Eastern District of New York
Press releases recorded for this federal judicial district.
Two Pharmacists Convicted for Illegal Distribution of OxycodoneRead the Press Release
Earlier today, a federal jury in Brooklyn returned guilty verdicts against licensed pharmacists Yousef Ennab and Mohamed Hassan on all counts of a superseding indictment charging them with conspiracies to dispense and distribute oxycodone, as well as distribution and possession with intent to distribute oxycodone. The verdict followed a three-week trial before United States District Judge Ann M. Donnelly. When sentenced, the defendants each face up to 60 years in prison.
John J. Durham, United States Attorney for the Eastern District of New York; Frank A. Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA); Naomi Gruchacz, Assistant Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI); Jessica S. Tisch, Commissioner, New York City Police Department (NYPD); Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI); and Dr. James V. McDonald, Commissioner, New York State Department of Health, announced the verdicts.
“The defendants abused their access to oxycodone and violated the trust placed in them as pharmacists by illegally agreeing to supply drug dealers with tens of thousands of pills to sell on the streets of our district with zero regard for the immense harm this dangerously addictive narcotic has caused,” stated United States Attorney Durham. “Pharmacists have a responsibility to prevent the illegal flow of drugs from their businesses, but these defendants only cared about lining their pockets with cash. With today’s verdict they will soon learn there is a reckoning for their criminal conduct that has contributed to the opioid epidemic.”
United States Attorney Durham expressed sincere thanks to his team of prosecutors and paralegals and all of the law enforcement partners whose tireless efforts contributed to the convictions of these defendants and their co-conspirators. They include the Federal Bureau of Investigation, the Office of the New York State Comptroller, the New York Attorney General’s Medicaid Fraud Control Unit and the New York National Guard.
“Today’s verdict against Yousef Ennab and Mohamed Hassan sends a strong message to anyone in the medical profession willing to betray their patients’ trust,” stated DEA New York Special Agent in Charge Tarentino. “Pharmacists who abuse their license, a license to help and promote the health and safety of others, will be prosecuted to the fullest extent of the law. This abuse is a breach of trust that not only undermines public confidence but also causes irreputable harm and erodes the foundation of integrity which the public relies on. The DEA and our partners will continue to target those individuals who abuse their authority and profit from fueling the national opioid crisis.”
“The pharmacists convicted in this case chose to dispense illegally prescribed controlled substances to patients and accept cash kickbacks to do so, which is especially egregious given the ongoing opioid epidemic,” stated HHS-OIG Special Agent in Charge Gruchacz. “HHS-OIG will continue to work with our law enforcement partners to ensure health care providers involved in schemes that threaten patient safety are held accountable.”
“These two men used their positions as pharmacists to scheme and cheat the system, filling their pockets with the money of the vulnerable and addicted. Yousef Ennab and Mohamed Hassan had little regard for the safety and well-being of their clients, and today a jury of their peers found them guilty of their criminal behavior. This conviction was made possible with the collaborative efforts of our federal and local partners, and now both defendants will soon be faced with sentencing,” stated IRS-CI Special Agent in Charge Chavis.
“Whether illegal drug transactions occur on a street corner or in brick-and-mortar pharmacies masquerading as legitimate businesses, the pushers are fueling addiction,” stated NYPD Commissioner Tisch. “The numbers here are staggering—over 1.2 million pills exchanged with a street value of approximately $24 million. While the full extent of the harm is unquantifiable, the guilty verdicts send a clear message that wherever you illegally distribute drugs, your operation will be shut down and you will go to jail. I thank the investigators in the NYPD, in the U.S. Attorney’s Office, and across numerous law enforcement agencies for their joint effort to eradicate poison from our streets.”
“The defendants’ criminal conduct, and that of their co-conspirators, flooded our city with 1.2 million pills of highly addictive oxycodone. Their convictions make clear that DOI, the U.S. Attorney’s Office for the Eastern District of New York, and all of our partner law enforcement agencies involved in this investigation are committed to bringing to justice those responsible for the distribution of dangerous drugs.” stated DOI Commissioner Strauber.
“The Department takes professional and medical misconduct very seriously, with the health and safety of New Yorkers and our communities being of utmost concern,” stated New York State Department of Health Commissioner McDonald. “The State Department of Health’s Bureau of Narcotic Enforcement will continue to remain vigilant and collaborate with law enforcement agencies to protect the public health by combatting diversion and safeguarding the legitimate use of controlled substances in health care.”
As proven at trial, Hassan and Ennab were licensed pharmacists who participated in a large-scale scheme using illegal medical prescriptions to obtain oxycodone for distribution on the streets of New York City. Hassan held ownership stakes in more than a dozen pharmacies, where were located in Brooklyn, Queens and Staten Island and did business under the names Nile RX, Nile Ridge, Nile City, Sunset Corner, Prospect Care, Downtown RX and Forest Care, among others. Ennab was the supervising pharmacist at Forest Care, one of Hassan’s pharmacies in Staten Island.
The scheme relied on filling illegally issued prescriptions for 30-day supplies of oxycodone 30 mg that were written out of a Brooklyn medical practice operating as a pill mill, often for patients that the resident doctor at the practice had never examined. Oxycodone 30 pills are high in strength and are prescribed to cancer patients, for instance. In some cases, the prescriptions were for individuals whose identities had been stolen and were not patients of the practice. The prescriptions were then filled at pharmacies controlled by Hassan, including the pharmacy where Ennab worked. Hassan and Ennab conspired with other drug dealers to effect the distribution of the illegally obtained oxycodone. One of the drug dealers picked up the oxycodone from the pharmacies in exchange for cash payments to Hassan and Ennab. Hassan and other pharmacist co-conspirators also billed insurance companies for the pills even though they had no legitimate medical purpose. The trial evidence included video footage of Ennab taking a cash payment from one of the drug dealers, Michael Kent, while handing over multiple prescriptions for oxycodone for sham patients. In total, the scheme resulted in the illegal distribution of more than 1.2 million pills of oxycodone worth more than $36 million in retail street value.
Six co-defendants, including Dr. Somsri Ratanaprasatporn, her receptionist Leticia Smith and pharmacists Bassam Amin and Omar Elsayed, previously pleaded guilty based on their involvement in the scheme and are awaiting sentencing. A seventh co-defendant, Michael Kent, previously pleaded guilty and was sentenced to nine years’ incarceration.
These convictions are part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation led by the U.S. Attorney’s Office and the DEA. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Assistant United States Attorneys Laura Zuckerwise, Victor Zapana and Gilbert M. Rein are in charge of the prosecution with assistance from Paralegal Specialists Rachel Friedman and Nadya Osman. Assistant United States Attorney Claire Kedeshian is handing forfeiture matters.
The Defendants:
YOUSEF ENNAB
Age: 27
Brooklyn, New YorkMOHAMED HASSAN
Age: 34
Brooklyn, New YorkCo-Defendants Who Pleaded Guilty:
LETICIA SMITH
Age: 54
Brooklyn, New YorkBASSAM AMIN
Age: 69
Brooklyn, New YorkOMAR ELSAYED
Age: 28
Hackensack, New JerseyMICHAEL KENT
Age: 49
Brooklyn, New YorkANTHONY MATHIS
Age: 55
New Windsor, New YorkDr. SOMSRI RATANAPRASATPORN
Age: 75
Staten Island, New YorkRAYMOND WALKER
Age: 70
Brooklyn, New YorkE.D.N.Y. Docket No. 22-CR-464 (AMD)
Bloods Gang Leader Charged with Narcotics Distribution Resulting in One Death and Three Additional PoisoningsRead the Press Release
Earlier today, Gary Johnson, a Bloods gang leader also known as “G Money,” was arraigned in federal court in Central Islip on new charges in a 26-count second superseding indictment charging him with distributing controlled substances, including fentanyl and cocaine base, that caused the death of a woman and caused serious bodily injury to three additional victims. Johnson is also charged with conspiracy to distribute and possession with intent to distribute heroin and fentanyl in Long Island, additional narcotics distribution offenses, various firearms offenses and destruction of evidence. Today’s arraignment was held before United States District Judge Joan M. Azrack. Johnson previously was detained pending trial.
John J. Durham, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Kevin Catalina, Commissioner, Suffolk County Police Department (SCPD), announced the charges.
“Our district has suffered terribly from the opioid epidemic, and as alleged in the superseding indictment, Johnson sold large amounts of dangerous narcotics for his own profit, without regard for the deadly consequences of his actions, even after a victim was fatally poisoned by the defendant’s drugs,” stated United States Attorney Durham. “With these new charges, this Office continues its tireless efforts, in conjunction with our federal and local law enforcement partners, to prosecute drug traffickers responsible for the opioid crisis. It is my hope that the charges will bring some measure of closure to the family members of the victim whose death was caused by the defendant.”
“Gary Johnson, a Bloods gang leader, allegedly sold substantial quantities of illicit drugs, which resulted in a known death of one victim and poisonings of three others. These alleged actions threatened public safety by exposing neighborhoods to a supply of dangerous substances,” stated FBI Assistant Director in Charge Dennehy. “The FBI and our law enforcement partners will continue its mission to assuage the flow of lethal narcotics from polluting our communities and apprehending those responsible for its pipeline.”
“For years, Gary Johnson knew the poison he was selling posed deadly consequences, yet, his only concern was about making money,” stated SCPD Commissioner Catalina. “We will continue to work with our federal partners to take down drug traffickers while undoubtedly saving lives in the process.”
As alleged in court filings, Johnson is a leader of the G-Shine set of the Bloods gang. Between June 2013 and November 2020, when Johnson was arrested on federal charges, the defendant conspired to sell narcotics throughout Long Island. The drugs that Johnson sold – including heroin, fentanyl and cocaine base – resulted in at least four victims suffering poisonings. Specifically, on March 3, 2020, Johnson distributed narcotics which were ingested by John Doe #1 and Jane Doe #1 in the parking lot of Baseball Heaven in Yaphank, New York. John Doe #1 and Jane Doe #1 lost consciousness and were revived by emergency medical personnel who administered CPR and Narcan on both victims. They were resuscitated and survived. On May 1, 2020, Johnson distributed narcotics ingested by John Doe #2 and Jane Doe #2. John Doe #2 was found unconscious by coworkers in St. James, New York, and was revived with Narcan. Jane Doe #2, a 39-year-old mother of a three-year-old son, was found deceased in her home in Rocky Point, New York. Her cause of death was determined to be acute mixed drug intoxication caused by a combination of cocaine and fentanyl – these drugs were supplied by the defendant.
The charges in the second superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Johnson faces a mandatory minimum sentence of 25 years’ imprisonment.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Mark Misorek, Meredith A. Arfa and Stephen Petraeus are in charge of the prosecution with assistance from Paralegal Specialist Dejah Turla.
The Defendant:
GARY JOHNSON
Age: 41
Bellport, New YorkE.D.N.Y. Docket No. 20-CR-518 (S-2)(JMA)
U.S. Attorney's Office for the Eastern District of New York Collected over $400 Million in Asset Forfeiture Actions in FY 2024Read the Press Release
United States Attorney John J. Durham announced today that the Eastern District of New York (EDNY) collected over $400 million in asset forfeiture actions in Fiscal Year (FY) 2024, ranking the EDNY first among all 93 districts in the country. Forfeiture recoveries are generally derived from warrants and forfeiture orders against illegal proceeds generated by, among other things, transnational criminal organizations and cartels; financial frauds; bribery and political corruption; cybercriminals; and those who violate the Office of Foreign Assets Control sanctions (OFAC).
“The forfeiture of criminal assets is an important tool used by law enforcement to deter crime and punish wrongdoers by depriving them of their ill-gotten gains,” stated United States Attorney Durham. “To the extent possible, forfeited funds are used to compensate victims of crime. That my Office collected the largest dollar amount of asset forfeiture of all U.S. Attorney’s Offices is a testament to the hard work and exceptional dedication of our prosecutors and professional staff in carrying out their mission to do justice, compensate victims, and hold defendants accountable for their crimes.”
In certain circumstances, forfeited assets deposited into the Department of Justice Assets Forfeiture Fund can be used to compensate victims of crimes, and for a variety of law enforcement purposes. In addition, the U.S. Attorney’s Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
In addition to the asset forfeiture recoveries, EDNY collected a total of $333,368,879.70 in judgments and other debts on behalf of victims and the government in FY 2024 in criminal and civil actions filed in the district and in cases in which the Office worked with other U.S. Attorney’s Offices and components of the Department of Justice. Of this amount, $303,583,835.60 was collected in criminal cases and $29,785,044.11 in civil cases.
FY 2024 Forfeiture Highlights
In March 2024, Gunvor S.A. (Gunvor), a part of the Gunvor Group, one of the largest commodities trading firms in the world, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act. The charge arose out of a scheme to bribe officials of the Ecuadorian Ministry of Hydrocarbons and Petroecuador, the Ecuadorian state-owned oil company, in order to obtain contracts to purchase oil products. In exchange for these bribe payments, high-level Ecuadorian officials helped Gunvor win contracts to provide a series of oil-backed loans to Petroecuador. Following the plea, United States District Judge Eric N. Vitaliano sentenced Gunvor to pay a criminal monetary penalty of more than $374 million and to forfeit more than $287 million in ill-gotten gains.
In October 2023, as previously ordered by United States District Judge Pamela K. Chen, $100,189,754.61 was forfeited from a Swiss bank account held by Datisa S.A. As proven at two separate trials, Datisa was a corrupt corporate entity that paid and promised to pay millions of dollars in bribes to top soccer officials to secure the media and marketing rights to the 2016 Copa America Centenario, a soccer tournament played in stadiums throughout the United States. This forfeiture is part of the larger investigation of the Federation Internationale de Football Association (FIFA), which exposed corruption throughout world soccer and has resulted in over 30 felony convictions and guilty pleas, and the recovery of over $200 million in forfeiture funds.Queens Man Pleads Guilty to Threatening to Kill Federal JudgeRead the Press Release
Earlier today, in federal court in Brooklyn, Kenneth J. Ward, Jr. pleaded guilty to an indictment charging him with threatening to assault and murder a United States District Judge (the District Judge). Today’s proceeding was held before United States District Judge John P. Cronan sitting by designation. When sentenced, Ward faces up to 10 years in prison.
John J. Durham, United States Attorney for the Eastern District of New York, announced the guilty plea.
“The judges and other court officials who work every day to keep our country safe and uphold the rule of law should not have to fear for their lives for doing their jobs,” stated United States Attorney Durham. “Threatening judges strikes at the very heart of our system. This Office has no tolerance for violence or threats of violence against public servants. We will prosecute offenders like the defendant to the fullest extent of the law.”
Mr. Durham praised the outstanding work of the United States Marshals Service on the case.
The charge is based on Ward’s threat at a telephone status conference in his pro se civil action, which was filed in federal court in Brooklyn. Ward’s civil case was assigned to the District Judge, who ultimately dismissed most of Ward’s claims. On July 15, 2024, Ward participated in a telephonic conference in connection with his case. During that conference, which was recorded, the defendant became angry and threatened to choke the District Judge “to death.” “And that’s on the f---ing – on the record,” Ward stated. At the plea hearing, Ward admitted that he made the threat in retaliation for the judge’s ruling against him in his civil case.
The government’s case is being handled by the Office’s General Crimes Section. Trial Attorney Leonid Sandlar is in charge of the prosecution.
The Defendant:
KENNETH J. WARD JR.
Age: 59
Glendale, QueensE.D.N.Y. Docket No. 24-CR-401
Long Island-Based Bloods Gang Members Charged with Attempted Murders, Armed Robberies, Firearms Trafficking and Fraud in Second Superseding IndictmentRead the Press Release
Earlier today in federal court in Central Islip, three Bloods gang members, Dwayne Murray, Kendrick Seymore and Lavalle Wilson, were arraigned on new charges in a 46-count second superseding indictment before United States District Judge Joan M. Azrack. That indictment also charges an additional defendant, high-ranking Bloods gang member Sheim Tevin Ramsey-Davis (Ramsey-Davis), with racketeering and racketeering conspiracy, violent crimes in-aid-of racketeering, brandishing and discharging a firearm during a crime of violence, robbery, fraud and narcotics trafficking. Ramsey-Davis was arrested on January 30, 2025, in Augusta, Georgia and will be arraigned in the Eastern District of New York at a later date.
The second superseding indictment includes the following new charges against Murray, Seymore and Wilson for crimes they allegedly committed in Suffolk County between 2016 and 2022:
- Murray is charged with a September 26, 2016 attempted murder; a May 28, 2020 attempted murder; a May 2020 gunpoint robbery; and firearms trafficking. Murray was previously charged with the June 12, 2020 murder of Wayne Cherry and Seymore was previously charged with the July 23, 2021 execution-style murders of Nyasia Knox, Diamond Schick and Richard Castano.
- Seymore is charged with a May 2020 gunpoint robbery; an October 23, 2020 armed home invasion robbery; a September 25, 2021 armed home invasion robbery; and an October 1, 2021 attempted armed home invasion robbery.
- Murray and Wilson are charged with conspiring with other members of the gang to defraud victims of significant amounts of money between 2020 and 2022.
John J. Durham, United States Attorney for the Eastern District of New York; Raymond A. Tierney, Suffolk County District Attorney; James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); Bryan Miller, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Office (ATF NY); and Kevin Catalina, Commissioner, Suffolk County Police Department (SCPD), announced the arrest and charges.
“With these new and very serious charges, law enforcement continues its objective of dismantling the Bloods on Long Island, and of prosecuting gang members who are drivers of gun violence and numerous other crimes in Suffolk County,” stated United States Attorney Durham. “My Office and our federal and local partners will not relent in our efforts to remove this threat in order to make our communities safer.”
Mr. Durham expressed his appreciation to the U.S. Attorney’s Office for the Southern District of Georgia and FBI’s Resident Agency in Augusta, Georgia, for their assistance with the case.
“The crimes alleged here strike at the very fabric of our community through violence, intimidation and corruption. Each count in this indictment, from murder to firearms trafficking, represents not just a crime, but a family traumatized, a neighborhood living in fear, or young people pulled into a cycle of violence,” stated Suffolk County District Attorney Tierney. “My office will continue working alongside our federal and local partners to dismantle all such criminal enterprises and restore safety to the communities they have terrorized.”
FBI Assistant Director in Charge Dennehy stated: “These three gang members allegedly engaged in an array of criminal activity –murders, armed robberies, and narcotics trafficking – designed to bolster their financial and internal social statuses as well as punish rival entities. This series of new charges emphasizes the various extreme measures the defendants will allegedly implement to support their gang’s operations. Alongside our law enforcement partners, the FBI remains steadfast in its mission to eradicate the gang violence and criminality polluting our communities.”
“This indictment underscores the collective commitment with ATF NY and our law enforcement partners,” stated ATF NY Special Agent in Charge Miller. “Dismantling violent gangs that terrorize our communities and threaten public safety remain a top priority. It is our obligation to bring every resource to bear in the face of brazen acts of violence. We remain fully committed to enhancing public safety through identifying and eliminating the key drivers of violence. Thank you to the efforts of the men and women of ATF NY Long Island Joint Firearms Task Force, FBI, Suffolk County Police Department and EDNY.”
“These defendants have terrorized the community for years, committing a spree of violent crimes,” stated SCPD Commissioner Catalina. “It is through the diligent work of investigators from multiple agencies that we are able to levy new charges. The department along with our law enforcement partners remains committed to working together to fight the brutality of gang members.”
As alleged in court filings, the defendants engaged in numerous acts of violence on behalf of the Bloods gang, including robberies, home invasions, numerous shootings and four murders. The defendants are members of a Bloods set known as the Gorilla Stone Bloods (GSB), which have “kaves” located in various towns on Long Island. Murray and Ramsey-Davis were the leaders of the “Money Gang Kave.” The second superseding indictment adds charges stemming from the defendants’ years-long use of violence to target their rivals and armed robberies to enrich the members of the gang.
Specifically, on September 26, 2016, Murray, who was the leader of a set of the Bloods, shot a victim multiple times to increase his own status within the Bloods. On May 28, 2020, Ramsey-Davis, at Murray’s direction, fired numerous shots at two individuals believed to be associated with a rival gang who were seated in a parked car in front of a residence in Bellport. Murray, Seymore and Ramsey-Davis, along with other gang members, also routinely scouted lucrative robbery targets and committed several armed robberies and home invasions in Suffolk County in 2020 and 2021. In addition, Ramsey-Davis and his co-conspirators sold large amounts of narcotics, including fentanyl. They also engaged in numerous fraud schemes, including identity theft, credit card and bank fraud and defrauding state unemployment systems. Ramsey-Davis also purchased and sold firearms, and supplied lower-level members of the gang with guns.
Previously, Murray and Seymore were charged with racketeering, murder, attempted murder, firearms offenses and narcotics trafficking, and Wilson was charged with attempted murder, firearms offenses and narcotics trafficking.
The charges in the second superseding indictment are allegations, and the defendants are presumed to be innocent unless and until proven guilty.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Mark E. Misorek and Andrew P. Wenzel and Special Assistant United States Attorneys Donald N. Barclay and Dena C. Rizopoulos are in charge of the prosecution, along with Paralegal Specialist Dejah Turla.
The Defendants:
DWAYNE MURRAY (also known as “Wayno”)
Age: 33
Residence: Coram, Long IslandSHEIM TEVIN RAMSEY-DAVIS (also known as “KG”)
Age: 26
Residence: Augusta, GeorgiaKENDRICK SEYMORE (also known as “KR”)
Age: 22
Residence: Coram, Long IslandLAVALLE WILSON (also known as “Val,” Skip,” “Flip” and “Wes”)
Age: 30
Residence: Shirley, Long IslandE.D.N.Y. Docket No. 22-CR-401 (S-2) (JMA)
International Arms Dealer Charged with Exporting U.S. Firearms to RussiaRead the Press Release
Earlier today, an indictment was filed in federal court in Brooklyn charging Sergei Zharnovnikov, an arms dealer and citizen of Kyrgyzstan, with conspiring to export firearms from the United States to Russia without the necessary licenses and with illegal smuggling. Zharnovnikov traveled from Kyrgyzstan to the United States last month and was arrested on January 24, 2025 in Las Vegas, Nevada, where he was attending the Shooting, Hunting, and Outdoor Trade (SHOT) Show to meet with U.S. arms dealers. Zharnovnikov has been detained pending trial and will be arraigned in the Eastern District of New York at a later date.
John J. Durham, United States Attorney for the Eastern District of New York, Devin DeBacker, head of the Justice Department’s National Security Division, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jonathan Carson, Special Agent in Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office (BIS-OEE), announced the arrest and charges.
“As alleged, the defendant operated a sophisticated scheme to circumvent export controls and to export semi-automatic firearms and send them to Russia,” stated United States Attorney Durham. “Today’s indictment sends a message to the world that we will vigorously enforce statutes that control and restrict the export of items that could be detrimental to the foreign policy or national security of the United States, in this case, preventing U.S.-made firearms from getting into the wrong hands.”
Mr. Durham thanked the U.S. Attorney’s Office for the District of Nevada for its assistance with the case.
“Violations of export control laws carry significant consequences for perpetrators in the U.S. and abroad,” said DeBacker, head of the Justice Department’s National Security Division. “The Department of Justice is committed to working with our partners to hold accountable those who violate our laws to smuggle firearms to prohibited destinations such as Russia.”
“Attempting to illegally sell arms to Russia using multiple companies may seem like a method to evade United States sanctions, it is however a definite way to end up under arrest. Sergei Zharnovnikov is alleged to have knowingly conspired with others to violate the export control laws of the United States to provide U.S made firearms to Russian companies. The FBI will continue to enforce the export control laws enacted to safeguard our national security,” stated FBI Assistant Director in Charge Dennehy.
“The Bureau of Industry and Security is committed to aggressively investigating the illegal transshipment of US firearms to adversaries like Russia through third countries,” said BIS-OEE Special Agent in Charge Carson. “Companies that provide false information to BIS to obtain export authorizations to circumvent our controls will be found out and held accountable.”
As alleged in the indictment and other court filings, since at least March 2020, the defendant, together with others, conspired to export firearms on the United States DOC Control List from the U.S. to Russia. The defendant, the General Director and owner of an arms dealer located in Bishkek, Kyrgyzstan (Kyrgyzstan Company-1), entered into a five-year, $900,000 contract with a company located in Chesapeake, Virginia (U.S. Company‑1) to purchase and export U.S. Company-1 firearms to Kyrgyzstan. DOC issued a license for U.S. Company-1 to export firearms to Kyrgyzstan Company-1, but the license prohibited the export or re-export of the firearms to Russia. Nevertheless, the defendant exported and re-exported U.S. Company‑1 firearms to Russia via Kyrgyzstan. These illegally exported firearms included semi‑automatic hybrid rifle-pistols from U.S. Company-1.
As alleged, after Kyrgyzstan Company-1 entered into a contract with U.S. Company-1, a second arms dealer company in Bishkek associated with the defendant (Kyrgyzstan Company-2) entered a contract with a Russian arms dealer (Russian Company-1) located in Moscow. The contract between Russian Company-1 and Kyrgyzstan Company-2 provided that Kyrgyzstan Company‑2 would export “Goods” to Russian Company-1 in the amount of $10 million and noted that the “Goods” could be delivered in batches. In correspondence in 2018, Russian Company-1 described the defendant’s company, Kyrgyzstan Company-1, as its “partner company.”
On or about February 3, 2021, U.S. Company-1 received an export license from DOC to export over $800,000 worth of firearms and parts to Kyrgyzstan Company-1. The license stated that items within the scope of the license “may not be reexported or transferred (in-country),” subject to certain exceptions not applicable here.
On or about July 2, 2022, the defendant emailed his banker: “Make payment according to the invoice attached to the letter,” and attached a commercial invoice from U.S. Company-1, which listed, among other things, 25 semi-automatic rifle-pistols with 25 unique serial numbers. Two days later, on or about July 4, 2022, Kyrgyzstan Company‑2, sent $67,000 to Kyrgyzstan Company-1. The next day, on or about July 5, 2022, Kyrgyzstan Company‑1 paid U.S. Company-1 $65,564—the full amount listed in the invoice from U.S. Company-1.
According to an Electronic Export Information (EEI) made on July 7, 2022, Company-1 exported semi-automatic rifles from John F. Kennedy International Airport to Kyrgyzstan Company-1 pursuant to its February 3, 2021 export license on or about July 10, 2022. According to the EEI filing, the value of the export from U.S. Company-1 to Kyrgyzstan Company-1 was over $59,000. The EEI filing’s corresponding license application indicated that the firearms were for “commercial resale in Kyrgyzstan.”
On or about August 8, 2022, the defendant received a spreadsheet titled “Supply [U.S. Company-1] ([Russian Company-1]) weapon numbers.” Russian Company-1 is a Russian company, and the DOC license did not authorize the export or re-export of the U.S. Company-1 firearms to Russia. The spreadsheet listed the same semi-automatic rifle-pistol the defendant purchased from U.S. Company-1 and serial numbers matching the U.S. Company‑1 Invoice.
