Eastern District of New York
Press releases recorded for this federal judicial district.
United States Sues Brooklyn Fish Processors in Food Safety CaseRead the Press Release
WASHINGTON, D.C. – The Department of Justice has filed a lawsuit and sought a preliminary injunction against N.Y. Fish Inc.; New York City Fish Inc.; Maxim Kutsyk, Pavel Roytkov, Leonid Staroseletesky, and Steven Koyfman under the federal Food, Drug, and Cosmetic Act (FDCA). New York City Fish manufactures and distributes ready-to-eat fishery products, including smoked salmon and mackerel, and operates out of a food processing facility located at 738 Chester Street in Brooklyn. N.Y. Fish previously operated a similar fish processing business out of the same location, employing virtually all of the same employees. Although N.Y. Fish has ceased manufacturing, FDA believes that N.Y. Fish products continue to be distributed and sold. The complaint alleges that all defendants have a history of processing fishery products under insanitary conditions, with inadequate safety procedures.
“Consumers depend on food producers to follow the right procedures to make sure our food is safe to eat,” said Acting Assistant Attorney General for the Civil Division Stuart F. Delery. “As this case demonstrates, the Department of Justice is committed to taking action against those who produce or process food under insanitary conditions or with inadequate safety procedures.”
“Inspectors who visited the defendants’ facility found more than Nemo; they found life-threatening bacteria. Despite repeated warnings and direction to sanitize the facility, the defendants have failed to do so. They cannot be allowed to continue to distribute potentially unsafe food to our families. Those who store, package and sell the food that we eat must maintain basic standards of cleanliness in their facilities. We are committed to protecting the public from health risks by ensuring that food manufacturers comply with federal laws prohibiting them from preparing, packing and holding food products under insanitary conditions,” stated Loretta E. Lynch, the U.S. Attorney for the Eastern District of New York.
According to the complaint, FDA conducted seven inspections of the Chester Street facility between 2006 and 2013. The inspections showed a repeated failure to minimize the risk of contamination by two dangerous types of bacteria: Listeria monocytogenes and Clostridium botulinum. People who eat food contaminated with Listeria monocytogenes can contract the disease listeriosis, which can be serious, even fatal, for vulnerable groups such as newborns and those with impaired immune systems. Complications from the disease can also lead to miscarriage. Clostridium botulinum spores can produce the toxin that causes botulism. Eating food tainted with this toxin can lead to paralysis and potentially death.
FDA’s most recent inspection occurred in February 2013, when New York City Fish was operating the Chester Street facility. According to court filings, the company missed critical processing steps that are essential to prevent the growth and toxin production of Clostridium botulinum and to eliminate any Listeria monocytogenes contamination, including heating fish for a dangerously short time and using insufficiently salty brining solution.
FDA previously investigated the facility in August 2012, when it was operated by N.Y. Fish. FDA inspectors discovered widespread sanitation problems and a similar failure to meet critical steps necessary to prevent contamination. They also found salmon products and production equipment contaminated with Listeria monocytogenes, even after the company attempted to clean and sanitize the facility.
Further testing by the FDA revealed that certain strains of Listeria monocytogenes it found likely had persisted in the Chester Street facility for years. FDA contends that the facility is so infiltrated with Listeria monocytogenes that New York City Fish must institute heightened monitoring and strict sanitation procedures to have any hope of eradicating this life-threatening organism, but that it has failed to do so.
The lawsuit is being brought by Assistant U.S. Attorney Elliot M. Schachner of the Eastern District of New York, and Trial Attorney Adrienne Fowler of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Julie Dohm of the FDA.
Two Doctors, Including A Psychiatrist for the U.S. Department of Veterans Affairs, and Two Others Charged in Brooklyn as Part of Nationwide Medicare Strike Force InitiativeRead the Press Release
Four individuals, including two doctors, have been charged for their alleged participation in two separate schemes that falsely billed the Medicare and Medicaid programs for more than $17 million.1 The charges filed in Brooklyn, New York, are part of a nationwide takedown by the Medicare Fraud Strike Force operations that led to charges against 89 individuals for their alleged participation in schemes to collectively submit approximately $223 million in fraudulent claims.
The Brooklyn cases were announced by United States Attorney Loretta E. Lynch of the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, and Thomas O’Donnell, Special Agent-in-Charge, Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations, New York. The results of the nationwide takedown were announced today by Attorney General Eric H. Holder, Health and Human Services Secretary Kathleen Sebelius, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, FBI Assistant Director Ron Hosko, Inspector General Daniel R. Levinson of HHS-OIG, and Centers for Medicare and Medicaid Services Deputy Administrator for Program Integrity Dr. Peter Budetti.
The two schemes charged in the Eastern District of New York, detailed in an indictment and a criminal complaint, and other documents filed by the government, are as follows:
Presman. Mikhail L. Presman, 55, a psychiatrist employed by the U.S. Department of Veterans Affairs (VA), was charged in a complaint with engaging in a scheme to submit false and fraudulent medicare claims while operating a private practice when not on duty at the VA. The complaint alleges that Presman submitted fraudulent claims to the Medicare program in excess of $4,000,000 for home medical visits for patients who were never seen by Presman, for patients whom Presman claimed to have treated when he was in fact away on vacation, and for patients who were confined in a hospital at the time that Presman claimed to have treated them. Presman received over $2,800,000 in Medicare payments as a result of this scheme. A search warrant was executed at Presman’s personal residence which purported to be his medical office. The Presman case is being prosecuted by Assistant United States Attorney Patricia E. Notopoulos and Trial Attorney Bryan Fields of the Criminal Division’s Fraud Section. The defendant is scheduled to be arraigned today before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York.
Lee, et al. The indictment charges Chang Ho Lee, 66, a medical doctor, Michelle Lee, 58, the manager of several medical clinics, and Francis Choi, 54, a medical biller, with conspiracy to commit health care fraud, conspiracy to pay health care kickbacks, and falsification of records. Chang Ho Lee and Francis Choi are charged with health care fraud. Chang Ho Lee is separately charged with paying health care kickbacks. The charges arise from an approximately $13 million Medicare fraud scheme that took place at three clinics – two in Flushing, New York, and one in Brooklyn, New York – from approximately March 2007 to May 2012, in which patients were offered massages, facials, and other inducements and, in return, the clinic billed those patients’ Medicare numbers for physical therapy, lesion removals, and other procedures that were medically unnecessary and not provided. According to the indictment, when Medicare audited the clinics and asked for patient records in support of claims, the defendants created false patient records to submit to Medicare. The Lee case is being prosecuted by Trial Attorney Bryan Fields and Senior Trial Attorney Nicholas Acker of the Criminal Division’s Fraud Section. The defendant is scheduled to be arraigned today before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York.
“As alleged, these two prosecutions have exposed corrupt doctors and medical professionals who defrauded the Medicare program out of millions of dollars for their personal gain. With so many patients in desperate need of medical care, it is particularly galling that these defendants allegedly arranged Medicare-funded facials and massages and billed while on vacation,” stated United States Attorney Lynch. “Today’s arrests demonstrate our continuing commitment to vigorously prosecute all who drain taxpayer funds from the Medicare program – funds which would otherwise pay for needed care for elderly and disabled Americans.” Ms. Lynch extended her grateful appreciation to the United States Department of Veterans Affairs, Office of Inspector General, the New York State Office of the Medicaid Inspector General, the New York Attorney General’s Office, the New York State Medicaid Fraud Control Unit, the New York State Department of Financial Services, the New York City Police Department, and New York City Human Resources Administration for their assistance in the investigations in this district.
FBI Assistant Director-in-Charge Venizelos stated, “The two cases present glaring
examples of abuse of the Medicare program. As alleged in the indictment and complaint, the common thread is unscrupulous medical professionals billing this taxpayer-funded program for millions of dollars of services that were either medically unnecessary or not provided at all. Alarmingly, one doctor allegedly billed for home visits when the patients were hospitalized and therefore not home, or when he himself was on vacation and not working. Medicare fraud threatens the vitality of the program and unjustly enriches lawbreakers, and it won’t be tolerated.”“Individuals continue to defraud the Medicare and Medicaid systems at an alarming rate, said HHS-OIG Special Agent-in-Charge O’Donnell. We will continue to aggressively investigate all heath care fraud schemes.”
The Defendants:
MIKHAIL PRESMAN
Brooklyn, NYFRANCIS CHOI
Blauvelt, NYCHANG LEE
Palisade Park, NJMICHELLE LEE
Palisade Park, NJ_____________________________
1 The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Statement of United States Attorney Loretta E. Lynch Regarding the Sentencing of Former New York State Senator Shirley HuntleyRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, former New York State Senator Shirley Huntley was sentenced to one year and one day in prison, followed by three years of supervised release. Huntley previously pleaded guilty to engaging in a mail fraud conspiracy. As part of her sentence, Huntley was ordered to make restitution of $87,700 to the New York State Department of Education for funds she embezzled, and $1,000 in connection with an unrelated bribery scheme involving a cargo-handling business at John F. Kennedy International Airport.
“The crux of this case has always been the defendant Shirley Huntley’s greed and self-interest. Promising to provide much needed assistance to the parents of New York City public schoolchildren, she set up a nonprofit organization that received state funding. Instead of serving the parents, Huntley helped herself and her family to state funds. Shirley Huntley violated the public trust and betrayed her constituents by stealing public funds for her own benefit,” stated United States Attorney Lynch. “Today’s sentence should send a clear message: we will bring to justice those who corrupt the system of laws upon which our community relies.”
Long Island Doctor Sentenced to 30 Months’ Imprisonment for Distribution of Oxycodone and Income Tax EvasionRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Frank Telang, a Long Island doctor, was sentenced to 30 months in prison by United States District Court Judge Joseph F. Bianco. Telang previously pleaded guilty to illegally distributing oxycodone, a highly addictive prescription pain killer, outside the scope of his professional practice and not for any medical purpose, as well as income tax evasion for failing to report the cash income that he received from providing the oxycodone prescriptions. Telang was also ordered to forfeit $10,500.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brian R. Crowell, Special Agent-in-Charge, 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, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York.
Between April 13, 2011 and October 20, 2011, Telang, who maintained offices in Bethpage and Port Jefferson Station, New York, sold prescriptions for oxycodone and other controlled substances to undercover DEA task force officers posing as patients without performing any medical examination. In addition, on the night of December 6, 2011, members of a DEA Tactical Diversion Squad, comprising DEA agents, Nassau County Police Department detectives, and New York State Police investigators, observed Telang meeting with a purported patient in a parking lot near the Long Island Expressway. When approached by law enforcement, Telang crumpled up a prescription that he had been holding and attempted to hide it in his vehicle. Telang was interviewed that night by law enforcement and subsequently returned to his office in Port Jefferson Station early the next morning where he altered the medical file of that purported patient.
Telang also failed to pay taxes on the cash he received for unlawfully providing the prescriptions.
Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals but 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.
“Telang abandoned his oath to ‘do no harm’ for the motto ‘where’s the money.’ His sale of prescriptions for this addictive and deadly drug in exchange for cash not only violated his oath but constituted a serious crime,” stated United States Attorney Lynch. “This sentence should serve as a warning to any physicians who would engage in such conduct.” Ms. Lynch thanked the Drug Enforcement Administration, the Nassau County Police Department, the New York State Police, and the Internal Revenue Service for their invaluable assistance in the investigation.
In January 2012, the United States Attorney’s Office for the Eastern District of New York 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 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 was prosecuted by Assistant United States Attorney Allen L. Bode.
The Defendant:
Name: FRANK TELANG
Age: 58Eight Members of New York Cell of Cybercrime Organization Indicted in $45 Million Cybercrime CampaignRead the Press Release
A four-count federal indictment was unsealed in Brooklyn charging eight defendants with participating in two worldwide cyberattacks that inflicted $45 million in losses on the global financial system in a matter of hours.1 These defendants allegedly formed the New York-based cell of an international cybercrime organization that used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data, and eliminate withdrawal limits. The stolen card data was then disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe. The eight indicted defendants and their co-conspirators targeted New York City and withdrew approximately $2.8 million in a matter of hours. The defendants are charged variously with conspiracy to commit access device fraud, money laundering conspiracy, and money laundering.
Seven of the eight defendants have been arrested on the charges in the indictment: the arrested defendants are Jael Mejia Collado, Joan Luis Minier Lara, Evan Jose Peña, Jose Familia Reyes, Elvis Rafael Rodriguez, Emir Yasser Yeje, and Chung Yu-Holguin, all residents of Yonkers, New York. Rodriguez was arrested on a criminal complaint on March 27, 2013, when he attempted to flee the United States for the Dominican Republic. Peña was arrested on a criminal complaint in Yonkers, New York, on April 3, 2013. Lara, Reyes, and Yeje surrendered to law enforcement authorities on April 15, 2013, and Collado and Yu-Holguin were arrested yesterday afternoon. The indictment also charges an eighth defendant, Alberto Yusi Lajud-Peña, also known as “Prime” and “Albertico,” who is reported to have been murdered on April 27, 2013, in the Dominican Republic. The case has been assigned to United States District Judge Kiyo A. Matsumoto.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Steven Hughes, Special Agent in Charge, United States Secret Service, New York Field Office, and James T. Hayes, Jr., Special Agent in Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York.
“As charged in the indictment, the defendants and their co-conspirators participated in a massive 21st century bank heist that reached across the Internet and stretched around the globe. In the place of guns and masks, this cybercrime organization used laptops and the Internet. Moving as swiftly as data over the Internet, the organization worked its way from the computer systems of international corporations to the streets of New York City, with the defendants fanning out across Manhattan to steal millions of dollars from hundreds of ATMs in a matter of hours,” stated United States Attorney Lynch. “Law enforcement is committed to moving just as swiftly to solve these cybercrimes and bring their perpetrators to justice.”
“New technologies and the rapid growth of the Internet have eliminated the traditional borders of financial crimes and provided new opportunities for the criminal element to threaten the world’s financial systems. However, as demonstrated by the charges and arrests announced today, the Secret Service and its law enforcement partners have adapted to these technological advancements and utilized cutting edge investigative techniques to thwart this cybercriminal activity,” said Secret Service Special Agent in Charge Hughes. “I want to take this opportunity to commend the dedicated men and women of the Secret Service and HSI for their extraordinary efforts in this investigation. This case is an excellent example of the impact that can be made when the law enforcement community works together.”
“The arrests today reflect the government’s joint efforts to bring a global cybercrime enterprise to justice,” said HSI Special Agent in Charge Hayes. “HSI is proud to be part of a proactive federal law enforcement initiative that uses its collective resources to pull the plug on those who attempt to use the Internet to commit bank robbery.”
The “Unlimited Operation”
As alleged in the indictment and other court filings, the cyberattacks employed by the defendants and their co-conspirators in this case are known in the cyber underworld as “Unlimited Operations” – through its hacking “operation,” the cybercrime organization can access virtually “unlimited” criminal proceeds.
The “Unlimited Operation” begins when the cybercrime organization hacks into the computer systems of a credit card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts. The elimination of withdrawal limits enables the participants to withdraw literally unlimited amounts of cash until the operation is shut down. “Unlimited Operations” are marked by three key characteristics: (1) the surgical precision of the hackers carrying out the cyberattack, (2) the global nature of the cybercrime organization, and (3) the speed and coordination with which the organization executes its operations on the ground. These attacks rely upon both highly sophisticated hackers and organized criminal cells whose role is to withdraw the cash as quickly as possible.
As alleged in court filings, “Unlimited Operations” are executed in the following manner: First, over the course of months, the hackers plan and execute sophisticated cyber intrusions to gain unauthorized access to the computer networks of credit card processors that are responsible for processing prepaid debit card transactions. They target databases of prepaid debit cards, which are typically loaded with finite funds; such cards are used by many employers in lieu of paychecks and by charitable organizations to distribute disaster assistance. The cybercriminals breach the debit card accounts’ security protocols, then dramatically increase the balances and effectively eliminate the withdrawal limits on the accounts. The elimination of withdrawal limits enables the participants to withdraw unlimited amounts of cash until the operation is shut down. Next, the cybercrime organization cashes in, by distributing the hacked prepaid debit card numbers to trusted associates around the world – the two cyberattacks charged in this case allegedly involved 26 countries. These associates operate cells or teams of “cashers,” who encode magnetic stripe cards, such as gift cards, with the compromised card data. When the cybercrime organization distributes the personal identification numbers (PINs) for the hacked accounts, the casher cells spring into action, immediately withdrawing cash from ATMs across the globe. Meanwhile, the cybercrime organization maintains access to the computer networks of the credit card processors they have hacked in order to monitor the withdrawals. At the end of an operation, when the cards are finally shut down, the casher cells launder the proceeds, often investing the operation’s proceeds in luxury goods, and kick money back up to the cybercrime organization’s leaders.
The Charged “Unlimited Operation” Cyberattacks
According to the government’s filings, between approximately October 2012 and April 2013, the defendants and their co-conspirators conducted two Unlimited Operations. The first operation, on December 22, 2012, targeted a credit card processor that processed transactions for prepaid MasterCard debit cards issued by the National Bank of Ras Al-Khaimah PSC, also known as RAKBANK, in the United Arab Emirates. After the hackers penetrated the credit card processor’s computer network, compromised the RAKBANK prepaid card accounts, and manipulated the balances and withdrawal limits, casher cells across the globe operated a coordinated ATM withdrawal campaign. In total, more than 4,500 ATM transactions were conducted in approximately 20 countries around the world using the compromised RAKBANK account data, resulting in approximately $5 million in losses to the credit card processor and RAKBANK. In the New York City area alone, over the course of just two hours and 25 minutes, the defendants and their co-conspirators conducted approximately 750 fraudulent transactions, totaling nearly $400,000, at over 140 different ATM locations in New York City.
As alleged in the indictment and other court filings, the second of these Unlimited Operations occurred on the afternoon of February 19 and lasted into the early morning of February 20, 2013. This operation again breached the network of a credit card processor that serviced MasterCard prepaid debit cards, this time issued by the Bank of Muscat, located in Oman. Again, after the cybercrime organization’s hackers compromised Bank of Muscat prepaid debit card accounts and distributed the data, the organization’s casher cells engaged in a worldwide ATM withdrawal campaign. This attack was particularly devastating: Over the course of approximately 10 hours, casher cells in 24 countries executed approximately 36,000 transactions worldwide and withdrew about $40 million from ATMs. From 3 p.m. on February 19 through 1:26 a.m. on February 20, the defendants and their co-conspirators withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals in the New York City area.
As charged in the indictment and other filings, defendant Alberto Yusi Lajud-Peña was the leader of the New York cell of this organization, and in the wake of the charged Unlimited Operations, he and defendants Elvis Rafael Rodriguez and Emir Yasser Yeje laundered hundreds of thousands of dollars in illicit cash proceeds. In one transaction alone, nearly $150,000 in the form of 7,491 $20 bills, was deposited at a bank branch in Miami, Florida, into an account controlled by defendant Alberto Yusi Lajud-Peña. Cell members also invested the criminal proceeds in portable luxury goods, such as expensive watches and cars. To date, the United States has seized hundreds of thousands of dollars in cash and bank accounts, two Rolex watches and a Mercedes SUV, and is in the process of forfeiting a Porsche Panamera. The Mercedes and Porsche were purchased with $250,000 in proceeds of this scheme.
In announcing the charges, United States Attorney Lynch praised the extraordinary efforts of the Secret Service in responding so rapidly to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally. Ms. Lynch also thanked the Department of Homeland Security for its invaluable role in recent arrest and seizure operations, as well as MasterCard, RAKBANK, and the Bank of Muscat for their cooperation with this investigation. Ms. Lynch expressed gratitude for the timely and extensive assistance of law enforcement authorities in Japan, Canada, Germany, and Romania, and also thanked authorities in the United Arab Emirates, Dominican Republic, Mexico, Italy, Spain, Belgium, France, United Kingdom, Latvia, Estonia, Thailand, and Malaysia for their cooperation in this investigation.
If convicted, the defendants face a maximum sentence of 10 years’ imprisonment on each of the money laundering charges and 7.5 years on the conspiracy to commit access device fraud charge, restitution, and up to $250,000 in fines. In addition, all property involved in the money laundering offenses and all proceeds of the conspiracy to commit access device fraud are subject to forfeiture.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa, Hilary Jager, Brian Morris, and Kevin Trowel.
