Eastern District of New York
Press releases recorded for this federal judicial district.
Staten Island Man Convicted of Scheme to Defraud Investors of $5 MillionRead the Press Release
Peter Liounis, a resident of Staten Island, was convicted today by a federal jury in Brooklyn on all nine counts of the indictment for defrauding investors of millions of dollars through Grayson Hewitt, a purported lawsuit funding investment firm. Liounis lied to potential investors and promised them a fixed rate of return on their investments. Rather than make investments as promised, Liounis and his coconspirators stole the investors’ money to purchase gold for their own use. Through the scheme, Liounis defrauded investors of approximately five million dollars. The jury’s verdict followed a two-week trial in United States District Court before the Hon. I. Leo Glasser. Liounis was convicted of six counts of wire fraud, one count of mail fraud, one count of wire and mail fraud conspiracy, and one count of securities fraud.
The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Philip R. Bartlett, Postal Inspector in Charge, U.S. Postal Inspection Service, New York Division; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York; and Steven G. Hughes, Special Agent-in-Charge, United States Secret Service.
"As the evidence at trial showed, Liounis lied to his victims over and over again, and went on to steal the savings of hard-working individuals. His victims’ needs meant nothing to him, as they were just the means he used to the end of filling his own pockets," stated United States Attorney Lynch. "We will tirelessly pursue individuals who seek to profit through this type of fraud." Ms. Lynch extended her appreciation to the Postal Inspection Service, New York Division; Department of Homeland Security, Homeland Security Investigations; and the United States Secret Service for their assistance in the investigation.
The evidence at trial established that from May 2010 through April 2012, Liounis used the alias "Mark Anderson," to solicit potential investors for Grayson Hewitt. Liounis told potential investors that Grayson Hewitt purchased plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised them a return of fifteen percent or more. To perpetrate the scheme, Liounis and his coconspirators sent the victims bogus account statements. In a series of calls captured by a court-ordered wiretap, the son of an investor sought the return of his father's money so that the son could place his father, who had suffered a heart attack, into assisted living. Although the father had some $23,000 left in his Grayson Hewitt account, Liounis falsely told the son that his father had been depleting the account and had only $3,000 remaining. Liounis then sent the father and son a "get well fruit basket." In another call, a Grayson Hewitt investor expressed skepticism about the company, noting "I see this as a Bernie Madoff deal." Liounis responded, "this is no way, no how, a Bernie Madoff...believe that!...You gotta understand, the amount of money we handle here, uh, we'd go away for a hell of a lot longer than Bernie did."
Liounis faces a maximum sentence of 20 years on each of the nine counts of conviction.
The government’s case was prosecuted by Assistant United States Attorneys Michael Yaeger and Justin Lerer, with assistance from Assistant United States Attorney Daniel Spector.
This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Defendant:
PETER LIOUNIS
Age: 42
Staten Island, New York
Two Ñetas Gang Members and A Gang Associate Plead Guilty in Connection with the Murders of Two 17-Year-Old Rival Gang MembersRead the Press Release
Earlier today, two members of the Ñetas street gang, Alvaro Cabral, also known as “Boobi,” and Jason Cabral, also known as “J-Live,” pleaded guilty to the 2004 murders of Anthony Marcano and Fabian Mestres. Stephanie DiCarlo-Cabral, an associate of the gang and at the time the girlfriend of Jason Cabral, pleaded guilty to robbery and using a firearm in connection with the robbery of Marcano and Mestres. Today’s pleas took place before United States District Judge Joanna Seybert. When sentenced, the defendants face life in prison.
The pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William J. Bratton, Commissioner, New York City Police Department (NYPD).
“These were brutal, senseless gang murders. The defendants stuffed the victims into the trunk of a car in the dog days of August, and then drove them to their execution,” stated United States Attorney Lynch. “We hope the victims’ families can take some measure of solace in knowing that the individuals who are responsible for their sons’ murders have been brought to justice.” Ms. Lynch expressed her grateful appreciation to the Suffolk County Police Department, the Tampa Division of the FBI, and United States Attorney’s Office, Middle District of Florida, for their cooperation and assistance in the investigation.
The defendants targeted one of the victims, Anthony Marcano, because of his affiliation with a rival gang, the Latin Kings. On August 10, 2004, at the direction of Jason Cabral, the leader of gang, the defendants devised a plan to rob and kill 17-year-old Marcano. As part of the plan, the defendants lured Marcano to a house in Brentwood. Marcano arrived with 17-year-old Fabian Mestres, a fellow “Pee Wee” member of the Latin Kings street gang. Once inside the house, Marcano and Mestres were restrained with duct tape, and their drugs, money, and jewelry were stolen. The victims were stuffed into the trunk of a car and driven to a warehouse in Queens where Luis Benitez , with the assistance of Alvaro Cabral, shot them with a shotgun. Mestres was shot once in the head, and Marcano was shot once in the head and once in the back of the neck. Marcano’s and Mestres’s bodies were found behind a warehouse in Queens the following day.
The government’s case is being prosecuted by Assistant United States Attorneys Nicole Boeckmann and Christopher C. Caffarone.
The Defendants:
ALVARO CABRAL
Age: 28
Apollo Beach, Florida
JASON CABRAL
Age: 36
Riverview, Florida
STEPHANIE DICARLO-CABRAL
Age: 29
Riverview, Florida
1. Luis Benitez pleaded guilty to the murders of Marcano and Mestres on November 7, 2013.
New Charge V. NYS Senator John Sampson - Superseding IndictmentRead the Press Release
Sampson Superseding Indictment
Criminal Complaint Unsealed Today in EDNY Federal Court Charging Four Members for Transnational Sex Trafficking RingRead the Press Release
Criminal Complaint
New Charges V. NYPD Cop Indicted for Extorting A Queens Business Owner and Stalking His GirlfriendRead the Press Release
Dervishaj Indictment
Patient Recruiter Pleads Guilty in Connection with $13 Million Health Care Fraud SchemeRead the Press Release
BROOKLYN, NY - Pavel Zborovskiy, 57, of Brooklyn, NY, pleaded guilty today to conspiracy to pay and receive illegal health care kickbacks in connection with a $13 million health care fraud and money laundering scheme.
U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) made the announcement.
Zborovskiy pleaded guilty before U.S. District Judge Nina Gershon of the Eastern District of New York and is the sixth defendant to plead guilty in connection with the scheme. At sentencing on May 28, 2014, Zborovskiy faces a maximum penalty of five years in prison and a fine of more than $2.5 million.
“Pavel Zborovskiy and his criminal associates manipulated elderly Medicaid and Medicare patients, paying them kickbacks to induce them to receive medically unnecessary treatments and services in a scheme to defraud those programs out of millions of dollars,” stated United States Attorney Lynch. “Protecting taxpayer funded programs like Medicaid and Medicare is a priority of this Office and the Department of Justice. Today’s sentence represents a clear warning to those who seek to defraud Medicaid and Medicare that they will be held accountable for their crimes.”
According to court documents, from 2010 to 2012, Zborovskiy, working through an ambulette company, recruited patients to attend a Brooklyn clinic called Cropsey Medical Care PLLC. An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary. Zborovskiy’s ambulette company transported the patients he had recruited to and from Cropsey Medical, and billed Medicaid for such transportation. Once Zborovskiy’s beneficiaries were transported to Cropsey Medical, Zborovskiy and others paid such beneficiaries cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing, and other services. Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.
According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy, and diagnostic tests.
The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Trial Attorney Sarah M. Hall and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Florida Attorney Sentenced to Six Months in Prison for Laundering Purported Stock Fraud ProceedsRead the Press Release
Michael J. Scaglione, Esq., an attorney in Coral Gables, Florida, was sentenced today in federal court in Brooklyn, New York, to six months in prison to be followed by four months of home detention with electric monitoring to be served during a two-year term of supervised release. As part of the sentence, Scaglione was ordered to perform 200 hours of community service and to forfeit approximately $31,950 to the government. In October 2013, Scaglione pleaded guilty to a money laundering charge for laundering over $750,000, which he believed were the proceeds of a penny stock fraud scheme. In July 2013, Scaglione was arrested after taking possession of $500,000 in cash from an undercover federal agent posing as a criminal stock promoter in connection with a government sting operation.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Toni Weirauch, Special Agent in Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS).
“Abusing his position as an attorney by laundering money, Scaglione not only violated the code of ethics by which he was bound – he also broke the law. Those attorneys who seek to misuse the trust that is instilled in them by the public to perpetrate crime are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI and the IRS for their work on this investigation.
From approximately February to July 2013, Scaglione exploited his position as an attorney to launder money through an escrow account for an undercover law enforcement agent who posed as a corrupt stock promoter. Scaglione believed that the undercover agent was a middleman for a network of corrupt stock brokers who fraudulently inflated prices of worthless stock in exchange for high commissions. Scaglione agreed to launder what he believed were proceeds of this stock fraud through his attorney escrow account to hide that money from the United States Securities and Exchange Commission and the IRS. In total, Scaglione funneled over $750,000, including $88,000 in cash given to him in a Federal Express box in the lobby of a Miami Beach hotel, through the escrow account into the undercover agent=s bank account in Long Island, New York. Scaglione carefully structured the movement of these funds to avoid triggering financial reporting requirements. In exchange, Scaglione collected over $25,000 in fees. In recorded conversations, Scaglione assured the undercover agent that their conversations were “completely privileged” and that his money was “safe” with Scaglione. When the undercover agent explained to Scaglione that he did not “want to go to jail,” Scaglione stated to the undercover agent that the escrow account was “tight as can be.” On the day of his arrest, Scaglione accepted an additional $500,000 in cash from the undercover agent, which Scaglione believed to be proceeds from the stock fraud, at a hotel in Miami Beach, Florida.
The government’s case is being prosecuted by Assistant United States Attorney Jacquelyn Kasulis.
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:
MICHAEL J. SCAGLIONE
Age: 42
Residence: Miami Springs, Florida
E.D.N.Y. Docket No. 13-CR-553
Former Internet Vendor Convicted of Scheme to Defraud Customers of $5 MillionRead the Press Release
Daniel Greenberg, the president and owner of Classic Closeouts, LLC, a now-defunct Internet seller of discounted clothing and personal items, was convicted today by a federal jury in Central Islip on all thirteen counts for defrauding thousands of customers through unauthorized use of the credit and debit card numbers they had provided in connection with a purchase at an earlier time. The jury’s verdict followed a two-week trial in United States District Court before the Honorable Arthur D. Spatt. Greenberg was convicted of eight counts of wire fraud, one count of access device fraud, one count of aggravated identity theft, and three counts of money laundering.
The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Postal Inspector-in-Charge, United States Postal Inspection Service, New York Division.
“Daniel Greenberg’s Classic Closeouts was a classic scam. When his business ran into trouble, Greenberg helped himself to his customers’ credit card numbers and then had the audacity to fight them when they tried to have the charges removed,” stated United States Attorney Lynch. “We will tirelessly pursue justice for consumers who trust online merchants only to have that trust betrayed.” Ms. Lynch extended her grateful appreciation to the Postal Inspection Service and the Federal Trade Commission for their assistance in the investigation. The FTC brought this matter to the attention of the U.S. Attorney’s Office after having filed a parallel civil action.
The evidence at trial established that from approximately June 2008 through at least April 2009, Greenberg charged victims’ credit cards or debited their bank accounts on over 60,000 occasions, without the victims’ authorization and without the victims purchasing merchandise. Greenberg used credit and debit card information retained by Classic Closeouts from earlier purchases and then fraudulently charged their credit or debit cards, often charging the same card multiple times over the course of several weeks and months. When victims disputed the unauthorized charges with their credit card companies and banks, Greenberg falsely asserted that the charges were valid because the customers had enrolled in an alleged “frequent shopper club” that he claimed required a one-time charge. As a result of Greenberg’s false representations, some of the victims’ credit card companies and banks declined to issue credits despite the victims’ protests, and certain victims were pressured into paying the fraudulent charges plus late fees and interest.
When sentenced Greenberg faces up to 20 years’ imprisonment for each of the eight counts of wire fraud, 15 years’ imprisonment on the access device fraud charge, up to 10 years’ imprisonment for the money laundering charges, and two years’ mandatory imprisonment on the aggravated identity theft charge to run consecutively to sentences imposed on the other charges.
The government’s case was prosecuted by Assistant United States Attorneys Walter Norkin and Charles Rose.
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:
DANIEL GREENBERG
Age: 40
Lawrence, New York
United States Attorney William J. Hochul, Jr. Western District of New York EDNY Federal Jury Convicts Joseph Romano on Both CountsRead the Press Release
BROOKLYN, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that a federal jury convicted Joseph Romano, 51, of Levittown, N.Y., of conspiring to murder the Assistant United States Attorney who prosecuted him for engaging in an eight-year, multi-million dollar fraud involving the telemarketing of coins. The jury also convicted the defendant of conspiring to murder the United States District Judge who sentenced him to 15 years in prison for that fraud. The defendant faces a maximum penalty of life in prison, a fine of $250,000, or both, in addition to forfeiture of over $200,000 when he is sentenced in March.
“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.
According to the Government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hit-man, to kill the federal judge and prosecutor. The defendant also requested that the hit-man cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Romano and co-conspirator, Dejvid Mirkovic, numerous times at locations on Long Island, including the Correctional Center.
At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim - in fact, a staged photograph and an identification card - Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated, and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.
In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder was sentenced to 24 years in prison in August 2013.
Today’s conviction was the latest development in an investigation handled by Special Agents and Task Force Officers of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.
Romano Ind
Jury Convicts Long Island Man of Conspiring to Murder Federal Judge and Federal ProsecutorRead the Press Release
BROOKLYN, N.Y. —U.S. Attorney William J. Hochul, Jr. announced today that a federal jury convicted Joseph Romano, 51, of Levittown, N.Y., of conspiring to murder the Assistant United States Attorney who prosecuted him for engaging in an eight-year, multi-million dollar fraud involving the telemarketing of coins. The jury also convicted the defendant of conspiring to murder the United States District Judge who sentenced him to 15 years in prison for that fraud. The defendant faces a maximum penalty of life in prison, a fine of $250,000, or both, in addition to forfeiture of over $200,000 when he is sentenced in March.
“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.
According to the Government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hit-man, to kill the federal judge and prosecutor. The defendant also requested that the hit-man cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Romano and co-conspirator, Dejvid Mirkovic, numerous times at locations on Long Island, including the Correctional Center.
At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim - in fact, a staged photograph and an identification card - Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated, and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.
In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder was sentenced to 24 years in prison in August 2013.
Today’s conviction was the latest development in an investigation handled by Special Agents and Task Force Officers of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.
Romano Indictment
Four More People Charged Today with Sandy Fraud in EDNY.Read the Press Release
Gesuele Complaint
Scolnick Complaint
Ellis Complaint
Valentin ComplaintBonanno Family Captain Vincent Asaro Indicted for Participation in the 1978 Lufthansa $5 Million Robbery at JFK Airport and the Murder of Paul Katz Who Disappeared in 1969Read the Press Release
Five Defendants Arrested and Charged Variously with 45-Year Racketeering Conspiracy, Including Predicate Acts of Murder, Solicitation to Murder, Robbery and Extortion, and Other Crimes
BROOKLYN, NY – Earlier today, an indictment was unsealed charging five members of the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”) variously with racketeering conspiracy, including predicate acts of murder, conspiracy to commit murder, solicitation to murder, robbery and extortion, and other crimes.1 Bonanno family administration members and captains Vincent Asaro and Thomas Di Fiore, Bonanno family captain Jerome Asaro, Bonanno family acting captain Jack Bonventre, and Bonanno family soldier John Ragano were arrested earlier today and are scheduled to be arraigned this afternoon before U.S. Magistrate Judge Marilyn D. Go at the federal courthouse in Brooklyn.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
“As alleged, Vincent Asaro devoted his adult life to the Bonanno crime family, with a criminal career that spanned decades. Far from a code of honor, theirs was a code of violence and brute force. Those suspected of cooperating with law enforcement paid with their lives. Asaro helped pull off the 1978 Lufthansa robbery - still the largest bank robbery in New York history. Neither age nor time dimmed Asaro’s ruthless ways, as he continued to order violence to carry out mob business in recent months. The arrests and charges announced today are a testament to the relentless pursuit of justice by law enforcement,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the FBI for its extraordinary work in bringing these defendants to account for the charged crimes.
“These ‘goodfellas’ thought they had a license to steal, a license to kill, and a license to do whatever they wanted. However, today’s arrests of the five members of the Bonanno crime family brings an end to their violent and ruthless ways. As alleged in the indictment, Vincent Asaro and his co-conspirators were not only involved in typical mob activities of extortion and murder, but Asaro himself was in on one of the most notorious heists - the Lufthansa robbery in 1978. It may be decades later, but the FBI’s determination to investigate and bring wiseguys to justice will never waver,” stated FBI Assistant Director-in-Charge Venizelos.
As alleged in the indictment and a detention memorandum filed by the government, over the last 45 years Vincent Asaro and various co-conspirators, including his son Jerome Asaro, engaged in a pattern of violence and threats of violence in order to profit from their illegal activity and evade prosecution. The indictment announced today is the result of a long-term investigation by the Federal Bureau of Investigation that utilized, among other law enforcement techniques, consensual recordings, cooperating witnesses and confidential sources, and electronic and visual surveillance.
1978 Lufthansa Heist
Vincent Asaro is charged for his participation in the 1978 robbery at the Lufthansa Terminal at John F. Kennedy Airport of over $5 million in United States currency and approximately $1 million in jewelry. Asaro, Lucchese crime family associate James “Jimmy the Gent” Burke, and their co-conspirators each expected to receive approximately $750,000 in cash and large quantities of gold jewelry from the proceeds of the robbery.