On or about November 14, 2022, the General Director of Russian Company‑1 executed a form used by tax authorities of the member states of the Eurasian Economic Union, which includes both Kyrgyzstan and Russia. The form listed the seller as Kyrgyzstan Company‑2 and the buyer as Russian Company-1 with an address in Moscow, Russia, and identified the goods as the same semi‑automatic rifle‑pistols that U.S. Company-1 exported to Kyrgyzstan Company‑1, the defendant’s company. The defendant did not apply for, obtain or possess a license to export or re-export the semi‑automatic pistol-rifles to Russia.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the charges, the defendant faces up to 30 years’ imprisonment.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorney Ellen H. Sise is in charge of the prosecution, along with Trial Attorney Leslie Esbrook of the National Security Division’s Counterintelligence and Export Control Section (CES), with assistance from Litigation Analyst Rebecca Roth and CES Trial Attorney Scott Claffee.
The case was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
The Defendant:
SERGEI ZHARNOVNIKOV
Age: 46
Bishkek, KyrgyzstanE.D.N.Y. Docket No. 25-CR-45 (ENV)
25-cr-45_-_indictment.pdfFormer NYC Fraud Investigator Sentenced to Prison for Stealing Homeless Victims' Identities to Apply for Unemployment BenefitsRead the Press Release
Earlier today, in federal court in Brooklyn, defendant Olabanji Otufale, a former New York City Department of Homeless Services fraud investigator, was sentenced by United States District Judge Kiyo A. Matsumoto to 27 months in prison for conspiracy to commit wire fraud and aggravated identity theft. Otufale and co-conspirator Marc Lazarre pleaded guilty in July 2024.
John J. Durham, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jocelyn Strauber, Commissioner, New York City Department of Investigation (DOI) announced the sentence.
“The defendant abused his position of trust as a fraud investigator to access and steal vulnerable homeless victims’ personal identifying information for his personal benefit,” stated United States Attorney John J. Durham. “Otufale betrayed the public trust and conspired to use his access for illicit financial gain. Today’s sentence should serve as a lesson to this defendant and all public employees that exploiting positions of power for personal financial gain will be punished.”
“Olabanji Otufale exploited his position within the Department of Homeless Services to steal the identities of homeless individuals and furtively reaped their allocated social services benefits. These abhorrent actions violate the trust and expected privacy placed in local agencies responsible for storing sensitive information. The FBI will never tolerate public service employees who prey upon our city’s vulnerable populations for fiscal profits,” stated FBI Assistant Director in Charge Dennehy.
DOI Commissioner Jocelyn E. Strauber said, “The defendant, a City fraud investigator with the Department of Homeless Services, had a duty to protect DHS and the vulnerable New Yorkers it serves from fraud. Instead, he used his access and position to steal personal information of applicants for social services, in a scheme to illegally obtain unemployment benefits. The sentence imposed today makes clear that we and our law enforcement partners will hold accountable those who misuse their City positions for personal profit. I thank the United States Attorney’s Office for the Eastern District of New York and the FBI for their continued partnership in the effort to protect critical public funds.”
In the fall of 2020, Otufale conspired with others to steal the personal identifying information of more than ten homeless individuals and use that stolen information to fraudulently apply for unemployment insurance benefits in the names of those homeless individuals without their knowledge or consent.
At the time of the scheme, Otufale was a fraud investigator with the New York City Department of Homeless Services (the Department). In that role, Otufale was responsible for ensuring individuals who applied for homeless services—such as housing in homeless shelters—were qualified to receive services from the Department.
Otufale, however, used his access to a database maintained by the Department to commit fraud himself, stealing the personal identifying information—names, social security numbers, dates of birth—of vulnerable victims who had given that personal information to the Department when they applied for services. Otufale then texted this victim information to a co-conspirator, Marc Lazarre, who applied online for unemployment benefits in the names of the homeless victims. Otufale and Lazarre conspired to split the fraudulent benefits they received. Lazarre is scheduled to be sentenced on March 4, 2025.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Sara K. Winik, Laura Zuckerwise and Katherine P. Onyshko are in charge of the prosecution, with assistance from Paralegal Specialist Nadya Osman.
The Defendants:
Olabanji Otufale
Age: 41
Brooklyn, NYMarc Lazarre
Age: 39
Secaucus, NJE.D.N.Y. Docket No. 24-CR-170 (KAM)
Two Individuals Charged with Running a Fencing Operation for South American Theft Groups in Manhattan’s Diamond DistrictRead the Press Release
Earlier today, at the federal court in Brooklyn, an indictment was unsealed charging Dimitriy Nezhinskiy and Juan Villar with conspiracy to receive stolen property related to their purchasing of stolen goods that traveled across state lines. The defendants were arrested today, Nezhinskiy in New Jersey and Villar in Manhattan. They will be arraigned tomorrow before United States Magistrate Judge Lara K. Eshkenazi.
John J. Durham, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Jessica S. Tisch, Commissioner, New York City Police Department (NYPD) and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD) announced the charges.
“As alleged, the defendants created an illicit market and fueled demand for burglaries by South American Theft Groups and other crews around the country by purchasing stolen watches, jewelry and other luxury items, and then re-selling them in their New York City store,” stated United States Attorney Durham. “My Office will continue to pursue organized groups who engage, enable, or encourage the pillaging of residential homes and businesses that has a corrosive effect on the sense of security in our communities.”
“For almost five years, Dimitriy Nezhinskiy and Juan Villar allegedly served as unlawful brokers to perpetuate the sale of stolen luxury items by purchasing them from burglary crews. The defendants’ alleged actions incentivized highly organized South American Theft Groups to continue their meticulous looting scheme against a myriad of affluent residences and businesses across the country. With our law enforcement partners, the FBI will continue to dismantle any criminal activity curated to capitalize on victims’ losses and establish an economic demand for ill-obtained merchandise within our city,” stated FBI Assistant Director in Charge Dennehy.
“We will not tolerate crime of any kind in New York, whether it be street crime, retail theft, or these organized operations that target residential homes to steal and resell luxury goods,” said NYPD Commissioner Tisch. “Today’s indictment is the result of our strong work with our law enforcement partners and our commitment to cracking down on these crime rings that threaten our communities.”
“We want to thank our partners in federal law enforcement for this collaborative effort to bring this criminal to justice,” stated NCPD Commissioner Ryder. “The men and women of the Nassau County Police Department, particularly the dedicated Detectives of the Major Case Squad, work tirelessly to investigate crimes and arrest those who prey upon our citizens.”
As alleged in the indictment, between approximately 2020 and 2025, the defendants conspired with each another and others to receive and purchase stolen property, including jewelry, watches, handbags and assorted luxury items that had been stolen outside of the state of New York and transported into New York. As detailed in court filings, Nezhinskiy and Villar regularly served as “fences” for burglary crews based out of South America who traveled around the United States committing burglaries, typically targeting wealthier neighborhoods or jewelry vendors, and stealing luxury accessories. Nezhinskiy and Villar’s operation provided an essential market for the stolen goods, perpetuating the dangerous criminal activities of the burglary and theft crews composed largely of foreign nationals.
For example, evidence links Nezhinskiy and Villar to thefts around the country, including crimes committed by Bryan Leandro Herrera Maldonado, a prolific burglar who committed at least 16 residential burglaries across the United States between 2019 and 2020. Additionally, phone records and video surveillance links Nezhinskiy to at least two members of a four-man burglary crew believed to be involved in the December 9, 2024 burglary of a high-profile athlete in Ohio, and showed Nezhinskiy in contact with that crew less than one week before the burglary in Ohio.
In addition, between October 2022 and January 2024, an undercover detective conducted seven controlled sales of purported stolen property, including high-end handbags and luxury accessories, to Nezhinskiy or Villar, or both, at their business location in Manhattan’s Diamond District. During these controlled sales, the undercover detective provided the defendants with items that the undercover told the defendants had been stolen, and received cash in exchange for the stolen goods.
Today, law enforcement executed a search warrant at the location on 47th Street in Manhattan where Nezhinskiy and Villar operate a pawn shop and seized large quantities of suspected stolen property, including dozens of high-end watches and jewelry. Law enforcement also recovered large quantities of cash and marijuana. Simultaneously, law enforcement executed a search warrant at storage units belonging to Nezhinskiy in New Jersey where an additional cache of suspected stolen property was found. From inside Nezhinskiy’s storage units, law enforcement recovered large quantities of luxury goods and clothing, including high-end handbags, wine, sports memorabilia, jewelry, artwork and power tools consistent with those commonly used in burglaries and opening safes.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. If convicted of receipt of stolen goods, the defendants face up to 10 years in prison.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division and the Office’s General Crimes Section. Assistant United States Attorneys Michael R. Maffei, Katherine P. Onyshko and Sean M. Sherman are in charge of the prosecution.
The Defendants:
DIMITRIY NEZHINSKIY
Age: 43
North Bergen, New JerseyJUAN VILLAR
Age: 48
Queens, New YorkE.D.N.Y. Docket No. 25-CR-40 (WFK)
25-cr-40_dimitriy_nezhinskiy_et_al_indictment.pdfDisbarred Queens Attorney Sentenced to 54 Months in Prison for Defrauding ClientsRead the Press Release
Earlier today, in federal court in Brooklyn, disbarred attorney Hyun W. Lee, also known as “Michael Lee,” was sentenced by United States District Judge Pamela K. Chen to 54 months in prison for wire fraud in connection with a scheme to defraud his real estate clients and their counterparties of funds held in his attorney escrow account. As part of the sentence, Lee was ordered to pay the government $3.27 million in forfeiture and restitution to the victims in the amount of $3.29 million. Lee pleaded guilty to wire fraud in December 2023.
John J. Durham, United States Attorney for the Eastern District of New York, announced the sentence.
“The defendant was disbarred from the practice of law for reprehensible misconduct, but that severe penalty did not deter him from continuing to abuse the trust of clients, so it is my hope that he will get the message after serving a term of imprisonment for his crimes,” stated United States Attorney Durham. “It is particularly egregious that Lee committed these crimes by holding himself out as a trusted lawyer to clients within the Korean-American community in Queens, where many immigrants have little experience with the legal system and place an enormous amount of trust in the hands of individuals like the defendant who profess to represent their interests in legal proceedings.”
Mr. Durham thanked the Queens County District Attorney’s Office for their assistance in this matter.
Lee was an attorney licensed by the State of New York admitted to practice in 2003. He maintained an office in Flushing, Queens, where he represented buyers and sellers in connection with the purchase and sale of real property. On March 11, 2020, Lee was disbarred as a result of charges brought by the Grievance Committee that he had engaged in a pattern and practice of misappropriating client and third-party funds. As a result, Lee was not permitted to accept funds from clients and third parties.
Between February 2018 and May 2023, Lee induced clients and counterparties to entrust funds to him for the purchase of real estate based on misrepresentations that he would release the funds deposited into his escrow account. Instead, Lee misappropriated these funds and used them for his own benefit, which included gambling at casinos and to pay expenses at a restaurant that he was a part-owner. Lee misrepresented that he was an attorney authorized to represent clients in connection with the purchase and sale of real estate, and to receive and hold funds in his escrow account in connection with real estate transactions.
In furtherance of the scheme, Lee misled clients about the status of funds held in his escrow account by fabricating documents leading them to believe their funds were secure. While documentation Lee showed to clients reflected a balance in Lee’s escrow account of nearly $3 million, in reality Lee had depleted the escrow account down to only approximately $25,000. Lee failed to honor requests by clients and their counterparties to release funds from his escrow account, falsely claiming that he was in the process of working out an equitable distribution of funds that remained. In reality, Lee had already spent virtually all of the funds in the account.
Victims who suffered losses as a result of the conduct of Lee, or other New York lawyers who engage in misconduct, may be eligible to receive compensation by filing a claim with the Lawyer’s Fund for Client Protection, which may be reached by calling (800) 442-3863 or e-mailing [email protected]
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant U.S. Attorney Hiral D. Mehta is in charge of the prosecution with assistance from Special Agent Martin Sullivan.
The Defendant:
HYUN W. LEE (also known as “Michael Lee”)
Age: 51
Closter, New JerseyE.D.N.Y. Docket No. 23-CR-465 (PKC)
Canadian National Charged with Stealing Approximately $65 Million in Cryptocurrency from Two DeFi ProtocolsRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Andean Medjedovic with wire fraud, computer hacking and attempted extortion for stealing approximately $65 million in cryptocurrency from the KyberSwap and Indexed Finance decentralized finance (DeFi) protocols, which are sophisticated financial platforms residing on cryptocurrency blockchains. Medjedovic is also charged with laundering the proceeds of the theft. He is currently at large.
John J. Durham, United States Attorney for the Eastern District of New York; Antoinette Bacon, Supervisory Official of the Justice Department’s Criminal Division; Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI); James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI) announced the indictment.
“As alleged, the defendant executed a highly sophisticated scheme to exploit two decentralized finance protocols and steal tens of millions of dollars’ worth of cryptocurrency from investors,” stated United States Attorney Durham. “My Office remains at the forefront in prosecuting cutting-edge cases involving new and emerging technologies, demonstrating our commitment to protecting all financial markets, including the digital assets markets. Criminals like the defendant who take advantage of new technologies to harm investors will be held accountable no matter where in the world they carry out their schemes.”
Mr. Durham expressed his appreciation to the United States Securities and Exchange Commission’s Crypto Assets and Cyber Unit for their valuable assistance during the investigation.
“This was a sophisticated fraud that exploited vulnerabilities in ‘smart contracts’, resulting in the theft of millions of dollars in cryptocurrency,” stated IRS-CI New York Special Agent in Charge Chavis. “It’s alleged that Medjedovic executed a hack that stole nearly $65 million in crypto between two schemes, leaving liquidity pool investors in the red. In investigating this case, IRS-CI New York’s Cyber group worked closely with its federal partners while leveraging resources from IRS-CI’s Cyber Attaché at Europol and the J5 Cyber Group. Even with the complexities of DeFi, we tracked down who is responsible for this large-scale theft, and he is now a wanted man.”
“Hackers can at times be painted in a flattering light by pop culture, some admiring their skills and acumen. They're stealing money that isn't theirs, and they're breaking the laws of this country. We allege Andean Medjedovic violated several of those laws, and he, along with all the other cyber criminals who believe they're untouchable, will face justice,” stated FBI Assistant Director in Charge Dennehy.
“These charges are a result of HSI New York’s determination to disrupt Andean Medjedovic’s alleged sophisticated far-reaching transnational cybercrime and seek justice for the millions of dollars syphoned from financial platforms,” stated HSI New York Special Agent in Charge Walker. “Our global reach, experience and extensive knowledge of the cyber domain allow us to rapidly develop investigations into bad actors who seek to exploit the cryptocurrency market. Our federal partnerships across the globe made this investigation a success to include support from the HSI attaché offices in the Netherlands.”
KyberSwap and Indexed Finance were developers of automated market-making services called “liquidity pools” that allowed users to swap cryptocurrency tokens with each other. The liquidity pools were managed by computer code called “smart contracts” and relied on investor contributions of cryptocurrency. As alleged, Medjedovic used manipulative trading to exploit vulnerabilities in the KyberSwap and Indexed Finance smart contracts. These manipulative trades enabled Medjedovic to drain approximately $65 million in cryptocurrency that belonged to investors from the KyberSwap and Indexed Finance liquidity pools.
The KyberSwap Exploit
As alleged in the indictment, in 2023, Medjedovic planned and executed a scheme to exploit vulnerabilities in the KyberSwap protocol. KyberSwap was a DeFi protocol and developer of liquidity pools on several public blockchains, including the Ethereum and Arbitrum networks. Liquidity pools use user-contributed cryptocurrency to facilitate trading and market-making in cryptocurrencies. The KyberSwap liquidity pools were managed by computer code or “smart contracts” called automated market makers or “AMMs,” which set prices in the KyberSwap liquidity pools.
In November 2023, Medjedovic exploited vulnerabilities in the KyberSwap computer code to drain the KyberSwap liquidity pools. Medjedovic used hundreds of millions of dollars in borrowed cryptocurrency to create artificial prices in the KyberSwap liquidity pools. Medjedovic then calculated precise combinations of trades that would cause the KyberSwap AMM to “glitch,” in his words, allowing him to steal tens of millions of dollars in cryptocurrency from the liquidity pools. In total, Medjedovic stole approximately $48.8 million in investors’ cryptocurrency from 77 KyberSwap liquidity pools on six public blockchains.
Following the exploit, Medjedovic attempted to extort the developers of the KyberSwap protocol, as well as KyberSwap’s investors and the members of the de-centralized autonomous organization or “DAO” that governed the KyberSwap protocol. Medjedovic demanded control of the KyberSwap protocol and the KyberSwap DAO in exchange for which he would return approximately 50% of the cryptocurrency that he had stolen.
Medjedovic also attempted to launder the proceeds of his theft, including through “bridge” protocols used to transfer cryptocurrency from one blockchain to another, and through a cryptocurrency “mixer” used to conceal the source of digital assets. After one bridge protocol froze several of his transactions, Medjedovic agreed to pay an undercover law enforcement agent posing as a software developer approximately $80,000 to circumvent the bridge protocol’s restrictions and release approximately $500,000 in stolen cryptocurrency.
The Indexed Finance Exploit
As alleged in the indictment, Medjedovic committed a similar exploit of the Indexed Finance DeFi protocol. Indexed Finance liquidity pools are referred to as “index pools,” and function similarly to a mutual fund or exchange-traded fund in traditional finance. Instead of holding a basket of traditional equities, the index pools held an index of digital tokens contributed by users.
In October 2021, Medjedovic used manipulative trading to exploit two Indexed Finance liquidity pools on the Ethereum network. Medjedovic used hundreds of millions of dollars in borrowed cryptocurrencies to distort a process called “re-indexing,” which was used by the Indexed Finance smart contracts to add a new token to the liquidity pools. Medjedovic used the borrowed cryptocurrency to engage in manipulative trading to cause the Indexed Finance smart contracts to set artificial prices during the re-indexing process. He then stole approximately $16.5 million in investor cryptocurrency from the liquidity pools.
Beginning after the Indexed Finance exploit, in or around 2022, Medjedovic conspired with another person to launder the proceeds of his illegal conduct through cryptocurrency exchange accounts that were opened using false information, and by using a cryptocurrency mixer. Among other things, Medjedovic maintained a step-by-step playbook for moving large amounts of cryptocurrency through the mixer, which he titled a “moneyMovementSystem.” In other documents, Medjedovic discussed circumventing “know your customer” or “KYC” procedures and using cryptocurrency exchange accounts opened with false KYC information for “hacks and cashing out.”
The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud and National Security and Cybercrime Sections, with the Justice Department Criminal Division’s National Cryptocurrency Enforcement Team (NCET). Assistant U.S. Attorneys Nick M. Axelrod and Andrew D. Reich of the Eastern District of New York and NCET Trial Attorney Tian Huang of the Criminal Division’s Fraud Section are prosecuting the case with assistance from Paralegal Specialists Liam McNett and Madison Bates. SEC Enforcement Attorney Daphna A. Waxman, formerly a member of the NCET, provided significant assistance.
Valuable assistance was provided by the Justice Department’s Office of International Affairs. The Office thanks the Netherlands’ Public Prosecution Service and the Dutch National Police’s Cybercrime Unit in The Hague and United States Customs and Border Protection, New York Field Office.
The Defendant:
ANDEAN MEDJEDOVIC
Age: 22
CanadaE.D.N.Y. Docket No. 24-CR-529 (NGG)
24-cr-529_andean_medjedvovic_indictmenrt.pdfCanadian Man Charged in $65M Cryptocurrency Hacking SchemesRead the Press Release
Note: View the indictment here.
A five-count criminal indictment was unsealed today in federal court in New York charging a Canadian man with exploiting vulnerabilities in two decentralized finance protocols to fraudulently obtain about $65 million from the protocols’ investors.
According to court documents, from 2021 to 2023, Andean Medjedovic, 22, allegedly exploited vulnerabilities in the automated smart contracts used by the KyberSwap and Indexed Finance decentralized finance protocols. Medjedovic borrowed hundreds of millions of dollars in digital tokens, which he used to engage in deceptive trading that he knew would cause the protocols’ smart contracts to falsely calculate key variables. Through his deceptive trades, Medjedovic was able to, and ultimately did, withdraw millions of dollars of investor funds from the protocols at artificial prices, rendering the victims’ investments essentially worthless.
Medjedovic also allegedly laundered the proceeds of his fraudulent schemes through a series of transactions designed to conceal the source and ownership of the funds, including through swap transactions, “bridging transactions,” and the use of a digital assets “mixer.” With others, Medjedovic also allegedly schemed to open accounts with digital assets exchanges using false and borrowed identifying information to conceal the source and true ownership of the proceeds. In around November 2023, after executing the KyberSwap exploit, Medjedovic also allegedly attempted to extort the victims of the KyberSwap exploit through a sham settlement proposal, in which he demanded complete control of the KyberSwap protocol and the decentralized autonomous organization that oversaw the KyberSwap protocol in exchange for returning 50 percent of the digital assets that he fraudulently obtained through his scheme.
Medjedovic is charged with one count of wire fraud, one count of unauthorized damage to a protected computer, one count of attempted Hobbs Act extortion, one count of money laundering conspiracy, and one count of money laundering. If convicted, he faces a maximum penalty of 10 years in prison on the unauthorized damage to a protected computer count and 20 years in prison on each of the other counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, U.S. Attorney John J. Durham for the Eastern District of New York, Chief Guy Ficco of IRS Criminal Investigation (IRS-CI), Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) New York, and Assistant Director in Charge James E. Dennehy of the FBI New York Field Office made the announcement.
IRS-CI, HSI, and the FBI New York Field Office are investigating the case, with valuable assistance provided by U.S. Customs and Border Protection’s New York Field Office and the Justice Department’s Office of International Affairs. The Justice Department also thanks the Netherlands’ Public Prosecution Service and Cybercrime Unit — the Hague of the Dutch National Police for their significant assistance with the investigation.
Trial Attorney Tian Huang of the Criminal Division’s Fraud Section, who is a member of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorneys Nicholas Axelrod and Andrew Reich for the Eastern District of New York are prosecuting the case. SEC Enforcement Attorney Daphna A. Waxman, formerly a member of the NCET, provided significant assistance.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Three Defendants Convicted of Killing a Security Guard and Wounding Three Others During the Armed Robbery of a Gambling Location in BrooklynRead the Press Release
Earlier today, a federal jury in Brooklyn convicted Charles Powell, Brian Castro and Musah Coward on four counts of a superseding indictment charging them with the firearm-related murder of Rodney Maxwell, discharging a firearm during a crime of violence, Hobbs Act robbery conspiracy and Hobbs Act robbery. Powell was also convicted of being a felon in possession of ammunition. The charges stem from an armed robbery carried out by the defendants inside an illegal gambling spot located at 181 Hegeman Avenue in the Brownsville section of Brooklyn. The verdict followed a three-week trial before U.S. District Judge Eric R. Komitee. When sentenced, the defendants each face a sentence of up to life in prison, with a mandatory minimum sentence of 10 years in prison.
John J. Durham, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD), announced the verdicts.
“Today’s verdict delivers justice for the victims of this vicious and senseless crime that was driven by greed and carried out with a complete disregard for human life,” stated United States Attorney Durham. “The defendants are responsible for murdering Rodney Maxwell, who was gunned down in cold blood, and the carnage could have been even worse with the wanton shooting of terrified bystanders. I commend the prosecutors in my Office, our law enforcement partners and the jury for holding the defendants accountable for this violent robbery.”
The evidence at trial proved that the defendants planned and carried out an armed robbery of an illegal gambling spot in Brownsville on October 7, 2020. The defendants were driven to the Brooklyn location from New Jersey by Coward. Powell and Castro entered the location while Coward waited outside in the car. During the robbery, Powell and Castro each shot Maxwell, who had been providing security for location. Castro shot Maxwell once in the back with a 9-millimeter pistol; and Powell shot him once in the chest with a .380 caliber pistol. Maxwell later died from his gunshot wounds. In addition, Powell indiscriminately fired into a crowd of individuals as they desperately attempted to escape the violence, hitting three men, all of whom ultimately survived their wounds. Castro later confessed to the robbery and murder to a friend who, unbeknownst to Castro, was a confidential source for the FBI and recorded the conversation. In the recording, Castro described how the defendants made off with thousands of dollars and mocked the sound that Maxwell made when he was fatally shot.
Powell, who has a prior conviction in New Jersey for felony possession of a weapon, was found guilty by the jury of possessing three .380 caliber cartridges on October 7, 2020 corresponding to the shots he fired at the gambling spot.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Andy Palacio, Raffaela Belizaire and Megan Larkin are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader.
The Defendants:
CHARLES POWELL (also known as “Payback”)
Age: 26
Newark, New JerseyBRIAN CASTRO (also known as “Morenaje”)
Age: 24
Paterson, New Jersey
MUSAH COWARD (also known as “General Mecka” and “Red” and “General Red”)
Age: 33
Paterson, New JerseyE.D.N.Y. Docket No. 21-CR-572 (EK)
Luchese Crime Family Soldier and Four Associates Plead Guilty to Crimes Including Racketeering, Money Laundering and Illegal GamblingRead the Press Release
Earlier today and throughout the past few weeks, in federal court in Brooklyn, five members and associates of the Luchese organized crime family of La Cosa Nostra pleaded guilty to multiple crimes, including racketeering, money laundering and illegal gambling related to criminal activities throughout New York City. The proceedings were held before United States District Judge Kiyo A. Matsumoto. Today, Luchese crime family soldier Anthony Villani pleaded guilty to racketeering, money laundering and illegal gambling. As part of Villani’s plea agreement, he will pay $4 million in forfeiture. His co-defendants have agreed to pay an additional approximately $1 million in forfeiture. Villani and his co-defendants operated a large-scale, illegal online gambling business (the Gambling Business) that operated under the protection of the Luchese crime family across the New York metropolitan area. The gambling business, known as “Rhino Sports,” operated since the early 2000s and brought millions in illicit profits annually.
John J. Durham, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.
“These guilty pleas represent a victory for the rule of law over the pernicious activities of organized crime that undermine the safety of our communities,” stated United States Attorney Durham. “Illegal gambling businesses require enforcement and protection from mob rivals that carry the persistent threat of violence. However, the defendants’ luck ran out and, thanks to the hard work of the team of prosecutors and investigators, they will be held accountable for their crimes and pay their debt to society.”
FBI Assistant Director in Charge Dennehy stated: “Our investigations involving members of the Five Families don't make the same headlines as they have historically. However, the men pleading guilty in this case illustrate how entrenched the traditional mafia are in their noxious and familiar criminality. They are less flashy these days - and a lot of that is due to the incredible cunning and tenacity agents and investigators on our FBI New York Westchester Organized Crime Task Force use to pursue members of these organizations.”
As detailed in the indictment and court filings, for over 25 years, Villani has been involved in significant gambling operations, principally based in the Bronx and Westchester, New York, that were affiliated with multiple organized crime families. Villani owned and operated the Gambling Business since at least 2004. The Gambling Business was hosted using servers in Costa Rica and employed local bookmakers to pay and collect winnings. Villani’s bookmakers included members and associates of the Luchese crime family and other La Cosa Nostra families. As part of the scheme, Villani employed trusted individuals, including defendants Louis Tucci, Jr. and Dennis Filizzola, to assist in operating the business and collecting at least $1 million annually. Records obtained of the Gambling Business’s website indicated that Villani’s illegal gambling operation regularly took bets from between 400 and 1,300 bettors each week, most of whom were based in New York City and the metropolitan area. At Villani’s direction, Filizzola took proceeds from the Gambling Business and used them to purchase U.S. Postal Service money orders in false names, which were then made payable to one of Villani’s property companies to appear as legitimate rental payments.
