Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment today charging MICHELLE BOND with conspiring to cause and causing unlawful campaign contributions in connection with her unsuccessful run for Congress in 2022.  BOND will be presented today before U.S. Magistrate Judge Ona T. Wang.  

U.S. Attorney Damian Williams said: “As alleged, Michelle Bond and her co-conspirator romantic partner attempted to fund her campaign for the U.S. House of Representatives by illegally using hundreds of thousands of dollars from corporate coffers, among other sources, and then lying to Congress and others to cover it all up.  Misconduct by those campaigning for public office undermines public trust in American elections and in representative government more broadly.  This Office is committed to holding elected officials and candidates accountable if they break the law.”

FBI Acting Assistant Director Christie M. Curtis said: “Michelle Bond, a former congressional candidate, allegedly financed her campaign with illicitly obtained funds then made calculated efforts to conceal her misconduct, including lying to Congress about the deposits’ origin.  Attempting to start a hopeful career in our government using unlawful transactions and lies erodes the integrity and credibility of our legislative system.  Investigating all forms of corruption remains a top priority of the FBI, as those seeking to hold governing positions are expected to comport themselves honestly and transparently to preserve public confidence.”

As alleged in the Indictment:[1]

In 2022, BOND—then a high-level executive at a digital assets trade group (the “Trade Group”)—ran for a seat in the U.S. House of Representatives.  BOND sought to represent New York’s first congressional district, which comprises the eastern portion of Long Island. 

Shortly after launching her congressional campaign in May 2022, BOND’s romantic partner (“CC-1”)—then a high-level executive at a Bahamas-based subsidiary of a now-defunct cryptocurrency exchange (the “Exchange”)—orchestrated a sham consulting agreement between BOND and the Exchange, pursuant to which BOND was paid $400,000.  BOND then used that money to illegally finance her campaign.  Further, between June and August 2022, CC-1 wired hundreds of thousands of dollars to BOND’s personal bank account, which BOND then used to illegally fund her campaign.  CC-1 and BOND discussed how CC-1 would pay the expenses for BOND’s campaign, and CC-1 was aware that BOND was using CC-1’s money to make large loans and contributions to her campaign.

BOND and CC-1’s conduct violated federal campaign finance laws prohibiting corporate contributions, excessive contributions by an individual, and conduit (or straw) contributions.  BOND attempted to conceal her and CC-1’s conduct by, among other things, making false statements to a congressional committee and the Federal Election Commission, and lying to her employer at that time.  For example, in a financial disclosure form filed with the House Ethics Committee, BOND described the $400,000 Exchange Payment as consulting income.  However, in talking points BOND prepared for a meeting with the board of her Trade Group, BOND acknowledged that she did not work for the Exchange and that the Exchange gave the money for her campaign.

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BOND, 45, of Potomac, Maryland, is charged with one count of conspiracy to cause unlawful campaign contributions; one count of causing and accepting excessive campaign contributions; one count of causing and receiving an unlawful corporate contribution; and one count of causing and receiving a conduit contribution.  Each of the crimes charged carries a maximum sentence of five years in prison. 

The statutory maximum 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 FBI. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Stephanie Simon and Sheb Swett 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 constitutes only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting 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 YUANJUN TANG, a naturalized citizen of the U.S. and resident of Flushing, Queens, with acting and conspiring to act in the U.S. as an unregistered agent of the People’s Republic of China (“PRC”) and making materially false statements to the FBI.  TANG was arrested today in Flushing, Queens, and was presented this afternoon before U.S. Magistrate Judge Ona T. Wang.

U.S. Attorney Damian Williams said: “As alleged, for years, Yuanjun Tang used his position as a leader among pro-democracy activists in the U.S. to collect information for the Chinese government and to report on people critical of the PRC and events conducted in support of democracy.  Today’s charges reflect this Office’s commitment to combating the repressive and illegal use of foreign agents in the U.S. to sow fear and distrust within our communities and subvert our country’s most basic freedoms.”

Acting Assistant Director in Charge Christie Curtis said: “Yuanjun Tang conspired with the PRC's Ministry of State Security, operating covertly to further the interests of a foreign power at the expense of our nation's security.  This behavior is not just illegal; it is harmful to the sovereignty of the United States, and we will not stand for it.  Let this serve as a clear warning: the FBI will hunt down and hold accountable those who seek to betray our country.”

As alleged in the Complaint unsealed today in Manhattan federal court:[1]

TANG is a former PRC citizen who was imprisoned in the PRC for his activities as a dissident opposing the one-party authoritarian political system controlled by the Chinese Communist Party (“CCP”), the PRC’s sole ruling party.  In or about 2002, TANG defected to Taiwan; he was subsequently granted political asylum in the U.S. and has since resided in New York City, where he has regularly participated in events with fellow PRC dissidents and leads a nonprofit dedicated to promoting democracy in China.

Between at least in or about 2018 and in or about June 2023, TANG acted in the U.S. as an agent of the PRC by completing tasks at the direction of the PRC’s Ministry of State Security (“MSS”), which is the PRC’s principal civilian intelligence agency.  The MSS is responsible for, among other things, the PRC’s foreign intelligence, counterintelligence, espionage, and political security functions.

Specifically, through a particular email account, encrypted chats, text messages, and audio and video calls, TANG regularly received instructions from and reported to an MSS intelligence officer regarding individuals and groups viewed by the PRC as potentially adverse to the PRC’s interests, including prominent U.S.-based Chinese democracy activists and dissidents.  He also traveled at least three times for face-to-face meetings with MSS intelligence officers and helped the MSS infiltrate a group chat on an encrypted messaging application used by numerous PRC dissidents and pro-democracy activists to communicate about pro-democracy issues and express criticism of the PRC government.  Law enforcement recovered instructions TANG received from the MSS and photographs, videos, and documents that he collected or created for transmission to the MSS from numerous electronic devices and accounts belonging to TANG.

TANG also made materially false statements to the FBI. He falsely claimed that he was no longer able to access an email account through which he had communicated with his MSS handler through draft emails.

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TANG, 67, of Flushing, Queens, is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison; one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; and one count of false statements, 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 a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Trafficking Unit.  Assistant U.S. Attorney Jane Yumi Chong is in charge of the prosecution, with assistance from Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section.

The charges contained in the Complaint 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 Complaint constitutes only allegations, and every fact described herein should be treated as an allegation.

Yuanjun Tang, 67, a naturalized citizen of the United States and resident of Queens, New York, was charged by criminal complaint with acting and conspiring to act in the United States as an unregistered agent of the People’s Republic of China (PRC) and making materially false statements to the FBI. Tang was arrested today in Flushing, Queens, and will be presented this afternoon.

According to court documents, Tang is a former PRC citizen who was imprisoned in the PRC for his activities as a dissident opposing the one-party authoritarian political system controlled by the Chinese Communist Party (CCP), the PRC’s sole ruling party. In or about 2002, Tang defected to Taiwan; he was subsequently granted political asylum in the United States and has since resided in New York City, where he has regularly participated in events with fellow PRC dissidents and leads a nonprofit dedicated to promoting democracy in China.

Between at least in or about 2018 and in or about June 2023, Tang acted in the United States as an agent of the PRC by completing tasks at the direction of the PRC’s Ministry of State Security (MSS), which is the PRC’s principal civilian intelligence agency. The MSS is responsible for, among other things, the PRC’s foreign intelligence, counterintelligence, espionage and political security functions.

Specifically, through a particular email account, encrypted chats, text messages and audio and video calls, Tang regularly received instructions from and reported to an MSS intelligence officer regarding individuals and groups viewed by the PRC as potentially adverse to the PRC’s interests, including prominent U.S.-based Chinese democracy activists and dissidents. He also traveled at least three times for face-to-face meetings with MSS intelligence officers and helped the MSS infiltrate a group chat on an encrypted messaging application used by numerous PRC dissidents and pro-democracy activists to communicate about pro-democracy issues and express criticism of the PRC government. Law enforcement recovered instructions Tang received from the MSS and photographs, videos and documents that he collected or created for transmission to the MSS from numerous electronic devices and accounts belonging to Tang.

Tang also made materially false statements to the FBI. He falsely claimed that he was no longer able to access an email account through which he had communicated with his MSS handler through draft emails.

Tang is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum penalty of five years in prison; one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum penalty of 10 years in prison; and one count of making false statements, which carries a maximum penalty of five years in prison. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York and Executive Assistant Director Robert Wells of the FBI’s National Security Branch made the announcement.

The FBI is investigating the case.

Assistant U.S. Attorney Jane Yumi Chong for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section 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. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ANTHONY RICCARDI, an owner and manager of the Connecticut insurance firm Employee Benefit Solutions LLC (“EBS”), was sentenced to 10 years in prison for conspiring to commit wire fraud and bank fraud.  Between 2015 and 2019, RICCARDI and his co-conspirators used EBS as part of a widespread, $40 million scheme to misappropriate and steal client healthcare funds and defraud multiple lenders.  RICCARDI previously pled guilty on February 21, 2023, before U.S. District Judge Philip M. Halpern, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “For years, Anthony Riccardi schemed to abuse his position of trust by stealing millions in fiduciary money that was meant to pay for important employee healthcare expenses.  He used this stolen money to fund a lavish lifestyle that included luxury cars and a sprawling mansion.  To keep the scheme going, Riccardi also defrauded lenders out of millions.  Today’s sentence underscores that no matter how complex the scheme, those who use their positions defraud others and enrich themselves will answer for their crimes.

According to the Indictment, the Complaint, other court filings, and statements made during court proceedings:

From at least 2015 and continuing through 2019, RICCARDI was the 50% co-owner and Executive Vice President of EBS, which offered a variety of healthcare insurance-related services to clients.  EBS, among other things, provided third party healthcare claims administration (“TPA”) services to clients that elected to “self-fund” (or self-insure) their employee healthcare plans.  As a TPA, EBS would purportedly administer, process, and pay healthcare claims for its clients’ employees in exchange for an administrative fee.

Between at least 2015 and continuing through 2019, EBS represented an automobile dealership chain (“Company-1”) headquartered in Westchester County, New York.  EBS served as a TPA for Company-1’s self-funded employee healthcare program and purported to process and pay claims to medical providers that treated Company-1’s employees.  To do this, EBS generated bimonthly “check register” invoices for Company-1 that listed all employee healthcare expenses from healthcare providers during that two-week period.  EBS also administered a bank account on Company-1’s behalf for the express purpose of paying Company-1 healthcare claims.  Company-1 would fund each check register by paying the invoiced amount, expecting that EBS would promptly pay the claims to the healthcare providers.  During this period, Company-1 transferred approximately $26 million to EBS for the payment of healthcare claims.

In reality, a significant number of purported checks listed on the EBS “check register” invoices were never actually deposited by the healthcare providers.  Instead, approximately $17.87 million in Company-1 healthcare payments were misappropriated with the overwhelming majority simply transferred by EBS into its own operating account, where they were used for non-healthcare expenses by the managers and owners of EBS.  For example, a review of bank records indicates that Company-1 healthcare funds were used by RICCARDI and his co-conspirators to pay their home mortgage expenses as well as a personal credit card account with expenses relating to boating, luxury cars, and golf.

EBS, through RICCARDI and his co-conspirators, made decisions on what few Company-1 healthcare claims they did pay based on which healthcare providers were likely to complain if they did not receive payment or if the claims were connected to Company-1 executives.

The “check registers” sent to Company-1 also contained millions of dollars in fraudulent or inflated healthcare claims that were eventually paid by Company-1.  EBS routinely inflated the Company-1 check registers at the direction of RICCARDI and his co-conspirators.  Such efforts were typically accomplished through RICCARDI and his co-conspirators instructing others to manually create fraudulent entries in the EBS claims processing software, including fake claims under the name of a business controlled by RICCARDI.  RICCARDI and his co-conspirators also took steps to conceal their fraud from Company-1 by creating and sending manipulated and fabricated bank statements and checks to create the appearance that healthcare claims were being paid by EBS, when in reality, they were not.   

By mid-2017, as EBS buckled under mounting outstanding fiduciary obligations, RICCARDI and his co-conspirators began an elaborate effort to conceal and perpetuate the ongoing fraud on Company-1 by applying for multiple fraudulent bank loans and merchant cash advances designed in part to pay various fiduciary obligations that EBS owed to Company-1.  RICCARDI and his co-conspirators fraudulently applied for and received millions of dollars in loans under the auspices of financing the purchase of upgraded billing software for EBS, which included RICCARDI and his co-conspirators submitting fabricated invoices from a fake company that supposedly sold the billing software.

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In addition to the prison term, RICCARDI, 46, of New Canaan, Connecticut, was sentenced to three years of supervised release.  He was additionally ordered to pay $14,870,653.36 in restitution and forfeit $2,000,000.00.

RICCARDI’s co-defendant, Patricia Riccardi, was previously sentenced to 30 months in prison following her guilty plea to one count of conspiring to commit wire fraud and bank fraud before Judge Halpern.

RICCARDI’s co-conspirator, Erin Verespy, was previously sentenced to 66 months in prison following her guilty plea to one count of conspiring to commit wire fraud and bank fraud before U.S. District Judge Cathy Seibel.

Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service and the Special Agents of the U.S. Attorney’s Office.  Mr. Williams also thanked the U.S. Department of Labor, Employee Benefits Security Administration; the U.S. Department of Labor, Office of Inspector General; and the U.S. Secret Service, which are assisting in the investigation, as well as the U.S. Attorney’s Office for the District of Connecticut.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Nicholas S. Bradley is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against ORANGE MEDICAL CARE, P.C. (“ORANGE MEDICAL”) and its owners, ASHIKKUMAR A. RAVAL and MANISH A. RAVAL (together, the “RAVALS” and with ORANGE MEDICAL, the “Defendants”).

The RAVALS are physicians who own and operate ORANGE MEDICAL, a family medicine practice that provides primary care services to patients in Newburgh, New York.  The settlement resolves claims that ORANGE MEDICAL and the RAVALS fraudulently billed Medicare and Medicaid by submitting claims for primary care services that were not rendered or supervised by the physician identified in the claim for payment and had, in fact, been rendered by non-credentialed providers.

Under the settlement approved Saturday, August 17, 2024, by U.S. District Judge Paul Gardephe, ORANGE MEDICAL and the RAVALS will pay $268,800 to the U.S. and have admitted and accepted responsibility for conduct alleged in the Complaint as further described below.  ORANGE MEDICAL and the RAVALS have also agreed to pay $331,200 to the State of New York to resolve the State of New York’s claims, for a total recovery of $600,000.  The settlement amount is based on the Office’s and the State of New York’s assessment of ORANGE MEDICAL’s and the RAVALS’ ability to pay based on the financial information they provided.  The parties have also executed a Consent Judgment in the amount of $1,646,835, which may be enforced if the Defendants do not make the payments required under the settlement agreement.

U.S. Attorney Damian Williams said: “Orange Medical and the Ravals submitted false claims to Medicare and Medicaid, failing to accurately identify who was involved in their patients’ treatment.  This Office is committed to ensuring that individuals and entities billing federal health care programs do so in an honest manner.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As a part of this settlement, the defendants acknowledged that Orange Medical obtained funds from the Medicare and Medicaid programs for claims that did not comply with those programs’ billing rules.  Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

As alleged in the Complaint filed in Manhattan federal court: 

From November 2006 through December 2022, ORANGE MEDICAL and the RAVALS submitted claims to Medicare and Medicaid that listed one of the RAVALS as the rendering provider even though the services had been rendered by non-credentialed providers, without the direct supervision of the RAVALS.  On many such occasions, the RAVALS were traveling outside of the U.S. at the time the patient received the treatment.

As part of the settlement, ORANGE MEDICAL and the RAVALS admitted and accepted responsibility for certain conduct alleged by the U.S., including the following:

• ORANGE MEDICAL and the RAVALS understood that they were prohibited by relevant federal healthcare program rules from submitting claims for reimbursement to Medicaid in the State of New York for primary care services if the physician listed as the rendering provider on the claim for reimbursement had not actually rendered the services and, with respect to Medicare, if the services were not, at minimum, rendered “incident to” medical services actually provided by the physician listed on the claim. ORANGE MEDICAL and the RAVALS further understood that, in order to receive reimbursement from Medicaid, a healthcare provider must be enrolled as a provider in the Medicare or Medicaid program at the time the services are rendered.

• Nonetheless, ORANGE MEDICAL and the RAVALS frequently submitted claims to Medicaid and Medicare for primary care services that listed Manish Raval or Ashikkumar Raval as the rendering provider, even though they had not rendered the services for which reimbursement had been sought.  In fact, the services had been performed by providers who had not enrolled in the Medicare or Medicaid programs.  Further, the providers that had rendered the services were often not physicians, but instead nurse practitioners or physician assistants.  On many such occasions, the RAVALS had no personal involvement or supervision in the treatment of the patient and were traveling outside of the U.S. at the time that the services were furnished.
• ORANGE MEDICAL and the RAVALS also altered patient records to reflect falsely that one of the RAVALS had seen a patient when, in fact, the patient had been seen by a different provider. 

• As a result of the conduct described above, ORANGE MEDICAL received reimbursements from Medicare and Medicaid for primary care claims that did not comply with those programs’ billing rules.

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 outstanding investigative work of HHS-OIG, and he thanked the Medicaid Fraud Control Unit at the New York State Attorney General’s Office for its extensive collaboration in the investigation and resolution of this case.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney David E. Farber is in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that, on Saturday, August 17, 2024, PAWEL BIELECKI, a/k/a “Paul Bielecki,” a/k/a “Paul HRH Saxe-Coburg-Gotha,” a/k/a “Dr. Phaakon Sonderburg-Glucksburg,” a/k/a “Father Paul,” a/k/a “Father Kowal,” was arrested on charges of wire fraud and mail fraud.  BIELECKI will be presented in White Plains federal court later today before U.S. Magistrate Judge Andrew E. Krause.

U.S. Attorney Damian Williams said: “As alleged, Pawel Bielecki exploited his position as a friar to gain the trust of victims across the country and steal hundreds of thousands of dollars from them.  Bielecki is now facing federal charges for allegedly illegally profiteering on the trust his victims placed in him.”  

As alleged in the Complaint:[1] 

BIELECKI is a friar in the Capuchin Order, a Catholic order of priests and brothers.  BIELECKI is a brother in a Province based in White Plains (the “Province”), which operates friaries in, among other places, New York City.  To become a Capuchin friar, BIELECKI took a vow of poverty that requires him to renounce and not to hold any property or bank accounts in his name for his personal benefit.  The Province provides friars, including BIELECKI, with a monthly stipend of approximately $250 for personal expenses, as well as a credit card, paid for by the Province, for friary-related expenses.[2]

BIELECKI has engaged in an ongoing fraudulent scheme related to fake medical clinics he claims to operate in Lebanon.  As described further in the Complaint, through appearances and advertisements on radio programs and online podcasts, as well as various other media, including campaigns on various crowdfunding websites, BIELECKI has fraudulently obtained donations from victims by claiming, among other misrepresentations, to run medical clinics in Beirut, Lebanon, when in fact BIELECKI was keeping victims’ donations for his personal use.

For example, from at least in or about June 2015 through at least in or about December 2023, BIELECKI repeatedly appeared as a guest or through advertisements on a particular local New York radio show (“Radio Program‑1”).  During these appearances and advertisements, BIELECKI repeatedly represented that he was a Catholic priest and physician living in Lebanon and running medical clinics there, with the goal of assisting Christians living in the Middle East.  BIELECKI also made similar appearances on other radio programs and electronic media.  For example, on or about April 1, 2023, BIELECKI appeared on a second radio show (“Radio Program-2”) to tell his “story” and to solicit donations for his purported medical clinics.  Radio Program-2 continued to solicit donations on behalf of BIELECKI on numerous occasions from at least in or around June 2023 through at least in or around August 2024.