Murder of Paul Katz
Vincent Asaro is charged with the murder of Paul Katz, who disappeared in 1969, and Asaro and his son Jerome are also charged with accessory after the fact for their roles in moving Katz’s body to prevent its discovery by law enforcement. Vincent Asaro and Burke allegedly strangled Katz with a dog chain because they believed he was cooperating with law enforcement. They then buried his body in the basement of a vacant home in Queens, New York, where it remained until the mid-1980s when, alerted to a state law enforcement investigation into Katz’s murder, Vincent Asaro directed Jerome Asaro and another individual to dig up Katz’s body and move it. Almost 35 years later, in June of 2013, the FBI executed a search warrant at the Queens residence, which was still owned by the Burke family, and recovered remnants of Katz’s remains buried in the basement. Katz’s identity was confirmed through DNA testing.
Solicitation to Murder
Vincent Asaro and Jerome Asaro are charged with solicitation to murder their cousin, identified in the indictment as “John Doe #1,” because he was perceived to be a “rat” for testifying against another family member in a federal trial on fraud charges.
Armed Robberies
Vincent Asaro and Jerome Asaro are charged variously with participating in additional armed robberies and armed robbery conspiracies, including the robbery of approximately $1 million in gold salts.
Extortion
All five defendants, including Thomas Di Fiore, the highest ranking member of the Bonanno family at liberty, are charged with using and conspiring to use extortionate means to collect an extension of credit from a Bonanno family associate. During an April 26, 2013, consensual recording of Vincent Asaro and John Ragano, Ragano asked Asaro, “When do we stab this guy [ ] in the neck? That’s what I want to know.” Asaro responded, “Stab him today.” Asaro continued, “I told you to give him a [ ] beating. Give him a [ ] beating, I told you that. Listen I sent three guys there to give him a beating, already, so it won’t be the first time he got a beating from me.”
The case has been assigned to United States Senior District Judge Allyne R. Ross. If convicted, Vincent Asaro faces life imprisonment, and each of his co-defendants faces a statutory maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Alicyn Cooley.
The Defendants:
VINCENT ASARO
Age: 78
Howard Beach, New York
JEROME ASARO
Age: 55
Bethpage, New York
JACK BONVENTRE
Age: 45
Campbell Hall, New York
THOMAS DI FIORE, also known as “Tommy D”
Age: 70
Commack, New York
JOHN RAGANO, also known as “Bazoo”
Age: 52
Rockaway, New York
E.D.N.Y. Docket No. 14-CR-26 (ARR)
1 The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Asaro Indictment
Asaro Detention Memo
Investment Manager Sentenced to 188 Months for Investment Fraud SchemeRead the Press Release
Earlier today, Aleksander Efrosman, the investment manager of Century Maxim Fund, Inc. and AJR Capital, Inc., was sentenced to a term of imprisonment of 188 months following his conviction for wire fraud. Efrosman, who fled the United States, was extradited from Poland and pleaded guilty on October 18, 2012. In addition to the prison term, Efrosman was ordered to pay restitution of approximately $4 million.
The sentence was announced by Loretta E. Lynch, United Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Philip R. Bartlett, U.S. Postal Inspector-in-Charge, New York Division.
“This case proves the old adage: ‘you can run, but you cannot hide.’ Aleksander Efrosman stole over $5 million from unsuspecting investors and fled the country, then engaged in a globetrotting effort to escape justice. But the coordinated efforts of law enforcement resulted in his capture. Today, Efrosman has finally been held to account for his betrayal of his clients’ trust,” stated United States Attorney Lynch. “As proved again today, this office will relentlessly pursue and prosecute the perpetrators of investment fraud schemes.” Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation and the Postal Inspection Service for their assistance in this case.
From January 2004 through June 2005, working from offices in Brooklyn and Staten Island, Efrosman defrauded investors by soliciting investments purportedly for the purpose of trading in the stock market and the foreign currency exchange market. Efrosman falsely told investors that he had a history of profitable trading and that the investments would be protected by a "stop-loss" mechanism which ensured that no trade lost more than 3%. Based on these misrepresentations, Efrosman raked in over $5 million from more than 100 investors. Efrosman did not invest the funds as promised, but instead used the funds for his personal benefit, including gambling over $3 million at the Foxwoods casino.
Efrosman fled the United States in 2005 with millions of dollars of investor funds. He first traveled to Cozumel, Mexico, then to Panama and ultimately to Poland, where he assumed the identity of “Mikhail Grosman” and obtained a high quality fraudulent Russian passport. In the meantime, federal agents in the United States pursued leads as to Efrosman’s whereabouts. In a coordinated multinational effort, law enforcement authorities in Austria, the Czech Republic, and Poland tracked, located, and ultimately arrested Efrosman in Krakow, Poland, on May 28, 2010.
The sentence was imposed by United States District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn, New York.
The government's case was prosecuted by Assistant United States Attorney Daniel Spector.
The Defendant:
ALEKSANDER EFROSMAN
Age: 51
Internet-Based Consumer Electronics Vendor to Pay $700,000 to Resolve Claims for Underpaid PostageRead the Press Release
Yall Inc., an Internet-based vendor of consumer electronics, and its principal, Hang Feng (Nick) Wu, have entered into a settlement agreement in which they have agreed to pay the United States $700,000 to resolve allegations that they knowingly underpaid postage on large amounts of mail sent through the United States Postal Service. The settlement agreement has been approved by United States District Judge Roslynn R. Mauskopf.
The settlement was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service.
In its complaint, filed in federal court in Brooklyn, the United States alleged that Yall and Wu sent thousands of underpaid mailings to consumers across the nation and around the world. The government further alleged that Yall and Wu failed to weigh the mail before presenting it to the Postal Service for mailing, while representing that their mail was paid in full. The complaint sought recovery under the False Claims Act, 31 U.S.C. §§ 3729-33, among other remedies. Under the False Claims Act, the government can recover up to three times its actual damages, plus penalties of $5,500 to $11,000 for each false claim.
Yall does business through various websites, including Yallstore.com and the online auction and shopping website eBay.com. Yall sells accessories, peripherals and replacement parts, such as batteries, protective cases, AC adapters, and cables for laptops, cell phones, digital cameras, and handheld game consoles, among other popular electronics items.
“Full and fair competition in business requires a level playing field. Mailers who underpay postage gain an unfair advantage over their competitors, while short-changing the Postal Service of necessary funds to carry out its mission,” said United States Attorney Lynch. "We are committed to protecting the Postal Service from abuse and ensuring its financial viability by holding businesses and business owners accountable for underpaying postage.”
“Postal Inspectors will vigorously pursue individuals who underpay the Postal Service. The Postal Inspection Service appreciates the strong stance U.S. Attorney Lynch has taken against those who seek to take advantage of the Postal Service through underpaying postage,” said Inspector-in-Charge Bartlett.
In reaching this settlement, Yall, Inc. and Wu did not admit liability, and the government did not make any concession regarding the legitimacy of the claims.
This case was investigated by the United States Postal Inspection Service and handled by Assistant U.S. Attorney Ameet B. Kabrawala, with assistance from Affirmative Civil Enforcement Auditor Emily Rosenthal.
MS-13 Gang Leader Pleads Guilty to RacketeeringRead the Press Release
Earlier today, Francisco Ponce, a leader of La Mara Salvatrucha, also known as the MS-13 street gang ("MS-13"), pleaded guilty at the federal courthouse in Central Islip, New York, to racketeering, including predicate acts relating to the February 15, 2009, armed robbery of the Pollo Campero restaurant in Lindenhurst, New York, and the September 12, 2009, armed robbery of Los Hermanos Grocery in Brentwood, New York, which resulted in the murder of Miguel Peralta, an employee of that grocery. When sentenced, Ponce faces up to life in prison.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
"Ponce was in charge of the MS-13 "brand" in New York, and sought to strengthen it with acts of mayhem. Seeking funds to fuel their violent lifestyle in New York and abroad, he and his cohorts robbed and terrorized Long Island neighborhoods. Miguel Peralta fell victim to their thirst for blood and money when he unknowingly walked in on a robbery at the store at which he worked," stated United States Attorney Lynch. "This office and our law enforcement partners will continue to vigorously investigate and prosecute gang members, especially those who terrorize our communities and, as demonstrated in the tragic murder of Mr. Peralta, kill innocent victims."
FBI Assistant Director-in-Charge Venizelos stated, "Rather than function as a productive member of society, the defendant instead chose a life of crime, intent on spreading fear and violence throughout our community. The FBI is committed to removing these violent criminals from our streets. We will continue to work with our law enforcement partners to dismantle MS-13 and bring to justice every gang member who victimizes the public."
According to court filings and facts presented during the plea proceeding, Ponce and two other MS-13 members, Joyser Velasquez, also known as "Baby Boy,"1 and Carlos Chicas, also known as "Flaco," carried out the September 12, 2009, armed robbery of Los Hermanos Grocery and the murder of Miguel Peralta. Shortly before midnight, Velasquez and Chicas, who were armed with semi-automatic handguns, entered the store, while Ponce waited as the getaway driver. Peralta, who was sweeping a storeroom in the back of the store, heard the commotion, entered the front of the store, and came face to face with Velasquez, who shot him once in the side. Peralta then ran down an aisle where he was confronted by Chicas, who shot him in the head. The robbers then rifled through the cash register, took cash and checks, and fled to the awaiting getaway car that was driven by Ponce.
Several months prior to the Peralta murder, Ponce, Velasquez, and two other MS-13 members, Wilmer Granillo, also known as "Chele," and Freddy Fuentes-Gonzalez, also known as "Pitufo,"2 committed an armed robbery of the Pollo Campero restaurant in Lindenhurst, New York. Specifically, on February 15, 2009, Velasquez, who was armed with a semi-automatic handgun, Granillo and Fuentes-Gonzalez entered the Pollo Campero restaurant, wearing hooded sweatshirts and ski masks, held the employees at gun-point and forced the manager to open the safe, by holding a knife to his throat. The MS-13 members stole approximately $15,000 from the safe and then fled to the car, where Ponce was waiting to drive them away.
Ponce’s conviction further demonstrates the strong connection between members of the MS-13 gang in New York, El Salvador, and elsewhere. As set forth in prior court filings and testimony introduced during two recent MS-13 racketeering trials, between 2009 and 2010, Ponce was the New York leader of "The Program," an initiative by the MS-13's leadership in El Salvador to exercise greater control over the international MS-13 enterprise, including the MS-13 cliques and members in New York, enforce discipline and adherence to the gang=s rules, and cause more money to be sent to MS-13 members in El Salvador and other parts of Central America. Ponce functioned as a liaison between the MS-13 clique leaders in New York and the gang’s hierarchy in El Salvador, organizing "universal meetings," which were meetings attended by the leaders of the New York cliques of the MS-13, and collecting money from the New York cliques to purchase firearms and ammunition, which were used in furtherance MS-13’s violent agenda, and to send money to gang leaders in El Salvador.
Chicas and Granillo, two of Ponce’s co-conspirators in the Peralta murder and Pollo Campero robbery, respectively, are believed to have fled the jurisdiction and remain fugitives.3 The FBI requests that anyone with information regarding their whereabouts telephone (212) 384-1000. Chicas and Granillo should be considered armed and dangerous.
Ponce’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or "cliques," the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more 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, Rockville Centre Police Department, and Suffolk County Police Department.
The government’s case is being prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
The Defendant:
FRANCISCO PONCE ("Spoiler")
Age: 31
Residence: Brentwood, NY
E.D.N.Y. Docket No. 12-063 (JFB)
1 Velasquez is in custody pending trial. The charges in the indictment against Velasquez are merely allegations, and he is presumed innocent unless and until proven guilty.
2 Fuentes-Gonzalez is in custody. He pled guilty and is facing life imprisonment when sentenced.
3 The charges in the indictment against Chicas and Granillo are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
United States Settles Action Against New York City Department of Education for Submitting False Claims to Medicaid for Psychological Services to Special Education StudentsRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced that the United States has entered into a settlement with the City of New York in the case of Ohlmeyer ex rel. United States of America v. City of New York, a whistleblower action brought pursuant to the qui tam provisions of the federal False Claims Act, 31 U.S.C. Sections 3729-33 (the FCA). In its civil complaint, the United States alleged that the City of New York Department of Education (DOE) submitted false claims to Medicaid for psychological counseling services to special education students in the New York City public schools. The settlement calls for the City to pay $1,375,000 to the United States.
“When Medicaid shells out scarce dollars for services that are not provided, both the students in need of psychological support and the public fisc are harmed,” stated United States Attorney Lynch. “We will vigorously pursue entities, including local governmental agencies that seek reimbursement of federal funds to which they are not entitled.”
As described in the complaint, Medicaid pays DOE a flat fee of $223 for each student to whom DOE provides at least two psychological counseling sessions in a calendar month. Half of that money comes from the federal government. DOE is not entitled to any payment if an individual student receives fewer than two counseling sessions in a month. The United States alleged that, between 2001 and 2004, the DOE knowingly billed Medicaid for counseling services to individual students, even though it provided fewer than two counseling sessions per month to those students. In one case, DOE requested 15 months of payments from Medicaid for psychological counseling to a student during the 2001-02 and 2002-03 school years. According to DOE’s own service records, the student received fewer than two counseling sessions in 12 of those months.
Of the settlement amount, 15%, or $206,250, will be paid to the Relator, Dana Ohlmeyer, who initiated the case under the qui tam, or whistleblower provisions of the FCA. The City will also pay FCA attorney’s fees of $40,000.
The case was handled by Assistant United States Attorney Michael J. Goldberger with assistance from Department of Health and Human Services Office of Inspector General Special Agent Elysia Doherty.
Member of an International Ethnic-Albanian Organized Crime Syndicate Sentenced to 115 Months for Drug Trafficking and Attempting to Assassinate Criminal Associate over Drug DebtRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Bajram Lajqi, a member of an international drug trafficking syndicate led by ethnic Albanians located in the United States, Canada, and Europe (the “syndicate”), was sentenced to 115 months in prison -- with credit for the 31 months he has already served -- following his June 27, 2013, guilty plea to trafficking hundreds of pounds of marijuana from Canada and using a firearm in connection with drug trafficking. As a part of the sentence, the court also imposed a term of supervised release of five years.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Brian R. Crowell, Special Agent-in-Charge of the Drug Enforcement Administration, New York (DEA); and James T. Hayes, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.
“To Lajqi and his syndicate, the U.S. was the ultimate destination for their deadly mix of narcotics and violence. Lajqi in particular exemplifies the violence tied to large-scale narcotics trafficking, as his drug-fueled quest for revenge led him to gun down a rival outside a Bronx restaurant without regard for the safety of the innocent bystanders around him,” stated United States Attorney Lynch. “We will continue to vigorously prosecute those who would lay waste to the streets of our communities with drugs and violence.”
The syndicate was comprised of several inter-related ethnic Albanian family clans (also known as “fis”), with hundreds of associated members, workers, and customers spanning three continents. In operation for more than a decade, the syndicate was responsible for organizing the importation and distribution of tens of thousands of kilograms of hydroponic marijuana from Canada and Mexico, substantial quantities of MDMA from the Netherlands and Canada, hundreds of kilograms of cocaine from Mexico, Colombia, Venezuela, and Peru, and large quantities of diverted prescription pills, such as oxycodone. The drugs were distributed in various locations in the United States, including New York, California, Georgia, Colorado, and Florida, as well as in Canada and Europe. During the course of the investigation, federal agents seized more than 1,200 pounds of marijuana, approximately $2,000,000 in suspected drug proceeds, 22 handguns, a military/police-issue assault rifle and hundreds of rounds of ammunition. To date, 49 members and associates of the syndicate have been convicted in this case.
On June 4, 2011, an escalating dispute between Bajram Lajqi and another syndicate member over the payment of a drug debt led to Lajqi stalking the victim for several hours before Lajqi pulled out a firearm and attempted to murder the victim inside a crowded Bronx restaurant-bar. The victim escaped temporarily, but Lajqi chased him into the street and repeatedly shot him, resulting in serious wounds.
Ms. Lynch expressed her grateful appreciation to the DEA’s New York Organized Crime Drug Enforcement Strike Force, DEA Special Operations Division, the Department of Justice Office of International Affairs, DEA Newark Division, DEA Denver Division, DEA Miami Division, DEA Albany District Office, DEA Rome Country Office, HSI attache in Vienna, HSI attache in Toronto, HSI Albany Office, HSI Denver Office, HSI Newark Office, HSI Miami Office, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the Monmouth County (New Jersey) Prosecutor’s Office, the Westchester County District Attorney’s Office, and the New York Attorney General’s Office for their assistance.
The sentencing proceeding was held before U.S. District Judge Dora L. Irizarry.
The government’s case is being prosecuted by Assistant United States Attorneys Steven Tiscione, Gina Parlovecchio, and Claire Kedeshian.
The Defendant:
BAJRAM LAJQI
Age: 38
Eastern District of New York U.S. Attorney’s Office Joins in Collections of over $2.2 Billion in Civil and Criminal Actions and Asset Forfeiture in Fiscal Year 2013Read the Press Release
U.S. Attorney Loretta E. Lynch announced today that the Eastern District of New York, working collaboratively with other offices as well as on its own, collected over $904 million in criminal and civil actions in Fiscal Year 2013. Of this total amount, $725,564,627.70 resulted from cases handled in conjunction with other U.S. Attorney’s Offices and components of the Department of Justice. Collections from criminal and civil actions handled solely by the Eastern District of New York totaled $178,848,788.63.
In addition, working with partner agencies and divisions, the Eastern District forfeited another $1,319,038,046 in assets tainted by crime. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and the Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes. The combined joint collections and asset forfeiture recoveries for the Eastern District total of over $2.2 billion exceeds the appropriated $1.86 billion operating budget for all U.S. Attorneys’ Offices nationwide.
Attorney General Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department’s enforcement actions help not only to ensure justice is served, but also deliver a valuable return to the taxpayer,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
“Working with our colleagues across the nation as well as on our own, the Eastern District of New York stands firm in its resolve to protect the public and recover funds for the federal treasury and for victims of crime,” stated U.S. Attorney Lynch. “Collections and asset forfeiture are important tools in our arsenal as we seek to ensure that crime does not pay. We are honored to be part of this web of protection for the American people.”