When sentenced, Villani faces up to 20 years in prison. Louis Tucci, Jr., pleaded guilty on January 27, 2025 to illegal sports betting and faces up to five years in prison. Filizzola pleaded guilty on January 21, 2025 to illegal sports betting and money laundering and faces up to five years in prison and up to 20 years in prison on those counts respectively. James Coumoutsos pleaded guilty on January 21, 2025 to illegal sports betting and faces up to five years in prison. Michael Praino pleaded guilty on January 10, 2025 to illegal sports gambling and faces up to five years in prison. A sixth defendant remains at large.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Antoinette N. Rangel is in charge of the prosecution. Assistant United States Attorney Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendants:
ANTHONY VILLANI
Age: 60
Elmsford, NYJAMES COUMOUTSOS (also known as “Quick”)
Age: 62
Bronx, NYDENNIS FILIZZOLA
Age: 61
Cortlandt Manor, NYMICHAEL PRAINO (also known as “Platinum”)
Age: 47
Lake Worth, FloridaLOUIS TUCCI, JR. (also known as “Tooch”)
Age: 61
Tuckahoe, NYE.D.N.Y. Docket No. 22-CR-405 (KAM)
Former Federal Correctional Officer Charged with Attempting to Smuggle Contraband into Metropolitan Detention Center in BrooklynRead the Press Release
Earlier today, a complaint was unsealed in federal court in Brooklyn charging former federal correctional officer Najee Jackson with attempting to smuggle contraband into the Metropolitan Detention Center in Brooklyn (MDC-Brooklyn). Jackson was arrested this morning and is scheduled for an initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon.
John J. Durham, United States Attorney for the Eastern District of New York, and Ryan T. Geach, Special Agent in Charge, Department of Justice, Office of the Inspector General (DOJ-OIG), announced the arrest.
“As alleged, Najee Jackson violated his duty and abused his position of trust as a correctional officer by attempting to smuggle contraband into the very institution he was sworn to protect,” stated United States Attorney Durham. “The smuggling of contraband into a jail endangers correctional officers and inmates. Disrupting corruption in any form at MDC-Brooklyn will continue to be a priority of my Office, working in tandem with our federal law enforcement partners.”
“Jackson’s alleged attempt to smuggle contraband into the Brooklyn prison compromised the safety and security of the institution,” stated DOJ-OIG Geach, “The Department of Justice Office of the Inspector General is committed to bringing to justice any Federal Bureau of Prisons employee who abuses their authority and attempts to smuggle illegal contraband into federal prisons.”
As alleged in the complaint, Jackson became a correctional officer at MDC-Brooklyn in November 2023. On January 21, 2025, Jackson arrived at the jail around 12:15 a.m. to begin working a night shift. Before entering MDC-Brooklyn, staff members are required to pass through a screening area consisting of a metal detector and a conveyor belt that passes through an x-ray machine. Staff members entering the facility are also required to place their personal belongings on the conveyor belt to pass through the x-ray machine, and to walk through the metal detector. Jackson placed various personal belongings into a bin on the conveyor belt, and then walked through the metal detector, triggering the alarm. After making several failed attempts to clear the metal detector, Jackson removed his Bureau of Prisons-issued protective vest, which was found to contain vacuum‑sealed bags of marijuana, cigarettes, two lighters and rolling papers. Two days later, Jackson resigned from the Bureau of Prisons.
The charges in the complaint are allegations and the defendant is presumed innocent unless and until proven guilty. If convicted, Jackson faces a maximum sentence of five years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Russell Noble is in charge of the prosecution.
The Defendant:
NAJEE JACKSON
Age: 32
Brooklyn, New YorkE.D.N.Y. Docket No. 25-MJ-18 (VMS)
Brooklyn Man Charged with Sexual Exploitation of a ChildRead the Press Release
Earlier today, an indictment was unsealed charging Ramel Warner with sexual exploitation of a child. The defendant was arrested this morning and arraigned before Magistrate Judge Vera M. Scanlon. He was detained pending trial.
John J. Durham, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
“As alleged, while babysitting a seven-year-old boy, the defendant horrifically abused him, filmed the acts and subsequently distributed it on the dark web,” stated United States Attorney Durham. “Our Office will continue to work tirelessly with our law enforcement partners to bring to justice anyone who abuses children.”
Mr. Durham expressed his appreciation to the New York City Police Department for their assistance on the case.
“Ramel Warner is alleged to have used his access to a young child, while babysitting him at his own home, to film himself sexually assaulting the child. Warner's alleged actions are unconscionable, and we believe there may be more victims. We ask anyone with information regarding his actions to please come forward, so that we can further investigate and aid his victims. The FBI is committed to ensuring the safety of children and holding their abusers accountable in the criminal justice system,” stated FBI Assistant Director in Charge Dennehy.
As set forth in court filings, in approximately 2022, the defendant raped the young son of a family friend in the child’s own home when he was supposed to be babysitting him. The defendant recorded six videos of his sexual abuse of the child, one of which was over four minutes long. The videos the defendant created depict him anally penetrating the child and performing oral sex on him. Those videos were subsequently distributed on the dark web.
The government believes the defendant has worked at afterschool programs in Brooklyn public schools, including a dance group for minor children operating out of a Brooklyn middle school. Anyone with information about sexual exploitation by the defendant should contact the FBI at [email protected].
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a minimum sentence of 15 years and a maximum sentence of 30 years.
The government’s case is being prosecuted by the Office’s General Crimes Section. Assistant United States Attorney Vincent Chiappini is in charge of the prosecution.
The Defendant:
Ramel Warner
Age: 23
Brooklyn, New YorkE.D.N.Y. Docket No. 25-CR-32
25-cr-32_ramel_warner_indictment.pdfSeven Individuals Charged in Largest Employee Retention Credit Scheme Case in the United StatesRead the Press Release
Earlier today, at the federal court in Central Islip, an indictment was unsealed charging Keith Williams, Janine Davis, Morais Dicks, James Hames, Jr., Jamari Lewis, Ewendra Mathurin, and Tiffany Williams with conspiracy to defraud the United States, wire fraud, and aiding and assisting the preparation of false tax returns. Six defendants were arrested this morning in New York and will be arraigned this afternoon before United States District Judge Gary R. Brown. Jamari Lewis is not in custody and will be arraigned in the Eastern District of New York at a later date.
John J. Durham, United States Attorney for the Eastern District of New York, Karen E. Kelly, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI ), Brendan Donahue, Acting Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS) and William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charges.
“As alleged, the defendants shamefully took advantage of a global health emergency to line their pockets with millions of dollars that were intended for struggling families and small businesses just trying to stay afloat and lavished themselves with luxury goods while shamefully boasting about their criminal activity,” stated United States Attorney Durham. “My Office will continue to investigate and prosecute those who stole taxpayer dollars intended to assist Americans coping with the impacts of the COVID-19 pandemic.”
“Criminals have found ways to exploit every iteration of aid offered through the COVID-19 pandemic relief funds. The ERC was created to help businesses keep themselves and their employees afloat. Yet, the defendants allegedly stole $44 million from the relief pool and chose to spend their illicit gains on jewelry, designer clothing, and luxury cars. IRS-CI worked this case with our law enforcement partners to make sure that the egregious acts of those arrested today do not go unpunished. It’s time they face justice,” stated IRS-CI New York Special Agent in Charge Chavis.
“This program was created to aide struggling small businesses during the pandemic, instead these individuals exploited it to fraudulently take money from taxpayers for their financial gain. USPIS will continue to aggressively investigate individuals who defraud the government,” stated USPIS Acting Inspector in Charge Donahue. “The outstanding work done by USPIS New York Division, HSI, IRS, DOJ Tax and the United States Attorney’s Office for the Eastern District of New York ensures individuals are brought to justice for their crimes.”
“As alleged in the indictment, an astonishing amount of taxpayer funds were illegally siphoned by a criminal organization from a needs-based government fund. As a result of the close coordination on this investigation, those defendants ultimately found guilty for perpetrating this fraudulent scheme will pay for their greed,” said HSI New York Special Agent in Charge William S. Walker. “HSI continues to work side-by-side with our law enforcement partners to ensure justice is brought to fraudsters who shamelessly steal from our nation’s economic assistance programs.”
Congress created the Employee Retention Credit (ERC) and the Sick and Family Leave Credit (SFLC) to provide emergency financial assistance in connection with the economic effects of the COVID-19 pandemic. The ERC was introduced in 2020 to incentivize businesses to continue paying employees by providing, at first, for a 50% credit on up to $10,000 in wages paid to each employee for the calendar year for businesses closed by government order or who had a 50% drop in gross receipts due to the pandemic. By 2021, the percentage credit increased to 70% per employee per quarter. The SFLC provided a dollar-for-dollar tax credit to businesses that paid wages to employees on sick leave and a two-thirds credit on wages paid to employees on family leave due to COVID-19. Through the PPP, Congress authorized over $600 billion in forgivable loans to small businesses for job retention and other expenses.
According to court documents, between November 2021 and June 2023, the defendants filed over 8,000 quarterly payroll tax returns claiming over $600 million in COVID-19 pandemic relief funds. On behalf of themselves and their clients, the defendants submitted filings seeking payment under the ERC and the SFLC. Several of the defendants also filed fraudulent Paycheck Protection Program (PPP) loan applications.
The scheme primarily operated out of Williams’s purported credit repair business, which was called “Credit Reset.” To claim the ERC and SFLC funds, the defendants and their co-conspirators submitted tax returns to the IRS on behalf of shell businesses that, in the vast majority of cases, had no legitimate operations or employees. In total, the defendants and their co-conspirators successfully secured over $44 million in government funds through this scheme, which they then spent on goods including jewelry, electronics, designer clothing, and luxury automobiles. The defendants flaunted their criminal activity openly. For example, Lewis, an aspiring rapper who uses the stage-name, “Mr. Chaketah,” posted on social media a recording of song he wrote that was entitled, “I’m Really Sophisticated (IRS)” and the album cover for his song featured the logo of the Internal Revenue Service. In a recorded call with a co-conspirator, Williams compared the fraud scheme to “taking candy from a baby.” When investigators executed a search warrant at Williams’s home, they seized millions of dollars’ worth of luxury goods that appear to have been purchased using proceeds of the fraud scheme, including designer items from Rolex, Gucci, Louis Vuitton, Fendi, Balenciaga, and Versace, as well as high-end vehicles, including a Land Rover, a Polaris Slingshot, and a Tesla Model Y.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. The defendants each face up to 20 years in prison if convicted of wire fraud, up to five years in prison for conspiracy and up to three years in prison on aiding and assisting in the preparation of false tax returns.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division and the Department of Justice’s Tax Division. Assistant United States Attorneys Adam R. Toporovsky and James R. Simmons of the Eastern District of New York, along with Trial Attorney Richard J. Kelley are in charge of the prosecution, with the assistance of Paralegal Specialist Janelle Robinson. Trial Attorney Samuel B. Bean, formerly of the Tax Division, also assisted on the investigation.
The Defendants:
KEITH WILLIAMS
Age: 46
West Hempstead, New YorkJANINE DAVIS (also known as “Holiday”)
Age: 41
Wheatley Heights, New YorkMORAIS DICKS
Age: 55
Dix Hills, New YorkJAMES HAMES, JR. (also known as “Poppa”)
Age: 65
Campbell Hall, New YorkJAMARI LEWIS (also known as “Mr. Chaketah”)
Age: 26
Queens, New YorkEWENDRA MATHURIN (also known as “Rayda”)
Age: 32
Queens Village, New YorkTIFFANY WILLIAMS (also known as “Joy”)
Age: 41
Brooklyn, New YorkE.D.N.Y. Docket No. 25-CR-20 (GRB)
erc_indictment.pdfLong Island Man Charged with Sexual Exploitation of ChildrenRead the Press Release
Jacob Israel Walden was arraigned this afternoon at the federal courthouse in Central Islip on a six-count indictment charging him with sexual exploitation of children, receipt of child pornography, possession of child pornography and access with intent to view child pornography. Walden was arrested on a complaint on July 31, 2024. Today’s proceeding was held before United States District Judge Gary R. Brown who ordered the defendant detained pending trial.
John J. Durham, United States Attorney for the Eastern District of New York and Spiros Karabinas, Acting Special Agent in Charge, Homeland Security Investigations, New Jersey (HSI), announced the indictment.
“As alleged, the defendant enticed minors to produce sexually explicit photographs and videos of themselves and send them to him via the internet in exchange for payment,” stated United States Attorney Durham. “Protecting children from predators who sexually exploit them will always be a priority of my Office.”
“We are determined to dismantle the insidious network of online child sexual exploitation and abuse – no child’s innocence should be for sale,” stated HSI Newark Acting Special Agent in Charge Karabinas. “Every day HSI Newark and our partners work tirelessly to protect children from exploitation by predators who produce, distribute and possess child sexual abuse material. The public can help us in that fight by notifying HSI immediately if they suspect someone is exploiting or abusing a child by calling our HSI tip line, 1-877-4-HSI-TIP.”
As set forth in court filings, law enforcement first identified Walden, a healthcare executive and Long Island resident, as a repeat purchaser of child sexual abuse material (CSAM) from a large-scale production and distribution ring that advertised, sold and distributed CSAM to adult male buyers. Subsequent investigation determined that Walden also used social media and encrypted messaging services to engage in sexually explicit conversations with minors. During these conversations, Walden enticed the minors to produce child pornography of themselves for payment. In his chat conversations with these victims, Walden insisted that he be addressed as “daddy,” provided directions for what content the minors were to produce (e.g., “take off your top”) and paid the minors via electronic payment after he received the requested content. Walden was also a prolific purchaser of CSAM from online producers and distributors of child pornography. Law enforcement agents recovered numerous images and videos of child pornography from the defendant’s iPhone.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Walden faces a mandatory minimum sentence of 15 years in prison and up to 30 years in prison.
The government’s case is being handled by the Office’s Criminal Section of the Long Island Criminal Division. Assistant U.S. Attorney Leonid Sandlar is in charge of the prosecution.
The Defendant:
JACOB ISRAEL WALDEN
Age: 38
Valley Stream, New YorkE.D.N.Y. Docket No.: 24-CR-521 (GRB)
jacob_walden_indictment.pdfDubai-Based Wall Street Exchange Agrees to Pay More Than $9.2 Million to Resolve Bank Fraud InvestigationRead the Press Release
John J. Durham, United States Attorney for the Eastern District of New York and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced today that Dubai-based Wall Street Exchange (WSE) entered into a non-prosecution agreement (the NPA) on January 19, 2025 with the United States Attorney’s Office for the Eastern District of New York (the Office) and the Department of Justice’s Money Laundering and Asset Recovery Section (MLARS), and has agreed to pay more than $9 million to resolve a bank fraud investigation into false statements that it made to a U.S. financial institution concerning the anti-money laundering compliance of WSE and its United Kingdom (U.K.)-based subsidiary, Wall Street Forex London Limited (Forex).
Under the terms of the NPA, WSE agreed to pay to the United States a criminal monetary fine of $3,920,000, and forfeiture in the amount of $5,326,648. The NPA also requires WSE to continue to cooperate with and provide information to the United States for the term of the agreement.
“With this agreement, WSE admits that it is responsible under U.S. law for the past acts of its former officers, directors, employees and agents which constitute a violation of law, specifically bank fraud, and has implemented a program to detect and prevent money laundering violations,” stated United States Attorney Durham. “My Office is committed to holding foreign actors accountable for abusing our financial system and ensures that we protect the integrity of U.S. banks.”
Mr. Durham expressed his appreciation to the Drug Enforcement Administration, New York Division, for their work on the case.
“WSE’s failure to inform the US bank of an open investigation in the UK left the bank vulnerable to regulatory scrutiny. Anti-money laundering compliance is not only necessary to protect the sovereignty of our financial institutions but also that of our nation. IRS-CI worked closely with our federal partners to ensure that there is accountability in this case, and now WSE will pay the US government more than $9 million in fines and forfeiture,” stated IRS-CI New York Special Agent in Charge Chavis.WSE and its Subsidiary, Forex
WSE is a money exchange service provider headquartered in Dubai, United Arab Emirates (UAE). Forex was incorporated in the United Kingdom in 1992 and was a wholly owned subsidiary of WSE. Prior to 2018, three of WSE’s most senior executives (collectively, WSE Executives) were also directly involved in directing and managing Forex. Two of the WSE Executives – Officer 1 and Officer 2— simultaneously served as executives of WSE and directors of Forex.
Between 2009 and 2018, WSE had a U.S. dollar correspondent bank account in New York with Bank A, which allowed WSE to execute transactions in U.S. dollars, access the U.S. financial system, and remit funds globally. Between 2012 and 2017, Forex had a similar trading account with Bank A in London.
Prior to 2016, Forex’s business included facilitating international dollar-denominated wires for money service businesses (MSBs) that could not wire funds internationally on their own. Forex was required to register with U.K. financial authorities, including His Majesty’s Revenue and Customs (HMRC) and the U.K. Financial Conduct Authority (FCA). Forex was also required to comply with U.K. money laundering regulations, including having to establish internal controls to prevent its clients from laundering money through its business.
Through its external compliance consultant and its own employees and directors, Forex was aware that its money services business clients were using Forex’s operations to engage in suspicious money laundering activities. For example, Forex’s external consultant alerted Forex that several of its clients were providing demonstrably false information to Forex. At least one Forex employee also raised concerns about the inadequacy of Forex’s internal controls and by extension, Forex’s potential facilitation of money laundering. These concerns were raised and elevated to one or more of the WSE Executives.
In 2016, HMRC revoked the “fit and proper” status of all of Forex’s directors, including the “fit and proper” status of Officer 1 and Officer 2. In withdrawing the directors’ “fit and proper” status, HMRC concluded that Forex repeatedly engaged in non-compliant financial activities and persistently failed to comply with key aspects of the requisite money laundering regulations and that among other deficiencies, Forex and its directors failed to establish and maintain appropriate internal controls to detect money laundering activities. HMRC also canceled Forex’s registration and notified Forex that it could not continue to do business in the U.K. After HMRC’s revocation, Forex subsequently ceased its U.K. operations in 2016.
Bank Fraud
Despite the above-described regulatory action against Forex, Forex and WSE never disclosed to Bank A negative findings regarding Forex’s money laundering controls and compliance, the regulatory action by HMRC, and the reason that Forex ceased operations in the U.K. Instead, Forex and WSE reported in multiple communications between 2015 and 2018, including in WSE’s and Forex’s audited financial statements for 2015, that Forex’s agents were the subjects of both an internal investigation and an investigation by U.K. authorities, while omitting that Forex itself was also a subject of both investigations. For example, when Bank A was conducting its due diligence review on WSE in 2015 and 2016, and asked WSE whether WSE had identified “any issues” in “internal/external audits,” each time, WSE responded, “No.” Moreover, in 2016, when Bank A asked whether WSE had any “regulatory action regarding any AML [anti-money laundering] issues” that year, WSE also reported “No,” –even though weeks prior, HMRC had revoked the “fit and proper” status of Forex’s directors, including officers of WSE, for AML issues and had notified Forex it could no longer operate as an MSB in the U.K. WSE repeated this misrepresentation to Bank A in 2017. Between 2016 and 2018, WSE also misrepresented to Bank A that Forex was voluntarily withdrawing from the U.K. and surrendering its license, characterizing the move as a “business decision” rather than the result of the HMRC regulatory action.
WSE, through its former officers and directors, failed between 2015 and 2018 to disclose information regarding Forex and made material misrepresentations to Bank A. WSE was able to maintain its banking relationships with Bank A until September 2018, when Bank A terminated its banking relationships with WSE globally.
The Non-Prosecution Agreement
The Justice Department reached this resolution with WSE based on a number of factors, including, among others: (i) the nature and seriousness of the offense, including that the events relevant to this matter largely related to a WSE affiliate no longer in operation and occurred under former WSE management and that WSE has had no bank accounts in the United States since 2018; (ii) WSE’s remedial measures to enhance its compliance program; and (iii) WSE’s lack of a criminal history in the United States. In addition, WSE received credit for cooperating with the department including by providing documents and information not otherwise available to the department.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and MLARS, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act. Assistant U.S. Attorney Hiral D. Mehta, former Assistant U.S. Attorneys Genny Ngai and Brian Morris of the Eastern District of New York, and Trial Attorneys Elizabeth Carr and Michael P. Grady of MLARS' Bank Integrity Unit, are in charge of the prosecution, with the assistance of MLARS Paralegal Specialist Nicholas Aholt. The Justice Department’s Office of International Affairs provided substantial assistance.
The Defendant:
Wall Street Exchange
2025.01.19_npa_and_sof_fully_executed.pdf
Dubai, United Arab EmiratesJohn J. Durham Appointed Interim United States Attorney for the Eastern District of New YorkRead the Press Release
John J. Durham has begun serving as Interim United States Attorney for the Eastern District of New York as per the authority of Acting United States Attorney General James R. McHenry III. Mr. Durham was sworn in on Tuesday, January 21, 2025 by United States District Judge Joanna Seybert. He will serve as Interim United States Attorney for a period of 120 days or until a Presidential nominee has been confirmed by the Senate. Mr. Durham has served as Chief of the Long Island Division and Chief of the Criminal Section of the Long Island Division since June 2024 to the present.
“As someone who has served this Office for nearly 20 years, it is truly an honor to be appointed as Interim United States Attorney for the Eastern District of New York,” stated John J. Durham. “Our mission remains steadfast and vital: to combat the greatest threats to this district – from violent crime, terrorism and drug trafficking to cybercrime, corruption, white-collar fraud and civil litigation – uphold the rule of law and pursue justice. I, along with my team of dedicated public servants in this great Office will never waver in our mission to protect the over eight million residents of this district, and the nation at large.”
Mr. Durham joined the Office in October 2005 and has served in the General Crimes and Long Island Criminal Sections. He has been appointed to several leadership positions in the Office and the Department of Justice, including Deputy Chief for the Long Island Criminal Section, the Office’s Capital Case Coordinator, the Attorney General’s Review Committee on Capital Cases and Chair of the MS-13 Subcommittee of the Attorney General’s Transnational Organized Crime Task Force. In August 2019, Mr. Durham was appointed to serve as the Director of Joint Task Force Vulcan (JTFV), a Department of Justice initiative to combat La Mara Salvatrucha (MS-13), where he spearheaded indictments against MS-13’s highest-ranking international leaders.
During his time in the Office, Mr. Durham has investigated, prosecuted, and supervised a broad range of federal offenses, including racketeering, murders, terrorism, civil rights, obstruction of justice, armed robberies, narcotics trafficking, money laundering, firearms and public corruption. Most significantly, he has directed the Office’s efforts to dismantle the operations of MS-13 in the EDNY, as well as nationally and internationally. In a series of EDNY indictments, he has led teams of AUSAs and investigators that have arrested and convicted hundreds of MS-13 leaders, members and associates on charges related to more than 70 murders committed in this district between January 2008 and the present.
As the Director of JTFV, Mr. Durham led a team of prosecutors and law enforcement officers from across the country and secured significant indictments against MS-13’s command and control structure across the United States, Central America and Mexico, including the first use of national security charges against MS-13 leaders. In addition to his work combatting MS-13, Mr. Durham has prosecuted defendants who attempted to travel to Yemen for the purpose of joining al-Qaeda in the Arabian Peninsula and fighting jihad against United States allies, and members of numerous other violent criminal organizations, including the Bloods, 18th Street gang, Crips, Salvadorans With Pride and violent narcotics trafficking and robbery crews. In addition to his violent crime work, Mr. Durham has prosecuted several significant and sensitive public corruption and civil rights matters, including cases brought against the former Chief of Department for the Suffolk County Police Department, the former Suffolk County District Attorney and former Chief of Investigations and Chief of the Government Corruption Bureau for the Suffolk County District Attorney’s Office, a then-sitting Nassau County Legislator, a New York City Police Department sergeant and a Food and Drug Administration official.
Among other awards, John is the recipient of the Charles E. Rose Award; Henry L. Stimson Medal; EOUSA Director’s Award for Superior Performance; National Association of Former United States Attorneys Exceptional Service Award; and several Federal Law Enforcement Foundation Awards.
John graduated from the College of the Holy Cross in 1998 and from the University of Connecticut School of Law in 2001. He clerked for U.S. District Judge Stephen C. Robinson in the Southern District of New York.
Three High-Ranking MS-13 Gang Members Plead Guilty to Racketeering Charges in Connection with Nine MurdersRead the Press Release
Earlier today and on January 16, 2025, in federal court in Central Islip, three members of the violent transnational criminal organization La Mara Salvatrucha, also known as the MS-13, pleaded guilty to multiple crimes, including nine murders committed on Long Island and elsewhere between 2016 and 2017. David Sosa-Guevara, also known as “Risky,” the New York regional leader of the Hollywood Locos Salvatruchas (Hollywood) clique of MS-13, and Victor Lopez-Morales, also known as “Persa,” a high-ranking member of the Hollywood clique, pleaded guilty on January 16, 2025. Kevin Torres, also known as “Inquieto” and “Quieto,” the New York regional leader of the Sailors Locos Salvatruchas Westside (Sailors) clique of MS-13, pleaded guilty on January 17, 2025.
Collectively, the three defendants pleaded guilty to racketeering charges in connection with their respective roles in nine MS-13 driven murders: (1) the April 26, 2016 murder of Samuel Martinez-Sandoval in Freeport; (2) the April 29, 2016 murder of Oscar Acosta in Brentwood; (3) the May 21, 2016 murder of Kerin Pineda in Freeport; (4) the September 4, 2016 murder of Josue Amaya-Leonor in Roosevelt; (5) the September 5, 2016 murder of Marcus Bohannon in Central Islip; (6) the October 10, 2016 murder of Javier Castillo in Freeport; (7) the October 14, 2016 murder of Carlos Ventura-Zelaya in Roosevelt; (8) the July 21, 2017 murder of Angel Soler in Roosevelt; and (9) the August 29, 2017 murder of David Rivera in Maryland, as well as narcotics trafficking. Additionally, Sosa-Guevara and Lopez-Morales pleaded guilty to participating in an August 2017 conspiracy to kidnap an individual identified in the superseding indictment as “John Doe #3.”
The three guilty plea proceedings were held before United States Magistrate Judge Lee G. Dunst. When sentenced by United States District Judge Joan M. Azrack, pursuant to the terms of their plea agreements, Sosa-Guevara and Torres each face up to 65 years in prison, and a minimum sentence of 40 years in prison. Victor Lopez-Morales faces up to 60 years in prison and minimum sentence of 40 years.
Carolyn Pokorny, Acting United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD) and Anne T. Donnelly, Nassau County District Attorney, announced the guilty pleas.
“The defendants have admitted to their participation in numerous murders savagely committed with machetes and guns, all on behalf of the MS-13 and to increase their status in that depraved criminal organization,” stated Acting United States Attorney Pokorny. “As a result of the guilty pleas, the defendants will be severely punished by serving decades in prison and provide some measure of relief and closure to the families of the many victims.”FBI Assistant Director in Charge Dennehy stated: “MS-13 callously used murder in an attempt to exert control over territory for their ruthless gang operations. As demonstrated by the guilty pleas of these three, high-ranking MS-13 members for their roles in nine murders, this type of extreme and senseless violence will not go unpunished. The FBI’s Long Island Gang Task Force, along with our law enforcement partners, will continue to bring to justice members of MS-13 or any other violent gang using violence and murder to terrorize our communities.”
