Eastern District of New York
Press releases recorded for this federal judicial district.
Romanian National Aurel Cojocaru Extradited from Czech Republic to United States to Face Charges Related to Multimillion Dollar International Cyber Fraud SchemeRead the Press Release
Romanian national Aurel Cojocaru has been extradited to the United States from the Czech Republic to face charges related to his participation in a sophisticated multimillion dollar cyber fraud scheme that targeted consumers on U.S.-based Internet marketplace websites such as eBay.com. Cojocaru specialized in making high-quality fraudulent passports to open U.S. bank accounts used to launder the stolen funds. His extradition followed a coordinated international takedown in December 2012 during which law enforcement officials in Romania, the Czech Republic, the United Kingdom, and Canada, acting at the request of the United States, arrested six Romanian nationals, including Cojocaru. The Czech Republic’s Ministry of Justice granted the extradition request on August 9, 2013. Cojocaru was transported to the Eastern District of New York on November 6, 2013, and was arraigned today before U.S. Magistrate Judge Roanne L. Mann.
In addition to Cojocaru’s extradition, three other defendants – Cristea Mircea, Ion Pieptea, and Nicolae Simion – have been extradited to the United States from Romania, and one defendant, Emil Butoi, was extradited from the United Kingdom. Earlier today, Mircea pleaded guilty to committing wire fraud. Butoi pleaded guilty to committing passport fraud on November 5, 2013. Defendant Nicolae Ghebosila is still engaged in extradition proceedings in Canada. Seven defendants, including Romanian national Nicolae Popescu, are currently fugitives from justice.1
The extradition and the guilty plea 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).
As alleged in the complaint and subsequent indictment,2 defendants Cojocaru, Mircea and their co-conspirators saturated Internet marketplace websites, such as eBay, Cars.com, AutoTrader.com, and CycleTrader.com, with detailed advertisements for cars, motorcycles, boats, and other high‑value items generally priced in the $10,000 to $45,000 range. Unbeknownst to the buyers, however, the merchandise did not exist. The so-called sellers corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. Sometimes, they pretended to sell cars from nonexistent auto dealerships in the United States and even created phony websites for these fictitious dealerships.
The complaint and indictment further describe how, after the purported Asellers@ reached an agreement with the victim buyers, they would often email them fraudulent invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with wire transfer instructions directing the buyers to send money to American bank accounts. Foreign nationals in the United States, known as Aarrows,@ used fraudulent passports manufactured and supplied by Cojocaru and others as identification to open the bank accounts. Finally, the Aarrows@ would collect the illicit proceeds and send them to co-conspirators in Europe by wire transfer and other methods. Cojocaru produced high-quality fake passports purportedly issued by various European countries as part of this scheme. During one recorded video chat, Cojocaru displayed the tools of his trade – new holograms he had acquired in order to create more authentic-looking passports. In another recorded call, he boasted about his supposed ability to evade the Czech authorities. On December 6, 2012, however, Czech law enforcement officers arrested Cojocaru, and during their search of Cojocaru’s residence outside Prague, the Czech officers and FBI agents found over 180 stolen and fraudulent passports and dozens of identification cards.
According to court filings, the government alleges that the defendant and his coconspirators defrauded their victims of at least $3 million during the course of the conspiracy.
Defendant Cojocaru is charged with conspiracy to commit substantive offenses against the United States, passport fraud, wire fraud, and money laundering. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each of the conspiracy, wire fraud, and money laundering counts, and a maximum sentence of 10 years’ imprisonment on the passport fraud count.
Defendant Mircea faces up to 20 years in prison as the result of his guilty plea to wire fraud. Defendant Butoi faces up to 10 years in prison as the result of his guilty plea to passport fraud.
“Cojocaru’s fraudulent passports were a key part of the criminal infrastructure supporting this sophisticated and global cyber scheme,” stated United States Attorney Lynch. “He operated his fake passport factory with what he thought was impunity. But unlike his passports, our efforts to protect American consumers are genuine and, as demonstrated by Cojocaru’s arrest and extradition and Mircea’s guilty plea today, extend beyond national borders.”
FBI Special Agent in Charge Venizelos stated, “Cojocaru’s extradition means he will finally have to face the American justice system. As alleged, Cojocaru played an integral part in a multi-million dollar cyber scam as the principal passport forger. Using the fake documents Cojocaru created, foreign nationals in the United States could open bank accounts under phony names and launder payments to foreign accounts from duped American buyers. Working with our law enforcement partners abroad, the FBI was able to stop this complex global scam.”
The government of the Czech Republic, particularly the Ministry of Justice, and Interpol provided significant assistance and support during the investigation, arrest, and extradition of the defendant. The Department of Justice’s Office of International Affairs worked with its counterparts in the Czech Republic to effect the extradition, and the U.S. Marshals Service coordinated and transported the defendant to the United States.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Carol Sipperly of the Criminal Division’s Fraud Section.
The Defendants
AUREL COJOCARU
Age: 44
RomanianCRISTEA MIRCEA
Age: 31
RomanianE.D.N.Y. Docket No. 12-CR-0785 (ERK)
_____________________________
1 The FBI’s Wanted Posters for the fugitive defendants are available at http://www.fbi.gov/wanted/cei.
2 The charges in the complaint and indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Real Estate Developer Sentenced to 6 Months of Imprisonment for Soliciting $300,000 in Kickbacks on NYC Housing Preservation & Development Project in the BronxRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Placido Rodriguez, a real estate developer who engaged in a $300,000 kickback scheme while developing the Alexander Avenue Cluster affordable housing project in the Bronx for the New York City Department of Housing Preservation and Development (HPD), was sentenced to a term of imprisonment of 6 months following his conviction for wire fraud conspiracy. In addition, Rodriguez was ordered to pay $98,333 in restitution to the City of New York and pay an additional $98,333 to the federal government as forfeiture.
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); Cheryl Garcia, Acting Special Agent in Charge, United States Department of Labor (DOL) Office of Inspector General; and Rose Gill Hearn, Commissioner, New York City Department of Investigation (DOI).
Previously, Rodriguez pleaded guilty to a one-count information charging him with wire fraud conspiracy in connection with a scheme to defraud HPD by collecting kickbacks from a general contractor on HPD affordable housing projects and making HPD pay for the kickbacks by disguising them as construction costs. As detailed in the information and complaint, after Rodriguez and two business partners won the HPD contract to develop the Alexander Avenue Cluster project, they hosted a “pre-bid” meeting with a prospective general contractor who was planning to bid on the project. During that meeting, Rodriguez, in agreement with his business partners, demanded $300,000 from the general contractor in return for their support of his bid. After the general contractor won the bid, he would direct some of the money that he was paid by HPD for his work as a general contractor to Rodriguez and his partners as payments toward the $300,000 kickback. In order to conceal the criminal nature of these payments, Rodriguez and his partners gave the general contractor false invoices from a company they controlled, PRA Building Materials, that were tailored to match the kickback payments. Until the government discovered this corrupt scheme, the general contractor had paid approximately $267,000 in kickbacks, fraudulently billed to HPD, to Rodriguez, and his partners.
“Thousands of New Yorkers turn to HPD for assistance in literally putting a roof over their heads. This defendant lined his pockets with federal housing funds intended to help those families. We will not stop in our pursuit of those who profit by corrupting this vital resource for some of this city’s most vulnerable families. Our ongoing investigation of the New York City affordable housing development sector will continue,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the United States Department of Labor, Office of the Inspector General, for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Motivated by greed, the defendant real estate developer constructed a scheme to defraud HPD and took advantage of an opportunity to help the less fortunate in our community. His sentence reinforces the federal government’s unyielding stance that corruption on any level will not be tolerated. The FBI and our law enforcement partners remain vigilant in bringing to justice those who misuse their positions of trust for personal gain.”
DOI Commissioner Rose Gill Hearn said, “This individual and his co-conspirators collected bribes and passed the cost to the taxpayers, in effect stealing money from the City’s affordable housing program. Their corruption was exposed in a joint federal and City investigation. Now as they go to prison, stripped of their stolen money, their scheme looks much less clever than they imagined.”
United States Attorney Lynch thanked the Internal Revenue Service, Criminal Investigation, New York (IRS); the United States Department of Housing and Urban Development (HUD); and the New York City Police Department (NYPD) for their cooperation in this case.
The sentencing proceeding was held before United States District Judge Nina Gershon at the U.S. Courthouse in Brooklyn, New York.
To date, three supervisory officials of HPD, including former HPD Assistant Commissioner Wendell Walters, and six real estate developers and general contractors have pleaded guilty to charges including racketeering conspiracy, bribery, and wire fraud conspiracy in connection with the government’s ongoing investigation of widespread corruption involving affordable housing contracts at HPD. HPD inspection supervisors Michael Provenzano and Luis Adorno were each sentenced to 18 months in prison, and developer Sergio Benitez was sentenced to 22 months. On October 10, 2013, Rodriguez’s partner, Angel Villalona, was sentenced to six months’ imprisonment and ordered to pay $100,000 restitution to the City of New York, and also ordered to forfeit $100,000 to the government. Rodriguez is the fourth defendant sentenced in this ongoing investigation of corruption within the New York City affordable housing development sector.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa, Anthony Capozzolo, and Claire Kedeshian.
The Defendant:
PLACIDO RODRIGUEZ
Fort Lee, New Jersey
Age: 66Queens Check Cashing Company and Its Owner Plead Guilty in $19 Million SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Belair Payroll Services, Inc. (“Belair”), a now defunct, multi-branch check cashing company based in Flushing, New York, and its owner, Craig Panzera, 47, pled guilty to failing to follow reporting and anti-money laundering requirements for over $19 million in transactions, in violation of the Bank Secrecy Act (BSA). Panzera also pled guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes. As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS.
The guilty pleas were 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; Department of Homeland Security, Immigration and Customs Enforcement (ICE) Acting Director John Sandweg; and Chief of the Internal Revenue Service Criminal Investigation (IRS-CI) Richard Weber. The pleas were accepted by United States District Judge Frederic Block.
“As today’s guilty pleas make clear, Panzera used the hard working residential community of Queens as a cover for his illegal schemes. Under the guise of offering much needed financial services to the community, Panzera instead operated Belair as a crooked enterprise, hiding illicit transactions, lining his own pockets and evading taxes,” stated United States Attorney Lynch. “We are committed to working with our law enforcement partners to expose and eradicate money laundering and tax fraud from our communities.” Ms. Lynch thanked the Department of Justice, Criminal Division, Fraud Section, ICE and IRS-CI for their work on the investigation.
According to court filings, from June 2009 through June 2011, numerous checks drawn on bank accounts of shell corporations were presented to Belair employees to be cashed at Belair. The checks appeared to be related to health care services, but in fact, the corporations did no legitimate business. The shell corporations and the corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were located overseas. Belair accepted the checks and, in return, provided cash in excess of $10,000 per check. Panzera and others at Belair intentionally failed to require or obtain identification documents or information from the individuals presenting the checks. Belair filed CTRs falsely stating that the checks were cashed by the foreign nationals who set up the shell corporations, and with respect to certain CTRs, failed to indicate the full amount of cash provided to the individuals. More than $19 million in checks were cashed through Belair during the course of the scheme. By systematically cashing checks in this manner, Panzera and Belair willfully failed to maintain an effective anti-money laundering program. Prior to the indictment, Belair had operated five check cashing stores in Queens.
The charges in the indictment against Panzera and Belair’s co-defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
The case is being prosecuted by Assistant United States Attorney Patricia E. Notopoulos and Trial Attorneys Claiborne W. Porter, Kevin G. Mosley and Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS).
The Defendants:
BELAIR PAYROLL SERVICES, INC.
Flushing, New YorkCRAIG PANZERA
Age: 47
Naples, FloridaE.D.N.Y. Docket No. 11-CR-591 (S-1)
Irish National Pleads Guilty in Brooklyn Federal Court to Crimes Relating to Illegal Trafficking of Endangered Rhinoceros HornsRead the Press Release
WASHINGTON – Michael Slattery Jr., 25, an Irish national, pleaded guilty today in federal court in Brooklyn, N.Y., to conspiracy to violate the Lacey Act in relation to illegal rhinoceros horn trafficking, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Loretta E. Lynch, U.S. Attorney for the Eastern District of New York.
Slattery pleaded guilty to one count of conspiracy to violate the Lacey Act, which carries a maximum penalty of five years in prison. Under the terms of the plea agreement, any proceeds from the illegal trafficking that remain in the United States will be forfeited or put toward the criminal fine. Slattery is scheduled to be sentenced by U.S. District Judge John Gleeson in the Eastern District of New York on Jan. 10, 2014.
In the plea agreement, Slattery admitted that he, along with others, traveled throughout the United States to illegally purchase and sell endangered rhinoceros horns. Slattery was arrested in September as part of “Operation Crash,” a nationwide, multi-agency crackdown on those involved in the black market trade of endangered rhinoceros horn.
“Slattery and his co-conspirators traveled to the United States to profit from the illegal trade in black rhinoceros horns,” said Acting Assistant Attorney General Dreher. “The black rhino is a species that, without our protection, could be headed for extinction in our own time. Rhino horn trafficking is a violation of the laws enacted by Congress to protect endangered species from extinction and the Justice Department will aggressively prosecute those who engage in this egregious market.”
“Today’s guilty plea highlights our commitment to protect endangered species, like the black rhinoceros, by prosecuting those who would profit from the rhinos’ extinction,” said U.S. Attorney Lynch. “Michael Slattery traveled the world in pursuit of illicit profit from the sale of black rhino horns. But instead of gaining a windfall by contributing to the demise of an age-old species, Slattery now faces up to five years in prison for his illegal conduct.”
“The involvement of an alleged member of an organized criminal group in rhino horn trafficking speaks to the scope, scale, and lawlessness of this problem,” said U.S. Fish and Wildlife Service Director Dan Ashe. “We will continue to work closely with the Department of Justice to crack down on profiteers whose crimes are pushing rhinos to the brink of extinction.”
“The black rhinoceros has been driven to the brink of extinction by this illicit trade,” said Special Agent in Charge James T. Hayes of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in New York. “HSI, along with our partners at the U.S. Fish and Wildlife Service and the Department of Justice, stand ready to protect these beautiful creatures from the villains who would trade the rhino’s continued existence on this planet for a quick buck.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.
Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.
Operation Crash is a continuing investigation being conducted by the Department of the Interior’s U.S. Fish and Wildlife Service in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. The investigation is being led by the Special Investigations Unit of the FWS Office of Law Enforcement and involves a nationwide task force of agents focused on rhino trafficking.
According to the information, plea agreement and statements made during court proceedings:
Beginning in May 2010 and continuing until April 2011, Slattery, along with others, traveled within the United States to purchase rhinoceros horns, which he, along with others, then resold to private individuals or consigned to auction houses in the United States. The profits from the sale of the rhinoceros horns were distributed via cashier’s checks made out to Slattery and others. Slattery used a fictitious “Endangered Species Bill of Sale” in connection with the purchase and sale of rhinoceros horns.
In September 2010, Slattery, along with others, traveled from London to Houston, where they attempted to purchase a taxidermied black rhinoceros mount with two horns from a business in Austin, Texas. The manager of the business refused to sell the mount to the defendant because Slattery and the others did not have proof that they resided in the State of Texas. Within days of being refused, Slattery returned to the establishment in Austin, where, with the assistance of a “straw buyer” that Slattery and his co-conspirators hired, the group purchased the mount for $18,000. At the time of the sale, the purchasers were given an “Endangered Species Bill of Sale” that stated “[s]eller expressly states that the described taxidermy is an endangered species and that interstate or foreign sales, barter and trade are strictly prohibited …. [p]ursuant to [the Endangered Species Act]. Buyer has expressly stated that he/she is a current resident of the State of Texas and has no intention of participating in any form of interstate commerce involving the described taxidermy.”
Following the purchase of the mount, Slattery and his co-conspirators traveled to Flushing, N.Y., where they sold the horns from the mount and other horns they had acquired to an individual for $50,000. At the time of the sale, Slattery and his co-conspirators provided the purchaser with a false and fictitious “Endangered Species Bill of Sale.” The “Endangered Species Bill of Sale” stated that the two pair of black rhinoceros horns were purchased in August 2010. The falsified document also included a false and fictitious FWS emblem, which it did not have at the time of purchase from the establishment in Texas. Pursuant to instructions from Slattery and his co-conspirators, the purchaser paid for the horns with cashier’s checks. One check in the amount of $12,500 was made payable to Michael Slattery Jr.
U.S. Attorney Lynch and Acting Assistant Attorney General Dreher commended FWS and ICE-HSI for their outstanding work in this investigation.
The case is being handled by the U.S. Attorney’s Office for the Eastern District of New York and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division. Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental Crimes Section are in charge of the prosecution.
Former Veterans Affairs Psychiatrist Pleads Guilty to Medicare FraudRead the Press Release
BROOKLYN, NY – Earlier today, Dr. Mikhail L. Presman, a licensed psychiatrist employed by the Department of Veterans Affairs (VA), pleaded guilty to health care fraud in federal court in Brooklyn. For over seven years, Dr. Presman lied about providing home medical treatment to Medicare beneficiaries and falsely billed Medicare for more than $1.2 million through the submission of fraudulent claims. As part of the guilty plea, Dr. Presman agreed not to contest the forfeiture of his ill-gotten gains, amounting to over $1.2 million.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Special Agent-in-Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). The plea was accepted by United States District Judge I. Leo Glasser.
“Dr. Presman was hired and paid by the taxpayers to treat those who sacrifice so much for our country – our injured veterans. As alleged, by defrauding the Medicare program, he betrayed the trust placed in him and stole from the very taxpayers who paid his salary. Far from honoring their sacrifice, Dr. Presman used our veterans as a cover for deceit and fraud,” stated United States Attorney Lynch. “We will root out Medicare fraud in our community wherever we find it.” Ms. Lynch thanked the Department of Justice, Criminal Division, Fraud Section and HHS-OIG for their work on the investigation.
According to court documents, from January 1, 2006 through May 10, 2013, Dr. Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries, notwithstanding his full-time, salaried position as a psychiatrist at the VA hospital in Brooklyn. Contrary to his false representations, Dr. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, on a number of occasions, Dr. Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Additionally, Dr. Presman submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
Dr. Presman is scheduled to be sentenced on February 13, 2014. At sentencing, he faces a maximum sentence of 10 years’ imprisonment, over $1.2 million in mandatory restitution, and a fine of up to $2.4 million.
The case was investigated by HHS-OIG, brought as part of the Medicare Fraud Strike Force, and supervised by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case is being prosecuted by Assistant United States Attorney Patricia E. Notopoulos and Department of Justice Trial Attorney Bryan D. Fields.
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.
The Defendant:
MIKHAIL L. PRESMAN, M.D.
Age: 56
Brooklyn, New YorkE.D.N.Y. Docket No. 13-CR-576
Former Hempstead Police Officer Convicted of Armed Robbery and Firearms ChargesRead the Press Release
Earlier today, a federal jury returned a guilty verdict against Brian Jones, a former Hempstead Village police officer, on charges of Hobbs Act robbery conspiracy and brandishing a firearm during the robbery conspiracy. The charges arose from an April 6, 2008 incident in which the defendant and two accomplices attempted to rob a cocaine dealer in Far Rockaway, New York. At the time of the attempted robbery, the defendant was employed as a police officer in Hempstead Village.
