Southern District of New York
Press releases recorded for this federal judicial district.
Three United Kingdom Nationals Charged in Connection with “Evolved Apes” NFT ScamRead the Press Release
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 the unsealing of an Indictment charging MOHAMED-AMIN ATCHA, MOHAMED RILAZ WALEEDH, and DAOOD HASSAN, all United Kingdom nationals, with conspiracy to commit wire fraud and money laundering. The charges arise from the defendants’ scheme to defraud victims into purchasing digital artwork known as the “Evolved Apes” collection of non-fungible tokens (“NFTs”). The case has been assigned to U.S. District Judge J. Paul Oetken.
U.S. Attorney Damian Williams said: “As alleged, the defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal. As we allege, thousands of people believed these false promises and were tricked into buying these NFTs, including here in the Southern District of New York. NFT fraud is no game, and those responsible will be held accountable.”
FBI Assistant Director in Charge James Smith said: “These three defendants allegedly were part of a scheme to pump up the price of NFTs with lies to the public about developing a related videogame, and to surreptitiously transfer the proceeds of the fraud to their personal accounts. Ghosting customers without fulfilling a promise not only reflects poor business integrity, it also violates the implicit trust buyers place in sellers when purchasing a product, no matter if that product is in a store or stored on a blockchain. The FBI remains committed to pursuing those who perpetrate fraudulent schemes out of a selfish desire for a quick profit.”
According to the allegations in the Indictment:[1]
In the fall of 2021, ATCHA, WALEEDH, and HASSAN executed a type of scam commonly known as a “rug pull,” where developers advertise a digital project, collect funds from purchasers, then abandon the project and keep the funds. ATCHA, WALEEDH, and HASSAN allegedly created and promoted an NFT project called “Evolved Apes” that involved the marketing of digital images of cartoon apes. The following is a graphic typical of the images that became Evolved Apes NFTs:
The creators and promoters of the Evolved Apes project publicly promised to use funds raised from selling the NFTs to develop a videogame based on the NFTs, which they claimed would increase the NFTs’ value. But after selling the NFTs and collecting large sums from purchasers, including in the Southern District of New York, they quickly shut down the Project’s website and kept the funds without developing the promised videogame. ATCHA, WALEEDH and HASSAN then laundered the misappropriated funds through multiple cryptocurrency transactions to their own personal accounts to conceal their ill-gotten gains.
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ATCHA, 23, WALEEDH, 23, and HASSAN, 23, all United Kingdom nationals, are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Samuel L. Raymond and Josiah Pertz are in charge of the prosecution.
The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Director at New York City Mayor’s Office Arrested for Participating in Bank Fraud SchemeRead the Press Release
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 TOMMY LIN in connection with a scheme to steal millions of dollars from financial institutions, which resulted in the theft of over $10 million. LIN was arrested this morning and will be presented today before U.S. Magistrate Judge Stewart D. Aaron. LIN was charged in a Superseding Indictment along with ZHONG SHI GAO, a/k/a “George,” and FEI JIANG, a/k/a “Jeffrey,” a/k/a “Brother Fei,” who were previously arrested in November 2023. The case is assigned to U.S. District Judge Colleen McMahon.
U.S. Attorney Damian Williams said: “Tommy Lin allegedly participated in a complex bank fraud scheme while also serving as a Director in the New York City Mayor’s Office and Senior Advisor to the NYPD’s Asian Advisory Council. Leveraging his connections to law enforcement, he allegedly leaked personal identifying information to members of the scheme, ran background checks for them, and even arranged for federal immigration authorities to arrest an individual in exchange for $20,000 in cash. I thank the career prosecutors of this Office and our law enforcement partners for their persistence in investigating this fraudulent and corrupt scheme.”
FBI Assistant Director in Charge James Smith said: “Tommy Lin, a former director in the Mayor’s Office, allegedly participated in a scheme to defraud more than a dozen financial institutions of at least $10 million by submitting illegitimate fraud reports to force the banks to reimburse them. To facilitate this conspiracy, Lin allegedly assisted members of the scheme in running background checks and accepted a significant cash bribe to arrange the arrest of a slighted accountholder by immigration authorities. Those in municipal offices are expected to conduct themselves with rectitude and obedience to the law, not engage in the purposeful manipulation of our economic infrastructure. The FBI is committed to ensuring all citizens, especially those in positions of authority, adhere to financial regulations and will investigate individuals who seek to profit from fraudulent plots.”
According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court:[1]
LIN previously served as the Director of Constituent Services in the Community Affairs Unit for the New York City Mayor’s Office between in or about 2014 and in or about 2019. As part of his responsibilities in the New York City Mayor’s Office, LIN served as a Senior Advisor to the New York City Police Department’s Asian Advisory Council.
Between at least in or about 2018 and in or about 2022, LIN participated in a scheme with GAO, JIANG, and others to steal millions of dollars from banks by causing transfers of funds between accounts they controlled, then falsely and fraudulently reporting that the transfers were unauthorized, which induced the financial institutions to credit them the amount of the transfers. The scheme was responsible for over $10 million in actual losses to nearly a dozen banks.
LIN participated in the bank fraud conspiracy by, among other things: providing names and dates of birth for potential accountholders to be used in the scheme, running background checks on members of the scheme to ensure that law enforcement was not investigating them, and accepting approximately $20,000 in cash in exchange for arranging for a Deportation Officer with Immigration and Customs Enforcement to arrest a disgruntled accountholder who had previously participated in the scheme.
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LIN, 41, of Forest Hills, New York, is charged with one count of bank fraud conspiracy, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of the FBI. Mr. Williams also thanked the New York City Department of Investigation and the Department of Homeland Security’s Office of Inspector General for their assistance in the investigation of this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan, James Ligtenberg, and Ni Qian are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[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 herein should be treated as an allegation.
Two Partners of Westchester Accounting Firm Plead Guilty to Tax Fraud ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that GEORGE SANOSSIAN and JACK N. SARDIS pled guilty to conspiracy to defraud the IRS, on May 29 and June 5, 2024, respectively, in White Plains federal court. SANOSSIAN’s sentencing before U.S. District Judge Cathy Seibel is scheduled for September 24, 2024. SARDIS’s sentencing before U.S. District Judge Nelson S. Román is scheduled for September 26, 2024.
U.S. Attorney Damian Williams said: “As they admitted in court, the defendants, both certified public accountants, conspired to fraudulently reduce the tax liability of clients of their accounting firm. This case serves as a reminder to all Americans that they are required to truthfully report their earnings and that criminal penalties could await those who fraudulently deceive the IRS, as George Sanossian and Jack Sardis have learned. My Office will continue to hold to account those who scheme to impede the lawful functions of the IRS.”
IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Schemes to conceal and reduce federal income and payroll tax liability, such as those utilized by Sardis and Sanossian, are unfair to every taxpayer who obeys the law and pays their fair share. The prosecution of individuals who intentionally conceal income and evade taxes is a key step in the IRS’s enforcement strategy. These guilty pleas place the defendants a step closer to realizing the consequences of their actions.”
According to the Informations, to which SARDIS and SANOSSIAN pled guilty, and statements made court:
SARDIS and SANOSSIAN were certified public accountants and partners in an accounting firm in Scarsdale, New York, that provided accounting and income and payroll tax services to clients, including nine businesses in the construction industry (the “Clients”). From in or about 2012 through at least on or about April 15, 2018, SARDIS and SANOSSIAN agreed with Clients to scheme to: (i) fraudulently reduce the income tax liability of the Clients; (ii) conceal wages paid to employees by the Clients and, thereby, fraudulently reduce the Clients’ payroll tax liability; and (iii) conceal personal income of the Clients. The defendants advised the Clients to participate in a scheme to reduce their federal income and payroll tax liability, pursuant to which the Clients issued checks made payable to a shell company and gave the checks to SARDIS and SANOSSIAN, who then caused the checks to be cashed at a check cashing service and returned the cash, minus a fee, to the Clients. Some Clients used the cash to pay employees without reporting the cash wages on their IRS Forms 941, thereby evading both their employer contributions to Social Security and Medicare and their obligation to withhold income tax on those wages, which permitted the employees to evade federal and state income tax. The owners and managers of some Clients took the cash for personal use without reporting the income on their personal federal and state tax returns. SARDIS and SANOSSIAN caused checks to be cashed in this manner for Clients in a total amount exceeding $2 million.
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SARDIS, 66, of Englewood Cliffs, New Jersey, and SANOSSIAN, 70, of Scarsdale, New York, pled guilty to one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison. SARDIS and SANOSSIAN have agreed to pay restitution to the IRS and New York State, representing the additional tax due and owing as a result of their conduct, in the total amount of $652,883.60.
The maximum potential sentence in these cases 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 outstanding investigative work of the IRS-CI in this case.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Jeffrey C. Coffman and James McMahon are in charge of the prosecution.
Senior Promoter in Cryptocurrency Ponzi Scheme Pleads Guilty to Wire Fraud ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JUAN TACURI, a senior promoter in the cryptocurrency Ponzi scheme known as Forcount (and later known as Weltsys), pled guilty to conspiracy to commit wire fraud before U.S. District Judge Analisa Torres. The Forcount scheme spanned the globe and, in the U.S., principally targeted Spanish-speaking populations. TACURI was one of the scheme’s most successful promoters and reaped millions of dollars from his participation in the fraud. TACURI is scheduled to be sentenced on September 24, 2024, before Judge Torres.
U.S. Attorney Damian Williams said: “With this guilty plea, Juan Tacuri is being held to account for taking advantage of retail investors and selling them a fabricated investment opportunity. Tacuri brought in millions of dollars in victim funds — funds the victims could not afford to lose — and spent it lavishly on luxury goods and real estate. This Office will not stop pursuing Ponzi schemers like Tacuri, particularly where they target regular, working people who are in dire straits financially.”
According to allegations in the Indictment, public filings, and statements made in court:
Forcount was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products. The founders and promoters of the scheme, such as TACURI, falsely promised their Victims, among other things, that profits from the company’s cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments and the doubling of those investments within six months. In reality, Forcount was not engaging in cryptocurrency trading or mining, and the founder and promoters of the scheme were using Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.
TACURI traveled throughout the U.S., where he and others hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York. During larger-scale events, TACURI would present Forcount’s investment products and compensation plan, encourage Victims to invest as a means of achieving financial freedom, and boast about the amount of money he was earning, including by wearing designer clothing to such events. The atmosphere of these events was festive and designed to generate excitement about the schemes.
Victims invested in the Forcount scheme by purchasing investment products from promoters, such as TACURI, using cash, checks, wire transfers, and actual cryptocurrency. Following a Victim’s investment, they would be provided with access to an online portal where they could monitor their purported returns. While Victims saw “profits” accumulate on the scheme’s online portal, most Victims were unable to withdraw any of these so-called profits and ultimately lost their entire investments. By contrast, Forcount’s promoters, like TACURI, siphoned off, in some cases, hundreds of thousands of dollars in Victim funds, which they withdrew as cash, spent on promotional expenses for the schemes, and used for personal expenditures such as luxury goods and real estate.
At least as early as in or about April 2018, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so, and when they complained to promoters, such as TACURI, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all. Despite these complaints, Forcount’s promoters, including TACURI, continued to promote the fraudulent scheme and accept Victims’ investments. As complaints mounted, Forcount began offering proprietary crypto-tokens for sale as a means of injecting liquidity into the scheme. TACURI claimed that these tokens, known as “Mindexcoin,” would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services. This was false. In reality, they were essentially worthless and resulted in further financial loss to Victims. By in or about 2021, the scheme had stopped making payments to Victims and their chief promoters, including TACURI, stopped promoting the schemes, and, in some instances, stopped responding to Victims’ complaints altogether.
The U.S. Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims. If you believe you are a victim of the Forcount scheme, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights. You can reach them at 866-874-8900.
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TACURI, 46, of Greenacres, Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. As part of his guilty plea, TACURI also agreed to forfeit nearly $4 million in Victim funds and certain real estate TACURI purchased using Victim funds.
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 a judge.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations. Mr. Williams also thanked the New York City Police Department; the New York City Sheriff’s Office; the Bureau of Insurance Fraud, Property, and Casualty in the Division of Investigative and Forensic Services of the Florida Department of Financial Services; and the Florida Office of Financial Regulation for their assistance. Mr. Williams also thanked the Securities and Exchange Commission and the Brazilian Federal Police for their assistance.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Benjamin A. Gianforti and Michael D. Maimin are in charge of the prosecution.
Pharmacy Owner and Physician Charged with Illegally Diverting Oxycodone for CashRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”); Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of Complaints charging Feroze Nazirbage, a pharmacy owner, and Mordechai Bar, a physician, with illegally diverting oxycodone and other controlled substances. Both NAZIRBAGE and BAR were arrested today and will be presented tomorrow in White Plains federal court.
U.S. Attorney Damian Williams said: “As alleged, Dr. Mordechai Bar and Feroze Nazirbage breached the trust that was placed in them to prescribe and dispense controlled substances only for legitimate medical purposes. They allegedly used their positions as healthcare professionals as a cover for what amounted to no more than common drug dealing operations. We will not tolerate the illegal sale of oxycodone and other addictive substances into the community, whether those sales take place on the street corner, at a doctor’s office, or behind a pharmacy counter.”
DEA Special Agent in Charge Frank A. Tarentino III said: “The arrests today of Doctor Mordechai Bar and pharmacy owner Feroze Nazirbage are the result of the DEA’s commitment in pursuing those individuals who allegedly exacerbate the ongoing opioid crisis. As alleged, these two healthcare professionals, who illegally diverted the highly addictive oxycodone for cash had a responsibility of protecting patients’ lives, not destroying them. The DEA will relentlessly pursue those individuals responsible for putting profits and greed over the health of their patients.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “This physician and pharmacy owner are alleged to have illegally distributed controlled substances, which is behavior that could contribute to the ongoing opioid epidemic. HHS-OIG works with our law enforcement partners to ensure that individuals involved in fraud schemes that exploit federal health care programs and threaten patient safety are held accountable.”
FBI Assistant Director in Charge James Smith said: “In exchange for financial compensation, Feroze Nazirbage and Mordechai Bar, a pharmacy owner and physician, respectively, allegedly conspired to distribute controlled substances – including oxycodone – without a legitimate prescription or patient medical examination. Failing their ethical duty to do good, the defendants allegedly abused their positions in healthcare by serving as suppliers for a highly addictive narcotic while greedily pocketing the rewards. With assistance from our law enforcement partners, today’s charges reflect the FBI’s intolerance of those who selfishly jeopardize the health of others, especially those entrusted with prioritizing and preserving the wellness of our city.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “Nazirbage and Bar went against all medical ethics and broke the law with their alleged dealing of oxycodone, a highly addictive drug. Law enforcement understands the continued need to stop the flow of this drug getting into hands with no medical need, and we remain steadfast in working investigations to arrest those who prey on the vulnerable.”
As alleged in the two Complaints filed on May 30, 2024, in White Plains federal court and unsealed today:[1]
Oxycodone, a Schedule II narcotic, is a highly addictive opioid analgesic that is used to treat severe and chronic pain conditions, such as post-operative pain, severe back and orthopedic injuries, as well as pain associated with certain forms of cancer and other terminal illnesses. Oxycodone prescriptions are in high demand and have significant cash value to drug dealers. The street value of oxycodone depends on the number of milligrams of oxycodone in each tablet, and in and around the New York City area, each milligram of oxycodone roughly translates to around $1 in street value.