"These defendants used their rank in the gang to help orchestrate multiple brutal murders and other crimes,” stated SCPD Acting Commissioner Waring. “We in law enforcement will never stop working to fight the pervasive violence sowed throughout these gangs.”
“The charges brought forth is a clear example of the results when Law Enforcement Personnel from Federal and Local Agencies combine their efforts and resources,” stated NCPD Commissioner Ryder. “Their relentless and continued investigations resulted with the charging of these criminals who were responsible for committing these murders. This combined investigation demonstrates the diligence of the well trained and determined investigators. The Nassau County Police Department remains committed in working with our law enforcement partners halting any gang activity on our streets and keeping our residents safe. I would like to thank all of the assisting agencies and their investigators on a job well done.”
“These defendants carried out vicious and senseless violence to instill fear and assert their dominance. Today’s guilty pleas bring us one step closer to ridding this dangerous gang activity from Nassau County communities,” stated Nassau County District Attorney Donnelly. “Together with our partners, we remain committed to protecting Long Island from this criminal organization’s brutality and ensuring individuals involved in these devastating acts are held accountable for their crimes.”
According to court filings and statements made during the guilty plea proceedings, Torres was the New York regional leader of the Sailors clique, Sosa-Guevara was the New York regional leader of the Hollywood clique, and Lopez-Morales was a high-ranking member of the Hollywood clique. The defendants admitted to committing the crimes set forth below in order to maintain and increase their membership and status within the gang, and to further the mission of the MS-13.April 26, 2016 Murder of Samuel Martinez-Sandoval
The defendants pleaded guilty to the murder of 20-year-old Martinez-Sandoval, which was carried out in April 2016, by the defendants and other members from the Sailors, Hollywood and Normandie Locos Salvatruchas cliques, who planned a joint operation to lure and kill Martinez-Sandoval because they believed that he was a member of the rival Sureños gang.
On April 26, 2016, MS-13 members convinced Martinez-Sandoval to drive with them to a secluded, wooded area near Freeport Lake in Roosevelt, under the guise of smoking marijuana. Separately, more than a half dozen MS-13 members, including the defendants, armed with machetes and other weapons, had gathered at a designated location along Freeport Lake where it was agreed that the other gang members would bring the victim. When Martinez-Sandoval arrived, Sosa-Guevara, Torres, Lopez-Morales and the other MS-13 members surrounded and attacked the victim, each taking turns hacking him with a machete and other weapons. After the victim was killed, the MS-13 members dug a shallow grave and buried the victim. However, because the initial hole was not deep enough to conceal Martinez-Sandoval’s body, a group of MS-13 members went back the following day, reburied the victim and covered his body with cement and dirt. Martinez-Sandoval’s body was not found until September 2024.
April 29, 2016 Murder of Oscar Acosta
Torres pleaded guilty to the murder of 19-year-old Acosta. In early 2016, Torres, as leader, ordered a “greenlight” authorizing other gang members to murder Acosta because the gang suspected that he was associating with the rival 18th Street gang after previously aligning himself with the MS-13. Torres assigned roles as to which members would take the lead in planning and carrying out the murder.
On April 29, 2016, MS-13 members met Acosta in a wooded area near an elementary school in Brentwood where he had been lured under the guise of smoking marijuana. They brutally beat Acosta with tree limbs, knocking him unconscious. They bound Acosta’s hands and feet, wrapped an article of clothing around his mouth to prevent him from making noise and summoned other MS-13 members who arrived in two cars. The MS-13 members loaded Acosta into the trunk of one of the cars and drove to a more secluded area in Brentwood near the abandoned Pilgrim State Psychiatric Hospital. The MS-13 members then removed Acosta, who was still alive, from the trunk and carried him deeper into the woods where they took turns hacking him to death with a machete. The murder was supervised by the local leaders of the Sailors clique who reported back to Torres once completed. After killing Acosta, the MS-13 members buried his body in a shallow grave.
Acosta’s body was discovered by law enforcement nearly five months later, on September 16, 2016, during a search for another MS-13 victim. His cause of death was homicidal violence, including sharp and blunt force injuries to his head and torso.
May 21, 2016 Murder of Kerin Pineda
The defendants also pleaded guilty to the murder of 20-year-old Pineda, who, like Acosta, was killed because of his suspected membership in the 18th Street gang. Torres, again, ordered the “greenlight” for Pineda, marking him for death. In response, MS-13 members from the Sailors and Hollywood cliques, including Sosa-Guevara and Lopez-Morales, devised a plan to kill Pineda.
On May 21, 2016, MS-13 members, armed with machetes, lured Pineda to a secluded wooded area near the Merrick-Freeport border. Torres, Lopez-Morales, and Sosa-Guevara acted as lookouts for police and coordinated the attack, staying in contact with the MS-13 members in the woods while they waited for Pineda. When Pineda arrived, he was surrounded and violently attacked by the group of MS-13 members, each of whom took turns hacking and slashing him with the machetes. Pineda’s body was then buried in a hole that had been dug in the ground the day before, in anticipation of the murder. Before leaving the scene, the MS-13 members contacted the lookouts – Torres, Lopez-Morales, and Sosa-Guevara – who advised them that they could safely come out of the woods and drove them away from the scene.
September 4, 2016 Murder of Josue Amaya-Leonor
Sosa-Guevara and Lopez-Morales pleaded guilty for their roles in the murder of 19 year-old Amaya-Leonor on September 4, 2016. Like the other victims, Amaya-Leonor was lured to a secluded wooded area and killed because of his perceived association with the 18th Street gang. On the evening of the murder, MS-13 members convinced Amaya-Leonor to venture deep into the Roosevelt Preserve, in Roosevelt, to smoke marijuana. Sosa-Guevara was in communication with the gang members by cell phone and was directing them on where to bring the victim. Once there, Amaya-Leonor was surrounded by the MS-13 members who were armed with machetes; he was struck repeatedly, and killed. Thereafter, Lopez-Morales, who was in the immediate area of the murder looking out for police, arrived on the scene and supervised the other MS-13 members as they dug a hole and buried Amaya-Leonor’s body, which was not found until May 2018 – over a year and a half after the murder had occurred.
September 5, 2016 Murder of Marcus Bohannon
Torres pleaded guilty to authorizing the murder of 27-year-old Marcus Bohannon. On September 4, 2016, members of the Sailors clique met at the house of local clique leaders Alexi Saenz and Jairo Saenz, in Central Islip, where Torres directed the gang members to go out hunting for rival gang members to kill. The MS-13 members separated into several cars and drove around Central Islip and Brentwood, until one of the cars spotted Bohannon walking along Lowell Avenue in Central Islip in the early morning hours of September 5. Suspecting that Bohannon was a member of the rival Bloods gang, two MS-13 members, carrying firearms, got out of the vehicle, approached him and started shooting. Bohannon was struck nine times, including in his head, neck, and chest, and died from his wounds.
October 10, 2016 Murder of Javier Castillo
Torres also pleaded guilty to the murder of 15-year-old Javier Castillo. In October 2016, the MS-13 targeted Castillo because he was believed to be a member of the 18th Street gang. On October 10, 2016, members of the Sailors clique in Brentwood convinced Castillo, who lived in Central Islip, to go with them to Freeport – approximately 30 miles away – to smoke marijuana. Torres authorized the members of the clique operating in Brentwood to bring Castillo to his territory in Freeport to be killed. The MS-13 members took Castillo to an isolated marsh area along the water in Cow Meadow Park, in Freeport, where they attacked and killed him, taking turns hacking him with a machete. Torres also served as the lookout for police in the area during the murder. Thereafter, the MS-13 members dug a hole and buried Castillo’s body, which was not recovered until one year later, in October 2017.
October 14, 2016 Murder of Carlos Ventura-Zelaya
Sosa-Guevara and Lopez-Morales pleaded guilty to the murder of 24-year-old Ventura-Zelaya, who had been marked for death by the MS-13 because of his suspected membership in the rival 18th Street gang. On the day of the murder, Ventura-Zelaya was observed at a deli in Roosevelt by a member of the Hollywood clique. Sosa-Guevara mobilized other members of the clique to kill Ventura-Zelaya and conducted surveillance of the victim until the other gang members arrived. The gang members tasked with carrying out the murder first drove to pick up a gun from Lopez-Morales. After obtaining the weapon, the group drove in the direction of the deli to look for and kill the victim. Once they spotted Ventura-Zelaya walking on Hudson Street in Roosevelt, two MS-13 members got out of the car, approached him and one
of them fired multiple times, striking and killing the victim. They then ran back to the car and drove away from the scene.
July 21, 2017 Murder of Angel Soler
Sosa-Guevara and Lopez-Morales also pleaded guilty to the murder of 15-year-old Soler. The MS-13 suspected Soler was an 18th Street gang member, and Sosa-Guevara ordered his murder. Lopez-Morales and other MS-13 members carried out the murder, luring Soler to wooded lot near Milburn Creek in Roosevelt to smoke marijuana. The group attacked Soler with machetes and a pickaxe, and buried his body in a shallow grave. The following day, MS-13 members went back to lay cement over Soler’s body, in order to better conceal it. Soler’s remains were recovered in October 2017.
August 2017 Conspiracy to Kidnap John Doe #3
Lopez-Morales and Sosa-Guevara also admitted that, just weeks after the Soler murder, they and other MS-13 members planned the kidnapping, assault, and/or murder of John Doe #3, an MS-13 member who had violated the rules of the gang. Specifically, Sosa-Guevara assigned Lopez-Morales and two other MS-13 members to carry out the kidnapping and attack. Lopez-Morales was instructed that, once they had John Doe #3, to wait for further guidance from MS-13 leadership as to whether to kill or brutally assault him. On August 6, 2017, Lopez-Morales and the other gang members’ plan to kidnap John Doe #3 was foiled by law enforcement, who had been intercepting the calls arranging the attack, pursuant to court-ordered wiretaps of certain MS-13 members’ cell phones, and Lopez-Morales was taken into custody.
August 29, 2017 Murder of David Rivera
Sosa-Guevara also admitted to his participation in the murder of 16-year-old Rivera in Maryland. To avoid law enforcement in New York, Sosa-Guevara and another Hollywood member from Long Island relocated to Maryland where they connected with the local Hollywood clique. After arriving, Sosa-Guevara learned of a plan to kill a rival gang member and directed the other Long Island member of his clique to participate. On August 29, 2017, Sosa-Guevara drove the other gang member to a park outside of Edgewater, Maryland, for him to participate in the Rivera murder. The victim was brought to that location by other MS-13 members, attacked with machetes and killed. After the murder, Sosa-Guevara drove the member of his clique away from the scene. Rivera’s body was not found until June 7, 2024.
Narcotics Trafficking Conspiracies
Finally, Torres pleaded guilty to conspiring with the members of the Sailors clique to distribute cocaine and marijuana, and Sosa-Guevara and Lopez-Morales pleaded guilty to conspiring with members of the Hollywood clique to distribute marijuana. These charges stemmed from the MS-13 cliques’ street-level sales of cocaine and marijuana on Long Island, the proceeds of which were used to help finance the MS-13’s criminal operations.
* * * *
These guilty pleas are the latest achievements in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across the United States. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, NCPD, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution, with assistance from Assistant District Attorney Jared Rosenblatt of the Nassau County District Attorney’s Office and Paralegal Specialist Kerry Ucci and Automated Litigation Specialist Michael Compitello.
The Defendants:
VICTOR LOPEZ-MORALES (also known as “Persa”)
Age: 36
Roosevelt, New YorkDAVID SOSA-GUEVARA (also known as “Risky”)
Age: 33
Roosevelt, New YorkKEVIN TORRES (also known as “Quieto” and “Inquieto”)
Age: 29
Freeport, New YorkE.D.N.Y. Docket No. 20-CR-251 (S-1)(JMA)
Former Finance Minister of Mozambique Sentenced in $2B Fraud and Money Laundering SchemeRead the Press Release
The former Finance Minister of Mozambique was sentenced today to 102 months in prison for his role in a $2 billion international fraud, bribery, and money laundering scheme, in which he received $7 million in bribes to approve fraudulent loans.
According to court documents and evidence presented at trial, Manuel Chang, 69, of Mozambique, received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects. As part of the scheme, Chang and his co-conspirators falsely told banks and investors that the loan proceeds would be used for the projects and not to pay bribes to government officials. In fact, however, Chang and his co-conspirators diverted more than $200 million of the loan proceeds that were used, among other things, to pay bribes and kickbacks to Chang and others.
“Manuel Chang abused his position as Finance Minister of Mozambique by obtaining $7 million in bribe payments in exchange for helping secure more than $2 billion in loans,” said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division. “Chang’s brazen misconduct betrayed his duty to the people of Mozambique and defrauded investors, including those in the United States, of substantial amounts. With today’s sentence, Chang has been held accountable for his violations of U.S. law.”
“Today’s sentence shows that foreign officials who abuse their power to commit crimes targeting the U.S. financial system will meet U.S. justice,” said Acting U.S. Attorney Carolyn Pokorny for the Eastern District of New York. “My office will continue to pursue those who violate our laws and harm U.S. investors regardless of their power, position or title.”
“Manuel Chang abused his authority as the former Mozambique Finance Minister by helping to obtain billions of dollars in loans, a large portion of which was diverted from its intended purposes to satisfy bribe payments, ultimately causing significant financial loss to U.S. and global investors,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. “With the support of his co-conspirators, Chang violated the trust of his office and wielded his position to enrich himself and other Mozambican officials. May today’s sentencing reiterate the FBI’s commitment to dismantling all corruptive malpractices orchestrated by foreign governments, especially those targeting our country as their personal piggy-bank.”
Between approximately 2013 and 2015, in his capacity as Mozambique’s Minister of Finance, Chang, together with his co-conspirators — including executives of Privinvest Group, a United Arab Emirates-based shipbuilding company — ensured that Credit Suisse AG, through its subsidiary in the United Kingdom, Credit Suisse Securities (Europe) Limited (CSSEL), and another foreign investment bank would arrange for more than $2 billion to be extended to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services. Specifically, Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing, and MAM was to build and maintain shipyards.
Instead, Chang and his co-conspirators illegally facilitated Privinvest’s diversion of more than $200 million of the loan proceeds to bribes and kickbacks. These funds included more than $150 million that Privinvest used to bribe Chang and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government would enter into the loan arrangements, and that the government of Mozambique would guarantee those loans. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In doing so, the participants in the scheme conspired to defraud these investors by misrepresenting how the loan proceeds would be used. Ultimately, Proindicus, EMATUM, and MAM each defaulted on their loans and proceeded to miss more than $700 million in loan payments, causing substantial losses to investors.
On Aug. 8, 2024, Chang was convicted at trial of one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. In addition to the term of imprisonment, Chang was ordered to forfeit $7 million. A restitution amount will be determined at a later date.
In October 2021, Credit Suisse AG and CSSEL (together, Credit Suisse) admitted to defrauding U.S. and international investors in the financing of an $850 million loan for the EMATUM project. CSSEL pleaded guilty to conspiracy to commit wire fraud and Credit Suisse AG entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and the U.S. Attorney’s Office for the Eastern District of New York. As a part of the resolution, Credit Suisse paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.
The FBI New York Field Office investigated the case.
Fraud Section Trial Attorney Peter Cooch, MLARS Trial Attorney Morgan Cohen, and Assistant U.S. Attorneys Hiral D. Mehta and Jonathan Siegel for the Eastern District of New York prosecuted the case.
The Justice Department’s Office of International Affairs provided substantial assistance. The Justice Department appreciates the assistance of South African authorities, particularly those in the South African Department of Justice and Constitutional Development and the South African Police Service, as well as authorities in the United Kingdom, Switzerland, Spain, and Portugal.
MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) and Foreign Extortion Prevention Act (FEPA) matters. Additional information about the Justice Department’s FCPA and FEPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Former Finance Minister of Mozambique Sentenced to 102 Months’ Imprisonment for His Role in $2 Billion Fraud and Money Laundering SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Manuel Chang, the former Finance Minister of Mozambique, was sentenced by United States District Judge Nicholas G. Garaufis to a term of imprisonment of 102 months and ordered to pay $7 million in forfeiture. The restitution amount will be determined at a later date. Chang was convicted after a four-week trial in July and August 2024 of conspiring to commit wire fraud and money laundering in connection with his role in a $2 billion international fraud, bribery and money laundering scheme that victimized investors in the United States and elsewhere. He was arrested in December 2018 in South Africa, pursuant to a provisional arrest warrant issued at the request of the United States and extradited to the Eastern District of New York in July 2023.
Carolyn Pokorny, Acting United States Attorney for the Eastern District of New York, Brent S. Wible, Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Today’s sentence shows that foreign officials who abuse their power to commit crimes targeting the U.S. financial system will meet U.S. justice,” stated Acting United States Attorney Pokorny. “My Office will continue to pursue those who violate our laws and harm U.S. investors regardless of their power, position or title.”
“Manuel Chang abused his position as Finance Minister of Mozambique by obtaining $7 million in bribe payments in exchange for helping secure more than $2 billion in loans,” said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division. “Chang’s brazen misconduct betrayed his duty to the people of Mozambique and defrauded investors, including those in the United States, of substantial amounts. With today’s sentence, Chang has been held accountable for his violations of U.S. law.”
“Manuel Chang abused his authority as the former Mozambique Finance Minister by helping to obtain billions of dollars in loans, a large portion of which was diverted from its intended purposes to satisfy bribe payments, ultimately causing significant financial loss to U.S. and global investors,” stated FBI Assistant Director in Charge Dennehy. “With the support of his co-conspirators, Chang violated the trust of his office and wielded his position to enrich himself and other Mozambican officials. May today’s sentencing reiterate the FBI’s commitment to dismantling all corruptive malpractices orchestrated by foreign governments, especially those targeting our country as their personal piggy bank.”
As proven at trial, Chang received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects. As part of the scheme, Chang and his co-conspirators falsely stated to banks and investors that the loan proceeds would be used for the projects and that the borrower would not pay bribes to Mozambican government officials. In fact, however, Chang and his co-conspirators facilitated the criminal diversion of more than $200 million of the loan proceeds that were used to pay bribes and kickbacks to Chang and others.Between approximately 2013 and 2016, in his capacity as Mozambique’s Minister of Finance, Chang, together with his co-conspirators – including executives of Privinvest Group, a United Arab Emirates-based shipbuilding company – ensured that Credit Suisse AG, through its subsidiary in the United Kingdom, Credit Suisse Securities (Europe) Limited (CSSEL), and another foreign investment bank would arrange for more than $2 billion to be extended to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services. Specifically, Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing, and MAM was to build and maintain shipyards.
Instead, Chang and his co-conspirators illegally facilitated Privinvest’s diversion of more than $200 million of the loan proceeds to bribes and kickbacks. These funds included more than $150 million that Privinvest used to bribe Chang and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government would enter into the loan arrangements, and that the government of Mozambique would guarantee those loans. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In doing so, the participants in the scheme conspired to defraud these investors by misrepresenting how the loan proceeds would be used. Ultimately, Proindicus, EMATUM, and MAM each defaulted on their loans and proceeded to miss more than $700 million in loan payments, causing substantial losses to investors.
In October 2021, Credit Suisse AG and CSSEL admitted to defrauding U.S. and international investors in the financing of an $850 million loan for the EMATUM project. CSSEL pleaded guilty to conspiracy to commit wire fraud and Credit Suisse AG entered into a deferred prosecution agreement with the United States Attorney’s Office for the Eastern District of New York, the Criminal Division’s Fraud Section (Fraud Section) and the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS). As a part of the resolution, Credit Suisse AG and CSSEL paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.
The Office’s Business & Securities Fraud Section is handling the case. Assistant United States Attorneys Hiral D. Mehta, Genny Ngai and Jonathan Siegel, and Trial Attorneys Peter Cooch of the Fraud Section and Morgan Cohen of MLARS, are in charge of the prosecution, with assistance from Paralegal Specialist Timothy Migliaro. The Justice Department’s Office of International Affairs provided substantial assistance. The Justice Department appreciates the assistance of South African authorities, particularly those in the South African Department of Justice and Constitutional Development and the South African Police Service, as well as authorities in the United Kingdom, Switzerland, Spain and Portugal.
The Defendant:
MANUEL CHANG
Age: 69
MozambiqueE.D.N.Y. Docket No. 18-CR-681 (NGG)
American Express Agrees to Pay More Than $138 Million to Resolve Wire Fraud Investigation in Connection with the Sales and Marketing of Wire ProductsRead the Press Release
Judy Philips, Acting Attorney for the United States for the Eastern District of New York and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced today that American Express Company (AMEX) has entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Eastern District of New York (the Office), and has agreed to pay more than $138 million for engaging in sales practices that provided inaccurate tax advice to customers and potential customers of AMEX for two wire products, Payroll Rewards and Premium Wire (PR/PW).
Under the terms of the NPA, AMEX agreed to pay a criminal fine of $77,696,000 and forfeit a total of $60,700,000. The NPA requires AMEX to continue to cooperate with and provide information to the Office for at least the 36-month term of the agreement. In the event that AMEX violates the NPA, the Office may prosecute AMEX for any of the conduct that gave rise to the NPA and any newly discovered criminal activity.
Separately, AMEX has entered a civil settlement with the Department of Justice’s Civil Division Fraud Section (Civil Frauds) related to the tax-avoidance scheme, for which AMEX has agreed to pay a $60,700,000 civil penalty. The Office and Civil Frauds have each agreed to credit approximately $30,350,000 of the forfeiture amount and civil fine to their respective resolutions.
“Financial institutions like American Express have no business pitching inaccurate tax avoidance schemes to sell products and turn a quick profit,” stated Acting Attorney for the United States Philips. “This resolution ensures that American Express will be held financially accountable for the unacceptable conduct of its sales employees in misrepresenting the tax benefits of these products.”
Ms. Philips expressed her appreciation to Civil Frauds and the Federal Reserve Board of Governors for their work on the case.
“American Express misled their customers by touting tax breaks that simply didn’t exist. This deceitful marketing campaign that involved hundreds of employees defrauding their customers and the government, resulted in AMEX paying more than $138 million to cover their deceit. Regardless of a company’s size, every business is required to comply with the laws of this nation, including all tax laws,” stated IRS-CI New York Special Agent in Charge Chavis.
The Improper Sales and Marketing of PR/PW
In approximately April 2018, AMEX launched “Payroll Rewards,” a wire product that allowed business customers to pay their payroll via a direct payment from an AMEX account. AMEX charged a percentage-based fee—ranging from 1.77% to 3.5%—based on the size of the wire, even though, at the time, competitors offered wiring services for nominal fees of $0 to $50, irrespective of the size of the wire. In exchange for AMEX’s fee, customers earned one Membership Reward (MR) point for each $1 of the wire, which could be deposited into any personal or business account at AMEX. In May 2019, Payroll Rewards was expanded to include Premium Wire, thereby allowing customers to use the products for wire payments beyond payroll. Whereas Payroll Rewards underwent a compliance and legal review process at AMEX, Premium Wire was determined to be a spin-off product, and only underwent a limited review process.
PR/PW were sold within the AMEX divisions Global Commercial Services, which offered corporate credit cards and financial services, and FX International Payments, which offered foreign and domestic wire transfer services. AMEX’s official marketing material for PR/PW listed benefits of the products as being, chiefly, the ability to earn MR and utilize AMEX’s “white glove service” in connection with customer wiring needs. The official marketing materials also contained the disclaimer: “The value of the [MR] may be taxable income to the Card Member and the Card Member is responsible for any federal or state taxes resulting from the [MR].”
In practice, however, the products were marketed as a means to generate tax savings. The products were primarily marketed to small and mid-size businesses that valued a reduced tax burden over increased profitability. Customers were advised: first, that the fees were tax-deductible as a business expense, and thereby had the effect of lowering their overall profit and taxable income; second, that they otherwise would have paid taxes on the fees, so the true cost of the fees had to be evaluated in the context of their effective tax rate; and, third, that the MR received in exchange for the transaction was earned tax-free (the Pitch). As a result, the value of the MR outweighed the true cost of the fees adjusted to account for the tax savings they generated.
The Pitch relied on incorrect tax advice, namely, that the wiring fee was deductible in its entirety as a business expense. Business expenses must be “ordinary” and “necessary.” Incurring a wiring fee—far in excess of that offered by competitors in the marketplace—for the purpose of generating a personal benefit is not an “ordinary” and “necessary” business expense. AMEX did not consult with tax professionals to verify the tax advice being offered.
In early 2021, as concerns grew regarding the way PR/PW was marketed, an internal investigation commenced, which ultimately resulted in the termination of approximately 200 employees. In the summer of 2021, AMEX stopped enrolling new customers in the products. In September 2021, a cap was instituted of $280,000 per wire sent. In November 2021, the products were discontinued entirely.
The Non-Prosecution Agreement
AMEX has agreed to pay a fine of $77,696,000 and forfeit $60,700,000, which represents the net revenue that could reasonably be attributed to the sale of PR/PW.
The Office reached this resolution with AMEX after carefully weighing all the factors relevant to the appropriate corporate resolution, including the nature and seriousness of the offense. The NPA recognizes that AMEX voluntarily took substantial remedial measures beginning in 2021 to mitigate and correct the sales and marketing practices described above and improving compliance measures, including terminating employees involved in the misconduct, discontinuing PR/PW, and making significant improvements to AMEX’s product approval and internal audit processes. AMEX also has no prior criminal history in the past 18 years. Furthermore, AMEX has cooperated with the Office in its investigation and has agreed to continue to cooperate fully with the Office.
The agreement announced today is the result of an investigation conducted by IRS-CI. The government’s case is being handled by the Office’s Business and Securities Fraud Section in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act. Assistant United States Attorneys Hiral D. Mehta, Gillian Kassner and Tara McGrath, and former Assistant U.S. Attorney Brian D. Morris prosecuted the case, with assistance from Paralegal Specialist Timothy Migliaro.
The Defendant:
amex_npa_agreement_print.pdfAMERICAN EXPRESS COMPANY
American Express Agrees to Pay $108.7M to Settle Allegations of Deceptive Marketing and “Dummy” Account InformationRead the Press Release
The American Express Company (American Express), based in New York, New York, has agreed to pay a $108.7 million civil penalty to resolve allegations that it violated the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by deceptively marketing credit card and wire transfer products and by entering “dummy” Employer Identification Numbers in the credit card accounts of its affiliate bank.
“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement makes clear that the department will hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be truthful about their business practices.”
The United States alleged that, from 2014 through 2017, American Express deceptively marketed credit cards through the conduct of an affiliated entity that initiated sales calls to small businesses. The alleged deceptive practices included misrepresenting the card rewards or fees and whether credit checks would be done without a customer’s consent and submitting falsified financial information for prospective customers, such as overstating a business’s income.