The Defendants:
ALBERTO YUSI LAJUD-PEÑA (deceased)
Age: 23JAEL MEJIA COLLADO
Age: 23JOAN LUIS MINIER LARA
Age: 22EVAN JOSE PEÑA
Age: 35JOSE FAMILIA REYES
Age: 24ELVIS RAFAEL RODRIGUEZ
Age: 24EMIR YASSER YEJE
Age: 24CHUNG YU-HOLGUIN
Age: 22_____________________________
1 The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
United States Obtains Settlement from City of New York over Failure to Reasonably Accommodate Disabled Firefighter Who Was 9/11 First ResponderRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the filing of a settlement agreement with the City of New York regarding allegations that the Fire Department (FDNY) violated the Americans with Disabilities Act (ADA) by failing to reasonably accommodate a disabled firefighter.The United States’ complaint was brought on behalf of Gerald Snell, a former FDNY fire captain who suffered irreversible lung damage while participating in search, rescue, recovery, and cleanup efforts at the World Trade Center site in New York City after September 11, 2001. The complaint alleges that the FDNY failed to reasonably accommodate Mr. Snell’s disability and forced him to retire despite his desire to remain with the FDNY in a non-firefighting capacity.
Under the Settlement Agreement, the FDNY has agreed to pay Snell back pay and to adjust his monthly pension payments. In addition, the FDNY has agreed to create and implement written reasonable accommodation procedures that comply with the ADA, which will ensure that all disabled firefighters are offered the opportunity to obtain reasonable accommodation and not be forced to retire if they wish to remain with the FDNY and are qualified for available “off-line” positions that do not involve firefighting duty.
“All New York City firefighters with disabilities – and in particular, 9/11 first responders such as Mr. Snell – are entitled to the protections of the Americans with Disabilities Act,” stated U.S. Attorney Lynch. “This includes the right to receive reasonable accommodation in the form of reassignment where appropriate, so that firefighters can continue to serve the people of New York City even if they are no longer physically able to fight fires. Their experience and expertise should not be lost.”
The government’s case is being litigated by Assistant U.S. Attorney Scott R. Landau.
Eight Indicted in Two Million Dollar Staged Accident ConspiracyRead the Press Release
An indictment was presented this morning in the United States Courthouse for the Eastern District of New York in Central Islip, New York, charging eight defendants with mail fraud and conspiracy to commit mail fraud in connection with a scheme to defraud multiple insurance companies. Named as defendants in the indictment are Shawnn McFadden, Roshon Cooke, Daniel Osborne, Daniel Thompson, Allah Brown, Byron Dudley, Shaquana Basnight and Clifford Hawkins. According to the indictment, the defendants staged accidents and later falsely claimed that they sustained physical injuries as a result of the accidents.1 The defendants are scheduled to be arraigned later today before the Honorable A. Kathleen Tomlinson, United States Magistrate Judge for the Eastern District of New York, at the federal courthouse in Central Islip.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Keith E. Mike, Acting Inspector-in-Charge, United States Postal Inspection Service, and Raymond W. Kelly, Commissioner of the New York City Police Department.
As alleged in the 14 count indictment, beginning in March 2009 and continuing until July 2011, the defendants rented vehicles from U-Haul International, Inc. (“U-Haul”) and drove with one or more coconspirators as passengers to locations in Kings and Nassau Counties where they either intentionally struck or were struck intentionally by vehicles driven and occupied by other coconspirators. After the accidents, the defendants and coconspirators responded to locations throughout the metropolitan area ostensibly to receive medical treatment for injuries purportedly suffered during the staged accidents. The defendants and others later filed insurance claims with U-Haul’s insurer Republic Western Insurance CompanyWest, as well as Travelers Insurance Company, Allstate Insurance Company, GMAC Insurance, GEICO, and Progressive Insurance which sought over $2 million, and the defendants obtained over $1 million in payment, for claimed injuries and medical treatment.
“As alleged, these defendants played bumper cars with the lives of unsuspecting New Yorkers, all to enrich themselves through insurance fraud. Insurance fraud through staged accidents presents a danger not only to the public health but also exacts a high cost to the public in the cost of insurance,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute those who seek to profit by such fraud.” Ms. Lynch expressed her grateful appreciation to the New York City Police Department and the New York State Department of Financial Services for their assistance.
Acting Postal Inspector-in-Charge Mike stated, “The arrests of these individuals for their alleged participation in a scheme to defraud insurance companies is an example of the commitment of Postal Inspectors to eliminate crime wherever it exists – keeping the mail safe and secure for the American public.”
The indictment charges all eight defendants with mail fraud and conspiracy to commit mail fraud. If convicted, they each face a maximum sentence of 20 years’ imprisonment, forfeiture of over a million dollars, and a $250,000 fine.
The government’s case is being prosecuted by Assistant United States Attorney Charles P. Kelly.
The Defendants:
Name: SHAWN McFADDEN
Age: 31
Residence: Uniondale, NYName: ROSHON COOKE
Age: 35
Residence: Hempstead, NYName: DANIEL OSBORNE
Age: 28
Residence: Uniondale, NYName: DANIEL THOMPSON
Age: 32
Residence: Norfolk, VAName: ALLAH BROWN
Age: 27
Residence: Roosevelt, NYName: BYRON DUDLEY
Age: 28
Residence: Baldwin, NYName: SHAQUANA BASNIGHT
Age: 30
Residence: Hempstead, NYName: CLIFFORD HAWKINS
Age: 25
Residence: Baldwin, NY_____________________________
1 The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
State Senator from Brooklyn Charged with Embezzlement and Obstruction of JusticeRead the Press Release
An indictment was unsealed this morning in federal court in Brooklyn charging New York State Senator John Sampson with two counts of embezzlement, five counts of obstruction of justice and two counts of making false statements to the Federal Bureau of Investigation.1 Since 1997, Sampson has served in the New York State Senate (the “Senate”) representing the 19th Senate District in southeastern Brooklyn. From June 2009 to December 2012, Sampson was the leader of the Democratic Conference of the Senate. From January 2011 to December 2012, Sampson was also the Senate Minority Leader. Sampson has also served as the chairman of the Senate Ethics Committee and the Senate Judiciary Committee. Sampson will be arraigned later today before United States Magistrate Judge Viktor V. Pohorelsky at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The indictment 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.
“The voters of New York State rightfully expect their elected officials to represent the voters’ interests, not to trade on their positions of power to line their own pockets,” stated United States Attorney Lynch. “As charged in the indictment, for years, Senator John Sampson abused his position of public trust to steal from New Yorkers suffering from home foreclosure and from the very county he was elected to represent. But the former Senate ethics leader didn’t stop there. Senator Sampson allegedly stole that money to fund his own ambition to become Brooklyn’s top state prosecutor, then engaged in an elaborate obstruction scheme to hide his illegal conduct, going so far as to counsel lies and the hiding of evidence.” United States Attorney Lynch thanked the FBI and the Federal Deposit Insurance Corporation Office of the Inspector General for their investigative efforts, as well as the Public Integrity Section and the Office of the Inspector General of the Department of Justice for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Today John Sampson has been added to the list of recently indicted New York elected officials. We could view this as an achievement for the FBI and federal prosecutors. But we share what may well be the concern of many New Yorkers that ‘incumbent’ and ‘defendant’ cannot be accepted as interchangeable. Elected officials are referred to as ‘public servants,’ and that should not be confused with ‘self-serving.’ The people of New York have a right to demand, at a bare minimum, that their elected representatives obey the law.”
I. The Embezzlement Scheme
As charged in the indictment, Sampson is an attorney licensed to practice law in the State of New York, and his law practice has included legal work involving the sale of foreclosed properties. Beginning in the late 1990’s, Sampson served as a court-appointed referee for foreclosure proceedings conducted by the Kings County Supreme Court. As referee, Sampson controlled escrow accounts holding proceeds of foreclosure sales of Brooklyn properties. Between 1998 and 2008, Sampson embezzled approximately $440,000 in surplus funds from the foreclosure sales of four Brooklyn properties. The prior owners of the Brooklyn properties, and other parties with a lawful interest, had a right to receive the funds embezzled by Sampson. Sampson indicated that he had illegally diverted the stolen funds to pay expenses arising from his unsuccessful run for Kings County District Attorney in 2005.
As alleged in the indictment, in July 2006, Sampson asked an associate who worked in the real estate industry (the “Associate”) for $188,500. The Associate agreed and, at Sampson’s direction, provided him with these funds in the form of three bank checks payable to third parties (the “Associate Transaction”). Sampson characterized the Associate Transaction to the Associate as a loan that he would repay, the proceeds of which he would use to cover the tracks of his embezzlement before it was uncovered. However, Sampson took this “loan” without written documentation or any rate of interest. Sampson never repaid the Associate. Further, Sampson concealed the Associate Transaction by lying on his Senate financial disclosure forms, falsely claiming that he had incurred no liabilities in excess of $5,000 or gifts or income in excess of $1,000.
The indictment further alleges that Sampson used a portion of the Associate Transaction funds to pay back some of the money he embezzled from two of the escrow accounts. However, Sampson never repaid any of the approximately $160,000 he stole from the two escrow accounts that are the subject of the embezzlement charges in the indictment.
II. John Sampson’s Obstruction of Justice
In the summer of 2011, the United States Attorney’s Office for the Eastern District of New York (the “USAO”) filed bank and wire fraud charges against the Associate in relation to a mortgage fraud scheme (the “Mortgage Fraud Case”). As charged in the indictment, after the Associate’s arrest, Sampson engaged in a multifaceted scheme to obstruct justice, so as to prevent the Associate from cooperating with law enforcement authorities and disclosing Sampson’s criminal conduct. Evidence of Sampson’s obstructive conduct includes intercepted phone calls from Sampson’s cellular telephone.
A. John Sampson’s Use of a USAO Employee to Obstruct Justice
According to the indictment, Sampson attempted to obtain confidential, nonpublic information regarding the Mortgage Fraud Case. Soon after the Associate’s arrest, Sampson informed the Associate that he knew an individual who, at that time, was an administrative employee in the USAO (the “Employee”). Sampson told the Associate that he could persuade the Employee to give inside information that would assist the Associate’s defense in the Mortgage Fraud Case.
As alleged in the indictment, Sampson then asked the Employee to determine whether the USAO was conducting a criminal investigation of Sampson and whether certain mortgage fraud defendants were cooperating with the government’s investigation. Sampson told the Associate that he was attempting to determine the identities of cooperating witnesses in the Mortgage Fraud Case, and that if they were able to identify those witnesses, Sampson could arrange to “take them out.”
According to the indictment, when the Associate asked Sampson about his efforts to use the Employee to obtain information about the Mortgage Fraud Case, Sampson was reluctant to discuss those illegal efforts over the telephone. For example, while meeting with the Associate in November 2011, Sampson stated, “I can’t talk on the phone . . . . From now on, our conversation is, ‘I don’t have no contacts, you don’t know nothing.’ When we talk, that’s how we talk.”
The indictment alleges that FBI agents later confronted the Employee concerning his contacts with Sampson. Immediately thereafter, agents searched the Employee’s office and located a slip of paper which contained the handwritten names of several individuals who were defendants in proceedings related to the Mortgage Fraud Case. The Employee was then suspended and subsequently terminated from his employment at the USAO.
B. John Sampson’s Witness and Evidence Tampering
As charged in the indictment, Sampson also obstructed justice by directing the Associate to withhold evidence regarding the Associate Transaction from the government. During a meeting on February 22, 2012, the Associate told Sampson that the federal government had subpoenaed the Associate’s business records, including a check register page that documented the Associate Transaction (the “Check Register Page”). Before disclosing the Check Register Page to the government, the Associate showed it to Sampson. At that time, Sampson took possession of the Check Register Page, examined it, and stated, “That’s a problem . . . I mean for me.”
Sampson instructed the Associate not to disclose the Check Register Page to the government. When the Associate stated that it might be a problem to withhold the document from the government, Sampson told the Associate to claim that the Associate did not maintain all of the Associate’s records. Sampson instructed, “Don’t say you don’t have it. Just say you don’t know. I don’t want you to lie, just say you don’t know.”
In addition, Sampson told the Associate to remove other items from the business records the Associate provided to the government, to make it appear as though the Associate’s records were incomplete. Sampson counseled the Associate to falsely claim that the Associate Transaction was payment for legal work Sampson had performed. Later during this conversation, Sampson instructed the Associate that, if the government asked whether the Associate ever loaned Sampson money, the Associate should say “No.” Sampson also suggested that, alternatively, the Associate could falsely claim that the Associate “forgave” the Associate Transaction “loan.” Sampson kept the Check Register Page during and after this meeting, and never returned it to the Associate.
III. John Sampson’s False Statements to the FBI
On July 27, 2012, FBI Special Agents interviewed Sampson outside his Brooklyn residence. When shown a copy of the Check Register Page, which he had taken from the Associate on February 22, 2012, Sampson stated that the document “didn’t ring a bell,” that he “didn’t have a recollection from it,” and that he did not recall seeing it previously. Sampson admitted that he had asked the Employee for information on the Mortgage Fraud Case, but claimed that he only requested public information from the Employee, such as the name of the judge assigned to the Mortgage Fraud Case. When asked why he would request public information from an employee of the USAO, when Sampson himself was an attorney, Sampson stated that he was not “good” with computers. At the conclusion of the interview, the agents advised Sampson that he had lied to federal agents, which constituted a federal crime. When asked whether he wished to revise his statement, Sampson stated, “Not everything I told you was false.”
If convicted, Sampson faces up to 10 years of imprisonment for each embezzlement charge, up to 10 years of imprisonment for a charge of obstruction of justice under 18 U.S.C. § 1503(a), up to 20 years of imprisonment for each of the remaining four charges related to obstruction of justice, and up to 5 years of imprisonment for each false statement charge, as well as restitution, forfeiture, and fines.
The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector, Paul Tuchmann, and Alexander Solomon.
The Defendant:
JOHN L. SAMPSON
Age: 47
Residence: Brooklyn, New York_____________________________
1The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Alleged Bonanno Associate Pleads Guilty to Narcotics Trafficking Crimes Carrying Sentence of 10 Years to LifeRead the Press Release
John Venizelos, also known as “John V,” “Big Man” and “John from Staten Island,” an alleged associate of the Bonanno organized crime family of La Cosa Nostra, pled guilty earlier today before U.S. Magistrate Judge Joan M. Azrack at the federal courthouse in Brooklyn to drug trafficking charges contained in a superseding indictment returned on April 3, 2013. When sentenced, Venizelos will face a statutory mandatory minimum ten-year sentence and a maximum of life imprisonment. Venizelos will also face a maximum fine of $10 million and will forfeit $148,480 and two firearms that federal agents seized from his residence.
The guilty plea was 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 Drug Enforcement Administration, New York (DEA).
According to the indictment and other court filings submitted by the government, Venizelos was a major Staten Island-based distributor of narcotics for a Canadian narcotics trafficking enterprise. Specifically, Venizelos was charged with narcotics and firearm-related offenses and witness tampering as a part of an indictment in which 10 members of a Montreal-based criminal enterprise that has connections with the Bonanno and Rizutto organized crime families and the Hell’s Angels have been charged with trafficking over $1 billion worth of marijuana and cocaine in the United States. Venizelos was charged with witness tampering in connection with his attempts to dissuade a co-conspirator from cooperating with law enforcement by, among other things, informing the co-conspirator about a $2 million “hit fund” set aside to murder or otherwise retaliate against any individuals who cooperated with the government.
During the course of the investigation, federal agents seized more than 80 kilograms of cocaine and approximately $10,000,000 in suspected drug proceeds. At the time of Venizelos’s arrest, agents discovered narcotics, multiple encrypted Blackberry devices, approximately $150,000 in drug proceeds, and multiple firearms in his residence – including a loaded semi-automatic handgun that had been stolen from a law enforcement officer. During the search of Venizelos’s residence, federal agents also discovered several handwritten letters addressed to Venizelos by an incarcerated associate of organized crime discussing a myriad of violent crimes committed by the author with, or on behalf of, Venizelos, including “a broad daylight kidnaping” and “torture” of an individual Venizelos suspected of stealing his drugs, threats of violence and vicious assaults against customers who owed Venizelos drug debts, and preventing a witness (through threats and intimidation) from positively identifying Venizelos for a crime that would have resulted in him serving “at least 7 years in jail.”
“Venizelos used violence and intimidation to protect his position as a major narcotics distributor. Those who challenged him were threatened, tortured, and beaten. Venizelos’s conviction underscores this Office’s strong commitment to prosecuting drug traffickers who flood our communities with narcotics, especially when those individuals have chosen a life of organized crime,” stated United States Attorney Lynch.” Ms. Lynch extended her grateful appreciation to the Drug Enforcement Administration, the New York Police Department, and New York State Police for their work on the case.
DEA Special Agent-in-Charge Crowell stated, “This is a significant guilty plea. Venizelos chose a life of crime and was involved with an international trafficking organization resulting in the seizure of stolen handguns, 80 kilograms of cocaine, and $10 million in drug cash. Venizelos had his hand in several crimes affecting our communities, and I commend our NYPD Detectives, NYSP Investigators, and Special Agents for their diligence in targeting those responsible for threatening our neighborhoods with drugs and violence.”
The government’s case is being prosecuted by Assistant United States Attorneys Steven L. Tiscione, Gina M. Parlovecchio, Amir H. Toossi, and Tanisha Payne.
The Defendant:
JOHN VENIZELOS
Age: 33Queens Doctor Indicted for Illegal Distribution of OxycodoneRead the Press Release
Earlier today, an indictment was unsealed charging Queens doctor Gracia L. Mayard with illegal distribution of oxycodone, a highly-addictive prescription medicine used to treat severe pain.1 Mayard is scheduled to be arraigned at 3:00 p.m. today before United States District Judge Joseph F. Bianco, at the United States Courthouse in Central Islip, New York.
The indictment 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, New York, Thomas V. Dale, Commissioner, Nassau County Police Department, and Joseph A. D'Amico, Superintendent, New York State Police.
On March 20, 2013, as part of a federal and state prescription drug abuse initiative within the Eastern District of New York, Mayard was arrested by members of a DEA Tactical Diversion Squad, comprising DEA agents, Nassau County Police Department detectives, and New York State Police investigators, on charges of illegally distributing oxycodone between January 1, 2012 and March 15, 2013. Mayard has been in custody since his arrest.
According to court filings and records of the New York State Bureau of Narcotics Enforcement, during the first nine months of 2012, Mayard issued 2,953 oxycodone prescriptions for approximately 376,469 pills to numerous individuals without performing any meaningful medical examination and in exchange for cash. In some cases, Mayard allegedly issued the prescriptions without even meeting the purported patients. On February 6, 2013, members of the DEA Tactical Diversion Squad contacted Mayard concerning his prescription activity, at which time Mayard voluntarily surrendered his DEA registration that authorized him to prescribe controlled substances. However, as alleged in court filings, on February 28, 2013, Mayard nevertheless issued a prescription for oxycodone. On March 13, 2013, a pharmacist, in the presence of DEA agents, called Mayard about the prescription. During the call, Mayard confirmed that he had issued the prescription and provided his surrendered DEA registration number, all in an effort to persuade the pharmacist to fill the oxycodone prescription.
“Overdose deaths from prescription painkillers are now more frequent than those from heroin and cocaine combined – this is an epidemic,” stated United States Attorney Lynch. “The defendant looked at this epidemic and saw opportunity – not to save lives and heal suffering, but for personal profit. Rather than follow his oath to ‘do no harm,’ Mayard prescribed hundreds of thousands of highly addictive pills with complete disregard for where they would end up or who would take them.” Ms. Lynch expressed her grateful appreciation to the Drug Enforcement Administration, the Nassau County Police Department, and the New York State Police for their assistance in this investigation.
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.
In January 2012, the United States Attorney’s Office for the Eastern District of New York 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 L. Bode.