FY 2013 EDNY COLLECTION HIGHLIGHTS
Health Care Fraud
This past year, working with colleagues in the District of Massachusetts and the Western District of Washington, the Eastern District of New York collected $748 million in a settlement with Amgen Inc. (Amgen). The Amgen settlement resolved criminal and civil liability arising from Amgen’s sale and promotion of Aranesp, a drug that treats anemia, as well as other drugs manufactured by Amgen. The settlement represents the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history. In its guilty plea, Amgen admitted that it illegally sold the drug with the intention that it be used at “off-label” doses that the FDA had specifically considered and rejected, and for an “off-label” treatment that the FDA had never approved and was later deemed to be extremely harmful to patients, all to increase profits. Amgen pled guilty to misdemeanor misbranding charges, paid a fine of $136 million, and forfeited $14 million. The civil settlement agreement encompassed allegations that Amgen: (1) promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for “off-label” uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs; (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and (3) engaged in false price reporting practices involving several of its drugs. As part of the global settlement, Amgen also entered into a Corporate Integrity Agreement with HHS-OIG that will govern its conduct and ensure careful oversight of its branding and marketing practices.
Prescription Drug Initiative
In addition, as part of its Prescription Drug Initiative, the Eastern District worked with colleagues in the Southern District of Florida, the District of Colorado, and the Eastern District of Michigan in resolving an action for civil penalties in the amount of $80 million against Walgreen Pharmacies for its repeated violations of the Controlled Substances Act. The Eastern District action focused on Walgreens stores on Long Island that repeatedly filled bogus prescriptions for highly addictive painkillers that they knew or should have known had no legitimate medical purpose. The Eastern District’s Prescription Drug Initiative seeks to stem the tide of prescription drug and painkiller abuse through both civil and criminal enforcement as well as community education. In another Prescription Drug Initiative matter, medical residents at New York Methodist Hospital in Brooklyn were found to have issued close to 200 prescriptions for the stimulant Adderall without a legitimate medical purpose. Indeed, the Adderall was alternately consumed by the residents or sold in hand to hand transactions or on Craigslist. The hospital entered into a Consent Judgment that not only provided for a civil penalty for violating the CSA but also established a formal program to ensure future compliance.
False Claims Act
Working with the Department’s Civil Frauds Branch, the Eastern District recovered $5.25 million from RxAmerica pursuant to the settlement of one of the first federal False Claims Act cases to involve a Medicare Part D plan, which resolved claims that RxAmerica made false submissions to the Centers for Medicare and Medicaid Services in order to receive higher reimbursements for certain medications. In addition, the Eastern District recovered $8 million from CA, an Islandia, New York-based software and information technology company for knowingly double-billing federal agencies in connection with software maintenance contracts administered by the General Services Administration and Department of Defense.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
In the Eastern District as well as nationwide, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
Purported Environmental Product Inventor and Developer Sentenced to 48 Months in Prison for $5 Million Fraud SchemeRead the Press Release
Theodore Sweeten, the president of Symtech International, Inc. (“Symtech”), was sentenced today in federal court in Brooklyn, New York, to 48 months in prison to be followed by three years of supervised release. As part of the sentence, Sweeten was ordered to forfeit more than $600,000 to the government and pay $5,001,949 in restitution to the defrauded investor. Sweeten was remanded into federal custody. In June 2013, Sweeten pleaded guilty to a charge of wire fraud for defrauding an individual investor of $5 million through, among other things, false representations about his investment and environmental expertise.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Theodore Sweeten conned an unsuspecting investor of $5 million by claiming to have expertise in environmental and financial products, when in reality, his only expertise was in fraud. Sweeten told the victim his money would be safe until their investment goals were accomplished. Instead, he and his cohorts simply stole the money and gave the victim phony documents and a trail of lies, each one more fanciful than the last. Those who seek to prey on the investing public through lies and deceit are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI, the agency responsible for leading the government’s investigation.
Sweeten, who claimed he developed and patented the “Clean Air Valve” among other environmental products, defrauded an investor of $5 million by lying to him about his expertise in their joint venture agreement. Sweeten, and two others, induced the victim to make the investment in order to “lease” a credit line of $100 million, which in turn would enable them to generate millions of dollars in profit through special investment programs.1 In furtherance of that scheme, Sweeten and his co-conspirators falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, they simply distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.
When the victim discovered that the bank documents on HSBC letterhead were phony, he requested a refund of the $5 million that he had deposited into the attorney escrow account. In response, Sweeten and his co-conspirators told the victim that the money had been disbursed to the investors who created the $100 million account. Sweeten then claimed innocence and placed the blame for the victim’s lost funds on his co-conspirators. In particular, Sweeten concealed from the victim the fact that he had requested and received more than $600,000 of the escrowed funds more than four months prior to the issuance of the fabricated HSBC documents. When the victim eventually confronted Sweeten about the money that Sweeten had withdrawn from the attorney’s escrow account, Sweeten lied to the victim yet again and told him that he had invested the withdrawn funds on the victim’s behalf into other highly profitable projects, including a gold mine project. Sweeten continued with these lies to the victim, in emails and telephone conversations, for more than three years after stealing the victim’s money.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes and Marcia M. Henry.
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:
THEODORE SWEETEN
Age: 61
Residence: Ashland, Oregon
E.D.N.Y. Docket No. 12-CR-471
1 The charges against the co-defendants are merely allegations, and they are presumed innocent unless and until proven guilty.
Former Federal Air Marshal and Border Patrol Agent Sentenced to Ninety Years’ Imprisonment for Sexual Exploitation of ChildrenRead the Press Release
Earlier today, Michael J. McGowan, a former Federal Air Marshal and Border Patrol Agent, was sentenced to 90 years’ incarceration for three counts of Sexual Exploitation of Children. McGowan repeatedly sexually abused three boys over the course of four years between 2000 and 2004 and photographed the abuse. In 2005, McGowan was convicted in U.S. District Court for the Eastern District of New York of one count of Attempting to Receive Child Pornography and sentenced to 20 years’ imprisonment. In 2008, while serving his sentence, McGowan sought from prison to have the photographs destroyed, which led to their discovery and his current prosecution for Sexual Exploitation of Children.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John E. Dupuy, Assistant Inspector General for Investigations, Office of Inspector General in the Department of Homeland Security (OIG-DHS); and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.
“Michal J. McGowan, sexual predator of young boys for personal gratification, went so far as to use his position as a Federal Air Marshal to perpetrate his abuses. Moreover, his prior imprisonment did nothing to deter him from compounding his crimes by reaching out from prison in an attempt to subvert justice and destroy evidence,” stated United States Attorney Lynch. “McGowan’s effective life sentence will ensure that no other child faces abuse at his hands and serves as a warning to those who would commit such crimes that they will be pursued, prosecuted, and prevented from continuing to endanger our most precious resource.” Ms. Lynch expressed her grateful appreciation to the U.S. Postal Inspection Service, the U.S. Bureau of Prisons, and the Drug Enforcement Administration for their outstanding assistance in this investigation.
The initial charges against McGowan arose out of a 2004 United States Postal Inspection Service sting operation in which he ordered child pornography via computer to be delivered to him at his residence in Hicksville, New York. On June 30, 2004, a search warrant was executed at his residence, at which time McGowan claimed to have been investigating child pornography cases in his capacity as a Federal Air Marshal. McGowan was arrested on July 21, 2004, after an analysis of his computer revealed in excess of 1,300 images and videos of child pornography, predominantly of boys between the ages of 10 and 15 years’ old, engaged in sexual activity with other boys and adult males. McGowan pleaded guilty in United States District Court on July 11, 2005 to Attempted Receipt of Child Pornography.
Prior to imposition of sentence for the 2004 child pornography offense, McGowan contacted a then 15-year-old boy via telephone and mail from jail and engaged in a sexual conversation with the boy. The boy later disclosed to federal investigators that McGowan had abused him on a number of occasions when he was 13 years’ old, in Corpus Christi, Texas, where McGowan previously resided. In 2006, following the disclosure of this molestation, as well as McGowan’s calls and letters from jail to the boy, McGowan was sentenced by United States District Judge Sandra J. Feuerstein to 20 years’ imprisonment, to be followed by lifetime supervised release.
On November 27, 2008, while housed at the Federal Correctional Institute in Butner, North Carolina, McGowan wrote a letter to a second victim, a then 18-year-boy, requesting him to recover and destroy a hard drive containing child pornography which McGowan had hidden behind a sheetrock wall at his Hicksville residence. This effort was discovered by Bureau of Prisons personnel, and the boy was interviewed. During the course of the interview, the boy admitted that McGowan had molested him from ages 10 to 14 years’ old, and further led OIG-DHS and HSI investigators to seize the hidden hard drive. Upon examination, the hard drive was found to contain in excess of 1,000 images of child pornography, including images of children as young as five-years-old engaged in sexual conduct, as well as images of McGowan molesting three boys, ages 11 to 13. Several of the photographs were taken in hotel rooms that McGowan had access to as a result of his work as a Federal Air Marshal. Also recovered was a VHS videotape which depicted an unidentified minor boy engaged in sexual activities filmed by McGowan.
Following McGowan’s return to the Eastern District of New York to face the current charges, he repeatedly attempted to obstruct justice by sending threatening letters to one of the victims depicted in the child pornography that McGowan created.
On September 20, 2011, McGowan pleaded guilty to three counts of Sexual Exploitation of Children. Today’s sentence of 90 years’ imprisonment will be served consecutive to the remaining term of the 20 year sentence McGowan is currently serving. The sentencing proceeding was held before Judge Sandra J. Feuerstein at the federal courthouse in Central Islip, New York.
The government’s case was prosecuted by Assistant United States Attorney Allen Bode.
The Defendant:
MICHAEL J. MCGOWAN
Age: 41
Hicksville, New York
Corpus Christi, Texas
E.D.N.Y. Docket No. 09-653(SJF)
Former Bank Director Charged with Securities and Wire Fraud Captured Following ManhuntRead the Press Release
BROOKLYN, NY – Earlier today, Aubrey Lee Price was presented at the federal courthouse in Brunswick, Georgia, near where he was arrested. The defendant, who sent acquaintances a suicide note stating that he planned to kill himself by throwing himself off a high speed ferry boat in Florida, has been wanted since June 27, 2012, when the Honorable Viktor V. Pohorelsky, United States Magistrate Judge for the Eastern District of New York, issued a warrant for Price’s arrest based on a complaint filed by the United States Attorney for the Eastern District of New York. At the time, Price was charged with wire fraud in connection with his use of brokerage accounts in New York to misappropriate millions of dollars belonging to a bank in southern Georgia where Price was a director. A grand jury in Brooklyn later expanded the charges against Price to include securities fraud in connection with Price’s theft of funds from both the bank and other investors in investment funds controlled by Price. The defendant also faces a charge in the Southern District of Georgia.
The arrest was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
According to the indictment, Price managed investment funds PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
The indictment further states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (“MB&T”), a financial institution in Ailey, Georgia. After telling MB&T that he would invest the bank’s capital in U.S. Treasury securities, Price instead lost much of the bank’s money by investing in risky equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.
“Aubrey Lee price created a life and death out of whole cloth, telling hundreds of investors and a Georgia bank that their money was safe when he was flying high, and telling the world he was dead when his lies crashed down around him,” stated United States Attorney Lynch. “But Price proved as unsuccessful at faking his own death as he was at faking his victims’ investments. Every person who seeks to harm our financial markets through fraud should be on notice. With the help of our law enforcements partners, both federal and local, we will find you, and we will hold you accountable for your behavior in a court of law.” Ms. Lynch expressed her grateful appreciation to the Securities and Exchange Commission, Atlanta Regional Office, and the Lowndes County Georgia Sheriff’s Department for their cooperation and assistance in the investigation. She also thanked the Glynn County Georgia Sheriff’s Department, who arrested the defendant following a traffic stop.
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 prosecuted by Assistant United States Attorneys David C. Woll, Jr. and Brian Morris.
This prosecution was the result of efforts by President Barack 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. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
AUBREY LEE PRICE
Age: 47
Valdosta, Georgia
E.D.N.Y. Docket No. 13-CR-058
Canadian Deputy Health Minister Impersonator Pleads Gulity in $25 Million Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Howard Leventhal, 56, pleaded guilty to wire fraud for defrauding and attempting to defraud a number of individuals and entities of millions of dollars by falsely claiming that his company, Neovision USA, Inc. (“Neovision”), had a lucrative contract with Canada’s Department of Health (“Health Canada”). Leventhal also pleaded guilty to aggravated identity theft, which carries a mandatory two-year term of imprisonment, for stealing the identity of Glenda Yeates, Health Canada’s former Deputy Minister of Health. When sentenced on April 3, 2014, Leventhal faces up to 22 years in prison, $1,050,819.78 in forfeiture and restitution, and a fine of more than $2 million.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“In Leventhal’s world, the truth was cloaked by his web of lies and impersonation. Within this alternate reality, Leventhal marketed nonexistent technology, fabricated an on-line presence, and impersonated a government official, all to defraud investors out of very real money. His actions were the stuff of fantasy and science fiction, valid only in another dimension. Today’s guilty plea marks the end of Leventhal’s elaborate scheme and demonstrates this Office’s steadfast commitment to protect investors from fraud,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the FBI, the lead agency responsible for the investigation, and the Royal Canadian Mounted Police (RCMP) and Health Canada for their significant cooperation and assistance in the investigation.
According to court filings and facts presented at the plea hearing, Leventhal told potential investors that Neovision had written agreements with Health Canada, whereby Neovision would provide Health Canada with “Heltheo’s McCoy Home Health Tablet,” a device ostensibly named after the fictional Dr. Leonard McCoy of TV’s Star Trek series.1 The written agreement provided by Leventhal to potential investors was purportedly signed by Glenda Yeates, Canada’s former Deputy Health Minister, on behalf of the government of Canada. For example, in May 2012, Leventhal used this agreement and entered into a factoring agreement with Paragon Financial Group, Inc. (“Paragon”), a Florida company, whereby Paragon advanced Neovision $800,000 in exchange for Paragon’s right to collect a larger sum of money purportedly owed to Neovision by Health Canada. Leventhal also used the purported agreement with Health Canada to solicit more than $25 million from other potential investors, including an undercover law enforcement agent posing as a high net worth individual.
Contrary to Leventhal’s representations, (1) there was no agreement between Health Canada and Neovision, (2) Health Canada did not owe Neovision any money, and (3) Deputy Health Minister Glenda Yeates’ signature on the agreement was a forgery. To conceal his scheme, Leventhal assumed the identities of Health Canada representatives, including that of former Deputy Health Minister Glenda Yeates. Further, Leventhal created and used domain names, telephone numbers, and email addresses that closely resembled those actually used by Health Canada. For example, Leventhal created and used healthcanada.com.co and hc-sg-gc.ca in place of Health Canada’s true domain name hc-sc.gc.ca.
Today’s guilty plea took place before United States District Judge Brian M. Cogan.
The government’s case is being prosecuted by Assistant United States Attorney Winston M. Paes.
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
HOWARD LEVENTHAL
Age: 56
Long Grove, IllinoisE.D.N.Y. Docket No. 13-CR-695
_____________________________
1 Leventhal claimed that Heltheo’s McCoy Home Health Tablet can instantaneously and effectively deliver detailed patient data to physicians and other licensed medical care providers.
Former Chief Executive Officer of Financial Lending Company Pleads Guilty in Bank Fraud SchemeRead the Press Release
Earlier today, John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC (“Oak Rock”), pled guilty to bank fraud before United States Magistrate Judge Gary R. Brown at the United States courthouse in Central Islip, New York. The charge arose out of Murphy’s scheme to defraud various financial institutions including Israel Discount Bank (“IDB”), the primary lender to Oak Rock. The losses to these financial institutions and Oak Rock investors are in excess of $100 million. When sentenced by United States District Judge Leonard D. Wexler, the defendant faces a maximum of 30 years’ imprisonment.
The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Murphy abused his position as CEO and defrauded banks out of millions of dollars by lying about his company’s financial health,” stated United States Attorney Lynch. “Today’s conviction should act as warning to executives, if you lie to lenders and investors, you will be investigated and prosecuted to the full extent of the law.” Ms. Lynch expressed her grateful appreciation to the New York State Department of Financial Services for its assistance in this investigation.
“Mr. Murphy, instead of being a steward of Oak Rock Financial, spent his time cooking the books. Let this serve as a reminder to executives everywhere that honesty and integrity are more important than the bottom line,” stated FBI Assistant Director-in-Charge Venizelos.
Oak Rock is a financial lending company located in Suffolk County, New York, that is in the business of securing lines of credit for businesses throughout the United States. Until April 2013, Murphy was the Chief Executive Officer and President of Oak Rock. During his guilty plea, Murphy admitted to lying to IDB, other financial institutions, and Oak Rock investors regarding the accounts receivable for Oak Rock. Specifically, Murphy admitted, since January 2009, he had been committing fraud by changing delinquency dates to keep collateral and loans current; booking fictitious payments, thereby creating fictitious accounts receivable; and re-aging delinquent accounts receivable by copying data from timely paid accounts so that the loans appeared to have been stable. By relying on Murphy’s misrepresentations IDB, other financial institutions and Oak Rock investors sustained losses in excess of $100 million.
The government’s case is being prosecuted by Assistant United States Attorney Michael P. Canty
The Defendant:
JOHN MURPHY
Age: 63
Nesconset, New YorkE.D.N.Y Docket No 13-CR-702 (LDW)
United States Announces Settlement with Suffolk County to Remedy Federal Leak Prevention Violations at the County’s Underground Storage TanksRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Judith A. Enck, Regional Administrator, United States Environmental Protection Agency (EPA) Region 2, today announced the settlement with Suffolk County (Suffolk) in a federal civil environmental lawsuit alleging that Suffolk violated the federal leak prevention requirements for underground storage tanks at 35 facilities that the County has owned or operated. The violations involve 68 underground storage tanks, which contain gasoline or waste oil in generally large quantities and can cause serious environmental damage if allowed to leak.