The United States also alleged that American Express engaged in practices to deceive its federally insured financial institution into allowing certain small business customers to acquire American Express credit cards without the required employer identification numbers (EINs). EINs are required by law if the card recipient is a business entity such as a corporation or partnership; the requirement does not apply to sole proprietors. The United States alleged that American Express employees used “dummy” EINs such as “123456788” in opening small business credit cards in 2015 and the first half of 2016. These cards were sold to replace an American Express co-branded credit card that was being discontinued during that time period. American Express allegedly allowed these “dummy” EINs to remain on the credit card accounts for up to two years before remediating the problem. American Express allegedly knew that many of the small business applicants had previously acquired American Express-issued co-brand cards where the card application stated that EINs were required for corporations or partnerships, but if the applicants left the EIN line blank, American Express would assume they are sole proprietors. That practice exacerbated the effects of American Express’s failure to enter proper EINs when it sold these customers replacement cards.
Finally, the United States further contended that American Express employees deceptively marketed wire transfer products known as Payroll Rewards and Premium Wire to its small business customers from 2018 through 2021, making false assertions regarding these products’ tax benefits. As to both products, American Express allegedly would wire money for an above-market fee that was far in excess of that offered by competitors in the marketplace and award the businesses or the business owners credit card membership reward points. American Express sales employees allegedly told customers that the wire transfer fees were tax deductible as business expenses, while the reward points earned on the transaction were not taxable, and thereby afforded the customer tax-free benefits. The United States contended, however, that the above-market wiring fee was not deductible as an ordinary or necessary business expense insofar as it was incurred by a customer solely for the purpose of generating a personal benefit.
Contemporaneous with the civil resolution, American Express will enter into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Eastern District of New York and pay a criminal fine and forfeiture. That agreement deals exclusively with the Payroll Rewards and Premium Wire programs referenced above. Under the terms of the civil settlement, American Express will receive a credit toward the satisfaction of the civil penalty in the amount of $30.35 million if it makes a full payment of the forfeiture and fine amounts due under the criminal resolution.
“This multi-million-dollar settlement holds American Express accountable for violating FIRREA through unlawful sales tactics and recordkeeping requirements, and deceiving small business customers who placed their trust in the Company,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Mid-Atlantic Region. “The FDIC-OIG will continue to work with our law enforcement partners to investigate financial crimes that harm customers and undermine the integrity of our Nation’s financial institutions.”
“Today’s multi-million dollar settlement should make clear that financial companies who engage in fraudulent and deceptive practices will be held accountable for their actions,” said Special Agent in Charge John T. Perez of Headquarters Operations, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “We are proud to have worked alongside our federal law enforcement partners to achieve this result.”
Attorneys Daniel Spiro and Mary Beth Hickcox-Howard of the Civil Division’s Commercial Litigation Branch, Fraud Section handled the matter with assistance from the Legal Division of the Federal Reserve Board of Governors and the Office of Comptroller of the Currency’s Chief Counsel’s Office. Senior Special Agent Brittany Harding of the Office of the Inspector General for the Department of Treasury, Special Agent Will Burmeister of the Office of the Inspector General for the Federal Reserve Board and Senior Special Agent Mike Serra from the Office of the Inspector General for the Federal Insurance Deposit Corporation investigated the matter.
Except for the conduct admitted in connection with the criminal resolution, the claims resolved by the settlement are allegations only. There has been no determination of liability.
View the settlement here
Broker and Three Traders Indicted for Years’ Long Insider Trading SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, an indictment was unsealed charging broker David Cooper and traders Randy Grewal, John Lowe and Richard Ringel with conspiracy to commit securities fraud and securities fraud for their involvement in an insider trading scheme. Cooper was arrested today in Westchester and will be arraigned this afternoon before United States Magistrate Judge Joseph A. Marutollo. Grewal was arrested in Anthem, Arizona and Lowe and Ringel were arrested in Stewart and Boca Raton, Florida, respectively. They will be arraigned in the Eastern District of New York at a later date.
Judy Philips, Acting Attorney for the United States for the Eastern District of New York, William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI) and Brendan Donahue, Acting Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), announced the arrests and charges.
“As alleged, the defendants exploited their access to inside information for years to gain an unfair advantage over the investing public for their own personal gain,” stated Acting Attorney for the United States Philips. “The arrests and indictment demonstrate that this Office will protect the integrity of the securities markets and aggressively prosecute those who engage in insider trading.”
Ms. Philips expressed her appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their significant cooperation and assistance during the investigation.
“Those who participate in illicit trading schemes undermine our U.S. Securities and Exchange Commission laws and regulations with selfish ambition,” stated HSI New York Special Agent in Charge Walker. “HSI continues to work side-by-side with our law enforcement partners to ensure fraudsters who manipulate our legal financial systems are identified and prosecuted to the fullest extent.”
“This is a case of pure greed where individuals lied, obtained information illegally, and used it solely for their own personal financial gain. Postal Inspectors, along with our law enforcement partners, will continue to investigate fraud vigilantly and will protect investors from falling victim to predatory behavior,” stated USPIS Acting Inspector in Charge Donahue.
As alleged in the indictment, between approximately January 2018 and May 2024, the defendants conspired to obtain material non-public information (MNPI) about upcoming secondary stock offerings and to trade on that MNPI in advance of those offerings. The defendants illegally obtained MNPI from numerous sources, including through Cooper, who obtained MNPI in his capacity as an employee of a broker-dealer (Broker-Dealer) with investment banks involved in and underwriting the secondary stock offerings. The MNPI included specific deal information such as the identity of the public company issuing the secondary offering; the timing of the deal; the structure of the deal; and the price at which the company would offer its stock in the upcoming offering. Cooper breached his duty of confidentiality to Broker-Dealer and misappropriated the information when he improperly disclosed it to Lowe, Ringel and others with knowledge that they intended to use the information to execute short sales in advance of the public announcement of the secondary offerings. Cooper shared the MNPI to induce Broker-Dealer customers, including Lowe and Ringel, to commit to buy shares in the offerings so that Cooper and Broker-Dealer would receive compensation from the underwriters. Lowe, in turn, passed MNPI to Grewal. Lowe, Ringel and Grewal used MNPI to obtain more than $1 million in illegal profits on their short sales in advance of secondary offerings.
Evidence obtained from judicially authorized wiretaps revealed that in connection with numerous secondary offerings between approximately January 2023 and May 2023, Cooper and a co-conspirator (Co-Conspirator #1) obtained MNPI from investment firms that were underwriting the secondary offerings and provided MNPI to Lowe, Ringel and others, with knowledge that Lowe, Ringel and others intended to trade securities in advance of secondary offerings based on the MNPI. Those secondary offerings included the companies Chicken Soul for the Soul Entertainment, Inc. (NASDAQ: CSSE), Revelation Biosciences, Inc. (NASDAQ: REVB) and Tivic Health Systems, Inc. (NASDAQ: TIVC).
Fraudulent Trading on MNPI in the CSSE Secondary Offering
On or about March 30, 2023, Cooper obtained MNPI about the timing and pricing of the CSSE offering from the sole managing underwriter for the deal and shared that information with Ringel, who traded in CSSE in advance of the offering using the information, and Co-Conspirator #1, who gave the inside information to Lowe. Lowe traded based on the MNPI and tipped Grewal, who also traded using the MNPI.
Fraudulent Trading on MNPI in the REVB Secondary Offering
Between February 6, 2023 and February 8, 2023, Lowe obtained MNPI about the timing of the REVB offering from a representative of the sole underwriter on the deal and passed it to Grewal, who traded in REVB using the information. Between February 7, 2023 and February 9, 2023, Ringel traded REVB based on MNPI that Cooper received from another representative of the sole underwriter on the deal.
Fraudulent Trading on MNPI in the TIVC Secondary Offering
On or about February 6, 2023, Cooper called a representative of the sole managing underwriter for the TIVC offering. The next day, Co-Conspirator #1 communicated to Lowe that TIVC intended to offer shares of its stock in a secondary offering. After learning this information, Lowe traded in TIVC and passed the MNPI he received from Co-Conspirator #1 to Grewal, who then also traded in TIVC. Between February 6, 2023 and February 8, 2023, Ringel and Cooper spoke over the telephone numerous times and Cooper executed a number of short sales in TIVC. In particular, on February 8, 2023 (after Co-Conspirator shared MNPI about the TIVC deal with Lowe), Cooper spoke with Co-Conspirator #1 and then with Ringel. Approximately six minutes after Ringel and Cooper spoke, Ringel executed additional short sales in TIVC.
The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. The defendants face up to 25 years in prison if convicted of the charges.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys Jessica K. Weigel, Sophia M. Suarez and Adam R. Toporovsky are in charge of the prosecution, with assistance from Paralegal Specialist Liam McNett.
The Defendants:
DAVID COOPER
Age: 38
Larchmont, New YorkRANDY GREWAL
Age: 54
Anthem, ArizonaJOHN LOWE (also known as “Clams”)
Age: 61
Sayville, New YorkRICHARD RINGEL
Age: 54
Boca Raton, FloridaE.D.N.Y. Docket No. 25-CR-10 (DG)
Bloods Gang Member Sentenced to 23 Years in Prison for Sex Trafficking of MinorsRead the Press Release
Earlier today, at the federal courthouse in Central Islip, Joshua Lampley-Reid, also known as “Tio” and “Fendi,” and a member of the Makk Balla set of the Bloods street gang, was sentenced by United States District Judge Gary R. Brown to 23 years in prison for sex trafficking of minors. Lampley-Reid operated as a “pimp,” using violence and the threat of violence to compel the commission of commercial sex acts for his financial benefit, including by minors as young as 15 years old. Lampley-Reid pleaded guilty to the charge in August 2022.
Carolyn Pokorny, Acting United States Attorney for the Eastern District of New York, William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI) and Errol D. Toulon, Jr., Suffolk County Sheriff, announced the sentence.
“The defendant is a ruthless predator who exploited vulnerable minors without families or homes, and sexually trafficked them for his own financial gain,” stated Acting United States Attorney Pokorny. “He is deserving of today’s significant jail sentence for the horrific physical and psychological abuse he inflicted on the victims, which, unfortunately, will continue to affect them for years to come. It is my sincere hope that the justice meted out today will provide some measure of comfort to these young women and help them on their journey to healing.”
“This sentence brings some justice to the minors victimized by this dangerous predator who is now put away from causing any further harm to our community’s most vulnerable members,” stated HSI New York Special Agent in Charge Walker. “Our children deserve to be protected from this violence and shielded from the lifelong trauma that accompanies it. HSI works collectively with our federal, state and local law enforcement partners to bring an end to child exploitation and sex trafficking. Prosecuting those who seek to exploit children for their own self-gratification or greed is one of our top priorities.”
“The sentencing of this dangerous gang member is a clear message that those who prey on the most vulnerable members of our community will be held accountable,” stated Suffolk County Sheriff Toulon. “The Suffolk County Sheriff’s Office is committed to continuing to fight human trafficking and working tirelessly with our federal and local partners to ensure that justice is served and that survivors are supported in their journey toward recovery.”
As set forth in the government’s sentencing memorandum and other court documents, in December 2019, Lampley-Reid began recruiting females, including Jane Doe 1 and Jane Doe 2, to engage in commercial sex acts for his own financial benefit. The defendant used social media and other internet applications to establish relationships with potential victims and groomed them by conveying a romantic interest in them, manipulating them into performing commercial sex acts and then effectively enslaving them through acts of force and coercion. The defendant directed when, where and with whom the commercial sex acts would be performed. The defendant met resistance to his commands, or failure to pay him, with violence or the threat of violence. To maintain control over his victims, the defendant alternately showed affection and acted violently, not only beating and choking his victims, but also withholding food and other basic necessities. This psychological and emotional abuse was depicted in videos recovered from the defendant’s cellular telephone. He tracked his victims’ phones, threatened their families and stalked them after they left him. The defendant used his association with the Makk Balla set of the Bloods street gang to terrorize them. He also engaged in sexual intercourse with his minor victims, which he often video recorded, and managed his prostitution business over the Internet, posting sexually exploitative photos of minor victims that he took or persuaded them to take of themselves in order to further his trafficking business. Although this conduct was concentrated in Nassau County, the defendant also transported certain victims to other states, including Florida, North Carolina and Maryland.
If you are a victim or have information about sex trafficking, call HSI at 1-866-347-2423. To get help from the National Human Trafficking Hotline, call 1-888-373-7888 or text HELP or INFO to BeFree (233733). HSI is ready to work with you in your native language, regardless of your immigration status.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorney Megan E. Farrell is in charge of the prosecution.
The Defendant:
JOSHUA LAMPLEY-REID (also known as “Tio” and “Fendi”)
Age: 30
West Hempstead, Long IslandE.D.N.Y. Docket No. 21-CR-319 (S-1) (GRB)
Member of 5-9 Brims Street Gang Sentenced to Life in Prison for Retaliatory Gang MurderRead the Press Release
Earlier today, in federal court in Brooklyn, Marvin Pippins, also known as “Mukk,” was sentenced by United States District Judge Pamela K. Chen to life imprisonment for murdering a rival gang member by shooting at him six times. Following a three-week trial in April 2023, Pippins was convicted by a federal jury of racketeering conspiracy, murder conspiracy, murder in-aid-of racketeering, drug conspiracy and related firearms charges. Pippins was also sentenced today to a concurrent term of 30 years for racketeering conspiracy and to a consecutive term of five years in prison for unlawful possession of a firearm, among other things.
Carolyn Pokorny, Acting United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Marvin Pippins will deservedly spend the rest of his life in prison for this cold-blooded murder, undertaken in service of a years-long gang war,” stated Acting United States Attorney Pokorny. “Pippins committed predatory and deadly crimes on behalf of a violent street gang that, for years, polluted the streets with drugs, preyed on unsuspecting victims of financial fraud and subjected rivals and innocent civilians alike to acts of violence. My Office is focused on dismantling violent criminal organizations, and today’s sentence should send a message that the most serious of crimes will be met with the most serious of consequences.”
Ms. Pokorny expressed her appreciation to the New York City Police Department for their outstanding work on this investigation.
“In 2015, Marvin Pippins, a 5-9 Brims gang member, ruthlessly murdered a rival associate in a twisted attempt to restore the gang’s honor and thwart future attacks,” stated FBI Assistant Director in Charge Dennehy. “Pippins’ myriad of crimes strengthened the gang’s presence across Brooklyn and fueled persisting territorial disputes. May today’s lifelong sentence reflect the FBI’s renowned commitment to disrupting all criminal enterprises plaguing our city with violence and illicit substances.”
Between 2012 and 2020, Pippins was a member of the 5-9 Brims—a violent set of the Bloods street gang, responsible for sophisticated fraud schemes, prolific narcotics trafficking and violent crimes, including gunpoint robberies, shootings and murders. This crew of 5-9 Brims was also known as “Breadgang.” Pippins and his fellow members operated principally in and around the Marlboro Houses in the Gravesend section of Brooklyn. Pippins personally engaged in a broad array of criminal activity and earned a reputation as a “shooter” and as someone who generated money for the gang. He participated in financial fraud on behalf of the gang, sold drugs and carried guns to protect the gang’s criminal rackets. Pippins was also convicted of several crimes related to the gang’s violent rivalry with “Real Ryte,” a Canarsie-based rival crew. In September 2015, the defendant’s brother Melvin Pippins, also known as “Melly,” was murdered. The defendant and his fellow gang members blamed Real Ryte for the murder, and there was an “expectation” that members of the 5-9 Brims would retaliate against Real Ryte with violence. On December 19, 2015, Pippins murdered Sean Peart, a member of Real Ryte, while the victim was alone and unarmed in his parked car on Dean Street outside the Weeksville Gardens housing development. Peart tried to speed away but crashed his car before succumbing to his injuries. After the murder, Pippins bragged to fellow members and associates of the gang admitting that he “did boy dirty.” In rap lyrics, the defendant described Peart’s murder in detail, including references to the victim “hanging out the window” and giving him “shot after shot.”
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsey R. Oken and Dana Rehnquist are in charge of the prosecution, with assistance from Assistant United States Attorneys Nicholas J. Moscow and Drew G. Rolle.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The Defendant:
MARVIN PIPPINS (also known as “Mukk”)
Age: 34
Brooklyn, New YorkE.D.N.Y. Docket No. 19-CR-378 (PKC)
High-Ranking MS-13 Gang Member Pleads Guilty to Seven Murders, Multiple Attempted Murders, Arson and Firearms OffensesRead the Press Release
Earlier today, in federal court in Central Islip, Jairo Saenz, also known as “Funny,” a high-ranking member of the Brentwood/Central Islip chapter of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to racketeering charges in connection with his participation in seven murders, namely, the January 28, 2016 murder of Michael Johnson; the April 29, 2016 murder of Oscar Acosta; the September 13, 2016 murders of Kayla Cuevas and Nisa Mickens; the October 10, 2016 murder of Javier Castillo; the October 13, 2016 murder of Dewann Stacks; and the January 30, 2017 murder of Esteban Alvarado-Bonilla. Saenz also pleaded guilty to his participation in three attempted murders, arson, narcotics trafficking, firearms offenses and a conspiracy to kill Marcus Bohannon, who was murdered on September 5, 2016 by other members of the MS-13.
Today’s guilty plea proceeding was held before United States District Judge Gary R. Brown. When sentenced, Jairo Saenz faces up to 60 years in prison, and a minimum sentence of 40 years in prison under the terms of his plea agreement.
Carolyn Pokorny, Acting United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.“Today, Jairo Saenz pleaded guilty to seven murders that can only be described as barbaric, and multiple acts of senseless gang violence that had turned parts of Long Island into a war zone, with MS-13 gang members wielding guns, machetes, bats and fire that threatened the safety of our communities,” stated Acting United States Attorney Pokorny. “I commend my Office’s prosecutors and the Long Island Gang Task Force who are committed to holding MS-13 gang members accountable for the crimes they have committed and harm they have caused. It is my sincere hope that today’s guilty plea brings some measure of solace and closure to the families of the defendant’s victims who continue to mourn the deaths of their loved ones.”
According to court filings and statements made during today’s guilty plea proceeding, Jairo Saenz was a high-ranking member of the Brentwood/Central Islip chapter of the Sailors clique of the MS-13 – one of the more powerful, violent and well-established cliques on the East Coast of the United States. At the time, he was second in command to his brother, Alexi Saenz, who pleaded guilty to the same crimes on July 10, 2024. Jairo Saenz committed the following crimes in order to maintain and increase his membership and status within the gang, and to further the mission of the MS-13:
January 28, 2016 Murder of Michael Johnson
On January 28, 2016, Alexi Saenz and other MS-13 members and associates were at the Jocorena Deli in Brentwood, where they saw 29-year-old Michael Johnson, and claimed to recognize him as a member of the rival Bloods street gang. At that point, Johnson was marked as their “food” – a reference to their intention to kill him.
After receiving the requisite approval from the New York leader of the Sailors clique to commit this murder, Alexi Saenz contacted Jairo Saenz and several other MS-13 members, informed them of the plan to kill Johnson and instructed them to bring weapons, including a machete and a baseball bat, to a wooded area in Brentwood. Alexi Saenz then lured Johnson to that secluded meeting location under the guise of smoking marijuana. The MS-13 members and associates, including Jairo Saenz, ambushed Johnson from behind – striking Johnson with the baseball bat, stabbing him with a knife and taking turns hacking him with the machete. They fled after hearing police sirens in the area.
Johnson was reported missing by family members. Less than one week after his murder, on February 2, 2016, members of the SCPD responded to a 911 call about a body found in the woods by a passerby and recovered Johnson’s body. An autopsy determined Johnson’s cause of death to be sharp and blunt force injuries.
April 29, 2016 Murder of Oscar Acosta
In early 2016, Alexi Saenz, Jairo Saenz and their fellow Sailors clique members decided to “green light,” or approve, the murder of 19-year-old Oscar Acosta because they suspected that he was associating with the rival 18th Street gang after previously aligning himself with the MS-13. The New York Sailors clique leader assigned roles as to which members would take the lead in planning and carrying out the murder.
On April 29, 2016, MS-13 members met Acosta in a wooded area near an elementary school in Brentwood where he had been lured under the guise of smoking marijuana. They brutally beat Acosta with tree limbs, knocking him unconscious. They bound Acosta’s hands and feet, wrapped an article of clothing around his mouth to prevent him from making noise and summoned other MS-13 members, including Alexi Saenz and Jairo Saenz, who arrived together. The MS-13 members loaded Acosta into the trunk of the Saenz brothers’ car, and drove to a more secluded area in Brentwood near the abandoned Pilgrim State Psychiatric Hospital. At the direction of Alexi Saenz, the MS-13 members removed Acosta, who was still alive, from the trunk and carried him deeper into the woods where they took turns hacking him to death with a machete. The murder was supervised by the Saenz brothers. The MS-13 members then buried Acosta’s body in a shallow grave.
Acosta’s body was discovered by law enforcement nearly five months later, on September 16, 2016, during a search for another MS-13 victim. His cause of death was homicidal violence, including sharp and blunt force injuries to his head and torso.
July 18, 2016 Attempted Murders of John Doe #1 and John Doe #2
On July 18, 2016, during a Sailors clique meeting at the Saenz brothers’ house in Central Islip, Alexi Saenz instructed the group to hunt for rival gang members who had been disrespectful to the MS-13, in order to attack and kill them.
Later that evening, Jairo Saenz and other members of the MS-13, who were driving around Brentwood armed with firearms and a machete, spotted a group of men on Apple Street. Believing these men to be members of a rival gang, three MS-13 members got out of the car driven by Jairo Saenz and attacked the group, firing rounds from two different guns, and then using a machete to hack at one of the men who had fallen to the ground.
Two individuals were injured as a result of this attack. John Doe #1 was struck with a bullet, but survived. John Doe #2 was attacked with a machete, and was permanently disfigured.
August 10, 2016 Attempted Murders of Suspected Rival Gang Members
In 2016, members of the MS-13 were engaged in a series of disputes with members of the Goon Squad, a rival gang in Brentwood.
On August 10, 2016, Alexi Saenz and another MS-13 member drove through the neighborhood around Lukens Avenue in Brentwood, and spotted several men who they believed were members of the Goon Squad. They then rallied other members of the Sailors clique, including Jairo Saenz, to come kill the rivals.
The MS-13 members divided into two vehicles and drove towards the house where the suspected Goon Squad members had been spotted. The Saenz brothers’ car kept watch for the police, while two other MS-13 members, each armed with a gun, approached the group of suspected rivals and fired numerous shots in their direction. No one was hit, although a stray bullet entered a neighbor’s house and struck the headboard of a bed in which the neighbor was sleeping.
September 5, 2016 Murder of Marcus Bohannon
On September 4, 2016, after a Sailors clique meeting at the Saenz brothers’ house in Central Islip, Jairo Saenz, Alexi Saenz and other MS-13 members went out hunting for rival gang members to kill.
The MS-13 members separated into several cars and drove around Central Islip and Brentwood, until Alexi Saenz’s group spotted 27-year old Marcus Bohannon walking along Lowell Avenue in Central Islip in the early morning hours of September 5. Suspecting that Bohannon was a member of the rival Bloods gang, two MS-13 members, carrying firearms, got out of the vehicle, approached him and started shooting. Bohannon was struck nine times, including in his head, neck, and chest, and died from his wounds.
September 12, 2016 Arson
During the summer of 2016, Sailors clique members of the MS-13 were regularly having altercations with local gang members based in a neighborhood on Freeman Avenue in Brentwood.
On September 12, 2016, the MS-13 members retaliated by setting fire to a car parked in the driveway of one of the houses in that rival gang neighborhood. Alexi Saenz directed other gang members to purchase gasoline and carry out the arson, while he drove around watching for police. Jairo Saenz drove the other MS-13 gang members to that house, where they poured gasoline on a car parked in the driveway, and set it on fire. The car exploded and set another parked car on fire.
September 13, 2016 Murders of Kayla Cuevas and Nisa Mickens
On September 13, 2016, Sailors clique members brutally murdered 15-year-old Nisa Mickens and 16-year-old Kayla Cuevas, both students at Brentwood High School.
In the months leading up to the murders, Cuevas was involved in a series of disputes with members and associates of the MS-13. Approximately one week before the murders, these disputes escalated when Cuevas and several friends were involved in an altercation with MS-13 members at Brentwood High School. After that incident, the MS-13 members vowed to seek revenge against Cuevas.
On the evening of September 13, 2016, the Saenz brothers and other members of the Sailors clique of the MS-13 were driving in separate cars around Brentwood in search of rival gang members to attack and kill. One group of MS-13 members spotted Cuevas and Mickens walking down residential Stahley Street. Recognizing Cuevas, they called the Saenz brothers and were granted permission to kill the girls. Several MS-13 members then chased down and attacked both Cuevas and Mickens, wielding baseball bats and a machete, striking each of the girls numerous times in their heads and bodies, while the Saenz brothers’ car drove around watching for police. After the murders, the group retreated to the Saenz brothers’ home in Central Islip, where they changed clothes and hid the weapons.
Mickens, whose body was discovered later that evening on Stahley Street, not far from Cuevas’s home, sustained significant sharp force trauma to her face and blunt force trauma to her head. Cuevas, whose body was discovered the following day behind a house adjacent to where Mickens’s body was found, sustained significant blunt force trauma to her head and body and multiple lacerations.
October 10, 2016 Murder of Javier Castillo
In October 2016, the MS-13 targeted 15-year-old Javier Castillo because he was believed to be a member of the 18th Street gang, one of MS-13’s principal rivals.
On October 10, 2016, Jairo Saenz and other members of the Sailors clique convinced Castillo, who lived in Central Islip, to drive with them to Freeport – approximately 30 miles away – to smoke marijuana. Once there, they met Alexi Saenz and other Sailors clique members. The group then lured Castillo to an isolated marsh area in Cow Meadow Park, where they attacked him, taking turns hacking him to death with a machete.
Afterwards, the MS-13 members dug a hole and buried Castillo’s body, which was not recovered until one year later, in late October 2017. Castillo was determined to have suffered multiple sharp force injuries to his head, neck, torso and extremities.
October 13, 2016 Murder of Dewann Stacks
On the evening of October 13, 2016, the Saenz brothers and other members of the Sailors clique of MS-13 were driving around Central Islip and Brentwood in search of rival gang members to attack and kill.
That night, they spotted 34-year-old Dewann Stacks and, believing him to be a rival gang member, Alexi Saenz authorized his murder. While Alexi Saenz drove around watching for police presence, Jairo Saenz drove three MS-13 members, armed with two machetes and a baseball bat, to attack Stacks. The three armed MS-13 members got out of the car, and beat and hacked Stacks to death on American Boulevard, a residential street in Brentwood. Stacks sustained severe sharp and blunt force trauma to his face and head, leaving his body nearly unrecognizable.
January 30, 2017 Murder of Esteban Alvarado-BonillaOn the morning of January 30, 2017, Alexi Saenz and other members of the Sailors clique of MS-13 spotted 29-year-old Esteban Alvarado-Bonilla inside El Campesino Deli in Central Islip. Alvarado-Bonilla was wearing a football jersey bearing the number “18,” which led the MS-13 to conclude that he was a member of a rival gang, and they plotted to kill him.
After Alvarado-Bonilla was observed in the Deli, Jairo Saenz drove MS-13 members to get a mask and another vehicle, both of which would be used when committing the murder. Alexi Saenz provided the clique’s 9-millimeter handgun for use in the murder.
At approximately 10:30 a.m., a masked MS-13 member entered the deli, approached Alvarado-Bonilla from behind, and shot him multiple times, killing him. One of the bullets pierced through Alvarado-Bonilla’s head and struck the chest of a female employee of the deli, who was standing directly in front of him. The deli employee survived the gunshot wound.