In these radio and media appearances, BIELECKI falsely represented, in sum and substance, among other things, the following:

• BIELECKI is a physician, vascular surgeon, cardiac surgeon, and/or general surgeon, and he has also earned multiple Ph.D. degrees;
• BIELECKI runs two medical clinics in Lebanon and is raising money for medicine, medical equipment, baby incubators, food, and an ambulance for his clinics in Lebanon;
• And BIELECKI, at the time of recording certain shows, was physically present in Lebanon, and he was badly injured and his clinics badly damaged by a widely reported August 2020 explosion in Beirut, Lebanon.

These representations were false.  In fact, BIELECKI is not a physician or surgeon of any kind, he has not also earned multiple Ph.D. degrees, and he does not operate any medical clinics in Lebanon.  In fact, travel records show that BIELECKI was in the U.S. continuously from in or around December 2019 through in or around April 2022, and on specific dates when he claimed during media appearances to be in Lebanon working on behalf of his medical clinics, BIELECKI was actually present in New York.  Indeed, on and around the date of the explosion in Beirut in which BIELECKI told victims he was injured, BIELECKI made several purchases at coffee shops, restaurants, and other businesses in New York, New York.

BIELECKI has caused victims of his fraud scheme to send him donations through various means.  Between approximately 2016 and 2019, BIELECKI directed victims from New York, New Jersey, Connecticut, Georgia, and Florida, among other locations, to send checks to the Province with “Fr. Paul Bielecki’s Mission” or a similar endorsement in the memo line.  From at least April 2021, BIELECKI directed victims to send donations by mail to “St. Francis in Beirut Inc.”—a non-profit entity established in or about March 2021—at the address of a particular Capuchin Order friary in New York, New York, where BIELECKI resides.  At various times during the fraudulent scheme, BIELECKI also obtained donations through crowdfunding websites and directly provided his bank account and Zell payment information to victims via email and other means of communication.

Despite his vow of poverty, BIELECKI maintained multiple credit or debit card accounts and multiple bank accounts.  Dozens of victims have cumulatively provided BIELECKI with at least hundreds of thousands of dollars in donations as a result of BIELECKI’s fraudulent misrepresentations.  Between approximately December 2017 and approximately February 2024, BIELECKI withdrew almost $50,000 in cash from his bank accounts; transferred more than $600,000 to two credit card companies to pay for personal expenses, including spending up to $334.40 per month for a membership at a luxury gym chain, and paying for multiple trips to the Hamptons and numerous meals at high-end restaurants; spent thousands of dollars on an aesthetic plastic surgery procedure at a liposuction clinic; and paid for numerous other personal expenses through debit card payments and other means.

There may be more victims of this alleged conduct.  If you have information to report, contact Special Agent Sean Smyth, U.S. Attorney’s Office for the Southern District of New York, at (914) 993-1900 or by following the instructions available at https://www.justice.gov/usao-sdny/report-crime.  

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BIELECKI, 48, of New York, New York, is charged with one count of wire fraud and one count of mail fraud, each of which carries a maximum potential sentence 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 the sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York and of the Internal Revenue Service – Criminal Division. Mr. Williams also thanked the New York Field Office of U.S. Customs and Border Protection for their assistance in the investigation.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Benjamin Levander and Ryan W. Allison 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.

[1] As the introductory phrase signifies, the entirety 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.

[2] The Province conducted an internal investigation of BIELECKI’s fraudulent scheme, referred the matter to law enforcement, and has since provided assistance in the law enforcement’s investigation.

Damian Williams, the United States Attorney for the Southern District of New York, announced the entry today of a Consent Decree with the RUTHERFORD TENANTS CORP. (“RUTHERFORD”) resolving the United States’ lawsuit against RUTHERFORD and its former Board President James Ramadei under the Fair Housing Act (“FHA”).  The lawsuit alleged that RUTHERFORD discriminated against a shareholder (the “Complainant”) in its co-operative building by refusing to permit her to live with emotional support animals to accommodate her disability and by retaliating against the Complainant when she filed a Complaint with the U.S. Department of Housing and Urban Development (“HUD”).  U.S. District Judge Jennifer H. Rearden approved the Consent Decree on August 16, 2024.

U.S. Attorney Damian Williams said: “This is the largest recovery the Department of Justice has ever obtained for a person with disabilities whose housing provider denied them their right to have an assistance animal.  This outcome should prompt all housing providers to consider carefully whether their policies and procedures comply with federal law.  We greatly appreciate our partners at HUD who provided invaluable assistance in the investigation and resolution of this matter.”  

According to documents filed by the Government in federal court:

The Rutherford is a residential cooperative apartment building that contains 175 units and is located at 230 East 15th Street in New York, New York.  Defendant RUTHERFORD is the shareholder cooperative association.  The Complainant moved into the building in 1999.  At the time, RUTHERFORD did not have a reasonable accommodation policy of any kind, whether for people with disabilities generally or for assistance animals specifically.

The Complainant maintained parrots in her home as emotional support animals to assist her with her disabilities and did so without incident until March 2015, when one of her neighbors began complaining about alleged noise.  In response, the New York City Department of Environmental Protection (“DEP”) visited the building and/or the Complainant’s apartment on 15 occasions over the course of a year and conducted inspections of these noise complaints.  DEP issued zero notices of noise violations.  RUTHERFORD never conducted any decibel testing or other objective evaluation of the alleged noise complaints.  Similarly, RUTHERFORD never retained the services of a noise prevention consultant, architect, engineer, or anyone with qualifications or experience in soundproofing to address the neighbor’s complaints.

In March 2016, the Complainant asked RUTHERFORD to allow her to maintain her parrots as support animals as a reasonable accommodation under the FHA, supporting her request with a letter from her treating psychiatrist.  

The FHA makes it unlawful to discriminate in the terms and conditions of the sale or rental of, or to otherwise make unavailable or deny, a dwelling based on the prospective buyer or renter’s disability.  The FHA also mandates that reasonable accommodations in rules, policies, practices, and services be provided when necessary to afford equal housing opportunities to persons with disabilities.  The assistance animals that must be allowed in private dwellings under the FHA are different from those that must be allowed in places of public accommodation under the Americans with Disabilities Act, which is limited to dogs and miniature horses.  Under the FHA and its applicable regulations, persons with disabilities may maintain in their homes a wide array of animals as support animals, provided the animal does not pose a direct threat to the health or safety of others, and does not physically damage the property.

Despite being aware that the Complainant was a person with a disability who needed the parrots as support animals, RUTHERFORD commenced eviction proceedings against the Complainant in May 2016.  The Complainant began to suffer severe emotional harm because of the eviction proceedings and left her apartment in July 2016.  Despite the fact that the Complainant left the building in 2016, RUTHERFORD continued to maintain the eviction proceeding against her well into 2024.

In May 2018, the Complainant filed a Complaint with HUD, alleging that the eviction proceeding interfered with her fair housing rights.  While HUD was investigating the Complaint, the Complainant obtained an offer to purchase the shares appurtenant to her unit for $467,500, but RUTHERFORD rejected the application from the proposed purchaser, thereby prolonging the dispute and, as alleged by the Government, engaging in retaliation against the Complainant for asserting her rights.

HUD completed its investigation and, in January 2021, found probable cause to believe that RUTHERFORD violated the FHA, at which juncture the parties had the opportunity to settle the matter, or, failing that, either the Complainant or RUTHERFORD could elect to proceed to federal court with the dispute.  RUTHERFORD chose to proceed to federal court, thereby triggering the statutory requirement that the Department of Justice file suit against it to resolve the matter in federal court.

Under the consent decree approved by Judge Rearden, RUTHERFORD must:

• Pay the Complainant $165,000 in damages, upon receipt of a release from the Complainant;

• Offer $585,000 to purchase the Complainant’s shares in the co-operative at a time when similarly situated units in the building are valued at approximately $500,000;

• In the event that the closing of the sale of the Complainant’s unit does not occur, provide the Complainant with additional accommodations, including a right to sublet the unit for 10 years;

• Adopt a reasonable accommodation policy regarding requests for assistance animals;

• Comply with certain notice, training, and recordkeeping requirements to ensure that its

agents and officers are knowledgeable about and comply with the requirements of the FHA;

• Allow the U.S. to monitor compliance with the Consent Decree;

• Dismiss the eviction proceedings against the Complainant in Housing Court.

This is the tenth case brought in recent years by the Southern District of New York to vindicate the rights of tenants and co-operative shareholders to maintain support animals in their homes, and the tenth case to end with an agreement compensating the victims of the alleged discriminatory acts and requiring the adoption of reasonable accommodation policies to protect future residents and co-operative shareholders from discrimination.  The monetary recovery for the Complainant in this case, above and beyond the value of her shares, is the largest recovery by the Government for a victim of housing discrimination denied the right to an assistance animal.

Individuals who believe they have been victims of housing discrimination may submit a report online at www.civilrights.justice.gov, by email to [email protected], or may contact the Department of Housing and Urban Development at 1-800-669-9777 or www.hud.gov.

The case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney David J. Kennedy is in charge of the case. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that FRED MASTROIANNI was sentenced to 35 years in prison by U.S. District Judge Philip M. Halpern for sexual exploitation of a child and distribution and possession of child sex abuse material.  MASTROIANNI previously pled guilty to one count of receiving and distributing child sex abuse material and one count of sexual exploitation of a child.

U.S. Attorney Damian Williams said: “The sentencing of Fred Mastroianni holds him accountable for years of horrific sexual abuse of children and for distributing and possessing a massive collection of child sex abuse material.  Mastroianni is being punished for the devastating harm and trauma he inflicted on his minor victims and their families.  This Office will do everything in its power to protect children and bring those who sexually exploit them to justice.”

According to the Information, plea agreement, other public court filings, and statements made in court:

MASTROIANNI repeatedly victimized a young child (“Victim-1”) for his own sexual gratification.  MASTROIANNI’s sexual abuse of Victim-1 began when Victim-1 was just 10 years old and continued until MASTROIANNI’s arrest.  On multiple occasions until Victim-1 turned 14 years old, MASTROIANNI directed ISMET KORAC to coerce Victim-1 to engage in sexual activities on live video calls with MASTROIANNI.  MASTROIANNI recorded that abuse and kept the recordings, as well as other nude photographs of Victim-1, for years.  MASTROIANNI broke Victim-1’s will and spirit to resist the abuse through a combination of threats and promises of gifts.

When Victim-1 was 17 years old, MASTROIANNI continued offering Victim-1 money and clothes in exchange for more photos and videos of Victim-1 engaging in sex acts.  After years of victimizing and grooming Victim-1, as soon as Victim-1 turned 18, MASTROIANNI, who was 48 years old at the time, began paying Victim-1 to have sex with himself and other men, which continued until MASTROIANNI’s arrest.

In addition, for more than a decade, MASTROIANNI amassed and maintained an extensive collection of child sex abuse material, which he shared with others online.  These videos involved rape, incest, and unspeakable abuse to very young children.

*                *                *

In addition to the prison term, MASTROIANNI, 53, of White Plains, New York, was sentenced to a lifetime of supervised release and ordered to pay a total of $10,000 in assessments and restitution in an amount to be determined.

Co-defendant ISMET KORAC, 49, of White Plains, New York, previously pled guilty to enticing a minor to engage in sexual activity and was sentenced to 25 years in prison by U.S. District Judge Kenneth M. Karas on April 16, 2024.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.

This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Courtney Heavey and Ryan W. Allison are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of FAREED DABIDAH for possessing numerous fully automatic firearms, semi-automatic firearms, silencers, and dozens of machinegun conversion devices in the Bronx.  DABIDAH was arrested this morning and will be presented later today in front of U.S. Magistrate Judge Sarah L. Cave. 

U.S. Attorney Damian Williams said: “As alleged, Fareed Dabidah built dozens of ghost guns – some by using 3D printing – at his apartment in the Bronx.  He allegedly converted many of the ghost guns into fully automatic weapons and had everything he needed to convert many more.  Machinegun conversion devices, like the 39 the defendant possessed, are particularly dangerous gun accessories that turn ordinary firearms into fully automatic weapons.  Removing these extraordinarily dangerous devices from our streets is an important law enforcement goal, and this Office will keep working diligently with our law enforcement partners to keep these devices and other illegal guns out of New York City.”

NYPD Commissioner Edward A. Caban said: “NYPD investigators’ meticulous work in this case underscores our efforts to eradicate gun violence by stopping homemade, untraceable ghost guns and other illegal firearms from ever reaching New York City streets.  I thank our federal colleagues for their partnership and their continued dedication to our shared public safety mission.”         

According to the allegations in the Complaint:1

Beginning as early as October 2022, DABIDAH ordered from various online retailers the components needed to 3D print and assemble numerous privately made firearms, which are commonly referred to as “ghost guns.”  On August 15, 2024, law enforcement agents conducted a search of DABIDAH’s apartment, pursuant to a judicially authorized search warrant.  During the execution of the warrant, law enforcement officers found, among other things, approximately 39 machinegun conversion devices; 14 completed ghost guns, including six with machinegun conversion devices installed; five partially assembled, 3D printed assault rifles, including two with machinegun conversion devices installed; two firearms silencers; two 3D printers; and various magazines and ammunition for use in the recovered firearms.

A “machinegun conversion device” is an item that converts a semi-automatic firearm into a fully automatic weapon by circumventing the weapon’s intended cycle.  Colloquially, machinegun conversion devices for handguns are frequently referred to as “Glock switches” and ones for assault rifles are referred to as “auto sears.”  Federal law prohibits the unlicensed possession of machineguns, a term that includes machinegun conversion devices.

The photographs below show many of the firearms recovered during the search of DABIDAH’s residence this morning, including 3D printed handguns and assault rifles, and a handgun and assault rifle with machinegun conversion devices installed.

3D Printed Handguns and Assault Rifles

9mm Ghost Gun with Glock Switch

Assault Rifle with Auto Sear

*                *                *

DABIDAH, 22, of the Bronx, New York, is charged with one count of possession of a machinegun, which carries a maximum potential sentence of 10 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.

Mr. Williams praised the outstanding work the NYPD and further thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Postal Inspection Service; U.S. Customs and Border Protection; and Homeland Security Investigations for their assistance in the investigation.

The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Andrew Jones is 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.

1 As the introductory phrase signifies, the entirety 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that four flight attendants charged in connection with smuggling drug money to the Dominican Republic have pled guilty to operating an unlicensed money transmission business.  SARAH VALERIO PUJOLS pled guilty before U.S. District Judge Naomi Reice Buchwald on July 23, 2024; CHARLIE HERNANDEZ pled guilty before U.S. District Judge Ronnie Abrams on July 25, 2024; EMMANUEL TORRES pled guilty before U.S. Magistrate Judge Sarah Cave on August 12, 2024; and JAROL FABIO pled guilty before U.S. District Judge Arun Subramanian on August 13, 2024.

U.S. Attorney Damian Williams said: “These four flight attendants abused their privileges as flight attendants to move money for drug traffickers.  My Office is committed to staunching the illicit flow of narcotics proceeds in all of its forms.  These guilty pleas show that the sky is not the limit when it comes to law enforcement’s reach.”

According to the allegations in the Complaints, the Informations, court filings, and statements made in Court:

During the relevant period, all of the defendants were employed as flight attendants with different international airlines that operated routes between New York City and the Dominican Republic.  All of the defendants had “Known Crewmember” (“KCM”) status with the Transportation Security Administration, which allowed them to pass through a special security lane at John F. Kennedy International Airport and other airports with less scrutiny than normal passengers.

Before or in about October 2021, a cooperating witness (“CW-1”) operated a significant money laundering organization (“MLO”) in New York City, specializing in the movement of cash proceeds from narcotics sales from New York City to the Dominican Republic.  One method that CW-1 used in furtherance of their MLO was corrupting flight attendants, like the defendants, who worked routes between New York City and the Dominican Republic.  In exchange for a fee – which generally amounted to a small percentage of the amount of money that they would be smuggling – the defendants accepted bulk cash from CW-1 in New York City, got it past airport security via the KCM lane, and passed it off to other members of CW-1’s MLO in the Dominican Republic, including another cooperating witness (“CW-2”).  After CW-1 and CW-2 began cooperating with law enforcement, Homeland Security Investigations (“HSI”) and the New York City Police Department (“NYPD”) orchestrated a number of sting operations in which CW-1 provided law enforcement funds represented to be narcotics proceeds to the defendants, who then smuggled it down to the Dominican Republic and handed it off to CW-2, who returned the funds to law enforcement.

*                *                *

PUJOLS, 42, of the Bronx, New York; HERNANDEZ, 42, of West New York, New Jersey; EMMANUEL TORRES, 34, of Brooklyn, New York; and JAROL FABIO, 35, of New York, New York, each respectively pled guilty to one count of operation of an unlicensed money transmission business, which carries a maximum sentence of five years in prison.  PUJOLS will be sentenced by Judge Buchwald on November 14, 2024; HERNANDEZ will be sentenced by Judge Abrams on November 15, 2024; TORRES will be sentenced by U.S. District Judge Colleen McMahon on January 6, 2025; and FABIO will be sentenced by Judge Subramanian on November 15, 2024.  As part of their guilty pleas, PUJOLS, HERNANDEZ, TORRES, and FABIO each agreed to forfeit property involved in their commission of the offense.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the investigative work of HSI and the NYPD.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Benjamin A. Gianforti and Jaclyn Delligatti are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that JUAN TOMAS DIAZ was arrested yesterday and charged with one count of possessing child pornography.  DIAZ will be presented later today before U.S. Magistrate Judge Sarah L. Cave. 

U.S. Attorney Damian Williams said: “As alleged, Juan Tomas Diaz, who had access to and lived in the same building as a daycare run by a family member, possessed at least one hundred images of child pornography.  Among those were graphic videos and images of children, ranging from infants to young teenagers, being raped and engaging in other sexual conduct.   Our investigation into Diaz is ongoing, and we urge anyone with information about Diaz’s conduct to call HSI at 1-877-4-HSI-TIP.  We will continue to tirelessly work together with our law enforcement partners to detect predators and protect our community’s children.” 

Acting Special Agent in Charge Erin Keegan said: “As alleged, Juan Tomas Diaz was found to have been in possession of over 100 images and videos of child pornography at his home mere steps from a daycare.  Every parent's worst nightmare, the defendant had access to a childcare facility where toddlers' and young adolescents' loved ones expected they would be safe.  This arrest underscores the urgency of our commitment to collaborate with our partners in the relentless fight of safeguarding our communities.  I commend HSI New York's Child Exploitation Investigations Team and the U.S. Attorney's Office for the Southern District of New York for confronting this alarming reality directly.”

According to the allegations contained in the Complaint:[1]

DIAZ lives in a basement apartment in the Bronx, located below a daycare.  11 children are currently enrolled at the daycare.  DIAZ has access to the daycare, which is run by a family member of DIAZ. 

On or about August 13, 2024, federal agents executed a judicially authorized search warrant of DIAZ’s apartment.  Pursuant to that warrant, federal agents seized and searched DIAZ’s phone, which was found to contain what appears to be over 100 images of child pornography.  DIAZ, after waving his Miranda rights and signing a written Miranda consent form, voluntarily spoke to law enforcement and admitted to having viewed videos and images of minors engaged in sexual activity.

*                *                *

DIAZ, 46, of the Bronx, New York, is charged with one count of possession of child pornography, which carries a maximum sentence of 10 years in prison.   

The maximum potential sentence in this case is 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 HSI.  

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Lauren E. Phillips is 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.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Arthur Petrov Allegedly Participated in a Russia-Based Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of Sensitive Microelectronics for a Russian Company That Supplies Manufacturers for the Russian Military

Arthur Petrov, 33, a dual Russian and German national, made his initial appearance in federal court today, following his extradition from the Republic of Cyprus for criminal offenses related to export control violations, smuggling, wire fraud and money laundering. Petrov allegedly participated in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov was arrested on Aug. 26, 2023, in the Republic of Cyprus at the request of the United States.

“Today’s extradition demonstrates the Justice Department’s enduring commitment to cutting Russia off from the western technologies that fuel President Putin’s war machine,” said Deputy Attorney General Lisa Monaco. “Together with global partners, the Department’s Disruptive Technology Strike Force and Task Force KleptoCapture will vigorously investigate and prosecute efforts to evade the global sanctions and export controls imposed to counter Russia’s brutal war in Ukraine. The defendant’s extradition is a vital step towards holding Russia accountable, and I am grateful to our Cypriot partners for their assistance in this matter.”