NAZIRBAGE is associated with multiple pharmacies in and around New York City, including F&N Pharmacy, of which he is the president, and QV Pharmacy, where he has been observed working and directing customers. From at least about December 2022 up to the date of the Complaint, NAZIRBAGE has conspired with others to dispense or distribute oxycodone and other controlled substances, in violation of the law, in exchange for cash. In addition to filling prescriptions that he knew were not issued for a legitimate medical purpose by a practitioner acting within the usual course of professional practice, NAZIRBAGE also repeatedly sold controlled substances to a customer without a prescription in what is commonly referred to as a “backdoor sale.” During one of those sales, NAZIRBAGE gave that customer a handwritten menu of various prescription drugs and their per-pill cost for future backdoor sales (pictured below):
BAR is a physician whose practice is located in New Rochelle, New York. From at least in or about January 2023 up to the date of the Complaint, BAR conspired with others to provide prescriptions not issued for a legitimate medical purpose for oxycodone, amphetamine, and alprazolam to patients in exchange for cash payments. BAR issued those prescriptions without conducting medical examinations of the patients and, in many cases, without even speaking to or meeting with the patients.
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NAZIRBAGE, 50, of Bellerose, New York, is charged with one count of conspiring to illegally dispense or distribute oxycodone and other controlled substances, which carries a maximum sentence of 20 years in prison, and 11 counts of dispensing or distributing oxycodone and other controlled substances, each of which carries a maximum sentence of 20 years in prison.
BAR, 71, of Larchmont, New York, is charged with one count of conspiring to illegally dispense or distribute oxycodone and other controlled substances, which carries a maximum sentence of 20 years in prison, and 12 counts of dispensing or distributing oxycodone and other controlled substances, each of which carries a maximum sentence of 20 years in prison.
The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding efforts of the DEA, HHS-OIG, the FBI, and IRS-CI. He also thanked the DEA Task Force Officers from the Yonkers Police Department, the Westchester County Police Department, the Putnam Sheriff Department, the Orangetown Police Department, and the Rockland Seriff Department. He added that the investigation is ongoing. Any individuals who believe they have information that may be relevant to this investigation should contact DEA Victim/Witness Coordinator James Lee at [email protected] and/or by calling (646) 529-4042.
This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S Attorneys David A. Markewitz and Kathryn Wheelock are in charge of the prosecution.
The charges contained in the Complaints 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 Complaints and the description of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Charged for Carrying Loaded Ghost Gun, Cocaine, and Scale on Bronx Subway PlatformRead the Press Release
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 filing of a Complaint in Manhattan federal court charging JERMAINE GREENE with firearms and narcotics offenses in connection with a March 28, 2024, incident at the New York City subway station located on Fordham Road and Jerome Avenue in the Bronx (the “Fordham Road Station”). GREENE was arrested today and presented before U.S. Magistrate Judge Stewart D. Aaron.
U.S. Attorney Damian Williams said: “As alleged, Jermaine Greene brought a loaded gun, a drug stash, and tools of the drug trade into the New York City subway system. I am grateful to the NYPD for its efforts to bring to justice those who endanger their follow passengers and abuse public transportation.”
NYPD Commissioner Edward A. Caban said: “Policing methods that focus on relatively minor offenses — in this case, fare evasion — often lead police officers to larger alleged crimes that are putting unsuspecting New Yorkers in danger. The NYPD refuses to turn a blind eye to criminal recidivists who allegedly continue to act with impunity and vows to keep addressing crime and disorder in every form. I commend the police officers who made this arrest and thank everyone at the office of the U.S. Attorney for the Southern District of New York for their continued partnership in our public safety mission.”
According to the allegations in the Complaint:[1]
On or about March 28, 2024, at approximately 5:37 p.m., NYPD officers observed GREENE entering the Fordham Road Station without paying a fare and walking upstairs to the southbound subway platform. The officers arrested GREENE after determining that he was the subject of open arrest warrants.
NYPD officers searched GREENE incident to arrest and recovered a privately assembled 9 mm “ghost” gun loaded with 12 rounds of ammunition. A photograph of the firearm and ammunition is below:
After transporting GREENE to NYPD Transit District 11 for processing, NYPD officers conducted an inventory search of GREENE. From inside a bookbag worn by GREENE underneath his jacket, the officers recovered a plastic bag containing approximately 50 grams of cocaine, a scale, and several empty plastic bags. The officers also found a small plastic bag of cocaine in GREENE’s pants pocket. A photograph of the scale and bags of cocaine is below:
GREENE was not permitted to possess ammunition because of prior felony convictions, including a Delaware conviction for second degree murder, for which GREENE was under court supervision at the time of these offenses.
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GREENE, 42, of the Bronx, New York, is charged with one count of possessing ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison; one count of distribution of narcotics, which carries a maximum sentence of 20 years in prison; and one count of possession of a firearm in furtherance of a drug trafficking crime, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the NYPD in connection with this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Henry Ross 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.
Two Men Sentenced to 185 and 220 Months in Prison for Murder of Rival Drug Dealer in 2002Read the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRIS OLIVER, a/k/a “T-Bird,” and RICARDO AYALA, a/k/a “Richie,” were sentenced to 185 and 220 months in prison, respectively, for their roles in the March 27, 2002, shooting death of 19-year-old Atari Felton. OLIVER and AYALA were participants in a drug conspiracy, members of which shot and killed Felton after a feud broke out between their group and Felton’s own drug business. OLIVER was sentenced this afternoon, and AYALA was sentenced on May 6, 2024, both by U.S. District Judge Alvin K. Hellerstein after pleading guilty to conspiring to distribute controlled substances. During their pleas, they admitted to participating in the Felton murder.
U.S. Attorney Damian Williams said: “This case is yet another reminder that no matter how much time passes, this Office will prosecute, and seek significant sentences for, any drug dealers and gang members who shoot and kill another person. There is absolutely no excuse for the taking of another life. Atari Felton has been dead for longer than he lived — a tragedy brought about by gun violence that this Office and City should never abide.”
According to the allegations in the Indictment and Information and statements made in public court proceedings:
OLIVER and AYALA were members of a drug crew that conducted open-air drug sales around 240 East 175th Street in the Bronx, near Monroe Avenue. The group had planned to merge operations with Felton, but when that failed, Felton attempted to shoot at members of OLIVER’s and AYALA’s group. Later that night, OLIVER, AYALA, and several other men traveled to the area of 1665 Topping Avenue, where at least four men, including OLIVER, fired shots at Felton as Felton exited a corner store.[1] One bullet struck Felton in the back, causing lethal injuries.
Following the murder, both OLIVER and AYALA incurred arrests and periods of incarceration on state charges of, among other things, gun possession, to which OLIVER pled guilty in 2006, and continued drug distribution, to which AYALA pled guilty in 2004.
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OLIVER, 42, of Bridgewater, Massachusetts, and AYALA, 43, of the Bronx, New York, previously pled guilty to conspiring to distribute crack cocaine, heroin, and marijuana, and both admitted to participating in the Felton murder. In addition to the prison term, OLIVER and AYALA were sentenced to three years of supervised release.
Mr. Williams praised the outstanding work of Special Agents from the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department’s Cold Case Squad. He also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Frank Balsamello, Andrew K. Chan, and Mathew Andrews are in charge of the prosecution.
[1] The Court accepted for purposes of sentencing that AYALA had acted as a lookout during the shooting.
U.S. Attorney Damian Williams Announces the Selection of Deputy U.S. Attorney and Executive Assistant U.S. AttorneyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the selection of Edward Y. Kim as Deputy U.S. Attorney and Lillian Evans as Executive Assistant U.S. Attorney, as well as the departure of Andrea Griswold, Deputy U.S. Attorney, and Neil M. Corwin, Executive Assistant U.S. Attorney.
Since February 2024, Mr. Kim has served as the Chief Counsel to the U.S. Attorney for the Southern District of New York. Mr. Kim was previously an Assistant U.S. Attorney in the Office from 2008 to 2017, serving in the Criminal Division. From 2015 to 2016, Mr. Kim was Chief of the General Crimes Unit, and from 2016 to 2017, he was Chief of the Complex Frauds and Cybercrime Unit. During his tenure, Mr. Kim twice received the Attorney General’s Distinguished Service Award. He also received the Assistant Attorney General’s Exceptional Service Award and was named a prosecutor of the year by the Federal Law Enforcement Foundation. From 2017 to 2024, Mr. Kim was a partner at Krieger Kim & Lewin LLP, a firm which he co-founded, where he represented individuals and entities in white collar criminal and regulatory matters. Mr. Kim graduated magna cum laude from Brown University in 1998 and cum laude from Harvard Law School in 2004. Upon graduation from law school, Mr. Kim served as a law clerk to the Honorable Naomi Reice Buchwald of the U.S. District Court in the Southern District of New York.
Ms. Evans joins the Office from the New York City Law Department, where she has worked since 2012. Since 2021, she has served as that office’s Director of Legal Recruitment, in which capacity she has overseen recruiting, hiring, and career counseling. Ms. Evans graduated from the University of Michigan in 2005 and from Benjamin N. Cardozo School of Law in 2011.
In making these selections, U.S. Attorney Damian Williams said: “I am pleased to appoint Ed Kim as Deputy United States Attorney. Ed’s intellect and leadership have already been invaluable to the Office, and I look forward to benefiting from his wise counsel as the newest Deputy. Lillian Evans’s impressive work in recruiting, hiring, and career counseling at the New York City Law Department makes her an ideal person to continue the uniquely important role of staffing this Office with the most talented lawyers in the country. Lillian has big shoes to fill, and I commend and thank Neil Corwin for his remarkable tenure in this Office and wish him well in retirement. Neil’s reputation for combining excellence and kindness is reflected in the many AUSAs and interns he has recruited and mentored. Lastly, I want to thank Andrea Griswold for her service to this Office. Having worked side-by-side with Andrea for nearly a decade, I know Andrea to be a relentless investigator, a talented trial lawyer, and a strategic counselor and leader with excellent judgement. Andrea is a generational talent. I will miss her dearly.”
Norman Gray, Founder and CEO of A Biomedical Company, Convicted at Trial for Defrauding Victim of Nearly $1.5 MillionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that on May 29, 2024, a jury returned a guilty verdict against NORMAN GRAY for wire fraud in connection with a scheme to defraud a victim (“Victim-1”) of nearly $1.5 million through false promises and bogus documents. GRAY falsely represented to Victim-1 that Victim-1’s funds would be invested in GRAY’s biomedical company (the “Biomedical Company”) and in deals to support the Biomedical Company through the sale of personal protective equipment (“PPE”) during the height of the COVID-19 pandemic. In reality, Victim-1’s funds were not used by GRAY as promised, and he instead used Victim-1’s funds to, among other things, retire prior debts and purchase himself a high-end automobile and a large home in Connecticut. GRAY’s scheme to defraud Victim-1 also involved the use of fabricated documents and the wholesale invention of a fake mortgage company and a fictitious mortgage broker. GRAY was found guilty after a seven-day trial before U.S. District Judge Paul A. Engelmayer. Judge Engelmayer remanded GRAY to the custody of the U.S. Marshals Service earlier today.
U.S. Attorney Damian Williams said: “Norman Gray meticulously crafted a relationship of trust and confidence with his victim by lying about his background, the financial health of his company, and how he would invest the victim’s money. Over the course of just a few weeks in 2020, Gray induced his victim to send him nearly $1.5 million after learning that the victim had recently been awarded a substantial sum of money in a commercial arbitration. Gray’s brazen scheme involved lie after lie, which included the use of fake documents and a made-up mortgage company. Gray’s lies have finally caught up with him, and he now faces substantial time in prison.”
According to the Superseding Indictment, public filings, public court proceedings, and the evidence presented at trial:
At all relevant times, GRAY was the founder and CEO of the Biomedical Company, which is headquartered in Hamden, Connecticut. GRAY presented himself to Victim-1 and others as a billionaire scientist with a Ph.D. from MIT at the helm of a company he was personally funding that was potentially worth hundreds of millions of dollars. In reality, GRAY did not have a Ph.D., and, as of August 2020, both he and the Biomedical Company were in significant debt. In or about August 2020, GRAY induced Victim-1 to send him $250,000 as a purported investment in the Biomedical Company. Rather than purchase equity for Victim-1, GRAY used nearly all of Victim-1’s $250,000 payment to repay a loan that GRAY had taken out from a tenant in the same building where the Biomedical Company is headquartered in order to make payroll. In the ensuing weeks, GRAY extracted an additional $1,217,000 from Victim-1, representing that Victim-1’s funds would be invested in deals involving the procurement of PPE for two major universities in the tristate area. GRAY falsely represented that his prior PPE deals had turned a 40% profit within 90 days, that he already had purchase orders in hand for PPE worth nearly $8 million, and that, therefore, the risk was “virtually zero.” In reality, over the preceding months, GRAY had accumulated a vast inventory of unsellable PPE, the purported purchase orders were fake, and GRAY did not invest Victim-1’s funds in PPE. Instead, GRAY misappropriated Vicitm-1’s funds, in part, to purchase himself a nearly $1 million home, a $50,000 luxury SUV, and to pay down $200,000 of his and his family’s credit card debt.
As part of his scheme to defraud Victim-1, and as a means of dispelling Victim-1’s concern that an investment with GRAY might require Victim-1 to forego the purchase of a home, GRAY offered Victim-1 a mortgage from a purported boutique mortgage company of which he was the sole investor. GRAY directed Victim-1 to a purported mortgage broker that worked for this boutique mortgage company. In reality, both the mortgage company and the mortgage broker were completely fabricated by GRAY and did not exist. To further this aspect of the fraud on Victim-1, GRAY registered an internet domain in the name of the purported mortgage company and created an email address in the name of the invented mortgage broker contemporaneously with making his false representations to Victim-1. As GRAY’s fraud began to unravel in or about early November 2020, GRAY promised to return all of Victim-1’s money. Ultimately, GRAY never returned any money to Victim-1, and after Victim-1 asked GRAY to provide her with the purported PPE purchase orders from the two universities, she never heard from GRAY again.
As demonstrated at trial, at the outset of the scheme to defraud Victim-1, GRAY separately attempted to defraud a board member of the Biomedical Company who had introduced Victim-1 to GRAY. GRAY solicited a $150,000 loan from the board member to make the Biomedical Company’s payroll and sent the board member a fake wire transfer supposedly demonstrating that GRAY would soon receive over half a million dollars and therefore would be able to repay the board member in short order. In reality, GRAY forged the wire transfer document, and no such money actually arrived.
If you believe you are a victim of any crimes related to NORMAN GRAY, please email [email protected].
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GRAY, 68, of Hamden, Connecticut, was convicted of one count of wire fraud, which carries a maximum potential sentence of 20 years in prison.
The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. GRAY is scheduled to be sentenced by Judge Engelmayer on September 12, 2024, at 2:30 p.m.
Mr. Williams praised the outstanding investigative work of the Special Agents of Homeland Security Investigations. Mr. Williams also thanked the New Haven Police Department, as well as law enforcement authorities in the United Kingdom and Spain and the Justice Department’s Office of International Affairs, for their assistance.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Benjamin A. Gianforti, Vladislav Vainberg, and Jessica Greenwood are in charge of the prosecution.
New Jersey Man Sentenced to 10 Years in Prison for Leading One of the Largest No-Fault Insurance Frauds in New York HistoryRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that BRADLEY PIERRE was sentenced to 10 years in prison by U.S. District Judge Paul G. Gardephe for conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies. PIERRE pled guilty before Judge Gardephe on December 18, 2023.
U.S. Attorney Damian Williams said: “Bradley Pierre’s deceitful orchestration of a $60 million fraud — the largest in New York’s history — targeting No-Fault automobile insurance companies exemplifies a blatant disregard for justice and fairness. Through bribery and manipulation, Pierre callously exploited the system, denying accident victims the rightful care they deserved. We commend the diligent work of the investigative team and career prosecutors whose dedication ensured accountability in this complex case.”
According to the Indictment, the plea agreement, and statements made in court:
New York and New Jersey No-Fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold. Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves. This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident.