The Defendant:
Name: GRACIA L. MAYARD
Age: 61_____________________________
1 The charges are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
New York State Assemblyman William F. Boyland Charged with Mail Fraud Conspiracy for Defrauding New York StateRead the Press Release
A second superseding indictment against New York State Assemblyman William F. Boyland, Jr. was filed today in the United States District Court for the Eastern District of New York. Boyland has served in the New York State Assembly representing the 55th District in Brooklyn since 2003. As alleged in the latest indictment, from July 2007 to September 2010, Boyland engaged in a scheme to defraud New York State by steering public funds to a Brooklyn-based non-profit organization (“Non-Profit A”) and then directing that a portion of those public funds be used to pay for community events promoting Boyland and on goods such as t-shirts imprinted with the slogan “Team Boyland” which were distributed at those events. 1
To conceal this scheme, Boyland allegedly directed members of his staff to instruct vendors involved in the community events to falsely list Non-Profit A, and not Boyland, as the purchaser on invoices for goods purchased for the events. A representative of Non-Profit A then submitted the fraudulent invoices to the New York State Office for the Aging (“NYSOFA”), which administered the public funds, without disclosing that these invoices were for events and goods promoting Boyland. In furtherance of the scheme, a representative of Non-Profit A also submitted Certification Forms to the NYSOFA that falsely stated, among other things, that the public funds would not be used for “partisan political activity,” and that Boyland had not and would not receive, either directly or indirectly, any financial benefit from Non-Profit A relating to the public funds.
The filing of the second superseding indictment 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. Ms. Lynch expressed her grateful appreciation to the New York State Comptroller’s Office for its assistance in this phase of the investigation.
If convicted on the new mail fraud conspiracy, Boyland faces a maximum sentence of 20 years in prison, a $250,000 fine, and restitution.
The government’s case is being prosecuted by Assistant United States Attorneys Robert Capers and Lan Nguyen.
The Defendant:
WILLIAM F. BOYLAND, JR.
Age: 42_____________________________
1 The charges contained in the indictments are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Three Members of International Cyber Fraud Ring Extradited from Romania to the United StatesRead the Press Release
Romanian nationals Cristea Mircea, Ion Pieptea, and Nicolae Simion will make their first appearance before United States District Judge Edward R. Korman later today following their extradition to the United States from Romania. The defendants are charged with participating in a sophisticated multimillion dollar cyber fraud scheme that targeted consumers on U.S.-based Internet marketplace websites such as eBay.com. Their 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 Mircea, Pieptea and Simion.1 The Bucharest Appeals Court ordered the extraditions of Mircea, Pieptea, and Simion on February 2, 2013. The defendants were subsequently transported to the Eastern District of New York and arraigned on March 27, 2013.
The extraditions were 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, New York Field Office
As alleged in the indictment, the defendants and their coconspirators saturated Internet marketplace websites, such as eBay.com, 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 indictment further describes how, after the purported 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 wire transfer instructions. However, these invoices were also fraudulent – the members of the conspiracy used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services. The fraudulent invoices directed the buyers to send money to American bank accounts that had been opened by foreign nationals in the United States, known as “arrows.” Finally, the “arrows” would collect the illicit proceeds and send them to the defendants in Europe by wire transfer and other methods. For example, the “arrows” forwarded defendant Pieptea $18,000 cash in fraud proceeds hidden inside hollowed-out audio speakers.
According to court filings, the defendants and their coconspirators allegedly defrauded their victims of at least $2 million during the course of the conspiracy. Notwithstanding the scope of the fraud, however, one of the coconspirators boasted, in a recorded conversation, that “criminals will not be extradited from Romania to the U.S.A. . . . it will never happen.”
Each defendant is charged with conspiracy to commit substantives offenses against the United States, wire fraud, and money laundering. The defendants face a maximum sentence of 20 years’ imprisonment on each count of conviction.
“These three defendants allegedly reached across the globe to defraud Americans, pretending to be legitimate online vendors and payment providers. In reality, they were con men with a computer. The defendants’ extraditions to the United States should make clear that our efforts to protect Internet consumers do not stop at our borders,” stated United States Attorney Lynch. “Thanks to our strong international partnerships, the notion that cybercriminals will never be extradited to the United States is merely a criminal’s fantasy.” Ms. Lynch extended her grateful appreciation to the FBI for its assistance.
The Romanian government, particularly the Ministry of Justice, the Romanian Internal Intelligence Service, and the Directorate for Combating Organized Crime, provided significant assistance and support during the investigation, arrest, and extradition of the defendants. The Department of Justice’s Office of International Affairs worked with its counterparts in Romania to effect the extraditions, and the U.S. Marshals Service coordinated and transported the defendants to the United States.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Nadia Shihata. and Claire Kedeshian, and Trial Attorney Carol Sipperly of the Criminal Division’s Computer Crimes and Intellectual Property Section.
The Defendants:
CRISTEA MIRCEA
Age: 30
RomanianION PIEPTEA
Age: 36
RomanianNICOLAE SIMION
Age: 37
Romanian_____________________________
1 The charges against the defendants are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Long Island Software Programmer Arrested for Hacking into Network of High-voltage Power ManufacturerRead the Press Release
A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Michael Meneses with hacking into the computer network of a company that manufactures high-voltage power supplies, causing the company over $90,000 in damage. Meneses was arrested earlier today in Smithtown, Long Island, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Gary Brown at the United States Courthouse, 100 Federal Plaza, Central Islip, New York. The charges were 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, New York Field Office.
According to the complaint, until January 2012, Meneses was employed at the victim company as a software programmer and system manager specializing in developing and customizing the software that the company used to run its business operations. A specialist in “enterprise resource planning” who had worked at the victim company for years, Meneses was one of two employees who were primarily responsible for ensuring that the software that drove the company’s manufacturing business - including its production planning, purchasing, and inventory control - operated efficiently. Meneses’s responsibilities gave him high-level access to the company’s computer network.
As alleged in the complaint, Meneses, who had voiced displeasure at having been passed over for promotions, tendered his resignation from the victim company in late December 2011, giving two weeks’ notice. After his network access was terminated, Meneses launched a three-week campaign to inflict damage on the company by gaining unauthorized access to its network and sabotaging the company’s business. Meneses employed various high-tech methods to hack into the victim company’s network and steal his former colleagues’ security credentials, including writing a program that captured user log-in names and passwords. Meneses then used the security credentials of at least one former colleague to remotely access the network via a virtual private network (VPN) from Meneses’s home and from a hotel located near his new employer, corrupting the network. Meneses’s efforts ranged from using a former colleague’s email account to discourage new applicants from taking Meneses’s position, to sending commands to alter the business calendar by one month, disrupting the company’s production and finance operations. The victim company suffered over $90,000 in damages as a result of Meneses’s intrusions.
“As the complaint alleges, the defendant engaged in a 21st Century campaign of cyber-vandalism and high-tech revenge, hacking into the computer network of his former employer to disrupt its operations, thereby causing tens of thousands of dollars in damage,” stated United States Attorney Lynch. “We will hold accountable any individual who victimizes others by exploiting computer network vulnerabilities.”
FBI Assistant Director in Charge Venizelos stated, “Bent on revenge, the defendant exploited his access and his technical know-how to sabotage his former employer. As alleged, he caused significant disruption and monetary damage. The FBI is committed to vigorous enforcement of laws governing computer intrusions.”
If convicted, the defendant faces a statutory maximum sentence of 10 years’ imprisonment, a $250,000 fine and restitution.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa and Charles N. Rose.
The Defendant:
MICHAEL MENESES
Age: 41
Residence: Smithtown, Long IslandLong Island Man Pleads Guilty After Multi-state Scam to Steal Victims’ Retirement SavingsRead the Press Release
CENTRAL ISLIP, NY – Smithtown, New York, resident Alexander Swanson, 48, waived indictment and pleaded guilty this morning to felony charges that he engaged in a wire fraud scheme to steal retirement savings from individuals in New York, New Jersey, and elsewhere. Through his investment fraud scheme, the defendant stole approximately $3.1 million from his victims. When sentenced, the defendant faces up to 20 years’ imprisonment on each of the three counts to which he pled guilty. Pursuant to his guilty plea, the defendant must also forfeit the proceeds of his fraud.
The charges were 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, New York Field Office.
According to the criminal charges filed today in the Eastern District of New York, Swanson misrepresented his job, background, and investment experience to his victims, and then provided the victims with false reports touting his investments’ performance. These misrepresentations fraudulently induced the victims to invest with Swanson, who stole and squandered their retirement savings for his own benefit, including gambling his victims’ savings on sporting events.
“Today, Swanson admitted that he constructed a false persona, lying about his job, background, and investment expertise, all for the purpose of bilking unsuspecting individuals out of their hard earned retirement savings. Promising them secure investments, he instead provided fraudulent reports that lured them deeper into his web of lies and deceit. Just as Swanson played fast and loose with the truth, he also played with his victims’ money, gambling much of it away on sporting events. Due to the combined efforts of law enforcement, the real Swanson will now receive the only payout his actions deserve: fraud charges, a guilty plea, and the prospect of a significant jail sentence,” stated United States Attorney Lynch. “I would like to thank our partners at the FBI for their hard work on this important investigation.”
FBI Assistant Director-in-Charge Venizelos stated, “Swanson preyed upon a particularly vulnerable class of victims. Investment fraud always victimizes the trusting investor, but Swanson targeted retirees who parted with portions of their savings. The FBI is determined to protect all investors from unscrupulous schemes.”
The defendant’s guilty plea took place this morning before United States Magistrate Judge Gary Brown, at the federal courthouse in Central Islip. United States District Judge Denis R. Hurley has not yet scheduled the sentencing hearing in this case.
The government’s case is being prosecuted by Assistant United States Attorney Christopher A. Ott.
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:
ALEXANDER SWANSON
Age: 48
Smithtown, New YorkFormer Chief Merchandising Officer of Aeropostale, Inc. Found Guilty of Receiving More Than $25 Million in KickbacksRead the Press Release
Christopher Finazzo, the former Executive Vice President and Chief Merchandising Officer of Aéropostale, Inc., a national mall-based specialty clothing retailer headquartered in Manhattan, was convicted today by a federal jury in Brooklyn on all sixteen counts for defrauding Aéropostale and receiving more than $25 million in kickbacks from Douglas Dey, the owner of South Bay Apparel, Inc. (“South Bay”), previously a major clothing supplier of Aéropostale. The jury’s verdict followed a three-week long trial in United States District Court in Brooklyn, New York, before the Honorable Roslynn R. Mauskopf. Finazzo was convicted of one count of conspiracy, fourteen counts of mail fraud, and one count of wire fraud. On Monday, April 29, 2013, the government will present its case to forfeit more than $21 million, two investment accounts, and four pieces of real property from Finazzo. Co-defendant Douglas Dey pleaded guilty on September 27, 2012, to conspiracy to bribe Finazzo.
Finazzo’s verdict and Dey’s guilty plea were 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, New York Field Office.
The evidence at trial established that Finazzo and Dey entered into a fraudulent scheme in which Finazzo caused Aéropostale to buy more than $350 million in t-shirt and fleece merchandise from South Bay in exchange for payments from Dey of approximately 50% of South Bay’s profits. Finazzo was Aéropostale’s head merchant from July 1996 until his termination by Aéropostale on November 7, 2006. While receiving approximately $20 million in salary, bonus, and stock options for the approximately 10 years that Finazzo worked at Aeropostale, Finazzo received more than $25 million in kickbacks from approximately June 2002 through November 2006 from Dey through C&D Retail Consultants, Inc., a company controlled by Finazzo, and through other companies Finazzo jointly owned with Dey. In 2005 alone, at the peak of the business between Aéropostale and South Bay, Finazzo received more than $13 million in kickbacks from South Bay. Throughout the course of the scheme, Finazzo and Dey concealed the kickbacks from Aéropostale and its employees, causing Aéropostale to lose profits and negatively impacting employee bonus amounts. Additionally, because Finazzo falsely stated in numerous company questionnaires that he was not engaged in any related-party transactions, Aéropostale falsely reported in its SEC filings that the company did not engage in such transactions. Aéropostale is a publicly traded company on the New York Stock Exchange.
At trial, the government proved that Finazzo defrauded Aéropostale by preventing Aéropostale from seeking lower prices for merchandise it purchased from South Bay, preventing Aéropostale from selecting other vendors who had better price and quality, and by causing Aéropostale to pay higher prices on merchandise it purchased from South Bay. For example, Finazzo’s unyielding commitment to placing t-shirt orders with South Bay caused him to repeatedly rebuff Aéropostale’s CEO’s direction that 25% of the t-shirt orders be placed with overseas vendors at a much lower cost. Finazzo did this to maintain his illegal kickbacks from South Bay.
“We have all heard the saying ‘money does not buy happiness,’ and today’s verdict is case in point for that maxim. Christopher Finazzo had a great job that paid him millions of dollars, but this honest living was apparently not enough to satisfy his greed. As the evidence at trial showed, he schemed to steal from Aéropostale and to receive more than $25 million in illegal kickbacks from a supplier,” stated United States Attorney Lynch. “As today’s verdict shows, we will vigorously pursue corporate fraudsters who double-deal to enrich themselves and bring them to justice.” Ms. Lynch extended her grateful appreciation to the FBI and the Securities and Exchange Commission for their assistance.
When sentenced by Judge Mauskopf, Christopher Finazzo faces a sentence of up to 20 years’ imprisonment for each of the fourteen counts of mail fraud and the one count of wire fraud, and up to five years’ imprisonment for the conspiracy count. Co-defendant Douglas Dey faces a maximum sentence of five years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, John P. Nowak, and Claire Kedeshian.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement 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 Defendants:
CHRISTOPHER FINAZZO
Age: 57DOUGLAS DEY
Age: 56Fitness Club Owner Sentenced to Life ImprisonmentRead the Press Release
Earlier today, Christian Tarantino, the owner of Synergy Fitness clubs on Long Island and New York City, was sentenced to three terms of life imprisonment without the possibility of parole for his role in the murders of three men between 1994 and 2003. The sentence was imposed by the Honorable Joanna Seybert, United States District Judge for the Eastern District of New York, at the United States Courthouse in Central Islip, 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, the FBI, the Nassau County Police Department (NCPD), and New York City Police Department (NYPD). Following jury trials in 2011 and 2012, Tarantino was convicted of participating in an armored car robbery in June 1994 during which a 47-year-old guard was shot and killed; orchestrating the August 1994 murder of an associate in that robbery, whose body Tarantino dumped from a boat several miles off the coast of Long Island; and, conspiring to murder a long-time confidant, who had threatened to take evidence of the first two murders to the FBI.
On June 23, 1994, Tarantino, Louis Dorval, and two others ambushed guards of the Mid-Island Check Cashing company as they delivered cash to a business in Syosset, New York. As Tarantino and his associates handcuffed one guard, Dorval shot and killed Julius Baumgardt in the back of the head as he lay face down on the pavement. Six weeks later, when federal law enforcement sought to arrest Dorval on charges in an unrelated racketeering indictment, Tarantino lured Dorval to his own death and with the help of others stuffed Dorval’s body in a plastic tool trunk that he then dumped at sea. A U.S. Coast Guard vessel pulled Dorval’s body out of the Atlantic several days later, but the investigations into both killings remained open.
In 2000, the U.S. Attorney’s Office, FBI, and NCPD, began to gather DNA evidence from several individuals. FBI forensic examiners subsequently found a match between Tarantino’s mitochondrial DNA and a hair fragment recovered six years earlier by the NCPD from a getaway car abandoned near the scene of the Baumgardt murder. The investigation also led to the arrest of an associate of Tarantino, who pled guilty in 2001 to engaging in a racketeering murder conspiracy to kill Dorval.
The collection of DNA evidence also led Tarantino’s long-time confidant, Vincent Gargiulo, to secretly tape-record a September 2000 conversation with Tarantino in an apparent effort to secure evidence that would prevent Tarantino or others from falsely implicating Gargiulo in either the Baumgardt or Dorval murders. In that recording, Tarantino implicated himself in both the Baumgardt murder and the killing and disposal of Dorval’s body. In 2003, Gargiulo revealed the existence of the recording to Tarantino and others and threatened to make the tape available to the FBI if he was not compensated for businesses losses. Thereafter, Garguilo wrote the FBI a letter offering to produce a tape that would prove Tarantino’s guilt in the two 1994 killings. However, before the FBI obtained the tape, Tarantino hired a Synergy Fitness gym employee to kill Gargiulo for $35,000. On the morning of August 18, 2003, as Gargiulo walked to work at a construction site Manhattan, that employee approached his victim and fired a single shot from a .22 caliber target pistol into the bridge of Gargiulo’s nose. Gargiulo was pronounced dead a short time later in Bellevue Hospital.
Several months later, Gargiulo’s tape recording was anonymously mailed to the homicide detectives of the NYPD. Analysis by the FBI’s forensic audio lab in Quantico, Virginia, confirmed its authenticity, and at the subsequent trials, juries heard Tarantino admit to his role in the armored car robbery and the subsequent dumping of Dorval’s body at sea.
In May 2011, a jury convicted Tarantino of participating in the murders of Julius Baumgardt and Louis Dorval, but failed to reach a verdict on the Gargiulo murder charges. Following a retrial, in May 2012, a second jury convicted Tarantino of conspiracy to murder Gargiulo to obstruct justice. Each of the counts of conviction carried mandatory life terms of imprisonment.
“For almost a decade, Christian Tarantino was a one man crime spree, engaging in armed robbery, murder, and murder conspiracy to cover his tracks. He controlled his confederates the old-fashioned way - by murdering them. As this investigation and prosecution demonstrate, law enforcement will never halt its efforts to ensure that murderers are brought to justice,” stated United States Attorney Lynch. “Tarantino thought that human life was his to take. He will now spend the rest of his life contemplating the just results of his actions.” Ms. Lynch extended her grateful appreciation to the Nassau County Police Department, the New York City Police Department, the New York County District Attorney’s Office, and the New York State Department of Corrections, Office of the Inspector General, for their assistance.
FBI Assistant Director-in-Charge Venizelos stated, “Because he ruthlessly took the lives of three others, Tarantino will spend the rest of his life behind bars. One victim was an innocent man doing his job, murdered in cold blood during a robbery. One was a robbery confederate of Tarantino whom he killed for fear of cooperation with the government. The third victim was also killed to silence him, when he threatened to expose Tarantino. This murderous conduct has been met with stern justice.”
The government’s case was prosecuted by Assistant United States Attorneys James M. Miskiewicz, Sean C. Flynn, and Carrie N. Capwell.
The Defendant:
CHRISTIAN GERALD TARANTINO
Age: 46Ralph Lauren Corporation Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $882,000 Monetary PenaltyRead the Press Release
Ralph Lauren Corporation (RLC), a New York based apparel company, has agreed to pay an $882,000 penalty to resolve allegations that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in Argentina to obtain improper customs clearance of merchandise, announced Mythili Raman, the Acting Assistant Attorney General for the Criminal Division, and Loretta E. Lynch, the United States Attorney for the Eastern District of New York.
According to the agreement, the manager of RLC’s subsidiary in Argentina bribed customs officials in Argentina over the span of five years to improperly obtain paperwork necessary for goods to clear customs; permit clearance of items without the necessary paperwork and/or the clearance of prohibited items; and on occasion, to avoid inspection entirely. RLC’s employee disguised the payments by funneling them through a customs clearance agency, which created fake invoices to justify the improper payments. During these five years, RLC did not have an anti-corruption program and did not provide any anti-corruption training or oversight with respect to its subsidiary in Argentina.
In addition to the monetary penalty, RLC agreed to cooperate with the Department of Justice in its ongoing investigation, to report periodically to the department concerning RLC’s compliance efforts, and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations. If RLC abides by the terms of the agreement, the department will not prosecute RLC in connection with the conduct.
The agreement acknowledges RLC’s extensive, thorough, and timely cooperation, including voluntarily making employees available for interviews, making voluntary document disclosures, conducting a world-wide risk assessment, and making multiple presentations to the Department of Justice on the status and findings of the internal investigation and the risk assessment. In addition, RLC has engaged in early and extensive remediation, including conducting extensive FCPA training for employees world-wide, enhancing the company’s existing FCPA policy, implementing an enhanced gift policy as well as other enhanced compliance, control, and anti-corruption policies and procedures, enhancing its due diligence protocol for third-party agents, terminating culpable employees and a third-party agent, instituting a whistleblower hotline, and hiring a designated corporate compliance attorney.
In a related matter, RLC reached a settlement with the SEC and agreed to pay $734,846 in disgorgement and prejudgment interest. The SEC settlement was filed today.
