Southern District of New York
Press releases recorded for this federal judicial district.
Leaders and Members of ABG Gang Sentenced for Murder, Attempted Murder, Assault, Racketeering, and Firearms OffensesRead the Press Release
Danielle R. Sassoon, the United States Attorney for the Southern District of New York, announced the sentencing of DAIVON MORGAN, a/k/a “Leeky,” the last of 10 defendants to be sentenced in a case involving members of a street gang known as “ABG” in the Bronx, New York. MORGAN was sentenced to 292 months in prison for crimes relating to his membership in ABG, including the murder of 19-year-old Darren Scruggs in February 2019 and a slashing of a rival gang member in February 2021. MORGAN previously pled guilty to conspiracy to commit racketeering and conspiracy to commit a violent crime in aid of racketeering on December 15, 2023, before U.S. District Judge Mary Kay Vyskocil, who imposed today’s sentence. MORGAN was the last of the 10 defendants in the ABG case before Judge Vyskocil to have been convicted and sentenced.
U.S. Attorney Danielle R. Sassoon said: “ABG terrorized communities in the Bronx with violence and drug-dealing. Among ABG’s many victims was Darren Scruggs, who was gunned down at the age of 19 by members of ABG. The 10 ABG leaders and members charged in this case have now been convicted and sentenced for their crimes. We will continue to protect the public from gangs and the senseless violence they bring.”
According to the Superseding Indictments, public court filings, and statements made in court:
From at least in or about 2017 to in or about the present, ABG was a criminal enterprise centered in the Bronx, New York. ABG primarily operated in the vicinity of the Mitchel Houses in the vicinity of 135th and 138th Streets and Lincoln and Willis Avenues. In addition to their local affiliation, many ABG members also affiliated with the national Crips gang. In order to make money for the gang, protect the gang’s territory, and promote the gang’s standing, members of ABG engaged in, among other things, narcotics trafficking and violence, including murder. To that end, ABG members sold crack cocaine, promoted their gang affiliation on social media, possessed firearms, and engaged in shootings and slashings as part of their gang membership and narcotics trafficking. Among other crimes committed by the gang, ABG was responsible for the following acts of violence:
On February 18, 2019, ROBERTO ESPINOSA, assisted by HENRY JONES and MORGAN, shot and killed Scruggs.
On October 30, 2018, ELIJAH PERKINS shot at rival gang members. On August 21, 2021, PERKINS and AMIER WILSON participated in a shooting of rival gang members.
On March 25, 2022, WILSON carried out a shooting, which resulted in a victim being shot and injured.
On November 7, 2021, JONES, assisted by JUAN REYES, committed a shooting in rival gang territory.
On May 8, 2020, REYES, PERKINS, and XAVIER ARAU beat and slashed a victim in rival gang territory.
On February 20, 2021, MORGAN slashed a victim across the face at the direction of DAVID TRUSTY in rival gang territory.
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A chart containing the names of the defendants, the charges they were convicted of, and the sentences they received is set forth below.
Ms. Sassoon praised the outstanding work of the New York City Police Department, Homeland Security Investigations, and the New York City Department of Corrections.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Courtney Heavey, Christopher Brumwell, and James Ligtenberg are in charge of the prosecution.
DefendantAgeConvictionSentenceJONES, a/k/a “Dew Man”28Racketeering Conspiracy and Attempt to Commit Murder in Aid of Racketeering30 yearsMORGAN, a/k/a “Leeky”25Racketeering Conspiracy and Conspiracy to Commit a Violent Crime in Aid of Racketeering292 monthsESPINOSA, a/k/a “Taco”23Racketeering Conspiracy and Receipt of a Firearm Intended to be Used in a Felony;28 yearsWILSON, a/k/a “Smula”26Racketeering Conspiracy13 yearsTRUSTY, a/k/a “Saint”25Conspiracy to Distribute Crack Cocaine and Assault with a Dangerous Weapon in Aid of Racketeering12 yearsPERKINS, a/k/a “Eli”24Use of a Firearm in Furtherance of a Crime of Violence; and Use and Brandishing of a Firearm in Furtherance of a Crime of Violence162 monthsJAMIE WILKINS, a/k/a “OJ”26Use of a Firearm During and in Relation to a Drug Trafficking Crime78 monthsXAVIER ARAU, a/k/a “X”23Use and Brandishing of a Firearm During and in Relation to a Drug Trafficking Crime7 yearsREYES, a/k/a “Gunplay”27Conspiracy to Possess a Firearm Following a Felony Conviction and Conspiracy to Assault with Dangerous Weapon in Aid of Racketeering9 yearsCASSIUS MILLER, a/k/a “Cash”24Conspiracy to Distribute Crack Cocaine5 yearsUnited States Files Fair Housing Act Lawsuit Against Lettire Construction Corp. and Related Entities for Failure to Construct Apartments with Features Accessible to Persons with DisabilitiesRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today that the U.S. has filed a federal Fair Housing Act (“FHA”) lawsuit against LETTIRE CONSTRUCTION CORP. (“LETTIRE”) relating to its failure to design and construct new apartment buildings to be accessible to persons with physical disabilities. The lawsuit also names other entities related to LETTIRE that participated in the design or construction of these residential complexes. Upon filing suit, the U.S. also submitted to the Court proposed consent decrees with LETTIRE, EAST 124TH STREET LLC, and other entities related to LETTIRE which participated in the design and construction of such buildings. These settlements are subject to the review and approval of the U.S. District Judge assigned to the case.
Acting U.S. Attorney Edward Y. Kim said: “Today’s filing is the 20th suit that this Office has brought to remedy the failure of real estate developers to comply with the Fair Housing Act. We appreciate Lettire’s and East 124th Street LLC’s cooperation in taking responsibility for their actions so that more properties are rendered accessible to more people. This Office will remain vigilant in ensuring that developers, construction managers, and architects comply with the FHA and remedy inaccessible housing in this District.”
The FHA’s accessible design and construction provisions require multifamily housing complexes constructed after January 1991 to have basic features accessible to persons with disabilities.
According to the allegations in the Complaint:
The inaccessible conditions at buildings that LETTIRE constructed include excessively high thresholds at building entrances and entrances to common use areas, and bathrooms in individual apartments that lack sufficient clear floor space for people who use wheelchairs. These features in the common use areas of buildings that LETTIRE constructed, as well as in the buildings’ apartment interiors, did not meet the standards set forth in the Fair Housing Act.
The Complaint identifies inaccessible conditions at the following three properties:
- The Tapestry, at 245 East 124th Street in Manhattan. In addition to LETTIRE, the Complaint names as defendants LETTIRE 124th STREET LLC as a co-developer of the Tapestry, and EAST 124th STREET LLC (with whom, as noted above, the Government has reached an agreement subject to Court approval) as the owner and managing member of the Tapestry.
- Chestnut Commons, at 3269 Atlantic Avenue in Brooklyn. In addition to LETTIRE, the Complaint names as defendants UBC CHESTNUT COMMONS LLC as a co-developer of Chestnut Commons, CHESTNUT COMMONS HOUSING DEVELOPMENT FUND CORP. as the owner of Chestnut Commons, and MHANY MANAGEMENT INC. as the managing member of Chestnut Commons. The Government’s claims relating to Chestnut Commons have not yet been resolved.
- The Atrium, at 57 Marcus Garvey Boulevard in Brooklyn. However, by the time that the Atrium opened in 2024, LETTIRE had retained an accessibility consultant, and the identified inaccessible conditions were in the process of being substantially remediated in consultation with the Government. The Atrium has been included in the lawsuit in order to ensure that remaining retrofits are completed.
Due to the inaccessible conditions at the buildings LETTIRE designed and constructed, LETTIRE engaged in a pattern or practice of resistance to the full enjoyment of rights protected by the FHA and denied such rights to people with disabilities. The Complaint seeks a court order directing LETTIRE to retrofit individual apartments as well as the public and common use areas of the buildings so that they are accessible, to adopt policies and procedures to ensure FHA compliance in future constructions, and to compensate individuals who suffered discrimination due to the inaccessible conditions.
Under the settlement with LETTIRE and other related entities, LETTIRE agreed to complete necessary retrofits at the Atrium, establish procedures to ensure FHA compliance at future development projects, and to institute policies and training to ensure that its employees and agents will comply with the FHA’s accessibility requirements. LETTIRE agreed to pay a civil penalty of $20,000, and the related entities agreed to pay a civil penalty of $10,000 each, commensurate with their role in designing and/or constructing the Tapestry and Chestnut Commons.
Under the settlement with EAST 124TH STREET LLC, EAST 124TH STREET LLC agreed to complete necessary retrofits at the Tapestry, establish procedures to ensure FHA compliance at future development projects, and to institute policies and training to ensure that its employees and agents will comply with the FHA’s accessibility requirements. EAST 124TH STREET LLC also agreed to pay a civil penalty of $10,000, commensurate with its role in designing and/or constructing the Tapestry.
Further, the settlement requires EAST 124th STREET LLC to provide $20,000 to compensate aggrieved persons with respect to the Tapestry. Aggrieved individuals may include those who:
- Were discouraged from living at the Tapestry because of the lack of accessible features;
- Have been hurt in any way by the lack of accessible features at the Tapestry;
- Paid to have an apartment at the Tapestry made more accessible to persons with disabilities; or
- Otherwise were discriminated against on the basis of disability at the Tapestry as a result of inaccessible design and construction.
People who believe they may have experienced discrimination due to the inaccessible conditions at the above-named buildings developed by LETTIRE may contact the Civil Rights Complaint account at [email protected], use the Civil Rights Complaint Form available on the U.S. Attorney’s Office’s website http://www.justice.gov/usao/nys/civilrights.html, or send a written report to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York 10007
Attention: Chief, Civil Rights Unit
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Mr. Kim thanked HUD for its assistance on the investigation.
The case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorneys Amanda Lee and Danielle J. Marryshow are in charge of the case.
Putnam Valley Husband and Wife Sentenced to Prison for Operating Prostitution Businesses at Multiple Massage Parlors in New YorkRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today that HONG RU LIN, a/k/a “Bruce,” and KENA ZHAO, a/k/a “Angela,” were each sentenced by U.S. District Judge Kenneth M. Karas to prison for violating the Travel Act by operating prostitution businesses at multiple massage parlors in Putnam, Westchester, New York, and Queens County. ZHAO was sentenced on January 10, 2025, to 12 months and one day in prison, and LIN was sentenced today to 12 month and one day in prison. LIN and ZHAO also forfeited over $1.3 million representing proceeds derived from their prostitution scheme.
Acting U.S. Attorney Edward Y. Kim said: "Hong Ru Lin and Kena Zhao operated an extensive prostitution business, using massage parlors as cover for their illegal activities. Today’s sentences hold them accountable for their actions. This Office will continue to investigate those who sponsor illegal prostitution, even if their criminal activities take place behind the closed doors of supposedly legitimate businesses.”
According to the charging documents, public court filings, and statements made in court:
Between at least September 2020 and September 2023, LIN and ZHAO operated a prostitution business out of multiple massage parlors that they owned in Putnam, Westchester, New York and Queens County. LIN and ZHAO managed a roster of women who worked at the massage parlors and performed sexual acts for the customers of LIN and ZHAO. LIN and ZHAO communicated by cellphone and private chatroom to manage and operate their prostitution business. Among other things, LIN and ZHAO used cellphones to communicate with potential customers, assign particular employees to customers, monitor the income of their prostitution business, and set performance goals for the women who worked in the massage parlors. In addition, on at least one occasion, ZHAO personally participated in a massage during which a sexual act was offered to a customer.
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In addition to the prison terms, LIN, 51, and ZHAO, 46, of Putnam Valley, New York, were both sentenced to two years of supervised release and agreed to forfeit the massage parlors’ bank accounts, various assets and cash proceeds derived from the massage parlors, and a $1.3 million money judgment.
Mr. Kim praised the outstanding work of the Federal Bureau of Investigation’s Westchester County Safe Streets Task Force and the Putnam County Sheriff’s Office. Mr. Kim also thanked the Town of Carmel Police Department, the Westchester County Police Department, and the Yonkers Police Department for their assistance in this matter.
The case is being prosecuted by the Office’s Civil Rights Unit in the Criminal Division and the White Plains Division. Assistant U.S. Attorneys Ryan W. Allison, Jamie Bagliebter, and Margaret N. Vasu are in charge of the prosecution.
Attorney for the United States Announces $9.5 Million Settlement with Stericycle, Inc. for Violations of Hazardous Waste Management RegulationsRead the Press Release
Matthew Podolsky, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515, and Cecil Rodrigues, the Acting Assistant Administrator of the Office of Enforcement and Compliance Assurance of the U.S. Environmental Protection Agency (“EPA”), announced today that the U.S. has filed and simultaneously settled a lawsuit against STERICYCLE, INC. (“STERICYCLE”) for systemic, nationwide violations of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., and related regulations in the operation of its former hazardous waste management business from May 5, 2014, through April 6, 2020.
The proposed stipulation and order of settlement agreed to by STERICYCLE requires payment of a $9.5 million civil penalty, one of the largest civil penalties ever paid for RCRA violations. The settlement is subject to approval by the Court.
Attorney for the United States Matthew Podolsky said: “Today, we hold Stericycle responsible for flouting hazardous waste management requirements while operating a nationwide hazardous waste business, and risking significant potential harm to human health and the environment. This penalty should put other waste management firms on notice that we will hold them accountable when they shirk their legal responsibilities and put the public and environment in harm’s way.”
EPA Acting Assistant Administrator Cecil Rodrigues said: “Stericycle repeatedly failed to ensure the proper transport, management, and storage of hazardous waste – a job that they were paid to do and entrusted to perform on behalf of customers nationwide. EPA is committed to ensuring companies comply with the law and to protecting communities from the potential risks associated with the mismanagement of hazardous wastes.”
As alleged in the U.S. Complaint filed in Manhattan federal court:
STERICYCLE is a waste management company that operated a nationwide hazardous waste transportation, storage, treatment, and disposal business until it sold the vast majority of the business on April 6, 2020. STERICYCLE operated 13 RCRA-permitted hazardous waste Treatment, Storage, and Disposal Facilities (“TSDFs”) and 44 waste transfer facilities.
Between May 5, 2014, and the date of sale, STERICYCLE routinely violated RCRA requirements related to tracking and transportation of hazardous waste, as alleged in detail in the Complaint. STERICYCLE routinely lost track of hazardous waste while transporting it, sent hazardous waste to disposal facilities that were not the ones its customers had chosen, or delivered hazardous waste shipments without the required manifests. STERICYCLE also failed to comply with requirements for resolving and reporting discrepancies between hazardous waste identified on a shipping manifest and the hazardous waste received by STERICYCLE at its facilities for disposal, and it failed to timely return signed manifests to generators and timely submit them electronically to EPA. STERICYCLE also violated RCRA by storing hazardous waste in transfer facilities when not authorized to do so, either because the storage period was longer than the 10 days permitted by RCRA regulations or because overall transportation times for the hazardous waste shipment exceeded those constituting “the normal course of transportation” under RCRA regulations. All of this conduct violated RCRA hazardous waste regulations critical to preventing substantial risks to human health and the environment.
STERICYCLE was well aware of severe problems giving rise to these violations and failed to address them. In the words of one STERICYCLE director in 2016, STERICYCLE had “way too many issues with a basic fundamental of [its] business, getting waste and paperwork from the generator to the designated facility.” In 2019, the same STERICYCLE director underscored the continuation of these fundamental failings: “The most basic thing that we do for our clients is moving the waste from point a to point b and we can’t do it.”
On April 6, 2020, STERICYCLE completed the sale of its “Stericycle Environmental Solutions” hazardous waste business and, since that date, has largely ceased managing hazardous waste in the U.S. However, STERICYCLE remains accountable for its systemic RCRA violations prior to that sale.
In the settlement filed with the federal court today, STERICYCLE admits, acknowledges, and accepts responsibility for the following, among other things:
- On numerous occasions between May 5, 2014, and April 6, 2020, STERICYCLE was the transporter of hazardous waste shipments for hazardous waste generators, and failed to deliver part or all of the hazardous waste shipment described on the shipment’s manifest to the designated TSDF.
- On numerous occasions between May 5, 2014, and April 6, 2020, STERICYCLE (or one of its subsidiaries or subcontractors) served as a transporter of hazardous waste shipments to one of STERICYCLE’s TSDFs and failed to ensure that a manifest accompanied all hazardous waste shipments.
- On numerous occasions between May 5, 2014, and April 6, 2020, STERICYCLE failed to timely provide hazardous waste generators with final signed copies of their waste shipment manifests within 30 days after the shipments were delivered to STERICYCLE TSDFs.
- On numerous occasions between June 2018 and April 2020, STERICYCLE failed to timely submit hazardous waste manifests to EPA’s national system for electronically tracking hazardous waste shipments—known as the e-Manifest system—within 30 days after the date of delivery of the hazardous waste shipment to STERICYCLE TSDFs.
- On numerous occasions between May 5, 2014, and April 6, 2020, STERICYCLE failed to consult with a generator prior to changing the destination of hazardous waste as designated on a hazardous waste manifest.
- On numerous occasions between May 5, 2014, and April 6, 2020, STERICYCLE stored hazardous waste at its hazardous waste transfer facilities (as that term is defined in 40 C.F.R. § 260.10) for longer than the 10-day limits permitted under RCRA.
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Mr. Podolsky thanked EPA’s Office of Enforcement and Compliance Assurance for its critical work on this case.
The case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Dominika Tarczynska and Tomoko Onozawa are in charge of the case.
Five People Charged with Gun-Point Home Invasion Robbery That Involved Zip Tying Two Victims in Front of Their ChildrenRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging BHUPINDERJIT SINGH, ELIJAIH ROMAN, COREY HALL, ERIK SUAREZ, and DIVYA KUMARI with perpetrating a gun-point home invasion robbery of the home of a small business owner in Orange County, New York. The defendants were arrested today, and will be presented in White Plains federal court before the Hon. Victoria Reznik, United States Magistrate Judge.
Acting U.S. Attorney Edward Y. Kim said: “Bhupinderjit Singh and his co-defendants allegedly planned and executed a violent robbery, during which four children watched as their parents were zip tied and held at gunpoint while four men ransacked their home looking for money and valuables. Thanks to the hard work of our law enforcement partners and the career prosecutors of this Office, the defendants will now face charges stemming from this brazen robbery.”
FBI Assistant Director in Charge James E. Dennehy said: “These five defendants participated in a robbery in which a firearm was brandished to gain unauthorized entry into a family’s home and steal valuable jewelry and thousands of dollars. This alleged forceful intrusion violated the privacy and security expected inside one’s home, and terrorized four young children left to helplessly beg for the safety of their restrained parents. The FBI will continue to apprehend any individual who utilizes weapons to intimidate victims to fulfill their criminal agenda.”
As alleged in the Complaint filed on January 15, 2025, in White Plains federal court and unsealed today:
On or about December 1, 2024, SINGH, ROMAN, HALL, SUAREZ, and KUMARI perpetrated a gun-point home invasion robbery in the vicinity of the Town of Wallkill, New York. When they arrived at the house, SINGH, ROMAN, HALL, and SUAREZ forced the homeowner (“Victim-1”) and Victim-1’s daughter, who is approximately 10 years old, into the house at gunpoint. When SINGH, ROMAN, HALL, and SUAREZ entered the home, Victim-1’s wife was sitting with the couple’s other three children, who ranged from approximately two to nine years old. SINGH, ROMAN, HALL, and SUAREZ then zip tied the hands and legs of both Victim-1 and his wife and placed the couple on the couch next to their children. Three of the four robbers then began to search throughout the house, while the fourth robber remained with Victim-1 and his family, armed with what appeared to be a small black pistol. At one point, Victim-1’s daughter begged the robbers to not hurt her parents and indicated that she would tell them where the family stored their valuables. Certain of the robbers then took Victim-1’s daughter to the house’s master bedroom where there was a safe, but Victim-1’s daughter was unable to get the safe open. The robbers then took Victim-1’s daughter back to her parents and forced Victim-1’s wife to come with them instead. Once in the bedroom, Victim-1’s wife opened the safe and watched as the robbers removed from it, among other items, numerous pieces of jewelry and approximately $10,000 in U.S. currency. While the robbery was ongoing, KUMARI was waiting in the vicinity of Victim-1’s house to act as a lookout. Eventually, SINGH, ROMAN, HALL, and SUAREZ left Victitm-1’s house with various stolen items, including the jewelry and U.S. currency stolen from the safe.
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SINGH, 26, of South Ozone Park, New York; ROMAN, 22, of Far Rockaway, New York; HALL, 45, of Saint Albans, New York; SUAREZ, 24, of Elmhurst, New York; and KUMARI, 26, of Massapequa, New York, are all charged with one count of Hobbs Act robbery conspiracy, which carries a maximum sentence of 20 years in prison, and one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison. SINGH, ROMAN, HALL, and SUAREZ are additionally charged with one count of using, carrying, possessing, and brandishing a firearm in furtherance of a crime of violence, which carries a maximum sentence of life in prison.
The maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, as well as the assistance of the Town of Wallkill Police Department and the New York State Police.
The case is being handled by the Office’s White Plains Division. Assistant U.S Attorney David A. Markewitz is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Global Cryptocurrency Exchange BitMEX Fined $100 Million for Violating Bank Secrecy ActRead the Press Release
Matthew Podolsky, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515, announced that HDR GLOBAL TRADING LTD., a/k/a “BITMEX”, was sentenced today to a fine of $100 million for violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) and know-your-customer (“KYC”) program.
Attorney for the United States Matthew Podolsky said: “Anti-money laundering and know-your-customer rules protect Americans from fraud, combat money laundering, and prevent the financing of terrorist activity. It is critical that all financial institutions, including cryptocurrency exchanges, comply with these rules to protect our country’s economy and national security. Today’s sentence sends a clear message that companies that willfully violate these rules and refuse to implement AML/KYC programs will face consequences.”
According to the allegations in the Information and other filings and statements made in court:
Arthur Hayes, Benjamin Delo, and Samuel Reed founded BITMEX in or about 2014, and Gregory Dwyer became BITMEX’s first employee in 2015 and later its Head of Business Development. BITMEX, which has long serviced and solicited business from U.S. traders and operated through U.S. offices, was required to register with the Commodity Futures Trading Commission (“CFTC”) and to establish and maintain an adequate AML program. AML programs ensure that financial institutions, such as BITMEX, are not exploited for illicit purposes and serve to protect the integrity of the U.S. financial system and national security more broadly.
BITMEX and its executives knew that because BITMEX served U.S. customers, it was required to implement an AML program that included a KYC component but chose to flaunt those requirements, requiring only that customers provide an email address to use BITMEX’s services. Indeed, senior executives each knew that customers residing in the U.S. continued to access BITMEX’s trading platform through at least in or about 2018, and that BITMEX policies nominally in place to prevent such trading were toothless or easily overridden to serve BITMEX’s bottom line goal of obtaining revenue through the U.S. market without regard to U.S. criminal laws. Corporate executives took affirmative steps purportedly designed to exempt BITMEX from the application of U.S. laws like AML and KYC requirements, despite knowing of BITMEX’s obligation to implement such programs by operating in the U.S. As part of BITMEX’s willful evasion of U.S. AML laws, the company lied to a bank about the purpose and nature of a subsidiary to allow BITMEX to pump millions of dollars through the U.S. financial system.
Hayes, Delo, and Reed, BITMEX’s three founders and top executives, and Dwyer, another top executive, all previously entered guilty pleas for violating the Bank Secrecy Act and were sentenced in 2022. The corporation entered a guilty plea on July 10, 2024, and was sentenced today.
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In addition to the fine, BITMEX was sentenced to two years’ probation.
Mr. Podolsky praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad.
The prosecution is being handled by the Office’s Illicit Finance & Money Laundering Unit. Assistant U.S. Attorneys Jessica Greenwood and Thane Rehn are in charge of the prosecution.
Leader of Drug Trafficking Organization That Distributed Fentanyl Linked to Eight Overdose Deaths in the Bronx Sentenced to 30 Years in PrisonRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that JESUS CABRERA, a/k/a “Gee,” was sentenced today to 30 years in prison by U.S. District Judge Naomi Reice Buchwald for leading a drug trafficking organization (the “DTO”) that sold deadly fentanyl in the Bronx. CABRERA previously pled guilty to participating in a conspiracy to distribute fentanyl and fentanyl analogue, and to a related firearms count. As part of his guilty plea, CABRERA admitted that the DTO’s drug trafficking resulted in the August 2021 death of Malik Rahman, and that the DTO’s product was recovered from the scenes of seven other fatal fentanyl poisonings in 2021.
Acting U.S. Attorney Edward Y. Kim said: “Jesus Cabrera led a drug trafficking organization that sold enormous amounts of deadly fentanyl in New York City, which led to the deaths of at least eight victims in the Bronx in 2021, and affected countless others in our community. Today’s sentence and those imposed to date on Cabrera’s co-conspirators send a loud message to fentanyl traffickers that their actions will be met with dire consequences in this District. I commend the work of the DEA, NYPD, and the career prosecutors and investigators of this Office who have worked tirelessly to hold accountable those who seek to flood our community with this deadly drug and to profit from addiction and tragedy.”
As alleged in the charging instruments, court filings, and statements in the public record:
Between approximately 2019 and February 2022, the DTO operated principally from a block on 142nd Street between Brook Avenue and St. Ann’s Avenue in the Bronx (the “Set”), where its members sold glassines of fentanyl in bulk to dealers who then re-distributed the DTO’s product on the Set and in other areas of the Bronx. Members of the DTO also sold individual glassines to users struggling with addiction who lined up on the Set on an almost daily basis. CABRERA was the undisputed leader of the DTO, and co-defendant MICHAEL AMAYA, a/k/a “Miz,” worked as CABRERA’s second in command, managing and overseeing the DTO’s various street-level dealers, baggers, and lookouts, including the other defendants charged in this case. Every day, members of the DTO, at CABRERA’s direction and often in his presence, packaged the DTO’s product in residential apartments for distribution on the Set. The DTO then relied on a roster of street-level dealers to push massive amounts of its deadly product into the community. Indeed, in the fall and winter of 2021 alone, the DTO distributed an estimated five to six kilograms of fentanyl per month, resulting in hundreds of thousands of dollars in profit for the DTO.
The DTO frequently used a signature “stamp” on the glassines of fentanyl it sold—a step CABRERA took to continue making money at the expense of the victims and families affected by the DTO’s drug dealing and the opioid epidemic in this country. For many months, the DTO stamped its glassines with a “Supreme” logo. Starting in or around December 2021, the DTO began using an “Off White” logo, and then switched to a “Thriller” logo. Despite CABRERA’s awareness of the potential deadly impact of fentanyl, he and the other DTO members continued pushing the DTO’s product. Indeed, when CABRERA was asked by another DTO member whether people were overdosing from the DTO’s product, Cabrera laughed it off and said, “na man, people hating, they don’t want us making money.”
On or about August 25, 2021, one of CABRERA and AMAYA’s co-defendants, Alberto Concepcion, sold a quantity of loose “Supreme”-stamped glassines to an individual on the Set (“Individual-1”), who subsequently provided one of those glassines to Rahman. Rahman died from an overdose shortly after ingesting the substances in the “Supreme”-stamped glassine, the residue of which later tested positive for, among other things, fentanyl and fentanyl analogue. Both CABRERA and AMAYA were directly involved in overseeing Concepcion’s narcotics sales at that time. Indeed, in the days leading up to Rahman’s fatal overdose, CABRERA and AMAYA exchanged text messages referencing certain quantities of narcotics that were going to Concepcion for resale on the Set, as well as the cut of the over $110,000 in recent DTO proceeds they were going to provide to Concepcion.
Including Rahman’s fatal overdose, between in or around March 2021 and in or around December 2021, there were at least eight confirmed fatal overdoses in the Bronx at which the DTO’s “Supreme”-stamped glassines were found on the scene.
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In addition to the prison term, CABRERA, 46, of the Bronx, New York, was sentenced to five years of supervised release.
Many of CABRERA’s co-defendants, who were also members of the DTO, have also been sentenced after having been convicted of participating in the same fentanyl trafficking conspiracy to which CABRERA pled guilty. AMAYA, who managed the DTO’s daily operations and reported to CABRERA, was sentenced to 16 years in prison. WILLIE HARRIS, a/k/a “Light,” who was one of the DTO’s armed lookouts and dealers, was sentenced to 12 years in prison. FRANKIE CAPELLAN, a/k/a “Nitty,” who helped package the DTO’s product with CABRERA and others, was sentenced to 10 years in prison, and JOSE FIGUEROA, a/k/a “Chelo,” one of the DTO’s street-level dealers, was also sentenced to 10 years in prison.
Mr. Kim praised the outstanding investigative work of the New York City Police Department, the Drug Enforcement Administration, and the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for support and assistance in this matter. He also thanked the Bronx District Attorney’s Office for its assistance in the case.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Matthew J. King, Kaylan E. Lasky, and David J. Robles are in charge of the prosecution.