From at least in or about 2008 through in or about 2021, PIERRE agreed with others (the “Clinic Controllers”) to unlawfully own and run medical clinics located in the New York area, including, among others, Veda Medical, Sky Medical, Sun Medical, and Rutland Medical (the “Clinics”). PIERRE knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians. PIERRE nonetheless agreed with others, including doctors, to submit bills to insurance companies falsely representing that the Clinics were owned and operated by licensed doctors and to direct doctors to lie under oath during Examinations under Oath (“EUOs”) about the ownership, control, and finances of the Clinics. PIERRE personally coached doctors to lie under oath in these EUOs.
PIERRE used his control of the Clinics for personal profit. Between 2008 and 2021, PIERRE took over $20,000,000 from the Clinics by either transferring the funds directly to bank accounts under his control or using the Clinics’ bank accounts to pay his personal finances. PIERRE also used his control of the Clinics to steer prescriptions to pharmacies in return for over a million dollars in kickbacks and to steer patients to seek legal representation from his wife’s law firm, the Law Firm of Nonna Shikh (the“Shikh Firm”). The Shikh Firm then filed lawsuits against insurance companies on these patients’ behalf. PIERRE maintained an office at the Shikh Firm and was actively involved in the legal practice as a “manager.” The Shikh Firm made millions of dollars from the scheme and transferred over $4 million of illegal proceeds to PIERRE through a “marketing” arrangement between PIERRE’s shell companies and the Shikh Firm.
PIERRE used his control of the Clinics and his managerial role at the Shikh Firm to also steer patients to seek MRIs at a medical facility over which he exercised substantial control (the “MRI Facility”). PIERRE also agreed with the purported sole owner of the MRI Facility, who was a doctor, that the doctor would falsely report injuries in MRI reports. These falsified injuries allowed the Clinics to bill insurance companies for additional, unnecessary medical services and allowed attorneys to falsely claim injuries in lawsuits against insurance companies. PIERRE and the doctor agreed that the doctor would lie to insurance companies during EUOs about PIERRE’s role in the MRI Facility.
PIERRE hid his control over several of the Clinics and the MRI Facility using phony loan arrangements. These agreements claimed that PIERRE was making non-recourse loans to the Clinics and the MRI Facility, which would only have to be paid back if insurance companies paid the medical practices’ claims. The agreements also set PIERRE’s “fee” as twice the amount loaned to the practices. However, in reality, PIERRE took almost $10,000,000 in excess of what these purported loan agreements permitted.
PIERRE further agreed to pay bribes to fill the Clinics and the MRI Facility with patients. From at least in or about 2015 up to and including 2021, PIERRE agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals (collectively, “lead sources”) for the confidential names and numbers of motor vehicle accident victims. PIERRE agreed that others, including Anthony Rose, a/k/a “Todd Chambers,” would then call victims and lie to them to induce victims to receive medical treatment at the Clinics and legal representation from the Shikh Firm. PIERRE helped Rose expand his bribery operation to New Jersey by recommending clinics and attorneys in the state that would pay kickbacks for referrals. PIERRE also recommended that Rose open a shell company to hide the illegality of the payments, which Rose in fact did. PIERRE paid Rose over $800,000 as part of the bribery scheme.
PIERRE further recruited his own lead sources to participate in the bribery scheme. For instance, in or about 2017, PIERRE recruited Andrew Prime, knowing that Prime was bribing 911 operators and a hospital employee for confidential information. PIERRE paid Prime over $800,000 as part of the bribery scheme. PIERRE also personally recruited and bribed several of his own lead sources, including 911 operators and a source in 2019 that PIERRE codenamed the “Motherload” or “ML.”
PIERRE also agreed to bribe medical offices to send patients to the MRI Facility for MRIs. These medical offices included, among others, Epione Medical Center and Modern Brooklyn Medical. PIERRE facilitated these bribe payments through several intermediaries, including Anthony Rose, Jelani Wray, and others. PIERRE paid Jelani Wray over $800,000 in connection with these bribes.
PIERRE then engaged in tax evasion. PIERRE utilized two companies in connection with the healthcare fraud and bribery schemes: Medical Reimbursement Consultants (“MRC”) and Marketing 4 You (“M4Y”). PIERRE hid income from the IRS by concealing multiple bank accounts for MRC and using a series of check cashers for checks made out to MRC and M4Y. PIERRE also paid personal expenses from MRC and M4Y’s bank accounts but improperly reported these payments as “business expenses.” These included payments for his wedding, home renovations, jewelry, furniture, luxury clothing, travel, and gifts. In total, PIERRE underreported income, falsely reported expenses of over $4 million, and deprived the IRS of approximately $1.5 million in taxes due.
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In addition to the prison term, PIERRE, 41, of Closter, New Jersey, was sentenced to three years of supervised release. PIERRE was also ordered to forfeit a money judgment of $3,500,000 and pay $1,500,000 in restitution.
Mr. Williams praised the investigative work of the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division. Assistant U.S. Attorneys Mathew Andrews, Qais Ghafary, and Michael Lockard are in charge of the prosecution.
Chief Financial Officer of Multinational Media Company Charged with Participating in Scheme to Launder at Least $67 Million in Fraud ProceedsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Jonathan Mellone, the Special Agent in Charge of the Northeast Region of the U.S. Department of Labor’s Office of Inspector General (“DOL-OIG”); and Andrew Wroblewski, the Assistant Director of the U.S. Department of State’s Diplomatic Security Service (“DSS”) Domestic Operations, announced the unsealing of an Indictment charging WEIDONG GUAN, a/k/a “Bill Guan,” the Chief Financial Officer of a multinational media company headquartered in New York City with participating in a transnational scheme to launder at least approximately $67 million of illegally obtained funds to benefit himself and the media company. GUAN was arrested yesterday morning and will be presented this afternoon before U.S. Magistrate Judge Stewart D. Aaron. The case has been assigned to U.S. District Judge Victor Marrero.
U.S. Attorney Damian Williams said: “As alleged, Bill Guan, the Chief Financial Officer of a global newspaper and media company, conspired with others to benefit himself, the media company, and its affiliates by laundering tens of millions of dollars in fraudulently obtained unemployment insurance benefits and other crime proceeds. When banks raised questions about the funds, Guan allegedly lied repeatedly and falsely claimed that the funds came from legitimate donations to the media company. Today’s charges reflect this Office’s ongoing commitment to vigorously enforcing the laws against those who facilitate fraud through money laundering and to protecting the integrity of the U.S. financial system.”
DOL-OIG Special Agent in Charge Jonathan Mellone said: “An important part of the mission of the Office of Inspector General is to investigate allegations of fraud involving the U.S. Department of Labor’s unemployment insurance program. We will continue to work with our law enforcement partners to safeguard benefits intended for unemployed American workers.”
DSS Domestic Operations Assistant Director Andrew Wroblewski said: “This case highlights the expansive global reach of the Diplomatic Security Service, demonstrating our capacity to collaborate effectively with both U.S. and international law enforcement agencies on complex transnational cases. DSS, along with our law enforcement partners, are tirelessly working to conduct investigations of this nature daily around the world.”
According to the allegations contained in the Indictment:[1]
From at least in or about 2020, through in or about May 2024, GUAN, while working as the Chief Financial Officer of a multinational media company headquartered in New York, New York (the “Media Company”), conspired with others to participate in a sprawling, transnational scheme to launder at least approximately $67 million of illegally obtained funds to bank accounts in the names of the Media Company and related entities (together, with the Media Company, the “Media Entities”). In furtherance of the money laundering conspiracy, GUAN managed, among other teams, the Media Company’s “Make Money Online” team (the “MMO Team”), which was located in a particular foreign office of the Media Company. Under GUAN’s management, members of the MMO Team and others used cryptocurrency to knowingly purchase tens of millions of dollars in crime proceeds, including proceeds of fraudulently obtained unemployment insurance benefits, that had been loaded onto tens of thousands of prepaid debit cards. The crime proceeds were generally purchased by the scheme participants, including members of the MMO Team and others working with them, using a particular cryptocurrency platform, at discounted rates of approximately 70 to 80 cents per dollar, and in exchange for cryptocurrency.
Once the crime proceeds were purchased, the MMO Team and other participants in the scheme used stolen personal identification information to open accounts, including prepaid debit card accounts, cryptocurrency accounts, and bank accounts, that were used to transfer the crime proceeds into bank accounts associated with the Media Entities. After the crime proceeds reached those bank accounts, they were often further laundered through other bank accounts held by the Media Entities, GUAN’s personal bank accounts, and through GUAN’s personal cryptocurrency accounts.
In or around the same time the money laundering scheme began, the Media Company’s internal financial accounting reflected an increased annual revenue over the previous year of approximately 410%—from approximately $15 million to approximately $62 million. When banks asked GUAN about the increase in transactions entering the bank accounts of the Media Entities, GUAN lied, including to two U.S.-based banks, and claimed that the increase in funds came from donations. However, in 2022, GUAN wrote a letter addressed to a congressional office falsely stating “donations” constitute “an insignificant portion of the overall revenue” of the Media Company.
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GUAN, 61, of Secaucus, New Jersey, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and two counts of bank fraud, each of which carries a maximum sentence of 30 years in prison. The charges do not relate to the Media Company’s newsgathering activities.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of DOL-OIG, DSS, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the U.S. Customs and Border Protection for its valuable assistance.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles high-level criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Emily Deininger, Rebecca T. Dell, and Jane Kim 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 Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Bloods Gang Member Sentenced to 12 Years in Prison for Violent and Extortionate Takeover of the New York City Fire Mitigation IndustryRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JATIEK SMITH, a/k/a “Tiek,” was sentenced to 12 years in prison for his role as the leader of a violent and extortionate racketeering enterprise that terrorized the fire restoration industry in New York City. SMITH was sentenced by U.S. District Judge Jed S. Rakoff after being convicted following a bench trial in December 2023 of racketeering and extortion conspiracies.
U.S. Attorney Damian Williams said: “Jatiek Smith led a group of gang members and associates that audaciously took over the New York City fire restoration industry through violence and threats. We will not stand for gangs or any criminal groups that try to corrupt our institutions and threaten our safety. Today’s sentence demonstrates that those who use violence and intimidation will face significant jail time.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
The fire restoration industry refers to the businesses that repair properties that have suffered damage from fires or exposures to fires. Within this industry, fire restoration companies (sometimes referred to as emergency mitigation services companies) provide emergency mitigation services, demolition, and construction services to properties that have suffered such damages. First Response Cleaning Corp. (“First Response”) was one such EMS company.
In 2019, JATIEK SMITH joined First Response and quickly assumed control over its operations. SMITH, a member of the Bloods, the violent street gang, recruited other gang members and associates to join him at First Response. As the leader of this crew, SMITH and his associates used violence, threats of violence, and extortion to terrorize and dominate the fire restoration industry in New York City.
SMITH asserted control over the industry by first ousting First Response’s main competitor through violence, threats, and extortion. Once SMITH and his crew had established control over the industry, they imposed rules that allocated a preferential share of fires to First Response. These rules were backed by threats — including threats to kill children — and violence. Industry participants, including senior citizens, who solicited fires in violation of SMITH’s rules were assaulted in broad daylight. Through threats of violence, actual violence, and economic fear, SMITH and his crew also extorted hundreds of thousands of dollars from other industry participants. SMITH maximized his profits from this scheme by concealing illegal conditions in properties and defrauding insurance companies.
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In addition to the prison term, SMITH, 39, of Staten Island, New York, was sentenced to three years of supervised release and ordered to forfeit $354,546.44. Restitution will be determined at a later date.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, Homeland Security Investigations, the New York City Police Department, and the New York City Department of Investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran, Marguerite B. Colson, Elizabeth A. Espinosa, and Adam S. Hobson are in charge of the prosecution, with assistance from Paralegal Specialists Grayson Glogoff and Ananya Sankar.
Leaders of Drug Trafficking Organization That Distributed Fentanyl Linked to Eight Overdose Deaths in the Bronx Plead GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JESUS CABRERA, a/k/a “Gee,” and MICHAEL AMAYA, a/k/a “Miz,” pled guilty to participating in a conspiracy to distribute fentanyl and fentanyl analogue, and CABRERA also pled guilty to a related firearm count. As part of the conspiracy, CABRERA and AMAYA distributed the fentanyl and fentanyl analogue that resulted in the death of Malik Rahman on August 25, 2021. CABRERA and AMAYA pled guilty today before U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Damian Williams said: “In broad daylight, Jesus Cabrera and his lieutenant, Michael Amaya, sold massive amounts of fentanyl in New York City, feeding addiction and causing untold tragedy. Their drugs were in the fatal dose that killed Malik Rahman, and glassines stamped with the defendants’ logo ‘Supreme’ were found at the scene of multiple other overdoses in the Bronx. This Office and our law enforcement partners will continue to hold accountable the dealers who peddle this poison, exploit addiction, and cause senseless death in our community.”
As alleged in the charging instruments, court filings, and statements in the public record:
CABRERA and AMAYA were the leaders of a drug trafficking organization (“DTO”) that operated principally from a block on 142nd Street between Brook Avenue and St. Ann’s Avenue in the Bronx (the “Set”), where its members sold glassines of fentanyl in bulk to dealers who then re-distributed the DTO’s product on the Set and in other areas of the Bronx. Members of the DTO also sold individual glassines to users who lined up on the Set on an almost daily basis. CABRERA was the ultimate leader of the DTO, and AMAYA worked as the second in command, managing and overseeing the DTO’s various street-level dealers, baggers, and lookouts, including the other defendants charged in this case. In the fall and winter of 2021 alone, the DTO distributed an estimated five to six kilograms of fentanyl per month.
The DTO frequently used a signature “stamp” on the glassines of fentanyl it sold. For many months, the DTO stamped its glassines with a “Supreme” logo. Starting in or around December 2021, the DTO began using an “Off White” logo and then switched to a “Thriller” logo.
Despite the DTO’s leadership’s awareness of the potential deadly impact of fentanyl, members of the DTO continued pushing the DTO’s product. For example, as early as about January 2019, CABRERA sent AMAYA a link to a news article that described law enforcement’s crackdown on heroin dealers in the Bronx who were “pushing a deadly cut of heroin . . . using a new drug known as fentanyl,” which had led to a rash of overdose deaths.
On about August 25, 2021, one of CABRERA and AMAYA’s co-defendants, Alberto Concepcion, sold a quantity of loose “Supreme”-stamped glassines to an individual on the Set, who subsequently provided one of those glassines to Rahman. Rahman died from an overdose shortly after ingesting the substances in the “Supreme”-stamped glassine, the residue of which later tested positive for, among other things, fentanyl and fentanyl analogue. Both CABRERA and AMAYA were directly involved in overseeing Concepcion’s narcotics sales at that time. Indeed, in the days leading up to Rahman’s fatal overdose, AMAYA and CABRERA exchanged text messages referencing certain quantities of narcotics that were going to Concepcion for resale on the Set.
Including Rahman’s fatal overdose, between around March 2021 and around December 2021, there were at least eight confirmed fatal overdoses in the Bronx at which the DTO’s “Supreme”-stamped glassines were found on the scene.
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JESUS CABRERA, 44, of the Bronx, New York, pled guilty to conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and to using, carrying, and possessing a firearm in furtherance of the drug trafficking conspiracy, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison, which must run consecutively to any other prison term imposed.
MICHAEL AMAYA, 42, of the Bronx, New York, pled guilty to conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York City Police Department and the Drug Enforcement Administration, as well as the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter. He also thanked the Bronx District Attorney’s Office for its assistance in the case.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Matthew J. King, Kaylan E. Lasky, and David J. Robles are in charge of the prosecution.
Former Executive of Airline Pleads Guilty to Participating in A Money Laundering ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SHUKHRATJON MIRSAIDOV pled guilty to participating in a money laundering conspiracy from June 2019 to February 2022, while MIRSAIDOV was a senior executive for an international airline (“Airline-1”) with a hub at John F. Kennedy International Airport in New York. MIRSAIDOV pled guilty before U.S. District Judge Loretta A. Preska.