The verdict followed a two-week trial at the federal courthouse in Central Islip, New York. The defendant’s sentencing is scheduled for February 26, 2014, at which time he faces a maximum sentence of 20 years’ imprisonment for the robbery conspiracy and a mandatory consecutive sentence of seven years to life for the firearms charge, as well as a criminal fine.
The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Raymond W. Kelly, Commissioner, New York City Police Department (NYPD), and Joseph Anarumo, Jr., Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“We trust our hard-working and dedicated law enforcement officers to protect our community. In violation of his sworn duty, Brian Jones betrayed his badge and disgraced his profession in an attempt to enrich himself at the expense of innocent victims. Jones crossed the line and became that which he had sworn to guard against,” stated United States Attorney Lynch. “The people of this district will not tolerate law enforcement officers who abuse their authority and violate the law.” Ms. Lynch expressed her thanks to the ATF and the NYPD’s Internal Affairs Division, Police Impersonation Investigation Unit, which led the investigation.
The evidence at trial established that in early 2008, the defendant and two accomplices plotted to rob a cocaine dealer, who they believed kept large quantities of drugs and cash at his apartment in Far Rockaway, New York. Prior to the robbery, the defendant abused his authority as a Hempstead Village police officer to identify the victim’s home address by running a search in a law enforcement database. On April 6, 2008, the defendant and his accomplices carried out the attempted robbery at an apartment building in Far Rockaway, armed with guns, the defendant’s police badge, and handcuffs. After using a ruse to enter an apartment by pretending to sell chocolate to raise money for the defendant’s daughter’s school, the defendant and his accomplices handcuffed a woman and her husband, while the couple’s two young children watched in horror, and then ransacked the apartment. After finding no cocaine or money, the defendant and his accomplices realized they were in the wrong apartment. Undeterred, they entered a second apartment, occupied by another woman and her two young children. They attempted to handcuff that woman as well, but she was able to flee into a bedroom with her children and call 9-1-1. The defendant and his accomplices then fled.
The trial was held before United States District Judge Joseph F. Bianco. All three individuals involved in the attempted robbery have now been convicted of crimes relating to that robbery.
The government’s case is being prosecuted by Assistant United States Attorney Lara Treinis Gatz.
The Defendant
BRIAN JONES
Age: 41
Hempstead, New YorkE.D.N.Y. Docket No. 13-CR-207 (JFB)
FEMA fraud charges for Hurricane Sandy disaster reliefRead the Press Release
Complaint 1: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 2: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 3: FEMA fraud charges for Hurricane Sandy disaster reliefFormer Hip-Hop Manager James Rosemond, Leader of A Notorious Drug Trafficking Organization, Sentenced to Life in PrisonRead the Press Release
Earlier today, James Rosemond, also known as “Jimmy Henchman,” was sentenced to mandatory life imprisonment in federal court in Brooklyn, New York, for leading a continuing criminal enterprise (the “Rosemond Organization”) that distributed thousands of pounds of cocaine, the majority of which was sold on the streets of Brooklyn and Queens. Rosemond was also sentenced for numerous narcotics conspiracy offenses, firearms possession, money laundering, structuring, and obstruction of justice. Rosemond was convicted of all thirteen counts in his indictment, following a three-week jury trial in May 2012. As part of the sentence, Rosemond forfeited $10 million, along with property worth approximately $4 million.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York, and Tony Weirauch, Special Agent-in-Charge, Internal Revenue Service (IRS), Criminal Investigation, New York. The sentence was imposed by United States District Judge John Gleeson.
ARosemond styled himself a hip hop mogul, bringing the music of the streets to a wider audience and expanding opportunities of artists. In reality, his image as a music impresario was a cover for the real Jimmy Rosemond – a thug in a suit who flooded those same streets with cocaine, and shuttled drugs and money from coast to coast. Today’s life sentence is a fitting end to the Henchman’s two-faced machinations,” stated United States Attorney Lynch. “Along with our partners in law enforcement, this Office is committed to ridding our communities of the scourge of drugs and guns.@ Ms. Lynch extended her grateful appreciation to the DEA, the IRS, the U.S. Postal Inspection Service, the United States Marshals Service, and the Department of Justice, Office of Inspector General, for their work on the case.
DEA Special Agent-in-Charge Crowell stated, “A life of luxury as an entertainment CEO built on a foundation of drug trafficking has resulted in a lifetime prison sentence. Drug trafficking does not pay off at the end of the day. As the head of this organization, Rosemond was overseeing the distribution of 50 to 100 kilos of cocaine per month into our communities while utilizing his position in the music industry to evade law enforcement. He oversaw an $11 million a year cocaine trafficking enterprise that transported cocaine in exchange for cash which was hidden in music equipment across the country. I commend the men and women of the DEA New York, Los Angeles, and Atlanta Divisions, as well as the IRS, USMS, USPS, DOJ OIG, and the United States Attorney’s Office, Eastern District of New York, whose diligence uncovered and completely dismantled this organization.”
IRS Special Agent-in-Charge Weirauch stated, “It is a good day for the American public whenever a narcotics trafficking organization is dismantled. As is typical in these investigations, the government has not only taken a supplier of illegal drugs off the streets, but has seized the assets that can be used in the fight against other such enterprises. IRS-Criminal Investigation proudly stands with our law enforcement partners in recognizing this accomplishment and looks forward to sharing our financial investigative expertise in the investigation and prosecution of other narcotics organizations.”
At trial, the evidence established that Rosemond was the leader of a large-scale, bi-coastal narcotics-trafficking organization that shipped cocaine from Los Angeles, California, to the New York City metropolitan area and that, in turn, shipped cash proceeds from narcotics sales back to Los Angeles. The organization used a variety of shipping methods as part of its operation, including Federal Express and UPS to ship boxes of mustard-covered cocaine and drug money, as well as a music equipment shipping company to transport cocaine and drug money concealed in music equipment cases.
During the investigation, federal law enforcement agents made multiple seizures of drugs, money, firearms, and tools of the narcotics distribution trade belonging to the Rosemond Organization. For example, in April 2010, law enforcement seized 27 kilograms of cocaine. As part of the seizure, law enforcement conducted a search of one of Rosemond’s stash houses in Queens, which yielded 12 kilograms of cocaine, a machine gun, ammunition, and a variety of drug trafficking paraphernalia, including kilo presses, scales, and vacuum sealed bags used to package drugs and money. On that same day, law enforcement also seized a vehicle containing a trap designed to conceal contraband. In December 2010, law enforcement seized over $785,000 in cash proceeds from narcotics trafficking, stored in a music equipment case at a rehearsal studio in Manhattan. In total, between 2008 and 2010, law enforcement in New York and California seized over $2.8 million of the Rosemond Organization=s drug proceeds.
Trial testimony also established that on May 11, 2011, Rosemond sold a kilogram of cocaine to a cooperating witness. After a warrant was issued for his arrest later that day, Rosemond fled, resulting in a manhunt lasting nearly two months that ended when he was apprehended in late June 2011.
To date as a result of this investigation, 19 members and associates of the Rosemond Organization have been convicted.
The government’s case was prosecuted by Assistant United States Attorneys Todd Kaminsky, Soumya Dayananda, Lan Nguyen, Una A. Dean, Carolyn Pokorny, and Karin Orenstein.
The Defendant
JAMES ROSEMOND
Brooklyn, NY
Age: 48EDNY Docket No. CR-11-424 (JG)
Indictment Unsealed and “Wanted” Posters Issued for Fugitives Charged with Multimillion Dollar International Cyber Fraud SchemeRead the Press Release
Earlier today, charges were unsealed against Romanian fugitive Nicolae Popescu, the leader of an international organized crime syndicate that ran a multimillion dollar cyber fraud scheme, and six other fugitives charged with participating in the same scheme. Interpol has issued red notices to foreign law enforcement partners seeking assistance in the apprehension of these fugitives, and the FBI has also released “Wanted” posters to facilitate their arrests.
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 (FBI), New York Office; and Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division.
Popescu, Romanian nationals Daniel Alexe,1 Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names “George Skyper” and “Tudor Barbu Lautaru,” as well as Albanian national Fabjan Meme, were originally charged in a criminal complaint with six other defendants for their participation in a cyber fraud conspiracy that targeted primarily American consumers on such U.S.-based websites as Cars.com and AutoTrader.com. Their six co-defendants were arrested in a coordinated international takedown on December 5, 2012,2 but Popescu, Alexe, Bosogioiu, Cristea, Razvan, and Meme have remained at large.
As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items – generally priced in the $10,000 to $45,000 range – that did not actually exist. The defendants employed co-conspirators who corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. The defendants allegedly even pretended to sell cars from nonexistent auto dealerships in the United States and created phony websites for these fictitious dealerships. As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States, including Razvan (who previously resided in California), to open American bank accounts. After the “sellers” reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants. The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services. The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.
The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy. Among other things, Popescu coordinated the roles of the various participants in the scheme – he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe. Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe. It is estimated that the defendants earned over $3 million from the fraudulent scheme.
According to the charging documents, Popescu and his close associate Bosogioiu demonstrated that they were aware of the risks of prosecution in the United States. In a recorded conversation on October 23, 2011, Bosogioiu asked about the difference between federal and state law in the United States and vowed to avoid the FBI. Popescu, meanwhile, predicted on July 28, 2011, that “criminals will not be extradited from Romania to U.S.A. . . . [I]t will never happen.”
“Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars. They thought their distance would insulate them from law enforcement scrutiny. They were wrong. By now, Popescu and his band of fugitives have seen their co-conspirators brought here to account for their crimes. Today’s actions place them squarely in the sights of our partners in international law enforcement,” said United States Attorney Lynch. “We will not stop in our efforts to find these fugitives and bring them to justice for the crimes they have allegedly committed against our citizens.”
“As alleged, the defendants infiltrated the cyber marketplace with advertisements for high-value items that didn’t exist. They siphoned funds from victims to fuel their greedy desires and created false identities, fake websites and counterfeit certificates of title in order to make the scheme more convincing. Popescu and his co-conspirators were masters of illusion, but they can’t escape their ultimate reality. With the help of our law enforcement partners at home and abroad, we will bring them to justice,” said FBI Assistant Director-in-Charge Venizelos.
“Today, we have unsealed charges – and issued “wanted” posters and Interpol red notices – for a band of dangerous cybercriminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Raman. “As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system. But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”
The charges in the complaint and the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant U.S. Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Carol Sipperly of the Criminal Division’s Fraud Section.
The offices of the FBI Legal Attachés in Romania, the Czech Republic, the United Kingdom, Canada, and Hungary were instrumental in coordinating efforts with the United States’ international partners, and the U.S. government thanks its partners in Romania, the Czech Republic, Hungary, the United Kingdom, Canada, and Germany for their close cooperation throughout this investigation. The Criminal Division’s Computer Crime and Intellectual Property Section, Office of International Affairs, and Asset Forfeiture and Money Laundering Section, as well as the International Organized Crime Intelligence and Operations Center; the Internet Crime Complaint Center; the Costa Mesa, Calif., Police Department; the Orange County, Calif., District Attorney’s Office; and the New York City Police Department also provided assistance in the investigation.
_____________________________
1 Daniel Alexe may also go by the name “Alexe Daniel.”
2 Three defendants, Cristea Mircea, Ion Pieptea, and Nicolae Simion, were arrested in Romania and extradited to the United States in March 2013. Defendant Emil Butoi was arrested in the United Kingdom and also recently extradited to the United States. The Czech Republic has ordered defendant Aurel Cojocaru’s extradition and defendant Nicolae Ghebosila is still engaged in extradition proceedings in Canada.
Popescu Indictment
Popescu Complaint
Illinois Man Charged with Fraudulent Scheme Involving Impersonation of Canadian Government OfficialsRead the Press Release
BROOKLYN, NY – Howard Leventhal, 56, was arrested this morning for defrauding a Florida company of $800,000 and attempting to defraud an undercover law enforcement agent in Brooklyn of more than $2.5 million, by falsely claiming that his company, Neovision USA, Inc. (“Neovision”), had a lucrative contract with Canada’s Department of Health (“Health Canada”). The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled this afternoon before United States Magistrate Judge Michael T. Mason, at the Everett McKinley Dirksen United States Courthouse in Chicago, Illinois.
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).
According to the complaint unsealed this morning in Brooklyn federal court, in May 2012, Leventhal entered into a factoring agreement with Paragon Financial Group, Inc. (“Paragon”), a Florida company, whereby Paragon would advance Neovision $800,000 in exchange for Paragon’s right to collect a larger sum of money purportedly owed to Neovision by Health Canada. Health Canada’s indebtedness to Neovision was purportedly based on an agreement between Neovision and 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 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.
Contrary to Leventhal’s representations to Paragon, (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. Believing his misrepresentations, Paragon advanced Leventhal $800,000. To date, Paragon has neither received a payment from Health Canada nor received a refund from Leventhal.
As alleged in the complaint, Leventhal also attempted to defraud a potential investor, who in reality was an undercover law enforcement agent posing as a high net worth individual, in Brooklyn, New York, of more than $2.5 million. In recorded conversations, Leventhal falsely represented that his company had a series of contracts with Health Canada for Heltheo’s McCoy Home Health Tablet and that his company had more than $18 million in sales for 2012. Leventhal emailed the undercover agent the same fraudulent agreement he used to deceive Paragon. To further induce the undercover agent to invest in his company, Leventhal sent him six months of phony Bank of America statements for Neovision that falsely showed more than $10 million in payments from Health Canada to Neovision from March 2013 through July 2013. Neovision’s actual bank statements for the same account and time period do not show any payments from Health Canada.
“As alleged, Leventhal claimed to have lucrative connections within the Canadian government and cutting edge technology that could help save lives. In reality, his scheme was pure science fiction, complete with phony documents and a fictional medical device. As part of his alternate reality, Leventhal impersonated Canadian government officials by creating phony government contracts, telephone numbers, and email addresses. Investors thought they were advancing scientific technology; instead they were merely financing Leventhal’s fraudulent scheme. Leventhal’s scheme was foiled due to the swift and effective actions of law enforcement both here and in Canada,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the Royal Canadian Mounted Police (RCMP) and Health Canada for their significant cooperation and assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged in the complaint, Leventhal concocted a scheme to defraud potential investors of their money based upon misrepresentations, forgeries, and lies. After stealing money from Paragon, Leventhal aggressively pursued his next victim-investor who, unbeknownst to him, was an undercover law enforcement agent. The FBI will use all investigative resources at its disposal to combat cases of fraud and will continue to work with its law enforcement partners to ensure that individuals who line their pockets by defrauding investors are brought to justice.”
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Winston M. Paes.
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
HOWARD LEVENTHAL
Age: 56
Long Grove, Illinois_____________________________
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.
Long Island Man Arrested for Attempting to Join Al-Qaeda in the Arabian Peninsula, Conspiring to Commit Murder OverseasRead the Press Release
A five-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Marcos Alonso Zea, also known as “Ali Zea,” an American citizen and resident of Brentwood, New York, with conspiracy to commit murder in a foreign country, attempting to provide material support to terrorists, attempting to provide material support to al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (AQAP/AAS), and obstruction and attempted obstruction of justice.1 Zea was arrested earlier this morning at his home on Long Island and is scheduled to be arraigned later today before United States Magistrate Judge Arlene Lindsay at the federal courthouse in Central Islip, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General, National Security Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
As set forth in the indictment and other court filings, beginning in the fall of 2011, Zea conspired with others to travel overseas in order to wage violent jihad on the perceived enemies of Islam, which included the secular government in Yemen. In furtherance of the conspiracy, on January 4, 2012, Zea flew from John F. Kennedy Airport (JFK) in Queens, New York, to London, England, en route to Yemen in an attempt to join and fight alongside members of AQAP/AAS, a designated Foreign Terrorist Organization that has claimed responsibility for several terrorist attacks against the United States, including the attempted Christmas Day 2009 bombing of a Detroit-bound passenger plane.
As set forth in the indictment and other court filings, Zea was intercepted by customs officials in the United Kingdom (UK) in transit to Yemen and returned to the United States. Despite being prevented from traveling to Yemen, Zea continued his participation in the terrorist conspiracy. Specifically, Zea encouraged and supported his co-conspirator, Justin Kaliebe, who also was plotting to travel to Yemen to fight jihad. In August 2012, in a covertly recorded conversation between Zea and Kaliebe, Zea bragged about his lies to UK authorities when he was detained, instructed Kaliebe regarding methods to evade electronic surveillance by law enforcement authorities, and discussed Kaliebe’s plans to fight jihad. On January 21, 2013, Kaliebe attempted to travel from New York to Yemen for the purpose of joining AQAP/AAS, but was arrested at JFK by members of the FBI’s Joint Terrorism Task Force (JTTF) and the NYPD’s Intelligence Division.2 Several days before Kaliebe attempted to travel to Yemen to join AQAQ/AAS, Zea gave Kaliebe money to support his trip. During this meeting, which was covertly recorded, Zea stated “I just hope, my story, my, the event that happened to me will help you guys move forward, inspire you.”
In April 2013, after learning that he was under investigation by the JTTF, Zea directed an associate to erase the hard drive on Zea’s home computer, and provided the associate two additional hard drives that Zea had used previously, which he also requested be destroyed. Despite Zea’s efforts to thwart the investigation, the JTTF obtained the hard drives and conducted a forensic examination, which revealed an assortment of violent Islamic extremist materials. For example, the drives contained issues of Inspire magazine, an AQAP/AAS publication that promotes violent jihad, containing articles such as “Which is Better: Martyrdom or Victory?” “Why did I choose al Qaeda?” “What to Expect in Jihad?” and an interview with “Shaykh Abu Hurairah, The Military Commander of al-Qaeda in the Arabian Peninsula.” The electronic media also included a video, disseminated by the propaganda wing of al-Qaeda in Iraq, depicting the detonation of an explosive device on a vehicle carrying western military personnel. In addition, investigators recovered a semi-automatic rifle that Zea had given to an acquaintance shortly before he departed for Yemen.
“Despite being born and raised in the United States, Zea allegedly betrayed his country and attempted to travel to Yemen in order to join a terrorist organization and commit murder,” stated U.S. Attorney Lynch. “When that plan was thwarted, Zea continued to support terrorism by assisting his co-conspirator’s efforts to travel to Yemen to fight violent jihad. When the defendant sensed investigators from the JTTF closing in, he engaged in a desperate effort to cover his tracks by attempting to destroy evidence – a tactic that only confirmed his violent aims. This case clearly demonstrates how the FBI and the NYPD, along with their partners on the JTTF and overseas, work diligently and effectively to counter the efforts of al-Qaeda’s affiliates and their supporters.” Ms. Lynch also expressed her grateful appreciation to the FBI, NYPD, Immigration and Customs Enforcement/Homeland Security Investigations (HSI), the Nassau County Police Department, the Suffolk County Police Department, the New York State Police, and the Port Authority of New York & New Jersey Police Department for their work on the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “Inspired by terrorist propaganda, Mr. Zea allegedly traveled abroad in 2012 in a vain attempt to reach Yemen, join Al-Qaeda in the Arabian Peninsula, and fight violent jihad. When his attempt failed, Zea turned to financing and inspiring another Long Island man’s commitment to global terror. And when Zea learned he was under investigation, he feverishly attempted to destroy the incriminating evidence.”
NYPD Commissioner Kelly stated, “Aspirants with lethal intent who seek terror training abroad are of paramount concern. Fortunately, like Kaliebe before him, Zea was stopped due to the close cooperation between the NYPD and FBI.”
