Eastern District of New York
Press releases recorded for this federal judicial district.
New York City Corrections Officer and 11 Additional Members and Associates of A Queens-Based Sect of the Bloods Gang Arrested on Narcotics Conspiracy ChargesRead the Press Release
Earlier today, a total of 12 members and associates of the Bloods street gang located in Queens, New York, including Covel Duncan, a New York City Corrections Officer at Riker’s Island, were arrested on narcotics trafficking charges. The defendants’ initial appearances are scheduled this afternoon before United States Magistrate Judge James Orenstein at the federal courthouse in Brooklyn.[1]
The charges and arrests were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Raymond R. Parmer, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI), and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Agency, New York.
As charged in the criminal complaint, between November 2014 and June 2015, the defendants Kamel Lambus, Stanley Fuller, Shavona Trappier, Shakeem Powell, Tyran Trotter, Henry Curry, Sean Brabram, Tiheem Crocker, Scott Williams, Earl Davis, Michael Scott, and Andre Mitchell, and others, conspired to distribute over a kilogram of heroin. Lambus and Fuller are allegedly leaders of a sect of the Bloods gang called the Paper Chasing Goons (PCG) or POV City, and used a network of distributors, some of whom are also members of PCG/POV City, to sell hundreds of glassines of heroin daily to customers throughout Queens and elsewhere. The glassines were marked with labels including “Sweet Dreams,” “First Take,” “Pepsi,” and “Coca Cola.” Duncan was charged separately in a criminal complaint charging her with possessing heroin with intent to distribute.
The gang had several stash houses used to store narcotics and the proceeds of narcotics sales. This morning, search warrants were executed at three stash houses in Queens located at 119-26 165th Street, 107-53 Watson Place, and Lambus’s residence. Law enforcement agents seized 40 glassines of heroin labeled “Coca Cola” and “Sweet Dreams” and over $5,000 in U.S. currency from Lambus’s residence. Additionally, law enforcement agents seized approximately 500 glassines of heroin bearing the labels “Coca Cola” and “Sweet Dreams” and approximately $7,000 in U.S. currency from the residence where Trappier and Duncan were arrested, and 250 glassines of heroin bearing the label “Coca Cola” from the residence where Mitchell was arrested.
During the investigation, law enforcement intercepted numerous telephone communications which revealed that Lambus and Fuller sent samples of heroin to their distributors to test for quality, and supplied the members of their gang, as well as other narcotics traffickers, with heroin on a daily basis.
Acting United States Attorney Currie stated, “Members of street gangs who distribute heroin are on notice that they will be held strictly accountable for their actions. We and our partners in law enforcement are committed to ending the scourge of illegal narcotics in our communities.” Mr. Currie expressed his grateful appreciation to the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the New York City Police Department, the Internal Revenue Service, and the New York State Department of Corrections and Supervision for their assistance in the investigation.
“Today’s arrests help dismantle a violent gang responsible for flooding the streets of New York with heroin,” said HSI Special Agent-in-Charge Parmer. “Working alongside our law enforcement partners, HSI will continue to use its unique authorities to ensure gangs and their members are brought to justice.”
DEA Special Agent-in-Charge Hunt stated, “These alleged gang members were distributing heroin with brand names such as “Sweet Dreams,” “Pepsi,” and “Coca Cola” – three things that appeal to America’s youth. The CDC reported the heroin death rate has quadrupled in a decade, and today’s collaborative efforts demonstrate law enforcement’s commitment to arresting those responsible for trafficking heroin which ultimately opens the door to increased heroin abuse, addiction, crime, and violence.”
“This investigation is an example of multiple law enforcement agencies working together toward a common objective, which is to protect our communities from individuals who would compromise the safety and well-being of our neighborhoods through the trafficking of illegal narcotics,” said Police Commissioner William J. Bratton. “I would like to thank the NYPD Gang Squad Queens and our many law enforcement partners whose work in this investigation resulted in the charges and arrests of these alleged gang members.”
ATF Special Agent in Charge Delano A. Reid states: "The ATF is grateful to the United States Attorneys Office as well as our law enforcement partners for their assistance and investigative expertise in dismantling what once was allegedly a structured and organized heroin ring. The arrests of these alleged gang members will hopefully create a ripple effect inside their ranks and remind them that when they decide to engage in narcotics trafficking, the full weight of law enforcement will be there at every turn. "
IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said, “IRS Criminal Investigation is proud to work with our partner law enforcement agencies in the investigation of crimes that directly impact our communities, including narcotics, illegal firearms, and gang activities. We are always ready to apply our expertise to the financial aspects of investigations of criminal organizations.”
If convicted, the defendants each face a maximum sentence of life imprisonment and a $10 million fine.[2]
The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Kenji Price, Lauren Elbert, and Michael Robotti are in charge of the prosecution.
The Defendants:
Name: COVEL DUNCAN
Age: 30
Residence: Queens, New YorkName: KAMEL LAMBUS
Age: 32
Residence: Queens, New YorkName: STANLEY FULLER
Age: 40
Residence: Queens, New YorkName: SHAVONA TRAPPIER
Age: 25
Residence: Queens, New YorkName: SHAKEEM POWELL
Age: 26
Residence: Queens, New YorkName: TYRAN TROTTER
Age: 20
Residence: Queens, New YorkName: HENRY CURRY
Age: 26
Residence: Queens, New YorkName: SEAN BRABRAM
Age: 46
Residence: Queens, New YorkName: TIHEEM CROCKER
Age: 40
Residence: Queens, New YorkName: SCOTT WILLIAMS
Age: 30
Residence: Queens, New YorkName: EARL DAVIS
Age: 50
Residence: Queens, New YorkName: MICHAEL SCOTT
Age: 45
Residence: Queens, New YorkName: ANDRE MITCHELL
Age: 28
Residence: Queens, New York
[1] The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.
[2] Duncan faces a maximum term of imprisonment of 20 years and no minimum term of imprisonment.
Executives of Panamanian Corporation and Aviation Company Arrested in Multi-Million Dollar Money Laundering StingRead the Press Release
Michael J. Dodd, also known as “Michael Stanley,” Kenneth Ardell Landgaard, and James Robert Shipman, Jr. were arrested today on charges that they conspired to launder over two million dollars of proceeds from what they thought to be a penny stock fraud scheme. The money was, in fact, provided to the defendants by an undercover law enforcement agent who posed as a criminal stock promoter as part of a sting operation. Defendants Landgaard and Shipman were arrested after flying to an airport in New York on a private jet to take possession of $2,200,000 in cash they had agreed to launder through banks in Panama and Belize. The defendants had already laundered $400,000 in cash previously provided by the undercover agent. Dodd was arrested a few hours later at a Manhattan restaurant where he expected to meet with the undercover agent.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, these defendants agreed to transport millions of dollars of stock fraud proceeds on private jets to Panama and then engage in a series of financial transactions. They did so with the intention of laundering the money, evading federal tax and banking laws, and lining their own pockets,” stated Acting United States Attorney Currie. “Today’s arrests have grounded these defendants, and will serve as a warning to others who are similarly inclined. We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.”
“As alleged, the defendants willingly entered a scheme to transport more than $2 million of stock fraud profits out of the United States using private jets and financial transactions in exchange for a 13 to 15 percent fee. The FBI is committed to working with our law enforcement partners to investigate and bring those who seek to evade federal tax and banking laws to justice.” stated FBI Assistant Director-in-Charge Rodriguez.
“Conspiring to launder millions of dollars on a private jet may have seemed like a great idea to evade law enforcement but we have proven this method does not fly,” said HSI New York Special Agent-in-Charge Parmer. “HSI and its partners will continue to investigate and prosecute those who attempt to conceal and launder illicit proceeds, no matter what the method.”
“Although it is not primarily thought about from this perspective, consider how money laundering erodes our nation's tax system,” said IRS-CI Special Agent-in-Charge Kitchen. “This is why money laundering investigations are important to the Internal Revenue Service and why we work with our law enforcement partners to dissect all types of complex money laundering schemes, including those with international ramifications.”
According to the complaint unsealed this afternoon and other documents filed in the Eastern District of New York, the defendants used private jets and off-shore bank accounts in Panama to launder cash for an undercover FBI agent who posed as a corrupt stock promoter. In his dealings with the defendants, the undercover agent represented himself to be a middleman working with corrupt stock brokers who artificially inflated prices for worthless stock in exchange for high commissions. In exchange for a 13% to 15% fee, the defendants agreed to launder $2,600,000. Immediately prior to their arrest earlier today, Landgaard and Shipman accepted $2,200,000 from the undercover agent, which they believed to be proceeds from the penny stock fraud. In conversations which were recorded by the FBI, the defendants explained in detail the measures they took to avoid detection of their money laundering scheme by law enforcement. Dodd insisted that the undercover agent download and use encryption software for online chats and voice communications. Landgaard insisted that the cash be provided in expensive Louis Vuitton duffel bags, and Shipman explained their reasoning: “You know why they do that? Because cops can’t get the authority to buy a Louis Vuitton bag, it’s too expensive … they can’t get the authorization to buy a Louis Vuitton bag. And if you think about it, it’s very smart.” Landgaard and Shipman also insisted that the undercover agent buy a “throwaway” or “burner” phone on which to speak to them about the scheme.
The defendants are scheduled to be arraigned on Thursday, July 9, 2015 before a United States Magistrate Judge 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. If convicted, the men face a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Jack Dennehy is in charge of the prosecution. Assistant United States Attorneys Brian Morris and Karin Orenstein of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendants:
Name: Michael Dodd, also known as "Michael Stanley"
Age: 65
Panama City, Panama
Name: Kenneth Landgaard
Age: 46
Alexandria, Minnesota
Name: James Robert Shipman, Jr.
Age: 64
Hollywood, Florida
Owner of Long Island Advertising Business Pleads Guilty to Multi-Million Dollar Mail Fraud SchemeRead the Press Release
Earlier today, Matthew Rosencrans was arraigned on a felony information and pled guilty at the federal courthouse in Central Islip, New York, to committing a multi-million dollar mail fraud scheme in connection with his ownership and operation of Community Coupons, an advertising business located in Glen Cove, New York.
The charge and plea were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Postal Inspector in Charge, New York Division, U.S. Postal Inspection Service.
Community Coupons printed coupon booklets and flyers that advertised for a fee its customers’ special promotions and discounted services and mailed those materials through the United States Postal Service at a discounted bulk mail rate via a permit. From approximately July 2010 to August 2013, Rosencrans conducted a scheme to defraud the Postal Service by submitting over 15 million pieces of bulk mail for distribution throughout the New York metropolitan area, although he only paid for delivery of approximately 3.4 million pieces of bulk mail. The fraud deprived the Postal Service of over $2,000,000 in payments that should have been paid by Community Coupons.
“In these financially difficult times for the Postal Service, the defendant failed to pay millions of dollars owed for services rendered,” stated Acting United States Attorney Currie. “Although he was in the business of providing his customers’ discounted services to consumers, Rosencrans cannot discount the law for his own financial gain.” Postal Inspector in Charge Bartlett stated, “A theft from the Postal Service is a theft from the American Public. Postal Inspectors will vigorously pursue and bring to justice anyone who cheats the Postal Service of revenue.”
Today’s plea took place before United States District Judge Joanna Seybert. When sentenced, Rosencrans faces up to 20 years in prison, as well as criminal forfeiture and restitution payable to the United States Postal Service in the amount of $2,101,278.33.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles N. Rose is in charge of the prosecution.
The Defendant:
MATTHEW ROSENCRANS
Age: 50
Glen Cove, New York
E.D.N.Y. Docket No. 15-CR-315 (JS)
Cybercriminal Sentenced to 50 Months for His Role in Hacking CampaignRead the Press Release
Earlier today at the federal courthouse in Brooklyn, Qendrim Dobruna, a member of an international cybercrime syndicate, was sentenced to 50 months’ imprisonment and restitution in the amount of $14 million for his role in hacking into the computer systems of U.S.-based financial institutions, stealing prepaid debit card data, and eliminating withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals in excess of $14 million in a single weekend. The sentencing was held before U.S. District Judge I. Leo Glasser. Dobruna pleaded guilty to bank fraud on July 11, 2014.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Robert J. Sica, Special Agent in Charge, United States Secret Service, New York Field Office.
“The defendants and his co-conspirators participated in a massive 21st century heist that stretched around the globe. Using sophisticated methods, the organization reached into the computer systems of American-based corporations and transmitted illegally obtained private financial information to confederates in 18 different countries who stole millions of dollars from hundreds of ATMs in a matter of hours,” stated Acting United States Attorney Currie. “Today’s sentence serves as a warning to cybercriminals around the world that law enforcement is committed to solving these cybercrimes, no matter how sophisticated, and bringing the perpetrators to justice, wherever they may be found.”
“This operation demonstrates that combining international law enforcement resources sends a strong message to criminals, that there is no such thing as anonymity in the cyber world. Secret Service agents utilize state-of-the-art investigative techniques to identify and pursue cyber criminals around the world. The adverse impact this individual and other transnational organized criminal groups have on our nation's financial infrastructure is significant and should not be underestimated," said Secret Service Special Agent in Charge Robert J. Sica.”
Between approximately February 27, 2011 and March 1, 2011, the defendant and his co-conspirators conducted an “Unlimited Operation,” which begins when the cybercrime organization hacks into the computer systems of a credit card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts. The elimination of withdrawal limits enables the hackers and their co-conspirators to withdraw unlimited amounts of cash until the operation is shut down. Next, the cybercrime organization cashes in, by distributing the hacked prepaid debit card numbers to trusted associates around the world, who then immediately withdraw cash from ATMs across the globe. At the end of an operation, when the cards are finally shut down, the casher cells launder the proceeds – often investing the operation’s proceeds in luxury goods – and kick back money to the cybercrime organization’s leaders. On February 27, 2011, hackers targeted a credit card processor that processed transactions for prepaid debit cards issued by the American Red Cross for disaster relief victims. After the hackers penetrated the credit card processor’s computer network, compromised the American Red Cross prepaid card accounts, and manipulated the balances and withdrawal limits, casher cells across the globe operated a coordinated ATM withdrawal campaign. In total, more than 15,000 ATM transactions were conducted in approximately 18 countries around the world using 21 compromised American Red Cross disaster relief prepaid cards, resulting in approximately $14 million in losses to the credit card processor and the American Red Cross.
The defendant, from his apartment in Stuttgart, Germany, participated in the cyber-attack by obtaining account information from the co-conspirators who directly hacked into the U.S.-based financial institution’s database and selling that account information to other co-conspirators over the Internet, including to an individual in Brooklyn, New York.
In announcing the guilty plea, Acting United States Attorney Currie praised the extraordinary efforts of the Secret Service in responding so rapidly to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally. Mr. Currie also thanked the American Red Cross for their cooperation with this investigation.
The government’s case is being prosecuted by Assistant United States Attorney Amir H. Toossi.
The Defendant:
QENDRIM DOBRUNA
Age: 29
Albanian National Pleads Guilty to Attempting and Conspiring to Support TerroristsRead the Press Release
Agron Hasbajrami, 31, an Albanian citizen and resident of Brooklyn, New York, pleaded guilty today to attempting and conspiring to provide material support to terrorists before U.S. District Judge John Gleeson of the Eastern District of New York. At sentencing on July 30, 2015, the defendant faces up to 20 years in prison.
The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department.
As part of the plea, Hasbajrami agreed to be deported from the United States at the conclusion of his sentence, and the government agreed to allow the defendant to preserve his right to challenge on appeal the lawfulness of surveillance obtained or derived from the FISA Amendments Act of 2008 (FAA), a question of first impression in the Second Circuit. The U.S. District Court of the Eastern District of New York ruled in February 2015 that the fruits of FISA surveillance in this case were admissible.
“This case, like many others before it, has shown that the application of lawful surveillance can allow the United States government to detect and disrupt a terrorist in the United States,” said Acting U.S. Attorney Currie. “The defendant’s plea today leaves no question as to his role in a very serious terrorism offense, and if he chooses to bring an appeal, we are confident we will prevail in the appellate court as well.”
“Today’s guilty plea is the result of a thorough investigation conducted by the New York FBI’s Joint Terrorism Task Force. I want to thank all of the agencies that participate on the FBI JTTF. Together we are able to use our combined legal and investigative tools to quickly identify and disrupt threats to our community,” stated FBI Assistant Director-in-Charge Rodriguez.
“This case is another example that shows that when people in the New York area conspire with, attempt to join, or fund a terrorist organization, even in the Tribal Area of Pakistan, they will be uncovered by the agents and detectives of the JTTF, and they will face the full consequences of the law,” said Police Commissioner Bratton.
According to court documents and statements made in court today, in September 2011, Hasbajrami attempted to travel to the Federally Administered Tribal Areas of Pakistan (the FATA) for the purpose of joining a radical jihadist insurgent group. In addition, he sent over $1,000 in multiple wire transfers abroad to support terrorist activities in Pakistan and Afghanistan. In pursuing his goal of fighting jihad, the defendant exchanged email messages with an individual in Pakistan who told him that he was a member of an armed group that had murdered American soldiers and kidnapped Westerners. In one email message, Hasbajrami stated that it was difficult to ask for money from fellow Muslims because they became apprehensive “when they hear it is for jihad.” In another email, he stated that he wished to travel abroad to “marry with the girls in paradise,” using jihadist rhetoric to describe a reference to his desire to die as a martyr himself.
On Sept. 5, 2011, Hasbajrami purchased a one-way airline ticket to travel to Turkey the following day. Based on Hasbajrami’s email communications, he intended to travel from Turkey to the FATA to join a jihadist group. On Sept. 6, 2011, the defendant was arrested at John F. Kennedy International Airport. At the time of his arrest, he was carrying a tent, boots and cold weather gear. A search of the defendant’s residence revealed, among other items, a note reading “Do not wait for invasion, the time is martyrdom time.”
Upon receiving notice that evidence in his case had been obtained or derived from surveillance conducted pursuant to the FAA, Hasbajrami was permitted by the District Court to withdraw his prior plea, and he thereafter moved to suppress the fruits of such evidence, arguing that certain provisions of the act were unconstitutional. On Feb. 20, 2015, the District Court denied the defendant’s motion, ruling that the fruits of the FAA surveillance, including the defendant’s post-arrest statements, were admissible. Under the terms of the plea agreement, Hasbajrami preserved his right to appeal the District Court’s decision on his suppression motion to the Second Circuit Court of Appeals.
Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in thanking the federal, state and local law enforcement agencies who participate in the FBI’s Joint Terrorism Task Force in New York.
The government’s case is being prosecuted by Assistant U.S. Attorneys Seth D. DuCharme, Saritha Komatireddy, Peter Baldwin and Matthew Amatruda of the Eastern District of New York, and Trial Attorney Danya Atiyeh of the National Security Division’s Counterterrorism Section.
The Defendant
AGRON HASBAJRAMI
Age: 31
Docket No.: 11 CR 623 (S2) (JG)
Leaders of Brownsville, Brooklyn-Based Gang Convicted of Racketeering, Murder in Aid of Racketeering, and Other ChargesRead the Press Release
Earlier today, following approximately eight weeks of trial, a federal jury in Brooklyn, New York, returned guilty verdicts against Paul Rivera and Michael Garrett on charges of racketeering, murder, sex trafficking, narcotics trafficking, money laundering, and witness tampering. These charges arose out of the defendants’ participation in and leadership of a gang known as “Together Forever” or the rap group “TF Mafia” (also referred to as “TF”) that for many years engaged in narcotics trafficking, sex trafficking, gang activity, and related violence in areas including the Brownsville neighborhood of Brooklyn, New York, an area victimized by a high rate of gang and drug related violent crime. When sentenced by United States District Judge Kiyo A. Matsumoto, both defendants face a mandatory minimum sentence of life imprisonment on the most serious charge.
The verdicts were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“With this verdict, the jury sent a message that our community will not stand for those who prey upon young, vulnerable girls for their own financial gain and supply our neighborhoods with dangerous narcotics,” stated Acting United States Attorney Currie. “We also hope that this verdict brings some closure to the family of Robert Barber, who was gunned down by these defendants in their effort to protect their illegal enterprise.” Mr. Currie extended his thanks to the Internal Revenue Service – Criminal Investigation, New York City Police Department, the Pennsylvania State Police, the New Jersey State Police, and the United States Attorney’s Office for the Middle District of Pennsylvania.
As proven at trial, the defendants’ were leaders of TF Mafia, a Brooklyn-based rap group, and Together Forever, a group that has operated in various neighborhoods of Brooklyn since the 1980s. The gang had members engaged in criminal activity in Brooklyn as well as in other parts of New York and in Pennsylvania. In connection with their leadership of TF, Rivera and Garrett plotted to kill — and killed — Robert Barber in the summer of 2011 because they perceived Barber, who was a member of a rival gang, as a threat to TF’s control of narcotics sales in Brownsville. On the evening of August 22, 2011, Rivera observed Barber walking outside the tattoo shop run by Rivera, which was located at 361 Sutter Avenue in Brownsville. Rivera took a firearm that had been supplied by Garrett, stood in the entrance to the tattoo shop, and shot Barber once, killing him. Garrett subsequently provided Rivera with payment, in the form of money and heroin, for the murder.
The jury also found the defendants guilty of interstate prostitution and sex trafficking, including sex trafficking by force, fraud, or coercion, and sex trafficking of one or more minors, which activities were committed as part of TF’s illegal activities. At trial, two victims testified about their involvement with TF, including one victim who became involved with TF when she was 14 years old, and another who testified that she began working as a prostitute for the defendants shortly after she met them, which, as proven at trial, was when she was 15 years old.