“Our charges allege that, after Russia’s full-scale invasion of Ukraine, the defendant and his co-conspirators formed an elaborate tech-trafficking syndicate to supply microelectronics to Russia’s military-industrial complex,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Together with our international law enforcement partners, the Justice Department will now hold Petrov to account in a U.S. courtroom and continue dismantling criminal networks that threaten our collective security.”

“As demonstrated by today’s extradition, just because you’re located overseas doesn’t mean we won’t find you,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Commerce Department’s Bureau of Industry and Security (BIS). “If you procure sensitive U.S. microelectronics with military applications for Russia, you risk the very real threat of facing justice in a U.S. courtroom.”

“Arthur Petrov is alleged to have conspired to smuggle shipments from U.S. distributors of microelectronics with military applications through intermediary countries to Russia as part of an illicit Russian-based procurement network,” said U.S. Attorney Damian Williams for the Southern District of New York. “As alleged, he concealed the ultimate destination of these sensitive materials, and he knew that these transactions and shipments were in violation of U.S. export controls relating to Russia. Thanks to the efforts of our law enforcement partners here and abroad, Petrov is now in U.S. custody and will face justice in a U.S. courtroom. This case demonstrates that we will work tirelessly with our law enforcement partners to protect national security and disrupt and prosecute the illicit supply of U.S.-sourced military technology to Russia.”

“The extradition of Arthur Petrov and the allegations laid out in a criminal complaint send a strong message about the resolve and commitment of the FBI and its partners to stop the illegal transfer of sensitive, military-use technology,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “In the hands of hostile nations, such technology presents a significant threat to U.S. national security. Today’s actions demonstrate the power and reach of law enforcement partnerships to dismantle even the most elaborate schemes while keeping Americans safe in the process.”

According to court documents, Petrov worked for LLC Electrocom VPK (Electrocom), a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov and two co-conspirators (CC-1 and CC-2), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas. They fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom. To carry out the scheme, Petrov, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronics components were destined for Russia. The technology that Petrov and his co-conspirators have procured in contravention of export controls during the course of the conspiracy have significant military applications and include various types of electronics components of the sort that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones and electronic warfare and communications devices.

To perpetrate the scheme, Petrov first acquired the controlled microelectronics from U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (Astrafteros), which he operates. Petrov procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact, the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military. The microelectronics that Petrov has procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or reexported to Russia without a license from the Commerce Department. Invoices provided to Petrov by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.

To evade these controls, Petrov, CC-1, and CC-2 worked together to transship the controlled items procured by Petrov using pass-through entities operated by CC-1 and CC-2 in third countries. CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia. At all times, Petrov, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia. During the course of the conspiracy, Petrov, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.

On Aug. 26, 2023, Petrov was arrested and detained by the Cypriot authorities at the request of the United States. The United States thereafter submitted a formal extradition request. On July 18, after extradition proceedings in the Cypriot courts concluded with extradition being approved, the Cypriot Minister of Justice and Public Order issued the extradition order.

Petrov is charged with one count of conspiracy to defraud the United States, which carries a maximum penalty of five years in prison; one count of conspiracy to violate the Export Control Reform Act (ECRA), which carries a maximum penalty of 20 years in prison; three counts of violating the ECRA, each of which carries a maximum penalty of 20 years in prison; one count of conspiracy to smuggle goods from the United States, which carries a maximum penalty of five years in prison; three counts of smuggling goods from the United States, which each carry a maximum penalty of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison; and one count of conspiracy to commit money laundering, which carries 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.

Assistant U.S. Attorney Kevin Sullivan for the Southern District of New York and Trial Attorney Maria Fedor of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Damian Williams, the United States Attorney for the Southern District of New York; Lisa Monaco, the Deputy Attorney General of the United States; Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division; Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Matthew S. Axelrod, the Assistant Secretary for Export Enforcement of the Commerce Department, announced today that ARTHUR PETROV, a dual Russian and German national, was extradited from the Republic of Cyprus after having been charged with export control violations, smuggling, wire fraud, and money laundering offenses in connection with his alleged participation in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military.  PETROV was arrested on August 26, 2023, in the Republic of Cyprus at the request of the U.S.  He arrived in the Southern District of New York yesterday and will be presented later today before U.S. Magistrate Judge Jennifer E. Willis.

U.S. Attorney Damian Williams said: “Arthur Petrov is charged with conspiring to smuggle microelectronics with military applications from U.S. distributors to Russia as part of an illicit Russian-based procurement network that supplies manufacturers for the Russian military.  As alleged, he concealed the ultimate destination of these sensitive materials, and he knew that these transactions and shipments were in violation of U.S. export controls relating to Russia.  Thanks to the efforts of our law enforcement partners here and abroad, Petrov is now in U.S. custody and will face justice in a U.S. courtroom.  This case demonstrates that we will work tirelessly with our law enforcement partners to protect national security and disrupt and prosecute the illicit supply of U.S.-sourced military technology to Russia.”

Deputy Attorney General Lisa Monaco said: “Today’s extradition demonstrates the Justice Department’s enduring commitment to cutting Russia off from the western technologies that fuel President Putin’s war machine.  Together with global partners, the Department’s Disruptive Technology Strike Force and Task Force KleptoCapture will vigorously investigate and prosecute efforts to evade the global sanctions and export controls imposed to counter Russia’s brutal war in Ukraine.  The defendant’s extradition is a vital step towards holding Russia accountable, and I am grateful to our Cypriot partners for their assistance in this matter.”

Assistant Attorney General Matthew G. Olsen said: “Our charges allege that, after Russia’s full-scale invasion of Ukraine, the defendant and his co-conspirators formed an elaborate tech-trafficking syndicate to supply microelectronics to Russia’s military-industrial complex.  Together with our international law enforcement partners, the Justice Department will now hold Petrov to account in a U.S. courtroom and continue dismantling criminal networks that threaten our collective security.”

Acting Assistant Director in Charge Christie M. Curtis said: “Arthur Petrov was brought to the United States to answer for allegedly participating in a global procurement scheme which secretly supplied Russia’s military industrial complex with critical U.S. technology, including the same types of microelectronics recovered from Russian weapons on Ukrainian battlefields.  This extradition underscores the dedication of the FBI and our international partners to maintaining the rule of law and holding accountable anyone attempting to evade international sanctions.  The FBI is committed to protecting our national security and bringing to justice anyone who attempts to undermine it, no matter where they are in the world.”

Assistant Secretary for Export Enforcement Matthew S. Axelrod said: “As demonstrated by today’s extradition, just because you’re located overseas doesn’t mean we won’t find you.  If you procure sensitive U.S. microelectronics with military applications for Russia, you risk the very real threat of facing justice in a U.S. courtroom.” 

According to the allegations contained in the Complaint and statements made during Court proceedings:[1]

PETROV is a dual Russian-German national who resided in Russia and Cyprus and worked for LLC Electrocom VPK (“Electrocom”), a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military.  PETROV and two co-conspirators (“CC-1” and “CC-2”), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas.  They have fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom.  To carry out the scheme, PETROV, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronics components were destined for Russia.  The technology that PETROV and his co-conspirators have procured in contravention of export controls during the course of the conspiracy have significant military applications and include various types of electronics components of the sort that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones, and electronic warfare and communications devices.

To perpetrate the scheme, PETROV first acquired the controlled microelectronics from U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (“Astrafteros”), which he operates.  PETROV procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military.  The microelectronics that PETROV has procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or reexported to Russia without a license from the Commerce Department.  Invoices provided to PETROV by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.

To evade these controls, PETROV, CC-1, and CC-2 worked together to transship the controlled items procured by PETROV using pass-through entities operated by CC-1 and CC-2 in third countries.  CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia.  At all times, PETROV, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia.  During the course of the conspiracy, PETROV, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.

On August 26, 2023, PETROV was arrested and detained by the Cypriot authorities at the request of the U.S.  The U.S. thereafter submitted a formal extradition request.  On July 18, 2024, after extradition proceedings in the Cypriot courts concluded with extradition being approved, the Cypriot Minister of Justice and Public Order issued the extradition order.

*                *                *

PETROV, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged with one count of conspiracy to defraud the U.S., which carries a maximum sentence of five years in prison; one count of conspiracy to violate the Export Control Reform Act (“ECRA”), which carries a maximum sentence of 20 years in prison; three counts of violating the ECRA, each of which carries a maximum sentence of 20 years in prison; one count of conspiracy to smuggle goods from the U.S., which carries a maximum sentence of five years in prison; three counts of smuggling goods from the U.S., which each carry a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, 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 statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division and the New York Field Office of the Bureau of Industry and Security of the Department of Commerce.  Mr. Williams also thanked the FBI’s Legal Attaché offices in Poland, Germany, and Athens, Greece; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section; the Department of Justice’s Office of International Affairs; the Republic of Cyprus Ministry of Justice and Public Order; and the Law Office of the Republic for their assistance.  The Republic of Cyprus National Police also provided critical assistance in effecting the defendant’s arrest and detention at the request of the U.S.

This prosecution is coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force.  Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the U.S. has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney Kevin Sullivan is in charge of the prosecution, with assistance from Trial Attorney Maria Fedor of the Counterintelligence and Export Control 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 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JUSTIN TURNICK pled guilty to conspiring to distribute fentanyl.  TURNICK distributed fentanyl that resulted in three fatal fentanyl poisonings and three non-fatal fentanyl poisonings between February 2020 and April 2022 in Rockland County, New York.  TURNICK pled guilty earlier today before U.S. District Judge Philip M. Halpern.

U.S. Attorney Damian Williams said: “Justin Turnick’s actions didn’t just facilitate addiction—they fueled a crisis that claimed lives and inflicted unimaginable suffering.  As we move forward, this Office remains resolute in its mission to combat the fentanyl epidemic and seek justice for the families and individuals affected by these deadly substances.”

According to the allegations in the Indictment, court filings, and statements made in Court:

TURNICK engaged in the regular distribution of narcotics to members of his community in Rockland County, New York, including his friends, partners, and acquaintances.  TURNICK knowingly distributed fentanyl — a deadly and highly potent opioid — in various forms, including fentanyl that had been packaged into pills, pure fentanyl, and fentanyl-laced powder.

TURNICK distributed fentanyl to Gustaf Olsen, resulting in his death, on or about February 3, 2020; to Jonathan Shashoua, resulting in his death, on or about July 11, 2020; to a female victim, resulting in her poisoning and serious bodily injury, on or about January 5, 2021; to Ione Koenig, resulting in her poisoning and serious bodily injury, on or about July 30, 2021; to Ione Koenig, resulting in her death, on or about July 31, 2021; and to a male victim, resulting in his poisoning and serious bodily injury, on or about on or about April 19, 2022.

*                *                *

TURNICK, 25, of Congers, New York, pled guilty to one count of conspiracy to distribute and possess with intent to distribute fentanyl, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.  As part of his guilty plea, TURNICK stipulated that the substances he conspired to distribute and possess with intent to distribute resulted in the fatal fentanyl poisonings of Gustaf Olsen, Jonathan Shashoua, and Ione Koenig, and the non-fatal fentanyl poisonings of a female victim, a male victim, and Ione Koenig.

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 a judge.

Mr. Williams praised the outstanding work of the Drug Enforcement Administration, the Clarkstown Police Department, and the Rockland County Sheriff’s Office.  He also thanked the Ramapo Police Department, the Westchester County Police Department, the Yonkers Police Department, the Putnam County Sherriff’s Department, and the Rockland County District Attorney’s Office for their support and assistance in this matter.

The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Ryan W. Allison and Kathryn Wheelock are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that on Friday, August 2, 2024, a jury found ARIE RANGOTT guilty of conspiring to defraud the federal Head Start program, to submit a false document to the federal government, and to obstruct a federal administrative proceeding.  RANGOTT was found guilty following a two-week trial before U.S. District Judge Jennifer H. Rearden and is scheduled to be sentenced on December 10, 2024.

U.S. Attorney Damian Williams said: “By secretly exploiting a non-profit entity for personal gain, Arie Rangott defrauded the federal government and undermined the public’s trust in the Head Start program.  This Office is committed to pursuing justice against those who place greed above their responsibility to be stewards of federal funds, and I commend our law enforcement partners and the dedicated team of career prosecutors of this Office for their outstanding work.”

According to the Indictment, public court filings, and the evidence presented at trial:

Between 2021 and January 2023, RANGOTT was the shadow executive director of a non-profit entity, Project Social Care Head Start Inc. (“PSCHS”), that operated in the New York City area.  The U.S. Department of Health and Human Services (“HHS”), which administers the federal Head Start program, annually granted to PSCHS millions of dollars that were to be overseen by an independent board of directors, to be used exclusively on the Head Start program, and from which earning a profit is prohibited by law.  RANGOTT and others conspired to submit numerous fictitious documents to HHS that fraudulently asserted PSCHS had an independent board of directors and had in place controls to guard against fraud, waste, and abuse.  In truth, PSCHS had neither an independent board nor sufficient controls in place.  RANGOTT and his co-conspirators used their control over PSCHS to impermissibly direct PSCHS’s Head Start funding to for-profit companies owned by co-conspirators through rampant undisclosed self-dealing.

In December 2021, HHS sent a letter to PSCHS detailing several complaints about self-dealing at PSCHS, among other things.  In response, RANGOTT and his co-conspirators prepared and submitted a report to HHS that falsely denied the self-dealing and made other misstatements.  Then, in August and September 2022, the HHS Office of the Inspector General opened an investigation into related issues at PSCHS.  RANGOTT and his co-conspirators agreed to obstruct that investigation by lying to the investigators, coordinating stories, and submitting false documents.

Several of RANGOTT’s co-conspirators have pled guilty.  Among others, Martin Handler and Menachem Lieberman, each of whom secretly controlled PSCHS and directed PSCHS to steer federal funds to their own for-profit companies, pled guilty in March 2024.  Isidore Handler, who played a significant role in falsifying documents submitted to HHS, pled guilty in September 2023.  All three await sentencing.

*                *                *

RANGOTT, 54, of Toms River, New Jersey, was convicted of conspiracy to defraud the U.S., conspiracy to falsify documents and records, and conspiracy to obstruct an agency proceeding.  Each of the three offenses carries a maximum sentence of five years in prison.

The maximum 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. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation, and the HHS Office of the Inspector General.  Mr. Williams also thanked the U.S. Department of Agriculture Office of the Inspector General and the New York City Department of Investigation for their assistance.

The prosecution of this case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Jacob R. Fiddelman, Catherine Ghosh, Stephanie Simon, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialist Jayda Foote.  

“Haji Abdul Satar Abdul Manaf, an international drug trafficker with deep ties to terrorist organizations, attempted to import large quantities of heroin into the United States while paying the Taliban and attempting to provide financial support to the Haqqani Network, another terrorist organization responsible for acts of terrorism against this country. After he was arrested and extradited to the United States, Manaf worked with others in Afghanistan to kidnap and intimidate a witness at gunpoint. Today, Manaf has been found guilty on all counts, and now faces significant time in prison for his attempts to exploit the heroin trade, fuel terrorism, and kidnap and threaten a witness. This verdict brings justice to the countless lives endangered by Manaf’s actions and hope to the many others under threat of terrorist organizations. It is thanks to the exceptional work of the career national security prosecutors of this Office, the DEA, and our international partners that Manaf has been brought to justice. This Office remains resolute in its mission to dismantle such dangerous networks and protect those fighting against terrorism.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging OSCAR LEMUS with sexual exploitation and enticement of a minor to engage in unlawful sexual activity.  LEMUS was presented before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court and detained.

U.S. Attorney Damian Williams said: “This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.  As today’s arrest shows, we will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.” 

As alleged in the Complaint:[1]

From at least on or about April 20, 2024, up to and including April 23, 2024, LEMUS, who used the screen name “lemus.xp,” met a 14-year-old minor on social media and persuaded her to meet him in Rockland County, New York, to engage in sexual activity.

On or about March 16, 2024, LEMUS engaged in sexual activity with a 14-year-old minor in the Bronx, New York, and video-recorded the sexual activity using a cellphone.

On or about August 20, 2023, LEMUS persuaded a 16-year-old minor in Mississippi to engage in sexual activity during a live video chat with LEMUS.

Anyone who may have encountered LEMUS or whose child may have had any communications with LEMUS is asked to contact the FBI at 1-800-CALL-FBI (225-5324).

*                *                *

LEMUS, 23, of Haverstraw, New York, is charged with one count of enticing a minor to engage in unlawful sexual activity, which carries a maximum sentence of life in prison.  He is also charged with two counts of sexual exploitation of a minor, each of which carries a maximum sentence of 30 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. Williams praised the efforts of the Federal Bureau of Investigation, the Ramapo Police Department, the Rockland County District Attorney’s Office, and the Rockland County Sheriff’s Department in connection with this investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Marcia S. Cohen is 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.

[1] As the introductory phrase 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VINOTH PONMARAN was sentenced to seven years in prison for participating in a fraud conspiracy that exploited elderly victims by remotely accessing their computers and convincing victims to pay for computer support services that they did not need and which were never actually provided.  In total, the conspiracy generated more than $6 million in criminal proceeds from at least approximately 6,500 victims.  PONMARAN previously pled guilty before U.S. District Judge Vernon S. Broderick, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Vinoth Ponmaran was a leader of a sophisticated fraud scheme that preyed on over 6,000 victims, including the elderly.  This conspiracy caused pop-up windows to appear on victims’ computers—pop-up windows which claimed, falsely, that a virus had infected the victim’s computer.  Through this and other misrepresentations, Ponmaran's fraud scheme deceived his many victims, including some of society’s most vulnerable members, into paying a total of more than $6 million.  Today’s sentence sends a clear message: those who exploit the vulnerable for financial gain will pay a heavy price.”

According to the allegations contained in the Superseding Information, court filings, and statements made in court, including during PONMARAN’s plea proceeding and sentencing:

From approximately March 2015 through July 2018, PONMARAN was a member of a criminal fraud ring (the “Fraud Ring”) based in the U.S. and India that committed a technical support fraud scheme targeting elderly victims located across the U.S. and Canada, including in the Southern District of New York.  The Fraud Ring’s primary objective was to trick victims into believing that their computers were infected with malware in order to deceive them into paying hundreds or thousands of dollars for phony computer repair services.  Over the course of the conspiracy, the Fraud Ring generated more than $6 million in proceeds from at least 6,500 victims.

The scheme generally worked as follows.  First, the Fraud Ring caused pop-up windows to appear on victims’ computers.  The pop-up windows claimed, falsely, that a virus had infected the victims’ computers.  The pop-up windows directed the victims to call a particular telephone number to obtain technical support.  In at least some instances, the pop-up windows threatened victims that, if they restarted or shut down their computer, it could “cause serious damage to the system,” including “complete data loss.”  In an attempt to give the false appearance of legitimacy, in some instances the pop-up windows included, without authorization, the corporate logo of a well-known, legitimate technology company.  In fact, no virus had infected victims’ computers, and the technical support phone numbers in the pop-up windows were not associated with the legitimate technology company.  Rather, these representations were false and were designed to trick victims into paying the Fraud Ring to “fix” a problem that did not exist.  And while the purported “virus” was a hoax, the pop-up windows themselves did cause various victims’ computers to completely “freeze,” thereby preventing these victims from accessing the data and files in their computer—which caused some victims to call the phone number listed in the pop-up windows.  In exchange for victims’ payment of several hundred or thousand dollars (depending on the precise “service” victims purchased), the purported technicians remotely accessed the victim’s computers and ran an anti-virus tool, which is free and available on the Internet. 

PONMARAN was an India-based leader of the Fraud Ring.  Among other things, PONMARAN managed a call center in India that was used to provide purported computer repair services to victims of the scheme.  PONMARAN also recruited co-conspirators in the U.S. to register fraudulent corporate entities and open bank accounts that were used to receive fraud proceeds from victims of the scheme.  PONMARAN also laundered fraud proceeds in multiple ways, including by directing co-conspirators to wire fraud proceeds to accounts in India and the U.S.