Narcotics Trafficking ConspiracyFor a year and a half, from approximately April 2016 through March 2017, in order to finance the illegal operations of the Sailors clique, the Saenz brothers obtained wholesale quantities of cocaine and marijuana, which they distributed to other Sailors clique members and associates for street-level sales in Brentwood and its surrounding areas. After the sales, the profits were turned over to the Saenz brothers, for use in, among other things, purchasing firearms for use by clique members, wiring money to MS-13 leaders in El Salvador and buying additional narcotics for further distribution.
Today’s guilty plea is the latest achievement in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization. The MS-13’s leadership is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across the United States. With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island. Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults. Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorneys John J. Durham, Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution, with the assistance of Paralegal Specialist Kerry Ucci and Automated Litigation Specialist Michael Compitello.
The Defendant:
JAIRO SAENZ (also known as “Funny”)
Age: 28
El Divisadero, Morazán, El Salvador; and Central Islip, New YorkE.D.N.Y. Docket No. 16-CR-403 (S-8)(GRB)
The City of New York and Queens Borough Public Library Settle Federal Claims That the Hunters Point Branch Failed to Comply with the Americans with Disabilities ActRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, announced today a settlement agreement with the Queens Borough Public Library (QBPL) and the City of New York (the City) to resolve violations of the Americans with Disabilities Act (the ADA) at the Hunters Point Library Branch of the QBPL (the HPL Branch). The ADA applies to QBPL because it is a “public accommodation” as defined by Title III of the ADA and to the City because it is a “public entity.” Title II and Title III of the ADA require that newly constructed public accommodations are accessible to individuals with mobility impairments.
“The design and construction of the Hunters Point Library Branch of the Queens Borough Public Library blatantly violated the ADA’s requirement that individuals with disabilities have equal access to public accommodations,” stated United States Attorney Peace. “Today’s settlement agreement ensures that access. My Office will continue to enforce the ADA and its protections against discrimination for people with disabilities.”
The HPL Branch, located at 47-40 Center Boulevard in Long Island City, Queens, was designed by Steven Holl Architects pursuant to a contract with the City. Construction was completed in the fall of 2019. Among the library’s unique architectural features is a two-story high, five-tiered mezzanine area intended to house HPL’s periodical and adult fiction sections. However, only the top and bottom tiers are accessible to individuals with mobility impairments, in violation of the ADA.
The United States conducted an ADA compliance review in December 2019 of the HPL Branch shortly after it opened. That review identified approximately 95 violations of the ADA’s accessibility requirements which the City and QBPL have now agreed to remediate. Among the work that the City and QBPL will perform is construction of a platform lift from the fifth tier to the fourth tier of the Mezzanine area and a skywalk/skybridge to the third tier. The platform lift and skywalk/skybridge will provide stair-free access to the third and fourth tiers. QBPL will not house any portion of the HPL collection on the second tier of the Mezzanine Tiers so long as that tier remains inaccessible to people with mobility disabilities.
Additional remediation will include creating wheelchair accessible spaces in the children’s area and the rooftop terrace. Under the terms of the agreement, all remediation work will be completed within five years.
This matter is being handled by the Office’s Civil Division Civil Rights Chief Michael J. Goldberger.
United States Files Civil Complaint Against New York Online Seller of Illegal Vehicle Emission Control Defeat DevicesRead the Press Release
Breon Peace, United States Attorney for the Eastern District of New York, and Lisa Garcia, Regional Administrator of the U.S. Environmental Protection Agency, Region 2 (EPA), today announced the filing of a civil complaint in federal court in Central Islip against Long Island-based company Spectrum Wholesale, Inc. (Spectrum) and Thomas J. Ciccarelli, Spectrum’s principal, alleging the defendants’ illicit sale of hundreds of products designed to remove, bypass, defeat, or render inoperative the emissions controls that vehicle and engine manufacturers use to meet emission standards, is in violation of the Clean Air Act.
The complaint seeks a court order finding that defendants’ sales violate the Clean Air Act, injunctive relief enjoining Defendants from further violations, as well as civil penalties for each violation.
“These sales have put the public health and the environment at risk by defeating critical vehicle emission controls on hundreds of vehicles,” stated United States Attorney Peace. “My Office will continue to rigorously enforce the Clean Air Act against those who degrade the public health and environment to make a fast dollar.”
“The increased air pollution resulting from these devices threatens the health of everyone, especially those with pre-existing health conditions, children and older adults,” stated EPA Regional Administrator Garcia. “To protect public health, EPA is enforcing measures to eliminate the manufacture and sale of such devices to ensure that the vehicles on our roads meet required emission standards.”The Clean Air Act prohibits selling, offering for sale, or causing the sale or offer of aftermarket parts that defeat motor vehicle emission controls (commonly known as “aftermarket defeat devices”). The complaint alleges that between October 18, 2019 and September 2, 2020, primarily through online transactions, the defendants sold, offered for sale, or caused the sale of approximately 672 such devices. By enabling vehicle emission controls to be evaded, aftermarket defeat devices contribute to air pollution and harm to public health. They also impede efforts by the EPA, states, tribes, and local agencies to plan for and meet air quality standards. The use of defeat devices can exponentially increase emissions of particulate matter (PM), carbon monoxide (CO), nitrogen oxides (NOx), and nonmethane hydrocarbons (NMHC). For example, EPA testing has found that deleting a motor vehicle's emissions controls can increase tailpipe emissions of NOx by a factor of up to 300 times, CO by a factor of approximately 130 times, NMHC by a factor of approximately 1,000 times, and PM by a factor of up to 37 times.
The lawsuit is being handled by Assistant United States Attorney Matthew Silverman and Paralegal Specialist Annabelle Duval of the Eastern District of New York, along with EPA Office of Regional Counsel, Assistant Regional Counsels Cassandra Basile and Erick Ihlenburg, with assistance from the EPA Office of the Inspector General.
In June 2021, the United States Attorney’s Office for the Eastern District of New York created an Environmental Justice Team within the Office’s Civil Division. The focus of the Environmental Justice Team is the protection of the rights of residents of the Eastern District of New York who are disproportionately burdened by environmental and health hazards. Additional information concerning the Office’s Environmental Justice Team can be found at: https://www.justice.gov/usao-edny/environmental-justice-and-enforcementThe Defendants:
SPECTRUM WHOLESALE INC.
Oakdale, Long IslandTHOMAS J. CICCARELLI
Oakdale, Long IslandE.D.N.Y. Docket No. 25-CV-127 (JMA)
us_v._spectrum_wholesale_complaint_as_filed.pdfCanadian National Sentenced to 40 Months in Prison for Multi Million Dollar Export Control SchemeRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Nikolay Goltsev was sentenced by United States District Judge LaShann DeArcy Hall to 40 months’ imprisonment for conspiring to commit export control violations. Goltsev, a Canadian national, masterminded a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. The electronic components shipped by Goltsev were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.
Breon Peace, United States Attorney for the Eastern District of New York; Merrick B. Garland, United States Attorney General; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI); James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jonathan Carson, Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement, New York Field Office (EEO), announced the sentencing.
“Simply put, Russia cannot effectively manufacture advanced weapons without U.S. technology. Today’s sentence goes a long way in preventing Russia’s access to U.S. electronics for use in the unlawful war against Ukraine,” stated United States Attorney Peace. “My Office is committed to stopping Russia’s illicit acquisition of U.S. technology.”
Mr. Peace also thanked U.S. Customs and Border Protection and the Department of Justice’s Office of International Affairs for their valuable assistance with the investigation.
“Today, Nikolay Goltsev joins the growing list of defendants held accountable for unlawfully procuring and profiting from the sale of U.S. technology to further Russia’s brutal war in Ukraine,” stated Attorney General Garland. “The Justice Department is sparing no effort to ensure that those who violate America’s export controls to feed Russia’s war machine answer for their crimes in American courtrooms.”
“Goltsev’s sentence sends a strong message that those who break our laws and contribute to Russia’s brutal war in Ukraine will be held accountable,” stated Assistant Attorney General Olsen of the Justice Department’s National Security Division. “The Department of Justice will vigorously pursue those who procure the component parts that make Russia’s war machine tick. This case demonstrates that these wrongdoers will be found and punished accordingly.”
“Nikolay Goltsev’s sentencing today sends a message to those seeking to bypass export control laws in support of the Kremlin’s inhumane attacks on Ukraine: HSI will do whatever it takes to prevent U.S. military technology from ending up on the Russian battlefield. HSI’s counter-proliferation investigators work tirelessly to combat the illegal export and proliferation of sensitive U.S. military and dual-purpose technology,” stated HSI New York Special Agent in Charge Walker. “Standing alongside our law enforcement partners, we are committing to stopping the Russian war machine in its tracks.”
FBI Assistant Director in Charge Dennehy stated, “Nikolay Goltsev served as a vehicle to reinforce Russia’s militant efforts against Ukraine through the distribution of electronics to sanctioned entities. Goltsev selfishly prioritized profits from this multi-million-dollar scheme at the expense of safeguarding United States technology against adversarial nations. May today’s sentencing reinforce the FBI's commitment to confront foreign countries which steal our technology to advance their nefarious and warmongering goals.”“Working with our law enforcement colleagues, the Office of Export Enforcement will continue to target networks that facilitate illicit shipments that support Russia’s war. Today’s sentencing is just the latest example of our resolute efforts to target, disrupt and dismantle these networks,” stated Department of Commerce EEO Special Agent in Charge Carson.
Goltsev used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia. Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.
To carry out the criminal scheme, Goltsev, along with co-defendant Salimdzhon Nasriddinov and others, purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn. The co-conspirators then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia. Goltsev’s wife, co-defendant Kristina Puzyreva, laundered the funds of the export control scheme.
Goltsev’s communications show that he had a sophisticated understanding of export control laws. For example, in a message in February 2023, Goltsev advised another co-defendant to “write something more substantial [to the U.S. company] so that there are no more questions.” The co-defendant responded, “is it better to provide them with a Chinese end user,” to which Goltsev stated, “yes should be ok.”
Goltsev’s communications also show that he knew the electronic components were going to Russia for use in Ukraine and support of Russia. In a May 30, 2023 text message conversation with Puzyreva, the defendants discussed a drone attack in Moscow and their support of Russia:
Puzyreva: what is Putin waiting for. He needs to destroy Ukraine.
Goltsev: yeah they’re gonna get f---ed either way.
Puzyreva: He needs to put fear into them. Those losers.
Goltsev: Well the way he is acting they have the right to do the same.
Puzyreva: I hate [ethnic slur for Ukrainians] anyway.
The scheme involved millions of dollars and proved to be lucrative for the defendants. In a text message exchange on or about January 13, 2023, Goltsev complained to Puzyreva that a subordinate of a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.” Puzyreva responded, “Lot of money? We will get rich.”
The government seized $20,000 in cash from the New York hotel room in which Goltsev was arrested. In total, the government has seized approximately $1.68 million in connection with this export scheme.
On July 24, 2024, co-defendant Kristina Puzyreva was sentenced to 24 months’ imprisonment for conspiracy to launder the proceeds of the export scheme. Co-defendant Salimdzhon Nasriddinov is awaiting sentencing.
The case was coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Artie McConnell and Ellen H. Sise are in charge of the prosecution, along with Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section, with the assistance of Paralegal Specialist Mary Clare McMahon. Assistant United States Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.
The Defendant:
NIKOLAY GOLTSEV
AGE: 38
Montreal, CanadaDefendants Previously Sentenced:
SALIMDZHON NASRIDDINOV
AGE: 54
Brooklyn, NYKRISTINA PUZYREVA
AGE: 33
Montreal, CanadaE.D.N.Y. Docket No. 23-CR-452 (LDH)
Canadian National Sentenced to 40 Months for Multimillion-Dollar Export Control SchemeRead the Press Release
Nikolay Goltsev, 38, of Montreal, Canada, was sentenced today to 40 months in prison for conspiring to commit export control violations. Goltsev masterminded a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. Some of the electronic components shipped by Goltsev were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.
“Today, Nikolay Goltsev joins the growing list of defendants held accountable for unlawfully procuring and profiting from the sale of U.S. technology to further Russia’s brutal war in Ukraine,” said Attorney General Merrick B. Garland. “The Justice Department is sparing no effort to ensure that those who violate America’s export controls to feed Russia’s war machine answer for their crimes in American courtrooms.”
“When Russia, its supporters, and its military companies lie and scheme their way around sanctions, they do not just violate the law – they endanger our Ukrainian allies and the freedoms they are fighting to protect,” said Secretary of Homeland Security Alejandro N. Mayorkas. “We cannot allow crimes like those committed by Mr. Goltsev to be ignored; to do so would only increase the risk they will be repeated. I commend the extraordinary Special Agents of Homeland Security Investigations who, alongside their federal and international law enforcement partners, are working diligently and bravely to support the people of Ukraine and hold accountable the perpetrators of Russia’s unlawful, unjust, and unprovoked war of aggression.”
“Today’s sentencing brings accountability to Nikolay Goltsev for his conspiracy to ship millions of dollars of electronics to Russia in support of its unprovoked invasion of Ukraine,” said FBI Director Christopher Wray. “Goltsev and his co-conspirators circumvented U.S. export control laws, used intermediary front companies to hide their crimes, and sold sophisticated electronics to Russia for use in its weapons platforms and signals intelligence equipment. The FBI is committed to working with our partners to investigate, disrupt, and hold accountable those who violate U.S. laws and provide aid to our adversaries.”
“Goltsev’s sentence sends a strong message that those who break our laws and contribute to Russia’s brutal war in Ukraine will be held accountable,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will vigorously pursue those who procure the component parts that make Russia’s war machine tick. This case demonstrates that these wrongdoers will be found and punished accordingly.”
“Goltsev and his wife thought they would ‘get rich’ by running an illicit global procurement scheme to supply sanctioned end users in Russia,” said Acting Assistant Secretary for Export Enforcement Kevin J. Kurland of the Department of Commerce. “Instead, they got jail time.”
“Simply put, Russia cannot effectively manufacture advanced weapons without U.S. technology,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s sentence goes a long way in preventing Russia’s access to U.S. electronics for use in the unlawful war against Ukraine. Today’s sentencing makes clear that the United States Attorney’s Office is committed to stopping Russia’s illicit acquisition of U.S. technology.”
Goltsev used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia. Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.
To carry out the defendants’ criminal scheme, Goltsev purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn. The co-conspirators then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia.
Goltsev’s communications show that he had a sophisticated understanding of export control laws. For example, in a message in February 2023, Goltsev advised another co-defendant to “write something more substantial [to the U.S. company] so that there are no more questions.” The co-defendant responded, “is it better to provide them with a Chinese end user,” to which Goltsev stated, “yes should be ok.”
Goltsev’s communications also show that he knew the electronic components were going to Russia for use in Ukraine and support of Russia. In a May 30, 2023 text message conversation between co-defendant Kristina Puzyreva, Goltsev’s wife, the defendants discussed a drone attack in Moscow and their support of Russia:
Puzyreva: what is Putin waiting for. He needs to destroy Ukraine.
Goltsev: yeah they’re gonna get f---ed either way.
Puzyreva: He needs to put fear into them. Those losers.
Goltsev: Well the way he is acting they have the right to do the same.
Puzyreva: I hate [ethnic slur for Ukrainians] anyway.
The scheme involved millions of dollars and proved to be lucrative for the defendants. In a text message exchange on or about Jan. 13, 2023, Goltsev complained to Puzyreva that a subordinate of a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.” Puzyreva responded, “Lot of money? We will get rich.”
The government seized $20,000 in cash from the New York hotel room in which defendant Goltsev was arrested. In total, the government has seized approximately $1.68 million in connection with this export scheme.
On July 24, co-defendant Kristina Puzyreva was sentenced to 24 months in prison for conspiracy to launder the proceeds of the export scheme. Co-defendant Salimdzhon Nasriddinov is awaiting sentencing.
The BIS, HSI, and FBI are investigating the case. U.S. Customs and Border Protection and Justice Department’s Office of International Affairs provided valuable assistance to the investigation.
Assistant U.S. Attorneys Artie McConnell, Ellen H. Sise, and Laura Mantell for the Eastern District of New York and Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
The case was coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
Владелец Расположенной В Бруклине Кредитной Kонсультационной Компании Приговорен К Более Чем 11 Годам Тюремного Заключения За Мошенничество В Отношении КлиентовRead the Press Release
Сегодня в федеральном суде Бруклина Марат Лернер, бывший президент компании по оказанию услуг по облегчению бремени задолженности, был приговорен Окружным судьей США Николасом Г. Гарауфисом [Nicholas G. Garaufis] к 135 месяцам тюремного заключения за сговор с целью совершения мошенничества с использованием электронных средств сообщения и за мошенничество с использованием электронных средств сообщения. Лернер также был осужден за продолжение деятельности по реализации своей преступной схемы в период досудебного освобождения. Лернер был приговорен к конфискации около 2 340 154 долларов в пользу государства. Размер возмещения убытков для жертв его преступлений будет определен позднее. Лернер признал себя виновным по этим обвинениям в феврале 2024 года.
Бреон Пис, Прокурор США Восточного округа Нью-Йорка, ДжеймсE. Деннехи [James E. Dennehy], помощник Директора Федерального бюро расследований (FBI) в Региональном управлении Нью-Йорка, и Гарри Т. Чавис младший [Harry T. Chavis, Jr.], Специальный агент в Региональном управлении Нью-Йорка Отдела расследований по уголовным делам Налогового управления США (IRS-CI), объявили приговор.
«Сегодня ответчик узнал, что существуют серьезные последствия за кражу денег своих клиентов, даже после его ареста, и безжалостную трату похищенных средств на роскошный автомобиль для себя, онлайн знакомства и дорогие обеды и ужины», – заявил Прокурор США Пис. «Его жертвами стали трудолюбивые люди, многие из которых выходцы из стран Восточной Европы, обратившиеся к нему за помощью, чтобы спасти свои дома и средства к существованию. Вместо оказания им помощи Лернер воспользовался их доверием и уязвимостью для кражи их денег. Лернер продолжал совершать свои преступления, даже когда он знал, что его действия привели к утрате жертвами его преступлений своих домов или к вынужденным объявлениям о банкротстве. Прокуратура намерена защищать население от недобросовестных консультантов, подобных Лернеру».
«Марат Лернер украл 2,5 миллионов долларов у уязвимых в финансовом отношении клиентов и довел нескольких из них до банкротства после того, как он направил их деньги на финансирование своих личных роскошных покупок вместо обеспечения обещанного снижения платежей по ипотеке», – заявил специальный агент FBI Деннехи. «Лернер предал доверие жертв своих преступлений, безжалостно продолжая использовать эту мошенническую схему даже после его первоначального ареста. Благодаря постоянной поддержке со стороны Полицейского управления Нью-Йорка (NYPD) и Таможенно-пограничной службы США (CBP), FBI продолжает расследовать дела преступников, использующих пустые обещания, чтобы нажиться на представителях социально незащищенных групп населения ради удовлетворения собственной жадности».
«Лернер жил роскошной жизнью, присваивая деньги людей в своем собственном сообществе», – заявил специальный агент IRS-CI Чавис. «Его подпольная брокерская деятельность не была простой денежной аферой; она приводила к тому, что жертвы не выплачивали ипотечные кредиты, а некоторые оказывались в ситуации изъятия банком заложенного под ипотечный кредит имущества. Сегодняшний приговор должен стать напоминанием всем, кто наживается на других ради удовлетворения собственных алчных желаний: вас поймают, вас будут преследовать по закону, и вы отправитесь в тюрьму за свои преступные деяния».
Согласно судебным документам и фактам, представленным во время слушания по вынесению приговора Лернеру, ответчик был владельцем компании Lerner Group, которая заявляла, что она предоставляет услуги по облегчению бремени задолженности, включая изменение условий ипотечного кредита, в основном для лиц в восточноевропейской иммигрантской общине в Бруклине. Многие из жертв, обманутых Лернером, уже испытывали финансовые затруднения и специально обращались к Лернеру за помощью, чтобы снизить свои ежемесячные выплаты по ипотеке. Лернер, в свою очередь, обещал, что он поможет им снизить ежемесячные ипотечные платежи, работая с их ипотечными кредиторами, чтобы добиться изменения условий ипотечного кредита или получения федеральной помощи домовладельцам. Для осуществления мошенничества Лернер получал доступ к банковским счетам своих жертв, которые, как он утверждал, будут использоваться для выплат ипотечным банкам от имени клиентов.
Лернер использовал доступ к банковским счетам своих жертв для хищения около 2,5 миллиона долларов – деньги, которые, как полагали его 19 жертв, использовались для оплаты их ипотечных кредитов. Получив доступ к банковским счетам своих жертв, Лернер переводил средства с их счетов в подконтрольные ему компании и/или банковские счета. Лернер прикрывал свое мошенничество, заявляя, что денежные средства находятся на условном депонировании или в филиалах ипотечных банков. На деле же Лернер оставлял себе большую часть денег и тратил их на личные и деловые расходы, включая автомобиль BMW, предметы роскоши и дорогие обеды и ужины. Лернер довел нескольких своих клиентов до вынужденной необходимости заявить о банкротстве во избежание изъятия банком заложенного под ипотечный кредит имущества, и в результате его преступной схемы несколько его жертв находятся в процессе изъятия банком заложенного под ипотечный кредит имущества.
В январе 2023 года Лернер был арестован в связи с мошенничеством и освобожден под залог. Ему были даны указания не совершать дополнительных преступлений. Однако Лернер незамедлительно открыл новые банковские счета и продолжил осуществление своей преступной схемы. После ареста по этому делу Лернер похитил у своих клиентов еще как минимум 50 000 долларов. В сентябре 2023 года постановление об освобождении Лернера под залог было отменено после того, как большое жюри предъявило Лернеру дополнительное обвинение в совершении дополнительных преступлений.
Государственное обвинение находится в ведении Отдела по борьбе с мошенничеством в сфере бизнеса и ценных бумаг Прокуратуры США. Помощник прокурора США Ник М. Аксельрод [Nick M. Axelrod] и бывший помощник прокурора США Дженни Нгаи [Genny Ngai] отвечали за ведение этого дела.
Ответчик:
МАРАТ ЛЕРНЕР
Возраст: 42
Бруклин, Нью-ЙоркНомер дела E.D.N.Y. 23-CR-15 (S-1) (NGG)
Owner of Brooklyn-Based Credit Counseling Business Sentenced to More Than 11 Years in Prison for Defrauding ClientsRead the Press Release
Earlier today, in federal court in Brooklyn, Marat Lerner, the former president of a debt relief services business, was sentenced by United States District Judge Nicholas G. Garaufis to 135 months in prison for conspiracy to commit wire fraud and wire fraud. Lerner was also convicted of continuing his criminal scheme while on pre-trial release. Lerner was ordered to forfeit approximately $2,340,154 to the government. Restitution to the victims will be determined at a later date. Lerner pleaded guilty to the charges in February 2024.
Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.
“Today the defendant learned there are serious consequences for stealing his clients’ money, even after he was arrested, and ruthlessly spending it on a luxury car for himself, on-line dating and expensive meals,” stated United States Attorney Peace. “His victims were hard-working people, many from the Eastern European community, who went to him for help saving their homes and livelihoods. Instead of helping them, Lerner took advantage of their trust and vulnerability to steal their money. Lerner continued his crimes even when he knew that his actions had directly caused his victims to lose their homes and-or to declare bankruptcy. My Office is committed to protecting the public from unscrupulous advisors like Lerner.”
“Marat Lerner stole $2.5 million from fiscally vulnerable clients and forced several into bankruptcy after funneling their money to fund his personal luxury purchases rather than providing the promised reduced mortgage payments," stated FBI Assistant Director in Charge Dennehy. "Lerner betrayed his victims’ trust, remorselessly continuing to perpetuate this fraudulent scheme even after his initial arrest. With the continued support from NYPD and CBP, the FBI remains dedicated to investigating those who employ empty promises to prey upon disadvantaged communities to satisfy their own greed.
“Lerner lived a glamourous life by taking money out of the pockets of people in his own community. His underground brokerage was not just a simple money scam; it led to victims defaulting on their mortgage payments and some falling into foreclosure,” stated IRS-CI Special Agent in Charge Chavis. “Today’s sentencing should stand as a reminder to those preying on others to fulfill their own greedy desires—you will get caught; you will be prosecuted; and you will go to prison for your criminal acts.”
According to court documents and facts presented at Lerner’s sentencing, the defendant was the owner of the Lerner Group, a business that claimed to provide debt relief services, including mortgage modifications, principally to the Eastern European immigrant community in Brooklyn. Many of the victims Lerner defrauded were already experiencing financial hardship and had specifically sought Lerner’s assistance to help reduce their monthly mortgage payments. Lerner, in turn, promised that he could help them lower their monthly mortgage payments by working with their mortgage lenders to secure a mortgage loan modification or federal homeowner assistance. To carry out his fraud, Lerner obtained access to the victims’ bank accounts, which he claimed he would use to pay the mortgage banks on their behalf.
Lerner used his access to his victims’ bank accounts to steal approximately $2.5 million – money that the 19 victims believed was being used to pay their mortgages. Once Lerner gained access to the victims’ bank accounts, he transmitted funds from their accounts to companies and/or bank accounts that he controlled. Lerner covered up his fraud by claiming the money was being held in escrow or by affiliates of the mortgage banks. In truth, Lerner kept most of the victims’ money and spent it on personal and business expenses, including a BMW, luxury goods and expensive meals. Lerner caused several of his clients to file bankruptcy petitions to stave off foreclosure to continue his fraud, and as a result of his scheme, several of his victims are facing foreclosure proceedings.
In January 2023, Lerner was arrested in connection with the fraud and released on bail. He was instructed not to commit additional crimes. However, Lerner promptly opened new bank accounts and continued his criminal scheme. After his arrest in this case, Lerner stole at least an additional $50,000 from his clients. In September 2023, Lerner’s bail was revoked after a grand jury returned a superseding indictment charging Lerner with additional crimes.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant U.S. Attorney Nick M. Axelrod and former Assistant U.S. Attorney Genny Ngai prosecuted the case.
The Defendant:
MARAT LERNER
Age: 42
Brooklyn, New York
E.D.N.Y. Docket No. 23-CR-15 (S-1) (NGG)Campaign Treasurer for Candidate for Brooklyn Borough President Pleads Guilty to Scheme to Defraud New York City’s Campaign Finance BoardRead the Press Release
Earlier today, in federal court in Brooklyn, Erlene King pleaded guilty to wire fraud in connection with her attempt to steal funds from New York City’s Campaign Finance Board (CFB). Today’s proceeding was held before United States District Judge Carol Bagley Amon. When sentenced, King faces up to 20 years in prison.
Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“Instead of playing by the rules New York City established for free and fair elections, the defendant attempted to use the city’s matching funds program to give the campaign an unfair advantage,” stated United States Attorney Peace. “My Office and our law enforcement partners are focused on rooting out corruption in our electoral system to ensure that all candidates are operating on a level playing field.”
Mr. Peace expressed his appreciation to the CFB for its cooperation and assistance during the investigation.“Erlene King deprived New York City residents of a fair election by attempting to manipulate hundreds of thousands of dollars in donor contributions to unlawfully favor her candidate,” stated FBI Assistant Director in Charge Dennehy. “King abused her position as a campaign treasurer and attempted to profit from exploiting a system designed to represent the voices of the city. The FBI remains steadfast in its mission to eliminate any source of corruption polluting our city’s democratic processes.”