Crips Gang Member Charged with March 2021 MurderRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and Jessica S. Tisch, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging ALIEU JARJOU, a/k/a “Scally,” a/k/a “Lu Scally,” with racketeering conspiracy, murder in aid of racketeering, and a firearms offense. The charges relate to JARJOU’s membership in the “Rollin 20s” set of the Crips gang and the March 9, 2021 murder of 30-year-old Jadon Robinson. JARJOU, who was in New York City Department of Correction custody, was transferred to federal custody earlier today and made his initial appearance in federal court in Manhattan. The case is assigned to U.S. District Judge Edgardo Ramos.
Acting U.S. Attorney Edward Y. Kim said: “As alleged, Alieu Jarjou shot and killed Jadon Robinson on a busy Bronx street in the middle of the day. He committed this cold-blooded murder to enhance his status within the Rollin 20s Crips, a violent street gang that traffics in illegal drugs. Let this be a reminder that this Office and our law enforcement partners will catch and prosecute those who commit acts of violence in our streets.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From at least January 2021 through at least January 2022, JARJOU was a member of the Rollin 20s Crips, which is based in the Bronx, New York. In order to fund the gang, protect its territory, and promote its standing, members of the Rollin 20s Crips engaged in, among other things, murders, assaults, threats of violence, and narcotics trafficking.
On March 9, 2021, JARJOU murdered Jadon Robinson in the vicinity of 1268 Morrison Avenue in the Bronx, New York. Jadon Robinson was 30 years old.
* * *
JARJOU, 30, of the Bronx, New York, is charged with one count of racketeering conspiracy, which carries a maximum sentence of life in prison; one count of murder in aid of racketeering, which carries a sentence of mandatory life in prison or death; one count of murder through the use of a firearm, which carries a maximum sentence of life in prison; and one count of using and carrying a firearm during and in relation to a crime of violence, which carries a maximum sentence of life in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the NYPD.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Christy Slavik and Jim Ligtenberg are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
PAC Treasurer Pleads Guilty to Multi-Year Scheme to Defraud PAC DonorsRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that ROBERT PIARO, the treasurer of multiple political action committees (“PACs”), pled guilty today to committing telemarketing wire fraud in connection with his scheme to defraud donors to his PACs through false and misleading statements. PIARO pled guilty before U.S. District Judge Arun Subramanian.
Acting U.S. Attorney Edward Y. Kim said: “Robert Piaro deceived hundreds of thousands of donors through false statements and misrepresentations about how contributions to his PACs would be spent. Piaro’s fraudulent actions not only undermined the trust of donors but also exploited their interest in supporting certain causes for his own personal gain. Today’s plea highlights this Office’s dedication to holding accountable those who misuse political organizations to defraud and mislead the public.”
According to the allegations in the Indictment, court filings, and statements made in Court:
PACs are entities registered with the Federal Election Commission that may be tax-exempt and collect money to advocate on behalf of or against certain causes and political candidates.
From at least in or about 2017 up to and including at least in or about December 2022, PIARO was the treasurer and operator of four PACs: Americans for the Cure of Breast Cancer, the Association for Emergency Responders & Firefighters, the US Veterans Assistance Foundation, and Standing By Veterans (the “PIARO PACs”). PIARO raised millions of dollars from hundreds of thousands of donors nationwide through false statements and misrepresentations about how contributions to the PIARO PACs would be spent. For example, at PIARO’s direction, the PIARO PACs misrepresented to donors that donations would be used to advance specific legislation, educate lawmakers, and conduct and fund research, when PIARO did not and did not intend to follow through on those representations.
If you believe you are a victim of fraud perpetrated by PIARO, please contact [email protected] or the Federal Bureau of Investigation (“FBI”) at 1-800-CALL-FBI or tips.fbi.gov, and find more information here: https://www.justice.gov/usao-sdny/united-states-v-robert-piaro.
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PIARO, 74, of Fredonia, Wisconsin, pled guilty to one count of wire fraud in connection with telemarketing, which carries a maximum sentence of 25 years in prison.
The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. PIARO is scheduled to be sentenced by Judge Subramanian on April 14, 2025.
Mr. Williams praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Rebecca T. Dell and Jane Kim are in charge of the prosecution.
Mount Vernon Police Sergeant Pleads Guilty to Depriving an Individual of His Constitutional RightsRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that MARIO STEWART, a Sergeant with the Mount Vernon Police Department (“MVPD”), pled guilty today to using excessive force against an individual (the “Victim”) while in Mount Vernon, New York, in violation of the Victim’s rights under the U.S. Constitution. STEWART pled guilty today before U.S. Magistrate Judge Andrew E. Krause.
Acting U.S. Attorney Edward Y. Kim said: “Mario Stewart betrayed his duty as a Sergeant with the Mount Vernon Police Department. Stewart was called to the scene to aid a person in emotional distress. But instead of rendering aid, he deployed his taser on the individual seven times in the span of roughly two minutes, while the individual was helpless, and while several other MVPD officers were on scene to assist. This Office will fiercely protect constitutional rights and hold accountable those who abuse their authority to violate those rights.”
According to the allegations contained in the Indictment and statements made in court:
On or about March 26, 2019, STEWART was employed as a Sergeant with the Mount Vernon Police Department. STEWART was assigned to the MVPD’s Emergency Services Unit, which is responsible for, among other things, responding to individuals who are experiencing mental health crises. On that day, STEWART and six other MVPD officers received a call to assist the Victim in Mount Vernon, New York, as the Victim was experiencing a mental health crisis.
At the scene, STEWART and the other MVPD officers restrained the Victim, handcuffing his hands behind his back and securing his legs in a restraint bag in preparation to transport the Victim for medical assistance. When the MVPD officers were unable to pull the restraint bag over the Victim’s chest because the Victim was holding onto one of the bag’s straps, STEWART directed the Victim to release the strap. While STEWART deployed his taser all seven times, the Victim remained laying on the ground, handcuffed with his hands behind his back and his legs secured in the restraint bag. STEWART’s actions caused bodily injury to the Victim, including extreme pain.
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STEWART, 46, of Brooklyn, New York, pled guilty to one count of deprivation of rights under color of law, which carries a maximum sentence of 10 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation, and thanked the Westchester County District Attorney’s Office and the Mount Vernon Police Department for their assistance with the investigation.
The prosecution is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Sam Adelsberg and Jared Hoffman are in charge of the prosecution.
Trader Arrested for Stealing Trade Secrets from Global Quantitative Trading FirmRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging CHEUK FUNG RICHARD HO with theft and attempted theft of trade secrets. The charges in the Indictment arise from HO’s alleged scheme to steal trade secrets from his former employer (“Firm-1”), a global quantitative trading firm. HO was arrested this morning in Los Angeles, California, and will be presented this afternoon before U.S. District Court for the Middle District of California, Magistrate Judge the Honorable Joel Richlin.
Acting U.S. Attorney Edward Kim said: “As alleged, Cheuk Fung Richard Ho abused the trust his former employer placed in him and stole trade secrets to use at his own quantitative trading firm. Ho allegedly tried to cover his tracks by lying to his former employer repeatedly and asking his employees to delete evidence. Thanks to the FBI, Ho is now in custody.”
FBI Assistant Director in Charge James E. Dennehy said: “Cheuk Fung Richard Ho allegedly stole and unlawfully shared private proprietary information to clandestinely develop his own firm in collaboration with his employer’s competitors. The defendant allegedly abused his trusted position by breaching company confidentiality agreements to the detriment of his former firm. The FBI will continue to apprehend any individual who attempts to garner success through manipulative and dishonest business strategies.”
As alleged in the Indictment:[1]
From approximately July 2019 to approximately August 2021, HO was a research developer and quantitative trader at Firm-1, a global, quantitative trading firm, which trades in equities and other securities on exchanges located in the U.S. and abroad. Firm-1’s proprietary source code (“Firm-1’s Source Code”), the development of which took years and cost Firm-1 more than one billion dollars, has been the linchpin of Firm-1’s success in these markets. During the period of HO’s employment at Firm-1, Firm-1 took substantial measures to protect the confidentiality of its Source Code. Among other things, Firm-1 limited access to Firm-1’s Source Code to only those individuals, like HO, who needed access to it in connection with the duties of their employment. Employees with access to Firm-1’s Source Code were required to enter into agreements with Firm-1 in which they acknowledged the importance of keeping Firm-1’s Source Code secret and promised to protect the confidentiality of that Source Code throughout their employment—and after their employment concluded. Firm-1 also implemented numerous physical and network security protocols to prohibit unauthorized access to Firm-1’s Source Code.
In or about the spring of 2021, HO secretly started his own quantitative trading firm (“Firm-2”), which partnered with one of Firm-1’s competitors (“Firm-3”). While still employed at Firm-1, and while taking advantage of the nearly complete access to Firm-1’s Source Code afforded to him as a result of that employment, HO stole valuable trade secrets from Firm-1 (the “Stolen Trade Secrets”) for use in developing the source code for Firm-2 (“Firm-2’s Source Code”). The Stolen Trade Secrets included, among other things, some of the very building blocks of Firm-1’s Source Code, known as “Atoms,” as well as some of its predictive formulas, known as “Alphas.” By stealing these trade secrets, HO was able to quickly launch Firm-2 and begin trading successfully.
Aware that he had misappropriated Firm-1’s trade secrets—and knowing that this theft would injure Firm-1—HO repeatedly lied to Firm-1 about his plans after his employment with Firm-1 concluded. For example, when Firm-1 asked HO about his post-Firm-1 employment plans, HO omitted any mention of the fact that he had started Firm-2 and he misrepresented his affiliation with Firm-3. And once Firm-1 learned that HO had started Firm-2, HO sought to destroy evidence. He directed his employees to delete their internal communications and further directed them to delete the source code history for Firm-2’s Source Code, a direction that HO’s employees did not follow.
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HO, 36, of Los Aneles, California, is charged with one count of theft and attempted theft of trade secrets, which carries a maximum sentence of 10 years in prison.
The statutory maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim praised the investigative work of the FBI.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Ni Qian are in charge of the prosecution.
The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Japanese Yakuza Leader Pleads Guilty to Nuclear Materials Trafficking, Narcotics, and Weapons ChargesRead the Press Release
Takeshi Ebisawa, 60, of Japan, pleaded guilty in Manhattan, New York, today to conspiring with a network of associates to traffic nuclear materials, including uranium and weapons-grade plutonium, from Burma to other countries, as well as to international narcotics trafficking and weapons charges.
“Today’s plea should serve as a stark reminder to those who imperil our national security by trafficking weapons-grade plutonium and other dangerous materials on behalf of organized criminal syndicates that the Department of Justice will hold you accountable to the fullest extent of the law,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division.
“This case demonstrates DEA’s unparalleled ability to dismantle the world's most dangerous criminal networks,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “Our investigation into Takeshi Ebisawa and his associates exposed the shocking depths of international organized crime from trafficking nuclear materials to fueling the narcotics trade and arming violent insurgents. DEA remains positioned to relentlessly pursue anyone who threatens our national security, regardless of where they operate. Protecting the American people from such evil will always remain DEA’s top priority.”
“As he admitted in federal court today, Takeshi Ebisawa brazenly trafficked nuclear material, including weapons-grade plutonium, out of Burma,” said Acting U.S. Attorney Edward Y. Kim for the Southern District of New York. “At the same time, he worked to send massive quantities of heroin and methamphetamine to the United States in exchange for heavy-duty weaponry such as surface-to-air missiles to be used on battlefields in Burma and laundered what he believed to be drug money from New York to Tokyo. It is thanks to the extraordinary efforts of the DEA’s Special Operations Division, the career national security prosecutors of this Office, and the cooperation of our law enforcement partners in Indonesia, Japan, and Thailand, that Ebisawa’s plot was detected and stopped.”
According to the court documents and evidence presented at court, since at least in or about 2019, the DEA investigated Ebisawa in connection with large-scale narcotics and weapons trafficking. During the investigation, Ebisawa unwittingly introduced an undercover DEA agent (UC-1), posing as a narcotics and weapons trafficker, to Ebisawa’s international network of criminal associates, which spanned Japan, Thailand, Burma, Sri Lanka, and the United States, among other places, for the purpose of arranging large-scale narcotics and weapons transactions. Ebisawa and his network, including his co-defendants, negotiated multiple narcotics and weapons transactions with UC-1.
Ebisawa conspired to broker the purchase, from UC-1, of U.S.-made surface-to-air missiles, as well as other heavy-duty weaponry, intended for multiple ethnic armed groups in Burma (including the leader of an ethnic insurgent group in Burma (CC-1)), and to accept large quantities of heroin and methamphetamine for distribution as partial payment for the weapons. Ebisawa understood the weapons to have been manufactured in the U.S. and taken from U.S. military bases in Afghanistan. Ebisawa planned for the heroin and methamphetamine to be distributed in the New York market.
In addition, Ebisawa conspired to sell, in a separate transaction, 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York. In furtherance of that transaction, on or about June 16, 2021, and on or about Sept. 27, 2021, one of Ebisawa’s co-defendants provided samples of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin. Ebisawa also worked to launder $100,000 in purported narcotics proceeds from the U.S. to Japan.
Finally, beginning in early 2020, Ebisawa informed UC-1 and a DEA confidential source (CS-1) that Ebisawa had access to a large quantity of nuclear materials that he wanted to sell. Later that year, Ebisawa sent UC-1 a series of photographs depicting rocky substances with Geiger counters measuring radiation, as well as pages of what Ebisawa represented to be lab analyses indicating the presence of thorium and uranium in the depicted substances. In response to Ebisawa’s repeated inquiries, UC-1 agreed, as part of the DEA’s investigation, to help Ebisawa broker the sale of his nuclear materials to UC-1’s associate, who was posing as an Iranian general (the General), for use in a nuclear weapons program. Ebisawa then offered to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for this purpose. Ebisawa further proposed, together with two other co-conspirators (CC-2 and CC-3), to UC-1 that CC-1 sell uranium to the General, through Ebisawa, to fund CC-1’s weapons purchase.
Thereafter, on a Feb. 4, 2022, videoconference, CC-2 told UC-1 that CC-1 had available more than 2,000 kilograms of Thorium-232 and more than 100 kilograms of uranium in the compound U3O8 — referring to a compound of uranium commonly found in the uranium concentrate powder known as “yellowcake” — and that CC-1 could produce as much as five tons of nuclear materials in Burma. CC-2 also advised that CC-1 had provided samples of the uranium and thorium, which CC-2 was prepared to show to UC-1’s purported buyers. CC-2 noted that the samples should be packed “to contain . . . the radiation.” Approximately one week later, Ebisawa, CC-2, and CC-3 participated in a series of meetings with UC-1 and CS-1 in Southeast Asia, to discuss their ongoing weapons, narcotics, and nuclear materials transactions. During one of these meetings, CC-2 asked UC-1 to meet in CC-2’s hotel room. Inside the room, CC-2 showed UC-1 two plastic containers each holding a powdery yellow substance (nuclear samples), which CC-2 described as “yellowcake.” CC-2 advised that one container held a sample of uranium in the compound U3O8, and the other container held Thorium-232.
With the assistance of Thai authorities, the nuclear samples were seized and subsequently transferred to the custody of U.S. law enforcement. A nuclear forensic laboratory in the United States examined the nuclear samples and determined that both samples contain detectable quantities of uranium, thorium, and plutonium. In particular, the laboratory determined that the isotope composition of the plutonium found in the nuclear samples is weapons-grade, meaning that the plutonium, if produced in sufficient quantities, would be suitable for use in a nuclear weapon.
Ebisawa pleaded guilty to six counts contained in the superseding indictment. A table containing the charges and minimum and maximum penalties is set forth below.
COUNT
MIN. AND MAX. PRISON TERM
Count One: Conspiracy to commit international trafficking of nuclear materialsMaximum of 10 years in prisonCount Two: International trafficking of nuclear materialsMaximum of 20 years in prisonCount Three: Narcotics importation conspiracyMandatory minimum of 10 years in prison; maximum of life in prisonCount Six: Narcotics importation conspiracyMandatory minimum of 10 years in prison; maximum of life in prisonCount Seven: Conspiracy to possess firearms, including machineguns and destructive devicesMaximum of life in prisonCount Eight: Money launderingMaximum of 20 years in prisonA federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The DEA is investigating the case with assistance from the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, Justice Department’s Office of International Affairs, and our law enforcement partners in Indonesia, Japan, and the Kingdom of Thailand.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. 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 www.justice.gov/OCDETF.
Assistant U.S. Attorneys Kaylan E. Lasky, Alexander Li, and Kevin T. Sullivan for the Southern District of New York are prosecuting the case with assistance from Trial Attorney Dmitriy Slavin of the Justice Department’s Counterterrorism Section.
Japanese Yakuza Leader Pleads Guilty to Nuclear Materials Trafficking, Narcotics, and Weapons ChargesRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General for National Security; and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that TAKESHI EBISAWA pled guilty in Manhattan federal court to conspiring to traffic nuclear materials, including uranium and weapons-grade plutonium, from Burma to other countries, as well as to international narcotics trafficking and weapons charges. EBISAWA pled guilty today before U.S. District Judge Colleen McMahon.
Acting U.S. Attorney Edward Y. Kim said: “As he admitted in federal court today, Takeshi Ebisawa brazenly trafficked nuclear material, including weapons-grade plutonium, out of Burma. At the same time, he worked to send massive quantities of heroin and methamphetamine to the United States in exchange for heavy-duty weaponry such as surface-to-air missiles to be used on battlefields in Burma and laundered what he believed to be drug money. It is thanks to the extraordinary efforts of the DEA’s Special Operations Division, the career national security prosecutors of this Office, and the cooperation of our law enforcement partners in Indonesia, Japan, and Thailand, that Ebisawa’s plot was detected and stopped.”
Assistant Attorney General Matthew G. Olsen said: “Today’s plea should serve as a stark reminder to those who imperil our national security by trafficking weapons-grade plutonium and other dangerous materials on behalf of organized criminal syndicates that the Department of Justice will hold you accountable to the fullest extent of the law.”
DEA Administrator Anne Milgram said: “This case demonstrates DEA’s unparalleled ability to dismantle the world’s most dangerous criminal networks. Our investigation into Takeshi Ebisawa and his associates exposed the shocking depths of international organized crime from trafficking nuclear materials to fueling the narcotics trade and arming violent insurgents. DEA remains positioned to relentlessly pursue anyone who threatens our national security, regardless of where they operate. Protecting the American people from such evil will always remain DEA’s top priority.”
According to the allegations contained in the Complaint, the Superseding Indictment, and other information in the public record:
Since at least in or about 2019, the DEA investigated EBISAWA in connection with large-scale narcotics and weapons trafficking. During the investigation, EBISAWA unwittingly introduced an undercover DEA agent (“UC-1”), posing as a narcotics and weapons trafficker, to EBISAWA’s international network of criminal associates, which spanned Japan, Thailand, Burma, Sri Lanka, and the U.S., among other places, for the purpose of arranging large-scale narcotics and weapons transactions. EBISAWA and his network, including his co-defendants, negotiated multiple narcotics and weapons transactions with UC-1.
EBISAWA conspired to broker the purchase, from UC-1, of U.S.-made surface-to-air missiles, as well as other heavy-duty weaponry, intended for multiple ethnic armed groups in Burma (including the leader of an ethnic insurgent group in Burma (“CC-1”)), and to accept large quantities of heroin and methamphetamine for distribution as partial payment for the weapons. EBISAWA understood the weapons to have been manufactured in the U.S. and taken from U.S. military bases in Afghanistan. EBISAWA planned for the heroin and methamphetamine to be distributed in the New York market.
In addition, EBISAWA conspired to sell, in a separate transaction, 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York. In furtherance of that transaction, on or about June 16, 2021, and on or about September 27, 2021, one of EBISAWA’s co-defendants provided samples of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin. EBISAWA also worked to launder $100,000 in purported narcotics proceeds from the U.S. to Japan.
Finally, beginning in early 2020, EBISAWA informed UC-1 and a DEA confidential source (“CS-1”) that EBISAWA had access to a large quantity of nuclear materials that he wanted to sell. Later that year, EBISAWA sent UC-1 a series of photographs depicting rocky substances with Geiger counters measuring radiation, as well as pages of what EBISAWA represented to be lab analyses indicating the presence of thorium and uranium in the depicted substances. In response to EBISAWA’s repeated inquiries, UC-1 agreed, as part of the DEA’s investigation, to help EBISAWA broker the sale of his nuclear materials to UC-1’s associate, who was posing as an Iranian general (the “General”), for use in a nuclear weapons program. EBISAWA then offered to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for this purpose. EBISAWA further proposed, together with two other co-conspirators (“CC-2” and “CC-3”), to UC-1 that CC-1 sell uranium to the General, through EBISAWA, to fund CC-1’s weapons purchase.
Thereafter, on a February 4, 2022, videoconference, CC-2 told UC-1 that CC-1 had available more than 2,000 kilograms of Thorium-232 and more than 100 kilograms of uranium in the compound U3O8 — referring to a compound of uranium commonly found in the uranium concentrate powder known as “yellowcake” — and that CC-1 could produce as much as five tons of nuclear materials in Burma. CC-2 also advised that CC-1 had provided samples of the uranium and thorium, which CC-2 was prepared to show to UC-1’s purported buyers. CC-2 noted that the samples should be packed “to contain . . . the radiation.” Approximately one week later, EBISAWA, CC-2, and CC-3 participated in a series of meetings with UC-1 and CS-1 in Southeast Asia, to discuss their ongoing weapons, narcotics, and nuclear materials transactions. During one of these meetings, CC-2 asked UC-1 to meet in CC-2’s hotel room. Inside the room, CC-2 showed UC-1 two plastic containers each holding a powdery yellow substance (the “Nuclear Samples”), which CC-2 described as “yellowcake.” CC-2 advised that one container held a sample of uranium in the compound U3O8, and the other container held Thorium-232.
With the assistance of Thai authorities, the Nuclear Samples were seized and subsequently transferred to the custody of U.S. law enforcement. A nuclear forensic laboratory in the U.S. examined the Nuclear Samples and determined that both samples contain detectable quantities of uranium, thorium, and plutonium. In particular, the laboratory determined that the isotope composition of the plutonium found in the Nuclear Samples is weapons-grade, meaning that the plutonium, if produced in sufficient quantities, would be suitable for use in a nuclear weapon.
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EBISAWA, 60, of Japan, pled guilty to six counts contained in the Superseding Indictment. A table containing the charges and minimum and maximum penalties is set forth below.
COUNT
MIN. AND MAX. PRISON TERM
Count One: Conspiracy to commit international trafficking of nuclear materialsMaximum of 10 years in prisonCount Two: International trafficking of nuclear materialsMaximum of 20 years in prisonCount Three: Narcotics importation conspiracyMandatory minimum of 10 years in prison; maximum of life in prisonCount Six: Narcotics importation conspiracyMandatory minimum of 10 years in prison; maximum of life in prisonCount Seven: Conspiracy to possess firearms, including machineguns and destructive devicesMaximum of life in prisonCount Eight: Money launderingMaximum of 20 years in prisonThe minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing will be determined by the judge.
Mr. Kim praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit. Mr. Kim also thanked the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, and our law enforcement partners in Indonesia, Japan, and the Kingdom of Thailand for their assistance.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the U.S. using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kaylan E. Lasky, Alexander Li, and Kevin T. Sullivan are in charge of the prosecution, with assistance from Trial Attorney Dmitriy Slavin of the Counterterrorism Section.
Former Corrections Officer Pleads Guilty to Accepting Bribes in Exchange for Smuggling Narcotics into Rikers IslandRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that GHISLAINE BARRIENTOS, a former corrections officer, pled guilty today to bribery in connection with her participation in a scheme to accept bribes in exchange for smuggling narcotics into Rikers Island. BARRIENTOS pled guilty before U.S. District Judge Gregory H. Woods and is scheduled to be sentenced on April 16, 2025.
Acting U.S. Attorney Edward Y. Kim said: “Ghislaine Barrientos took bribes when working as a corrections officer at Rikers Island. Rikers Island is less safe, for inmates and officers alike, when corrections officers and others in positions of public trust accept bribes to smuggle contraband. We will not tolerate any breach of trust or corruption that jeopardizes the well-being of inmates and staff.”
As reflected in the Complaint, Information, and statements made in court:
BARRIENTOS, a former New York City Department of Correction (“DOC”) correction officer, conspired with others to smuggle contraband, including cocaine, smokeable synthetic cannabinoids (known as “K2”), and food to inmates housed at the Robert N. Davoren Complex on Rikers Island in exchange for thousands of dollars in bribe payments.
For example, on April 11, 2024, CC-1, an associate of an inmate (“Inmate-1”), and BARRIENTOS discussed CC-1 sending BARRIENTOS a package through a delivery service. On April 15, 2024, surveillance footage showed BARRIENTOS entering Inmate-1’s cell, where surveillance footage could not capture her actions. Two days later, DOC searched Inmate-1’s cell and recovered sheets of paper that tested positive for the presence of cocaine.
On April 24, 2024, CC-1 sent BARRIENTOS another package using the delivery service. When BARRIENTOS went to work later that day, a drug-detecting canine alerted for the presence of narcotics. DOC employees searched BARRIENTOS’s belongings and found approximately 10 sheets of paper that tested positive for the presence of K2. In an interview with law enforcement, BARRIENTOS falsely stated, among other things, that no inmate had ever asked her to bring them contraband. Law enforcement officers then searched BARRIENTOS’s vehicle and recovered additional sheets of paper, as well as approximately $2,466 in cash, as shown in the following photographs:
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BARRIENTOS, 37, of Mount Vernon, New York, pled guilty to one count of conspiracy to commit federal program bribery, which carries a maximum sentence of five years in prison.
The statutory maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Department of Investigation.
This case is being handled by the Office’s Public Corruption and Narcotics Units. Assistant U.S. Attorney Jeffrey Coyle is in charge of the prosecution.
Associate of Miles Guo, Yvette Wang, Sentenced to 10 Years in Prison for Her Role in an over $1 Billion Dollar Fraud ConspiracyRead the Press Release
Daniel M. Gitner, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515, announced today that YVETTE WANG, a/k/a “Yanping,” was sentenced by U.S. District Judge Analisa Torres to 10 years in prison for conspiracy to commit wire fraud and conspiracy to commit money laundering in connection with her managerial role in a sprawling and complex scheme WANG and her co-conspirator, Miles Guo, orchestrated in order to fraudulently solicit investments from thousands of Miles Guo’s online followers in various entities and programs. As part of that scheme, WANG and Guo made false representations to induce victims to invest money in various entities WANG and/or her co-conspirators controlled, including GTV Media Group, Inc. (“GTV”), the Himalaya Farm Alliance, G Club Operations, LLC (“G|CLUBS”), and the Himalaya Exchange. And then WANG and her co-conspirators spent their victims’ money on themselves, purchasing luxurious items such as million-dollar sports cars and a New Jersey mansion.
Attorney for the United States Daniel M. Gitner said: “Yvette Wang worked with Miles Guo to defraud thousands of victims out of more than $1 billion. Today’s sentence is a reminder that there will be serious consequences for this conduct, and that this Office will tirelessly in its work to detect, prosecute, and punish fraud.”
According to the charging documents, public court filings, statements made in court, and evidence admitted at Miles Guo’s trial:
From at least in or about 2018 through at least in or about March 2023, WANG and others conspired to defraud thousands of victims of more than approximately $1.4 billion. Miles Guo was the leader of this complex conspiracy. WANG was Guo’s “Chief of Staff.” In that capacity, WANG played a managerial role in a variety of entities that the Government has alleged were part of the “G Enterprise” – a series of interrelated entities and companies that were used by WANG and her co-conspirators to carry out this billion-dollar fraud scheme. Through her work in the G Enterprise, and as WANG well knew, WANG directed the expenditure of fraud proceeds on luxury items for herself, Miles Guo’s family, and others.
WANG and her co-conspirators’ fraud relied on several interrelated operations: the Rule of Law Charities, GTV Private Placement, the Farm Loan Program, G|CLUBS, the Himalaya Exchange, and A10.
Between on or about April 20, 2020, and on or about June 2, 2020, approximately $452 million worth of purported GTV common stock was sold to more than 5,500 investors. Investors participated in the GTV Private Placement based, in part, on the belief that their money would be invested into GTV to develop and grow that business. In early June 2020, as WANG and her co-conspirators agreed, WANG transferred $100 million of funds raised from the GTV Private Placement into a high-risk hedge fund for the benefit of GTV’s parent company and its ultimate beneficial owner, Guo’s son.
On or about July 22, 2020, in a video distributed via social media, WANG’s co-conspirator promoted the Farm Loan Program, which was a purported opportunity to obtain stock in GTV in exchange for a loan. However, no stock was ever provided, and WANG and her co-conspirators misappropriated funds that were raised through the Farm Loan Program. For example, approximately $2.3 million was used to cover maintenance expenses associated with an approximately 145-foot luxury yacht worth approximately $37 million.
