ imprisonment on the theft of funds count and 20 years’ imprisonment on each of the mail fraud counts.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorney Maria Cruz Melendez is in charge of the prosecution.
The Defendant:
WILLIAM NELSON
Age: 44
New York, New York
E.D.N.Y. Docket No. 17-CR-394 (RJD)
Staten Island Woman Sentenced to 12 Years’ Imprisonment for Illegal Distribution of OxycodoneRead the Press Release
Earlier today before United States District Judge I. Leo Glasser in Brooklyn, New York, Carolyn Richardson was sentenced to 12 years’ imprisonment, to be followed by three years of supervised release, for operating a sophisticated scheme to fraudulently obtain and distribute thousands of Schedule II controlled substances, particularly opioids such as oxycodone, without a medical license. Richardson had previously pled guilty to conspiring to distribute and possess with intent to distribute oxycodone. Her co-defendant, Doraymus Robinson, who also previously pled guilty, was sentenced to eight years’ imprisonment for his role in the conspiracy on June 28, 2017.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
Between January 2015 and July 2016, Richardson and Robinson operated a fraudulent scheme to illegally obtain oxycodone and other prescription narcotics using the DEA registration number of an active practicing physician. Richardson had the physician’s prescriber information printed on fraudulent prescription pads, along with a fake address and a phone number that routed back to Richardson’s cell phone. The defendants wrote false prescriptions, which contained fake patient identification information and signatures, and used the prescriptions to fraudulently obtain oxycodone from pharmacies. If a pharmacy called to verify a prescription, Richardson answered the phone feigning to be an employee at the doctor’s office. Additionally, the defendants sold the fraudulent prescription pads for cash. Prior to arresting the defendants, law enforcement executed a search warrant on the defendants’ storage unit and recovered thousands of prescription pills filled in false names, fake prescription pads, dozens of identifications and health care cards, and a firearm.
“Carolyn Richardson and Doraymus Robinson used fraud and deceit to fuel the opioid epidemic for their own gain and at immeasurable cost to the community,” stated Acting United States Attorney Rohde. “This Office and our partners at the DEA will continue to use all the tools at our disposal to solve the opioid crisis, including by holding offenders, like Richardson and Robinson, accountable to the fullest extent under the law.”
“This sentencing highlights how drug dealers infiltrate medical practices in order to divert controlled substances to street sales, increasing the supply of opioids in our communities,” stated DEA Special Agent-in-Charge Hunt. “However, law enforcement is doubling down on opioid traffickers; targeting traditional street dealers selling heroin and tracking down white collar criminals diverting prescription medication.”
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorney Jennifer M. Sasso is in charge of the prosecution.
Forcefield Energy Investor Relations Professional Sentenced to 36 Months in Prison for Role in A $131 Million Market Manipulation SchemeRead the Press Release
Jared Mitchell, an investor relations professional, was sentenced earlier today to 36 months’ imprisonment, to be followed by three years of supervised release, after having pleaded guilty to securities fraud for his role in the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly traded company previously listed on the NASDAQ under the ticker symbol “FNRG.”
The sentencing was announced by 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.
According to court filings and facts presented at the sentencing hearing, between 2009 and 2015, Mitchell and others engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField. Mitchell and others committed this crime by, among other means: (1) secretly using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the misleading appearance of genuine trading volume and interest in the stock; and (3) concealing secret payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while falsely claiming to be independent of the company. The fraudulent scheme caused a loss of approximately $131 million to the investing public.
Between October 2014 and April 2015, a ForceField executive paid secret commissions, or kickbacks, to Mitchell. Mitchell then paid a portion of the kickbacks to registered brokers in exchange for the registered brokers’ purchasing ForceField stock in their clients’ brokerage accounts. Mitchell kept the remaining portion of the kickbacks for himself. The registered brokers did not disclose to their clients the kickbacks they were receiving for purchasing ForceField stock. Mitchell and his co-conspirators took pains to conceal their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other, and by paying kickbacks in cash during in-person meetings.
Today’s proceeding, which took place before United States District Court Judge Brian M. Cogan, is the fourth sentencing to take place in connection with the ForceField securities fraud. Four other defendants who pleaded guilty in this matter, and one defendant convicted after trial, remain to be sentenced.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mark E. Bini and Lauren H. Elbert are in charge of the prosecution.
The Defendant:
JARED MITCHELL
Age: 35
Residence: Brooklyn, New York
E.D.N.Y. Docket No. 16-CR-234 (BMC)
Three Defendants Plead Guilty to Firearms Trafficking ConspiracyRead the Press Release
Earlier today, Kevin Todd, Kenneth Todd and Keycia Bynum pled guilty at the federal courthouse in Brooklyn, New York, to conspiracy to engage in the business of firearms dealing without a license.
The pleas were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD).
According to court filings, Bynum acted as a straw purchaser, purchasing approximately 18 firearms at gun shops and shows in Virginia between May 2014 and November 2014. In May 2014, the New York City Police Department recovered three of the firearms purchased by Bynum in Queens, New York. Kevin Todd had sold those three firearms to an individual in Queens, and the sales of those firearms were facilitated by his brother Kenneth Todd.
The pleas were entered before Magistrate Judge Cheryl L. Pollak. At sentencing, the defendants face a maximum of five years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Alicia N. Washington and Hiral D. Mehta.
The Defendants:
KEVIN TODD
Age: 39
Portsmouth, VA
KENNETH TODD
Age: 43
Queens, NY
KEYCIA BYNUM
Age: 40
Chesapeake, VA
E.D.N.Y. Docket No. 16-CR-497 (S-3) (FB)
Attorney Jonathan Flom Sentenced to 48 Months’ Imprisonment for Money LaunderingRead the Press Release
Earlier today, Jonathan Flom, an attorney licensed in three states, was sentenced to 48 months’ imprisonment and three years’ supervised release for money laundering. Today’s sentencing took place before United States District Judge Roslynn R. Mauskopf at the federal courthouse in Brooklyn, New York.
The sentence was announced by 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).
“Attorney Jonathan Flom took advantage of the trust placed in him by virtue of his profession to make easy money for himself,” stated Acting United States Attorney Rohde. “Such abuse of trust will be appropriately punished.”
“Flom preyed on the vulnerabilities of victims who were already being cheated out of money, falsely representing himself as someone who was working in their favor,” Assistant Director-in-Charge Sweeney stated. “He further tried to exploit his role as an attorney to conceal the fraud, but in the end the joke was on him, when it was revealed that an undercover FBI agent had been keeping tabs on his scheme. Today’s sentencing serves as a fine example of how the FBI successfully brings these scams to light.”
On June 24, 2016, following a five-day trial, a federal jury convicted Flom of money laundering. According to previous court filings and the testimony at trial, between December 2013 and April 2014, Flom accepted $141,300 into his bank account from investors whom he believed to be the victims of a securities fraud scheme. He then funneled those monies to a man he believed was orchestrating the fraud scheme, but who in fact was an undercover agent with the FBI—while keeping a 5% fee for himself. At trial, the jury heard that recorded conversations between Flom and the undercover agent in which Flom bragged that the letters of his name stood for “For Love of Money” and provided advice to the undercover agent about how they could use the guise of attorney-client privilege to conceal the fraud from law enforcement.
At trial and at sentencing, the government also presented evidence that between approximately February 2012 and August 2013, Flom knowingly laundered $756,168 in a nearly identical securities fraud scheme with Cecil Franklin Speight. In this scheme, investor-victims who believed they were making legitimate stock purchases were instructed to send money to bank accounts belonging to Flom, knowing he was a lawyer and believing that he was going to transfer funds to the issuers of the securities. In fact, Flom took the investor-victims’ money, kept a percentage for himself and sent the remainder to Speight. The investor-victims received only worthless counterfeit stock certificates.
On February 12, 2016, Speight was sentenced to 42 months’ imprisonment and ordered to pay $3.3 million dollars in restitution following his guilty plea to conspiracy to commit mail fraud and securities fraud.
The government’s case is being prosecuted by Assistant United States Attorneys Keith D. Edelman, Moira Kim Penza and Jack Dennehy.
The Defendant:
JONATHAN FLOM
Age: 59
South Palm Beach, Florida
E.D.N.Y. Docket No. 14-CR-507 (RRM)
Suffolk County Police Officer Charged with Civil Rights Violation for Forcing Female Arrestee to Engage in Sexual ActRead the Press Release
A complaint was unsealed today in federal court in Central Islip, New York, charging Suffolk County Police Department Officer Christopher McCoy with depriving an arrestee of the right to bodily integrity by forcing her to perform a sexual act in the precinct. McCoy was arrested this morning, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Anne Y. Shields.
This charge was announced by 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).
“Law enforcement officials are duty-bound to uphold the Constitution and protect all of our citizens, and certainly not to abuse them,” stated Acting United States Attorney Rohde. “No dereliction of this duty will be tolerated.” Ms. Rohde thanked the Suffolk County Police Department for its assistance during the investigation.
“While in custody, this woman didn’t deserve to be allegedly abused and degraded by a sworn public servant,” stated Assistant Director-in-Charge Sweeney. “Police officers are held to a high standard, as they should be, and they certainly don’t have the authority to disrespect any human being. This type of conduct threatens the reputation of the vast majority of law enforcement officials who serve each day with honor and integrity.”
According to the complaint, on March 16, 2017, while on duty, McCoy arrested Jane Doe[1], as she was the subject of several outstanding warrants in connection with unresolved vehicle and traffic offenses. Jane Doe was transported to the First Precinct in Wyandanch. During arrest processing, while McCoy and Jane Doe were alone in the precinct’s juvenile room, McCoy forced Jane Doe to perform oral sex. Upon her release, Jane Doe promptly reported the incident.
The charge in the complaint is are merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Lara Treinis Gatz is in charge of the prosecution
The Defendant:
CHRISTOPHER MCCOY
Age: 38
Sayville, New York
E.D.N.Y. Docket No. 17-MJ- (AYS)
[1] Jane Doe is a pseudonym, as the Department of Justice does not name alleged victims of sexual abuse in publicly filed documents.
Six Brooklyn Men Charged with Heroin Trafficking and Use of FirearmsRead the Press Release
Earlier today, a two-count indictment was unsealed in federal court in Brooklyn, New York, charging Victor Agosto, also known as “Bebo,” Perfecto Deleon, also known as “Fec,” Luis Lopez, also known as “Lou,” Andres Reyes, also known as “Dre,” Nestor Rivera, also known as “Tito” and “Tito Bird,” and Peter Vasquez as members of a narcotics trafficking conspiracy. Agosto, Lopez, and Vasquez face an additional charge for use of firearms in connection with their narcotics trafficking. The defendants’ narcotics operation is based in Brooklyn and Queens.
The defendants’ initial appearances and arraignments are scheduled for this afternoon before United States Magistrate Judge Steven L. Tiscione at the United States Courthouse, 225 Cadman Plaza East, in Brooklyn.
The arrests and charges were announced by 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). The arrests follow a long-term investigation by the FBI and NYPD into the narcotics activities of the defendants.
According to the indictment and other court documents, all of the defendants were members of a large-scale heroin trafficking organization with Mexican cartel connections that trafficked in hundreds of kilograms of heroin into New York City. The defendants transported the heroin from Los Angeles and Chicago, and traveled directly to Mexico for narcotics-related meetings in furtherance of their trafficking operation. One of the defendants relied on a crew of the violent street gang the Young Gunnerz, also known as the YGs, based in the Bushwick section of Brooklyn to provide protection of the illicit business.
Between December 2011 and February 2015, law enforcement seized over $800,000 in alleged drug proceeds hidden in “traps” designed to conceal contraband in vehicles connected to Lopez and his brother-in-law, Vasquez. The proceeds of their illicit narcotics operation have funded the purchase of a fleet of luxury vehicles, and hundreds of thousands of dollars in jewelry. Lopez celebrated Christmas with an Audemars Piguet watch worth approximately $20,000, and a birthday with a 256-gram piece of gold jewelry and diamond encrusted ring. One defendant chauffeured his infant child in a Versace baby stroller that retails for over $3,000, dressed his eight-year-old in Gucci sneakers worth hundreds of dollars, and showered his wife with a Rolex watch, Chanel handbag and Versace dress. Today, law enforcement seized approximately twelve kilograms of heroin valued at $900,000 from a stash house maintained by members of the conspiracy, and five luxury vehicles: a Rolls Royce Ghost, Lamborghini Hurácan, Audi R8 Spyder, Mercedes CLS63 AMG and Range Rover Sport. The ill-gotten proceeds of the narcotics trafficking conspiracy will be subject to forfeiture, according to the indictment.
“As charged, the defendants are members of a multi-million dollar heroin trafficking organization with access to firearms and ties to other states and a Mexican cartel,” stated Acting United States Attorney Rohde. “Today’s arrests are the latest example of the success that can be achieved through federal, state and local law enforcement cooperation to combat narcotics trafficking and the all too often associated violence in our communities.” Ms. Rohde gives particular thanks to the New York Metropolitan Safe Streets Task Force, which is comprised of detectives from the NYPD and agents from the FBI, and additionally thanks the Ohio State Highway Patrol, Pennsylvania State Police, Indiana State Police, New Jersey State Police, the Chicago Field Divisions of the Drug Enforcement Administration and Homeland Security Investigations, the Drug Enforcement Administration New York City Strike Force and the Bergen County Prosecutor’s Office for their participation and assistance in the investigation.
“Through their alleged heroin trafficking operation, the defendants not only lived a sham lavish life, but trafficked hundreds of kilograms of this deadly drug in New York City,” stated Assistant Director-in-Charge Sweeney. “It is our duty and priority to take out the leadership of these organizations. We’re not just going after the dealers of illegal prescription and street drugs, but everyone involved in the supply chain to stop the crippling impact both are having on our communities.”
“The heroin epidemic is real. These defendants not only moved large amounts of heroin across the country -- they carried firearms to protect their turf and extravagant lifestyle,” stated NYPD Commissioner O’Neill. “Today, the drugs, guns, and expensive cars are all in our possession; several are under arrest; and New Yorkers are safer with this poison off the street.”
The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, all of the defendants face mandatory minimum sentences of 10 years’ imprisonment and maximum sentences of life. In addition, for using firearms in furtherance of narcotics trafficking, defendants Agosto, Lopez and Vasquez face consecutive five-year minimum terms.
The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys David C. Pitluck, Lindsay K. Gerdes and Jennifer M. Sasso are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit.
The Defendants:
VICTOR AGOSTO, also known as “Bebo”
Age: 29
Brooklyn, New York
PERFECTO DELEON, also known as “Fec”
Age: 42
Brooklyn, New York
LUIS LOPEZ, also known as “Lou”
Age: 35
Brooklyn, New York
ANDRES REYES, also known as “Dre”
Age: 34
Brooklyn, New York
NESTOR RIVERA, also known as “Tito” and “Tito Bird”
Age: 39
Brooklyn, New York
PETER VASQUEZ
Age: 30
Queens, New York
E.D.N.Y. Docket No. 17-CR-390 (RJD)
Long Island Investment Advisor Pleads Guilty to Insider TradingRead the Press Release
Earlier today in federal court in Brooklyn, Tibor Klein, a registered investment advisor, pleaded guilty before United States District Judge Joan M. Azrack to one count of conspiracy to commit securities fraud.
Today’s guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS).
According to court documents, Klein had received material, non-public information regarding the pending merger between Pfizer, Inc., and King Pharmaceuticals, Inc., from his client and friend, Robert Schulman, a former partner of a Richmond-based global law firm. Schulman had learned of the information through his representation of King Pharmaceuticals. Klein and another co-conspirator then used that material, non-public information to engage in securities transactions ahead of the merger announcement that resulted in more than $400,000 in illegal profits.
At sentencing, Klein faces a maximum sentence of five years’ imprisonment. Schulman was convicted of securities fraud and securities fraud conspiracy following a jury trial in March 2017.
Ms. Rohde thanked the USPIS for its hard work and dedication in leading the investigation and expressed her appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys David C. Pitluck, Julia Nestor and Patrick T. Hein are in charge of the prosecution.
The Defendant:
Name: TIBOR KLEIN
Age: 43
Residence: Melville, New York
E.D.N.Y. Docket No. 16-CR-442 (JMA)
Staten Island Man Indicted for Million-Dollar Real Estate Investment Scam Targeting Elderly VictimsRead the Press Release
A nine-count indictment was unsealed this morning in federal court in Brooklyn, New York, charging the defendant Yevgeniy Braziler with securities fraud, mail fraud, and wire fraud for orchestrating a scheme to target elderly investors by selling them partnerships in three fraudulent real estate companies. Braziler was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.
The indictment was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Division of the United States Postal Inspection Service.
“As alleged, the defendant targeted the elderly with lies and deceit. We will bring the full force of the law to bear on those, such as the defendant, who take advantage of our vulnerable neighbors,” stated Acting United States Attorney Rohde.
“Mr. Braziler allegedly fleeced elderly investors when he devised a scheme to separate them from their hard earned money and secure retirements. Postal Inspectors will never tolerate the financial abuse of anyone regardless of their age,” stated Inspector in Charge Philip R. Bartlett.
According to the indictment, Braziler and his associates promised potential investors, many of whom were elderly, that the companies would purchase, renovate, rent and re-sell residential real estate in the Buffalo and Niagara Falls, New York areas. In response to Braziler’s solicitations, investors sent over $1.8 million to Braziler. Instead of using the money for the purposes he promised, however, Braziler stole the great majority of the funds. For example, investors sent one of Braziler’s investment vehicles at least $978,000, but Braziler purchased only one property for at most $12,000, and took most of the remaining funds for himself and his associates. The investors lost nearly all of their money.
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 Office’s Business and Securities Fraud Section. Assistant United States Attorney Matthew S. Amatruda is in charge of the prosecution.
The Defendant:
YEVGENIY BRAZILER
Age: 40
Residence: Staten Island, New YorkE.D.N.Y. Docket No. 17-CR-385 (AMD)
Former NYPD Officer Sentenced to Two Years in Prison for Insurance Fraud SchemeRead the Press Release
Carlos Becker, a former police officer with the New York City Police Department (“NYPD”), was sentenced earlier today to two years in prison for submitting a false insurance claim after directing accomplices to burn his car. On January 10, 2017, Becker pleaded guilty to conspiracy to commit mail fraud for his role in a scheme to defraud the Government Employment Insurance Company (“GEICO”). Today’s sentencing proceeding was held before United States District Judge Margo K. Brodie. Becker was also ordered to pay $34,261.19 in restitution to GEICO.
The sentencing was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York.
As set forth in court documents, in September 2012, Becker, while employed as a police officer with the NYPD, directed accomplices to set fire to Becker’s Range Rover so that Becker could file a fraudulent insurance claim with GEICO and collect the insurance proceeds. During the early morning hours of September 7, 2012, Becker’s accomplices set fire to the Range Rover on a residential street in Queens. New York City firefighters responded to a 911 call about the Range Rover fire and put it out. Becker then submitted a fraudulent claim to GEICO, claiming that the Range Rover had been stolen from a parking space in front of his house in Hempstead, New York, and that the car was later found burned. Based on his fraudulent claim, in January 2013, GEICO mailed two checks to Becker in the amounts of $29,480.86 and $4,780.33.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Alexander Solomon and Robert Polemeni are in charge of the prosecution.