U.S. Attorney Damian Williams said: “For years, Shukhratjon Mirsaidov used his position as an executive for an international airline to participate in a complex scheme to launder the proceeds of healthcare fraud. While all forms of money laundering are pernicious, such conduct is particularly severe when it involves executives at major businesses abusing their positions to launder the proceeds of fraud. This case demonstrates that money launderers – no matter what their station – will be held accountable by this Office.”
According to allegations in the Indictment, the criminal Complaint, public filings, and statements made in court:
In the course of the money laundering conspiracy charged in the Indictment, MIRSAIDOV used a U.S. company bank account for Airline-1 (the “Airline-1 Bank Account”) to operate a check-cashing scheme and to launder hundreds of thousands of dollars of healthcare fraud proceeds. As a senior executive, MIRSAIDOV was one of two signatories for the Airline-1 Bank Account. Between approximately June 2019 and August 2021, MIRSAIDOV deposited into the Airline-1’s Bank Account over 100 checks drawn from accounts controlled by seven shell companies that were used to launder the proceeds of healthcare fraud. For example, the shell companies had received insurance payments for medical services purportedly provided by a doctor, but the doctor did not, in fact, provide such services. The shell companies were primarily funded by payments from medical clinics, physicians, and medical diagnostic testing companies and had no relation to the airline industry. MIRSAIDOV obtained the checks from the shell companies from his co-defendant, SHUKHRAT ABDULLAEV. In exchange for the checks, MIRSAIDOV provided cash generated from Airline-1 ticket sales to ABDULLAEV to give to the perpetrators controlling the shell companies.
MIRSAIDOV not only used the Airline-1 Account to launder healthcare fraud proceeds from the shell companies, but also used the Airline-1 Account to launder funds represented to be fraud proceeds in a series of sting transactions. Between approximately June 2021 and February 2022, law enforcement, with the assistance of a confidential source (“CS-1”), conducted a series of sting money laundering transactions involving MIRSAIDOV, ABDULLAEV, and the Airline-1 Bank Account. CS-1 asked ABDULLAEV to cash checks and transmit funds abroad and agreed to pay ABDULLAEV a four percent fee to do so. ABDULLAEV told CS-1 a portion of the fee went to MIRSAIDOV. During the transactions, CS-1 represented to ABDULLAEV that the funds were healthcare fraud proceeds. Overall, CS-1 provided ABDULLAEV with 14 checks totaling $210,000 issued from a covert law enforcement account held in the name of a fictitious company. MIRSAIDOV, working with ABDULLAEV, deposited 12 of the checks totaling $190,000 into the Airline-1 Bank Account. CS-1 received cash from ABDULLAEV in exchange for the checks, and in one instance, ABDULLAEV coordinated the delivery of U.S. currency to an individual abroad in exchange for some of the checks. During the course of these sting transactions, in a recorded conversation with CS-1, MIRSAIDOV admitted, in sum and substance, that he received many checks from ABDULLAEV and that MIRSAIDOV gave ABDULLAEV cash in exchange for the checks. CS-1 informed MIRSAIDOV, in sum and substance, that the checks from CS-1 came from a medical company and that the company disguised the check payments in its financial reporting by claiming the check deposits were for business class flight tickets. MIRSAIDOV nevertheless expressed a willingness to work directly with CS-1 to conduct check cashing using the Airline-1 Bank Account.
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MIRSAIDOV, 46, of Fort Lee, New Jersey, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. As part of his guilty plea, MIRSAIDOV agreed to forfeit to the U.S. $674,171, as well as funds seized from the Airline-1 Bank Account. MIRSAIDOV will be sentenced on September 4, 2024, at 10:30 a.m. by U.S. District Judge Loretta A. Preska.
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 a judge.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Cecilia Vogel, Christopher Brumwell, and Vladislav Vainberg are in charge of the prosecution.
Chief Operating Officer of International Cargo Airline Sentenced to Four Years in Prison for Defrauding His EmployerRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that LARS WINKELBAUER was sentenced to four years in prison by U.S. District Judge Jesse M. Furman in connection with a massive scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of more than $32 million dollars in revenue. WINKELBAUER previously pled guilty to conspiracy to commit wire fraud and money laundering.
U.S. Attorney Damian Williams said: “Lars Winkelbauer abused his high-level position at Polar for over a decade, extracting millions of dollars in kickbacks for himself and causing tens of millions of dollars of harm to the company. The substantial sentence imposed today sends an important message: corporate corruption doesn’t pay.”
According to the charging documents and other filings and statements made in court:
From at least about 2009 through about July 2021, LARS WINKELBAUER and at least nine other individuals participated in a massive scheme to defraud Polar. At all relevant times, WINKELBAUER and three co-defendants were senior executives of Polar (the “Executive Defendants”), and six co-defendants (the “Vendor Defendants”) owned and operated various Polar vendors and customers.
The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants, and also reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favorable business arrangements with Polar. The fraud they perpetrated — which involved a substantial portion of Polar’s senior management and at least 10 customers and vendors of Polar — led to pervasive corruption of Polar’s business, touching nearly every aspect of the company’s operations for over a decade.
As a result of the scheme, the Executive Defendants, along with two co-conspirators who also worked as senior executives at Polar, received unlawful payments, either directly or through various limited liability companies they controlled, in excess of approximately $23 million in kickback payments or disbursements as a result of their ownership of conflicted companies.
WINKELBAUER was Polar’s Chief Operating Officer and Executive Vice President and was the most senior of the Executive Defendants. He personally received kickbacks connected to approximately 11 separate vendors or customers of Polar totaling over $6 million. He also attempted to conceal the illegal kickback payments through a sophisticated money laundering scheme, including via falsified invoices and the use of shell companies in China.
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In addition to the prison term, WINKELBAUER, 48, of Bangkok, Thailand, was sentenced to three years of supervised release. WINKELBAUER was also ordered to forfeit $6,774,039.30 and to make restitution to Polar in the amount of $32,902,847.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Katherine Reilly, Danielle Kudla, Kevin Mead, and Qais Ghafary are in charge of the prosecution.
Two Bronx Men Sentenced for 2014 Harlem MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CARLOS LAUREANO was sentenced on May 23, 2024, to 30 years in prison for the murder of Luis Perez on August 12, 2014, and NNANDI BEN-JOCHANNAN was sentenced today to 10 years for his role in the murder. LAUREANO and BEN-JOCHANNAN were sentenced by U.S. District Judge Lewis J. Liman. LAUREANO previously pled guilty in October 2023 to discharging a firearm in connection with a drug trafficking offense and possessing a firearm in connection with a drug trafficking offense. BEN-JOCHANNAN pled guilty in December 2023 to possessing a firearm in connection with a drug trafficking offense, which was brandished, and aiding and abetting the same.
U.S. Attorney Damian Williams said: “Carlos Laureano and Nnandi Ben-Jochannan participated in the murder of Luis Perez nearly 10 years ago in connection with a drug debt. Thanks to the hard work of the DEA, the NYPD, and the career prosecutors of this Office, the defendants have been sentenced for this heinous crime. We hope that these sentences bring some measure of comfort to the family of Luis Perez and make clear that this Office and our law enforcement partners will continue to be relentless in our pursuit of anyone who takes another person’s life.”
According to Indictment, the Superseding Informations, other public filings, and statements made in Court:
On or about August 12, 2014, in the vicinity of 501 West 147th Street in Harlem, New York, LAUREANO shot and killed Perez in connection with a conspiracy to distribute heroin and marijuana. BEN-JOCHANNAN drove LAUREANO to the scene of the murder, knowing that LAUREANO was armed with a firearm and served as LAUREANO’s getaway driver after the murder. After successfully fleeing from the police, LAUREANO and BEN-JOCHANNAN cleaned BEN-JOCHANNAN’s car and disposed of evidence linking them to the murder.
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In addition to their prison terms, LAUREANO, 35, and BEN-JOCHANNAN, 30, both of the Bronx, New York, were sentenced to three and five years of supervised release, respectively.
Mr. Williams praised the outstanding investigative work of the New York City Police Department and the Drug Enforcement Administration. He also thanked the Manhattan District Attorney’s Office for its assistance.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Rushmi Bhaskaran is in charge of the prosecution.
Sinaloa Cartel Leader Nestor Isidro Perez Salas, A/K/A “Nini,” Extradited to the United States on Drug Importation, Murder, Kidnapping, Firearms, and Money Laundering ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Merrick B. Garland, the Attorney General of the United States, announced that Sinaloa Cartel leader Nestor Isidro Perez Salas, a/k/a “Nini,” was extradited Saturday, May 25, from Mexico to the U.S. based on the charges contained in two Indictments. The first, filed in the District of Columbia by the Criminal Division’s Narcotic and Dangerous Drug Section (the “NDDS Indictment”), charges PEREZ SALAS with cocaine and methamphetamine importation, firearms offenses, and conspiracy to obstruct justice through murder. The second, filed in the Southern District of New York (the “SDNY Indictment”) charges Perez Salas with leadership of a continuing criminal enterprise resulting in the deaths of numerous victims, including a confidential source for the Drug Enforcement Administration ("DEA"), fentanyl importation and trafficking, obstruction of justice by murdering an informant, kidnapping resulting in the deaths of eight people, including a minor boy, firearms, and money laundering offenses. Perez Salas was arrested in Mexico by Mexican authorities on November 22, 2023. Perez Salas was presented on the charges contained in the SDNY Indictment today before U.S. Magistrate Judge Ona T. Wang. Perez Salas will be arraigned before U.S. District Judge Katherine Polk Failla on May 30, 2024, at 3:00 p.m.
According to the allegations contained in the NDDS Indictment, SDNY Indictment, other court filings, and statements made during court proceedings:[1]
The Sinaloa Cartel (the “Cartel”) is one of the most powerful drug cartels in Mexico and is responsible for the manufacturing and importing of fentanyl for distribution in the U.S. Fentanyl is a dangerous synthetic opioid that is more than 50 times more potent than heroin and is the leading cause of death for Americans ages 18 to 49.
In recent years, the Cartel has been led, in part, by the sons of the Cartel’s notorious former leader, Joaquin Archivaldo Guzman Loera, a/k/a “El Chapo”—Ivan Archivaldo Guzman Salazar, Jesus Alfredo Guzman Salazar, and Ovidio Guzman Lopez—known collectively as the “Chapitos.”[2] Like their father, who, in July 2017, was sentenced to a term of life plus 30 years in prison, the Chapitos have used violence and rely on a sophisticated security apparatus to maintain control and to protect themselves and their operations as they traffic massive quantities of narcotics, including fentanyl, cocaine, and methamphetamine, to the U.S.
PEREZ SALAS is one of the senior leaders of the Chapitos’ security apparatus. Under PEREZ SALAS’s direction, armed enforcers for the Chapitos, known as sicarios, have used rampant violence to protect the Chapitos’ operation and to demolish unsupportive businesses, capture contested territory, intimidate civilians, and attack and murder law enforcement which resist their efforts. In part under the direction of PEREZ SALAS, these sicarios regularly used military-grade firearms and explosives, including machineguns and rocket launchers, to kidnap, torture, and kill anyone who opposed the Chapitos. This relentless violence has led to rampant bloodshed and taken the lives of untold victims.
PEREZ SALAS has also personally committed brutal acts of violence to advance the Chapitos’ trafficking operations. For example, in or about 2017, PEREZ SALAS, with two of the Chapitos, captured, tortured, interrogated, and killed two Mexican federal law enforcement officers. In or about May 2017, PEREZ SALAS, with two of the Chapitos and others, captured three members of a rival drug cartel, Los Zetas, and tortured them with electrocution before interrogating and killing them. Also in or about 2017, PEREZ SALAS and others conspired to kill and retaliate against a witness and informant. And in or about 2022, PEREZ SALAS and another sicario tested the potency of their fentanyl on individuals, and also experimented on a woman by injecting her repeatedly with the dangerous drug until she overdosed and died.
In addition, PEREZ SALAS has personally participated in the negotiation and sale of large quantities of fentanyl. More specifically, in or about the summer of 2022, PEREZ SALAS and other associates sold fentanyl (later seized by the DEA) in Los Angeles. During the course of these sales, among other things, PEREZ SALAS described that he owned his own fentanyl labs and that three fentanyl “cooks” from one of his labs had recently died from sampling the product because it was so potent.
Finally, most recently, in or about October 2023, PEREZ SALAS, and other sicarios acting at his direction, kidnapped a DEA confidential source and 10 other victims in Mexico—including a U.S. citizen—whom PEREZ SALAS believed worked for or were related to the confidential source. PEREZ SALAS and his sicarios killed eight of the kidnapped victims, including the DEA confidential source, and a thirteen-year-old boy. PEREZ SALAS kidnapped and killed these victims in retaliation for the confidential source’s provision of information to the DEA in connection with the investigation of PEREZ SALAS and his associates in the Southern District of New York.
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PEREZ SALAS, 32, a Mexican national, is charged in the SDNY Indictment with: one count of participating in a continuing criminal enterprise resulting in death, which carries a mandatory sentence of life in prison; one count of conspiring to import fentanyl into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of conspiring to distribute and possess with intent to distribute fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using, carrying, and possessing machine guns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; one count of conspiring to use, carry, and possess machine guns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a maximum sentence of life in prison; one count of conspiring to launder money, which carries a maximum sentence of 20 years in prison; one count of obstruction of justice by retaliating against an informant through murder, which carries a mandatory sentence of life in prison; one count of conspiring to obstruct justice by retaliating against an informant through murder, which carries a mandatory sentence of life in prison; one count of kidnapping resulting in death, including of a minor, which carries a mandatory sentence of life in prison; and one count of conspiring to commit kidnapping resulting in death, including of a minor, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison. PEREZ SALAS is charged in the NDDS Indictment with one count of conspiring to import cocaine and methamphetamine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using, carrying, and possessing machineguns and destructive devices in connection with the cocaine and methamphetamine conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and one count of conspiracy to obstruct justice by retaliating against a witness and informant through murder, which carries a mandatory sentence of life in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The DEA’s Special Operations Division Bilateral Investigations Unit and the FBI Washington Field Office investigated this case, with assistance from multiple DEA offices, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division; the U.S. Department of State, Rewards for Justice Program; and the U.S. Marshals Service. The Justice Department also thanks Mexican authorities for their key role in securing the arrest and extradition of PEREZ SALAS.
This prosecution is being handled by the Southern District of New York’s National Security and International Narcotics Unit alongside the NDDS. SDNY Assistant U.S. Attorneys Nicholas S. Bradley, Sarah L. Kushner, Alexander N. Li, David J. Robles, and Kyle A. Wirshba, and NDDS Trial Attorneys Kirk Handrich, Kate Naseef, Samantha Thompson, and Tara Arndt, are in charge of the prosecution.
The charges contained in the SDNY Indictment and NDDS 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 NDDS Indictment and the SDNY Indictment and the description of the other court filings set forth herein constitute only allegations, and every fact described should be treated as an allegation.
[2] In September 2023, Ovidio Guzman Lopez was extradited to the U.S. on charges relating to his drug trafficking operations as a leader of the Cartel.
Former FTX Executive Ryan Salame Sentenced to 90 Months in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that RYAN SALAME was sentenced today to 90 months in prison. SALAME previously pled guilty to conspiracy to make unlawful political contributions and defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law. Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system. Today’s sentence underscores the substantial consequences for such offenses.”
According to the filings and statements made during court proceedings:
RYAN SALAME was a high-ranking official at Alameda Research, the quantitative cryptocurrency trading firm founded by Samuel Bankman-Fried, from 2019 to 2021. In or about October 2021, SALAME was named co-CEO of FTX’s Bahamian affiliate FTX Digital Markets Ltd.