From at least in or about October 2020 through at least in or about March 2023, WANG and her co-conspirators fraudulently obtained more than approximately $250 million in victim funds through G|CLUBS. G|CLUBS claimed on its website to be “an exclusive, high-end membership program offering a full spectrum of services” and “a gateway to carefully curated world-class products, services and experiences.” WANG was the de facto CEO of G|CLUBS, and as she well knew, G|CLUBS did not provide anything other than superficial services to its members. Moreover, on the basis of Guo’s statements in online videos, victims sent money to G|CLUBS expecting to receive stock in GTV, G|Fashion, or other entities. But, as WANG well knew, victims never received stock and instead G|CLUBS funds were used—often at WANG’s direction—to purchase, among other things, a 50,000 square foot New Jersey mansion; various furniture and decorative items including, among other items, Chinese and Persian rugs worth approximately $978,000, a $62,000 television, and a $53,000 fireplace log cradle holder; a $900,000 Lamborghini, and a custom-built Bugatti sports car for approximately $4.4 million.
On or about November 1, 2021, WANG’s co-conspirators introduced purported cryptocurrencies called the Himalaya coin and the Himalaya dollar through a fraudulent cryptocurrency exchange called the Himalaya Exchange. These purported cryptocurrencies were fraudulent and designed so that the conspiracy could collect additional money from victims. On or about September 20, 2022, and September 21, 2022, U.S. authorities served judicially-authorized seizure warrants on several domestic banks and subsequently seized approximately $335 million of proceeds from bank accounts held in the names of Himalaya Exchange entities and other entities associated with WANG and her co-conspirators.
Wang was arrested on March 15, 2023, at which time FBI agents located $130,000 of cash in a safe in her apartment.
In connection with the sentencing, Judge Torres said that Wang was an “integral part of the conspiracy and knew what she was doing was illegal.”
* * *
In addition to the prison term, WANG, 45, of New York, New York, was sentenced to three years of supervised release concurrently on each count. WANG also agreed to pay forfeiture in the amount of $1.4 billion.
Guo was convicted at trial on July 16, 2024. Guo’s sentencing date is pending.
Mr. Gitner praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being handled by the Complex Frauds and Cybercrime Unit of the Office’s Criminal Division. Assistant U.S. Attorneys Micah F. Fergenson, Ryan B. Finkel, Justin Horton, and Juliana N. Murray are in charge of the prosecution.
Do Kwon Extradited to the United States from Montenegro to Face Charges Relating to Fraud Resulting in $40B in LossesRead the Press Release
Do Hyeong Kwon, 33, a citizen of the Republic of Korea, was extradited from Montenegro and appeared in court today in Manhattan to face federal fraud charges. A superseding indictment that was unsealed against Kwon alleged that the co-founder and former chief executive officer of Terraform Labs PTE Ltd. (Terraform) engaged in multiple schemes to deceive investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies.
Kwon arrived in the United States on Dec. 31, 2024, and made his initial appearance before U.S. Magistrate Judge Robert W. Lehrburger for the Southern District of New York. Kwon’s case is assigned to U.S. District Court Judge John P. Cronan, and will appear before Judge Cronan for an initial conference on Jan. 8 at 10:30 a.m ET.
“Do Hyeong Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses,” said Attorney General Merrick B. Garland. “We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes and trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the United States. This extradition from Montenegro is an example of the Justice Department’s international partnerships, which enable the pursuit of criminals wherever they attempt to hide.”
“A federal grand jury has indicted Do Kwon for misleading his investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies, and laundering the proceeds of his crimes,” said Attorney for the United States Daniel M. Gitner for the Southern District of New York. “As we allege, this fraud and the crash of Terraform’s cryptocurrencies in May 2022 erased over $40 billion in investor assets, causing devastating losses to countless investors in the United States and around the world. Kwon will now face justice in a federal courtroom in Manhattan.”
“Do Kwon, co-founder and former CEO of Terraform, allegedly defrauded investors by falsely advertising the company’s blockchain products as decentralized, reliable, and effective, and by engaging in market manipulation, ultimately resulting in more than $40 billion in investor losses,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. “For at least four years, Kwon allegedly played puppet master to maintain this crafted illusion and ensnare investors. The FBI will tirelessly work to apprehend any individual who engages in fraudulent financial practices, even those who flee internationally to escape prosecution.”
As alleged in the superseding indictment, from at least in or about 2018, up to and including in or about 2022, Kwon orchestrated schemes to defraud purchasers of Terraform cryptocurrencies. Among other things, Kwon made false and misleading claims regarding the stability and efficacy of Terraform’s cryptocurrency stablecoin protocol, its use of blockchain technology, and its development of functioning and reliable financial technologies.
As Kwon knew, however, core Terraform products did not work as Kwon had claimed. Rather, Kwon manipulated Terraform products to create the illusion of a functioning, stable, and decentralized financial system. Kwon’s conduct inflated the value of Terraform’s cryptocurrencies, which Kwon and entities he controlled possessed in large amounts and sold to investors in exchange for billions of dollars’ worth of other assets.
Kwon’s misrepresentations included the following:
- The Stablecoin Misrepresentations: Kwon made misrepresentations about the effectiveness of the system that lay at the heart of Terraform’s cryptocurrency empire, the “Terra Protocol,” which purportedly used a computer algorithm to maintain the value of Terraform’s so-called “stablecoin” pegged to the U.S. dollar, TerraUSD (UST), at a value of $1 for one UST. But as Kwon knew, after the Terra Protocol failed to cause the restoration of UST’s $1 peg in May 2021, Kwon reached an agreement with executives at a high-frequency trading firm (the Trading Firm) so that the Trading Firm would purchase large amounts of UST in order to artificially support UST’s $1 peg.
- The LFG Misrepresentations: Kwon made misrepresentations about the governance of the Luna Foundation Guard Ltd. (LFG), which Kwon claimed was managed by an independent governing body and was tasked with deploying billions of dollars’ worth of financial reserves to defend UST’s peg. But as Kwon knew, he controlled both the LFG and Terraform. In addition, Kwon misappropriated hundreds of millions of dollars in assets from the LFG. Kwon and others acting at his direction sought to launder those misappropriated funds through transactions designed to conceal and disguise the nature, location, source, ownership, and control of the funds.
- The Mirror Misrepresentations: Kwon made misrepresentations about the success and operation of an investing platform on Terraform’s blockchain (the Terra blockchain) called Mirror Protocol (Mirror), that purportedly allowed users to create, buy, and sell synthetic versions of stocks listed on U.S. securities exchanges. Kwon claimed that Mirror operated in a decentralized manner and that he and Terraform played no role in Mirror’s governance. But as Kwon knew, he and Terraform secretly maintained control over Mirror, and used automated trading bots to manipulate the prices of synthetic assets that Mirror issued. Kwon also caused Terraform to inflate key user metrics to deceive investors.
- The Chai Misrepresentations: Kwon falsely claimed that the Terra blockchain was being used to process billions of dollars in financial transactions for the Korean payment-processing application Chai. In doing so, Kwon claimed that the Terra blockchain had “real world” applications or uses, as distinct from competing cryptocurrency platforms. But as Kwon knew, Chai processed transactions through traditional financial processing networks, not the Terra blockchain.
- The Genesis Coin Misrepresentations: Kwon made misrepresentations about the use of a supply of one billion stablecoins programmed into the Terra blockchain at its creation (the Genesis Stablecoins), which were purportedly held in reserve for Terraform for certain specified uses. But Kwon used at least $145 million worth of Genesis Stablecoins, among other things, to fund fake Chai blockchain transactions and trading bots to manipulate the prices of synthetic assets that Mirror issued.
At its peak in the spring of 2022, the total apparent market value of all UST and another Terraform cryptocurrency, LUNA, exceeded $50 billion. Much of this growth followed Kwon’s misrepresentations about Terraform and its technology, including efforts in May 2021 by Kwon and his associates to secretly manipulate the market for UST. By May 2022, the UST market was approximately nine times larger in terms of market capitalization and more than eight times larger in terms of daily trading volume relative to May 2021. In May 2022, UST’s peg began to break down as it had a year prior. While Kwon was able to cover up the weaknesses of the Terra Protocol in May 2021, he was not able to do so in May 2022. As a result, the value of UST and LUNA crashed and investors suffered over $40 billion in losses. After the crash of UST and LUNA in May 2022, Kwon caused the distribution of a misleading “third party audit” report to cover up his crimes, and sought to launder the proceeds of his fraud through different blockchains, cryptocurrency exchanges, and a Swiss bank account.
On or about March 23, 2023, Kwon was arrested in Europe for trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the United States.
Kwon was previously charged in the Southern District of New York in an initial indictment on March 23, 2023.
Kwon is charged with two counts of commodities fraud, for which he faces a maximum penalty of 10 years in prison for each count; two counts of securities fraud, for which he faces a maximum penalty of 20 years in prison for each count; two counts of wire fraud, for which he faces a maximum penalty of 20 years in prison for each count; two counts of conspiracy to commit commodities fraud, securities fraud, and wire fraud, for which he faces a maximum penalty of five years in prison for each count; and one count of money laundering conspiracy, for which he faces a maximum penalty of 20 years in prison. If convicted of all charges, Kwon faces a maximum penalty of 130 years in prison. A federal district court judge will determine any sentence based on the U.S. Sentencing Guidelines and other statutory factors.
The FBI are investigating the case, with assistance from Trial Attorneys Jason Cunningham and Goran Krnaich of the Justice Department’s Office of International Affairs, Interpol, and the Ministry of Justice, Supreme State Prosecutor’s Office, Special State Prosecutor’s Office, and Police Directorate of Montenegro in the extradition of the defendant. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission also assisted in the case.
Assistant U.S. Attorneys Jared Lenow, Kimberly Ravener, and Andrew Thomas for the Southern District of New York are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Do Kwon Extradited to the United States from Montenegro to Face Charges Relating to Fraud Resulting in $40 Billion in LossesRead the Press Release
Daniel M. Gitner, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515; Merrick B. Garland, the Attorney General of the United States; and James E. Dennehy, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that DO HYEONG KWON was extradited from Montenegro and appeared in a federal courtroom in Manhattan earlier today to face federal fraud charges. Mr. Gitner also announced the unsealing of a Superseding Indictment against KWON. As alleged, KWON, the co-founder and former chief executive officer of Terraform Labs PTE, Ltd. (“Terraform”), engaged in multiple schemes to deceive investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies. KWON arrived in the United States on December 31, 2024, and made his initial appearance in the Southern District of New York before U.S. Magistrate Judge Robert W. Lehrburger. KWON’s case is assigned to U.S. District Court Judge John P. Cronan, and will appear before Judge Cronan for an initial conference on January 8, 2025, at 10:30 a.m.
Attorney for the United States Daniel M. Gitner said: “A federal grand jury has indicted Do Kwon for misleading his investors in order to fraudulently inflate the value of Terraform’s cryptocurrencies, and laundering the proceeds of his crimes. As we allege, this fraud and the crash of Terraform’s cryptocurrencies in May 2022 erased over $40 billion in investor assets, causing devastating losses to countless investors in the United States and around the world. Kwon will now face justice in a federal courtroom in Manhattan.”
Attorney General Merrick B. Garland said: “Do Hyeong Kwon will now be held accountable in an American courtroom for, as alleged in court documents, his elaborate schemes involving Terraform’s cryptocurrencies, which resulted in over $40 billion in investor losses. We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes and trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the U.S. This extradition from Montenegro is an example of the Justice Department’s international partnerships, which enable the pursuit of criminals wherever they attempt to hide.”
FBI Assistant Director in Charge James E. Dennehy said: “Do Kwon, co-founder and former CEO of Terraform, allegedly defrauded investors by falsely advertising the company's blockchain products as decentralized, reliable, and effective, and by engaging in market manipulation, ultimately resulting in more than $40 billion in investor losses. For at least four years, Kwon allegedly played puppet master to maintain this crafted illusion and ensnare investors. The FBI will tirelessly work to apprehend any individual who engages in fraudulent financial practices, even those who flee internationally to escape prosecution.”
As alleged in the Superseding Indictment unsealed today in Manhattan federal court:[1]
From at least in or about 2018, up to and including in or about 2022, KWON orchestrated schemes to defraud purchasers of Terraform cryptocurrencies. Among other things, KWON made false and misleading claims regarding the stability and efficacy of Terraform’s cryptocurrency stablecoin protocol, its use of blockchain technology, and its development of functioning and reliable financial technologies.
As KWON knew, however, core Terraform products did not work as KWON had claimed. Rather, KWON manipulated Terraform products to create the illusion of a functioning, stable, and decentralized financial system. KWON’s conduct inflated the value of Terraform’s cryptocurrencies, which KWON and entities he controlled possessed in large amounts and sold to investors in exchange for billions of dollars’ worth of other assets.
KWON’s misrepresentations included the following:
- The Stablecoin Misrepresentations: KWON made misrepresentations about the effectiveness of the system that lay at the heart of Terraform’s cryptocurrency empire, the “Terra Protocol,” which purportedly used a computer algorithm to maintain the value of Terraform’s so-called “stablecoin” pegged to the U.S. dollar, TerraUSD (“UST”), at a value of $1 for one UST. But as KWON knew, after the Terra Protocol failed to cause the restoration of UST’s $1 peg in May 2021, KWON reached an agreement with executives at a high-frequency trading firm (the “Trading Firm”) so that the Trading Firm would purchase large amounts of UST in order to artificially support UST’s $1 peg.
- The LFG Misrepresentations: KWON made misrepresentations about the governance of the Luna Foundation Guard Ltd. (the “LFG”), which KWON claimed was managed by an independent governing body and was tasked with deploying billions of dollars’ worth of financial reserves to defend UST’s peg. But as KWON knew, he controlled both the LFG and Terraform. In addition, KWON misappropriated hundreds of millions of dollars in assets from the LFG. KWON and others acting at his direction sought to launder those misappropriated funds through transactions designed to conceal and disguise the nature, location, source, ownership, and control of the funds.
- The Mirror Misrepresentations: KWON made misrepresentations about the success and operation of an investing platform on Terraform’s blockchain (the “Terra blockchain”) called Mirror Protocol (“Mirror”), that purportedly allowed users to create, buy, and sell synthetic versions of stocks listed on U.S. securities exchanges. KWON claimed that Mirror operated in a decentralized manner and that he and Terraform played no role in Mirror’s governance. But as KNOW knew, he and Terraform secretly maintained control over Mirror, and used automated trading bots to manipulate the prices of synthetic assets that Mirror issued. KWON also caused Terraform to inflate key user metrics to deceive investors.
- The Chai Misrepresentations: KWON falsely claimed that the Terra blockchain was being used to process billions of dollars in financial transactions for the Korean payment-processing application Chai. In doing so, KWON claimed that the Terra blockchain had “real world” applications or uses, as distinct from competing cryptocurrency platforms. But as KWON knew, Chai processed transactions through traditional financial processing networks, not the Terra blockchain.
- The Genesis Coin Misrepresentations: KWON made misrepresentations about the use of a supply of one billion stablecoins programmed into the Terra blockchain at its creation (the “Genesis Stablecoins”), which were purportedly held in reserve for Terraform for certain specified uses. But KWON used at least $145 million worth of Genesis Stablecoins, among other things, to fund fake Chai blockchain transactions and trading bots to manipulate the prices of synthetic assets that Mirror issued.
At its peak in the spring of 2022, the total apparent market value of all UST and another Terraform cryptocurrency, LUNA, exceeded $50 billion. Much of this growth followed KWON’s misrepresentations about Terraform and its technology, including efforts in May 2021 by KWON and his associates to secretly manipulate the market for UST. By May 2022, the UST market was approximately nine times larger in terms of market capitalization and more than eight times larger in terms of daily trading volume relative to May 2021. In May 2022, UST’s peg began to break down as it had a year prior. While KWON was able to cover up the weaknesses of the Terra Protocol in May 2021, he was not able to do so in May 2022. As a result, the value of UST and LUNA crashed and investors suffered over $40 billion in losses. After the crash of UST and LUNA in May 2022, KWON caused the distribution of a misleading “third party audit” report to cover up his crimes, and sought to launder the proceeds of his fraud through different blockchains, cryptocurrency exchanges, and a Swiss bank account.
On or about March 23, 2023, KWON was arrested in Europe for trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the U.S.
KWON was previously charged in this District in an initial Indictment on March 23, 2023.
* * *
KWON, 33, a citizen of the Republic of Korea, is charged with two counts of commodities fraud, each of which carries a maximum sentence of 10 years in prison; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison; two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; two counts of conspiracy to commit commodities fraud, securities fraud, and wire fraud, each of which carries a maximum sentence of five years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. In aggregate, KWON faces a maximum sentence of 130 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Gitner praised the investigative and operational work of the FBI. He also thanked Jason Cunningham and Goran Krnaich of the Department of Justice’s Office of International Affairs, Interpol, and the Ministry of Justice, Supreme State Prosecutor’s Office, Special State Prosecutor’s Office, and Police Directorate of Montenegro for their assistance in the extradition of the defendant. Mr. Gitner further thanked the U.S. Securities and Exchange Commission, which previously filed a separate civil action against KWON, and the Commodity Futures Trading Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jared Lenow, Kimberly Ravener, and Andrew Thomas are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
U.S. Attorney’s Office Sues and Settles with Katz’s Deli to Ensure Americans with Disabilities Act ComplianceRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today the filing and settlement of a lawsuit against the owner and operator of KATZ’S DELICATESSEN OF HOUSTON ST. INC. (“KATZ’S DELI”) for violations of the Americans with Disabilities Act (“ADA”). The settlement, in the form of a consent decree, was entered today by U.S. District Judge Katherine Polk Failla.
Acting U.S. Attorney Edward Y. Kim said: “The corrections and modifications agreed to by Katz’s Deli will give individuals with disabilities an equal opportunity to enjoy one of New York City’s most popular restaurants, as is required by the ADA.”
The lawsuit and consent decree brings to a close the Office’s Manhattan Restaurants ADA Compliance Initiative, first announced in September 2011. As part of the initiative, the U.S. Attorney’s Office reviewed and evaluated the ADA compliance of the 50 “most popular” restaurants in Manhattan as designated by the 2011 Zagat Guide.
Many restaurants required only minor accessibility improvements to comply with the law, and over the next few years, the Office resolved its concerns by letter to approximately two dozen restaurants. In approximately two dozen cases where more extensive accessibility improvements were necessary, the Office entered into voluntary compliance agreements. In two cases, where there were multiple locations of restaurants with significant barriers to accessibility, the Office filed suit: the Office filed a complaint against the owners and operators of three Rosa Mexicano restaurants on October 15, 2012, and the Court approved the Consent Decree with the owners of Rosa Mexicano on January 30, 2013. The Office filed a complaint on October 30, 2013, against the owners and operators of two Carmine’s locations (Upper West Side and Theater District locations), and the Court approved the Consent Decree resolving that matter on November 12, 2013. A handful of restaurants closed before the accessibility review could be completed.
According to the Complaint and Consent Decree filed in Manhattan federal court:
The U.S. Attorney’s Office identified numerous violations of the ADA at KATZ’S DELI, located on the Lower East Side of Manhattan. Most significantly, the main entrance of KATZ’S DELI is not accessible, the restaurant does not provide sufficient dining surfaces for persons with disabilities, and despite having been renovated in 2018, its restrooms fail to comply with the ADA.
Today’s consent decree requires KATZ’S DELI to improve the accessibility of their entrances, dining areas, and restrooms. Notably, the consent decree provides for staff to assist individuals with disabilities in using the main public entrance, ensures that the required number of accessible dining surfaces are provided, and requires renovations to the men’s and women’s restrooms at KATZ’S DELI. In addition, KATZ’S DELI will pay a $20,000 civil penalty to the U.S.
Mr. Kim thanked the Disability Rights Section of the Department of Justice, in particular its architectural staff, for their assistance in this matter.
To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the U.S. Attorney’s Office’s website, https://www.justice.gov/usao-sdny/civil-rights. Complaints should be emailed or sent by mail to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York, 10007
Attention: Chief, Civil Rights Unit
The case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorney David Farber is in charge of the case.
Justice Department’s Tenth Distribution Provides over $4 Billion in Nearly Full Recovery to over 40,000 Victims in Madoff Ponzi SchemeRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Brent S. Wible, the Principal Deputy Assistant Attorney General of the United States and head of the U.S. Department of Justice’s Criminal Division; and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the Madoff Victim Fund (“MVF”) began its tenth and final distribution to victims of the Bernard L. Madoff fraud scheme of over $131.4 million. These funds were forfeited by the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme.
In this distribution, payments will be sent to more than 23,000 victims across the globe, bringing their total recoveries to 93.71% of their fraud losses. Most of these victims were small investors who lost less than $500,000 in the fraud. Through its ten distributions, MVF has paid over $4.3 billion to 40,930 victims in 127 countries as compensation for losses they suffered from the collapse of BLMIS.
This distribution represents the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions to provide compensation to eligible victims.
Acting U.S. Attorney Edward Y. Kim said: “This Office has never stopped pursuing justice for victims of history’s largest Ponzi scheme. With this tenth and final distribution, we have succeeded in compensating 40,930 victims with close to 94% of their losses. As this extraordinary effort demonstrates, this Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section are committed to protecting and assisting victims of crime, no matter how long it takes and no matter how complicated the endeavor.”
Principal Deputy Assistant Attorney General Brent S. Wible said: “The Criminal Division, through its Money Laundering and Asset Recovery Section (“MLARS”), is proud to administer the department’s remission program to compensate victims using forfeited assets. The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims — a primary goal of the department’s Asset Forfeiture Program. This tenth and final distribution, led by MLARS’s dedicated victim compensation team, achieves the department’s goal of compensating victims by returning over $4 billion in forfeited assets to more than 40,000 victims of Madoff’s crimes and achieving nearly full recovery for these victims.”
FBI Assistant Director in Charge James E. Dennehy said: “Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme with more than $4 billion repaid to over 40,000 victims. These victims implicitly trusted Madoff with their investments only to ultimately lose significant monies to his selfish plan. With the steadfast support from the Justice Department, the FBI will continue its tireless seizure of assets from criminals who steal from others and seek to recover those assets for victim losses.”
According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family and select members of his inner circle.
On June 29, 2009, then-U.S. District Judge (now senior U.S. Circuit Judge), Denny Chin sentenced Madoff to serve 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff and their co-conspirators.
The MVF’s payouts would not have been possible without the extraordinary efforts of the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Money Laundering and Asset Recovery Section, and the FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case.
The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. Mr. Breeden and his team at MVF have been essential in working with the Department to evaluate over 66,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Tara M. La Morte is in charge of the prosecution. The remission of these forfeited funds is being handled by the Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.
More information about MVF and its compensation to victims of BLMIS is available on the MVF website at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or [email protected].
Justice Department’s 10th Distribution Brings Total Provided to over $4.3B in Nearly Full Recovery to over 40,000 Victims in Madoff Ponzi SchemeRead the Press Release
The Justice Department announced today that the Madoff Victim Fund (MVF) began its 10th and final distribution of over $131.4 million to victims of the Bernard L. Madoff fraud scheme. These funds were forfeited by the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme.
In this distribution, payments will be sent to more than 23,000 victims across the globe. With this 10th distribution, over 40,000 victims in the Madoff scheme will have recovered 93.71% of their fraud losses. Most of these victims were small investors who lost less than $500,000 in the fraud. Through its 10 distributions, MVF has paid over $4.3 billion from forfeited funds to 40,930 victims in 127 countries for losses they suffered from the collapse of BLMIS.
“The Criminal Division, through its Money Laundering and Asset Recovery Section (MLARS), is proud to administer the department’s remission program to compensate victims using forfeited assets,” said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division. “The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims — a primary goal of the department’s Asset Forfeiture Program. This 10th and final distribution, led by MLARS’ dedicated victim compensation team, achieves the department’s goal of compensating victims by returning over $4 billion in forfeited assets to more than 40,000 victims of Madoff’s crimes and achieving nearly full recovery for these victims.”
“This office has never stopped at pursuing justice for victims of history’s largest Ponzi scheme,” said Acting U.S. Attorney Edward Y. Kim for the Southern District of New York. “With this 10th and final distribution, we have succeeded in compensating 40,930 victims with close to 94% of their losses. As this extraordinary effort demonstrates, this office and MLARS are committed to protecting and assisting victims of crime, no matter how long it takes and no matter how complicated the endeavor.”
“Today’s distribution represents an unprecedented conclusion of victim compensation from civil forfeiture actions related to the Madoff scheme with more than $4 billion repaid to over 40,000 victims,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. “These victims implicitly trusted Madoff with their investments only to ultimately lose significant monies to his selfish plan. With the Justice Department’s steadfast support, the FBI will continue its tireless seizure of assets from criminals who steal from others and seek to recover those assets for victim losses.”
This 10th and final distribution represents the culmination of a decade of work identifying thousands of victims around the world and unwinding layers of complex financial transactions to provide compensation to eligible victims.
According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle.
On June 29, 2009, Madoff was sentenced to 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff, and their co-conspirators.
Compensation from the MVF is possible due to the extraordinary efforts of MLARS, which administers the forfeiture victim compensation program; the U.S. Attorney’s Office for the Southern District of New York; and the FBI, which led the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in this case.
The MVF is overseen by Richard Breeden, former Chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Justice Department to assist in connection with the victim remission proceedings. Mr. Breeden and his team at MVF have been essential in working with the department to evaluate over 66,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.
More information about MVF and its compensation to victims of BLMIS is available at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or [email protected].
Returning assets to victims of crime is a primary goal of the department’s Asset Forfeiture Program. Since 2000, the victim compensation program has returned more than $12 billion in forfeited assets to victims. MLARS, through its Program Management and Training Unit, coordinates with U.S. Attorneys’ Offices, federal law enforcement and regulatory agencies, and private parties to ensure consistent and efficient return of forfeited assets to victims.
IRS Obtains Court Order Authorizing “John Doe” Summonses for Records Relating to U.S. Taxpayers Who May Have Used Network of Offshore Service Providers to Hide Assets and Evade TaxesRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; David A. Hubbert, the Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Danny Werfel, Commissioner of the Internal Revenue Service (“IRS”), announced that U.S. District Judge John P. Cronan entered an order today authorizing the IRS to issue summonses requiring certain entities to produce information about U.S. taxpayers, including individuals and trusts, who may have used the services of a multinational group of affiliated companies that operate under the trade name “Trident Trust” (collectively, the “Trident Trust Group”) to evade federal income taxes. Specifically, the IRS summonses seek records from a Trident Trust Group affiliate, as well as from companies that may have facilitated electronic fund transfers and courier deliveries to Trident Trust Group entities, to identify U.S. taxpayers who may have used the Trident Trust Group’s services to create or control foreign assets and entities to potentially avoid compliance with their U.S. tax obligations.
Acting U.S. Attorney Edward Y. Kim said: “Today’s action is part of this Office’s steadfast commitment to hold accountable those who use offshore service providers to avoid paying their U.S. taxes. In obtaining authority to issue these latest John Doe summonses, we continue our joint efforts with the IRS to investigate tax evaders who use foreign financial accounts and sham foreign entities to hide their assets and income.”
Tax Division Deputy Assistant Attorney General David A. Hubbert said: “The Department of Justice and the IRS are committed to using the tools available to us, including John Doe summonses like the ones authorized today, to ensure that taxpayers fully meet their responsibilities, including reporting their worldwide income and use of foreign accounts.”
IRS Commissioner Danny Werfel said: “U.S. taxpayers and their facilitators who hide offshore income generating activities and assets from the U.S. government are on notice that the IRS continues to prioritize combatting offshore abusive activities. These records will assist the IRS and its partners in finding those taxpayers, ensuring their compliance with the U.S. tax laws and delivering on our mission of a fair tax system.”
Federal tax law requires U.S. citizens, resident aliens, and trusts with gross annual income above the reporting threshold to pay taxes on all their income earned worldwide. They must also disclose their interests in certain foreign financial accounts, assets, and entities. Failure to report these offshore arrangements or pay associated taxes can result in serious civil and criminal consequences. According to the allegations set forth in the documents filed in support of the petition to authorize the John Doe summonses, and other information in the public record:
The Trident Trust Group is a privately owned network of entities operating in nearly 30 jurisdictions worldwide, including known tax havens. The Trident Trust Group has provided corporate, trust, and fund administration services for over 40 years. It offers, among other things, services that enable customers to conceal their interests in offshore accounts and entities, including creating opaque corporate structures in jurisdictions with strict privacy laws, providing corporate directors and officers who act on their customers’ behalf, mail forwarding and retention services, and inactive companies known as “shelf companies” that are dormant and sitting “on a shelf” for purpose of later sale, that are incorporated with a standard memoranda or articles of association and have inactive shareholders, directors, and secretaries. The Trident Trust Group advertises these services as assisting its clients in keeping confidential their beneficial ownership of assets and avoiding public reporting, including for “tax and estate planning.”