The Defendant:
CARLOS BECKER
Age: 40
Residence: Hempstead, New York
E.D.N.Y. Docket No. 16-CR-460 (MKB)
MS-13 Gang Members Indicted in New York for Murder of Four Young Men in Park and Killing of Rival at DeliRead the Press Release
17 members and associates of La Mara Salvatrucha, also known as the MS-13, have been charged with racketeering, 12 murders, attempted murders, assaults, obstruction of justice, arson, conspiracy to distribute marijuana, and related firearms and conspiracy charges relating to the gang’s activities on Long Island, New York. The 59-count, third superseding indictment was unsealed on July 13, in federal court in Central Islip, New York, and includes charges relating to the April 11, murder of four young men in a Central Islip, New York park.
Attorney General Jeff Sessions; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; 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 Timothy D. Sini of the Suffolk County Police Department made the announcement.
“MS-13 is one of the most vicious criminal gangs in this country today,” said Attorney General Sessions. “As I said when I visited Long Island after these murders took place in April, MS-13’s motto may be ‘kill, rape and control’, but the Department of Justice’s motto is justice for victims and consequences for criminals. We are committed to bringing violent criminals to justice, and this indictment is the next step in our mission of finding, prosecuting, and eradicating the MS-13 threat.”
“The senseless murders charged in this superseding indictment further demonstrate MS-13’s compulsion to commit horrific acts of violence in communities in our district,” stated Acting U.S. Attorney Rohde. “This Office and the FBI’s Long Island Gang Task Force will continue to work tirelessly to rid communities, including Central Islip, of MS-13, using every law enforcement resource at our disposal.” Ms. Rohde expressed her grateful appreciation to the members of the FBI’s Long Island Gang Task Force, as well as the U.S. Attorney’s Offices for the Eastern District of Virginia, the Western District of Virginia, and the Western District of North Carolina for assistance provided during the investigation.
“MS-13 is our number one priority on Long Island because much of what they do and how they behave boils down to violence for violence sake,” stated Assistant Director in Charge Sweeney. “The idea that human life means nothing to these gang members should shock the conscience, and we cannot allow this type of thinking to take hold in our youth. We need help in addressing the violence, by the community supporting churches, community programs and activists who can provide a positive alternative to the deadly future MS-13 offers.”
“Today’s announcement is the culmination of excellent police work, and true collaboration between the Suffolk County Police Department, and our federal law enforcement partners,” stated Police Commissioner Sini. “The fact that this case was done in approximately three months is nothing short of outstanding, and I want to thank everyone involved for their critical work. This is another huge blow against MS-13. It shows that we will not tolerate violence in our communities. It shows that we will stop at nothing to achieve justice. And it means that we will prevail.”
Among the counts added in the third superseding indictment are charges against: (1) Alexis Hernandez, 20, of Central Islip, New York; Santos Leonel Ortiz-Flores, 19, of Central Islip, New York; and Omar Antonio Villalta, 22, of Central Islip, New York and Charlottesville, Virginia, in connection with the April 11, murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos in Central Islip; (2) Mario Aguilar-Lopez, 18, of Brentwood, New York; Enrique Portillo, 20, of Central Islip, New York; Alexi Saenz, 22, of Brentwood, New York; Jairo Saenz, 20, of Brentwood, New York; and Jose Suarez, 23, of Central Islip, New York, in connection with the January 30, murder of Esteban Alvarado-Bonilla, a suspected rival gang member, and assault of an innocent bystander at El Campesino Deli in Central Islip; and (3) Jeffrey Amador, 21, of Brentwood, New York; and Ronald Catalan, 26, of Brentwood, New York, in connection with the Oct. 21, 2015 attempted murder of two suspected rival gang members.
As detailed in the third superseding indictment and the government’s detention letter filed on July 13, Hernandez, Ortiz-Flores and Villalta have been charged with the April 11, murders of Llivicura, Lopez, Tigre and Villalobos. According to the allegations in the government’s detention letter, on the evening of the murders, two female associates of MS-13 lured five young men, including the four victims, to a community park in Central Islip at the direction of MS-13 members who believed the victims to be members of a rival gang. More than a dozen MS-13 members and associates, including Hernandez, Ortiz-Flores and Villalta, met in a heavily wooded area behind the park where they discussed the plan to kill the victims, distributed weapons and waited for word from the females that they had arrived.
According to the allegations in the government’s detention letter, when the female MS-13 associates arrived at the park, they led the victims to a wooded area and notified MS-13 members of their location by text message. Hernandez, Ortiz-Flores, Villalta and the other MS-13 members approached and surrounded the victims, and attacked and killed Llivicura, Lopez, Tigre and Villalobos using machetes, knives and wooden clubs. The fifth victim escaped. According to the allegations in the detention letter, the MS-13 members and associates dragged the victims’ bodies a short distance to a more secluded spot and fled the scene. The victims’ bodies were discovered the following evening, on April 12.
According to the government’s detention letter, Portillo, Alexi Saenz and Jairo Saenz were previously charged with the Sept. 13, 2016, murders of Nisa Mickens and Kyla Cuevas. In the third superseding indictment, they are also charged, along with Aguilar-Lopez and Suarez, in connection with the January 30, murder of Alvarado-Bonilla, a suspected rival gang member, and the assault of an innocent bystander. The government contends in the detention letter that, on the day of the murder, Portillo, a member of the Sailors Locos Salvatruchas Westside (“Sailors”) clique, saw Alvarado-Bonilla, a suspected rival gang member, inside a deli in Central Islip. Portillo reported this sighting to Alexi Saenz and Jairo Saenz, the leaders of the Sailors clique, who directed Aguilar-Lopez, Suarez and another MS-13 associate to go to the deli and kill Alvarado-Bonilla. The government alleges in the detention letter that, after arriving at the deli, Aguilar-Lopez approached Alvarado-Bonilla from behind and shot him multiple times, killing him, and also striking an employee of the deli.
According to the superseding indictment and the allegations in the detention letter, Amador and Catalan, who was the leader of the Brentwood Locos Salvatruchas (“BLS”) clique of the MS-13, are also charged in connection with the Oct. 21, 2015 attempted murders and assaults of two men that occurred in North Bay Shore, New York. According to the allegations, that evening, MS-13 members had decided to retaliate against suspected members of the rival Latin Kings gang for an assault on an MS-13. Amador, Catalan and other MS-13 members observed a group of people they believed to be Latin Kings, approached the group and fired multiple shots before running back to the car and fleeing the scene. The government contends in the detention letter that two victims were struck but survived their gunshot wounds.
The third superseding indictment also charges members of the Sailors and BLS MS-13 cliques with conspiracy to distribute cocaine and marijuana, the proceeds of which the government contends were used to help finance MS-13’s criminal operations.
This superseding indictment is the latest in a series of federal prosecutions by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Organized Crime and Gang Section targeting members of MS-13, a violent transnational criminal organization. MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. With numerous branches, or “cliques,” MS-13 is the most violent street gang on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010 alone, the U.S. Attorney’s Office for the Eastern District of New York has obtained indictments charging MS-13 members with carrying out more than 40 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprised of agents and officers of the FBI, Suffolk County Police Department, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, the New York State Police, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On July 13, Aguilar-Lopez, Amador, Catalan, Hernandez and Ortiz-Flores were arraigned before U.S. District Judge Joseph F. Bianco at the federal courthouse in Central Islip. Villalta was arraigned in the Western District of Virginia that same day. The remaining defendants were arraigned before Judge Bianco on July 17.
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The case is being prosecuted by the Assistant U.S. Attorneys John J. Durham, Raymond A. Tierney and Paul G. Scotti of the Long Island Criminal Division with assistance from Deputy Chief Douglas Crow and Trial Attorney Francesca Liquori of the Criminal Division’s Organized Crime and Gang Section.
The Defendants:
EDWIN AMAYA-SANCHEZ (“Strong”)
Age: 30
Brentwood, New York
WILLIAM CASTELLANOS (“Dizzy” and “Satanico”)
Age: 20
Central Islip, New York
JHONNY CONTRERAS (“Reaper”)
Age: 23
Brentwood, New York
REYNALDO LOPEZ-ALVARADO (“Mente”)
Age: 25
Brentwood, New York
ELMER ALEXANDER LOPEZ (“Smiley,” “Little Smiley” and “Alex”)
Age: 19
Brentwood, New York
SELVIN CHAVEZ (“Flash”)
Age: 20
Brentwood, New York
GERMAN CRUZ (“Bad Boy”)
Age: 19
Brentwood, New York
ENRIQUE PORTILLO (“Oso” and “Turkey”)
Age: 20
Central Islip, New York
ALEXI SAENZ (“Blasty” and “Big Homie”)
Age: 22
Brentwood, New York
JAIRO SAENZ (“Funny”)
Age: 20
Brentwood, New York
MARIO AGUILAR-LOPEZ (“Cuchumbo”)
Age: 18
Brentwood, New York
JEFFREY AMADOR (“Cruel”)
Age: 21
Brentwood, New York
RONALD CATALAN (“Stranger”)
Age: 26
Brentwood, New York
ALEXIS HERNANDEZ
Age: 20
Central Islip, New York
SANTOS LEONEL ORTIZ-FLORES
Age: 19
Central Islip, New York
JOSE SUAREZ (“Chompira”)
Age: 23
Central Islip, New York
OMAR ANTONIO VILLALTA (“Anticristo”)
Age: 22
Central Islip, New York and Charlottesville, Virginia
E.D.N.Y. Docket No. 16-403 (S-3)(JFB)
MS-13 Gang Members Indicted in New York for Murder of Four Young Men in Park and Killing of Rival at DeliRead the Press Release
WASHINGTON – 17 members and associates of La Mara Salvatrucha, also known as the MS-13, have been charged with racketeering, 12 murders, attempted murders, assaults, obstruction of justice, arson, conspiracy to distribute marijuana, and related firearms and conspiracy charges relating to the gang’s activities on Long Island, New York. The 59-count, third superseding indictment was unsealed on July 13, 2017, in federal court in Central Islip, New York, and includes charges relating to the Apr. 11, 2017, murder of four young men in a Central Islip, New York park.
Attorney General Jeff Sessions; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; 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 Timothy D. Sini of the Suffolk County Police Department made the announcement.
“MS-13 is one of the most vicious criminal gangs in this country today,” said Attorney General Sessions. “As I said when I visited Long Island after these murders took place in April, MS-13’s motto may be ‘kill, rape and control’, but the Department of Justice’s motto is justice for victims and consequences for criminals. We are committed to bringing violent criminals to justice, and this indictment is the next step in our mission of finding, prosecuting and eradicating the MS-13 threat.”
“The senseless murders charged in this superseding indictment further demonstrate MS-13’s compulsion to commit horrific acts of violence in communities in our district,” stated Acting U.S. Attorney Rohde. “This Office and the FBI’s Long Island Gang Task Force will continue to work tirelessly to rid communities, including Central Islip, of MS-13, using every law enforcement resource at our disposal.” Ms. Rohde expressed her grateful appreciation to the members of the FBI’s Long Island Gang Task Force, as well as the United States Attorney’s Offices for the Eastern District of Virginia, the Western District of Virginia, and the Western District of North Carolina for assistance provided during the investigation.
“MS-13 is our number one priority on Long Island because much of what they do and how they behave boils down to violence for violence sake,” stated Assistant Director-in-Charge Sweeney. “The idea that human life means nothing to these gang members should shock the conscience, and we cannot allow this type of thinking to take hold in our youth. We need help in addressing the violence, by the community supporting churches, community programs and activists who can provide a positive alternative to the deadly future MS-13 offers.”
“Today’s announcement is the culmination of excellent police work, and true collaboration between the Suffolk County Police Department and our federal law enforcement partners,” stated Commissioner Sini. “The fact that this case was done in approximately three months is nothing short of outstanding, and I want to thank everyone involved for their critical work. This is another huge blow against MS-13. It shows that we will not tolerate violence in our communities. It shows that we will stop at nothing to achieve justice. And it means that we will prevail.”
Among the counts added in the third superseding indictment are charges against: (1) Alexis Hernandez, 20, of Central Islip, New York; Santos Leonel Ortiz-Flores, 19, of Central Islip, New York; and Omar Antonio Villalta, 22, of Central Islip, New York and Charlottesville, Virginia, in connection with the Apr. 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos in Central Islip; (2) Mario Aguilar-Lopez, 18, of Brentwood, New York; Enrique Portillo, 20, of Central Islip, New York; Alexi Saenz, 22, of Brentwood, New York; Jairo Saenz, 20, of Brentwood, New York; and Jose Suarez, 23, of Central Islip, New York, in connection with the Jan. 30, 2017 murder of Esteban Alvarado-Bonilla, a suspected rival gang member, and assault of an innocent bystander at El Campesino Deli in Central Islip; and (3) Jeffrey Amador, 21, of Brentwood, New York; and Ronald Catalan, 26, of Brentwood, New York, in connection with the Oct. 21, 2015 attempted murder of two suspected rival gang members.
As detailed in the third superseding indictment and the government’s detention letter filed on July 13, Hernandez, Ortiz-Flores and Villalta have been charged with the Apr. 11, 2017 murders of Llivicura, Lopez, Tigre and Villalobos. According to the allegations in the government’s detention letter, on the evening of the murders, two female associates of MS-13 lured five young men, including the four victims, to a community park in Central Islip at the direction of MS-13 members who believed the victims to be members of a rival gang. More than a dozen MS-13 members and associates, including Hernandez, Ortiz-Flores and Villalta, met in a heavily wooded area behind the park where they discussed the plan to kill the victims, distributed weapons and waited for word from the females that they had arrived.
According to the allegations in the government’s detention letter, when the female MS-13 associates arrived at the park, they led the victims to a wooded area and notified MS-13 members of their location by text message. Hernandez, Ortiz-Flores, Villalta and the other MS-13 members approached and surrounded the victims, and attacked and killed Llivicura, Lopez, Tigre and Villalobos using machetes, knives and wooden clubs. The fifth victim escaped. According to the allegations in the detention letter, the MS-13 members and associates dragged the victims’ bodies a short distance to a more secluded spot and fled the scene. The victims’ bodies were discovered the following evening, on April 12.
According to the government’s detention letter, Portillo, Alexi Saenz and Jairo Saenz were previously charged with the Sept. 13, 2016, murders of Nisa Mickens and Kyla Cuevas. In the third superseding indictment, they are also charged, along with Aguilar-Lopez and Suarez, in connection with the Jan. 30, 2017, murder of Alvarado-Bonilla, a suspected rival gang member, and the assault of an innocent bystander. The government contends in the detention letter that, on the day of the murder, Portillo, a member of the Sailors Locos Salvatruchas Westside (“Sailors”) clique, saw Alvarado-Bonilla, a suspected rival gang member, inside a deli in Central Islip. Portillo reported this sighting to Alexi Saenz and Jairo Saenz, the leaders of the Sailors clique, who directed Aguilar-Lopez, Suarez and another MS-13 associate to go to the deli and kill Alvarado-Bonilla. The government alleges in the detention letter that, after arriving at the deli, Aguilar-Lopez approached Alvarado-Bonilla from behind and shot him multiple times, killing him, and also striking an employee of the deli.
According to the superseding indictment and the allegations in the detention letter, Amador and Catalan, who was the leader of the Brentwood Locos Salvatruchas (“BLS”) clique of the MS-13, are also charged in connection with the Oct. 21, 2015 attempted murders and assaults of two men that occurred in North Bay Shore, New York. According to the allegations, that evening, MS-13 members had decided to retaliate against suspected members of the rival Latin Kings gang for an assault on an MS-13. Amador, Catalan and other MS-13 members observed a group of people they believed to be Latin Kings, approached the group and fired multiple shots before running back to the car and fleeing the scene. The government contends in the detention letter that two victims were struck but survived their gunshot wounds.
The third superseding indictment also charges members of the Sailors and BLS MS-13 cliques with conspiracy to distribute cocaine and marijuana, the proceeds of which the government contends were used to help finance MS-13’s criminal operations.
This superseding indictment is the latest in a series of federal prosecutions by the U.S. Attorney’s Office for the Eastern District of New York targeting members of MS-13, a violent transnational criminal organization. MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. With numerous branches, or “cliques,” MS-13 is the most violent street gang on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010 alone, the U.S. Attorney’s Office for the Eastern District of New York has obtained indictments charging MS-13 members with carrying out more than 40 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprised of agents and officers of the FBI, Suffolk County Police Department, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, Rockville Centre Police Department, the New York State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On July 13, 2017, Aguilar-Lopez, Amador, Catalan, Hernandez and Ortiz-Flores were arraigned before U.S. District Judge Joseph F. Bianco at the federal courthouse in Central Islip. Villalta was arraigned in the Western District of Virginia that same day. The remaining defendants were arraigned before Judge Bianco on July 17, 2017.
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The case is being prosecuted by Assistant U.S. Attorneys John J. Durham, Raymond A. Tierney and Paul G. Scotti of the Office’s Long Island Criminal Division, with assistance provided by Deputy Chief Douglas Crow and Trial Attorney Francesca Liquori of the Justice Department’s Criminal Division’s Organized Crime and Gang Section.
The Defendants:
EDWIN AMAYA-SANCHEZ (“Strong”)
Age: 30
Brentwood, New York
WILLIAM CASTELLANOS (“Dizzy” and “Satanico”)
Age: 20
Central Islip, New York
JHONNY CONTRERAS (“Reaper”)
Age: 23
Brentwood, New York
REYNALDO LOPEZ-ALVARADO (“Mente”)
Age: 25
Brentwood, New York
ELMER ALEXANDER LOPEZ (“Smiley,” “Little Smiley” and “Alex”)
Age: 19
Brentwood, New York
SELVIN CHAVEZ (“Flash”)
Age: 20
Brentwood, New York
GERMAN CRUZ (“Bad Boy”)
Age: 19
Brentwood, New York
ENRIQUE PORTILLO (“Oso” and “Turkey”)
Age: 20
Central Islip, New York
ALEXI SAENZ (“Blasty” and “Big Homie”)
Age: 22
Brentwood, New York
JAIRO SAENZ (“Funny”)
Age: 20
Brentwood, New York
MARIO AGUILAR-LOPEZ (“Cuchumbo”)
Age: 18
Brentwood, New York
JEFFREY AMADOR (“Cruel”)
Age: 21
Brentwood, New York
RONALD CATALAN (“Stranger”)
Age: 26
Brentwood, New York
ALEXIS HERNANDEZ
Age: 20
Central Islip, New York
SANTOS LEONEL ORTIZ-FLORES
Age: 19
Central Islip, New York
JOSE SUAREZ (“Chompira”)
Age: 23
Central Islip, New York
OMAR ANTONIO VILLALTA (“Anticristo”)
Age: 22
Central Islip, New York and Charlottesville, Virginia
E.D.N.Y. Docket No. 16-403 (S-3)(JFB)
Senior Executives of Medical Drug Re-Packager Plead Guilty to Defrauding Healthcare ProvidersRead the Press Release
Earlier today, in federal court in Brooklyn, Gerald Tighe, the president and owner of Med Prep Consulting Inc. (Med Prep), and Stephen Kalinoski, its director of pharmacy and registered pharmacist-in-charge, pleaded guilty to wire fraud conspiracy in connection with their operation of the now-defunct Tinton Falls, New Jersey-based medical drug re-packager and compounding pharmacy. The pleas were entered before United States District Judge I. Leo Glasser.
The guilty pleas were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Mark McCormack, Special Agent-in-Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations, Metropolitan Washington Field Office (FDA/OCI).