CFB Overview
The CFB oversees and administers a publicly funded campaign finance system in connection with municipal elections in New York City. This includes a “matching funds program” that provides eligible candidates with public funds based on the number and amount of certain donor contributions. According to the CFB, the program “empowers New Yorkers in every neighborhood to make their voices heard in city elections.” In addition, the CFB maintains that “by encouraging candidates to raise small-dollar contributions from average New Yorkers, the program increases engagement between voters and those who seek to represent them.”
Candidates running for the Office of the Brooklyn Borough President in the 2021 election cycle were eligible to participate in the CFB’s matching funds program if they met certain criteria. Among other things, to be eligible to receive public funds, candidates were required to meet a two-part fundraising threshold. Specifically, a candidate had to collect a minimum number of donations and raise a minimum amount of money from New York City residents before the CFB paid any matching funds.
For candidates who ran for the Office of the Brooklyn Borough President during the 2021 election cycle, candidates received up to $8 in matching funds for each $1 of eligible contributions, up to $175 per contributor. If a candidate received an eligible contribution of $175, then that candidate could collect up to $1,400 in matching funds. In total, the matching funds program provided up to $1,457,777 in public matching funds to a candidate for the Office of the Brooklyn Borough President. Because campaigns for Brooklyn Borough President during the 2021 election cycle needed to raise at least $50,000 in eligible contributions to receive any matching funds, any candidate who was eligible to receive matching funds necessarily received at least $400,000 in matching funds from the CFB.
The SchemeKing served as the campaign treasurer for a candidate who ran in a primary for the Office of the Brooklyn Borough President during the 2021 election cycle (Candidate #1). King admitted that she obtained fraudulent donations for the purpose of inducing the CFB to provide matching funds to Candidate #1’s campaign. A number of those contributions, which were obtained at King’s direction, were fraudulent nominee contributions made in the names of individuals who either did not personally fund the contributions or were later reimbursed for their contributions (i.e., straw donors). For example, King used CashApp to send money to intermediaries and instructed them to distribute the money to fund contributions from straw donors to Candidate #1. Other fraudulent contributions were made in the names of individuals whose identities were stolen and who had not personally contributed to Candidate #1. The CFB ultimately determined that the campaign submitted fictitious records and did not pay any public matching funds to the campaign.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Philip Pilmar and Eric Silverberg are in charge of the prosecution, with the assistance of Paralegal Specialist Rachel Friedman.
The Defendant:
ERLENE KING
Age: 71
Brooklyn, NY
E.D.N.Y. Docket No. 24-CR-374 (CBA)Two Indian Chemical Companies and a Senior Executive Indicted for Distributing Fentanyl Precursor ChemicalsRead the Press Release
BROOKLYN, NY - Earlier today, at the federal courthouse in Brooklyn, two indictments were unsealed charging India-based companies Raxuter Chemicals and Athos Chemicals Pvt. Ltd. (Athos Chemicals) and Bhavesh Lathiya, a founder and senior executive of Raxuter Chemicals, with criminal conspiracies to distribute and import fentanyl precursor chemicals to the United States. Lathiya was arrested on January 4, 2025 in New York City and arraigned before United States Magistrate Judge Joseph A. Marutollo. Lathiya was ordered detained pending trial.
Breon Peace, United States Attorney for the Eastern District of New York, Merrick B. Garland, United States Attorney General and Alejandro N. Mayorkas, Department of Homeland Security Secretary, announced the arrest and indictments.
“Our efforts to disrupt the global fentanyl supply chain are being fought on many fronts, and as alleged in these indictments, by charging two chemical companies based in India and a company executive with knowingly distributing the chemical building blocks of fentanyl,” stated United States Attorney Peace. “My Office will vigorously prosecute those pushers of poison, here and abroad, who are responsible for fueling our nation’s opioid epidemic without any regard for the extreme harm they are causing.”
Mr. Peace thanked the Justice Department’s Office of International Affairs, Homeland Security Investigations, New York and United States Customs and Border Protection, New York Field Office, for their invaluable assistance.
“The Justice Department is targeting every link in fentanyl trafficking supply chains that span countries and continents and too often end in tragedy in the United States,” stated Attorney General Garland. “We allege these companies, and a company founder and senior executive who is now in custody, conspired to distribute and import fentanyl precursor chemicals from India to the United States and Mexico. We made a promise that the Justice Department would never forget the victims of the fentanyl epidemic, and that we would never stop working to hold accountable those who bear responsibility for it — that is what we have done, and that is what we will continue to do.”“Much of our nation’s illicit fentanyl crisis can be traced to bad actors overseas who knowingly and illegally traffic precursor chemicals to North America, where cartels refine them into deadly narcotics and wreak immeasurable heartbreak and destruction on so many American communities,” stated DHS Secretary Mayorkas. “The Department of Homeland Security, alongside our federal partners, will continue to take the fight against fentanyl directly to alleged foreign precursor chemical exporters like the companies and the individual indicted today – because the best way to stop illicit fentanyl from killing Americans and devastating communities is by preventing it from being manufactured in the first place.”
Fentanyl, a Schedule II controlled substance, is the deadliest drug threat currently facing the United States. It is a highly addictive synthetic opioid that is approximately 50 times more potent than heroin and 100 times more potent than morphine. Fentanyl is designated as a Schedule II controlled substance while various precursors that can be used to produce fentanyl are included on the controlled substance schedules List I and List II.
Raxuter Chemicals and Lathiya are charged with conspiracy to distribute and import a listed chemical, distribution and importation of a listed chemical knowing it would be used to manufacture fentanyl, smuggling and other related offenses. Athos Chemicals is charged with similar offenses, including conspiracy to distribute and import a listed chemical and distribution and importation of a listed chemical.
As alleged in the indictments and court filings, the defendants supplied precursor chemicals to the United States and Mexico, among other places, knowing they would be used to manufacture fentanyl. They also sent their chemical products to the United States and Mexico using international mail and package carriers. The chemicals distributed by the defendants included all the materials necessary to manufacture fentanyl via the most common methods or pathways. To prevent detection and interception of chemical products at the borders, the defendants employed deceptive and fraudulent practices, such as mislabeling packages, falsifying customs forms, and making false declarations at border crossings.
For example, on or about June 29, 2024, a package shipped by Raxuter Chemicals was delivered to an address in the Eastern District of New York. The package had a false manifest that listed its contents as Vitamin C. In truth, the contents were a List I chemical, 1-boc-4-piperidone, an unlawfully imported fentanyl precursor.
On or about October 2, 2024 and October 15, 2024, Lathiya appeared on a video call to discuss sale of fentanyl precursor chemicals with an HSI undercover officer. After being told by the undercover officer that his “clients in Mexico were very happy with the quality of what you sent me” and with “the yield they got of the final product,” Lathiya agreed to sell 20 kilograms 1-boc-4-piperidone, which is a List I chemical used in fentanyl synthesis. Lathiya also proposed mislabeling the chemical as an antacid. The undercover officer replied and asked if it would be easier to ship the product to Mexico, stating “This is a very controversial product … Because like you said it’s banned and in Mexico I think it could be easier but there’s so much pressure on them because of fentanyl.” On or about November 23, 2024, Raxuter Chemicals and Lathiya shipped approximately 20 kilograms of 1-boc-4-piperidone to the Eastern District of New York. The package was mislabeled as an antacid.
In addition, on or about February 20, 2024, Athos Chemicals agreed to sell 100 kilograms of 1-boc-4-piperidone to a known drug trafficker in Mexico who was making fentanyl in association with a drug trafficking organization.
Mexican drug trafficking organizations, including but not limited to the Sinaloa Cartel, have increasingly availed themselves of the fentanyl precursors developed and distributed by companies like the defendants. The chemicals provided by the defendant companies have enabled such cartels and other drug trafficking organizations to produce fentanyl in clandestine laboratories in Mexico on a massive scale for subsequent distribution in the United States and elsewhere.
The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of all the charges, Lathiya faces up to 53 years in prison.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Adam Amir, William P. Campos and Chand Edwards-Balfour are in charge of the prosecution with the assistance of Paralegal Specialist Samuel Ronchetti.
The Defendants:
BHAVESH ranCHHODBHAI LATHIYA (also known as “Bhavesh Patel” and “Bhavesh Bhai”)
Age: 36
Surat, Gujarat, IndiaRAXUTER CHEMICALS
Surat, Gujarat, IndiaE.D.N.Y. Docket No. 24-CR-525 (PKC)
ATHOS CHEMICALS PVT. LTD.
Surat, Gujarat, IndiaE.D.N.Y. Docket No. 24-CR-526 (RPK)
Two Indian Chemical Companies and a Senior Executive Indicted for Distributing Fentanyl Precursor ChemicalsRead the Press Release
Two indictments were unsealed today and Saturday charging India-based companies Raxuter Chemicals and Athos Chemicals Pvt. Ltd. (Athos Chemicals) and Bhavesh Lathiya, a founder and senior executive of Raxuter Chemicals, with criminal conspiracies to distribute and import fentanyl precursor chemicals to the United States. Lathiya was arrested on Jan. 4, in New York City and arraigned before U.S. Magistrate Judge Joseph A. Marutollo for the Eastern District of New York. Lathiya was ordered detained pending trial.
“The Justice Department is targeting every link in fentanyl trafficking supply chains that span countries and continents and too often end in tragedy in the United States,” said Attorney General Merrick B. Garland. “We allege these companies, and a company founder and senior executive who is now in custody, conspired to distribute and import fentanyl precursor chemicals from India to the United States and Mexico. We made a promise that the Justice Department would never forget the victims of the fentanyl epidemic, and that we would never stop working to hold accountable those who bear responsibility for it — that is what we have done, and that is what we will continue to do.”
“Much of our nation’s illicit fentanyl crisis can be traced to bad actors overseas who knowingly and illegally traffic precursor chemicals to North America, where cartels refine them into deadly narcotics and wreak immeasurable heartbreak and destruction on so many American communities,” said Secretary of Homeland Security Alejandro N. Mayorkas. “The Department of Homeland Security, alongside our federal partners, will continue to take the fight against fentanyl directly to alleged foreign precursor chemical exporters like the companies and the individual indicted today — because the best way to stop illicit fentanyl from killing Americans and devastating communities is by preventing it from being manufactured in the first place.”
“Our efforts to disrupt the global fentanyl supply chain are being fought on many fronts, and as alleged in these indictments, by charging two chemical companies based in India and a company executive with knowingly distributing the chemical building blocks of fentanyl,” stated U.S. Attorney Breon Peace for the Eastern District of New York. “My office will vigorously prosecute those pushers of poison, here and abroad, who are responsible for fueling our nation’s opioid epidemic without any regard for the extreme harm they are causing.”
Fentanyl, a Schedule II controlled substance, is the deadliest drug threat currently facing the United States. It is a highly addictive synthetic opioid that is approximately 50 times more potent than heroin and 100 times more potent than morphine. Fentanyl is designated as a Schedule II controlled substance while various precursors that can be used to produce fentanyl are included on the controlled substance schedules List I and List II.
Raxuter Chemicals and Lathiya are charged with conspiracy to distribute and import a listed chemical, distribution and importation of a listed chemical knowing it would be used to manufacture fentanyl, smuggling, and other related offenses. Athos Chemicals is charged with similar offenses, including conspiracy to distribute and import a listed chemical and distribution and importation of a listed chemical.
As alleged in the indictments and court filings, the defendants supplied precursor chemicals to the United States and Mexico, among other places, knowing they would be used to manufacture fentanyl. They also sent their chemical products to the United States and Mexico using international mail and package carriers. The chemicals distributed by the defendants included all the materials necessary to manufacture fentanyl via the most common methods or pathways. To prevent detection and interception of chemical products at the borders, the defendants employed deceptive and fraudulent practices, such as mislabeling packages, falsifying customs forms, and making false declarations at border crossings.
For example, on or about June 29, 2024, a package shipped by Raxuter Chemicals was delivered to an address in the Eastern District of New York. The package had a false manifest that listed its contents as Vitamin C. In truth, the contents were a List I chemical, 1-boc-4-piperidone, an unlawfully imported fentanyl precursor.
On or about Oct. 2, 2024, and Oct 15, 2024, Lathiya appeared on a video call to discuss sale of fentanyl precursor chemicals with an Homeland Security Investigations (HSI) undercover officer. After being told by the undercover officer that his “clients in Mexico were very happy with the quality of what you sent me” and with “the yield they got of the final product,” Lathiya agreed to sell 20 kilograms 1-boc-4-piperidone, which is a List I chemical used in fentanyl synthesis. Lathiya also proposed mislabeling the chemical as an antacid. The undercover officer replied and asked if it would be easier to ship the product to Mexico, stating “This is a very controversial product … Because like you said it’s banned and in Mexico I think it could be easier but there’s so much pressure on them because of fentanyl.” On or about Nov. 23, 2024, Raxuter Chemicals and Lathiya shipped approximately 20 kilograms of 1-boc-4-piperidone to the Eastern District of New York. The package was mislabeled as an antacid.
In addition, on or about Feb. 20, 2024, Athos Chemicals agreed to sell 100 kilograms of 1-boc-4-piperidone to a known drug trafficker in Mexico who was making fentanyl in association with a drug trafficking organization.
Mexican drug trafficking organizations, including but not limited to the Sinaloa Cartel, have increasingly availed themselves of the fentanyl precursors developed and distributed by companies like the defendants. The chemicals provided by the defendant companies have enabled such cartels and other drug trafficking organizations to produce fentanyl in clandestine laboratories in Mexico on a massive scale for subsequent distribution in the United States and elsewhere.
If convicted, Lathiya faces a maximum penalty of 53 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
HSI New York investigated the case. The Justice Department’s Office of International Affairs and U.S. Customs and Border Protection’s New York Field Office provided assistance.
HSI New York investigated the case. The Justice Department’s Office of International Affairs and U.S. Customs and Border Protection’s New York Field Office provided assistance.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
athos_chemicals_indictment.pdf 24-cr-525_bhavesh_lathiya_et_al_indictment.pdfUnited States and Freeport, NY Police Department Enter into Voluntary Technical Assistance Agreement to Ensure Meaningful Language Access to Police Services for Individuals with Limited English ProficiencyRead the Press Release
Breon Peace, the United States Attorney for the Eastern District of New York, and Kristen Clarke, Assistant Attorney General for Civil Rights, announced today that the United States has entered into a Voluntary Technical Assistance Agreement with the Freeport, NY Police Department (FPD). The agreement memorializes a cooperative effort between the Department of Justice (DOJ) and FPD to help FPD develop a language access program that will ensure its police services are accessible to individuals who are limited English proficient (LEP).
This agreement is the first Voluntary Technical Assistance Agreement of its kind in the United States under DOJ’s Law Enforcement Language Access Initiative (LELAI). It is the result of a mutual desire to improve FPD’s language access services and not the result of an investigation or complaint against FPD. DOJ commends FPD for taking the initiative to build a complete and effective language access program for its LEP residents.
United States Attorney Peace stated, “It is critically important that law enforcement can communicate effectively with members of the community, regardless of the language that they speak. Working collaboratively with FPD, we will improve public safety for all and hope to replicate this agreement with other law enforcement agencies throughout the Eastern District of New York.”
“The Law Enforcement Language Access Initiative was specifically designed for proactive police departments that recognize the need for accurate and timely communication and are willing to invest in the language access tools and training that ensure that crime victims and witnesses can report, the reliability of evidence, protect the public, and promote community trust,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division will continue to work cooperatively with law enforcement agencies across the country that seek to remove language barriers in policing.”
Launched in December 2022, LELAI is a nationwide effort to help law enforcement agencies address language barriers when they interact with the public. The initiative builds on the Department’s longstanding efforts to enforce Title VI of the Civil Rights Act of 1964 (Title VI) and the Omnibus Crime Control and Safe Streets Act of 1968 (Safe Streets Act).
Under the two-year voluntary agreement, DOJ will help FPD build its language access program consistent with the parties’ shared goals of promoting officer safety and public safety, helping to further control crime, collecting reliable evidence for prosecution purposes, and fostering even greater community trust. DOJ will also help FPD develop policies, procedures, interpretation and translation protocols, community partnerships, and training, among other things.
LELAI provides technical assistance resources and tools that can help state and local law enforcement provide meaningful language access to individuals with LEP. By affirmatively engaging law enforcement agencies that want to review, update and/or strengthen their language access polices, plans and training, LELAI aims to support relationship-building efforts between law enforcement agencies, community stakeholders and populations with LEP.
Additional information about the EDNY U.S. Attorney’s Office Civil Rights work is available at its website at https://www.justice.gov/usao-edny/civil-rights. The Civil Rights Division’s work is available on its website at www.justice.gov/crt and information about limited English proficiency and Title VI is available at www.lep.gov. More information on LELAI is available at www.lep.gov/law-enforcement. Members of the EDNY public may report possible civil rights violations at https://www.justice.gov/usao-edny/page/file/1396116/dl?inlineor%20civilrights.justice.gov/report/.
This matter is being handled by Eastern District of New York Assistant U.S. Attorneys Megan Freismuth, Michael Goldberger, and Dara Olds of the Civil Division’s Civil Rights Team.
freeport_pd_agreement.pdf freeport_pd_agreement_translated.pdfLA Fiscalia Federal De Estados Unidos Y El Departamento De Policía De Freeport, Ny, Celebran Un Acuerdo Voluntario De Asistencia Técnica Para Garantizar Un Acceso Lingüístico Pleno a Los Servicios Policiales a Personas Con Conocimiento Limitado De InglésRead the Press Release
Breon Peace, Fiscal General del Distrito Este de Nueva York, y Kristen Clarke, Fiscal General Adjunta de Derechos Civiles, han anunciado hoy que los Estados Unidos han firmado un Acuerdo Voluntario de Asistencia Técnica con el Departamento de Policía de Freeport, Nueva York (FPD). El acuerdo formaliza un esfuerzo de cooperación entre el Departamento de Justicia (DOJ) y el FPD para ayudar al FPD a desarrollar un programa de acceso lingüístico que garantice que sus servicios policiales sean accesibles a las personas con dominio limitado del inglés (LEP).
Este es el primer Acuerdo Voluntario de Asistencia Técnica de este tipo en los Estados Unidos en el marco de la Iniciativa de Acceso Lingüístico de las Fuerzas y Cuerpos de Seguridad (LELAI) del DOJ. Es el resultado de un deseo mutuo de mejorar los servicios de acceso lingüístico del FPD y no el producto de una investigación o queja contra el FPD. El DOJ elogia al FPD por tomar la iniciativa de crear un programa de acceso lingüístico completo y eficaz para sus residentes LEP.
El fiscal Peace declaró: «Es de vital importancia que las fuerzas del orden puedan comunicarse eficazmente con los miembros de la comunidad, independientemente de la lengua que estos hablen. Trabajando en colaboración con el FPD, mejoraremos la seguridad pública para todos y esperamos replicar este acuerdo con otras agencias de seguridad en todo el Distrito Este de Nueva York.»
«La Iniciativa de Acceso Lingüístico de las Fuerzas y Cuerpos de Seguridad se diseñó específicamente para los departamentos de policía proactivos que reconocen la necesidad de una comunicación pronta y precisa y están dispuestos a invertir en las herramientas de acceso lingüístico y el entrenamiento que garanticen que las víctimas y los testigos de delitos puedan informar, la fiabilidad de las pruebas, proteger al público y promover la confianza de la comunidad», dijo la Fiscal General Adjunta Kristen Clarke de la División de Derechos Civiles del Departamento de Justicia. «La División de Derechos Civiles continuará trabajando en cooperación con las agencias policiales de todo el país que buscan eliminar las barreras lingüísticas en la actuación policial».
Lanzado en diciembre de 2022, LELAI es un esfuerzo a nivel nacional para ayudar a las agencias policiales a abordar las barreras lingüísticas cuando interactúan con el público. La iniciativa se basa en los esfuerzos de larga data del Departamento para hacer cumplir el Título VI de la Ley de Derechos Civiles de 1964 (Título VI) y la Ley Ómnibus de Control del Crimen y Calles Seguras de 1968 (Ley de Calles Seguras).
En virtud del acuerdo voluntario de dos años, el DOJ ayudará al FPD a desarrollar su programa de acceso lingüístico de acuerdo con los objetivos compartidos por las partes de promover la seguridad de los agentes y la seguridad pública, contribuir a un mayor control de la delincuencia, recopilar pruebas fiables a efectos de enjuiciamiento y fomentar aún más la confianza de la comunidad. El DOJ también ayudará al FPD a desarrollar políticas, procedimientos, protocolos de interpretación y traducción, asociaciones comunitarias y formación, entre otras cosas.
LELAI proporciona recursos y herramientas de asistencia técnica que pueden ayudar a las fuerzas del orden estatales y locales a proporcionar un acceso lingüístico significativo a las personas con LEP. Mediante la participación activa de los organismos policiales que desean revisar, actualizar o reforzar sus políticas, planes y formación en materia de acceso lingüístico, LELAI pretende apoyar los esfuerzos de creación de relaciones entre los organismos policiales, las partes interesadas de la comunidad y las poblaciones con LEP.
Puede obtenerse información adicional sobre el trabajo de la Oficina de Derechos Civiles de la Fiscalía de los EE.UU. de EDNY en su sitio web https://www.justice.gov/usao-edny/civil-rights. El trabajo de la División de Derechos Civiles está disponible en su sitio web en www.justice.gov/crt y la información sobre el dominio limitado del inglés y el Título VI está disponible en www.lep.gov.
Más información sobre LELAI en www.lep.gov/law-enforcement. El público de EDNY puede denunciar posibles violaciones de los derechos civiles en https://www.justice.gov/usao-edny/page/file/1396116/dl?inlineor%20civilrights.justice.gov/report/.
Encargados: Megan Freismuth, Michael Goldberger y Dara Olds, fiscales adjuntos de la División de Derechos Civiles del Distrito Este de Nueva York.
freeport_pd_agreement.pdf freeport_pd_agreement_translated.pdfUnited States Attorney Breon Peace Announces Upcoming Resignation from OfficeRead the Press Release
Breon Peace is resigning as United States Attorney for the Eastern District of New York on January 10, 2025. Mr. Peace has served in the position since October 15, 2021.
First Assistant United States Attorney Carolyn Pokorny will become Acting United States Attorney for the Eastern District of New York upon Mr. Peace’s departure.
Statement from United States Attorney Peace:
“It has been the honor of a lifetime to serve as United States Attorney, to be at the forefront in protecting the over eight million residents of this great district from harm, in upholding the rule of law and promoting civil rights and dignity for all people. As United States Attorney, I have had the singularly rewarding experience of being called to public service and leadership in a district that is filled with people of different backgrounds and life experiences – yet share a common bond of humanity. Throughout my tenure I have also had the good fortune to work with some of the most talented prosecutors and staff to be found anywhere in the country and this district and our nation are the better for their skill, sacrifice and service. As I leave the Office, I will always be grateful for the extraordinary work we have done together in furthering our mission, doing the right thing always and in achieving justice with honor and integrity. And, I look forward to the Office’s continued courageous commitment to pursuing justice, fairly and ethically, without bias, without fear or favor, and with compassion and empathy for our fellow human beings.”
New York Resident Pleads Guilty to Operating Secret Police Station of the Chinese Government in Lower ManhattanRead the Press Release
Chen Jinping, 60, of New York, New York, pleaded guilty today to conspiring to act as an illegal agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station, located in lower Manhattan, for the PRC’s Ministry of Public Security (MPS).
“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”
“Today's acknowledgment of guilt is a stark reminder of the insidious efforts taken by the PRC government to threaten, harass, and intimidate those who speak against their Communist Party,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “These blatant violations will not be tolerated on U.S. soil. The FBI remains committed to preserving the rights and freedoms of all people in our country and will defend against transnational repression at every front.”
“A priority of my office has been to counteract the malign activities of foreign governments that violate our nation’s sovereignty by targeting local diaspora communities in the United States,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today, a participant in a transnational repression scheme who worked to establish a secret police station in the middle of New York City on behalf of the national police force of the People’s Republic of China has pleaded guilty to conspiracy to act as an illegal agent. We will continue our efforts to protect the rights of vulnerable persons who come to this country to escape the repressive activities of authoritarian regimes.”
As alleged, Chen Jinping and co-defendant “Harry” Lu Jianwang conspired to act as illegal agents of the PRC government and also obstructed justice by destroying evidence of their communications with an MPS official. While acting under the direction and control of the MPS official, the defendants worked together to establish the first known overseas police station in the United States on behalf of the Fuzhou branch of the MPS. The police station — which closed in the fall of 2022 — occupied an entire floor in an office building in Manhattan’s Chinatown. Lu and Chen helped open and operate the clandestine police station. None of the participants in the scheme informed the U.S. government that they were helping the PRC government surreptitiously open and operate an undeclared MPS police station on U.S. soil.
In October 2022, the FBI conducted a judicially authorized search of the illegal police station. In connection with the search, FBI agents interviewed both defendants and seized their phones. In reviewing the contents of these phones, FBI agents observed that communications between the defendants and an MPS official appeared to have been deleted. In subsequent consensual interviews, the defendants admitted to the FBI that they had deleted their communications with the MPS official after learning about the ongoing FBI investigation, thus preventing the FBI from learning the full extent of the MPS’s directions for the overseas police station.
Chen faces a maximum penalty of five years in prison. Per Chen’s plea agreement, the government has agreed to dismiss the obstruction of justice charge against him. Lu has pleaded not guilty to both of the charges against him and is awaiting trial.
The FBI is investigating the case.
Assistant U.S. Attorneys Alexander A. Solomon and Antoinette N. Rangel for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
The FBI has created a website for victims to report efforts by foreign governments to stalk, intimidate, or assault people in the United States. If you believe that you are or have been a victim of transnational repression, please visit www.fbi.gov/investigate/counterintelligence/transnational-repression.
New York City Resident Pleads Guilty to Operating Secret Police Station of the Chinese Government in Lower ManhattanRead the Press Release
BROOKLYN, NY – Today in federal court in Brooklyn, Manhattan resident Chen Jinping pleaded guilty to conspiring to act as an agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station in lower Manhattan for the PRC’s Ministry of Public Security (MPS). Today’s proceeding was held before United States District Judge Nina R. Morrison. When sentenced, the defendant faces up to five years in prison.
Breon Peace, United States Attorney for the Eastern District of New York; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.
“A priority of my Office has been to counteract the malign activities of foreign governments that violate our nation’s sovereignty by targeting local diaspora communities in the United States,” stated United States Attorney Peace. “Today, a participant in a transnational repression scheme who worked to establish a secret police station in the middle of New York City on behalf of the national police force of the People’s Republic of China has pleaded guilty to conspiracy to act as an illegal agent. We will continue our efforts to protect the rights of vulnerable persons who come to this country to escape the repressive activities of authoritarian regimes.”
“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” stated Assistant Attorney General Olsen. “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”
“Today, Chen Jinping admitted to his role in audaciously establishing an undeclared police station in the heart of New York City and attempting to conceal the effort when approached by FBI New York,” stated FBI Assistant Director in Charge Dennehy. “This illegal police station was not opened in the interest of public safety, but to further the nefarious and repressive aims of the PRC in direct violation of American sovereignty. The FBI is unwavering in our duty to protect both the freedoms enshrined in the Constitution and the security of our nation from oppressive hostile governments.”