Some U.S. clients of the Trident Trust Group use or may use these services to conceal their interests in assets and avoid paying U.S. taxes on them. For example, Trident Trust Group employees have listed themselves as the founders, directors, and officers of thousands of Panamanian companies to help their U.S. taxpayer clients potentially conceal their interests in and income from these foreign entities. Indeed, at least nine U.S. taxpayers who used the Trident Trust Group’s services to conceal their interests in foreign assets have reported their tax non-compliance to the IRS through the agency’s Offshore Voluntary Disclosure Program—which allowed U.S. taxpayers to voluntarily disclose their foreign accounts or entities used to evade tax liability in exchange for fixed penalties.
In this action, the Court granted the IRS permission to serve what is known as a “John Doe” summons on Nevis Services Limited, a Trident Trust Group affiliate based in Manhattan, that seeks information about U.S. taxpayers who may have used its services or those of other entities within the Trident Trust Group to establish, maintain, operate, or control: any foreign financial account or other foreign asset; any foreign corporation, company, trust, foundation, or other legal entity; or any foreign or domestic financial account or other asset in the name of such foreign entity, from 2014 through 2023. By obtaining these records, the IRS expects to be able to identify Trident Trust Group clients who used the Group’s services to avoid or evade U.S. taxes.
In addition, the Court also granted the IRS leave to serve summonses on twelve financial entities and courier services: the Federal Reserve Bank of New York; Clearing House Payments Company LLC; HSBC Bank USA, N.A.; the Bank of New York Mellon Corporation; Citibank, N.A.; UBS AG; Bank of America, N.A.; Deutsche Bank Trust Company Americas; FedEx Corporation; DHL Express (USA), Inc.; and United Parcel Service, Inc. There is no allegation in this action that these financial entities and courier services have engaged in any wrongdoing. Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. The John Doe summonses direct these financial entities and courier services to produce records that will enable the IRS to identify U.S. taxpayers who have sent or received money or documents to or from the Trident Trust Group, along with other records relating to these transactions.
In parallel, the U.S. has sought John Doe summonses in the U.S. District Courts for the Northern District of Georgia and the District of South Dakota authorizing the IRS to issue summonses to four other U.S.-based entities in the Trident Trust Group seeking information about U.S. taxpayers who may have used the Group’s services.
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This case is being handled by the Office’s Tax and Bankruptcy Unit. Assistant U.S. Attorney Anthony J. Sun is in charge of the case.
Captain in the Islamic Revolutionary Guard Corps (IRGC) Charged with Murder and Terrorism OffensesRead the Press Release
Note: View the unsealed complaint here.
A complaint was unsealed today charging Mohammad Reza Nouri, 36, of Iran, also known as Muhammad Rida Husayn, Ali Asghar Nuri, and Abu Abbas, an Iranian national and officer in the IRGC, in connection with Nouri’s alleged role in orchestrating the Nov. 7, 2022, murder of American Stephen Troell in Baghdad, Iraq. Nouri was arrested in Iraq in March 2023.
“The Department of Justice will not tolerate terrorists and authoritarian regimes targeting and murdering Americans anywhere in the world,” said Attorney General Merrick B. Garland. “We allege that Mohammad Reza Nouri, an officer in the Islamic Revolutionary Guard Corps, orchestrated the murder of Stephen Troell, an American citizen living in Iraq, carrying out the Iranian Regime’s efforts to take vengeance for the death of Qasim Soleimani. Stephen should still be alive today, and the Justice Department will work relentlessly to ensure accountability for his murder.”
“The Islamic Revolutionary Guard Corps remains determined to target U.S. citizens, and orchestrated a cold-blooded plot to brutally murder Stephen Troell, a Tennessee native working at an English language institute in Iraq,” said FBI Director Christopher Wray. “According to the allegations, Mohammad Reza Nouri, an IRGC captain, played a key role in planning the attack in which Troell was ambushed as he drove home from work with his wife. Today’s announcement makes clear that the FBI and our partners will not tolerate the IRGC’s ruthless attacks on Americans, here in the United States or overseas, and will hold accountable any who seek to harm our citizens.”
“As alleged, Mohammad Reza Nouri, a Captain in Iran’s Islamic Revolutionary Guard Corps, orchestrated the murder of American Steven Troell in Iraq,” said Acting U.S. Attorney Edward Kim for the Southern District of New York. “Nouri is alleged to have gathered intelligence on Troell’s daily routine and whereabouts, procured weapons and vehicles, and provided safe harbor to the operatives who carried out the sinister plot to brutally attack Troell in front of his wife. As alleged, the Iranian regime is actively targeting U.S. citizens, such as Troell, living in countries around the world for kidnapping and execution both to repress and silence dissidents critical of the regime and to take vengeance for the death of Qasem Soleimani. This office will not stand by when an American is attacked and murdered in cold blood, and we will continue working with our law enforcement partners to bring Nouri to justice.”
“As alleged in the complaint, Nouri facilitated Troell’s murder. He gathered information and coordinated with a co-conspirator to procure supplies that operatives relied on during their attack on Troell,” said Assistant Director in Charge David Sundberg of the FBI Washington Field Office. “The FBI will continue to work with our law enforcement partners to bring IRGC operatives, including Nouri’s co-conspirator, to justice for harming Americans.”
According to court documents, the Government of the Islamic Republic of Iran (Iran) is actively targeting nationals of the United States and its allies living in countries around the world for kidnapping and/or execution both to repress and silence dissidents critical of the Iranian regime and to take vengeance for the January 2020 death of then-Commander of the IRGC-Qods Force (IRGC-QF), Qasem Soleimani, who was killed by a U.S. drone strike in Baghdad. The IRGC is an Iranian military and counterintelligence agency under the authority of Iran’s Supreme Leader, comprised of components including an external operations force, the IRGC-QF, and has been designated as a foreign terrorist organization by the U.S. Secretary of State since April 15, 2019. The IRGC has publicly stated its desire to avenge the death of Soleimani, and, among its activities, the IRGC plots and conducts attack operations outside Iran targeting U.S. citizens residing in the United States and abroad. In November 2022, the Iranian regime struck in Iraq: a group of operatives working on behalf of the IRGC brutally murdered Stephen Troell, a 45-year-old American living in Baghdad, where he worked at an English language institute, as Troell was driving home with his wife after work.
Nouri is an IRGC Captain who works for the IRGC in Iraq and is involved in the IRGC’s external attack plotting against U.S. citizens and others. Nouri played a key role in the IRGC’s targeting and ultimate murder of Troell, whom Nouri appears to have believed was working as an American or Israeli intelligence officer. Nouri, on behalf of the IRGC, collected critical, highly personal information about Troell to facilitate stalking, attacking, and ultimately killing Troell. Nouri, with the assistance of co-conspirators, developed a source with access to details of Troell’s life and daily routine. With this information, Nouri created intelligence documents for his IRGC associates and a group of operatives recruited to execute the attack, which included Troell’s date of birth, coordinates of his residence, occupation, work schedule, telephone number, wife’s name, and children’s names, among other information. In the weeks leading up to the murder, Nouri coordinated with one of his co-conspirators (CC-1) in the plot targeting Troell to procure some of the means for attacking Troell, including firearms as well as a vehicle for use in the lethal attack on Troell. On the evening of Nov. 7, 2022, the group of recruited operatives carried out the attack. Troell was driving home from work with his wife when heavily armed gunmen in two cars forced the Troells to stop shortly before they reached their residence, blocked any possible escape route, approached Troell on the driver’s side, and, using an assault weapon, shot and killed Troell as his wife witnessed the attack in the passenger seat.
On the day of the murder, Nouri coordinated with CC-1 shortly before and immediately after the attack. Nouri and CC-1 spoke repeatedly in the hours leading up to the attack. Less than a half hour after the attack, Nouri sent CC-1 encrypted messages inquiring about the wellbeing of the operatives tasked with carrying out the hit on Troell, asking, “The guys are fine?” and “They are doing well?” to which CC-1 responded, “One is injured.” As the night went on, CC-1 continued to update Nouri, noting that “two so far” of the operatives on the hit squad — whom Nouri referred to as “our guys” — had gathered safely since the murder, that “the rest are on the way,” and that the injury sustained by one of their confederates was “slight.” In the course of these encrypted messages, Nouri and CC-1 celebrated the events of the day and their success. That night, after the murder, Nouri left Iraq for Iran. Shortly before departing Baghdad, Nouri visited a religious site associated with mourning for Soleimani’s death.
Following the murder, approximately nine of the operatives on the hit squad also left Iraq and entered Iran, where they joined Nouri. In Iran, Nouri arranged housing for the operatives, providing them safe harbor in the aftermath of the murder. Nouri and another IRGC official addressed the operatives during their stay in Iran, offered their blessings to the hit squad, and told them that Troell was purportedly a spy on behalf of America and Israel, that Troell threatened Islam by attracting Iraqi youths to the Jewish religion and spreading it in Iraq, and that Troell therefore deserved to be murdered.
In March 2023, Iraqi authorities arrested Nouri, and he was subsequently convicted by an Iraqi court for his role in Troell’s murder. Nouri remains in custody in Iraq.
Nouri has been charged with conspiring to provide material support to a foreign terrorist organization resulting in death, and faces a maximum penalty of life in prison; providing material support to a foreign terrorist organization resulting in death, and faces a maximum penalty of life in prison; conspiring to provide material support for acts of terrorism resulting in death, and faces a maximum penalty of life in prison; providing material support for acts of terrorism resulting in death, and faces a maximum penalty of life in prison; conspiring to take hostages, and faces a maximum penalty of life in prison; conspiring to murder U.S. nationals outside the United States, and faces a maximum penalty of life in prison; murdering a U.S. national outside the United States, and faces a maximum penalty of death or life in prison; and causing death through the use of a firearm, and faces a maximum penalty of death or life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Washington Field Office’s Counterterrorism Division is investigating the case. The Justice Department’s Office of International Affairs; Justice Department’s Attaché in Iraq; FBI Legal Attaché office in Iraq; Iraqi authorities; and U.S. Attorney’s Office for the District of Columbia provided valuable assistance.
Assistant U.S. Attorneys Jacob H. Gutwillig, Matthew J.C. Hellman, and Kyle A. Wirshba for the Southern District of New York and Trial Attorneys Joshua Champagne and Timothy J. Reardon III of the National Security Division’s Counterterrorism Section are prosecuting the case.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Acting U.S. Attorney Announces Murder and Terrorism Charges Against IRGC OfficerRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); and David Sundberg, the Assistant Director in Charge of the FBI Washington Field Office, announced the unsealing of murder and terrorism charges against MOHAMMAD REZA NOURI, a/k/a “Muhammad Rida Husayn ‘Ali Asghar Nuri,” a/k/a “Abu Abbas,” an Iranian national and officer in the Islamic Revolutionary Guard Corps (“IRGC”), in connection with NOURI’s alleged role in orchestrating the November 7, 2022 murder of American Stephen Troell in Baghdad, Iraq. The charges are contained in a Complaint unsealed today in Manhattan federal court. NOURI was arrested in Iraq in March 2023.
Acting U.S. Attorney Edward Y. Kim said: “As alleged, Mohammad Reza Nouri, a Captain in Iran’s Islamic Revolutionary Guard Corps, orchestrated the murder of American Steven Troell in Iraq. Nouri is alleged to have gathered intelligence on Troell’s daily routine and whereabouts, procured weapons and vehicles, and provided safe harbor to the operatives who carried out the sinister plot to brutally attack Troell in front of his wife. As alleged, the Iranian regime is actively targeting U.S. citizens, such as Troell, living in countries around the world for kidnapping and execution both to repress and silence dissidents critical of the regime and to take vengeance for the death of Qasem Soleimani. This Office will not stand by when an American is attacked and murdered in cold blood, and we will continue working with our law enforcement partners to bring Nouri to justice.”
Attorney General Merrick B. Garland said: “The Department of Justice will not tolerate terrorists and authoritarian regimes targeting and murdering Americans anywhere in the world. We allege that Mohammad Reza Nouri, an officer in the Islamic Revolutionary Guard Corps, orchestrated the murder of Stephen Troell, an American citizen living in Iraq, carrying out the Iranian Regime’s efforts to take vengeance for the death of Qasim Soleimani. Stephen should still be alive today, and the Justice Department will work relentlessly to ensure accountability for his murder.”
FBI Director Christopher A. Wray said: “The Islamic Revolutionary Guard Corps remains determined to target U.S. citizens, and orchestrated a cold-blooded plot to brutally murder Stephen Troell, a Tennessee native working at an English language institute in Iraq. According to the allegations, Mohammad Reza Nouri, an IRGC captain, played a key role in planning the attack in which Troell was ambushed as he drove home from work with his wife. Today’s announcement makes clear that the FBI and our partners will not tolerate the IRGC’s ruthless attacks on Americans, here in the U.S. or overseas, and will hold accountable any who seek to harm our citizens.”
FBI Assistant Director in Charge David Sundberg said: “As alleged in the complaint, Nouri facilitated Troell's murder. He allegedly gathered information and coordinated with a co-conspirator to procure supplies that operatives relied on during their attack on Troell. The FBI will continue to work with our law enforcement partners to bring IRGC operatives, including Nouri's co-conspirator, to justice for harming Americans.”
According to the allegations contained in the Complaint charging the defendant:[1]
The Government of the Islamic Republic of Iran (“Iran”) is actively targeting nationals of the United States and its allies living in countries around the world for kidnapping and/or execution both to repress and silence dissidents critical of the Iranian regime and to take vengeance for the January 2020 death of then-Commander of the IRGC-Qods Force (“IRGC-QF”), Qasem Soleimani, who was killed by a U.S. drone strike in Baghdad. The IRGC is an Iranian military and counterintelligence agency under the authority of Iran’s Supreme Leader, comprised of components including an external operations force, the IRGC-QF, and has been designated as a foreign terrorist organization by the U.S. Secretary of State since April 15, 2019. The IRGC has publicly stated its desire to avenge the death of Soleimani, and, among its activities, the IRGC plots and conducts attack operations outside Iran targeting U.S. citizens residing in the United States and abroad. In November 2022, the Iranian regime struck in Iraq: a group of operatives working on behalf of the IRGC brutally murdered Stephen Troell, a 45-year-old American living in Baghdad, where he worked at an English language institute, as Troell was driving home with his wife after work.
NOURI is an IRGC Captain who works for the IRGC in Iraq and is involved in the IRGC’s external attack plotting against U.S. citizens and others. NOURI played a key role in the IRGC’s targeting and ultimate murder of Troell, whom NOURI appears to have believed was working as an American or Israeli intelligence officer. NOURI, on behalf of the IRGC, collected critical, highly personal information about Troell to facilitate stalking, attacking, and ultimately killing Troell. NOURI, with the assistance of co-conspirators, developed a source with access to details of Troell’s life and daily routine. With this information, NOURI created intelligence documents for his IRGC associates and a group of operatives recruited to execute the attack, which included Troell’s date of birth, coordinates of his residence, occupation, work schedule, telephone number, wife’s name, and children’s names, among other information. In the weeks leading up to the murder, NOURI coordinated with one of his co-conspirators (“CC-1”) in the plot targeting Troell to procure some of the means for attacking Troell, including firearms as well as a vehicle for use in the lethal attack on Troell. On the evening of November 7, 2022, the group of recruited operatives carried out the attack. Troell was driving home from work with his wife when heavily armed gunmen in two cars forced the Troells to stop shortly before they reached their residence, blocked any possible escape route, approached Troell on the driver’s side, and, using an assault weapon, shot and killed Troell as his wife witnessed the attack in the passenger seat.
On the day of the murder, NOURI coordinated with CC-1 shortly before and immediately after the attack. NOURI and CC-1 spoke repeatedly in the hours leading up to the attack. Less than a half hour after the attack, NOURI sent CC-1 encrypted messages inquiring about the wellbeing of the operatives tasked with carrying out the hit on Troell, asking, “The guys are fine?” and “They are doing well?” to which CC-1 responded, “One is injured.” As the night went on, CC-1 continued to update NOURI, noting that “two so far” of the operatives on the hit squad — whom NOURI referred to as “our guys” — had gathered safely since the murder, that “the rest are on the way,” and that the injury sustained by one of their confederates was “slight.” In the course of these encrypted messages, NOURI and CC-1 celebrated the events of the day and their success. That night, after the murder, NOURI left Iraq for Iran. Shortly before departing Baghdad, NOURI visited a religious site associated with mourning for Soleimani’s death.
Following the murder, approximately nine of the operatives on the hit squad also left Iraq and entered Iran, where they joined NOURI. In Iran, NOURI arranged housing for the operatives, providing them safe harbor in the aftermath of the murder. NOURI and another IRGC official addressed the operatives during their stay in Iran, offered their blessings to the hit squad, and told them that Troell was purportedly a spy on behalf of America and Israel, that Troell threatened Islam by attracting Iraqi youths to the Jewish religion and spreading it in Iraq, and that Troell therefore deserved to be murdered.
In March 2023, Iraqi authorities arrested NOURI, and he was subsequently convicted by an Iraqi court for his role in Troell’s murder. NOURI remains in custody in Iraq.
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NOURI, 36, of Iran, has been charged with: (i) conspiring to provide material support to a foreign terrorist organization resulting in death, which carries a maximum penalty of life in prison; (ii) providing material support to a foreign terrorist organization resulting in death, which carries a maximum penalty of life in prison; (iii) conspiring to provide material support for acts of terrorism resulting in death, which carries a maximum penalty of life in prison; (iv) providing material support for acts of terrorism resulting in death, which carries a maximum penalty of life in prison; (v) conspiring to take hostages, which carries a maximum penalty of life in prison; (vi) conspiring to murder U.S. nationals outside the United States, which carries a maximum penalty of life in prison; (vii) murdering a U.S. national outside the United States, which carries a maximum penalty of death or life in prison; and (viii) causing death through the use of a firearm, which carries a maximum penalty of death or life in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant would be imposed by a judge.
Mr. Kim praised the outstanding investigative work of the FBI Washington Field Office, Counterterrorism Division. Mr. Kim also thanked Iraqi authorities for providing invaluable support, as well as the Department of Justice’s National Security Division, Counterterrorism Section; the Department’s Office of International Affairs; the Department’s Office of the Justice Attaché in Iraq; the FBI Legal Attaché office in Iraq; and the U.S. Attorney’s Office for the District of Columbia for their assistance.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jacob H. Gutwillig, Matthew J.C. Hellman, and Kyle A. Wirshba are in charge of the prosecution, with assistance from Trial Attorneys Joshua Champagne and Timothy J. Reardon III of the Counterterrorism Section.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Luigi Mangione Charged with the Stalking and Murder of UnitedHealthcare CEO Brian Thompson and Use of a Silencer in a Crime of ViolenceRead the Press Release
A criminal complaint was unsealed today charging Luigi Nicholas Mangione, 26, of Towson, Maryland, in connection with the Dec. 4 murder of UnitedHealthcare executive Brian Thompson in Midtown Manhattan. Mangione was taken into federal custody today and will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker for the Southern District of New York.
“Today, the Justice Department has brought federal murder charges against Luigi Mangione,” said Attorney General Merrick B. Garland. “As alleged, Mangione planned his attack for months and stalked his victim for days before murdering him — methodically planning when, where, and how to carry out his crime. I am grateful to our state and local law enforcement partners for their tireless efforts to locate and apprehend the defendant and to ensure that he answers for his alleged crime.”
“Brian Thompson was gunned down in cold blood as he walked down a street in midtown Manhattan,” said Acting U.S. Attorney Edward Y. Kim for the Southern District of New York. “Thompson was allegedly killed just because he held the position of chief executive officer of a health insurance company. As alleged, Luigi Mangione traveled to New York to stalk and shoot Thompson in broad daylight in front of a Manhattan hotel, all in a grossly misguided attempt to broadcast Mangione’s views across the country. But this wasn’t a debate, it was murder, and Mangione now faces federal charges. This office and its law enforcement partners remain steadfast in our commitment to fight violence in whatever form it takes.”
“Luigi Mangione allegedly conducted the carefully premeditated and targeted execution of Brian Thompson to incite national debates,” said Assistant Director James E. Dennehy of the FBI New York Field Office. “This alleged plot demonstrates a cavalier attitude towards humanity — deeming murder an appropriate recourse to satiate personal grievances. Through continued close partnership with the NYPD, the FBI maintains our steadfast commitment to fervently pursue any individual who promotes a personal agenda through violence.”
“NYPD detectives worked relentlessly to identify and widely distribute images of the suspect who allegedly carried out this premeditated, preplanned, targeted murder, and they are committed to assisting prosecutors in seeing this important case through to its rightful conclusion,” said Commissioner Jessica S. Tisch of the New York City Police Department (NYPD). “This senseless incident highlights the critical role of the public in the NYPD’s public safety mission, and I thank everyone who saw something, said something, and did something. It is because of the public’s actions that we now have an alleged killer in custody back in New York City.”
As alleged in the complaint, over the course of the last several months, Mangione meticulously planned the execution of Brian Thompson in an effort to initiate a public discussion about the healthcare industry. Mangione targeted the victim, tracked his whereabouts, and traveled from out of state to New York City, where the victim was scheduled to attend the company’s investor conference. After arriving in the city on Nov. 24, more than one week before the murder, Mangione performed reconnaissance in the area around the victim’s hotel and the conference venue where the victim was scheduled to speak. Using a false identification, Mangione checked into an Upper West Side hostel.
In the early morning hours of Dec. 4, Mangione traveled by bicycle from the Upper West Side to the area around West 54th Street and Sixth Avenue. At approximately 6:45 a.m., Mangione strategically placed himself in between two cars on West 54th Street, and as the victim passed by, Mangione walked up behind the victim and fired several gunshots from a 9mm pistol causing the victim’s death. The pistol was equipped with what appeared to be a firearm sound suppressor or silencer. After the murder, Mangione fled on his bicycle northbound through Central Park and ultimately back to the Upper West Side.
On Dec. 9, Mangione was arrested in Altoona, Pennsylvania, while he sat in a fast-food restaurant after being recognized by one of the restaurant’s workers. Members of the Altoona Police Department confronted Mangione, who provided the same false identification that he used when checking into the Upper West Side hostel. Mangione was also found in possession of, among other things, a 9mm pistol and a sound suppressor consistent with the weapon used to kill the victim.
Mangione is charged with one count of using a firearm to commit murder, which carries a maximum penalty of death or life in prison; one count of interstate stalking resulting in death, which carries a maximum penalty of life in prison; one count of stalking through use of interstate facilities resulting in death, which carries a maximum penalty of life in prison; and one count of discharging a firearm that was equipped with a silencer in furtherance of a crime of violence, which carries a maximum penalty of life in prison and a mandatory minimum penalty of 30 years. A federal district court judge will determine any sentencing after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s Violent Crimes Task Force and NYPD are investigating the case. The Justice Department also thanks the Manhattan District Attorney’s Office, which has brought a separate prosecution against Mangione, which is currently expected to proceed to trial before the federal case.
Assistant U.S. Attorneys Dominic A. Gentile, Jun Xiang, and Alexandra Messiter for the Southern District of New York are prosecuting the case.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Luigi Mangione Charged with the Stalking and Murder of UnitedHealthcare CEO Brian Thompson and Use of A Silencer in A Crime of ViolenceRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Jessica S. Tisch, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of a Complaint charging LUIGI NICHOLAS MANGIONE in connection with the December 4, 2024, murder of UnitedHealthcare executive Brian Thompson in Midtown Manhattan. MANGIONE was taken into federal custody today and will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.
Acting U.S. Attorney Edward Y. Kim said: “Brian Thompson was gunned down in cold blood as he walked down a street in midtown Manhattan. Thompson was allegedly killed just because he held the position of chief executive officer of a health insurance company. As alleged, Luigi Mangione traveled to New York to stalk and shoot Thompson in broad daylight in front of a Manhattan hotel, all in a grossly misguided attempt to broadcast Mangione’s views across the country. But this wasn’t a debate, it was murder, and Mangione now faces federal charges. This Office and its law enforcement partners remain steadfast in our commitment to fight violence in whatever form it takes.”
Attorney General Merrick B. Garland said: “Today, the Justice Department has brought federal murder charges against Luigi Mangione. As alleged, Mangione planned his attack for months and stalked his victim for days before murdering him — methodically planning when, where, and how to carry out his crime. I am grateful to our state and local law enforcement partners for their tireless efforts to locate and apprehend the defendant and to ensure that he answers for his alleged crime.”
FBI Assistant Director James E. Dennehy said: “Luigi Mangione allegedly conducted the carefully premeditated and targeted execution of Brian Thompson to incite national debates. This alleged plot demonstrates a cavalier attitude towards humanity – deeming murder an appropriate recourse to satiate personal grievances. Through continued close partnership with the NYPD, the FBI maintains our steadfast commitment to fervently pursue any individual who promotes a personal agenda through violence.”
NYPD Commissioner Jessica S. Tisch said: “NYPD detectives worked relentlessly to identify and widely distribute images of the suspect who allegedly carried out this premeditated, preplanned, targeted murder, and they are committed to assisting prosecutors in seeing this important case through to its rightful conclusion. This senseless incident highlights the critical role of the public in the NYPD’s public safety mission, and I thank everyone who saw something, said something, and did something. It is because of the public’s actions that we now have an alleged killer in custody back in New York City.”
As alleged in the Complaint:
Over the course of the last several months, MANGIONE meticulously planned the execution of Brian Thompson in an effort to initiate a public discussion about the healthcare industry. MANGIONE targeted the victim, tracked his whereabouts, and traveled from out of state to New York City, where the victim was scheduled to attend the company’s investor conference. After arriving in the City on November 24, 2024, more than one week before the murder, MANGIONE performed reconnaissance in the area around the victim’s hotel and the conference venue where the victim was scheduled to speak. Using a false identification, MANGIONE checked into an Upper West Side hostel.
In the early morning hours of December 4, 2024, MANGIONE traveled by bicycle from the Upper West Side to the area around West 54th Street and Sixth Avenue. At approximately 6:45 a.m., MANGIONE strategically placed himself in between two cars on West 54th Street, and as the victim passed by, MANGIONE walked up behind the victim and fired several gunshots from a 9mm pistol causing the victim’s death. The pistol was equipped with what appeared to be a firearm sound suppressor or silencer. After the murder, MANGIONE fled on his bicycle northbound through Central Park and ultimately back to the Upper West Side.
On December 9, 2024, MANGIONE was arrested in Altoona, Pennsylvania while he sat in a fast-food restaurant after being recognized by one of the restaurant’s workers. Members of the Altoona Police Department confronted MANGIONE, who provided the same false identification that he used when checking-in to the Upper West Side hostel. MANGIONE was also found in possession of, among other things, a 9mm pistol and a sound suppressor consistent with the weapon used to kill the victim.
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MANGIONE, 26, of Towson, Maryland, is charged with one count of using a firearm to commit murder, which carries a maximum potential sentence of death or life in prison; one count of interstate stalking resulting in death, which carries a maximum potential sentence of life in prison; one count of stalking through use of interstate facilities resulting in death, which carries a maximum potential sentence of life in prison; and one count of discharging a firearm that was equipped with a silencer in furtherance of a crime of violence, which carries a maximum potential sentence of life in prison and a mandatory minimum sentence of 30 years.
The maximum and minimum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI’s Violent Crimes Task Force and the NYPD.
Mr. Kim also thanked the Manhattan District Attorney’s Office, which has brought a separate prosecution against MANGIONE, which is currently expected to proceed to trial before the federal case.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Dominic A. Gentile, Jun Xiang, and Alexandra Messiter are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Founder and Head of Archegos Capital Management Bill Hwang Sentenced to 18 Years in Prison for Orchestrating Massive Market Manipulation and Fraud SchemesRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today that SUNG KOOK (BILL) HWANG, the founder and head of a private investment firm known as Archegos, was sentenced by U.S. District Judge Alvin K. Hellerstein to 18 years in prison concurrently on each count charged for leading a criminal enterprise that manipulated the prices of multiple stocks and defrauded at least nine investment banks. In July 2024, HWANG was convicted following a nine-week jury trial of racketeering conspiracy, securities fraud, market manipulation, and wire fraud.
Acting U.S. Attorney Edward Y. Kim said: “Bill Hwang weaponized his personal hedge fund, Archegos, to pursue financial fraud on a national scale. For months on end, Hwang and his coconspirators used an array of lies and manipulative trading strategies to rig the stock market in Hwang’s favor. Hwang’s crimes brought him to the brink of staggering wealth before his fraud collapsed and left investors, banks, and even Hwang’s own employees with billions of dollars in losses. Today’s sentence sends a clear message that criminal manipulation schemes will be met with serious prison sentences.”