According to court filings and facts presented during the plea proceeding, Med Prep processed numerous drugs, including oncology and dialysis drugs, pain medications, anesthesia drugs, and operating room drugs, in purportedly aseptic conditions. In an effort to gain market share, Med Prep repeatedly misrepresented to its customers, who consisted of hospitals and other healthcare providers, that it adhered to, and in some areas exceeded, industry standards and laws applicable to sterile drug preparation. In fact, Med Prep produced drugs in a facility that fell far short of basic industry standards of cleanliness, creating a risk to the health of already ill patients. Tighe and Kalinoski lied to healthcare providers about Med Prep’s failures to comply with basic sterility practices. Med Prep halted its production of drug products in the summer of 2013, following an incident in which it had distributed intravenous drugs containing visible mold to a Connecticut hospital.
"Today's guilty pleas mark an important step in our continuing effort to hold accountable those who pursue corporate profits over the health and safety of vulnerable patients suffering from disease,” said Acting United States Attorney Rohde. In announcing the guilty plea, Ms. Rohde gratefully acknowledged the assistance and cooperation of the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the United States Office of Personnel Management, Office of the Inspector General; the Department of Justice, Civil Division, Consumer Protection Branch and Commercial Litigation Branch; the FDA’s Office of the Chief Counsel; the Office of the Attorney General of New Jersey; and the New Jersey Board of Pharmacy.“Producing unsafe and contaminated drugs poses a serious threat to the U.S. public health and cannot be tolerated,” stated FDA/OCI Special Agent-in-Charge McCormack. “The FDA remains fully committed to aggressively pursuing those who place unsuspecting American consumers at risk by distributing adulterated drugs.”
The sentencing, Tighe and Kalinoski each face up to five years in prison, a fine and the forfeiture of criminal proceeds. They will also be required to make full restitution to their victims.The case is being prosecuted by Assistant United States Attorneys Alixandra E. Smith, Ameet B. Kabrawala and Erin E. Argo.
The Defendants:
GERALD TIGHE
Age: 59
West Long Branch, New Jersey
STEPHEN KALINOSKI
Age: 53
Middletown, New Jersey
E.D.N.Y. Docket No. 15-CR-62 (ILG)
Three Doctors, A Chiropractor, Three Therapists and Medical Company Owners Arrested in Brooklyn as Part of National Health Care Fraud TakedownRead the Press Release
Ten individuals, including three doctors, a chiropractor, three licensed physical and occupational therapists and two medical company owners, have been charged for their alleged participation in multiple schemes that fraudulently billed the Medicare and Medicaid programs more than $125 million. The charges filed in federal court in Brooklyn, New York are part of a nationwide health care fraud takedown led by the Medicare Fraud Strike Force, which resulted in criminal charges against 412 individuals for their alleged participation in health care fraud schemes involving approximately $1.3 billion in fraudulent claims.
The Brooklyn and Queens cases were announced by 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), Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), New York Regional Office, James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Medicaid Inspector General Dennis Rosen of New York State Office of Medicaid Inspector General (OMIG). The results of the nationwide takedown were announced today by Attorney General Jeff Sessions, Department of Health and Human Services (HHS) Secretary Tom Price, M.D., Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting FBI Director Andrew McCabe, Acting Drug Enforcement Administration (DEA) Administrator Chuck Rosenberg, Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), IRS-Criminal Investigations Chief Don Fort, Centers for Medicare and Medicaid Services Administrator Seema Verma, and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).
“As alleged, the defendants charged in the Eastern District of New York as part of this national takedown took advantage of programs designed to provide essential healthcare for the elderly and the needy. Doctors, medical professionals and others who defraud Medicare and Medicaid and pay illegal kickbacks to line their pockets at the taxpayers’ expense are on notice that they will be investigated and prosecuted,” stated Acting United States Attorney Rohde. Ms. Rohde extended her grateful appreciation to the U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the New York City Police Department (NYPD), the New York Attorney General’s Medicaid Fraud Control Unit (MFCU), the New York City Human Resources Administration and the New York City Health and Hospitals Corporation, Office of Inspector General, for their assistance in the investigations in this district.
“Bhambhani’s alleged acts of illegally paying for patient referrals and submitting a plethora of false million-dollar claims to Medicare and Medicaid were aimed towards selfish gain,” FBI Assistant Director-in-Charge Sweeney Jr. stated. “Crimes of this nature not only stand to compromise government programs created to assist those in need, but also the confidence of those who put great trust in doctors and medical professionals. It goes without saying that to betray this trust is utterly unethical.”
“Being a health care provider in the Medicare and Medicaid programs is a privilege, not a right. When fraudsters rip off scarce taxpayer funds meant to pay for legitimate health care services, they undermine these vital programs and affect the millions of Americans who rely on them,” said Special Agent in Charge Lampert of HHS-OIG. "Our agency, working closely with our law enforcement partners, will continue root out fraudulent schemes and hold criminals accountable in order to protect the integrity of our nation’s federally funded health care system.”
“Healthcare Fraud is not a victimless crime,” stated IRS-Criminal Investigation Special Agent-in-Charge Robnett. “We all pay when others swindle the United States overnment. With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist our law enforcement partners in these cases, by following the money when investigating these allegations.”
“Individuals who commit Medicaid fraud prey on the most vulnerable New Yorkers, and the impacts - fewer health care resources and waste of taxpayer dollars - affect all of us,” said OMIG Inspector General Rosen. “My office will continue to work closely with our partners at the federal and state level to root out fraud and hold wrongdoers fully accountable.”
The schemes charged in the Eastern District of New York, detailed in four indictments and two criminal complaints, are as follows:
Ghanshyam Bhambhani: A criminal complaint charges Ghanshyam Bhambhani, a Queens cardiologist, with violating the Anti-Kickback Statute by paying other physicians for patient referrals to his practice. A search warrant was also executed at his medical office in Ozone Park. According to the complaint, physicians who worked with the doctor covertly recorded him discussing paying for patient referrals. Bhambhani, along with other employees of his practice, submitted over $3.7 million in claims to Medicare Part B, and Bhambhani is listed as the attending physician for over $7.4 million in claims submitted to Medicare Part A. This case is being prosecuted by Assistant United States Attorney Erin Argo and Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York. Bhambani was arrested today and he is expected to be arraigned this afternoon before United States Magistrate Judge Robert Levy at the federal courthouse in Brooklyn, New York on July 13, 2017.
United States v. Wael Bakry, et al.: The indictment charges five health care professionals for their role in a wide-ranging health care fraud conspiracy in Brooklyn and Queens that billed the Medicare program approximately $100 million. The defendants—Wael Bakry, a physical therapist, Abraham Demoz, a physician, Victor Genkin, an occupational therapist, Mayura Kanekar, an occupational therapist, and Alexander Khavash, a chiropractor—were charged with conspiring to commit health care and wire fraud and with related tax charges. According to the indictment, the defendants paid illegal kickbacks for the referral of patients to their clinics who, in turn, subjected themselves to purported physical and occupational therapy and other services. This case is being prosecuted by Acting Assistant Chief A. Brendan Stewart and Trial Attorney Richard A. Powers of the Criminal Division’s Fraud Section. Bakry, Demoz, and Kanekar were arrested and arraigned before States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn, New York on July 10, 2017. The case has been assigned to States District Judge Pamela K. Chen.
Xiaoliang Zhang: A criminal complaint charges Xiaoliang Zhang, a licensed physician specializing in rehabilitation medicine, with health care fraud for submitting $27 million worth of claims to Medicare and Medicaid for physical therapy services even though such services were not medically necessary, often not provided, and otherwise did not qualify for reimbursement. Search warrants were executed by agents from the FBI and HHS-OIG at two of Zhang's medical clinic locations, which he operated under the name Elmhurst United Medical, P.C. As described in the complaint, Zhang ordered his physical therapists to bill Medicare and Medicaid for administering treatments to patients that were not rendered. This case is being prosecuted by Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York. Zhang was arrested and arraigned before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York on July 12, 2017.
Svetlana Shargorodskaya: The indictment charges Svetlana Shargorodskaya, the owner of a medical diagnostic testing company, LUVR Diagnostic Services, with health care fraud, false claims, and conspiracy to receive and pay kickbacks. As set forth in the indictment, Shargorodskaya, through LUVR, submitted false claims to various health care benefit programs, including Medicare, and paid patients to receive medically unnecessary services. LUVR fraudulently billed Medicare and insurance companies for more than $13 million in diagnostic testing services. This case is being prosecuted by Trial Attorneys Debra Jaroslawicz and Richard A. Powers of the Criminal Division’s Fraud Section. Shargorodskaya was arrested and arraigned before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York on July 12, 2017. The case has been assigned to United States District Judge Margo K. Brodie.
Suzanna Meliksetyan: The indictment charges Suzanna Meliksetyan with conspiracy to commit health care fraud, health care fraud, and false statements relating to health care matters for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administered Medicare Advantage plans and New York Medicaid Managed Care plans for participating members. As described in the indictment, Meliksetyan and others impersonated representatives of approved providers in order to get approval for the submission of fraudulent claims for durable medical equipment. In total, the scheme resulted in the submission of more than $12 million in fraudulent claims and the payment of more than $5 million for those claims. This case is being prosecuted by Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section. Meliksetyan was arrested and arraigned before United States Magistrate Judge Timothy J. Sullivan at the federal courthouse in Greenbelt, Maryland on July 11, 2017. The case has been assigned to United States District Judge Roslynn R. Mauskopf.
Vadim Alekseyev: The indictment charges Vadim Alekseyev, who owned and operated a number of shell companies in furtherance of a health care fraud and kickback scheme, with conspiracy to commit money laundering and conspiracy to obstruct the lawful functions of the Internal Revenue Service. As described in the indictment, Alekseyev and his co-conspirators filled multiple Brooklyn-area clinics, which purported to provide physical and occupational therapy to Medicare and Medicaid beneficiaries, with patients by paying bribes and kickbacks to beneficiaries and to Brooklyn-area ambulance drivers, who provided patients to be subjected to medically unnecessary treatment at the clinics. Through the clinics in which Alekseyev was involved, he and his co-conspirators submitted claims for over $40 million in purported therapy sessions in return for which Medicare and Medicare paid the clinics over $11 million. This case is being prosecuted by Trial Attorneys Sarah Wilson and Richard A. Powers of the Criminal Division’s Fraud Section.
The charges in the indictments and complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendants:
Ghanshyam Bhambhani
Age: 52Queens, NY
EDNY Docket No. 17-M-604
WAEL BAKRY
Age: 45
Staten Island, NY
Dr. Abraham Demoz
Age: 57
Oceanside, NY
Victor Genkin
Age: 48
Brooklyn, NY
Mayura Kanekar
Age: 42
Bayside, NY
Alexander Khavash
Age: 40
Parkland, FL
EDNY Docket No. 17-CR-353
XIAOLIANG ZHANG
Age: 53
Brooklyn, NY
EDNY Docket No. 17-M-618
Svetlana Shargorodskaya
Age: 47
Staten Island, NY
EDNY Docket No. 17-CR-358
Suzanna Meliksetyan
Age: 28
Montgomery Village, MD
EDNY Docket No. 17-CR-351
Vadim Alekseyev
Age: 33
Brooklyn, NY
EDNY Docket No. 17-CR-336
Corporate Insiders and Managers of Long Island Boiler Room Indicted for Orchestrating $147 Million Stock Manipulation Scheme Involving Publicly Traded CompaniesRead the Press Release
A nine-count indictment was unsealed this morning in federal court in Brooklyn, New York, against 14 defendants: Jeffrey Chartier, Stephanie Lee, Lawrence Isen and Robert Gleckman, insiders and marketers of five publicly traded companies whose stock the defendants manipulated; Erik Matz and Ronald Hardy, managers of My Street Research and its predecessors (the “Boiler Room”); Brian Heepke, Dennis Verderosa, Emin L. Cohen, Paul Ewer, McArthur Jean, and Sergio Ramirez, Boiler Room cold-callers; Anthony Vassallo, owner of Elite Stock Research (“ESR”); and Robert Gilbert, owner of Accredited Investor Preview (“AIP”).[1]
The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and substantive securities fraud in connection with the stock manipulation of five publicly traded companies – National Waste Management Holdings, Inc., trading under the ticker symbol NWMH; CES Synergies, Inc., trading under the ticker symbol CESX; Grilled Cheese Truck, trading under the ticker symbol GRLD; Hydrocarb Energy Corporation, trading under the ticker symbol HECC; and Intelligent Content Enterprises, Inc., trading under the ticker symbol ICEIF. In addition, the government restrained Matz’s residence in Mt. Sinai, New York, Isen’s residence in San Diego, California, and a co-conspirator’s residence in Hicksville, New York, and seized bank accounts containing alleged criminal proceeds and automobiles purchased with alleged criminal proceeds.
Matz, Hardy, Heepke, Verderosa, Cohen, Ewer, Jean, Ramirez, Vassallo, and Gilbert will be arraigned this afternoon before Magistrate Judge Robert M. Levy, at the United States Courthouse in Brooklyn. Chartier’s and Gleckman’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 312 North Spring Street, Los Angeles, California. Lee’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 801 North Florida Avenue, Tampa, Florida. Isen’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 333 W. Broadway, San Diego, California.
The indictment was announced by 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).
“As alleged, the defendants designed an elaborate, fraudulent scheme, to defraud the investing public, preying, in particular, upon unsuspecting and elderly investors. Specifically, the defendants obtained shares from corporate insiders at below-market prices and engaged in manipulative trading patterns to drive up the price of the shares, while aggressively and repeatedly calling and emailing victims to purchase those shares,” stated Acting United States Attorney Rohde. “Today’s 14 arrests, in three states, reflect the scope of this fraud and our commitment to aggressively locating and bringing to justice those who abuse our financial markets in order to fraudulently enrich themselves.” Ms. Rohde expressed her grateful appreciation to the FBI and the United States Securities and Exchange Commission for their significant cooperation and assistance in the investigation.
“Manipulating stock prices, as alleged in this case, to appear more attractive to investors, is a deliberate attempt at sabotaging fair market trading,” stated Assistant Director-in-Charge Sweeney. “And manipulation, at its core, is a true act of deception, especially when the elderly are targeted. This scheme involved an incredible amount of money, more than $147 million. That's no small change for even the savviest investor. As evidenced by our arrests today, we take these matters seriously, and will continue to pursue those who make victims out of unwitting participants in these schemes.”
Overview
As alleged in the indictment and court proceedings, between January 2014 and July 2017, the defendants, together with others, engaged in a $147 million scheme to defraud investors and potential investors in, among other companies, one or more of the following publicly traded companies: NWMH, CESX, GRLD, HECC, and ICEIF (collectively, the “Manipulated Public Companies”), by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, among other things, (a) artificially generating price movements and trading volume in the shares, and (b) material misrepresentations and omissions in their communications with victim investors about the stock of the Manipulated Public Companies, relating to, among other things, the advisability of purchasing such stock. To execute this scheme, the defendants fraudulently concealed their control of shares of the Manipulated Public Companies that were held in brokerage accounts in the names of other individuals or entities. In addition, in or about and between 2014 and 2017, defendants Chartier, Lee, Isen, Matz, and Hardy engaged in a scheme to launder approximately $14,714,493 in proceeds of the foregoing stock manipulation schemes.
The Stock Manipulation Scheme
In order to carry out the fraudulent pump and dump scheme, employees of the Boiler Room based in Melville, New York, obtained shares from insiders at the Manipulated Public Companies, including the defendants Chartier, Lee and Gleckman, at below-market prices through stock purchase and consulting agreements. Once employees of the Boiler Room obtained shares in the Manipulated Public Companies, the defendants engaged in manipulative trading patterns including wash trades and matched trades to drive up the price of the shares, while aggressively and repeatedly calling and emailing victims – many of whom were senior citizens – to purchase shares in the Manipulated Public Companies. When victims indicated a willingness to purchase a recommended stock, the defendants and their co-conspirators at the Boiler Room called the victims repeatedly, pressured them to follow through with their purchases and directed them to log into their trading accounts while still on the telephone to place purchase orders for the relevant stock. Many of the victims ultimately purchased stock in more than one of the Manipulated Public Companies. In some cases, the Boiler Room also charged the victims for “subscriptions” to receive stock recommendations.
The defendants did not disclose to the victims that, contemporaneously with or shortly after their recommendation to the victims of the stocks of the Manipulated Public Companies, the defendants and their co-conspirators sold their own shares in the same companies. The victims therefore were left with the false and misleading impression that the stocks of the Manipulated Public Companies were sound investments in which the defendants and their co-conspirators themselves firmly believed.
The defendants’ deceptive practices included using false names or the names of co-conspirators instead of their true names during their communications with victims. The defendants Matz, Heepke, Cohen and Jean most frequently employed those tactics by providing false names to victims and by using email addresses in other individuals’ names when communicating with victim investors. In addition, the defendants directed and controlled trading in shares of the Manipulated Public Companies in brokerage accounts with names that were not associated with themselves or the Boiler Room. Such trading, which included matching trades of both victims and co-conspirators as part of the scheme to manipulate the stock of the Manipulated Public Companies, appeared not to be linked to the defendants or the Boiler Room.
The Money Laundering Scheme
Between 2014 and 2017, the defendants Chartier, Lee, Isen, Matz and Hardy engaged in a scheme to launder approximately $14,714,493 in proceeds of the fraudulent schemes to manipulate the share prices of NWMH, CESX, GRLD, HECC and ICEIF. They laundered proceeds of their pump and dump schemes by transferring the proceeds from brokerage accounts that they and their co-conspirators controlled through, among other things, bank accounts in the names of companies controlled by the co-conspirators and other individuals, or by generating invoices to lend the appearance of legitimacy to the transactions.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alicyn L. Cooley and Patrick T. Hein are in charge of the prosecution. Assistant U.S. Attorney Tanisha R. Payne is handling the forfeiture aspects of the case.
The Defendants:
JEFFREY CHARTIER
Age: 53
Residence: Los Angeles, CaliforniaSTEPHANIE LEE
Age: 46
Residence: St. Petersburg, FloridaLAWRENCE ISEN
Age: 63
Residence: San Diego, CaliforniaROBERT GLECKMAN
Age: 52
Residence: Tarzana, CaliforniaERIK MATZ
Age: 44
Residence: Mt. Sinai, New YorkRONALD HARDY
Age: 42
Residence: Port Jefferson, New YorkBRIAN HEEPKE, also known as “Brian Targis”
Age: 36
Residence: Farmingdale, New YorkDENNIS VERDEROSA
Age: 67
Residence: Coram, New YorkEMIN L. COHEN, also known as “Ian Grant”
Age: 33
Residence: Coram, New YorkANTHONY VASSALLO
Age: 54
Residence: Farmingdale, New YorkPAUL EWER
Age: 36
Residence: Massapequa, New YorkMCARTHUR JEAN, also known as “John McArthur”
Age: 34
Residence: Dix Hills, New YorkROBERT GILBERT
Age: 51
Residence: Cold Spring Harbor, New YorkSERGIO RAMIREZ
Age: 44
Residence: East Meadow, New YorkE.D.N.Y. Docket No. 17-CR-372 (JS)
[1] The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.
Registered Broker Sentenced to 18 Months in Prison for Securities Fraud in A $131 Million Market Manipulation SchemeRead the Press Release
BROOKLYN, NY – Gerald Cocuzzo, a registered broker, was sentenced earlier today to 18 months in prison after having pleaded guilty to securities fraud for his role in the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly traded company previously listed on the NASDAQ under the ticker symbol “FNRG.”