The government’s case is being prosecuted by Assistant United States Attorneys Seth D. DuCharme, John J. Durham, and Michael P. Canty, with assistance provided by Trial Attorney Kelli Andrews of the Counterterrorism Section of the Department of Justice.
The Defendant
MARCOS ALONSO ZEA (a/k/a “Ali Zea”)
Age: 25
Brentwood, New York_____________________________
1 The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
2Kaliebe subsequently pled guilty to one count of attempting to provide material support to terrorists, and one count of attempting to provide material support to AQAP/AAS. Kaliebe is scheduled to be sentenced on December 6, 2013, by United States District Judge Arthur D. Spatt in United States District Court in Central Islip.
Long Island Doctor Convicted of Conspiracy to Distribute Oxycodone and Distribution of OxycodoneRead the Press Release
Today, following three weeks of trial, a jury in federal court in Central Islip, New York, returned a verdict convicting Long Island doctor Leonard I. Stambler of Baldwin Harbor, New York, of conspiracy to distribute oxycodone and distribution of oxycodone, in connection with prescriptions that he provided to patients without a legitimate medical purpose. The defendant faces imprisonment of up to 20 years at sentencing. Sentencing is scheduled for February 14, 2014, before United States District Judge Joseph F. Bianco. After the verdict, the defendant’s bail was revoked, and he was ordered detained pending sentencing
The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York; Thomas V. Dale, Commissioner, Nassau County Police Department; Joseph A. D’Amico, Superintendent, New York State Police; and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York.
At trial, the government’s evidence established that Stambler provided prescriptions for hundreds of oxycodone pills to two of his patients without a legitimate medical purpose and outside the course of a professional medical practice, and also conspired with those patients and assisted them in the sale of pills that he prescribed. On November 21, 2011, investigators with the DEA Task Force observed Stambler driving his patient, Christopher Adams, to a pharmacy in East Rockaway, New York, where Stambler and Adams filled a prescription that Stambler had written in the name of Adams’s girlfriend, Nancy Cook. As investigators watched, Stambler then drove Adams to a nearby location to meet with a third individual where some of the oxycodone pills were exchanged for cash. Investigators stopped Stambler’s vehicle shortly after the drug deal. The government’s evidence also established that on a separate occasion, Stambler drove Cook, who was also Stambler’s patient, to a home in East Rockaway where she sold oxycodone pills to the same individual involved in the November 21, 2011, drug deal. Both Adams and Cook testified at trial about Stambler’s participation in the drug transactions as well as their own destructive addiction to oxycodone.
Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals only for a legitimate medical purpose in the usual course of a doctor’s professional practice. It is a powerful and highly addictive drug, and is increasingly abused because of its potency when crushed into a powder and ingested, leading to a heroin like euphoria.
“Instead of living up to his responsibilities as a trusted physician, Stambler assumed the role of a drug dealer, acting to put hundreds of oxycodone pills onto the streets of Long Island for no valid medical reason, but simply to make money,” stated United States Attorney Lynch. “This conviction should serve as a warning to any physicians engaged in such conduct that in addition to losing his or her license to practice medicine, they will face the prospect of a felony conviction.” Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
Stambler’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, the United States Attorney’s Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the Prescription Drug Initiative has brought over 120 federal and local criminal prosecutions, taken civil enforcement action against a pharmacy, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by Assistant United States Attorney Allen Bode.
The Defendant
Name: LEONARD I. STAMBLER
Age: 62Former President and Fund Administrator of Electrical Union Plead Guilty to EmbezzlementRead the Press Release
Jessie Bell, the former pension fund administrator of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, Local 431 (“Local 431”) Pension Fund (“Pension Fund”) pleaded guilty today at the federal courthouse in Brooklyn, New York, before United States Magistrate Judge Marilyn D. Go to embezzling from the Pension Fund. On May 7, 2013, Frederick Meyers, Bell’s father and the former president of Local 431, also pleaded guilty to embezzling from the Pension Fund.
The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Jonathan Kay, Regional Director for the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration (“DOL-EBSA”), and Cheryl Garcia, Acting Special Agent in Charge, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region (“DOL-OIG”).
During their respective plea allocutions, both defendants admitted that from approximately January 2005 to October 2008, they embezzled $85,000 by using a Pension Fund American Express credit card for their personal expenses, including travel, gasoline, parking, meals and cellular telephone bills, and also used Pension Fund bank checks to pay personal expenses such as parking tickets and parking expenses. In addition, from approximately January 2005 to July 2008, Bell received over $100,000 in compensation from the Pension Fund that was not approved by the Pension Fund Board of Trustees.
“Members of Local 431 entrusted their hard-earned dollars, made by the sweat of their brow, to Bell and her father, relying on them to safeguard those funds until the day they had to put down their tools. Instead of watching over the workers’ future, Bell and her father stole those funds and squandered them on their own daily expenses,” stated United States Attorney Lynch. “Union executives who take pension contributions from hardworking union members to fund their own personal spending sprees will be held accountable.” Ms. Lynch expressed her grateful appreciation to DOL-EBSA Regional Director Kay and DOL-OIG Acting Special Agent in Charge Garcia, whose offices led the government’s investigation.
When sentenced, each defendant faces a maximum of five years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Anthony M. Capozzolo.
The Defendants:
FREDERICK MEYERS
Jersey City, New Jersey
Age: 74JESSIE BELL
Newark, New Jersey
Age: 52Alleged International Terrorist Arraigned Today in Brooklyn Federal Court, Following Extradition from NigeriaRead the Press Release
Lawal Olaniyi Babafemi, a Nigerian citizen charged with providing material support to al-Qaeda in the Arabian Peninsula (“AQAP”), a designated foreign terrorist organization, and using firearms in furtherance of that crime, was arraigned today before United States District Judge John Gleeson at the federal courthouse in Brooklyn, New York. At this initial appearance in court in the United States after his extradition from Nigeria, Babafemi was ordered held without bail.
The charges and arraignment were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for the National Security Division; and George Venizelos, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation.
“As alleged in the indictment, the defendant was a member of a violent terrorist organization bent on doing harm to the United States and its allies. The defendant threw his efforts behind al-Qaeda in the Arabian Peninsula’s media, recruitment, and weapons training campaigns in an effort to strengthen the terrorist group’s grip on the region and extend its reach throughout the world. We will use every tool at our disposal to combat al-Qaeda and other terrorist groups in a manner consistent with our laws,” stated United States Attorney Lynch. Ms. Lynch also expressed her grateful appreciation to the government of Nigeria for its assistance and cooperation in this extradition.
“As alleged, the defendant trained with al-Qaeda, assisted in its propaganda efforts, and actively recruited others to join its demented cause. We will continue to work with our international partners to mitigate the global terrorist threat,” stated FBI Assistant Director-in-Charge Venizelos.
According to court documents and the record of today’s proceeding, between approximately January 2010 and August 2011, the defendant traveled twice from Nigeria to Yemen to meet and train with leaders of AQAP, the Yemen-based branch of al-Qaeda. Babafemi assisted in AQAP’s English-language media operations, which include the publication of the magazine “Inspire.” At the direction of the now-deceased senior AQAP commander Anwar al-Aulaqi, Babafemi was provided by AQAP leadership with the equivalent of almost $9,000 in cash to recruit other English-speakers from Nigeria to join that group. While in Yemen, Babafemi also received weapons training from AQAP.
On February 21, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of conspiracy to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of providing and attempting to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of unlawful use of machineguns, in violation of Title 18, United States Code, Section 924(c); and one count of conspiracy to unlawfully use machineguns, in violation of Title 18, United States Code, Section 924(o). At the request of the United States, the Nigerian government thereafter commenced extradition proceedings against the defendant in July 2013, and he was ordered extradited in September 2013.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
If convicted, the defendant faces up to 15 years in prison on each of the material support charges and up to life on each of the firearms charges.
The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Hilary Jager, with assistance from Trial Attorney William M. Narus of the Justice Department’s Counterterrorism Section and the Justice Department’s Office of International Affairs.
The Defendant:
LAWAL OLANIYI BABAFEMI
Age: 33Eleven Individuals Arrested in A Scheme to Fraudulently Obtain Commercial Driver’s Licenses from the New York State Department of Motor VehiclesRead the Press Release
A complaint was unsealed yesterday in federal court in Brooklyn, New York, charging eleven individuals with conspiracy to commit mail fraud as part of an extensive scheme to enable applicants for New York State commercial driver’s licenses to cheat on required tests. The defendants were arraigned before United States Magistrate Judge Ramon E. Reyes, Jr. at the United States Courthouse in Brooklyn, New York on September 25, 2013 and five defendants were detained.
The charges 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), Douglas Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation-Office of Inspector General (DOT-OIG), and Catherine Leahy Scott, New York State Inspector General (NYS-OIG).
As set forth in the complaint, drivers of certain commercial vehicles, such as large buses and heavy transportation trucks, must possess a New York State commercial driver’s license (CDL), which is issued by the DMV pursuant to the regulations set forth by the United States Department of Transportation. Before obtaining a CDL, all applicants must pass tests covering various subjects related to safely driving large vehicles. The DMV offers CDL exams in a written format containing multiple choice questions, or an audio format comprised of true or false questions. Both versions require applicants to fill out a paper answer sheet.
One cheating method that the defendants allegedly used was to provide applicants with a coded pencil that contained a series of dots and dashes inscribed on the sides of the pencil. These symbols reflected the correct true or false answers to the audio version of the CDL exam. Another cheating method that the defendants allegedly orchestrated enabled applicants to cheat on written CDL tests at various DMV offices in Queens, Long Island and Manhattan. Defendants employed as DMV security guards surreptitiously signaled applicants to leave the DMV offices with their uncompleted tests in hand. Other defendants then met the applicants outside the DMV offices and arranged for another defendant to complete the exams. Applicants then re-entered the DMV with the completed exams and submitted them for grading. The security guards received cash bribes for their role in the scheme.
As alleged in the complaint, the defendants charged each applicant approximately $1,500 to $2,500 for assistance in cheating on the CDL exam. Between April 2013 and September 2013, the defendants enabled over 60 people to fraudulently obtain or attempt to obtain CDLs.
“Today’s arrests demonstrate the Office’s commitment to aggressively prosecute and investigate those who compromise the public safety on our roads,” stated Ms. Lynch. “As alleged in the complaint, with their wide-spread cheating scheme the defendants enabled unqualified drivers to take to our roads and highways behind the wheel of large buses and heavy trucks. In doing so, they jeopardized the safety of other drivers, their passengers and even pedestrians. Together with our law enforcement partners, we will seek to punish those individuals who endanger the public by committing such crimes.” Ms. Lynch expressed her grateful appreciation to the New York State Attorney General’s Office; the New York City Police Department, Internal Affairs Bureau; New York County District Attorney’s Office; and the New York State Department of Motor Vehicles for their cooperation and assistance in the investigation.
“The alleged fraudulent scheme of issuing commercial driver’s licenses’ to unworthy drivers puts all of us at risk,” said HSI New York Special Agent-in-Charge Hayes. “These arrests today make our roads safer but also show the great lengths that people will go to circumvent the process of obtaining a commercial driver’s license by breaking the law.”
“This investigation demonstrates our commitment to ensuring that U.S. DOT’s CDL regulations fulfill their purpose of advancing safety on the roads by requiring that only qualified individuals obtain CDLs,” stated U.S. DOT-OIG Regional Special Agent-in-Charge Shoemaker. “Working with our law enforcement and prosecutorial colleagues, we will continue our vigorous efforts to prevent, detect and prosecute to the fullest extent of the law fraud schemes which adversely affect the public trust throughout New York and elsewhere.”
New York State Inspector General Scott said: “Truck drivers – many of whom are charged with transporting hazardous chemicals – are trained to drive several tons of cargo often through busy streets and highways. Bus drivers take our children to school every day. These are among the serious responsibilities of anyone who acquires a commercial driver’s license. Our investigation uncovered numerous people who paid others thousands of dollars for answers to a test they could not answer without cheating, a scheme which undermined the system designed to ensure the security of our roads and communities. I am very pleased to report today that my office along with our federal partners, the Department of Motor Vehicles and the District Attorney’s Office have shut down this operation, and we will take all steps to ensure that everyone who has gamed the system will be off the road.”
The charges contained in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a maximum sentence of twenty years’ imprisonment. Additionally, if convicted, the defendants may be fined up to $250,000.
The government’s case is being prosecuted by Assistant United States Attorneys Michael Warren and Soumya Dayananda.
The Defendants:
AKMAL NARZIKULOV
Age: 28
Residence: Brooklyn, New YorkFIRDAVS MAMADALIEV
Age: 22
Residence: Brooklyn, New York
DALE HARPER
Age: 48
Residence: Bronx, New YorkJOACHIM PIERRE LOUIS
Age: 32
Residence: Brooklyn, New YorkLATOYA BOURNE
Age: 32
Residence: Brooklyn, New YorkMARIE DANIEL
Age: 47
Residence: Queens Village, New YorkLUC DESMANGLES
Age: 27
Residence: Brooklyn, New YorkBEAYEAH KARMARA
Age: 25
Residence: Staten Island, New YorkJOSE PAYANO
Age: 44
Residence: Brooklyn, New YorkTANAEL DANIEL
Age: 36
Residence: Brooklyn, New YorkINOCENTE RENE GONZALEZ-MARTINEZ
Age: 57
Residence: Bronx, New YorkBrooklyn Man Charged with Conspiracy to Commit Honor Killings in PakistanRead the Press Release
Mohammad Ajmal Choudhry was arraigned earlier today on a superseding indictment charging him with conspiring to commit murder in a foreign county, transmitting threats via interstate communications, and visa fraud. He is next scheduled to appear in court before United States District Judge William F. Kuntz II tomorrow at 11:00 a.m. at the United States Courthouse in Brooklyn, New York.1
The charges 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, Homeland Security Investigations (HSI), New York; and Michael R. Fogarty, Acting Special Agent-in-Charge, New York Field Office, U.S. Department of State’s Diplomatic Security Service.
According to the superseding indictment and other court filings submitted by the government, Choudhry’s daughter, Amina Ajmal, was held against her will in Pakistan for more than three years by relatives at her father’s direction. During that time, Ajmal, a U.S. citizen, was forced into an arranged marriage with a Pakistani national for the purpose of obtaining a U.S. visa for that individual. Ajmal eventually escaped Pakistan and returned to the United States with the assistance of a cousin and U.S. State Department officials. During subsequent recorded telephone calls between Ajmal and Choudhry, the defendant threatened to orchestrate the murder of Ajmal’s cousin if Ajmal, whose whereabouts remained unknown to the defendant, did not return immediately to the family home in Brooklyn. On February 25, 2013, after Ajmal refused to return home, Ajmal’s cousin’s father and sister were shot and killed in Pakistan. According to an eyewitness, Choudhry’s brother was observed standing over the victims, holding a gun and desecrating the bodies. Agents from HSI and the Diplomatic Security Service placed Choudhry under arrest in Brooklyn later that same day.
“As alleged, the defendant viewed his daughter as a commodity to be bartered. When she escaped those holding her overseas and fled to safety in the U.S., the defendant enlisted his confederates to retaliate against those who had helped her to freedom. As a result of his plot, two innocent people were murdered in Pakistan,” stated United States Attorney Lynch. “We are committed to ensuring that people in the United States who export murder abroad will be brought to justice.” Ms. Lynch expressed her grateful appreciation to HSI and the State Department, which have worked closely together to investigate the case, and added that the government’s investigation is ongoing.
“There is nothing less honorable than the murder of innocent people,” said HSI New York Special Agent-in-Charge Hayes. “HSI and our global law enforcement partners work diligently crimes like these and serve justice on the predators who commit them.”
“The Diplomatic Security Service is firmly committed to working with the U.S. Attorney’s Office and Homeland Security Investigations to bring those who commit crimes to justice,” said Gregory B. Starr, Principal Deputy Assistant Secretary and Director, U.S. Department of State’s Diplomatic Security Service. “The Diplomatic Security Service’s strong relationship with our law enforcement partners continues to be essential in the pursuit of justice.”
The government’s case is being prosecuted by Assistant United States Attorneys Amanda Hector, Richard M. Tucker and Margaret E. Gandy.
The Defendant
MOHAMMAD AJMAL CHOUDHRY
Age: 60_____________________________
1 The charges contained in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Pound Ridge Man Sentenced to Eleven Years for Luring Young Foreign Women to His Home for Sex CrimesRead the Press Release
Earlier today, Joseph Yannai, author of The International Who’s Who of Cooks (2004-2005), was sentenced to a term of imprisonment of 11 years following his conviction after trial for enticing women to travel to the United States from abroad so that he could commit sex crimes against them, forced labor, and several immigration crimes. The proceeding was held before Senior United States District Judge Edward R. Korman at the United States Courthouse in Brooklyn, New York.
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 (ICE), Homeland Security Investigations (HSI), New York, and Janet DiFiore, Westchester County District Attorney. The case was jointly investigated with the New York State Police Department and Pound Ridge Police Department.
The government’s evidence at trial established that between January 2003 and March 2009, Yannai searched au pair websites for young women from around the world to recruit to work in his home, which he shared with his wife. Yannai told the women that the work involved domestic services and clerical assistance. Yannai, however, used deception and fraud in recruiting the victims, even posing as two different women, “Joanna” and “Sylvia,” who had supposedly worked for Yannai before and who extolled Yannai’s virtues in email exchanges with the victims. In these fake emails, which were intended to allay the victims’ reservations about working for the defendant, “Joanna” and “Sylvia,” among other things, reassured the victims that Yannai had no intention of having sex with them.
As the evidence at trial showed, however, once the victims, five of whom testified at trial, arrived at Yannai’s Pound Ridge home, he subjected them to near-constant sexual abuse, which included groping the victims’ breasts and buttocks, digitally penetrating them, and attempting to force them to perform oral sex on him. Yannai sought to ensure the victims’ compliance with his increasingly more sexually abusive demands through fear, isolation, psychological coercion, and other means. Some of the victims were able to escape shortly after they arrived; others could not escape for months. Yannai was arrested after one of the victims escaped and went to a local police precinct. In addition to the five victims who testified at trial, the government’s investigation revealed that Yannai had victimized six other women, and, during the course of his scheme, had attempted to contact approximately 1,500 women worldwide.
“Yannai used the Internet to lure young women from around the world into his home to sexually abuse them, even using alter egos to manipulate them into coming to the U.S. Once they were in this country, alone and without friends and family, he exploited their fears to keep them trapped in his home. Yannai’s other personas were no help to him today, as he stands revealed for what he is, a predator who used and abused defenseless young women. Today the defendant has been held to account for his victimization of numerous women throughout the world,” stated United States Attorney Lynch. “This office will continue to aggressively investigate and prosecute these crimes to the full extent of the law.”
“Today’s sentencing begins the healing process for these victims that were so unjustly targeted for sex crimes and forced labor through fraud and false promises,” said HSI Special Agent-in-Charge Hayes. “The sentencing of this man is a stern warning to individuals who target innocent women for sexual abuse: You will be found and brought to justice.”
Westchester County District Attorney DiFiore stated, “This defendant used the Internet to engage in a long running coercive campaign to lure numerous young European and South American women for a purported job as a personal assistant. In reality, he was like the proverbial fox entering the chicken coop where he controlled, psychologically manipulated and sexually abused these women, leaving them trapped and victimized.”