As reflected in the Indictment, court filings, and the evidence presented at trial:
Beginning in 2020, HWANG—along with his co-conspirators, including codefendant Patrick Halligan (Archegos’s Chief Financial Officer)—used the Archegos enterprise to pursue two interrelated criminal schemes, one involving manipulative trading in the marketplace and the other involving false and misleading statements to Archegos’s trading counterparties. Although HWANG held himself out as an investor focused on company fundamentals with a three- to five-year investment horizon, which had been Archegos’s investment approach for years, by the fall of 2020, HWANG spent his time—and nearly all Archegos’s capital—on constant trading in the same core stocks. HWANG began deploying strategies aimed to manipulate, control, and artificially affect the market for securities in Archegos’s portfolio. Those techniques included purchasing or selling securities at particular times of day including marking the price of securities up at the close of trading to trigger payouts to Archegos and trading at times and in a manner to give the false impression of additional interest in the securities, transacting in certain securities in large amounts or high volume, and timing or coordinating certain transactions to maximize impact on the market.
HWANG’s manipulative trading was sustained and furthered by lies and misrepresentations made to Archegos’s counterparties. As HWANG’s trading led to large position sizes, Archegos’s counterparties started to impose limits on Archegos’s trading. To enable HWANG to continue to trade the same names at larger sizes, HWANG, Halligan, and others conspired to make repeated, materially false and misleading statements to Archegos’s counterparties about Archegos’s portfolio of securities. These false and misleading statements were designed to fraudulently induce the counterparties into trading with and extending credit to Archegos, enabling and facilitating the market manipulation scheme, and to hide the true risk of doing business with Archegos.
By March 2021, HWANG’s manipulative trading scheme—which relied in part on continually increasing the size of Archegos’s positions in a handful of equities—had profoundly reshaped Archegos’s portfolio and risk profile. Now Archegos had concentrated its investments in a number of publicly traded stocks with markets that HWANG found he could distort, including of large companies, such as ViacomCBS and Discovery. Archegos’s portfolio became highly vulnerable to external events that might deflate the artificial prices HWANG had created. In late March 2021, the markets exposed HWANG’s price manipulation. On March 22, 2021, ViacomCBS announced a seasoned equity offering. Following that announcement, on March 23, 2021, HWANG directed nearly a billion dollars in additional purchases of stock in ViacomCBS and other companies whose stock HWANG had manipulated in a final effort to control the prices of those stocks and prevent them from declining and harming the value of his portfolio. On March 24, 2021, using what cash and trading capacity remained, HWANG made one final attempt to reverse market forces, but he failed. When the markets closed, Archegos faced substantial margin calls that it could not meet, causing billions of dollars in losses to the counterparties that had financed HWANG’s trading.
Ultimately, the market manipulation and fraud schemes, and the billions of dollars in losses that they caused, victimized a wide swath of market participants, including counterparties that engaged in loans and securities trading with Archegos based on lies and deceit, ordinary investors who purchased and sold the relevant securities at artificial prices, and securities issuers who made business decisions based on the artificial prices of their stocks. The schemes also caused millions of dollars of losses to innocent Archegos employees who had been required to allocate to Archegos a substantial amount of their pay as deferred compensation.
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In addition to the prison term, HWANG, 60, of Tenafly, New Jersey, was sentenced to three years of supervised release concurrently on each count and ordered to pay more than nine billion dollars in restitution.
Halligan, who was convicted at trial alongside HWANG of racketeering conspiracy, securities fraud, and wire fraud, is scheduled to be sentenced on January 27, 2025.
Mr. Kim praised the outstanding work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew Podolsky, Alexandra Rothman, Samuel P. Rothschild, and Andrew Thomas are in charge of the prosecution.
Bronx Gang Member Charged with Murdering 18-Year-Old Jayquan McKenley in Drive-By ShootingRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; William S. Walker, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Jessica Tisch, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment charging PAUL JOHNSON, a/k/a “PJ Glizzy,” with racketeering conspiracy, murder in aid of racketeering, conspiracy to commit murder in aid of racketeering, and a firearms offense. The charges relate to JOHNSON’s membership in a Bronx-based street gang known as the “Original Goonz,” or “OGz.” As alleged, on February 6, 2022, JOHNSON murdered 18-year-old Jayquan McKenley. JOHNSON, who was in New York City Department of Correction custody, was transferred to federal custody earlier today and made his initial appearance in federal court in Manhattan. The case has been assigned to U.S. District Judge Victor Marrero.
Acting U.S. Attorney Edward Y. Kim said: “Jayquan McKenley’s death was senseless. As alleged, Paul Johnson murdered him as part of a dispute between rival gangs. We hope that today’s charges bring some measure of comfort to McKenley’s family and make clear that this Office and our law enforcement partners will never stop investigating those who commit violence on our streets.”
HSI Special Agent in Charge William S. Walker said: “Paul Johnson's alleged ruthless murder of Jayquan McKenley sent shockwaves through our Brooklyn neighborhoods and shone a light on the level of senseless violence committed by street gangs in New York City. Today's indictment is the result of the relentless work and determination of HSI New York's Violent Gang Task Force. The streets are made safer everyday thanks to the dedication of New York's local, state, and federal law enforcement who work together to obtain justice for victims of violent crime.”
According to the allegations in the Indictment unsealed today in Manhattan federal court,[1] other court documents, and statements made during court proceedings:
From at least 2019 up to and including December 2024, JOHNSON was a member of the “Original Goonz,” or “OGz” street gang, which is based in the Bronx, New York. In order to fund the gang, protect its territory, and promote its standing, members of the OGz engaged in, among other things, narcotics trafficking and other acts of violence, including murder.
On February 6, 2022, JOHNSON and others murdered Jayquan McKenley in a drive-by shooting in Brooklyn, New York. Jayquan McKenley was 18 years old.
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JOHNSON, 23, of the Bronx, is charged with one count of racketeering conspiracy, which carries a maximum term of life in prison; one count of murder in aid of racketeering, which carries a mandatory minimum term of life in prison or death; one count of conspiracy to commit murder in aid of racketeering, which carries a maximum term of 10 years in prison; and one count of use, carrying, and possession of a firearm in furtherance of a crime of violence, which carries a minimum sentence of 10 years in prison to run consecutive to any other term imposed and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of HSI and NYPD.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Patrick R. Moroney is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
International Drug Traffickers Indicted on Charges of Importing and Distributing Fentanyl and Methamphetamine Precursor ChemicalsRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced an Indictment charging XIANG GAO, OLEKSANDR KLOCHKOV, and IGORS KRICFALUSIJS with conspiring to distribute fentanyl and methamphetamine in the U.S., conspiring to import fentanyl precursor chemicals and a methamphetamine precursor chemical with intent to manufacture fentanyl and methamphetamine in the U.S., importing a fentanyl precursor chemical, and conspiring to commit money laundering. GAO, KLOCHKOV, and KRICFALUSIJS were arrested in Morocco by Moroccan authorities on April 17, 2024, extradited to the U.S. on December 11, 2024, and made their initial appearances in the Southern District of New York before U.S. Magistrate Judge Robyn F. Tarnofsky on December 12, 2024.
Acting U.S. Attorney Edward Y. Kim said: “Fentanyl and fentanyl analogues continue to wreak catastrophic damage on the lives of New Yorkers. The defendants are alleged to have aggressively pursued methods to circumvent our ability to stem the flow of the poisons into this country and to bring tons of potentially deadly chemicals to the United States. This Office will continue to work relentlessly to detect and charge international drug traffickers bringing deadly drugs to our borders and to stop the danger long before it arrives.”
Attorney General Merrick B. Garland said: “Those responsible for flooding our country with fentanyl must answer for their crimes. These three international chemical brokers are charged with conspiring to send fentanyl and methamphetamine precursor chemicals into the United States -- now they will face justice in an American courtroom.”
Deputy Attorney General Lisa Monaco said: “Today’s actions reflect our commitment to holding accountable those who peddle the poison responsible for fentanyl deaths in our communities, including those who import the precursor chemicals needed to manufacture these deadly drugs. No matter where in the world these individuals operate, the Department will find them and bring them to justice.”
DEA Administrator Anne Milgram said: “Today’s announcement of charges against three high-level fentanyl chemical brokers highlights DEA’s commitment to attack every part of the global fentanyl supply chain. The defendants indicted today brokered ton-quantities of fentanyl and methamphetamine precursor chemicals from China, knowing that these chemicals would be used to flood American communities with deadly drugs. These defendants also coached drug traffickers on how to use different precursor chemicals to make finished fentanyl destined for the United States. Today’s indictment should serve as a warning to drug traffickers operating across the globe that DEA will stop at nothing to save American lives and bring those responsible to justice.”
As alleged in the Indictment, other court filings, and statements made during court proceedings:[1]
Fentanyl is the single deadliest drug threat that the U.S. has ever encountered. It is the leading cause of death for Americans ages 18 to 49. Fentanyl analogues, similar in chemical makeup and effect to fentanyl, can be even more potent and lethal than fentanyl. Fentanyl and its analogues have ruined countless lives, devastated entire communities, and killed Americans at an unprecedented rate.
The manufacture of fentanyl and its analogues begins with raw chemicals, known as precursors. Today, fentanyl precursor chemicals are principally sourced from China-based chemical manufacturers. These China-based chemical manufacturers ship fentanyl-related precursor chemicals around the world, including to the U.S., Europe, and elsewhere, where clandestine laboratories use the precursor chemicals to synthesize finished fentanyl and fentanyl analogues at scale, and distribute the deadly narcotics into and throughout the U.S.
Aware of sanctions placed on chemical precursors by the U.S. and other nations, Chinese manufacturers have adapted to create and export fentanyl precursor chemicals that are not yet banned, but that are specifically designed to imitate other prohibited chemicals or that can produce finished fentanyl and other drugs. The chemists working at such factories pursue chemical modifications to create new chemical compounds not yet subject to controls but capable of producing novel versions of narcotics that are as deadly or more than fentanyl. These new chemical compounds are marketed to international drug traffickers through broker networks with direct access to the chemical manufacturers, who take custom orders from buyers seeking to create fentanyl and evade customs and law enforcement agencies around the world.
XIANG GAO, OLEKSANDR KLOCHKOV, and IGORS KRICFALUSIJS are international drug traffickers who used their connections with China-based chemical manufacturers to broker deals for fentanyl and methamphetamine precursor chemicals for further distribution in the U.S. and elsewhere. During this investigation, GAO, KLOCHKOV, and KRICFALUSIJS conspired to sell ton-quantities of fentanyl precursor chemicals; provided more than five kilograms of fentanyl precursor chemicals and more than 50 kilograms of methamphetamine precursor chemicals; and shipped those chemicals to New York, Austria, and Spain, intending that the chemicals would be used to manufacture fentanyl and methamphetamine in New York for further distribution there.
Throughout the course of the conspiracy, the defendants repeatedly offered access to factories capable of producing tons of deadly narcotics precursors at a time, and consistently acknowledged that the precursors were designed to evade sanctions on narcotics importation but were purpose-built to make fentanyl and methamphetamine. For example, during one meeting, when GAO acknowledged that fentanyl is illegal in the U.S. and China, KLOCHKOV explained that, as a result, fentanyl “must be created, not purchased.” The defendants further provided instructions, including chemical formulas, to turn the precursors into finished fentanyl destined for distribution throughout New York.
* * *
GAO, 35, a Chinese national; KLOCHKOV, 34, a Ukrainian national; and KRICFALUSIJS, 32, a Latvian national, are charged in the Indictment with: one count of conspiracy to distribute fentanyl and methamphetamine, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of conspiracy to import fentanyl precursor chemicals and a methamphetamine precursor chemical with intent to manufacture fentanyl and methamphetamine, which carries a maximum sentence of 20 years in prison; one count of importation of a fentanyl precursor chemical, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Kim praised the outstanding efforts of the Bilateral Investigations Unit of the DEA Special Operations Division, the U.S. Department of Justice’s Office of International Affairs, and Moroccan and Spanish authorities for their ongoing assistance.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Amanda C. Weingarten is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint, and the description of the Indictment and Complaint set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation.
Defendant Sentenced to 10 Years in Prison for Violent Spree of Gunpoint CarjackingsRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York; Bryan Miller, the Special Agent in Charge of the New York Field Division for the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”); and Jessica Tisch, the Commissioner of the New York City Police Department (“NYPD”), announced that ROBERT FELIX-ARACENA was sentenced yesterday by U.S. District Judge George B. Daniels to 10 years in prison for conspiring to commit a series of gunpoint carjackings in Manhattan, the Bronx, and elsewhere in 2020, and for a related firearms offense.
Acting U.S. Attorney Edward Y. Kim said: “Robert Felix-Aracena and his co-defendants engaged in a violent, armed carjacking spree that endangered lives and terrorized victims. Felix-Aracena, like his co-defendants, is now being held accountable for his actions. Today’s sentence is a reminder that this Office will relentlessly investigate and prosecute those who seek to inflict violence on our communities.”
ATF Special Agent in Charge Bryan Miller said: “This sentencing for these brazen armed carjackings should serve as a clear warning that such criminal acts will never be tolerated. ATF remains steadfast in its commitment to working together with our partners to identify, investigate, and apprehend the most violent offenders in our communities. I want to thank the men and women of the ATF/NYPD SPARTA Task Force, the NYPD Manhattan Robbery Squad, and the U.S. Attorney’s Office for the Southern District of New York for bringing these individuals to justice. We will dedicate all necessary resources to continue collaboration with our local, state, and federal partners to ensure our streets remain safe.”
NYPD Commissioner Jessica S. Tisch said: “This sentencing marks the final dismantling of an organized criminal network that instilled fear in New York City motorists. It is also a testament to the collaborative efforts of the dedicated NYPD investigators and ATF agents on the SPARTA task force. Their tireless work, day and night, is making people safe, making them feel safe, and enhancing the quality of life for all New Yorkers.”
According to the Indictment and statements made in public court documents and proceedings:
In October and November 2020, FELIX-ARACENA and a group of other individuals participated in a series of armed carjackings in Manhattan, the Bronx, and elsewhere. That group also included co-defendant CHRISTIAN CRUZ, who was sentenced earlier this year to 10 years in prison; co-defendant ANDRES CAICEDO, who was sentenced last month to four years in prison; and co-defendant JOSE LAVANDIER, who was previously sentenced to three years in prison. In particular:
- On October 22, 2020, CAICEDO and others participated in a gunpoint carjacking in the Bronx. As a co-conspirator brandished a firearm at the victim, CAICEDO took marijuana, cash, and the victim’s car keys from the victim.
- On November 1, 2020, FELIX-ARACENA, CRUZ, and others participated in a gunpoint carjacking from two victims in the Bronx. FELIX-ARACENA, armed with a TEC-9 firearm, and another carjacker took the vehicle from the victims, with FELIX-ARACENA brandishing a firearm and firing a shot near the foot of one of the victims in the process.
- On November 3, 2020, FELIX-ARACENA, CRUZ, and others participated in a gunpoint carjacking from two victims in Brooklyn. The group was driving the vehicle they had carjacked two days earlier, and CRUZ was armed with, and brandished, the TEC-9. That same day, the stolen vehicle was recovered in the Bronx by law enforcement, after FELIX-ARACENA, CRUZ, and the other carjackers fled from law enforcement in the stolen vehicle and on foot.
- On November 7, 2020, FELIX-ARACENA and others participated in a gunpoint carjacking from multiple victims in Manhattan. The other carjackers, armed with a firearm, approached the victims and took their vehicle, while FELIX-ARACENA and another carjacker remained in the getaway vehicle.
- During the evening of November 10, 2020, and the early morning hours of November 11, 2020, FELIX-ARACENA, CRUZ, and others participated in three gunpoint carjackings and an attempted carjacking.
- Finally, on November 13, 2020, FELIX-ARACENA, LAVANDIER, and others participated in a gunpoint carjacking from two victims in Manhattan. FELIX-ARACENA, armed with a defaced firearm, and another individual took the vehicle from the victims, while the other carjackers remained in the getaway vehicle. The stolen vehicle was located a few hours later, at which time FELIX-ARACENA, LAVANDIER and the others attempted to flee in the stolen vehicle before crashing into a nearby parked car. FELIX-ARACENA, LAVANDIER, and the others then fled on foot.
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In addition to the prison term, FELIX-ARACENA, 24, a citizen of the Dominican Republic residing in the Bronx, New York, was sentenced to three years of supervised release.
Mr. Kim praised the outstanding investigative work of the ATF and the NYPD, in particular, the Strategic Patterned Armed Robbery Technical Apprehension Task Force, which is composed of agents and officers of the ATF and the NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Adam Z. Margulies and Jonathan L. Bodansky are in charge of the prosecution.
Arizona Man Indicted for Sending Antisemitic Death Threats and StalkingRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, and Nelson I. Delgado, the Acting Special Agent in Charge of the Federal Bureau of Investigation (“FBI”) Newark Field Office, announced the return today of a three-count Indictment charging DONOVAN HALL with making interstate threats and interstate stalking. HALL was arrested on November 22, 2024, in Mesa, Arizona, and was subsequently presented in federal court in the District of Arizona. The case has been assigned to U.S. District Judge Jennifer H. Rearden.
Acting U.S. Attorney Edward Y. Kim said: “Donovan Hall allegedly unleashed a campaign of terror against several Jewish New Yorkers, allegedly sending scores of hateful, violent, and antisemitic death threats. No individual deserves to be at the receiving end of these types of threats or to be targeted because of their religion. This Office is committed to aggressively prosecuting hate crimes of all kinds and seeking justice for the victims of these offensive and harmful acts.”
Acting Special Agent in Charge Nelson I. Delgado said: “We allege Hall used graphic and hate-filled rhetoric to terrorize several victims in New York City and around the U.S. These malicious phone calls escalated to text messages brazenly displaying his weapons, furthering his victims' worst fears. The FBI has ZERO tolerance for hate-filled speech, threats and violent actions. We will not rest until those who commit these types of crimes are held accountable.”
According to the Complaint, the Indictment, and other documents and statements in the public record:
Over a period of three months, HALL contacted several individuals located in New York, New York, (the “Victims”) approximately 1,000 times and made anti-Semitic and violent threats to torture, mutilate, and murder them and their families. In particular, starting in August 2024, HALL made dozens of threatening phone calls—many of which were anti-Semitic in nature—to the owner of a hotel located in Manhattan, the owner’s family members, and hotel staff. During these calls, HALL threatened numerous times to kill the Victims.
In October 2024, HALL escalated his threatening conduct by texting photographs of two firearms and a machete to the hotel owner, along with threats to use those weapons to harm the owner and his family. During a search of HALL’s residence in Arizona conducted on November 22, 2024, the firearms depicted in the text messages, among other weapons and ammunition, were recovered. The two firearms—neither of which is registered in HALL’s name—were located alongside his wallet in his backpack. One of the firearms was loaded.
HALL’s threats toward the Victims were part of a larger pattern of death threats sent to various other individuals. The targets of his threats are located throughout the U.S. In these communications, HALL consistently used violent and threatening language, and often targeted Jews.
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HALL, 34, of Mesa, Arizona, has been charged with two counts of making interstate threats, which each carry a maximum sentence of five years in prison, and one count of interstate stalking, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim praised the outstanding investigative work of the FBI’s Newark Field Office. Mr. Kim also thanked the New York Police Department, the U.S. Attorney’s Office for the District of Arizona, the FBI Phoenix Field Office, the Mesa Police Department, and the Clifton Police Department in Clifton, New Jersey.
This case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorney Sam Adelsberg is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Executive of Airline and Co-Conspirator Sentenced in A Money Laundering ConspiracyRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced that SHUKHRATJON MIRSAIDOV and SHUKHRAT ABDULLAEV were sentenced to one year and a day and 24 months in prison, respectively, for their roles in operating a money laundering scheme from June 2019 to February 2022, using the U.S. bank account of an international airline (“Airline-1”) with a hub at John F. Kennedy International Airport in New York, where MIRSAIDOV was the lead U.S.-based executive. U.S. District Judge Loretta A. Preska imposed MIRSAIDOV’s sentence today and ABDULLAEV’s sentence on September 4, 2024, following the defendants’ guilty pleas to conspiracy to commit money laundering.
Acting U.S. Attorney Edward Y. Kim said: “For years Shukhratjon Mirsaidov and Shukrat Abdullaev engaged in a scheme to launder healthcare fraud proceeds through the accounts of an international airline in order to conceal the illicit nature of these funds. Laundering schemes that use real businesses to conceal crime proceeds are often particularly difficult for law enforcement to detect. This case demonstrates that this Office will continue to root out money laundering, no matter how sophisticated, wherever it occurs and that those responsible will be held to full account."
According to allegations in the Indictment, the criminal Complaint, public filings, and statements made in court:
In the course of the money laundering conspiracy, MIRSAIDOV and ABDULLAEV used a U.S. company bank account for Airline-1 (the “Airline-1 Bank Account”) to operate a check-cashing scheme and to launder hundreds of thousands of dollars of healthcare fraud proceeds. As a senior executive, MIRSAIDOV was one of two signatories for the Airline-1 Bank Account. Between approximately June 2019 and August 2021, MIRSAIDOV deposited into the Airline-1’s Bank Account over 100 checks drawn from accounts controlled by seven shell companies that were used to launder the proceeds of healthcare fraud. For example, the shell companies had received insurance payments for medical services purportedly provided by a doctor, but the doctor did not, in fact, provide such services. The shell companies were primarily funded by payments from medical clinics, physicians, and medical diagnostic testing companies and had no relation whatsoever to the airline industry.
MIRSAIDOV obtained the checks from the shell companies from ABDULLAEV, who was not an employee of Airline-1 and who obtained the checks from the perpetrators of the healthcare fraud scheme. MIRSAIDOV and ABDULLAEV collected cash generated from Airline-1 ticket sales and fees, and instead of depositing that cash into Airline-1’s bank account, used the cash to illegally cash the shell company checks. ABDULLAEV gave the cash generated from the airline ticket sales and fees to the perpetrators controlling the shell companies.
MIRSAIDOV and ABDULLAEV not only used the Airline-1 Bank Account to launder healthcare fraud proceeds from the shell companies, but also used the Airline-1 Bank Account to launder funds represented to be fraud proceeds in a series of sting transactions. Between approximately June 2021 and February 2022, law enforcement, with the assistance of a confidential source (“CS-1”), conducted a series of sting money laundering transactions involving MIRSAIDOV, ABDULLAEV, and the Airline-1 Bank Account. CS-1 asked ABDULLAEV to cash checks and transmit funds abroad and agreed to pay ABDULLAEV a four percent fee to do so. ABDULLAEV told CS-1 a portion of the fee went to MIRSAIDOV. During the transactions, CS-1 represented to ABDULLAEV that the funds were healthcare fraud proceeds. Overall, CS-1 provided ABDULLAEV with 14 checks totaling $210,000 issued from a covert law enforcement account held in the name of a fictitious company. MIRSAIDOV, working with ABDULLAEV, deposited 12 of the checks totaling $190,000 into the Airline-1 Bank Account. CS-1 received cash from ABDULLAEV in exchange for the checks, and in one instance, ABDULLAEV coordinated the delivery of U.S. currency to an individual abroad in exchange for some of the checks. During the course of these sting transactions, in a recorded conversation with CS-1, MIRSAIDOV admitted, in sum and substance, that he received many checks from ABDULLAEV and that MIRSAIDOV gave ABDULLAEV cash in exchange for the checks. CS-1 informed MIRSAIDOV, in sum and substance, that the checks from CS-1 came from a medical company and that the company disguised the check payments in its financial reporting by claiming the check deposits were for business class flight tickets. MIRSAIDOV nevertheless expressed a willingness to work directly with CS-1 to conduct check cashing using the Airline-1 Bank Account.
Participants in the underlying healthcare fraud scheme who laundered their crime proceeds with the assistance of MIRSAIDOV and ABDULLAEV using the Airline-1 Bank Account have been charged by this Office in U.S. v. Tariverdi, et al, No. 24 Cr. 599 (JPO).
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In addition to the prison sentence, MIRSAIDOV, 46, of Fort Lee, New Jersey, was ordered to pay forfeiture in the amount of $674,171. ABDULLAEV, 39, of Brooklyn, New York, was sentenced to three years of supervised release and was ordered to pay forfeiture in the amount of $704,171.
Mr. Kim praised the outstanding work of the Federal Bureau of Investigation.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Cecilia Vogel, Christopher Brumwell, and Vladislav Vainberg are in charge of the prosecution.
Bronx Tax Preparer Pleads Guilty to Filing Tens of Thousands of False Tax Returns Causing $145 Million in Fraudulent Tax LossRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today the guilty plea of RAFAEL ALVAREZ, a/k/a “the Magician,” to a two-count Superseding Information charging ALVAREZ with one count of conspiracy to defraud the U.S. and steal government funds and one count of aiding and assisting in the preparation of a false and fraudulent U.S. individual income tax return. The charges arise from ALVAREZ’s orchestration of a decade-long, $145 million tax fraud scheme to file tens of thousands of federal individual income tax returns that included false information designed to fraudulently reduce the individuals’ tax burden. As part of today’s guilty plea, Alvarez agreed to pay the Internal Revenue Service (“IRS”) $145 million in restitution and forfeit over $11.84 million in fraudulent proceeds he received from his criminal conduct. ALVAREZ pled guilty today before U.S. District Judge J. Paul Oetken.
Acting U.S. Attorney Edward Y. Kim said: “Rafael Alvarez became known as ‘the Magician’ by his customers for his supposed ability to make their tax burden disappear. But, as today’s guilty plea shows, there was no magic to what Alvarez was doing – he was committing a serious federal crime by falsifying tens of thousands of tax returns and, in the process, depriving the IRS of $145 million in tax revenue. Today’s guilty plea, in one of the largest ever tax frauds by a return preparer, should serve as an important reminder to tax professionals that this Office will vigorously investigate and prosecute tax offenses.”
As alleged in the Indictment and Superseding Information and statements made in public filings and court proceedings:
From at least in or about 2010, up to and including in or about 2020, ALVAREZ was the CEO, owner, and manager of ATAX New York, LLC, also doing business as ATAX New York-Marble Hill, ATAX Marble Hill, ATAX Marble Hill NY, and ATAX Corporation (together, “ATAX”). ATAX was a high-volume tax preparation company located in the Bronx, New York, which prepared approximately 90,000 federal income tax returns for its customers during this period. ALVAREZ both prepared tax returns for ATAX customers and recruited, supervised, and directed other ATAX personnel who in turn prepared tax returns for customers. During this period, ALVAREZ oversaw a sweeping fraudulent scheme, whereby he and his employees submitted false information to the IRS in ATAX customers’ tax returns. This false information, which included, among other things, bogus itemized tax deductions, made-up capital losses, phony business expenses, and fraudulent tax credits, served to fraudulently reduce the customers’ tax liability and increase the customers’ tax refunds from the IRS.
In total, ALVAREZ oversaw ATAX’s fraudulent submission of tax returns on behalf of customers that deprived the IRS of $145 million in tax revenue. ALVAREZ was so consistent at falsifying ATAX customer tax returns that he became known to ATAX’s customers as “the Magician.” Additionally, ALVAREZ agreed as part of his plea agreement that he was a leader of the scheme and attempted to obstruct or impede the administration of justice with respect to the investigation of the tax fraud scheme when he and an ATAX employee made false statements to an IRS Revenue Agent. ALVAREZ’s operation of ATAX helped the company generate approximately $12 million in fraudulent proceeds over the duration of the fraud.
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ALVAREZ, 61, of Cortland Manor, New York, pled guilty to one count of conspiracy to defraud the U.S. and steal government funds, which carries a maximum sentence of five years in prison, and one count of aiding and assisting in the preparation of a false and fraudulent U.S. individual income tax return, which carries a maximum sentence of three years in prison. ALVAREZ is scheduled to be sentenced by Judge Oetken on April 11, 2025.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the IRS, Criminal Investigation, the Federal Bureau of Investigation, and the Treasury Inspector General for Tax Administration in this case.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney David R. Felton is in charge of the prosecution.
“Incognito Market” Owner Pleads Guilty for Operating One of the Largest Illegal Narcotics Marketplaces on the InternetRead the Press Release
Edward Y. Kim, the Acting United States Attorney for the Southern District of New York, announced today that RUI-SIANG LIN, a/k/a “Ruisiang Lin,” a/k/a “林睿庠,” a/k/a “Pharoah,” a/k/a “faro,” pled guilty to narcotics conspiracy, money laundering, and conspiracy to sell adulterated and misbranded medication in connection with LIN’s operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world. LIN pled guilty today before U.S. District Judge Colleen McMahon and is scheduled to be sentenced on March 27, 2025.
Acting U.S. Attorney Edward Y. Kim said: “Rui-Siang Lin led a prolific online narcotics bazaar that sold more than $100 million of narcotics around the world. While Lin profited millions of dollars from his sophisticated scheme, the community suffered. Lin and his “Incognito Market” exacerbated the opioid and fentanyl crisis and put the community in danger. Lin now faces a lengthy term in prison.”