The jury found also found the defendants guilty of narcotics trafficking conspiracy, involving cocaine base, heroin, cocaine, and marijuana, and firearms offenses, including use of a firearm to cause the death of Robert Barber. Garrett was also convicted on money laundering, and Rivera was convicted of witness tampering and attempted obstruction of justice related to his efforts to convince a witness to cease cooperating with the government.
The government’s case is being prosecuted by Assistant United States Attorneys Taryn Merkl, Alixandra Smith, and Michael Robotti.
The Defendants:
PAUL RIVERA
Age: 48
Brooklyn, NY
MICHAEL GARRETT
Age: 40
Brooklyn, NY
E.D.N.Y. Docket No. 13-149 (KAM)
Long Island Doctor Pleads Guilty to Health Care Fraud and Obstruction of Medicare AuditRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Melvin Cwibeker, a doctor of chiropractic medicine from Nassau County, New York, pled guilty to healthcare fraud and obstruction of a federal audit, and he agreed to pay restitution and a $500,000 forfeiture.
The plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Scott Lampert, Special Agent-in-Charge, Health of Human Services, Office of Inspector General (HHS-OIG), New York Region.
“Dr. Cwibeker violated his oath and the law by hiring individuals to create fictitious patient records which were submitted to Medicare to obstruct its audit of his chiropractic billings,” stated Acting United States Attorney Currie. “Health care providers who falsely bill for care are on notice that they will face serious consequences.”
FBI Assistant Director-in-Charge Rodriguez stated, “Financial crimes, like the ones allegedly committed by Dr. Cwibeker when he fictitiously billed Medicare for treatments not provided, may appear victimless. However, these crimes impact society, through rising costs and diminishing services provided. By allegedly profiting over $4.3 million through illegitimate claims, Dr. Cwibeker put greed above his license and patient care.”
“Dr. Cwibeker engaged in a greed-fueled fraud scheme that undermined our health care system and the vulnerable individuals it serves,” said HHS-OIG Special Agent-in-Charge Lampert. “HHS-OIG, together with our law enforcement partners, will continue to vigorously pursue those who steal from government health programs for personal gain.”
Between 2006 and 2012, Dr. Cwibeker and his co-conspirators fraudulently billed Medicare more than $7 million for treatments never given to residents of assisted living facilities, and Dr. Cwibeker received over $4.5 million from such billings. On one day alone, New Year’s Eve in 2006, Dr. Cwibeker billed Medicare for chiropractic treatments he purportedly gave to 133 patients at various assisted living facilities. Between 2009 and 2012, Dr. Cwibeker employed three other chiropractors to provide chiropractic care to residents of adult homes and assisted living facilities in Brooklyn, Queens, and Westchester – and trained those chiropractors not to provide the patient care that was required under Medicare. Those three chiropractors were indicted with Dr. Cwibeker and previously pled guilty to health care fraud charges. Each time Dr. Cwibeker was audited by Medicare, he hired others to create fictitious patient records to support his earlier billings and then then sent the fictitious records to Medicare.
Dr. Cwibeker is scheduled to be sentenced on November 6, 2015 before United States District Judge Joanna Seybert, and he faces a maximum of 15 years in prison together with restitution, a forfeiture of $500,000, and potential fines of twice the gross gain from his scheme.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly and Senior Investigation Counsel Burton T. Ryan, Jr. are in charge of the prosecution.
The Defendant:
Name: MELVIN CWIBEKER
Age: 60
Residence: Cedarhurst, New York
E.D.N.Y. Docket No.: 12-CR-632 (JS)
Alleged Mastermind of Global Cybercrime Campaigns Extradited to the United States to Face ChargesRead the Press Release
Earlier today, an indictment was unsealed in a Brooklyn, New York federal court charging Ercan Findikoglu, a Turkish citizen also known as “Segate,” with organizing three worldwide cyberattacks that inflicted $55 million in losses on the global financial system in a matter of hours. The defendant’s organization used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data and eliminate withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The charges announced today follow charges previously brought against other members of the organization, including members of a New York City cell charged in May 2013 in connection with their roles in two of the attacks. The defendant is scheduled to be arraigned at 11 a.m. today before U.S. Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Acting U.S. Attorney Kelly T. Currie for the Eastern District of New York and Special Agent in Charge Robert J. Sica of the U.S. Secret Service New York Field Office.
“Cybercriminals, and especially hackers as this defendant is alleged to be, wreak havoc and steal millions of dollars by breaching our information systems and networks with clicks and keystrokes from the perceived anonymity of their computers at locations all over the globe,” said Acting U.S. Attorney Currie. “However, in doing so they leave traces in digital space that allow law enforcement to identify, apprehend and ultimately hold them accountable for their crimes.”
Acting U.S. Attorney Currie praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions and thanked the authorities in Germany for their assistance in effecting the defendant’s extradition.
“For the past twenty years, Special Agents assigned to the Secret Service New York Electronic Crimes Task Force have worked closely with our law enforcement partners, the business community and our partners in academia to pursue cybercriminals who have taken aim at our homeland’s financial infrastructure. Today, we recognize our international law enforcement partners who were instrumental in the extradition of Ercan Findikoglu,” said Special Agent in Charge Sica. “The significance of this case cannot be understated as Findikoglu is the alleged mastermind behind the global ATM cashout operations which plagued the financial services sector from 2010 until his capture in late 2013. The Secret Service and its international partners remain committed to solving complex financial crimes as well as tracking down and bringing to justice significant cybercriminals who pose a threat to payment systems worldwide.”
As detailed in the indictment and other court filings, Findikoglu gained unauthorized access to, or “hacked,” the computer networks of at least three payment processors for various types of credit and debit card transactions (the Victim Processors). He then targeted Visa and MasterCard prepaid debit cards serviced by the Victim Processors, breached the security protocols that enforce withdrawal limits on those cards, and then dramatically increased the account balances on those cards to allow withdrawals far in excess of the legitimate card balances.
Findikoglu allegedly managed a trusted group of co-conspirators who disseminated the stolen debit card information to leaders of “cashing crews” around the world; they, in turn, used the stolen information to conduct tens of thousands of fraudulent ATM withdrawals. During these operations, Findikoglu allegedly maintained access to the computer networks of the Victim Processors in order to monitor the withdrawals. These coordinated, calculated cyberattacks are known in the cyber-underworld as “Unlimited Operations,” because the manipulation of withdrawal limits enables the withdrawal of literally unlimited amounts of cash until the operation is shut down.
In one operation on Feb. 27 and 28, 2011, cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in at least 18 countries. In a second operation on Dec. 22, 2012, cashing crews withdrew approximately $5 million through more than 4,500 ATM in approximately 20 countries. In a third operation on Feb. 19 and 20, 2013, cashing cells in 24 countries executed approximately 36,000 transactions and withdrew approximately $40 million from ATMs. During this third operation, in New York City alone, cashing crews withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals over the course of less than 11 hours.
Once the funds were extracted, Findikoglu and high-ranking members of the conspiracy allegedly received the proceeds from other co-conspirators in various forms, including by wire transfer, electronic currency and the personal delivery of U.S. and foreign currency. On one occasion, members of a New York City cashing crew transported approximately $100,000 to co-conspirators in Romania. Findikoglu directed a co-conspirator to destroy evidence of their criminal activities after learning that a member of a New York cashing crew had been arrested.
On Dec. 18, 2013, Findikoglu was arrested in Frankfurt, Germany, and yesterday was extradited to the United States.
The government’s case is being handled by the U.S. Attorney’s Office of the Eastern District of New York’s National Security & Cybercrime Section. Assistant U.S. Attorneys Hilary Jager, Douglas M. Pravda, Richard M. Tucker and Saritha Komatireddy are in charge of the prosecution. Assistant U.S. Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. Additional assistance was provided by Marcus Busch and Cristina M. Posa of the Justice Department’s Office of International Affairs.
Alleged Mastermind of Global Cybercrime Campaigns Extradited to the United States to Face ChargesRead the Press Release
Earlier today, an indictment was unsealed in Brooklyn federal court charging Ercan Findikoglu, a Turkish citizen also known as “Segate,” with organizing three worldwide cyberattacks that inflicted $55 million in losses on the global financial system in a matter of hours.1 The defendant’s organization used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data, and eliminate withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The charges announced today follow charges previously brought against other members of the organization, including members of a New York City cell charged in May 2013 in connection with their roles in two of the attacks. The defendant is scheduled to be arraigned at 11 a.m. today before United States Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Robert J. Sica, Special Agent in Charge, United States Secret Service, New York Field Office.
“Cybercriminals, and especially hackers as this defendant is alleged to be, wreak havoc and steal millions of dollars by breaching our information systems and networks with clicks and keystrokes from the perceived anonymity of their computers at locations all over the globe. However, in doing so they leave traces in digital space that allow law enforcement to identify, apprehend, and ultimately hold them accountable for their crimes,” stated Acting United States Attorney Currie. Mr. Currie praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions and thanked the authorities in Germany for their assistance in effecting the defendant’s extradition.
“For the past twenty years, Special Agents assigned to the Secret Service New York Electronic Crimes Task Force have worked closely with our law enforcement partners, the business community, and our partners in academia to pursue cybercriminals who have taken aim at our homeland’s financial infrastructure. Today, we recognize our international law enforcement partners who were instrumental in the extradition of Ercan Findikoglu,” said Secret Service Special Agent in Charge Sica. “The significance of this case cannot be understated as Findikoglu is the alleged mastermind behind the global ATM cashout operations which plagued the financial services sector from 2010 until his capture in late 2013. The Secret Service and its international partners remain committed to solving complex financial crimes as well as tracking down and bringing to justice significant cybercriminals who pose a threat to payment systems worldwide.”
As detailed in the indictment and other court filings, Findikoglu gained unauthorized access to, or “hacked,” the computer networks of at least three payment processors for various types of credit and debit card transactions (the “Victim Processors”). He then targeted Visa and MasterCard prepaid debit cards serviced by the Victim Processors, breached the security protocols that enforce withdrawal limits on those cards, and then dramatically increased the account balances on those cards to allow withdrawals far in excess of the legitimate card balances.
Findikoglu allegedly managed a trusted group of co-conspirators who disseminated the stolen debit card information to leaders of “cashing crews” around the world; they, in turn, used the stolen information to conduct tens of thousands of fraudulent ATM withdrawals. During these operations, Findikoglu allegedly maintained access to the computer networks of the Victim Processors in order to monitor the withdrawals. These coordinated, calculated cyberattacks are known in the cyber-underworld as “Unlimited Operations” because the manipulation of withdrawal limits enables the withdrawal of literally unlimited amounts of cash until the operation is shut down.
In one operation on February 27 and 28, 2011, cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in at least 18 countries. In a second operation on December 22, 2012, cashing crews withdrew approximately $5 million through more than 4,500 ATM in approximately 20 countries. In a third operation on February 19 and 20, 2013, cashing cells in 24 countries executed approximately 36,000 transactions and withdrew approximately $40 million from ATMs. During this third operation, in New York City alone, cashing crews withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals over the course of less than 11 hours.
Once the funds were extracted, Findikoglu and high-ranking members of the conspiracy allegedly received the proceeds from other co-conspirators in various forms, including by wire transfer, electronic currency, and the personal delivery of United States and foreign currency. On one occasion, members of a New York City cashing crew transported approximately $100,000 to co-conspirators in Romania. Findikoglu directed a co-conspirator to destroy evidence of their criminal activities after learning that a member of a New York cashing crew had been arrested.
On December 18, 2013, Findikoglu was arrested in Frankfurt, Germany, and yesterday was extradited to the United States.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Hilary Jager, Douglas M. Pravda, Richard M. Tucker, and Saritha Komatireddy are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. Additional assistance was provided by Marcus Busch and Cristina M. Posa of the Justice Department’s Office of International Affairs.
The Defendant:
ERCAN FINDIKOGLU
Alias: Segate
Age: 33
Nationality: Turkish
E.D.N.Y. Docket No. 13-CR-440 (KAM)
__________________________________________________________
1. The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Seventeen Alleged Leaders and Associates of Clan Usuga Indicted in Brooklyn and Miami as Part of Coordinated Strike Against Colombia’s Largest and Most Influential Drug Trafficking and Armed Bacrim Criminal GroupRead the Press Release
BOGOTA, COLOMBIA --Wifredo A. Ferrer, United States Attorney for the Southern District of Florida (SDFL), Kelly T. Currie, Acting United States Attorney for the Eastern District of New York (EDNY) and Jay Bergman, Regional Director of the Andean Region for the U.S. Drug Enforcement Administration (DEA), announced today the unsealing of five indictments in U.S. federal courts in Brooklyn, New York and Miami, Florida charging 17 alleged leaders and associates of Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños). The alleged leaders and other high-ranking members of CLAN USUGA are charged with operating continuing criminal enterprises, participating in international cocaine trafficking conspiracies, and using firearms in furtherance of drug trafficking crimes. CLAN USUGA and many of its principal leaders have been previously designated by the President of the United States and the U.S. Department of the Treasury, Office of Foreign Assets Control as specially designated narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act. The U.S. Department of State has posted a $5 million reward for information leading to the arrest and/or conviction of alleged CLAN USUGA principal leader Dairo Antonio Usuga David, also known as Otoniel.
“The indictments announced today are the result of a sweeping national and international effort to stem the flow of drugs across the world and into our communities,” said Kelly T. Currie, Acting U.S. Attorney for the Eastern District of New York. “We stand united with our partners in Colombia in our unwavering commitment to root out the leaders of drug trafficking criminal enterprises wherever they may be found.”
“The cases referenced today demonstrate that the U.S. government, in collaboration with our international law enforcement partners, continues to successfully combat leaders and associates of BACRIM criminal enterprises that seek to supply narcotics to the United States,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Together, the U.S. Attorney’s Offices and the Colombian authorities strive to systematically dismantle one BACRIM structure after another and eliminate the threat they pose to our communities.”
Mr. Currie and Mr. Ferrer extended their grateful appreciation to the Drug Enforcement Administration’s New York Field Division, Miami Field Division, and the Bogota Country Office as well as the Department of Homeland Security, Homeland Security Investigations (HSI) New York El Dorado Task Force, and the Colombian National Police, the agencies responsible for leading the investigations. Mr. Currie and Mr. Ferrer also expressed their gratitude for the invaluable assistance provided by the Colombian Fiscalia General and the U.S. Department of Justice Office of International Affairs.
“These indictments are the culmination of years of work and far too often heartfelt sacrifice by the brave men and women of the Colombian National Police and the Office of the Prosecutor General of Colombia,” said DEA Regional Director Jay Bergman. “These indictments represent the United States’ steadfast bilateral commitment to conclusively dismantle what is the largest and arguably the last of the nationally structured criminal bands in Colombia.”
“Today’s indictments illustrate our commitment, along with our international law enforcement partners to disrupt a criminal network responsible for smuggling tons of cocaine into the United States,” said Luis Sierra, country attaché for HSI in Colombia. “HSI will continue to use its unique customs authorities to attack and dismantle these types of organizations, and will aggressively pursue leads, regardless of where that information may lead us.”
Six of the CLAN USUGA leaders were charged in both Brooklyn and Miami. Dairo Antonio Usuga-David, also known as “Otoniel,” “Mao,” “Gallo,” and “Mauricio-Gallo,” is alleged to be the principal leader of CLAN USUGA. Roberto Vargas Gutierrez, also known as “Gavilan,” Carlos Alberto Moreno Turberquia, also known as “Nicolas,” Aristides Manuel Mesa Paez, also known as “El Indio,” and Cesar Daniel Anaya Martinez, also known as “Tierra,” are alleged commanders of CLAN USUGA responsible for collecting drug taxes, managing armed combatants, and maintaining control over specific territorial areas within Colombia. Also charged in Brooklyn and Miami is an alleged manager of CLAN USUGA, Ramiro Caro Pineda, also known as “Nolasco,” who was in charge of collecting drug taxes, coordinating drug shipments, and maintaining control over airstrips and ports on the coast of Colombia.
The Brooklyn indictments also charge seven other cartel leaders, including Daniel Rendon-Herrera, also known as “Don Mario,” the original founder and prior leader of CLAN USUGA; Luis Orlando Padierna Pena, also known as “Inglaterra,” and Jobanis de Jesus Avila Villadiego, also known as “Chiquito” and “Chiquito Malo,” commanders of CLAN USUGA; and Jhoni Alberto Grajales, also known as “Guajiro,” Orlando Gutierrez-Rendon, also known as “Negro Orlando,” Gustavo Palomino Araujo, also known as “Camilo,” and Eduard Fernando Cardoza-Giraldo, also known as “Boliqueso” – alleged leaders of drug collections offices and paramilitary armed groups aligned with CLAN USUGA.
A Miami indictment unsealed today, United States v. Dairo Antonio Usuga-David, et. al., 15 CR 20403-WPD, charges Dairo Antonio Usuga-David, also known as “Otoniel,” “Mao,” and “Mauricio,” Jairo De Jesus Durango Restrepo, also known as “Gua Gua,” Roberto Vargas Gutierrez, also known as “Gavilan,” Aristides Manuel Mesa Paez, also known as “El Indio,” Alverio Feo Alvarado, also known as “Benevides,” Oscar David Pulgarin-Ganan, also known as “Nino” and “Coroso,” Ramiro Caro-Pineda, also known as “Nolasco” and “Hugo,” Cesar Daniel Anaya Martinez, also known as “Tierra,” and Eduardo Luis Vargas Gutierrez, also known as “Pipon,” with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the defendants are charged with the distribution from as early as 2002 through June 2015, in Colombia, Venezuela, Ecuador, Guatemala, Panama, Honduras, Costa Rica, Nicaragua, Mexico, and elsewhere.
According to a previously unsealed superseding indictment out of Miami, United States v. Lopez Londono, et. al., 10 CR 20763 – Lenard (DE 9), beginning around October 2006 through February 10, 2012, defendants Henry De Jesus Lopez Londono, also known as “Mi Sangre,” “Salvador,” “Carlos Mario,” “Brother,” “Krackin,” and “Federico,” Jhon Fernando Giraldo Usuga, also known as “Simon,” and “Revenlino,” Arley Usuga Torres, also known as “07,” “Siete,” and “Samuel,” Jose Carlos Londono Robledo, also known as “Tito” and “Wolverine,” Carlos Antonio Moreno Tuberquia, also known as “Nicholas,” Edison Gomez Molina, also known as “El Doctor,” and Juan Diego Giraldo Usuga, also known as “Menor” and “Camilo,” are charged with conspiring to distribute 5 kilograms or more of cocaine knowing that it would be imported into the United States. Gomez Molina, Giraldo Usuga, and Fernando Usuga pled guilty to the superseding indictment on November 26, 2013, March 20, 2014, and May 8, 2014, respectively (DE 72, 98, 110). According to their stipulated factual proffers (DE 74, 101, 112), from at least October 2006 through February 2012, Gomez Molina, Giraldo Usuga, and Fernando Usuga, along with others, used airplanes and other means of transportation to ship multiple loads of cocaine from Colombia to Central America. The loads ranged anywhere from 300 to 600 kilograms each. From there, the cocaine would be delivered to representatives of other organizations, who would take the cocaine and ultimately import it into the United States. Each defendant admitted that he was responsible for the shipment or attempted shipment of at least 150 kilograms of cocaine and knew that the cocaine would ultimately be imported into the United States. Gomez Molina was sentenced to 63 months in prison on February 4, 2014 (DE 90). Girlado Usuga was sentenced to 63 months’ imprisonment on June 9, 2014 (DE 124). Fernando Usuga was sentenced to 168 months’ imprisonment on August 29, 2014 (DE 139).
In another Miami indictment, United States v. Victor Alfonso Mosquera Perez, 14 CR 20332 – Moore/McAliley (DE 1), Victor Alfonso Mosquera Perez, also known as “Negro,” is charged with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would be imported into the United States. Specifically, the distribution allegedly occurred from as early as 2008 until approximately May 9, 2014, in Colombia, Honduras, Nicaragua, and elsewhere.
According to another indictment, United States v. Andres Fernandez Perez-Restrepo, 14 CR 20333 – Ungaro/Otazo-Reyes (DE 1), Andres Fernandez Perez-Restrepo, also known as “Anthrax,” is charged with conspiring to distribute 5 kilograms or more of cocaine, knowing that it would imported into the United States. Specifically, the defendant is alleged to have committed the distribution from at least as early as July 2012 through March 2, 2014, in Colombia, Honduras, and elsewhere.
As detailed in one of the Brooklyn indictments, United States v. Usuga-David et al., 14 CR 625 (S-2) (DLI), between June 2003 and December 2014, Usuga-David, Vargas Gutierrez, Moreno Turberquia, Padierna Pena, Avila Villadiego, Anaya Martinez, and others, as leaders of CLAN USUGA, conspired to import more than 73 metric tons of cocaine into the United States. CLAN USUGA coordinated the production, purchase, and transfer of multi-ton shipments of cocaine, as well as the receipt of shipments of cocaine in Mexico and Central America, for ultimate importation into the United States. CLAN USUGA also controlled territory in various areas in Colombia and imposed a tax on any drug traffickers operating in those territories – a set fee for every kilogram of cocaine that was manufactured, stored, or transported through areas under their control. The indictment further alleges that these defendants employed sicarios, or hitmen, who carried out acts of violence including murders, assaults, kidnappings, and assassinations to collect drug debts, maintain discipline, control and expand drug territory, and to promote and enhance the position of the organization.