All of the facilities at which Suffolk has owned or operated underground storage tanks are located within the boundaries of a federally-designated Sole Source Aquifer, which, among other criteria, is an aquifer that supplies at least 50% of the drinking water consumed within the Sole Source Aquifer boundaries. The Sole Source Aquifer designation is a tool to protect drinking water supplies in areas with few or no alternative sources to the groundwater resources, and where, if contamination occurred, using an alternative source would be extremely expensive. The violations alleged in the complaint do not pose an immediate threat to the drinking water of Suffolk’s residents. However, Suffolk’s compliance with the federal leak prevention requirements of the Resource Conservation and Recovery Act (RCRA) is vital to ensure the integrity of tanks and to prevent the release of petroleum product to soil and groundwater.
The lawsuit also alleges that Suffolk violated RCRA’s hazardous waste management requirements by improper handling of used fluorescent lamps at its facilities. Compliance with these requirements is essential to minimize the present and future threat to human health and the environment of hazardous waste.
Under the Consent Judgment, lodged today in U.S. District Court for the Eastern District of New York, Suffolk County will pay a civil monetary penalty of $500,000 to the United States. Suffolk will also fund a Supplemental Environmental Project in the amount of $1,500,000 to acquire an interest in land, and to manage such land and any associated ecological resources, into perpetuity, to protect or enhance groundwater. This project will secure significant environmental and public health benefits for Suffolk’s residents, including protecting Suffolk County’s sole source aquifer, and enhancing the condition of the ecosystem.
While the settlement was being negotiated, Suffolk undertook measures to achieve compliance with RCRA that the EPA has valued at approximately $2,900,000. This included replacement and upgrade of automated release detection systems, removal and closure of obsolete tanks, upgrade and renovation of fueling stations, adding inventory control equipment at fueling sites, conducting training and inspections, and cleanup and restoration of a fuel spill at one of Suffolk’s facilities. Under the Consent Judgment, Suffolk has committed to remain in compliance with RCRA requirements for all of its underground storage tanks and in its handling of used fluorescent lamps, and to submit regular reports to the EPA to demonstrate that it is in compliance. The EPA has estimated the value of these future compliance measures at approximately $1,115,000.
“Suffolk County’s residents are entitled to full protection of the laws and regulations designed to protect our water, our environment, and our citizens from risk of contamination from gasoline. Suffolk’s commitment to maintain compliance with those laws and to fund the acquisition of an interest in land that will be perpetually managed to protect and enhance groundwater provides a significant benefit to Suffolk’s residents,” stated United States Attorney Lynch. “This Consent Judgment will ensure that Suffolk County’s groundwater, the sole source aquifer for Suffolk County, is protected from releases from Suffolk’s underground storage tanks.”
“As a result of this settlement, the health of people living in communities throughout Suffolk County will be better protected from the threat of petroleum contamination to ground water," said EPA Regional Administrator Judith A. Enck. "Under this agreement, the county will come into compliance with Federal Hazardous Waste Laws, including those laws aimed at preventing leaks of underground petroleum storage tanks, and will undertake a $1.5 million land conservation program to preserve and protect a major source of Long Island's drinking water."
The proposed settlement will be published in the Federal Register for a 30-day public comment period, and to be become effective, it must be approved by the United States District Court for the Eastern District of New York.
The government’s case is being prosecuted by Assistant United States Attorney Sandra L. Levy. EPA is represented by Assistant Regional Counsel Stuart Keith.
Former Agape Employees Charged with Massive Ponzi Scheme in Superseding IndictmentRead the Press Release
Earlier today, a 21-count superseding indictment was unsealed charging Bryan Arias, Anthony Ciccone, Diane Kaylor, Jason Keryc and Shamika Luciano, former employees of Hauppauge-based Agape World, Inc. (“Agape”) and Agape Merchant Advance (“AMA”), for their participation in a large-scale Ponzi scheme.1 The superseding indictment adds two new defendants, Arias and Luciano, a securities fraud charge, a mail fraud count and two additional wire fraud counts. The defendants are scheduled to be arraigned on the superseding indictment this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse in Central Islip, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, 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, New York (USPIS).
“Today’s superseding indictment is but the latest step in this Office’s dismantling of the fraudulent business empire of Nicholas Cosmo,” stated United States Attorney Lynch. “The defendants charged were an integral part of Cosmo’s Ponzi scheme that defrauded thousands of people of hundreds of millions of dollars. The defendants actively promoted the Ponzi scheme, promising safe investments in low risk business ventures. Even when the business ventures began to fail, the defendants continued to peddle lies and deceit to the investors in order to keep money flowing into the scheme.” Ms. Lynch added that the government’s investigation is continuing.
“As alleged in the indictment, the defendants’ foundation for success was built on deception and sham investments using the victims’ money. Over time, as with all Ponzi schemes, the defendants’ lies began to unravel leaving the collective investors millions of dollars out of pocket. Unfortunately, the public should be reminded that sometimes investment opportunities that are too good to be true are merely schemes designed to steal your money. The FBI, along with our law enforcement partners, will continue to aggressively investigate those who prey upon the public with illegal get-rich-quick plans,” stated FBI Assistant Director-in-Charge Venizelos.
“Today’s arrests should serve notice to criminals that Postal Inspectors will leave no stone unturned to bring to justice all parties involved in any crime that utilizes the U.S. Mail to steal the hard earned money of consumers,” said Inspector-in-Charge Bartlett.
Nicholas Cosmo founded Agape and AMA in August 2000. According to the superseding indictment and court filings, between October 2003 and January 2009, Arias, Ciccone, Kaylor, Keryc and Luciano, who worked as account representatives or brokers for Cosmo, played critical roles in the operation of a 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, among other things, (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 and AMA carried little or no risk of loss. The defendants allegedly raised significantly more money than was needed for the loans, and lied to the investors when they assured them that their money would specifically be used to fund only a particular loan. For their efforts, Arias, Ciccone, Kaylor, Keryc and Luciano received approximately $1.7 million, $10.7 million, $4.75 million, $16 million and $275,000, respectively.
As alleged in the superseding indictment, Cosmo and the defendants actually ran a Ponzi scheme, paying returns to Agape and AMA investors not from any profits earned on investments, but rather from existing investors’ deposits or money paid by new investors. In addition, unbeknownst to the investors, approximately $100 million of their money was used to trade high risk futures and commodities. Despite the fact that the defendants knew that Agape and AMA did not produce or earn rates of return that could support the exorbitant returns promised to investors, they allegedly continued to solicit money from investors.
As the fraudulent scheme began to unravel, the defendants allegedly lied to investors about the status of various Agape bridge loans. For example, on November 3, 2008, the defendants learned that all of Agape’s 2007 bridge loans were in default or on extension but allegedly failed to disclose that information to existing or new investors. Instead, the defendants actively continued to solicit money from investors, obtaining an additional $25.6 million.
During the course of the Ponzi scheme, approximately 5,000 individuals invested a total of more than $400 million in Agape and AMA. Although some investors succeeded over the years in making full or partial withdrawals, particularly before the Ponzi scheme began to unravel, approximately 4,100 investors sustained actual losses totaling approximately $179 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.
If convicted, the defendants face a maximum sentence of 20 years’ imprisonment on each count.
The government’s case is being prosecuted by Assistant United States Attorneys Christopher C. Caffarone, Grace M. Cucchissi and Vincent Lipari.
The Defendants
BRYAN ARIAS
Age: 40
Maspeth, New YorkANTHONY CICCONE
Age: 41
Locust Valley, New YorkDIane kaylor
Age: 37
Bethpage, New YorkJASON KERYC
Age: 36
Wantagh, New YorkSHAMIKA luciano
Age: 31
Coram, New YorkE.D.N.Y. Docket No. 12-CR-357 (S-1)(DRH)
_____________________________
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Ukrainian National Who Co-Founded Cybercrime Marketplace Sentenced to 18 Years in PrisonRead the Press Release
BROOKLYN, NY – Earlier today, at the federal courthouse in Brooklyn, New York, Roman Vega, one of the world’s most prolific cybercriminals, was sentenced to 18 years in prison. Vega, a Ukrainian national who co-founded the notorious Internet website CarderPlanet, pled guilty in 2009 to conspiracies to commit money laundering and access device fraud. At the time of his arrest, Vega possessed over half a million stolen credit card numbers.
The sentence was announced today by Loretta E. Lynch, the United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Criminal Division of the Department of Justice; and Steven G. Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.
“Roman Vega and his cybercriminal associates emulated the mafia in organizing their criminal operations,” stated United States Attorney Lynch. “Now, he shares the same fate as so many mafia bosses – a long term of imprisonment. This investigation spanned the globe and sends the unmistakable warning that when it comes to dismantling global cybercrime organizations, neither distance nor complexity will deter us and our partners in law enforcement.” Ms. Lynch expressed her grateful appreciation to the United States Postal Inspection Service for its assistance.
“Today’s sentence is a significant milestone in our ongoing effort to aggressively target and dismantle global cybercrime organizations that operate from every corner of the world,” said Acting Assistant Attorney General Raman. “Vega helped create one of the largest and most sophisticated credit card fraud sites in the cybercrime underworld – a distinction that has earned him the substantial sentence he received today.”
“The Secret Service is pleased to have participated in this multi-agency criminal investigation that lead to the arrest of Roman Vega also known as ‘Boa’,” said Secret Service Special Agent in Charge Hughes. “This case demonstrates by constricting this criminal enterprise, there is no such thing as anonymity in the cyber world. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network law enforcement partners.”
Vega, who at various times was also known as “Boa,” “Roman Stepanenko,” “Randy Riolta,” and “RioRita,” formed two online marketplaces for stolen credit card information. In the late 1990s, he founded the Boa Factory, one of the earliest websites on the Internet to provide a forum for buyers and sellers of stolen credit card information. In the early 2000s, he co-founded and became a high-ranking administrator of a second criminal website, CarderPlanet, which became one of the first and busiest online marketplaces for the sale of stolen financial information, computer hacking services, and money laundering.
At its height, CarderPlanet had more than 6,000 members and had a hierarchical leadership structure that borrowed its leadership titles from La Cosa Nostra. For example, CarderPlanet was headed by a “Godfather.” Immediately below the Godfather were a number of “Dons,” including Vega, who used the name “Boa” when serving in this role. Two levels below the Dons was the “Consigliere,” who was an advisor. Vega, using the name “RioRita,” also served as the Consigliere.
CarderPlanet quickly became a premier online criminal bazaar in significant part as a result of Vega’s leadership. Most notably, he helped institute a quality control system for sales. If a cyberthief wanted to sell stolen credit card information on CarderPlanet, the information was subjected to a vetting process overseen by a manager to ensure that buyers obtained usable stolen data. In addition, the website used e-currencies, such as WebMoney, to provide the participants with security and the cloak of anonymity. As a result, Vega and his co-conspirators created an efficient and reliable online marketplace for the buyers and sellers of stolen financial information not unlike legitimate e-commerce sites.
Vega also sold stolen data on the marketplaces he founded and managed. He directed cells of cybercriminals around the globe who hacked into financial institutions to steal credit card and other financial information that would in turn be sold on online marketplaces, including CarderPlanet.
Vega was arrested in Cyprus in February 2003 and extradited to the Northern District of California for prosecution. In November 2007, Vega was transferred to the Eastern District of New York following his indictment on the instant charges. Vega has been incarcerated continuously since 2003.
The sentencing proceeding was held before Senior United States District Judge Allyne R. Ross.
The case was prosecuted by Assistant U.S. Attorney William P. Campos of the Eastern District of New York and Senior Counsel Thomas Dukes of the Criminal Division’s Computer Crime & Intellectual Property Section.
The Defendant:
ROMAN VEGA
Age: 49
UkraineE.D.N.Y. Docket No. CR-07-707 (ARR)
New Arrest: Carmine Mandarano MD- Complaint for Distribution of Controlled SubstanceRead the Press Release
New Arrest: Carmine Mandarano MD- Complaint for Distribution of Controlled Substance
Long Island Man Charged with Orchestrating $5 Million Ponzi SchemeRead the Press Release
A fourteen-count indictment was unsealed today in the United States District Court for the Eastern District of New York located in Central Islip, charging Robert Rocco with wire and mail fraud in connection with a series of business ventures that he created. 1 Rocco was arrested earlier today and will be arraigned before the Honorable Leonard D. Wexler in the federal courthouse in Central Islip.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
The indictment alleges that Rocco, while acting as the president of the Dix Hills Soccer Club, solicited club members and volunteers, friends and neighbors, to invest money in a series of businesses that he formed including, Limestone Capital Services (“Limestone”), Advent Merchant Services, LLC and Advent Equity Partners, LLC, that Rocco claimed would earn high rates of return on investments. Rocco allegedly told investors that they would receive returns of up to 18% of their principal investment annually through the companies’ investments in ventures that purportedly included providing loans to finance wholesale cigarette purchases on behalf of the Shinnecock Nation tobacco shop and a credit card processing venture. The indictment charges that Rocco solicited and received approximately $5 million in investor money between 2006 and 2013, which was not invested as promised. Instead Rocco allegedly misappropriated the money and additionally, solicited money from new investors which he used to pay purported profits to earlier investors, thus concealing the earlier misappropriation. Rocco also is alleged to have sent fraudulent account statements to investors that falsely showed that investors’ accounts had earned high rates of return. The indictment further alleges that Rocco controlled the bank accounts and records of the Dix Hills Soccer Club and did not permit others to have access to them. Between January and March 2010, Rocco allegedly deposited $66,915 in checks from the soccer club into Limestone and later distributed the proceeds of the checks to early investors in Limestone, leaving the soccer club with no funds to operate. In April 2010, Rocco allegedly sought and received donations to allow the club to continue operations.
“As alleged in the indictment, Rocco employed fraud and deceit to victimize friends and neighbors and even used his local soccer club to further his schemes. His promises of high returns were illusory, propped up by false account statements,” stated United States Attorney Lynch. “Today’s arrest demonstrates our continuing commitment to investigate and prosecute those who commit financial crimes, particularly those who haven’t gotten the message that we will actively and aggressively pursue those who inflict financial harm on our citizens.” Ms. Lynch thanked the Federal Bureau of Investigation for its work on the investigation.
“As alleged in the indictment, Rocco mastered the role of con artist when he traded upon his relationship with friends and colleagues with empty promises of high financial returns in exchange for their investments. While not physically violent, Rocco’s alleged actions had a significant impact on the lives of his victims who lost their hard earned money to someone they trusted. The FBI will continue to vigorously investigate those who prey upon and defraud members of our community for their own personal gain,” stated Assistant Director-in-Charge Venizelos.
The government’s case is being prosecuted by Assistant United States Attorney Allen Bode.
The Defendant
ROBERT ROCCO
Age: 48
Dix Hills, New YorkE.D.N.Y. Docket No. 13-CR-664 (LDW)
_____________________________
1 The charges in the indictment are merely allegations and the defendant is presumed innocent unless and until proven guilty.
New Arrest in $5 Million Dollar Ponzi Scheme- Indictment
Chinese National Sentenced to 57 Months' Incarceration for Attempting to Illegally Export Aerospace-Grade Carbon FiberRead the Press Release
Earlier today at the federal courthouse in Brooklyn, New York, Ming Suan Zhang, a citizen of the People’s Republic of China, was sentenced today to 57 months’ incarceration for violating the International Emergency Economic Powers Act by attempting to export high-grade carbon fiber from the United States to China. Zhang attempted to negotiate a long-term contract for massive quantities of the controlled commodity, which he asserted was to be provided to a Chinese company involved in the development of a military aircraft. Zhang was arrested after traveling to the United States to meet with an undercover agent (“UC”) in an effort to obtain a sample of the specialized fiber, which has applications in the defense and aerospace industries and is therefore closely regulated by the United States Department of Commerce.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for National Security; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Sidney Simon, Special Agent-in-Charge, U.S. Department of Commerce (DOC), Office of Export Enforcement, New York Field Office.
"The defendant brazenly disregarded U.S. law in an attempt to procure a highly sought after commodity and provide it to a foreign power," stated United States Attorney Lynch. "Foreign governments are willing to go to great lengths to acquire potentially dangerous materials such as specialized carbon fiber composites, which are of high value in the development of advanced weapons programs. We and our law enforcement partners will continue to use all of the tools in our arsenal to protect our technology and maintain the national security of the United States and its allies." Ms. Lynch expressed her grateful appreciation to the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York, and the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office, for their outstanding work in this investigation.
Zhang came to the attention of federal authorities last year after two Taiwanese buyers, acting on his behalf, attempted to procure several tons of specialized carbon fiber, including Toray type M60-JB-3000-50B (“M60”), via Internet marketplace forums. Zhang met with one of the buyers in mainland China and directed him to purchase a large quantity of high-grade carbon fiber, which Zhang intended to provide to a customer in China. The buyers searched for a source of the commodity and contacted the UC. The UC informed the buyers that he was willing to negotiate a deal, but that a license from the U.S. government was required to export the M60 from the United States.
When Zhang’s agents failed to obtain and deliver a sample of the carbon fiber, Zhang became personally involved in the scheme. He ultimately contacted the UC and stated that he had an urgent need for the carbon fiber. Zhang indicated that his customer, an executive at a prominent Chinese military company, was involved in the test flight of a “jet fighter plane.” In an email to the UC in August 2012, Zhang explained:
Hello! Please find time to send me an email or call me to explain the situation, because the customer over here is rushing me. . . . On the 5th, [he] is handling the site of a new fighter aircraft test flight. He will return between the 10th and the 20th of next month. That’s why he requested that be done this month. . . . Thank you for your cooperation!
Zhang then obtained a passport to travel to the United States for a meeting with the UC and take possession of a sample of M60 carbon fiber, which would be shipped to China and analyzed to verify its authenticity. Zhang’s plan was obtain a steady supply of the high-grade fiber for export to China, totaling thousands of pounds. However, Zhang was placed under arrest after he arrived at the meeting with the UC.