While working at Alameda Research and FTX, SALAME conspired with Bankman-Fried and other employees of FTX and Alameda Research to operate an unlicensed money transmitting business, unlawfully using FTX, Alameda Research, and an entity called “North Dimension” to transmit FTX customer funds without a license. The conspirators and others at Alameda Research and FTX also made false statements to U.S. banks in order to maintain their unlawful businesses.
Additionally, beginning in or around 2020, SALAME conspired with Bankman-Fried and FTX executive Nishad Singh to donate campaign contributions in a manner that obscured Bankman-Fried’s association with certain of the contributions. These donations were made to improve Bankman-Fried’s personal standing in Washington, D.C., increase FTX’s profile, and curry favor with candidates that could help pass legislation favorable to FTX, Alameda, or Bankman-Fried’s personal agenda. In total, SALAME and his co-conspirators made over 300 political contributions, totaling tens of millions of dollars, that were unlawful because they were made in the name of a straw donor or paid for with corporate funds and caused false information to be reported by campaigns and political action committees to the Federal Election Commission.
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In addition to the prison term, SALAME, 30, of Potomac, Maryland, was sentenced to three years of supervised release and ordered to pay more than $6 million in forfeiture and more than $5 million in restitution.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force, with assistance from the Office’s Illicit Finance and Money Laundering and Complex Frauds and Cybercrime Units. Assistant U.S. Attorneys Danielle Kudla, Samuel Raymond, Thane Rehn, Nicolas Roos, and Danielle Sassoon are in charge of the prosecution.
Alleged Sinaloa Cartel Leader and Lead Assassin Extradited from Mexico to the United States on Drug Importation, Murder, Kidnapping, Firearms, and Money Laundering ChargesRead the Press Release
Alleged Sinaloa Cartel leader and lead sicario, or assassin, Néstor Isidro Pérez Salas, also known as El Nini, 32, of Mexico, was extradited on May 25 from Mexico to the United States to face charges contained in two indictments.
“Today, El Nini joins the growing list of cartel leaders and associates extradited to the United States and held accountable in an American courtroom,” said Attorney General Merrick B. Garland. “We allege El Nini was one of the Sinaloa Cartel’s lead sicarios, or assassins, and was responsible for the murder, torture, and kidnapping of rivals and witnesses who threatened the cartel’s criminal drug trafficking enterprise. This includes killing a Drug Enforcement Administration (DEA) confidential source and killing others in retaliation for the confidential source’s cooperation. We also allege El Nini was a part of the Sinaloa Cartel’s production and sale of fentanyl, including in the United States. I am grateful to our Mexican government counterparts for their extraordinary efforts in apprehending and extraditing El Nini. The Justice Department will always be relentless in its pursuit of the cartels responsible for flooding our communities with fentanyl and other drugs.”
The first indictment, filed in the District of Columbia by the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), charges Pérez Salas with cocaine and methamphetamine importation, firearms offenses, and conspiracy to obstruct justice through murder. The second indictment, filed in the Southern District of New York (SDNY), charges Pérez Salas with leadership of a continuing criminal enterprise resulting in the deaths of numerous victims, including a confidential source for the DEA, fentanyl importation and trafficking, obstruction of justice by murdering an informant, kidnapping resulting in the deaths of eight people, including a minor boy, firearms, and money laundering offenses.
Pérez Salas was arrested in Culiacan, Mexico, by Mexican authorities on Nov. 22, 2023. Pérez Salas was presented on the charges contained in the SDNY indictment today at 10:30 a.m. before U.S. Magistrate Judge Ona T. Wang.
According to court documents, the Sinaloa Cartel is one of the most powerful drug cartels in Mexico and is responsible for a substantial portion of the fentanyl that is manufactured and imported for distribution in the United States. Fentanyl is a dangerous synthetic opioid that is more than 50 times more potent than heroin and is the leading cause of death for Americans ages 18 to 49. In recent years, the cartel has been led, in part, by the sons of the cartel’s notorious former leader, Joaquin Archivaldo Guzman Loera, also known as El Chapo, and Ivan Archivaldo Guzman Salazar, Jesus Alfredo Guzman Salazar, and Ovidio Guzman Lopez—known collectively as the “Chapitos.” Like their father, the Chapitos have used violence and rely on a sophisticated security apparatus to maintain control and to protect themselves and their operations as they traffic massive quantities of narcotics, including fentanyl, cocaine, and methamphetamine, to the United States.
Pérez Salas is allegedly one of the senior leaders of the Chapitos’ security apparatus. Under Pérez Salas’ direction, armed enforcers for the Chapitos, known as sicarios, have allegedly used rampant violence to protect the Chapitos’ operations and to demolish unsupportive businesses, capture contested territory, intimidate civilians, and attack and murder law enforcement members who resist their efforts. In part under the direction of Pérez Salas, the sicarios allegedly regularly used military-grade firearms and explosives, including machineguns and rocket launchers, to kidnap, torture, and kill anyone who opposed the Chapitos.
According to court documents, Pérez Salas is allegedly a leader and commander of the “Ninis,” a violent group charged with providing security for the Chapitos. From at least 2012 until February 2021, Pérez Salas allegedly conspired to distribute and manufacture cocaine and methamphetamine for unlawful importation into the United States, used a firearm in furtherance of the alleged drug-trafficking offense, and killed, attempted to kill, threatened, and caused bodily injury to another to intimidate a government witness and informant.
Pérez Salas has also allegedly committed brutal acts of violence to advance the Chapitos’ trafficking operations. For example, in or about 2017, Pérez Salas, with two of the Chapitos, allegedly captured, tortured, interrogated, and killed two Mexican federal law enforcement officers. In or about May 2017, Pérez Salas, with two of the Chapitos and others, allegedly captured three members of a rival drug cartel, Los Zetas, and tortured them before interrogating and killing them. Also, in or about 2017, Pérez Salas and others allegedly conspired to kill and retaliate against a witness and informant. And in or about 2022, Pérez Salas and another sicario allegedly tested the potency of their fentanyl on individuals.
In addition, Pérez Salas has allegedly participated in the negotiation and sale of fentanyl. More specifically, in or about the summer of 2022, Pérez Salas and other associates allegedly sold fentanyl (later seized by the DEA) in Los Angeles. Finally, in or about October 2023, Pérez Salas and other sicarios acting at his direction, allegedly kidnapped a confidential source and 10 other victims in Mexico—including a U.S. citizen—whom Pérez Salas believed worked for or were related to the confidential source. Pérez Salas and his sicarios allegedly killed eight of the kidnapped victims, including the confidential source, and a 13-year-old boy. Pérez Salas allegedly kidnapped and killed these victims in retaliation for the confidential source’s provision of information to law enforcement in connection with the investigation of Pérez Salas and his associates in the Southern District of New York.
Pérez Salas is charged in the District of Columbia indictment with (i) conspiring to import cocaine and methamphetamine into the United States, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (ii) using, carrying, and possessing machineguns and destructive devices in connection with the cocaine and methamphetamine conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum penalty of life in prison; and (iii) conspiracy to obstruct justice by retaliating against a witness and informant through murder, which carries a mandatory minimum of life in prison.
Pérez Salas is charged in the SDNY indictment with: (i) participating in a continuing criminal enterprise resulting in death, which carries a mandatory minimum of life in prison; (ii) conspiring to import fentanyl into the United States, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (iii) conspiring to distribute and possess with intent to distribute fentanyl, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (iv) using, carrying, and possessing machineguns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a mandatory minimum of 30 years in prison and a maximum penalty of life in prison; (v) conspiring to use, carry, and possess machineguns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a maximum penalty of life in prison; (vi) conspiring to launder money, which carries a maximum penalty of 20 years in prison; (vii) obstruction of justice by retaliating against an informant through murder, which carries a mandatory minimum of life in prison; (viii) conspiring to obstruct justice by retaliating against an informant through murder, which carries a mandatory minimum of life in prison; (ix) kidnapping resulting in death, including of a minor, which carries a mandatory minimum of life in prison; and (x) conspiring to commit kidnapping resulting in death, including of a minor, which carries a mandatory minimum of 20 years in prison and a maximum penalty of life in prison.
The DEA’s Special Operations Division Bilateral Investigations Unit and the FBI Washington Field Office are investigating the case, with assistance from multiple DEA offices throughout Mexico, as well as the assistance of the U.S. Department of State Rewards for Justice Program and U.S. Marshals Service. The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition Pérez Salas. The Justice Department also thanks Mexican authorities for their role in securing the arrest and extradition of Pérez Salas.
NDDS Trial Attorneys Kirk Handrich, Kate Naseef, Samantha Thompson, and Tara Arndt and SDNY Assistant U.S. Attorneys Nicholas S. Bradley, Sarah L. Kushner, Alexander N. Li, David J. Robles, and Kyle A. Wirshba are prosecuting the case.
The case is supported by the Organized Crime and Drug Enforcement Task Forces (OCDETF).
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Indictment
USPS Mail Carrier Arrested for Targeting Victims on Mail Route in Fraud and Identity Theft SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Matthew Modafferi, the Special Agent in Charge of the Northeast Area Field Office of the United States Postal Service, Office of Inspector General (“USPS-OIG”), announced today that TAMEKA BABULAL, a/k/a “Tameka Williams,” a/k/a “Sharniece Williams,” a/k/a “Meek Williams,” a United States Postal Service (“USPS”) mail carrier in Mount Vernon, New York, was arrested for stealing credit cards, checks, and identities from the mail in order to carry out a scheme and conspiracy to fraudulently steal money from individuals and financial institutions. TAMEKA BABULAL, along with her husband JOEL BABULAL, a/k/a “Joel Nical Babulal,” were arrested this morning in Hempstead, New York, this morning and appeared this afternoon before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Damian Williams said: “The charges against the defendants reflect this Office’s continued commitment to working with our law enforcement partners to protect the U.S. mail system. As alleged, Tameka Babulal abused her position as a mail carrier, targeted victims on her mail route, and stole their identities to carry out an extensive and calculated scheme to line her and her co-conspirators’ pockets. When those entrusted to deliver mail abuse their position to corrupt our mail system from within, this Office will hold them responsible for their conduct.”
USPS-OIG Special Agent in Charge Matthew Modafferi said: “U.S. Postal Service employees who betray the American Public’s trust by using their position for personal gain will be thoroughly investigated by the Special Agents of the U.S. Postal Service Office of Inspector General. The dedicated work of Postal Service employees should never be overshadowed by those who compromise their integrity. Our agency values all of our relationships in the law enforcement community, and we would like to thank the U.S. Attorney’s Office Southern District of New York for their continued support.”
As alleged in the Complaint:[1]
TAMEKA BABULAL is a mail carrier who delivers mail to and from residents and businesses with mail going through the USPS Processing and Distribution Center in Mount Vernon, New York. She, however, did not perform the role entrusted to her and, instead, used her position to steal mail in furtherance of a fraud and identity theft scheme aimed at illicitly benefitting herself and her co-conspirators, including JOEL BABULAL.
TAMEKA BABULAL’s alleged actions include stealing checks mailed from victims, stealing credit cards mailed to victims and then attempting to use those cards for personal gain, depositing altered checks that were stolen from victims throughout the U.S. into personal financial accounts, and coordinating with co-conspirators to obtain the personal identifying information of victims she targeted on her mail route so that she and her co-conspirators could open fraudulent accounts in the victims’ names. As detailed in the Complaint, the evidence obtained during the course of law enforcement’s investigation includes photographs from TAMEKA BABULAL’s cloud storage account connected to her phone, emails and telephone calls she made to financial institutions, fraudulent credit card applications, and messages between her and her co-conspirators in furtherance of their fraud scheme and conspiracy. JOEL BABULAL is alleged to have participated in the conspiracy.
When law enforcement conducted a search of TAMEKA BABULAL and JOEL BABULAL’s residence this morning, officers recovered, among other things, dozens of credit cards and checks in other people’s names, including “washed” checks; several bundles of undelivered mail, including from financial institutions, destined for addresses on TAMEKA BABULAL’s mail route in Mount Vernon, New York; several social security cards and tax documents in other people’s names; and 17 phones, including phones alleged to have been used in the fraud scheme and conspiracy.
As a result of these allegations, TAMEKA BABULAL’s employment with USPS will be suspended indefinitely pending resolution of these charges.
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TAMEKA BABULAL, 36, of Hempstead, New York, is charged with one count of theft of mail by a postal worker, which carries a maximum sentence of five years in prison; one count each of bank fraud and conspiracy to commit wire and bank fraud, each of which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.
JOEL BABULAL, 36, of Hempstead, New York, is charged with one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and 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 Northeast Area Field Office of the USPS-OIG. Mr. Williams also thanked the U.S. Postal Inspection Service for its continued involvement in this investigation.
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 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.
U.S. Attorney Announces $10.1 Million Settlement with Managed Long-Term Care Plan for Improper Receipt of Medicaid PaymentsRead the Press Release
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 U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today a settlement of a civil fraud lawsuit against RIVERSPRING LIVING HOLDING CORP. and ELDERSERVE HEALTH, INC., d/b/a RiverSpring at Home (“RIVERSPRING”), New York not-for-profit corporations that, among other things, administer a Managed Long Term Care Plan (the “RiverSpring MLTCP”) for Medicaid beneficiaries. In connection with the RiverSpring MLTCP, RIVERSPRING arranges for health and long-term care services and is reimbursed by Medicaid through per-member payments on a monthly basis (“Capitation Payments”).
The settlement resolves allegations that RIVERSPRING submitted false claims to Medicaid for months during which RIVERSPRING failed to provide, or failed to adequately document, certain long-term care services to RiverSpring MLTCP members as obligated by the applicable contract between RIVERSPRING and the New York State Department of Health (“DOH”).
Under the terms of the settlement approved today by U.S. District Judge P. Kevin Castel, RIVERSPRING must pay a total sum of $10,159,130.95, with $4,063,652.38 paid to the United States and the remaining amount paid to the State of New York. As part of the settlement, RIVERSPRING admits that it either did not provide RiverSpring MLTCP members with qualifying services as required by the applicable contract with DOH or did not adequately maintain documentation of the provision of such services during some or all of their enrollment in the RiverSpring MLTCP. As a result, RIVERSPRING obtained Medicaid payments to which it was not entitled.
U.S. Attorney Damian Williams said: “RiverSpring collected millions of dollars in Medicaid payments to provide long-term care services as part of its managed care plan, but in many cases either failed to deliver these services or failed to maintain adequate documentation showing that it did so. This Office is committed to holding recipients of government health care funds accountable when they fail to provide the care and services the government pays them to provide.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As a part of this settlement, the defendants acknowledged that they obtained funds from the Medicaid program to which they were not entitled. 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:
RIVERSPRING administers a managed long-term care plan for Medicaid beneficiaries pursuant to applicable contracts with DOH (the “Contract”). To be eligible for enrollment into a managed long-term care plan, a Medicaid beneficiary must, among other things, be assessed as needing at least one of the community-based long-term care services listed in the Contract (“Qualifying Services”) for more than 120 days from the effective date of enrollment. These services include nursing services in the home, therapies in the home, home health aide services, personal care services in the home, and adult day health care. In order to receive Capitation Payments from Medicaid for members of the RiverSpring MLTCP, RIVERSPRING was required to ensure that RiverSpring MLTCP members received Qualifying Services during their enrollment or otherwise remained appropriately enrolled in the RiverSpring MLTCP consistent with the Contract and DOH disenrollment practices. In exchange for arranging and providing these services, RIVERSPRING received Capitation Payments averaging between $4,000 and $4,500 for each member.
As part of the settlement, RIVERSPRING admits, acknowledges, and accepts responsibility for the following conduct:
- In many instances, RIVERSPRING either did not provide RiverSpring MLTCP members with Qualifying Services or did not adequately maintain documentation of the provision of such Qualifying Services during some or all of their enrollment in the RiverSpring MLTCP. Nonetheless, RIVERSPRING received Capitation Payments to which it was not entitled for these RiverSpring MLTCP members for the months in question.