*                *                *

In addition to his prison sentence, PONMARAN, 36, a citizen of India, was sentenced to three years of supervised release and forfeiture of $6,110,884.51.

PONMARAN’s co-defendants, Romana Leyva and Ariful Haque, were both sentenced by Judge Paul A. Crotty in 2022, following their respective guilty pleas.  Leyva was sentenced to 100 months in prison and three years of supervised release, and she was ordered to forfeit $4,679,586.93 and to pay restitution of $2,707,882.91.  Haque was sentenced to one year and one day in prison and three years of supervised release, and he was ordered to forfeit $38,886.32 and to pay restitution of $470,672.16.

Mr. Williams praised the outstanding work of the New York Office of the Homeland Security Investigations’s El Dorado Task Force, Cyber Intrusion/Cyber Fraud Group.  Mr. Williams also thanked the New York City Police Department for its assistance on this case. 

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that the United States has filed a lawsuit on behalf of teacher and U.S. Army National Guard member John Chewens against LIBERTY CENTRAL SCHOOL DISTRICT (“LIBERTY”) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).  The Complaint alleges that LIBERTY, which is in Sullivan County, New York, willfully violated USERRA by refusing to compensate Chewens at the proper rate because of his absence from the school during a military deployment.

U.S. Attorney Damian Williams said: “Federal law ensures that our brave soldiers, who sacrifice so much to keep us safe, are not punished by employers when they return to the workforce after completing their military service.  This Office is dedicated to giving full force to USERRA’s protections to ensure that service members like Captain John Chewens receive all the benefits to which they are legally entitled.”

According to the pleadings filed in Manhattan federal court:

LIBERTY pays teachers according to a salary schedule by which a teacher’s base annual salary is determined by the teacher’s step.  Teachers typically progress one step per school year, which results in an increase in the teacher’s compensation.

Chewens began teaching at LIBERTY in the 2016–17 school year, and he was paid at step 1.  At the start of the 2017–18 year, he progressed to step 2.  Subsequently, he was ordered to report for active duty starting in March 2018, in support of Operation Enduring Freedom.  As a result of his deployment, he did not return to teaching until April 2019.

Because of his absence during his deployment, when Chewens returned to teaching, LIBERTY denied him the step increase that he would have otherwise received.  As a result, his annual base salary was repeatedly less than it would have been but for his military service.

USERRA guarantees that service members whose employment is interrupted by more than 90 days of military service are, upon their return to the employer, paid at the same rate that they would have earned absent their military service.

The Complaint seeks, among other things, compensation for Chewens’s lost wages and liquidated damages.

*                *                *

This case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney Mark Osmond is in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of NADER AL-NAJI, the founder and promoter of the “BitClout” token.  AL-NAJI was charged with defrauding a “BitClout” purchaser by making false and misleading representations disclaiming control over the use of the investment funds.  AL-NAJI was taken into custody on Saturday, July 27, 2024, and was presented yesterday before a U.S. Magistrate Judge in California.

U.S. Attorney Damian Williams said: “BitClout may have been a new token, but Nader Al-Naji’s alleged fraud was nothing new.  He allegedly lied to get access to millions of dollars, then gave the money away to family and friends.  Today’s arrest signifies this Office’s commitment to holding to account people who use deception to enrich themselves.”

FBI Acting Assistant Director in Charge Christie M. Curtis said: “Nader Al-Naji, founder of the BitClout protocol, allegedly lied to investors and misappropriated investments in the protocol for personal expenses and gifts.  Failing to properly disclose the use of invested funds disrupts the integrity vital to investing and can breed distrust for future opportunities.  The FBI does not tolerate individuals who use false promises and half-truths to exploit well-intended investors of their funds.

According to the allegations contained in the Complaint:[1]

AL-NAJI is the founder of BitClout, a social media and cryptocurrency trading platform that purportedly allowed users to purchase BitClout tokens using Bitcoin, ostensibly through a decentralized protocol without any centralized issuer, for the purpose of trading BitClout tokens in connection with the social media profiles of other BitClout users.

BitClout held itself out as a “cross between a financial app and a social app.”  Specifically, BitClout was touted as “a social network built from the ground up as its own custom blockchain.  It’s not a company, it has no employees—it’s just code and coins . . . . [W]e refer to BitClout as a ‘protocol’—it is ultimately nothing more than an open-source piece of code running on machines all over the world.  No company, just code and coins.”

In or about January 2021, AL-NAJI contacted representatives of a prospective investor (“Investor-1”) to discuss the BitClout project and provided Investor-1 with BitClout’s marketing material.  On or about January 18, 2021, AL-NAJI met with representatives of Investor-1 and stated, in substance and in part, his intent to use the Bitcoin raised from selling BitClout to develop the BitClout protocol.  As part of negotiations with Investor-1, AL-NAJI claimed, in substance, that the role played by his entity was merely to purchase BitClout tokens from the protocol, and that he did not have any control over the funds after the purchase was complete.

In fact, contrary to AL-NAJI’s representations to Investor-1, AL-NAJI did maintain control over the proceeds provided by Investor-1 and used them for, among other things, personal expenses and gifts to AL-NAJI’s family members.  After inducing Investor-1 to invest approximately $3 million, AL-NAJI routed the funds through multiple accounts for the ultimate benefit of himself and family members.

*                *                *

Al-NAJI, 32, of Los Angeles, California, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential 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. Williams praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendant, for its assistance in the investigation.

The case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Sarah Mortazavi and Nicholas Folly 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.

[1] As the introductory phrase 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. 

John Chen, 71, of the People's Republic of China (PRC) and Los Angeles, California, and Lin Feng, 44, a PRC citizen and resident of Los Angeles, California, pleaded guilty to acting as unregistered agents of the PRC and bribing an IRS agent in connection with a plot to target U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC.

According to court documents, from at least approximately January 2023 to May 2023, Chen and Feng worked inside the United States at the direction of the PRC government, including PRC government official identified as PRC Official-1, to further the PRC's campaign to repress and harass Falun Gong practitioners. The PRC designated the Falun Gong as one of the “Five Poisons,” or one of the top five threats to its rule. In China, Falun Gong adherents face a range of repressive and punitive measures from the Chinese government, including imprisonment.

As part of the PRC's campaign against the Falun Gong, Chen and Feng engaged in a PRC government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (Entity-1). After Chen filed a defective whistleblower complaint with the IRS, Chen and Feng paid $5,000 in cash bribes and promised to pay substantially more to a purported IRS agent (Agent-1) who was, in fact, an undercover officer, in exchange for Agent-1’s assistance in advancing the complaint. Neither Chen nor Feng notified the Attorney General that they were acting as agents of the PRC in the United States.

In the course of the scheme, Chen, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC, was to carry out the PRC government’s aim of “toppl[ing] . . . the Falun Gong.” During a call intercepted pursuant to a judicially authorized wiretap, Chen and Feng discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if Chen and Feng’s meetings to bribe Agent-1 did not go as planned. Chen and Feng also discussed that PRC Official-1 was the PRC government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, Chen and Feng met with Agent-1 in Newburgh, New York, on May 14, 2023. During the meeting, Chen gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment. Chen further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen whistleblower complaint were successful. On May 18, 2023, Feng paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. 

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York and Executive Assistant Director Robert R. Wells of the FBI’s National Security Branch made the announcement.  

Chen and Feng each pleaded guilty to one count of acting as an unregistered agent of a foreign government and one count of bribing a public official. Chen pleaded guilty yesterday and is scheduled to be sentenced on Oct. 30. Feng pleaded guilty today and is scheduled to be sentenced on Oct. 31. Chen and Feng each face a maximum penalty of 25 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 and the Office of the Treasury Inspector General for Tax Administration are investigating the case.

Assistant U.S. Attorneys Qais Ghafary, Michael D. Lockard and Kathryn Wheelock for the Southern District of New York and Trial Attorney Christina Clark of the Counterintelligence and Export Control Section are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHN CHEN and LIN FENG pled guilty to acting as unregistered agents of the government of the People’s Republic of China (“PRC”) and bribing an Internal Revenue Service (“IRS”) agent in connection with a plot to target U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC.  CHEN pled guilty yesterday before U.S. Magistrate Judge Andrew E. Krause and is scheduled to be sentenced on October 30, 2024, before U.S. District Judge Nelson S. Román.  FENG pled guilty today before Judge Krause and will be sentenced on October 31, 2024, before Judge Román.

U.S. Attorney Damian Williams said: “John Chen and Lin Feng brazenly attempted to bribe an undercover agent they believed to be an IRS agent here in the United States on behalf of the PRC Government in order to harass and intimidate the Falun Gong, a target of PRC repression.  Efforts such as this to repress free speech by targeting critics of the PRC in the United States will not be tolerated.  This Office remains committed to thwarting malicious transnational repression attempts by foreign influences on American soil.”

According to Indictment and other court documents:

From at least approximately January 2023 to May 2023, CHEN and FENG worked inside the United States at the direction of the PRC Government, including an identified PRC Government official (“PRC Official-1”), to further the PRC Government’s campaign to repress and harass Falun Gong practitioners.  The PRC Government has designated the Falun Gong as one of the “Five Poisons,” or one of the top five threats to its rule.  In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC Government, including imprisonment.

As part of the PRC Government’s campaign against the Falun Gong, CHEN and FENG engaged in a PRC Government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (“Entity-1”).  After CHEN filed a defective whistleblower complaint with the IRS (the “Chen Whistleblower Complaint”), CHEN and FENG paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was, in fact, an undercover officer (“Agent-1”) in exchange for Agent-1’s assistance in advancing the complaint.  Neither CHEN nor FENG notified the Attorney General that they were acting as agents of the PRC Government in the United States.

In the course of the scheme, CHEN, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC Government, was to carry out the PRC Government’s aim of “toppl[ing] . . . the Falun Gong.”  During a call intercepted pursuant to a judicially authorized wiretap, CHEN and FENG discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if CHEN and FENG’s meetings to bribe Agent-1 did not go as planned.  CHEN and FENG also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, CHEN and FENG met with Agent-1 in Newburgh, New York, on May 14, 2023.  During the meeting, CHEN gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment.  CHEN further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful.  On May 18, 2023, FENG paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. 

*                *                *

CHEN, 71, of Chino, California, and FENG, 44, a PRC citizen and resident of Los Angeles, California, each pled guilty to one count of acting as an unregistered agent of a foreign government, which carries a maximum sentence of 10 years in prison, and one count of bribing a public official, which carries a maximum sentence of 15 years in prison.

The maximum potential sentences 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 outstanding investigative work of the Federal Bureau of Investigation’s New York and Los Angeles Field Offices and Counterintelligence Division and the Office of the U.S. Treasury Inspector General for Tax Administration.  Mr. Williams also thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section for their assistance.

The case is being handled by the Office’s White Plains Division and National Security and International Narcotics Unit.  Assistant U.S. Attorneys Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock are in charge of the case, with assistance from Trial Attorney Christina Clark of the Counterintelligence and Export Control Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that BEVELYN BEATTY WILLIAMS was sentenced to 41 months in prison for violating the Freedom of Access to Clinic Entrances Act (the “FACE Act”) in June 2020 in connection with her interference, including by threats and force, with individuals seeking to obtain and provide lawful reproductive health services at a reproductive health center in Manhattan.  On February 22, 2024, WILLIAMS was convicted after a nine-day jury trial of one count of violating the FACE Act before U.S. District Judge Jennifer L. Rochon, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Bevelyn Beatty Williams repeatedly intimidated and interfered with individuals seeking and providing critical reproductive health services.  She did so by physically blocking access to clinics, threatening staff, and by force.  This Office and our law enforcement partners are committed to ensuring that patients exercising their legal right to obtain reproductive health services, and healthcare facilities and their staff providing those services, can do so without unlawful interference or fear of threats or violence.”

According to evidence admitted at trial and other public filings and statements made in Court:

On June 19, 2020, and June 20, 2020, WILLIAMS threatened and used force against patients and staff members at a reproductive health center located in lower Manhattan (the “Health Center”) and blocked patients and staff members from accessing the Health Center.  In one instance, and as captured on video, WILLIAMS pressed her body against the door of the Health Center’s patient entrance and refused to move, preventing a Health Center volunteer from entering the Health Center.  As a Health Center staff member (“Victim-1”) attempted to open the door for the volunteer, WILLIAMS purposefully leaned against the door, crushing Victim-1’s hand.  Victim-1 yelled, “She’s crushing my hand,” but WILLIAMS remained against the door, trapping Victim-1’s hand and injuring it. 

At various times on June 19 and 20, 2020, WILLIAMS stood directly in front of the Health Center entrances.  WILLIAMS initially blocked the main entrance used by patients, causing the Health Center to have to divert patients to enter through the staff entrance.  WILLIAMS responded by moving to block the staff entrance and directing others to do the same. 

WILLIAMS livestreamed some of her conduct on June 19 and 20, 2020, on a social media account.  On the livestream on June 19, 2020, WILLIAMS stood within inches of the Health Center’s chief administrative officer and threatened to “terrorize this place” and warned that “we’re gonna terrorize you so good, your business is gonna be over mama.”  Similarly, WILLIAMS stood within inches of a Health Center security officer and threatened “war.”  WILLIAMS also stated that she would act by “any means necessary.” 

In addition to WILLIAMS’s conduct in Manhattan, on multiple other occasions from at least 2019 to 2022, WILLIAMS and others intimidated and interfered with individuals seeking to obtain or provide reproductive health services at other health clinics across the country, including in Florida, Tennessee, Georgia, and Brooklyn, New York.  For example, in January 2022, WILLIAMS travelled to a health center in Fort Myers, Florida, where she directed other individuals to block health center entrances.  As a result of the blockade, medical staff was delayed in treating at least a dozen patients, three of whom were scheduled for time-sensitive procedures that could have resulted in bleeding, infection, or significant pain without timely treatment.  In addition, in July 2022, WILLIAMS invaded a health center in Atlanta, Georgia, where she screamed through the door at patients attempting to enter the facility until they were forced to leave.  Among other things, WILLIAMS shouted that she’d go to jail before letting patients enter the facility for an abortion and that she was “not afraid to get arrested.” 

*                *                *

In addition to the prison term, WILLIAMS, 33, of Ooltewah, Tennessee, was sentenced to two years of supervised release.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. 

The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorneys Emily A. Johnson, Mitzi Steiner, and Jamie Bagliebter, with the assistance of Paralegal Specialist Isabel Loftus, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Christopher A. Scharf, the Special Agent in Charge of the Northeast Region of the U.S. Department of Transportation, Office of the Inspector General (“DOT-OIG”); and Daniel Cort, the Inspector General of the Metropolitan Transportation Authority (“MTA-IG”), announced that international bus parts supplier CBM entered into a non-prosecution agreement (the “NPA”) with the U.S. Attorney’s Office.  Under the NPA, CBM agreed to pay significant monetary penalties for engaging in a scheme to defraud U.S. transit authority customers through false and misleading statements about the sources of contracted-for bus parts during the period from approximately 2010 to April 2021.  Specifically, the NPA requires CBM to forfeit $463,243.41 to the United States, representing its profits from the scheme, and pay a fine of $1,500,000.  In addition, CBM has agreed to pay restitution to victims who submit claims and to revert unclaimed funds up to $438,859.52 to the Crime Victims Fund, administered by the Department of Justice’s Office for Victims of Crime.  The NPA also requires that for at least two years from the date of the agreement, CBM will further cooperate with the United States, self-report any future violations of U.S. law, and continue its ongoing efforts to implement and maintain an adequate compliance program.  In the event that CBM violates the NPA, the U.S. Attorney’s Office may prosecute CBM for any newly discovered criminal activity and for the conduct that gives rise to the NPA.

This corporate action reflects a careful weighing of factors relevant to the appropriate corporate resolution.  The NPA recognizes that, although CBM’s serious misconduct was reported to the U.S. Attorney’s Office before CBM self-disclosed it, (i) CBM US cooperated extensively with the U.S. Attorney’s Office, including through detailed disclosures and accountings of conduct not already known when CBM’s cooperation began; (ii) the most serious wrongdoing at CBM was limited to two individuals, though they were at the highest levels of the company; (iii) CBM has no history of criminal conduct, including any resolved through prior NPAs or deferred prosecution agreements; (iv) CBM has undertaken extensive remedial measures to ensure that similar conduct does not occur or go undetected in the future; and (v) CBM has taken full responsibility and agreed to make full restitution to all victims that seek compensation.

U.S. Attorney Damian Williams said: “CBM, primarily through the actions of a limited number of managers outside of the United States, represented to U.S. transit authorities that CBM was providing bus parts from specific suppliers and under specific brand names.  Fortunately, none of the transactions at issue involved parts that bear on the safety of any affected buses.  Since this Office’s investigation came to CBM’s attention, the company has cooperated fully and taken significant and commendable steps to remediate the institutional failures that allowed this situation to occur in the first place.  But this NPA also ensures that CBM is held financially accountable for its conduct and that victims will be made whole.  It should serve as a reminder to all companies that it will lose its profits, and then some, when this Office becomes aware of business practices like CBM’s in this case.”

DOT-OIG Special Agent in Charge Christopher A. Scharf said: “This NPA is an important step in remedying the harm caused by CBM when it misled U.S. transit authority customers.  DOT OIG remains committed to holding transportation industry suppliers accountable for their actions that compromise the integrity of contracted goods and services.”

MTA Inspector General Daniel Cort said: "The MTA must have faith in the integrity of its supply chain, and any breach of that trust is unacceptable.  I thank our federal partners for holding vendors accountable for deceptive behavior."

As part of the NPA, CBM agreed to a statement of facts describing its conduct and the remedial measures that it took in response to learning of that conduct.

*                *                *

Mr. Williams praised the outstanding investigative work of the DOT-OIG and thanked the MTA-IG for its assistance.  

This matter is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorney Frank Balsamello is in charge of the matter.

Damian Williams, the United States Attorney for the Southern District of New York, announced that KONRAD BICHER was sentenced today by U.S. District Judge Lorna G. Schofield to 51 months in prison in connection with his fraudulent operation of real estate businesses, including by entering into lease agreements for residential apartment units in Manhattan on false and fraudulent pretenses and by making false statements to obtain loans guaranteed by the U.S. government.  BICHER previously pled guilty to one count of wire fraud in connection with the scheme.

U.S. Attorney Damian Williams said: “For years, Bicher schemed to defraud New York City landlords and the U.S. Government.  Bicher enriched himself by abusing Government programs and tenant protections intended to benefit people and businesses in need during one of the worst economic and public health crises in history.  He bragged about his schemes to his friends and the media, proudly referring to himself as the ‘Wolf of Airbnb,’ but as today’s sentence underscores, those who partake in such callous and fraudulent conduct will answer for their crimes, no matter their self-given title.”

According to the allegations in the Complaint, Indictment, other court documents, and statements made in Court:

Beginning in at least February 2019, BICHER and/or individuals working in concert with BICHER, began renting apartment units (the “Units”) in Manhattan.  The Units were leased pursuant to lease agreements which required that the lessee make monthly rental payments and also included clauses that prohibited the lessee from renting the Units to third parties on a short-term basis and/or included clauses that prohibited the lessee from subletting the Units to third parties without written consent of the owner.  Despite the requirement to make monthly rental payments, BICHER failed to make payments as required by the lease agreements.  For many of the Units, BICHER also refused to vacate the Units after the expiration of the lease agreements.  During the period of time that BICHER failed to make required rental payments, including the period of time after a lease agreement expired and the premises had not been vacated, BICHER derived income by renting the Units on a short-term basis, including by posting the Units for rent on various online marketplaces, including Airbnb, Inc. (“Airbnb”). 

Between in or about July 2019, and in or about April 2022, BICHER and his associates failed to make more than $1,000,000 in payments pursuant to the Lease Agreements or, for the period of time after the expiration of the Lease Agreements, based on the estimated fair market value for the Units.  During this period, BICHER caused the Units to be listed for short-term rent on Airbnb and at least one other online marketplace for short-term rentals, resulting in at least $1,170,000 in rental income to BICHER and his associates.