Certain types of carbon fiber, such as the type that the defendant sought to acquire in this case, are closely controlled for nuclear non-proliferation and anti-terrorism reasons because they can be used to make ballistic missiles, aircraft, and nuclear centrifuges, among other things. The regulation of carbon fiber falls under the jurisdiction of the Department of Commerce, which reviews and controls the export of certain goods and technology from the United States to foreign countries. In particular, the Commerce Department has placed restrictions on the export of goods and technology that it has determined could make a significant contribution to the military potential or nuclear proliferation of other nations, or that could be detrimental to the foreign policy or national security of the United States. High grade carbon fiber has applications in specialized technology, including aerospace and nuclear engineering. In addition, certain carbon fiber-based composites, such as the material sought by the defendant, can be used in military aircraft.
The sentencing proceeding was held before by the Hon. Nicholas G. Garaufis at the United States District Court in Brooklyn, New York. The government's case was prosecuted by Assistant United States Attorneys Seth DuCharme and David Sarratt, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section. Assistance was also provided by Trial Attorney Dan E. Stigall of the Department of Justice Office of International Affairs.
The Defendant:
MING SUAN ZHANG
Age: 42MS-13 Gang Leader Sentenced to Life in PrisonRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Heriberto Martinez, also known as “Boxer,” the former leader of the Coronados clique of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life in prison. Martinez and co-defendant Carlos Ortega, also known as “Silencio,” were convicted, on March 21, 2013, following a six-week trial, on all 21 counts of the trial indictment, including racketeering, racketeering conspiracy, murder, assault with dangerous weapons, and related firearms and conspiracy offenses. Ortega was sentenced to life in prison on November 21, 2013.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Thomas V. Dale, Commissioner of the Nassau County Police Department.
“Heriberto Martinez placed less value on human lives than he did on enforcing the barbaric rules of the MS-13, and, as a leader of the MS-13, making sure other gang members were doing the same. In keeping with those twisted rules, during a six-week period in early 2010, Martinez authorized the execution of a young mother, whom he believed had disrespected the gang, ordered the execution of a security guard for doing his job, and both advocated for and carried out the execution of a fellow MS-13 member who refused to commit senseless, violent crimes,” stated U.S. Attorney Lynch. “The jury’s verdict earlier this year and today’s sentence demonstrate that the brutal and senseless violence committed by Martinez and his fellow MS-13 members will not be tolerated and will be prosecuted tenaciously.” Ms. Lynch extended her grateful appreciation to the members of the FBI’s Long Island Gang Task Force and the New York City Police Department for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Martinez terrorized, victimized, and murdered members of our community in the name of MS-13. His violence and criminal activity knew no limits. Consistent with the recent sentences of other MS-13 gang members, today’s sentence of Martinez should send a clear message to all members of these violent enterprises: your actions will not be tolerated, no matter what group you hide behind. The FBI, along with our law enforcement partners, will continue efforts to rid the streets of these violent criminals and bring them to justice.”
At trial, the government proved that Martinez, along with his fellow MS-13 gang members, killed multiple victims between February and March of 2010:
(1) Martinez was convicted in connection with the execution-style murder of Vanessa Argueta, a 19-year-old woman, in Central Islip, New York, on February 5, 2010. Martinez also was convicted of being an accessory after-the-fact in the murder of Argueta and her 2-year-old son, Diego Torres, who was shot and killed during the same criminal incident. Martinez helped three of his co-conspirators evade arrest in New York and flee to El Salvador after the commission of the murders. The bodies of Argueta and Torres were found in a secluded wooded area in Central Islip. Argueta had been shot in the head and chest, and Torres had been shot twice in the head.
(2) Martinez also was convicted in connection with the execution-style murder of 23-year-old Nestor Moreno, a security guard at El Rancho Bar and Grill in Hempstead, New York, on March 6, 2010. In late February 2010, Heriberto Martinez and several other members of the MS-13 were involved in a dispute with El Rancho employees over an unpaid bar tab. The dispute escalated into a physical altercation during which Martinez was sprayed with pepper spray. Prior to leaving El Rancho, Martinez identified himself as an MS-13 member to the victim and told him, “It’s not going to end like this.” On March 6, 2010, Martinez, along with four co-conspirators, returned to El Rancho and carried out that threat, shooting Moreno in the head at point-blank range. The gun used to kill Moreno was the same semi-automatic handgun used to kill Argueta and her son one month earlier.
(3) Both Martinez and Ortega were convicted for the March 17, 2010, murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with the same semi-automatic handgun used in the murders of Moreno, Argueta, and Argueta’s son. However, the gun jammed. Undeterred, Martinez, Ortega, and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
Martinez’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more 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, Rockville Centre Police Department, and Suffolk County Police Department.
The life sentence was imposed by United States District Judge Joseph F. Bianco.
The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
The Defendant:
HERIBERTO MARTINEZ, also known as “Boxer”
Far Rockaway, New York
Age: 26Corrupt Colombian Government Employee and Criminal Defense Attorney Convicted in Obstruction of Justice CaseRead the Press Release
Earlier today, Freddy Mauricio Tellez-Buitrago and Adriana Gonzalez-Marquez pled guilty before U.S. Magistrate Judge Cheryl M. Pollak at the federal courthouse in Brooklyn, New York, to obstruction of justice for stealing selling sensitive and confidential United States law enforcement information concerning prosecutions in the Eastern District of New York and selling that information to a narcotics trafficker in Colombia. When sentenced, both defendants face a maximum of twenty years' imprisonment and a fine of up to $250,000. Tellez-Buitrago has agreed to forfeit $30,000, and Gonzalez-Marquez has agreed to forfeit $50,000.
The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division. The investigation was led by HSI in Bogota, Colombia, with assistance provided by HSI in New York, DEA in Bogota and New York, and local law enforcement authorities in Colombia.
“The defendants sought to undermine U.S. efforts to bring international narco-traffickers to justice, and traded on sensitive and confidential information on U.S. operations in exchange for money. Their convictions signify our pursuit of individuals who attempt to compromise the judicial process by obstructing justice here and in Colombia,” stated United States Attorney Lynch. “We will continue to rely on the success of the international cooperation between the United States and Colombia to pursue individuals who steal information that put the lives of law enforcement officers at risk.” Ms. Lynch extended her grateful appreciation to the Colombian National Police and the Colombian Attorney General's Office for their assistance in this case.
The defendants' convictions resulted from an investigation that revealed that, through his employment at the Colombian Attorney General's Office, Tellez-Buitrago had specialized access to law enforcement materials, including requests from the United States government for the extradition of alleged Colombian drug traffickers. The Colombian authorities treat such extradition requests as sensitive and confidential until the arrest of the individual whose extradition is sought. Tellez-Buitrago accepted bribes from criminal defense attorney Gonzalez-Marquez, a former prosecutor at the Attorney General’s Office in Colombia, in exchange for leaking documents relating to EDNY extradition requests for narcotics traffickers. Gonzalez-Marquez, in turn, sold the information to a narcotics trafficker in exchange for the equivalent of approximately $30,000 in U.S. dollars.
The government’s case is being prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendants:
ADRIANA GONZALEZ-MARQUEZ
Age: 33FREDDY MARQUEZ TELLEZ-BUITRAGO
Age: 34E.D.N.Y. Docket No. 12-687 (ERK)
United States Agrees to Comprehensive Settlement to Resolve Its Investigation of the Suffolk County Police Department for Discriminatory Policing Against LatinosRead the Press Release
WASHINGTON, D.C. and BROOKLYN, NEW YORK – The Civil Rights Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Eastern District of New York today announced that they have tentatively agreed to a settlement with the Suffolk County Police Department which calls for SCPD to implement new and enhanced policies and procedures to ensure nondiscrimination in the provision of police services to Latino communities in Suffolk County. The agreement, which the Department of Justice has agreed to, requires approval of the Suffolk County Legislature before it will be formally executed by the parties.
The United States commenced an investigation of SCPD in 2009 in the wake of the killing of Marcelo Lucero, an Ecuadorian national who was murdered by a group of teenagers in Patchogue, New York, as he was walking home on the evening November 8, 2008. The United States’ investigation, pursuant to the Violent Crime and Law Enforcement Act of 1994, 42 U.S.C. ' 14141, and the Omnibus Crime Control and Safe Streets Act of 1968, 42 U.S.C. ' 3789d, focused on discriminatory policing allegations, including claims that SCPD discouraged Latino victims from filing complaints and cooperating with the police and failed to investigate crimes and hate-crime incidents involving Latinos. The United States issued a Technical Assistance letter on September 13, 2011, which recommended a wide range of reforms to improve policing by the SCPD, focused particularly on promoting trust between SCPD and the Latino community. The County cooperated with the United States’ investigation, and has already instituted a number of the recommendations from the Technical Assistance letter. The agreement announced today memorializes those recommendations and commits SCPD to significant changes in how it engages the Latino community.
Specifically, the agreement calls for SCPD to ensure that it polices equitably, respectfully, and free of unlawful bias. Other highlights include enhanced training and investigation of allegations of hate crimes and bias incidents, meaningful access to police services for individuals with limited English proficiency (LEP), strengthening of SCPD’s outreach efforts in Latino communities, and developing and maintaining a true Community Oriented Policing Enforcement (COPE) program throughout the county. The United States will monitor compliance with the agreement, which terminates only when SCPD has substantially complied with all of the requirements of the agreement for at least one year.
Loretta E. Lynch, United States Attorney for the Eastern District of New York stated,
“All residents of Suffolk County deserve full and unbiased police protection, regardless of national origin, race, or citizenship status. When people feel they cannot turn to the police for protection, they have lost one of our most basic rights – the right to feel safe in one’s community. Law enforcement also suffers when it does not hear from everyone under its umbrella of protection. I commend Suffolk County and SCPD for its cooperation with the United States’ investigation and its willingness to ensure fairness and equal treatment for all.”The case was handled by AUSA Michael J. Goldberger, Chief of Civil Rights in the Civil Division of the U.S. Attorney’s Office; Laura Coon, Special Litigation Counsel in the Special Litigation Section of the Civil Rights Division; and Silvia Dominguez and Jack Morse, Trial Attorneys in the Special Litigation Section.
New York City Police Officer and Criminal Associates Charged with Extorting Queens RestauranteurRead the Press Release
A three-count indictment was unsealed today in federal court in Brooklyn, New York charging Redinel Dervishaj, Besnik Llakatura, and Denis Nikolla with Hobbs Act extortion conspiracy, attempted Hobbs Act extortion, and brandishing a firearm in relation to the extortion.1 The charges arose from the defendants’ extortion of money from a Queens County restaurant owner. Llakatura was at the time of the alleged offenses a police officer with the New York City Police Department (NYPD), assigned to the 120th Precinct in Staten Island, New York. He was suspended without pay upon his arrest. The defendants are scheduled to be arraigned this afternoon at the United States District Court for the Eastern District of New York, before United States Magistrate Judge Joan Azrack.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Raymond W. Kelly, Commissioner, NYPD.
“The defendants told their victims they offered “protection,” but in reality they peddled fear and intimidation through the Albanian community – their community – of Queens,” stated United States Attorney Lynch. “When one victim turned to law enforcement for help, he was betrayed again by a corrupt officer on the take, who turned his back on his badge, his oath and his friend in exchange for extortion money in his pocket.” Ms. Lynch expressed her thanks to members of the Joint Organized Crime Task Force, which includes agents of the FBI and detectives of the NYPD, which led the investigation, as well as the NYPD’s Internal Affairs Division for its cooperation and assistance in the investigation.
“By creating a climate of fear, the defendants allegedly coerced an innocent restaurant owner into paying for so-called protective services. The victim was further betrayed when seeking the assistance of Besnik Llakatura, an NYPD officer whose sinister intentions were shrouded by his badge of honor. But Llakatura didn’t serve his community with honor; he, instead, abused his powers to the detriment of the public trust. He remains an exception to those law enforcement officers who work selflessly to weed out crime and corruption in their communities,” stated FBI Assistant Director-in-Charge Venizelos.
“Llakatura is alleged to have exploited his friendship and shared heritage in order to help the defendants extort a restaurateur. Once it was reported, the NYPD Internal Affairs Bureau, and the Department’s Organized Crime Investigations Division thoroughly responded, resulting in the charges being announced today.” Commissioner Kelly said.
According to the indictment and court filings, Dervishaj, Llakatura, and Nikolla demanded monthly payments from a Queens restaurant owner in exchange for “protection,” repeatedly using threats and intimidation to ensure his compliance. The scheme began shortly after the victim opened a restaurant in Astoria when he was visited by Dervishaj and told that he had opened a business in “our neighborhood” and, as a result, “you have to pay us.” The restaurant owner, who understood that he was targeted because he, like the defendants, is of Albanian descent, sought help from his friend Llakatura. Unbeknownst to him, Llakatura, an NYPD officer on Staten Island since 2006, was conspiring with Dervishaj in the extortion. Llakatura discouraged the restaurant owner from going to the police and sought to leverage his position to persuade the victim that he had no choice but to make the demanded payments. When the victim resisted, he was threatened with physical violence and chased at gunpoint down the street in Queens by Nikolla.
Court-authorized wiretaps of the defendants’ telephones uncovered detailed evidence of their efforts to maintain control over businesses in the neighborhood through fear, intimidation, and violence. In one intercepted call, Llakatura joked about how he “taxes” local businesses. In another, Nikolla described to Dervishaj how he had grabbed another victim “by the neck” because he had told Nikolla that he only had $2,000 and could not pay more.2
Over the course of five months, each of the three defendants took turns collecting monthly payments from the Astoria restaurant owner, ultimately collecting $24,000 in so-called protection money.
The government’s case is being prosecuted by Assistant United States Attorneys Nadia Shihata and M. Kristin Mace.
The Defendants
REDINEL DERVISHAJ, a/k/a “Redi”
Age: 37
Queens, New YorkBESNIK LLAKATURA, a/k/a “Besi” and “Nick”
Age: 34
Staten Island, New YorkDENIS NIKOLLA
Age: 33
Brooklyn, New YorkE.D.N.Y. Docket No. 13-CR-668 (ENV)
_____________________________
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
2 The referenced language from the intercepted calls is based on draft translations from Albanian.
US Attorney Lynch's testimony before NY County Lawyers' AssociationRead the Press Release
US Attorney Lynch's testimony before NY County Lawyers' Association
Defendant Sentenced to 5 Years’ Imprisonment for Exporting Stolen Luxury Cars Worth over $1 Million to AfricaRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Yasser Lawani was sentenced to 5 years in prison following his March 13, 2013, guilty plea to two separate criminal schemes: (1) conspiring to export to Africa luxury vehicles stolen from rental car companies and valued at more than $1 million, and (2) filing fraudulent federal tax returns that sought more than $200,000 from the federal government. The defendant had testified at the October 2013 trial of his brother, Thierno Lawani, who was convicted by a jury in the Eastern District of New York for his participation in the scheme to export stolen motor vehicles. Yasser Lawani’s sentence reflected the sentencing court’s judgment that he made false statements during his trial testimony. The sentence also included a term of supervised release of three years and an order that Lawani make restitution in the amount of $72,985 to his victims.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service (IRS), Criminal Investigation, New Jersey.
“The defendant devised and executed two brazen schemes that defrauded rental car companies and the U.S. government out of more than a million dollars and resulted in the theft of dozens of individuals’ identities, for the sole purpose of personal gain,” stated United States Attorney Lynch. “In addition, the defendant lied under oath at a federal trial. The defendant’s fraud and deception have now earned him a new home in federal prison. Today’s sentencing sends a message to others who seek to profit from similar schemes and underscores the seriousness with which our justice system views the commission of perjury.” Ms. Lynch expressed her grateful appreciation to HSI and the IRS, and thanked the New York City Police Department, the Port Authority Police Department, and the Office of the Queens County District Attorney for their assistance.
Over a period of several months in 2012, the defendant and his brother used fraudulent Canadian driver’s licenses and fraudulent credit cards to rent and then steal luxury cars from a variety of rental car agencies, including the Hertz Corporation. The defendant and his brother then drove the stolen cars to a warehouse in Newark, New Jersey, where the cars were loaded into shipping containers bound for Africa. At least 35 cars were stolen during the course of the scheme. The defendant’s brother, Thierno Lawani, was convicted in October 2013 of conspiracy to export motor vehicles, attempted exportation of motor vehicles, conspiracy to obstruct justice, and false statements. He is scheduled to be sentenced on February 28, 2013.
Between 2010 and 2012, the defendant filed 53 fraudulent federal income tax returns, each of which claimed a refund of taxes. In total, these fraudulent tax returns claimed in excess of $200,000 in refunds; the defendant actually received and stole $72,985 in connection with those returns. In filing the fraudulent returns, the defendant utilized the identities of 43 individuals.
Today’s sentence was imposed by United States District Judge Margo K. Brodie.
The government’s case is being prosecuted by Assistant United States Attorney Alixandra E. Smith.
The Defendant
YASSER LAWANI
Age: 30
Lindenwold, New Jersey / Cotonou, BeninEDNY Docket No. 13-CR-139 (MKB)
MS-13 Gang Leader Sentenced to Life in PrisonRead the Press Release
Earlier today, Carlos Ortega, also known as “Silencio,” a former leader of the Sitios Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life in prison at the federal courthouse in Central Islip, New York. Ortega was convicted, on March 21, 2013, following a six-week trial, on all counts of the trial indictment, including racketeering, racketeering conspiracy, murder, assault with dangerous weapons, and related firearms and conspiracy offenses.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Thomas V. Dale, Commissioner of the Nassau County Police Department.