- In many of these instances, RIVERSPRING collected Capitation Payments for RiverSpring MLTCP members despite the fact that RIVERSPRING either did not provide or did not maintain documentation reflecting the provision of Qualifying Services to these members for three or more consecutive months during their enrollment in the RiverSpring MLTCP.
- In other instances, RIVERSPRING collected Capitation Payments for RiverSpring MLTCP members despite the fact that RIVERSPRING either did not provide or did not maintain documentation reflecting the provision of Qualifying Services to these members during the entirety of their enrollment in the RiverSpring MLTCP.
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 for its assistance. Mr. Williams also thanked the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for its investigative efforts and work on the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Samuel Dolinger and Jacob M. Bergman are in charge of the case.
Operators of Nationwide Sports and Pokémon Trading Card Fraud ArrestedRead the Press Release
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 unsealing of an Indictment charging ANTHONY CURCIO, a/k/a “Brendan Wooley,” and IOSIF BONDARCHUK, a/k/a “Joe Bondarchuk,” with conspiracy to commit wire fraud and wire fraud. The charges arise from the defendants’ fraudulent scheme to defraud buyers and marketplaces to purchase sports and Pokémon trading cards at false and inflated prices by misrepresenting that low-to-mid grade cards had received high-grade ratings from a reputable card authentication company (“Company-1”), thereby causing victims to pay more money for the cards than they otherwise would have. CURCIO and BONDARCHUK were arrested this morning and are expected to be presented today before a U.S. Magistrate Judge in the Western District of Washington. This case is assigned to U.S. District Judge Ronnie Abrams.
U.S. Attorney Damian Williams said: “As alleged, Anthony Curcio and Iosif Bondarchuk carried out a brazen, nationwide fraud scheme involving valuable sports and Pokémon trading cards to deceive buyers and marketplaces, ultimately amassing over $2 million in fraudulent and attempted sales. Curcio and Bondarchuk allegedly sold and tried to sell at inflated prices cards of various professional athletes, including, among others, Michael Jordan, Tom Brady, Nolan Ryan, Larry Bird, Julius Erving, and Magic Johnson, as well as various valuable Pokémon cards. Thanks to our law enforcement partners, the dedicated prosecutors of this Office, and the many victims who came forward, this alleged fraud has had its last dance. Our message today is clear: no matter what product you’re selling, if you try to deceive the public to make money, you will be brought to justice.”
FBI Assistant Director in Charge James Smith said: “For over two years, Anthony Curcio and Joe Bondarchuk allegedly manipulated common-level trading cards to fraudulently inflate the retail price from its true market value by assigning false validity grades, resulting in more than $2 million in victim losses. This alleged scheme not only damages the reputation of a respectable authentication company, but the defendants’ alleged actions also betray the trust and wallets of avid collectors. The FBI will continue to investigate all fraudulent behavior, especially those who seek to exploit the good faith of companies and consumers.”
According to the allegations in the Indictment:[1]
From at least 2022 to May 2024, CURCIO and BONDARCHUK sold and attempted to sell fraudulent sports and Pokémon trading cards to victims across the country. In total, CURCIO and BONDARCHUK attempted to deprive victims of over $2 million through their sales and attempted sales by misrepresenting the grade of numerous trading cards.
Sports and Pokémon trading cards containing the images of professional athletes and Pokémon can have considerable resale value depending on, among other things, their condition and authenticity. Company-1 is a prominent card authenticator and grader. For a fee, it verifies a card’s authenticity, assesses its condition, and assigns it a numerical grade from one to 10, with one being the lowest grade and 10 being the highest grade. The grade assigned is reflective of the card’s comparative market value. After grading a card, Company-1 seals the card in a distinctive, tamper-resistant plastic case that encloses the card to preserve its condition and indicates its grade on an affixed label.
The card grade assigned by Company-1 significantly impacts the market value of the card. As an example, among the cards that CURCIO and BONDARCHUK sold in connection with the scheme was a misrepresented 1986 Fleer Michael Jordan #57 rookie card (the “1986 MJ Card”). The 1986 MJ Card graded as an 8 has an estimated market value of between $6,000 and $7,000. But this same card, when graded as a 10 by Company-1, has had an estimated market value of between approximately $185,000 and $203,000. In short, representations about Company-1’s grade of the card go directly to the value of the card itself and the price at which the card can be bought and sold. In May 2022, CURCIO advertised one version of the 1986 MJ Card on an online marketplace based in Manhattan (the “Manhattan Marketplace”) for sale for the amount of $171,700, as pictured below:
As is depicted above, CURCIO advertised the 1986 MJ Card as having a purported grade of 10 assigned by Company-1. In truth and in fact, CURCIO knew that Company-1 had not assigned this grade to the card. To further make it appear that the 1986 MJ Card had received a rating of 10 from Company-1, CURCIO caused a purported Company-1 label to be included in the plastic case, along with a fraudulent bar code and certification number.
Through the Manhattan Marketplace, CURCIO and BONDARCHUK sold various cards at inflated prices by falsely claiming the cards had been assigned higher ratings by Company-1 than was true.
CURCIO and BONDARCHUK also sold and attempted to sell fraudulent cards at in-person card shops, auctions, and card shows. CURCIO further sold and attempted to sell fraudulent cards through other online platforms using third-party sellers.
When victims demanded refunds and confronted CURCIO and BONDARCHUK, including by showing them confirmations from Company-1 that they had misrepresented the grade of the cards they were selling, CURCIO and BONDARCHUK feigned ignorance and often refunded the victims. Yet, after being put on notice that the cards’ grades and labels were fraudulent, CURCIO and BONDARCHUK repeatedly attempted to, and did, sell these very same cards to subsequent victims, again with fraudulent labels showing an inflated grade from Company-1.
Among the fraudulent cards that CURCIO, BONDARCHUK, and others sold and attempted to sell are a 1999 Pokémon Venusaur card and a 1999 Pokémon Charizard card, pictured below.
In July 2023, as part of a law enforcement undercover purchase of the above fraudulently misrepresented 1999 Pokémon Venusaur card for $10,500—a card which BONDARCHUK had previously attempted to sell on an online marketplace—CURCIO mailed the card to the undercover law enforcement purchaser in Manhattan after the undercover purchaser wired the money to a CURCIO-controlled bank account.
CURCIO and BONDARCHUK repeatedly used fake names and identities in order to conceal their involvement in the fraudulent scheme. For example: after a victim complained to BONDARCHUK about his sales of fraudulent cards, including a Tom Brady rookie card, a John Elway rookie card, and various Michael Jordan cards, BONDARCHUK gave the victim CURCIO’s phone number but falsely told the victim that the phone number belonged to another individual who, in reality, was a leader of the Hells Angels motorcycle ring. After another victim complained to BONDARCHUK about his sales of fraudulent cards, including a 1968 Topps Nolan Ryan/Jerry Koosman rookie card, BONDARCHUK gave the victim CURCIO’s phone number but this time falsely told the victim that the phone number belonged to someone named, “John Steel.”
Last month, in April 2024, at a card show in New Jersey, CURCIO gave a business card to a potential victim buyer, falsely claiming to be “Brendan Wooley” and listing, among other identifiers, a phone number and LinkedIn page purportedly belonging to “Brendan Wooley.” In truth and in fact, CURCIO—and not “Brendan Wooley”—created and operated the LinkedIn page and controlled the phone number.
In furtherance of the fraud, CURCIO ordered from an online marketplace various items needed to create forged card cases and labels. The items included various card grading cases, thermal transfer barcode labels, a magnifier loupe optical glass, a handheld inkjet printer, a lock-cutting kit, an electric grinding pen, an abrasive buffer and polishing wheel, an abrasive and bristle brushes, and drill bits designed for engraving.
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CURCIO, 43, of Redmond, Washington, and BONDARCHUK, 37, of Lake Stevens, Washington, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 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 the judge.
Mr. Williams praised the investigative work of the FBI.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys David R. Felton and Kingdar Prussien are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Former Professor Charged with Obstructing Justice by Falsifying RecordsRead the Press Release
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 filing of a Criminal Information charging MATTHEW QUEEN with falsification of records in connection with falsified notes Queen produced to the FBI related to an ongoing federal investigation. QUEEN was arraigned on the Information before U.S. District Judge Lewis Kaplan earlier today.
U.S. Attorney Damian Williams said: “As alleged, Matthew Queen attempted to interfere with a federal grand jury investigation by creating false notes in an attempt to corroborate his own lies. The criminal obstruction charge announced today should exemplify the seriousness of attempts by any individual to manipulate or interfere with a federal investigation.”
FBI Assistant Director in Charge James Smith said: “Matthew Queen, an interim Provost, allegedly failed to inform the FBI of a conspiracy to destroy evidence related to the ongoing investigation of sexual misconduct and instead produced falsified notes to investigators. Queen’s alleged actions deliberately violated a court order and delayed justice for the sexual abuse victims. The FBI will never tolerate those who intentionally lie and mislead our investigation in an attempt to conceal their malicious behavior.”
According to the allegations in the Information filed today in Manhattan federal court and other public statements made in court:[1]
Since approximately 2022, the U.S. Attorney’s Office for the Southern District of New York (“U.S. Attorney’s Office”) and the FBI have been investigating allegations of sexual abuse and misconduct related to a national religious denomination (the “Denomination”) and its affiliated entities, and the alleged cover-up of such allegations by individuals and entities associated with the Denomination. In October 2022, as part of that investigation, a grand jury subpoena was issued to a seminary that is affiliated with the Denomination (the “Seminary). Among other things, the subpoena required the production of all documents in the Seminary’s possession related to allegations of sexual abuse against anyone employed by or associated with the Seminary.
The following month, in November 2022, a Seminary employee (“Employee-1”) received a report alleging that a current Seminary student had committed sexual abuse. Employee-1 immediately notified the campus police at the Seminary. No further action was taken by the Seminary at that time, however, and the allegation was not reported to the U.S. Attorney’s Office.
In January 2023, Employee-1 created a document describing the sexual abuse allegation Employee-1 received in November 2022, and the failure of the Seminary to take action regarding the allegation at that time (the “Document”). On January 26, 2023, Employee-1 met with MATTHEW QUEEN, the then-Interim Provost and professor at the Seminary, and a member of the Seminary’s executive staff (“Employee-2”). During that meeting, and in QUEEN’s presence, Employee-2 directed Employee-1, in sum and substance, to destroy the Document.
In May 2023, the U.S. Attorney’s Office and the FBI interviewed MATTHEW QUEEN in Fort Worth, Texas regarding the January 26, 2023 meeting with Employee-2 and Employee-1. During that interview, QUEEN falsely stated that he had not heard Employee-2 direct Employee-1 to destroy the document. Three days after the interview, QUEEN falsely stated to another Seminary employee (“Employee-3”) that he had just located a notebook in his office containing purportedly contemporaneous notes of the January 26, 2023 meeting. The notes falsely stated that during the January 26, 2023 meeting, Employee-2 and Employee-1 merely discussed providing the Document to a different department at the Seminary, and omitted the fact that Employee-2 had directed Employee-1 to destroy the Document. Queen provided the falsified notes to Employee-2 to produce in response to the grand jury subpoena.
In June 2023, MATTHEW QUEEN provided the U.S. Attorney’s Office with a copy of his notes. On June 20, 2023, QUEEN met again with the U.S. Attorney’s Office and the FBI in New York and produced the original notebook containing his notes. During his second interview, QUEEN initially falsely stated that he had written the notes contemporaneously with the January 26, 2023 meeting, but then during the same meeting, QUEEN falsely stated that he instead had written the notes months later, in April 2023. In truth and in fact, QUEEN had written the notes following his initial May 2023 interview with the U.S. Attorney’s Office and the FBI.
On June 21, 2023, MATTHEW QUEEN testified under oath that he had in fact heard Employee-2 direct Employee-1 to make the Document “go away.”
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QUEEN, 49, of Greensboro, North Carolina, is charged with one count of falsification of records, which carries a maximum sentence of twenty 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 outstanding investigative efforts of the FBI. He added that the investigation is ongoing.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorney Jacqueline Kelly is in charge of the prosecution.
The charges contained in the Information 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.
Disbarred Attorney Sentenced to Nine Years in Prison for COVID-19 Relief Loan Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that DOUGLAS RAYMOND ARNTSEN was sentenced to nine years in prison for his scheme to defraud the U.S. Small Business Administration (“SBA”) of more than $1.4 million in government-funded loans designed to provide relief to small businesses during the COVID-19 pandemic. ARTSEN previously pled guilty before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Douglas Raymond Arntsen, a disbarred attorney and recidivist fraudster, took advantage of a national emergency to line his pockets, masterminding a scheme to defraud the government out of more than $1.4 million by submitting fraudulent COVID-19 relief loan applications. Thanks to the hard work of this Office and our law enforcement partners, Arntsen is being held accountable for his fraud.”
According to the Indictment, other public filings, and statements made in court:
Between about June 2020 through about August 2020, DOUGLAS RAYMOND ARNTSEN orchestrated a scheme to defraud the SBA by submitting fraudulent loan applications through the Economic Injury Disaster Loan (“EIDL”) Program. In doing so, ARNTSEN recruited multiple co-conspirators. ARNTSEN promised potential co-conspirators a way out of their difficult financial circumstances. Certain of those co-conspirators trusted ARNTSEN because they thought he was an attorney. In reality, ARNTSEN had been disbarred.
ARNTSEN asked his co-conspirators to give him their personal information, including social security and driver’s license numbers, and then used this information to submit fraudulent loan applications to the EIDL program. The applications submitted by ARNTSEN falsely claimed that the co-conspirators owned businesses that had substantial revenue. Often, the co-conspirators named as owners of the businesses, in fact, had no legitimate connection to the businesses at all. After the loan applications were submitted, ARNTSEN directed his co-conspirators to lie to the SBA during the loan diligence process.
ARNTSEN also directed his co-conspirators to recruit additional participants to his fraudulent scheme. After one co-conspirator had obtained a fraudulent loan, ARNTSEN directed him, in sum and substance, to “[g]et me one more warm body.” The co-conspirator proceeded to give ARNTSEN the personal information of a relative, which was then used to obtain another fraudulent loan.
In total, ARNTSEN and his co-conspirators obtained at least approximately $1.4 million in fraudulent loans and attempted to obtain hundreds of thousands of dollars of additional loans that the SBA declined to fund. After one fraudulent loan was approved by the SBA, ARNTSEN texted a co-conspirator, in sum and substance, “Need how you want your bank checks. Your chariot has arrived this morning.”
Prior to the instant offense, in 2012, ARNTSEN, then a barred attorney working for Crowell & Moring, was convicted and sentenced to four to 12 years in prison for engaging in a multi-year scheme to steal more than $10 million in clients’ money from escrow accounts.
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In addition to his prison term, ARNTSEN, 45, of Staten Island, New York, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $1,430,200 and to forfeit the same amount.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and additionally thanked the Suffolk County District Attorney’s Office for its assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
“Incognito Market” Owner Arrested for Operating One of the Largest Illegal Narcotics Marketplaces on the InternetRead the Press Release
Rui-Siang Lin, also known as Ruisiang Lin, 林睿庠, Pharoah, and faro, 23, of Taiwan, was arrested today in connection with his operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world. Lin was arrested at John F. Kennedy Airport on May 18, and will be presented in Manhattan federal court before U.S. Magistrate Judge Willis later today.
“Drug traffickers who think they can operate outside the law on the dark web are wrong,” said Attorney General Merrick B. Garland. “As alleged, Rui-Siang Lin was the architect of Incognito, a $100 million dark web scheme to traffic deadly drugs to the United States and around the world. The long arm of the law extends to the dark web, and we will bring to justice those who try to hide their crimes there.”