Throughout the course of this scheme, the lessors of the Units made numerous efforts to recover rental payments from BICHER and/or to stop BICHER from continuing to rent the Units on a short-term basis, including by initiating civil litigation against BICHER.  BICHER relied on legal protections intended to benefit tenants, including tenant protections adopted in connection with the COVID-19 pandemic, in order to oppose the lawsuits.  Despite relying on tenant protections for New Yorkers in need, BICHER continued to generate revenue by renting certain Units on a short-term basis. 

In addition, between at least in or about April 2021, until in or about July 2021, BICHER obtained Government-guaranteed loans through a loan program of the U.S. Small Business Administration designed to provide relief to small businesses during the COVID-19 pandemic, namely the Paycheck Protection Program (“PPP”).  In furtherance of this scheme, BICHER submitted at least four applications for PPP loans on behalf of at least three entities and obtained over $565,000 in loan proceeds.  These PPP applications contained fraudulent documents and false information.  For example, in connection with the PPP applications, BICHER submitted tax documents which were purportedly filed with the Internal Revenue Service (“IRS”).  These documents were falsified, in that the entities seeking PPP loans had not actually filed the purported tax returns with the IRS, and BICHER had not otherwise reported the purported income to the IRS.

During the course of the scheme, BICHER referred to himself as the “Wolf of Airbnb” and explained to media outlets that this nickname referred to the fact that he was “hungry and ruthless enough to get on top of the financial ladder” and had the “ferocity…of a wolf, because wolves are territorial, vicious, and show no mercy when provoked.”

*                *                *

In addition to the prison term, BICHER, 32, of Hialeah, Florida, was sentenced to three years of supervised release.  He was additionally ordered to forfeit $1,740,407.12 and pay restitution in the amount of $2,227,371.58. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Matthew Weinberg is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, the Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), announced today that ANTHONY ALFANO was arrested after he made a series of graphic and violent threats to kill U.S. Postal Service (“USPS”) employees and burn down U.S. post offices in Ossining, New York.  ALFANO was arrested in Yorktown Heights, New York, this morning and is expected to appear this afternoon in White Plains federal court before U.S. Magistrate Judge Victoria Reznik.

U.S. Attorney Damian Williams said: “The charges against the defendant underscore this Office’s unwavering commitment to swiftly collaborate with our law enforcement partners to neutralize threats against the U.S. mail system.  Any individual who dares to cross the line and threaten our postal employees and facilities with violence and destruction will be stopped in their tracks, and we will ensure they are held accountable for their actions.”

USPIS Inspector in Charge Daniel B. Brubaker said: “The U.S. Postal Inspection Service does not take lightly any threats of violence against USPS employees.  This behavior will never be tolerated, and we will work with our local and federal law enforcement partners to maintain a safe working environment for the postal employees we protect.  That is our mission, and that is our unwavering commitment to the people we serve.”

As alleged in the Complaint:[1]

On Saturday, June 22, 2024, ANTHONY ALFANO was awaiting the delivery of a parcel that had been mailed out via USPS from Florida the evening before.  According to ALFANO, the parcel contained cremated remains.  In a series of phone calls with USPS call center representatives before the package was scheduled to arrive, ALFANO threatened to kill USPS employees and burn down U.S. post offices because he apparently believed the parcel was not going to arrive when he wanted it to.  ALFANO’s threats included the following:

• ALFANO threatened, “I am gonna start killing you guys one by one.”  He also said, “people are going to die,” and that there would be “a lot of dead bodies,” “hurt people,” and people who would “not be returning home.”  ALFANO also swore to kill his local mail carrier, stating that he would “walk up to him” and “blow his brains out.”  Referencing a notorious “massacre,” ALFANO warned that it would not “have shit on what I’m about to do” and that his actions would go down “in history.”

• ALFANO also made threats to kill members of the postal police by using incendiary ammunition, as well as threats to burn down U.S. post offices.  For example, he welcomed the arrival of the postal police and said, “as soon as they show up at my door they’re gonna catch a hot one,” referring to shooting them with a “napalm round” from his 12-gauge shotgun.  “I’m going to kill every one of those motherfuckers,” he said.  He further threatened, “I’m gonna burn all the post offices down to the ground” and said he would go to his local post office and “burn it down to the fucking ground.”

Underscoring his commitment to carry out his threats, ALFANO said several times, “I don’t make threats, I make promises.”  He also expressly swore to carry out his threats and said, “I really don’t care if I go to jail or not.”

On Monday, June 24, 2024, ALFANO received his parcel on the next business day after it had been mailed out on the Friday before.

ALFANO has a history of encounters with law enforcement because of prior threats he has made against others, including local police officers, delivery persons, and customer service representatives.

*                *                *

ANTHONY ALFANO, 46, of Ossining, New York, is charged with threatening interstate communications, which carries a maximum sentence of five years in prison, and willfully making a threat involving fire, which carries a maximum sentence of 10 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. Williams praised the outstanding work of the USPIS in investigating the threats charged in the Complaint and undertaking security measures to protect USPS employees and facilities.  Mr. Williams also thanked the Village of Ossining Police Department and City of Peekskill Police Department for their assistance in this case.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Reyhan Watson is 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.

[1] As the introductory phrase 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.

Damian Williams, the United States Attorney for the Southern District of New York, and Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), announced today the unsealing of a Complaint charging MIGUEL DE JESUS REYES MEDINA a/k/a “Azua,” and ERIK ALBERTO LOPEZ VALDEZ with conspiracy to distribute fentanyl and distribution of protonitazene, a novel synthetic opioid that is up to three times more potent than fentanyl.  REYES MEDINA and LOPEZ VALDEZ were arrested today.  LOPEZ VALDEZ will be presented later today before U.S. Magistrate Judge Robert W. Lehrburger, and REYES MEDINA will be presented before Judge Lehrburger tomorrow, July 19, 2024.

U.S. Attorney Damian Williams said: “As alleged, Miguel de Jesus Reyes Medina and Erik Alberto Lopez Valdez engaged in a scheme to sell dangerous narcotics to New Yorkers, including a novel, and potentially lethal, synthetic opioid.  As part of that scheme, the defendants sold protonitazene, which, as alleged, is as much as three times more deadly than fentanyl.  This prosecution underscores my Office’s unwavering commitment to protecting our communities from the deadly opioid crisis, including from emergent synthetic opioids that pose even greater threats than fentanyl.  We will not allow drug dealers to hide behind novel changes to the chemical structure of drugs to avoid prosecution.”

DEA Special Agent in Charge Frank A. Tarentino III said: “Today’s arrests show the commitment the DEA and our law enforcement partners have in targeting those poisoning our communities.  As alleged, these individuals are not only responsible for the distribution of the lethal drug fentanyl, but the distribution of protonitazene, a novel synthetic opioid that is up to three times more potent than fentanyl.  It is safe to say that the removal of these individuals, and the distribution of these illicit drugs from our streets, saved another family from having to bury their loved one.  The DEA and members of our NYDETF remain committed to doing everything we can to bring those responsible to justice.”

As alleged in the Complaint:[1]

In or about April 2024, REYES MEDINA agreed to sell fentanyl to a confidential source (the “Source”) working with law enforcement.  REYES MEDINA negotiated the price and quantity of fentanyl to be provided, requesting $2,000 for 74 grams of fentanyl.  On or about April 10, 2024, REYES MEDINA met with the Source and provided a 74-gram package of narcotics.  During the meeting, REYES MEDINA emphasized that the narcotics were high quality and strong.  Then, on or about April 16, 2024, REYES MEDINA arranged to have LOPEZ VALDEZ deliver a further 420-gram package of narcotics to the Source for the price of $12,250, which LOPEZ VALDEZ did.  Following the arrest of REYES MEDINA and LOPEZ VALDEZ, laboratory testing determined that the packages of narcotics provided to the Source by REYES MEDINA and LOPEZ VALDEZ consisted of nearly 500 grams of protonitazene, a synthetic opioid that is up to three times more potent than fentanyl.

*                *                *

REYES MEDINA, 49, of Yonkers, New York, is charged with one count of conspiracy to distribute fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and two counts of distribution of protonitazene, each of which carry a maximum sentence of 20 years in prison. 

LOPEZ VALDEZ, 38, of Camden, New Jersey, is charged with one count of conspiracy to distribute fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of distribution of protonitazene, 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. Williams praised the outstanding work of the DEA, the New York City Police Department, and the New York State Police in connection with this investigation.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney William C. Kinder 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.

[1] As the introductory phrase 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.

Maxim Marchenko, 52, was sentenced today to three years in prison followed by three years of supervised release for his role in procuring dual-use, military grade OLED micro-displays for Russian end users.

“Today’s sentence holds Mr. Marchenko accountable for his role in a procurement syndicate that funneled U.S.-manufactured military-grade microelectronics to end users in Russia, illegally delivering controlled technologies worth hundreds of thousands of dollars,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department remains relentlessly focused on dismantling illicit procurement networks led by individuals like the defendant, who use their business skills and connections to advance the Russian war agenda.”

“The transshipment of military-grade microelectronics through Hong Kong to Russia helps fuel the engine of Russia’s war machine,” said Assistant Secretary of Commerce Matthew S. Axelrod for Export Enforcement. “Today’s sentencing is just the latest example of our unceasing efforts to target and disrupt illegal Russian procurement networks.”

“This office will stop at nothing to hold accountable those who seek to circumvent our laws to gain access to some of our most sensitive technologies,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s sentence should be a reminder that no number of shell companies or obfuscation will stop this office in its pursuit of those who seek to illicitly gain access to controlled technologies.” 

“Marchenko and his co-conspirators operated an international smuggling network of sensitive microelectronics used in military gear and other weapons systems,” said Executive Assistant Director Robert Wells of the FBI National Security Branch. “Today’s sentencing demonstrates the FBI’s resolve in doing our part to protect national security and prevent American military technology from being diverted to foreign adversaries and hostile nation states.”

According to court documents, Marchenko is a Russian national who resides in Hong Kong and operates several Hong Kong-based shell companies, including Alice Components Co. Ltd. (Alice Components), Neway Technologies Limited (Neway) and RG Solutions Limited (RG Solutions). Marchenko and two co-conspirators, who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong and elsewhere overseas. This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users. To carry out this scheme, Marchenko and his co-conspirators used shell companies based in Hong Kong and other deceptive means to conceal from U.S. government agencies and U.S. distributors that the OLED micro-displays were destined for Russia. The technology that Marchenko and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night vision goggles, thermal optics and other weapon systems.

To perpetrate the scheme, Marchenko and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using Marchenko’s Hong Kong-based shell companies, including Alice Components, Neway and RG Solutions. Members of the conspiracy, including Marchenko, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong and other countries outside of Russia for use in electron microscopes for medical research or hunting rifles. In reality, the OLED micro-displays were destined for end users in Russia. Marchenko and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, Marchenko and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by Marchenko in third countries, such as Hong Kong. Marchenko then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia. In addition, Marchenko and other members of the conspiracy used Hong Kong-based shell companies, principally operated by Marchenko, to conceal the fact that payments for the OLED micro-displays were coming from Russia. In total, between in or about May 2022 and in or about August 2023, Marchenko’s shell companies funneled more than $1.6 million to the United States in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.

The FBI, Commerce Department’s Bureau of Industry and Security and Department of State’s Diplomatic Security Service investigated the case with assistance from the Justice Department’s Office of International Affairs.

Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah for the Southern District of New York prosecuted the case, with assistance from Trial Attorney Garrett Coyle of the National Security Division’s Counterintelligence and Export Control Section.

Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

Damian Williams, the United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division; Matthew S. Axelrod, the Assistant Secretary of Export Enforcement for Department of Commerce’s the Bureau of Industry and Security (“BIS”); and Robert Wells, the Executive Assistant Director of the National Security Branch of the Federal Bureau of Investigation (“FBI”), announced that MAXIM MARCHENKO was sentenced today by U.S. District Judge Nelson S. Román to three years in prison for his role in procuring dual-use, military grade OLED micro-displays for Russian end users.  MARCHENKO previously pled guilty to money laundering and smuggling charges before U.S. Magistrate Judge Victoria Reznik on February 29, 2024. 

U.S. Attorney Damian Williams said: “This Office will stop at nothing to hold accountable those who seek to circumvent our laws to gain access to some of our most sensitive technologies.  Today’s sentence should be a reminder that no number of shell companies or obfuscation will stop this Office in its pursuit of those who seek to illicitly gain access to controlled technologies.” 

Assistant Attorney General Matthew G. Olsen said: “Today’s sentence holds Mr. Marchenko accountable for his role in a procurement syndicate that funneled U.S.-manufactured military-grade microelectronics to end users in Russia, illegally delivering controlled technologies worth hundreds of thousands of dollars.  The Justice Department remains relentlessly focused on dismantling illicit procurement networks led by individuals like the defendant, who use their business skills and connections to advance the Russian war agenda.”

BIS Assistant Secretary of Export Enforcement Matthew S. Axelrod said: “The transshipment of military-grade microelectronics through Hong Kong to Russia helps fuel the engine of Russia’s war machine.  Today’s sentencing is just the latest example of our unceasing efforts to target and disrupt illegal Russian procurement networks.”

FBI Executive Assistant Director Robert Wells said: “Marchenko and his co-conspirators operated an international smuggling network of sensitive microelectronics used in military gear and other weapons systems.  Today’s sentencing demonstrates the FBI’s resolve in doing our part to protect national security and prevent American military technology from being diverted to foreign adversaries and hostile nation states.”

According to the allegations contained in the Information and other filings and statements made in court:

MAXIM MARCHENKO is a Russian national who resides in Hong Kong and operates several Hong Kong-based shell companies, including Alice Components Co. Ltd. (“Alice Components”), Neway Technologies Limited (“Neway”), and RG Solutions Limited (“RG Solutions”).  MARCHENKO and two co-conspirators (“CC-1” and “CC-2”), who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong, and elsewhere overseas.  This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users.  To carry out this scheme, MARCHENKO, CC-1, and CC-2 used shell companies based in Hong Kong and other deceptive means to conceal from U.S. Government agencies and U.S. distributors that the OLED micro-displays were destined for Russia.  The technology that MARCHENKO and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night vision goggles, thermal optics, and other weapon systems.

To perpetrate the scheme, MARCHENKO and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using MARCHENKO’s Hong Kong-based shell companies, including Alice Components, Neway, and RG Solutions.  Members of the conspiracy, including MARCHENKO, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research or hunting rifles.  In reality, the OLED micro-displays were destined for end users in Russia.  MARCHENKO and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, MARCHENKO and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by MARCHENKO in third countries, such as Hong Kong.  MARCHENKO then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia.  In addition, MARCHENKO and other members of the conspiracy used Hong Kong-based shell companies, principally operated by MARCHENKO, to conceal the fact that payments for the OLED micro-displays were coming from Russia.  In total, between in or about May 2022 and in or about August 2023, MARCHENKO’s shell companies funneled more than $1.6 million to the U.S. in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.

*                *                *

In addition to the prison term, MARCHENKO, 52, a Russian citizen who resided in Hong Kong, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division and the New York Field Office of the BIS.  Mr. Williams also thanked the FBI’s Legal Attaché office in Australia; the U.S. Department of State’s Diplomatic Security Service; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section; and the Office of International Affairs of the Department of Justice’s Criminal Division for their assistance.

This case is being handled by the Office’s White Plains Division and the Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah are in charge of the prosecution, with assistance from Trial Attorney Garrett Coyle of the Counterintelligence and Export Control Section.

Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force.  Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NIKOLAY LEVINSON was sentenced today to 26 months in prison for mailing threatening communications.  LEVINSON previously pled guilty before U.S. District Judge Edgardo Ramos, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Nikolay Levinson sent vile racist, anti-Semitic, and anti-Muslim threats for the sole purpose of instilling fear in innocent members of our community.  This sentence should serve as a reminder that we will never stop protecting the community from such disturbing, hateful conduct.”   

According to the Indictment, other public filings, and statements made in court:

From June through November 2022, shortly after his release from prison for similar offenses, LEVINSON mailed six threatening letters to five victims in the Bronx, Manhattan, and Brooklyn, New York, and at least 35 other anonymous, threatening, hateful, racist, anti-Semitic, and anti-Muslim letters to victims in the greater New York City area.  LEVINSON sent the letters, which often contained racial epithets and Nazi imagery, to businesses, schools, synagogues, and individuals.

*                *                *

In addition to the prison term, LEVINSON, 41, of Palisades Park, New Jersey, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.

The case is being prosecuted by the Office’s White Plains Division and Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution.

Note: View the indictment here.

Sue Mi Terry, 54, of New York, New York, was arrested yesterday and presented on criminal charges related to offenses under the Foreign Agents Registration Act (FARA).

According to court documents, after leaving U.S. government service and for more than a decade, Terry worked as an agent of the government of the Republic of Korea (ROK), commonly known as South Korea, without registering as a foreign agent with the Attorney General, as required by law. As covertly directed by ROK government officials, Terry publicly advocated ROK policy positions, disclosed non-public U.S. government information to ROK intelligence officers and enabled ROK officials to gain access to U.S. government officials. In exchange for these actions, ROK intelligence officers provided Terry with luxury goods, expensive dinners and more than $37,000 in funding for a public policy program focusing on Korean affairs that Terry controlled.

From in or about 2001 to in or about 2011, Terry served in a series of positions in the U.S. government, including as an analyst on East Asian issues for the Central Intelligence Agency, as the Director for Korea, Japan and Oceanic Affairs for the White House National Security Council and as the Deputy National Intelligence Officer for East Asia at the National Intelligence Council. Since leaving government service in or about 2011, Terry has worked at academic institutions and think tanks in New York City and Washington, D.C. Terry has made media appearances, published articles and hosted conferences as a policy expert specializing in, among other things, South Korea, North Korea and various regional issues impacting Asia. Terry has also testified before Congress on at least three occasions regarding the U.S. government’s policy toward Korea.

As she admitted in a voluntary interview with the FBI in 2023, Terry served as a valuable “source” of information for the ROK National Intelligence Service (ROK NIS), the primary intelligence agency for the ROK. For example, in or about June 2022, Terry participated in a private, off-the-record group meeting with a U.S. Secretary level official regarding the U.S. Government’s policy toward North Korea. Immediately after the meeting, Terry’s primary ROK NIS point of contact, or handler, picked up Terry in a car with ROK Embassy diplomatic plates. While in the car, Terry passed her handler detailed handwritten notes of her meeting, which were written on the letterhead of a think tank where Terry had recently worked. Terry’s handler then photographed the notes while still sitting in the car with Terry.

Weeks later, at the request of her ROK NIS handler, Terry hosted a happy hour for Congressional staff. Although the happy hour was ostensibly on behalf of the think tank where Terry worked, the ROK NIS paid for it with Terry’s knowledge. Terry’s handler attended the event and posed as a diplomat, mingling with Congressional staff without disclosing that he was, in fact, an ROK intelligence officer. 

ROK government rewarded Terry for her services. For example, Terry’s ROK NIS handlers gifted her a $2,950 Bottega Veneta handbag and a $3,450 Louis Vuitton handbag, both of which Terry selected during shopping trips with her handlers. One of Terry’s ROK NIS handlers also gifted her a $2,845 Dolce & Gabbana coat. In addition to luxury goods, Terry’s ROK NIS handlers provided her expensive meals, including at Michelin-starred restaurants. Terry’s ROK NIS handlers also deposited approximately $37,000 into an unrestricted “gift” account that Terry controlled at the think tank where she worked. In addition, ROK government officials paid Terry to write articles in both the U.S. and Korean press conveying positions and phrases dictated by the ROK government.

Terry is charged with one count of conspiracy to violate FARA and one count of failure to register under FARA. If convicted, she faces a maximum penalty of 10 years in prison. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York and Executive Assistant Director Robert R. Wells of the FBI’s National Security Branch made the announcement. 

The FBI’s Counterintelligence Division and New York Field Office are investigating the case with assistance from the FBI Washington Field Office.

Assistant U.S. Attorneys Kyle A. Wirshba, Alexander Li and Sam Adelsberg for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section.