The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant United States Attorney Sarah Coyne, Chief of the Business and Securities Fraud Section from the Eastern District of New York. The case was investigated by the FBI’s New York Field Office. The department acknowledges and expresses its appreciation for the assistance provided by the SEC’s Division of Enforcement.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Queens Man Sentenced to 72 Months Imprisonment for Mail Fraud Conspiracy and Aggravated Identity TheftRead the Press Release
Earlier today, at the United States District Court for the Eastern District of New York in Central Islip, New York, Grigoriy Dekhkanov, a Queens resident, was sentenced to 72 months in prison for his role in a mail fraud conspiracy and aggravated identity theft.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Michael E. Seremetis, United States Secret Service (“USSS”), Long Island Resident Office, Resident Agent in Charge; and Edward J. Ryan, Special Agent in Charge, Social Security Administration, Office of the Inspector General (“SSA-OIG”).
According to court filings and the government’s factual recitation at the guilty plea and sentencing proceedings, between May 1, 2011 and July 20, 2011, when the scheme was broken up by law enforcement, defendant Grigoriy Dekhkanov, together with co-conspirators Rohit Gulati, Monish Patel, and others, stole personal identity information (names, addresses, dates of birth, social security numbers, and credit information) for 26,000 individuals from a medical billing company operated by Patel’s father, located in New Hyde Park, New York. Approximately 200 of these identities were used to apply for credit cards. “Runners” employed by the conspirators then used the credit cards to buy high-end electronic equipment and devices, mobile telephones, gift cards, and gold, which items were resold for cash. On July 21, 2011, when USSS and SSA-OIG agents executed a search warrant at a Sands Point rental home used by the organization, agents found envelopes containing fraudulently obtained credit cards and fake driver’s licenses in the names of identity theft victims, as well as gift cards and receipts showing that the organization had taken in $28,000 over the four days preceding the search. Agents also recovered a mobile phone containing the identity data for all 26,000 victims.
In April 2012, Dekhkanov pled guilty in federal district court in Central Islip to mail fraud conspiracy and aggravated identity theft. United States District Judge Joseph F. Bianco imposed sentence earlier today.
In November 2011 and April 2012, respectively, Dekhkanov’s principal co-conspirators, Monish Patel and Rohit Gulati, each pled guilty to mail fraud conspiracy and aggravated identity theft. Gulati was sentenced on March 8, 2013, to three years’ imprisonment. Patel is awaiting sentence.
“This identity theft scheme was stopped in its tracks only a few months after it began, by the quick action of dedicated law enforcement agents. Because the agents promptly discovered and put a stop to the fraud, only 200 out of the 26,000 stolen identities were compromised. Nevertheless, the amount of the loss – $749,000 – from the use of the 200 of the stolen identities is staggering.” stated United States Attorney Lynch. “This case exemplifies how law enforcement works to protect consumers in the digital age.” Ms. Lynch thanked the United States Secret Service and the Social Security Administration, Office of the Inspector General for their work on the case.
USSS Resident Agent in Charge Seremetis stated, “The U.S. Secret Service recognizes the consequences to those affected by identity theft and is committed to combating this criminality with the assistance of agency partnerships at every level.”
SSA-OIG Special Agent in Charge Ryan stated, “This office is pleased to have brought this case to a successful conclusion, and grateful to the U.S. Secret Service and the U.S. Attorney for their perseverance. The integrity of the Social Security Number (SSN) is among our highest priorities, and as this case demonstrates, the SSN is often a key tool in the commission of large-scale financial institution fraud. SSN misuse can have devastating consequences for the true SSN holder, and has a significant impact on corporate America. Concerted efforts such as we have seen in this case send a strong message that SSN misuse will not be tolerated and that drastic consequences await those who commit such crimes.”
The government’s case was prosecuted by Assistant United States Attorney Allen L. Bode.
The Defendant:
Name: GRIGORIY DEKHKANOV
Age: 26Gambino Family Administration Member Convicted of Racketeering Conspiracy Involving Two MurdersRead the Press Release
Following a five-week trial, a federal jury in Brooklyn today found Bartolomeo Vernace, a member of the administration of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”), guilty of a racketeering conspiracy spanning 1978 through 2011. As part of the racketeering conspiracy, the jury found that Vernace participated in all nine racketeering acts alleged in the indictment, including the 1981 double homicide of Richard Godkin and John D’Agnese, heroin trafficking, robbery, loansharking, and illegal gambling.
The verdict 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, New York Field Office.
The evidence at trial established that Vernace, also known as “Bobby Glasses,” “Pepe,” and “John Canova,” had a long career in the mafia beginning in the early 1970s and culminating in his induction and rise to become a powerful Gambino family captain who served on the three-member ruling panel overseeing the family that was established in 2008. Vernace was arrested on January 20, 2011, as part of a national sweep of almost 100 members and associates of organized crime led by the U.S. Department of Justice and Federal Bureau of Investigation.
Among the crimes he committed for the mafia, Vernace, together with two Gambino associates, murdered Richard Godkin and John D’Agnese in the Shamrock Bar in the Woodhaven neighborhood of Queens on April 11, 1981, after a dispute arose between a Gambino family associate and others in the bar over a spilled drink. The associate left the bar and picked up Vernace and a third accomplice at a nearby social club. A short time later, the three men entered the bar and gunned down Godkin and D’Agnese – the owners of the bar – as the bar’s patrons fled for cover.
In the weeks after the murders, Vernace went into hiding while one of his close associates, Ronald “Ronnie One-Arm” Trucchio, a rising star in the Gambino family who would later become a powerful captain, sought to question witnesses from the Shamrock Bar that night, placing those witnesses in fear. While in hiding, Vernace was indicted under the alias “Pepe” in the Southern District of New York on heroin trafficking charges. Years later, Vernace, who had avoided state charges for the murders and who had never been identified in connection with the heroin trafficking indictment, returned to Queens and to an active role in the Gambino family. Over the next two decades, his power within the mafia grew, as he became actively involved in robbery, loansharking, and gambling, while operating a large and profitable crew from a café on Cooper Avenue in the Glendale neighborhood of Queens.
In 1998, Vernace was charged in Queens County Supreme Court with the Godkin and D’Agnese murders, but was acquitted after trial in 2002. During testimony from the first week of the federal trial, an eyewitness to the murders testified that he had lied during the state trial about Vernace’s role in the murders due to fear of retribution. In the federal case, the eyewitness testified he recognized all three assailants but that had been afraid to testify against them because, in his words, “two men were dead over a spilled drink. I think that was reason enough to be afraid.” The eyewitness further described how, moments before the murders, he saw Vernace pointing a gun at Godkin’s head and taunting him, and that he saw one of Vernace’s accomplices threatening D’Agnese with a gun. According to the medical examiner, Godkin was killed by a gunshot to the chest fired from point-blank range, and D’Agnese died from a gunshot to the face.
In addition to the Godkin and D’Agnese murders, the jury found the other seven racketeering acts proved, including heroin trafficking, robbery, loansharking, and gambling, and found the defendant guilty of separate firearms and illegal gambling charges as well.
“Organized crime has been depicted by Hollywood as a group of criminals with honor. This case shows what organized crime is really all about - murder, mayhem, and making money off of the weaknesses and addictions of others. Today’s racketeering conspiracy conviction of a powerful Gambino family leader demonstrates, yet again, this Office’s unwavering commitment to holding individuals who choose a life of organized crime accountable, regardless of the age of their crimes,” stated United States Attorney Lynch. “The defendant spent the last forty years pursuing a career of crime, including the vicious double murder, as well as traditional mafia rackets. With this verdict, Vernace has finally been brought to justice and will be held to account for the destruction and pain he has inflicted on his victims and their families. We sincerely hope that today’s verdict helps bring a measure of closure for the families of Vernace’s murder victims, for whom justice has too long been denied.” Ms. Lynch expressed her grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation, and to the United States Marshals Service for its assistance during trial.
FBI Assistant Director-in-Charge Venizelos stated, “The thirty-two years since Vernace took part in the ruthless double murder of two good men represent half his lifetime. They have not been years spent atoning for those murders. It has been time spent living the life of a mob soldier, capo, and overseer – half a lifetime committing and directing crimes for the Gambino crime family. We expect that Vernace’s remaining years will be spent behind bars where he belongs. There is no expiration date on the FBI’s resolve to see justice done.”
When sentenced by United States District Judge Sandra L. Townes, Bartolomeo Vernace faces a sentence of up to life imprisonment.
The government’s case was prosecuted by Assistant United States Attorneys Evan M. Norris, Amir H. Toossi, and M. Kristin Mace.
The Defendant:
BARTOLOMEO VERNACE
Age: 64Approximately $1 Million Worth of Food Products Seized from V.I.P. Foods, Inc.’s Ridgewood, New York FacilityRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the unsealing of a civil complaint and the seizure of approximately $1,000,000 worth of food products from V.I.P. Foods, Inc. (“V.I.P.”) pursuant to a warrant issued by United States District Judge Nicholas G. Garaufis. The complaint alleges that V.I.P. violated the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq. The suit seeks forfeiture and condemnation of the adulterated food products.
V.I.P., based in Ridgewood, New York, is a manufacturer, warehouse, and repacker of various formulated dried mixes and bases such as chicken soup base, blueberry muffin mix, pancake mix, and flavored mashed potatoes. V.I.P.’s products are distributed under various names including V.I.P. Foods, VIP Foods, and KoJel. V.I.P. also distributes products under private label. The government’s claims arose from an investigation conducted by the FDA which revealed widespread rodent infestation, other insanitary conditions, and issues with V.I.P.’s building structure which provide entryway for insects and rodents. The complaint alleges that FDA inspectors observed live and dead rodents, rodent-gnawed containers of food, rodent nests within pallets of food and packaging materials, rodent excreta pellets too numerous to count scattered throughout V.I.P.’s premises, and rodent urine stains on and around food product and food product packaging.
“VIP’s warehouse was a picnic ground for rodents, and the company failed utterly in its obligation to provide food deemed safe for human consumption. Those who store, package, and sell the food we serve our families have a responsibility to maintain basic standards of cleanliness in their facilities. We are committed to protecting the public from health risks and ensuring that food manufacturers comply with the federal laws prohibiting them from preparing, packing, and holding food products under unsanitary conditions,” stated United States Attorney Lynch.
The government’s case is being litigated by Assistant United States Attorney Melanie D. Hendry.
Long Island Health Care Provider Sentenced to 12 Years in Prison for $10 Million Medicare Fraud and Hipaa Identity TheftRead the Press Release
Earlier today, Helene Michel, an owner and officer of Medical Solutions Management, Inc. (“MSM”), was sentenced to 12 years in federal prison by United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip, New York. Michel was convicted after a three-week jury trial in August 2012 of conspiracy to commit health care fraud, health care fraud, and HIPAA identity theft crimes. At today’s sentencing, Judge Bianco also ordered that Michel forfeit $1.3 million that was seized by the government at the time of her indictment.
The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Thomas O’Donnell, Special Agent in Charge, United States Department of Health & Human services, Office of Inspector General, Office of Investigations (“HHS OIG”), and George C. Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (“FBI”), New York Field Office.
According to the evidence at trial, between approximately April 2003 and March 2007, Helene Michel owned and operated MSM, a medical equipment company located in Hicksville, New York. Michel used her position as a medical equipment company owner to enter nursing homes in Nassau, Suffolk, Queens, Kings, and Dutchess Counties in order to access and steal patient records, in violation of the Health Insurance Portability and Accountability Act (“HIPAA”). During the scheme, Michel also falsely assumed a number of roles, including posing at various times as a doctor, a nurse practitioner, and a wound care expert. At times, in her false roles, Michel even accompanied doctors on patient evaluation rounds. Thereafter, Michel used the records that she stole to create and submit $10 million in false billings to Medicare for medical supplies and products that were either not required or not delivered. For example, in one instance, Michel used fraudulent drawings and measurements to support a Medicare claim for the cost of fitted boots for a legless patient. In another, Michel submitted false claims for the purchase of expensive wound care bandages to treat patients who never had such wounds. In the event that Medicare denied an MSM claim, Michel submitted an appeal of the denial supported by additional stolen and altered patient records.
Michel spent the Medicare funds that she stole through false claims and identity theft on her own personal interests, including a multi-million dollar home on Long Island’s North Shore, a half-million dollar pension account, and personal items such as luxury cars and designer handbags. Michel’s co-defendant Etienne Allonce, the co-owner of MSM, was also charged in the indictment and is believed to have fled from the United States. He remains a fugitive, listed on HHS OIG’s Most Wanted List.
“Helene Michel brazenly roamed the halls of dozens of nursing homes, pretending to be, among other things, a doctor, a nurse practitioner, and a wound care expert, even going so far as to join patient evaluations. In reality she was a con woman, deceiving patients and administrators alike as she trolled for the information she used to submit fraudulent claims to Medicare to support her extravagant lifestyle. Through her scheme she violated the privacy of over a thousand patients and stole Medicare funds dedicated to preserving the health of our seniors and other citizens,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute those who seek to profit by such despicable crimes.” Ms. Lynch expressed her grateful appreciation to HHS OIG, the FBI, and the Nassau County District Attorney’s Office.
The government’s case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr.
The Defendant:
Name: HELENE MICHEL
Age: 45Former President of Union Pleads Guilty to Accepting Kickbacks Embezzled from Union Welfare FundRead the Press Release
Earlier today, Hector Lopez, the former president of the Metal Polishers Union (Local 8A-28A) and Chairman of the Board of Trustees of the Local 8A-28A welfare fund, pled guilty to charges of conspiracy to commit mail and wire fraud and tax evasion. The guilty plea proceeding was held before United States District Judge Allyne R. Ross, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The defendant admitted to engaging in several schemes to obtain money from the union welfare fund, including:
(1) accepting kickbacks from the third-party administrator of the welfare fund in exchange for ensuring the continued retention of that administrator,
(2) accepting kickbacks from the employer trustee of the local’s welfare fund (“the employer trustee”) in exchange for authorizing the welfare fund to pay inflated invoices for a union hall renovation, and
(3) accepting a kickback from the employer trustee in exchange for rigging the bidding process to ensure that a sprinkler installation job was awarded to a company controlled by the employer trustee.
“As a union official, Lopez was charged with looking out for the welfare of his members. Instead, he put himself first and brazenly stole money that was intended to pay for healthcare expenses of union members and their beneficiaries,” stated United States Attorney Lynch. “Our office is committed to combating union corruption and safeguarding union funds.” Ms. Lynch expressed her grateful appreciation to the U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations, New York; the Department of Labor Office of Labor-Management Standards, New York; Internal Revenue Service, Criminal Investigation, New York; and the Employee Benefits Security Administration, New York, for their assistance in this investigation.
When sentenced, Lopez faces a maximum of 25 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Charles Kleinberg and Marisa Megur Seifan.
The Defendant:
Name: HECTOR LOPEZ
Age: 54
Residence: Oakland, NJBrooklyn Doctor Convicted in $77 Million Medicare Fraud SchemeRead the Press Release
Gustave Drivas, M.D., a medical doctor and resident of Staten Island, was convicted today of two felony counts for his role in a $77 million Medicare fraud scheme. The jury’s verdict followed an eight-week long trial in United States District Court in Brooklyn, New York, before the Honorable Nina Gershon. The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Mythili Raman, Acting Assistant Attorney General of the United States for the Department of Justice.
The evidence at trial showed that Drivas, a medical doctor licensed in the State of New York, knowingly authorized his coconspirators at a medical clinic in Brooklyn, New York, to use his Medicare billing number to charge Medicare for more than $20 million in medical procedures and services that were never performed. In return he received more than $500,000 for his role in the scheme. The evidence established that Drivas was a “no show” doctor, who almost never visited the clinic. The evidence also showed that the medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary 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, the conspirators used a network of external money launderers. The owners and operators of the clinic wrote clinic checks to numerous shell companies that were controlled by money launderers. These checks did not represent payment for any legitimate service at, or for, the medical clinics. Rather, the checks were written to launder the medical clinics’ fraudulently obtained Medicare proceeds. Two of the external money launderers, Anatoly Kraiter and Larisa Shelabadova, pleaded guilty prior to trial. Irina Shelikhova and her son Maksim Shelikhov, who directed the money laundering operation from inside the clinic, also pleaded guilty prior to trial to conspiracy to commit money laundering.
Drivas was convicted today of health care fraud conspiracy and health care fraud. He was acquitted of kickback conspiracy. At sentencing before U.S. District Judge Nina Gershon of the Eastern District of New York, scheduled for July 9, 2013, Drivas faces a maximum penalty of 20 years in prison. Drivas also faces mandatory restitution to be paid jointly and severally with his co-defendants of up to $50 million, and a fine of up to $100 million.
This is the 13th conviction in this case. Prior to trial, 12 defendants pleaded guilty. At trial, Alexander Zaretser, 32, Vladimir Kornev, 53, and Yelena Galper, 40, were acquitted.
“Gustave Drivas sold his license and his ethics for cold, hard cash, and was the linchpin in a scheme that defrauded the Medicare system of millions. Medicare fraud weakens a vitally important program which millions of our citizens rely upon. We will continue to be vigilant in bringing those who seek to steal from Medicare to justice,” stated United States Attorney Lynch. Ms. Lynch thanked the Federal Bureau of Investigation and Health and Human Services for their hard work in connection with this investigation that led to the defendant’s arrest and conviction.
The case was brought together with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section. 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 Health and Human Services 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 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
The government’s case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys William C. Campos and Shannon C. Jones.
The Defendant:
Gustave Drivas, M.D.
Age: 50NYPD Officer Assigned to Harlem Precinct Indicted for Armed Robbery and Narcotics TraffickingRead the Press Release
A superseding indictment was unsealed yesterday evening in federal court in Brooklyn charging New York City Police Officer Jose Tejada with armed robbery conspiracy, narcotics distribution conspiracy, and the unlawful use of a firearm.1 Tejada is a 17-year veteran of the New York City Police Department (“NYPD”) who, at the time of the robberies, was assigned to the 28th Precinct in Harlem and committed at least one of the robberies while on duty and in uniform. Tejada will be arraigned later today before United States Magistrate Judge Marilyn D. Go at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration, New York, and Raymond W. Kelly, Commissioner, New York City Police Department.
The superseding indictment added Tejada as a defendant to a previously filed indictment against a violent crew responsible for more than one hundred armed robberies of narcotics traffickers in the New York City metropolitan area that netted more than 250 kilograms of cocaine and $1 million in drug proceeds. As detailed in the superseding indictment and a detention letter filed by the government, beginning in 2001, members of the robbery crew, posing as police officers, staged arrests of drug traffickers, using fake arrest and search warrants, and then forcibly took drugs and money from the traffickers. Members of the crew restrained the drug traffickers with handcuffs, rope, and duct tape. During some of these robberies, crew members brandished firearms and assaulted their victims. The crew included actual officers, such as Tejada, who is the third member of law enforcement to be charged in the case.
According to the government’s filings, Tejada personally participated in three robberies in 2006 and 2007, which netted thousands of dollars in cash and multiple kilograms of cocaine. During one of the robberies, Tejada, while on duty and in uniform, used his status as a police officer to demand and gain access to a private residence in the Bronx. The crew mistakenly believed the residents to be drug dealers. In fact, the residents were a family of three, including a teenager, who had no involvement in drug dealing. Tejada and two others unsuccessfully searched the premises for drugs, while Tejada brandished his service weapon at the family. During another robbery in Upper Manhattan, Tejada and other crew members dressed in NYPD uniforms – including a second, actual NYPD officer – pulled over a car, handcuffed the driver, and stole five kilograms of cocaine hidden inside the car.
According to the government’s filings, Tejada helped robbery crew members pose as police officers by supplying them with NYPD equipment and paraphernalia. Tejada also searched confidential law enforcement databases to determine whether there were outstanding warrants in the names of his confederates.
Twenty-one members of the robbery crew, including a second NYPD officer and an auxiliary NYPD officer, have previously been convicted in the case. At the time of the robberies, Tejada was assigned to the 28th Precinct in Harlem. Currently, he is assigned to Police Service Area 7 of the NYPD Housing Bureau, located in the Bronx.
United States Attorney Lynch thanked the Drug Enforcement Administration and the NYPD Internal Affairs Bureau for their work on the case, and the New York State Police, United States Customs and Border Protection and Homeland Security Investigations for their assistance.
If convicted, Tejada faces a maximum sentence of life imprisonment on the narcotics and firearms charges.
The government’s case is being prosecuted by Assistant United States Attorneys Alexander Solomon and Douglas Pravda.