The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector and Hilary Jager, and Special Assistant United States Attorney Audrey Stone, Second Deputy District Attorney and Chief of the Special Prosecutions Division, Westchester County District Attorney’s Office.
The Defendant
JOSEPH YANNAI
Age: 66Long-time Colombo Crime Family Associate Sentenced to 14 Years’ ImprisonmentRead the Press Release
Earlier today, Francis “BF” Guerra, a long-time associate of the Colombo organized crime family of La Cosa Nostra (the “Colombo crime family”), was sentenced to 14 years’ imprisonment for his role in a scheme to fraudulently obtain and distribute prescription drugs. The sentence was imposed by the Honorable Sandra L. Townes, United States District Judge for the Eastern District of New York, at the United States Courthouse in Brooklyn, New York.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George C. Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.
Today’s proceeding marks the culmination of a lengthy investigation and prosecution by the U.S. Attorney’s Office and the FBI. Following a jury trial conducted in June and July of 2011, Guerra was convicted of one count of conspiracy to distribute oxycodone and Oxycontin, and one count of actually distributing those drugs, in 2010 and 2011. In addition, he was convicted of four counts of wire fraud based on his fraudulently obtaining reimbursement for those drugs from his insurance provider.
During the sentencing proceeding, United States District Judge Sandra L. Townes found that, in addition to the crimes of conviction, the government proved by a preponderance of the evidence that the defendant had committed numerous additional crimes, including the 1992 murder of Michael Devine and the 1993 murder of Joseph Scopo. Devine was murdered because he had a relationship with the wife of Alphonse Persico, then the acting boss of the Colombo crime family and son of the official boss, Carmine Persico, Jr. Scopo was murdered because he was the underboss of a faction of the Colombo crime family that sought to take control from the Persicos. By murdering Scopo, Guerra and his co-conspirators won the “Colombo family war” -- one of the most violent feuds in mafia history -- for the Persico faction.
“Years ago, the defendant Guerra chose a life of crime, with murder as his criminal stock in trade. Organized crime has always been about money rather than honor, and recent years saw Guerra move into the equally deadly business of illegal trafficking in prescription drugs,” stated United States Attorney Lynch. “This sentence is a harsh warning to anyone considering introducing these addictive, deadly drugs into our community. This sentence also sends an important message to members and associates of organized crime. We will never stop investigating and prosecuting the murders and other violent crimes they commit, no matter how long ago they occurred, and we will hold those who commit such crimes accountable, regardless of how long they have avoided justice.” Ms. Lynch extended her grateful appreciation to the FBI and the New York City Police Department for their assistance.
FBI Assistant Director-in-Charge Venizelos stated, “The illegal traffic in prescription drugs poses as grave a danger to society as trafficking in illicit drugs. Today’s sentence reflects the seriousness of the offense. The sentence also closes a chapter in the bloody Colombo war from 20 years ago. Responsibility for two murders has been laid at the feet of this defendant. There is no statute of limitations on the resolve of the FBI to see justice done.”
The government’s case was prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Allon Lifshitz.
The Defendant:
FRANCIS GUERRA
Age: 47Staten Island Man Sentenced to 13 Years in Prison for Making False Statements in A Matter Involving International TerrorismRead the Press Release
Abdel Hameed Shehadeh, a United States citizen and resident of Staten Island, New York, was sentenced to 13 years in prison today in federal court in Brooklyn, New York. In March 2013, Shehadah was convicted at trial of making false statements in a matter involving international terrorism. In addition to the prison term, Shehadeh was sentenced to 3 years of supervised release.
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 (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
According to court filings and the evidence introduced at trial, in early 2008, Shehadeh devised a plan to travel to the Federally Administered Tribal Areas of Pakistan in order to join al Qaeda or the Taliban. In furtherance of his plan, on June 13, 2008, Shehadeh flew on a one-way airline ticket from John F. Kennedy International Airport to Islamabad, Pakistan. After he was denied entry by Pakistani officials, Shehadeh told investigators from the FBI’s Joint Terrorism Task Force (“JTTF”) that he had traveled to Pakistan in order to visit a university. However, as established by the evidence at trial, the true purpose of Shehadeh’s trip was to wage violent jihad against United States military forces.
Several weeks after he was denied entry to Pakistan, Shehadeh attempted to enlist in the United States Army at the Times Square recruiting station in Manhattan. Shehadeh’s application was denied when it was discovered that he had concealed his prior trip to Pakistan. Though Shehadeh claimed that he had tried to enlist for career opportunities and benefits, as established at trial, his true motive was to commit treason by defecting and fighting alongside insurgent forces overseas.
Over the next several months, in subsequent interviews with members of the JTTF, Shehadah continued to conceal the true purpose of his travel. However, in 2010, Shehadah confessed to FBI agents that he had sought to join a jihadist fighting group. Shehadah was arrested in Honolulu, Hawaii, in October 2010.
“Shehadah was ardently committed to becoming a terrorist and waging violent jihad. He repeatedly attempted to travel overseas to turn against his native country, going so far as to try to join the U.S. military in a treasonous ruse,” stated United States Attorney Lynch. “Due to the tireless work of the FBI and the NYPD, the defendant’s jihadist efforts were detected and foiled. Now, he will spend 13 years in a federal prison.” United States Attorney Lynch thanked the FBI’s New York and Honolulu Field Offices, as well as the New York City Police Department, for their substantial contributions to the multi-year investigation that led to the defendant’s arrest and conviction.
The sentence was imposed by United States District Judge Eric N. Vitaliano.
The government’s case was prosecuted by Assistant United States Attorneys Alexander Solomon, David Sarratt and James Loonam, with the assistance of Trial Attorney Mara Kohn of the Counterterrorism Section of the Department of Justice.
The Defendant
Abdel Hameed Shehadeh
Age: 23
Staten Island, New YorkNew York Methodist Hospital Agrees to Implement Compliance Program, to Settle Civil Claims Under the Controlled Substances ActRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the filing and settlement of a civil action by the United States against New York Methodist Hospital (“NY Methodist”). Under a Consent Judgment, NY Methodist has agreed to implement measures designed to prevent the issuance of NY Methodist prescriptions in violation of the Controlled Substances Act and paid a civil penalty in the amount of $70,000.
In the civil action, the United States alleges that between May 2008 and July 2010, medical residents employed by NY Methodist issued a total of 194 prescriptions for Adderall without a legitimate medical purpose. The medical residents employed by NY Methodist issued the prescriptions on prescription forms bearing the name of NY Methodist. The residents, acting with other individuals, then filled the prescriptions at local pharmacies. The residents themselves consumed some of the Adderall obtained by filling the prescriptions. The remainder of the Adderall was sold, either on Craigslist or in hand to hand transactions. In 2012, in a related criminal prosecution in this district, a former NY Methodist medical resident was convicted for conspiracy to distribute and possess with intent to distribute Adderall.
Adderall, a stimulant that contains amphetamine salts, is classified as a Schedule II controlled substance, because it has a high potential for abuse and, when abused, may lead to severe psychological or physical dependence. Adderall abuse has become a growing problem, particularly among high school and college students. According to figures compiled by the Substance Abuse and Mental Health Services Administration, emergency room visits involving Adderall and similar stimulants nearly tripled from 2005 to 2010. Abuse of Adderall can lead to heart attack, stroke, seizures, hallucinations and paranoia, among other things.
Under the Consent Judgment, NY Methodist will establish a computer database that will contain information concerning each prescription written on NY Methodist prescription paper. This database will make it easier to identify any NY Methodist prescriptions that are issued in violation of the Controlled Substances Act. NY Methodist will also implement a compliance program designed to ensure that NY Methodist complies with the requirements of the Controlled Substances Act regarding the issuance of prescriptions and the prevention of theft and loss of controlled substances and blank prescription forms. In settling the action, NY Methodist did not admit wrongdoing.
“This settlement serves as a wake-up call to hospitals, especially hospitals that employ medical residents,” said United States Attorney Lynch. “Federal law requires that hospitals ensure that their residents and other medical personnel follow all requirements of the Controlled Substances Act, including the requirement that a prescription for a controlled substance such as Adderall be issued only for a legitimate medical purpose. New York Methodist Hospital failed to live up to its obligations and is being held accountable for its conduct. This settlement also serves as a reminder to the community as a whole of the destructive effects of the abuse of Adderall and of the need to make sure that Adderall is used only when there is a legitimate medical need for it, and only under the supervision of a physician.” United States Attorney Lynch thanked the Drug Enforcement Administration’s New York City Tactical Diversion Squad for its assistance. The Tactical Diversion Squad comprises agents and officers from the Drug Enforcement Administration, The New York City Police Department, Town of Orangetown Police Department and Westchester County Police Department.
In January 2012, the United States Attorney’s Office for the Eastern District of New York and the Drug Enforcement Administration, in conjunction with the five district attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department and New York State Police, along with other key federal, state and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Prescription Drug Initiative has brought over 120 federal and local criminal prosecutions, taken civil enforcement actions against a pharmacy and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The United States’ case was handled by Assistant United States Attorney Elliot M. Schachner.
New Arrest: Rhamaad Spann, 30, of Brentwood Arrested Yesterday Evening. Attached Indictment Alleges Spann as Shooter in Murder of Innocent Home Owner Killed During A Home Invasion in December, 2009 in Bohemia, NY.Read the Press Release
New Arrest: Rhamaad Spann, 30, Of Brentwood Arrested Yesterday Evening. Attached Indictment Alleges Spann As Shooter In Murder Of Innocent Home Owner Killed During A Home Invasion In December, 2009 In Bohemia, NY.
Federal Grand Jury in Brooklyn Hands Down Indictment in Maralit Gun Trafficking CaseRead the Press Release
Federal Grand Jury In Brooklyn Hands Down Indictment In Maralit Gun Trafficking Case
Angel Cortez-Granados, Member of the Granados-Hernandez Sex Trafficking Organization, Sentenced to 15 Years in PrisonRead the Press Release
Earlier today, Angel Cortez-Granados was sentenced in federal court in Brooklyn, New York, to 15 years’ imprisonment, to be followed by five years of supervised release, for the sex trafficking of two victims. In addition, the defendant was ordered to pay $145,815 in restitution to the two victims. On September 20, 2011, Homeland Security Investigations arrested Cortez-Granados as part of an ongoing investigation into the Granados Sex Trafficking organization. The investigation has resulted in the successful prosecution of five Granados family members including Cortez-Granados’s cousins, Eleuterio Granados-Hernandez and Samuel Granados-Hernandez.
The sentence was 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. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York. The sentence was imposed by United States District Judge Sandra L. Townes.
“Angel Cortez-Granados ruthlessly exploited his victims, using threats of violence to force them into a form of sexual slavery. The significant sentence imposed today is an important step in restoring dignity to the defendant’s victims,” stated United States Attorney Lynch. “This sentence reflects our ongoing commitment to eradicate the sex trafficking of young girls.” Ms. Lynch thanked the HSI agents who investigated the case and extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families, Polaris Project, and the law firms of Cleary, Gottlieb, Steen & Hamilton LLP and Steptoe & Johnson LLP.
On March 2, 2012, Cortez-Granados pled guilty to engaging in sex trafficking between April 2011 and August 2011, by smuggling an individual identified in court filings as Jane Doe 1 from Mexico illegally into the United States and forcing her to engage in prostitution.
According to court filings, Cortez-Granados smuggled 21-year-old Jane Doe 1 and another individual identified as 21-year-old Jane Doe 2 from Mexico into the United States for the purpose of trafficking them as prostitutes. When Jane Doe 1 refused to engage in commercial sex acts, Cortez-Granados placed a knife to her throat and threatened that she would never see her children again. Ultimately, Cortez-Granados forced both Jane Doe 1 and Jane Doe 2 to work as prostitutes and provide all of their earnings to him. Jane Doe 1 worked for the defendant in the New York area, Massachusetts, Maryland, Virginia, and North Carolina from 2006 to 2011, and Jane Doe 2 worked for the defendant in North Carolina from April 2010 until September 2011.
At the sentencing proceeding, Jane Doe 2 stated that Cortez-Granados “forced me to prostitute to myself to 100 clients per week to reach a quota of $1,500 dollars.” Jane Doe 2 stated throughout her time with Cortez-Granados, she “felt like a prisoner.” Finally, Jane Doe 2 asked the Court for “justice to be done for myself and my family.”
As set forth in court filings, Cortez-Granados’s cousins, Eleuterio Granados-Hernandez and Samuel Granados-Hernandez, also smuggled young women from Mexico illegally into the United States, forced them to work as prostitutes in New York City and elsewhere, and collected profits from their activities. Both have pleaded guilty to sex trafficking in a separate case, and each faces a mandatory minimum sentence of 15 years in prison.
The government’s case was prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendant
ANGEL CORTEZ-GRANADOS
Age: 26
MexicoE.D.N.Y. Docket No. CR-11-657 (SLT)
MS-13 Members Plead Guilty to Racketeering, Murder Conspiracy, Assault and Witness Tampering ChargesRead the Press Release
In federal court in Brooklyn, New York, Abraham Iraheta, a member of the Flushing, Queens, chapter of the violent international gang La Mara Salvatrucha, also known as “MS-13,” pleaded guilty on Monday to racketeering and murder conspiracy charges. Jose Barrera, a member of the same MS-13 chapter, pleaded guilty earlier today to assault with a dangerous weapon. When sentenced, Iraheta and Barrera each face up to 20 years’ imprisonment. On Tuesday, Jose Celestino Guillen-Rivas, a member of a Fairfax County, Virginia, chapter of MS-13, pleaded guilty to conspiracy to tampering with a witness, and faces a sentence of up to life imprisonment. The defendants entered their pleas before United States District Judge William F. Kuntz at the federal courthouse in Brooklyn.
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 Field Office; and Edmund Hartnett, Commissioner, City of Yonkers Police Department.
“This Office will match MS-13’s dedication to violence with our own unwavering commitment to justice. We have now convicted over 200 MS-13 soldiers and leaders in the Eastern District of New York, and we will work tirelessly until this violent gang is eradicated from the district and elsewhere,” stated United States Attorney Lynch. “This week’s convictions are another important step toward ending the gang’s influence in our communities and bringing a measure of justice to the victims and their families.” Ms. Lynch expressed her grateful appreciation to HSI and the City of Yonkers Police Department for their assistance in the investigation and prosecutions.
According to the indictment and other court filings, Iraheta, known in the gang as “Lobo,” was a member of a chapter of the gang that committed a series of violent crimes, including murder, murder conspiracy and attempted murder, in Flushing, Queens, and elsewhere. Among other crimes, Iraheta was charged with attacking the father of a rival gang member with a machete. As part of his plea, Iraheta admitted to being a member of MS-13, conspiring to kill members of a rival gang, and plotting to kill a disfavored associate of the gang. As part of his plea, Barrera, known in the gang as “Travieso,” admitted to the violent stabbing of a young associate of rival gang.
Guillen-Rivas, known in the gang as “Pirata,” pled guilty to conspiring with members of the Flushing chapter to tamper with a witness for the government in the Virginia homicide trial of an MS-13 member by using violence in order to prevent the witness from testifying again.
The defendants were charged along with seven other MS-13 members in an indictment unsealed on January 5, 2012, and are the last to plead guilty. Their convictions are 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 chapters, or “cliques,” the MS-13 is the largest street gang in the Eastern District of New York, with a strong presence in immigrant communities in Queens and 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.
The government’s case is being prosecuted by Assistant United States Attorneys Darren A. LaVerne, Tali Farhadian, and Kevin Trowel.
The Defendants
ABRAHAM IRAHETA, also known as “Lobo”
Age: 22
Queens, New YorkJOSE BARRERA, also known as “Travieso”
Age: 24
Queens, New YorkJOSE CELESTINO GUILLEN-RIVAS, also known as “Pirata”
Age: 33
Fairfax, VirginiaRhino Horn Trafficker Arrested and DetainedRead the Press Release
Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act. The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000.
The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
“The illicit trafficking in black rhino horns encourages the wholesale destruction of these protected animals. Slattery showed no regard for the black rhino’s tenuous hold on survival, as he allegedly used a straw buyer and fraudulent documents to convert the protected animal parts into cash. This arrest is the culmination of the dogged efforts of committed law enforcement agents to track down and root out illegal trafficking in protected wildlife,” said U.S. Attorney Lynch. “The majestic black rhinoceros is protected under the laws of this country and the international community – we stand by our obligations to defend these precious animals.” Ms. Lynch extended her grateful appreciation to the U.S. Fish and Wildlife Service Special Operations and the Department of Homeland Security for their assistance.
According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns. Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin. The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.
According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle. The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving. According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty. The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.
The Defendant
Michael Slattery, Jr.
Citizenship: Irish
Age: 25Malian National Indicted in Brooklyn Federal Court for Murder of U.S. DiplomatRead the Press Release
An indictment was unsealed today in federal court in Brooklyn, New York, charging Alhassane Ould Mohamed, also known as “Cheibani,” a Malian citizen, with the murder and attempted murder of United States Embassy personnel stationed in Niamey, Niger in December 2000. In addition, a reward of $20,000 was announced for information that leads to the defendant’s capture.
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 (FBI), New York Field Office; Lieutenant General Michael T. Flynn, Director of the Defense Intelligence Agency; and Greg Starr, Principal Deputy Assistant Secretary for Diplomatic Security, U.S. Department of State.
According to the indictment, in the early morning hours of December 23, 2000, the defendant and a co-conspirator accosted a group of employees of the United States Embassy in Niger as they left a restaurant in Niamey, Niger. Carrying a pistol and an AK-47 assault rifle, the two men approached Department of Defense official William Bultemeier as he was about to enter his car, a white sport-utility vehicle bearing diplomatic license plates clearly indicating that it belonged to the United States Embassy. The defendant demanded that Mr. Bultemeier turn over the keys to the diplomatic vehicle and used the pistol to shoot Mr. Bultemeier. Staff Sergeant Christopher McNeely, the Marine Detachment Commander for the United States Embassy in Niger at the time, ran to Mr. Bultemeier’s aid. The defendant’s co-conspirator then fired his AK-47 at Mr. Bultemeier and Staff Sergeant McNeely, hitting them both. After rifling through Mr. Bultemeier’s pockets to get the car keys, the defendant and his fellow assailant drove away in the United States Embassy vehicle.
Mr. Bultemeier died of the injuries inflicted by the gunshot wounds. Staff Sergeant McNeely survived the shooting, and later retired from the Marine Corps as a Master Sergeant.
On September 13, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of murdering an internationally protected person, in violation of Title 18, United States Code, Section 1116(a), and one count of attempting to murder an internationally protected person, in violation of Title 18, United States Code, Section 1116(a). The indictment was unsealed earlier today.
“U.S. diplomat William Bultemeier lost his life while representing his country overseas, and U.S. Marine Christopher McNeely was gravely wounded trying to protect him, all during the brazen armed carjacking allegedly perpetrated by the defendant and his confederate. The sacrifice of Mr. Bultemeier and the courage of Staff Sergeant McNeely in service to their country will not be forgotten. The United States will work ceaselessly to bring those who harm our diplomats and military personnel to justice,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the governments of Niger, Mali and Algeria for their substantial assistance and cooperation in connection with this investigation. The FBI and the State Department’s Bureau of Diplomatic Security are currently coordinating with foreign partners to apprehend the defendant.