“Ortega’s journey to federal prison began in El Salvador when he joined MS-13 and continued when he illegally entered the US and chose to maintain his allegiance to the gang. Ortega committed heinous acts of violence in the name of MS-13, cutting a swath of murder from Brentwood to Far Rockaway, all within the span of a few weeks,” stated U.S. Attorney Lynch. “From a suspected rival gang member, to an MS-13 gang member who was not violent enough, there was no room for mercy in the gang’s code of enforcing respect through murder. Today’s life sentence is a fitting end to Ortega’s reign of terror. He will now have the rest of his life to contemplate the just results of his allegiance to the killing machine known as MS-13.” Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “The victims were robbed of their futures by the defendant’s senseless killing spree. His cowardly acts have earned him a life sentence. The defendant’s imprisonment should be a reminder to all those who participate in gang activity that violence and victimization of the public will not be tolerated and will be met with the full force of the FBI. The FBI’s Long Island Gang Task Force is committed to ridding the streets of these violent criminals. Our resolve is strong, and we will not stop until every last gang member is brought to justice.”
At trial, the government proved that Ortega, along with his fellow MS-13 gang members, committed two murders and one attempted murder in February and March of 2010. First, Ortega was convicted in connection with the murder of 21-year-old David Sandler and the attempted murder of 20-year-old Aaron Galan in Brentwood, New York, on February 17, 2010. Ortega and his fellow MS-13 gang members lured Sandler, whom the MS-13 believed was a member of the rival Latin Kings street gang, to Timberline Drive in Brentwood under the pretext of buying marijuana from him. Once Sandler arrived, Ortega shot him in the face at close range, killing him. Ortega also shot Sandler’s close friend, Galan, who was with Sandler at the time, in the face. Miraculously, Galan survived.
At trial, Ortega was also convicted of the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with a semi-automatic handgun, which had been used in several other murders committed by the MS-13, including the murders of a young woman and her two- year-old son. However, the gun jammed. Undeterred, Ortega and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
Ortega’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more 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, Rockville Centre Police Department, and Suffolk County Police Department.
The life sentence was imposed by United States District Judge Joseph F. Bianco.
The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
The Defendant:
CARLOS ORTEGA, also known as “Silencio” and “Silent”
Brentwood, New York
Age: 24Former President of Union Sentenced to 48 Months of Imprisonment for Accepting Kickbacks and Tax EvasionRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Hector Lopez, the former president of the Metal Polishers Union (Local 8A-28A) (the “Union”) and Chairman of the Board of Trustees of the Local 8A-28A welfare fund (the “Fund”), was sentenced to a term of imprisonment of 48 months following his convictions for conspiracy to commit mail and wire fraud, and tax evasion. In addition, Lopez was ordered to pay $800,371 in restitution and forfeit an additional $371, 517 to the federal government.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Cheryl Garcia, Acting Special Agent-in-Charge, United States Department of Labor (DOL), Office of Inspector General; Andriana Vamvakas, District Director, Department of Labor, Office of Labor-Management Standards, New York; and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.
“The hard-working members of Local 8A-28A trusted Hector Lopez to safeguard their welfare fund. Instead of representing their best interests, Lopez corrupted his leadership position and abused his authority to the tune of over $1 million. The defendant’s corruption and fraud have now earned him a new home in federal prison,” stated U.S. Attorney Lynch. “Today’s sentencing sends a message to other union officials that they will be held accountable if they abuse their position of trust.” Ms. Lynch expressed her appreciation to the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration, for its assistance on this case.
On April 9, 2013, Lopez pleaded guilty to conspiracy to commit mail and wire fraud, and tax evasion, both in connection with a scheme to defraud the Fund of over $1 million. As detailed in the indictment, the defendant defrauded the Fund in multiple ways:
(1) accepting over $740,000 in kickbacks from the third-party administrator of the Fund in exchange for continuing to employ the administrator,
(2) accepting kickbacks from an employer trustee of the Fund (“the employer trustee”) in exchange for authorizing the Fund to pay fraudulent invoices for a union hall renovation performed by a company owned by the employer trustee, and
(3) accepting a kickback from the employer trustee in exchange for rigging the bidding process to ensure that a sprinkler installation job was awarded to a company controlled by the employer trustee.
Further, the defendant committed tax evasion by failing to report over $300,000 in income from his fraudulent schemes, resulting in a tax loss to the United States of over $100,000.
Finally, as also charged in the indictment, the defendant criminally violated the Taft-Hartley Act by living rent-free with his family in a New Jersey home owned by the employer trustee, whose company had a collective bargaining agreement with the Union, and illegally structured over $82,000 in cash deposits at local banks to evade federal currency reporting requirements.
The sentence was imposed by United States District Judge Allyne R. Ross.
The government’s case is being prosecuted by Assistant United States Attorneys Charles Kleinberg and Marisa Megur Seifan.
The Defendant:
HECTOR LOPEZ
Oakland, New Jersey
Age: 55Long Island Nurse Practitioner and Brooklyn Podiatrist Plead Guilty to Illegally Distributing OxycodoneRead the Press Release
Rools Deslouches, a Brentwood, New York, nurse practitioner, pled guilty today in the United States District Court for the Eastern District of New York to illegally distributing the highly addictive painkiller oxycodone to customers, whom the defendant knew were drug dealers and addicts, without performing any meaningful medical examination. When sentenced, Deslouches faces up to 20 years in prison and a $1,000,000 fine. Deslouches also agreed to forfeit more than $150,000 in illegal proceeds from his criminal activity.
Defendant Owusu Sold Oxycodone Prescriptions
Written in the Names of Individuals Never ExaminedIn a separate case, Stephen Owusu, a Brooklyn, New York, podiatrist, pled guilty today in the United States District Court for the Eastern District of New York to the illegal distribution of oxycodone to individuals who were not his patients in exchange for cash. When sentenced, Owusu faces up to 20 years in prison and a $1,000,000 fine. Owusu also agreed to surrender his DEA registration number, which had permitted him to issue controlled substance prescriptions.
The guilty pleas were announced by Loretta E. Lynch, the United States Attorney for the Eastern District of New York, and Brian R. Crowell, Special Agent in Charge of the United States Drug Enforcement Administration (DEA), New York Division.
“Instead of providing needed medical services to their communities, Deslouches and Owusu fueled the prescription drug crisis that has swept across our district and our nation. On the defendants’ watch, drug dealers and drug addicts found easy access to oxycodone pills,” stated Ms. Lynch. “Today’s convictions should serve as a warning to those who would violate their oath as medical professionals to do no harm: if you illegally distribute prescription drugs, you will be held accountable.” Ms. Lynch extended her grateful appreciation to the DEA, Suffolk County Police Department, and the New York State Police for their assistance in this case.
“Medical professionals who traffic narcotics are significantly responsible for the pain pill and heroin addiction we see in NY. These traffickers are one of our top priorities,” stated DEA Special Agent in Charge Crowell. “Lines of individuals filled the waiting room outside of Deslouches’ office to pay between $200 to $400 per visit to leave with a prescription; while Owusu sold over 450 prescriptions for oxycodone for $300 per prescription. Neither Deslouches nor Owusu practiced medicine, but they did practice in drug dealing. Law enforcement continues to focus our resources on those who divert prescription medication for abuse and profit.” SAC Crowell commends the US Attorney’s Office Eastern District of New York, DEA Long Island District Office, and TDS, which includes agents and officers from the DEA, Nassau County Police Department, New York State Police, Rockville Centre PD, and Port Washington PD.
According to court filings, the investigation revealed that Deslouches ran a cash-only business, where his customers paid him between $200 and $400 for oxycodone prescriptions. Further, the investigation determined that between October 2011 and February 2012, Deslouches issued 4,349 oxycodone prescriptions for a total of 422,107 pills to over 288 individuals. Approximately one-third of those individuals had criminal records for narcotics-related offenses.
According to court filings, the investigation revealed that between March 2009 and July 2011, Owusu sold over 450 prescriptions for oxycodone to individuals who were not his patients, for $300 a prescription. Those pills were then later sold to narcotics users in street level narcotics transactions.
Deslouches and Owusu’s convictions resulted from the Eastern District of New York’s Prescription Drug Initiative (Initiative), which is a joint effort led by the United States Attorney’s Office for the Eastern District of New York, the DEA, and the five District Attorneys in Kings, Nassau, Queens, Richmond, and Suffolk Counties, working in conjunction with the New York City Police Department and the Nassau and Suffolk County Police Departments, as well as the Department of Health and Human Services, the Internal Revenue Service, New York/New Jersey HIDTA, the New York State Department of Health, and the New York State Medicaid Inspector General. The Initiative is a broad and comprehensive approach to the epidemic of prescription drug trafficking and abuse, involving not only criminal investigation and prosecution at the federal, state, and local level, but also the targeted use of civil law enforcement, regulatory action, and community outreach. The Initiative has expanded information-sharing among federal and state enforcement agencies to better identify and target suspected traffickers, and ensure greater use of criminal, civil, forfeiture, injunctive, and other tools. Since the inception of the Initiative, the United States Attorney’s Office for the Eastern District of New York has prosecuted approximately 68 defendants on charges relating to the distribution of oxycodone and other prescription drugs. Among the defendants prosecuted, are 12 health care professionals, including medical doctors, pharmacists, a nurse practitioner, and a podiatrist, and seven of these defendants have pled guilty or been convicted after trial and the others are pending trial.
Deslouches’s plea was entered before United States District Judge Sandra J. Feuerstein, and Owusu’s plea was entered before United States Magistrate Judge William D. Wall, at the United States Courthouse in Central Islip, New York.
Deslouches’s case is being prosecuted by Assistant United States Attorney Michael P. Canty, and Owusu’s case is being prosecuted by Assistant United States Attorney Lara Treinis Gatz.
The Defendants:
ROOLS DESLOUCHES
Brentwood, New York
Age: 42STEPHEN OWUSU
Valley Stream, New York
Age: 57Home-Invasion Robber Sentenced to 20 Years’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Derrick Diaz, the former leader of a crew of robbers who targeted innocent civilians in their homes, was sentenced to 20 years in prison following his February 10, 2012, guilty plea to Hobbs Act robbery conspiracy. The sentence also included a term of supervised release of 3 years and an order that Diaz make restitution payments in the amount of $296,300 to his victims.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
“As the leader of a vicious crew of robbers, Derrick Diaz violated the sanctity of the homes of innocent residents of Brooklyn and terrorized his victims with guns and knives,” stated United States Attorney Lynch. “Today, his life as a career criminal has earned him a home in federal prison for the next 20 years of his life.” Ms. Lynch expressed her grateful appreciation to the DEA, and thanked the New York City Police Department and the Office of the Kings County District Attorney for their assistance.
DEA Special Agent-in-Charge Crowell stated, “Nearly four years ago, the DEA and the NYPD tracked down and arrested this ruthless criminal, along with four of his gang members, who terrorized residents in and around the 61st Precinct in Brooklyn, NY. This organization was violent and a community’s worst nightmare, to include breaking into occupied homes and forcibly restraining children during robberies. This crew stole valuables worth hundreds of thousands of dollars with no concern for the children they terrorized. As part of this joint investigation, additional victims were identified resulting in dozens of home invasions linked to this armed robbery crew.” Mr. Crowell commended the men and women of the U.S. Attorney’s Office for the Eastern District of New York, the DEA and the New York City Police Department for their tenacious work.
Over the course of several robberies, Diaz and members of his crew broke into Brooklyn homes armed with, among other weapons, firearms and knives. They threatened their victims, including senior citizens and children, at gunpoint and knifepoint, pistol whipped victims, stabbed one victim, and bound and gagged multiple victims.
From the age of 16, Diaz has never gone longer than three years between arrests, other than time when he was already in custody of law enforcement. He has been convicted of burglary or related crimes five times, narcotics crimes twice, and various other offenses. Of Diaz’s burglary convictions, three involved his breaking into, or attempting to break into, a private residence. Today’s sentence was the culmination of Diaz’s first conviction in federal court.
Four members of the Diaz crew previously were convicted of federal felony charges in the Eastern District of New York.
The sentencing proceedings were held before United States District Judge Kiyo A. Matsumoto.
The government’s case is being prosecuted by Assistant United States Attorney Justin D. Lerer.
The Defendant
DERRICK DIAZ
Age: 40
Roselle Park, New JerseyEDNY Docket No. 10-CR-277 (S-4) (KAM)
Five New Arrests in $45 Million International Cyberheist CaseRead the Press Release
BROOKLYN, NY – Earlier today, five defendants were arrested in connection with their participation in the massive cyberheist campaign that inflicted $45 million in losses on the global financial system in a matter of hours in early 2013. Defendants Anthony Diaz, Saul Franjul, Saul Genao, Jaindhi Polanco and Jose Angeley Valerio were members of the New York-based cell of the international cybercrime organization, which used sophisticated intrusion techniques to hack into the systems of financial institutions, steal prepaid debit card data, and make fraudulent ATM withdrawals on a global scale. Newly seized photographic evidence reveals that the defendants sent the lion’s share of the proceeds to the organization’s leaders – including $800,000 of criminal cash proceeds sent in luggage and transported to Florida by bus for delivery to a cyberheist organizer.
The superseding indictment unsealed today charges the five arrested defendants with conspiracy to commit access device fraud. They will be arraigned at 2 p.m. today before United States Magistrate Judge Robert M. Levy at the U.S. District Court in the Eastern District of New York.1 Three of the original defendants, Jael Collado, Jose Familia Reyes and Chung Yu-Holguin, are also charged in the superseding indictment unsealed today. Four other defendants, Joan Luis Minier Lara, Evan Jose Peña, Elvis Rodriguez and Emir Yasser Yeje have pleaded guilty to charges resulting from the cyberheist. The eighth original defendant, Alberto Yusi Lajud-Peña, is deceased.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Steven G. Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.
“As alleged, just a few months ago, after exploiting cyber-weaknesses in the financial system to steal millions from ATMs, these defendants were packing bags to the brim with stolen cash, destined for the cybercriminal organizers of these attacks,” stated United States Attorney Lynch. “Today, we have sent them packing once again – but this time, to jail. We will not relent until all those responsible for these financially devastating cybercrimes are brought to justice.”
“This case is another example of the ability of cybercriminals to inflict significant damage to world financial systems. This investigation and the resulting indictments should serve as a reminder to cybercriminals that law enforcement will continue to utilize cutting-edge investigative techniques, traditional tactics and hard work to thwart complex transnational cybercriminal activity. We are grateful to our many law enforcement partners for their assistance in this investigation, in particular the U.S. Attorney’s Office in the Eastern District of New York, DHS Homeland Security Investigations, and our foreign law enforcement partners,” stated Secret Service Special Agent in Charge Hughes.
As alleged in the superseding indictment and other court filings, the defendants arrested today and their co-conspirators in this case engaged in cyberattacks known in the cyber underworld as “Unlimited Operations” – through its hacking “operation,” the cybercrime organization can access virtually “unlimited” criminal proceeds.
Defendants Anthony Diaz, Saul Franjul, Saul Genao, Jaindhi Polanco and Jose Angeley Valerio allegedly participated in two recent “Unlimited Operations” of staggering size. During the first operation, on December 22, 2012, hackers penetrated a credit card processor’s computer network, compromised prepaid debit card accounts of the National Bank of Ras Al-Khaimah PSC, also known as RAKBANK, and operated a coordinated ATM withdrawal campaign. In total, more than 4,500 ATM transactions were conducted in approximately 20 countries around the world, resulting in approximately $5 million in losses. In the second and even more damaging Unlimited Operation, which occurred on February 19-20, 2013, the hackers compromised prepaid debit card accounts associated with Bank Muscat, and operated a coordinated ATM withdrawal campaign. Over the course of approximately 10 hours, cybercells in 24 countries withdrew about $40 million from ATMs.
As alleged, as part of the RAKBANK and Bank Muscat campaigns, Diaz, Franjul, Genao, Polanco and Valerio operated the New York cell of “cashers,” who fanned out across the New York area to make thousands of withdrawals from ATMs. During the two operations, over the course of a few hours, the defendants and their co-conspirators withdrew approximately $2.8 million at over 140 different ATM locations in New York City. The defendants sent the bulk of the cash proceeds back to the organizers of the attacks.
As alleged in court filings and captured in a photograph seized from a conspirator’s iPhone, on March 2, 2013, just days after the Bank Muscat Unlimited Operation, defendant Franjul packed approximately $800,000 in cash into luggage destined for the late Alberto Yusi Lajud-Peña, who was then in Miami. Franjul’s co-conspirators took the cash-filled luggage on a bus to Florida, where they gave the cash to Lajud-Peña, who later fled to the Dominican Republic. New York cell members also used the funds to celebrate at high-priced nightclubs and go on shopping sprees for luxury goods, such as expensive watches and cars, many of which have been seized in the course of this investigation.
In announcing the arrests and charges, United States Attorney Lynch praised the extraordinary efforts of the Secret Service in responding to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally, and also expressed gratitude to U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New York, and the Yonkers Police Department for their assistance in this investigation. Ms. Lynch also thanked MasterCard, RAKBANK and Bank Muscat for their cooperation with this investigation.
Diaz, Franjul, Genao, Polanco and Valerio face up to 7.5 years in prison on the charge of access device fraud conspiracy, as well as forfeiture and a fine of up to $250,000.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Hilary Jager, David Sarratt, and Brian Morris.
The Defendants:
ANTHONY DIAZ
Age: 24
Residence: Yonkers, New YorkSAUL FRANJUL, also known as “Conejo”
Age: 23
Residence: Yonkers, New YorkSAUL GENAO, also known as “Cocolito” and “Ely Genao”
Age: 24
Residence: Yonkers, New YorkJAINDHI POLANCO
Age: 29
Residence: Yonkers, New YorkJOSE ANGELEY VALERIO, also known as “Zikkytakki”
Age: 25
Residence: Yonkers, New York_____________________________
1 A sixth defendant, Franklyn Ferreira, is a fugitive from justice. The charges contained in the indictment are merely allegations, and the defendants, including those charged today, are presumed innocent unless and until proven guilty.