The Defendant:
JOSE TEJADA
Age: 45_____________________________
1 The charges contained in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Far Rockaway Man Charged with Defrauding Victims of $50 Million in A Real Estate Ponzi SchemeRead the Press Release
Earlier today, FBI agents arrested Gershon Barkany based on a criminal complaint alleging that the Far Rockaway man defrauded investors by promising to use their money in “risk-free” deals to purchase, and then immediately re-sell at a profit, large real estate properties located in New York City and New Jersey. In fact, the complaint alleges that no such deals existed and the defendant defrauded victims of over $50 million.
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 (“FBI”), New York Field Office. The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse in Central Islip, New York. 1
According to the criminal complaint that was unsealed this morning, Barkany induced at least five investors to wire transfer large sums of money supposedly to purchase real estate in Manhattan, Queens, the Bronx and Atlantic City, New Jersey. According to one of the investor victims, Barkany claimed that the sellers of these properties would only close on the real estate sales contracts after Barkany had located a purchaser who would be willing to buy the property from Barkany at a higher price. In that way, Barkany assured the victim that the real estate deals would be “risk free.”
In fact, the real estate deals did not exist. As part of Barkany’s Ponzi scheme, he diverted some of the funds he received to pay investors whom he had earlier defrauded. The defendant also lost some of the funds in gambling and otherwise used the money for his own benefit.
“Barkany’s victims sought the security of investing in real estate. Instead, they were taken for millions by the defendant’s lies and deception,” stated United States Attorney Lynch. “As alleged, the promised high returns were only for him, as he used his victims’ money to gamble and keep his scheme afloat. Today’s arrest demonstrates the Department of Justice’s commitment to investigate and prosecute financial crimes.” Ms. Lynch added that the government’s investigation is continuing.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged, Barkany promised a get-rich-quick investment scheme that really had potential to enrich only him. There were no investment properties, just a house of cards built on a foundation of lies. There may be no truly risk-free investments, but investors are entitled to honesty.”
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Christopher C. Caffarone.
The Defendant:
GERSHON BARKANY
Far Rockaway, New York
Age: 29_____________________________
1 The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Port Authority Police Officer Arrested for Mail FraudRead the Press Release
A criminal complaint was unsealed this morning in Brooklyn federal court charging Port Authority Police Officer Christopher Inserra, a five-year veteran of the Port Authority Police Department (“PAPD”), with mail fraud in connection with his scheme to defraud American Family Life Assurance Company of New York (“AFLAC”) by falsely claiming that he had suffered a debilitating work-related injury to his right arm.1 In furtherance of the scheme, Inserra lied to Port Authority medical staff (“PAMS”), falsely claiming that he suffered from excruciating pain and, at times, loss of mobility to his right arm. As a result, Inserra was classified by the PAPD as injured on duty (“IOD”) and out sick with full pay for nearly two years, from June 1, 2010 until his return to full duty in March 2012. During this time period, Inserra fraudulently filed two claims with AFLAC for short-term disability payments, based upon his alleged inability to return to work. AFLAC approved the claims and mailed two checks to Inserra totaling $31,486.66. Christopher Inserra is scheduled to be arraigned later today before United States Magistrate Judge Robert M. Levy at the U. S. Courthouse, Brooklyn, New York.
The arrest was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Keith E. Milke, Acting Inspector-in-Charge, United States Postal Inspection Service, New York, and Robert Van Etten, Inspector General for the Port Authority of New York and New Jersey.
As alleged in the complaint, beginning on June 1, 2010 and continuing until his return to duty in March 2012, Inserra repeatedly and falsely claimed to medical personnel that, while on duty, he suffered a debilitating injury to the lower bicep and elbow region of his right arm. Inserra further falsely claimed that the injury caused him excruciating pain and difficulty moving his right arm.
As alleged in the complaint, during the same time when Inserra was classified as IOD and collecting disability payments from AFLAC, he performed as the lead singer of a Brooklyn based “punk rock” group originally named “At The End Of The World,” and later renamed “Cousin Sleaze.”2 In photographs and video footage of his band’s numerous performances during this time period, Inserra frequently moved his right arm in a violent back and forth manner inconsistent with the severe level of pain and loss of mobility that Inserra had falsely reported to medical personnel.
For example, as alleged in the complaint, in September 2011, some fifteen months after falsely claiming that he was severely injured, and while still classified as IOD, Inserra told treating medical personnel, in substance, that he continued to be in constant pain, had difficulty using his right hand, and could not fully bend his right arm at the elbow. Inserra also claimed, in substance, that his pain level was an eight (8) on a scale of one (1) to ten (10), with ten (10) representing the highest level of pain.
However, during that same month, Cousin Sleaze embarked on a tour entitled the “Miles of Mayhem Tour,” in which they performed at multiple venues spread across the mid-Atlantic and Southeast regions of the United States. Law enforcement agents located and downloaded multiple photographs and video footage of Cousin Sleaze’s performances at the Sidebar Tavern in Baltimore, Maryland on September 21, 2011, the Coffeehouse in Murfreesboro, North Carolina on September 22, 2011, the Burro Bar in Jacksonville, Florida on September 23, 2011, the Surfer’s Pub in Cocoa Beach, Florida on September 24, 2011, and the Caledonia Lounge in Athens, Georgia on September 26, 2011.3 In the photographs and video footage, Inserra was observed holding a microphone in his right hand; extending his right arm out; curling his right arm back and forth; repeatedly bending his right arm at a ninety degree angle; and violently flailing and thrashing his right arm in an up and down and back and forth fashion. Notably, one of the PAMS medical personnel who had examined Inserra on multiple occasions during the course of his claimed injury reviewed the videotaped footage of the “Miles of Mayhem Tour” and concluded that the movements that Inserra performed with his right arm were inconsistent with Inserra’s stated medical complaints.
“As alleged in the complaint, this officer dishonored himself and his department by sliding down the slippery slope of deception and fraud. This prosecution demonstrates that such a violation of the public’s trust will not be tolerated,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the USPIS and the PANYNJ OIG, the agencies responsible for leading the government’s investigation.
Inspector General Van Etten stated “I commend United States Attorney Loretta Lynch and her staff for bringing this prosecution resulting in today’s arrest of a Port Authority Police Officer, who stands accused of violating his solemn oath of office to protect the public. As alleged in the complaint, for more than two years, Officer Inserra lied to medical staff and his fellow police officers at the Port Authority claiming he had a painful and debilitating work-related injury, while performing in a punk rock band and fraudulently collecting short-term disability payments from an insurance policy. Such conduct undermines the dedicated and hard-working officers who put their lives on the line each day. Thanks to our colleagues at the US Postal Inspection Service for their participation in this investigation. The Office of the Inspector General will continue to aggressively pursue and prosecute all those Port Authority employees, including police officers, who engage in deceptive and fraudulent conduct.”
The complaint charges Inserra with mail fraud. If convicted, he faces a maximum sentence of 20 years’ imprisonment and a $250,000 fine.
The government’s case is being prosecuted by Assistant U. S. Attorney Robert L. Capers.
The Defendant:
CHRISTOPHER INSERRA
Age: 31_____________________________
1The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
_____________________________
2A schedule of Cousin Sleaze’s performances was obtained from the band’s website.
_____________________________
3 Some of the video footage obtained during the course of this investigation was downloaded from http://www.YouTube.com/user/cousinsleaze . Many of the photographs of performances by Cousin Sleaze were downloaded from various Facebook sites that contained photo footage from those performances.
Staten Island Man Convicted of Making False Statements in A Matter Involving International TerrorismRead the Press Release
Abdel Hameed Shehadeh, a United States citizen and former resident of Staten Island, was convicted today of making false statements in a matter involving international terrorism. The jury’s verdict followed a week-long trial in United States District Court in Brooklyn, New York before the Honorable Eric N. Vitaliano. The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
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 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 Pakistani officials denied him entry, Shehadeh told investigators from the FBI’s Joint Terrorism Task Force (“JTTF”) that he had traveled to Pakistan to visit a university. However, the true purpose of Shehadeh’s trip was to wage violent jihad against United States military forces.
Several weeks after Shehadeh was denied entry to Pakistan, he 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 trip to Pakistan on his application. Though Shehadeh claimed that he had tried to enlist for career opportunities and benefits, his true motive was to deploy overseas, where he would commit treason by defecting and fighting alongside insurgent forces. Over the next several months, in subsequent interviews with members of the JTTF, Shehadah continued to lie about 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.
“Time and again, Shehadeh sought to travel overseas to wage violent jihad against U.S. military forces, going so far as to attempt to infiltrate the U.S. Army,” stated United States Attorney Lynch. “When confronted with his attempts to join a terrorist group and kill American soldiers, he repeatedly lied about his actions and his intentions. Due to the tireless work of our law enforcement partners, the defendant did not succeed in his jihadist goals. We will continue to be vigilant in bringing those who seek to commit terrorist acts to justice.” Ms. 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.
When sentenced, Shehadeh faces a maximum sentence of twenty-one years’ imprisonment.
The government’s case was prosecuted by Assistant United States Attorneys Alexander Solomon, David Sarratt and James Loonam.
The Defendant:
Abdel Hameed Shehadeh
Age: 23Two MS-13 Street Gang Members Convicted in Federal Court on Racketeering, Murder and Firearms ChargesRead the Press Release
Following six weeks of trial, a federal jury in Central Islip today returned a verdict convicting Salvadoran street gang members, Heriberto Martinez, also known as “Boxer,” and Carlos Ortega, also known as “Silent” or “Silencio,” on federal criminal charges, including murder, assault with a dangerous weapon, firearms offenses, and conspiracy. Both defendants are facing mandatory life sentences as a result of their convictions. Sentencing is scheduled for September 10, 2013 before United States District Judge Joseph F. Bianco.
The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Thomas V. Dale, Commissioner of the Nassau County Police Department.
At trial, the government proved that the defendants Martinez and Ortega, along with their fellow MS-13 gang members, killed multiple victims between February and March of 2010:
(1) Martinez was convicted in connection with the execution-style murder of Vanessa Argueta, a 19-year-old woman, in Central Islip, New York, on February 5, 2010. Martinez also was convicted of being an accessory after-the-fact in the murder of Argueta and her 2-year-old son, Diego Torres, who was shot and killed during the same incident. Martinez , the leader of the Coronados Clique of the MS-13, authorized the murder of Argueta and then helped three of his co-conspirators evade arrest in New York and flee to El Salvador after the commission of the murders. The bodies of Argueta and Torres were found in a secluded wooded area in Central Islip. Argueta had been shot in the head and chest, and Torres had been shot twice in the head.
(2) Ortega was convicted in connection with the murder of 21-year-old David Sandler and the attempted murder of 20-year-old Aaron Galan in Brentwood, New York on February 17, 2010. Ortega and his fellow MS-13 gang members lured Sandler, whom the MS-13 believed was a member of the rival Latin Kings street gang, to Timberline Drive in Brentwood, under the pretext of wanting to buy marijuana from him. Once Sandler arrived, Ortega shot him in the face at close range, killing him. Ortega also shot Sandler’s close friend, Galan, who was with Sandler at the time, in the face. Miraculously, Galan survived.
(3) Martinez also was convicted in connection with the execution-style murder of 23-year-old Nestor Moreno, a security guard at El Rancho Bar and Grill in Hempstead, New York on March 6, 2010. In late February 2010, Heriberto Martinez and several other members of the MS-13 were involved in a dispute with El Rancho employees over an unpaid bar tab. The dispute escalated into a physical altercation during which Martinez was sprayed with pepper spray. Prior to leaving El Rancho, Martinez identified himself as an MS-13 member to the victim and told him, “It’s not going to end like this.” On March 6, 2010, Martinez, along with four co-conspirators, returned to El Rancho and carried out that threat, shooting Moreno in the head at point-blank range. The gun that Martinez used to kill Moreno was the same semi-automatic handgun used to kill Argueta and her son, one month earlier.
(4) Both Martinez and Ortega were convicted in the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with the same semi-automatic handgun used in murders of Moreno, and Argueta and her son. However, the gun jammed. Undeterred, Martinez, Ortega and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
The convictions of Martinez and Ortega are the latest in a series of federal prosecutions by this Office targeting New York 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 that two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 50 of those MS-13 members have been convicted on federal racketeering charges. Seventeen of those defendants have received sentences of 10 years or more, and more than a dozen MS-13 defendants have been sentenced or are awaiting sentencing on murder convictions. These prosecutions are the product of investigations led by the FBI Long Island Gang Task Force, comprised of agents and officers of the FBI, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department and the Rockville Centre Police Department.
“Instead of working to lift up their immigrant community, Martinez and Ortega chose to join the killing machine known as MS-13,” stated United States Attorney Lynch. “They devoted their energies to spreading senseless violence through the neighborhoods of Long Island, destroying their victims’ lives and the peace in the community. The range of victims, from a bouncer doing his job, to the cases of mistaken identity, to the fellow gang member who didn’t want to kill, to a young mother and her toddler, underscores these defendants’ callous disregard for human life. They will soon spend the rest of their own lives contemplating the choices they made. This case demonstrates the on-going commitment of this Office and the FBI’s Long Island Gang Task Force to combat the violence perpetrated by the MS-13 and other gangs.” Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “The wanton disregard for human life displayed by Martinez and Ortega is a graphic reminder of why MS-13 poses a threat to public safety on Long Island. The crimes for which they have been convicted include four murders committed in a six-week period in 2010. The FBI will continue to place a high priority on policing and curtailing gang violence on Long Island.”
Nassau County Police Commissioner Dale stated, “ In Nassau County we have zero tolerance for gang activity. These two defendants are particularly vicious gang members who were brought to justice by the Long Island Gang Task Force and the United States Attorney for the Eastern District of New York. The Nassau County Police Department’s participation in this task force is critical for ensuring that the most dangerous predators will be removed from our communities.”
The government’s case is being prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney and Carrie N. Capwell.
The Defendants:
Heriberto Martinez, also known as “Boxer”
Age: 26Carlos Ortega, also known as “Silencio” and “Silent”
Age: 23Queens Doctor Arrested for Illegal Distribution of OxycodoneRead the Press Release
A Queens doctor was arrested this morning pursuant to a complaint charging him in federal court in Long Island with distribution of oxycodone, a highly-addictive prescription medicine used to treat severe pain.1 Dr. Gracia L. Mayard is scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown at the U.S. Courthouse, Central Islip, New York.
The charges were 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, New York and Thomas V. Dale, Commissioner, Nassau County Police Department.
This morning, as part of a federal and state prescription drug abuse initiative within the Eastern District of New York, Mayard was arrested by members of a DEA Tactical Diversion Squad, comprised of DEA agents and Nassau County Police Department detectives, on charges of illegally distributing oxycodone between January 1, 2012 and March 15, 2013. According to the complaint, during the first nine months of 2012, Mayard issued 2,953 oxycodone prescriptions – 376,469 pills – to numerous individuals, without performing any meaningful medical examination and in exchange for cash. In some cases, Mayard issued the prescriptions without even meeting the purported patients. On February 6, 2013, when members of the DEA Tactical Diversion Squad contacted Mayard, he voluntarily surrendered his DEA registration authorizing him to prescribe controlled substances. However, the complaint alleges that three weeks later, on February 28, 2013, Mayard nevertheless issued a prescription for oxycodone. On March 13, 2013, a pharmacist, in the presence of DEA agents, called Mayard about the prescription. During the call, Mayard confirmed that he had issued the prescription and provided his surrendered DEA registration number, all in an effort to persuade the pharmacist to fill the oxycodone prescription.
“Instead of abiding by the charge to ‘do no harm,’ Mayard allegedly operated under the credo ‘where’s the money,’ placing profits above patient safety,” stated United States Attorney Lynch. “When doctors participate in the diversion of addictive prescription drugs from their intended use they fuel drug abuse and addiction. We are committed to vigorous prosecution of this growing problem.” Ms. Lynch expressed her grateful appreciation to the Drug Enforcement Administration, the Nassau County Police Department and the New York State Police for their assistance in this investigation.
DEA Special Agent-in-Charge Brian R. Crowell stated, “Illegal prescribing is the white collar money making crime of the decade. We allege Dr. Mayard, with no regard to public safety, abused his position as a licensed doctor by prescribing pain medications to people with no legitimate medical need in exchange for cash. It is estimated that Dr. Mayard wrote prescriptions for over 9,000 pills of oxycodone per week affecting the availability of diverted medications in our community and on our streets. Over 26% of first time drug users began with non-medical use of prescription drugs and it is law enforcement’s concerted efforts to thwart both the supply and the demand.”
Nassau County Police Commissioner Dale stated, “Addiction to prescription opiates is a burgeoning problem here on Long Island. In Nassau County, overdoses from these types of medications almost doubles that of overdoses from heroin. Our partnership in the DEA Tactical Diversion Squad and with the United States Attorney for the Eastern District of New York ensures that law enforcement is doing their part to keep these illegally prescribed drugs out of our communities.”
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.
In January 2012, the United States Attorney’s Office for the Eastern District of New York 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 L. Bode.
The Defendant:
Name: GRACIA L. MAYARD
Age: 61_____________________________
1 The charges are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Alleged Al-Qaeda Operative Charged in New York for Terrorism Offenses Against Americans OverseasRead the Press Release
BROOKLYN, N.Y. – A six-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Ibrahim Suleiman Adnan Adam Harun, also known as “Spin Ghul,” with conspiracy to murder American military personnel in Afghanistan, conspiracy to bomb American diplomatic facilities in Nigeria, conspiracy to provide material support to al-Qaeda, providing material support to al-Qaeda, and related firearms and explosives counts.1 The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York on February 21, 2012, and relates to Harun’s alleged activities in Afghanistan, Pakistan, and Africa beginning in 2001.
The charges were 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, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.
According to court documents, Harun, who was born in Saudi Arabia but claims citizenship in Niger, was extradited from Italy to the United States on October 4, 2012, and arraigned in a sealed proceeding in federal court in Brooklyn, New York on October 5, 2012. The case is scheduled for a public status conference before United States District Judge Edward R. Korman at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, N.Y, on March 22, 2013 at 2:30 p.m.
Harun is charged with crimes related to his alleged terrorist activities on behalf of al-Qaeda beginning in 2001. According to the indictment and other court documents, beginning in 2001, the defendant traveled from Saudi Arabia to Afghanistan with the intent to fight violent jihad. He arrived in Afghanistan shortly before the September 11, 2001 attacks. He then joined al-Qaeda, received military-type training at al-Qaeda training camps, and ultimately fought against United States and Coalition forces in Afghanistan with an al-Qaeda fighting group based in Pakistan. According to the indictment, Harun allegedly attempted to kill United States military personnel in Afghanistan between 2002 and 2003. In 2003, in Pakistan, Harun received further al-Qaeda training and traveled to Africa with the intent to conduct attacks on United States diplomatic facilities in Nigeria. While in Nigeria, Harun allegedly conspired with others to bomb such facilities.
According to the indictment and other documents, after the arrest of a co-conspirator, the defendant traveled to Libya, en route to Europe, but was apprehended in early 2005. The defendant then remained in Libyan custody until June 2011, when he was released by the Libyan government. He was then arrested by Italian authorities after assaulting officers on board a refugee ship bound for Italy. As noted, the defendant was indicted in the United States on February 21, 2012, and charged with (1) conspiring to murder United States nationals; (2) conspiring to bomb United States government facilities; (3) conspiring to provide material support to al-Qaeda; (4) providing material support to al-Qaeda; (5) using firearms in furtherance of crimes of violence; and (6) using explosives in furtherance of one or more felonies.
On July 5, 2012, the Naples Court of Appeals found the defendant extraditable to face the charges in the indictment pending against him in U.S. federal court, pursuant to the bilateral extradition treaty between the United States and Italy. On September 14, 2012, the Italian Minister of Justice ordered the defendant extradited. Federal agents took the defendant into custody in Italy on October 4, 2012, and he arrived in the United States on that same day.
If convicted of all the charges in the indictment, Harun faces a maximum possible sentence of life in prison.
“As alleged in the indictment, the defendant was a prototype al-Qaeda operative, trained by al-Qaeda in terrorist tradecraft, deployed to fight American servicemen, and dispatched to commit terrorist attacks throughout the world,” said United States Attorney Lynch. “Whether they try to attack our servicemen on the battlefield, or scheme to kill our diplomats and citizens in embassies abroad, terrorists will find no refuge. The United States will use every tool at our disposal to protect our nation’s security and stop terrorist attacks before they happen.” Ms. Lynch expressed her gratitude to the law enforcement personnel who took part in the investigation, including Department of Defense Army investigators. She also thanked the Italian Ministry of Justice, the Prosecutor’s Office in Palermo, Italy, and other Italian police authorities in their support of the investigation and extradition of the defendant.