“As alleged in the indictment, Mr. Bultemeier was representing the United States Government in Niger when he was callously murdered by the defendant. U.S. Marine Staff Sergeant McNeely, who courageously attempted to come to Mr. Bultemeier’s aid, was seriously injured in the ambush. An attack on U.S. Government personnel, whether domestically or abroad, is an attack on the United States. The perpetrator of these crimes should always be looking over his shoulders; it is only a matter of time before he is apprehended. The FBI will continue working with its partners overseas to ensure that the defendant is captured and brought to justice,” stated FBI Assistant Director-in-Charge Venizelos.
Lieutenant General Flynn expressed his deep gratitude for the long and dedicated service of the FBI, Department of Justice, and Department of State personnel involved in the effort to bring Mr. Bultemeier’s alleged murderers to justice.
“The Bureau of Diplomatic Security has been working with our domestic and international law enforcement partners to locate, pursue, and apprehend Mohamed since his prison escape. With agents in more than 270 U.S. diplomatic missions around the world, Diplomatic Security is uniquely positioned for this effort,” stated Principal Deputy Assistant Secretary Starr.
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 Attorney Zainab Ahmad, with assistance from Trial Attorney Jennifer Levy of the Justice Department’s Counterterrorism Section and Trial Attorney Dan Stigall of the Justice Department’s Office of International Affairs.
The Defendant:
ALHASSANE OULD MOHAMED
Age: 42Unseald Indictiment Alhassane Mohamed
Photograph of Victim-William Bultemeier
DOJ/FBI Wanted PosterUS Attorney Lynch Testimony at Moreland Act CommissionRead the Press Release
US Attorney Lynch Testimony at Moreland Act Commission
Staten Island Doctor Sentenced to 151 Months in Prison in Connection with $77 Million Medicare Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Gustave Drivas, M.D., 58, of Staten Island, New York, was sentenced to 151 months in prison for his role as a “no-show” doctor 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 Drivas to three years of supervised release with a concurrent exclusion from employment with any federally funded medical treatment program, ordered him to forfeit $511,000, and ordered him to pay restitution in the amount of $50,943,386. The State of New York revoked Dr. Drivas’s medical license earlier this year.
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).
Drivas was convicted by a jury of health care fraud conspiracy and health care fraud on April 8, 2013, after a seven-week trial. Including Drivas, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.
“Abandoning the mandate to ‘do no harm,’ Dr. Drivas was instead up to no good. Drivas put personal greed before patient care, and was willing to sell his Medicare billing number for cash in his pocket,” stated United States Attorney Lynch. “This Office and the Department of Justice will aggressively investigate and prosecute health care fraud. Corrupt doctors like Dr. Drivas are not above the law and will be held accountable for their crimes.”
According to court documents and the evidence at trial, from 2005 to 2010, Drivas was the medical director or a rendering physician of a clinic in Bath Beach, Brooklyn, that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC, and SZS Medical Care PLLC (Bay Medical clinic). Drivas knowingly authorized his co-conspirators at the clinic to use his Medicare billing number to fraudulently charge Medicare more than $20 million for medical procedures and services that were never performed. In return, he received more than $500,000 for his role in the scheme. The evidence proved that Drivas was a “no show” doctor, who almost never visited the clinic except to pick up his check. The evidence also showed that the 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 and never provided.
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, Drivas’s business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic. Clinic owners 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. Clinic employees 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. Attorneys William P. Campos and Shannon C. 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.
The Defendant:
GUSTAVE DRIVAS, M.D.
Staten Island, New York
Age: 58Chief Executive Officer of ACI Capital Group Pleads GuiltyRead the Press Release
BROOKLYN, NY – Fredrick Douglas Scott, 29, waived indictment and pleaded guilty earlier today to a two-count information which charged him with engaging in a wire fraud conspiracy to steal over $1 million from investors, and lying to officials from the Securities and Exchange Commission (“SEC”) who were conducting a regulatory examination of ACI Capital Group LLC (“ACI”). Scott was the Chief Executive Officer of ACI, an investment advisor registered with the SEC since July 2011. As set forth in court filings, to implement his scheme, Scott lied to potential investors to induce them to wire funds to one of ACI’s bank accounts, which funds Scott then stole. To date, investigators have identified over $1 million in investor losses caused by Scott. Scott faces up to 20 years’ imprisonment on the fraud charge and five years’ imprisonment on the false statement charge. Scott also faces a fine equal to double the investors’ losses, mandatory restitution of $1,338,770 to the victims, and forfeiture of assets.
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.
“Today, Fredrick Douglas Scott admitted that he used ACI Capital to steal his clients’ investments and fund his own lavish lifestyle. Rather than the historic figure he presented to the media, Scott stands revealed as a common thief, who lied his way into his investors’ pockets and then continued his web of lies when confronted by the SEC. Scott has now been brought to justice for lying, cheating and stealing for his own personal financial gain,” stated United States Attorney Lynch. “We remain committed to protecting the public by rooting out fraud in the investment industry. I would like to thank the Securities and Exchange Commission, Division of Enforcement in New York, for its assistance in this case. I would also like to recognize the hard work and dedication of our partners at the FBI for their swift action and effective work on this important investigation.”
According to documents filed in this case, ACI was founded by Scott in 2009, and purported to be an investment banking and advisory firm with an office located at 477 Madison Avenue, New York, New York. ACI registered as an investment advisor with the SEC in July
2011 and, according to its most recent regulatory filing, claimed to manage $3.7 billion in assets. While Scott touted his bona fides as an investor to potential clients, including distributing the May 2010 issue of Ebony magazine, which described him as “the youngest African American hedge fund founder in history,” in reality, Scott used ACI to execute his fraudulent scheme, causing over a million dollars in losses.In connection with his scheme, Scott worked with intermediaries or finders to locate potential victims. Once potential victims were identified, Scott promised those victims a high rate of return for providing short-term financing to businesses purportedly associated with ACI. Once victims wired money to ACI, Scott stole the funds for his personal use. Bank records show that Scott used client funds to finance his personal lifestyle, purchasing personal items at establishments including Louis Vuitton, the Apple Store, Starbucks, Fair Bail Bonds, True Religion Jeans, Tao Restaurant, the Hampton Inn SoHo, and Dizzy's Coca-Cola Club, among others. Bank records also show that Scott wired stolen client funds directly into his personal checking account.
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 government’s case is being prosecuted by Assistant United States Attorney James P. Loonam.
The Defendant:
FREDRICK DOUGLAS SCOTT
Age: 29Statement of United States Attorney Loretta E. Lynch Regarding the Sentencing of Ronell WilsonRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, United States District Judge Nicholas G. Garaufis sentenced Ronell Wilson to death for the murders of two New York City Police Department Detectives, Rodney J. Andrews and James V. Nemorin.
Today’s sentencing followed a five-week evidentiary hearing that culminated on July 24, 2013, with a federal jury verdict unanimously recommending that the court impose the death penalty on Wilson.
“Wilson’s death sentence marks the end of a ten-year odyssey in the relentless pursuit of justice,” stated United States Attorney Loretta E. Lynch. “This sentence follows the recommendation of a jury of Wilson’s peers that justice requires the imposition of the ultimate punishment for the vicious and senseless murder of two husbands, two fathers and two protectors of the City of New York. With this sentence, we can only hope that the families of New York City Police Detectives Andrews and Nemorin will take some comfort in its finality.”
MS-13 Gang Member Convicted of Murdering Mother and Two Year-Old ChildRead the Press Release
Today, following three weeks of trial, a federal jury in Central Islip, New York returned a verdict convicting MS-13 street gang member Adalberto Ariel Guzman, also known as “Gringo,” on federal criminal charges, including murder, conspiracy to commit murder, and firearms offenses, in connection with the execution-style murders of a mother and her two year-old son. The defendant is facing a sentence of life in prison as a result of his conviction. Sentencing is scheduled for January 9, 2014, before United States District Judge Joseph F. Bianco.
The conviction 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.
At trial, the government proved that the defendant Adalberto Ariel Guzman carried out the execution-style murders of Vanessa Argueta, a 19 year-old woman, and Diego Torres, her two year-old son, in Central Islip, New York, on February 5, 2010. 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. The evidence introduced at trial established that Guzman fired the fatal shot to Torres’s head, and after committing the murders, he and two of his co-conspirators fled to El Salvador. Guzman was arrested on May 17, 2010 in Miami, Florida, when he attempted to return to the United States.
Today’s conviction is the third that the government has obtained in connection with the Argueta and Torres murders. Heriberto Martinez, also known as “Boxer,” was convicted in March 2013, following a six-week trial, and Rene Mendez Mejia, also known as “Zorro,” pled guilty to the murders in June 2011.
Guzman’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.
“Guzman and his co-conspirators shot a young mother and her toddler in cold blood. Her crime in their eyes -- showing “disrespect” to their vicious gang. Her child’s -- simply being with her when the defendant and his cronies decided that she could no longer live. Few other acts illustrate so clearly the heartless nature of this criminal enterprise known as MS-13. Guzman will now be held to account for his allegiance to this band of killers,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
The government’s case is being prosecuted by Assistant United States Attorneys John J. Durham and Raymond A. Tierney.
The Defendant:
ADALBERTO ARIEL GUZMAN, also known as “Gringo”
Central Islip, New York
Age: 21East Moriches Man Pleads Guilty to Child Pornography PossessionRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Jay Lockett Sears, a resident of East Moriches, New York, pled guilty before United States District Judge Denis R. Hurley to possessing child pornography.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office; and Edward Webber, Commissioner, Suffolk County Police Department (“SCPD”).
According to court pleadings, Sears created hundreds of images of child pornography by taking photographs of children in public settings, such as beach club parties and other events, and then placing the heads of the children onto images of adult bodies engaged in sexual activity. Some of the images included pictures of Sears’ face pasted onto the bodies of other males so as to appear as if he were having sexual relations with children.
Sears came to the attention of the SCPD Computer Crimes Squad on January 11, 2013, after hundreds of child pornography images were found in a dumpster outside of the defendant’s East Moriches townhouse apartment building. The images had been discarded as Sears prepared to move out of his apartment.
“Sears victimized children by using their innocent faces to create child pornography. He then dragged them further into his aberrant fantasy world by adding his own images to these pictures. Such exploitation of children is one of our most important law enforcement priorities and will not be tolerated,” stated United States Attorney Lynch.
At sentencing on January 17, 2014, Sears faces up to 10 years in prison.
Parents who believe that their children may have been the victims of persons involved in child pornography should contact the Suffolk County Computer Crimes Squad at (631) 852-6279, or the Federal Bureau of Investigation at (631) 501-8600.
The government’s case is being prosecuted by Assistant United States Attorney Allen Bode.
The Defendant
Name: JAY LOCKETT SEARS
Age: 74New York City Police Officer and Customs and Border Protection Officer Arrested for International Arms Trafficking; Brother in Philippines Also ChargedRead the Press Release
Federal agents have arrested REX MARALIT, a New York City Police Officer assigned to police headquarters in Manhattan, and his brother WILFREDO MARALIT, a Customs and Border Protection Officer assigned to Los Angeles International Airport, pursuant to arrest warrants issued in the Eastern District of New York. These two men, along with a third brother, ARIEL MARALIT, are charged with conspiring to violate the Arms Export Control Act by exporting high-powered weapons from the United States to the Philippines without a license from the U.S. State Department, and with conspiring to engage in unlicensed firearms dealing.1 REX MARALIT will make his initial appearance at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York at 11:00 a.m. in courtroom 2A. WILFREDO MARALIT will appear at the United States Courthouse, 411 West Fourth Street, Santa Ana, California at 2:00 p.m. in Room 1053, and is expected to be removed to the Eastern District of New York to face the charges. The government is coordinating with foreign authorities regarding the apprehension of ARIEL MARALIT.
The arrests 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’s (ICE), Homeland Security Investigations (HSI), New York; Craig W. Rupert, Special Agent-in-Charge of the Defense Criminal Investigative Service (DCIS); Joseph Anarumo, Jr., Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), New York Field Division; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
According to the complaint, between January 2009 and March 2013, the defendants engaged in a scheme to smuggle high-powered assault rifles, sniper rifles, pistols and firearm accessories from the United States to the Philippines, where they were sold to overseas customers. ARIEL MARALIT, who resides in the Philippines, identified customers and sought the assistance of his brothers, both American law enforcement officers, to purchase and ship the weapons for resale overseas. In response to customer orders from the Philippines, the defendants located weapons advertised on firearms-brokering websites and made arrangements to purchase the guns through dealers in the United States. They then disassembled the weapons and smuggled them out of the United States in disguised shipments.
According to the complaint, none of the defendants obtained export licenses or federal firearms licenses in connection with the weapons they sold. Instead, they used their knowledge of firearms and their status as law enforcement officers to engage in an illegal international arms trafficking business. On several occasions, the defendants used their law enforcement credentials to obtain discounts on weapons from U.S.-based gun dealers. For example, in an email dated June 21, 2012, REX MARALIT asked a U.S.-based gun dealer whether the dealer had a Special Operations Combat Assault Rifle (“SCAR”) in stock. Upon learning that the dealer had such a weapon available, REX MARALIT requested that the dealer hold the high-powered assault rifle until the following Monday, adding, “One other question do you give discounts to LEO, I am an active PO with the NYPD, please advise.” “LEO” is a common abbreviation for “Law Enforcement Officer,” and “PO” refers to “Police Officer.”
The powerful and dangerous firearms that the defendants illegally exported and sold include the Barrett M82A1 .50 caliber semi-automatic rifle, the SCAR, and the FN Herstal 5.7mm semi-automatic pistol. For example, the Barrett M82A1 .50 caliber semi-automatic rifle is a long-range, weapon capable of penetrating body armor, exterior walls of buildings, and even aircraft. The Barrett rifle is favored by specialized military forces due to its extraordinary power and range. The SCAR is a military rifle designed in 2004 at the request of the United States Special Operations Command for a new family of assault rifles to be used by U.S. Special Forces. The FN Herstal 5.7mm semi-automatic pistol is a high-capacity, battlefield weapon capable of firing a projectile that can penetrate body armor.
The Arms Export Control Act requires exporters of firearms to first obtain the approval of the United States State Department before shipping weapons overseas. The United States Munitions List requires export licenses for firearms such as the military-style assault rifles, sniper rifles, and semi-automatic handguns allegedly exported by the defendants. Similarly, dealing in firearms is regulated by the ATF, which requires gun dealers to first obtain a federal firearms license before engaging in such a business.
“As alleged, rather than upholding and enforcing the law as they had sworn to do, these defendants made international gunrunning a family business. The brothers used their knowledge of the law to circumvent it, and sent dangerous weapons overseas without regard for the ultimate destination or targets,” stated U.S. Attorney Lynch. “Criminal conduct by police officers, federal agents, and their confederates cannot be tolerated and will be met with the full force of the law.” Ms. Lynch expressed her grateful appreciation to HSI, DCIS, ATF and the NYPD’s Internal Affairs Bureau, which worked closely together to investigate the case, and to the U.S. Attorney’s Office for the Central District of California, and the U.S. Attorney’s Office for the District of New Jersey for their assistance.
“The defendants are alleged to have illegally exported some of the world’s most powerful firearms with complete disregard as to who the end user would be,” said James T. Hayes Jr., Special Agent-in-Charge of HSI New York. “HSI and our law enforcement partners both locally and around the globe are committed to upholding the exportation laws of the United States to ensure that these deadly weapons do not end up in the wrong hands.”
Special Agent-in-Charge Rupert stated, “As alleged, the trafficking in weapons from the U.S. to foreign entities in violation of U.S. law is a wholly unacceptable crime, but when committed by trusted civil servants charged with public safety, the crime is even more deplorable. DCIS, the law enforcement arm of the Office of the Inspector General, Department of Defense, is dedicated to preventing the exportation of controlled U.S. military technology and to exposing U.S. public servants who violate their oath and the public trust. The DCIS New York Resident Agency and our partner agencies are commended for their continuing dedication to this pursuit.”
Special Agent-in-Charge Anarumo stated, “The alleged criminal acts carried out by these defendants, including two law enforcement officers, are reprehensible and inexcusable. We must not allow the public trust and confidence in those sworn to protect and serve our communities to be compromised. By allegedly misusing their positions as sworn officers of the law in an ill-conceived scheme to illegally acquire and traffic firearms, now, the sad irony is that the laws once enforced by these defendants will be the very same laws used to prosecute them.”
“The vast majority of police officers do outstanding work to protect New York City and a case like this is disheartening to the entire department,” Commissioner Kelly said. “The experienced personnel assigned to our Internal Affairs Bureau engaged in an in-depth investigation and worked closely with all of the outside agencies involved.”
At sentencing, the defendants face up to 5 years in prison on each charge, forfeiture, and a fine of up to $250,000.
The government’s case is being prosecuted by Assistant United States Attorneys Seth DuCharme and Sam Nitze, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section.
The Defendants:
ARIEL MARALIT
The Philippines
Age: 43REX G. MARALIT
Lawrenceville, New Jersey
Age: 44WILFREDO MARALIT
Garden Grove, California
Age: 48_____________________________
1 The charges contained in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Maralit Charging Documents and Exhibits:
Maralit.Complaint & Affidavit.pdf
Maralit.Detention letter.pdf
Maralit.Exhibits to Detention Letter.pdfBrooklyn Resident Pleads Guilty in Connection with $13 Million Kickback and Health Care Fraud SchemeRead the Press Release
BROOKLYN, NY – Brooklyn resident Gregory Konoplya, 57, pleaded guilty today in federal court in the Eastern District of New York to conspiracy to pay and receive illegal health care kickback payments, in connection with his role in a $13 million health care fraud scheme. Konoplya is the fourth defendant to plead guilty in connection with the scheme, which was based at the Cropsey Medical Care PLLC clinic in Bensonhurst, Brooklyn.
Today’s guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and Thomas O’Donnell, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).
“Gregory Konoplya tried to take taxpayers for a ride with his fraudulent ambulette service,” stated United States Attorney Lynch. “He used illegal cash kickbacks to recruit Medicaid beneficiaries to obtain medical services, including rides in his ambulettes, which the beneficiaries did not need. Konoplya is the latest defendant to be convicted in connection with the government’s ongoing investigation of the Cropsey Medical Care clinic, which submitted more than $13 million in fraudulent claims to Medicare and Medicaid. We will continue to do our part to root out health care fraud to help protect the integrity of Medicare and Medicaid.” U.S. Attorney Lynch extended her grateful appreciation the Federal Bureau of Investigation and the Department of Health and Human Services, Office of Inspector General for their work on the investigation.
Konoplya pleaded guilty before U.S. Magistrate Judge Roanne Mann of the Eastern District of New York. At sentencing, Konoplya faces a maximum penalty of five years in prison, a fine of over $850,000, restitution of up to $429,000 and forfeiture of up to the same amount, $429,000.
According to court documents, from 2009 to 2012, Konoplya, working through an ambulette company in Brooklyn, recruited patients to attend a Brooklyn clinic called Cropsey Medical Care PLLC. An ambulette is a vehicle licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary. Konoplya paid employees of Cropsey Medical a per-beneficiary cash kickback so that Cropsey Medical would accept Konoplya’s beneficiaries as patients and Konoplya’s ambulette company could bill Medicaid for the transportation of beneficiaries to and from Cropsey Medical. Once Konoplya’s beneficiaries were transported to Cropsey Medical, they were paid cash kickbacks to induce them to continue to attend the clinic and receive medically unnecessary physical therapy, diagnostic testing and other services. Such purported medical services were then fraudulently 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, brought as part of the Medicare Fraud Strike Force, and supervised by the Criminal Division’s Fraud Section and the 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. Attorneys Shannon Jones and Ilene Jaroslaw of the Eastern District of New York.