Cyberheist Indictment
Sixth Defendant in New York-Based Armed Robbery Crew Convicted of Gruesome North Carolina MurderRead the Press Release
Earlier today, Wendell Alomar-Cabrera, a citizen of the Dominican Republic, pled guilty at the federal courthouse in Brooklyn, New York, to the October 16, 2006, murder of Luis Sifuentes in Durham, North Carolina. The proceeding took place before United States District Judge Nicholas G. Garaufis. When sentenced, Alomar-Cabrera faces up to life imprisonment.
The plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Robert T. Johnson, District Attorney, Bronx County, New York, Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
“Alomar-Cabrera was part of a vicious robbery crew that viewed the East Coast of the United States as their hunting ground. They traveled the highways impersonating police officers, and showed their victims no mercy. Today a sixth perpetrator of the murder of Luis Sifuentes has been brought to justice,” stated United States Attorney Lynch. “We pursued these defendants to North Carolina to show the extent of our commitment to protecting communities, in New York and elsewhere, from the violence posed by violent robbers and drug traffickers.” Ms. Lynch congratulated the Bronx County District Attorney’s Office and the members of law enforcement who led the investigation, and thanked the New York State Police; the Durham County District Attorney’s Office; and the Durham, North Carolina Police, Special Operations Division, Major Crimes Unit for their assistance in the investigation.
According to court filings and facts presented in court, Alomar-Cabrera was a member of a violent robbery crew responsible for more than 100 armed robberies of narcotics traffickers along the east coast of the United States that netted more than 750 kilograms of cocaine and $4 million in drug proceeds. Crew members posed as police officers in order to subdue narcotics traffickers and their families, and then kidnaped, tortured, and robbed their victims. In 2006, members of the crew traveled to North Carolina from New York to engage in a series of robberies. On October 16, 2006, near Durham, North Carolina, the defendants kidnaped Luis Sifuentes by executing a police-style car stop of Sifuentes’ pickup truck using lights and sirens. The robbery crew then drove Sifuentes to a rented house where they beat and tortured him for several hours, demanding that he provide information regarding the location of narcotics and cash. Crew members then carried Sifuentes outside, placed him in his pickup truck, shot him twice killing him, and set the truck on fire.
Alomar-Cabrera’s guilty plea is the most recent of 51 convictions in a group of interlocking cases brought in the Eastern District of New York against members of violent drug robbery crews who impersonated police officers and frequently committed robberies with real officers. Of the 51 convictions, nine defendants have been convicted for their roles in murders, including six for the Sifuentes murder.
The government’s case is being prosecuted by Assistant United States Attorneys Justin D. Lerer, Shreve Ariail, Gina M. Parlovecchio, and Douglas M. Pravda and Special Assistant United States Attorney Jeremy Shockett, an Assistant District Attorney from the Bronx County District Attorney’s Office.
The Defendant
WENDELL ALOMAR-CABRERA, aka “gregorio”
Age: 35E.D.N.Y. Docket No. 08 CR 115 (S-4) (NGG)
Chinese National Sentenced to 108 Months' Imprisonment for International Weapons TraffickingRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Zhifu Lin, a Chinese national and resident of West Virginia, was sentenced to 108 months’ imprisonment for violating the Arms Export Control Act and engaging in illegal weapons trafficking. From 2010 to 2012, Lin and others, including a former member of the United States Marine Corps and National Guard, exported multiple shipments of high-powered firearms from the United States to China. Lin and his accomplices secreted the weapons in packages and transported them to shipping companies in Queens, New York, and elsewhere, to be sent to Shanghai, China’s largest city. The weapons included dozens of semi-automatic handguns, rifles, shotguns, and military-style assault weapons.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, John P. Carlin, Acting Assistant Attorney General for National Security, James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York; Joseph Anarumo, Jr., Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division; Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, New York Field Office; and Sidney Simon, Special Agent-in-Charge, Department of Commerce, Office of Export Enforcement, New York Field Office.
Authorities uncovered the weapons trafficking ring after police in China seized a package containing firearms with defaced serial numbers, which had been shipped from Queens, New York. Upon learning of the seizure, American law enforcement officials traveled to China to examine the evidence. The types of weapons seized by the Chinese authorities have been designated by the President of the United States on the United States Munitions List, and may not be exported without a license from the U.S. State Department. With the aid of forensic techniques, agents determined that one of the weapons seized in China had originally been purchased by a former United States Marine in North Carolina. Agents then traced the shipments back to Lin and his accomplices. Agents arrested Lin in West Virginia in April 2012, and he has been in federal custody ever since. Lin, who originally entered the United States in 2009 on a student visa and briefly attended an American university, faces deportation upon the conclusion of his prison term.
“ The defendant traded the promise of the American dream for a jail cell and deportation by flagrantly violating federal gun laws and export regulations. All those who seek profits through the black market for illegal weapons – whether a former U.S. Marine who traded his honor for easy money, or a foreign national who took advantage of our country’s freedoms – will face the full force of the law. We will not cease in our efforts to stem the flow of illegal weapons that threaten the safety of our communities and our national security,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the federal agencies that worked closely together to investigate the case.
The sentence was imposed by United States District Judge Eric N. Vitaliano. To date, four individuals have been convicted of weapons trafficking and export offenses in connection with this case.
The government's case was prosecuted by Assistant United States Attorney Seth DuCharme, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section. Assistance also was provided by the U.S. Attorneys= Offices in the Northern District of West Virginia and the Eastern District of North Carolina and Trial Attorney Dan Stigall of the Department of Justice Office of International Affairs.
The Defendant
ZHIFU LIN
Age: 27U.S. Attorney Files Civil Complaint and Stipulation of Settlement to Forfeit Ancient Italian Tomb PaintingRead the Press Release
A civil complaint was docketed today in federal court in the Eastern District of New York to forfeit a triangular Italian fresco fragment (the “Fresco”) that was falsely described as Macedonian when it was shipped from Switzerland to the United States in April 2011. The complaint alleges that the Fresco is the property of Italy and is protected under that country’s laws. Upon its arrival in the United States, the Fresco was seized by U.S. Customs and Border Protection (“CBP”) with the assistance of Homeland Security Investigations (“HSI”). The government also filed a stipulation of settlement with the shipper, in which the shipper abandoned its interest in the Fresco and consented to its forfeiture.
The complaint and settlement were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James T. Hayes, Jr., Special Agent in Charge, U.S. Department of Homeland Security, HSI, New York.
“Returning looted cultural property to its country of origin remains a priority of this office,” stated United States Attorney Lynch. “This artifact belongs to the people of Italy. It is a part of their history and heritage. By filing this action, we are using the legal tools available to us to return it to its rightful owners.” Ms. Lynch thanked the Italian Ministry of Cultural Heritage and the Italian Carabinieri Protection of Cultural Heritage Command for their assistance.
“The unlawful theft, transportation, smuggling and sale of precious cultural property – like the ancient tomb painting being forfeited today – has become increasingly difficult as a result of increased collaboration amongst law enforcement around the globe," said James T. Hayes Jr., special agent in charge of HSI New York. “HSI and our partners at CBP work more closely than ever to ensure the legitimacy of cultural property and antiquities that are brought into the United States”.
Italian authorities have identified the Fresco as the pediment of a painted tomb that originated near the ancient city of Paestum, Italy. The Paestum archeological site, which has been designated as a UNESCO World Heritage site, has suffered from thefts and illegal excavations. The painted tombs of Paestum were first excavated in 1969 and typically had four walls with pitched roofs, like small houses. Thus, as the pediment of one end of a painted tomb, the Fresco would have stood opposite a wall with a similarly painted pediment. Indeed, an exact match – a single wall whose pediment is identical to the Fresco in both dimensions and decoration – stands in the National Archeological Museum of Paestum in Italy.
When the Fresco was shipped to the United States, the shipper declared that the Fresco’s country of origin was Macedonia. CBP detained the Fresco on arrival and requested additional information on the Fresco’s history of ownership, or provenance. The shipper then supplied an affidavit repeating that the Fresco was Macedonian. The affidavit further stated that the Fresco had been purchased from a Swiss art gallery in 1959 – ten years prior to the excavation of the painted tombs at Paestum. An expert in ancient paintings advised HSI that the piece originated in Italy, not Macedonia, leading HSI to inquire with Italian authorities.
Upon being presented with evidence that the Fresco originated in Italy, not Macedonia, the shipper entered into a stipulation with the United States agreeing to forfeit the piece so that it can be repatriated to Italy.
The government’s case is being handled by Assistant United States Attorney Karin Orenstein.
E.D.N.Y. Docket No. 13-CV-6286 (CBA)
Fresco Stipulation of Settlement
Fresco ComplaintCrew Responsible for More Than 45 Commercial and Residential Burglaries Charged with Interstate Transportation of Stolen PropertyRead the Press Release
Earlier today, an indictment was unsealed charging Victor Arias, Rafael Astacio, Michael Figueroa, Nikitas Margiellos, and Leonard Repka with conspiracy and the interstate transportation of stolen property.1 Astacio, who was a detective with the New York City Police Department at the time of the burglaries, was also charged with unlawfully accessing a database that was maintained by the Federal Bureau of Investigation. The defendants= initial appearances are scheduled for this afternoon before United States District Judge Joseph F. Bianco at the United States Courthouse in Central Islip, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Kathleen M. Rice, Nassau County District Attorney, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas V. Dale, Commissioner, Nassau County Police Department, Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
“The defendants were part of a sophisticated burglary crew that victimized Long Island businesses and residents for more than three years. Each defendant had a role to play in this band of criminals. The crew relied upon weapons of force as well as modern technology to steal millions from both homes and businesses alike. The defendant Astacio’s actions make clear that he was a police officer in name only, having sold his badge and his honor in exchange for his share of their ill-gotten gains,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the Nassau County Police Department for its work in the investigation, and to the Suffolk County Police Department for its cooperation and assistance in the investigation.
“When a police officer or any public servant breaks the law it casts a pall on all men and women who risk their lives and work hard to serve their communities. Detective Astacio and his fellow defendants betrayed the public trust by using Long Island homes and businesses as personal piggybanks, and we will prosecute to the fullest extent of the law,” stated Nassau County District Attorney Rice.
“The defendants did not discriminate when choosing their victims: businesses and private residences were equal targets of their thievery. To facilitate their alleged illegal activity, the defendants used a combination of physical labor and modern technology, to include the unlawful access by Astacio of protected FBI information. As charged, Astacio not only turned his back on the community he promised to protect, he also betrayed his fellow law enforcement officers for a chance to line his pockets with his victims’ hard-earned money. As the arrest of these defendants demonstrates, no one is above the law. We will continue to work with our law enforcement partners to ensure that those who steal and violate the public’s trust will be brought to justice,” stated FBI Assistant Director-in-Charge Venizelos.
“It is always a sad day when a member of the law enforcement community aligns himself with those who will hurt the public, choosing to abandon those he swore to protect,” stated IRS Special Agent-in-Charge Weirauch. The public should be secure in knowing, however, that the strong partnership between federal and local law enforcement authorities will work tirelessly to protect the public from harm and will strive to make the public whole when it is wronged.”
“The Internal Affairs Bureau thoroughly investigates allegations of members of the service, and their dedication to this Long Island-based case resulted in the indictment being announced today. The Department subsequently removed Astacio of his post and terminated his employment, and any of the members of the service considering criminal association faces the same,” stated NYPD Police Commissioner Kelly.
According to the indictment and court filings, between 2009 and 2012, the sophisticated burglary crew led by Nikitas Margiellos committed approximately three dozen commercial burglaries and ten residential burglaries in the Eastern District of New York stealing approximately $10,000,000 in cash and property. To carry out the burglaries, the crew used both traditional burglary tools, such as blow torches, crowbars, wire cutters, and sledge hammers, as well as modern technology, including cell phone jammers and police scanners. In addition, they often conducted surveillance of their burglary victims to determine when the victims would be out of their homes and businesses. On at least one occasion, the crew even installed a tracking device on a victim’s car to assist in that endeavor.
Additionally, as set forth in the indictment and court filings, in one instance, the defendants Arias, Figueroa, Margiellos, and Repka burglarized a business in Plainview, New York, entering that commercial establishment, while Astacio and another coconspirator monitored a police scanner and acted as lookouts. Arias, Figueroa, Margiellos, and Repka spent approximately three and a half hours in the business and stole more than 45,000 pairs of Under Armour, Hobie, and other sunglasses that were worth approximately $3,000,000. After the burglary, the defendants and their coconspirators transported the stolen property across state lines and sold some of the sunglasses on the Internet. During another burglary, members of the crew stole approximately $2,000,000 in cash from a plastic surgeon’s office located in Nassau County.
If convicted, Arias, Figueroa, Margiellos, and Repka each face a maximum sentence of 15 years’ imprisonment, and Astacio faces 17 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Christopher C. Caffarone and Nassau County District Attorney’s Office Rackets Bureau Chief Rick Whelan, who will be cross-designated for this case as a Special Assistant United States Attorney.
The Defendants
VICTOR ARIAS
Age: 37
Copiague, New YorkRAFAEL ASTACIO
Age: 41
Copiague, New YorkMICHAEL FIGUEROA
Age: 52
Mount Vernon, New YorkNIKITAS MARGIELLOS
Age: 40
West Babylon, New YorkLEONARD REPKA
Age: 50
Lindenhurst, New YorkE.D.N.Y. Docket No. 13-CR-640
_____________________________
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Two Indicted in $15 Million Investment Fraud Scheme That Victimized National Hockey League Players and Long Island InvestorsRead the Press Release
An indictment was unsealed this morning in federal court in Brooklyn charging Phillip A. Kenner, a former financial advisor to several former and current National Hockey League (“NHL”) players, and Tommy C. Constantine, also known as “Tommy C. Hormovitis,” a former professional race car driver, with wire fraud and wire fraud and money laundering conspiracies in connection with schemes involving fraudulent real estate and business investments. Kenner is also charged with wire fraud involving a separate scheme to buy real estate in Sag Harbor, New York.
The defendants were arrested earlier today in Scottsdale, Arizona, by agents of the Federal Bureau of Investigation and Internal Revenue Service and officers of the Scottsdale Police Department, and a search warrant was executed at Kenner’s residence. The defendants are scheduled to appear later today before United States Magistrate Judge Bridget S. Bade at the federal courthouse in Phoenix, Arizona, for removal proceedings to the Eastern District of New York.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Criminal Investigation, New York.
During his college years at Rensselaer Polytechnic Institute (“RPI”) in Troy, New York, Kenner became acquainted with one of the schemes’ victims, who played hockey at RPI before being drafted by an NHL professional team. In approximately 1994, Kenner was licensed as a financial advisor and, early in his career, worked at a firm in Boston, Massachusetts, where he built a client list of several NHL players, before starting his own firm in 2003. Between 2002 and 2013, Kenner advised numerous hockey players on investments in a series of allegedly fraudulent schemes that he represented would earn significant profits for the players; however, the victimized players instead suffered losses exceeding $15 million.
The Hawaii Real Estate Investment Scheme
As alleged in the indictment and other court filings by the government, Kenner fraudulently solicited at least 13 players to invest $100,000 each in a real estate development project on the Big Island of Hawaii. In connection with this scheme, Kenner also convinced several NHL players to open lines of credit, to which Kenner was given access. Unbeknownst to the players, Kenner allegedly used their investments for purposes unrelated to the development of the Hawaii real estate project. Rather than investing the money as promised, Kenner and Constantine used it to fund personal real estate purchases, pay personal expenses, and pay down other debts necessary to conceal the scheme. Beyond the NHL players, in August 2006, Kenner and Constantine also allegedly defrauded Lehman Brothers Holdings, Inc. of $2 million based on Kenner’s misrepresentations concerning the use of a real estate loan. In total, the victims of this scheme lost more than $13 million.
The Eufora LLC Scheme
Constantine operated Eufora, LLC, a prepaid debit card business, which he founded in 2002. Kenner informed the NHL players that Eufora was an up-and-coming company with great potential for growth. Between February 2008 and May 2009, players invested, at Kenner’s urging, approximately $1.4 million into Eufora. However, none of that $1.4 million was actually invested in Eufora; rather, the investment money was diverted to bank accounts that Kenner and Constantine controlled, and was used to cover the costs of Kenner and Constantine’s personal mortgages, credit card bills, travel costs, jewelry, and other expenses. In December 2009, Kenner and Constantine fraudulently convinced an Eastern District of New York resident to invest another $200,000 in Eufora, the vast majority of which was later diverted to a Constantine-controlled account unrelated to Eufora. In total, investors lost more than $1.5 million as a result of the Eufora scheme.
The Global Settlement Fund Scheme
In May 2009 through February 2010, Kenner and Constantine persuaded NHL players to give approximately $4.1 million to fund an attorney’s escrow account, termed the Global Settlement Fund, or “GSF,” which was to be used to finance litigation related to Mexican land deals. However, only a small fraction of the players’ contributions to the GSF were used for litigation; rather, the vast majority of the money was allegedly transferred into bank accounts controlled by Constantine, and significant portions of the money were used by Kenner and Constantine for purposes unrelated to the GSF, including funding Kenner’s personal investment in a tequila company in Mexico, funding litigation in Florida related to a race car company owned by Constantine, and funding the transfer of Constantine’s Arizona home. The players lost more than $1 million as a result of this scheme.
The Sag Harbor Scheme
In a separate scheme, Kenner acquired a 25% interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from a player’s line of credit, without that player’s knowledge or permission. Kenner also convinced another player to pay $375,000 for a 50% interest, when Kenner only gave him a 25% interest and pocketed the other half of the money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss. Kenner has filed a civil lawsuit in Arizona against one of the investors in connection with the Sag Harbor property.
“As alleged, Phillip Kenner spun a web of lies, deceit and broken promises that stretched from Hawaii to Mexico to the East End of Long Island. Kenner used his school connections to build a client list of NHL players. Once he gained their trust he promptly betrayed it by steering them to fraudulent investment schemes that enriched himself and Constantine to the tune of millions at the players’ expense,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent those who seek to profit by such fraud.” Ms. Lynch expressed her grateful appreciation to the FBI and IRS for their work on the investigation, and thanked the Scottsdale, Arizona, Police Department for their assistances.