“The indictment unsealed today seeks to hold accountable an alleged al-Qaeda operative who targeted U.S. personnel and diplomatic facilities across two continents. His arrest and extradition to the United States are important milestones in our ongoing counterterrorism efforts. I thank the many agents, analysts and prosecutors who brought about this significant case,” said Acting Assistant Attorney General for National Security Carlin.
FBI Assistant Director-in-Charge Venizelos said, “Vowing allegiance to al-Qaeda and training to commit violent jihad are not the worst of Harun’s alleged crimes. The allegations include actually attacking U.S troops and plotting to use explosives to kill U.S. diplomats. As alleged, Harun not only intended to, but did commit acts of terrorism against Americans. Now he is subject to the American justice system. We remain committed to protecting the safety of Americans and our national security.”
Police Commissioner Kelly said, “As more al-Qaeda operatives continue to be flushed from hiding, the NYPD remains vigilant to the fact that terrorists have repeatedly since 9/11 plotted to kill more Americans. We are determined not to let that happen. I want to commend our federal partners and the U.S. Attorney in the prosecution of this important case.”
The government’s case is being prosecuted by Assistant United States Attorneys David Bitkower, Shreve Ariail and Amanda Hector of the United States Attorney’s Office for the Eastern District of New York. Assistance was provided by Alamdar Hamdani, Joseph Kaster, and Annamartine Salick of the Counterterrorism Section of the Justice Department’s National Security Division, and by William Nardini of the Justice Department’s Office of International Affairs.
The Defendant:
IBRAHIM SULEIMAN ADNAN ADAM HARUN, also known as “Spin Ghul”
Age: 43_____________________________
1 The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
New York State Assemblyman William F. Boyland Charged with Mail Fraud for Defrauding New York StateRead the Press Release
A superseding indictment against New York State Assemblyman William F. Boyland, Jr. was filed today in the United States District Court for the Eastern District of New York, which added new charges of mail fraud in connection with a scheme to defraud New York State by submitting fraudulent vouchers for travel expense and per diem payments. The Superseding Indictment also includes the charges from the underlying indictment against Boyland, charging him with bribery and attempted Hobbs Act extortion for soliciting more than $250,000 in bribes and accepting thousands of dollars of bribe money in exchange for performing official acts for the bribe payers.1 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 (FBI), New York Field Office.
As charged in the Superseding Indictment, from January 2007 to December 2011, Boyland fraudulently submitted New York State Assembly Member Travel Vouchers (Vouchers) in which he falsely claimed to be in Albany on legislative business when he in fact was not in Albany. New York State records show that in reliance on Boyland’s fraudulent Vouchers, New York State paid Boyland tens of thousands of dollars in mileage expense and per diem payments.
For example, on some of the days on which Boyland falsely claimed that he was in Albany and thus entitled to mileage expense and per diem payments, Boyland was actually not in Albany and was instead in New York City meeting with individuals he believed to be out-of-state businessmen and real estate developers, but who actually were the undercover FBI agents from whom he solicited bribes. In addition, E-ZPass records associated with Boyland’s vehicle and New York State Assembly records reflect that Boyland was not in Albany on the days when he claimed on Vouchers to be there on legislative business. By falsely overstating the number of days in which he was in Albany for legislative business, Boyland fraudulently secured tens of thousands of dollars in taxpayer funds to which he was not entitled.
If convicted, Boyland faces a maximum sentence on each fraud charge of 20 years in prison, a $250,000 fine and restitution.
United States Attorney Lynch and Assistant Director-in-Charge Venizelos expressed their thanks to the New York State Comptroller’s Office for its assistance in this phase of the investigation.
The government's case is being prosecuted by Assistant United States Attorneys Robert Capers and Lan Nguyen.
The Defendant:
WILLIAM F. BOYLAND, JR.
Age: 42_____________________________
1 The charges contained in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
16 Members of an International Money Laundering Scheme Arrested in the United States and ColombiaRead the Press Release
Two indictments were unsealed today in federal court in Brooklyn, New York, charging 19 members of an international money laundering scheme with conspiring to launder tens of millions of dollars in narcotics proceeds.1 According to the indictments and a detention letter filed today by the government, members of the conspiracy laundered tens of millions of dollars in narcotics proceeds from the United States to Colombia between 2006 and 2013. As part of the government’s investigation, law enforcement officers have thus far seized more than $6.5 million in United States currency as well as 52.5 kilograms of heroin, 32 kilograms of cocaine, 63 pounds of marijuana, eight vehicles and three firearms.
Twelve of the defendants were arrested earlier today in Colombia by members of the Colombian National Police. Four other defendants were arrested today in Queens, Long Island, New Jersey and Connecticut. Three additional defendants are already in custody for previously charged crimes and will be transferred to the Eastern District of New York to be arraigned in the coming days. In addition, nine other defendants have previously been arrested in connection with this investigation and charged in separate indictments; six of those defendants have pleaded guilty to the charges. Those defendants arrested today in the New York City metropolitan area will be arraigned later this afternoon before United States Magistrate Judge Lois Bloom at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York.
According to the indictment and other court filings submitted by the government, the four-year investigation revealed that, between January 2006 and March 2013, individuals operating out of retail shopping malls in Cali, Colombia (“money brokers”) assisted drug trafficking organizations in Colombia by laundering the proceeds of sales of narcotics in the United States. The twelve individuals arrested in Colombia today were money brokers who operated out of the El Diamante, Gran Centro Commercial, San Andresito and Atlantis retail shopping malls in Cali. Photographs of the interior areas of the El Diamante and Gran Centro Commercial shopping malls, where some of these money brokers operated, are attached to this press release.
These twelve money brokers oversaw a large network of confederates to assist in transferring millions of dollars in narcotics proceeds from narcotics distributors in the United States to narcotics suppliers in Colombia. The money brokers employed many individuals known as “money movers,” i.e., people responsible for collecting narcotics proceeds and disposing of those proceeds as directed by either the drug trafficking organization or the money brokers. The money movers served as go-betweens, taking the proceeds from narcotics distributors in the United States and eventually passing the money to other members of the organization, who repatriated the proceeds to Colombia.
The four individuals arrested today in the United States (and the three others already in custody on other charges) were money movers. They received phone numbers and code words from the money brokers to use to contact and identify the recipients to whom they were to deliver the narcotics proceeds. The money movers concealed and transported amounts ranging from thousands to hundreds of thousands of dollars in narcotics proceeds at a time, hidden within compartments in vehicles, gasoline containers, duffel bags and shoeboxes. These cash deliveries took place in locations such as parking lots of retail stores and fast food restaurants in Queens, New York, and elsewhere. At these meeting places, the money movers delivered the United States currency, which often was bundled and heat sealed, to other members of the organization.
“Money laundering is the lifeblood of the narcotics trade, both here in the US and in Colombia,” stated United States Attorney Lynch. “The individuals arrested and charged today are alleged to have worked to funnel tens of millions of dollars in narcotics proceeds out of the US and back to narcotics traffickers in Colombia. This international investigation illustrates our resolve to fight these schemes both here and abroad. As several of today’s defendants have learned, distance does not insulate them from the reach of our investigation and our resolve. With these charges, we focus not just on those who moved money in the US but also on those who furthered this scheme in Colombia. 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 Colombian National Police, particularly the Investigative Directorate and members of the HSI Transnational Criminal Investigations Unit, for their hard work and dedication throughout the investigation. Ms. Lynch also thanked the HSI attaché in Bogota and the HSI Hartford Office for their assistance. The investigation was led by agents with HSI New York serving on the El Dorado Task Force, which investigates narcotics trafficking and narcotics money laundering.
ICE/HSI Special Agent-in-Charge Hayes stated, “As alleged, the brokers and members of this money laundering organization orchestrated the transfer of millions of dollars in illicit narcotics proceeds to circumvent law enforcement in the United States and reap their illicit gains abroad. HSI is dedicated to combating criminal organizations by severing their financial life line.”
If convicted, the defendants face a maximum penalty of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Douglas Pravda, Brendan King and Tiana Demas.
The Defendants:
FABER ENRIQUE BERMUDEZ ARCINIEGAS
Age: 33HARBI CAICEDO
Age: 49ALEXANDER HENAO CHAMORRO
Age: 35EDWIN ARENAS CHAMORRO
Age: 38LUIS ANIBAL SALAZAR GARCIA
Age: 49JOSE LEONIDAS SALAZAR GARCIA
Age: 54JUAN CARLOS MEJIA GONZALEZ
Age: 48JAVIER ORLANDO ALVAREZ JARAMILLO
Age: 50JOSE LISANDRO ABADIA JIMENEZ
Age: 59JUAN FERNANDO MOLINA JIMENEZ
Age: 54MANUEL ANTONIO CAMPO JIMENEZ
Age: 51NUBIA ABADIA SARRIA
Age: 33RAFAEL ANTONIO ALVAREZ
Age: 33LEONARDO CALDERON-CASTRO
Age: 36JEFFERSON HERNANDEZ
Age: 24JUAN FRANCISCO MONEGRO PERALTA
Age: 29CEASAR STAPLETON
Age: 37MAGDIEL ELIAS VALENCIA
Age: 26
RICHARD VIQUEZ VARGAS
Age: 32_____________________________
1 The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Florida Man Pleads Guilty to Conspiring to Kill Federal JudgeRead the Press Release
BROOKLYN, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Dejvid Mirkovic, 38, of Lake Worth, Florida, pleaded guilty before U.S. District Judge John Keenan, to a felony charge of conspiring to murder the U.S. District Judge (the “federal judge”) who presided over the boiler room fraud conviction of Mirkovic’s coconspirator, a close business associate. Mirkovic and his coconspirator agreed to pay $40,000 to an undercover police officer, who they thought was a hit-man, to kill the federal judge as well as the Assistant U.S. Attorney (the “federal prosecutor”) who successfully handled the coconspirator’s fraud prosecution. Mirkovic paid the undercover officer $22,000 in cash as a down payment for the murders of the federal judge and the federal prosecutor. Conspiring to murder a federal employee on account of the performance of official duties carries a maximum penalty of life in prison, a fine of $250,000, or both. Additionally, Mirkovic agreed to the forfeiture of over $200,000, a car and four firearms.
According to case filings, law enforcement authorities learned of the plot in August 2012, when a confidential informant reported that the coconspirator stated he wanted to torture and kill the judge and the federal prosecutor and asked the informant for assistance in arranging for a hit-man to carry out the murders. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Mirkovic and the coconspirator numerous times at locations on Long Island, including at the Nassau County Correctional Center (“NCCC”), where the coconspirator was being held. At one of the first meetings, the coconspirator offered to pay one of the undercover officers $3,000 to assault an individual with whom the coconspirator had a financial dispute. Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of John Doe – in fact, a staged photograph and an identification card for John Doe – Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic met with the undercover officer, relayed the coconspirator’s instructions to murder the federal judge and federal prosecutor, and offered $40,000 for commission of the two murders. Mirkovic also gave the undercover officer a $12,000 down payment and paid an additional $10,000 the following week. Mirkovic promised payment of the final $18,000 upon confirmation of the murders. At the time of Mirkovic’s arrest at his home in Lake Worth, Florida, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun.
At today’s guilty plea proceeding, Mirkovic admitted under oath that he agreed to kill the federal judge and the federal prosecutor in retaliation for the performance of their duties. Mirkovic further admitted under oath that he traveled to the Eastern District of New York in September and October of 2012 and made payments for the murders.
The plea was the latest step in an investigation on the part of Special Agents of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.
Sentencing is scheduled for June 19, 2013, at 3 p.m. EST, in U.S. District Court, Brooklyn, in front of Judge Keenan.
MS-13 Gang Leader Pleads Guilty to Racketeering and Murder Conspiracy ChargesRead the Press Release
Hector Aleman Lemos, the former leader of the Flushing, Queens, chapter of the violent international gang La Mara Salvatrucha, also known as “MS-13,” pleaded guilty today to racketeering and murder conspiracy charges. Lemos entered his plea before United States District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn. As part of his plea, Lemos agreed to a sentence of 30 years’ imprisonment.
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 Field Office; and Charles Gardner, Commissioner, City of Yonkers Police Department.
According to the indictment and other court filings, Lemos, known in the gang as “Diablito,” was alleged to have been the leader 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, Lemos was charged with murdering 25-year-old John Halley in Yonkers, New York. Lemos believed, incorrectly, that Halley was a member of a rival gang when he shot him on the street. As part of his plea, Lemos admitted that he was a member of MS-13 and that he participated in the murder of Halley, as well as the shooting of a 13-year-old boy who had been standing on the stoop of a house in Flushing, New York that Lemos believed to be a rival gang location.
This conviction is the latest of the more than 120 convictions of MS-13 soldiers and leaders in the Eastern District of New York over the past decade. MS-13 is a violent, transnational gang, based in El Salvador, which has engaged in narcotics trafficking, robbery, extortion, murder and other crimes in cities throughout the United States and Central America. The gang has had a strong presence in immigrant communities in Queens and Long Island.
“Lemos was the leader of a gang that turned our streets into a shooting gallery, and killed innocent bystanders in its bid to dominate the streets,” said United States Attorney Lynch. Lemos’s conviction underscores this Office’s ongoing commitment to eradicating MS-13’s influence in our communities and seeking justice for the gang’s victims and their families. We will continue to vigorously prosecute members of the gang and work to dismantle its operations in this District.” Ms. Lynch expressed her grateful appreciation to the City of Yonkers Police Department for its invaluable assistance in this investigation.
“The defendant in this case indiscriminately brought or threatened violence against rival gang members and innocent civilians alike. HSI is proud to continue to partner with the United States Attorney’s Office to target violent transnational gang members who threaten the safety of New York communities,” stated HSI Special Agent-in-Charge Hayes.
The government’s case is being prosecuted by Assistant United States Attorneys Gina M. Parlovecchio and Darren A. LaVerne.
The Defendant:
HECTOR ALEMAN LEMOS, also known as “Diablito”
Age: 32Seven Defendants Arrested for Narcotics Trafficking in Brooklyn’s Bushwick HousesRead the Press Release
Three indictments were unsealed today in Brooklyn federal court charging seven defendants from the Bushwick section of Brooklyn, New York, with narcotics trafficking.1 Two of the indictments charge groups of defendants with trafficking cocaine base, and the third indictment charges a group with heroin trafficking. The defendants are scheduled to be arraigned today before United States Magistrate Judge Marilyn D. Go, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Raymond W. Kelly, Commissioner, New York City Police Department.
In response to a spate of violence that included the near-fatal shooting of a police officer in January 2012, the NYPD and FBI conducted a one-year joint investigation resulting in today’s charges against members of three separate narcotics trafficking organizations in the Bushwick Houses public housing development in Brooklyn. During the investigation, the NYPD conducted dozens of audio and video recorded purchases of cocaine base, or “crack,” and heroin from the defendants using undercover police officers. The crack cocaine transactions occurred in the hallways and stairwells of buildings in the development as well as just outside the buildings, often in public view. The heroin traffickers sold distribution-level quantities of heroin, frequently pre-packaged and stamped for retail sale. Several of the defendants have serious criminal records that include felony narcotics and firearms convictions.
“All New Yorkers deserve a safe place to live and raise their families. Instead, these defendants allegedly turned the Bushwick Houses into a drug market, rather than a place of refuge for the residents. This case again demonstrates this Office’s ongoing commitment to investigating and prosecuting organized drug trafficking activity in our community. Those who introduce drugs and other dangers into our neighborhoods will face the full force of the law,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the FBI agents and NYPD detectives who investigated the case. She added that the government’s investigation is ongoing.
The cases have been assigned to United States District Judges Matsumoto, Mauskopf and Weinstein. If convicted of the most serious offenses in the indictment, the defendants charged with crack offenses face a maximum sentence of 20 years’ imprisonment. The heroin defendants face a minimum sentence of five years’ imprisonment and a maximum sentence of 40 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Matthew Amatruda.
The Defendants:
KEITH BEAUFORT
Alias: Rosco
Age: 30EMPEROR BUILDER
Age:43KAREEM CAMPBELL
Alias: K
Age: 33TERRANCE JONES
Alias: Chef
Age: 40ROBERTO OGANDO
Age: 30RICKY PABON
Alias: Riz
Age: 36HECTOR SORIA
Alias: Hollywood
Age: 37_____________________________
1The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Long Island Financial Advisor Charged in Insider Trading ConspiracyRead the Press Release
A criminal indictment was unsealed today in federal court in Brooklyn charging Damian Perna, a financial advisor from Oceanside, Long Island, with conspiracy to commit insider trading. Perna is charged with conspiring with others to trade in securities of publicly-traded corporations registered under the Securities and Exchange Act of 1934 during the period from June 2011 through October 2012. 1
The defendant was arrested this morning and was arraigned earlier this afternoon before United States Magistrate Judge Ramon E. Reyes, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. As the government explained during the arraignment, Perna obtained draft earnings reports for publicly-traded companies before their public release through a contact at an investor relations firm. These companies included Consolidated Graphics, Alamo Group and Miller Industries, which are listed on the New York Stock Exchange, and Innophos Holdings, Inc., which is listed on the NASDAQ. In one meeting, Perna sold an advance copy of an earnings report to an undercover agent of the Federal Bureau of Investigation and was paid $7,000 in cash.
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.
If convicted, the defendant faces a statutory maximum sentence of 25 years’ imprisonment.
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. For more information on the task force, please visit www.StopFraud.gov.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa and Ilene Jaroslaw.
The Defendant:
DAMIAN PERNA
Age: 30_____________________________
1 The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Ukrainian National Pleads Guilty to Conspiracy to Export Night Vision EquipmentRead the Press Release
Volodomyr Ponomarenko, a citizen of Ukraine, pled guilty today at the federal courthouse in Brooklyn, New York, before the Honorable Edward R. Korman to conspiring to violate the Arms Export Control Act by attempting to export military-grade night vision equipment from the United States to Ukraine. Ponomarenko was arrested while attempting to enter the United States on March 23, 2011.
The plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Lisa Monaco, Assistant Attorney General for National Security; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Kenneth Siegler, Resident Agent-in-Charge, Defense Criminal Investigative Service (DCIS).
As alleged in the indictment and the underlying criminal complaint, the defendant purchased military-grade night vision equipment and other restricted weapons components from dealers in the United States and then attempted to export that equipment to Ukraine without the required license. As part of the export scheme, the defendant used straw purchasers in the United States to purchase the equipment. In exchange for a fee, the straw purchasers shipped the items to various freight forwarding companies for export to the defendant in Ukraine. Pursuant to the investigation, however, the night vision scopes and other weapons components were intercepted by law enforcement at John F. Kennedy International Airport.
The export of military-grade night vision equipment requires a license from the United States Department of State, and those who willfully seek to circumvent that requirement face significant criminal penalties. When sentenced, Ponomarenko faces up to 5 years in prison.
“The defendant tried to circumvent laws that protect our national security by preventing specialized technologies from falling into the wrong hands,” stated United States Attorney Lynch. “As today’s conviction shows, the United States will vigorously prosecute violations of our laws that help maintain the superiority of our armed forces on land, sea, and air.” Ms. Lynch expressed her grateful appreciation to U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York, and added that the government’s investigation is ongoing.
“Today’s guilty plea ends a conspiracy to willfully violate the customs laws of the United States and further safeguards America’s sensitive military technology,” said James T. Hayes Jr., Special Agent-in-Charge of HSI New York. “HSI agents and our partners with DCIS and the United States Attorney’s Office expertly foiled a potentially dangerous smuggling scheme.”
“Today’s guilty plea demonstrates the ongoing commitment of the Defense Criminal Investigative Service, in cooperation with our law enforcement partners and the U.S. Attorney’s Office, to aggressively pursue those intent on acquiring and illegally exporting U.S. military technology. Any attempt to circumvent the export laws will be fully investigated and prosecuted to ensure that America’s Warfighters maintain their tactical and strategic advantage around the world,” stated DCIS Resident Agent-in-Charge Siegler.
The government’s case is being prosecuted by Assistant United States Attorneys David Sarratt and Seth DuCharme, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section.