In a second of the indictments unsealed in Brooklyn, United States v. Gutierrez-Rendon, 14 CR 607 (CBA), Orlando Gutierrez-Rendon, also known as “Negro Orlando,” is charged with leading the Gutierrez-Rendon drug trafficking organization, a cocaine trafficking and cocaine-debt collection organization based in Cali, Colombia that was aligned with CLAN USUGA. According to the indictment, the Gutierrez-Rendon’s organization was involved in multi-ton shipments of cocaine from Colombia to Mexico, El Salvador, and Panama for ultimate importation into the United States. The organization is also alleged to have acted as a collection agency, using violence and murder to collect payments and outstanding debts related to cocaine shipments on behalf of CLAN USUGA. In exchange for its role in collecting funds, the organization received ownership interests in the cocaine shipments. Gutierrez-Rendon is also charged with conspiring to murder rival drug traffickers, including the murder of Samir Garcia. Between January 2006 and May 2013, Gutierrez-Rendon allegedly imported more than 30,000 kilograms of cocaine into the United States.
In a third Brooklyn indictment, United States v. Palomino-Araujo, 15 CR 162 (CBA), Gustavo Palomino Araujo, also known as “Soldado,” “Zarco,” and “Camilo,” is charged with leading the Palomino Araujo an organization responsible for cocaine trafficking, cocaine-debt collection, and a paramilitary organization based in Cali, Colombia that was aligned with CLAN USUGA. The organization allegedly facilitated the transfer of multi-ton shipments of cocaine from Colombia to Mexico and Central America for importation into the United States, controlled territory in various areas in Colombia, imposed a tax on any drug traffickers operating in regions under its control, and employed sicarios, or hitmen, to collect debts. Palomino Araujo is also charged with conspiring to murder numerous drug rivals.
In the fourth Brooklyn indictment, United States v. Cardoza-Giraldo, 15 CR 305 (KAM), Eduard Fernando Cardoza-Giraldo, also known as “Boliqueso,” is charged with international cocaine trafficking in connection with his role in controlling a drug debt collection office aligned with CLAN USUGA.
In all, 25 individuals have been charged in the investigations coordinated between the U.S. Attorneys’ Offices in Brooklyn and Miami. All of the defendants face a maximum sentence of life in prison if convicted of the charges against them. Certain individuals named in indictments unsealed today have also been charged by other U.S. Attorneys’ Offices around the country. These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
The cases in the Eastern District of New York are being prosecuted by Assistant U.S. Attorneys Steven L. Tiscione, Gina M. Parlovecchio, and Margaret Lee from the Office’s International Narcotics and Money Laundering Section.
The cases in the Southern District of Florida are being prosecuted by Assistant U.S. Attorney Michael Nadler from the Office’s Narcotics Section.
An indictment is a formal charging document notifying the defendant of the charges. All persons charged in an indictment are presumed innocent until proven guilty.
BACRIM.Clan Usuga Joint PR Spanish version
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Londono, Henry De Jesus Lopez, et al Indictment
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usuga.indictment (S-2) (signed)
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Secret Owner of Offshore Brokerage Firm Arrested for Alleged Leadership Role in A $300 Million Securities Fraud and Money Laundering SchemeRead the Press Release
Gregg R. Mulholland, a dual U.S. and Canadian citizen, was arrested at Phoenix International Airport earlier today during a layover of his flight from Canada to Mexico on charges of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of numerous U.S. publicly-traded companies and then laundering approximately $300 million in profits through at least five offshore law firms. Mulholland was the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, which was indicted in September 2014 (United States v. Bandfield, et al., 14-CR-476 (ILG)). The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow before United States Magistrate Judge Eileen Willett at the Sandra Day O’Connor United States Courthouse in Phoenix, Arizona.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of $300 million. He concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies, and fled the United States when his secretly-owned brokerage firm was indicted last summer,” stated Acting United States Attorney Currie. “We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.” Mr. Currie thanked the Securities and Exchange Commission and the Justice Department’s Office of International Affairs for their cooperation and assistance in the investigation.
“Mulholland’s alleged sophisticated scheme for ill-gotten gains included everything from lies, fraud, and offshore firms. It all caught up with him today when he was arrested and charged with securities fraud conspiracy and money laundering conspiracy. The FBI will continue to work with our partners to police our markets and ensure they are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.
“The use of overseas accounts and other offshore mechanisms to conceal income and assets is obviously of great interest to the Internal Revenue Service,” stated IRS-CI Special Agent-in-Charge Kitchen. “Investment fraud schemes that incorporate these means to hide proceeds ultimately make the Internal Revenue Service an unwitting, additional victim. In response, IRS-Criminal Investigation, working with our law enforcement partners, will follow the global financial trail to unravel such crimes.”
“Mulholland’s arrest puts an end to an alleged money laundering and security fraud scheme that was motivated by greed,” said HSI New Special Agent in Charge Parmer. “HSI will work with our law enforcement partners and use every tool at our disposal to combat financial crimes that cost tax payers millions of dollars.”
According to the complaint unsealed this morning in Brooklyn federal court, between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (a) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (c) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through this scheme, the Mulholland Group laundered approximately $300 million in fraudulent proceeds.
To facilitate these interrelated schemes, the complaint charges that the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in numerous “pump and dump” schemes. This structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap in May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this May 15, 2014 conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Mulholland used the services of a U.S.-based lawyer to launder the $300 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes enabled Mulholland to evade reporting requirements to the IRS.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Mulholland faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis and Winston Paes are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
GREGG R. MULHOLLAND
Age: 45
San Juan Capistrano, California
Vancouver, Canada
Queens Doctor Sentenced to 54 Months’ Imprisonment for Conspiracy to Distribute OxycodoneRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Gracia L. Mayard, a Queens doctor, was sentenced to 54 months in prison and $20,000 forfeiture by United States District Judge Joseph F. Bianco. Mayard pleaded guilty to conspiring to illegally distribute oxycodone, a highly addictive prescription pain killer, on September 16, 2014.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York; Thomas C. Krumpter, Acting Commissioner, Nassau County Police Department; Joseph A. D’Amico, Superintendent, New York State Police; and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York.
“Dr. Mayard violated his oath and the law by illegally providing vast quantities of these powerful painkillers without medical necessity. Even after surrendering his DEA registration, he wrote a backdated prescription for oxycodone in an attempt to illegally provide pills,” stated Acting United States Attorney Currie. “Health care providers who act as drug dealers are on notice that they will face serious consequences.” Mr. Currie extended his grateful appreciation to each of the law enforcement agencies for their assistance in this case.
During his guilty plea allocution in September 2014, Mayard admitted that in 2012 and 2013, he provided prescriptions to a co-conspirator for patients he had not examined in exchange for cash and continued to write prescriptions after surrendering his DEA registration to prescribe controlled substances on February 7, 2013.
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.
Mayard’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York 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’ Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the 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 prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
Name: GRACIA L. MAYARD
Age: 63
Residence: Queens, NY
Long Island Investment Advisor Sentenced to 55 Months in Prison for Ponzi SchemeRead the Press Release
CENTRAL ISLIP, NY – Earlier today, Paul Sullivan, a Long Island-based investment advisor, was sentenced in federal court to 55 months’ imprisonment. In November 2013, Sullivan pleaded guilty to wire fraud for engaging in a Ponzi scheme that defrauded investors of approximately $1.9 million. As part of the sentence, Sullivan was also sentenced to 3 years’ supervised release and ordered to pay $1.9 million in restitution to the victims of his fraud.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Raymond R. Parmer, Jr., Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (DHS-HSI), New York; and Shantelle P. Kitchen, Special-Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York.
“Sullivan abused the trust placed in him by his clients, many of whom considered him a close friend. Sullivan then dug a deeper hole for himself and his clients by orchestrating a Ponzi scheme that ensnared even more victims,” stated Acting United States Attorney Currie. “We are committed to bringing to justice those who seek to defraud the investing public.” Mr. Currie thanked DHS-HSI and the IRS-CI for their cooperation and assistance in the investigation and prosecution of this case.
Sullivan, a licensed financial advisor, made investments without his clients’ authorization that resulted in significant losses. When these losses were discovered, Sullivan admitted his misconduct to some clients and attempted to prevent them from alerting the authorities by promising to reimburse the clients for their losses. However, in order to obtain the money to reimburse these clients, Sullivan stole funds belonging to other clients. Sullivan falsely told the clients from whom he stole funds that he was investing their money in special private investments with high rates of return. When one of the Sullivan’s defrauded clients confronted him using a hidden camera, Sullivan admitted that he had used the client’s funds to repay another client’s investment losses, stating: “What I did was completely illegal, completely wrong . . . everything I’ve done was wrong, was illegal, I have nothing to say.”
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Today’s sentence was imposed by United States District Judge Leonard D. Wexler.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Daniel Spector is in charge of the prosecution.
The Defendant:
PAUL SULLIVAN
Age: 50
Franklin Square, New York
E.D.N.Y. Docket No. 12-CR-642
Fifth Defendant Charged with Attempt and Conspiracy to Provide Material Support to ISILRead the Press Release
Earlier today, a second superseding indictment was unsealed charging Akmal Zakirov with attempt and conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. The defendant, who is charged with four Brooklyn residents whose arrests have previously been announced, is scheduled to be arraigned at 2:00 p.m. today before United States Magistrate Judge Viktor V. Pohorelsky at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; William J. Bratton, Commissioner, New York City Police Department (NYPD); and Raymond R. Parmer, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.
As alleged in the indictment and other court filings, the investigation began last year when Abdurasul Hasanovich Juraboev, one of Zakirov’s co-defendants, came to the attention of law enforcement. Juraboev posted on an Uzbek-language website that propagates ISIL’s ideology his offer to engage in an act of martyrdom on U.S. soil on behalf of ISIL, such as killing the President of the United States. The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL. Saidakhmetov was arrested on February 25, 2015, at John F. Kennedy International Airport where he was attempting to board a flight to Istanbul, Turkey. Juraboev previously purchased a plane ticket to travel from New York to Istanbul and was scheduled to leave the United States in March 2015.
Zakirov, co-defendant Abror Habibov, and others, allegedly helped to fund Saidakhmetov’s efforts to join ISIL. Specifically, Zakirov and Habibov discussed providing their own money to purchase Saidakhmetov’s plane ticket and to cover his travel expenses, and they also solicited money for that purpose from other individuals. In the week leading up to Saidakhmetov’s scheduled departure, several individuals transferred a total of approximately $2,400 into Zakirov’s personal bank account, which funds were intended to facilitate Saidakhmetov’s travel to join ISIL.
“Zakirov is the fifth to be charged as part of the network of individuals alleged to have conspired and attempted to provide material support to ISIL,” stated Acting United States Attorney Currie. “Our efforts to investigate terrorist support groups are ongoing -- we are committed to disrupting and deterring those who seek to support ISIL, whether by lending themselves or their funds to ISIL’s cause.” Mr. Currie extended his grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state, and local agencies from the region, and to the FBI Norfolk Division.
“Any material support of a terrorist organization not only threatens our national security but violates federal law. In this case, Zakirov is alleged to have been part of a team committed to financing terrorist efforts. Fortunately, the FBI’s Joint Terrorism Task Force identified and stopped such activity. We will continue to work with our partners to uphold our mission and proactively protect the people of the U.S., both home and abroad, through these types of intelligence-based investigations,” said FBI Assistant Director-in-Charge Rodriguez.
“This indictment illustrates the NYPD’s ongoing commitment to stem the efforts of organizations such as ISIL who do not hesitate to promote their violent ideology both here and abroad,” said Police Commissioner Bratton. “I would like to commend the efforts of the Joint Terrorism Task Force investigators, along with our many law enforcement partners, who continue to thwart the efforts of those who would advance a terrorist agenda.”
“Providing material support to terrorist organizations that seek to do us harm represents a clear and present danger to the United States,” said HSI Special Agent-in-Charge Parmer. “Today’s indictment should serve as a warning to all those who attempt to assist ISIL and other terrorist organizations that no stone will go unturned to identify, apprehend, and have them prosecuted to the fullest extent of the law.”
If convicted, Zakirov faces a maximum sentence of 30 years in prison. The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, and Peter W. Baldwin are in charge of the prosecution, with assistance provided by Trial Attorney Danya Atiyeh of the Justice Department’s Counterterrorism Section.
The Defendant:
AKMAL ZAKIROV
Age: 29
Nationality: Uzbeki
E.D.N.Y. Docket No. 15-CR-095 (WFK)
Former Long Island Legislator Sentenced to Three Months’ Imprisonment and Three Months’ Home Confinement for Stealing More Than $2 Million from Client of His Former Law FirmRead the Press Release
David Denenberg, a former New York attorney and former Nassau County Legislator, was sentenced today before U.S. District Judge Joanna Seybert at the federal courthouse in Central Islip to three months’ imprisonment and three months’ home confinement for defrauding a former client of over $2 million. Denenberg previously pleaded guilty to eight counts of mail fraud in connection with this fraud scheme.
Today’s sentencing was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Mr. Denenberg stole his client’s money and violated his oath as a member of the bar. Today’s sentence should serve as a reminder that in our nation, no one is above the law,” stated Acting U.S. Attorney Kelly T. Currie.
“Denenberg diverted funds from his client’s checkbook into his own pockets through the false representation of legal services. Today we remind everyone of our commitment to identify those who misuse their position to take advantage of unsuspecting consumers; those responsible will not go unpunished,” stated FBI Assistant Director-in-Charge Rodriguez.
As detailed in the defendant’s guilty plea allocution and court filings, between November 2006 and June 2014, Denenberg was a partner in the Garden City law firm Davidoff Hutcher & Citron LLP (DHC), formerly Davidoff Malito & Hutcher LLP (DMH), and sent fraudulent bills to a client for legal services that he never rendered. The client, a corporation based in Port Washington, New York, relied on Denenberg’s false billings and paid DHC/DHM $2,265,004.46.
During the same time period, Denenberg also sent fraudulent expense billings to the client for purported expenses incurred in furtherance of the legal representation, which expenses were never incurred, totaling $126,071.43.
In all, the client paid DHC/DHM $2,342,607.64 for legal services never rendered and expenses never incurred. Denenberg has made full restitution to the client.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Lara Treinis Gatz is in charge of the prosecution.
The Defendant:
DAVID DENENBERG
Age: 51
Merrick, New York
E.D.N.Y. Docket No. 14-CR-594 (JS)
Contractor Charged in $6.9 Million Con Ed Bribery and Kickback SchemeRead the Press Release
Rodolfo Quiambao, the President and Chief Executive Officer of the engineering and design firm Rudell & Associates, Inc. (Rudell), was arrested this morning on charges of providing over $6.9 million in bribes and kickbacks to supervisors of Consolidated Edison of New York (Con Ed) in exchange for receiving lucrative contracts from the public utility services provider. The defendant’s initial appearance is scheduled later today before United States Magistrate Judge Marilyn D. Go, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges and arrest were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Raymond R. Parmer, Jr., Special Agent-in-Charge of U.S. Immigration and Custom Enforcement (ICE), Homeland Security Investigations (HSI), in New York; Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York; and Michael Nestor, Inspector General, The Port Authority of New York and New Jersey, Office of the Inspector General.
Quiambao’s arrest is the latest part of the government’s continuing investigation of bribery and kickback schemes involving employees of Con Ed. In January 2009, ten Con Ed supervisors and one employee were charged with collectively receiving more than $1 million in kickbacks from contractors; all eleven later pled guilty to federal offenses.
As alleged in the criminal complaint unsealed today, for over a decade beginning in as early as 2000, Quiambao, whose company specializes in electrical design, surreptitiously and regularly provided three Con Ed supervisors with over $6.9 million in cash and checks in exchange for securing contracting work for his company.
From at least 2007 to 2011, Quiambao – acting through his company, Rudell – allegedly provided over $6.5 million in checks to a company owned by a Con Ed Section Manager who oversaw various projects within Con Ed’s Electrical/Controls Systems Design section. In 2007 and 2008, Rudell issued approximately 120 checks to the Section Manager’s company, totaling approximately $2.7 million. Beginning in January 2009 – after the announcement of the arrests of Con Ed supervisors for taking kickbacks – Quiambao is alleged to have attempted to conceal his illegal payments, instead issuing checks from Rudell to Rudicon Power Corp. (Rudicon), another company that Quiambao owned and which did no work for Con Ed, and then issuing checks from Rudicon to the Section Manager’s company in the same amount as the checks from Rudell to Rudicon. Throughout 2009 and 2010, Rudicon paid the Section Manager’s company approximately $3.7 million in some 146 checks. The memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Section Manager’s company checks, often listed the same Con Ed project.
Throughout the same years, the Section Manager steered Con Ed work to Rudell, supported the awarding of lucrative Con Ed contracts to Rudell, and reviewed and authorized payments to Rudell under those contracts. During this time period, Rudell received approximately $30 million in payments from Con Ed that were approved by the Section Manager.
The complaint also alleges that, from approximately 2003 to 2010, Quiambao provided approximately $200,000 in cash kickbacks to a Con Ed Section Manager in the Construction Public Improvement (CPI) unit. The CPI Section Manager oversaw engineering construction projects and had influence over the awarding of contracts to outside contractors like Rudell. Approximately once per month or every two months, Quiambao provided the CPI Section Manager with an envelope of cash. In exchange, the CPI Section Manager reviewed, edited, and provided advice regarding Rudell’s bid proposals before Rudell submitted them to Con Ed. The CPI Section Manager also steered Con Ed work to Rudell and supported the awarding of “sole source” contracts to Rudell.
The complaint further alleges that, from approximately 2000 to 2010, Quiambao provided at least $240,000 in kickbacks to a Con Ed Engineering Supervisor in the Mapping Department. During that time period, Rudell was awarded numerous Mapping Department contracts in the amount of approximately $6.9 million. Approximately once per month, Quiambao gave the Engineering Supervisor checks from Rudell – and, after the January 2009 arrests, from Rudicon, which had received the same amounts from Rudell – made out to a company owned by the Engineering Supervisor and which Quiambao had suggested and assisted in setting up to facilitate the illegal payments. Consistent with the defendant’s modus operandi, the memo lines of the Rudell to Rudicon checks, and the corresponding Rudicon to the Engineering Supervisor’s company checks, often listed the same Con Ed projects, projects which were supervised by the Engineering Supervisor. The Engineering Supervisor steered Con Ed projects to Rudell, supported the awarding of sole source contracts to Rudell, and recommended Rudell to other Con Ed employees.
“For more than a decade, Rodolfo Quiambao allegedly played dirty to make sure he received the contracts, and millions of dollars, that he wanted. And, ordinary New Yorkers, who rely on Con Ed for electricity, gas, and steam, bore the costs,” stated Acting United States Attorney Currie.
“Today’s arrest is one more domino to fall in a long line of Con Ed employees and contractors involved in systematic corruption that has left the consumer to foot the bill through higher rates,” said HSI New York Special Agent-in-Charge Parmer. “HSI remains committed to working with our law enforcement partners to investigate and expose money laundering activities regardless of the scheme.”
“Like any other purchaser of goods or services, Con Ed customers expect to pay fair rates for their utilities. Customers ultimately pay for corrupt bidding practices in the form of higher prices, or in the case of utilities, higher rates. Just as IRS Criminal Investigation is committed to ensuring that everyone pays their fair share of taxes, we will work with our law enforcement partners on bribery and kickback scheme investigations, sharing our financial investigative expertise to ensure that businesses play fairly and that customers get what they pay for,” stated Special Agent-in-Charge Kitchen of IRS-CI.
“The conduct charged against Quiambao, the subject in today’s announcement, is egregious in its nature, duration, and its scope. Further, the conduct was particularly brazen in that he allegedly took steps to hide his scheme, and yet continue the scheme, even while others were arrested in this investigation. The Port Authority Inspector General will continue to work cooperatively with its law enforcement partners to root out systematic corruption in the construction industry,” stated Inspector General Nestor of The Port Authority.
If convicted, Quiambao faces a maximum sentence of ten years’ imprisonment and a $250,000 fine.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Lan Nguyen and Tali Farhadian are in charge of the prosecution.
The Defendant:
RODOLFO QUIAMBAO
Age: 71
Queens, New York
E.D.N.Y. Docket No. 15 M 475
Attorney General Recognizes Two Eastern District of New York EmployeesRead the Press Release
WASHINGTON – Assistant United States Attorneys James McGovern and Celia Cohen of the U.S. Attorney’s Office for the Eastern District of New York were two of 160 members of the Department of Justice recognized by Attorney General Loretta E. Lynch, Deputy Attorney General Sally Quillian Yates, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 31st Director’s Awards Ceremony today in Washington D.C.
The Eastern District of New York was one of 31 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In her prepared remarks, Attorney General Lynch told the awardees, “Our honorees include career executives and supervisors; Assistant U.S. Attorneys and Special Assistant U.S. Attorneys; appellate attorneys and law enforcement officials; administrators, paralegals, and public affairs officers. These individuals, and so many others, have faced daunting and sometimes dangerous challenges. They have dedicated their leadership and their expertise, their time and their energy, to the service of their mission. And they have remained devoted, at all times, to the high ideals and deeply-held values that animate our country and our cause.”
Assistant Unites States Attorneys McGovern and Cohen were honored for securing a death sentence, for a second time, against Ronell Wilson, a high-ranking member of the violent Bloods gang, who committed the execution-style murders of New York City Police Department Detectives James V. Nemorin and Rodney “Jay” Andrews during an undercover weapons transaction in Staten Island, New York, on March 10, 2003. After the Second Circuit Court of Appeals reversed Wilson’s 2007 death sentence, the prosecutors undertook what many believed to be the insurmountable task of convincing a New York jury to impose the death penalty, again. Proving that will, skill, and commitment can overcome most obstacles, the prosecutors worked tirelessly and masterfully to defeat a newly contrived intellectual disability claim and to build a case for the death penalty, vastly different from that offered in the 2007 proceeding. As a result of their efforts, Wilson was returned to death row in September 2013.