According to the allegations contained in the Indictment, Complaint, and statements made in public filings and in public court proceedings:
Incognito Market was an online narcotics bazaar that existed on the dark web. Incognito Market formed in October 2020. Since that time, and through its closing in March 2024, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. Incognito Market was available globally to anyone with internet access and could be accessed using the Tor web browser on the “dark web” or “darknet.” LIN operated the Incognito market under the online pseudonym “Pharoah” or “faro.” As “Pharoah” — the leader of Incognito market — LIN supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation.
Incognito Market was designed to foster seamless narcotics transactions across the internet and across the world and incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service. Upon visiting the site, users were met by a splash page and graphic interface, which is pictured below:
After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice. Incognito Market sold illegal narcotics and misbranded prescription medication, including heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam. An example of listings on Incognito market is below:
Listings included offerings of prescription medication that was advertised as being authentic but was not. For example, in November 2023, an undercover law enforcement agent received several tablets that purported to be oxycodone, which were purchased on Incognito Market. Testing on those tablets revealed that they were not authentic oxycodone at all and were, in fact, fentanyl pills.
Each listing on Incognito Market was sold by a particular vendor. To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee. In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market. That revenue funded Incognito Market’s operations, including paying “employee” salaries and for computer servers. LIN collected millions of dollars of profits from Incognito. To facilitate these financial transactions, Incognito Market had its own “bank,” which allowed its users to deposit cryptocurrency on the site into their own “bank accounts.” After a narcotics transaction was completed, cryptocurrency from the buyer’s “bank account” was transferred to the seller’s “bank account,” less the 5% fee that Incognito collected. The bank enabled buyers and sellers to stay anonymous from each other. The bank’s graphic interface is pictured below:
On March 12, 2020, before Incognito Market launched, LIN emailed himself a rough diagram of a darknet marketplace. That diagram, which is pictured below, contains features consistent with the operation of Incognito Market.
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RUI-SIANG LIN, 23, of Taiwan, pled guilty to one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum potential sentence of life in prison; one count of money laundering, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to sell adulterated and misbranded medication, which carries a maximum potential sentence of five years in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation, Homeland Security Investigations, the Drug Enforcement Administration, the U.S. Food and Drug Administration Office of Criminal Investigations, and the New York City Police Department.
This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the U.S. using a prosecutor-led, intelligence-drive, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel and Nicholas Chiuchiolo are in charge of the prosecution.
United States Obtains Consent Decree Against Lilmor Management, Morris Lieberman, and Others to Abate Lead Paint and Improve Housing Conditions Across More Than 2,500 Apartments in Largely Low and Moderate-Income NeighborhoodsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”); Matthew Ammon, the U.S. Department of Housing and Urban Development (“HUD”) Office of Lead Hazard Control and Healthy Homes; and Rae Oliver Davis, the Inspector General of the HUD Office of the Inspector General (“HUD OIG”), announced today that the United States, together with the State of New York, filed a civil lawsuit against LILMOR MANAGEMENT LLC (“LILMOR”), MORRIS LIEBERMAN (“LIEBERMAN”), and related LLCs (the “LLC DEFENDANTS”) (collectively, the “Defendants”), alleging that since 2012 the Defendants have violated federal law relating to lead-based paint safety and maintained a public nuisance in approximately 2,700 apartments, including more than 2,500 still owned by the LLC Defendants and more than 2,400 apartments currently managed by LILMOR and LIEBERMAN. Among other things, the U.S. and the State of New York allege that the Defendants’ apartments are riddled with peeling lead paint and lead dust; infested by rats, mice, and roaches; damp from perpetual leaks and covered with growing mold; and otherwise a danger to human health. More than 130 children living in the Defendants’ apartments have tested positive for elevated blood-lead levels since 2012.
The parties simultaneously filed a Consent Decree that would resolve the lawsuit and impose extensive relief, including requiring the Defendants to pay $3.575 million in penalties and $2.925 million in restitution to affected tenants, and requiring Defendants to identify and abate all lead-based paint (at an estimated cost of $10 million) and remediate substandard housing conditions across more than 2,500 apartments, subject to the oversight of an independent Housing Specialist selected by the U.S. and New York State.
U.S. Attorney Damian Williams said: “New Yorkers are entitled to protection from lead-paint hazards and other unsafe conditions in their homes. Landlords must comply with federal lead paint laws, and they cannot neglect their residential properties in ways that create a public nuisance. The consent decree we filed today, if entered by the Court, would provide the most extensive relief ever achieved in a case of this kind, including requiring the defendants to make 2,500 apartments safe and sanitary and to pay $6.5 million, including nearly $3 million in restitution to impacted tenants.”
EPA Regional Administrator Lisa F. Garcia said: “Our message to housing authorities, landlords, and renovators is loud and clear – Follow The Law – if you persist in cutting corners and putting public health at risk, we will pursue a violation and you will pay a hefty fine. There is no excuse for these violations. Rather than protecting children from lead poisoning, Lilmor Management Company LLC and the other named defendants systematically violated lead paint safety regulations. EPA appreciates the partnership with HUD, the U.S. Department of Justice and New York State officials on this action that underscores our joint commitment to protect our children and families from lead hazards.”
HUD Director Matthew Ammon said: “Today’s settlement means that thousands of families in New York City will have their apartments tested for lead and made lead safe. HUD’s partnering with DOJ and EPA on this case is part of the whole-of-government approach that is vital for addressing lead hazards in homes nationally.”
HUD-OIG Inspector General Rae Oliver Davis said: “The defendants’ failure to maintain safe and healthy living conditions for tenants, particularly the hundreds of children who have tested positive for elevated blood-lead levels, is simply unacceptable. This consent decree holds the defendants accountable for its egregious conduct. It provides important relief for victims and will require the defendant to take meaningful action to protect tenants from future exposure to health hazards. My office will continue to work with DOJ, HUD, EPA, and our local partners such as the New York Attorney General in addressing critical health and safety issues and safeguarding the well-being of families nationwide from preventable hazards such as lead poisoning.”
Exposure to lead-based paint dust is the most common cause of lead poisoning, which can lead to severe, irreversible health problems, particularly in children. Lead poisoning can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems. Federal law seeks to protect tenants from these grave threats. In particular, the federal Lead Disclosure Rule requires landlords and their agents to inform tenants about the risks of lead exposure in their apartments before entering lease agreements and to disclose known facts about the presence of lead paint and lead paint hazards in their housing. The federal Renovation, Repair, and Painting Rule (“RRP Rule”) provides work-practice standards and related requirements to minimize the risk of lead exposure during renovation projects.
As alleged in the U.S. and New York State’s Complaint filed in the district court, LIEBERMAN is the co-owner and principal of LILMOR, which currently manages a portfolio of more than 2,400 apartments and previously managed others. Many of the apartments are owned by the LLC DEFENDANTS. The apartments are largely located in communities where families have low to moderate incomes and are disproportionately burdened by environmental and other health hazards. For years, the Defendants systematically failed to provide their tenants with disclosures about lead-based paint and lead-based paint hazards in their apartments, as required by the Lead Disclosure Rule. LILMOR and LIEBERMAN also failed to protect tenants when conducting renovation work as required by the RRP Rule, creating risks of exposure to toxic dust. Furthermore, the Defendants failed to properly maintain their residential properties, leading to apartments that were so unsafe and unsanitary as to present a public nuisance.
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In the Consent Decree, LILMOR and LIEBERMAN admit, acknowledge, and accept responsibility for the following, among other things:
- Defendants own, control, or manage, in whole or in part, 49 residential buildings containing 2,539 units in New York City, all of which were built prior to 1978.
- Government records show that, since 2012, more than 130 children have tested positive for elevated blood-lead levels while living in an apartment owned or controlled by one or more of the Defendants.
Disclosures
- Prior to November 2020, LILMOR and LIEBERMAN failed to provide tenants entering new and renewal leases with known information relating to lead-based paint or lead-based paint hazards and/or records in the possession or control of the Defendants relating to lead-based paint or lead-based paint hazards, as required by the federal Lead Disclosure Rule.
- In hundreds of apartments they rented, LILMOR and LIEBERMAN knew of lead-based paint or previous lead-based paint hazards because of prior lead-based paint hazard violations issued by the New York City Department of Housing Preservation and Development (“HPD”) or the New York City Department of Health and Mental Hygiene (“DOHMH”), but LILMOR and LIEBERMAN did not disclose this fact to tenants as required by the Lead Disclosure Rule.
- Prior to the dates upon which government records show that children tested positive for elevated blood-lead levels while residing in the Defendants’ apartments, LILMOR and LIEBERMAN had received citations for lead-based paint hazard violations from HPD or DOHMH for at least 18 of these apartments but did not disclose the fact that these apartments contained lead-based paint to the tenants when they signed their leases or lease renewals.
Lead-Safe Work Practices
- LILMOR and LIEBERMAN lacked federal certification to conduct repairs and renovations that required lead-safe work practices pursuant to the RRP Rule, did not provide maintenance staff with equipment necessary to perform RRP-Rule-compliant work, and did not train maintenance staff on lead-safe work practices. LILMOR and LIEBERMAN provided no instructions to its maintenance staff to prevent them from conducting work that was required to be performed in accordance with lead-safe work practices. Their work-order database nevertheless reflects that work subject to the RRP Rule was conducted by their maintenance staff.
- Through at least 2020, LILMOR and LIEBERMAN failed to follow lead-safe work practices required by federal and local law in covered repair and renovation projects for which they engaged an entity that worked solely or principally for them. During this time, the entity did not employ lead-safe work practices.
- Furthermore, although LILMOR had arranged for this entity to receive EPA certifications required by the RRP Rule in 2010 and 2020, the entity was not certified to conduct work covered by the RRP Rule from 2015 to 2020.
- In a period spanning from 2019 to the present, HPD issued violations to Defendants under applicable housing code provisions:
- more than 966 times for lead-based paint hazards,
- more than 2331 times for rodent or roach infestations,
- more than 1465 times for mold,
- more than 1492 times for leaks, and
- more than 85 times for lack of heat.
The Consent Decree agreed upon by the parties requires the Defendants, among other things, to do the following:
- Identify and abate all lead-based paint across 49 buildings containing more than 2,500 apartments.
- Eliminate substandard conditions throughout this housing portfolio.
- Engage an independent Housing Specialist, selected by the U.S. and the State of New York, to oversee the Defendants’ work under the consent decree.
- Pay a $3.25 million civil penalty to the U.S.
- Pay $3.25 million to New York State, of which $325,000 will be a civil penalty and $2.925 million will be used to pay restitution to tenants harmed by Defendants’ conduct.
- Provide rent-abatement credits for tenants affected by lead-based paint violations and substandard conditions.
- Provide tenant education efforts to tenants related to the hazards of lead-based paint.
To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.
Mr. Williams thanked EPA and HUD attorneys and staff and HUD OIG for their critical work in this matter. Mr. Williams also thanked the Housing Protection Unit of the New York Attorney General’s Office for coordinating in pursuing the federal and state claims resolved in the Consent Decree.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Zack Bannon and Jacob Lillywhite are in charge of the case.
Third Former NYCHA Superintendent Convicted of Bribery and Extortion Offenses at TrialRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Corey Gilmore, a former NYCHA superintendent, was convicted of bribery and extortion under color of official right for taking thousands of dollars from contractors in exchange for awarding those contractors no-bid contracts or approving payment on previously awarded contracts at NYCHA developments for approximately six years. The verdict followed a four-day trial before U.S. District Judge Lewis J. Liman.
U.S. Attorney Damian Williams said: “Corruption is an insidious crime—difficult to detect, corrosive in its effect on government agencies, and damaging to the public’s trust in government institutions. As a NYCHA Superintendent, Corey Gilmore abused his position of public trust by demanding thousands of dollars of bribes from contractors, betraying his duty to NYCHA residents, the City of New York, and taxpayers. The jury’s unanimous verdict sends a clear message that those who use their public offices for personal gain will be held accountable.”
According to the evidence presented in court during the trial:
NYCHA is the largest public housing authority in the country, providing housing to New Yorkers across the City and receiving over $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development (“HUD”) every year. When repairs or construction work at NYCHA housing require the use of outside contractors, services must typically be purchased via a bidding process. However, when the value of a contract was under a certain threshold, designated staff at NYCHA developments, including superintendents, could hire a contractor of their choosing without soliciting multiple bids. With either type of contract, a NYCHA employee needed to certify that the work was satisfactorily completed in order for the contractor to receive payment from NYCHA.
GILMORE, a superintendent at three NYCHA developments in the Bronx between 2016 and 2023—Bronx River Houses, Eastchester Gardens, and Forest Houses—demanded and received cash in exchange for NYCHA contracts. GILMORE typically demanded $1,000 for each contract he awarded. In total, GILMORE demanded and received tens of thousands of dollars in bribes in exchange for hundreds of thousands of dollars in NYCHA contracts.
Of the 70 individual NYCHA employees charged with bribery and extortion offenses in February 2024, 59 have pled guilty, and three have been convicted after trial.
If you believe you have information related to bribery, extortion, or any other illegal conduct by NYCHA employees, please contact [email protected] or (212) 306-3356. If you were involved in such conduct, please consider self-disclosing through the SDNY Whistleblower Pilot Program at [email protected].
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GILMORE, 46, of Garnerville, New York, was convicted of one count of federal program bribery, which carries a maximum term of 10 years in prison, and one count of extortion under color of official right, which carries a maximum term of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation, U.S. Department of Homeland Security – Homeland Security Investigations (“HSI”), the HUD Office of Inspector General, and the U.S. Department of Labor – Office of Inspector General, which work together collaboratively as part of the HSI Document and Benefit Fraud Task Force, as well as the special agents and task force officers of the U.S. Attorney’s Office for the Southern District of New York.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Emily Deininger, Matthew King, and Derek Wikstrom are in charge of the prosecution, with the assistance of Paralegal Specialist Braden Florczyk.
OFAC-Sanctioned Afghan Man Sentenced to 30 Years in Prison for Narco-Terrorism and Witness TamperingRead the Press Release
Haji Abdul Satar Abdul Manaf, 59, of Afghanistan, also known as Haji Abdul Sattar Barakzai, was sentenced to 30 in prison for attempting to import heroin into the U.S., engaging in narco-terrorism for the benefit of the Taliban, attempting to engage in narco-terrorism for the benefit of the Haqqani Network, and witness tampering offenses. Manaf was convicted after a two-week jury trial that concluded in August.
According to court documents, evidence at trial, and statements made in public court proceedings, the Treasury Department sanctioned Manaf in June 2012, pursuant to the U.S.’ terrorism sanctions authority, Executive Order No. 13224, for storing or moving money for the Taliban. Upon announcing the sanctions against Manaf, the Treasury Department stated that Manaf “donated thousands of dollars to the Taliban to support Taliban activities in Afghanistan and has distributed funds to the Taliban” and provided money “to aid the Taliban’s fight against Coalition Forces.”
Beginning in at least January 2018, Manaf attempted to import large quantities of heroin into the United Sates; paid benefits to the Taliban to support his heroin trafficking; and attempted to provide financial support to the Haqqani Network, a violent faction of the Taliban. Specifically, Manaf participated at in-person meetings, recorded telephone calls, and electronic communications with five individuals whom Manaf understood to be affiliated with an international drug trafficking organization. During those meetings, Manaf helped arrange to import large quantities of heroin into the U.S. with the assistance of — and recognizing that some of the proceeds of that narcotics trafficking would be provided to — the Taliban and the Haqqani Network. Four of these individuals were, in fact, DEA confidential sources. The fifth was an undercover DEA agent (the UC).
The Haqqani Network and the Taliban have committed highly public acts of terrorism against U.S. interests, including U.S. and coalition forces in Afghanistan. In August 2018, Manaf sold the UC a ten-kilogram shipment of heroin in Afghanistan, after the UC told Manaf that the heroin would ultimately be imported into the United States for sale in New York. Manaf repeatedly told the UC that Manaf had paid the Taliban in connection with the production of the ten-kilo shipment and reported that heavily armed members of the Taliban would guard and transport future heroin shipments for Manaf and the UC. In August 2018, Manaf facilitated the transfer of thousands of dollars of what he believed to be narcotics proceeds through his money-remitting business to individuals Manaf had been advised were members of the Haqqani Network. Manaf subsequently agreed to supply the UC with thousand-kilogram loads of heroin for importation into the United States.
Following his arrest overseas and subsequent extradition, while incarcerated in New York pending trial in this case, Manaf directed members of his family in Afghanistan to kidnap and threaten a DEA source — a witness to his crimes — in an effort to silence him. Specifically, in a series of recorded prison calls in February and March 2019, Manaf directed his brothers to bring the source to Manaf’s family home, to “not let him go even for a minute,” to take the source’s phone, and to hand the source over to a “security chief” who would make the source “confess like a parrot” and “tell the whole story in two minutes.” Manaf’s brothers did just as he directed — they kidnapped that DEA source at gunpoint in Afghanistan and threatened to kill him.
In addition to the prison term, Manaf was sentenced to five years of supervised release and ordered to forfeit the proceeds of his crimes.
The DEA Special Operations Division’s Bilateral Investigations Unit; the DEA European Regional Director; the DEA Copenhagen, Canberra, Dubai, Islamabad, Kabul, New Delhi, and Sydney Country Offices; the Government of Estonia; and the Australian Criminal Intelligence Commission investigated the case.
Assistant U.S. Attorneys Sam Adelsberg, Nicholas S. Bradley, and Kimberly J. Ravener for the Southern District of New York are prosecuting the case with assistance from Trial Attorney Joshua Champagne of the National Security Division’s Counterterrorism Section.
OFAC-Sanctioned Afghan Man Sentenced to 30 Years in Prison for Narco-Terrorism and Witness TamperingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that HAJI ABDUL SATAR ABDUL MANAF, a/k/a “Haji Abdul Sattar Barakzai,” was sentenced to 30 years in prison for attempting to import heroin into the U.S., engaging in narco-terrorism for the benefit of the Taliban, attempting to engage in narco-terrorism for the benefit of the Haqqani Network, and witness tampering offenses. MANAF was convicted after a two-week jury trial that concluded in August 2024. The sentence was imposed by U.S. District Judge Jed S. Rakoff, who also presided over the trial.
U.S. Attorney Damian Williams said: “Haji Abdul Satar Abdul Manaf was in the business of peddling poison. He leveraged the help of terrorists—the Taliban—to advance his drug business and to expand his drug trafficking operation to the United States. And he did not hesitate to order the kidnapping of a critical witness at gunpoint in an effort to silence him. Thankfully, our law enforcement allies, in partnership with the career national security prosecutors of this Office, put an end to his years of narco-terrorism.”
DEA Administrator Anne Milgram said: “Haji Abdul Satar Abdul Manaf used heroin as a weapon of war, funding the Taliban and Haqqani Network to spread terror and death. His poison targeted our streets while his profits fueled violence against U.S. coalition forces. Today's sentence sends a clear message: narco-terrorists who bankroll terror and threaten American lives will be brought to justice, no matter where they hide.”
According to the Complaint, Indictment, evidence at trial, and statements made in public court proceedings:
In June 2012, the U.S. Treasury Department sanctioned MANAF pursuant to the U.S.’s terrorism sanctions authority, Executive Order No. 13224, for storing or moving money for the Taliban. In announcing the sanctions against MANAF, the Treasury Department stated that MANAF “donated thousands of dollars to the Taliban to support Taliban activities in Afghanistan and has distributed funds to the Taliban” and provided money “to aid the Taliban’s fight against Coalition Forces.”
Beginning in at least January 2018, MANAF attempted to import large quantities of heroin into the U.S.; paid benefits to the Taliban to support his heroin trafficking; and attempted to provide financial support to the Haqqani Network, a violent faction of the Taliban. Specifically, MANAF participated in in-person meetings, recorded telephone calls, and electronic communications with five individuals whom MANAF understood to be affiliated with an international drug trafficking organization. During those meetings, MANAF helped arrange to import large quantities of heroin into the U.S. with the assistance of—and recognizing that some of the proceeds of that narcotics trafficking would be provided to—the Taliban and the Haqqani Network. Four of these individuals were, in fact, DEA confidential sources. The fifth was an undercover DEA agent (the “UC”).
The Haqqani Network and the Taliban have committed highly public acts of terrorism against U.S. interests, including U.S. and coalition forces in Afghanistan. In August 2018, MANAF sold the UC a ten-kilogram shipment of heroin (the “Ten Kilo Shipment”) in Afghanistan, after the UC told MANAF that the heroin would ultimately be imported into the United States for sale in New York. MANAF repeatedly told the UC that MANAF had paid the Taliban in connection with the production of the Ten Kilo Shipment, and reported that heavily armed members of the Taliban would guard and transport future heroin shipments for MANAF and the UC. In August 2018, MANAF facilitated the transfer of thousands of dollars of what he believed to be narcotics proceeds through his money-remitting business to individuals MANAF had been advised were members of the Haqqani Network. MANAF subsequently agreed to supply the UC with thousand-kilogram loads of heroin for importation into the United States.
Following his arrest overseas and subsequent extradition, and while incarcerated in New York pending trial in this case, MANAF directed members of his family in Afghanistan to kidnap and threaten a DEA source—a witness to his crimes—in an effort to silence him. Specifically, in a series of recorded prison calls in February and March 2019, MANAF directed his brothers to bring the source to MANAF’s family home, to “not let him go even for a minute,” to take the source’s phone, and to hand the source over to a “security chief” who would make the source “confess like a parrot” and “tell the whole story in two minutes.” MANAF’s brothers did just as he directed—they kidnapped that DEA source at gunpoint in Afghanistan and threatened to kill him.
* * *
In addition to the prison term, MANAF, 59, of Afghanistan, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative efforts of the DEA’s Special Operations Division’s Bilateral Investigations Unit; the DEA European Regional Director; the DEA Copenhagen, Canberra, Dubai, Islamabad, Kabul, New Delhi, and Sydney Country Offices; the Government of Estonia; and the Australian Criminal Intelligence Commission.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Nicholas S. Bradley, and Kimberly J. Ravener are in charge of the prosecution, with assistance from Trial Attorney Joshua Champagne of the Counterterrorism Section.
Maximiliano Davila-Perez, Former Head of Bolivian Anti-Narcotics Agency, Extradited to the United States from Bolivia on Cocaine Importation and Firearms ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that MAXIMILIANO DAVILA-PEREZ, a/k/a “Macho,” was extradited from Bolivia and arrived in the U.S. this morning to face federal charges for conspiring to import cocaine into the U.S. and conspiring to use and possess machineguns in connection with this cocaine importation conspiracy. DAVILA-PEREZ will make his initial appearance in the Southern District of New York this afternoon before the Honorable Robyn F. Tarnofsky. DAVILA-PEREZ’s case is assigned to U.S. District Court Judge Denise L. Cote.
U.S. Attorney Damian Williams said: “As alleged, Maximiliano Davila-Perez abused his position as the head of Bolivia’s anti-narcotics law enforcement agency to instead aid the very narcotics traffickers he was entrusted to investigate and arrest. Along the way, he sought to use Bolivian law enforcement officers to guard and transport cocaine shipments and participate in the shipment of massive quantities of cocaine. While this conduct is abhorrent, it is sadly not shocking; instead, this is the latest example of our work with the DEA’s Special Operations Division in rooting out this type of cocaine-fueled corruption around the globe. Let this be another loud message to those who would abuse their positions to send ton-quantities of cocaine to the United States: our reach is global, our memory is long, and we will not allow you to continue to flood our country with cocaine without punishment. I commend the work of the career prosecutors of this Office, who have investigated and prosecuted these cases alongside the Special Operations Division for years and will continue to do so for as long as remains necessary.”
DEA Administrator Anne Milgram said: “Maximiliano Davila-Perez was supposed to fight the drug trade, but instead he fueled it. As the head of Bolivia's anti-narcotics agency, he turned law enforcement into a cocaine trafficking machine, seeking to flood our streets with poison. His betrayal of public trust ends here. Let this extradition serve as a warning: no corrupt official is untouchable, and the DEA will stop at nothing to bring criminals to justice, no matter where they hide.”
According to the allegations contained in the Superseding Indictment, other court filings, and statements made during court proceedings:[1]
Until in or about November 2019, DAVILA-PEREZ was the Director of Bolivia’s chief anti-narcotics law enforcement agency, Fuerza Especial de Lucha Contra el Narcotráfico (“FELCN”). In DAVILA-PEREZ’s role as Director of FELCN, he exploited his official position in furtherance of large-scale cocaine trafficking activities, including by seeking to divert resources away from investigating traffickers supported by DAVILA-PEREZ, and by providing heavily armed FELCN officers under his command as security for cocaine shipments. DAVILA-PEREZalso worked in partnership with large-scale cocaine suppliers who operated cocaine labs in Bolivia and agreed to ship more than a thousand kilograms of Bolivian cocaine to New York.
In or around July 2019, while DAVILA-PEREZ was still the Director of FELCN, DAVILA-PEREZ and his co-conspirators were recorded while they discussed a plot to send over one ton of cocaine to the U.S. via airplane from Bolivia. During that meeting, DAVILA-PEREZ suggested using particular airfields in Bolivia at which he controlled airport security and could divert law enforcement resources to provide cover while the aircraft was loaded with ton-quantities of cocaine. DAVILA-PEREZ also committed to providing uniformed FELCN officers armed with machineguns to guard the plane during loading and before takeoff. DAVILA-PEREZ explained that he charged by-the-kilogram rates for the protection of the cocaine load.
In November 2019, DAVILA-PEREZ was demoted from his post at FELCN but continued to use his political influence and law enforcement authority while he conspired to import ton-quantities of cocaine from Bolivia to the U.S. and provide armed paramilitary protection for those cocaine shipments. Indeed, between November 2019 and February 2020, during a series of recorded meetings and calls, DAVILA-PEREZ and his co-conspirators continued to arrange the anticipated cocaine shipment. During those meetings, DAVILA-PEREZ discussed the drug competition in the New York market; his continued promise to provide armed protection for the cocaine shipment; and the successful delivery of a 10-kilogram sample of cocaine in Lima, Peru, which was delivered on or about December 10, 2019, in anticipation of the larger cocaine shipment that DAVILA-PEREZ and his co-conspirators intended to import to the U.S. under DAVILA-PEREZ’s protection.
* * *
DAVILA-PEREZ, 60, of Bolivia, is charged with: conspiring to import cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison; and conspiring to use and carry machineguns during, and to possess machineguns in furtherance of, the cocaine importation conspiracy, which carries a maximum term of life in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding efforts of the Special Operations Division of the DEA Bilateral Investigations Unit for its ongoing assistance. He also thanked the DEA Southern Cone Division, the DEA Newark Field Division, the DEA Aviation Division, and the U.S. Department of Justice’s Office of International Affairs for securing extradition of DAVILA-PEREZ.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Matthew J.C. Hellman, and David J. Robles are in charge of the prosecution.
The charges in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Indictment and court filings set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
U.S. Attorney Announces Findings of Civil Rights Violations by the Mount Vernon Police DepartmentRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Kristen Clarke, Assistant Attorney General for the Department of Justice’s Civil Rights Division, announced today that the Department of Justice, following a comprehensive investigation, has concluded that the Mount Vernon Police Department (“MVPD”) engages in a pattern or practice of conduct that deprives people of rights secured by the U.S. Constitution and federal law.
Specifically, the Department of Justice finds that MVPD:
- Uses excessive force in numerous ways, including by unnecessarily escalating minor encounters, and by excessive use of tasers and closed-fist strikes, particularly against individuals who have already been taken to the ground, are controlled by many officers, or are already fully or partially restrained;
- Conducted unlawful strip searches and body cavity searches of individuals until at least 2023; and
- Makes arrests without probable cause.
The Department also identified serious concerns with MVPD’s vehicle stop and evidence collection practices, as well as serious concerns about discriminatory policing in predominantly Black neighborhoods. Deficiencies in policies, training, supervision, and accountability systems contribute to MVPD’s unlawful practices.
U.S. Attorney Damian Williams said: “Our investigation has found reasonable cause to believe that MVPD engages in a pattern or practice of conduct that violates the constitutional rights of the citizens it has sworn to protect. The systemic deficiencies we identified have resulted in a pattern of MVPD officers using excessive force; making illegal arrests; and, for many years, regularly conducting unlawful strip searches and body cavity searches. We are encouraged by the recent steps the City of Mount Vernon and the MVPD have taken that evince a commitment to constitutional policing, and we look forward to continued cooperation to ensure that MVPD keeps its community safe from crime while respecting its citizens’ constitutional rights.”
Assistant Attorney General Kristen Clarke said: “Our investigation into the Mount Vernon Police Department reveals a pattern and practice of unlawful conduct that can and must be addressed. While officials have undertaken preliminary actions to address some areas of concern, the city and police department must institute comprehensive measures that will fully and finally bring an end to these unconstitutional practices. It will require commitment and hard work by the leadership of the city and the police department as well as by rank-and-file officers. We stand ready to work with Mount Vernon officials to achieve constitutional policing and to strengthen community trust. Police reform will not happen overnight. Across the country, the department’s investigations, findings reports and resulting reform measures help law enforcement agencies become the departments that their citizens need and deserve.”