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment yesterday charging SUE MI TERRY with offenses under the Foreign Agents Registration Act (“FARA”).  TERRY was arrested on July 16, 2024, in New York, New York, and presented before U.S. Magistrate Judge Robert W. Lehrburger.  The case is assigned to U.S. District Judge Lorna G. Schofield.

U.S. Attorney Damian Williams said: “As alleged, Sue Mi Terry, a former CIA and White House employee, subverted foreign agent registration laws in order to provide South Korean intelligence officers with access, information, and advocacy.  Terry allegedly sold out her positions and influence to the South Korean government in return for luxury handbags, expensive meals, and thousands of dollars of funding for her public policy program.  The charges brought should send a clear message to those in public policy who may be tempted to sell their expertise to a foreign government to think twice and ensure you are in accordance with the law.”

FBI Acting Assistant Director in Charge Christie M. Curtis said: “Compromising national security endangers every American by weakening our defenses and putting lives at risk.  Sue Mi Terry, a former CIA and White House official, was arrested for allegedly acting as an unregistered agent for South Korea.  For over a decade, despite repeated warnings, Terry allegedly exploited her think tank roles to advance a foreign agenda.  As alleged, she disclosed sensitive U.S. government information to South Korean intelligence and used her position to influence U.S. policy in favor of South Korea… for money and luxury gifts.  Her alleged actions posed a severe threat to national security.  This arrest sends a clear message: the FBI will pursue and arrest anyone who endangers our nation’s security by collaborating with foreign spies.”

As alleged in the Indictment:[1] 

After leaving U.S. government service and for more than a decade, TERRY worked as an agent of the government of the Republic of Korea (“ROK”), commonly known as South Korea, without registering as a foreign agent with the Attorney General, as required by law.  As covertly directed by ROK government officials, TERRY publicly advocated ROK policy positions, disclosed non-public U.S. government information to ROK intelligence officers, and enabled ROK officials to gain access to U.S. government officials.  In return for these actions, ROK intelligence officers provided TERRY with luxury goods, expensive dinners, and more than $37,000 in funding for a public policy program focusing on Korean affairs that TERRY controlled. 

From in or about 2001 to in or about 2011, TERRY served in a series of positions in the U.S. government, including as an analyst on East Asian issues for the Central Intelligence Agency, as the Director for Korea, Japan, and Oceanic Affairs for the White House National Security Council, and as the Deputy National Intelligence Officer for East Asia at the National Intelligence Council.  Since leaving government service in or about 2011, TERRY has worked at academic institutions and think tanks in New York City and Washington, D.C.  TERRY has made media appearances, published articles, and hosted conferences as a policy expert specializing in, among other things, South Korea, North Korea, and various regional issues impacting Asia.  TERRY has also testified before Congress on at least three occasions regarding the U.S. government’s policy toward Korea. 

Since leaving U.S. government service, TERRY served as a valuable source of information for the ROK National Intelligence Service (“ROK NIS”), the ROK’s primary intelligence agency.  For example, in or about June 2022, TERRY participated in a private, off-the-record group meeting with the U.S. Secretary of State regarding the U.S. government’s policy toward North Korea.  Immediately after the meeting, TERRY’s primary ROK NIS point of contact, or “handler,” picked up TERRY in a car bearing ROK Embassy diplomatic license plates.  While in the car, TERRY provided her handler detailed handwritten notes of her meeting with the U.S. Secretary of State.  TERRY’s handler photographed the notes while sitting in the car with TERRY. 

Weeks later, at the request of her ROK NIS handler, TERRY hosted a happy hour for Congressional staff.  Although the happy hour was under the auspices of the think tank where TERRY worked, the ROK NIS paid for it with TERRY’s knowledge.  TERRY’s handler attended the event and posed as a diplomat, mingling with Congressional staff without disclosing that he was, in fact, an ROK intelligence officer. 

The ROK government rewarded TERRY for her services.  For example, TERRY’s ROK NIS handlers gifted her a $2,950 Bottega Veneta handbag and a $3,450 Louis Vuitton handbag, both of which TERRY selected during shopping trips with her handlers.  One of TERRY’s ROK NIS handlers also gifted her a $2,845 Dolce & Gabbana coat.  

In addition to luxury goods, TERRY’s ROK NIS handlers provided her with expensive meals, including at Michelin-starred restaurants.  TERRY’s ROK NIS handlers also deposited approximately $37,000 into an unrestricted “gift” account that TERRY controlled at the think tank where she worked.  In addition, ROK government officials paid TERRY to write articles in both the U.S. and Korean press conveying positions and phrases provided by the ROK government. 

*                *                *

TERRY, 54, of New York, New York, has been charged with one count of conspiracy to violate FARA, which carries a maximum sentence of five years in prison, and one count of failure to register under FARA, 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. Williams praised the outstanding investigative work of the Counterintelligence Division of the FBI’s New York Field Office.  Mr. Williams also thanked the Counterintelligence Division and Foreign Influence Task Force of FBI Headquarters, the Mission Services and Counterintelligence Divisions of the FBI’s Washington Field Office, the Amtrak Police Department, and the Department of Justice’s National Security Division for their assistance. 

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg, Alexander Li, and Kyle A. Wirshba are in charge of the prosecution, with assistance from Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section.

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.

U.S. Attorney Damian Williams said: “Moments ago, a jury convicted Senator Robert Menendez of corruption offenses.  This case has always been about shocking levels of corruption.  Hundreds of thousands of dollars of bribes, including gold, cash, and a Mercedes-Benz.  This wasn’t politics as usual; this was politics for profit.  Because Senator Menendez has now been found guilty, his years of selling his office to the highest bidder have finally come to an end.  Corruption isn’t costless: it erodes public trust, and it undermines the rule of law.  That’s why we’re so committed to fighting it, regardless of political party.  I want to thank the career prosecutors and law enforcement agents who meticulously investigated and prosecuted this case.  Their work brought this egregious corruption to light.  They are the best of the best, and I am enormously proud to serve with them.” 

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ROBERT MENENDEZ, 70, of Englewood Cliffs, New Jersey; WAEL HANA, 40, of Edgewater, New Jersey, and originally of Egypt; and FRED DAIBES, 66, of Edgewater, New Jersey, were convicted of the charges listed in the chart below. 

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by Judge Stein.  Sentencing for MENENDEZ, HANA, and DAIBES has been scheduled for October 29, 2024.  

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the Internal Revenue Service, Criminal Investigation for its invaluable assistance on the investigation and the Department of Justice’s National Security Division, Counterintelligence and Export Control Section for its support of the case.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark, Paul Monteleoni, Lara Pomerantz, Daniel C. Richenthal, and Catherine Ghosh, and Special Assistant U.S. Attorney Christina Clark, are in charge of the prosecution, with the assistance of Paralegal Specialists Connor Hamill, Rachel Wechsler, and Braden Florczyk.

Count

Defendant(s)

Charge

Potential Maximum Prison Term

1

MENENDEZ

HANA

DAIBES

Conspiracy to commit bribery

Five years 

2

MENENDEZ

HANA

DAIBES

Conspiracy to commit honest services wire fraud

20 years

3

MENENDEZ

Conspiracy to commit extortion under color of official right

20 years 

4

MENENDEZ

DAIBES

Conspiracy to commit obstruction of justice

5 years

5

MENENDEZ

Bribery – actions to benefit Wael Hana and Egypt

15 years

6

HANA

DAIBES

Bribery – actions to benefit Wael Hana and Egypt

15 years

7

MENENDEZ

HANA

DAIBES

Honest services wire fraud - actions to benefit Wael Hana and Egypt

20 years

8

MENENDEZ

Extortion under color of official right – actions to benefit Wael Hana and Egypt

20 years

9

MENENDEZ

HANA

Honest services wire fraud - actions to benefit Jose Uribe and Uribe’s Associates

20 years

10

MENENDEZ

Extortion under color of official right – actions to benefit Jose Uribe and Uribe’s Associates

20 years 

11

MENENDEZ

Bribery – actions to benefit Fred Daibes and Qatar

15 years 

12

DAIBES

Bribery – actions to benefit Fred Daibes and Qatar

15 years

13

MENENDEZ

DAIBES

Honest services wire fraud – actions to benefit Fred Daibes and Qatar

20 years

14

MENENDEZ

Extortion under color of official right – actions to benefit Fred Daibes and Qatar

20 years

15

MENENDEZ

HANA

Conspiracy for a public official to act as a foreign agent

Five years

16

MENENDEZ

Public official acting as a foreign agent

Two years

17

MENENDEZ

Conspiracy to commit obstruction of justice

Five years

18

MENENDEZ

Obstruction of justice

10 years 

“Miles Guo, an exiled Chinese businessman and purported billionaire, brazenly operated several interrelated fraud schemes, all designed to fleece his loyal followers out of their hard-earned money so that Guo could spend his days in his 50,000 square foot mansion, driving his $1 million Lamborghini, or lounging on his $37 million yacht.  Thousands of Guo’s online followers were victimized so that Guo could live of a life of excess.  Today, Guo’s schemes have been put to an end.  Moments ago, a unanimous jury found Miles Guo guilty of racketeering conspiracy and various securities fraud, wire fraud, and money laundering charges.  He faces decades in prison.  I commend the career prosecutors of this Office and our law enforcement partners for bringing this case and seizing hundreds of millions of dollars’ worth of fraud proceeds so that justice can be brought to Guo’s victims.  This Office will not waver in our dedication to prosecuting malicious and harmful fraud schemes.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today that VITALY FARGESEN and IGOR PALATNIK were sentenced to 4 years and 78 months in prison, respectively, by U.S. District Judge Loretta A. Preska for participating in a fraudulent scheme to defraud investors in CanaFarma Corp. and, later, CanaFarma Hemp Products Corp. (together, “CanaFarma”), by soliciting funds based upon false and misleading representations, failing to invest investor’s funds as promised, and secretly misappropriating millions of dollars of CanaFarma funds.  PALATNIK was sentenced on January 11, 2024, and FARGESEN was sentenced today.

U.S. Attorney Damian Williams said: “Vitaly Fargesen and Igor Palatnik orchestrated a sophisticated scheme to obtain millions of dollars from investors by falsely pledging to spend their funds building a legitimate business.  Instead, Fargesen and Palatnik deceived investors about the nature of their business and kept millions of dollars of investor funds for their own personal use.  After they were charged, Fargesen and Palatnik attempted to escape accountability by obstructing this Office’s investigation of their crimes.  Today’s sentence should serve as a reminder that if you steal from investors and cover up your crimes, you will pay a steep price.”

According to the allegations contained in the Indictment and statements made in public filings and public court proceedings:

From in or about March 2019 to in or about March 2020, CanaFarma was a privately held Delaware corporation with offices in New York, New York.  Beginning on or about March 19, 2020, CanaFarma was listed on the Canadian Stock Exchange, and beginning on or about March 23, 2020, CanaFarma was listed on the Frankfurt Stock Exchange.  CanaFarma marketed itself to the investors as a “fully integrated cannabis company addressing the entire cannabis spectrum from seed to delivery of consumer products.”  To the public, FARGESEN was held out as Senior Vice President of Strategic Planning and PALATNIK as Senior Vice President of Product Acquisition at CanaFarma.  In truth, the two men exercised full control of CanaFarma but hid their control from the investing public by, among other things, convincing an experienced businessman to falsely present himself to the market as the CEO of the company.

Using their control of CanaFarma, FARGESEN and PALATNIK devised and carried out a scheme to defraud CanaFarma’s investors by soliciting approximately $14 million in funds, including investments in private shares of CanaFarma, with false and misleading representations concerning the company’s management, products, and financials; failing to invest investor’s funds as promised; and secretly misappropriating at least $4 million of CanaFarma funds for their own benefit.  FARGESEN and PALATNIK effectuated the scheme by, among other things, controlling CanaFarma through a nominal CEO who reported to FARGESEN and PALATNIK, lying to investors regarding CanaFarma’s actual and anticipated operations, attempting to artificially inflate CanaFarma’s reported revenue, making false statements to CanaFarma’s auditors, and misappropriating millions of dollars of investor funds.

*                *                *

In addition to the prison sentence, FARGESEN, 54, of Manalapan, New Jersey, and PALATNIK, 49, of Morganville, New Jersey, were each ordered to forfeit $1,733,000 and to pay restitution in the amount of $4,703,915.26.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.

The case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Adam Hobson, and Sarah Mortazavi are in charge of the prosecution.

“Moments ago, a unanimous jury found Sung Kook ‘Bill’ Hwang and Patrick Halligan guilty of a massive market manipulation scheme via the private investment firm Archegos.  As the evidence at trial has shown, Hwang, founder and owner of Archegos, and Halligan, Archegos’s Chief Financial Officer, made false assurances and lied to Wall Street investment banks to induce them to provide capital to Archegos, which Hwang and Halligan then used to inflate the stock prices of several publicly traded companies.  Hwang and Halligan lied about Archegos’s positions in these companies and just about every other materially important metric investment banks would use in determining the firm’s creditworthiness.  In doing so, Hwang and Halligan were able to fraudulently inflate a $1.5 billion portfolio into a $36 billion portfolio.  This verdict should send a resounding message that this Office will continue to police the financial markets with an eagle eye and swiftly hold accountable those who think they can cheat the system.”

Damian Williams, the United States Attorney for the Southern District of New York, announced that YAKOV WEINGARTEN, SHMIEL WEINGARTEN, and YOIL WEINGARTEN were sentenced yesterday to 14 years, 14 years, and 12 years in prison, respectively, for child sexual exploitation and kidnapping offenses.  The defendants, leaders of an extremist religious sect called Lev Tahor, masterminded a scheme to kidnap a 14-year-old girl (“Minor-1”) and a 12-year-old boy (“Minor-2”) from their mother in Woodridge, New York.  The defendants then smuggled the children across the U.S. border to Mexico, where they reunited Minor-1 with her adult “husband” to allow him to continue his illegal sexual relationship with Minor-1.  The defendants were convicted in March 2024 following a five-week jury trial before U.S. District Judge Nelson S. Román. 

U.S. Attorney Damian Williams said: “The sentencing of the Weingarten brothers holds them accountable for kidnapping children from their mother in the middle of the night, including for the purpose of coercing a child into a sexual relationship with an adult.  This Office will do everything in its power to protect children and use every available tool to investigate and prosecute those who sexually exploit them.”

 According to the allegations contained in the Superseding Indictment, other court filings, and the evidence presented at trial:

The WEINGARTEN brothers—YAKOV, SHMIEL, and YOIL—are U.S. citizens and senior leaders of Lev Tahor, an extremist religious sect that has been located in several different jurisdictions, including New York, Israel, Canada, Mexico, and Guatemala.  Lev Tahor leaders, including the WEINGARTENs, embraced several extreme practices, including forced family separations, child marriages, and underage sex.

In or about 2017, Lev Tahor leaders arranged for a 12-year-old girl, Minor-1, to be “married” to a then-18-year-old man.  Though they were never legally married, they were religiously “married” the following year, when Minor-1 was 13 and her “husband” was 19.  Lev Tahor leadership, including the WEINGARTENs, required young brides such as Minor-1 to have sex with their husbands, to tell people outside Lev Tahor that they were not married, and to lie about their ages.  For example, Lev Tahor leaders instructed child brides to deliver babies inside their homes instead of at a hospital to conceal the mothers’ young ages from outsiders.

In or about October 2018, the mother of Minor-1 determined that it was no longer safe for her children to remain in the Lev Tahor community, which was then living in Guatemala.  The mother escaped from the group’s compound, arrived in the U.S. in early November 2018, and was eventually joined by all six of her children, including Minor-1.  Also in November 2018, a Brooklyn family court granted her sole custody of the children and prohibited the children’s father, a leader within Lev Tahor, from communicating with the children.

After the mother fled and settled in New York with her children, the WEINGARTENs and their co-conspirators devised a plan to kidnap Minor-1, then 14 years old, to return her to Guatemala and to her then-20-year-old “husband.”  In December 2018, they kidnapped Minor-1 and her brother in the middle of the night from a home in upstate New York and transported them through various states and, eventually, to Mexico.  In order to carry out the kidnapping, the defendants used disguises, aliases, drop phones, fake travel documents, and an encrypted application.  At the time of the kidnapping, Lev Tahor leaders were seeking asylum for the entire Lev Tahor community in the Islamic Republic of Iran. 

Following a three-week search involving hundreds of local, federal, and international law enforcement entities, Minor-1 and Minor-2 were recovered in Mexico and returned to New York.  In or about March 2019 and March 2021, members of Lev Tahor again tried to kidnap the children but were unsuccessful.

*                *                *

In addition to the prison terms, YAKOV WEINGARTEN, 34, SHMIEL WEINGARTEN, 28, and YOIL WEINGARTEN, 36, each of Guatemala, were sentenced to five years of supervised release.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the New York State Police, the Sullivan County District Attorney’s Office, U.S. Customs and Border Protection, the Rockland County Sheriff’s Department, the Village of Spring Valley Police Department, Special Agents with the U.S. Attorney’s Office for the Southern District of New York, the Department of State, the Transportation Security Administration, and our law enforcement partners in Mexico, Guatemala, Canada, and Israel.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Sam Adelsberg, Jamie Bagliebter, and Jim Ligtenberg, and paralegal specialist Shannon Becker, are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York; Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment charging SHYMELL EPHRON, a/k/a “Shy,” with two counts of coercion and enticement of minors to engage in unlawful sexual activity and five drug-trafficking counts, including two counts of using a minor to distribute narcotics and two counts of distributing narcotics to a minor.  EPHRON was arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.  The case is assigned to U.S. District Judge Margaret M. Garnett.

U.S. Attorney Damian Williams said: “As alleged, Shymell Ephron raped and sexually abused two teenagers he found in Times Square, plied them with drugs and alcohol, and directed them to sell his drugs on the streets of New York City.  This Office is committed to keeping New York City safe from sexual predators, and thanks to the hard work of our law enforcement partners and the career prosecutors of this Office, Ephron has now been arrested and charged for his egregious conduct.”

FBI Acting Assistant Director in Charge Christie M. Curtis said: “Shymell Ephron allegedly targeted two minor female victims for repeated sexual abuse, using illicit substances to encourage cooperation.  He directed them to participate in his unlawful drug trafficking operation by exploiting their innocence for nefarious purposes, as alleged.  Along with our law enforcement partners, the FBI remains committed to apprehending sexual predators and eliminating sources of illegal narcotics in our city.” 

NYPD Commissioner Edward A. Caban said: “The charges leveled against this alleged predator are the result of NYPD investigators and our local, state, and federal law enforcement partners working together to protect everyone in our community, especially young victims.  I commend the members of the FBI’s Westchester Safe Streets Task Force and the prosecutors at the office of the U.S. Attorney for the Southern District of New York for their continued focus on holding accountable individuals who allegedly target children.”

As alleged in public court filings, statements at public court proceedings, and the Indictment:[1] 

EPHRON and his co-conspirators have distributed narcotics, including ecstasy and crack cocaine, since at least in or about May 2024 in Times Square and other locations in New York City.  EPHRON has also offered and provided narcotics, including ecstasy and cocaine, to others in an effort to have sex with them.  On or about May 17, 2024, EPHRON approached two teenage girls in Times Square while he and a co-conspirator were selling drugs.  EPHRON convinced the two girls to follow him to his residence in Harlem, where they stayed with EPHRON for several days.

EPHRON engaged in multiple acts of forcible rape, forcible touching, sexual abuse, and sex with a minor while the girls were staying in EPHRON’s apartment.  EPHRON repeatedly provided the girls with ecstasy, marijuana, and alcohol, and EPHRON also directed the girls to sell his drugs on the streets of New York City.  EPHRON provided a cellphone to the girls to monitor their whereabouts, direct them to sell narcotics, and to persuade, induce, and entice them to return to his apartment each night so he could engage in unlawful sexual conduct with them.  Law enforcement agents with the FBI and NYPD eventually rescued the two girls.

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.  