The sentencing was announced by 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.
According to court filings and facts presented at the plea hearing, between 2009 and 2015, Cocuzzo and others engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the misleading appearance of genuine trading volume and interest in the stock; and (3) concealing secret payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while falsely claiming to be independent of the company. The fraudulent scheme caused a loss of approximately $131 million to the investing public.
Between January 2015 and April 2015, Cocuzzo received secret cash kickbacks from a ForceField executive in exchange for purchasing ForceField stock in his clients’ brokerage accounts. Cocuzzo did not disclose these payments to his clients. Cocuzzo and his co-conspirators took pains to conceal their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other, and by paying kickbacks in cash during in-person meetings.
Today’s proceeding, which took place before United States District Court Judge Brian M. Cogan, is the third sentencing to take place in connection with the fraud in ForceField securities. Five other defendants in this matter who pleaded guilty, and one defendant convicted after trial, are awaiting sentencing.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mark E. Bini and Lauren H. Elbert are in charge of the prosecution.
The Defendant:
GERALD COCUZZO
Age: 39
Residence: Delray Beach, Florida
E.D.N.Y. Docket No. 16-CR-234 (BMC)
Leader of Brooklyn Sex Trafficking Ring Sentenced to 15 Years in PrisonRead the Press Release
Earlier today in federal court in Brooklyn, Brian Adams, leader of a Brooklyn-based sex trafficking ring, was sentenced to 15 years’ imprisonment and 10 years’ supervised release by United States District Judge Jack B. Weinstein, based on his guilty plea last February to sex trafficking young women in Brooklyn. He was also ordered to pay restitution in the amount of $10,500 to the victim identified in the indictment as Jane Doe #4.
The sentence was announced by 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).
Beginning in 2004, the defendant trafficked and attempted to traffic numerous young women and girls, some as young as 12-years-old, for sex with adult men in Brooklyn. The defendant arranged sex dates for these young women and girls, and had them attend sex parties. The defendant ran the prostitution business from his home in the Brooklyn neighborhood of Bedford-Stuyvesant, where many of these young women lived while they worked for him. He also subjected one of the young women, Jane Doe #1, to violence, forcing her to prostitute herself, and directed one of his workers to use Facebook to solicit underage women for the defendant’s sex parties, where adult men would pay the underage women for sex.
"The defendant’s conduct severely harmed numerous young women and girls, some of whom were still in middle school when preyed upon by the defendant and his co-conspirators. “This prosecution and sentence demonstrate that those who seek to profit from the sexual exploitation of others will be held accountable,” stated Acting United States Attorney Rohde.
“It defies explanation why men knowingly seek out girls as young as 12-years-old for sex, but the subject in this case knew he could make money offering up a service that attracts a vile clientele,” Assistant Director-in-Charge Sweeney stated. “He forced his young victims into a world most adults wouldn’t be able to cope with physically, or mentally. We won’t stop going after each and every criminal who exploits children and uses them for their own selfish profits.”
At sentencing, Jane Doe #1 recounted in a written statement that the defendant forced her to have sex beginning when she was 14-years-old, physically abused her, and threatened to have her and her family deported. Because of this abuse, Jane Doe # 1 stated, “I have tried to kill myself, and if it were not for my children I would continue to try. I am in therapy and can’t foresee the day I will be able to do without therapy.” She concluded, “Yet, I don’t want Mr. Adams to think he broke me. I try every day to become stronger. He will not win by having me destroyed for my entire life. I try each day to be stronger and to become the great mother that I know I can be. He tried to kill me in so many ways every day but I refuse to let that happen to me.”
The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Michael P. Robotti and Hiral D. Mehta are in charge of the prosecution.
The Defendant:
BRIAN ADAMS
Age: 35
Brooklyn, New York
E.D.N.Y. Docket No. 14-CR-650
United States Files Civil Action to Forfeit Thousands of Ancient Iraqi Artifacts Imported by Hobby LobbyRead the Press Release
Earlier today, the United States filed a civil complaint to forfeit thousands of cuneiform tablets and clay bullae. As alleged in the complaint, these ancient clay artifacts originated in the area of modern-day Iraq and were smuggled into the United States through the United Arab Emirates (UAE) and Israel, contrary to federal law. Packages containing the artifacts were shipped to Hobby Lobby Stores, Inc. (“Hobby Lobby”), a nationwide arts-and-crafts retailer based in Oklahoma City, Oklahoma, and two of Hobby Lobby’s corporate affiliates. The shipping labels on these packages falsely described cuneiform tablets as tile “samples.”
The government also filed a stipulation of settlement with Hobby Lobby, in which Hobby Lobby consented to the forfeiture of the artifacts in the complaint, approximately 144 cylinder seals and an additional sum of $3 million, resolving the civil action. Hobby Lobby further agreed to adopt internal policies and procedures governing its importation and purchase of cultural property, provide appropriate training to its personnel, hire qualified outside customs counsel and customs brokers, and submit quarterly reports to the government on any cultural property acquisitions for the next eighteen months.
The complaint and stipulation of settlement were announced by 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.
“American collectors and importers must ensure compliance with laws and regulations that require truthful declarations to U.S. Customs and Border Protection, so that Customs officers are able to scrutinize cultural property crossing our borders and prevent the inappropriate entry of such property,” stated Acting United States Attorney Rohde. “If they do not, and shippers use false declarations to try to clandestinely enter property into the United States, this Office and our law enforcement partners will discover the deceit and seize the property.” Ms. Rohde thanked U.S. Customs and Border Protection for its role in intercepting shipments and safeguarding the seized antiquities.
“The protection of cultural heritage is a mission that HSI and its partner U.S. Customs and Border Protection (CBP) take very seriously as we recognize that while some may put a price on these artifacts, the people of Iraq consider them priceless,” stated Special Agent-in-Charge Melendez.
According to the complaint and stipulated statement of facts filed with the court, in or around 2009, Hobby Lobby began to assemble a collection of historically significant manuscripts, antiquities and other cultural materials. In connection with this effort, Hobby Lobby’s president and a consultant traveled to the UAE in July 2010 to inspect a large number of cuneiform tablets and other antiquities being offered for sale (the “Artifacts”). Cuneiform is an ancient system of writing on clay tablets that was used in ancient Mesopotamia thousands of years ago.
In October 2010, an expert on cultural property law retained by Hobby Lobby warned the company that the acquisition of cultural property likely from Iraq, including cuneiform tablets and cylinder seals, carries a risk that such objects may have been looted from archaeological sites in Iraq. The expert also advised Hobby Lobby to review its collection of antiquities for any objects of Iraqi origin and to verify that their country of origin was properly declared at the time of importation into the United States. The expert warned Hobby Lobby that an improper declaration of country of origin for cultural property could lead to seizure and forfeiture of the artifacts by CBP.
Notwithstanding these warnings, in December 2010, Hobby Lobby executed an agreement to purchase over 5,500 Artifacts, comprised of cuneiform tablets and bricks, clay bullae and cylinder seals, for $1.6 million. The acquisition of the Artifacts was fraught with red flags. For example, Hobby Lobby received conflicting information where the Artifacts had been stored prior to the inspection in the UAE. Further, when the Artifacts were presented for inspection to Hobby Lobby’s president and consultant in July 2010, they were displayed informally. In addition, Hobby Lobby representatives had not met or communicated with the dealer who purportedly owned the Artifacts, nor did they pay him for the Artifacts. Rather, following instructions from another dealer, Hobby Lobby wired payment for the Artifacts to seven personal bank accounts held in the names of other individuals.
With Hobby Lobby’s consent, a UAE-based dealer shipped packages containing the Artifacts to three different corporate addresses in Oklahoma City, Oklahoma. Between one and three shipments arrived at a time, without the required customs entry documentation being filed with CBP, and bore shipping labels that falsely and misleadingly described their contents as “ceramic tiles” or “clay tiles (sample).” . After approximately 10 packages shipped in this manner were received by Hobby Lobby and its affiliates, CBP intercepted five shipments. All of the intercepted packages bore shipping labels that falsely declared that the Artifacts’ country of origin was Turkey. No further shipments were received until September 2011, when a package containing approximately 1,000 clay bullae from the same purchase was received by Hobby Lobby. It was shipped by an Israeli dealer and accompanied by a false declaration stating that the bullae’s country of origin was Israel.
In executing the stipulation of settlement, Hobby Lobby has accepted responsibility for its past conduct and agreed to take steps to remedy the deficiencies that resulted in its unlawful importation of the Artifacts. Hobby Lobby has agreed to the forfeiture of all of the Artifacts shipped to the United States.
The government’s case is being handled by Assistant United States Attorneys Karin Orenstein and Ameet B. Kabrawala.
E.D.N.Y. Docket No. 17-CV-3980 (LDH) (VMS)
Exhibit A
Sample Images of the Defendants in RemCuneiform Tablet
Cuneiform Tablets
Clay Bullae
Merrick Doctor Indicted for the Overdose Deaths of Two Nassau County Residents and Illegal Distribution of Oxycodone to an Undercover Police OfficerRead the Press Release
An indictment was returned late yesterday in the United States Court for the Eastern District of New York charging Michael Belfiore, a Merrick, New York, doctor, with two counts of illegal distribution of oxycodone causing the deaths of two Nassau County residents, Edward Martin and John Ubaghs, and 26 counts of illegal distribution of oxycodone. The defendant is scheduled to be arraigned tomorrow at 10:00 a.m. before United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip, New York.
The charge was announced by 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, and Thomas C. Krumpter, Acting Commissioner, Nassau County Police Department.
“As alleged in the indictment, Dr. Belfiore’s illegal distribution of oxycodone tragically caused the overdose deaths of two young men,” stated Acting Unitied States Attorney Rohde. “Medical professionals who issue prescriptions without a legitimate medical purpose are violating the law and will be held accountable, especially when they cause the death of the very patients they have a duty to heal.” Ms. Rohde extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case. The case was investigated by the DEA Tactical Diversion Squad-Long Island District Office (TDS-LIDO), comprised of agents and officers of the DEA, Nassau County Police Department, Suffolk County Police Department, Port Washington Police Department, Rockville Centre Police Department, and the Internal Revenue Service.
“We hope the message is clear that law enforcement is zeroed in on opioid traffickers, whether a dealer, or a doctor,” stated Special Agent-in-Charge Hunt. “There is no excuse for medical professionals to engage in drug dealing, especially when that dealing ends lives.”
"The indictment of Dr. Belfiore during this multi-jurisdictional investigation is another reminder that we all have to continue to enforce the laws that will make society safer,” said Commissioner Krumpter. “These illegally prescribed drugs are detrimental to all and we need to continue to arrest the individuals responsible for their distribution.”
Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals only for a legitimate medical purpose in the usual course of a doctor’s professional practice. It is a powerful and highly addictive drug and is increasingly abused because of its potency when crushed into a powder and ingested, leading to a heroin-like euphoria.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a mandatory minimum sentence of 20 years’ imprisonment and a $10 million fine.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the United States Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the Prescription Drug Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 15 health care professionals; taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain; removed prescription authority from numerous rogue doctors; and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Lara Treinis Gatz and Charles N. Rose are in charge of the prosecution.
The Defendant:
Name: MICHAEL BELFIORE
Age: 51
Residence: Westbury, New York
Staten Island Man Charged with Brokering Sale of Anti-Tank Rocket Launcher and Fifteen AK-47 Rifles in KosovoRead the Press Release
Later today, Albert Veliu and Anthony Noterile will be arraigned at the federal courthouse in Brooklyn, New York on charges relating to the operation of extortion, money laundering and narcotics trafficking schemes that ultimately resulted in Veliu’s sale to law enforcement of over a dozen AK-47s and an M80 Zolja Anti-Tank Rocket Launcher equipped with a 64 millimeter rocket. Defendants Dilber Kukic, Ekram Sejdija, Xhevat Gocaj, Agim Rugova, and Alban Veliu are also charged in connection with a related money laundering scheme.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; James Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division; Angel M. Melendez, Special-Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Division, New York Field Office (IRS); James P. O’Neill, Commissioner, New York City Police Department (NYPD); and George Beach, Superintendent, New York State Police (NYSP).
As alleged in the complaint and a detention memorandum, the investigation revealed that Christopher Curanovic, an associate of La Cosa Nostra, sought to recover an extortionate debt from a former criminal associate. Through the use of wiretap evidence and confidential sources working at the direction of law enforcement, agents were able to determine that Veliu, Curanovic and Noterile, another associate of La Cosa Nostra, devised an illicit scheme in which a money laundering operation would facilitate the re-payment of Curanovic’s extortionate debt. During the course of the investigation, the defendants laundered approximately $800,000 in purported drug proceeds. Defendants Kukic, Sejdija, Gocaj, Rugova, and Alban Veliu facilitated the money laundering scheme by, among other things, exchanging the cash for purportedly “clean” checks supported by fraudulent paperwork. Separately, Curanovic and Veliu also brokered the sale of approximately five pounds of marijuana to a confidential source.
In addition, Veliu informed a DEA confidential source that he had access to firearms in Kosovo for distribution. Thereafter, Veliu used his connections to broker the sale of more than a dozen AK-47s and the M80 Zolja Anti-Tank Rocket Launcher equipped with a 64 millimeter rocker. During one recorded conversation, Veliu referred to the AK-47s as “sneakers” and to the rocket launcher as a “Shaq-sized sneaker.” Search warrants conducted by Kosovo law enforcement netted additional weapons, ammunition and over 60,000 euros in cash.
“This case demonstrates the increasingly global reach of our investigations and marks the important disruption a money laundering, drug trafficking, and arms trafficking network that extended into Europe and involved criminals who were prepared to provide a pipeline of dangerous weapons,” stated Acting United States Attorney Rohde. “Through our partnerships with law enforcement agencies around the world, we will continue to target and dismantle criminal organizations.” Ms. Rohde thanked the DEA New York Strike Force, DEA Special Operations Division, DEA Austria Country Office, DEA Croatia Country Office, the New York City Department of Investigation, and the Kosovo Police Force.
“This investigation has shut down an illegal and violent source of weapons in our backyard. In this case, DEA defines weapons as guns and drugs since both are the source of murder and fatal accidents,” stated Special Agent-in-Charge Hunt. “As alleged, extortion, gun trafficking, robbery, and money laundering were some crimes that unfolded as we investigated a drug trafficking operation based in New York City with ties to Kosovo. I would like to thank the brave men and women from our local, state, federal, and international law enforcement partners for their cooperation and hard work.”
“These defendants allegedly participated in an illegal enterprise lining their pockets from their criminal activity,” said Special Agent-in-Charge Robnett of IRS Criminal Investigation. “Tracing the illicit funds and taking assets away from illegal operations is one of the government’s most effective tools against money laundering and organized crime.”
“These individuals allegedly used extortion, money laundering, and narcotics trafficking to aid Mexican drug cartels,” stated ICE-HSI Special Agent-in-Charge Melendez. “They further provided dangerous weapons, including an anti-tank rocket launcher. Protecting the Homeland not only means ensuring that these drugs and weapons do not enter our streets, but it also means they not be distributed abroad.”
“The takedown of this weapons and drug trafficking operation is a direct result of the hard work and cooperation among our law enforcement partners,” said Superintendent Beach. “The New York State Police, along with our other law enforcement partners, will remain vigilant in our efforts to aggressively target and pursue such criminals who perpetuate these crimes that threaten the safety and security of our neighborhoods.”
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven M. Gold at the federal courthouse in Brooklyn. The charges in the complaint 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 Attorney Michael T. Keilty is in charge of the prosecution.
The arrest was the result of a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshals Service, New York National Guard, the Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
The Defendants:
ALBERT VELIU
Age: 34
Staten Island, New York
CHRISTOPHER CURANOVIC
Age: 35
FCI Fort Dix, New Jersey
ANTHONY NOTERILE
Age: 56
Queens, New York
XHEVAT GOCAJ
Age: 50
Mamaroneck, New York
DILBER KUKIC
Age: 45
Bronx, New York
AGIM RUGOVA
Age: 45
Staten Island, New York
EKRAM SEJDIJA
Age: 40
Brooklyn, New York
ALBAN VELIU
Age: 32
Staten Island, New York
E.D.N.Y. Docket No. 17-M-585
New York City School Guidance Counselor Sentenced to Five Years’ Imprisonment for Posting of Child PornographyRead the Press Release
Earlier today, John Capuano, a New York City school guidance counselor and teachers’ union representative, was sentenced at the federal courthouse in Central Islip, New York, to five years’ imprisonment followed by 10 years of supervised release following his March 2016 guilty plea to Transportation of Child Pornography in Interstate and Foreign Commerce. The sentencing proceeding was held before United States District Judge Denis R. Hurley. During his supervised release, Capuano must register as a sex offender, and he will not be allowed unsupervised contact with minors.
The sentence was announced by 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.
“As a school guidance counselor and educator, Capuano had a mandatory obligation in New York State to report child abuse,” stated Acting United States Attorney Rohde. “Instead, he victimized children by sharing images of their rape and abuse with others online. Protection of our children remains a top priority of this Office, and we will continue to vigorously prosecute such offenses.” Ms. Rohde extended her grateful appreciation to U.S. Immigration and Customs Enforcement, Homeland Security Investigations, for its assistance in the investigation.
“Capuano had been a trusted educator within the community while posting pornographic images of children as young as three,” stated ICE-HSI Special Agent-in-Charge Melendez. “Further, he used his work phone as a teachers’ union rep to download images. Protecting children is a priority and we will relentlessly investigate and pursue cases of child predators who hide behind their computer screens and bringing them into the light.”
As set forth in the charging instruments and at the defendant’s plea allocution, in April 2015, an undercover HSI agent, as part of an ongoing effort to locate individuals sharing child pornography, found child pornography images and videos involving children as young as 3-5 years’ old which had been posted by Capuano to a chat room in a publicly available Internet application. After tracing location information for the account used to post the images, law enforcement officers executed a search warrant on May 28, 2015, at Capuano’s residence in Valley Stream, New York.
During the search, Capuano spoke with law enforcement personnel following a waiver of his Miranda rights and admitted that he used the Internet application to trade child pornography and posted the images located by the undercover agent. Capuano also identified his personal telephone and his work telephone as a teachers’ union representative as devices he used to access these materials. Capuano was arrested at that time and remains incarcerated.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
JOHN CAPUANO
Age: 44
Valley Stream, New York
E.D.N.Y. Docket No. 15 CR 312 (DRH)
Narcotics Dealer Indicted for Murder and Racketeering in Brooklyn Cold CaseRead the Press Release
An indictment was unsealed today in United States District Court for the Eastern District of New York charging Tammeco Cargill, a member of the Nineties Crew, a Brooklyn-based street gang, with four counts, including murder in-aid-of-racketeering and the attempted murders of two bystanders who witnessed the murder, on July 30, 2007. As part of the same indictment, Cargill and his father, Winston Cargill, also known as “Pops,” are charged with racketeering and racketeering conspiracy relating to their involvement in narcotics trafficking and related crimes in Brooklyn between January 2003 and December 2014. The indictment was returned by a federal grand jury sitting in Brooklyn, New York, on June 21, 2017.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; James P. O’Neill, Commissioner, New York City Police Department (NYPD); and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York.