As alleged in the complaint and the indictment, Incognito Market was an online narcotics bazaar that existed on the dark web. Incognito Market formed in October 2020. Since that time, and through its closing in March, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. Incognito Market was available globally to anyone with internet access and could be accessed using the Tor web browser on the “dark web” or “darknet.” Lin operated the Incognito market under the online pseudonym “Pharoah” or “faro.” As “Pharoah” — the leader of Incognito market — Lin supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation.
“As alleged, Rui-Siang Lin operated a sophisticated and dangerous online narcotics marketplace through which he profited millions of dollars at the community’s expense,” said U.S. Attorney Damian Williams for the Southern District of New York. “The dedicated prosecutors from the Southern District of New York and our law enforcement partners will pursue criminal actors regardless of whether they operate on street corners or in the dark corners of the internet. The so-called ‘dark web’ is not a safe haven for those who seek to break the law.”
“For nearly four years, Rui-Siang Lin allegedly operated ‘Incognito Market,’ one of the largest online platforms for narcotics sales, conducting $100 million in illicit narcotics transactions and reaped millions of dollars in personal profits,” said Assistant Director in Charge James Smith of the FBI New York Field Office. “Under the promise of anonymity, Lin’s alleged operation offered the purchase of lethal drugs and fraudulent prescription medication on a global scale. The FBI is committed to targeting and dismantling all criminal enterprises, especially those whose leaders distribute illegal substances on the dark web.”
“As alleged, Rui-Siang Lin’s brazen operation resulted in the illicit sale of over $100 million in narcotics, including those that were mislabeled and later found to include deadly fentanyl,” said Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York. “The defendant’s greed and disregard for others was further demonstrated by his alleged extortion attempt during the platform’s final days. The El Dorado Task Force’s Darkweb and Cryptocurrency Task Force leverages cutting-edge techniques to target even the Internet’s most savvy criminals. HSI New York, in coordination with law enforcement partners, remains resolute in its commitment to protecting the public from individuals utilizing dangerous means to make a profit.”
“The arrest of ‘Incognito Market’ owner Rui-Siang Lin is a result of the continued working relationship the DEA has with our law enforcement partners in targeting individuals who use the dark web as a marketplace to promote the sale of illicit narcotics,” said Special Agent in Charge Frank A. Tarentino III of the Drug Enforcement Administration (DEA)’s New York Division. “Mr. Lin’s alleged actions of putting profits before public health were not only reckless and dangerous, but unconscionable. We will continue to make sure those who hide behind a keyboard and use the dark web to profit off lives face justice.”
“The FDA is committed to continuing its work to disrupt and dismantle the illegal sales of drugs on the dark web, where such sales far too often have tragic consequences,” said Special Agent in Charge Charles Grinstead of the Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Kansas City Field Office. “We will continue to monitor, investigate, and bring to justice those who misuse the internet in a quest for profits with reckless disregard for the risk to public health and safety.”
“This arrest underscores the dedicated, ongoing efforts of law enforcement to identify and dismantle illicit drug networks operating from every shadowy recess of the marketplace,” said Commissioner Edward A. Caban of the New York Police Department (NYPD). “I commend our NYPD investigators and all of our state and federal partners for their unwavering commitment to public safety.”
Incognito Market was designed to foster seamless narcotics transactions across the internet and across the world and incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service. Upon visiting the site, users were met by a splash page and graphic interface, which is picture below:
After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice. Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam. An example of listings on Incognito market is below:
Listings included offerings of prescription medication that was advertised as being authentic but was not. For example, in November 2023, an undercover law enforcement agent received several tablets that purported to be oxycodone, which were purchased on Incognito Market. Testing on those tablets revealed that they were not authentic oxycodone at all and were, in fact, fentanyl pills.
Each listing on Incognito Market was sold by a particular vendor. To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee. In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market. That revenue funded Incognito Market’s operations, including paying “employee” salaries and for computer servers. Lin collected millions of dollars of profits from Incognito. To facilitate these financial transactions, Incognito Market had its own “bank,” which allowed its users to deposit cryptocurrency on the site into their own “bank accounts.” After a narcotics transaction was completed, cryptocurrency from the buyer’s “bank account” was transferred to the seller’s “bank account,” less the 5% fee that Incognito collected. The bank enabled buyers and sellers to stay anonymous from each other. The bank’s graphic interface is picture below:
If convicted, Lin faces a mandatory minimum penalty of life in prison for engaging in a continuing criminal enterprise; a maximum penalty of life in prison for narcotics conspiracy; a maximum penalty of 20 years in prison for money laundering; and a maximum penalty of five years in prison for conspiracy to sell adulterated and misbranded medication. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI, HSI, DEA, FDA-OCI, and NYPD investigated the case.
Assistant U.S. Attorneys Ryan B. Finkel and Nicholas Chiuchiolo for the Southern District of New York are prosecuting the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-drive, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
“Incognito Market” Owner Arrested for Operating One of the Largest Illegal Narcotics Marketplaces on the InternetRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); Charles Grinstead, the Special Agent in Charge of the Kansas City Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations (“FDA-OCI”); Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”); and Elana Iatarola, the Special Agent in Charge of the Cincinnati Field Office of the FBI, announced today the arrest of RUI-SIANG LIN, a/k/a “Ruisiang Lin,” a/k/a “林睿庠,” a/k/a “Pharoah,” a/k/a “faro,” in connection with his operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world. LIN was arrested at John F. Kennedy Airport on May 18, 2024, and will be presented in Manhattan federal court before U.S. Magistrate Judge Willis later today.
U.S. Attorney Damian Williams said: “As alleged, Rui-Siang Lin operated a sophisticated and dangerous online narcotics marketplace through which he profited millions of dollars at the community’s expense. The dedicated prosecutors from the Southern District of New York and our law enforcement partners will pursue criminal actors regardless of whether they operate on street corners or in the dark corners of the internet. The so-called ‘dark web’ is not a safe haven for those who seek to break the law.”
Attorney General Merrick B. Garland said: “Drug traffickers who think they can operate outside the law on the dark web are wrong. As alleged, Rui-Siang Lin was the architect of Incognito, a $100 million dark web scheme to traffic deadly drugs to the U.S. and around the world. The long arm of the law extends to the dark web, and we will bring to justice those who try to hide their crimes there.”
FBI Assistant Director in Charge James Smith said: “For nearly four years, Rui-Siang Lin allegedly operated ‘Incognito Market,’ one of the largest online platforms for narcotics sales, conducting $100 million in illicit narcotics transactions and reaping millions of dollars in personal profits. Under the promise of anonymity, Lin’s alleged operation offered the purchase of lethal drugs and fraudulent prescription medication on a global scale. The FBI is committed to targeting and dismantling all criminal enterprises, especially those whose leaders distribute illegal substances on the dark web.”
HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Rui-Siang Lin’s brazen operation resulted in the illicit sale of over $100 million in narcotics, including those that were mislabeled and later found to include deadly fentanyl. The El Dorado Task Force’s Darkweb and Cryptocurrency Task Force leverages cutting-edge techniques to target even the Internet’s most savvy criminals. HSI New York, in coordination with law enforcement partners, remains resolute in its commitment to protecting the public from individuals utilizing dangerous means to make a profit.”
DEA Special Agent in Charge Frank A. Tarentino III said: “The arrest of ‘Incognito Market’ owner Rui-Siang Lin is a result of the continued working relationship the DEA has with our law enforcement partners in targeting individuals who use the dark web as a marketplace to promote the sale of illicit narcotics. Mr. Lin’s alleged actions of putting profits before public health were not only reckless and dangerous, but unconscionable. We will continue to make sure those who hide behind a keyboard and use the dark web to profit off lives face justice.”
FDA-OCI Special Agent in Charge Charles Grinstead said: “The FDA is committed to continuing its work to disrupt and dismantle the illegal sales of drugs on the dark web, where such sales far too often have tragic consequences. We will continue to monitor, investigate and bring to justice those who misuse the internet in a quest for profits with reckless disregard for the risk to public health and safety.”
NYPD Commissioner Edward A. Caban said: “This arrest underscores the dedicated, ongoing efforts of law enforcement to identify and dismantle illicit drug networks operating from every shadowy recess of the marketplace. I commend our NYPD investigators and all of our state and federal partners for their unwavering commitment to public safety.”
As alleged in the Complaint and the Indictment unsealed today:[1]
Incognito Market was an online narcotics bazaar that existed on the dark web. Incognito Market formed in October 2020. Since that time, and through its closing in March 2024, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. Incognito Market was available globally to anyone with internet access and could be accessed using the Tor web browser on the “dark web” or “darknet.” LIN operated the Incognito market under the online pseudonym “Pharoah” or “faro.” As “Pharoah” — the leader of Incognito market — LIN supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation.
Incognito Market was designed to foster seamless narcotics transactions across the internet and across the world and incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service. Upon visiting the site, users were met by a splash page and graphic interface, which is picture below:
After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice. Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam. An example of listings on Incognito market is below:
Listings included offerings of prescription medication that was advertised as being authentic but was not. For example, in November 2023, an undercover law enforcement agent received several tablets that purported to be oxycodone, which were purchased on Incognito Market. Testing on those tablets revealed that they were not authentic oxycodone at all and were, in fact, fentanyl pills.
Each listing on Incognito Market was sold by a particular vendor. To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee. In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market. That revenue funded Incognito Market’s operations, including paying “employee” salaries and for computer servers. LIN collected millions of dollars of profits from Incognito. To facilitate these financial transactions, Incognito Market had its own “bank,” which allowed its users to deposit cryptocurrency on the site into their own “bank accounts.” After a narcotics transaction was completed, cryptocurrency from the buyer’s “bank account” was transferred to the seller’s “bank account,” less the 5% fee that Incognito collected. The bank enabled buyers and sellers to stay anonymous from each other. The bank’s graphic interface is picture below:
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RUI-SIANG LIN, 23, of Taiwan, is charged with one count of engaging in a continuing criminal enterprise, which carries a mandatory minimum sentence of life in prison; one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum potential sentence of life in prison; one count of money laundering, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to sell adulterated and misbranded medication, which carries a maximum potential sentence of five years in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the investigative work of the FBI, HSI, DEA, FDA-OCI, and NYPD.
This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-drive, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel and Nicholas Chiuchiolo are in charge of the prosecution.
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 Complaint, Indictment and the descriptions of the Complaint and Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Insider at TIAA-CREF Sentenced to 70 Months in Prison for Involvement in Multimillion-Dollar Insider Trading RingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that LAWRENCE BILLIMEK was sentenced by U.S. District Judge Paul G. Gardephe to 70 months in prison for engaging in a multi-year insider trading scheme resulting in tens of millions of dollars in profits. BILLIMEK previously pled guilty to one count of securities fraud before Judge Gardephe.
U.S. Attorney Damian Williams said: "Lawrence Billimek shamelessly abused his position, orchestrating an insider trading scheme that pocketed tens of millions in illicit gains. Billimek thought that hiding his conduct behind burner phones and lies would shield him from detection from law enforcement. He was mistaken. Prosecuting white collar crimes like this sends a clear message that no one, regardless of their position, privilege, or the type of crime they commit, is outside the reach of the law.”
According to the filings and statements made during court proceedings:
Through his employment at TIAA-CREF, BILLIMEK had advance access to certain of TIAA-CREF’s anticipated trades. Due to the size of certain of these TIAA-CREF trade orders, they often caused market movement in the securities they traded. From at least 2016 through his arrest in December 2022, BILLIMEK abused his insider access and provided inside information about these trades to his co-conspirator (“CC-1”) who then bought or sold the same securities in advance of the TIAA-CREF trading. CC-1 then provided BILLIMEK with a portion of the profits on these trades.
BILLIMEK and CC-1 engaged in these front-running trades on over a thousand occasions between in or about 2016 and December 2022. In an effort to hide their scheme, BILLIMEK used prepaid, unregistered “burner” phones to communicate with CC-1 throughout the trading day. BILLIMEK and CC-1 also lied to various financial institutions about the source of funds they received during the scheme, claiming that they were, among other things, gifts. In total, BILLIMEK and CC-1 generated tens of millions of dollars in profits. BILLIMEK bought multiple homes and funded an active social lifestyle through the proceeds of his criminal scheme.
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In addition to a prison term, BILLIMEK, 52, of Hailey, Idaho, was sentenced to three years of supervised release and ordered to pay forfeiture of $12,249,000.
Mr. Williams praised the outstanding investigative 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.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Jason A. Richman is in charge of the prosecution.
Singapore Resident Sentenced to 57 Months in Prison for Soliciting Millions of Dollars in Pre-IPO Stock SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” was sentenced today by U.S. District Judge Victor Marrero to 57 months in prison for engaging in a scheme in which RAFIQ solicited millions of dollars of investors’ money by falsely representing that he was offering investments in shares of stock in privately held companies that had not yet conducted an initial public offering (“pre-IPO stock”), even though he did not actually have those shares to offer, by impersonating senior officials of a reputable family office investment firm and by engaging in other acts of deception. RAFIQ previously pled guilty to conspiracy to commit securities fraud and wire fraud before U.S. Magistrate Judge Sarah L. Cave.
U.S. Attorney Damian Williams said: “Today’s sentence demonstrates that stiff penalties await anyone who seeks to cheat and swindle American investors, and that running an investment scheme from halfway around the world will not shield fraudsters from being pursued by this Office and our law enforcement partners.”
According to the charging documents and other filings and statements made in court:
RAFIQ was born in the Netherlands and resided in Singapore. RAFIQ was convicted in 2004 in the U.S. District Court for the Eastern District of New York for carrying out a wire fraud scheme in which he purported to sell pre-IPO stock in a privately held company that had not yet conducted its initial public offering when, in fact, RAFIQ did not own or have access to such stock. After serving a 41-month federal prison sentence for that crime, RAFIQ was deported from the U.S. and eventually relocated to Singapore.
In or about 2020, RAFIQ engaged in a new scheme from Singapore to defraud victims into paying him millions of dollars for alleged investment interests in various pre-IPO stocks that he did not actually own or control.
In connection with his new fraud scheme, RAFIQ fraudulently impersonated two senior officials (“Victim-1” and “Victim-2”) of a prominent family office investment firm (“FamCap”) that manages and invests assets of members of a prominent billionaire family. In July 2020, RAFIQ caused the creation of a fake FamCap website, which automatically routed users to the official FamCap website, and the creation of fake FamCap email addresses for Victim-1 and Victim-2 that closely resemble, but are slightly different from, their genuine FamCap email addresses. The fake FamCap website and email addresses for Victim-1 and Victim-2 were created without their or FamCap’s consent. The fake email addresses also included the names of Victim-1 and Victim-2 without their authorization.
In July 2020, RAFIQ began soliciting millions of dollars from investment firms in New York and elsewhere based on false claims that in exchange for their funds, he would sell them investment interests in a purported special purpose investment vehicle called “[Fam] Capital Technology Fund, LLC” that was supposedly managed by FamCap and allegedly owned pre-IPO stock in Airbnb, Inc., among other companies. For example, as part of this fraudulent scheme, RAFIQ deceived an investment firm based in New York, New York (the “New York Firm”), and one of the firm’s foreign institutional clients (the “Foreign Client”) into making agreements under which the Foreign Client wired about $9 million in mid-August 2020 into an escrow account in New York for anticipated release to a bank account in Singapore to pay RAFIQ for his purported sale of investment interests in the LLC.
In soliciting this $9 million investment, RAFIQ made a variety of false representations, including the following:
- RAFIQ falsely claimed that the LLC was managed by FamCap. In fact, the LLC never existed.
- RAFIQ falsely claimed that the LLC owned pre-IPO shares of Airbnb, Inc. In fact, the LLC did not own and could not have owned such stock because the LLC never existed.