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 Chief Compliance Officer of Long Island Brokerage Firm Indicted on Fraud and Money Laundering ChargesRead the Press Release
A two-count indictment was unsealed this morning in federal court in Brooklyn, New York, charging William Michael Quigley, the former Chief Compliance Officer of a registered broker-dealer in Woodbury, New York, with conspiracy to commit wire fraud and money laundering conspiracy in connection with a fraudulent investment scheme. Quigley will be arraigned later today before Magistrate Judge Arlene R. Lindsay at the United States Courthouse in Central Islip, New York.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Quigley and his co-conspirators allegedly engaged in a coordinated and sophisticated scheme built on lies and deceit to defraud overseas investors. Rather than use his training and expertise to protect these investors who were told that their money would be invested in well-known U.S. companies and funds, Quigley helped his co-conspirators steal the funds by transferring them to the Philippines and using them for his personal use,” stated Acting United States Attorney Currie. “We are committed to holding accountable those who abuse their positions of trust to deceive the investing public.” Mr. Currie thanked the Securities and Exchange Commission for its significant cooperation and assistance in the investigation.
“Operating under false pretenses, Quigley and his co-conspirators assumed the role of registered brokers who were working in close coordination with regulatory authorities here in the United States. In doing so, they allegedly carried out a scheme to siphon funds from victim investors overseas – a scheme that fueled their own greedy desires. Today’s indictment is a step forward in restoring the public’s trust and a reminder that this type of dishonorable behavior will not go unpunished,” stated FBI Assistant Director-in-Charge Rodriguez.
As alleged in the indictment, the defendant Quigley, together with his co-conspirators, represented to overseas investors that they were brokers at firms registered with the National Association of Securities Dealers (NASD) or the Financial Institution Regulatory Authority Inc. (FINRA) and that they would invest the investors’ money in companies and investment funds such as Dell, Berkshire Hathaway, and BlackRock. In reality, Quigley and his co-conspirators were not registered brokers and did not invest the funds as promised. Instead, Quigley personally opened several bank accounts in New York to receive the investors’ funds, and he and his co-conspirators transferred more than $500,000 of the $800,000 investor funds from these accounts to accounts in the Philippines. Quigley immediately withdrew more than $42,000 in cash for his personal use and made dozens of trips to different banks in an effort to conceal his cash withdrawals.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Quigley faces a maximum sentence of 20 years of imprisonment.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Christopher Ott is in charge of the prosecution.
The Defendant:
WILLIAM MICHAEL QUIGLEY
Age: 47
Seaford, New York
E.D.N.Y. Docket No. 15 CR 258
Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and CorruptionRead the Press Release
The Defendants Include Two Current FIFA Vice Presidents and the Current and Former Presidents of the Confederation of North, Central American and Caribbean Association Football (CONCACAF); Seven Defendants Arrested Overseas; Guilty Pleas for Four Individual Defendants and Two Corporate Defendants Also Unsealed
A 47-count indictment was unsealed early this morning in federal court in Brooklyn, New York, charging 14 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. Jeffrey Webb and Jack Warner – the current and former presidents of CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Director James B. Comey of the FBI, Assistant Director in Charge Diego W. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI’s Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and José Maria Marin, at the request of the United States. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International Inc. and Traffic Sports USA Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.”
Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough,” said Acting U.S. Attorney Currie. “After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation.”
Acting U.S. Attorney Currie extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” said Director Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years.”
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said Chief Weber. “Corruption, tax evasion and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn't about soccer, it is about fairness and following the law. IRS-CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
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Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member and Cayman Islands Football Association (CIFA) president.
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Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member and Costa Rican soccer federation (FEDEFUT) president.
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Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
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Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
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Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.
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Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
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Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
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José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
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Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
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Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
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Aaron Davidson: President of Traffic Sports USA Inc. (Traffic USA).
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Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
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José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pleaded guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pleaded guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On Oct. 25, 2013, the defendant Daryan Warner waived indictment and pleaded guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On Nov. 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pleaded guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On Dec. 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pleaded guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA Inc. and Traffic Sports International Inc. pleaded guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
* * * *
The indictment unsealed today has been assigned to U.S. District Court Judge Raymond J. Dearie of the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges. In addition, Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of five years for each tax charge. Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and five years for the tax evasion charges; and Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman and Brian D. Morris of the Eastern District of New York, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
The Indicted Defendants:
ALEJANDRO BURZACO
Age: 50
Nationality: Argentina
AARON DAVIDSON
Age: 44
Nationality: USA
RAFAEL ESQUIVEL
Age: 68
Nationality: Venezuela
EUGENIO FIGUEREDO
Age: 83
Nationality: USA, Uruguay
HUGO JINKIS
Age: 70
Nationality: Argentina
MARIANO JINKIS
Age: 40
Nationality: Argentina
NICOLÁS LEOZ
Age: 86
Nationality: Paraguay
EDUARDO LI
Age: 56
Nationality: Costa Rica
JOSÉ MARGULIES, also known as José Lazaro
Age: 75
Nationality: Brazil
JOSÉ MARIA MARIN
Age: 83
Nationality: Brazil
JULIO ROCHA
Age: 64
Nationality: Nicaragua
COSTAS TAKKAS
Age: 58
Nationality: United Kingdom
JACK WARNER
Age: 72
Nationality: Trinidad and Tobago
JEFFREY WEBB
Age: 50
Nationality: Cayman Islands
The Convicted Defendants:
CHARLES BLAZER
Age: 70
Nationality: USA
JOSÉ HAWILLA
Age: 71
Nationality: Brazil
DARYAN WARNER
Age: 46
Nationality: Trinidad and Tobago, Grenada
DARYLL WARNER
Age: 40
Nationality: USA, Trinidad and Tobago
TRAFFIC SPORTS INTERNATIONAL INC.
Registered: British Virgin Islands
TRAFFIC SPORTS USA INC.
Registered: USA
E.D.N.Y. Docket Numbers:
United States v. Daryll Warner, 13 Cr. 402 (WFK)
United States v. Daryan Warner, 13 Cr. 584 (WFK)
United States v. Charles Blazer, 13 Cr. 602 (RJD)
United States v. José Hawilla, 14 Cr. 609 (RJD)
United States v. Traffic Sports International, Inc., 14 Cr. 609 (RJD)
United States v. Traffic Sports USA, Inc., 14 Cr. 609 (RJD)
United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)
Documents:
Webb et al. Indictment (12.25 MB)
Daryan Warner Information (320.77 KB)
Daryll Warner Information (2.26 MB)
Hawilla et al. Information (2.98 MB)
Charles Blazer Information (4.45 MB)
FIFA Graphic (490 KB)
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Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and CorruptionRead the Press Release
BROOKLYN, N.Y. – A 47-count indictment was unsealed early this morning in federal court in Brooklyn charging 14 defendants with racketeering, wire fraud, and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. The defendants Jeffrey Webb and Jack Warner – the current and former presidents CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch; Kelly T. Currie, Acting U.S. Attorney for the Eastern District of New York; James B. Comey, Director, Federal Bureau of Investigation (FBI); Diego W. Rodriguez, Assistant Director-in-Charge, FBI, New York Field Office; Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation; and Special Agent in Charge Erick Martinez, IRS Criminal Investigation, Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel, and José Maria Marin, at the request of the United States.1
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International, Inc. and Traffic Sports USA, Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.” Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough. After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation,” stated Acting United States Attorney Currie. Mr. Currie extended his thanks to the agents, analysts, and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS Criminal Investigation Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world. Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years,” said FBI Director Comey.
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said IRS Criminal Investigation Chief Weber. “Corruption, tax evasion, and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players, and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn’t about soccer, it is about fairness and following the law. IRS CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations, and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and the Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors, and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery, and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores, and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup, and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers, and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member, and Cayman Islands Football Association (CIFA) president.
Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member, and Costa Rican soccer federation (FEDEFUT) president.
Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president, and Trinidad and Tobago Football Federation (TTFF) special adviser.
Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
Aaron Davidson: President of Traffic Sports USA, Inc. (Traffic USA).
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pled guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pled guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On October 25, 2013, the defendant Daryan Warner, son of defendant Jack Warner and a businessman, waived indictment and pled guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy, and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On November 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pled guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion, and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On December 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pled guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA, Inc. and Traffic Sports International, Inc. pled guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
The indictment unsealed today has been assigned to the Honorable Raymond J. Dearie, United States District Judge for the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering, and obstruction of justice charges. In addition, the defendant Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of 5 years for each tax charge. The defendant Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and 5 years for the tax evasion charges; and the defendants Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture, and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant United States Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman, and Brian D. Morris, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
The Indicted Defendants:
ALEJANDRO BURZACO
Age: 50
Nationality: Argentina
AARON DAVIDSON
Age: 44
Nationality: USA
RAFAEL ESQUIVEL
Age: 68
Nationality: Venezuela
EUGENIO FIGUEREDO
Age: 83
Nationality: USA, Uruguay
HUGO JINKIS
Age: 70
Nationality: Argentina
MARIANO JINKIS
Age: 40
Nationality: Argentina
NICOLÁS LEOZ
Age: 86
Nationality: Paraguay
EDUARDO LI
Age: 56
Nationality: Costa Rica
JOSÉ MARGULIES, also known as José Lazaro
Age: 75
Nationality: Brazil
JOSÉ MARIA MARIN
Age: 83
Nationality: Brazil
JULIO ROCHA
Age: 64
Nationality: Nicaragua
COSTAS TAKKAS
Age: 58
Nationality: United Kingdom
JACK WARNER
Age: 72
Nationality: Trinidad and Tobago
JEFFREY WEBB
Age: 50
Nationality: Cayman Islands
The Convicted Defendants:
CHARLES BLAZER
Age: 70
Nationality: USA
JOSÉ HAWILLA
Age: 71
Nationality: Brazil
DARYAN WARNER
Age: 46
Nationality: Trinidad and Tobago, Grenada
DARYLL WARNER
Age: 40
Nationality: USA, Trinidad and Tobago
TRAFFIC SPORTS INTERNATIONAL, INC.
Registered: British Virgin Islands
TRAFFIC SPORTS USA, INC.
Registered: USA
E.D.N.Y. Docket Numbers:
United States v. Daryll Warner, 13 Cr. 402 (WFK)
United States v. Daryan Warner, 13 Cr. 584 (WFK)
United States v. Charles Blazer, 13 Cr. 602 (RJD)
United States v. José Hawilla, 14 Cr. 609 (RJD)
United States v. Traffic Sports International, Inc., 14 Cr. 609 (RJD)
United States v. Traffic Sports USA, Inc., 14 Cr. 609 (RJD)
United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)
_______________________________________________________________________
1. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
Attachments
- UNITED STATES V. CHARLES BLAZER
- UNITED STATES V. DARYAN WARNER
- UNITED STATES V. DARYLL WARNER
- UNITED STATES V. JOSE HAWILLA ET AL
- FIFA Press Visuals.05.27.2015
- FIFA Indictment - Certified Copy_Clean_Reduced Size_Redacted (2)
Senior Member of Al-Qaeda Pleads Guilty to Conspiring to Kill U.S. Soldiers in Iraq and Afghanistan and Providing Material Support to Al-QaedaRead the Press Release
Earlier today, Saddiq al-Abbadi, a Yemeni national, pleaded guilty to conspiring to murder U.S. nationals abroad, providing and conspiring to provide material support to al-Qaeda, and using a machine gun in furtherance of those crimes. The guilty plea proceeding took place before United States District Judge Nicholas G. Garaufis. At sentencing, al-Abbadi faces a maximum of life imprisonment.
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; and Andrew G. McCabe, Assistant Director in Charge, Federal Bureau of Investigation, Washington Field Office.
“The defendant was a high-level al-Qaeda operative with ties to the terrorist group’s senior leadership in both Pakistan and Yemen. He fought in battles against U.S. troops in Iraq and Afghanistan, tried to kill U.S. troops in Afghanistan by luring them to a compound rigged with explosives, and helped an American citizen gain entry to al-Qaeda,” stated Acting United States Attorney Currie. “We stand resolute in our commitment to bring to justice those who would try to harm members of our military or who assist al-Qaeda’s efforts to kill Americans at home or abroad.”
“With the guilty plea entered today, Saddiq al-Abbadi will be held accountable for conspiring to kill Americans overseas and providing material support to al-Qaeda,” said Assistant Attorney General Carlin. “Seeking to identify, thwart, and hold accountable those who target U.S. citizens and interests around the world will remain a top priority of the National Security Division.”
“With today’s guilty plea, Al-Abbadi admitted to directly supporting the mission of a designated terrorist organization through planning an operation designed to kill U.S. forces and for engaging in recruitment efforts on behalf of al-Qaeda,” said FBI Assistant Director in Charge McCabe. “This plea is due in no small part to the many FBI Special Agents, intelligence analysts, and linguists from the Washington and New York Field Offices as well as our interagency and international partners who spent countless hours investigating terrorism actors and al-Abbadi’s actions. The FBI will not rest until we find and hold accountable those who provide support to terrorist groups and ensure that they are brought to justice.”
According to court filings, al-Abbadi traveled from his home country of Yemen to Iraq where, from approximately late 2005 through early 2007, he fought alongside al-Qaeda affiliated battalions against U.S. troops stationed in Iraq.
In early 2008, al-Abbadi traveled to the Federally Administered Tribal Areas (“FATA”) of Pakistan in order to fight for al-Qaeda in Pakistan and Afghanistan. While in the FATA, al-Abbadi – who had longstanding ties to senior members of al-Qaeda’s Yemen-based affiliate, known as al-Qaeda in the Arabian Peninsula or AQAP – engaged directly with senior al-Qaeda leadership in Pakistan, including Sheikh Saeed al-Masri, at the time the third-ranking member of al-Qaeda.
During late spring and summer 2008, Al-Abbadi crossed from Pakistan into Afghanistan for the purpose of fighting and killing members of the United States military stationed in Afghanistan. In June 2008, he planned an operation designed to lure U.S. forces to a compound in Ghazni, Afghanistan, that was rigged with explosives set to detonate upon their entry. When U.S. forces arrived at the compound, they found rocket-propelled grenades and artillery rounds littered about. One soldier observed wiring running from the exterior gate to the inside of the compound and recognized the trap. The military evacuated and subsequently leveled the compound.
In addition to fighting against the U.S. military, al-Abbadi used his connections with al-Qaeda’s leadership to help U.S. citizen Bryant Neal Vinas gain entry into al-Qaeda. Vinas had traveled to Pakistan from Long Island in the hopes of joining al-Qaeda and fighting against U.S. military forces in Afghanistan. As a result of al-Abbadi’s assistance, Vinas was allowed to join al-Qaeda. After participating in al-Qaeda’s military training program, Vinas developed a plan with senior al-Qaeda external operations leadership to conduct an attack on the Long Island Railroad in New York. Vinas was arrested before he could carry out this attack.
The case is being prosecuted by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Zainab Ahmad, Michael P. Canty, and Douglas M. Pravda, are in charge of the prosecution, with assistance provided by Trial Attorney Josh Parecki of the Justice Department’s Counterterrorism Section and by the Office of International Affairs.
The Defendant:
SADDIQ AL-ABBADI
Age: 40
Nationality: Yemeni
E.D.N.Y. Docket No. 15-CR-124 (NGG)
Smithtown Doctor Indicted for the Illegal Distribution of Controlled Substances Without Legitimate Medical NeedRead the Press Release
A federal grand jury indicted Smithtown, New York, doctor Mitchel Fagin this morning on charges that he illegally distributed oxycodone, methodone and alprazalom, highly addictive prescription pain medications.1 The defendant is scheduled to be arraigned this afternoon before United States District Judge Joanna Seybert at the United States Courthouse located in Central Islip, New York.
The charges were announced by Kelly T. Currie, 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.
Fagin surrendered this morning to the Long Island District Office Tactical Diversion Squad, which is comprised of federal agents and officers of the Nassau County, Rockville Centre, and Port Washington police departments. The 12-count indictment and public filings allege that between May 2010 and September 2014, Fagin, a pain management doctor, issued mutltiple controlled substance prescriptions without a legitimate medical purpose to individuals he knew were addicts. Fagin is also alleged to have issued controlled substance prescriptions in exchange for sexual favors from female patients. Fagin was previously investigated by the Office of Professional Medical Conduct resulting in at least one suspension of his medical license.
Acting United States Attorney Currie stated, “Dr. Fagin allegedly used his prescription-writing privileges not to heal, as was his duty, but to victimize vulnerable patients. Doctors who issue prescriptions without a legitimate medical need are violating the law and will be held accountable.” Mr. Currie extended his grateful appreciation to each of the law enforcement agencies for their assistance in this case.
DEA Special Agent-in-Charge Hunt stated, “As detailed in the indictment, Dr. Fagin’s house was a medicine chest for opioid addicts to fuel their addiction. Dr. Fagin allegedly abused his position as a medical practitioner and prescribed medications for non-medical needs. I commend the Long Island District Office Tactical Diversion Squad and the U.S. Attorney’s Office, Eastern District of New York, for their diligent work throughout this investigation.”
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 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’ Center 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 prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Lara Treinis Gatz is in charge of the prosecution.
The Defendant:
Name: MITCHEL FAGIN
Age: 63
Residence: Smithtown, New York
______________________________________________________________________________
1. The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Three MS-13 Gang Members Indicted on Racketeering ChargesRead the Press Release
A 29-count superseding indictment was unsealed yesterday in federal court in Central Islip, New York, charging MS-13 members Edwin Acosta-Martinez (“Scarface”), Sergio Cerna (“Taz” and “Lechon”), and Arnolvin Umanzor Velasquez (“Momia” and “Lito”), with the November 2, 2011 murder of Brandon Sotomayor in Baywood, NY, the December 18, 2011 double-murder of two brothers, Enston and Ricardo Ceron, in Brentwood, NY, four attempted murders which took place between May and December 2011, and multiple racketeering offenses related to those murders and attempted murders. The superseding indictment was returned under seal by a federal grand jury on May 13, 2015.
Velasquez was arrested yesterday morning in Flowery Branch, Georgia, by a Federal Bureau of Investigation SWAT team, and he was arraigned before United States Magistrate Judge E. Clayton Scofield, III, at the federal courthouse in Atlanta, where he was ordered to be removed in custody to the Eastern District of New York. Cerna and Acosta-Martinez are already in federal custody and will be arraigned this afternoon and next week, respectively, before United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, FBI, New York Field Office.
“The execution-style killings of Brandon Sotomayor and the Ceron brothers, as well as the attempted murders charged in this superseding indictment, demonstrate the callous depravity of the MS-13,” stated Acting United States Attorney Currie. “This Office and the FBI’s Long Island Gang Task Force will continue to investigate and prosecute the MS-13 to ensure that the gang members are held accountable for their brutal acts.” Mr. Currie expressed his appreciation for the assistance provided by the United States Attorney’s Office for the Northern District of Georgia and the FBI’s Atlanta Field Office.
“MS-13 is a scourge on our communities. As alleged, the three defendants charged today with murder demonstrate the extraordinary violence of this gang. We continue to work with prosecutors and local law enforcement on Long Island to arrest and prosecute members of MS-13,” stated Assistant Director-in-Charge Rodriguez.
Cerna was charged in the underlying indictment with racketeering and firearms offenses relating to the May 12, 2011 and September 11, 2011 attempted murders of two suspected rival gang members, and an October 23, 2011 conspiracy to murder rival gang members which resulted in two men being shot and wounded. The superseding indictment adds charges against Cerna and Velasquez in connection with the December 18, 2011 murders of the Ceron brothers, Enston and Ricardo. As set forth in prior court filings and a detention letter, the Brentwood clique of the MS-13 (“BLS”) killed Enston Ceron because he was distancing himself from the gang by not attending meetings or “putting in work” for the gang, and they were concerned that he might cooperate with law enforcement authorities if he were arrested. The BLS clique also murdered his brother, Ricardo Ceron, who belonged to the Western clique of the MS-13, because they were concerned he would retaliate if he learned that the BLS killed his brother. On December 18, 2011, Cerna and Velasquez, who volunteered to carry out the murders and were armed with 9mm and .22 caliber semi-automatic handguns, asked Enston and Ricardo Ceron for a ride home from a party. When the car stopped in the vicinity of Lincoln Avenue and Stockton Streets in Brentwood, Cerna and Velasquez executed them, shooting them in the head and torso at close range. Cerna and Velasquez exited the car and when another vehicle approached the murder scene and stopped, Cerna fired multiple shots at the driver, striking him once in the chest. The driver survived the shooting.
Following the Ceron brothers’ murders, the BLS clique blamed the killings on the rival Latin Kings street gang and plotted a retaliation shooting with members of the Huntington clique of the MS-13, including Acosta-Martinez. On December 22, 2011, Acosta-Martinez and two other MS-13 members observed two suspected members of the Latin Kings in Brentwood. Acosta-Martinez, who was armed with a 9mm semi-automatic handgun, is charged with shooting one of the men in the arm before the suspected Latin Kings members fled. The victim survived that shooting.
Acosta-Martinez was also indicted in connection with his participation in the November 2, 2011 murder of Brandon Sotomayor and a series of armed robberies in 2011 and 2012. On the night of the Sotomayor murder, Acosta-Martinez and another MS-13 member, who was a juvenile at the time, agreed to “put in work” for the MS-13 by killing a rival gang member. Acosta-Martinez and his co-conspirator were armed with the same 9mm and .22 caliber semi-automatic handguns used to murder the Ceron brothers. While in the vicinity of Reilly Street in Baywood, Acosta-Martinez and his co-conspirator saw a car with three people, including Sotomayor, who was wearing a red hat and who they believed to be a member of the rival Bloods street gang. Acosta-Martinez and his co-conspirator approached the car and fired numerous shots at Sotomayor, striking him multiple times in the neck and torso and killing him.
The defendants are also charged with additional racketeering offenses, including assaults, obstruction of justice, armed robbery, and related firearms and conspiracy counts.