According to court filings, on the evening of July 30, 2007, Tammeco Cargill shot Robert Dixon on a crowded street in Brooklyn, killing Dixon, and then attempted to kill two nearby witnesses, injuring both. As alleged in the indictment, Tammeco Cargill and Winston Cargill were members of the Nineties Crew, a Brooklyn-based street gang, between January 2003 and December 2014, and engaged in narcotics trafficking and other crimes as part of that gang.
“As alleged, Tammeco Cargill murdered Robert Dixon, and attempted to kill two witnesses to that crime, approximately 10 years ago,” stated Acting United States Attorney Rohde. “Today’s indictment makes clear that the passage of time will not stop this Office and our law enforcement partners from pursuing those responsible for such violence in our streets.” Ms. Rohde expressed her grateful appreciation to the NYPD’s Cold Case Homicide Unit, the U.S. Drug Enforcement Administration’s New York Division, and the United States Marshal Service’s New York / New Jersey Regional Fugitive Task Force.
“In law enforcement, there is no rest until justice is served. And after ten years, a drug investigation paved a path that led to the arrest of Robert Dixon’s alleged murderer,” stated Special Agent-in-Charge Hunt. “I commend the agents, officers, marshals, and prosecutors who diligently investigated this cold case and put the person responsible for this heinous crime in jail.”
The defendant Tammeco Anthony Cargill is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven M. Gold at the federal courthouse in Brooklyn. The defendant Winston Anthony Cargill, who is in custody on another matter, will be arraigned in the near future.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. Tammeco Cargill faces a sentence of life imprisonment if convicted. Winston Cargill faces a sentence of 20 years’ imprisonment if convicted.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nathan Reilly, Hiral Mehta, and Ryan Harris are in charge of the prosecution.
The Defendants:
TAMMECO ANTHONY CARGILL
Age: 34
Brooklyn, NY
WINSTON ANTHONY CARGILL
Age: 55
Brooklyn, NY
E.D.N.Y. Docket No. 17-CR-330 (ENV)
Mother and Son Who Ran Cocaine Importation Scheme from Their Family’s Queens Restaurant Sentenced to PrisonRead the Press Release
Earlier today at the federal courthouse in Brooklyn, United States District Judge Raymond J. Dearie sentenced the defendant Angelo Gigliotti to 20 years in prison and 10 years of supervised release following his conviction for conspiracy to import and possess cocaine. Judge Dearie had previously sentenced the defendant Angelo Gigliotti’s mother, Eleonora Gigliotti, on May 11, 2017, to 7 years in prison for her role in the importation scheme.
The sentence was announced by 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 (FBI), New York Field Office; and Angel M. Melendez, Special-Agent-in-Charge, U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI), New York.
“The defendants used their family restaurant in Corona, Queens, as well as a produce importation company, to import over 50 kilograms of cocaine worth millions of dollars from Costa Rica. The prison sentences imposed on the defendants put an end to the transnational drug trafficking they conducted behind the disguise of local businesses,” stated Acting United States Attorney Rohde. Ms. Rohde thanked our law enforcement partners in Italy, including the Prosecutor of the Republic of Reggio Calabria, the Italian National Police (INP), and in particular, the Squadra Mobile of Reggio Calabria and the Servizio Centrale Operativo, the Direzione Centrale per i Servizi Antidroga, and the Direzione Nazionale Antimafia, as well as our law enforcement partners in Costa Rica, including the Organismo de Investigacion Judicial. Ms. Rohde also expressed her gratitude to the U.S. Department of Justice Attaché and the Offices of the HSI and FBI Legal Attaché at the U.S. Embassy in Rome, as well as the FBI Legal Attaché at the U.S. Embassy in Panama City, who coordinated extensive evidence-sharing and coordinated operations, and to the New York City Police Department, the U.S. Drug Enforcement Administration, and U.S. Customs and Border Protection for their assistance in this matter.
“The damaging effects of drugs aren’t limited to those individuals who abuse them—negative consequences often befall family members and friends, while businesses and government entities frequently incur the economic costs associated with drug abuse and prevention programs,” stated FBI Assistant Director-in-Charge Sweeney. “To say the threats posed by the illegal drug trade know no boundaries would be an understatement, and yet there are those among us who dare to draw the line a little closer to home. Today, with the help of our law enforcement partners around the globe, two more people remain behind bars for carelessly and deliberately contributing to this international dilemma.”
“This mother and son team trafficked cocaine across the globe, and used their own family-run restaurant as a front for their criminal activities,” said ICE-HSI New York Special Agent-in-Charge Melendez. “HSI uses its multifaceted investigative authorities with its partners to pursue and dismantle drug trafficking organizations whether it’s a small family run operation in New York or a large cartel operating in South America.”
Following a two-week trial in July 2016, a federal jury in Brooklyn, New York found the defendant Angelo Gigliotti and his father, Gregorio Gigliotti, guilty of participating in a long-running cocaine importation scheme. The defendant’s mother, Eleonora Gigliotti, also participated in the family-run drug-trafficking operation, and in January 2017, pled guilty to conspiring to import cocaine. Gregorio Gigliotti was previously sentenced to 18 years in prison for his role in the narcotics scheme, as well as for the possession of firearms in furtherance of the drug operation.
The defendants’ arrests arose out of a long-term investigation by ICE’s Homeland Security Investigations and the Federal Bureau of Investigation, in coordination with law enforcement authorities in Italy, into a transnational cocaine trafficking operation. Between October and December 2014, federal law enforcement officers intercepted and seized approximately 55 kilograms of cocaine that had been hidden inside cardboard boxes that contained cassava and sent from co-conspirators in Costa Rica to the defendants in New York. To facilitate their operation, the defendants used their family-run Italian restaurant in Corona, Queens, Cucino Amodo Mio, as well as a produce importation company, Fresh Farm Export Corp., that was incorporated in 2012 to provide a cover for their drug-trafficking operation. On March 11, 2015, the day the defendants were arrested, federal law enforcement officers executed a search warrant at Cucino Amodo Mio and recovered one 12 gauge shotgun, one loaded .357 magnum Trooper revolver, one loaded .22 caliber Colt pistol, one loaded .38 caliber Charter Arms revolver, one 9 mm Keltec pistol, one .762 Czech pistol, one .38 caliber Derringer that had a defaced serial number, ammunition magazines, loose ammunition, two handgun holsters, brass knuckles, a handwritten ledger showing the movement of more than $350,000, and more than $100,000 in cash.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Margaret E. Gandy and Keith D. Edelman are in charge of the prosecution.
The Defendants:
ANGELO GIGLIOTTI
Age: 36Woodside, New York
ELEONORA GIGLIOTTI
Age: 56
Malba, New York
E.D.N.Y. Docket No. 15-CR-204 (S-2) (RJD)
Long Island MS-13 Member Sentenced to 40 Years’ Imprisonment for Two Gang-Related MurdersRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Melvin Marquez-Sanchez, a member of La Mara Salvatrucha, also known as the MS-13, was sentenced to 40 years in prison by United States District Judge Joseph F. Bianco. Marquez-Sanchez previously pled guilty to racketeering charges in connection with the August 25, 2012 murder of Douglas Martinez in Brentwood, New York, the September 8, 2012 murder of Jose Vallejo in Hempstead, New York, and a conspiracy to kill a rival gang member in Maryland in early 2013.
The sentence was announced by 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); Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD); and Thomas C. Krumpter, Acting Commissioner, Nassau County Police Department (NCPD).
“This defendant killed two young men here on Long Island, before fleeing to Maryland, where he sought to continue the murderous agenda of the MS-13,” stated Acting United States Attorney Rohde. “Due to our continuing work with the FBI’s Long Island Gang Task Force, the defendant’s role in these violent crimes has come to an end. Today’s sentence will ensure that the public is protected from this defendant for decades to come.” Ms. Rohde expressed her sincere appreciation to the United States Attorney’s Office for the District of Maryland for its invaluable assistance and cooperation during this prosecution.
“The brutal nature of MS-13’s crimes and the intimidation tactics they use in furtherance of their illegal activity pose a very serious threat to the communities in which they live,” stated FBI Assistant Director-in-Charge Sweeney. “Even more disturbing is the impact their presence has on the children in these neighborhoods, who face this disturbing reality in school and other places where they should be made to feel safe. Gang violence, whether directed toward rival gang members or not, negatively affects society as a whole. Today, thanks to the great work of our partners on the Long Island Gang Task Force and our colleagues at EDNY, we can assure the public we’re continuing to erode the influence of MS-13 in our communities and that Melvin Marquez-Sanchez will no longer have the chance to roam free.”
“The Suffolk County Police Department is staunchly committed to working with our regional and federal law enforcement partners in taking down every single member and associate of MS-13,” Commissioner Sini stated. “These vicious and inhumane individuals have no place in our society. The sentencing of Marquez-Sanchez guarantees he will never be on our streets again and reinforces this department’s strong message to all gang members – we will find you, and you will be prosecuted to the fullest extent of the law.”
“The arrest and sentencing of defendant Marquez-Sanchez is another positive step for our residents and families as it eliminates another MS-13 member from society,” stated NCPD Commissioner Krumpter. “Our main goal is to protect our communities with special emphasis on our young men and women, and I would like to congratulate all of the law enforcement professionals who assisted with this investigation.”
As set forth in the government’s sentencing memorandum and other court filings, Marquez-Sanchez committed two murders on Long Island during the summer of 2012, before fleeing to Maryland, where he continued his affiliation with the MS-13 and plotted to kill a rival gang member. Specifically, on August 25, 2012, Marquez-Sanchez shot Martinez multiple times at point-blank range with a .38 caliber revolver, killing him. Marquez-Sanchez and several other MS-13 members, including an MS-13 leader in El Salvador, decided to kill Martinez for violating the rules of the gang, namely, not “putting in work” (committing acts of violence against rival gang members), not sending enough money to gang leaders in El Salvador, and possibly cooperating with law enforcement authorities. In total, seven MS-13 members have been convicted of racketeering charges in connection with Martinez’s murder.
Two weeks later, Marquez-Sanchez and several other MS-13 members carried out the murder of Vallejo, a suspected rival gang member who was selling drugs in Kennedy Park in Hempstead, New York, which the MS-13 considered to be its turf. After the MS-13 members lured Vallejo to the park, under the guise of purchasing marijuana, Marquez-Sanchez shot Vallejo multiple times with the same .38 caliber revolver and another MS-13 member attacked Vallejo with a machete, slashing his throat and face. Marquez-Sanchez and four other MS-13 members have been convicted of racketeering charges in connection with Vallejo’s murder.
After committing the Martinez and Vallejo murders on Long Island, Marquez-Sanchez fled to Maryland, where he continued his membership in the MS-13. Beginning in January 2013, Marquez-Sanchez and other members of the Sailors clique members conspired to kill an individual who they believed to be a member of the rival 18th Street gang. On several occasions in early 2013, Marquez-Sanchez and other MS-13 members traveled to a specific neighborhood in Maryland for the purpose of killing the victim, but were unable to locate him. However, after Marquez-Sanchez had been arrested on other charges, on March 12, 2013, that victim was located and murdered by Marquez-Sanchez’s co-conspirators.
Today’s sentencing is the latest in a series of prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international criminal organization. The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America. With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 35 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, Bureau of Alcohol Tobacco Firearms and Explosives, New York State Police, Suffolk County Police Department, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Department, Suffolk County Sheriff’s Department, Hempstead Police Department, and Rockville Centre Police Department.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Paul G. Scotti are in charge of the prosecution.
The Defendant:
MELVIN MARQUEZ-SANCHEZ
Age: 22
Freeport, New York
E.D.N.Y. Docket No. 14-CR-068 (JFB)
Ex-Suffolk County Conservative Party Chairman Edward Walsh, Jr., Sentenced to 24 Months for Fraud SchemeRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, former Suffolk County Conservative Party Chairman Edward M. Walsh, Jr. was sentenced to 24 months in prison, 3 years of supervised release, $202,225 in restitution, and $245,811.21 in forfeiture. Walsh was convicted at trial in March 2016 on charges of theft of government funds and wire fraud in connection with his employment with the Suffolk County Sheriff’s Office (SCSO). The sentencing proceeding was before United States District Judge Arthur D. Spatt.
The sentence was announced by 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).
As proven at trial, from January 2011 to April 2014, Walsh, a SCSO Correction Officer III Investigator, falsely represented to the SCSO that he had worked certain regular and overtime hours when in fact, he did not work those hours. Contrary to his representations, Walsh was, among other things, playing golf, gambling at Foxwoods Casino, or performing work on behalf of the Suffolk County Conservative Party. In reliance on Walsh’s false representations, the SCSO paid Walsh wages for hours he did not work. Over the course of the indictment period, Walsh was paid more than $200,000 for regular and overtime hours he did not work.
“The defendant, Edward Walsh, Jr., engaged in sports gambling and politics on the taxpayer’s dime to the tune of $200,000,” stated Acting United States Attorney Rohde. “We will continue to ensure that public officials who abuse their positions will be brought to justice.” Ms. Rohde extended her grateful appreciation to the FBI New York Office for its excellent work in the investigation that lead to Walsh’s trial conviction and the SCSO for its important assistance with the investigation.
“What Walsh did was steal taxpayer money, plain and simple. He misrepresented the hours he worked with the intent of deceiving his employer, the Suffolk County Sheriff’s Office, which in turn netted him more than $200,000,” stated FBI Assistant Director-in-Charge Sweeney. “We certainly expect more from our public servants. Today’s sentence should remind the public that nobody gets a free pass.”
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Raymond A. Tierney, Catherine M. Mirabile, and Madeline O’Connor are in charge of the prosecution.
The Defendant:Edward M. Walsh, Jr.
Age: 51East Islip, New York
E.D.N.Y. Docket No. 15-CR-091 (ADS)
Deputy Attorney General Recognizes Eastern District of N.Y. Assistant U.S. Attorneys at Director’s Awards CeremonyRead the Press Release
WASHINGTON – Assistant United States Attorneys James D. Gatta, Nathan D. Reilly, Richard M. Tucker and Una A. Dean of the United States Attorney’s Office for the Eastern District of New York were four of 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 33rd Director’s Awards Ceremony today in Washington D.C.
The Eastern District of New York was one of 35 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Rosenstein told the awardees, “These 179 award recipients embody the best of the Department of Justice. Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens — whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded.”
Criminal Division Chief James D. Gatta and Public Integrity Section Deputy Chief Nathan D. Reilly received the award for Superior Performance as an AUSA-Criminal for their outstanding accomplishments in securing the conviction of former United States Congressman Michael Grimm for tax fraud. Grimm was brought to justice for his schemes to underreport nearly $1 million in sales from his Manhattan restaurant and deprive federal and state authorities of hundreds of thousands of dollars, as well as his obstruction of justice while a member of Congress. One week after he pleaded guilty, Grimm resigned his Congressional seat representing New York’s 11th Congressional District. Grimm was sentenced to eight months in prison and required to pay $148,907 in restitution to federal and state tax authorities.
National Security & Cybercrime Section Deputy Chief Richard M. Tucker and Assistant United States Attorney Una A. Dean received the award for Superior Performance as an AUSA-Criminal for their outstanding achievement in securing convictions against eight defendants charged with exporting more than $30 million worth of microelectronics to Russia for use by the Russian military in advanced weapon systems and next-generation fighter aircraft. The defendants were employees of ARC Electronics in Houston, Texas, that operated an extensive proliferation network that provided controlled U.S. technology to the Russian government, including military and intelligence agencies, yet ARC never obtained the requisite license and covered up its illegal activity by using front companies, shell entities, fake end users and other tradecraft to send the technology to Russia. Five defendants pleaded guilty, including the lead defendant, Alexander Fishenko who pleaded guilty to the entire indictment, and was sentenced to 10 years’ imprisonment. The three remaining defendants were convicted after trial.
"In the great tradition of our Office, these four Assistant United States Attorneys successfully carried out complex investigations in the prosecution of a then-sitting congressman, and the protection of our homeland by holding accountable those who illegally exported sensitive military technology,” stated Acting United States Attorney Rohde. “Their achievements are deserving of the Director’s Award and our gratitude for their public service.”
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Former Swiss Banker Pleads Guilty to Money Laundering Charge in Connection with Soccer Bribery SchemeRead the Press Release
Earlier today, a private banker formerly employed by several Swiss banks pleaded guilty in Brooklyn, New York, to a criminal information charging him with participating in a money laundering conspiracy in connection with the distribution and receipt of millions of dollars of bribes paid to high-ranking soccer officials.
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 R. Damon Rowe of IRS-Criminal Investigation’s (IRS-CI) Los Angeles Field Office made the announcement.
The defendant, Jorge Luis Arzuaga, a 56 year old Argentinian national, entered his plea before the Honorable U.S. District Court Judge Pamela K. Chen. According to the criminal information, between 2010 and 2015, the defendant was employed as a private banker at two financial institutions based in Switzerland, and he managed several accounts controlled by a sports media and marketing business headquartered in Argentina (the “Sports Marketing Company”). In that capacity, Arzuaga assisted the principal of the Sports Marketing Company, along with others, in paying bribes to various high-ranking soccer officials, the information states. According to the information, Arzuaga furthered the bribery conspiracy in a variety of ways, including by opening a bank account in the name of a shell company ostensibly established on behalf of the Sports Marketing Company, when, in fact, the true beneficial owner of this account was a high-ranking soccer official. In total, according to the information, Arzuaga assisted in paying more than $25 million in bribes into the account. Following the death of the beneficial owner of the account, Arzuaga arranged for the balance of the funds remaining in the account to be distributed to the soccer official’s heirs, the information states. In exchange for his assistance in facilitating the payment of these bribes, the information states that Arzuaga received approximately $1,046,000 in bonus payments.
The FBI New York Field Office and the IRS-CI Los Angeles Field Office investigated the case. Assistant U.S. Attorneys Samuel P. Nitze, Paul Tuchmann, Lauren Howard Elbert, and Brian D. Morris of the Eastern District of New York and Trial Attorney Michael P. Grady of the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division prosecuted the case. The Criminal Division’s Office of International Affairs, Organized Crime and Gang Section, and Fraud Section, as well INTERPOL Washington provided substantial assistance with the case.
Former Managing Director at Swiss Bank Pleads Guilty to Money Laundering Charge in Connection with Soccer Bribery SchemeRead the Press Release
Earlier today, Jorge Luis Arzuaga, a citizen of Argentina and a private banker formerly employed by Swiss banks, pleaded guilty to a criminal information charging him with participating in a money laundering conspiracy in connection with the distribution and receipt of millions of dollars of bribes paid to soccer officials, including the late president of the Asociación del Futbol Argentina (“AFA”), the Argentinian soccer federation. The plea was entered before United States District Judge Pamela K. Chen at the federal courthouse in Brooklyn, New York.
The guilty plea was announced by 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; and Richard Weber, Chief of IRS Criminal Investigation.
Swiss authorities are expected to announce the resolution of charges against Arzuaga in a related matter soon.
According to court filings and facts presented during the plea proceeding, beginning in around 2010 and continuing through 2015, while employed as a private banker at two financial institutions based in Switzerland, Arzuaga managed several accounts controlled by Alejandro Burzaco, a principal of Torneos y Competencias, S.A. (“TyC”), a sports media and marketing business headquartered in Argentina. In that capacity, Arzuaga assisted Burzaco and others in paying bribes to various soccer officials, including to the then-president of AFA, who is identified in the information as Soccer Official #1. Arzuaga furthered the bribery conspiracy in a variety of ways, including by opening a bank account in the name of a shell company established to effect certain transactions on behalf of TyC. The true beneficial owner of this account was Soccer Official #1. Arzuaga assisted Burzaco in paying more than $25 million in bribes into the account for the benefit of Soccer Official #1. Burzaco pleaded guilty to racketeering conspiracy and other offenses on November 16, 2015 in connection with his involvement in paying bribes to soccer officials.