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.
In the Spotlight: Loretta LynchRead the Press Release
In the Spotlight: Loretta Lynch
Nigerian Court Orders Alleged AQAP Operative Extradited to the Us W/I 15 Days to Face Indictment Charging Terrorism OffensesRead the Press Release
Nigerian Court Orders Alleged AQAP Operative Extradited To The Us W/I 15 Days To Face Indictment Charging Terrorism Offenses
Member of Al-Qaeda in the Arabian Peninsula, Al-Qaeda’s Yemeni Affiliate, Indicted in Brooklyn Federal CourtRead the Press Release
An indictment was unsealed today in federal court in Brooklyn, New York, charging a Nigerian citizen with providing material support to a designated foreign terrorist organization, al-Qaeda in the Arabian Peninsula (“AQAP”), and using high-powered firearms in furtherance of that crime. The United States is currently seeking the extradition of the defendant, Lawal Olaniyi Babafemi, also known as “Abdullah” and “Ayatollah Mustapha,” from Nigeria.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General, National Security Division; and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office. United States Attorney Lynch acknowledged the continued cooperation and assistance of the government of Nigeria in terrorism matters affecting both nations.
According to court documents, between approximately January 2010 and August 2011, the defendant traveled twice from Nigeria to Yemen to meet and train with leaders of AQAP, the Yemen-based branch of al-Qaeda. Babafemi assisted in AQAP’s English-language media operations, which include the publication of the magazine “Inspire.” At the direction of the now-deceased senior AQAP commander Anwar al-Aulaqi, Babafemi was provided by AQAP leadership with the equivalent of almost $9,000 in cash to recruit other English-speakers from Nigeria to join that group. While in Yemen, Babafemi also received weapons training from AQAP.
On February 21, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of conspiracy to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of providing and attempting to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of unlawful use of machineguns, in violation of Title 18, United States Code, Section 924(c); and one count of conspiracy to unlawfully use machineguns, in violation of Title 18, United States Code, Section 924(o). At the request of the United States, the Nigerian government thereafter commenced extradition proceedings against the defendant in July 2013.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. The case is assigned to the United States District Judge John Gleeson in the Eastern District of New York.
The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Hilary Jager, with assistance from Trial Attorney William M. Narus of the Justice Department’s Counterterrorism Section and Trial Attorney Timothy Hammer of the Justice Department’s Office of International Affairs.
The Defendants
LAWAL OLANIYI BABAFEMI
Age: 33East Elmhurst Man Pleads Guilty to Hiding $3.2 Million from the Internal Revenue Service in Foreign Bank AccountsRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Mohanbhai Ramchandani, of East Elmhurst, New York, pled guilty to violating the United States Treasury Department’s Foreign Bank and Financial Accounts Report law (FBAR) and filing false tax returns to conceal $3.2 million that he earned from his Manhattan-based tailoring business – Mohan’s Custom Tailors. According to court filings and facts presented during the plea proceeding, Ramchandani admitted the illegal activity and cooperated with Internal Revenue Service (IRS) agents after being confronted with the evidence against him.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.
Ramchandani built a successful business that made millions. Rather than live up to his financial responsibilities, he sought to conceal in foreign banks $3.2 million of income clearly earned in the United States. Ramchandani tried to evade not just lawful tax reporting obligations but also the laws that protect our economy,” stated United States Attorney Lynch. “Ramchandani not only grossly underreported his true income, he completely underestimated the tenacity of the IRS to ‘follow the money’.”
IRS Special Agent-in-Charge Weirauch stated, “Offshore tax enforcement is a major priority for the Internal Revenue Service. Individuals who chose to hide income outside of the United States expose themselves to a variety of criminal charges, including criminal tax and FBAR violations, and severe penalties. As we continue to gain access to more and more information about individuals involved in offshore tax evasion, potential violators can expect us to use all of our enforcement tools to stop this abuse.”
The government’s investigation revealed that Ramchandani operated a lucrative custom tailoring business specializing in the manufacturing of suits and shirts. Customers paid for their purchases with cash, checks and credit cards, including American Express. Ramchandani sent checks that American Express issued to him for payment of his customers’ purchases to the Bank of India in Hong Kong where he held an account. He then transferred those proceeds to an account held at the same bank in his son’s name, as well as to other banks in India and Canada. Between 2007 and 2009, Ramchandani hid $3.2 million in the foreign bank accounts and, in violation of FBAR laws, failed to report that he had money in those accounts. Ramchandani also filed tax returns that failed to include the money that he sent overseas. The tax loss to the IRS for 2007, 2008 and 2009 was $736,002.00.
Today’s guilty plea took place before United States District Judge Joseph F. Bianco. When sentenced, Ramchandani faces up to five years in prison, a penalty of $1.6 million for the FBAR violation and restitution to the IRS of $736,002.00 for unpaid taxes.
The government’s case is being prosecuted by Assistant United States Attorney Demetri M. Jones.
The Defendants
MOHANBHAI RAMCHANDANI
Age: 66Stock Broker Sentenced on Wire Fraud Charges for Executing International Investment Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Hector Gallardo, a registered representative and a holder of Series 7 and 63 licenses issued by the Financial Industry Regulatory Authority, was sentenced to 60 months in prison in connection with his wire fraud conviction. On December 13, 2012, Gallardo pled guilty to wire fraud for stealing investments induced through false promises of exorbitant monthly investment returns. In addition to the prison term, United States District Judge Sandra L. Townes imposed a term of supervised release of three years and fines and forfeiture awards totaling $876,193.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service.
“Hector Gallardo told international investors a tale of safe and lucrative investing through a professional trading corporation. His story was nothing more than a fairy tale, designed to part the investors from their money and to fund his own lavish lifestyle. Ultimately, the truth caught up with Gallardo, and justice has now been served,” stated United States Attorney Lynch. “Protecting investors, foreign and domestic, from fraudulent schemes is a priority of this Office and the Department of Justice. Those who commit these crimes will be aggressively tracked down and prosecuted.”
Between January and October 2007, the defendant, a registered representative employed at the New York office of Orion Trading, LLC, which did business as “Brokerlatino,” solicited investments from two representatives of an investment firm in Bolivia (“the Bolivian investors”) that had collected and bundled funds from at least 350 Bolivian retail investors, each of whom invested sums ranging from approximately $100 to $32,000. Lured by the defendant’s promises of monthly returns between nine and fifteen percent, the Bolivian investors wired approximately $1.15 million to Ventel Enterprises Corporation (“Ventel”), a sham corporation the defendant had falsely described as comprising “professional traders” who bought and sold a wide variety of securities for investors. In the course of the fraud, the defendant returned approximately $250,000 of the Bolivian investors’ investment to fraudulently demonstrate illusory returns on the investment, and to maintain the ruse that the investment was performing well.
In fact, the defendant did not invest any of the Bolivian investors’ money as promised. At most, he invested approximately $190,000 of their money in stocks and bonds through nominee accounts at three brokerages and lost virtually the entire amount – a fact that he did not disclose to the Bolivian investors. As for the remaining approximately $685,000 of the investment, the defendant stole that money and used it to pay his and his family’s expenses, including airline tickets and multiple trips to Atlantic City. The defendant’s scheme fell apart when the Bolivian investors demanded to see the documentation associated with their purported investments with Ventel. In total, the Bolivian investors’ lost approximately $900,000 of their investments with the defendant and Ventel.
After the defendant’s scheme was brought to the attention of the Securities and Exchange Commission, the defendant fled to Venezuela in September 2009. The defendant later re-entered the United States, where he was tracked by law enforcement to his new home in Long Island City, Queens.
The government’s case is being prosecuted by Assistant United States Attorney James G. McGovern.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendants
Name: HECTOR GALLARDO
Age: 40Sandy Winick and Gregory Curry Arrested in Thailand for One of the Largest International Penny Stock Frauds and Advance Fee Schemes in HistoryRead the Press Release
Winick Boasted About His Fake Passports and Ability to Avoid Arrest
BROOKLYN, NY – On Saturday, August 17, 2013, Thai officials working with Federal Bureau of Investigation (FBI) and U.S. Embassy personnel in Bangkok arrested alleged penny stock fraud kingpin Sandy Winick on a provisional arrest warrant in Bangkok, Thailand, to face extradition proceedings to the Eastern District of New York. Earlier today, Thai officials working with FBI and U.S. Embassy personnel in Bangkok arrested Winick’s alleged penny stock fraud co-defendant Gregory Curry on a provisional arrest warrant in Bangkok, Thailand, and he will also face extradition proceedings to the Eastern District of New York. These arrests mark the latest successful chapter in an effort to address fraud in the over the counter securities markets. Previously, on August 13, 2013, the FBI arrested six men in New York, Arizona, New Jersey, Florida and California -- and the Royal Canadian Mounted Police (RCMP), in coordination with the FBI, arrested a seventh man on a provisional arrest warrant in Ontario, Canada -- for engaging in this same international fraud conspiracy that spanned the globe from North America to Europe and Asia. Each arrest resulted from an indictment charging the nine defendants with 24 counts of securities fraud, wire fraud and false personation of Internal Revenue Service (IRS) employees in connection with the sale of securities and conspiracy. 1
The indictment 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, FBI, New York Field Office.
As set forth in court filings, Sandy Winick masterminded securities fraud and advance fee schemes that victimized investors in approximately 35 nations and generated more than $140 million through various brokerage and bank accounts under their control. Gregory Curry aided Winick in the securities fraud and advance fee schemes. To uncover the international aspects of the scheme and gather evidence, the FBI used wiretaps in the United States and undercover agents in foreign countries.
The indictment and arrests are the result of one of the largest international penny stock investigations ever conducted by the Department of Justice and the FBI and mark the unveiling of a multi-year, ongoing investigation, which included significant assistance from the RCMP, as well as from other U.S. law enforcement agencies and law enforcement authorities in England, as well as assistance from Thailand and China.
Defendant Sandy Winick is charged as the lead defendant in two separate but interrelated schemes. According to the indictment, the defendants first engaged in an international ‘pump and dump’ scheme during which they fraudulently ‘pumped up’ the share price of worthless penny stocks and then ‘dumped’ billions of shares of those stocks by unloading them on unsuspecting victim investors across the globe. Winick boasted about the superiority of the charged scheme compared to another more obvious scam, stating: “That deal is obviously a pump and dump. We know enough to be subtle.” Second, the defendants operated boiler rooms in at least four countries that induced investors in penny stocks, including many of the same victims from the ‘pump and dump’ scheme, to pay advance fees that the defendants promised would enable the victim-investors to sell their penny stocks and recover losses that they incurred. In reality, the defendants simply stole the fees without providing any services, fraudulently extracting millions of additional dollars from their victims. Hundreds of victims live in Brooklyn, Queens and Long Island. As for the group’s recent plans to open a call center in Brooklyn, New York, a co-defendant said, “I tell you what man . . . hitting the Americans would be like taking money from a baby.” Sandy Winick also openly boasted in intercepted phone calls about how he maintained fake passports in assumed names and how regulators and law enforcement officials could never reach him in Thailand.
“As alleged in the indictment, the defendants Sandy Winick and Gregory Curry used our securities markets as a platform from which to run elaborate fraudulent schemes to victimize tens of thousands of unsuspecting investors across the globe. They swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to pick their pockets yet again. They thought that they could simply run away from their crimes. Today, with the help of our friends in Thai law enforcement, we once again showed that fraudsters cannot hide from the law,” stated United States Attorney Lynch. “I would like to thank our partners at FBI for their hard work on this important investigation.” Ms. Lynch also thanked the Royal Thai Police. Throughout the course of the investigation, significant assistance was also provided by the United States Embassies in Ottawa, Toronto, London, Bangkok and Beijing.
FBI Assistant Director-in-Charge Venizelos stated, “Sandy Winick and Gregory Curry were wanted for their alleged roles in one of the largest international penny stock frauds and advance fee schemes in history. Their arrests are a significant accomplishment for the FBI as we continue our work in this ongoing investigation. We would like to thank our overseas partners, especially the Royal Thai Police, for their ongoing assistance with this matter.”
Winick has been charged with one count of conspiracy to commit securities fraud, two counts of conspiracy to commit wire fraud, 15 counts of wire fraud, four counts of securities fraud and two counts of false personation of an officer of the United States. Curry has been charged with: one count of conspiracy to commit wire fraud, 5 counts of wire fraud and two counts of false personation of an officer of the United States. If convicted, Winick and Curry will face up to 20 years’ imprisonment for each count of conspiracy to commit wire fraud, substantive wire fraud and substantive securities fraud, and up to five years’ imprisonment for conspiracy to commit securities fraud. Winick and Curry face up to three years in prison for each count of false personation of an officer of the United States. In addition, all proceeds of fraudulent schemes are subject to forfeiture. Now that they have been arrested, Winick and Curry will begin extradition proceedings from Thailand to the United States. For the other defendants, the next court date is scheduled for September 5, 2013, at 12:30 p.m., before the Honorable William F. Kuntz II.
The government’s case is being prosecuted by Assistant United States Attorneys Christopher A. Ott, Sylvia Shweder and Melanie Hendry.
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 Defendants
SANDY WINICK
Citizenship: Canada
Age: 55
Bangbok, ThailandGREGORY CURRY
Citizenship: Canada
Age: 63
Bangbok, Thailand_____________________________
1The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty..
Bostwick Laboratories, Inc. Pays $503,668 to Resolve Civil Fraud Allegations That Its Sales Representatives Used A Clinical Study to Induce Physicians to Utilize Its ServicesRead the Press Release
Bostwick Laboratories, Inc. (“Bostwick”) has entered into a civil settlement agreement in which it agreed to pay the United States $503,668.00 to resolve allegations that the company made illegal payments to induce certain physicians to utilize Bostwick’s laboratory testing services – some of which were not medically necessary under the circumstances.
The settlement was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and Tom O’Donnell, Special Agent-in-Charge of New York’s Office of the Inspector General for the Department of Health and Human Services (HHS).
The government alleges that Bostwick made the illegal payments to physicians to induce them to enroll their patients in a study sponsored by Bostwick called “Determination of the Accuracy of PCA3Plus Urine Assay for the Detection of Prostate Cancer” (the “PCA3Plus Study”). One requirement of the study was that for each patient enrolled, the physicians were obligated to send both the PCA3Plus urine assay for the PCA3Plus Study and prostate biopsy samples – which otherwise could have been sent to any number of laboratories – to Bostwick for analysis. As a result, Bostwick in effect paid those physicians to steer their prostate biopsy analysis business to its laboratories. Bostwick then submitted claims to Medicare and Tricare for reimbursement for both the prostate biopsy test analysis and the PCA3Plus urine assay analysis for each patient enrolled in the PCA3Plus Study, even though the prostate biopsy was the “gold standard” for prostate cancer detection, and the PCA3Plus urine assay was not medically necessary in such situations. In settling this matter, Bostwick is not admitting the government’s allegations.
“Decisions involving medical treatment and testing go to the heart of the doctor patient relationship, and must be based on the needs of each patient and possibility of the advancement of science. They cannot and should not be based on illegal payments from laboratories. Our office is committed to stopping such inducements, and returning patient care to the forefront of the doctors’ decisions,” stated United States Attorney Lynch.
“In order to ensure the best possible treatment for our nation’s Medicare population, it is important that the relationship between labs and physicians be free of any illegal inducements, and we will continue to investigate such allegations,” stated HHS Special Agent-in-Charge O’Donnell.
The investigation that led to the settlement began after Robert Gluck, M.D., an urologist who had been approached by Bostwick regarding participation in the PCA3Plus Study, filed a complaint against the company on behalf of the United States in the Eastern District of New York. Under the federal False Claims Act, a private individual who has uncovered fraud against the federal government may file a suit in federal court on behalf of the United States. If the United States is successful in resolving those claims, the individual who filed the complaint may receive a share of the recovery.
The government’s case was handled by Assistant U.S. Attorneys Scott R. Landau and Paul Kaufman.
49 Members and Associates of an International Ethnic-Albanian Organized Crime Syndicate Convicted of Drug Trafficking CrimesRead the Press Release
Earlier today, Nicholas Masi, the final defendant in this case charging 49 members and associates of an international drug trafficking syndicate led by ethnic Albanians located in the United States, Canada, and Europe (the “syndicate”), pled guilty before U.S. District Judge Dora L. Irizarry at the federal courthouse in Brooklyn to drug trafficking charges contained in a superseding indictment returned on July 11, 2011.
The guilty pleas were 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); James T. Hayes, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.
“This family led business was no ‘Mom and Pop’ organization, but a sophisticated ring of international drug dealers and money launderers. They dealt in narcotics by the thousands of pounds and drug proceeds in the multi-millions, and had no qualms about using violence to protect their ill-gotten gains. For more than a decade their web of narcotics trafficking and violence literally spanned the globe. With the assistance of our law enforcement partners across the country, the United States Attorney’s Office for the Eastern District of New York was able to bring this prolific criminal syndicate to justice,” stated United States Attorney Lynch. “We and our partners in law enforcement are committed to investigating and prosecuting international drug traffickers and seizing the proceeds of their crimes. We remain relentless in this pursuit.” Ms. Lynch expressed her grateful appreciation to the DEA Special Operations Division, DEA Newark Division, DEA Denver Division, DEA Miami Division, DEA Albany District Office, DEA Rome Country Office, the 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 Monmouth County (New Jersey) Prosecutor’s Office, the Westchester District Attorney’s Office and the New York Attorney General’s Office for their assistance.
DEA Special Agent-in-Charge Crowell stated, “This global organization operated from our street corners to the tops of the supply chain in Canada, Mexico, South America, and Netherlands. We estimate the organization was earning at least $15 million per year trafficking cocaine, marijuana, MDMA, and oxycodone. Our investigative partners at the international, state, local, and federal levels are commended for working tirelessly to shut down this violent syndicate.”
“Today, a violent and ruthless criminal organization that operated an extensive drug supply route in multiple countries has been dismantled,” HSI Special Agent-in-Charge Hayes. “The public expects law enforcement to work together in order to keep our communities free from drugs and the violence that comes with it. These convictions help do just that.”
IRS Special Agent-in-Charge Weirauch stated, “These convictions represent an extraordinary accomplishment in the fight against global drug trafficking. International money laundering remains a high priority for IRS-Criminal Investigation and we are proud to stand with our law enforcement partners as we acknowledge this achievement and look ahead to dismantling other international syndicates.”
The syndicate comprised 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.
The four-year investigation revealed that most of the marijuana smuggled from Canada and Mexico was concealed in tractor trailers, typically in hundred pound quantities, with some shipments weighing as much as 1,200 pounds. The marijuana shipments were stored in warehouses and stash locations throughout Brooklyn, Queens, and the Bronx, before distribution. Kilogram quantities of cocaine were obtained from sources in the United States and exported to Albania and other locations in Europe concealed in hidden compartments inside luxury automobiles – ostensibly under the auspices of legitimate car dealerships which were actually controlled by syndicate members. Until the arrests of its members in July 2011, the syndicate was involved in negotiations to obtain hundreds of kilograms of cocaine from sources in South America for transport through the United States to Canada and Europe. The syndicate was also involved in obtaining large shipments of oxycodone, a highly addictive prescription medicine used to treat severe pain, and during the past year distributed thousands of oxycodone pills in New York which had been diverted from pain clinics in Florida.