The superseding indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador and Honduras. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2003, more than 250 MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 150 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 25 murders in the Eastern District of New York, and has convicted dozens of MS-13 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, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, and Rockville Centre Police Department.
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face life in prison or the death penalty.
The government’s case is being prosecuted by Assistant United States Attorneys John J. Durham and Raymond A. Tierney of the Long Island Criminal Division.
The Defendants:
EDWIN ACOSTA-MARTINEZ (“Scarface”)
Age: 26
Huntington Station, New York
SERGIO CERNA (“Taz” and “Lechon”)
Age: 31
Brentwood, New York
ARNOLVIN UMANZOR VELASQUEZ (“Momia” and “Lito”)
Age: 22
Brentwood, New York and Flowery Branch, Georgia
E.D.N.Y. Docket No. 15-CR-087 (S-1)(JFB)
Hunter Roberts Construction to Pay More Than $7 Million in Penalties and Restitution for Engaging in A Fraudulent Overbilling SchemeRead the Press Release
Hunter Roberts Construction Group, LLC (“Hunter Roberts”), one of the largest construction companies in New York City, has entered into a non-prosecution agreement and agreed to pay more than $7 million in penalties to the federal government and restitution to victims to resolve a criminal investigation into the company’s past fraudulent billing practices. In addition, pursuant to the non-prosecution agreement, Hunter Roberts will provide continuing cooperation and maintain far-reaching corporate reforms.
The resolution was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Michael Nestor, Inspector General, Port Authority of New York and New Jersey; Robert Erickson, Acting Inspector General, General Services Administration, Office of the Inspector General; Cheryl Garcia, Special Agent-in-Charge, Department of Labor, Office of Inspector General; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Mark G. Peters, Commissioner, New York City Department of Investigation.
“Hunter Roberts defrauded its clients by fraudulently billing them for work that was not performed and at rates that were higher than contracted. Today’s resolution marks a significant step in our continued effort to eliminate fraud in New York City’s construction industry and also recognizes Hunter Roberts’s decision to timely accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices,” stated Acting U.S. Attorney Currie. Mr. Currie thanked the investigative agencies for their outstanding commitment and dedication over the course of this six-year industry investigation.
“Responsible for overseeing billions of dollars of publicly funded construction throughout the region, the Port Authority’s Office of Inspector General is committed to ensuring that industry participants operate with integrity and accountability,” stated Inspector General Nestor. Inspector General Nestor thanked his law enforcement partners for their dedication and professionalism in investigating these practices.
“We will continue working with our law enforcement partners on important construction contract fraud cases such as this, ensuring that the United States always gets what it bargained for,” said Acting Inspector General Erickson.
“Contractors that inflate invoices for union labor threaten the integrity of collective bargaining agreements and the viability of federally funded projects and private development. We will continue to work with our law enforcement partners to identify practices that jeopardize the employment opportunities for American workers,” stated Special Agent-in-Charge Garcia.
“Both public and private projects across the New York City metropolitan area were victims of Hunter Roberts’ fraudulent billing practices for more than eight years. Today’s restitution settlement of more than $7 million should help make right on a practice so wrong. The FBI is committed to working with our law enforcement partners to investigate and bring justice to those who seek to profit from fraudulent schemes, especially those in the city’s construction industry,” stated Assistant Director-in-Charge Rodriguez.
Commissioner Peters said, “This fraudulent overbilling scheme was insidious – bilking publicly-funded vendors and, in the end, taxpayers paid the ultimate cost. DOI will continue to work with its law enforcement partners to expose and stop these crimes because fraud has no business in New York City.”
Pursuant to the non-prosecution agreement signed today, Hunter Roberts acknowledged and accepted responsibility for engaging in an eight-year-long fraudulent overbilling scheme that impacted virtually all of its projects. Specifically, from 2006 through 2011, Hunter Roberts billed clients, including government contracting and funding agencies, for hours that were not worked by labor foremen from Local 79 Mason Tenders’ District Council of Greater New York (“Local 79”). Hunter Roberts effectuated this overbilling by systemically adding one to two hours of unworked or unnecessary overtime per day to the labor foremen’s time sheets and falsely listing unworked hours as worked when labor foremen were absent for vacation days, sick days, and major holidays. Additionally, from 2010 through November 2013, without seeking advance approval from its clients, Hunter Roberts paid a select group of labor foremen, and billed its clients, at wage rates that exceeded those specified in Hunter Roberts’ contracts with its clients. In admitting responsibility, Hunter Roberts acknowledged that it engaged in fraudulent overbilling on a wide number of public and private projects across the New York City metropolitan area. These projects included the Dormitory Authority of the State of New York’s Queens Hospital Center Ambulatory Care Pavilion, the Harvey Theater at the Brooklyn Academy of Music, the Borough of Manhattan Community College’s Fiterman Hall, and the PAVE Academy Charter School in Red Hook, Brooklyn.
In light of Hunter Roberts’ comprehensive internal investigation, prompt and complete acceptance of responsibility for the full breadth of its unlawful conduct, exemplary cooperation and far-reaching remedial measures, the government has agreed not to prosecute Hunter Roberts for its criminal conduct, provided that Hunter Roberts complies for two years with all the terms of the agreement executed today. Significantly, this agreement secures immediate compensation for victimized companies who were overbilled on their projects.
This resolution was the result of efforts by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman Knapp and Special Assistant United States Attorney Jonathan P. Lax are in charge of the prosecution.
HRCC NP, Stmt of Fact & Bd Cert -- FULLY EXECUTED
Former Chief Financial Officer Pleads Guilty for Role in $30 Million Bank Fraud SchemeRead the Press Release
Earlier today, Thomas Torre, the former Chief Financial Officer of Metro Fuel Oil Corp., pled guilty to conspiracy to commit bank fraud. According to court filings and facts presented during the plea proceeding, Torre conspired in a scheme to overstate Metro Fuel’s accounts receivable in order to draw from a revolving line of credit issued by New York Commercial Bank. The fuel company later filed for bankruptcy after fraudulently obtaining over $30 million from the bank.
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office.
“Through his deceit and trickery, Torre defrauded New York Commercial Bank in an amount exceeding $30 million,” stated Acting United States Attorney Currie. “We will remain alert to such schemes and will aggressively prosecute those who would steal from our financial institutions.” Mr. Currie extended his grateful appreciation to the Federal Bureau of Investigation, the agency which led the government’s investigation.
From approximately July 2007 to July 2012, Torre and others falsely overstated the company’s accounts receivable on certificates submitted to the bank at least once per month by not recording cash payments from customers and by creating fictitious invoice amounts. The bank relied on this misinformation in determining the amount Metro Fuel could borrow on its revolving line of credit. By September 2012, Metro Fuel could no longer pay its bills and filed a voluntary petition for bankruptcy.
Today’s guilty plea took place before United States District Judge Pamela K. Chen. When sentenced, Torre faces up to 30 years in prison, as well as forfeiture and a fine. The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney William P. Campos is in charge of the prosecution. Assistant United States Attorney Brian D. Morris is handling the forfeiture aspect of the case.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
THOMAS TORRE
Age: 63
Albertson, New York
E.D.N.Y. Docket No. 14 - CR - 514 (PKC)
Three Members of Al-Shabaab Plead Guilty to Conspiring to Provide Material Support to the Terrorist OrganizationRead the Press Release
Earlier today, Madhi Hashi, Ali Yasin Ahmed and Mohamed Yusuf pleaded guilty to conspiring to provide material support to al-Shabaab, a designated foreign terrorist organization. Today’s plea took place before United States District Judge John Gleeson. At sentencing, each of the defendants faces a maximum of 15 years in prison and automatic removal from the United States.
The guilty pleas were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, John P. Carlin, Assistant Attorney General for National Security and Diego Rodriguez, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office.
As stated in court today and according to court documents, between approximately December 2008 and August 2012, the defendants served as members of al-Shabaab in Somalia, where they agreed with others to support al-Shabaab and its extremist agenda. In early August 2012, the defendants were apprehended in East Africa by local authorities while on their way to Yemen. On November 14, 2012, the Federal Bureau of Investigation took custody of the defendants and brought them to the Eastern District of New York for prosecution.
“The defendants were committed supporters of al-Shabaab, a violent terrorist organization that has demonstrated its capabilities and motives in numerous terrorist attacks overseas, and has publicly called for attacks against the United States,” stated Acting U.S. Attorney Kelly T. Currie. “We will use every tool at our disposal to combat terrorist groups, deter terrorist activity, and incapacitate individual terrorists around the world. Today’s convictions demonstrate that criminal prosecution is an effective tool in our efforts to combat international terrorism.”
“Hashi, Ahmed and Yusuf all pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, al-Shabaab,” said Assistant Attorney General Carlin. “The National Security Division remains committed to identifying, disrupting and holding accountable all who seek to provide material support to terrorists both at home and abroad. I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”
During the time of the charged conspiracy (and thereafter), al-Shabaab successfully recruited individuals from around the world, like the defendants, to come to Somalia and join the organization. These individuals, known within al-Shabaab as “foreign fighters” and muhajireen, lived, trained, and often fought separately from, but in coordination with, other al-Shabaab fighters. They were also especially valuable to al-Shabaab for several reasons. For example, al-Shabaab frequently made Western foreign fighters the face of its fund-raising and propaganda efforts as part of a broader strategy of emphasizing that the conflict in Somalia was part of a global jihad aimed at creating an Islamic caliphate. Indeed, one of the defendants, Mohamed Yusuf, is featured in an al-Shabaab propaganda video in which he encouraged young men to travel to Somalia and join al-Shabaab and threatened a cartoonist who had depicted the prophet Mohammad. In addition, Yusuf and defendant Ali Yasin Ahmed fought in battles in Somalia against African Union forces. Defendant Madhi Hashi was a close associate of American-born al-Shabaab leader Omar Hammami.
Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in thanking the federal, state and local law enforcement agencies who participate in the FBI’s Joint Terrorism Task Force in New York.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Shreve Ariail, Seth D. DuCharme, and Richard M. Tucker, along with Trial Attorney Annamartine Salick of the Department of Justice’s Counterterrorism Section, are in charge of the prosecution. Trial Attorneys Shanna Batten and Dan Stigall of the Department of Justice’s Office of International Affairs also provided invaluable assistance.
The Defendants:
MADHI HASHI, also known as “Talha”
Age: 25
Nationality: Somali
ALI YASIN AHMED, also known as “Ismail”
Age: 30
Nationality: Swedish
MOHAMED YUSUF, also known as “Abu Zaid,” “Hudeyfa” and “Mohammed Abdulkadir”
Age: 32
Nationality: Swedish
Leader and Top Enforcer of “Cash Money Brothers” Criminal Gang Sentenced to Six Terms of Life ImprisonmentRead the Press Release
Earlier today, Damion Hardy, also known as “World,” and Aaron Granton, also known as “E-Bay,” were each sentenced to six terms of life imprisonment following their April 29, 2015 conviction after trial on charges of murder in-aid-of racketeering and related offenses. The sentence was imposed by United States District Judge Frederic Block.
The sentences were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Raymond R. Parmer Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department.
“Gang members and would-be gang members are on notice that we will never cease in our efforts to bring murderous criminals to justice and to make communities like Lafayette Gardens safe for its law abiding residents,” stated Acting United States Attorney Currie. “I thank the FBI, HSI, and the New York City Police Department for their extraordinarily hard work and total dedication to bringing these most violent gang members to justice.”
From 1991 until August 2004, Hardy was the leader of a criminal enterprise known as the “Cash Money Brothers” (CMB) based in the Lafayette Gardens houses in Brooklyn, New York. Granton was a member of CMB and one of its top enforcers. From the time the crack-cocaine epidemic began in the late 1980s, Lafayette Gardens was a central and lucrative hub for the distribution of cocaine base. At that time, the young men who would later form CMB acted as street dealers under the direction of the senior drug dealers who controlled Lafayette Gardens. In approximately 1991, after CMB was formed under the leadership of the defendant Hardy and his brother, Myron Hardy, also known as “Wise,” the CMB ousted the senior dealers and seized control of the Lafayette Gardens crack trade for themselves.
CMB maintained control of Lafayette Gardens through acts of violence that included near-daily gun battles with rival organizations and numerous murders. For example, in 1998, Hardy ordered a junior gang member to shoot and kill Michael Colon because Hardy believed Colon disrespected and humiliated him at a roller skating rink. In 1999, while Hardy was incarcerated, his brother Myron was shot and killed in Lafayette Gardens. Hardy and other CMB members believed that a rival drug dealer named Ivery “Peanut” Davis and other members of Davis’s drug organization were responsible for the murder. While Hardy lay wounded in the hospital, Damion Hardy, from his prison cell, directed his gang members to exact revenge and ordered CMB members to murder Darryl Baum, James Hamilton, Tyrone Baum, and Ivery Davis – each was murdered by Granton. Davis’s killing also resulted in the death of an innocent bystander, Johan Camitz.
Through his murderous work with CMB, Granton earned a reputation as an effective and ruthless killer. As a result, he was recruited in 2001 by a separate gang, the “Supreme Team,” to kill Troy Singleton – who was then shot multiple times in the back and head as he left a nightclub in Queens, New York.
The government’s case is being prosecuted jointly by the Office’s International Narcotics & Money Laundering Section and Organized Crime & Gangs Section. Assistant United States Attorneys Matthew Amatruda, Soumya Dayananda, and Rena T. Paul are handling the prosecution.
The Defendants:
DAMION HARDY
Age: 40
Brooklyn, NY
AARON GRANTON
Age: 40
Brooklyn, NY
E.D.N.Y. Docket No. 04-CR-0706
United States and State of New York Announce Start up of Croton Water Filtration Plant in Compliance with Mandates of Federal Consent DecreeRead the Press Release
Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Judith A. Enck, Regional Administrator, United States Environmental Protection Agency Region 2, and Eric T. Schneiderman, Attorney General for the State of New York, announced today that the City of New York, in compliance with the Consent Decree and Supplements entered in this action, began distribution of filtered drinking water from its Croton Water Filtration Plant. Through the Croton Water Filtration Plant, the City of New York will have the ability to deliver 290 million gallons of high-quality drinking water each day to residents of the City. If the City had failed to meet the May 17, 2015 deadline for commencement of operation of the Croton Water Filtration Plant, the Consent Decree provided for stipulated penalties in the amount of $65 million.
In 1997, the United States brought suit against New York City to enforce the filtration requirements for its Croton System. Soon thereafter, the State of New York and its Commissioner of Health intervened in the suit as plaintiffs and are parties to the Consent Decree as supplemented. New York City is required to filter its Croton System under the Safe Drinking Water Act and the Surface Water Treatment Rule (SWTR), as well as the New York State Sanitary Code. Under the SWTR, the City was required to implement filtration for its Croton System by June 29, 1993. By stipulation with the State of New York, the City agreed to begin construction of a filtration plant by July 1, 1996. When the City failed to comply with the Stipulation, the United States filed its suit to compel filtration of the Croton System. The United States and the State of New York have vigorously enforced the terms of the Consent Decree, resulting in the City constructing the Croton Filtration Plant and paying $5,064,000 in penalties to date for missed deadlines associated with the delays in the project schedule. Under the Consent Decree, the City was also required to conduct interim measures including monitoring the quality and safety of the Croton System and implementing watershed protection measures.
Filtering drinking water obtained from surface water sources, such as the Croton System, reduces the risk of waterborne disease. These sources are susceptible to potential contamination from disease causing organisms such as Giardia and Cryptosporidium which can easily get into surface water supplies from human activity and animals. Filtration, coupled with disinfection and source water protection, is the best means of ensuring the safety of drinking water from the City’s Croton water supply.
“The United States brought this action in 1997 to ensure that New York City residents are provided with safe drinking water from the Croton Water Supply. Through many years of litigation, enforcement and negotiation, this office has persevered to ensure that construction of the filtration plant was completed and that filtered water will be available to New York City residents from the Croton System. I am pleased that our enforcement efforts have come to fruition and the residents of New York City will have a high quality filtered drinking water supply,” said Acting United States Attorney Currie.
“New Yorkers deserve to have the highest quality water possible," said EPA Regional Administrator Judith A. Enck. "The EPA required New York City to build a filtration plant to protect people from Giardia and Cyrptosporidium, both of which can cause serious illness. The Croton Water Filtration plant will provide millions with a safe source of drinking water, which is essential to protecting public health.”
“Water from the Croton Watershed system has been critical to New Yorkers for more than a century, since the Croton Aqueduct began operating in 1842. Bringing this water filtration plant on-line is a major step forward in ensuring that drinking water from the watershed remains safe and available to New York City residents. It is also a critically-needed investment in New York's public infrastructure. My office will continue to work with our federal, state, and local partners to ensure that the city's compliance with the remaining obligations of the consent decree,” said New York Attorney General Schneiderman.
The action is entitled United States and State of New York v. City of New York and New York City Department of Environmental Protection, Civil Action No. 97-CV-2154 (Gershon, J.) (Gold, M.J.). The action was litigated and the Consent Decree was negotiated by Assistant United States Attorney Deborah B. Zwany, Elizabeth Yu, U. S. Department of Justice, Environment and Natural Resources Division, and Andrew Gershon, New York State Attorney General’s Office, with assistance from EPA Region 2, Phyllis Feinmark, Regional Counsel’s Office, Doughlas McKenna, Chief of the Water Compliance Branch, and Nicole Kraft, Chief of the Ground Water Compliance Section, and the New York State Department of Health’s Bureau of Water Supply Protection.
School Construction Authority General Contractor and His Employees Convicted of Multiple Crimes for Participating in Long-Running Scheme to Deprive Workers of the Prevailing WageRead the Press Release
Earlier today, following four weeks of trial, a federal jury in Brooklyn, New York, returned a guilty verdict against Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), and co-defendants Zainul Syed, Afzaal Chaudry, and Irfan Muzaffar for their participation in a scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do. Specifically, Nadeem was convicted on charges of mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges. Syed, Chaudry, and Muzaffar were convicted of various crimes for their participation in the scheme. When sentenced by United States District Judge Brian M. Cogan, Nadeem, Syed, and Chaudry face sentences of up to 20 years in prison, and Muzaffar faces a sentence of up to five years in prison.
The verdicts were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Shantelle P. Kitchen, Special-Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York; and Special Agent-in-Charge Cheryl Garcia, New York Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“The message to those who win and perform public works contracts in New York City and New York State is loud and clear – if you want to reap the benefits that come from being awarded those contracts, you will be held to following the rules,” stated Acting United States Attorney Currie. “You must pay your workers the wages to which they are entitled, rather than rig the system with bribes and then scheme to hide your income from the government. Those who do not follow the rules will be vigorously prosecuted.”
Mr. Currie expressed his grateful appreciation to the Office of the New York State Attorney General and that office’s Organized Crime Task Force, the New York City Department of Investigation, the New York City School Construction Authority, Office of Inspector General, the New York City Police Department, and the New York County District Attorney’s Office for their assistance in the investigation and prosecution of the defendants.
Nadeem owned and operated SM&B, which received over $36 million in fraud-induced payments from the SCA since 2007. Chaudry and Syed worked as a foreman and office manager, respectively, at SM&B. Muzaffar is Nadeem’s son, and also worked in SM&B’s office.
Both New York State Labor Law and the terms of its contracts with the SCA required SM&B to pay workers on SCA-funded projects a prevailing wage rate, which was set by the New York City Comptroller. Instead, SM&B paid workers, including bricklayers and laborers, cash wages on its projects at rates that were a small fraction of the prevailing wage. Nadeem, Chaudry, and Syed then falsely certified to the SCA that the workers had been paid the prevailing wage, thereby committing mail fraud, wire fraud, and conspiracy to commit those crimes.
To conceal the charged fraud scheme, and to obtain cash to pay the illegally low wages to workers, Nadeem, Syed, and Muzaffar engaged in illegal structuring, cashing multiple checks, each for less than $10,000 on a single day, for a total amount of more than $10,000, in an effort to avoid the required filing of Currency Transaction Reports (CTRs). Since July 2006, Nadeem and others acting his direction wrote more than $4.1 million in structured checks on SM&B’s account.
Nadeem and Syed also arranged for the payment of $30,000 in cash bribes to an undercover SCA Inspector, and over $7,000 in cash bribes to a shop steward for the Local 1 Bricklayers Union, Russell Argila. Argila has previously pleaded guilty to accepting those bribes. Nadeem also laundered approximately $7 million in proceeds of the charged fraud scheme by funneling it through shell companies and sent millions of dollars through these shell companies to Pakistan to invest in an amusement park and resort complex named “Wayzgoose Park.”
Finally, Nadeem filed false tax returns for SM&B and himself that fraudulently inflated SM&B’s business expenses and reduced its profits by more than $4 million.
At sentencing, the defendants also face forfeiture of substantial assets and cash.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Lan Nguyen, Gina M. Parlovecchio, and Nathan Reilly are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.
The Defendants:
MUZAFFAR NADEEM
Age: 59
Brooklyn, New York
ZAINUL SYED
Age: 40
Brooklyn, New York
AFZAAL CHAUDRY
Age: 48
Brooklyn, New York
IRFAN MUZAFFAR
Age: 31
Brooklyn, New York
E.D.N.Y. Docket No. 13-CR-424 (BMC)
Four Defendants Charged in Brooklyn and Sixteen Charged in Italy for Their Participation in A Transnational Cocaine Trafficking OperationRead the Press Release
Queens Defendants Also Charged with Possessing Illegal Firearms
A six-count superseding indictment was unsealed yesterday in Brooklyn federal court charging husband and wife defendants Gregorio and Eleonora Gigliotti, their son Angelo Gigliotti, and a relative who is an Italian citizen, Franco Fazio, with conspiracy to import cocaine, conspiracy to possess with intent to distribute cocaine, importation of cocaine, and attempted possession of cocaine. In addition, the Gigliotti defendants were charged with unlawful use and possession of firearms. The charges arise from the defendants’ participation in an international narcotics-trafficking operation between July 1, 2014 and March 11, 2015.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Raymond R. Parmer, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
The unsealing of the superseding indictment coincides with the arrest of thirteen defendants in Italy today on related drug-trafficking charges resulting from the collaboration between the United States and Italian law enforcement agencies. Among those arrested by the Italian authorities was Franco Fazio, who will face charges in Italy before the United States seeks his extradition to face the charges contained in the Brooklyn superseding indictment. The Gigliotti defendants, who remain in custody in the United States, were also charged with narcotics-trafficking offenses by the Italian authorities.