Following Soccer Official #1’s death in 2014, Arzuaga arranged for the balance of the funds remaining in the account to be distributed to Soccer Official #1’s heirs. In exchange for his assistance in facilitating the payment of these bribes, Arzuaga received approximately $1,046,000 in bonus payments from Burzaco for moving bribe money through the financial system. Arzuaga will forfeit that amount in connection with his plea.
“By facilitating the flow of bribe money through the Swiss and American banking systems, the defendant provided a critical service to those involved in corruption in international soccer,” stated Acting United States Attorney Rohde. “Today’s plea marks another important step in our continuing effort to hold accountable those who facilitate the movement of criminal proceeds in the United States and across the globe.” Acting United States Attorney Rohde extended her grateful appreciation to the authorities of the government of Switzerland for their invaluable assistance in this investigation and for their ongoing collaboration.
This plea shows how wide-ranging and systemic corruption once was in one of the world’s most popular sports,” stated FBI Assistant Director-in-Charge Sweeney. “Our work is nowhere near finished, and we will continue to pursue each and every corrupt member of this scheme until each is brought to justice.”
“The guilty plea announced today builds upon the ongoing investigation of corruption within FIFA, where we have continued to trace illicit funds through banks around the world,” said Chief Weber. “We are pursuing the bad actors - including soccer officials, sports marketing companies, financial institutions, and their bankers - who have intentionally and criminally violated the law by laundering illegal proceeds. Prospective private bankers and relationship managers should take note of Mr. Arzuaga’s conviction and think twice about the consequences of conspiring to launder money. These criminal actors will continue to be under the microscope of the financial investigative expertise of IRS CI.”
The guilty plea announced today is part of an investigation led by the U.S. Attorney’s Office for the Eastern District of New York, the Bank Integrity Unit in the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division in Washington, D.C., the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn and the Bank Integrity Unit are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Samuel P. Nitze, Paul Tuchmann, Lauren Howard Elbert, and Brian D. Morris of the Eastern District of New York and Trial Attorney Michael P. Grady of the Money Laundering and Asset Recovery Section of the Justice Department’s Criminal Division are in charge of today’s prosecution.
The Defendant:
JORGE LUIS ARZUAGA
Age: 56Citizenship: Argentina
E.D.N.Y. Docket No. 17-CR-313 (PKC)
Crips Gang Member Convicted of Murder In-Aid-Of Racketeering, Multiple Robberies and Drug TraffickingRead the Press Release
Following five weeks of trial, a federal jury in Central Islip, New York, returned a guilty verdict today against Eric Smith, a Crips street gang member also known as “Esama” and “Esco,” on 11 counts, including murder in-aid-of racketeering, racketeering, Hobbs Act robbery, and conspiracy to murder rival gang members. Smith faces a mandatory term of life imprisonment when he is sentenced by United States District Judge Joanna Seybert.
The verdict was announced by 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 (FBI).
During the trial, the government proved that Smith was a ranking member of the Rollin’ 60s set of the Crips, a racketeering enterprise based in Roosevelt, New York, that engaged in murder, attempted murder, narcotics trafficking and firearms trafficking to maintain control of the Roosevelt community for nearly a decade. Smith, who nicknamed himself “Esama da Bomba” in reference to Osama Bin Laden, bragged on social media and to fellow gang members about being the gang’s “top shooter.” The evidence at trial showed Smith lived up to this title. In accordance with the gang’s “on sight” rule, which required members to attack the rival Bloods in Roosevelt whenever possible, using whatever means available, Smith participated in a dozen shootings of rival gang members or their homes. The evidence also showed that Smith shot a man outside a busy nightclub in Freeport and brazenly shot at rivals on residential streets. In addition, the evidence showed that Smith participated in a half dozen robberies with his fellow gang members to acquire cash and drugs for the gang to sell on the streets of Roosevelt.
Among the crimes Smith was convicted of was the December 15, 2010 murder of 19-year-old James McClenic, a member of the rival Bloods street gang. In that December 2010 murder, Smith, drove through the streets of Nassau County for hours, looking for McClenic. At approximately 6:20 p.m., Smith found McClenic sitting in a parked car in a crowded gas station on Hempstead Turnpike in Hempstead, New York. With innocent bystanders standing nearby, Smith, wearing a black ski mask and armed with a .40 caliber semi-automatic pistol, crept alongside the vehicle in which McClenic was a passenger, and opened fire into the vehicle at close range. Smith fatally shot McClenic in the neck.
According to the evidence, in the wake of the murder and after attempted retaliation by the Bloods against Smith and his fellow Crips, Smith and the leader of the Rollin’ 60s Crips, Raphael Osborne, dispatched younger members of their gang to retaliate. The younger Crips, acted at Smith’s direction, and fired more than a dozen shots into the home of McClenic’s grieving family on the day of the victim’s burial.
Smith was also convicted for his role in two robberies that he committed with the aid of fellow members of the Rollin’ 60s in the fall of 2010. The first robbery involved Smith and a fellow gang member stealing crack cocaine and cash from a victim he pistol-whipped in an effort to force the victim to disclose the location of the drugs. In the second robbery, Osborne directed Smith and fellow Rollin’ 60s members to the home of a drug dealer where Smith and a fellow gang member robbed the dealer of cash and drugs at gunpoint.
“The defendant’s crimes and those of his fellow gang members demonstrated a disregard for human life and the safety of citizens of the Roosevelt community. The defendant took a young man’s life because of his allegiance to a violent street gang. Such gangs like the Rollin’ 60s terrorize communities through violence and drug dealing,” stated Acting United States Attorney Rohde. “This Office, together with our law enforcement partners, will remain vigilant in bringing gang members to justice.” Ms. Rohde thanked the Nassau County District Attorney’s Office and the Nassau County Police Department for their assistance in the investigation.
“The subject in this case had such little regard for human life he took pride in killing people and terrorizing the community, so much so that he nicknamed himself glorifying one of the world’s worst terrorists, Osama bin Laden,” stated Assistant Director-in-Charge Sweeney. “Our FBI Long Island Gang Task Force won’t rest until we search out and stop every gang member who believes they are above the law and can get away with being such immoral criminals.”The government’s investigation has led to the arrest and conviction of more than 20 members and associates of the Rollin’ 60s Crips, including its founder Raphael Osborne who was sentenced in January 2017 to three life sentences plus 135 years. To date, ten defendants have been sentenced:
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June 21, 2016, Jahmani Hamilton was sentenced to a term of imprisonment of ten years;
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August 4, 2016, Kurtis Philip was sentenced to a term of imprisonment of ten years;
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August 5, 2016, Courtney Smith was sentenced to a term of imprisonment of ten years;
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September 23, 2016, Merlyn Benitez was sentenced to a term of imprisonment of ten years;
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October 13, 2016, Derick Hernandez was sentenced to a term of imprisonment of 20 years that will run consecutively to a four-year state sentence that he is presently serving;
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October 19, 2016, Kwame Lake was sentenced to a term of imprisonment of five years that will run consecutively to an eight-year state sentence that he is presently serving;
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November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment;
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January 13, 2017, Branden Short was sentenced to 30 months’ imprisonment;
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April 21, 2017, Rommel Lobban was sentenced to 15 years’ imprisonment; and
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April 25, 2017, Daquanne Nunn was sentenced to 13 years’ imprisonment;
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann, Christopher C. Caffarone and Michael Maffei are in charge of the prosecution.
The Defendant:
ERIC SMITH (a/k/a Esama)
Age: 29
Roosevelt, Long Island
E.D.N.Y. Docket No. 14-CR264 (JS)
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Leader of Eight Trey Crips Gang Charged with Murder In-Aid-Of RacketeeringRead the Press Release
An indictment was unsealed today in the United States District Court for the Eastern District of New York charging Larry Pagett, also known as “Biz,” “Biz Loc” and “Molotovbizzz,” with murder in-aid-of racketeering. Pagett was arraigned today at the federal courthouse in Williamsport, Pennsylvania.
The charges were announced by 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).
As detailed in the indictment and detention memorandum, Pagett was a leader of the Eight Trey Crips gang. On August 28, 2015, in order to maintain and increase his position in the gang, Pagett shot and killed a rival gang member, Chrispine Philip, also known as “Droppa,” inside the Buda Hookah Lounge in the Prospect-Lefferts Gardens section of Brooklyn. Surveillance video from the Buda Hookah Lounge depicts the defendant removing a firearm in a crowded bar and shooting the victim several times in the back and in the head while the victim tried to escape. The defendant then fled the Buda Hookah Lounge, climbing over several of the customers who had fallen to the ground.
“As alleged, the defendant, a leader of the Eight Trey Crips, brazenly shot and killed a rival gang member in a Brooklyn bar crowded with patrons,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners, the FBI and the NYPD, we will use all available resources to hold accountable those who endanger the lives of the residents of our community.”
“Gang members have shown they will do whatever necessary to maintain their control over their turf and retaliate against those who they see as a threat,” stated Assistant Director-in-Charge Sweeney. “The suspect in this case allegedly shot and killed someone in a crowded nightclub, not considering the dozens of innocent people who could have been hurt or worse killed as well. The violence these gangs spread impacts people every day, so we will continue to go after the leadership who use murder and violence to threaten our communities.”
“As alleged, the defendant in this case shot and killed a rival gang member to elevate his status in the Eight Trey Crips,” stated NYPD Commissioner O’Neill. “The deadly shooting happened inside of a crowded lounge, injuring several others in the shooting, and several more with the panic that ensued. Today’s indictment reinforces the message that law enforcement is committed to fighting gun violence and gang activity wherever and whenever we find it.”
The charge contained in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces mandatory life imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Patrick T. Hein and Mathew S. Miller are in charge of the prosecution.The Defendant:
LARRY PAGETT
Age: 37
Brooklyn, New YorkEDNY Docket No. 17-CR-306
Long Island Man Sentenced to 60 Years in Prison for Producing Child Pornography Involving Multiple VictimsRead the Press Release
Earlier today, Joseph Valerio, of Smithtown, New York, was sentenced at the federal courthouse in Central Islip, to 60 years’ imprisonment for the production, transportation, receipt and possession of child pornography. The sentencing proceeding was held before United States District Judge Joseph F. Bianco, who also ordered Valerio to serve a lifetime term of supervised release to follow his prison sentence. Valerio will be required to register as a sex offender.
The sentence was announced by 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 Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD).
“This lengthy prison sentence ensures that the defendant will never harm another child as long as he lives and serves as a warning to anyone who victimizes children,” stated Acting United States Attorney Rohde.
“As a parent, hearing details about the child pornography cases we are investigating is extremely hard, so it begins to boggle the mind when the victims are six and two-years-old,” stated FBI Assistant Director-in-Charge Sweeney. “These children can’t fight off their attackers because the abuse is at the hands of adults who are supposed to be feeding, clothing and sheltering them from the evil in the world. No child should ever have to endure this sort of pain, humiliation and abuse. The agents and task force officers on the FBI Child Exploitation Task Force won’t ever stop going after these predators with every tool we have.”
“The crimes committed by Joseph Valerio are despicable and this sentence of 60 years ensures the defendant will spend the rest of his life in prison for these heinous crimes,” stated SCPD Commissioner Sini.
The evidence at trial showed that Valerio paid a woman in Ukraine to produce custom-made videos of child pornography that he scripted. woman, Olena Kalichenko,[1] produced over 30 pornographic videos of a then two-year-old girl that she emailed to Valerio between April and November 2012. After FBI agents discovered Valerio and Kalichenko’s international child exploitation conspiracy, in January 2014, federal agents, joined by members of the Suffolk County Police Department, executed a search warrant at Valerio’s residence in Smithtown. During the search, investigators found several hidden cameras, computers and a stage. A forensic examination of computers and electronic devices recovered by investigators revealed that, in September 2010, Valerio had produced child pornography in the basement of his house involving a then six-year-old Long Island girl. Valerio has been in custody since February 2014.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Ameet B. Kabrawala and Allen L. Bode are in charge of the prosecution.
The Defendant:
Joseph Valerio
Age: 50
Smithtown, New York
E.D.N.Y. Docket No. 14 CR 94 (JFB)
[1] On April 1, 2016, Kalichenko pled guilty to conspiracy to sexually exploit a child, sexual exploitation of a child, production of child pornography for importation into the United States, and transportation of child pornography. At sentencing, Kalichenko faces a 15-year mandatory minimum term of imprisonment.
Manhattan Doctor Arrested for Illegal Distribution of OxycodoneRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging medical doctor Martin Tesher with writing thousands of illegal prescriptions for Schedule II controlled substances, particularly opioids such as oxycodone, without a legitimate medical purpose. Tesher was arrested earlier today in Manhattan, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Lois Bloom.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
As alleged in the complaint, the defendant operates a family medical practice in Manhattan. Between June 2012 and January 2017, Tesher wrote more than 14,000 prescriptions for oxycodone, totaling over 2.2 million oxycodone pills, a disproportionately high amount for a family practitioner. Opioids, which include heroin, are highly addictive narcotics. Tesher does not have any specialized training in pain management. In some cases, Tesher indicated that he knew that certain of his patients were addicted to oxycodone, or that they were using other illicit substances such as heroin or cocaine, but continued prescribing oxycodone and other opioids to those patients anyway. In one case, on a patient’s first visit, Tesher prescribed the patient 15 oxycodone pills a day without even basic verification that the patient had any injury.
“As alleged, Dr. Tesher used his position as a doctor not to heal but to foster opioid addiction,” stated Acting United States Attorney Rohde. “This Office and our partners at the DEA will continue to hold medical professionals accountable to the fullest extent of the law whenever they abrogate their duties and contribute to the opioid crisis.”
“Dr. Tesher acted no differently than a multi-million dollar heroin ring, distributing more than $20 million worth of opioids,” stated DEA Special Agent-in-Charge Hunt. “In fact, by using his position as a family practitioner, he enabled patients seeking help for substance abuse and turned new patients into opioid addicts by writing unnecessary prescriptions in exchange for cash. Law enforcement has no tolerance for rogue doctors, their medical staff or opioid traffickers, and we are committed to dismantling drug trafficking organizations, be it operating out of a family practitioner’s office or a heroin mill.”
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, which is comprised of agents and officers of the DEA, Internal Revenue Service, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department, and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the New York City Police Department (NYPD), Criminal Enterprise Investigations, the Department of Health & Human Services, Office of the Inspector General, New York City Department of Investigation, and NCPD’s Asset Forfeiture and Intelligence Bureau.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being handled by the Office’s Narcotics and Money Laundering Section. Assistant United States Attorney Jennifer M. Sasso is in charge of the prosecution.
The Defendant:
MARTIN TESHER
Age: 81
Manhattan, New YorkE.D.N.Y. Docket No. 17-MJ-504
Former General Secretary of Guatemalan Soccer Federation Pleads Guilty to Wire Fraud ChargesRead the Press Release
Earlier today in federal court in Brooklyn, Héctor Trujillo, general secretary of the Guatemalan soccer federation (the “federation”) from 2009 to 2015 and a former judge of the Constitutional Court of Guatemala, pleaded guilty to one count of wire fraud conspiracy and one count of wire fraud in connection with his participation in a scheme to accept hundreds of thousands of dollars in kickbacks. Trujillo also agreed to forfeit $175,000. Trujillo faces a maximum sentence of 20 years’ imprisonment for each count. Today’s plea proceeding took place before United States District Judge Pamela K. Chen.
The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assisting Director in Charge, FBI New York Field Office; and Special Agent in Charge R. Damon Rowe, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Trujillo and other officials of the federation agreed to accept hundreds of thousands of dollars in kickbacks from Media World, a sports marketing company based in Miami, in exchange for media and marketing rights to the Guatemalan soccer team’s home World Cup qualifier matches leading up to the 2018 and 2022 World Cup tournaments. Over a period of years, Media World transmitted these kickbacks from its U.S. bank accounts. After Media World wired some of the kickback money to a United States bank account controlled by Trujillo’s associate, the associate wired the money from that account to an account in Guatemala, where Trujillo received his share.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
HÉCTOR TRUJILLO
Age: 63
Nationality: Guatemala
E.D.N.Y. Docket No. 15 CR 252 (S-1)
Gabonese-French Dual Citizen Sentenced to 24 Months Imprisonment for Bribing African OfficialsRead the Press Release
A dual citizen of Gabon and France was sentenced to 24 months in prison for his role in a conspiracy to pay bribes to senior government officials across Africa, in violation of the Foreign Corrupt Practices Act (FCPA).
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget 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 Acting Special Agent in Charge Ronald L. Whitsett of Internal Revenue Service-Criminal Investigation (IRS-CI)’s New York office made the announcement.
Samuel Mebiame, 43, who resided in Paris prior to his arrest, was sentenced by U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York. Mebiame pleaded guilty on Dec. 9, 2016, to one count of conspiracy to violate the FCPA.
According to admissions made at his plea hearing, Mebiame formed a conspiracy to provide improper benefits to government officials in multiple countries in Africa. Mebiame admitted that the improper benefits he provided were intended to influence the performance of official governmental duties, and that he took steps to further the conspiracy while physically in New York. Based on court documents, Mebiame worked as a “fixer” on behalf of a joint venture company owned by New-York-based hedge fund Och-Ziff Capital Management Group LLC (Och-Ziff) and its business partner, a Turks and Caicos Islands-registered corporate entity controlled by a co-conspirator. In that role, Mebiame traveled extensively across Africa, Europe and the U.S. and routinely made bribe payments to senior government officials in Africa. Mebaime’s plea documents indicated that at least five senior officials in three countries, Niger, Chad and Guinea, received corrupt payments and various illicit benefits from Mebiame. The officials, each of whom could influence the award of mining, oil and mineral concessions in their countries, received either cash payments, luxury vehicles or extravagant travel including the private rental of an Airbus jet. The bribes paid by Mebiame to the officials were often masked through additional intermediaries or attorneys.
According to court documents, in Niger, Mebiame paid more than $3 million in bribes to a high-ranking government official both directly and through intermediary agents who were selected by the Nigerien official. Mebiame also made payments for luxury cars for that foreign official and directed a $100,000 donation to a charity run by a government official. In return, Mebiame obtained licenses for uranium concessions for the joint venture from the government of Niger. Similarly, in Chad, Mebiame bribed a high-ranking government official with cash payments and luxury foreign travel for the official and the official’s wife. In return, Mebiame obtained uranium concessions for the joint venture, including rights to an asset which had been stripped by the Chadian government, at Mebiame’s urging, from a French-owned company. In Guinea, during a time when the conspirators were seeking to establish a state-owned mining company there, Mebiame made corrupt payments to gain special access to senior Guinean government officials. Mebiame provided the officials with cash and other benefits, including an S-Class Mercedes Benz vehicle and the use of private planes, in exchange for special access and confidential information.
Mebiame’s plea documents indicate that Mebiame repeatedly traveled to the United States between 2007 and 2015, the period of the criminal acts, and used facilities in both New York and Florida to further the conspiracy. Among other activities undertaken by Mebiame cited in court papers, he met with co-conspirators in New York, received funds from co-conspirators to U.S. bank accounts he controlled, and had telephone calls and email correspondence about the scheme.