The Defendant:
VOLODOMYR PONOMARENKO
Age: 43Three Charged in Scheme to Defraud New York City School Construction Authority of over $32 Million; Two Others Charged with Structuring to Conceal FraudRead the Press Release
A criminal complaint was unsealed this morning in federal court in Brooklyn charging Muzaffar Nadeem, Afzaal Chaudry, and Zainul Syed with conspiring to defraud the New York City School Construction Authority (SCA) by falsely certifying that workers on the defendants’ SCA-funded construction projects received the legally and contractually mandated prevailing wage for their work.1 The complaint also charges Syed, as well as Irfan Muzaffar and Arun Gandham, an employee of a check-cashing business located in Jersey City, New Jersey, with structuring financial transactions in violation of federal law. The defendants arrested this morning have their initial appearances scheduled later today before United States Magistrate Judge Viktor V. Pohorelsky at the U. S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Eric T. Schneiderman, New York State Attorney General, Rose Gill Hearn, Commissioner, New York City Department of Investigation (DOI); Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS), New York; and Special Agent-in-Charge Robert Panella, New York Regional Office of the U.S. Department of Labor, Office of Inspector General (DOL IG), Office of Labor Racketeering and Fraud Investigations.
As alleged in the complaint and other court filings by the government, Nadeem operated a construction company, SM&B Construction Co., Inc. (SM&B) in Brooklyn, which has been awarded over $72 million in contracts by the SCA since 1997 and has received over $32 million in fraud-induced payments from the SCA since 2008. Chaudry and Syed worked as a foreman and office manager, respectively, at SM&B. Both New York State Labor Law and the terms of its contracts with the SCA required SM&B to pay workers on SCA-funded projects a prevailing wage rate, which was set by the New York City Comptroller. In fact, SM&B paid workers on its projects, including bricklayers and laborers, in cash at rates far below the prevailing wage and then falsely certified to the SCA that the workers had been paid the prevailing wage. For example, bricklayers renovating a Brooklyn elementary school were paid $250 for each eight-hour day, rather than the $580 daily wage to which they were legally entitled. Laborers on the same project were paid about $125 per day, rather than the $460-$540 daily wage to which they were legally entitled. As alleged in a detention memorandum filed today by the government, more than $3 million of SM&B’s proceeds from the charged fraud scheme were laundered through shell companies and then sent to Pakistan to fund an investment in an amusement park and resort complex there.
To conceal the charged fraud scheme from law enforcement, and to obtain cash to pay the illegally low wages to workers, Syed, Muzaffar, and Gandham allegedly engaged in illegal structuring, specifically, cashing multiple checks, each for less than $10,000, on a single day, for a total amount of more than $10,000, and thereby avoiding the required filing of Currency Transaction Reports (CTRs). According to the complaint, since January 2008, more than $3.6 million in structured checks were written on SM&B’s account.
“As charged in the complaint, the defendants promised workers a fair wage for a day’s work - work that was often difficult manual labor, but shortchanged them to line their pockets. They also defrauded the taxpayers by falsely stating to the School Construction Authority that they were paying a full day’s wages for a full day’s work. Their lies resulted in the awarding of contracts they were not entitled to, tens of millions of taxpayer dollars obtained by fraud, and the exploitation of workers,” stated United States Attorney Lynch. “They will now be held to account for their actions.” Ms. Lynch expressed her grateful appreciation to the New York City School Construction Authority Office of the Inspector General, the New York State Office of the Attorney General Organized Crime Task Force, the New York City Police Department, and the New York County District Attorney’s Office for their assistance in the investigation.
Attorney General Schneiderman stated, “My office will not tolerate employers who violate New York’s labor laws, steal taxpayer dollars and violate the public trust. Instead of complying with the law and paying their employees the fair and legally required wages, these unscrupulous business owners cheated their workers and stole tens of millions of dollars from New York City schools.”
DOI Commissioner Gill Hearn stated, “The defendants were well schooled in cheating their workers, according to the charges, and even sent millions they skimmed overseas to fund an amusement park. But defrauding the City’s school construction program is a serious crime that no one in law enforcement finds amusing. DOI thanks our partners in this case for their enduring commitment to rooting out fraud in our City’s construction industry.”
IRS Special Agent-in-Charge Weirauch stated, “Structuring financial transactions to avoid currency reporting requirements is a criminal violation of federal law under the Bank Secrecy Act. Such investigations are important because structuring is essentially a form of money laundering. The structuring activities alleged in this complaint not only hid a major fraud, but they provided the means to deprive hard working individuals of honest wages.”
DOL IG Special Agent-in-Charge Panella stated, “Today’s charges serve as a deterrent to those who would allegedly defraud unions and workers by falsifying payroll records to conceal their crimes. The Office of Inspector General will continue to work closely with our law enforcement partners to investigate these types of allegations.”
If convicted, the defendants charged with conspiracy to commit mail fraud each face a maximum sentence of 20 years’ imprisonment. If convicted, the defendants charged with illegally structuring financial transactions each face a maximum sentence of five years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Paul Tuchmann, Lan Nguyen and Claire Kedeshian.
The Defendants:
MUZAFFAR NADEEM
Age: 57
Residence: Brooklyn, NYAFZAAL CHAUDRY
Age: 46
Residence: Brooklyn, NYZAINUL SYED
Age: 38
Residence: Brooklyn, NYIRFAN MUZAFFAR
Age: 28
Residence: Brooklyn, NYARUN GANDHAM
Age: 44
Residence: Jersey City, NJ_____________________________
1The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Most Wanted “Deadbeat Parent” Pleads Guilty to Flight to Evade over $1.2 Million in Child Support ObligationsRead the Press Release
Earlier today, defendant Robert D. Sand, the nation’s “Most Wanted Deadbeat Parent” according to a child support enforcement web page, pleaded guilty to two counts of traveling in interstate and foreign commerce with the intent to evade child support obligations totaling over $1.2 million. The proceedings were held before the Honorable Joseph F. Bianco at the United States Courthouse located in Central Islip, New York. Sand faces a maximum sentence of 4 years’ imprisonment when sentenced on May 21, 2013.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Thomas O’Donnell, Special Agent in Charge of the New York Regional Office, Office of the Inspector General, United States Department of Health and Human Services (“OIG-DHHS”) and Charles Dunne, United States Marshal for the Eastern District of New York.
As part of his plea, Sand admitted that he initially relocated from New York to Florida and then fled the United States in order to evade his support obligations following the issuance of arrest warrants in 2000 and 2002. Sand admitted that he had spent much of the past decade in the Kingdom of Thailand where he operated a business. Sand was arrested in late November 2012, upon entering the Republic of the Philippines from Thailand without proper identification documents, and on December 17, 2012, he was deported to Los Angeles, where he was taken into custody by deputies with the United States Marshals Service. During the time Sand was a fugitive, his support obligations continued to grow. At the time of his arrest, Sand owed more than $1.2 Million in back child support.
According to a complaint filed in federal court on April 8, 2002, the New York State Family Court in Nassau County issued an arrest warrant for Sand on November 22, 2000, following multiple contempt findings against him in child support proceedings. A federal arrest warrant was issued for Sand on April 8, 2002. On September 17, 2009, an indictment was filed in the United States District Court for the Eastern District of New York charging Sand with two counts of failure to pay child support, and on February 17, 2010, a federal arrest warrant was issued for Sand’s arrest.
In January 2012, OIG-DHHS launched a child support enforcement web page (http://oig.hhs.gov/fraud/child-support-enforcement/) to seek the public’s help in ongoing federal efforts to bring fugitive “deadbeat parents” to justice. Sand was listed on the site as the number one “Most Wanted Deadbeat Parent” based upon his child support obligations that allegedly totaled more than $1 million.
“Today, the defendant has admitted to abandoning his responsibilities to the children he helped bring into this world, and to leaving the country to do so. Neither court orders nor the familial bond meant anything to him as he fled to avoid his obligations. Today’s guilty plea stands as a strong warning to those who would flee their lawful child support obligations that we will prosecute them to the fullest extent of the law,” stated United States Attorney Lynch. “Neither time, nor distance, will prevent the vigorous pursuit by law enforcement to bring them to justice.” Ms. Lynch expressed her grateful appreciation to the Office of the Inspector General, United States Department of Health and Human Services and the United States Marshals Service for their assistance in this case.
The government’s case is being prosecuted by Assistant United States Attorney Allen Bode.
The Defendant:
Name: ROBERT D. SAND
Age: 50Bedford-stuyvesant Based Drug Ring Charged with Narcotics TraffickingRead the Press Release
An indictment was unsealed today in Brooklyn federal court charging six defendants from the Bedford-Stuyvesant section of Brooklyn, New York, with trafficking crack and powder cocaine.1 Four of the arrested defendants are scheduled to be arraigned today before United States Magistrate Judge Viktor V. Pohorelsky, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. A fifth defendant was arrested yesterday in Harrisburg, Pennsylvania. A sixth is currently in being held in Vermont state custody on narcotics charges and will be brought to Brooklyn for arraignment on the federal indictment.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Raymond W. Kelly, Commissioner, New York City Police Department.
A one-year joint investigation by the FBI and the NYPD resulted in the charges against members of a narcotics trafficking organization based in Bedford-Stuyvesant, Brooklyn. As detailed in the indictment and a detention memorandum filed by the government, Glenn Miller, also known as “Chewy,” Jaron Johnson, also known as “Jay Jay,” Rashawn Johnson, also known as “SB,” Raumel Johnson, Azee Patterson and Eric South together trafficked cocaine and cocaine base (or “crack”), supplying street-level drug dealers with narcotics for re-sale. During the investigation, investigating agents intercepted communications over a series of cellular telephones used by Rashawn Johnson, pursuant to court-authorized wiretaps, purchased over 500 grams of cocaine base from Rashawn Johnson through a confidential informant, and executed two search warrants. Also during the investigation, state authorities in upstate New York and Vermont arrested Patterson in possession of distribution-level quantities of heroin, cocaine and cocaine base. As described in the detention memorandum, the investigation revealed that the defendants engaged in daily drug trafficking of large quantities of narcotics in Brooklyn and transported narcotics to upstate New York and Vermont for re-sale.
During the wiretaps, the defendants spoke in code, referring to “eight-balls” or 3.5 gram quantities of narcotics as “squirrelies,” and two-hundred gram quantities of narcotics as a “deuce.” During one intercepted call, Rashawn Johnson reported to a co-conspirator that he had prepared approximately 198 grams of cocaine base or “crack,” with a street wholesale value of approximately $7,900, for Miller. During the call, the co-conspirator asked Rashawn Johnson, “You do that shit for Chewy [Miller] already?” Rashawn Johnson answered: “Yea. I been do that shit already.” The co-conspirator asked, “Was it that much?” Rashawn Johnson answered, “Na. It was only a deuce. Not even a deuce. A little under a deuce. Like a buck 98.” As alleged by the government in the detention memorandum, the defendants’ drug business was of a sufficiently large scale that 198 grams of crack cocaine was considered a small amount.
Glenn Miller, Rashawn Johnson, Raumel Johnson and Eric South were arrested yesterday afternoon in Brooklyn. As alleged in government filings, contemporaneously with the arrests, agents executed search warrants and seized two kilograms of cocaine, 24 grams of cocaine base, two .45 caliber handguns, two .22 caliber handguns, scales and materials for making cocaine base from the defendants’ stash house in Bedford Stuyvesant, Brooklyn, and ten grams of heroin, over $6,000 in currency and an electronic money-counter from a residence across the street. Jaron Johnson was arrested yesterday by FBI agents in Harrisburg, Pennsylvania. At the time of his arrest, Jaron Johnson possessed approximately $23,000 in currency. Jaron Johnson will be arraigned today in United States District Court in Pennsylvania.
“As set forth in the indictment, instead of working to improve the Bedford-Stuyvesant neighborhood, the defendants chose to supply crack and powder cocaine to their community, building a lucrative narcotics organization. The narcotics trade siphons off not just dollars from those affected, but hope and opportunity. This case also illustrates how drug trafficking and illegal firearms go hand in hand. We are committed to removing the scourge of illegal guns and drugs from our communities, and holding those who possess and sell them accountable for their conduct,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the NYPD, and added that the government’s investigation is ongoing.
FBI Assistant Director-in-Charge Venizelos stated, “It’s hardly a surprise, in a case where the indictment charges drug trafficking, to find a cache of guns. Guns - and the potential for gun violence - go hand-in-hand with illegal drugs. That connection between drugs and guns is why the FBI will continue to work with the Police Department to curtail drug trafficking.”
The cases have been assigned to United States District Judge Eric N. Vitaliano. If convicted of the most serious offenses in the indictment, the defendants face a maximum sentence of life imprisonment and a minimum sentence of ten years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Matthew Amatruda.
The Defendants:
GLENN MILLER
Alias: Chewy
Age: 32JARON JOHNSON
Alias: Jay Jay
Age: 35RAUMEL JOHNSON
Age: 36RASHAWN JOHNSON
Alias: SB
Age: 32AZEE PATTERSON
Age: 28ERIC SOUTH
Age: 59_____________________________
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Teacher's Aide Pleads Guilty to Producing Child PornographyRead the Press Release
Earlier today, Taleek Brooks, a former teacher’s aide at a public elementary school in Brooklyn, pleaded guilty to producing child pornography and distributing child pornography. The proceedings were held before United States Magistrate Judge Roanne L. Mann at the United States Courthouse in Brooklyn, New York. Brooks faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum sentence of 50 years’ imprisonment when sentenced on May 23, 2013.
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.
Brooks, a teacher’s aide at Public School 243, The Weeksville School, in Brooklyn, regularly downloaded and distributed videos and images depicting child pornography over the Internet through a peer-to-peer file sharing program. In December 2011, Brooks accepted a “friend” request from an undercover FBI special agent, which permitted the agent to observe and download several videos and images depicting child pornography that Brooks had designated for sharing with his “friends” on the peer-to-peer network.
On January 13, 2012, FBI special agents executed a search warrant on Brooks’s residence in Brooklyn. During the search, agents seized, among other items, a computer and two external hard drives from Brooks’s bedroom. Hundreds of videos and images depicting child pornography were found on the computer equipment.
A FBI forensic examination of the equipment revealed that Brooks had produced child pornography. In a folder that Brooks had labeled “Special,” investigators recovered videos and images of a young child performing sexually explicit acts at Brooks’s direction. Brooks can be heard and seen in some of the videos. Investigators later confirmed that the young child had been a student at Public School 243 while Brooks was a teacher’s aide and that the videos and images were produced in two of the school’s classrooms.
“School is supposed to be a place of learning, where our children can excel and grow. Brooks turned his classroom into a place of fear and exploitation, taking advantage of the trust that was placed in him by a young child that he was charged with teaching and protecting. He spent his additional time and energy collecting images of the exploitation of yet more children. We stand committed to protecting our youth from those who abuse them and violate that trust,” stated United States Attorney Lynch. “Today’s guilty plea stands as a strong warning to those who prey on our youth that we will prosecute them to the fullest extent of the law.”
FBI Assistant Director-in-Charge Venizelos stated, “Brooks not only collected and traded images of child pornography, he created it when he directed and recorded a child performing sexually explicit acts in a school classroom. The FBI is committed to protecting children by policing child predators.”
The government’s case is being prosecuted by Assistant United States Attorney Robert Polemeni.
The Defendant:
TALEEK BROOKS
Age: 42New York Man Pleads Guilty to Attempting to Bomb New York Federal Reserve Bank in Lower ManhattanRead the Press Release
BROOKLYN, N.Y. – Earlier this afternoon, at the U.S. District Court for the Eastern District of New York, Quazi Mohammad Rezwanul Ahsan Nafis, 21, pleaded guilty to attempting to detonate what he believed to be a 1,000 pound bomb at the New York Federal Reserve Bank on Liberty Street in lower Manhattan’s financial district. The charge to which Nafis pleaded guilty, attempting to use a weapon of mass destruction, carries a sentence of up to life imprisonment.
The guilty plea was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; Lisa Monaco, Assistant Attorney General for National Security; George Venizelos, Assistant Director-in-Charge, FBI, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
According to today’s guilty plea and documents filed in the case, defendant Nafis, a Bangladeshi national, traveled to the United States in January 2012, intending to fight violent jihad. Nafis attempted to recruit multiple individuals to form a terrorist cell inside the United States. He brought with him digital media containing bomb-making instructions and speeches by Anwar al-Awlaki, a now deceased leader of al-Qaeda in the Arabian Peninsula (AQAP). 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 was a source for the FBI. During their subsequent investigation, FBI agents and NYPD detectives working with the Joint Terrorism Task Force closely monitored Nafis as he attempted to implement his plan.
Nafis proposed several targets for terrorist attack, including a high-ranking U.S. official and the New York Stock Exchange. Ultimately, Nafis decided to conduct a bombing operation against the New York Federal Reserve Bank. In a written statement he devised to claim 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 killing of women and children that Nafis expected would result from the attack.
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 worked to store the material and assemble 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 in lower Manhattan. Throughout his interactions with the undercover agent, Nafis repeatedly asserted that the plan was his own and was the reason he had come to the United States.
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 a 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 to the American public which he intended to release 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 the inert explosives provided by the undercover agent. JTTF agents arrested Nafis immediately after he attempted to detonate the bomb.
“As today’s guilty plea shows, the defendant came to this country not to further his studies, but to advance the goals of jihad. Once here, he devoted his energies to refining his plan to disrupt the U.S. economy and kill Americans, and attempting to recruit others to join him. Ultimately, he resolved to commit mass murder in downtown Manhattan through an attack on the New York Federal Reserve Bank, a symbol of America’s economy. With diligence and determination, Nafis attempted to carry out his plan in the name of al-Qaeda. We are committed to protecting the safety of all Americans, including the hundreds of thousands who work in New York’s financial district. We will not wait for our enemies to attack us before using the tools at our disposal to discourage, disrupt, and ultimately, detain them with lengthy terms of incarceration,” stated U.S. Attorney Loretta E. Lynch. “I would like to thank our partners at the FBI, NYPD, United States Secret Service, Immigration and Customs Enforcement/Homeland Security Investigations, New York State Police, 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.”
“Rezwanul Nafis today admitted that he came to America for the purpose of conducting terrorist attacks, that he tried to recruit others into his plans, and that he ultimately concocted and attempted to carry out an attack against the New York Federal Reserve Bank. Thanks to a coordinated undercover law enforcement effort, his plot was thwarted. I applaud the many agents, analysts and prosecutors who helped bring about today’s successful outcome,” said Lisa Monaco, Assistant Attorney General for National Security.
FBI Assistant Director-in-Charge George Venizelos stated, “Nafis admits he came to the U.S. intent on committing jihad, assembled a bomb for that purpose, and attempted to detonate it. Thankfully, among those who stood between him and his goal were a source and an undercover FBI agent. In order to stop those committed to terrorism from conspiring with others who would actually help them, we will continue to use all available tactics, including the use of undercover agents. There is no more important mission.”
NYPD Commissioner Kelly stated, “Nafis is just one of the more recent examples of individuals charged in terrorist plots against targets in New York City. There have been 16 plots against the city that we know of since the World Trade Center Twin Towers were destroyed in 2001. Time and again, individuals intent on making a violent terrorist statement select New York City as their venue. That’s why, as in many other cases, the NYPD cooperated closely with federal prosecutors and the Joint Terrorism Task Force of the FBI to bring Nafis to justice.”
The defendant faces a statutory maximum sentence of life. His sentencing is scheduled for May 30, 2013, at 10:00 AM, before Chief Judge Carol B. Amon, at the federal courthouse in Brooklyn.
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: 21
Jamaica, New YorkFive Individuals and Five Corporations Charged in New York for Importing and Selling Hazardous and Counterfeit ToysRead the Press Release
Five individuals and five corporations have been charged in an indictment unsealed today in Brooklyn federal court for allegedly importing hazardous and counterfeit toys from China for sale in the United States, announced Assistant Attorney General Lanny Breuer of the Justice Department's Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Special Agent in Charge of Homeland Security Investigations (HSI) in New York James T. Hayes Jr.; Robert E. Perez, New York Field Operations Director of Customs and Border Protection (CBP); Chairman Inez Tenenbaum of the Consumer Product Safety Commission (CPSC); and Commissioner Raymond W. Kelly of the New York City Police Department (NYPD).
The 24-count indictment charges Chenglan Hu, 51, Hua Fei Zhang, 52, and Xiu Lan Zhang, 60, all Chinese nationals and residents of Queens, N.Y., and Guan Jun Zhang, 29, and Jun Wu Zhang, 28, both naturalized citizens and Queens residents, along with their closely held companies Family Product USA Inc., H.M. Import USA Corp., ZCY Trading Corp., Zone Import Corp. and ZY Wholesale Inc., with importing and trafficking hazardous toys in violation of the Consumer Product Safety Act (CPSA) and toys bearing copyright-infringing images and counterfeit trademarks, smuggling, money laundering and structuring.