“This case is a powerful example of the impact of international cooperation in combatting criminal organizations whose activities transcend national borders,” stated Acting United States Attorney Currie. Mr. Currie extended his grateful appreciation to Homeland Security Investigations and the Federal Bureau of Investigation, and 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. Mr. Currie also expressed his 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, who coordinated extensive evidence-sharing and coordinated operations.
“The arrests in New York and Italy dismantle a global network of alleged drug smugglers believed responsible for importing more than 50 kilograms of cocaine into the U.S.,” said HSI New York Special Agent-in-Charge Parmer. “This investigation is another example of the collective efforts of our federal and international law enforcement partners to bring down those responsible for the proliferation of illegal drugs in our communities, no matter where in the world they hide.”
“Using their family’s businesses in New York as a front for a narcotics trafficking operation, the defendants, as alleged, sought to establish a global cocaine ring. We also used a global team to take on this case, working closely with our partners in Italy,” said FBI Assistant Director-in-Charge Rodriguez. “As today’s arrests show, we are committed to working together to disrupt and dismantle organized criminal enterprises.”
The charges detailed in the Brooklyn indictment are the product of a lengthy investigation by HSI and the FBI that involved the use of court-authorized wiretaps and physical surveillance, and revealed that between October and December 2014 alone, the defendants imported over 55 kilograms of cocaine into the United States from Costa Rica, which was recovered by law enforcement.
As alleged, Gregorio and Eleonora Gigliotti owned and operated several businesses in New York City that were used to facilitate their narcotics-trafficking operation, including Cucino Amodo Mio, an Italian restaurant and pizzeria in Corona, Queens, and Fresh Farms Export Corp., an import/export company. In October 2014, law enforcement intercepted a shipment of cassava (a starchy root) that was shipped to the United States from Costa Rica and bound for Farm Fresh Export Corp. in New York. The shipment was found to contain approximately 40 kilograms of cocaine secreted inside cardboard boxes of cassava. Earlier, Eleonora Gigliotti allegedly traveled to Costa Rica with approximately $400,000 in cash that she delivered to the sources of supply. In September 2014, Franco Fazio allegedly traveled from Italy to New York and then to Costa Rica to deliver another $170,000 in cash to the sources of supply.
In December 2014, law enforcement intercepted a second shipment of cassava bound for Fresh Farms Export Corp. in New York that had also been shipped from Costa Rica and seized approximately 15 kilograms of cocaine secreted within the cardboard boxes of produce. Prior to the arrival of this shipment of cocaine, defendant Franco Fazio allegedly made two additional trips to Costa Rica to meet with the sources of supply.
The Gigliotti defendants were arrested on March 11, 2015, in New York. That same day, law enforcement searched Cucino Amodo Mio and Gregorio and Eleonora Gigliotti’s residence. In the restaurant they seized 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; and more than $100,000 in cash. In the Gigliotti residence agents recovered a loaded .45 caliber Llama handgun and more than $18,000 in cash.
The charges in Italy relate to the defendants’ narcotics trafficking distribution ring in that country – as a quantity of the cocaine imported into the United States was destined for exportation to and distribution in Italy. Based in part upon the U.S. investigation, Italian law enforcement disabled a narcotics distribution ring allegedly operating in Calabria on behalf of the U.S.-based defendants.
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, they face a potential mandatory minimum sentence of 15 years’ imprisonment. The Brooklyn defendants will be arraigned at a later date before United States District Judge Raymond J. Dearie.
The government’s case is being prosecuted jointly by the Office’s Organized Crime & Gangs Section and the Long Island Criminal Section. Assistant United States Attorneys James Miskiewicz, Nicole M. Argentieri and Margaret E. Gandy are in charge of the prosecution.
The Defendants:
GREGORIO GIGLIOTTI
Age: 59
Malba, New York
ELEONORA GIGLIOTTI
Age: 54
Malba, New York
ANGELO GIGLIOTTI
Age: 34
Woodside, New York
FRANCO FAZIO
Age: 56
Calabria, Italy
E.D.N.Y. Docket No. 15-CR-204 (RJD)
Brooklyn Man Sentenced to Life for Conspiracy to Commit Honor Killings in PakistanRead the Press Release
Earlier today, in federal court in Brooklyn, Mohammad Ajmal Choudhry was sentenced to life in prison. Following a nine-day trial in June and July 2014, Choudhry was convicted of conspiring to commit murder in a foreign country, transmitting threats via interstate communications, and immigration fraud.
“Choudhry’s murderous plan was orchestrated in Brooklyn, and the deadly consequences were felt in Pakistan – but not beyond the reach of the American justice system,” stated Acting United States Attorney Kelly T. Currie. “Today, Choudhry was ordered to spend the rest of his life in prison, a fitting punishment for a man who – in the mistaken name of honor – caused two innocent people to be killed, and their bereaved family members to flee leaving behind their home and the place where their beloved family members are buried.” Mr. Currie expressed his grateful appreciation to U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI) and the U.S. State Department’s Diplomatic Security Service, who worked closely together to investigate the case.
“There is absolutely no honor in killing innocent victims whose only fault was helping a young woman find freedom in the United States,” said Raymond R. Parmer Jr., Special Agent in Charge, HSI New York. “This case serves as a stern reminder to those who plot crimes to be committed overseas, that our law enforcement and justice systems have global reach and will always be used to make sure justice is served.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enable us to work with our law enforcement partners domestically and around the world to bring criminals to justice,” said David Schnorbus, Special Agent in Charge of the Diplomatic Security New York Field Office. “With this case, Diplomatic Security sends a strong message to criminals: there is no safe harbor outside the United States.”
Choudhry’s daughter, Amina Ajmal, was held against her will in Pakistan for more than three years by relatives at her father’s direction. During that time, Ajmal, a U.S. citizen, was forced into an arranged marriage with a Pakistani national. Ajmal eventually escaped Pakistan and returned to the United States with the assistance of a Pakistani man, Shujat Abbas, and U.S. State Department officials.
Following Ajmal’s flight from Pakistan in early January 2013, Choudhry and members of his family in Pakistan began a several months-long campaign of threats and intimidation against Abbas’s family members, who hailed from the same village as Choudhry, to avenge the perceived blight on the Choudhry’s honor resulting from Ajmal’s and Abbas’s actions. On January 26, 2013, Choudhry’s brother and other members of his family lured Abbas’s mother and father to a location just outside the village where they fired gunshots repeatedly at their car; Abbas’s mother and father managed to escape the attack unharmed, but spent the weeks that followed living in fear that they and their children would be murdered.
These fears were compounded by a threat that Choudhry communicated directly to Abbas’s father during a telephone call shortly after the shooting took place – “If our daughter will not come back to the home, we will kill all five of you. Otherwise, we will find your son and we’ll kill him. This time we shoot on your car. It was threatening, but next time we will shoot in the chest of all five of you.”
On February 25, 2013, Abbas’s father and twenty-one year old sister were shot and killed in the streets of their village. According to eyewitnesses, Choudhry’s brother and other relatives were observed standing over the victims, holding guns and desecrating the bodies. Choudhry foreshadowed the murders just days before they occurred when he warned his daughter during a recorded telephone call – “Now let me make it clear to you. If you don’t come back, I will kill each and every one of them.”
After Abbas’s father and sister were killed, he and the remaining members of his family living in Pakistan moved to an undisclosed location in the United States to assist the United States government in the prosecution of this case and to escape the ongoing threats of violence against them in Pakistan.
The sentencing proceeding was held before the Hon. William F. Kuntz, II.
The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Amanda Hector, Richard M. Tucker, and Margaret E. Gandy are in charge of the prosecution.
The Defendant:
MOHAMMAD AJMAL CHOUDHRY
Age: 62
E.D.N.Y. Docket No. 13 CR 150 (WFK)
Irs Revenue Officer Indicted for Mail and Wire Fraud, Filing False Tax Returns, Identity Theft, and PerjuryRead the Press Release
A twenty-eight-count indictment was unsealed today in United States District Court for the Eastern District of New York charging James Brewer, a resident of Staten Island, New York, with seven counts of wire fraud, mail fraud, three counts of subscribing to false federal tax returns, six counts of aiding and assisting in the preparation of false federal tax returns, ten counts of aggravated identity theft, and perjury. Brewer is a Revenue Officer of the Internal Revenue Service (IRS), assigned to the Edison, New Jersey IRS office. Brewer was arrested in Las Vegas, Nevada, and is scheduled to be arraigned tomorrow afternoon before a United States Magistrate Judge at the federal courthouse in Las Vegas.
The charges were announced by Kelly T. Currie, 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 and Rodney A. Davis, Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA), Washington Field Division.
“As alleged, James Brewer abused his position of trust to enrich himself,” stated Acting United States Attorney Currie. “He willfully disregarded his responsibility to deal honestly and testify truthfully, and now stands accused of a series of crimes. We will continue to work with our law enforcement partners to enforce our laws across the board.” Mr. Currie expressed his 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, IRS-CI, Las Vegas Field Office and the Treasury Inspector General for TIGTA, Denver Field Division for its assistance in this case.
“The crimes alleged in this indictment are very serious. While employed by the IRS to enforce our nation’s tax laws, it is alleged that James Brewer was himself breaking these laws,” stated Special Agent-in-Charge Larsen, IRS-Criminal Investigation, Newark Field Office. “Today’s indictment underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who allegedly violate the public’s trust.”
“Mr. Brewer allegedly not only stole the identities of taxpayers for personal gain but also allegedly cheated the very tax system he was paid to uphold and support. TIGTA will aggressively investigate any allegation of an IRS employee committing a criminal act that impacts federal tax administration,” said TIGTA Special Agent-in-Charge Davis.
According to the indictment, Brewer operated two outside businesses contrary to IRS regulations: he prepared tax returns for others in exchange for fees, and he operated a business selling designer clothes, collectable toys, sports memorabilia, and other items through the Internet auction site “eBay.” As part of a scheme to fraudulently reduce his taxable income and increase his tax refunds, Brewer failed to report any income he received for his unauthorized tax preparation business, underreported the gross receipts earned from his Internet retail business, and claimed false dependents on federal tax returns he prepared and filed on his behalf for three tax years. 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. 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 in New York, New York.
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 Public Integrity Section. Assistant United States Attorneys Marisa Megur Seifan and Moira Kim Penza are in charge of the prosecution.
The Defendant:
JAMES C. BREWER
Age: 38
Staten Island, New York
E.D.N.Y. Docket No. 15 CR 209 (PKC)
Independent Contractor in Afghanistan Sentenced to 48 Months for His Role in Offering $54,000 in Bribes to A U.S. Government OfficialRead the Press Release
Earlier today at the federal courthouse in Brooklyn, Akbar Ahmad Sherzai, an independent contractor for a trucking company operating in Afghanistan responsible for delivering fuel to U.S. Army installations, was sentenced to 48 months’ imprisonment, three years of supervised release, and forfeiture of $54,000 for his role in offering a U.S. Army serviceman bribes to falsify documents to reflect the successful delivery of fuel shipments that Army records indicate were never delivered. The sentencing proceeding was held before U.S. District Judge Margo K. Brodie. Sherzai previously pleaded guilty to one count of conspiracy to commit bribery.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division, John F. Sopko, Special Inspector General for Afghanistan Reconstruction, Diego G. Rodriguez, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office, Raymond R. Parmer, Special Agent in Charge, Immigration and Customs Enforcement, Homeland Security Investigations (HSI), and Frank Robey, Director of the U.S. Army’s Criminal Investigation Command.
“Attempts to corrupt American officials will not be tolerated, either at home or abroad,” stated Acting United States Attorney Currie. “Our efforts to bring to justice those who would do so do not end at our nation’s borders.” Mr. Currie extended his grateful appreciation to each of the agencies who participated in the investigation and prosecution of this case.
The U.S. Army regularly contracts with local Afghan trucking companies to transport U.S. military equipment, fuel, and other supplies throughout Afghanistan. To ensure the companies fulfilled these requests, the U.S. Army used transportation movement requests (TMRs), which, when properly completed, verified that the shipments were successfully completed before approving payments to the trucking companies.
In April 2013, Sherzai approached a U.S. military serviceman to discuss fuel delivery missions that had been classified by the U.S. Army as “no-shows,” meaning that the fuel had not been delivered. Sherzai offered the serviceman a bribe to falsify the TMRs to reflect successful deliveries so that Sherzai’s company would receive payment and avoid penalties for failed fuel deliveries. The serviceman, under the supervision of law enforcement, continued to meet with Sherzai to discuss payments for the falsification of records. On two separate occasions, Sherzai paid the serviceman bribes in cash on American military bases in Afghanistan. On another occasion, Sherzai arranged for the serviceman’s bribe to be transferred to the United States through a hawala, an informal money transfer system. In total, Sherzai paid the serviceman $54,000 in cash to falsify 14 TMRs. Each “no show” delivery mission, absent the fraudulent TMRs, would have resulted in a fine of the company by the U.S. government of $75,000.
The government’s case is being prosecuted by Assistant U. S. Attorney Amir H. Toossi and Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section.
The Defendant:
AKBAR AHMAD SHERZAI
Age: 50
Centerville, Virginia
Citizenship: Dual United States and Afghanistan
E.D.N.Y. Docket No. 14-Cr-60 (MKB)
Former Officer of Rockford Group Pleads Guilty for Role in Multi-Million Dollar Fraud SchemeRead the Press Release
Earlier today, Genadi Yagodayev, a former officer of the Rockford Group, pleaded guilty to conspiracy to commit mail and wire fraud in connection with a scheme to defraud investors of more than $10 million. Today’s plea is the fourth conviction in connection with the investigation into Rockford Group.
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Philip R. Bartlett, Postal Inspector in Charge, New York Division, U.S. Postal Inspection Service (USPIS); Raymond R. Parmer Jr., Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); and Robert J. Sica, Special Agent in Charge, United States Secret Service, New York Field Office (USSS).
“Yagodayev and his cohorts scammed unsuspecting investors through a web of lies and deceit. When the money was stolen and sent overseas, Yagodayev fled the country and thought he had escaped the reach of U.S. law enforcement,” stated Acting United States Attorney Currie. “His extradition and prosecution show that we and our law enforcement partners will leave no stone unturned in bringing to justice those who seek to defraud the investing public.” Mr. Currie expressed his appreciation to the USPIS, HSI, and USSS for their hard work and dedication over the course of this investigation and prosecution. Mr. Currie also thanked the government of Cyprus and the Department of Justice, Office of International Affairs (OIA), for their substantial assistance in the extradition of Yagodayev.
From approximately December 2008 to November 2009, Yagodayev and his co-conspirators participated in a fraudulent investment scheme through a company called the Rockford Group. The Rockford Group marketed itself as a “leading private equity firm,” claimed to invest in plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised a 15% return on their investments. The Rockford Group, however, never invested in any lawsuits. Instead, nearly all of the investors’ funds were wired to bank accounts overseas. Approximately 200 investors in the U.S. and Canada lost approximately $11 million as a result of this scheme.
After the scheme collapsed, Yagodayev fled to Israel. In 2014, he was apprehended while traveling to Cyprus and extradited to the United States later that year.
Today’s guilty plea took place before United States District Judge I. Leo Glasser. When sentenced, Yagodayev faces up to 20 years in prison. The government’s case is being prosecuted by the Office’s Business and Security Fraud Section. Assistant United States Attorney Daniel Spector is in charge of the prosecution.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
GENADI YAGODAYEV
Age: 37
E.D.N.Y. Docket No. 14-CR-258
Former CEO and President of Gateway Bank Pleads Guilty to Bank Fraud ConspiracyRead the Press Release
Earlier today, Poppi Metaxas, the former President and Chief Executive Officer (CEO) of Gateway Bank, FSB (Gateway) pleaded guilty to conspiracy to commit bank fraud for her role in defrauding the bank of more than $1.8 million in the aftermath of the financial crisis.
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Christina Scaringi, Special Agent-in-Charge, Northeast Region, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG).
“As Gateway Bank struggled to survive under the burden of its accumulated toxic assets, its CEO Poppi Metaxas turned to sham transactions to deceive regulators and convince them that the bank had rid itself of its bad loans and underwater real estate holdings. Today’s guilty plea puts bank officers on notice that they will be brought to justice if they resort to lies and deceit to fix mistakes of the past,” stated Acting United States Attorney Currie. Mr. Currie thanked the FBI, SIGTARP, and HUD-OIG for their hard work and dedication through the course of this five-year investigation and prosecution.
According to court filings and the facts presented at the plea hearing, between 2009 and 2010, Metaxas engaged in a scheme to defraud Gateway in connection with Gateway’s sale of non-performing assets and mortgage loans to three entities in exchange for $15 million. Specifically, Metaxas caused Gateway to enter into a sham loan agreement with Ideal Mortgage Bankers Ltd. d/b/a Lend America, a Long Island mortgage lender and Gateway’s largest mortgage lending client. Metaxas and her co-conspirators, through a series of wire transfers, then used the proceeds of that sham loan to satisfy the 25 percent down payment that the three entities owed to Gateway in connection with the sale of the non-performing assets and loans. To conceal the fraudulent “round trip” nature of the loan funds, Metaxas deceived the board of directors of Gateway and, in October 2009, she provided false testimony to bank regulators when asked about the source of the down payment.
Today’s guilty plea took place before United States District Judge Joseph F. Bianco at the United States Courthouse in Central Islip, New York. When sentenced, Metaxas faces up to five years in prison.
The government’s case is being prosecuted by the Office’s Business and Security Fraud Section. Assistant United States Attorneys Walter M. Norkin and Christopher L. Nasson are in charge of the prosecution.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant:
POPPI METAXAS
Age: 62
Hillsborough, California
E.D.N.Y. Docket No. 14-CR-190 (JFB)
Leader and Top Enforcer of Criminal Gang Convicted of Racketeering and MurderRead the Press Release
Earlier today, following three weeks of trial, a federal jury in Brooklyn, New York, returned a guilty verdict against Damion Hardy, also known as “World,” and Aaron Granton, also known as “E-Bay,” on charges of racketeering, including six murders, narcotics trafficking, kidnaping, and robbery as predicate racketeering acts, and related offenses. Granton was also convicted of his participation in a murder-for-hire. When sentenced by United States District Judge Frederic Block, each defendant faces a mandatory sentence of life imprisonment on the most serious charge.
The verdicts were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Raymond R. Parmer Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department.
“Today’s verdict is the culmination of more than a decade of work by prosecutors, special agents, and detectives to dismantle the Cash Money Brothers gang and to hold Damion Hardy and Aaron Granton accountable for their heinous crimes. Hardy and Granton terrorized parts of Brooklyn in the 1990s and early 2000s, and they now face mandatory sentences of life imprisonment,” stated Acting United States Attorney Currie. “I would like to thank our partners at the FBI, HSI, and the New York City Police Department for their hard work and years of dedication to this important case.”
“The process of eradicating gangs and the violence they bring to our communities remains a top priority for the FBI. Today’s convictions are a significant step, but in no way do they mark the end of our commitment to protect the welfare of those who live in neighborhoods plagued by crime,” stated FBI Assistant Director-in-Charge Rodriguez.
“Drug traffickers destroy lives and ruin communities. Today’s guilty verdicts should leave no doubt about our shared commitment to attack and dismantle drug traffickers who pose a threat to our communities,” HSI New York Special Agent-in-Charge Parmer. “Working alongside our law enforcement partners, HSI will continue to use its unique authorities to ensure criminals are held accountable and brought to justice.”
“We applaud this guilty verdict which acknowledges the violent acts perpetrated by notorious gang members Damion Hardy and Aaron Granton. I want to thank our law enforcement partners for their dedication and tireless efforts which resulted in these criminals being brought to justice,” stated NYPD Commissioner Bratton.
From 1991 until August 2004, Hardy was the leader of a criminal enterprise known as the “Cash Money Brothers” (CMB), based in the Lafayette Gardens houses in Brooklyn, New York (Lafayette Gardens). Granton was a member of CMB and one of its top enforcers. From the time the crack-cocaine epidemic began in the late 1980s, Lafayette Gardens was a central and lucrative hub for the distribution of cocaine base. At that time, the young men who would later form CMB acted as low-level street dealers under the direction of the senior drug dealers who controlled Lafayette Gardens. In or around 1991, after CMB was formed under the leadership of the defendant Hardy and his brother, Myron Hardy, also known as “Wise,” the CMB ousted the senior dealers and seized control of the Lafayette Gardens crack trade for themselves.
The CMB wrested and maintained control of Lafayette Gardens through acts of violence that included near-daily gun battles with rival organizations and numerous murders. In 1998, Hardy ordered a junior gang member to shoot and kill Michael Colon because Hardy believed that Colon had disrespected and humiliated him at a roller skating rink. In 1999, while Hardy was incarcerated, his brother Myron Hardy was shot and killed in Lafayette Gardens. Hardy and other CMB members believed that a rival drug dealer named Ivery “Peanut” Davis and other members of Davis’s drug organization were responsible for the murder. Immediately after Myron Hardy was shot, while he still lay wounded in the hospital, Damion Hardy, from prison, began directing his gang members to exact revenge. Hardy ordered the CMB to murder Darryl Baum, James Hamilton, Tyrone Baum, and Ivery Davis, all four of whom were ultimately murdered by CMB members. Davis’s killing also resulted in the death of an innocent bystander, Johan Camitz. At Hardy’s direction, Granton acted as the triggerman in the murders of Darryl Baum, Hamilton, and Davis.