Assistant Director in Charge George Venizelos: “As alleged, Kenner exploited his personal relationship with these players in pursuit of his own lucre. Player after player, time after time he and his partner, Constantine, stole from anyone they could find. This was an elaborate scheme of deception, trickery, and lies that victimized many. The FBI will continue to pursue anyone who believes using others’ savings as their personal piggy bank is acceptable behavior.
“It is not uncommon for investment fraudsters to target a specific group of victims and that group may even include the perpetrator’s own friends and acquaintances,” stated IRS Special Agent-in-Charge Weirauch. “The cooperation between IRS-Criminal Investigation, the U.S. Attorney’s Office, and the FBI should give the investing public confidence that investment fraud schemes will ultimately be uncovered and thoroughly investigated, and that the scammers will be prosecuted. Nevertheless, always take care when entrusting money to others, including to investment professionals whom you already know.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted the defendants face maximum sentences of 20 years.
The criminal case has been assigned to the Honorable Joseph F. Bianco, United States District Judge for the Eastern District of New York, in Central Islip, New York. The government's case is being prosecuted by Assistant United States Attorneys Carrie Capwell, Demetri Jones and Diane Leonardo.
The Defendants
Name: PHILLIP A. KENNER
Age: 43
Residence: Scottsdale, ArizonaName: TOMMY C. CONSTANTINE, a/k/a “Tommy C. Hormovitis”
Age: 47
Residence: Scottsdale, ArizonaE.D.N.Y. Docket No. 13-CR-607(JFB)
Leader of Mexican Narcotics Trafficking Organization Extradited to the United States to Face International Narcotics Importation and Distribution Conspiracy ChargesRead the Press Release
Juan Juarez Orosco, also known as “El Abuelo,” the alleged leader of a Mexican narcotics trafficking organization responsible for trafficking multi-ton quantities of cocaine, was extradited to the United States from Panama on November 8, 2013, and was arraigned on November 10, 2013, before United States Magistrate Judge Lois Bloom at the federal courthouse in Brooklyn, New York.
The extradition was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Mythili Raman, Acting Assistant Attorney General of the Criminal Division of the U.S. Department of Justice; New York Division; and James T. Hayes, Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (HSI); Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA).
According to charges in an indictment returned in the Eastern District of New York, from the early 1990’s until his arrest in March 2012, Juarez led a large-scale maritime and land transportation operation responsible for trafficking multi-ton quantities of cocaine from Central America, through the waters of the Atlantic Ocean to the coast of Mexico. Once the cocaine arrived in Mexico, Juarez and his co-conspirators transported the tons of cocaine from the coast of Mexico to Mexico City, where they were shipped to the United States for distribution. Throughout the 2000s, Juarez worked with major narcotics traffickers based in Colombia and Mexico, including the Norte Valle Cartel, the Beltran-Leyva Cartel, and the Sinaloa Cartel. According to court filings, through the mid-2000’s, Juarez’s organization was responsible for transporting over 35,000 kilograms of cocaine for the Beltran-Leyva organization alone. At the height of its activity, Juarez’s organization was allegedly responsible for transporting approximately eight tons of cocaine a month in conjunction with the Sinaloa Cartel.
“There is no escape from the reach of the law, no matter where drug kingpins operate their poisonous trade. Juan Juarez Orosco may have operated an international drug trafficking network that stretched across the Western Hemisphere, but today he faces justice in a courtroom in Brooklyn,” stated United States Attorney Lynch. “Thanks to our law enforcement partners in Panama, today’s extradition also shows that there is no safe haven for drug traffickers on the run.” Ms. Lynch extended her appreciation to the DEA, HSI, and the Office of International Affairs of the U.S. Department of Justice.
“As alleged in the indictment, Juarez’s trafficking organization was responsible for the importation of massive quantities of cocaine, across oceans and continents, into the United States,” said Acting Assistant Attorney General Raman. “Juarez’s arrest and extradition are a testament to the tenacity of law enforcement officers across the world, and show that what we can accomplish when we work together with our partners around the globe to capture major drug traffickers and bring them to justice.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a mandatory minimum sentence of ten years and a maximum penalty of life imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Gina M. Parlovecchio and Tiana Demas, and Trial Attorney Adrian Rosales of the Narcotics and Dangerous Drugs Section of the U.S. Department of Justice.
The Defendant
JUAN JUAREZ OROSCO
Age: 64
Mexico City, MexicoE.D.N.Y. Docket No. 12-CR-197
The United States and CA, Inc. Settle Federal Civil Fraud Claims for $8 MillionRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the settlement of claims that CA, Inc. (CA), an Islandia, New York-based software and information technology company, defrauded the federal government in connection with contracts administered by the General Services Administration (GSA) and the Department of Defense (DOD). Pursuant to the settlement, which has been approved by United States District Judge Leonard D. Wexler, CA has paid the United States eight million dollars ($8,000,000.00).
The settlement announced today is the result of a joint investigation conducted by the GSA Office of the Inspector General, and, on behalf of DOD, the Defense Criminal Investigative Service (DCIS).
Between 2001 and 2010, federal government agencies purchased software maintenance services from CA, including upgrades and technical assistance, in accordance with contracts between CA and the GSA. The government’s investigation established that CA knowingly double-billed federal agencies by charging for periods of software maintenance for which the agencies had already paid. Specifically, when federal customers entered into software maintenance renewal agreements with CA, the company began the renewal periods on the day CA processed the order, rather than the day after the expiration of the customer’s then-existing maintenance period.
The government’s investigation also encompassed claims that CA prevented DOD buying commands, including military bases, from taking advantage of pre-paid software inventory and discounts available under several contracts known as Blanket Purchase Agreements (BPAs). The investigation established that CA fraudulently administered the BPAs by steering DOD customers away from BPA purchases and toward purchases under more costly contracts.
The settlement resolves claims filed under seal by Ann-Marie Shaw pursuant to the False Claims Act (FCA) in the action United States of America, et al., ex rel. Shaw v. CA, Inc. The FCA provides that a person with information that false claims for payment have been presented to the United States may bring a lawsuit for the United States and may share in any recovery. The Shaw suit also alleged fraud claims on behalf of California, Florida, Hawaii, Illinois, Massachusetts, Nevada, Virginia, New York, the District of Columbia, and the City of New York. The state claims are being settled pursuant to a separate agreement. The seal in the Shaw case was lifted on November 5, 2013.
CA has denied the government’s claims.
“The United States is not a deep pocket of taxpayer dollars to be exploited by private industry. We expect those who conduct business with the United States to honor their obligations accurately and honestly,” stated United States Attorney Loretta E. Lynch. “We will continue to vigorously enforce the False Claims Act for the protection of taxpayers and the United States government.” Ms. Lynch praised the successful partnership between the United States Attorney’s Office and the investigative agencies to carry out the mission to detect and prevent fraud.
“The federal government cannot afford to be overcharged,” said GSA Inspector General Brian D. Miller. “We need to save every taxpayer dollar we can.”
“By steering DOD customers away from the value-saving contract instruments, CA, Inc. took advantage of their federal customers and the U.S. taxpayers through their disregard for appropriate corporate governance. CA’s actions resulted in DOD paying again for software maintenance already paid for,” commented Special Agent in Charge Craig W. Rupert, DCIS Northeast Field Office. “The Defense Criminal Investigative Service, with our partner agencies, continues to aggressively pursue defense contractors who disregard the rules of commerce and law that disadvantage their customers.”
The United States’ claims were litigated by Assistant United States Attorney Robert W. Schumacher.
Members of New York Cell of Cybercrime Organization Plead Guilty in $45 Million Cybercrime CampaignRead the Press Release
BROOKLYN, NY – Earlier today, Evan Jose Peña pleaded guilty to participating in two worldwide cyberattacks that inflicted $45 million in losses on the global financial system in a matter of hours. Peña’s plea followed two other guilty pleas in this case entered by defendants Emir Yasser Yeje and Elvis Rafael Rodriguez in October 2013. These three defendants were members of the New York-based cell of an international cybercrime organization that 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 instantly disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The New York cell in which Pena, Yeje, and Rodriguez participated withdrew almost $2.8 million in a matter of hours.
The pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Steven Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.
“These three defendants participated in a criminal flash mob, using data stolen through the most sophisticated hacking techniques to withdraw millions of dollars in mere hours in an unprecedented cyber heist,” stated United States Attorney Lynch. “Their pleas demonstrate that the United States government will not relent in its efforts to investigate and prosecute the perpetrators of these financially devastating cyberattacks.” Ms. Lynch expressed her grateful appreciation to the United States Secret Service, New York Field Office for their work on the investigation.
The “Unlimited Operation”
As alleged in the indictment and other court filings, the cyberattacks employed by the defendants and their co-conspirators in this case are known in the cyber underworld as “Unlimited Operations” — through its hacking “operation,” the cybercrime organization can access virtually “unlimited” criminal proceeds.
The “Unlimited Operation” begins when the cybercrime organization hacks into the computer systems of a payment card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts and also manipulates the security protocols that would alert the victim to the attack. The compromised card data is then distributed to cells worldwide who use the data to encode magnetic stripe cards to use at ATMs. These sophisticated techniques enable the participants to withdraw literally unlimited amounts of cash until the operation is finally detected and shut down. “Unlimited Operations” are marked by three key characteristics: (1) the surgical precision of the hackers carrying out the cyberattack, (2) the global nature of the cybercrime organization, and (3) the speed and coordination with which the organization executes its operations on the ground. These attacks rely upon both highly sophisticated hackers and organized criminal cells whose role is to withdraw the cash as quickly as possible.
The Defendants’ Roles in the Charged Cyberattacks
Evan Peña, Elvis Rafael Rodriguez, and Emir Yasser Yeje participated in two recent “Unlimited Operations” of staggering size. The first operation, on December 22, 2012, targeted a payment card processor that processed transactions for prepaid MasterCard debit cards issued by the National Bank of Ras Al-Khaimah PSC, also known as RAKBANK, in the United Arab Emirates. After the hackers penetrated the credit card processor’s computer network, compromised the RAKBANK 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 4,500 ATM transactions were conducted in approximately 20 countries around the world using the compromised RAKBANK account data, resulting in approximately $5 million in losses to the credit card processor and RAKBANK.
The second, and even more damaging, of these Unlimited Operations occurred on the afternoon of February 19 and lasted into the early morning of February 20, 2013. This operation again breached the network of a payment card processor that serviced MasterCard prepaid debit cards, this time issued by Bank Muscat, located in Oman. Again, after the cybercrime organization’s hackers compromised Bank of Muscat prepaid debit card accounts and distributed the data, the organization’s casher cells engaged in a worldwide ATM withdrawal campaign. Over the course of approximately 10 hours, cyber cells in 24 countries executed approximately 36,000 transactions worldwide and withdrew about $40 million from ATMs.
Peña, Rodriguez, and Yeje operated the New York cell of “cashers,” who encoded magnetic stripe cards, such as gift cards, with the compromised card data. After receiving the compromised account information and personal identification numbers (PINs) for the hacked accounts, the defendants’ cells sprang into action, immediately fanning out across the New York area making thousands of withdrawals from ATMs. During the RAKBANK Unlimited Operation, over the course of just two hours and 25 minutes, the defendants and their co-conspirators conducted approximately 750 fraudulent transactions, totaling nearly $400,000, at over 140 different ATM locations in New York City. The Bank Muscat Unlimited Operation was even more devastating. From 3 p.m. on February 19 through 1:26 a.m. on February 20, the defendants and their co-conspirators withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals in the New York City area.
The defendants then passed portions of the proceeds back to the hackers organizing the attack and kept the rest for themselves. Notably, defendants Rodriguez and Yeje laundered hundreds of thousands of dollars in illicit cash proceeds. In one transaction alone, nearly $150,000 in the form of 7,491 $20 bills, was deposited at a bank branch in Miami, Florida, into an account controlled by defendant Alberto Yusi Lajud-Peña, who is now deceased. New York cell members also invested the criminal proceeds in portable luxury goods, such as expensive watches and cars. To date, the United States has seized hundreds of thousands of dollars in cash, bank accounts, and luxury merchandise, including two Rolex watches and a Mercedes SUV, and is in the process of forfeiting a Porsche Panamera. The Mercedes and Porsche were purchased with $250,000 in proceeds of this scheme.
In announcing the pleas, United States Attorney Lynch praised the extraordinary efforts of the Secret Service in responding to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally, and also expressed gratitude to U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New York for their assistance in this investigation. Ms. Lynch also thanked MasterCard, RAKBANK, and Bank Muscat for their cooperation with this investigation.
Today’s plea took place before United States District Judge Kiyo A. Matsumoto. When sentenced, the defendants face up to 7.5 years in prison, as well as forfeiture and a fine of up to $250,000.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Hilary Jager, David Sarratt, and Brian Morris.
The Defendants:EVAN JOSE PEÑA
Age: 35ELVIS RAFAEL RODRIGUEZ
Age: 24EMIR YASSER YEJE
Age: 24Massive Medicare Fraud Mastermind Sentenced to 15 Years in Prison in Connection with $77 Million SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Irina Shelikhova, 50, of Brooklyn, New York, was sentenced to 15 years in prison for her leadership role in a $77 million Medicare fraud scheme. In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Shelikhova to 3 years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered her to forfeit $36,241,545, and ordered her to pay restitution in the amount of $50,943,386. Shelikhova has been in custody since June 15, 2012, when she was arrested at JFK Airport after living as a fugitive in the Ukraine for almost two years. After serving her sentence, she faces deportation from the United States.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).
Shelikhova pleaded guilty on December 18, 2012 to conspiracy to commit money laundering. Including Shelikhova, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.
“Irina Shelikova used fake doctors and forged documents to defraud Medicare out of millions of dollars of very real money. As the owner and operator of three medical clinics, Shelikova engaged in a brazen scheme of fraudulent billing and kickbacks, going so far as to pay kickbacks to elderly patients in exchange for their Medicare numbers and their silence. She relied upon her web of payoffs, kickbacks, and Russian propaganda to support her criminal scheme, but the truth caught up with her and justice has now been served,” stated United States Attorney Lynch. “Protecting taxpayer funded programs like Medicare is a priority of this Office and the Department of Justice. Today’s sentence represents a clear warning to those who seek to defraud Medicare that they will be held accountable for their crimes.”
According to court documents, from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic). Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to testimony at the trial of her co-defendants, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s “no-show” doctor and render phony medical “care” to such patients. Shelikhova also directed employees to create fake medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operation of a network of external money launderers who cashed checks for the clinic. Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers. These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds. The money launderers cashed these checks and provided the cash back to the clinic. Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.
This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Alleged Dominican Drug Supplier Extradited to the United States to Face Narcotics Trafficking ChargesRead the Press Release
Angel Gregorio Liriano Cruz will be arraigned this afternoon before United States Magistrate Judge Roanne L. Mann, at the federal courthouse in Brooklyn, New York, on heroin and cocaine trafficking charges. Liriano Cruz is alleged to be the leader of an international drug organization responsible for shipping more than 200 kilograms of heroin and 35 kilograms of cocaine to the United States between 2002 and 2007. Liriano Cruz was arrested on an extradition request issued from the Eastern District of New York and extradited from Spain to the United States on November 8, 2013.
The extradition and charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York. The investigation was conducted by the DEA, with assistance provided by law enforcement authorities in Spain and the Dominican Republic.
As detailed in the indictment and other court filings by the government, Liriano Cruz’s regular heroin and cocaine supply route during part of the course of the conspiracy originated in the Dominican Republic, continued to Puerto Rico, and concluded in the New York City metropolitan area.
“As alleged, Angel Liriano Cruz ran a pipeline of poison, flooding the U.S. with millions of dollars’ worth of heroin and cocaine sent through Caribbean locales. His alleged drug distribution organization was not limited by international boundaries, but neither is the reach of U.S. law enforcement with the assistance of its partners abroad,” stated United States Attorney Lynch. “We are steadfast in our commitment to bringing drug sources to justice and stemming the flow of illegal narcotics into this country and the streets of our communities.” Ms. Lynch extended her grateful appreciation to the agencies that conducted the government’s investigation, including the DEA JFK Airport Office, comprising the New York City Police Department, Port Authority of New York and New Jersey, and Nassau County Sheriff’s Office, and thanked the Department of Justice, Office of International Affairs, for its significant assistance in this case.
“ Liriano Cruz, is the alleged leader of a drug distribution organization responsible for shipping more than 200 kilograms of heroin and 35 kilograms of cocaine into our neighborhoods. This organization fueled the ongoing heroin threat our communities face, and we estimate this international drug network earned $13 million selling this poison. On Friday, November 8th, Liriano Cruz arrived in New York to face federal narcotics charges based on the diligent work of the DEA, NYPD investigators, and the U.S. Attorney’s Office Eastern District of New York. I commend their dogged pursuit of this key heroin trafficker,” stated DEA Special Agent-in-Charge Crowell.
As part of the investigation, in May 2007, DEA agents seized approximately 36 kilograms of heroin hidden in furniture that was allegedly modified for the organization to transport the narcotics. That furniture was en route to be forwarded by common carrier to the Bronx, New York, with a return address in Puerto Rico. Several days later, law enforcement agents, disguised as shipping company personnel, delivered in New York the furniture that had contained the heroin and arrested three members of the organization. Further investigation revealed that the seized shipment was the last of approximately 10 narcotics shipments that were sent in a similar fashion. The narcotics from this and other sources were allegedly distributed in the New York City area by members of the defendant’s organization and are valued by the DEA at more than 13 million dollars. Liriano Cruz also allegedly supplied heroin for internal couriers to bring kilo-quantities from the Dominican Republic to the United States. The couriers often smuggled the narcotics through JFK International Airport.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of life imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Sylvia Shweder and Douglas Pravda.
The Defendant
ANGEL GREGORIO LIRIANO CRUZ
Age: 53
Dominican RepublicE.D.N.Y. Docket No. O9-CR-057 (SJ)