The Department of Justice opened this investigation on December 3, 2021. The investigation was conducted by career attorneys and staff in the Civil Division of the U.S. Attorney’s Office for the Southern District of New York and the Civil Rights Division’s Special Litigation Section. The Department interviewed MVPD command staff and supervisors, patrol officers, police union representatives, Mount Vernon residents, prosecutors from the Westchester County District Attorney’s Office, defense attorneys, and local civic associations. The Department also reviewed MVPD’s arrest reports, use-of-force reports, stops, search, and arrest data, policies, training materials, and internal affairs files.
The Department met regularly throughout the investigation with City of Mount Vernon and MVPD officials to provide feedback on the observations of the Department and the Department’s policing experts.
The Department conducted this investigation pursuant to 34 U.S.C. § 12601 (Section 12601), which prohibits law enforcement officers from engaging in a pattern or practice of conduct that deprives people of rights protected by the Constitution or federal law.
The Department will be conducting outreach to members of the Mount Vernon community for input on remedies to address the investigation’s findings. Individuals may also submit recommendations by email at [email protected] or by phone at 1-866-985-1378.
This is one of 12 investigations into law enforcement agencies opened by the Department of Justice under Section 12601 since April 2021. The Department has issued Section 12601 findings reports regarding seven of those investigations: the Louisville, Kentucky, Metro Police Department; Minneapolis, Minnesota, Police Department; the Phoenix, Arizona, Police Department; the Lexington, Mississippi, Police Department; the Trenton, New Jersey, Police Department; the Memphis, Tennessee, Police Department; and the Worcester, Massachusetts, Police Department. The four other investigations cover the Louisiana State Police; New York City Police Department’s Special Victims Division; the Oklahoma City, Oklahoma, Police Department; and Rankin County, Mississippi, Sheriff’s Department.
The U.S. Attorney’s Office for the Southern District of New York specifically has handled four investigations since the passage of the Violent Crime Control and Law Enforcement Act of 1994, now known as Section 12601. The Southern District of New York successfully concluded its investigation with police practice reforms to the Beacon Police Department in 2010 and to the Yonkers Police Department in 2024. In addition to announcing its findings with regard to the MVPD, the Southern District is continuing its investigation into the New York City Police Department’s Special Victims Division announced on June 30, 2022.
Additional information about the U.S. Attorney’s Office for the Southern District of New York is available at https://www.justice.gov/usao-sdny. Additional information about the Civil Rights Division is available on its website at https://www.justice.gov/crt. Information specific to the Civil Rights Division’s Police Reform Work can be found here: https://www.justice.gov/crt/file/922421/download.
The Justice Department will hold a virtual community meeting on December 16, 2024, at 6:00 p.m. E.T. Members of the public are encouraged to attend to learn more about the findings.
Please register to join the meeting at: www.zoomgov.com/webinar/register/WN_jxTvdftFR_KZtUwFvH1ADQ.
The case is being handled by the Civil Rights Unit in the Civil Division of the U.S. Attorney’s Office for the Southern District of New York and the Special Litigation Section of the Civil Rights Division, in Washington, D.C. Assistant U.S. Attorneys Lucas Issacharoff and Jacob Lillywhite and Trial Attorney Nicole Porter are in charge of the case.
Russian National Indicted for Assisting Sanctioned Oligarch in Schemes to Employ an American Citizen to Launch and Operate Russian Television NetworkRead the Press Release
Note: View the superseding indictment here.
WASHINGTON — A superseding indictment was unsealed today charging Alexey Komov, 53, of Russia, with conspiracy and violations of U.S. sanctions arising from his assistance to sanctioned Russian oligarch Konstantin Malofeyev, who was previously charged with sanctions violations in April 2022.
As alleged, Komov conspired with Malofeyev to recruit and employ an American citizen, Jack Hanick, who worked for Malofeyev in launching and operating a television network in Russia. Komov also conspired with Malofeyev, Hanick, and others to illegally transfer a $10 million investment that Malofeyev had made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Malofeyev’s assets from being transferred.
“The indictment alleges Alexey Komov played an essential role in a multi-faceted scheme to violate and evade U.S. sanctions imposed on a significant financier of Russian aggression in Ukraine,” said Co-Director Menno Goedman of Task Force KleptoCapture. “Task Force KleptoCapture will continue to disrupt schemes perpetrated by Komov and other sanction evaders, whenever and wherever they may hide.”
“As alleged, Alexey Komov facilitated the efforts of Konstantin Malofeyev — an oligarch closely tied to Russian aggression in Ukraine who has been determined by the Department of Treasury’s Office of Foreign Assets Control (OFAC) to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine — to flout U.S. sanctions,” said U.S. Attorney Damian Williams for the Southern District of New York. “The unsealing today of the indictment against Komov is yet another reminder that this office will continue to hold those accountable that seek to undermine the United States’ national security goals.”
In 2014, the president issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the president blocked all property and interest in property that came within the United States or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13660, along with certain regulations issued pursuant to it (the Ukraine-Related Sanctions Regulations) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked.
On Dec. 19, 2014, OFAC designated Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.
As alleged in the indictment, beginning in at least 2012, Komov assisted Malofeyev in recruiting and hiring a U.S. citizen named Jack Hanick to work on a new Russian cable television news network that Malofeyev was creating. As part of Komov’s recruitment of Hanick, Komov travelled to Manhattan to meet with Hanick and subsequently introduced Hanick to Malofeyev in Russia. With Komov’s knowledge, Malofeyev negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa. Malofeyev paid Hanick through two separate Russian entities through the end of 2018.
After OFAC designated Malofeyev as a SDN in December 2014, Malofeyev continued to employ Hanick on the Russian TV Network, with Komov’s assistance and input, and in violation of the Ukraine-Related Sanctions Regulations. For example, prior to the launch of the Russian TV Network on the air in Russia in April 2015, Komov wrote an email to Malofeyev, Hanick, and another employee, referencing their prior discussion with Malofeyev earlier that day and instructing Hanick to create two types of programs and allocate staff. Komov further wrote, “Hopefully Konstantin will be providing general direction and guidance for both projects. Looking forward to our long-term co-operation on those exciting endeavors!” In turn, Hanick requested Komov to serve as a moderator for the first broadcast, writing “KM [i.e. Malofeyev] and I agree that we need you on this the first show on [the Russian TV Network]!!!”
With Komov’s participation, Malofeyev also employed Hanick to assist Malofeyev in transferring a shell company that Malofeyev owned to a Greek associate of Malofeyev. In 2014, Malofeyev, assisted by Komov, had used the shell company to make a $10 million investment in a Texas-based bank holding company. Komov helped set up the deal, emailing a Texas-based attorney (Individiual-1), “I plan to come to the US with two of my close friends Konstantin Malofeev [sic] and [another individual] on Feb 4-9, 2014 . . . I’d like the three of us to meet with you to discuss our cooperation, and also joint investment projects (please propose attractive investment opportunities with reliable partners for $50-100 mln participation from our side)”. On or about March 25, 2014, Komov wrote to Individual-I, “Konstantin has confirmed today that he goes ahead with the 10 mln investment in the bank project.”
Beginning in or about March 2015, with Komov’s assistance, Malofeyev began making plans to transfer ownership of the shell company to the Greek Business Associate, in violation of the Ukraine-Related Sanctions Regulations. On or about March 4, 2015, Komov wrote to Individual-1, “I need to discuss with you several things: previous investment in the bank project (we want to consider selling it)”. On or about March 17, 2015, Komov wrote to Individual-1 about the Texas Bank Interest, in part, “We want to keep it where it is now, only the owner from our side changes.” Consistent with that plan, in or about May 2015, Malofeyev’s attorney drafted a sale and purchase agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 Malofeyev had Hanick physically transport a copy of Malofeyev’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. Malofeyev signed the sale and purchase agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of U.S. sanctions. Malofeyev’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though Malofeyev and his attorney well knew that the transfer of the shell company was executed in June 2015.
The United States seized and forfeited approximately $5.4 million in the property traceable to Malofeyev’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked U.S. bank account. In February 2023, the U.S. Attorney General authorized a transfer of these forfeited funds to the State Department to support Ukrainian veterans.
Malofeyev and Komov are believed to be in Russia and remains at large. Komov is charged with one count of violating the International Emergency Economic Powers Act and one count of conspiring to do the same, each of which carry a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case with assistance from the Justice Department’s Office of International Affairs.
Assistant U.S. Attorneys Vladislav Vainberg, Thane Rehn, and Jessica Greenwood for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Section are prosecuting the case.
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 beyond a reasonable doubt in a court of law.
Russian National Assisted Sanctioned Oligarch in Schemes to Employ an American Citizen to Launch and Operate Russian Television NetworkRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Menno Goedman, the Co-Director of Task Force KleptoCapture, and James E. Dennehy, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging ALEXEY KOMOV with conspiracy and violations of U.S. sanctions arising from his assistance to sanctioned Russian oligarch KONSTANTIN MALOFEYEV, who was previously charged in April 2022. As alleged, KOMOV conspired with MALOFEYEV to recruit and employ an American citizen, Jack Hanick, who worked for MALOFEYEV in launching and operating a television network in Russia. KOMOV also conspired with MALOFEYEV, Hanick, and others to illegally transfer a $10 million investment that MALOFEYEV had made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking MALOFEYEV’s assets from being transferred.
U.S. Attorney Damian Williams said: “As alleged, Alexey Komov facilitated the efforts of Konstantin Malofeyev – an oligarch closely tied to Russian aggression in Ukraine who has been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine – to flout U.S. sanctions. The unsealing today of the Indictment against Komov is yet another reminder that this Office will continue to hold those accountable that seek to undermine the United States’ national security goals.”
KleptoCapture Co-Director Menno Goedman said: “The indictment alleges Alexey Komov played an essential role in a multi-faceted scheme to violate and evade U.S. sanctions imposed on a significant financier of Russian aggression in Ukraine. Task Force KleptoCapture will continue to disrupt schemes perpetrated by Komov and other sanction evaders, whenever and wherever they may hide.”
FBI Assistant Director in Charge James E. Dennehy said: “Alexey Komov, a Russian national, allegedly conspired with an American citizen and a sanctioned Russian oligarch to develop a Russian cable network to promote anti-Western propaganda. This alleged conspiracy violated laws designed to protect the national security of the United States and our allies. The FBI remains committed to apprehending foreign nationals who employ our citizens to satisfy their odious agenda.”
According to the Indictment unsealed today in Manhattan federal court:[1]
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the U.S. or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13660, along with certain regulations issued pursuant to it (the “Ukraine-Related Sanctions Regulations”) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked.
On December 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) designated MALOFEYEV as a Specially Designated National (“SDN”) pursuant to Executive Order 13660. OFAC’s designation of MALOFEYEV explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.
As alleged in the Indictment, beginning in at least 2012, KOMOV assisted MALOFEYEV in recruiting and hiring a U.S. citizen named Jack Hanick to work on a new Russian cable television news network (the “Russian TV Network”) that MALOFEYEV was creating. As part of KOMOV’s recruitment of Hanick, KOMOV travelled to Manhattan to meet with Hanick and subsequently introduced Hanick to MALOFEYEV in Russia. With KOMOV’s knowledge, MALOFEYEV negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa. MALOFEYEV paid Hanick through two separate Russian entities through the end of 2018.
After OFAC designated MALOFEYEV as a SDN in December 2014, MALOFEYEV continued to employ Hanick on the Russian TV Network, with KOMOV’s assistance and input, and in violation of the Ukraine-Related Sanctions Regulations. For example, prior to the launch of the Russian TV Network on the air in Russia in April 2015, KOMOV wrote an e-mail to MALOFEYEV, Hanick, and another employee, referencing their prior discussion with MALOFEYEV earlier that day and instructing Hanick to create two types of programs and allocate staff. KOMOV further wrote, “Hopefully Konstantin will be providing general direction and guidance for both projects. Looking forward to our long-term co-operation on those exciting endeavors!” In turn, Hanick requested KOMOV to serve as a moderator for the first broadcast, writing “KM [i.e. MALOFEYEV] and I agree that we need you on this the first show on [the Russian TV Network]!!!”
With KOMOV’s participation, MALOFEYEV also employed Hanick to assist MALOFEYEV in transferring a shell company that MALOFEYEV owned to a Greek associate of MALOFEYEV (the “Greek Business Associate”). In 2014, MALOFEYEV, assisted by KOMOV, had used the shell company to make a $10 million investment in a Texas-based bank holding company (the “Texas Bank”). KOMOV helped set up the deal, emailing a Texas-based attorney (“Individiual-1”), “I plan to come to the US with two of my close friends Konstantin Malofeev [sic] and [another individual] on Feb 4-9, 2014 . . . I’d like the three of us to meet with you to discuss our cooperation, and also joint investment projects (please propose attractive investment opportunities with reliable partners for $50-100 mln participation from our side)”. On or about March 25, 2014, KOMOV wrote to Individual-I, “Konstantin has confirmed today that he goes ahead with the 10 mln investment in the bank project.”
Beginning in or about March 2015, with KOMOV’s assistance, MALOFEYEV began making plans to transfer ownership of the shell company to the Greek Business Associate, in violation of the Ukraine-Related Sanctions Regulations. On or about March 4, 2015, KOMOV wrote to Individual-1, “I need to discuss with you several things: previous investment in the bank project (we want to consider selling it)”. On or about March 17, 2015, KOMOV wrote to Individual-I about the Texas Bank interest, in part, “We want to keep it where it is now, only the owner from our side changes.” Consistent with that plan, in or about May 2015, MALOFEYEV’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 MALOFEYEV had Hanick physically transport a copy of MALOFEYEV’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. MALOFEYEV signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of U.S. sanctions. MALOFEYEV’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though MALOFEYEV and his attorney well knew that the transfer of the shell company was executed in June 2015.
The U.S. seized and forfeited approximately $5.4 million in the property traceable to MALOFEYEV’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked U.S. bank account. In February 2023, the U.S. Attorney General authorized a transfer of these forfeited funds to the State Department to support Ukrainian veterans.
MALOFEYEV, of Russia, is believed to be in Russia and remains at large.
* * *
KOMOV, 53, a Russian national, is charged with conspiracy to violate and substantive violation of International Emergency Economic Powers Act, each of which carry a maximum potential sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI and thanked the support and expertise of the Department of Justice’s National Security Division and Office of International Affairs in the conduct of this matter.
The prosecution is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Vladislav Vainberg, Thane Rehn, Jessica Greenwood, and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Section are in charge of the prosecution.
[1] The entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Justice Department Finds Civil Rights Violations by the Mount Vernon, New York, Police DepartmentRead the Press Release
Following a comprehensive investigation, the Justice Department announced today that the Mount Vernon, New York, Police Department (MVPD) engages in a pattern or practice of conduct that deprives people of rights secured by the U.S. Constitution and federal law.
Specifically, the Justice Department finds that MVPD:
- Uses excessive force in numerous ways, including by unnecessarily escalating minor encounters and by overusing tasers and closed-fist strikes, particularly against individuals who have already been taken to the ground, are controlled by many officers or are already fully or partially restrained;
- Conducted unlawful strip searches and body cavity searches of individuals until at least 2023; and
- Makes arrests without probable cause.
The department also identified serious concerns with MVPD’s practices regarding vehicle stops and evidence collection, as well as serious concerns that MVPD practices may result in discriminatory policing. Deficiencies in policies, training, supervision and accountability systems contribute to MVPD’s unlawful practices.
“Our investigation into the Mount Vernon Police Department reveals a pattern and practice of unlawful conduct that can and must be addressed,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “While officials have undertaken preliminary actions to address some areas of concern, the city and police department must institute comprehensive measures that will fully and finally bring an end to these unconstitutional practices. It will require commitment and hard work by the leadership of the city and the police department as well as by rank-and-file officers. We stand ready to work with Mount Vernon officials to achieve constitutional policing and to strengthen community trust. Police reform will not happen overnight. Across the country, the department’s investigations, findings reports and resulting reform measures help law enforcement agencies become the departments that their citizens need and deserve.”
“Our investigation has found reasonable cause to believe that MVPD engages in a pattern or practice of conduct that violates the constitutional rights of the citizens it has sworn to protect,” said U.S. Attorney Damian Williams for the Southern District of New York. “The systemic deficiencies we identified have resulted in a pattern of MVPD officers using excessive force; making illegal arrests; and, for many years, regularly conducting unlawful strip searches and body cavity searches. We are encouraged by the recent steps the City of Mount Vernon and the MVPD have taken that evince a commitment to constitutional policing, and we look forward to continued cooperation to ensure that MVPD keeps its community safe from crime while respecting its citizens’ constitutional rights.”
The Justice Department opened this investigation on Dec. 3, 2021. The investigation was conducted by career attorneys and staff in the Civil Rights Division’s Special Litigation Section and U.S. Attorney’s Office for the Southern District of New York. The department interviewed MVPD command staff and supervisors, patrol officers, police union representatives, Mount Vernon residents, prosecutors from the Westchester County District Attorney’s Office, defense attorneys and local civic associations. The department also reviewed MVPD’s arrest reports, use-of-force reports, stops, search, and arrest data, policies, training materials and internal affairs files.
The department met regularly throughout the investigation with city and MVPD officials to provide feedback on the observations by the department and the department’s policing experts. The city and MVPD cooperated throughout the investigation.
The department conducted this investigation pursuant to 34 U.S.C. § 12601 (Section 12601), which prohibits law enforcement officers from engaging in a pattern or practice of conduct that deprives people of rights protected by the Constitution or federal law.
MVPD has implemented a number of changes since the opening of the investigation. For example, MVPD is working with the city to equip all officers with body-worn cameras and less-lethal weapons. MVPD also has made progress in connection with strip and cavity searches, including by revising its policy and offering training on it. The department’s findings report outlines additional remedial measures necessary to address its findings.
The City has pledged to work cooperatively with the Justice Department to address the findings.
The Justice Department will be conducting outreach to members of the Mount Vernon community for input on remedies to address the investigation’s findings. Individuals may also submit recommendations by email at [email protected] or by phone at 1-866-985-1378.
Since January 2021, the Justice Department has opened 12 investigations into law enforcement agencies pursuant to 34 U.S.C. § 12601, and has been actively monitoring over a dozen agreements with law enforcement agencies that were secured prior to that period. Since 2021, the department has successfully concluded agreements and portions of consent decrees with the Yonkers, New York Police Department; the Albuquerque, New Mexico, Police Department; the Suffolk County, New York, Police Department; the Portland, Oregon, Police Bureau; and the Seattle Police Department. The department has issued findings reports concerning several agencies including: Louisville, Kentucky, Metro Police Department; the Minneapolis, Minnesota, Police Department; the Phoenix, Arizona, Police Department; the Lexington, Mississippi, Police Department; the Trenton, New Jersey, Police Department; the Memphis, Tennessee, Police Department; and the Worcester, Massachusetts, Police Department. Investigations are ongoing regarding the Louisiana State Police; the New York City Police Department’s Special Victims Division; the Oklahoma City, Oklahoma, Police Department; and the Rankin County, Mississippi, Sheriff’s Department.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the Southern District of New York is available at www.justice.gov/usao-sdny.
The Justice Department will hold a virtual community meeting on Dec. 16 at 6 p.m. ET. Members of the public are encouraged to attend to learn more about the findings. Please register to join the meeting at www.zoomgov.com/webinar/register/WN_jxTvdftFR_KZtUwFvH1ADQ.
U.S. Attorney Reaches $1.47 Million Civil Fraud Settlement with Owner of Footwear Business for Submitting False Information to Obtain Paycheck Protection Program LoansRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Amaleka McCall-Brathwaite, the Special Agent in Charge of the Eastern Regional Office of the U.S. Small Business Administration, Office of Inspector General (“SBA-OIG”), announced that the United States has filed and settled a civil fraud lawsuit against STEFANO MARONI for including false information in applications for Paycheck Protection Program (“PPP”) loans he submitted on behalf of two related New York City-based companies he owned and operated, in violation of the False Claims Act. The settlement resolves claims that MARONI improperly obtained separate first-draw and second-draw PPP loans for GMI USA Corp. (“GMI”) and Belovefine, Ltd. (“Belovefine”), when the two entities in fact operated essentially the same footwear design and importation business during the relevant timeframe, using a single office space and sharing the same employees. The U.S. alleged, among other things, that MARONI inflated payroll figures in the PPP loan and forgiveness applications by double-counting the salaries of shared employees when only one entity paid these employees’ salaries a at a given time, and improperly sought loan forgiveness for certain payroll costs in excess of allowable forgiveness amounts.
Under the settlement agreement approved by U.S. District Judge Jennifer H. Rearden on December 9, 2024, MARONI will pay the U.S. $1,470,085.65 and has agreed to the entry of a consent judgment in that amount. As part of the settlement, MARONI admitted and accepted responsibility for certain conduct alleged in the Government’s Complaint, including that he misrepresented and inflated the total payroll and employee headcounts in Belovefine’s and GMI’s first and second-draw PPP applications and loan forgiveness applications, which increased the amount of the PPP loans received and the amounts forgiven. Belovefine and GMI are no longer doing business or in operation.
The PPP was an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and administered by the SBA. The PPP was created to provide forgivable loans to support small businesses struggling to pay employees and other business expenses during the COVID-19 pandemic. Under the PPP, eligible businesses could obtain SBA-guaranteed loans to spend on payroll costs, rent or mortgage, and other specified business expenses. The amount of PPP funds a business was eligible to receive was determined by the number of individuals employed by the business and average payroll costs. When applying for PPP loans, borrowers were required to certify that they were eligible for the requested loan and that the information provided in the loan application was true and accurate. To receive forgiveness, borrowers were required to submit signed loan forgiveness applications and documents containing certain information and certifications. In December 2020, Congress approved funding for a second round of PPP loans, which became available to borrowers beginning in January 2021.
U.S. Attorney Damian Williams said: “Stefano Maroni submitted false information and false certifications to receive Paycheck Protection Program loans to which he and his businesses were not entitled. PPP loans were intended to help small businesses stay afloat and retain their employees during the COVID-19 pandemic. This Office will continue its efforts to root out fraud and misconduct in the PPP and other pandemic-related assistance programs and hold those responsible accountable.”
As alleged in the Complaint filed in Manhattan federal court:
Belovefine and GMI operated essentially the same footwear business from the same office space in Manhattan. At various times, MARONI alternately used Belovefine or GMI as the corporate entity performing certain business functions. During the relevant period, MARONI repeatedly transferred employees of the footwear business from GMI’s payroll to Belovefine’s payroll, or the reverse, even though there was no material difference in employees’ job functions when they were paid by one company as opposed to the other.
MARONI sought and received first-draw and second-draw PPP loans on behalf of both Belovefine and GMI as though they were two distinct businesses, each with its own separate employee payroll. MARONI personally signed the PPP loan and forgiveness applications on behalf of Belovefine and GMI. In total, the companies received more than $1 million in PPP loan funds, nearly all of which was forgiven by the SBA.
MARONI misrepresented and inflated the total payroll and employee headcounts of Belovefine and GMI in their PPP applications and loan forgiveness applications, which increased the amount of the PPP loans received and the amounts forgiven. MARONI essentially double-counted the salaries of shared employees of both GMI and Belovefine, when in fact only one of these entities paid these employees’ salaries and payroll taxes at a given time.
MARONI falsely certified in Belovefine’s PPP loan applications that Belovefine had employees for whom it paid salaries and payroll taxes as of February 15, 2020, which was a PPP loan eligibility requirement. However, between January and April 2020, MARONI paid all employees of the footwear business through GMI’s payroll. Belovefine had no employee payroll during this period and was thus ineligible to receive PPP loans.
Moreover, in GMI’s first-draw PPP loan forgiveness application, MARONI misrepresented and inflated the total payroll amounts eligible for forgiveness because GMI had reduced covered employees’ total wages by amounts in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter that preceded the relevant period covered by the loan.
As part of the settlement, MARONI admits, acknowledges, and accepts responsibility for the following conduct:
- MARONI was the sole owner and CEO of GMI and Belovefine. Both entities operated the same footwear business and shared the same leased office space in Manhattan. In 2019, the footwear business’s employees were all paid by Belovefine. In early 2020, prior to applying for PPP loans, MARONI transferred all of the footwear business’s employees to GMI’s payroll.
- MARONI personally signed the PPP loan and forgiveness applications on behalf of Belovefine and GMI. These applications included certain inaccurate information. Prior to signing both the PPP loan and forgiveness applications, MARONI recklessly failed to confirm the accuracy of the information contained in the applications and that the applications complied with the PPP program’s rules.
- During all periods covered by Belovefine and GMI’s first-draw and second-draw PPP loans, the two companies shared the same office space at 3 Columbus Circle, Suite 2410, New York, New York. GMI listed this address in its PPP loan applications. However, Belovefine incorrectly listed a different suite number in its loan applications, which gave the impression that the entities were distinct and operated in separate locations.
- In order to be eligible for a PPP loan, the applicant needed to be in operation as of February 15, 2020, and have employees for whom it paid salaries and payroll taxes. The first and second-draw PPP applications submitted on behalf of Belovefine misrepresented that the company had employees for whom it paid salaries and payroll taxes as of February 15, 2020. As noted above, Belovefine actually had no employee payroll between January and April 2020, because all employees of the footwear business were being paid by GMI. Belovefine did not file an Employer’s Quarterly Federal Tax Return for the first quarter of 2020.
- In Belovefine’s and GMI’s first- and second-draw PPP applications and loan forgiveness applications, MARONI misrepresented and inflated their total payroll and employee headcounts, which increased the amount of the PPP loans received and the amounts forgiven. During the periods covered by the loans, MARONI repeatedly transferred employees from one entity’s payroll to the other’s payroll. MARONI included the wages of the employees in both Belovefine’s and GMI’s PPP loan and forgiveness applications, when in fact only one entity was paying salaries and payroll taxes to employees of the footwear business at a given time.
- In GMI’s first-draw PPP loan forgiveness application, MARONI falsely certified that GMI “did not reduce salaries or hourly wages of any employee by more than 25 percent for any employee during the Covered Period compared to the most recent quarter before the Covered Period.” In fact, during the covered period for the forgiveness application, GMI had reduced the salaries of multiple covered employees by 50% as compared to their pay during the first quarter of 2020, the most recent quarter preceding the relevant covered period. Thus, MARONI misrepresented and inflated the GMI payroll costs that were eligible for forgiveness under the first-draw PPP loan.
- As a result of the above-referenced conduct and misrepresentations, MARONI requested and received PPP loans on behalf of Belovefine and GMI for amounts substantially in excess of what the footwear business was entitled to receive.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
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Mr. Williams praised the SBA-OIG for its assistance with this case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Samuel Dolinger is in charge of the case.
New Jersey Contractor Pleads Guilty to Negligent Release of AsbestosRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Tyler Amon, the Special Agent in Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division, New York (“EPA-CID”), and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today that JOSE CORREA, a New Jersey-based contractor, pled guilty to one count of negligently causing the release of asbestos into the ambient air, thereby placing other persons in imminent danger of death and serious bodily injury, in violation of the Clean Air Act. CORREA pled guilty before U.S. Magistrate Judge Robyn F. Tarnofsky. The case is assigned to U.S. District Judge John P. Cronan.
U.S. Attorney Damian Williams said: “As he admitted in court today, Jose Correa decided to cut corners by failing to hire an asbestos abatement contractor to safely remove floor tiles and mastic from a supermarket in East Harlem. Correa instead had construction workers complete this dangerous work—without providing them with basic safety equipment—and put in harm’s way those he had a responsibility to protect. This Office remains committed to protecting all individuals from the harms caused by environmental crimes.”
EPA-CID Special Agent in Charge Tyler Amon said: “Asbestos exposure can cause cancer, lung disease, and other serious respiratory diseases. In this case, General Contractor Correa failed to hire trained and certified asbestos abatement professionals. Defendant Correa did the work ‘on the cheap,’ negligently putting workers and others at risk.”
DOI Commissioner Jocelyn E. Strauber said: “Abatement of asbestos poses serious safety risks to workers and to the public if handled improperly, and federal regulations governing abatement are intended to reduce those risks. Today, the general contractor responsible for an illegal abatement at a Harlem supermarket pleads guilty to a felony, showing that flouting those regulations has serious consequences. I thank the NYC Department of Environmental Protection for notifying DOI and prompting this investigation, and the U.S. Attorney’s Office for the Southern District of New York and the Criminal Investigation Division of the U.S. Environmental Protection Agency for their partnership on this case.”
According to the Information that was filed today in Manhattan federal court as well as other public statements made in court:
From at least in or about November 2022 to in or about December 2022, CORREA was employed as the general contractor for a construction project at a supermarket in East Harlem, Manhattan. CORREA removed asbestos-containing floor tiles and mastic from the supermarket floor without hiring an asbestos abatement contractor to perform the work. CORREA instead used his own construction workers to remove the floor tiles and mastic and failed to provide the workers with protective gear such as masks and protective suits. CORREA’s actions caused the release of asbestos material into the ambient air and placed the construction workers in imminent danger of death and serious bodily injury.