As alleged in court filings and facts presented at the plea proceeding, Chen Jinping and co-defendant Lu Jianwang conspired to act as illegal agents of the PRC government and also obstructed justice by destroying evidence of their communications with an MPS official (the MPS Official). While acting under the direction and control of the MPS Official, the defendants worked together to establish the first known overseas police station in the United States on behalf of the Fuzhou branch of the MPS. The police station—which closed in the fall of 2022—occupied an entire floor in an office building in Manhattan’s Chinatown. Chen and Lu helped open and operate the clandestine police station. None of the participants in the scheme informed the U.S. government that they were helping the PRC government open and operate an undeclared MPS police station on U.S. soil.In October 2022, the FBI conducted a judicially authorized search of the illegal police station. In connection with the search, FBI agents interviewed both defendants and seized their phones. In reviewing the contents of these phones, FBI agents observed that communications between the defendants, on the one hand, and the MPS Official, on the other, appeared to have been deleted.
Lu Jianwang has pleaded not guilty to the charges and is awaiting trial.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon and Antoinette N. Rangel are in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
The FBI has created a website for victims to report efforts by foreign governments to stalk, intimidate, or assault people in the United States. If you believe that you are or have been a victim of transnational repression, please visit https://www.fbi.gov/investigate/counterintelligence/transnational-repression.
The Defendant:
CHEN JINPING
Age: 60
Manhattan, New YorkE.D.N.Y. Docket No. 23-CR-316 (NRM)
Member of Cypress Gangsta Crips Gang Charged with 2015 MurderRead the Press Release
Earlier today, a two-count indictment was unsealed in federal court in Brooklyn charging Jason Soto, also known as “Twin,” a member of the Cypress Gangsta Crips (CGC), a subgroup of the Eight Trey Crips based in the Cypress Hills Houses of East New York, Brooklyn, with the February 2015 murder of Shakim Rivera, the leader of the CGC. The defendant was arrested this morning and will be arraigned before United States Magistrate Judge Sanket J. Bulsara.
Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD), announced the arrest and indictment.
“This indictment makes clear that my Office and our law enforcement partners are relentless in our pursuit of violent gang members who have committed murders and harmed communities like the Cypress Hills Houses for far too long,” stated United States Attorney Peace. “We are reducing gang and gun-related violence and saving lives through a coordinated effort to target the most violent offenders, like this defendant.”
“Jason Soto, a Crips gang member, allegedly appointed himself as judge, jury, and executioner to murder his own leader as twisted justice for the death of a fellow member. Soto’s alleged actions contributed to the infestation of gang violence plaguing a Brooklyn housing complex and endangered the lives of thousands of its residents. With the assistance of our law enforcement partners, the FBI will continue to apprehend any gang member wreaking havoc in our communities,” stated FBI Assistant Director in Charge Dennehy.
“The residents of the Cypress Hills Houses, along with all New Yorkers in every neighborhood, deserve to live their lives without fear,” stated NYPD Commissioner Tisch. “The NYPD and our law enforcement partners are dedicated to systematically dismantling the gangs and crews responsible for crime and violence in New York City. I commend the collaborative efforts of our NYPD investigators, the FBI, and the U.S. Attorney’s Office for the Eastern District of New York in identifying and holding accountable those who terrorize our communities.”
As detailed in the indictment and other court documents, since at least February of 2015, Soto was a member of the CGC, which operated in the Cypress Hills Houses and elsewhere. CGC members committed acts of violence to promote the gang, enforce the rules of the gang, keep rivals in fear of CGC and earn money for the gang through firearm and narcotics trafficking and robberies.
The investigation revealed a deadly gang turf war fought in the Cypress Hill Houses—in the midst of residential buildings, stores and a playground—between gangs that have aligned themselves by where their members live within the housing complex. The Bloods gang associated with the “Frontside” section of Cypress feuded with the CGC members of the “Backside” and “Teamside” sections of Cypress. An internal war broke out in 2015 within the CGC when high-ranking member Demetrius Graham, also known as “Duke,” was murdered on February 19, 2015. Believing that CGC leader Shakim Rivera was responsible for Graham’s murder, members of CGC planned retaliation.
On February 19, 2015, Soto traveled from Pennsylvania to Brooklyn to carry out Rivera’s murder. On February 22, 2015, Soto lured Rivera to the vicinity of 9011 Bayview Place in the Canarsie neighborhood of Brooklyn. As alleged, Soto and another member of the CGC shot and killed Rivera, the leader of CGC, in retaliation for Graham’s murder.
The indictment is the result of a long-term investigation initiated by the FBI, the NYPD and the Office in 2015 in response to gang-related violence in and around the Cypress Hills Houses. The investigation has resulted in charges against over 20 defendants for drug trafficking, illegal weapons possession, robbery and murder.
If convicted, the defendant faces a mandatory sentence of life in prison, or possibly the death penalty.
The charges announced today are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Emily J. Dean and Andy Palacio are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader.
The Defendant:
JASON SOTO
Age: 36
Queens, New YorkE.D.N.Y. Docket No. 24-CR-511 (RER)
Resident of China Sentenced to 24 Months in Prison for Conspiring to Send Trade Secrets Belonging to Leading U.S.-Based Electric Vehicle CompanyRead the Press Release
Today, in federal court in Central Islip, Klaus Pflugbeil was sentenced by Judge Joan M. Azrack to 24 months’ imprisonment for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil, a resident of the People’s Republic of China (the “PRC” or “China”) and a Canadian and German national, and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil and Shao, former employees of a company that was purchased by Victim Company-1, took trade secrets from their employer, and later used the trade secrets to build a business that they marketed as a replacement for Victim Company-1’s products. Pflugbeil pleaded guilty in June 2024.
Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“The defendant built a business in China to sell sensitive technology that belongs to a U.S. company. His actions were bold—he even advertised that he was selling the victim’s products—because he thought, incorrectly, that he was outside the reach of U.S. prosecutors,” stated United States Attorney Peace. “Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”
Mr. Peace expressed his appreciation to the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS) and the Japanese authorities for their assistance on this case.
“In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”
“Klaus Pflugbeil attempted to benefit a foreign economy through an unauthorized monopoly fueled by technology stolen from the United States. His actions blatantly violated the trust of his employer and the integrity of our country’s innovative technology. May today’s sentencing reiterate the FBI’s commitment to disrupting any conspiracy which threatens our national security and the balance of the global economic market,” stated FBI Assistant Director in Charge Dennehy.
Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the “Canadian Manufacturer”). Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium‑ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly (the “Battery Assembly Trade Secret”). The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the lithium-ion battery manufacturing process.
Both Pflugbeil and his co-defendant Shao are former employees of the Canadian Manufacturer, and Shao also worked for Victim Company-1. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao confirmed, among other things, that, “we have all of original assembly drawings by PDF.”
The conspirators took measures to obfuscate that they had stolen trade secrets. For example, Pflugbeil wrote to Shao about a document he created based on one that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”
In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian Manufacturer developed. The battery assembly technology is related to the development of electric vehicles that can compete with U.S.-made vehicles. The potential for Chinese automakers to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology presents a potential national security risk.
Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube and LinkedIn. Pflugbeil repeatedly sent LinkedIn messages that named Victim Company-1 and said Business-1 was not infringing on any intellectual property:
Hello [name], I hope to get some of your busy time. As I like to introduce our company to you. We already have supplied companies such [a]s [list of U.S. Fortune 500 Companies by name] . . . We engineer and manufacture all of our products in-house, and we warrant that none of our products infringe any patents, copyrights, or other intellectual property rights of any third party.
(Emphasis added.) The above reflects a blatant lie, told over and over—that Business-1’s products did not infringe on intellectual property rights of a third party. Pflugbeil also advertised products based on stolen trade secrets on Google. These ads were shown tens of thousands of times per week.
On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries (the “Trade Show”) in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.
Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal (the “Proposal”) to an undercover agent (UC-1). The Proposal noted, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.” In reality, the Proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1: at least half a dozen drawings Pflugbeil used in the Proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret. The business proposal quoted the battery assembly line at costing over $15 million to purchase.
The investigation and prosecution were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
The government’s case is being handled by the Office’s National Security and Cybercrime Section and the Long Island Criminal Division. Assistant United States Attorneys Ellen H. Sise and Samantha Alessi are in charge of the prosecution, along with Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section with assistance from Paralegal Specialist Rebecca Roth.
The Defendant
KLAUS PFLUGBEIL
AGE: 59
NINGBO, CHINAE.D.N.Y. Docket No. 24-CR-238
Resident of China Sentenced to 24 Months in Prison for Conspiring to Send Leading Electric Vehicle Company’s Trade SecretsRead the Press Release
Klaus Pflugbeil, 59, of Ningbo, China, was sentenced today to 24 months in prison for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil, a resident of the People’s Republic of China (the PRC or China) and a Canadian and German national, and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil and Shao, former employees of a company that was purchased by Victim Company-1, took trade secrets from their employer, and later used the trade secrets to build a business that they marketed as a replacement for Victim Company-1’s products.
“In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”
“The defendant built a business in China to sell sensitive technology that belongs to a U.S. company. His actions were bold — he even advertised that he was selling the victim’s products — because he thought, incorrectly, that he was outside the reach of U.S. prosecutors,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”
Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly. Prior to its purchase by Victim Company-1, the Canadian manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium‑ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly. The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the lithium-ion battery manufacturing process.
Both Pflugbeil and his co-defendant Shao are former employees of the Canadian manufacturer, and Shao also worked for Victim Company-1. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao confirmed, among other things, that, “we have all of original assembly drawings by PDF.”
The conspirators took measures to obfuscate that they had stolen trade secrets. For example, Pflugbeil wrote to Shao about a document he created based on one that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”
In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany, and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian manufacturer developed. The battery assembly technology is related to the development of electric vehicles that can compete with U.S.-made vehicles. The potential for Chinese automakers to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology presents a potential national security risk.
Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube, and LinkedIn. Pflugbeil repeatedly sent LinkedIn messages that named Victim Company-1 and said Business-1 was not infringing on any intellectual property:
Hello [name], I hope to get some of your busy time. As I like to introduce our company to you. We already have supplied companies such [a]s [list of U.S. Fortune 500 Companies by name] . . . We engineer and manufacture all of our products in-house, and we warrant that none of our products infringe any patents, copyrights, or other intellectual property rights of any third party.
The above reflects a blatant lie, told over and over—that Business-1’s products did not infringe on intellectual property rights of a third party. Pflugbeil also advertised products based on stolen trade secrets on Google. These ads were shown tens of thousands of times per week.
On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.
Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal to an undercover agent (UC-1). The proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.” In reality, the proposal contained battery assembly trade secret information belonging to Victim Company-1: at least half a dozen drawings Pflugbeil used in the proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the battery assembly trade secret. The business proposal quoted the battery assembly line at over $15 million.
Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case.
The investigation and prosecution were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
Carlos Watson, Founder and Former CEO of Ozy Media Inc., Sentenced to 116 Months in Prison for Leading Multi-Million Dollar Fraud SchemeRead the Press Release
Earlier today, in federal court in Brooklyn, Carlos Watson, the founder and former Chief Executive Officer of Ozy Media, Inc. (Ozy), was sentenced by United States District Judge Eric R. Komitee to 116 months in prison for conspiracy to commit securities fraud, conspiracy to commit wire fraud and aggravated identity theft. Watson was convicted in July 2024 following an eight-week trial. Ozy, which was also convicted at trial, was sentenced to one year probation. Additional penalties of forfeiture and restitution will be imposed at a later date.
Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentences.
“Carlos Watson orchestrated a years-long, audacious scheme to defraud investors and lenders to his company, Ozy Media, out of tens of millions of dollars,” stated United States Attorney Peace. “His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship. On far too many occasions, Watson chose deceit over candor, grasping for the illusion of business success and personal acclaim at any cost. Today’s sentence should serve as a warning to those who would engage in fraud that justice will be swift and certain.”
“Carlos Watson masqueraded his former company’s composition and purported success to entice investors, but ultimately cost them millions when the curated façade collapsed,” stated FBI Assistant Director in Charge Dennehy. “Watson abused his official capacity to ensnare subordinates to serve as lackies and perpetuate these fraudulent actions. May today’s sentencing deter any individual from implementing deceptive business practices to avoid a similar fate.”
According to court filings and as proven at trial, between 2018 and 2021, Watson and his co-conspirators orchestrated a scheme to defraud investors out of tens of millions of dollars through fraudulent misrepresentations and omissions about Ozy’s financial performance, including revenue, cash on hand and profit, ongoing business relationships with celebrities, acquisition prospects from high- profile technology and media corporations, contract negotiations and other corporate metrics. For example, Watson and his co-conspirators lied to prospective investors about who else might be investing in Ozy, the existence and size of acquisition offers received by Ozy, the existence and timing of financing rounds, and the existence and terms of Ozy’s business contracts — going so far as to direct Ozy employees to create fake contracts with forged signatures to provide in due diligence. On multiple occasions, when faced with questions from lenders or potential investors, Watson and his co-conspirators assumed the identities of and impersonated actual media company executives to cover up their prior fraudulent misrepresentations. Watson’s scheme caused actual investor losses in excess of $60 million and intended to deprive potential investors of hundreds of millions more on the basis of his and his co-conspirators’ lies and misrepresentations.
In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud, wire fraud and identity theft.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jonathan Siegel, Gillian Kassner and Dylan A. Stern are in charge of the prosecution. Assistant United States Attorney Laura Mantell of the Asset Recovery Section is assisting with forfeiture matters.
The Defendants:
Carlos Watson
Age: 55
Mountain View, CaliforniaOzy Media, Inc.
Mountain View, CaliforniaE.D.N.Y. Docket No. 23-CR-82 (EK)
Genovese Crime Family Member Sentenced to 30 Months in Prison for RacketeeringRead the Press Release
Today, at the federal courthouse in Brooklyn, Carmelo Polito, also known as “Carmine Polito,” a former acting captain and soldier in the Genovese organized crime family, was sentenced to 30 months in prison by United States District Judge Eric N. Vitaliano for racketeering in connection with operating an illegal gambling business at the Gran Caffé in Lynbrook, Long Island, and attempting to extort an individual who owed him money stemming from a separate online sports betting business.
Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Anne T. Donnelly, Nassau County District Attorney, announced the sentence.
“Today’s sentence makes clear to the defendant that the outcome for participating in illegal gambling and making extortionate threats is the loss of something very valuable — your freedom,” stated United States Attorney Peace. “Thanks to the outstanding work of prosecutors in my Office and law enforcement, the alliance of the Genovese and Bonanno organized crime families’ rackets was a bust.”
Mr. Peace expressed his appreciation to the New York City Police Department and the Nassau County Police Department for their invaluable assistance in the investigation.
“The cards did not favor Carmelo Polito's illicit gambling parlor or his extortionate methods,” stated FBI Assistant Director in Charge Dennehy. “His illegitimate business and death threats financed the operations of two crime families. May today’s sentencing reaffirm the FBI’s commitment to doubling down on all organized crime activity plaguing our communities.
“This defendant, along with other associates of the Genovese family, operated illegal gambling businesses in Nassau County that funneled money straight into organized crime,” stated District Attorney Donnelly. “Extortion, threats, and violence have no place in Nassau County. I thank our partners at the U.S. Attorney’s Office and the FBI for their collaboration in dismantling this illicit operation and working to rid organized crime from our communities.”
Polito is a longtime, inducted member of the Genovese organized crime family. As detailed in earlier court filings, for years, numerous members and associates of the Genovese and Bonanno organized crime families operated several illegal gambling operations in the Eastern District of New York. Beginning in at least May 2012, the Genovese and Bonanno families jointly operated a lucrative illegal gambling parlor concealed inside a coffee shop called the Gran Caffé in Lynbrook. Polito and co-defendant Joseph Macario, also known as “Joe Fish,” on behalf of the Genovese crime family, and Anthony Pipitone, also known as “Little Anthony,” on behalf of Bonanno crime family, successfully negotiated a profit split for the gambling location, which ensured that each crime family benefited from the illegal gambling operation. In addition to the Gran Caffé, the Genovese crime family—through Polito, Macario, Joseph Rutigliano, also known as “Joe Box,” Salvatore Rubino, also known as “Sal the Shoemaker,” and others—operated illegal gambling parlors at establishments called Sal’s Shoe Repair and the Centro Calcio Italiano Club. Rutigliano and Rubino collected the proceeds for the Genovese crime family and distributed them up to higher ranking members, including Polito and Macario. Polito was surveilled distributing proceeds to higher ranking members on numerous occasions.
Polito and co-defendant Mark Feuer also operated an illegal online gambling scheme in which bets were placed on sporting events through a website called “PGWLines.” In connection with his operation of PGWLines, Polito attempted to extort an individual who lost several thousand dollars in bets using death threats and other threats of violence. For example, during a September 2019 call concerning the debtor, Polito instructed another individual to tell the debtor that Polito would “break” the debtor’s “face.” When the debtor still did not pay Polito, Polito instructed the same individual to relay a new message to the debtor: “Tell him I’m going to put him under the f------g bridge.”
Polito is the first defendant sentenced in this case and a related case against four members and associates of the Bonanno organized crime family of La Cosa Nostra. Macario, Rutigliano, Rubino and Feuer are awaiting sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar, Drew Rolle, Anna Karamigios and Sean M. Sherman are in charge of the prosecution, with the assistance of Paralegal Specialist Eleanor Jaffe-Pachuilo.
The Defendants:
CARMELO POLITO (also known as “Carmine Polito”)
Age: 64
Whitestone, QueensDefendants Awaiting Sentencing:
JOSEPH MACARIO (also known as “Joe Fish”)
Age: 69
West Islip, Long IslandSALVATORE RUBINO (“Sal the Shoemaker”)
Age: 60
Bethpage, Long IslandJOSEPH RUTIGLIANO (also known as “Joe Box”)
Age: 65
Commack, Long IslandMARK FEUER
Age: 61
Oceanside, Long IslandE.D.N.Y. Docket No. 22-CR-356 (ENV)
Brooklyn Man Convicted of Threatening to Shoot and Kill Employees of the New York State Department of LaborRead the Press Release
Earlier today, a federal jury in Brooklyn convicted Quadri Garnes of transmission of threats to injure. The verdict followed a five-day trial before United States District Judge Nina R. Morrison. When sentenced, Garnes faces up to five years in prison.
Breon Peace, United States Attorney for the Eastern District of New York and Daniel B. Brubaker, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), announced the verdict.
“The defendant used threats of violence as a weapon to terrorize government employees because he couldn’t get what he wanted and today, the jury’s verdict spoke loudly that such conduct will not be tolerated,” stated United States Attorney Peace. “My Office is committed to protecting civil servants who are subjected to work-related threats, and we will do so by vigorously prosecuting offenders like the defendant and demonstrating that there are consequences for such conduct.”
“Today’s guilty verdict should signal to anyone who makes threats of violence against federal employees, or through creating an environment of fear, attempts to impede or obstruct the services these employees provide to the American people, that your actions will absolutely not be tolerated on any level. Postal Inspectors and our law enforcement partners in the U.S. Attorney’s Office, Eastern District of New York, will bring anyone who attempts or threatens to harm these dedicated employees to justice,” stated USPIS Inspector in Charge Brubaker.
As proven at trial, Garnes was employed as a mail carrier for the United States Postal Service (USPS) at the Homecrest post office in Brooklyn from March 26, 2022 to May 29, 2022. After crashing his postal truck into two vehicles, Garnes was terminated on May 31, 2022. Garnes subsequently applied for unemployment benefits but was denied because he had worked for the USPS for fewer than 60 days and was thus ineligible to receive benefits. On the morning of September 29, 2022, Garnes called the New York State Department of Labor (DOL) and was advised that he had worked for the USPS for too short a period to be eligible to receive benefits. In response, he threatened to shoot and kill employees of the USPS and DOL. During the 45-minute recorded call with two DOL employees, Garnes’s statements included:
- If I go back to the post office, I’m gonna shoot somebody.
- Y’all gonna make me go to jail for killing somebody.
- Do the city want me to kill five or six different people?
- I got 18 and a half years in jail. It don’t bother me to be in jail. I made myself, meaning like I’m made, as long as I’m in the New York City jail, I’m good.
- You might see this s--t on TV. Just remember my name. You might see it on TV tonight. You, just remember my name!
- Somebody might get shot today coming out of Department of Labor.
- Believe me, I’ll be at the New York State Department of Labor down on Schermerhorn or Livingston Street and I will make a big f----ng deal out of it.
Garnes’s threats triggered an immediate response by the DOL, the New York State Police and by Postal Inspectors, who took precautions against Garnes’s return to the postal facility where he had briefly worked and the DOL office he named. Garnes was arrested approximately two weeks after making his threats.
Assistant United States Attorneys Antoinette N. Rangel and Alexander Mindlin are in charge of the prosecution, with the assistance of Paralegal Specialist Rebecca Roth.
The Defendant:
QUADRI GARNES
Age: 48
Brooklyn, New YorkE.D.N.Y. Docket No. 22-CR-487 (NRM)
Manager of U.S. Freight Forwarding Company Indicted for Circumventing Export ControlsRead the Press Release
A 12-count indictment was unsealed yesterday charging Natalya Ivanovna Mazulina, of Federal Way, Washington, also known as “Natasha Mazulina,” for her alleged involvement in a scheme to circumvent U.S. export laws and sanctions on Russia. Mazulina, the Western regional manager of a freight forwarding company based in Jamaica, New York, which operated out of John F. Kennedy International Airport (JFK airport) in Queens, New York, and Seattle-Tacoma International Airport in Washington State, was arrested yesterday in Seattle and will be arraigned in the Eastern District of New York at a later date.
“The defendant exploited her knowledge of the export business to falsify documents and circumvent U.S. sanctions by illegally shipping oil and gas products to Russian customers,” said Assistant Attorney General Matthew G. Olsen of the National Security Division. “American companies like the freight forwarder where Mazulina worked play a critical role in the global supply chain and movement of goods. The National Security Division will not tolerate individuals who seek to abuse their positions in these companies for financial gain at the expense of national security.”
“We’ve been clear and consistent that we want to help freight forwarders comply with our rules,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Department of Commerce’s Bureau of Industry and Security (BIS). “But, as today’s arrest underscores, we’ve also been clear and consistent about what happens when they don’t.”
“As alleged, Mazulina used her position as a manager of a freight forwarding company to facilitate unlawful exports to Russia through JFK airport,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Evading U.S export regulations presents a danger to our national security, and we will continue to use all of our law enforcement and national security tools make sure these enablers, both individuals and corporations, cannot operate in our district.”
“The defendant in this case allegedly helped Russia obtain such valuable items as industrial oil and gas equipment in violation of export laws and sanctions,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “The FBI will continue to work closely with our partners to detect and stop such illegal transfers and hold accountable those who engage in activities detrimental to U.S. national security interests.”
As alleged in the indictment, from at least December 2022 through December 2024, Mazulina conspired with Russian freight forwarding companies and others to unlawfully ship controlled items, including industrial oil and gas equipment from the United States to Russia, through intermediary countries. At one point, in June 2023, Mazulina told colleagues that her clients were paying through bank accounts in third party countries because “[m]ost of [her] clients [were] currently sanctioned with USA.” Mazulina attempted to conceal the unlawful scheme by submitting and causing the submission of false export documents to the U.S. government, documents which should have revealed that the exported goods were destined for Russia.
Mazulina is charged with conspiracy to export controlled goods to Russia without a license, conspiracy to defraud the U.S., conspiracy to commit money laundering, exporting controlled goods to Russia without a license, filing false export documents with the U.S. government, and smuggling goods contrary to U.S. law. If convicted, she faces a maximum penalty of 20 years in prison for each count of conspiring to export or exporting controlled goods to Russia without a license; a maximum penalty of 20 years in prison for conspiring to commit money laundering; up to 10 years in prison for each count of smuggling; and a maximum penalty of five years in prison for each count of conspiracy and filing false export documents with the U.S. government. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The BIS and FBI are investigating the case. The U.S. Attorney’s Office for the Western District of Washington, FBI Seattle Field Office, and BIS Boston Field Office assisted the investigation.
Assistant U.S. Attorneys Artie McConnell and Matthew Skurnik for the Eastern District of New York and Trial Attorneys Christopher M. Rigali and Adam Barry of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. The Justice Department's Money Laundering and Asset Recovery Section assisted with this investigation.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty.
Long Island Medical Doctor Convicted of Illegally Distributing Oxycodone PillsRead the Press Release
A federal jury in Central Islip returned a guilty verdict today against Roya Jafari-Hassad, a medical doctor with a practice in Great Neck, Long Island, on eight counts of a second superseding indictment charging her with prescribing oxycodone pills without a legitimate medical purpose. The verdict followed a 10-day trial before United States District Judge Gary R. Brown. When sentenced, Dr. Jafari-Hassad faces up to 20 years in prison on each count. The defendant was acquitted of witness tampering charges.
Breon Peace, United States Attorney for the Eastern District of New York, Frank A Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA) and Naomi Gruchacz, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General’s Office of Investigations, New York Region (HHS-OIG), announced the verdict.
“As proven, Dr. Hassad was a drug dealer who disgracefully dispensed highly addictive oxycodone pills without any regard for the well-being of the patient but with plenty of interest in their cash,” stated United States Attorney Peace. “Corrupt doctors like this defendant, who value greed over their oath to do no harm, fuel the opioid epidemic and my Office is committed to holding them accountable for the incalculable harm they have caused.”
“Dr. Roya Jafari-Hassad knowingly prescribed opioids without cause, and with a possible life of addiction. Dr Jafari-Hassad knew the harmful effects opioids could have on and not only jeopardized their health, but the patient’s future as well.” stated DEA New York Special Agent in Charge Tarentino. “Today, the jury recognized her actions of putting profit and greed over her oath to protect the health and safety of her patients, all while exacerbating the opioid crisis.”
“The defendant convicted in this case is a physician who knowingly prescribed controlled substances illegally, which is especially egregious given the ongoing opioid epidemic,” stated HHS-OIG Special Agent in Charge Gruchacz. “HHS-OIG will continue to work with our law enforcement partners to ensure individuals involved in schemes that threaten patient safety are held accountable.”
Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals only for a legitimate medical purpose in the usual course of a doctor’s professional practice. It is a powerful and highly addictive drug and is frequently abused because of its potency when crushed into a powder and ingested, leading to a heroin-like euphoria.
As proven at trial, Dr. Hassad charged hundreds of dollars in cash in exchange for a monthly oxycodone prescription which had no legitimate medical purpose. In the spring of 2021, law enforcement opened an investigation into Dr. Hassad’s conduct. Over nine months and 10 appointments that were tape-recorded, Dr. Hassad gave an undercover detective, who claimed he had pain, ten prescriptions for oxycodone totaling hundreds of oxycodone pills for which he paid thousands of dollars in cash. Dr. Hassad typically charged about $350 for a 15-day supply of oxycodone and about $700 for a 30-day supply of oxycodone.
The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant U.S. Attorneys Charles P. Kelly and Katherine Onyshko are in charge of the prosecution, with the assistance of Paralegal Specialist Samantha Schroder.
The Defendant:
ROYA JAFARI-HASSAD
Age: 58
Bayside, QueensE.D.N.Y. Docket No. 22-CR-545(S-2) (GRB)