In addition, Granton also participated in the 2001 contract murder of Troy Singleton. Through his work with CMB, Granton had earned a reputation as an effective and ruthless killer. He was recruited by a separate gang, known as the “Supreme Team,” to kill Singleton, who was then shot multiple times in the back and head as he left a nightclub in Queens, New York.
The government’s case is being prosecuted jointly by the Office’s International Narcotics & Money Laundering Section and Organized Crime & Gangs Section. Assistant United States Attorneys Matthew Amatruda, Soumya Dayananda, and Rena T. Paul are handling the prosecution.
The Defendants:
DAMION HARDY
Age: 40
Brooklyn, NY
AARON GRANTON
Age: 40
Brooklyn, NY
E.D.N.Y. Docket No. 04-CR-0706
MEDIA ADVISORY: Kelly T. Currie Will Serve as the Acting United States Attorney for the Eastern District of New YorkRead the Press Release
Effective today, Kelly T. Currie will serve as the acting United States Attorney for the Eastern District of New York. In that capacity, he is responsible for overseeing all federal criminal and civil investigations and cases in Brooklyn, Queens, and Staten Island, as well as Nassau and Suffolk Counties on Long Island. Mr. Currie supervises a staff of approximately 170 attorneys and 129 support personnel. Most recently, Mr. Currie served as First Assistant United States Attorney in this Office.
Mr. Currie returned to the U.S. Attorney’s Office in November 2014 after four years at the law firm Crowell & Moring, LLP. While in private practice, he represented corporations and individuals in white collar criminal defense matters, enforcement actions, corporate internal investigations, and complex civil litigation.
Prior to joining the law firm, Mr. Currie served in the U.S. Attorney’s Office from 1999-2010, including as Deputy Chief of the Criminal Division and Chief of the Violent Crimes & Terrorism Section. Mr. Currie led investigations and prosecutions of a wide range of crimes, including racketeering, international terrorism, securities and wire fraud, money laundering, and murder. He tried 15 cases to verdict and argued over a dozen appeals before the U.S. Court of Appeals for the Second Circuit. As Chief of the Violent Crimes and Terrorism Section, Mr. Currie led teams of prosecutors in bringing nationally-recognized terrorism and national security prosecutions, and RICO prosecutions against violent gang members. He also obtained a trial conviction in the prosecution of the head of securities lending at a major Wall Street investment bank for securities fraud and money laundering.
Mr. Currie joined the U.S. Attorney’s Office after working as an associate at the law firm of Rogers & Wells, LLP. From 1996 to 1998, Mr. Currie served as a senior advisor to former United States Senator George J. Mitchell, who chaired the political negotiations in Northern Ireland that led to the 1998 Good Friday Agreement.
Mr. Currie graduated from the University of Virginia, McIntire School of Commerce in 1986, and the University of Virginia School of Law in 1993.
7-Eleven Franchisee Sentenced to 87 Months in Prison for Wire Fraud, Alien Harboring, and Identity Theft SchemeRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Farrukh Baig was sentenced to 87 months in prison following his September 22, 2014, guilty plea to committing wire fraud and concealing and harboring illegal aliens employed at 7-Eleven, Inc. (7-Eleven) franchise stores located throughout Long Island and Virginia.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Raymond R. Parmer Jr., Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); Joseph A. D’Amico, Superintendent, New York State Police; Edward Webber, Commissioner, Suffolk County Police; and Irv Miljoner, District Director, United States Department of Labor.
“Using the 7-Eleven brand in our neighborhoods, the defendant exploited his alien employees, stealing their wages and requiring them to live in unregulated boarding houses. He now faces time in prison for not only systematically employing illegal aliens, but also for concealing their employment by stealing the identities of children and even the dead,” stated Acting United States Attorney Currie. “We are committed to preserving the rule of law and protecting our communities from the abuses of corrupt businesses seeking to gain illegal advantage. I would like to thank our partners at HSI, New York State Police, Suffolk County Police, and the United States Department of Labor for their hard work on this important and ongoing investigation.”
“Today’s sentencing holds Farrukh Baig accountable for knowingly stealing identities to hire and employ an illegal workforce. He also stole more than $2.6 million from his overworked and underpaid employees,” said Raymond R. Parmer Jr., special agent in charge HSI New York. “This case serves as a stern reminder about the consequences facing employers who exploit illegal alien labor and violate our nation’s laws.” According to court filings and facts presented in court, the defendant, who owned, managed, and controlled fourteen 7-Eleven franchise stores during the course of the conspiracy, hired dozens of illegal aliens, equipped them with more than 20 identities stolen from United States citizens, housed them at residences he and his coconspirators owned, and stole substantial portions of his workers’ wages. During the scheme, the defendant generated over $182 million in proceeds from the 7-Eleven franchise stores.
This sentence marks an important milestone in the government’s ongoing investigation, which is already one of the largest criminal alien employment investigations ever conducted by the Department of Justice and the Department of Homeland Security. In addition to the sentence of imprisonment, the court entered an order forfeiting the defendant’s rights to ten 7-Eleven stores in New York and four 7-Eleven stores in Virginia, as well as five houses in New York worth over $1.3 million. In addition, the court ordered the defendant to pay $2.5 million in restitution for the back wages that he stole from his workers.
The government’s case is being prosecuted by the Office’s Business and Security Fraud Unit. Assistant United States Attorney Christopher A. Ott is in charge of the prosecution, with assistance provided by Assistant United States Attorneys Brian Morris and Elliot M. Schachner of the Office’s Civil Division, which is responsible for the forfeiture of assets.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.StopFraud.gov.
Tips and Information
For questions or concerns about immigrant workers and job seekers, contact the New York State Department of Labor Division Policies and Affairs (DIPA) at its toll-free worker hotline (1-877-466-9757).
E.D.N.Y. Docket No. 14-CR-351(SJF)
The Defendant:
FARRUKH BAIG
Citizenship: Naturalized United States Citizen
Age: 58
Head of Harbor, New York
Former Agape Employees Convicted on All Counts by Jury in Massive Ponzi SchemeRead the Press Release
Earlier today, after four weeks of trial, a federal jury in Central Islip, New York, returned guilty verdicts against Diane Kaylor and Jason Keryc, former employees of Hauppauge-based Agape World, Inc. (Agape), on charges of securities fraud, conspiracy, mail fraud, and wire fraud. The charges arose out of the defendants’ participation in a huge Ponzi scheme. When sentenced by United States District Judge Denis R. Hurley, the defendants face a maximum sentence of 20 years’ imprisonment on each count. Keryc was remanded.
The verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service (USPIS).
“Kaylor and Keryc convinced thousands of hard-working, middle class Americans to invest their life savings, their children’s college funds, or their retirement money in Agape, knowing that Agape was a Ponzi scheme,” stated United States Attorney Lynch. “The defendants’ motive was simple and all too common today: greed. The more money the defendants pried out of investors’ pockets, the larger their commission checks. The defendants gained the trust of their investors and then betrayed that trust to feed their insatiable appetites for money.” Ms. Lynch expressed her grateful appreciation to the United States Securities and Exchange Commission for their assistance in the case.
“What was intended as a get-rich-quick scheme was, in fact, a cowardly plan. A plan that deceived unwitting investors and lured them into a false sense of security, while promising unrealistic returns on their investments. Unlike those convicted today, the FBI and our partners intend to keep the promises we make to those who invest their faith in us. Those who employ schemes to capitalize on the pain and suffering of others will most certainly be brought to justice,” stated FBI Assistant Director-in-Charge Rodriguez.
“The Postal Inspectors are committed to protecting the American Consumers from falling victims to these types of frauds. We have a robust program in fraud prevention and when warranted, as such as this case, prosecuting defendants through the efforts of the United States Attorney’s Office,” stated Postal Inspector-in-Charge Bartlett.
Nicholas Cosmo founded Agape in August 2000. Earlier, Cosmo spent 21 months in a federal prison for defrauding investors. Kaylor and Keryc were aware of Cosmo’s prior fraud conviction, but, not surprisingly, did not disclose this information to their investors. Between October 2005 and January 2009, the defendants, who worked as account representatives or brokers for Cosmo, played critical roles in the operation of the Ponzi scheme by soliciting and obtaining hundreds of millions of dollars from investors. To induce investments and discourage withdrawals, the defendants misled the investors by (1) assuring investors that their investments would only be used to fund specific, short-term secured bridge loans to commercial borrowers, or to make short-term loans to small businesses; (2) promising to pay investors unusually high rates of returns; and (3) representing that investing in Agape carried little or no risk of loss. The defendants raised significantly more money than was needed for the loans, and lied to the investors by assuring them that their money would specifically be used to fund only a particular loan. For their efforts, Kaylor and Keryc made approximately $3.4 million and $8.9 million, respectively.
Cosmo and the defendants paid returns to Agape investors, not from any profits earned on investments, but rather from existing investors’ deposits or money paid by new investors. The defendants and their coconspirators took more than $370 million from approximately 5,000 investors. Of that $370 million, only $22 million actually went to fund bridge loans. Unbeknownst to investors, approximately $113 million of their money was used to trade high risk futures and commodities.
As the fraudulent scheme began to unravel, Kaylor and Keryc continued to deceive investors about Agape’s financial health and the status of various Agape bridge loans. In the summer of 2008, Agape stopped paying commissions to the defendants and asked them not to cash checks for fear that the checks would bounce. On November 3, 2008, the defendants learned that all of Agape’s 2007 bridge loans were in default or on extension but once again did not disclose this information to existing or new investors. Rather, they actively continued to solicit money from investors, obtaining an additional $13 million. As a result of the Ponzi scheme, approximately 3,800 investors sustained actual losses totaling approximately $147 million.
On October 14, 2011, Cosmo was sentenced to a term of imprisonment of 25 years in United States v. Nicholas Cosmo, 09 CR 255 (DRH), for his role in the scheme. In addition to the convictions of Cosmo, Kaylor, and Keryc, the government’s investigation led to the conviction of six other defendants for their roles in this scheme, who are pending sentence before Judge Hurley.
The government’s case is being prosecuted by the Office’s Long Island Criminal and Civil Divisions. Assistant United States Attorneys Christopher C. Caffarone, Bradley T. King, Grace M. Cucchissi and Vincent Lipari are in charge of the prosecution.
The Defendants:
DIANE KAYLOR
Age: 39
Bethpage, New York
JASON KERYC
Age: 38
Wantagh, New York
E.D.N.Y. Docket No. 12-CR-357 (S-4)(DRH)
Long Island Man Sentenced to 25 Years in Prison for Attempting to Join Al-Qaeda in the Arabian PeninsulaRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Marcos Alonso Zea, also known as “Ali Zea,” an American citizen and resident of Brentwood, New York, was sentenced to 25 years in prison following his September 9, 2014, guilty plea to attempting to provide material support to a foreign terrorist organization, al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (collectively AQAP), and obstruction of justice.
The sentencing was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Assistant Attorney General, National Security Division; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).
Beginning in the fall of 2011, Zea planned to travel overseas in order to wage violent jihad against the perceived enemies of Islam, which included the government of Yemen and its allies. In furtherance of his plot, on January 4, 2012, Zea boarded a flight at John F. Kennedy Airport (JFK) in Queens, New York, to London, England, en route to Yemen. Zea was not permitted to transit onward from London, however, and was returned to the United States by British authorities. Zea was interviewed and closely surveilled by investigators following his return. Despite being prevented from traveling to Yemen, Zea continued to plot, including by encouraging and supporting his co-conspirator, Justin Kaliebe, who also was planning to travel to fight jihad. In January 2013, Kaliebe was arrested at JFK while attempting to travel to Yemen to join AQAP1. Months later, after learning that he too was under investigation, Zea caused electronic media on his computer to be destroyed in an effort to obstruct the investigation. Notwithstanding his efforts, a forensic examination of Zea’s electronic media subsequently conducted by investigators revealed an assortment of violent Islamic extremist materials, including issues of Inspire magazine, part of AQAP’s English-language media operations.
“Marcos Alonso Zea presents a chilling reminder of the danger presented to the United States by homegrown terrorists. Born, raised, and schooled in the United States, the defendant nevertheless betrayed his country by attempting to join al-Qaeda in the Arabian Peninsula, assisting a co-conspirator’s attempt to join that terrorist group, and, after learning he was under investigation, attempting to destroy evidence of his guilt,” stated U.S. Attorney Lynch. “We will continue to work tirelessly to protect our national security from all enemies, both foreign and domestic.” Ms. Lynch expressed her grateful appreciation to all the members of the FBI’s Joint Terrorism Task Force and the New York City Police Department, Intelligence Division, for their work on the investigation.
“One of our highest priorities is to protect our country by identifying, disrupting, and holding accountable those who provide or attempt to provide material support to designated foreign terrorist organizations,” said Assistant Attorney General Carlin. “This sentence serves unambiguous notice that attempting to travel abroad to engage in such conduct has significant consequences.”
“The threat from al-Qaeda is real, look no further than Marcos Zea. Zea betrayed our country, attempting to first join al-Qaeda. When that failed, he helped others wage jihad. We continue working relentlessly to disrupt the plans of those who look to do us harm,” stated FBI Assistant Director-in-Charge Rodriguez.
Police Commissioner Bratton said, “The New York City Police Department will continue to work closely with our federal counterparts to identify and arrest homegrown terrorists like Marcos Alonso Zea, and ensure all extremists bring no harm to American soil, especially here in New York City.”
The government’s case is being prosecuted jointly by the Office’s National Security and Cybercrime Section and the Long Island Criminal Division. Assistant United States Attorneys Seth D. DuCharme, John J. Durham, and Michael P. Canty are in charge of the prosecution, with assistance provided by Trial Attorney Kelli Andrews of the Counterterrorism Section of the Department of Justice.
The Defendant:
MARCOS ALONSO ZEA (a/k/a “Ali Zea”)
Age: 26
Brentwood, New York
___________________________________________________________________________
1 Kaliebe subsequently pled guilty to one count of attempting to provide material support to terrorists and one count of attempting to provide material support to AQAP. Kaliebe is pending sentence by United States District Judge Denis R. Hurley in Central Islip.
Chairman of the Board of Forcefield Energy Inc. Arrested for Securities Fraud ConspiracyRead the Press Release
Richard St. Julien, the Executive Chairman of the Board of Directors of ForceField Energy Inc. (ForceField), a publicly traded company whose common stock was listed on the NASDAQ under the ticker symbol FNRG, was arrested late Friday evening on charges of securities fraud conspiracy1. The arrest occurred as St. Julien was preparing to board a plane in Ft. Lauderdale bound for Costa Rica. The defendant’s initial appearance for removal proceedings to the Eastern District of New York occurred this afternoon before United States Magistrate Judge Lurana S. Snow, at the United States District Court in Ft. Lauderdale, Florida.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
ForceField purports to be a worldwide distributor and provider of LED lighting products and solutions. According to the criminal complaint unsealed this morning in Brooklyn federal court, since approximately August 2012, St. Julien and his co-conspirators engaged in a scheme to manipulate the price and trading volume of ForceField’s stock by using undisclosed nominee accounts, including an account held by a dermatologist in Boulder, Colorado, to purchase and sell the stock, and through the use of stock promoters and broker dealers who failed to disclose to potential investors that they had been paid by St. Julien to promote the purchase of the stock. St. Julien did not disclose his ownership and control of the shares purchased through nominees and used offshore banks, including in Belize, to pay the nominees to conceal his ownership and control. St. Julien coordinated the purchases by telephone and text messages.
As detailed in the complaint, at the end of January 2015, St. Julien allegedly paid approximately $50,000 to a stock promoter through the dermatologist in Colorado. A few days later, the stock promoter began promoting the purchase of ForceField shares on its publicly available Facebook page, disclosing that his company had been paid $25,000 by an entity unrelated to St. Julien, or the dermatologist.
Through his scheme, St. Julien and his co-conspirators deceived the investing public by creating the appearance of genuine trading volume and interest in ForceField’s stock, and as a result, from approximately January 2014 to April 2015, the price of the stock rose from a low of $4.55 per share to a high of $7.82 per share.
“As Chairman of the Board of a publicly traded company, St. Julien owed a duty of full disclosure to ForceField’s investors and shareholders. However, instead of protecting their interests by enforcing required disclosures and transparency at the company, St. Julien engaged in a stock trading scheme that was crafted on lies and deceit. Corporate insiders are on notice that we will bring to justice those who seek to deceive the investing public,” stated United States Attorney Lynch. Ms. Lynch expressed her appreciation to the FBI, the agency responsible for leading the government’s investigation, and to the United States Securities and Exchange Commission for its cooperation and assistance in the investigation.
“St. Julien had a fiduciary responsibility to act in the best interest of ForceField and its shareholders. He did neither. As alleged, St. Julien used backroom promoters and broker dealers to boost the price of ForceField by 58%, in violation of securities laws,” stated FBI Assistant Director-in-Charge Rodriguez.
If convicted, the defendant faces a maximum sentence of 25 years’ imprisonment.
The case is being handled by the Office’s Business and Securities Fraud Section. Assistant U.S. Attorney Jacquelyn M. Kasulis is in charge of the prosecution.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
RICHARD ST. JULIEN
Age: 46
Residence: San Jose, Costa Rica
________________________________________________________________________
1 The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Genovese Organized Crime Family Soldier Sentenced to 41 Months in Prison for Racketeering ConspiracyRead the Press Release
NEWARK, N.J. – A Kenilworth, New Jersey, man was sentenced today to 41 months in prison for his role in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), including engaging in a pattern of racketeering activity by extorting Christmastime tribute payments from members of the International Longshoremen’s Association (ILA), New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Stephen Depiro, 59, a Genovese family soldier, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to Count One of the second superseding indictment charging him with racketeering conspiracy. Depiro admitted to predicate acts involving conspiracy to commit extortion and bookmaking. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Since at least 2005, Depiro has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478.
During their guilty plea proceedings, Depiro and two other Genovese family associates – Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president; and Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. Cernadas and LaGrasso admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation. Depiro also admitted to managing an illegal sports betting business.
In addition to the prison term, Judge Cecchi sentenced Depiro to serve three years of supervised release. Cernadas was previously sentenced to probation and LaGrasso was sentenced to 28 months in prison.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Richard M. Frankel, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s sentencing. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
15-132 ###
Defense counsel: Alyssa Cimino Esq., Fairfield, New Jersey
Brian Gill Sentenced to Life and His Brothers David Gill and Samuel Mcintosh Sentenced to 40 Years for Drug-Related MurderRead the Press Release
Earlier today, in U.S. District Court in Brooklyn, New York, Chief Judge Carol Bagley Amon sentenced defendant Brian Gill to life in prison and his brothers David Gill and Samuel McIntosh to 40 years in prison. Following a three-week trial in November 2014, the three brothers were convicted of the June 22, 1994, drug-related murder of Michael Dawson and conspiracy to commit the murder. Brian Gill and David Gill were also convicted of a narcotics trafficking conspiracy between 2011 and 2013. At sentencing, the court found by clear and convincing evidence that Samuel McIntosh also participated in the 2011-2013 narcotics trafficking conspiracy. The charges stemmed from the defendants’ control of a drug-trafficking organization that operated in the Park Hill housing complex in the Clifton neighborhood of Staten Island.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
Over the course of two decades, the defendants intermittently operated a lucrative drug distribution business in Park Hill. On June 22, 1994, in connection with that business and in retaliation for selling crack cocaine on the defendants’ turf, the defendants brazenly murdered 22-year-old Michael Dawson in broad daylight in the street outside 160 Park Hill Avenue, a profitable building for crack dealing. Shortly thereafter, Brian Gill fled Staten Island. In 2011, when Brian Gill returned to Park Hill after 17 years, he launched another crack dealing business in Park Hill from his residence at 160 Park Hill Avenue. David Gill and Samuel McIntosh participated in and helped Brian Gill with that business.
“For years, these defendants escaped punishment for a senseless murder they committed in a community plagued by drug-trafficking and violence for far too long,” stated United States Attorney Lynch. “The sentences imposed appropriately reflect the seriousness of their crimes and demonstrate our steadfast commitment to holding accountable those who choose to commit murder and drug-trafficking, regardless of the age of their crimes.” Ms. Lynch extended her grateful appreciation to the FBI, the New York City Police Department, and the Richmond County District Attorney for their outstanding work in this case.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nadia Shihata, Alicyn Cooley, and Tali Farhadian are in charge of the prosecution.
The Defendants:
BRIAN GILL
Age: 46 years
Staten Island, New York
DAVID GILL
Age: 43 years
Staten Island, New York
SAMUEL MCINTOSH
Age: 40 years
Staten Island, New York
E.D.N.Y. Docket No. 13-CR-487 (CBA)
Genovese Organized Crime Family Associate Sentenced to 28 Months in Prison for Racketeering ConspiracyRead the Press Release
NEWARK, N.J. – A North Jersey man was sentenced today to 28 months in prison for his role in the affairs of the Genovese organized crime family of La Cosa Nostra (the “Genovese family”), including engaging in a pattern of racketeering activity by extorting Christmastime tribute payments from members of the International Longshoremen’s Association (ILA), New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Nunzio LaGrasso, 64, of Florham Park, New Jersey, former vice president of ILA Local 1478 and ILA representative – previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to Count One of the second superseding indictment, charging him with racketeering conspiracy. LaGrasso admitted to predicate acts involving conspiracy to commit extortion and multiple extortions.