The government’s investigation further revealed that the syndicate employed the services of a Canadian-based money laundering organization, which was allegedly responsible for laundering more than $15 million of the syndicate’s narcotics proceeds in a single year. Typically, the launderers picked up drug money in New York and transported it to Canadian and Mexican drug suppliers. The syndicate also sent millions of dollars in marijuana sale proceeds to co-conspirators on the West Coast of the United States to purchase cocaine from Mexican drug cartels. The cocaine was then allegedly transported across the border into Canada for distribution, with the proceeds to be used to fund subsequent marijuana purchases.
Several defendants are believed to have committed drug and organized-crime-related violence, including kidnaping and attempted murder. For example, on June 4, 2011, an escalating dispute between syndicate members over the payment of a drug debt led to a shooting outside a Bronx restaurant-bar, and a potential drug-related shooting was narrowly averted in October 2010, when law enforcement agents intercepted a syndicate member with a loaded firearm en route to rob a drug customer who owed him money from a prior drug deal.
During the course of the investigation, federal agents seized more than 1,200 pounds of marijuana, approximately $2 million in suspected drug proceeds, 22 handguns, a military/police-issue assault rifle, and hundreds of rounds of ammunition.
The government’s case is being prosecuted by Assistant United States Attorneys Steven Tiscione, Gina Parlovecchio, Una Dean, and Claire Kedeshian.
The investigation was led by the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, and the U.S. Marshal Service.
The Defendants
GJAVIT THAQI
Age: 42ARIF KURTI
Age: 43GJEVALIN BERISHA
Age: 33GJEVALIN BERISHA
Age: 33KUSHTRIM ABAZAGA
Age: 32CARLOS ALVAREZ
Age: 30KUSHTRIM BLAKU
Age: 33ROBERT BONURA
Age: 34JOSEPH BUX
Age: 36ALEJANDRO CALDERIN
Age: 43JOHN CEKAJ
Age: 43MARTINO CEKAJ
Age: 35GIOVANNI DIFUCCIA
Age: 40ADRIAN DUBIEL
Age: 29BRIAN DUBLYNN
Age: 36ARVY EBRAHIME
Age: 31HECTOR FLORES
Age: 41ANTHONY GATT
Age: 31ANGELO GERMANO
Age: 39JETON GJIDIJA
Age: 35HAMZA HAMIDEH
Age:PERRY IEROPOLLI
Age: 31AL KARAQI
Age: 39LEE KARAQI
Age: 38ROBERT KARAQI
Age: 41HASAN KURTI
Age: 42IBRAHIM KURTI
Age: 40BAJRAM LAJQI
Age: 38SELMAN LAJQI
Age: 41ALESSANDRO LATINO
Age: 37LAURETTA LOKAJ
Age: 42NIKOLA LUKAJ
Age: 41FRANK MAHONEY
Age: 42NICHOLAS MASI
Age: 51DAVID MCLEAN
Age: 47FATMIR MEHMETI
Age: 35FAIK MEHMETI
Age: 38NEFAIL MEHOVIC
Age: 29VALTER MEMIA
Age: 30ALBERTO MERCADO
Age: 43FABIAN MIHAJ
Age: 33MAGDALENA NIKOLLAJ
Age: 40MAL REXHA
Age: 51DARIUS RIVERA
Age: 38ROBERT RUDAJ
Age: 39FADIL SALAJ
Age: 53BRENT SAPERGIA
Age: 50LANCE SCHONER
Age: 29LESTER ZABORSKI
Age: 40AGRON ZENELAJ
Age: 34Chinese National Pleads Guilty to Attempting to Illegally Export Aerospace-Grade Carbon Fiber to ChinaRead the Press Release
Today, at the federal courthouse in Brooklyn, New York, Ming Suan Zhang, a citizen of the People’s Republic of China, pled guilty to violating the International Emergency Economic Powers Act by attempting to export massive quantities of aerospace-grade carbon fiber from the United States to China. According to court filings, Zhang was arrested after trying to acquire a sample of the specialized carbon fiber, a high-tech material used frequently in the military, defense and aerospace industries, which is closely regulated by the United States Department of Commerce to combat nuclear proliferation and terrorism.
The guilty plea 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 (ICE), Homeland Security Investigations (HSI), New York; and Sidney Simon, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office. The plea took place before United States District Judge Nicholas G. Garaufis.
“Zhang crossed the ocean to obtain massive quantities of restricted American technology for the stated purpose of assisting the Chinese military. He was actively working to circumvent laws that protect our national security by preventing specialized technologies from falling into the wrong hands,” stated U.S. Attorney Lynch. “We will use every tool at our disposal to protect our nation against those who would seek to export valuable defense technology from the United States.” Ms. Lynch expressed her grateful appreciation to the DOC and HSI, which worked closely together to investigate the case and bring the defendant to justice, and noted that the government’s investigation is ongoing.
According to court documents and statements in court today, Zhang came to the attention of federal authorities last year after two Taiwanese accomplices attempted to locate large quantities of the specialized carbon fiber via remote Internet contacts. Zhang told an undercover law enforcement agent that he had an urgent need for the carbon fiber in connection with the scheduled test flight of a Chinese fighter plane. Zhang then arranged a meeting in the United States with an undercover agent to take possession of a carbon fiber sample, which was to be shipped to China and analyzed to verify its authenticity. Zhang was placed under arrest after he arrived for the meeting. The scheme was aimed at obtaining thousands of pounds of the high-grade fiber.
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.
Carbon fiber composites of the type allegedly pursued by Zhang and his accomplices are ideally suited to applications where strength, stiffness, lower weight, and outstanding fatigue characteristics are critical requirements. These composites also can be used in applications where high temperature, chemical inertness and high damping are important. The two main applications of carbon fiber are in specialized technology, particularly in the fields of aerospace and nuclear engineering, and in general engineering and transportation. In addition, certain carbon fiber-based composites, such as the material sought by the defendant, are used in military aircraft.
At sentencing on November 15, 2013, Zhang faces up to 20 years in prison and a fine of up to $1,000,000.
The government’s case is being 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 Defendants
MING SUAN ZHANG
Age: 41Two Organized Crime Members Sentenced to 180 Months and 168 Months, Respectively, for Conspiring to Distribute CocaineRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Joseph Sclafani and Neil Lombardo, members of the Gambino organized crime family of La Cosa Nostra, were sentenced to terms of imprisonment of 180 months and 168 months, respectively, following their April 2013 guilty pleas to conspiracy to distribute cocaine in Brooklyn and Staten Island. The sentences were imposed by United States District Court Judge John Gleeson, who also ordered that both defendants serve three years of supervised release upon their release from prison, and forfeit $500,000 in narcotics proceeds.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian R. Crowell, Special Agent-in-Charge of the U.S. Drug Enforcement Administration (DEA).
“Years ago these defendants chose a life of violence and crime, pledging their loyalty to the Gambino crime family. Today’s case shows them still clinging to that choice, despite previous arrests and incarcerations. Once out of prison, both men continued their criminal connections and activities, working to bring cocaine across the country into the streets and neighborhoods of Brooklyn and Staten Island,” stated United States Attorney Lynch. “Today’s sentencings send an important message to both organized crime and drug trafficking enterprises. Both remain high priorities for the Department and this Office, and we will pursue them with all available resources and law enforcement methods -- particularly in the case of violent recidivists like the defendants in this case.” Ms. Lynch extended her grateful appreciation to the DEA, the agency responsible for leading the government’s investigation.
Between 2008 and August 2011, Lombardo and Sclafani conspired to distribute multi-kilogram amounts of cocaine in Brooklyn and Staten Island. Lombardo, who lived in Las Vegas, Nevada, obtained the cocaine from his sources in Mexico and then arranged for it to be transported to Brooklyn. Once the cocaine was in Brooklyn, Lombardo delivered it to Sclafani, who distributed to cocaine dealers throughout Brooklyn and Staten Island. According to government filings, in May 2009, Sclafani was stopped in Kansas en route to Las Vegas in possession of more than $100,000 that he intended to use to pay Lombardo for cocaine, and in April 2011, DEA agents at John F. Kennedy International Airport seized $155,000 in cash that Lombardo possessed as he waited to board a flight back to Las Vegas. In addition, Lombardo and Sclafani were recorded by a cooperating witness explicitly discussing their cocaine business and arranging multi-kilogram transactions. Lombardo and Sclafani agreed as part of their plea agreements with the government that they were responsible for conspiring to distribute between 15 and 50 kilograms of cocaine.
Both Lombardo and Sclafani have storied criminal histories. In addition to a prior felony narcotics trafficking conviction, in 1999, Lombardo was convicted of attempted murder in New Jersey State court and witness tampering in the United States District Court for the Southern District of New York after he shot the brother of an individual who he believed was cooperating with law enforcement against him. He was sentenced to 10 years’ imprisonment. In addition to felony racketeering and narcotics trafficking convictions, in 1990, Sclafani was convicted of criminal possession of a weapon and harboring the fugitive Gus Farace, who was wanted by authorities for the February 1989 murder of DEA Special Agent Everett Hatcher on Staten Island. Specifically, in November 1989, in an effort to protect Farace, Sclafani returned fired at assailants who shot at and killed Farace. Sclafani was sentenced to six years’ imprisonment.
Both Lombardo and Sclafani are inducted members -- “made men” -- in the Gambino crime family, a sign of their lifelong commitment to organized crime and the crime family’s recognition of their capacity for committing violent and lucrative crimes.
Eight other members of the conspiracy that Lombardo and Sclafani headed up have pled guilty to cocaine conspiracy charges, including Staten Island resident Afrim Kupa and his brother Lulzim Kupa. On August 9, 2013, Lulzim Kupa, who has prior convictions for narcotics trafficking, racketeering, bank larceny, and bank fraud, was sentenced to 132 months’ imprisonment for his role in the conspiracy. Afrim Kupa, who also has prior convictions for narcotics trafficking, racketeering, bank larceny and bank fraud, is awaiting sentencing.
The government’s case is being prosecuted by Assistant United States Attorneys Allon Lifshitz and Robert T. Polemeni.
The Defendants
JOSEPH SCLAFANI, also known as “Joe Boy”
Age: 47NEIL LOMBARDO
Age: 57David H. Brooks, Founder and Former Chief Executive Officer of DHB Industries, Inc., Sentenced to 17 Years in Prison for Insider Trading, Fraud, Lying to Auditors and Obstruction of JusticeRead the Press Release
Earlier today, in Central Islip, New York, the former Chief Executive Officer of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies was sentenced to 17 years in prison for his leadership role in a $200 million fraud and obstruction of justice case, to be followed by five years of supervised release. DHB Industries, Inc. founder David H. Brooks, who was convicted in September 2010 on 14 counts of conspiracy, mail and wire fraud, securities fraud, obstruction of justice, and lying to auditors and subsequently pleaded guilty to conspiracy to defraud the IRS and filing false income tax returns, was also ordered to pay a fine of $8.7 million, and to forfeit approximately $65 million in illegally-gained profits to the United States. The court will determine the amount Brooks must pay in restitution to the victims of his fraud scheme within 90 days. The sentence was imposed by United States District Judge Joanna Seybert.
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 Richard Weber, Chief, Criminal Investigation, Internal Revenue Service (IRS).
“DHB Industries made body armor that protected the men and women of the U.S. military, who risk their lives to keep us safe. To David Brooks, it was merely a vehicle for plunder and a means to feed his own greed. Brooks fancied himself a master of the sport of kings. In reality, he was a selfish man who looted his company, defrauded his investors, lied to the SEC and the investing public, and sought to profit through insider trading right before the collapse of his house of cards. And he demonstrated time and time again that he believes he is above the law. Today, David Brooks learned otherwise,” stated United States Attorney Lynch. “Thanks to the hard work and dedication of law enforcement, the investing public can rest easier knowing that for the next 17 years, Brooks will not be able to lie, cheat and steal from anyone else.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case.
FBI Assistant Director-in-Charge Venizelos stated, “David Brooks repeatedly stole from his company, stole from investors, lied to auditors and regulators, and traded on inside information. He did all this to finance an obscenely lavish lifestyle paid for by his victims. Today’s sentencing is the justice the government has been seeking.”
“Tax fraud was integral to sustaining Brooks’s securities fraud schemes and fueling his lust for money,” stated IRS Chief, Criminal Investigation Weber. “Brooks falsified his income tax returns in order to prevent law enforcement from discovering that he was looting DHB. IRS-CI will turn over every stone to find where criminals are hiding and spending their illegal proceeds. This case should send a message to those who feel that they can commit fraud and evade taxes -- their consuming greed will always leave a money trail.”
During an eight-month trial, the government’s evidence proved that Brooks and others conspired to loot DHB for personal gain. Brooks concealed his control of a related company in order to funnel more than ten million dollars from DHB to support a thoroughbred horse-racing business. Brooks also falsely inflated inventory at a DHB subsidiary to artificially boost reported profits, and then lied to auditors in an effort to cover up the schemes.
Although Brooks was initially released on bail conditions requiring that he account for and repatriate all foreign assets, he was re-arrested and bail was revoked in January 2010 after the government discovered that Brooks had concealed millions of dollars in accounts in the tax haven principality of San Marino as well as in London, England. He has remained in custody ever since. During his trial, Brooks smuggled prescription pills into the courtroom, created a fake e-mail that his attorney tried to use to cross examine a government witness, and then disobeyed a court order to produce evidence of the email’s authenticity prompting the court to hold him in contempt.
Unauthorized and Undisclosed Compensation
Brooks stole more than $6 million from DHB’s coffers to finance a horse-racing business that had no relationship to DHB’s business and to finance a lavish lifestyle that included corporate-paid trips to exotic locations, the purchase of a luxury car and an armor-plated vehicle, personal jewelry, plastic surgery for his wife, a burial plot for his mother, a plasma television for his son’s bedroom, country club bills, $40,000 leather bound invitations for his son’s Bar Mitzvah and a $101,000 belt buckle encrusted with diamonds, sapphires and rubies. To cover up his theft, Brooks created, and directed others to create, fictitious documents and misclassified these personal expenses as business expenses on DHB’s books and records. In yet another scheme, Brooks scalped tickets to sporting events and concerts that DHB paid for and then kept more than $300,000 that he generated from selling the company’s tickets.
The Related Party Scheme
Brooks also concealed the related party status of Tactical Armor Products (TAP), a company supposedly run independently of DHB by Brooks’ wife, but in fact wholly controlled by Brooks. Through this scheme, Brooks siphoned more than $10 million out of DHB to pay for obsolete body armor plates sold by TAP. The profits from these concealed related party transactions were used to pay for more than $16 million in Brooks’s personal horse racing business, jewelry and cash investments. To conceal the scheme and deceive auditors and investors, Brooks created fraudulent multi-million dollar transactions and doctored internal DHB documents.
The Accounting Frauds
Brooks also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission (SEC) by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses.
Lying to Auditors and Obstruction of Justice
Brooks attempted to cover up several of the schemes by obstructing the SEC’s investigation. Brooks and others submitted false reports to the SEC during an investigation of DHB’s executive compensation and related party schemes that began in March 2003; Brooks lied to DHB’s independent auditors about the inventory inflation fraud; and when auditors tried to look at the phony inventory, Brooks falsely claimed that it had been destroyed in a hurricane. Brooks later admitted that the supposed inventory never actually existed.
Insider Trading
In November 2004, several days after DHB filed a financial report with the SEC and sent shareholders a statement containing many of the same misrepresentations and omissions described above, Brooks sold more than $69 million of DHB stock. In December 2004, he sold an additional $116 million in stock knowing that that DHB’s stock price of $20 per share had been artificially-inflated through his many and varied schemes. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange.
The government’s case was prosecuted by Assistant United States Attorneys Richard Lunger, Christopher Ott, Christopher Caffarone, James Knapp, Kathleen Nandan, Laura Mantell, Bonni Perlin and Mary Dickman.
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:
DAVID H. BROOKS
Age: 58
Old Westbury, New YorkNine Individuals Indicted for One of the Largest International Penny Stock Frauds and Advance Fee Schemes in HistoryRead the Press Release
Defendants Planned to Open Next Fraudulent Call Center in Brooklyn
BROOKLYN, NY – Earlier today, the Federal Bureau of Investigation (FBI) arrested six men in New York, Arizona, New Jersey, Florida and California for engaging in an international fraud conspiracy that spanned the globe from North America to Europe and Asia. A seventh defendant was also arrested today on a provisional arrest warrant in Ontario, Canada. The arrests resulted from an indictment charging nine defendants with 24 counts of securities fraud, wire fraud and false personation of Internal Revenue Service (IRS) employees in connection with the sale of securities and conspiracy.1 As set forth in court filings, the defendants masterminded securities fraud and advance fee schemes that victimized investors in approximately 35 nations and generated more than $140 million through various brokerage and bank accounts under their control. To uncover the international aspects of the scheme and gather evidence, the FBI used wiretaps in the United States and undercover agents in foreign countries.
The indictment and arrests are the result of one of the largest international penny stock investigations ever conducted by the Department of Justice and the FBI and mark the unveiling of a multi-year, ongoing investigation, which included significant assistance from the Royal Canadian Mounted Police (RCMP), as well as from other U.S. law enforcement agencies and law enforcement authorities in England, as well as assistance from Thailand and China.
The defendants are charged in two separate but interrelated schemes. According to the indictment, the defendants first engaged in an international ‘pump and dump’ scheme during which they fraudulently ‘pumped up’ the share price of worthless penny stocks and then ‘dumped’ billions of shares of those stocks by unloading them on unsuspecting victim investors across the globe. Second, the defendants operated boiler rooms in at least four countries that induced investors in penny stocks, including many of the same victims from the ‘pump and dump’ scheme, to pay advance fees that the defendants promised would enable the victim-investors to sell their penny stocks and recover losses that they incurred. In reality, the defendants simply stole the fees without providing any services, fraudulently extracting millions of additional dollars from their victims.
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, FBI, New York Field Office; Toni Weirauch, Special Agent-in-Charge, IRS, Criminal Investigation, New York; James C. Spero, Special Agent-in-Charge, Homeland Security Investigations, Department of Homeland Security, Buffalo; and Robert O’Malley, Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA).
The ‘Pump and Dump’ Scheme
As alleged in the indictment, defendants Sandy Winick, Gary Kershner, Joseph Manfredonia, Cort Poyner, Songkram Roy Shachaisere and William Seals orchestrated one of the largest international penny stock frauds in history. First, the defendants gained controlling interests of huge quantities of worthless stock in 11 public companies known in the industry as ‘file cabinet businesses’ – thinly traded companies with minimal assets and non-existent business operations, which in many cases were mere shell companies. They then ‘pumped up’ the share prices of the companies’ stock by engaging in fraudulent and illegal sales campaigns, which included distributing false press releases, announcing non-existent business ventures and fake mergers, posting false information on social media sites and bribing stock promoters and brokers.
These efforts fraudulently inflated share prices so that the pump and dump defendants could trade billions of shares of penny stocks that they owned and controlled at a profit, ultimately generating more than $120 million worth of fraudulent stock sales in accounts under their control. As a result of the defendants’ efforts, investors in 35 countries were defrauded in connection with their purchase of the companies’ stock.
To avoid detection, the defendants, many of whom operated from outside the United States, were often careful to use “throwaway phones.” In fact, defendant Poyner was intercepted on a wire communication reminding others in the scheme to use such mobile devices to avoid being caught. The defendants also knew that they should not draw attention to their illegal trading scheme. For example, defendant Winick boasted about the superiority of the charged scheme compared to another more obvious scam, stating: “That deal is obviously a pump and dump. We know enough to be subtle.”