“The defendants are accused of importing and selling toys that posed significant health hazards to children or were the product of blatant intellectual property theft,” said Assistant Attorney General Breuer. “They allegedly retooled their operations many times in order to avoid detection, and despite repeated citations by the authorities, they continued to peddle counterfeit toys featuring Dora the Explorer, SpongeBob SquarePants and other popular children's characters. Today’s actions reflect a Justice Department focused on ensuring that consumers receive safe and legitimate goods.”
“For years, the defendants sought to enrich themselves by importing and selling dangerous and counterfeit children’s toys without regard for the law or the health of our children,” said U.S. Attorney Lynch. “Profits from the counterfeit items, as well as toys riddled with lead and choking hazards, went to provide the defendants with luxury cars. We stand committed to protecting the residents of our communities from those who would engage in such conduct.”
The five individual defendants were arrested this morning, and a federal task force comprising HSI agents, other federal agents and NYPD officers, aided by CBP officers and CPSC investigators, executed four search warrants and nine seizure warrants. The agents, officers and investigators searched the defendants’ warehouse, two residences and an email account. In addition, three luxury vehicles, including a Porsche and Lexus, three personal bank accounts and three corporate accounts were seized. The agents also filed lis pendens on two of the defendants' properties in Queens, N.Y. The defendants’ initial appearances are scheduled this afternoon before U.S. Magistrate Judge Ramon E. Reyes Jr.
The indictment charges that from July 2005 through January 2013 the individual defendants used their companies, the corporate defendants, to import toys from China that they sold, both wholesale and retail, from a storefront and warehouse in Ridgewood, N.Y., and other locations in Brooklyn and Queens.
According to the indictment, the defendants’ companies had children’s toys seized by CBP from shipping containers entering the United States from China on 33 separate occasions. Seventeen of the 33 seizures were of violative toys - toys prohibited from import into and distribution in the United States, under laws and regulations enforced by the CPSC, because of excessive lead content, excessive phthalate levels, small parts that presented choking, aspiration or ingestion hazards, and easily accessible battery compartments. Sixteen of the 33 seizures were of toys bearing copyright-infringing images and counterfeit trademarks, including knockoff versions of toys featuring a wide variety of popular children’s characters, such as Winnie the Pooh, Dora the Explorer, SpongeBob SquarePants, Betty Boop, Teenage Mutant Ninja Turtles, Power Rangers, Spiderman, Tweety, Mickey Mouse, Pokémon, as well as those from movies, such as the “Cars,” “Toy Story” and “High School Musical.”
The indictment charges that following each of the 33 seizures, the violator toy company was served written notice by CBP detailing the reason for the seizure, and a representative of the company signed a release form acknowledging the seizure and abandoning the seized goods. Additionally, the violator company and its principal were served written notice by CPSC of the specific safety violations of the toys, and each time a representative of the company signed a release form acknowledging the seizure and abandoning the seized goods.
Due to the number and volume of the seizures, the individual defendants allegedly shifted their use of the companies and alternated formal roles, in order to continue importing and distributing violative and infringing toys. Each time the number of seizures accumulated for one company, the individual defendants allegedly formed a new toy company to continue importing the violative and infringing toys.
“The people and companies involved in this illegal trade not only allegedly infringed on intellectual property rights, they placed the lives of innocent children in danger,” said HSI Special Agent in Charge Hayes. “They allegedly sold toys with high lead content and cheap knock offs with substandard parts that break easily and pose a choking hazard. HSI is firm on using its unique customs expertise and law enforcement partnerships to put an end to the importation and sale of dangerous goods.”
“Customs and Border Protection is on the forefront of intercepting unsafe, counterfeit products,” said CBP New York Field Operations Director Perez. “We are proud to have done our part preventing these dangerous toys from getting in the hands of our children.”
“Today’s action highlights the unprecedented level of cooperation and coordination among federal regulatory and law enforcement partners to keep U.S. consumers safe,” said CPSC Chairman Tenenbaum. “The United States has some of the strongest toy standards and lowest lead limits in the world, and CPSC is committed to enforcing these child safety requirements at the ports and in the marketplace.”
“When it comes to trademark infringement, don’t mess with Mickey or other American icons,” said NYPD Commissioner Kelly.
In the indictment, the government is seeking forfeiture of the seized vehicles and bank accounts and the restrained properties, in addition to a money judgment to be determined at trial.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being prosecuted by Trial Attorney Evan Williams of the Criminal Division's Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Claire Kedeshian and William Campos of the Eastern District of New York. This case was jointly investigated by the HSI Intellectual Property Rights Group and the NYPD, through its participation in the New York Border Enforcement Security Taskforce, with the assistance of CPSC and CBP.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Former New York State Senator from Queens Pleads Guilty to Conspiring to Defraud State of over $87,000Read the Press Release
Earlier today, at the United States District Court for the Eastern District of New York in Brooklyn, New York, former New York State Senator Shirley Huntley pleaded guilty to a criminal Information charging her with conspiracy to commit mail fraud. Huntley served in the New York State Senate, representing the 10th District in Queens, from 2007 to 2012. During part of the time of the charged conspiracy, Huntley was a sitting State Senator.
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.
As charged in the Information, Huntley ran a Queens non-profit organization known as Parents Information Network, Inc. (PIN) that received public funds to help educate parents about the New York City public school system. From October 2005 through October 2008, Huntley embezzled approximately $87,700 from PIN. In furtherance of this scheme, Huntley falsely certified to New York State that these funds would be used, and had been used, to support PIN’s charitable mission. Instead, Huntley used the money for her own personal benefit and for the benefit of her family members and associates. During this time period, PIN received nearly all of its funding from New York State.
Huntley controlled PIN’s finances through a bank account which held PIN funds. Huntley stole from PIN by writing over $21,000 in checks from the PIN account to herself and a family member. Huntley used $500 of PIN funds to pay her personal credit card bill and embezzled more than $34,000 from PIN through ATM withdrawals. Huntley also embezzled funds from PIN by using straw recipients, who posed as legitimate recipients of payments from PIN. Huntley wrote checks for $24,500 to the straw recipients, who cashed the checks and returned substantially all of the funds to Huntley in cash.
In her plea agreement with the government, Huntley agreed to make restitution of $87,700 to the New York State Department of Education for the funds she embezzled. In addition, Huntley also agreed to make restitution of $1,000 in connection with an unrelated bribery scheme involving a cargo-handling business at John F. Kennedy International Airport.
The guilty plea took place before U.S. District Judge Jack B. Weinstein. When sentenced, Huntley faces up to five years of imprisonment and a fine of $250,000, in addition to restitution.
“Huntley’s experience and influence were supposed to be used for the benefit of her constituents. Instead, Huntley used her knowledge of the system to steal funds intended to help some of her neediest constituents, lining her own pockets at the expense of parents in need, and ultimately their children,” stated United States Attorney Lynch. “She will now be held to account for her crime. This guilty plea underscores our unwavering commitment to hold responsible those who abuse their authority and pursue their own financial interests instead of the public interest.” Ms. Lynch thanked the office of the New York State Attorney General and the Port Authority of New York and New Jersey for their assistance.
FBI Assistant Director-in-Charge Venizelos stated, “Because of the trust placed in them, elected officials should hold themselves to a higher ethical standard than the public at large. The law sets the bar lower, but still Huntley failed to clear it. In a sense, her victims are everyone whose confidence in government is undermined by such conduct.”
The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector, Paul Tuchmann, and Alexander Solomon.
The Defendant:
SHIRLEY HUNTLEY
Age: 74Former Dockworker Sentenced to 30 Months in Prison for Extortion Conspiracy Involving Christmastime Tribute PaymentsRead the Press Release
NEWARK, N.J. – A former International Longshoremen’s Association (“ILA”) member was sentenced to 30 months in prison today for conspiring to extort ILA Local 1235 longshoremen on the New Jersey piers for Christmastime tribute payments, New Jersey U.S. Attorney Paul J. Fishman and Eastern District of New York U.S. Attorney Loretta E. Lynch announced.
Edward Aulisi, 53,of Flemington, N.J., previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh in Newark federal court to conspiring to extort Christmastime tributes from the ILA Local 1235 members – Count Three of the Second Superseding Indictment against him.
According to documents filed in this case and statements made in court:
Edward Aulisi conspired with his father, Vincent Aulisi – the former President of ILA Local 1235 who succeeded another co-defendant, Albert Cernadas – and Michael Coppola, a Genovese organized crime family captain, in the scheme. Coppola was convicted in July 2009 following a trial in the Eastern District of New York of racketeering and racketeering conspiracy, based in part on acts relating to extortion and wire fraud concerning ILA Local 1235.
Edward Aulisi admitted he participated in telephone calls in furtherance of the extortion conspiracy in March 2007 with Coppola – who was then a fugitive from a New Jersey state murder after having been served with a summons to provide DNA in 1996. Edward Aulisi agreed that he passed information to Coppola on the calls – specifically that Cernadas had told Vincent Aulisi the Christmastime extortion scheme would cease once Cernadas left the presidency, and Vincent Aulisi stated it would continue. Edward Aulisi also admitted Vincent Aulisi had asked him to tell Coppola the Christmastime extortion collections had almost doubled.
Edward Aulisi admitted it had been his intention to deliver Christmastime tribute money extorted from ILA Local 1235 members to Coppola had Coppola not been arrested shortly after the phone calls.
In addition to the prison term, Judge Cavanaugh sentenced Edward Aulisi to two years of supervised release and fined him $10,000.
Coppola is serving a 16-year prison term on his conviction.
U.S. Attorneys Fishman and Lynch credited the FBI in New Jersey and New York and the Department of Labor’s Office of Inspector General with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacquelyn M. Kasulis and Jack Dennehy of the U.S. Attorney’s Office, Eastern District of New York, and Assistant U.S. Attorney Anthony Mahajan, of the U.S. Attorney’s Office, District of New Jersey.
Defense counsel: Robert E. Lytle Esq., Lawrenceville, N.J.
Gambino Organized Crime Family Associate John Burke Sentenced to Life Imprisonment for Racketeering and MurderRead the Press Release
John Burke, a longtime associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”), was sentenced today to life imprisonment without parole plus 10 years for the murder of a rival drug dealer in aid of racketeering, racketeering conspiracy, and other charges. On June 8, 2012, following a four-week trial before United States District Judge Sterling Johnson, Jr., in Brooklyn federal court, Burke was convicted of all charges in the superseding indictment.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
As established at trial, Burke was a trusted Gambino family enforcer and drug dealer for nearly three decades. As part of the racketeering conspiracy, Burke participated in numerous acts of violence, including fatal shootings and home-invasion robberies, as well as drug trafficking involving cocaine and marijuana. Burke was convicted of two murder predicate acts, including the 1991 murder of Bruce Gotterup, who was shot in the back of the head on the boardwalk in the Rockaways, and the 1996 murder of John Gebert, who was slain under a pool table in a Woodhaven bar. The jury also found Burke guilty of the murder of John Gebert in aid of racketeering, murdering John Gebert as part of a continuing criminal enterprise, and a firearms charge.
Ms. Lynch expressed her appreciation to the Federal Bureau of Investigation, the New York State Department of Corrections and Community Supervision, the Queens County District Attorney’s Office, the United States Marshals Service, and the other members of the law enforcement community for their efforts in the investigation and prosecution of this case.
The government’s case was prosecuted by Assistant United States Attorneys Jacquelyn M. Kasulis, Evan M. Norris, and Whitman G.S. Knapp.
The Defendant:
JOHN BURKE
Age: 51Former Bank Director Charged with Securities and Wire FraudRead the Press Release
A former director of a Georgia bank who managed two private investment funds has been charged by a federal grand jury in the Eastern District of New York with securities fraud and wire fraud. According to court documents, defendant Aubrey Lee Price sent a letter to acquaintances in mid-June 2012 in which he admitted that he had lost a large amount of investor money through trading activities and that he planned to kill himself by jumping from a ferry boat in Florida. Price remains missing. Anyone with information regarding Price’s whereabouts or the alleged crime is urged to contact the Federal Bureau of Investigation office in New York at (212) 384-1000, or at [email protected].
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 (FBI), New York Field Office.
According to the indictment, Price managed investment funds PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.
The indictment also states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (“MB&T”), a financial institution in Ailey, Georgia. Price also invested some of the bank’s capital, which he told the bank’s management he would invest safely in U.S. Treasury securities. Instead, Price lost much of the bank’s money through risky investments in equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.
“As charged in the indictment, this defendant repeatedly abused the trust placed in him by his investors and MB&T by lying about his investment losses, fabricating documents, and embezzling bank funds. Through this web of deception, Price acted to create the image of a successful investor. When that image was shown to be a lie, he then orchestrated his confession and disappearance. We are using every resource available to locate him and recover the funds he stole,” said U.S. Attorney Lynch.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged, Price lied to investors about where their money would be invested, and lied to them about the solvency of his company. He lied to the bank on whose board he served about investment of bank capital, and lied again to cover up that lie. It is therefore reasonable to assume that Price’s talk of suicide was also a lie. The FBI is actively looking for Aubrey Lee Price.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum prison sentence of 30 years for wire fraud and 25 years for securities fraud.
The government’s case is being prosecuted by Assistant United States Attorneys David C. Woll, Jr., James McMahon, and Brian Morris.
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:
Name: AUBREY LEE PRICE
Age: 46East Moriches Man to Be Arraigned Today on Charge of Child Pornography PossessionRead the Press Release
Federal agents and investigators with the Suffolk County Police Department’s Computer Crimes Squad arrested an East Moriches man this morning on the charge of possessing child pornography. The defendant, Jay Lockett Sears, is scheduled to be arraigned later today before United States District Magistrate Arlene R. Lindsay at the U.S. Courthouse, 100 Federal Plaza, Central Islip, New York.1
The arrest 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, (“FBI”) New York Field Office, and Edward Webber, Commissioner, Suffolk County Police Department (“SCPD”).
According to court filings, which include an application for a search warrant of the defendant’s East Moriches apartment, Sears created hundreds of images of child pornography by taking photographs of children in public settings, and then cutting and pasting the heads of the children onto images of adult bodies engaged in sexual activity. Some images included those in which Sears allegedly pasted his own facial images 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 on January 11, 2013, after the discovery of numerous bags containing hundreds of child pornography images were found in trash removed from the defendant’s apartment. The images were discarded apparently in anticipation of Sears vacating his apartment.
“As alleged, Sears victimized countless children by using their innocent images to create child pornography. He then went so far as to use his own image to virtually join in the exploited scenarios he created. The sexual exploitation of children is one of our most important law enforcement priorities. Those who seek to harm children will be arrested and prosecuted,” stated United States Attorney Lynch.
Assistant Director-in-Charge Venizelos stated, “The altering of children’s photos to create child pornography victimizes those children to provide merchandise for a depraved market. We have an obligation and a commitment to protect children from exploitation.”
“Children are our most precious and vulnerable resource,” said Suffolk County Police Department Commissioner Webber. “Protecting children in our community is a high priority for our police department, and we will continue to work with other law enforcement agencies, as well as community leaders, to ensure their safety.”
If convicted, the defendant faces a maximum sentence of 10 years’ imprisonment.
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 Attorneys Allen Bode and Thomas Sullivan.
The Defendant:
Name: JAY LOCKETT SEARS
Age: 73_____________________________
1 The charge is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
Defendant from Shirley Arrested for Aiming A Laser Beam at Aircraft Flying over Long IslandRead the Press Release
Complaint Charges Angel Rivas with Using a Laser Pointer to Direct a Laser Beam at a Commercial Airliner Headed for JFK Airport and a Police Helicopter
Federal agents arrested a Shirley, Long Island, man this morning on the charge of aiming a laser pointer at two aircraft last August 2012. 1
The arrest of Angel Rivas was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office. The defendant is scheduled to be arraigned before the United States Magistrate Judge Arlene R. Lindsay at the United States Courthouse in Central Islip, New York, later today.
According to court filings, on August 21, 2012, the defendant used a laser pointer to direct a laser beam at a commercial aircraft and a Suffolk County Police Department helicopter sent up to investigate the initial incident. Investigators first determined that the beam of light came from the vicinity of the defendant’s residence on William Floyd Parkway in Shirley, New York, then confirmed that the defendant himself had directed the laser beam at the aircraft and helicopter.
“Laser pointers aimed at aircraft pose many dangers, including disrupting the vision of pilots,” said United States Attorney Lynch. “Last February, President Obama signed the FAA Modernization and Reform Act of 2012, which specifically prohibited the conduct alleged in the complaint. The safety of American air travelers has been and will continue to be a priority for law enforcement.” Ms. Lynch expressed her grateful appreciation to the U.S. Department of Transportation, Office of Inspector General - Investigations, the FBI Joint Terrorism Task Force in New York, and the Suffolk County Police Department for their participation in the investigation leading to today’s arrest.
FBI Assistant Director-in-Charge Venizelos stated, “On a night last summer, Rivas allegedly endangered the lives of passengers and crew of not one but two aircraft, and potentially, people on the ground. Pointing a laser at an aircraft is not a prank, it is a federal crime with penalties befitting its seriousness.”
If convicted of the charge, the defendant faces a maximum sentence of five years’ imprisonment and a maximum fine of $250,000.
The government’s case is being prosecuted by Assistant United States Attorney Charles N. Rose.
The Defendant:
ANGEL M. RIVAS
Age: 33_____________________________
1 The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Brooklyn Real Estate Developer Charged in $2 Million Mortgage Fraud SchemeRead the Press Release
Brooklyn-based real estate developer Schelton Assoumou was arrested today on charges of bank fraud and wire fraud for his participation in a multi-year mortgage fraud scheme. The defendant’s initial appearance is scheduled this afternoon before United States Magistrate Judge Robert M. Levy at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Cary Rubenstein, Special-Agent-in-Charge, United States Department of Housing and Urban Development - Office of Inspector General; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Steve Linick, Federal Housing Finance Agency - Office of Inspector General.
As detailed in the criminal complaint, between approximately June 2008 and June 2012, Assoumou purported to be a real estate developer doing business as the President of Renaissance Development, Inc. In that capacity, Assoumou sold homes in Brooklyn as investment properties. Assoumou assured the investors that he would manage the real estate properties on their behalf, including collecting rents and making mortgage payments to lenders. In fact, Assoumou made little more than token efforts to manage the properties and failed to maintain mortgage payments as promised. As a consequence, each of the loans Assoumou procured fell into default. The loss to the lenders described in the complaint was over $2 million. As noted therein, these were not the only fraudulent transactions disclosed during the government’s investigation.
As part of the scheme, Assoumou submitted fraudulent mortgage applications to the lenders. The applications contained various misrepresentations, including falsely inflated information concerning one borrower’s bank balance and false claims that certain borrowers would live at the properties – a requirement for receipt of certain federally insured loans. To further the scheme, Assomou provided to the lenders fraudulent documentation to support the false claims in the mortgage applications.
If convicted of all charges, the defendant faces a maximum sentence of 30 years in prison, restitution, and a fine of up to twice the loss inflicted by the defendant’s conduct.
“As alleged in the complaint, Schelton Assoumou purported to run a real estate development business that invested in the revitalization of the Bedford-Stuyvesant neighborhood in Brooklyn. Instead, his goal was to fleece investors and lending institutions alike, using false promises and fraudulent documents to carry out his scheme. Assoumou engaged in the very type of fraud that contributed to the recent collapse of the housing market,” stated United States Attorney Lynch. “Those who engage in such conduct will be vigorously investigated and prosecuted.”
FBI Special-Agent-in-Charge Venizelos said, “The defendant allegedly deceived both mortgage lenders and borrowers to enrich himself. Profiting from dishonest business doesn’t revitalize the economy, it undermines it.”
Federal Housing Finance Agency Inspector General Linick said, “The complaint
alleges a scheme to defraud in which home mortgage lenders, among them Fannie Mae and Freddie Mac, lost millions of dollars as a result of Schelton Assoumou’s activities. My Office is committed to prosecuting such fraud schemes to the fullest extent under law.”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 government’s case is being prosecuted by Assistant United States Attorney Michael Warren.
The Defendant:
SHELTON ASSOUMOU
Age: 36
Residence: Brooklyn, NY