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CORREA, 66, of Englewood, New Jersey, pled guilty to one count of negligently causing the release of asbestos into the ambient air, which carries a maximum sentence of one year in prison.
The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the EPA-CID and DOI.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorney Alexandra Rothman is in charge of the prosecution.
Alon Alexander, Oren Alexander, and Tal Alexander Charged in Manhattan Federal Court with Sex Trafficking OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Jessica S. Tisch, Commissioner of the New York City Police Department, announced the return today of a three-count Indictment charging ALON ALEXANDER, OREN ALEXANDER, and TAL ALEXANDER (the “ALEXANDER BROTHERS”), with sex trafficking offenses. The defendants were arrested this morning in the Southern District of Florida and will be presented in federal court in Miami, Florida. The case has been assigned to U.S. District Judge Valerie E. Caproni.
U.S. Attorney Damian Williams said: “As alleged in the Indictment, for more than a decade, the Alexander Brothers, alone and together, repeatedly and violently sexually assaulted and raped dozens of female victims. Today, the defendants are charged with multiple sex trafficking offenses. Our investigation is far from over. If you have been a victim of the alleged sexual violence perpetrated by Alon Alexander, Oren Alexander, or Tal Alexander – or if you know anything about their alleged crimes – we urge you to come forward.”
FBI Assistant Director in Charge James E. Dennehy said: “The Alexander brothers allegedly conspired using their wealth and status to prey on innocent women, coercing them into engaging in sexual acts. We will not allow this type of alleged behavior to go unimpeded. Predators forcefully coercing victims into sexual acts cannot and will not be tolerated. The FBI’s investigations into these types of cases are only possible because of the bravery victims show in coming forward. The FBI, along with our law enforcement partners, are committed to investigating sex trafficking and ensuring anyone attempting to engage in it is held accountable in the criminal justice system.”
NYPD Commissioner Jessica S. Tisch said: “The charges outlined in this indictment reflect some of the most heinous and dehumanizing crimes of sexual exploitation that our NYPD detectives investigate. I applaud all the members of our joint FBI-NYPD Child Exploitation and Human Trafficking Task Force for their unwavering dedication to identifying, investigating, and holding accountable those who allegedly prey on vulnerable individuals in such despicable ways.”
According to the Indictment, Superseding Indictment, and other documents and statements in the public record:
From at least in or about 2010, up to and including at least in or about 2021, the ALEXANDER BROTHERS worked together and with others to engage in sex trafficking, including by repeatedly drugging, sexually assaulting, and raping dozens of female victims. The ALEXANDER BROTHERS, who reside primarily in New York and Miami, Florida, have considerable social and financial connections, including through OREN ALEXANDER and TAL ALEXANDER’s positions as prominent real estate agents focused on ultra-luxury markets. The ALEXANDER BROTHERS used their wealth and prominent positions in real estate to create and facilitate opportunities to sexually assault women.
To carry out and facilitate their sex trafficking scheme, the ALEXANDER BROTHERS used deception, fraud, and coercion to cause victims to travel with them or meet them in private locations for various trips and events. The ALEXANDER BROTHERS and others identified women to invite to these events through, among other things, social media, dating applications, in person encounters, or through the use of party promoters who would recruit women for these events.
The ALEXANDER BROTHERS used the promise of luxury experiences, travel, and accommodations to lure and entice women to these events, and then—on multiple occasions—forcibly raped and sexually assaulted women who attended. At times, multiple men, including one or more of the ALEXANDER BROTHERS, participated in these assaults. In some instances, the defendants physically restrained and held down their victims during the rapes and sexual assaults and ignored screams and explicit requests to stop.
In advance of the events, the ALEXANDER BROTHERS and others procured drugs that they agreed to provide to the women, including, among other things, cocaine, mushrooms, and GHB. On multiple occasions during these events and trips, the ALEXANDER BROTHERS and others surreptitiously drugged women’s drinks. Some of the victims experienced symptoms of impaired physical and mental capacity, including limitations of movement and speech and incomplete memories of events. This prevented the victims from being able to fight back or escape during the rapes and sexual assaults.
The agreement between the ALEXANDER BROTHERS encompassed numerous other acts of sexual violence in addition to the sexual assaults during planned trips and events. On numerous occasions, one or more of the ALEXANDER BROTHERS drugged and raped or sexually assaulted women they encountered by chance, including women they met at bars and nightclubs, social events, and on dating applications.
If you have been victimized by the ALEXANDER BROTHERS in any way or have any additional information about their alleged illegal behavior, please call the FBI at 1-800-CALL-FBI, or reach out to us at [email protected].
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ALON ALEXANDER, 37, OREN ALEXANDER, 37, and TAL ALEXANDER, 38, all of Miami, Florida, are each charged with one count of engaging in a sex trafficking conspiracy, which carries a maximum sentence of life in prison; and one count of sex trafficking by force, fraud, or coercion, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 15 years in prison. TAL ALEXANDER is additionally charged with a second count of sex trafficking by force, fraud, or coercion, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 15 years in prison.
The statutory maximum and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI-NYPD Child Exploitation and Human Trafficking Task Force in New York, as well as the assistance of FBI Miami, the U.S. Attorney’s Office for the Southern District of Florida, the Miami-Dade County State Attorney’s Office, and the Miami Beach Police Department.
This case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Kaiya Arroyo, Elizabeth A. Espinosa, and Andrew W. Jones are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
u.s._v._alexander_brothers_superseding_indictment_may_2025.pdf u.s._v._alexander_et_al_superseding_indictment.pdfOwner of Telemarketing Call Center Sentenced to 121 Months in Prison for Multi-Year Scheme to Defraud PAC DonorsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that RICHARD ZEITLIN, the owner of a telemarketing call center business, was sentenced to 121 months in prison for his leadership role in a scheme to defraud donors of certain political action committees (“PACs”) through false and misleading fundraising calls. The sentence was imposed by U.S. District Judge Lewis A. Kaplan following the defendant’s guilty plea to one count of conspiracy to commit wire fraud on September 10, 2024.
U.S. Attorney Damian Williams said: “Richard Zeitlin’s actions represent a profound breach of trust, as represented by today’s sentencing. The integrity of donor contributions is essential, and this Office will continue to pursue justice against those who undermine it.”
According to the allegations in the Indictment, court filings, and statements made in Court:
PACs are entities registered with the Federal Election Commission that may be tax-exempt and collect money to advocate on behalf of or against certain causes and political candidates. By contrast, charities, unlike PACs, typically provide direct services to communities or causes.
From at least in or about 2017 up to and including in or about 2020, ZEITLIN used his telemarketing call center business and various associated entities to defraud numerous donors of millions of dollars by providing misleading and false information about how the donors’ money would be spent and the nature of the organizations to which they were giving. Specifically, ZEITLIN directed his employees to alter the call scripts used when calling potential donors on behalf of certain PACs in order to mislead potential donors into believing that they would be giving to a direct-services organization (i.e., a charity), rather than to a political advocacy organization (i.e., a PAC). ZEITLIN directed that these lies, misleading statements, and misrepresentations be made so that donors would be more likely to give money, thereby increasing the funds raised and profits for his businesses – which typically received approximately 90% of the funds donated. In some instances, ZEITLIN’s businesses retained 100% of the funds donated with none of the money going to the causes described in telemarketing calls to donors. When one PAC treasurer confronted ZEITLIN with complaints from donors that solicitation calls falsely represented a PAC as a charity, ZEITLIN falsely denied that the calls were being made, acknowledged that such calls would be inappropriate, and refused to give the treasurer any call recordings that would have revealed his fraud.
ZEITLIN lied under oath to conceal his fraud. In December 2020, while testifying under oath during a deposition in connection with a federal civil matter, ZEITLIN falsely stated, in substance and in part, that neither he nor his employees provided input as to the call scripts used by ZEITLIN’s telemarketing call centers when making fundraising calls on behalf of PACs. In truth and in fact, ZEITLIN and his employees frequently provided input on and changed call scripts, including by adding false and misleading statements into the call scripts. In March 2022, in a declaration filed under penalty of perjury to a federal judge, ZEITLIN falsely stated that, among other things, he was not associated with and did not direct, supervise, or control certain business entities relating to ZEITLIN’s telemarketing business when, in truth and in fact, ZEITLIN controlled all of the entities by exercising ultimate authority over managerial, operational, and financial decisions, including at the time he signed this declaration.
In or about May 2022, after ZEITLIN learned that he and his businesses were under federal investigation, ZEITLIN directed his employees to delete electronic messages relating to his businesses.
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In addition to the prison sentence, ZEITLIN, 54, of Las Vegas, Nevada, was sentenced to five years of supervised release and was ordered to pay forfeiture in the amount of $8,906,760.00, which represents ZEITLIN’s proceeds from the crime, and restitution in the amount of $8,906,760.00.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jane Kim, Emily Deininger, and Rebecca T. Dell are in charge of the prosecution.
McKinsey & Company Africa to Pay over $122M in Connection with Bribery of South African Government OfficialsRead the Press Release
McKinsey and Company Africa (Pty) Ltd (McKinsey Africa), which operates in South Africa as a wholly owned and controlled subsidiary of international consulting firm McKinsey & Company Inc. (McKinsey), will pay over $122 million to resolve an investigation by the Justice Department into a scheme to pay bribes to government officials in South Africa between 2012 and 2016. The guilty plea of a former McKinsey senior partner who participated in the bribery scheme was also unsealed. The Justice Department’s resolution is coordinated with prosecutorial authorities in South Africa.
McKinsey Africa entered into a three-year deferred prosecution agreement (DPA) with the department in connection with a criminal information filed in the Southern District of New York charging the company with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Vikas Sagar, a former senior partner of McKinsey who worked in McKinsey Africa’s South Africa office, previously pleaded guilty to one count of conspiracy to violate the FCPA.
According to court documents and admissions, McKinsey Africa, acting through a senior partner and for the benefit of McKinsey, agreed to pay bribes to then-officials at Transnet SOC Ltd. (Transnet), South Africa’s state-owned and state-controlled custodian of ports, rails, and pipelines, and at Eskom Holdings SOC Ltd. (Eskom), South Africa’s state-owned and state-controlled energy company. Between at least 2012 and 2016, McKinsey Africa obtained sensitive confidential and non-public information from Transnet and Eskom regarding the award of lucrative consulting contracts and submitted proposals for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which McKinsey Africa had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom. As a result of the bribery scheme, McKinsey and McKinsey Africa earned profits of approximately $85,000,000.
“McKinsey Africa bribed South African officials in order to obtain lucrative consulting business that generated tens of millions of dollars in profits,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “As a consequence, McKinsey Africa has agreed to pay a criminal penalty of more than $122 million. The resolution announced today — the department’s third coordinated resolution with South African authorities in only two years — is evidence that our International Corporate Anti-Bribery (ICAB) initiative, which we announced in November 2023, is bearing fruit. Through the ICAB, the Criminal Division remains committed to strengthening its international partnerships, including in South Africa, to combat corruption.”
“McKinsey Africa participated in a yearslong scheme to bribe government officials in South Africa and unlawfully obtained a series of highly lucrative consulting engagements that netted McKinsey Africa and its parent entity McKinsey & Company approximately $85 million in profits,” said U.S. Attorney Damian Williams for the Southern District of New York. “The scheme was carried out by a senior partner at McKinsey and allowed McKinsey Africa to repeatedly get awarded consulting contracts through corruption and bribes at two different state-owned entities in South Africa. This office and our law enforcement partners will continue our fight against American companies that seek to gain an unfair business advantage by supporting corrupt political officials overseas, no matter the industry, no matter the country, and no matter how prominent or profitable those companies may be.”
“This settlement underscores our unwavering commitment to holding companies accountable that willfully engage in corrupt activities around the world,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “McKinsey Africa engaged in a serious and long-running bribery scheme to secure contracts by corrupting government officials. This misconduct is a blatant violation of law and a breach of public trust. No matter what country the crime occurs in, the FBI will always work closely with our international partners to root out corruption.”
“McKinsey Africa will pay over $122 million, a clear indication that corruption comes at a significant cost,” said Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group. “The resolution of this case underscores that justice has no borders, and those who engage in bribery and conspire to commit crimes will be held accountable. The Postal Inspection Service is committed to ensuring that government resources and international partnerships serve the public good and are never exploited for personal or corporate gain.”
Pursuant to the DPA, McKinsey Africa has agreed to pay a criminal penalty of $122,850,000. The Justice Department has agreed to credit up to one-half of the criminal penalty against amounts McKinsey pays to authorities in South Africa in related proceedings. In addition, both McKinsey and McKinsey Africa have agreed to, among other things, continue cooperating with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of New York in any ongoing or future criminal investigation arising during the term of the DPA. McKinsey and McKinsey Africa have also agreed to enhance their compliance program where necessary and appropriate and to report to the government regarding remediation and implementation of their enhanced compliance program.
The Justice Department reached this resolution with McKinsey Africa based on a number of factors, including, among others, the nature and seriousness of the offense. McKinsey Africa received credit for its cooperation with the department’s investigation, which included (i) immediately and proactively cooperating from the inception of the department’s investigation; (ii) making numerous factual presentations to the department over the course of its investigation, derived from information obtained through the company’s internal investigation; (iii) collecting, reviewing, and producing voluminous records, including those located abroad, in response to requests from the department; (iv) promptly reporting the discovery of document-deletion efforts by the McKinsey partner involved in the conduct found during its internal investigation, taking additional investigative steps to uncover information and evidence regarding those efforts, and producing such information and evidence to the department; (v) reporting, in real time, newly discovered information and documents that allowed the department to preserve and obtain evidence as part of its independent investigation; (vi) tracing complex internal accounting money-flows and currency exchange-information in response to requests from the department; (vii) preserving, collecting, and producing to the department documents located abroad, and engaging a third-party forensics consultant to analyze key electronic devices and providing to the department the results of that analysis; (viii) collecting and producing to the department personal email and bank account information of the McKinsey partner involved in the conduct relevant to the department’s investigation; (ix) engaging with the department in response to a deconfliction request to preserve the integrity of the department’s investigation; and (x) making company officers and employees available for interviews.
McKinsey and McKinsey Africa also engaged in timely remedial measures, including: (i) putting the McKinsey partner involved in the criminal scheme on leave when it learned of the partner’s role in the scheme, subsequently separating that partner from McKinsey after discovering his deletion activity, and requiring that partner’s continued cooperation post-separation; (ii) conducting additional anti-corruption training for employees in South Africa and elsewhere in Africa, and ceasing work with all state-owned enterprises (SOEs) for a period of time while it conducted its internal investigation; (iii) enhancing due diligence processes for third-party partners, including instituting controls to ensure that due diligence is completed before work begins on an engagement and imposing a more rigorous risk-review for public sector clients; (iv) carrying out an enhanced review process for all sole-source work that requires advance-approval before the engagement can begin; and (v) voluntarily repaying, in 2018 and 2021, all revenues that McKinsey and McKinsey Africa received from potentially tainted contracts to the SOEs in South Africa from which they received contracts as a result of the criminal scheme.
In light of these considerations as well as McKinsey’s prior history, the criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 35% reduction off the fifth percentile of the otherwise applicable guidelines fine range.
FBI’s Los Angeles International Corruption squad and USPIS are investigating the case.
Trial Attorneys William E. Schurmann and Alexandra P. Swain of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Andrew K. Chan and Nicholas Chiuchiolo for the Southern District of New York are prosecuting the case.
The Justice Department’s Office of International Affairs and authorities in South Africa provided assistance in this matter.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting FCPA and Foreign Extortion Prevention Act matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
View the Deferred Prosecution Agreement.
View the Information.
McKinsey & Company Africa to Pay over $120 Million in Connection with Bribery of South African Government OfficialsRead the Press Release
Damian Williams, United States Attorney for the Southern District of New York; Nicole M. Argentieri, Principal Deputy Assistant Attorney General for the Criminal Division of the U.S. Department of Justice (“DOJ”); Akil Davis, Assistant Director in Charge of the Federal Bureau of Investigation (“FBI”) Los Angeles Field Office; and Eric Shen, Inspector in Charge of the U.S. Postal Inspection Service (“USPIS”) Criminal Investigations Group, announced today that MCKINSEY AND COMPANY AFRICA (PTY) LTD (“MCKINSEY AFRICA”), a wholly-owned and controlled subsidiary of McKinsey & Company, Inc. (“McKinsey”), a multinational strategy and management consulting firm headquartered in the U.S., will pay over $120 million to resolve an investigation by the DOJ into a scheme to bribe government officials in South Africa in exchange for lucrative consulting contracts at multiple state-owned and state-controlled entities. MCKINSEY AFRICA entered into a deferred prosecution agreement (“DPA”) in connection with a criminal information filed today in the Southern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act ("FCPA"). The case has been assigned to U.S. District Judge Colleen McMahon.
Also unsealed today is the guilty plea of VIKAS SAGAR, a former Senior Partner at McKinsey & Company, who pled guilty to participating in a conspiracy to violate the Foreign Corrupt Practices Act before U.S. District Judge Laura Taylor Swain on December 16, 2022.
U.S. Attorney Damian Williams said: “McKinsey Africa participated in a yearslong scheme to bribe government officials in South Africa and unlawfully obtained a series of highly lucrative consulting engagements that netted McKinsey Africa and its parent entity McKinsey & Company approximately $85 million in profits. The scheme was carried out by a senior partner at McKinsey and allowed McKinsey Africa to repeatedly get awarded consulting contracts through corruption and bribes at two different state-owned entities in South Africa. This Office and our law enforcement partners will continue our fight against companies that seek to gain an unfair business advantage by supporting corrupt political officials overseas, no matter the industry, no matter the country, and no matter how prominent or profitable those companies may be.”
Principal Deputy Assistant Attorney General Nicole M. Argentieri said: “McKinsey Africa bribed South African officials in order to obtain lucrative consulting business that generated tens of millions of dollars in profits. As a consequence, McKinsey Africa has agreed to pay a criminal penalty of more than $122 million. The resolution announced today — the department’s third coordinated resolution with South African authorities in only two years — is evidence that our International Corporate Anti-Bribery ("ICAB") initiative, which we announced in November 2023, is bearing fruit. Through the ICAB, the Criminal Division remains committed to strengthening its international partnerships, including in South Africa, to combat corruption.”
USPIS Inspector in Charge Eric Shen said: “McKinsey Africa will pay over $122 million, a clear indication that corruption comes at a significant cost. The resolution of this case underscores that justice has no borders, and those who engage in bribery and conspire to commit crimes will be held accountable. The Postal Inspection Service is committed to ensuring that government resources and international partnerships serve the public good and are never exploited for personal or corporate gain.”
FBI Assistant Director in Charge Akil Davis said: “McKinsey Africa’s corruption seemed to pay off for a time, yielding millions in government contracts. Those actions have now cost the company dearly. Individuals and companies who collude to thwart free market competition have a direct and negative impact on communities and the American consumer. This agreement demonstrates the commitment of the FBI and our partners to investigate anti-competitive behavior, and we will continue to work with foreign governments, including South Africa, to hold accountable those who try to cheat the system for their own benefit and profit.”
According to court documents and admissions:
Between at least 2012 and 2016, MCKINSEY AFRICA, acting through McKinsey Senior Partner SAGAR, agreed to pay bribes to then-officials at Transnet SOC Ltd ("Transnet"), South Africa’s state-owned and state-controlled custodian of ports, rails, and pipelines, and at Eskom Holdings Limited ("Eskom"), South Africa’s state-owned and state-controlled energy company. As part of the scheme, MCKINSEY AFRICA obtained sensitive confidential and non-public information from Transnet and Eskom regarding the award of lucrative consulting contracts and submitted proposals for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which MCKINSEY AFRICA had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom. As a result of the bribery scheme, McKinsey and MCKINSEY AFRICA earned profits of approximately $85,000,000.
As part of the DPA, MCKINSEY AFRICA has agreed to pay a criminal penalty of $122,850,000. The Department has agreed to credit up to one-half of the criminal penalty against amounts McKinsey pays to authorities in South Africa in related proceedings. In addition, both McKinsey and MCKINSEY AFRICA have agreed, among other things, to continue cooperating with the U.S. Attorney’s Office for the Southern District of New York and the Criminal Division’s Fraud Section and in any ongoing or future criminal investigation arising during the term of the DPA. In addition, McKinsey and MCKINSEY AFRICA have agreed to enhance their compliance program where necessary and appropriate, and to report to the government regarding remediation and implementation of their enhanced compliance program.
The Department reached this resolution with MCKINSEY AFRICA based on a number of factors, including, among others, the nature and seriousness of the offense. MCKINSEY AFRICA received credit for its cooperation with the Department’s investigation, which included immediately and proactively cooperating from the inception of the Offices’ investigation; making numerous factual presentations to the Offices over the course of their investigation, derived from information obtained through the Company’s internal investigation; collecting, reviewing, and producing voluminous records, including those located abroad, in response to requests from the Offices; promptly reporting the discovery of document-deletion efforts by the McKinsey partner involved in the conduct found during its internal investigation, taking additional investigative steps to uncover information and evidence regarding those efforts, and producing such information and evidence to the Offices; reporting, in real time, newly discovered information and documents which allowed the Offices to preserve and obtain evidence as part of their independent investigation; tracing complex internal accounting money-flows and currency exchange-information in response to requests from the Offices; preserving, collecting, and producing to the Offices documents located abroad, and engaging a third-party forensics consultant to analyze key electronic devices and providing to the Offices the results of that analysis; collecting and producing to the Offices personal email and bank account information of the McKinsey partner involved in the conduct relevant to the Offices’ investigation; engaging with the Offices in response to a deconfliction request to preserve the integrity of the Offices’ investigation; and making Company officers and employees available for interviews.
McKinsey and MCKINSEY AFRICA also engaged in timely remedial measures, including: putting the McKinsey partner involved in the criminal scheme on leave when it learned of the partner’s role in the scheme, subsequently separating that partner from McKinsey after discovering his deletion activity, and requiring that partner’s continued cooperation post-separation; conducting additional anti-corruption training for employees in South Africa and elsewhere in Africa, and ceasing work with all SOEs for a period of time while it conducted its internal investigation; enhancing due diligence processes for third-party partners, including instituting controls to ensure that due diligence is completed before work begins on an engagement and imposing a more rigorous risk-review for public sector clients; carrying out an enhanced review process for all sole-source work that requires advance-approval before the engagement can begin; and voluntarily repaying, in 2018 and 2021, all revenues that McKinsey and MCKINSEY AFRICA received from potentially tainted contracts to the SOEs in South Africa from which it received contracts as a result of the criminal scheme.
In light of these considerations as well as McKinsey’s prior history, the criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 35% reduction off the fifth percentile of the otherwise applicable guidelines fine range.
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The FBI’s International Corruption Unit and the USPIS are investigating the case as part of the IRS Global Illicit Financial Team in Washington, D.C.
SAGAR, 56, of Johannesburg, South Africa, pled guilty to participating in a conspiracy to violate the Foreign Corrupt Practices Act.
Mr. Williams praised the outstanding work of the FBI and USPIS. Mr. Williams also thanked the Department of Justice’s Office of International Affairs and authorities in South Africa for their assistance in this matter.
The case is being prosecuted by Assistant U.S. Attorneys Andrew K. Chan and Nicholas Chiuchiolo of the Southern District of New York; and Trial Attorneys William E. Schurmann and Alexandra P. Swain of the Criminal Division’s Fraud Section.
Federal Inmate and His Sister Charged with Cyberstalking and Conspiring to Extort Victims by Threatening to Release Sexually Explicit MaterialsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a Complaint charging FRED MASTROIANNI and DOREEN MASTROIANNI with cyberstalking, extortion, and conspiracy to commit extortion. DOREEN MASTROIANNI and FRED MASTROIANNI will be presented in White Plains federal court before U.S. Magistrate Judge Victoria Reznik on December 11, 2024, at 3:00 p.m.
U.S. Attorney Damian Williams said: “As alleged, Fred and Doreen Mastroianni have cyberstalked and conspired to extort victims by threatening to release compromising images of them to the public, allegedly engaging in this conduct even though Fred is already serving a 35-year prison sentence for receiving, distributing, and producing child pornography. This Office will continue to protect the community from those who repeatedly try to harm and exploit vulnerable citizens.”
FBI Assistant Director in Charge James E. Dennehy said: “The Mastroianni siblings allegedly preyed on individuals who were victimized by Fred Mastroianni; stalking and conspiring to extort them for the siblings’ financial benefit. Victimization by sexual exploitation is beyond appalling and will not be tolerated. FBI New York will work tirelessly to hold accountable anyone attempting to utilize stalking and extortion for financial gain."
As alleged in the Complaint unsealed today:[1]
FRED MASTROIANNI (“FRED”) is currently serving a 35-year sentence imposed by the Honorable Philip M. Halpern, U.S. District Judge for the Southern District of New York, on August 15, 2024, for receiving and distributing child pornography and for the sexual exploitation of a minor. DOREEN MASTROIANNI (“DOREEN”) is FRED’s sister.
Since at least October 2024, FRED and DOREEN have engaged in a plot to extort victims by threatening to release sexually explicit images and videos of the victims that FRED has saved. The extortion attempts are designed to compel victims to contribute money to FRED’s commissary account in prison and to fund the purchase of an insurance policy against DOREEN’s life for the benefit of FRED. FRED has used another inmate’s email account to send DOREEN draft extortion threats in furtherance of this scheme. At FRED’s direction, DOREEN has forwarded those extortion threats to victims on FRED’s behalf.
There may be more victims of this alleged conduct. If you have information to report, contact the FBI through its toll-free Tip Line at 1-800-CALL-FBI (225-5324) or https://tips.fbi.gov.
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FRED, 54, formerly of White Plains, New York, and DOREEN, 69, of Yorktown Heights, New York, are each charged with one count of cyberstalking, which carries a maximum sentence of five years in prison; one count of interstate extortion, which carries a maximum sentence of two years in prison; and one count of conspiracy to commit interstate extortion, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the work of the FBI’s Westchester Safe Streets Task Force.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Ryan W. Allison, Margaret N. Vasu, and Courtney Heavey are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Own Every Dollar Gang Member Pleads Guilty to 2019 MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of JERRIN PENA, a/k/a “Rooga,” a/k/a “Perry,” in connection with his criminal activities as a member of the violent gang Own Every Dollar (“OED”), including the 2019 murder of Hector Cruz. PENA pled guilty today to several charges, including racketeering conspiracy, before U.S. Magistrate Judge Henry J. Ricardo.
U.S. Attorney Damian Williams said: “On April 14, 2019, Jerrin Pena murdered Hector Cruz, an innocent bystander to gang violence. That murder is just one of the many acts of violence that members and associates of Own Every Dollar have committed that have terrorized Washington Heights and surrounding communities. This Office will not stop its pursuit of dangerous gangs, and violent gang members will be apprehended and prosecuted to the fullest extent of the law.”
As alleged in the Indictment and statements made in public filings and public court proceedings:
PENA is a member of the violent gang OED, a subset of the Trinitarios gang based in and around the Washington Heights area of Manhattan. The Indictments in this case charge 24 members and associates of OED with numerous violent crimes, including five murders and 15 attempted murders.
On April 14, 2019, in the early evening, PENA and others drove to West 135th Street in Manhattan to shoot at members of a rival gang. PENA exited the car and shot at a rival gang member on West 135th Street and Amsterdam Avenue. He missed the rival gang member but struck bystander Hector Cruz—then age 57—in the liver. Cruz died of the gunshot wound approximately one month later.
PENA also pled guilty to an attempted murder on February 28, 2023, when he and several other inmates stabbed another inmate in the Metropolitan Detention Center; a gunpoint robbery of a drug dealer on January 22, 2022, in the vicinity of Riverside Drive and West 145th Street in Manhattan; conspiring to traffic more than four kilograms of fentanyl; and trafficking firearms from Pennsylvania to New York.
13 other OED defendants have previously pled guilty in the case, including MAYOVANEX RODRIGUEZ, who was sentenced to 25 years in prison for a 2022 murder.
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PENA, 23, of New York, New York, pled guilty to one count of racketeering conspiracy, which carries a maximum sentence of life in prison; one count of attempted murder, which carries a maximum sentence of 20 years in prison; one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison; one count of discharging a firearm during a crime of violence, which carries a maximum sentence of life in prison; one count of narcotics conspiracy, which carries a maximum sentence of life in prison; and one count of firearms trafficking, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. PENA is scheduled to be sentenced by U.S. District Judge J. Paul Oetken on March 4, 2025.
Mr. Williams praised the outstanding work of the New York City Police Department and the Drug Enforcement Administration.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Sarah L. Kushner, Kevin Mead, Alexandra S. Messiter, and Ashley C. Nicolas are in charge of the prosecution.