The Advance Fee Scheme
As the indictment alleges, defendants Winick, Gregory Curry, Kolt Curry and Gregory Ellis perpetrated a second scheme in which they fraudulently induced penny stock victims to pay advance fees, on the promise that the victims would then either be able to sell their securities to other waiting investors or join lawsuits to reclaim their losses. In reality, the advance fees were nothing more than a con, as neither the investors nor the lawsuits existed. To hoodwink the penny stock owners, the advance fee defendants invented fake trading companies and a fake law firm and then posed as employees of those entities while soliciting advance fees from the penny stock victims.
To facilitate the scheme, the defendants established boiler rooms or call centers from which members of the conspiracy would solicit advance fees from the unsuspecting penny stock victims. The call centers were located in various locales around the world, including Canada, Thailand and the United Kingdom. Recently, the defendants began planning to open a new call center in Brooklyn, New York. Some of the victims were told that they either needed to pay the advance fee to remove restrictions that were placed upon their penny stock, which prevented the victims from selling their stock in the market, or to join investors in a pending or anticipated lawsuit to recover losses that they incurred while owning the penny stock. Victims were then told that the advance fees were needed to convert the warrants of their stocks to a saleable security. In several instances, the advance fee defendants even pretended to be IRS employees collecting a bogus advance tax from victim investors before they could unload their penny stocks.2 The victims were directed to send payment of the advance fees to banks around the world, including bank accounts in New York City. The fraud proceeds were then transferred through a funds transfer network, located in Getzville, New York, to an account maintained in Beirut, Lebanon. Ultimately, these defendants generated more than $20 million in fraudulently obtained advance fees.
Defendant Kolt Curry described the Advance Fee Scheme in the following way over an intercepted wire communication: “I would say that 100 percent of these stocks are like uh pink uh… just dumps . . . . so … ya know they’re totally, they’re like, so a lot of these guys are dying . . . . to get rid of this crap. . . . The money is good, it’s easy. It’s easy money. Definitely easy money, and it’s good money.” In fact, while bragging about his prowess as a fraudster, defendant Kolt Curry further stated, “I had a guy send me a million dollars over one phone call . . . . He actually sent me almost two million dollars over the period of the hit . . . . I guess in the industry they coin it as a smash and grab.” As for the group’s recent plans to open a call center in Brooklyn, New York, defendant Kolt Curry said, “I tell you what man . . . hitting the Americans would be like taking money from a baby.”
“As alleged in the indictment, the defendants used our securities markets as a platform from which to run elaborate fraudulent schemes to victimize unsuspecting investors across the globe. Where others saw citizens of the world, the defendants saw a pool of potential marks. They cheated, lied and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again. But today, the defendants were the marks, and it was law enforcement that ran the table,” stated United States Attorney Lynch. “As this case shows, we are committed to preserving the rule of law and protecting our investors and markets from fraud. I would like to thank our partners at FBI for their hard work on this important investigation.” Ms. Lynch also thanked the Royal Canadian Mounted Police, Financial Crime Intelligence Unit in Vancouver and the Integrated Market Enforcement Team in Toronto, the IRS, the Department of Homeland Security, TIGTA and the Serious Organized Crime Agency in the United Kingdom. Throughout the course of the investigation, significant assistance was also provided by the United States Embassies in Ottawa, Toronto, London, Bangkok and Beijing. Ms. Lynch also expressed her grateful appreciation to the Securities and Exchange Commission for its cooperation and assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged in the indictment, the defendants overstated the value of penny stocks and sold them to unwitting investors worldwide. By tricking victims into paying advance fees with the promise of realizing larger gains or recovering losses, some of the defendants dipped into the pockets of those they had betrayed—not once, but twice. The investing public has the right to trade in an uncorrupted market, and we have a responsibility to uphold the public’s confidence in the integrity of our financial markets. While the charges announced today are significant, they are but one example of what’s left to come as we continue to work with our partners in this ongoing investigation.”
“The criminals behind this scheme were shameless in heartlessly defrauding hundreds of victims out of their savings and retirement accounts for their own enrichment,” said James C. Spero, special agent in charge of Immigration and Customs Enforcement Homeland Security Investigations (HSI) in Buffalo. “HSI is committed to working with our partners at the FBI and the U.S. Attorney’s Office to hold these perpetrators accountable and recover as much money as possible for their victims.”
IRS Special Agent-in-Charge Weirauch stated, “Illegal activity in the investment industry continues to bring financial ruin to unsuspecting American investors. IRS-Criminal Investigation is proud to be part of the multi-agency team that stopped this international investment scam. We stand ready to bring our forensic accounting skills to the fight against other investment schemes and white collar crimes.”
“Impersonation of an employee of the Internal Revenue Service is a violation of federal law,” said Robert E. O’Malley, Special Agent in Charge for the TIGTA. “Taxpayers should exercise extreme caution when contacted by individuals representing themselves as IRS employees, and immediately verify those individuals’ employment by contacting the IRS through their website at www.irs.gov. If the individuals cannot be verified as IRS employees, they should immediately contact TIGTA.”
The defendants have been charged with: one count of conspiracy to commit securities fraud, two counts of conspiracy to commit wire fraud, 15 counts of wire fraud, four counts of securities fraud and two counts of false personation of an officer of the United States. If convicted, the defendants will face up to 20 years’ imprisonment for each count of conspiracy to commit wire fraud, substantive wire fraud and substantive securities fraud and up to five years’ imprisonment for conspiracy to commit securities fraud. The defendants face up to three years in prison for each count of false personation of an officer of the United States. In addition, all proceeds of fraudulent schemes are subject to forfeiture. The defendants will be presented for arraignment later today at the United States Courthouses in Brooklyn, New York; Los Angeles, California; Miami, Florida; and Tucson, Arizona. The defendants in Los Angeles, Miami and Tucson are expected to be removed to Brooklyn.
The government’s case is being prosecuted by Assistant United States Attorneys Christopher A. Ott, Sylvia Shweder and Melanie Hendry.
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 Defendants
SANDY WINICK
Citizenship: Canada
Age: 55
Bangkok, ThailandGREGORY CURRY
Citizenship: Canada
Age: 63
Bangkok, ThailandKOLT CURRY
Citizenship: Canada
Age: 38
Ontario, CanadaGREGORY ELLIS
Citizenship: Canada
Age: 46
Ontario, CanadaGARY KERSHNER
Citizenship: United States
Age: 72
Tucson, ArizonaJOSEPH MANFREDONIA
Citizenship: United States
Age: 45
Tom’s River, New JerseyCORT POYNER
Citizenship: United States
Age: 44
Boca Raton, FloridaSONGKRAM ROY SAHACHAISERE
Citizenship: United States
Age: 43
Huntington Beach, CaliforniaWILLIAM SEALS
Citizenship: United States
Age: 51
Fallbrook, California_____________________________
1The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
2 The investigation showed that the identities used were fictitious and no IRS employees were involved in the scheme.
Three Queens Defendants Convicted of Committing Armed Robberies of Check Cashing StoresRead the Press Release
Following a two-week trial, a federal jury in Brooklyn, New York, today found Edward Byam, Derrick Dunkley, and Akeem Monsalvatge guilty of robbery conspiracy, two counts of robbery, and two counts of using a firearm in connection with those robberies.
The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
The government’s evidence at trial established that the defendants committed two armed robberies of separate Pay-O-Matic check cashing stores in Queens, New York. In 2010, the three defendants stole over $40,000 from a Pay-O-Matic after one of the defendants gained entry into the secure teller area through the roof. Wearing hooded sweatshirts and cloth masks over their faces, the defendants held the victim teller at gunpoint, handcuffed him, and beat him with a metal chair before making off with the stolen cash. In 2012, the defendants robbed yet another Pay-O-Matic check cashing store at gunpoint, this time wearing New York City Police Department jackets, badges, and life-like Hollywood-style special effects masks that concealed their identities and made them appear to be three white men. During this robbery, the defendants gained entry to the secure teller area by showing one of tellers a picture of her own home to indicate they knew where she lived and then forced the other teller on duty to open the locked doors to the teller area, where the defendants held the tellers at gunpoint and stole over $200,000 from the safe and teller drawers.
The government’s evidence included the testimony of the victim tellers who were held up at gunpoint during the 2010 and 2012 robberies, a manager at a different check cashing store who, the evidence showed, was a future intended victim of the defendants, as well as the owner of the company that manufactured the life-like special effects masks used by the defendants during the 2012 robbery. The government’s evidence also included telephone and cell site records placing the defendants at the scene of one of the crimes, DNA evidence, emails, and other documents showing the defendants’ purchases of the disguises used in the 2012 robbery and their purchases of tens of thousands of dollars of luxury items from high-end luxury boutiques.
“Those who would use violence and intimidation to make a quick buck should take this as a lesson: whatever tricks and deception they employ, they will be found and they will be prosecuted to the fullest extent of the law,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the New York City Police Department’s Police Impersonation Unit and the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the agencies responsible for leading the government’s investigation. Ms. Lynch also thanked the United States Marshals Service for their crucial assistance in apprehending these violent criminals.
When sentenced by United States District Judge Raymond J. Dearie, the defendants face a mandatory term of imprisonment between 32 years and life.
The government’s case is being prosecuted by Assistant United States Attorneys Maria Cruz Melendez, Una A. Dean, Tiana A. Demas, and Tyler J. Smith.
The Defendants
EDWARD BYAM, Age: 25
DERRICK DUNKLEY, Age: 25
AKEEM MONSALVATGE, Age: 38
Defendant in Romanian Cybercrime Ring Convicted of Wire Fraud and Identification Document Fraud ConspiraciesRead the Press Release
Following a four-day trial, a federal jury in Brooklyn yesterday returned a verdict convicting David Ojo of conspiracy to commit wire fraud and identification document fraud. The defendant was a member of an international organized crime conspiracy, operating in Romania, Bulgaria, and the United States, that defrauded victims of tens of thousands of dollars through an Internet scam.
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 (FBI), New York Field Office.
Trial testimony showed that the defendant and his co-conspirators advertised used cars for sale on websites like Craigslist and eBay. Some buyers who responded to the advertisements were told variations of a story that the seller of the car had been called to active duty in Afghanistan and needed to sell his car quickly. The victims were promised that their purchases would be handled by an eBay or Google Checkout agent, who would hold their payments in escrow until they had received the car. Once the victims agreed to buy the cars and wired payments through Western Union, they never received any cars or heard from the purported sellers again.
The defendant worked with individuals in Romania and the United States to make and use false Pennsylvania and Delaware driver’s licenses, which they used to claim the money that the victims had wired through Western Union. The defendant was personally responsible for making or directing more than 30 separate money pick-ups in which victims were defrauded out of more than $80,000.
“Ojo and his cohorts sought to hide in cyberspace as they concocted a scheme that crossed the ocean and invoked patriotic themes to fleece hard working Americans. Their scheme was a new low for used car dealers, but no match for law enforcement. This conviction shows that we are committed to rooting out Internet scams that prey on those that purchase goods online,” stated United States Attorney Lynch.
When sentenced by the Honorable Allyne R. Ross, the defendant faces a maximum penalty of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Douglas M. Pravda and Margaret E. Gandy.
The Defendant
DAVID OJO
Age: 32Al-Qaeda Inspired Operative Sentenced to 30 Years in Prison for Attempting to Bomb Federal Reserve Bank in Lower ManhattanRead the Press Release
BROOKLYN, NY – Earlier today, Quazi Mohammad Rezwanul Ahsan Nafis, who attempted to detonate a 1,000-pound bomb at the New York Federal Reserve Bank on Liberty Street in lower Manhattan’s financial district in October 2012, was sentenced to 30 years in prison by Chief Judge Carol B. Amon of United States District Court in Brooklyn, New York.
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; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
“Nafis came to the United States radicalized and bent on fighting jihad here in our homeland. He sought to commit mass murder in downtown Manhattan in the name of al-Qaeda. The prospect of widespread death and destruction could not dissuade him from his deadly plan. Nafis’s goals of martyrdom and carnage were thwarted by the vigilance of law enforcement. He will now spend the next 30 years where his own actions have landed him, in a federal prison cell,” stated United States Attorney Lynch. “I would like to thank our partners at the FBI, NYPD, Immigration and Customs Enforcement/Homeland Security Investigations, the United States Secret Service, the other agencies who participate in the JTTF, and the Department of Justice’s National Security Division, for their hard work on this important investigation. I would also like to thank the security teams at the New York Federal Reserve Bank and the New York Stock Exchange for their assistance.”
“With the sentence handed down today, Rezwanul Nafis is being held accountable for his attempt to carry out a terrorist attack on U.S. soil. I applaud the many agents, analysts, and prosecutors who ensured that his deadly plans never came to fruition and who are responsible for today’s successful outcome,” said Acting Assistant Attorney General for National Security Carlin.
As set forth in the indictment and other case filings, defendant Nafis, a 22-year-old Bangladeshi national, traveled to the United States in January 2012 intending to fight violent jihad. Nafis possessed operable bomb-making instructions and attempted to recruit multiple individuals to form a terrorist cell inside the United States. Nafis also actively sought out al-Qaeda contacts within the United States to assist him in carrying out an attack. Unbeknownst to Nafis, one of the individuals he attempted to recruit into his jihadist cell was actually a source for the FBI. During the subsequent investigation, FBI agents, NYPD detectives and other law enforcement agents working with the FBI’s New York Joint Terrorism Task Force were able to closely monitor Nafis as he attempted to implement his plan.
Nafis proposed several targets for his attack, including a high-ranking United States official and the New York Stock Exchange. Ultimately, Nafis decided to conduct a bombing operation against the New York Federal Reserve Bank. In a statement claiming responsibility for the terrorist bombing of the Federal Reserve Bank on behalf of al-Qaeda, Nafis wrote that he wanted to “destroy America” and that he believed the most efficient way to accomplish this goal was to target America’s economy. In this statement, Nafis also included quotations from “our beloved Sheikh Osama bin Laden” to justify the fact that Nafis expected that the attack would involve the killing of women and children.
During the investigation, Nafis came into contact with an FBI undercover agent who posed as an al-Qaeda facilitator. At Nafis’s request, the undercover agent supplied Nafis with 20 50-pound bags of purported explosives. Nafis then stored the material and assembled the explosive device for his attack. Nafis purchased components for the bomb’s detonator and conducted surveillance for his attack on multiple occasions in New York City’s financial district. Throughout his interactions with the undercover agent, which were captured on recordings, Nafis repeatedly asserted that the plan was his own and the reason he had come to the United States was to commit an attack.
On October 17, 2012, the day of the planned attack, Nafis met the undercover agent and traveled in a van to a warehouse located in the Eastern District of New York. While en route, Nafis explained to the undercover agent that he had a “Plan B” that involved conducting a suicide bombing operation in the event that the attack was about to be thwarted by the police. Upon arriving at the warehouse, Nafis assembled what he believed to be an operational 1,000-pound bomb inside the van. Nafis and the undercover agent then drove to the New York Federal Reserve Bank. During this drive, Nafis armed the purported bomb by assembling the detonator and attaching it to the explosives. Nafis and the undercover agent parked the van next to the New York Federal Reserve Bank, exited the van, and walked to a nearby hotel. There, Nafis recorded a video statement which he intended to release to the public in connection with the attack. During this video statement, Nafis stated: “We will not stop until we attain victory or martyrdom.” Nafis then repeatedly, but unsuccessfully, attempted to detonate the bomb, which had been assembled using inert explosives provided by the undercover agent. JTTF agents arrested Nafis immediately after he attempted to detonate the bomb.
On February 7, 2013, in federal court in Brooklyn, New York, Nafis pled guilty to attempting to use a weapon of mass destruction. During the guilty plea proceeding, Nafis admitted under oath that he had attempted to bomb the Federal Reserve Bank in Manhattan, that he had used a cellular phone as the detonator for the explosion, and that he had selected the Federal Reserve Bank as the target for his attack.
The government’s case is being prosecuted by Assistant U.S. Attorneys James P. Loonam and Richard M. Tucker, with assistance from Trial Attorney Bridget Behling of the Justice Department’s Counterterrorism Section.
The Defendant:
QUAZI MOHAMMAD REZWANUL AHSAN NAFIS
Age: 22
Jamaica, New YorkCorporate Lawyer Sentenced to 24 Months’ Imprisonment on Convictions for Money Laundering and Securities Fraud ConspiracyRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Martin Weisberg, a former corporate partner in the New York office of the international law firm Baker & McKenzie LLP, was sentenced to 24 months’ imprisonment on his conviction for money laundering and for his conviction on conspiracy to commit securities fraud, to run concurrently. As a further part of his sentence, Weisberg was ordered to pay $297,500 in restitution, $250,000 in forfeiture, and a $200 special assessment, and is to serve three years of supervised release following the completion of his prison term. Weisberg must surrender to the Bureau of Prisons by November 6, 2013.
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. The sentence was imposed by United States District Judge Nicholas G. Garaufis.
“A license to practice law is not a license to violate it. As a noted attorney, Weisberg held a position of trust and had the respect of his peers. Instead of using his talents to provide wise counsel, he lied to and stole from his own clients, lied to the Securities and Exchange Commission, and betrayed the investing public. Weisberg’s unbridled greed has led him from the halls of an international law firm to a federal prison cell,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the Federal Bureau of Investigation, the agency that led the government’s investigation, and thanked the Securities and Exchange Commission for its assistance.
The securities fraud conspiracy conviction resulted from Weisberg’s involvement with a scheme in which he received kickback payments from co-conspirators in connection with the issuance of publicly-traded securities by two of Weisberg’s former corporate clients. The money laundering conviction resulted from Weisberg’s theft of money from an escrow account established on behalf of one of his clients for which Weisberg served as escrow agent. The convictions relate to separate criminal acts committed by Weisberg and were charged in two separate indictments. Weisberg entered a guilty plea to both charges on May 21, 2013, on the morning that jury selection for his first trial was scheduled to begin.
In connection with the securities fraud conspiracy conviction, Weisberg engaged in a $55 million fraud scheme in which he agreed to conceal co-conspirators’ ownership and control of securities issued through a series of offerings by two public companies, Xybernaut Corporation and Ramp Corporation. During the course of the conspiracy, Weisberg acted as outside counsel to Xybernaut and Ramp, and was a member of Xybernaut’s Board of Directors. In return for his participation, the co-conspirators made kickback payments to Weisberg and others. The co-conspirators’ ownership and control over the Xybernaut and Ramp securities and the kickback payments were never disclosed in Ramp’s or Xybernaut’s corporate filings with the U.S. Securities and Exchange Commission.
In connection with the money laundering conviction, Weisberg was engaged by a corporate client to establish a $30 million escrow account. He advised the client that the account could not earn interest for the client’s benefit. In fact, Weisberg caused the $30 million to be placed into an interest-bearing account. During a 14-month period, the account earned approximately $1.6 million in interest, and Weisberg caused approximately $1.3 million to be wired out of the account to pay for his personal and business expenses without the client’s knowledge. Weisberg concealed the fraud by falsely convincing his client that the bank did not send monthly account statements; Weisberg instead sent the client letters on law firm letterhead stating false account balances.
The government’s case is being prosecuted by Assistant United States Attorneys Ilene Jaroslaw and John Nowak.
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:
MARTIN WEISBERG
Residence: Waccabuc, NY
Age: 62