*                *                *

EPHRON, 35, of New York, New York, is charged with two counts of coercion and enticement of a minor, each of which carries a mandatory minimum sentence of 10 years in prison and a maximum potential sentence of life in prison; one count of narcotics conspiracy, which carries a maximum potential sentence of 20 years in prison; two counts of distributing narcotics using a minor, each of which carries a mandatory minimum sentence of one year in prison and a maximum potential sentence of 45 years in prison; and two counts of distributing narcotics to a minor, each of which carries a mandatory minimum sentence of one year in prison and a maximum potential sentence of 40 years in prison.

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.

Mr. Williams praised the work of the FBI’s Westchester Safe Streets Task Force and the NYPD.  Mr. Williams also thanked the New York State Police and the Yorktown Police Department for their assistance in the investigation. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Ryan W. Allison and Michael R. Herman 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 phase 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.

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that HDR GLOBAL TRADING LIMITED, a/k/a “Bitcoin Mercantile Exchange” or “BitMEX” (“BITMEX”), pled guilty today to violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) program.  The case is assigned to U.S. District Judge John G. Koeltl. 

U.S. Attorney Damian Williams said: “As BitMEX’s founders and long-time employee admitted in federal court in 2022, the company, one of the leading cryptocurrency derivatives platforms in the world from 2015 to 2020, operated in the United States without any meaningful anti-money laundering program, as required by federal law.  As a result, BitMEX opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes, posing a serious threat to the integrity of the financial system.  Today’s guilty plea indicates again the need for cryptocurrency companies to comply with U.S. law if they take advantage of the U.S. market.”  

FBI Acting Assistant Director in Charge Christie M. Curtis said: “By only mandating lax service access credentials, BitMEX not only failed to comply with nationally required anti-money laundering procedures designed to protect the US financial markets from illicit actors and transactions, but knowingly did so to increase the business’s revenue.  Today’s plea represents the FBI’s steadfast dedication to ensuring adherence to all U.S. financial laws, protecting the U.S. financial system, and holding accountable those who attempt to establish a workaround for profits.”

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 also 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.

The company and its executives knew that because BITMEX operated in the United States, including by serving U.S. customers, it was required to implement an AML program that included a “know your customer” (“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 United States 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 United States.  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 the company to pump millions of dollars through the U.S. financial system.

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HDR GLOBAL TRADING LIMITED, an entity incorporated in the Republic of Seychelles, pled guilty to one count of violating the Bank Secrecy Act, which carries a maximum sentence of five years in prison and a fine. 

The maximum potential 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. Williams praised the outstanding investigative work of the FBI’s New York Money Laundering Investigation Squad and thanked the attorneys and investigators at the CFTC whose expertise and diligence were integral to the development of this investigation.

The prosecution is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, and Thane Rehn are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that U.S. COMPOUNDING, INC. (“USC”), a subsidiary of DMK Pharmaceuticals Corporation, pled guilty to multiple fraud offenses before U.S. District Judge Arun Subramanian, and a former USC executive, SAM GLOVER, was charged in an Indictment with conspiring to violate the Food, Drug, and Cosmetic Act (“FDCA”).  GLOVER was arrested this morning and is expected to be presented today before a U.S. Magistrate Judge in the Eastern District of Arkansas.

U.S. Attorney Damian Williams said: “Distributing prescription drugs with sham prescriptions is wrong and illegal.  The corporate resolution entered into today, and the indictment of Sam Glover, an executive who oversaw and allegedly perpetuated that scheme, reflects this Office’s commitment to holding accountable those who seek to violate laws designed to ensure that the drugs distributed across the United States are safe, necessary, and legal.”

FBI Acting Assistant Director in Charge Christie M. Curtis said: “U.S. Compounding, Inc. and its former executive, Sam Glover, allegedly committed various frauds and violated the Food Drug and Cosmetic Act by falsifying prescription orders.  Despite scrutiny by members of the company who suspected the orders were unverified, the company’s leadership continued to allow the requests and collect profits as a result.  This investigation is part of the FBI’s larger effort to ensure that both individuals and organizations who devise complex fraud schemes are prevented from furthering their illegitimate arrangements and making money off mistruths.”

According to admissions and court documents, as well as the allegations in the Indictment:[1]

Beginning in approximately 2015, while USC was still a privately-held corporation, a USC sales representative (“Sales Rep 1”) entered into an illegal arrangement with a veterinarian (the “Veterinarian”), wherein Sales Rep 1 would use the Veterinarian’s state veterinary licenses to generate false prescriptions in order to justify shipping prescription drugs directly to consumers, including to consumers in the Southern District of New York, in violation of the FDCA.  Those consumers otherwise lacked bona fide prescriptions for those drugs.  The Veterinarian was promised a 10% commission of all such sales generated using his credentials, even though Sales Rep 1 and his supervisor, GLOVER, the Vice President of Sales at USC, knew that the prescriptions issued in the Veterinarian’s name were a sham.  GLOVER, Sales Rep 1, and the sales team working under them generated approximately $1 million in sales annually because of the false prescription scheme, which comprised approximately one-third of Sales Rep 1’s total sales of USC drugs.

On or about March 28, 2016, USC was acquired by Adamis Pharmaceuticals Corporation (“Adamis”), a publicly traded company that has since changed its name to DMK Pharmaceuticals Corporation (“DMK”).  USC retained its essential functions, operating as a wholly owned subsidiary of Adamis, and much of its staff remained employed, including GLOVER.  Following the acquisition, an executive at Adamis (the “Adamis Executive”) was made aware of the scheme and the Veterinarian’s role in it.  GLOVER, in conjunction with the Adamis Executive and Sales Rep 1, continued the false prescription scheme and attempted to enter into a sham consulting agreement with the Veterinarian that purported to pay the Veterinarian an hourly rate for consultations.  In actuality, the consulting agreement was a means to cover up the commission payments the Veterinarian was receiving as part of the scheme.  GLOVER and others intended to claim the Veterinarian was a USC consultant if the commission payments to the Veterinarian were ever questioned.

In or about December 2019, the head of the USC pharmacy responsible for fulfilling prescription drug orders (“Pharmacist-1”) resigned due to USC’s failure to halt the practice of fulfilling drug orders submitted by USC’s sales representatives based on unverified prescriptions.  Pharmacist-1’s replacement (“Pharmacist-2”) refused to fulfill any further orders for prescription drugs predicated on unverified prescriptions submitted by USC’s sales representatives.  Pharmacist-2 raised concerns regarding USC’s prescription practices with GLOVER and the Adamis Executive.  Pharmacist-2’s concerns were initially dismissed, but they ultimately convinced Adamis to implement a new veterinary software platform that was intended to eliminate the involvement of USC’s sales representatives in the creation or submission of prescriptions in connection with drug orders.  Nonetheless, GLOVER, the Adamis Executive, and Sales Rep 1 allowed sales representatives to submit false prescriptions through the new software, circumventing the control that Pharmacist-2 had insisted on implementing.  Consequently, in or about September 2020, Pharmacist-2 and two other pharmacists employed at USC resigned.  A fourth pharmacist employed at USC resigned the following week.  USC sales representatives continued to falsely indicate through the new software that drug orders were accompanied by valid prescriptions when they were not.

In or about July 2020, in response to increased perceived scrutiny of USC’s operations, USC sales representatives ceased submitting false prescriptions in the name of the Veterinarian.  Instead, USC sales representatives falsely classified direct-to-consumer sales of prescription drugs as sales of office stock to the Veterinarian, on the pretext that the Veterinarian was prescribing these drugs to USC’s customers.  According to USC’s internal sales data, sales of a particular prescription drug to the Veterinarian’s practice increased proportionally as direct-to-consumer sales of that drug declined.

In or about April 2021, the Arkansas State Board of Pharmacy issued an Order and Notice of Hearing directed to the pharmacist who replaced Pharmacist-2.  Prior to any hearing, USC entered into a consent order wherein USC agreed to cease all operations in Arkansas, and USC agreed to relinquish its Arkansas State licenses as a pharmacy and wholesale distributor.  USC also entered into a resolution in which they made the following factual admissions: USC “failed to ensure prescribing veterinarians were licensed in the state into which product was ordered and/or shipped”; USC “allowed for issuance of veterinary legend products directly to consumers without receipt of a legal prescription”; USC “provided remuneration directly to a veterinarian in connection with a veterinary prescription”; USC “provided veterinary prescriptions drugs to animal owners without the authorization of a licensed veterinarian and a prescription”; and USC “filled veterinary prescriptions for patients that did not have a valid practitioner-patient relationship.”

The U.S. Attorney’s Office for the Southern District of New York reached its resolution with USC based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct.  The U.S. Attorney’s Office also considered USC and its parent company’s efforts to cooperate with the federal criminal investigation.  After learning of the federal criminal investigation in May 2021, Adamis, through its Audit Committee, cooperated in the investigation, which included making presentations to, and addressing questions posed by, the U.S. Attorney’s Office after conducting an internal investigation.  Moreover, since learning of the investigation, Adamis, on behalf of USC, made remedial efforts, including ceasing all USC’s operations;   terminating all employees and severing its relationships with all individuals involved in the criminal conduct, including senior personnel; and engaging a third party to conduct a cross-company enterprise risk assessment evaluating governance, product services, internal audit, risk management, compliance, and operations and implementing and effectuating the resulting recommendations.

Pursuant to the plea agreement, USC agreed that it is subject to an approximately $4.2 million forfeiture payment and a criminal fine of up to $16.9 million.

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GLOVER, 45, of Arkansas, is charged with one count of conspiring to violate the FDCA, 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 the judge.

Mr. Williams praised the outstanding investigative work of the FBI.  Mr. Williams also thanked the Food and Drug Administration and the Customs and Border Protection for their support of this investigation.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Sarah Mortazavi and David Felton 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.

 Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of ELIJAH BERMUDEZ, a/k/a “Quiet,” in connection with his criminal activities as a member of the violent gang Bully Hard Hunna Blood (“Bully Hard”), including his role as the shooter in the June 20, 2020, murder of 16-year-old bystander Frederick Wells, known to his friends and family as “Khabir.”  The murder arose out of a dispute between Bully Hard gang members and members of a rival set of Bloods called the Untouchable Gorilla Stone Nation (“Gorilla Stone”), which led to, three months later, a retaliatory September 21, 2020, broad daylight murder of a second minor victim, 15-year-old Jalani Jones, in Poughkeepsie.  BERMUDEZ pled guilty today before U.S. District Judge Nelson S. Román.  

U.S. Attorney Damian Williams said: “In a tragic three-month stretch in 2020, brutal gang violence between the Bully Hard and Gorilla Stone sets of the Bloods caused two senseless murders of minor victims in Poughkeepsie.  Previously, Gorilla Stone leader Brandon Soto was convicted and sentenced to 35 years in prison for his role in planning out and ordering the retaliatory September 21, 2020, murder of a 15-year-old.  Today, thanks to our law enforcement partners and the dedicated prosecutors of this Office, Elijah Bermudez has now admitted to an earlier, June 20, 2020, murder that prompted the retaliatory September 2020 murder.  Today’s plea is a reminder that this Office will relentlessly pursue any gangs who threaten the safety of New Yorkers.”

According to allegations in the Indictment and Information and statements made in public filings and public court proceedings:

From early 2020 to April 2022, BERMUDEZ was a member or associate of a racketeering enterprise known as Bully Hard, a criminal organization whose members and associates engaged in, among other things, murder, robberies, narcotics trafficking, and fraud.  Bully Hard operated in New York City and Upstate New York, including in Poughkeepsie.  Members and associates of Bully Hard engaged in a series of violent disputes with rivals of Bully Hard, as well as those within Bully Hard who they deemed disloyal.  During these disputes, members and associates of Bully Hard committed murder, shootings, and assaults against their rivals and against fellow members of Bully Hard.  They also distributed heroin and marijuana.

On June 20, 2020, BERMUDEZ shot and killed 16-year-old bystander Frederick Wells in the vicinity of Charles Street in Poughkeepsie in furtherance of his membership in the Bully Hard racketeering enterprise.  Specifically, on the night of June 20, 2020, BERMUDEZ and another member of Bully Hard (“Bully Hard Member-1”) got into a physical fight with members of Gorilla Stone, a rival set of Bloods.  During the fight, Bully Hard Member-1 confronted a 17-year-old Gorilla Stone member (“Gorilla Stone Member-1”).  At the time, Gorilla Stone Member-1 was standing with Wells, who was Gorilla Stone Member-1’s friend from school, was not in a gang, and was a bystander to the altercation.  BERMUDEZ then stabbed Gorilla Stone Member-1, picked up Bully Hard Member-1’s gun, which had dropped to the ground, and shot Wells as Wells tried to run away.   Wells was found dead with a gunshot wound to his head. 

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BERMUDEZ, 31, of New York, New York, pled guilty to one count of racketeering conspiracy, which carries a maximum sentence of 20 years in prison; one count of being a felon in possession of ammunition, which carries a maximum sentence of 10 years in prison; and one count of conspiracy to possess ammunition after a felony conviction, which carries a maximum sentence of five years in prison.  BERMUDEZ is scheduled to be sentenced by Judge Román on October 17, 2024.   

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 Federal Bureau of Investigation Westchester County Safe Streets Task Force.  Mr. Williams also thanked the City of Poughkeepsie Police Department and Dutchess County District Attorney’s Office for their assistance in the case.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys David R. Felton, Courtney L. Heavey, Shiva H. Logarajah, and Kevin T. Sullivan are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York announced today that the United States filed a civil lawsuit against GRISTEDE’S FOODS NY, INC. (“GRISTEDES”) alleging violations of the Clean Air Act and the Environmental Protection Agency’s (“EPA”) Recycling and Emissions Reduction Rule (“RER Rule”) due to GRISTEDES’ failure to comply with regulations designed to limit the emission of refrigerants from appliances at its store into the atmosphere.  The United States and GRISTEDES simultaneously entered into a Consent Decree resolving that lawsuit.  The Consent Decree requires GRISTEDES to pay a $400,000 civil penalty and to undertake millions of dollars of repairs to reduce its future emissions of refrigerants that are greenhouse gasses.

U.S. Attorney Damian Williams said: “Between 2019 and 2021, Gristedes systematically violated EPA refrigerant regulations, resulting in greenhouse gas emissions at a rate far higher than others in the industry.  To give a sense of scale, Gristedes’ emissions had a global warming effect equal to driving a car 140,000,000 miles.  As a result of our lawsuit, Gristedes is now required to reduce its emissions by over 70% from their 2020 levels to offset at least some of the damage it has caused, and it will face significant additional penalties under the Consent Decree if it fails to do so.”

The Clean Air Act and the RER Rule impose requirements on the owners and operators of commercial refrigeration appliances to prevent the emission of regulated refrigerants into the atmosphere.  Many refrigerants (including those utilized in GRISTEDES stores) are powerful greenhouse gases that contribute to global climate change when emitted.  They also deplete the ozone layer and are toxic to humans when present in the air in large quantities.

As alleged in the United States’ Complaint filed in Manhattan federal court:

GRISTEDES has owned and operated a chain of approximately 20 supermarkets in New York City.  Between 2019 and 2021, despite utilizing regulated refrigerants known as hydrochlorofluorocarbons and hydrofluorocarbons at its supermarkets, GRISTEDES systematically failed to comply with key aspects of the RER Rule — failing to calculate the rate at which its appliances were leaking when adding new refrigerants, failing to timely repair leaks, failing to conduct verification testing after repairing appliances, failing to retrofit or retire leaking appliances, and failing to report chronically leaking appliances to EPA. 

As a result, GRISTEDES’ refrigerators have leaked refrigerants into the atmosphere at a rate far higher than industry standards.  These leaks have emitted more than 40,000 pounds of regulated climate-impacting refrigerants, with a greenhouse gas effect equivalent to driving an average, gasoline-powered vehicle an extra 140,000,000 miles.

In the Consent Decree, GRISTEDES admits, acknowledges, and accepts responsibility for the following conduct between 2019 and 2021: 

• Failing failed to adopt or implement refrigerant management practices that were consistent with the RER Rule.
• Failing to calculate the leak rates for appliances upon addition of refrigerants to those appliances and to maintain records of the same. 
• Failing to repair appliances that had leak rates above applicable thresholds under the RER Rule and to maintain records of the same.
• Failing to perform initial and follow-up verification tests to ensure that the repairs were successful, to perform subsequent leak inspections at intervals required by the RER Rule, and to maintain records of the same.
• Failing to implement retrofit or retirement plans for the appliances that had uncontrolled leaks or to maintain records of the same.
• Failing to submit reports to EPA related to chronically leaking appliances.
• Maintaining corporate-wide leak rates of 40%, 59%, and 46% in 2019, 2020, and 2021, respectively, resulting in the emission of 42,094 pounds of refrigerants, in total.

Pursuant to the Consent Decree, GRISTEDES will pay a penalty of $400,000, an amount based on the company’s documented inability to pay the full civil penalty for which it otherwise would be liable.  Further, the Consent Decree requires GRISTEDES to undertake repairs of its commercial refrigeration equipment with an estimated cost of $13,500,000, to adopt a comprehensive refrigerant compliance management plan, to convert three stores to utilize advanced refrigerants with low global warming potential, and to lower its corporate leak-rate below 16%.  Failure to comply with the Consent Decree will give rise to significant additional penalties. 

*                *                *

To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the Consent 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 the attorneys and enforcement staff at EPA’s Region 5 for their critical work in this matter.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant U.S. Attorneys Zack Bannon and Dominika Tarczynska are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MONA FAIZ MONTRAGE was sentenced to 12 months and one day in prison by U.S. District Judge J. Paul Oetken on June 28, 2024.  MONTRAGE previously pled guilty on February 21, 2024, to conspiracy to receive stolen money.

U.S. Attorney Damian Williams said: “Mona Faiz Montrage knowingly received illegal funds from older Americans who were victims of romance scams and now faces serious consequences for her actions.  Romance scams such as Montrage’s harm vulnerable, elderly victims not only in the cruel betrayal of trust in the realization that their online romantic connection was fiction, but by also callously stealing their money.  This Office and our law enforcement partners are relentless in bringing fraudsters who target Americans to justice, no matter where they are.”

As alleged in the Indictment and statements made in public filings and public court proceedings:

From at least in or about 2013 through in or about 2019, MONTRAGE was a member of a criminal enterprise (the “Enterprise”) based in West Africa that committed a series of frauds against individuals and businesses in the U.S., including romance scams. 

Many of the Enterprise’s romance scam victims were vulnerable, older men and women who lived alone.  The Enterprise frequently conducted the romance scams by sending the victims emails, text messages, and social media messages that deceived the victims into believing that they were in romantic relationships with a person who was, in fact, a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had successfully convinced victims that they were in a romantic relationship and had gained their trust, they convinced the victims, under false pretenses, to transfer money to bank accounts the victims believed were controlled by their romantic interests, when, in fact, the bank accounts were controlled by members of the Enterprise.

MONTRAGE is a Ghanaian public figure who rose to fame as an influencer through her Instagram profile under the username “Hajia4Reall,” which at one point had approximately 3.4 million Instagram followers and was among the top 10 most followed profiles in Ghana.

MONTRAGE received money from approximately forty victims of romance frauds, whom members of the Enterprise tricked into sending money.  Among the false pretenses used to induce victims to send money to MONTRAGE were payments to transport gold to the U.S. from overseas, payments to resolve a fake Federal Bureau of Investigation (“FBI”) investigation, and payments to assist a fake U.S. Army officer in receiving funds from Afghanistan.

In total, MONTRAGE controlled bank accounts that received over $2 million in fraudulent funds for the Enterprise.

*                *                *

In addition to the prison term, MONTRAGE, 32, of Accra, Ghana, was sentenced to three years of supervised release and order to forfeit $216,475 and pay restitution in the amount of $1,387,458.

Mr. Williams praised the outstanding work of the FBI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Mitzi Steiner and Kevin Mead are in charge of the prosecution.

“Today, Doctor William Washington was found guilty by a unanimous jury of engaging in a widespread scheme to defraud the NBA Players’ Health and Welfare Benefits Plan.  This scam by former players — some who earned tens of millions in successful NBA careers — and health care providers caused a loss of over $5 million to the health care benefit plan.  The players and doctors who engaged in this audacious scheme clearly thought it would go unnoticed — they were wrong.  Washington now stands convicted of federal crimes for facilitating fraud and betraying his oath as a health care provider.” 