According to documents filed in this case and statements made in court:
Since at least 2005, co-defendant Stephen Depiro, 59, of Kenilworth, New Jersey, has managed the Genovese family’s control over the New Jersey waterfront – including the nearly three-decades-long extortion of port workers in ILA Local 1, ILA Local 1235 and ILA Local 1478. Members of the Genovese family, including Depiro, are charged with conspiring to collect tribute payments from New Jersey port workers at Christmastime each year through their corrupt influence over union officials, including the last three presidents of Local 1235 and vice president of ILA Local 1478.
During their guilty plea proceedings, LaGrasso, Depiro and co-defendant Albert Cernadas, 79, of Union, New Jersey, former president of ILA Local 1235 and former ILA executive vice president, admitted their involvement in the Genovese family, including conspiring to compel tribute payments from ILA union members, who made the payments based on actual and threatened force, violence and fear. LaGrasso and Cernadas admitted to carrying out multiple extortions of dockworkers. The timing of the extortions typically coincided with the receipt by certain ILA members of “Container Royalty Fund” checks, a form of year-end compensation.
In addition to the prison term, Judge Cecchi sentenced LaGrasso to two years of supervised release and fined $25,000. Cernadas was previously sentenced to probation and DePiro is scheduled to be sentenced April 17, 2015.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey, under the direction of Special Agent in Charge Richard M. Frankel, and in New York, under the direction of Assistant Director in Charge George Venizelos, as well as the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, with the investigation leading to today’s guilty pleas. They also thanked the Waterfront Commission of New York Harbor for its cooperation and assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jacquelyn M. Kasulis of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
15-131
Defense counsel: Michael Critchley Sr., Esq., Roseland
United States Attorney Announces Settlement with the Fabco Discount Shoe Store for Barring A Wheelchair Bound Woman from Shopping in Its Brooklyn Branch StoreRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the settlement of a federal civil rights suit against the FABCO Shoe Store chain (“FABCO”), for violations of the Americans With Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq. The ADA prohibits discrimination against people with disabilities and requires places of public accommodation to make reasonable accommodations to allow people with disabilities to use and enjoy their facilities.
The settlement resolves claims made by Amal Mohamed, who is disabled and confined to a wheelchair. Mrs. Mohamed alleged that on May 1, 2013, she entered the FABCO branch located at 2171 86th Street in Brooklyn to buy shoes for herself and her children. She further alleged that a FABCO employee told her she was not permitted in the store because the tires on her motorized wheelchair might soil the store’s carpet. Mrs. Mohamed stated that the FABCO employee attempted to remove her physically from the store and stopped only when the employee discovered the wheelchair was too heavy to be moved.
Under the settlement, FABCO will pay $10,000 to Mrs. Mohamed. It will also train all of its store managers on their obligations and responsibilities under the ADA, and FABCO has agreed to post signs in each of its 51 stores welcoming people with disabilities. FABCO cooperated in the government’s investigation.
“Instead of treating Mrs. Mohammad like any other customer, FABCO violated her rights under the ADA by not allowing her to shop for herself and her children and attempting to remove her from the store,” stated U.S. Attorney Lynch. “This settlement serves notice that store owners who fail to respect the rights of individuals with disabilities will be held accountable for their actions.”
FABCO owns and operates 51 discount shoe stores throughout Brooklyn, Queens, Manhattan, and the Bronx, as well as in New Jersey and Westchester County.
Kevan Cleary, Senior Trial Counsel, handled this matter on behalf of the United States.
Silent Business Partner of Organized Crime-Controlled World Trade Center Contractor Indicted for Scheme to Defraud the Port Authority and Related CrimesRead the Press Release
A ten-count indictment was unsealed today in United States District Court for the Eastern District of New York charging the defendant Vincent Vertuccio, also known as “Vinny,” with conspiracy to defraud the Port Authority of New York and New Jersey in connection with the One World Trade Center project located in lower Manhattan, and related money laundering and tax crimes. The defendant Praful Pandya, an accountant, was charged with aiding and assisting in the preparation of false tax returns for Vertuccio. The defendant John Servider, a lawyer, was charged with Vertuccio with conspiracy to alter, and alteration of, records for use in a grand jury proceeding. The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York, on April 8, 2015.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), Cheryl Garcia, Special Agent-in-Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG), Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Michael Nestor, Inspector General, Port Authority of New York and New Jersey, Office of Inspector General (PA-OIG).
As alleged in the indictment, Vincent Vertuccio controlled and directed the activities of Crimson Construction Corporation (Crimson), a company that was awarded a contract for work at the One World Trade Center (1WTC) project in lower Manhattan worth approximately $11.4 million. In seeking the contract, Vertuccio directed an employee of Crimson not to disclose Vertuccio’s role in Crimson because of his ties to organized crime. After being awarded the contract, Crimson received more than $1.5 million in connection with the 1WTC project, of which significant sums were diverted into a bank account held by Vertuccio’s mother and used to pay for renovations to Vertuccio’s daughter’s house. As a result, Crimson was unable to meet its obligations at 1WTC and was terminated from the project. Vertuccio, with the assistance of his accountant Praful Pandya, also submitted false and fraudulent individual tax returns for tax years 2008 and 2011.
After Vertuccio became aware of an ongoing grand jury investigation into his conduct, he and his lawyer, John Servider, allegedly conspired to alter invoices and sales receipts issued by a Manhattan jewelry store so as to remove Vertuccio’s name from the records before they were returned to the grand jury.
“As alleged, Vertuccio and his team of criminal consultants, including his accountant and his lawyer, cheated the taxpayers and the criminal justice system for their own corrupt purposes. We will not tolerate self-serving exploitations of Port Authority projects. We will continue to work closely with our law enforcement partners to vigorously prosecute such criminal activity,” stated United States Attorney Lynch.
“As the federal agency responsible for investigating tax crimes, IRS-Criminal Investigation works with our law enforcement partners on a variety of complex financial fraud investigations toward the mutual goals of protecting the American taxpayer and seeing that everyone pays their fair share. When individuals divert money intended for public projects into their own pockets, they risk committing tax and money laundering crimes in the process, inviting additional criminal sanctions. These consequences are magnified by the steps they take to conceal their actions and cover their tracks,” stated IRS Special Agent-in-Charge Kitchen.
“As alleged, the defendants defrauded the Port Authority and the construction of One World Trade Center. When they learned of our investigation, they altered invoices, changed names, and doctored receipts in a vain attempt to avoid detection. We have no tolerance for the shakedown of projects,” stated FBI Assistant Director-in-Charge Rodriguez.
“Today serves as an unfortunate reminder that as alleged in the indictment, organized crime continues to plague the region’s construction industry. Accordingly, we remain vigilant in protecting Port Authority projects and programs from fraudsters who line their pockets at the expense of law-abiding citizens,” stated PA-OIG Inspector General Nestor. Mr. Nestor expressed thanks to his law enforcement partners for their dedication and skill in the investigation of this case and commended the One World Trade Center integrity monitor whose efforts were integral in detecting some of the alleged schemes.
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Roanne L. Mann at the federal courthouse in Brooklyn. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled jointly by the Office’s Organized Crime & Gangs Section and the Public Integrity Section. Assistant United States Attorneys Lan Nguyen and M. Kristin Mace, and Special Assistant United States Attorney Jonathan P. Lax are in charge of the prosecution.
The Defendants:
VINCENT VERTUCCIO, a/k/a “Vinny”
Age: 60
Maspeth, NY
PRAFUL PANDYA
Age: 68
Forest Hills, NY
JOHN SERVIDER
Age: 53
Patterson, NY
E.D.N.Y. Docket No. 15-CR-174 (SRT)
Former Executive Director of the Village of Hempstead Housing Authority and Three Others Arrested and Charged with Conspiracy to Commit Wire Fraud in Connection with Bid Rigging and Kickback SchemeRead the Press Release
Earlier today, federal agents arrested Stacey Stackhouse, the former executive director of Village of Hempstead Housing Authority (VHHA) and James Alimonos, Michael Lambros, and Demetrios Kaouris, who performed construction work for the agency, for their involvement in a wire fraud conspiracy in connection with the theft of federal funds. The defendants are scheduled to appear this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the federal courthouse in Central Islip, New York.
The charges in a criminal complaint unsealed this morning were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Christina Scaringi, Special Agent in Charge, Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG), Northeast Region, and Diego G. Rodriguez, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office.
“The defendants here were entrusted to use federal funds to provide safe and affordable housing to senior citizens and low income residents. Instead, as alleged, they bypassed the rules in order to siphon taxpayer dollars into their own pockets. We are committed to fighting criminal conduct and fraud that targets vital federal programs,” stated United States Attorney Lynch.
“The charges made today prove our determination to root out corruption in public housing authorities. We in the Office of Inspector General and the Federal Bureau of Investigation will continue to collaborate and combine resources to accomplish HUD’s vital mission to ensure that decent housing is available to the country’s low and moderate-income families. We also wish to thank the U.S. Attorney’s Office for their committed and steadfast resolve in preserving the integrity of federally-funded programs,” said HUD-OIG Special Agent in Charge Scaringi.
“Bid-rigging schemes deprive issuers of a fair and just bidding process. They harm the financial integrity of programs established to help those in need, and the cost is transferred to the taxpayers. Today’s charges are proof of our continued determination to root out those whose business practices contribute to the deterioration of healthy competition in the competitive-bidding process,” said FBI Assistant Director in Charge Rodriguez.
As alleged in court filings by the government, Stackhouse was responsible for obtaining competitive bids and overseeing the work done by private contractors hired to repair and maintain various low-income properties managed by VHHA. Funding for the work is provided to the VHHA through the U.S. Department of Housing and Urban Development (HUD). Requests for bids on contracts for the work are required to be published, and Stackhouse was responsible for awarding contracts to the most qualified lowest bidder.
Instead, as part of the charged conspiracy, Stackhouse bypassed the bidding process and awarded the construction contracts to companies owned or controlled by her co-conspirators Alimonos, Lambros, and Kaouris, at prices several times greater than the true cost of the repairs. In return, Stackhouse received kickbacks from the winning contractors.
As detailed in the complaint, in one case Stackhouse awarded a contract to a construction company controlled by Alimonos and Lambros to repair a roof at a building operated by the VHHA based on bids stating that the repairs would cost $273,900 to complete. After winning the contract, Alimonos hired a different construction company to do the repair for $23,000, keeping over $201,000 in excess payments and eventually making kickback payments to Stackhouse and others totaling $25,900.
In another example, Stackhouse allegedly awarded a contract to upgrade an intercom system at a second VHHA property without competitive bidding by claiming that the repairs were required on an emergency basis. Alimonos and Kaouris, the owners of another contracting company, jointly submitted an inflated bid of $94,000 to VHHA knowing that it would be approved by Stackhouse. After the bid was approved, Alimonos demanded and received kickbacks from Kaouris totaling $44,000.
To date, the investigation has uncovered in excess of $500,000 stolen from VHHA through the charged kickback conspiracy.
If convicted, the defendants face a maximum sentence of 20 years imprisonment. 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 Long Island Criminal Section. Assistant United States Attorney Michael P. Canty is in charge of the prosecution.
The Defendants:
JAMES ALIMONOS
Age: 51
Residence: Bethpage, New York
DEMETRIOS KAOURIS
Age: 47
Residence: Plainview, New York
MICHAEL LAMBROS
Age: 48
Residence Queens, New York
STACEY STACKHOUSE
Age: 51
Residence: Dobbs Ferry, New York
E.D.N.Y. Docket No. 15-M-0314
Fourth Brooklyn Resident Charged with Attempt and Conspiracy to Provide Material Support to ISILRead the Press Release
Earlier today, a federal grand jury in Brooklyn returned a superseding indictment charging Dilkhayot Kasimov, a Brooklyn resident, with attempt and conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization. The defendant, who is charged with three other Brooklyn residents whose arrests were first announced on February 25, 2015, is scheduled to be arraigned on Wednesday, April 8, 2015 at 2 p.m. before United States Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; William J. Bratton, Commissioner, New York City Police Department (NYPD); and Raymond R. Parmer, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.
As alleged in the superseding indictment and other court filings, the investigation began last year when Abdurasul Hasanovich Juraboev, one of Kasimov’s co-defendants, came to the attention of law enforcement after posting on an Uzbek-language website that propagates ISIL’s ideology. The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then onward to Syria for the purpose of waging violent jihad on behalf of ISIL. Saidakhmetov was arrested on February 25, 2015, at John F. Kennedy International Airport, where he was attempting to board a flight to Istanbul, Turkey. Juraboev had previously purchased a plane ticket to travel from New York to Istanbul and had been scheduled to leave the United States in March 2015.
Working closely with co-defendant Abror Habibov, Kasimov allegedly helped fund Saidakhmetov’s efforts to join ISIL. Kasimov and Habibov collected over $1,600 from multiple individuals for Saidakhmetov to use in Syria. Kasimov thereafter delivered the money to Saidakhmetov at Kennedy Airport shortly before Saidakhmetov was apprehended trying to board his flight in February. Additional investigation uncovered electronic messages in which Kasimov encouraged others to participate in violent jihad and made clear his role in facilitating the travel of foreign fighters to Syria.
“This defendant is the fourth Brooklyn resident charged as part of the same network of individuals who are alleged to have conspired and attempted to provide material support to ISIL,” stated United States Attorney Lynch. “Terrorist support networks like the one this defendant was involved in offer critical funding, travel logistics, and encouragement to persons seeking to join ISIL and other foreign terrorist organizations. We will remain vigilant in our efforts to stem the flow of foreign fighters to Syria and to disrupt and dismantle the networks, here and abroad, that support them.” Ms. Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state, and local agencies from the region.
“Dilkhayot Kasimov allegedly attempted and conspired with others to provide material support to ISIL,” said Assistant Attorney General Carlin. “The National Security Division remains committed to holding accountable all who seek to provide material support to designated foreign terrorist organizations. I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“Kasimov served as a money man in support of a co-defendant’s efforts to join ISIL,” said FBI Assistant Director-in-Charge Rodriguez. “He provided encouragement and facilitated travel for foreign fighters. As the recent series of cases indicate, we will pursue every lead and every person who succumbs to this radical agenda. It is my hope that these cases deter others from sharing Kasimov’s fate: being under arrest and in trouble with the law.”
“Money is the oxygen that fuels terrorism. This investigation proves again that we will leave no stone unturned to disrupt the finance, support, or membership in terrorist organizations like ISIL,” said NYPD Commissioner Bratton.
“These arrests are the culmination of an extensive joint law enforcement effort to disrupt the recruitment of alleged terrorist sympathizers,” said Raymond R. Parmer Jr., special agent in charge, HSI New York. "ICE-HSI will continue to use its unique immigration and customs authorities to assist our domestic and international law enforcement partners to stop jihadists from supporting terrorist organizations such as ISIL.”
If convicted, the defendant faces a maximum sentence of 30 years in prison. The charges in the superseding 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 National Security & Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, and Peter W. Baldwin are in charge of the prosecution, with assistance provided by Trial Attorney Danya Atiyeh of the Justice Department’s Counterterrorism Section.
The Defendant:
DILKHAYOT KASIMOV
Age: 26
Nationality: Uzbeki
E.D.N.Y. Docket No. 15-CR-095 (WFK)
Two Queens Residents Charged with Conspiracy to Use A Weapon of Mass DestructionRead the Press Release
Earlier today, a criminal complaint was unsealed in federal court in Brooklyn charging Noelle Velentzas and Asia Siddiqui with conspiracy to use a weapon of mass destruction against persons or property in the United States. The defendants’ initial appearances are scheduled for this afternoon before United States Magistrate Judge Viktor V. Pohorelsky at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).
As alleged in the complaint, the defendants have repeatedly expressed their support for violent jihad. For instance, in or about 2009, Siddiqui wrote a poem in a magazine published by al-Qaeda in the Arabian Peninsula that exhorted readers to wage jihad and declared that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.” More recently, Velentzas, who has characterized al-Qaeda founder Usama Bin Laden as one of her heroes, declared that she and Siddiqui are “citizens of the Islamic State” – a reference to the foreign terrorist organization that is also known as Islamic State of Iraq and the Levant (ISIL). Less than two weeks ago, Velentzas, asked whether she had heard the news about the recent arrest of a former U.S. airman who had attempted to travel to Syria to wage jihad, stated that she did not understand why people were traveling overseas to engage in jihad when there were more opportunities of “pleasing Allah” in the United States.
Since at least August 2014, the defendants have allegedly plotted to construct an explosive device for use in a terrorist attack on American soil. In their self-proclaimed effort to “make history,” the defendants researched numerous explosive precursors. For instance, they researched and acquired some of the components of a car bomb, like the one used in the 1993 World Trade Center bombing; a fertilizer bomb, like the one used in the 1995 bombing of the federal building in Oklahoma City; and a pressure cooker bomb, like the one used in the 2013 Boston Marathon bombing. The investigation recently revealed that the defendants possessed propane gas tanks together with instructions from an online jihadist publication for transforming propane tanks into explosive devices.
“We are committed to doing everything in our ability to detect, disrupt, and deter attacks by homegrown violent extremists,” stated United States Attorney Lynch. “As alleged, the defendants in this case carefully studied how to construct an explosive device to launch an attack on the homeland. We remain firm in our resolve to hold accountable anyone who would seek to terrorize the American people, whether by traveling abroad to commit attacks overseas or by plotting here at home.” Ms. Lynch extended her grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state, and local agencies from the region, as well as to the NYPD Intelligence Bureau, for their assistance in the investigation.
“Velentzas and Siddiqui are alleged to have researched how to construct bombs as part of their conspiracy to use a weapon of mass destruction on American soil,” said Assistant Attorney General Carlin. “Identifying and disrupting such threats to public safety, whether at home or abroad, is the number one priority of the National Security Division and our partners in the law enforcement and intelligence communities. I want to thank the agents, analysts, and prosecutors who are responsible for today’s charges.”
FBI Assistant Director in Charge Rodriguez stated, “The defendants allegedly plotted to wreak terror by creating explosive devices and even researching the pressure cooker bombs used during the Boston Marathon bombing. We continue to pursue those who look to commit acts of terror and deter others who think they are beyond the reach of law enforcement. I’d like to thank Commissioner Bratton and the New York City Police Department for their partnership on this case and so many others.
“These defendants allegedly engaged in sustained efforts to obtain bomb-making instructions and materials, including using instructions provided by al-Qaeda’s online magazine,” said Police Commissioner Bratton. “The work of the NYPD’s Intelligence Bureau, its undercover Detective, and the seamless collaboration with the Special Agents and Detectives of the Joint Terrorism Task Force and United States Attorney for the Eastern District should serve as a model for early detection and prevention of terrorist plotting.”
If convicted, both defendants face a maximum sentence of life imprisonment. 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 prosecuted by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, and Jennifer S. Carapiet are in charge of the prosecution, with assistance provided by Trial Attorney Clement McGovern of the Justice Department’s Counterterrorism Section.
The Defendants:
NOELLE VELENTZAS
Age: 28
ASIA SIDDIQUI
Age: 31
E.D.N.Y. Docket No. 15-M-303
Leader of Bloods Street Gang Sentenced to Life in Prison for Racketeering MurdersRead the Press Release
Earlier today, Bloods street gang leader Ronald Herron, also known as “Ra Diggs,” was sentenced to 12 terms of life in prison plus 105 years. Herron was convicted on June 26, 2014, following a month-long jury trial, of all counts, including racketeering, murder in aid of racketeering, narcotics trafficking conspiracies, robbery, and firearms offenses. The charges arose from Herron’s leadership of a violent set of the Bloods Street Gang that operated in and around the Gowanus and Wyckoff Gardens housing developments in Brooklyn.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and William J. Bratton, Commissioner, New York City Police Department.
“For years, Ronald Herron unleashed brutal, unrelenting violence on his community while glorifying his criminal lifestyle as a crack-dealing gangster. Today’s sentence put an end to all of that, for good,” stated United States Attorney Lynch. “Herron styled himself a rap artist, but the evidence proved that he was a murderous thug who sought power through violence, fear, and intimidation. Let today’s sentence send a message to other gang members who terrorize their own communities: we and our federal and city law enforcement partners will not tolerate such heinous criminal conduct.” Ms. Lynch expressed her thanks to the agents and investigators from the FBI and NYPD who worked relentlessly to dismantle this violent gang and bring Herron to justice.
At trial, the government proved that Herron committed numerous crimes of violence in support of his drug trafficking operation around two New York City public housing communities located in the Boerum Hill section of Brooklyn. In 2001, Herron murdered Frederick Brooks. Herron was acquitted of that murder in state court after witnesses refused to testify because they were threatened by Herron and his associates. After being released from state custody and consolidating his control over the drug trade in Gowanus and Wyckoff Gardens, Herron murdered Richard Russo in 2008 and Victor Zapata in 2009.
Herron boasted about his exploits in songs and videos in which he identified himself as the leader of the “Murderous Mad Dogs” set of the Bloods Street Gang and claimed that he had previously “beat a body.” Presented with overwhelming evidence of Herron’s criminal conduct, including testimony from more than 50 witnesses, the jury rejected Herron’s claim that he was merely an aspiring rap artist and not a murderer.
Herron’s conviction followed dozens of successful prosecutions over the past decade conducted by the U.S. Attorney’s Office, along with the FBI and NYPD, of violent gang members and drug dealers from the Gowanus and Wyckoff Gardens housing developments.
The sentence was imposed by United States District Judge Nicholas G. Garaufis.
The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Shreve Ariail, Sam Nitze, and Rena Paul are in charge of the prosecution.
The Defendant:
RONALD HERRON, also known as “Ra Diggs”
Age: 33
E.D.N.Y. Docket No. 10 CR 615 (NGG)