Following Mebiame’s arrest in Brooklyn last August, as part of the government’s broader investigation, Och-Ziff was charged in September 2016 with violations of the FCPA’s anti-bribery, books and records, and accounting controls provisions for conduct in Libya and the Democratic Republic of Congo, and conduct in Chad and Niger connected to Mebiame and his co-conspirators’ conduct. Och-Ziff entered into a deferred prosecution agreement in connection with those charges. An Och-Ziff subsidiary company, OZ Africa Management GP LLC pleaded guilty to a one-count criminal information related to the payment of extensive bribes in the Democratic Republic of Congo.
The FBI’s New York Field Office and IRS-CI New York investigated the case. Trial Attorney James P. McDonald and Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys James P. Loonam, Jonathan P. Lax and David Pitluck of the Eastern District of New York are prosecuting the case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The U.S. Securities and Exchange Commission’s Boston Regional Office provided significant cooperation.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Gabonese-French Dual Citizen Sentenced to 24 Months Imprisonment for Bribing African OfficialsRead the Press Release
Earlier today, Samuel Mebiame, a dual citizen of Gabon and France, was sentenced to 24 months in prison for his role in a conspiracy to pay bribes to senior government officials across Africa, in violation of the Foreign Corrupt Practices Act (FCPA).
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Kenneth Blanco, Acting Assistant Attorney General for the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office.
Mebiame, who resided in Paris prior to his arrest, was sentenced by United States District Judge Nicholas G. Garaufis. Mebiame pleaded guilty, on December 9, 2016, to one count of conspiracy to violate the FCPA.
According to admissions made at his plea hearing, Mebiame was part of a conspiracy to provide improper benefits to government officials in multiple countries in Africa. Mebiame admitted that the improper benefits he provided were intended to influence the performance of official governmental duties, and that he took steps to further the conspiracy while physically present in New York City. Based on court documents, Mebiame worked as a “fixer” on behalf of a joint venture company owned by New-York-based hedge fund Och-Ziff Capital Management Group LLC (Och-Ziff) and its business partner, a Turks and Caicos Islands-registered corporate entity controlled by a co-conspirator. In that role, Mebiame traveled extensively across Africa, Europe, and the United States and routinely made bribe payments to senior government officials in Africa. Mebaime’s plea documents indicated that at least five senior officials in three countries, Niger, Chad, and Guinea, received corrupt payments and various illicit benefits from Mebiame. The officials, each of whom could influence the award of mining, oil, and mineral concessions in their countries, received either cash payments, luxury vehicles, or extravagant travel, including the private rental of an Airbus jet. The bribes paid by Mebiame to the officials were often disguised through additional intermediaries or attorneys.
According to court documents, in Niger, Mebiame paid more than $3 million in bribes to a high-ranking government official both directly and through intermediary agents who were selected by one of the Nigerien officials. Mebiame also made payments for luxury cars for that foreign official and directed a $100,000 donation to a charity run by a government official. In return, Mebiame obtained licenses for uranium concessions for the joint venture from the government of Niger. Similarly, in Chad, Mebiame bribed a high-ranking government official with cash payments and luxury foreign travel for the official and the official’s wife. In return, Mebiame obtained uranium concessions for the joint venture, including rights to an asset that had been stripped by the Chadian government, at Mebiame’s urging, from a French-owned company. In Guinea, during a time when the conspirators were seeking to establish a state-owned mining company there, Mebiame made corrupt payments to gain special access to senior Guinean government officials. Mebiame provided the officials with cash and other benefits, including an S-Class Mercedes Benz vehicle and the use of private planes, in exchange for special access and confidential information.
Mebiame’s plea documents indicate that Mebiame repeatedly traveled to the United States between 2007 and 2015, the period of the criminal acts, and used facilities in both New York and Florida to further the conspiracy. Among other activities undertaken by Mebiame cited in court papers, he met with co-conspirators in New York, received funds from co-conspirators to U.S. bank accounts he controlled, and had telephone calls and email correspondence about the scheme.
Following Mebiame’s arrest in Brooklyn last August, as part of the government’s broader investigation, Och-Ziff was charged in September 2016 with violations of the FCPA’s anti-bribery, books and records, and accounting controls provisions for conduct in Libya and the Democratic Republic of Congo, and conduct in Chad and Niger connected to Mebiame and his co-conspirators’ conduct. Och-Ziff entered into a deferred prosecution agreement in connection with those charges. An Och-Ziff subsidiary company, OZ Africa Management GP LLC, pleaded guilty to a one-count criminal information related to the payment of extensive bribes in the Democratic Republic of Congo.
The government’s case is being handled by the U.S. Attorney’s Office Business and Securities Fraud Section, and the Foreign Corrupt Practices Act Unit of the Department of Justice, Fraud Section. Assistant United States Attorneys James P. Loonam, Jonathan P. Lax, and David Pitluck, and Department of Justice Fraud Section Assistant Chief Leo R. Tsao, and Trial Attorney James P. McDonald are in charge of the prosecution. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The U.S. Securities and Exchange Commission’s Boston Regional Office provided significant cooperation.
The Defendant:
SAMUEL MEBIAME
Age: 43
Libreville, Gabon
Air Force Veteran Sentenced to 35 Years in Prison for Attempting to Join ISIS and Obstruction of JusticeRead the Press Release
Today, Tairod Nathan Webster Pugh, a U.S. citizen and former member of the U.S. Air Force, was sentenced to 35 years in prison for attempting to provide material support to the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization, and obstruction of justice. Pugh, of Neptune, New Jersey, was convicted at trial on March 9, 2016.
The sentence was announced by Acting Assistant Attorney General for National Security Dana Boente; Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York; Assistant Director in Charge William J. Sweeney of the FBI’s New York Field Office; Commissioner James P. O'Neill of the NYPD. The sentence was imposed by U.S. District Court Judge Nicholas G. Garaufis.
“With this sentence, Tairod Pugh – an American citizen and former member of the U.S. Air Force where he served as an aircraft mechanic – is being held accountable for attempting to travel to Syria to provide material support to ISIS,” said Acting Assistant Attorney General Boente. “We are committed to bringing to justice all those who seek to provide material support to foreign terrorist organizations. I would like to thank all of the agents, analysts, and prosecutors who are responsible for this result.”
“The defendant turned his back on his country, and the military he once served, to attempt to join a brutally violent terrorist organization committed to the slaughter of innocent people throughout the world and the destruction of our way of life. Today’s sentence sends a powerful message that those who support terrorist groups and seek to obstruct the efforts of our law enforcement community will be brought to justice,” stated Acting U.S. Attorney Rohde. Ms. Rohde expressed her appreciation to the members of the FBI’s Joint Terrorism Task Force, which comprises federal, state and local agencies from across the region, for their work on the investigation.
“The alarming reality of this case is that Pugh served in the U.S. military but ultimately traded in his pledge to defend the United States to defend the Islamic State,” stated Assistant Director in Charge Sweeney. “Today’s sentencing should send a strong message to those who seek to support terrorists groups — they will face serious consequences for their actions. The FBI’s Joint Terrorism Task Force will continue to work with our partners, both here and abroad, to prevent acts of terrorism. This investigation demonstrates the importance of law enforcement coordination and collaboration here and around the world.”
“The defendant broke his oath to defend our nation and instead made repeated attempts to join ISIL on the battlefield of Syria,” stated Commissioner O’Neill. “The work of protecting New York City from those who seek to harm us is ever present. I am thankful for the work of so many whose diligence helps keep this city safe.”
Before traveling overseas to try to join ISIS, the defendant served in the U.S. Air Force as an avionics instrument system specialist and received training in the installation and maintenance of aircraft engines, navigation, and weapons systems. The defendant later worked as an airplane mechanic for numerous companies in the U.S. and Middle East. He lived abroad for more than one year before his arrest in this case.
On Jan. 10, 2015, the defendant traveled from Egypt to Turkey in an effort to cross the border into Syria to join ISIS to engage in violent jihad. Turkish authorities denied the defendant entry and returned him to Egypt. At the time of his detention, the defendant was carrying a laptop computer and four USB drives that he had stripped of their plastic casings in an effort to destroy their contents and thereby make them unavailable to investigators. The defendant was also carrying solar powered chargers, compasses, a black balaclava, and clothing suitable for war-torn Syria. Foreign government officials quickly deported the defendant to the U.S., where the FBI closely monitored him, relying in part on a covert undercover employee who encountered the defendant at John F. Kennedy International Airport in New York City. The defendant was arrested on Jan. 16, 2015, in Asbury Park, New Jersey, and thereafter indicted in the Eastern District of New York.
The defendant’s laptop contained Internet searches for “borders controlled by Islamic state,” the ISIS propaganda video “Flames of War,” as well as terrorist videos he had downloaded, including ISIS execution videos. In the months before he attempted to join ISIS, the defendant made statements to coworkers and on social media establishing his support for ISIS, including advising Facebook followers to “support [ISIS] with your bodies.”
Shortly before he left Egypt for Turkey on his way to Syria, the defendant drafted a letter proclaiming, “I am a Mujahid. I am a sword against the oppressor and a shield for the oppressed. I will use the talents and skills given to me by Allah to establish and defend the Islamic State. There is only 2 possible outcomes for me. Victory or Martyr.”
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant U.S. Attorneys Samuel P. Nitze, Tiana A. Demas and Mark Bini are in charge of the prosecution, with assistance from Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.
Air Force Veteran Sentenced to 35 Years in Prison for Attempting to Join ISIS and Obstruction of JusticeRead the Press Release
Earlier today at the federal courthouse in Brooklyn, New York, Tairod Pugh, an American citizen and former member of the U.S. Air Force, was sentenced to 35 years in prison following his March 9, 2016 trial conviction for attempting to provide material support to a foreign terrorist organization, the Islamic State of Iraq and Syria (“ISIS”), and obstruction of justice. The sentence was imposed by United States District Court Judge Nicholas G. Garaufis.
The sentence was announced by 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).
“The defendant turned his back on his country, and the military he once served, to attempt to join a brutally violent terrorist organization committed to the slaughter of innocent people throughout the world,” stated Acting United States Attorney Rohde. “Today’s sentence sends a powerful message that those who support terrorism will be brought to justice by this Office and our law enforcement partners, undeterred by obstructionist efforts." Ms. Rohde expressed her appreciation to the members of the FBI’s Joint Terrorism Task Force, which comprises federal, state, and local agencies from across the region, for their work on the investigation.
“With this sentence, Tairod Pugh – an American citizen and former member of the U.S. Air Force where he served as an aircraft mechanic – is being held accountable for attempting to travel to Syria to provide material support to ISIS,” said Acting Assistant Attorney General Boente. “We are committed to bringing to justice all those who seek to provide material support to foreign terrorist organizations. I would like to thank all of the agents, analysts, and prosecutors who are responsible for this result.”
“The alarming reality of this case is that Pugh served in the U.S. military but ultimately traded in his pledge to defend the United States to defend the Islamic State,” stated Assistant Director-in-Charge Sweeney. “Today’s sentencing should send a strong message to those who seek to support terrorists groups — they will face serious consequences for their actions. The FBI’s Joint Terrorism Task Force will continue to work with our partners, both here and abroad, to prevent acts of terrorism. This investigation demonstrates the importance of law enforcement coordination and collaboration here and around the world.”
“The defendant broke his oath to defend our nation and instead made repeated attempts to join ISIL on the battlefield of Syria,” stated Commissioner O’Neill. “The work of protecting New York City from those who seek to harm us is ever present. I am thankful for the work of so many whose diligence helps keep this city safe.”
Before traveling overseas to try to join ISIS, the defendant served in the U.S. Air Force as an avionics instrument system specialist and received training in the installation and maintenance of aircraft engines, navigation, and weapons systems. The defendant later worked as an airplane mechanic for numerous companies in the United States and Middle East. He lived abroad for more than one year before his arrest in this case.
On January 10, 2015, the defendant traveled from Egypt to Turkey in an effort to cross the border into Syria to join ISIS to engage in violent “jihad.” Turkish authorities denied the defendant entry and returned him to Egypt. At the time of his detention, the defendant was carrying a laptop computer and four USB drives that he had stripped of their plastic casings in an effort to destroy their contents and thereby make them unavailable to investigators. The defendant also was carrying solar powered chargers, compasses, a black balaclava, and clothing suitable for war-torn Syria. Foreign government officials quickly deported the defendant to the United States, where the FBI closely monitored him, relying in part on a covert undercover employee who encountered the defendant at John F. Kennedy International Airport. The defendant was arrested on January 16, 2015, in Asbury Park, New Jersey, and thereafter indicted in the Eastern District of New York.
The defendant’s laptop contained Internet searches for “borders controlled by Islamic state,” the ISIS propaganda video “Flames of War,” as well as terrorist videos he had downloaded, including ISIS execution videos. In the months before he attempted to join ISIS, the defendant made statements to coworkers and on social media establishing his support for ISIS, including advising Facebook followers to “support [ISIS] with your bodies.”
Shortly before he left Egypt for Turkey on his way to Syria, the defendant drafted a letter proclaiming, “I am a Mujahid. I am a sword against the oppressor and a shield for the oppressed. I will use the talents and skills given to me by Allah to establish and defend the Islamic State. There is only 2 possible outcomes for me. Victory or Martyr.”
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Samuel P. Nitze, Tiana A. Demas, and Mark Bini are in charge of the prosecution, with assistance provided by Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.
The Defendant:
TAIROD NATHAN WEBSTER PUGH
Age: 49
Neptune, New Jersey
E.D.N.Y. Docket No. 15-CR-116 (NGG)
Brooklyn Bloods Gang Enforcer Sentenced to 30 Years in Prison for Narcotics TraffickingRead the Press Release
Earlier today at the federal courthouse in Brooklyn, New York, Shondell Walker, also known as “M-Dot,” a member of the Brooklyn-based Murderous Maddawg Bloods, was sentenced to 30 years in prison for narcotics trafficking and his role as an enforcer for Bloods gang leader Ronald Herron, also known as “Ra Diggs,” or “Ra Digga.” The sentence was imposed by United States District Judge Nicholas G. Garaufis.
The sentence was announced by 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); James P. O’Neill, Commissioner, New York City Police Department (NYPD).
“The defendant was an enforcer for a criminal gang that terrorized the Gowanus and Wyckoff Gardens communities for decades,” stated Acting United States Attorney Rohde. “He also testified falsely on behalf of the gang's leader. Together with our law enforcement partners, we are committed to bringing violent criminals to justice and will not be deterred by attempts to obstruct our efforts.”
“This case proves the lengths gang members will go to protect their own,” stated FBI Assistant Director-in-Charge Sweeney. “The subject will spend the bulk of his life in federal prison all because he felt allegiance to a deadly and criminal gang. The work of our FBI New York Metro Safe Streets Task Force and our law enforcement partners is vital to stopping the spread of criminal enterprises like these gangs, and we won’t back off until these gangs no longer exist.”
“The defendant in this case – the enforcer for a violent gang that plagued the Gowanus Houses and Wyckoff Gardens housing developments for decades – was sentenced to 30 years behind bars,” stated Commissioner O’Neill. “Today’s sentence should be a reminder to those who trade in drugs and violence: We will never stop in our relentless pursuit of justice.”
Walker pled guilty pursuant to a plea agreement on October 6, 2011, to conspiring to distribute narcotics. During Herron’s trial, Walker was called as a defense witness and testified falsely on Herron’s behalf. Specifically, Walker testified that Herron had served as a positive role model in the Gowanus and Wyckoff Gardens communities, that he had never seen Herron sell narcotics, and that he had never worked, sold drugs, or carried a firearm on Herron’s behalf. Walker’s claims were substantially undermined by the admission into evidence of a letter he had written from prison in which he stated that he intended to remain loyal to Herron because of their relationship in the Bloods.
Herron was convicted after trial and previously sentenced to multiple life terms consecutive to 105 years in prison.
Herron and Walker’s convictions followed dozens of successful prosecutions over the past decade conducted by the U.S. Attorney’s Office for the Eastern District of New York, along with the FBI and NYPD, of violent gang members and drug dealers from the Gowanus and Wyckoff Gardens housing developments.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Shreve Ariail, Samuel Nitze, and Rena Paul are in charge of the prosecution.
The Defendant:
SHONDELL WALKER
Age: 31
Brooklyn, New York
E.D.N.Y. Docket No. 10-CR-615 (NGG)
International Narcotics Transporter Extradited from ColombiaRead the Press Release
Later today, Gustavo Bermudez-Vanegas will be arraigned at the federal courthouse in Brooklyn, New York, on an international cocaine distribution conspiracy charge. The defendant was arrested in Colombia on a provisional arrest warrant issued from the Eastern District of New York and subsequently extradited from Colombia to the United States on May 25, 2017.
The extradition was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
According to court documents, between February 2016 and July 2016, Bermudez-Vanegas conspired to use airplanes and submarines to transport tonnage quantities of cocaine from Colombia, Ecuador, and Venezuela through Central American countries to Mexico, for the purpose of unlawfully importing the cocaine into the United States for further distribution. Bermudez-Vanegas provided his transportation services to Mexico-based drug cartels.
“The United States will continue to prosecute international narcotics traffickers wherever they may be operating,” stated Acting United States Attorney Rohde. “As alleged, the defendant conspired to transport narcotics across several borders and continents, from South America to the United States. Now he faces justice in the Eastern District of New York, with the help of our law enforcement partners in Colombia, who effectuated his capture and extradition to the United States.” Ms. Rohde thanked the Department of Justice’s Office of International Affairs (OIA) for its assistance with the extradition of the defendant.
“The United States has been besieged by drug traffickers bringing drugs into our country. In contrast, drug law enforcement has brought Bermudez-Vanegas, a significant trafficker who used submarines and planes into our country to face charges for such crimes,” stated DEA Special-in-Charge Hunt.
The defendant is scheduled to be arraigned later today before United States Magistrate Judge Robert M. Levy.
If convicted, Bermudez-Vanegas faces a mandatory minimum sentence of 10 years’ imprisonment. The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Narcotics & Money Laundering Section. Assistant United States Attorneys Michael Robotti, Hiral Mehta, and Ameet Kabrawala are in charge of the prosecution.
The Defendant:
GUSTAVO BERMUDEZ-VANEGAS
Age: 57
Colombia
E.D.N.Y. Docket No. 16-CR-416 (FB)
Hezbollah Associate Pleads Guilty to Money Laundering ChargeRead the Press Release
Earlier today, Joseph Asmar, a citizen of Lebanon, pled guilty at the federal courthouse in Brooklyn, New York, to a money laundering charge for laundering funds he believed to be drug money. Asmar was arrested in Paris, France, in October 2015, on a provisional arrest warrant issued from the Eastern District of New York, and was extradited to the United States on December 21, 2016. The guilty plea was entered before United States District Judge Eric N. Vitaliano.
The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York.
According to court filings, the investigation, a Drug Enforcement Administration (DEA) undercover operation, determined that between approximately September 2013 and October 2015, the defendant conspired to conduct monetary transactions to assist individuals, whom he believed to be drug traffickers, to conceal drug money. In a series of recorded conversations, Asmar discussed his money laundering network that spanned the globe and provided money laundering services in parts of the Middle East, Europe, Africa, South America, and cities across the United States. Asmar claimed to know how to make large amounts of money appear to be legitimately-derived and suggested that he could use his connections with Hezbollah[1] to provide security for narcotics shipments at transshipment points in Africa and the Middle East. During the course of the investigation, undercover agents provided approximately $400,000 in purported drug proceeds to Asmar and his coconspirators, who laundered the money back to the United States in exchange for a commission.