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of JUSTIN HEATH SMITH, an adult film actor who uses the stage name “Austin Wolf.”  SMITH is charged with sending and receiving hundreds of videos of child pornography via the Telegram application.  Those videos depicted children as young as infants, including a video showing a 10-year-old child bound and raped.  In addition to sharing child pornography via Telegram, SMITH is also charged with possessing hundreds of additional videos containing child pornography in his Manhattan apartment.  SMITH will be presented later today before U.S. Magistrate Judge Robyn F. Tarnofsky in Manhattan federal court. 

U.S. Attorney Damian Williams said: “As alleged, Justin Heath Smith received and distributed hundreds of recordings containing child pornography, including a ghastly video showing a young child bound, beaten, and raped.  Our investigation into Smith is ongoing, and we urge anyone with information about Smith’s conduct to call the FBI at 1-800-CALL-FBI.  Together with our law enforcement partners, we will relentlessly pursue those predators who victimize children and prosecute them to the fullest extent of the law.” 

FBI Assistant Director in Charge James Smith said: “I want to make it clear: those who distribute child sexual abuse images prey upon the most vulnerable in our society.  Each image is a crime scene, leaving lasting scars on innocent victims.  The FBI is relentless in our pursuit of these perpetrators.  We will track them down, arrest them, and ensure they face justice for the harm they cause.”

According to the allegations contained in the Complaint:[1]

Between March 24 and March 28, 2024, SMITH, using an anonymous Telegram account, exchanged hundreds of videos containing child pornography with another individual whose phone was later seized and searched by the FBI pursuant to a search warrant.

An undercover FBI agent subsequently began a conversation with SMITH’s anonymous Telegram account.  In the course of those conversations, SMITH revealed details that confirmed his identity.

On April 21, 2024, the FBI executed a search warrant at SMITH’s Manhattan apartment, which revealed an SD card with hundreds of videos containing child pornography.

*                *                *

SMITH, 43, of New York, New York, is charged with one count of distribution and receipt of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possession of child pornography, which carries a maximum sentence of 10 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 defendant will be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the FBI.  Mr. Williams urged anyone who has additional information about SMITH’s conduct to call the FBI at 1-800-CALL-FBI or to submit a tip at tips.fbi.gov.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Getzel Berger is 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.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York; Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); Daniel B. Brubaker, the Inspector in Charge of the New York Division of the U.S. Postal Inspection Service ("USPIS"); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of CALEB ECCLES-GONSALVES in connection with his sale and distribution of firearms, machinegun conversion devices (“MCDs”), silencers, ammunition, and narcotics.  ECCLES-GONSALVES was arrested this morning in St. Petersburg, Florida, and will be presented later today in the U.S. District Court for the Middle District of Florida.  The case is assigned to U.S. District Judge Richard M. Berman. 

U.S. Attorney Damian Williams said: “As alleged, Caleb Eccles-Gonsalves participated in a scheme to illegally traffic various contraband into and around New York City, including guns, narcotics, and gun accessories like machinegun conversion devices, silencers, and ammunition.  Machinegun conversion devices are particularly dangerous gun accessories that turn ordinary firearms into fully automatic weapons.  Removing these extraordinarily dangerous devices from our streets is an important law enforcement goal, and we will continue working diligently with our law enforcement partners to keep these devices and other illegal guns out of New York City.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, the defendant trafficked illicit high-powered weapons, accessories, and ghost guns and in turn overlooked the incalculable dangers posed to the public.  HSI New York is committed to working with law enforcement partners to confront violent crime and its underlying causes directly.  I commend HSI’s Violent Gang Task Force, the New York Police Department, and the U.S. Attorney’s Office for the Southern District of New York for our shared dedication to removing illegal guns from our streets.”

USPIS Inspector in Charge Daniel B. Brubaker said: “The defendants allegedly used the U.S. Mail to traffic and distribute illegal firearms and other contraband in New York City without any regard for public safety in our communities.  The United States Postal Inspection Service will continue to aggressively pursue and investigate anyone who attempts to use the mail to encourage gun violence and ongoing drug use in our communities.  Combating these illegal activities will always be a priority for postal inspectors.  I commend our partners in the NYPD, HSI, and the U. S. Attorney’s Office for the Southern District of New York for their collaborative efforts on this investigation.”

NYPD Commissioner Edward A. Caban said: “These charges punctuate that the manufacturing and trafficking of fully assembled untraceable ghost guns, as well as their component parts, is among the most pressing public safety concerns in New York City today.  NYPD investigators and our federal partners will continue to vigorously pursue these types of cases in order to deliver on our promise to keep all New Yorkers safe, and to hold accountable anyone who allegedly involves themselves in this illicit trade.”

According to the allegations in the Indictment unsealed today in Manhattan federal court, as well as publicly filed court documents and statements at public court proceedings:1

From about July 2023 up to and including June 2024, ECCLES-GONSALVES participated in a conspiracy to sell at least two MCDs, multiple firearms — including a privately manufactured “ghost” gun (depicted below) — and narcotics.  An MCD is a combination of parts that, when installed on a semiautomatic firearm, enables the firearm to automatically shoot more than one shot, without manual reloading, by a single function of the trigger.  A “ghost” gun is an unserialized, privately manufactured firearm that is difficult to trace and typically constructed from a kit.

ECCLES-GONSALVES and his co-conspirators used the U.S. Postal Service (“USPS”) to ship MCDs as well as firearms from Florida to New York.  In addition, ECCLES-GONSALVES advertised multiple guns, including at least one rifle, as available for sale.  Law enforcement seized USPS parcels during the course of the investigation and seized, among other things, a privately manufactured “ghost” gun, a silencer, an MCD, ammunition, and magazines.  A photo of a "ghost gun" and silencer seized from a USPS parcel during the course of this investigation is copied below:

At the time of his arrest today, law enforcement officers executed a search warrant in the home in which ECCLES-GONSALVES was staying in St. Petersburg, Florida.  During the search, as depicted below, law enforcement officers recovered, among other things, 13 firearms, magazines, ammunition, and a lower receiver.

*                *                *

ECCLES-GONSALVES, 29, of Brooklyn, New York, is charged with conspiracy to possess and transfer a machinegun, which carries a maximum potential sentence of five years in prison; possession and transfer of a machinegun, which carries a maximum potential sentence of 10 years in prison; conspiracy to engage in the unlicensed business of dealing in firearms, which carries a maximum potential sentence of five years in prison; and narcotics distribution, which carries a maximum potential sentence of 20 years in prison.

The maximum potential sentences 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 work of HSI, the NYPD, and USPIS.   

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Ashley C. Nicolas and Timothy Ly 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 Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

SYRACUSE, NEW YORK – Lauren Roosa, age 39, formerly of Clay, New York, was sentenced today to 72 months in federal prison for her role in a drug-trafficking organization that distributed methamphetamine in Onondaga County and elsewhere in Central New York.

The announcement was made by United States Attorney Carla B. Freedman and Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division.

As part of her prior guilty plea, Roosa admitted that from approximately January 2020 through at least April 2021, she conspired with others to distribute methamphetamine in Central New York, which had been transported from California. Roosa further admitted that she agreed to receive shipments of methamphetamine at her residence in Clay, New York, which had been sent via commercial delivery service by coconspirators. One of these shipments contained 879 grams of pure methamphetamine. Roosa also acknowledged that she knew that a coconspirator had stored methamphetamine at a small convenience store in Syracuse, New York, which included 405 grams of pure methamphetamine seized by law enforcement, and that the $17,460 in U.S. currency also seized from that location was drug proceeds.

United States District Judge David N. Hurd also ordered Roosa to serve a 3-year term of supervised release to follow her release from prison, and the forfeiture of a total of $22,010 seized currency.

This case was investigated by DEA, U.S. Internal Revenue Service Criminal Investigation (IRS-CI), New York State Police-Violent Gang and Narcotics Enforcement Team (NYSP-VGNET), Onondaga County Sheriff’s Office, Onondaga County District Attorney’s Office, Syracuse Police Department, Oklahoma City Police Department, San Bernardino County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Matthew J. McCrobie.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SILFREDO CASTILLO MARTINEZ was sentenced today to 25 years in prison for producing child pornography with a minor victim who was under his watch in the Bronx daycare CASTILLO MARTINEZ owned and operated.  On March 21, 2024, CASTILLO MARTINEZ pled guilty to sexual exploitation of a child and production of child pornography before U.S. District Judge Paul A. Engelmayer, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Silfredo Castillo Martinez exploited the trust placed in him as a daycare provider by sexually abusing one of the minor children under his care and recording that abuse.  This lengthy prison sentence holds Castillo Martinez accountable for his horrific crimes and the extraordinary harm and trauma he caused.” 

According to the allegations contained in the Superseding Information and the Complaint:

From about July 2015 through about May 3, 2022, CASTILLO MARTINEZ operated a licensed daycare facility for children at his residence in the Bronx, New York (the “Daycare Facility”). 

From about May 2018 through about July 2018, CASTILLO MARTINEZ induced an 11-year-old minor (“Minor Victim-1”) who attended the Daycare Facility to engage in sexually explicit conduct with him at the Daycare Facility while CASTILLO MARTINEZ recorded that conduct on his cellphone and camera. 

On about May 3, 2022, law enforcement agents executed a search warrant at CASTILLO MARTINEZ’s residence and seized several electronic devices belonging to CASTILLO MARTINEZ.  Those devices contained, among other things, several images and a video containing child pornography depicting Minor Victim-1 and approximately 9,800 other images depicting child pornography.

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In addition to his prison term, CASTILLO MARTINEZ, 34, of the Bronx, New York, was sentenced to a lifetime of supervised release.   

Mr. Williams praised the outstanding investigative work of the U.S. Secret Service’s Internet Crimes Against Children Task Force, the Federal Bureau of Investigation, and the New York City Police Department.  Mr. Williams also thanked the Bronx County District Attorney’s Office for its assistance.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jackie Delligatti is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has settled a civil fraud lawsuit against VISITING NURSE SERVICE OF NEW YORK d/b/a VNS HEALTH, VISITING NURSE SERVICE OF NEW YORK HOME CARE II d/b/a VISITING NURSE SERVICE OF NEW YORK HOME CARE, and VNS HEALTH BEHAVIORAL HEALTH, INC. (collectively, “VNS”).

VNS, which operates one of the largest non-profit home and community-based health care organizations in the U.S., is licensed by the New York State Office of Mental Health (“OMH”) to serve as an Assertive Community Treatment (“ACT”) Program provider.  The settlement resolves claims that VNS violated the False Claims Act by fraudulently billing Medicaid for services that it either failed to provide or failed to document to persons with serious mental illness at the ACT Program VNS operated in Far Rockaway, Queens (the “VNS Far Rockaway ACT Program”).  Specifically, the settlement resolves claims that from January 1, 2014, through December 31, 2018, VNS submitted or caused to be submitted false claims to Medicaid for monthly payments for 103 patients at the VNS Far Rockaway ACT Program who did not receive the full array of services that VNS was required to provide under the ACT Program or for whom VNS did not adequately or timely document provision of such services in accordance with applicable regulations or the ACT guidelines.

Under the settlement approved June 25, 2024, by U.S. District Judge Paul A. Engelmayer, VNS will pay the U.S. $381,766.59 and has admitted and accepted responsibility for conduct alleged in the U.S. Complaint.  VNS has also agreed to pay the State of New York $572,649.89 to resolve state law claims for a total combined recovery of $954,416.48.

U.S. Attorney Damian Williams said: “The patients with serious mental illness who were receiving services from VNS’s Far Rockaway location deserved better.  These individuals needed, and Medicaid agreed to pay for, a full suite of monthly support services so that they could better manage their disabilities.  This Office will hold health care providers accountable when they fail to provide the necessary services that the federal and state governments are paying for.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As an Assertive Community Treatment Program in the State of New York, the defendants obtained funds from the Medicaid program to which they were not entitled because they did not record or provide appropriate services to a vulnerable patient population.  Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

As alleged in the Complaint filed in Manhattan federal court: 

VNS, as an ACT Program provider, receives monthly payments from Medicaid for each patient enrolled in its ACT Program.  In order to receive these payments, VNS must comply with certain regulations and guidelines promulgated by OMH, as well as their own contractual agreements with OMH.

However, in violation of these regulations, guidelines, and contractual agreements, VNS repeatedly failed to provide or document essential services to 103 patients at the VNS Far Rockaway ACT Program.  Specifically, VNS repeatedly failed to complete intake forms and/or conduct initial assessments, failed to complete immediate needs assessments, failed to complete service plans, failed to provide and/or record monthly psychiatric visits, and failed to record progress notes.

As part of the settlement, VNS admitted and accepted responsibility for certain conduct alleged by the U.S. in its Complaint, including the following:

▪           Intake Forms and Initial Assessments: Intake forms and initial assessments record necessary background information about the patient, inform subsequent treatment, and set a baseline for improvement while the patient is in the program.  In multiple instances and contrary to the ACT guidelines, VNS failed to complete intake forms and/or initial assessments for patients enrolled in the VNS Far Rockaway ACT Program, failed to complete intake forms and/or initial assessments in a timely manner, or failed to provide the necessary supervisory review and approval of intake forms and/or initial assessments.

▪           Immediate Needs Assessments: Immediate needs assessments are used to determine patient needs as to safety/dangerousness, food, clothing, shelter, and medical needs.  In multiple instances and contrary to the ACT guidelines, VNS failed to complete immediate needs assessments for patients enrolled in the VNS Far Rockaway ACT Program, failed to complete immediate needs assessments in a timely manner, or failed to provide the necessary supervisory review and approval of immediate needs assessments.

▪           Comprehensive Assessments: Comprehensive assessments provide a necessary baseline to provide services and are updated to reflect the patient’s changing needs over time.  In multiple instances and contrary to the ACT guidelines, VNS failed to complete comprehensive assessments for patients enrolled in the VNS Far Rockaway ACT Program, failed to complete comprehensive assessments in a timely manner, or failed to provide the necessary supervisory review and approval of comprehensive assessments.

▪           Service Plan: Service plans set forth specific objectives and planned services necessary to facilitate achievement of the patient’s recovery goals.  In multiple instances and contrary to the ACT guidelines, VNS failed to complete service plans for patients enrolled in the VNS Far Rockaway ACT Program, failed to complete service plans in a timely manner, or failed to provide the necessary supervisory review and approval of service plans.

▪           Psychiatric Visits: In multiple instances and contrary to the ACT guidelines, VNS failed to document psychiatric visits for patients enrolled in the VNS Far Rockaway ACT Program.

▪           Progress Notes: Progress notes document service contacts and attempted contacts, progress or lack of progress toward goals, and significant events.  In multiple instances and contrary to the ACT guidelines, VNS failed to record progress notes for patients enrolled in the VNS Far Rockaway ACT Program until several days or even weeks after the contact with the patient.  In addition, VNS sought and received payment at the full monthly level even though, based on the progress notes, they were entitled only to partial payment based on the number of documented contacts with the patient.

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 thanked HHS-OIG and the New York Medicaid Fraud Control Unit for their assistance with this case.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney David J. Kennedy is in charge of the case.

The former president of Honduras, Juan Orlando Hernández, 55, also known as JOH, was sentenced today to 540 months in prison and 60 months of supervised release for cocaine importation and related weapons offenses. The former two-term president was in office until weeks before his extradition to the United States in April 2022. Hernández was convicted on March 8 following a three-week jury trial. 

“As President of Honduras, Juan Orlando Hernández abused his power to support one of the largest and most violent drug trafficking conspiracies in the world, and the people of Honduras and the United States bore the consequences,” said Attorney General Merrick B. Garland. “Thanks to the diligent work of the Justice Department’s agents and prosecutors, Hernández will now spend more than four decades in prison. The Justice Department will hold accountable all those who engage in violent drug trafficking, regardless of how powerful they are or what position they hold.”

“The Drug Enforcement Administration (DEA) is relentlessly focused on dismantling drug trafficking organizations that threaten the safety and health of the American people,” said DEA Administrator Anne Milgram. “Former Honduran President Juan Orlando Hernández financed his political career with drug trafficking profits and abused his authority as President of Honduras to traffic hundreds of tons of cocaine to the United States. Let me be clear, political actors who use their power to traffic in drugs and corruption will be brought to justice in the United States.”

“As the former two-term president of Honduras, Juan Orlando Hernández had every opportunity to affect positive change for his country," said U.S. Attorney Damian Williams for the Southern District of New York. "Instead, Hernández helped to facilitate the importation of an almost unfathomable 400 tons of cocaine to this country: billions of individual doses sent to the United States with the protection and support of the former president of Honduras. Now, after years of destructive narco-trafficking of the highest imaginable magnitude, Hernández will spend 45 years where he belongs: in federal prison.”

According to court documents, from at least in or about 2004, up to and including in or about 2022, Hernández, the former two-term president of Honduras and former president of the Honduran National Congress, was at the center of one of the largest and most violent drug-trafficking conspiracies in the world. During his political career, Hernández abused his powerful positions and authority in Honduras to facilitate the importation of over 400 tons of cocaine into the U.S. Hernández’s co-conspirators were armed with machine guns and destructive devices, including AK-47s, AR-15s, and grenade launchers, which they used to protect their massive cocaine loads as they transited across Honduras on their way to the United States, protect the money they made from the eventual sale of this cocaine, and guard their drug-trafficking territory from rivals. Hernández received millions of dollars of drug money from some of the largest and most violent drug-trafficking organizations in Honduras, Mexico, and elsewhere, and used those bribes to fuel his rise in Honduran politics. In turn, as Hernández rose to power in Honduras, he provided increased support and protection for his co-conspirators, allowing them to move mountains of cocaine, commit acts of violence and murder, and help turn Honduras into one of the most dangerous countries in the world.

During his time in office, Hernández publicly promoted legislation and the efforts he purported to undertake in support of anti-narcotics measures in Honduras. At the same time, he protected and enriched the drug traffickers in his inner circle and those who provided him with cocaine-fueled bribes that allowed him to obtain and stay in power in Honduras. For example, Hernández selectively upheld extraditions by supporting and taking credit for extraditions to the United States of certain drug traffickers who threatened his grip on power, while at the same time promising drug traffickers who bribed him and followed his instructions that they would remain safe in Honduras. In addition, Hernández and his co-conspirators abused Honduran institutions, including the Honduran National Police and Honduran military, to protect and grow their conspiracy. Among other things, members of the conspiracy used heavily armed Honduran National Police officers to protect their cocaine loads as they transited through Honduras towards the United States for eventual distribution. Members of the conspiracy also turned to violence and murder to protect and grow their drug trafficking enterprise, attacking and murdering rival traffickers and those who threatened their grip on the Honduran cocaine trade.

Several of Hernández’s co-conspirators have already been convicted and sentenced in connection with this investigation. Among others, Hernández’s brother, Juan Antonio Hernández Alvarado, also known as Tony Hernández, was convicted after trial in October 2019 and sentenced to life in prison, and Geovanny Fuentes Ramirez, a violent cocaine trafficker who met with Hernández on multiple occasions to discuss their drug trafficking partnership, was convicted after trial in March 2021 and sentenced to life in prison. Juan Carlos Bonilla Valladares, also known as El Tigre, the former chief of the Honduran National Police, pleaded guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on Aug. 1, and Mauricio Hernández Pineda, a former member of the Honduran National Police and Hernández’s cousin, pleaded guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on July 2.

In total, Hernández and his co-conspirators trafficked more than 400 tons of U.S.-bound cocaine through Honduras during Hernández’s tenure in the Honduran government. This amounts to well over approximately 4.5 billion individual doses of cocaine.

The DEA investigated the case.

The Justice Department’s Office of International Affairs provided valuable assistance in securing Hernández’s arrest and extradition.

Trial Attorneys Andrea Broach and Jessica Fender of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Jacob H. Gutwillig, David J. Robles, Elinor L. Tarlow, and Kyle A. Wirshba for the Southern District of New York prosecuted the case.