At sentencing, Asmar faces up to 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Narcotics & Money Laundering Section. Assistant United States Attorneys Gina M. Parlovecchio and Ameet B. Kabrawala are in charge of the prosecution.
The Defendant:
Joseph Asmar
Age: 43
Nationality: Lebanese
E.D.N.Y. Docket No. 15-CR-491 (ENV)
[1] Hezbollah has been designated as a foreign terrorist organization by the United States Department of State since 1997.
Three Federal Correctional Officers Charged with Sexually Abusing Female InmatesRead the Press Release
Three separate multi-count indictments were unsealed this morning in United States District Court for the Eastern District of New York charging three federal correctional officers employed by the United States Bureau of Prisons (BOP) variously with deprivation of civil rights under color of law, aggravated sexual abuse, sexual abuse, sexual abuse of a ward, attempted sexual abuse of a ward and abusive sexual contact. The defendants – Lieutenant Carlos Richard Martinez, Lieutenant Eugenio Perez, and Officer Armando Moronta – were arrested earlier today.
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Marilyn D. Go, at the federal courthouse in Brooklyn. United States v. Martinez is assigned to United States District Judge Brian M. Cogan. United States v. Perez is assigned to United States District Judge Kiyo A. Matsumoto; United States v. Moronta is assigned to United States District Judge Roslynn R. Mauskopf.
The arrests are the result of a nearly year-long investigation into allegations of sexual abuse of female prisoners at the Metropolitan Detention Center (MDC) in Brooklyn. The investigation relied upon, among other evidence, the corroborated statements of many female inmate-victims, MDC video surveillance, social media evidence, phone records, documentary records, medical records and physical searches. Following their arrests, Lieutenants Martinez and Perez will be suspended without pay; Officer Moronta was previously suspended without pay for other conduct.
The charges and arrests were announced by 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 (OIG); William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“By using their authority and power to prey upon and abuse female inmates in their care, these defendants violated their oaths of public service as well as numerous criminal laws,” stated Acting United States Attorney Rohde. “Our Office is committed to eliminating sexual violence and abuse against inmates in all forms and ensuring that any correctional staff who engage in such conduct are punished.”
“Rape, sexual assault, and threats of retaliation must be aggressively investigated and prosecuted, and Justice Department employees who engage in such conduct should know that the OIG will pursue them and bring them to justice,” stated OIG Special Agent-in-Charge Gardella. “The OIG will continue to conduct independent oversight to help ensure that federal prisons are safe, secure, and free from abuse.”
“As alleged, those charged today trapped their victims in a cycle of fear and intimidation while carrying out various acts of sexual abuse,” stated FBI Assistant Director-in-Charge Sweeney. “This type of conduct is never acceptable, especially at the hands of those who misuse the power afforded them as public servants. We want the public to know we take these crimes seriously and will continue to investigate any and all activity that violates the basic human rights of those within our prison system.”
Carlos Martinez
As alleged in publicly filed documents, over a period of five months from December 2015 to April 2016, the defendant Carlos Martinez used physical force and fear to repeatedly rape a sentenced female prisoner at the MDC. Martinez forced himself on his victim almost every weekend for a period of approximately two months, often multiple times per weekend, exploiting her fear of being sent to the Special Housing Unit and facing additional jail time to ensure her silence. Concerned about a potential investigation of his contact with his victim, Martinez ceased assaulting her for a period of time, before raping her one last time shortly before her transfer to immigration custody. At the time of Martinez’s crimes, he was an active-duty Lieutenant at the MDC, with supervisory and disciplinary authority over inmates.
Eugenio Perez
As alleged in publicly filed documents, over a period of three years from 2013 to 2016, the defendant Eugenio Perez used his position as a Lieutenant at the MDC to engage in sexual acts and contact with five different female inmates detained at the MDC and under the defendant’s supervisory and disciplinary authority. In many cases, Perez’s conduct involved the use of physical force, intimidation and threats of retaliation against his victims. Specifically, on multiple occasions, Perez lured the victims into isolated situations by arranging for them to clean the Lieutenants’ office area at night, and then requiring them to perform oral sex on him, in many cases using force, intimidation and fear of adverse consequences to ensure the victims’ compliance.
Armando Moronta
As alleged in publicly filed documents, the charges relating to the defendant Armando Moronta involve three separate victims. Between May and June 2016, Moronta engaged in criminal sexual contact and acts with female inmates, including inserting his fingers into the vagina of a female inmate and causing inmates to perform oral sex on him while he was assigned to guard their unit.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. Martinez and Perez each face a maximum sentence of life imprisonment, and Moronta faces a maximum sentence of 60 years’ imprisonment, if convicted on all counts.
The investigation is ongoing; anyone with relevant information about prison corruption is asked to contact OIG through its Hotline at (800) 869-4499, or https://oig.justice.gov/hotline/.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Nicole M. Argentieri, Marisa Megur Seifan, and Nadia I. Shihata are in charge of the prosecution.
The Defendants:
CARLOS MARTINEZ
Age: 47
Brooklyn, NY
EUGENIO PEREZ
Age: 46
Brooklyn, NY
ARMANDO MORONTA
Age: 39
Brooklyn, NY
E.D.N.Y. Docket Nos. 17 CR 279 (RRM); 17 CR 280 (KAM); and 17 CR 281 (BMC)
New York Precious Metals Brokerage Firm Operator Indicted for Tax EvasionRead the Press Release
A federal grand jury sitting in the Eastern District of New York returned an indictment on April 12, which was unsealed today, charging a former Brooklyn resident, who operated a precious metals brokerage firm with tax evasion and aiding and assisting in the preparation of false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the indictment, Christopher Wolf operated Rothchild & Associates LLC, in Brooklyn, New York, and was in the business of selling precious metals to investors over the telephone. Although Wolf controlled all aspects of Rothchild’s operations, it was technically owned by a third party.
Wolf allegedly concealed the income he earned from Rothchild by causing his commissions to be paid to shell corporations and diverting the funds from those corporations to his own personal use. According to the indictment, Wolf filed a false 2010 individual income tax return that did not report the income he earned from selling precious metals and he failed to file a 2011 income tax return, despite earning brokerage commissions. The indictment further alleges that Wolf caused the shell corporations to file false 2010 and 2011 corporate tax returns that claimed deductions for phony expenses.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Wolf faces a statutory maximum sentence of five years in prison for tax evasion and three years in prison for aiding and assisting the preparation or presentation of a false tax return.
Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Sean Green and Mark Kotila of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former CONCACAF and Cayman Islands Soccer Official Pleads Guilty to Money Laundering ChargeRead the Press Release
Earlier today in federal court in Brooklyn, Costas Takkas pleaded guilty to money laundering conspiracy in connection with his receipt and transmission of millions of dollars in bribes paid to now-former CONCACAF president and FIFA vice president, Jeffrey Webb. Takkas, a former general secretary of the Cayman Islands soccer federation, was the attaché to Webb at the time of Takkas’s arrest in Zurich, Switzerland pursuant to an indictment unsealed in May 2015 alleging various corrupt schemes in organized soccer. At sentencing, Takkas faces a maximum sentence of 20 years. Today’s plea proceeding took place before United States District Judge Pamela K. Chen.
The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, FBI New York Field Office; and Special Agent in Charge R. Damon Rowe, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Webb accepted a $3 million bribe in exchange for using his influence as a soccer official to award and enforce a contract granting two sports marketing companies the media and marketing rights to home World Cup qualifier matches played by teams representing soccer federations of the Caribbean Football Union during the 2018 and 2022 qualification cycles. Webb, Takkas, and representatives of Traffic USA, one of the sports marketing companies, arranged for Traffic USA to secretly funnel half of Webb’s $3 million bribe through front companies and accounts controlled by Takkas. After receiving this $1.5 million, Takkas distributed these funds at Webb’s direction. Media World, the other sports marketing company, paid approximately $500,000 of its $1.5 million share of the bribe money through a sham transaction involving a false invoice, to accounts controlled by Takkas. Webb pleaded guilty to racketeering conspiracy and other offenses on November 23, 2015 and, in his allocution, he admitted, among other things, accepting this bribe.
The guilty plea announced today is part of an investigation into corruption in international soccer led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, and Keith D. Edelman of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
COSTAS TAKKAS
Age: 60
Nationality: United Kingdom
E.D.N.Y. Docket No. 15 CR 252 (PKC)
Registered Broker Sentenced to 24 Months in Prison for Securities Fraud in A $131 Million Market Manipulation SchemeRead the Press Release
Today in federal court in Brooklyn, Naveed Khan, a registered broker, was sentenced to 24 months in prison and two years of supervised release after having pleaded guilty to securities fraud for his role in the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company that was listed on the NASDAQ under the ticker symbol “FNRG.”
The sentencing was announced by 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.
According to court filings and facts presented at the plea hearing, between January 2009 and April 2015, Khan, together with others, engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the appearance of genuine trading volume and interest in the stock; and (3) concealing payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while claiming to be independent of the company. The fraudulent scheme caused a loss of approximately $131 million to the investing public.
Between February 2015 and April 2015, Khan received commission payments, or kickbacks, from a ForceField executive for purchasing ForceField stock in his clients’ brokerage accounts. Khan did not disclose to his clients the kickbacks he was receiving for their purchase of ForceField stock. Khan and his co-conspirators took pains to conceal their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other, and by paying kickbacks in cash.
Today’s proceeding took place before United States District Court Judge Brian M. Cogan.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mark E. Bini and Lauren H. Elbert are in charge of the prosecution.
The Defendant:
NAVEED KHAN
Age: 35
Residence: Staten Island, New York
E.D.N.Y. Docket No. 16-CR-234 (BMC)
CFO of “Soup Nazi” Business Indicted for Tax EvasionRead the Press Release
An indictment was unsealed earlier today at the federal courthouse in Brooklyn charging Robert N. Bertrand, the Chief Financial Officer of Soupman, Inc., with 20 counts of failure to pay Medicare, Social Security, and federal income taxes. Soupman, Inc., which is based in Staten Island, and licenses the name and recipes of Al Yeganeh, the “Soup Nazi” character from the television series “Seinfeld.” The defendant will be arraigned this afternoon before United States Magistrate Judge Marilyn D. Go.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent in Charge, Internal Revenue Service-Criminal Division, New York Field Office (IRS).
As alleged in the indictment and publicly filed documents, Bertrand had a corporate responsibility to collect, truthfully account for, and pay Medicare, Social Security, and federal income taxes (collectively, “trust fund taxes”) for Soupman’s employees. However, between 2010 and 2014, Bertrand paid Soupman employees on the side in unreported cash amounts, and compensated certain employees in large unreported stock awards. Bertrand never reported this employee compensation to the IRS, and never paid trust fund taxes on the cash payments or the stock awards, despite a 2012 warning from an external auditor that these payments should be reported to the IRS. From 2010 through 2014, Soupman’s total approximate unreported cash and stock compensation was $2,850,967.59, and the total approximate tax loss to the United States was $593,971.52.
“As alleged, the United States was fleeced out of more than half a million dollars through the defendant’s corporate misdeeds,” stated Acting United States Attorney Rohde. “Tax crimes like those alleged in the indictment hurt every American citizen. My Office and our law enforcement partners will prosecute such crimes to the full extent of the law.”
“IRS Criminal Investigation, along with the Justice Department, realizes the negative consequences employment tax evasion has on the solvency of the United States government,” stated Special Agent-in-Charge Robnett. “However, this type of evasion also results in the loss of future Social Security and Medicare benefits for the employees of Soupman Inc. as well.”
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the offense, Bertrand faces a maximum sentence of five years’ imprisonment.
The government’s case is being handled by the Office’s General Crimes Division. Assistant United States Attorney Kaitlin T. Farrell is in charge of the prosecution.
The Defendant:
Robert N. Bertrand
Age: 62
Norwalk, Connecticut
E.D.N.Y. Docket No. 17-CR-186 (RRM)
Former New York City Buildings Inspector Pleads Guilty to ExtortionRead the Press Release
Earlier today, Massimo Dabusco, also known as “Max,” pled guilty at the federal courthouse in Brooklyn, New York, to conspiracy to commit extortion. According to court filings and facts presented during the plea proceeding, Dabusco was formerly an Inspector with the New York City Department of Buildings (DOB) and a silent partner in a business, A&G Contracting Group Corp. (A&G), a demolition and excavation company.
The plea was announced by 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 Mark G. Peters, Commissioner New York City Department of Investigation (DOI).
According to court filings, between December 2013 and June 2015, Dabusco abused his position as a DOB Inspector by threatening punitive action against contractors and property owners in an effort to benefit A&G. In one instance, Dabusco threatened to use his authority at the DOB to shut down all of a contractor’s existing jobs if the contractor did not pay outstanding fines owed by A&G. Dabusco also unlawfully warned contractors about impending DOB inspections in an effort aid another contractor. Dabusco resigned his job as a DOB Inspector in August 2015.
Today’s plea took place before United States District Court Chief Judge Dora L. Irizarry.
When sentenced, Dabusco faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Martin Coffey is in charge of the prosecution.
The Defendants:
MASSIMO DABUSCO
Age: 54
Yorktown Heights, New York
E.D.N.Y. Docket No.16-CR-559 (DLI)
Former Long Island Doctor and Health Minister of Guyana Sentenced to 50 Months in Prison for Illegally Selling Oxycodone PrescriptionsRead the Press Release
Noel Blackman, who practiced as a medical doctor and was the former Health Minister of Guyana and Executive Member of the World Health Organization, was sentenced to 50 months’ imprisonment and three years of supervised release today for illegally distributing oxycodone, a highly addictive prescription painkiller. Additionally, United States District Judge Joanna Seybert ordered Blackman to forfeit $536,200 in illegal proceeds. The sentence followed the defendant’s guilty plea on August 24, 2016.
The sentence was announced by 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 Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.
Between 2015-2016, Blackman prescribed more than 365,000 30-milligram oxycodone pills from “pain management” clinics that he worked out of in Elmhurst, Queens, Franklin Square, Long Island and Cypress Hills, Brooklyn. During his guilty plea allocution before Judge Seybert last August, Blackman admitted that, in exchange for $300 cash payments, he wrote oxycodone prescriptions for 1,920 30 milligram oxycodone pills to persons whom he knew had no legitimate medical need for that highly-addictive drug. As described in court papers, that amount of oxycodone was worth up to $57,600 on the street.
According to court filings, on February 7, 2016, HSI agents removed Blackman from a plane at John F. Kennedy International Airport en route to Guyana and arrested him in connection with the illegal distribution of oxycodone. At the time of his arrest, more than $30,000 was found concealed in Blackman’s luggage. Following his arrest, Blackman admitted that he believed that some of his patients were addicted to oxycodone.
Blackman has forefeited his medical license and will no longer be allowed to practice medicine in the United States.
“Today’s sentence should send a clear message to other doctors and medical professionals that when they abandon their oaths and act as drug dealers, we will prosecute them to the fullest extent of the law,” stated Acting United States Attorney Rohde. “Blackman violated his professional oath to put his patients’ legitimate medical needs first, and instead chose to line his pockets with the proceeds of sales from oxycodone, which has ravaged communities in New York City and on Long Island. Together with our law enforcement partners, we will continue to vigorously prosecute illegal prescription drug distribution.” Ms. Rohde thanked the DEA’s Long Island Tactical Diversion Squad, comprised of agents and officers from the DEA, Nassau County Police Department, Rockville Centre Police Department, Suffolk County Police Department, Port Washington Police Department and Internal Revenue Service, for its participation and assistance in the investigation.
“Prescribing ‘oxys’ in exchange for cash is no different than a street dealer’s hand to hand drug transaction; both are illegal and fuel drug misuse in our communities. Today's sentencing is a result of law enforcement’s collaborative work,” stated DEA Special Agent-in-Charge Hunt.
“Blackman prescribed highly addictive pills to people who had no legitimate need. To add to his crime, he knowingly handed out prescriptions for oxycodone to individuals he knew were already addicted,” stated HSI Special Agent-in-Charge Melendez. “Blackman’s actions make him no different than the street-corner drug pusher. Today’s sentencing should stand as a reminder to others that we will continue our joint law enforcement efforts to ensure that crooked doctors like Blackman can no longer put pen to pad and cause more harm.”
The government’s case is being handled by the Office’s Long Island Criminal and Civil Divisions. Assistant United States Attorneys Bradley T. King and Madeline O’Connor are in charge of the prosecution.
The Defendant:
NOEL BLACKMAN
Age: 69
Valley Stream, New YorkE.D.N.Y. Docket No. 16-CR-89 (JS)
Former IRS Revenue Officer Sentenced to Six Months’ Imprisonment for Tax Fraud SchemeRead the Press Release
Earlier today, James C. Brewer, a former Revenue Officer of the Internal Revenue Service (IRS) who was assigned to the Edison, New Jersey IRS office before his arrest, was sentenced to six months’ imprisonment and ordered to pay $73,548.00 in restitution. Brewer pled guilty on September 19, 2016 to filing or preparing false tax returns, wire fraud and mail fraud, all in connection with a scheme to falsify tax returns he filed on behalf of himself and others and enrich himself with inflated refunds from those returns. Brewer also pled guilty to committing perjury in United States Tax Court in 2012 in a successful effort to obtain a tax credit for himself to which he was not entitled.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), Newark Field Office; Rodney A. Davis, Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA), Washington Field Division.
“James Brewer engaged in a tax fraud and identity theft scheme in which he cheated the very tax system he was entrusted to uphold,” stated Acting United States Attorney Rohde. “Today’s sentence reminds government employees they will be held to the level of integrity expected of them, and assures honest taxpayers that no one who commits fraud is above the law.” Ms. Rohde expressed her grateful appreciation to the United States Attorney’s Office for the District of New Jersey, the United States Attorney’s Office for the District of Nevada, the IRS-CI, Las Vegas Field Office and the Treasury Inspector General for TIGTA, Denver Field Division for their assistance in this case.
According to court filings and statements made during the guilty plea, as part of a scheme to fraudulently reduce his taxable income and increase his tax refunds, for four tax years Brewer failed to report any income he received in connection with his unauthorized tax preparation business, which he operated in violation of IRS rules; underreported the gross receipts he earned from an Internet retail business, which he also operated in violation of IRS rules; and claimed false dependents, all on federal tax returns he prepared and filed on his own behalf.
As part of his unauthorized tax preparation business, Brewer also engaged in a multi-year scheme in which he prepared and filed false tax returns for others. Brewer listed false dependents and false deductions on these returns, among other materially false information, in order to fraudulently cause his clients to receive a refund to which they were otherwise not entitled or fraudulently inflate their refunds. In doing so, Brewer listed the names and social security numbers of various individuals on those tax returns as dependents without those individuals’ authorization, including those of two minor children. As part of this scheme, Brewer also diverted a portion of those clients’ refunds to himself, in some cases without his clients’ authorization or knowledge.
Finally, in an effort to fraudulently obtain for himself a tax credit for first time homebuyers, Brewer lied under oath about his residency when he testified in a matter in the United States Tax Court.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Marisa Seifan and Moira Kim Penza are in charge of the prosecution.
The Defendant:
JAMES C. BREWER
Age: 40
Staten Island, New York
E.D.N.Y. Docket No. 15 CR 209 (PKC)