- RAFIQ falsely claimed that Victim-1 and Victim-2 had approved of his sale of his alleged interests in the LLC. In fact, Victim-1 and Victim-2 do not know RAFIQ and have confirmed that FamCap was never involved in or approved of any such transaction.
During and to further the goals of this fraudulent scheme, RAFIQ also caused the creation and transmission of emails from the fake FamCap email addresses, fake contracts, and deal documents purporting to have been signed by Victim-1 or Victim-2 on behalf of FamCap that neither of them approved. In August 2020, during the course of email communications with the New York Firm and Foreign Client concerning RAFIQ’s alleged sale to them of his purported interests in the alleged FamCap-managed LLC that supposedly held Airbnb, Inc. shares, RAFIQ copied into the email chain the fake FamCap email addresses to create the false impression that FamCap was involved in and approved of the alleged transaction.
Also pursuant to the fraudulent scheme, RAFIQ solicited over $1 million from an investment group located in California (the “California Group”) in late 2020 by yet again purporting to be a representative of FamCap offering pre-IPO stock for sale. As a result, the California Group wired RAFIQ a total of approximately $1,002,615 in November and December 2020.
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In addition to his prison term, RAFIQ, 50, a resident of Singapore and a citizen of the Netherlands, was ordered to pay restitution and forfeiture in the amount of $1,002,615.
Mr. Williams praised the investigative work of Homeland Security Investigations, the U.S. Postal Inspection Service, the New York City Police Department, and the New York City Sheriff’s Office, and he also thanked the U.S. Securities and Exchange Commission, which conducted a separate parallel investigation, for its assistance, and the Department of Justice’s Office of International Affairs, Interpol, Singapore Police Force, and the Attorney-General’s Chambers of Singapore for their assistance in the extradition of the defendant.
This case is being handled by this Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.
U.S. Attorney Announces $2.5 Million False Claims Act Settlement with Diagnostic Testing Facility for Paying Kickbacks to Physicians for Patient ReferralsRead the Press Release
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 U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the U.S. has settled a civil fraud lawsuit against Balance Diagnostics USA, LLC (“BALANCE”), a diagnostic testing facility based in Cedarhurst, New York, for paying kickbacks to physicians and their medical practices in the form of sham “rent payments” to secure patient referrals in violation of the federal Anti-Kickback Statute (the “AKS”). Specifically, the settlement resolves claims that from January 2009 through December 2019, BALANCE paid hundreds of thousands of dollars to over 100 physicians and their practices in the New York City area (the “Providers”) to induce them to refer patients for diagnostic testing services performed by BALANCE staff at the Providers’ offices. The U.S. alleges that the so-called rent payments were based entirely upon the number of patient referrals and, in many instances, were well above the fair market rental value of the leased office space.
Under the settlement approved yesterday by U.S. District Judge Vernon S. Broderick, BALANCE will pay the U.S. $1,725,850 and has admitted and accepted responsibility for conduct alleged in the U.S. Complaint, including that BALANCE determined the amount of rent to be paid pursuant to the subleases by taking into account the anticipated volume or value of the patients referred. BALANCE has also agreed to pay the State of New York $774,150 to resolve state law claims, for a total combined recovery of $2.5 million. BALANCE has executed judgments in favor of the U.S. for $4,280,108, and in favor of the State of New York for $1,919,892, for a total combined amount of $6.2 million, which may be enforced if BALANCE fails to make the payments required under the settlements.
U.S. Attorney Damian Williams said: “The Anti-Kickback Statute is meant to ensure that medical decision-making is driven by what is best for the patient, and never by what is most profitable. Balance entered into sham office rental arrangements with scores of doctors in the New York City area, paying them to refer patients to Balance for diagnostic tests, pressuring them to meet referral expectations, and terminating the arrangements when referral rates were lower than expected. These are precisely the kind of business arrangements that the statute was enacted to prevent. This Office will continue to scrutinize such arrangements and hold accountable those providers whose dealings violate the law.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Violations of the Anti-Kickback Statute, as demonstrated by this lawsuit and settlement, can induce diagnostic testing referrals that are compromised by profit-making considerations. 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 U.S. Complaint:
BALANCE is a diagnostic testing facility based in Cedarhurst, New York, which provides on-site mobile diagnostic testing services, such as video steganography (used to diagnose balance disorders) and ultrasound procedures. During the period from 2009 through 2019, BALANCE orchestrated a kickback scheme designed to direct patients to BALANCE for diagnostic testing services. BALANCE entered into sham office rental arrangements with over 100 Providers, who referred thousands of patients to BALANCE for diagnostic testing services that were reimbursed by Medicare and Medicaid.
BALANCE routinely sent employees to visit physicians and medical practices to persuade them to enter these kickback arrangements. BALANCE representatives inquired about the volume of patients the Providers anticipated referring for diagnostic testing services each month. BALANCE and the Providers then used these anticipated referral rates to negotiate the amount BALANCE would pay in rent to the Providers each month. BALANCE characterized the payments to the Providers as rent payments because it knew that it was illegal to make payments in exchange for referrals and wanted to conceal the true purpose of the payments.
BALANCE’s agreements with the Providers typically provided for the use of an exam room by BALANCE personnel, as well as for the use of basic equipment (e.g., a telephone, fax machine, a computer) and administrative staff to assist with patient flow and recordkeeping. In exchange, BALANCE agreed to pay monthly rent, which ranged from one to several thousand dollars per month. In many cases, the monthly payments exceeded the fair market value for BALANCE’s limited use of the rented space, equipment, and services. The sole factor BALANCE took into account when setting the monthly rent was the expected value of the patient referrals the Provider would generate.
Many of the agreements misrepresented key terms, such as the square footage of the rented space and the number of days per month BALANCE would use the space. In some instances, BALANCE did not even enter into written lease agreement with the Providers.
As part of the settlement, BALANCE admitted, acknowledged, and accepted responsibility for the following conduct:
- In a number of instances, BALANCE and the Providers determined the amount of rent to be paid pursuant to the sublease by taking into account the anticipated volume or value of the patients referred to BALANCE. Frequently, BALNCE representatives reached out to the Providers about leasing office space from them, and if the Providers were interested, the BALANCE representatives inquired about the volume of patient referrals for diagnostic testing services that BALANCE could expect to receive in a given month. The BALANCE representatives and the Providers then negotiated the monthly rent amount by taking into account the anticipated volume and/or value of such referrals. The greater the number of patients the Providers indicated they could refer to BALANCE for diagnostic testing service each month, the greater the monthly amount BALANCE agreed to pay the Providers.
- BALANCE typically performed no meaningful analysis to determine the fair market value of the subleased premises or to verify that the agreed-upon monthly rent payments were consistent with fair market value. In a number of instances, the payments made to the Providers substantially exceeded the fair market value of the rented space.
- BALANCE representatives monitored the number of patient referrals received each month from the Provider. BALANCE took a number of steps to address situations where the volume of patient referrals was meaningfully less than that which BALANCE had anticipated when setting the monthly rent amount. For example, BALANCE representatives routinely reached out to Providers to press them to achieve the expected patient referral rates. Sometimes, BALANCE representatives secured commitments from Providers to increase the number of patients they would refer for diagnostic testing services each month. In other instances, when there were fewer referrals or BALANCE did not use the space because of low patient referrals, BALANCE paid the Providers less than the amount specified in the sublease and/or varied its payment (between the amount specified in the sublease and a lesser amount) based on the actual patient referral volume. In other instances, BALANCE representatives renegotiated the rent amount downward or terminated the sublease arrangement entirely.
In connection with the filing of the lawsuit and the settlement, the U.S. 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 the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Pierre G. Armand is in charge of the case.
Two Brothers Arrested for Attacking Ethereum Blockchain and Stealing $25M in CryptocurrencyRead the Press Release
An indictment was unsealed today charging Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York, with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The charges in the indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds. Anton Peraire-Bueno and James Peraire-Bueno were arrested yesterday in Boston and New York, respectively, and will be presented this afternoon before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York.
“As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco. “Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its kind wire fraud and money laundering scheme. As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.”
“Today, my office indicted two brothers — Anton Peraire-Bueno and James Peraire-Bueno — for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it,” said U.S. Attorney Damian Williams for the Southern District of New York. “As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe. And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged. But as the indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this office will be relentless in pursuing people who attack the integrity of all financial systems.”
“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims,” said Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office. “In this case, IRS-CI New York’s Cyber Unit simply followed the money. Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations with cutting-edge technology and good-ole-fashioned investigative work, on and off the blockchain.”
As alleged in the indictment, Anton Peraire-Bueno and James Pepaire-Bueno are brothers who studied mathematics and computer science at one of the most prestigious universities in the country. Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading, Anton Peraire-Bueno and James Pepaire-Bueno exploited the very integrity of the Ethereum blockchain in order to fraudulently obtain approximately $25 million worth of cryptocurrency from victim cryptocurrency traders (the “Exploit”). Through the Exploit, which is believed to be the very first of its kind, Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency. Once the defendants stole their victims’ cryptocurrency, they rejected requests to return the stolen cryptocurrency and took numerous steps to hide their ill-gotten gains.
Anton Peraire-Bueno and James Pepaire-Bueno meticulously planned the Exploit over the course of several months. Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole. As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges. After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.
Throughout the planning, execution, and aftermath of the Exploit, Anton Peraire-Bueno and James Pepaire-Bueno also searched online for information about, among other things, how to carry out the Exploit, ways to conceal their involvement in the Exploit, cryptocurrency exchanges with limited “know your customer” procedures that they could use to launder their criminal proceeds, attorneys with expertise in cryptocurrency cases, extradition procedures, and the very crimes charged in the indictment.
If convicted, Anton Peraire-Bueno and James Pepaire-Bueno each face a maximum penalty of 20 years in prison for each count.
IRS-CI New York’s Cyber Investigations Unit investigated the case, with the assistance of the U.S. Customs and Border Protection and New York City Police Department.
Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla for the Southern District of New York are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Brothers Arrested for Attacking the Ethereum Blockchain and Stealing $25 Million in CryptocurrencyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Lisa Monaco, the Deputy Attorney General of the United States; and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an Indictment charging ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The charges in the Indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds. ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO were arrested yesterday in Boston, Massachusetts, and New York, New York, respectively, and will be presented this afternoon before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York.
U.S. Attorney Damian Williams said: “Today, my Office indicted two brothers—Anton Peraire-Bueno and James Peraire-Bueno—for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it. As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe. And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged. But as the Indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this Office will be relentless in pursuing people who attack the integrity of all financial systems.”
Deputy Attorney General Lisa Monaco said: “As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds. Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its kind wire fraud and money laundering scheme. As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims. In this case, IRS-CI New York’s Cyber Unit simply followed the money. Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations with cutting-edge technology and good-ole-fashioned investigative work, on and off the blockchain.”
As alleged in the Indictment:[1]
ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO are brothers who studied mathematics and computer science at one of the most prestigious universities in the country. Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO exploited the very integrity of the Ethereum blockchain in order to fraudulently obtain approximately $25 million worth of cryptocurrency from victim cryptocurrency traders (the “Exploit”). Through the Exploit, which is believed to be the very first of its kind, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency. Once the defendants stole their victims’ cryptocurrency, they rejected requests to return the stolen cryptocurrency and took numerous steps to hide their ill-gotten gains.
ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO meticulously planned the Exploit over the course of several months. Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole. As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges. After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.
Throughout the planning, execution, and aftermath of the Exploit, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO also searched online for information about, among other things, how to carry out the Exploit, ways to conceal their involvement in the Exploit, cryptocurrency exchanges with limited “know your customer” procedures that they could use to launder their criminal proceeds, attorneys with expertise in cryptocurrency cases, extradition procedures, and the very crimes charged in this Indictment.
* * *
ANTON PERAIRE-BUENO, 24, of Boston, Massachusetts, and JAMES PERAIRE-BUENO, 28, of New York, New York, are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 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 defendants will be determined by a judge.
Mr. Williams praised the investigative work of the IRS-CI New York’s Cyber Investigations Unit. Mr. Williams also acknowledged the assistance of the U.S. Customs and Border Protection and the New York City Police Department.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla are in charge of the prosecution.
The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Statement of U.S. Attorney Damian Williams on the Conviction of Bruce GarelickRead the Press Release
U.S. Attorney Damian Williams said: “Bruce Garelick was part of a sophisticated group of individuals invited to invest in Digital World Acquisition Corporation (DWAC), a special purpose acquisition company that had raised funds with the intention of later investing in a target company, Trump Media & Technology Group, not yet known to the public. When he was given that opportunity, Garelick promised to keep the information about DWAC’s interest in acquiring Trump Media secret and not use it to trade in the stock market. Garelick was also given a seat on DWAC’s board, which gave him direct access to additional non-public information regarding the acquisition. As a unanimous jury has just found, Garelick blatantly violated the law by using the information that he obtained as an insider at DWAC to trade and tip others. Garelick’s federal conviction is yet another stark reminder that insider trading is always a losing bet.”
Man Who Carried Out Machete Attack on NYPD Officers in Times Square on New Year’s Eve 2022 Sentenced to 27 Years in PrisonRead the Press Release
Trevor Bickford, 20, of Wells, Maine, was sentenced to 324 months in prison for attempting to kill officers and employees of the U.S. Government and persons assisting them during his brazen attack using a machete-style knife against three New York City Police Department (NYPD) officers in Times Square on Dec. 31, 2022. Bickford pleaded guilty to terrorism charges on Jan. 11.
“Today’s sentence holds Trevor Bickford accountable for his premeditated 2022 terrorist attack in Times Square during which he attempted to kill three NYPD officers in a violent rampage,” said Attorney General Merrick B. Garland. “The Justice Department is deeply grateful to the NYPD for its quick actions and bravery in disrupting this New Year’s Eve attack, and for the work it does every day to keep New Yorkers safe. The Justice Department will always stand by its state and local law enforcement partners as we work together to counter the threat of terrorism, and that includes being relentless in prosecuting those who seek to harm officers.”
“The defendant’s brutal ambush of three New York City police officers keeping watch over New Year’s Eve celebrations was a premeditated act of terrorism,” said FBI Director Christopher Wray. “Police officers work tirelessly to protect the communities they serve and assaults on them are reprehensible. He planned, prepared, and travelled to conduct a savage attack in support of his violent ideology and now he is being held accountable for his actions.”
“Inspired by radical Islamic extremism, Trevor Bickford brutally attacked three NYPD officers who were just doing their jobs by protecting the public during the Times Square New Year’s Eve festivities,” said U.S. Attorney Damian Williams for the Southern District of New York. “Thankfully, one officer’s quick-thinking actions stopped the defendant’s attack while minimizing risk to the innocent bystanders who easily might have become additional victims of the defendant’s heinous violence. Less than a year and a half after his attack, Bickford has been convicted and now sentenced to 27 years in prison. Bickford’s conviction and sentence demonstrate that cowardly acts of terrorism will be met with law enforcement’s unwavering resolve to protect New York City, our country, and our core values of freedom and democracy.”
According to court documents, In December 2022, Bickford, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many targets as possible. He targeted one of the most densely populated areas in the United States at one of the most densely populated times possible: Times Square on New Year’s Eve. It was there that Bickford ambushed three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and swung his blade at their heads, seriously injuring all three officers. Bickford also tried to grab one of the NYPD officers’ guns during his attack. One of the victims that Bickford struck managed to shoot Bickford in the shoulder, halting his brutal rampage before he could attack and possibly kill others. Bickford later proudly declared that he carried out his attack to wage jihad and proclaimed that his goal was to kill as many military-aged men who worked for the U.S. Government as he could, before himself becoming a martyr in the attack.
The machete-style knife, which has a blade more than a foot long, that Bickford used to carry out his attack.Bickford’s violent rampage on Dec. 31, 2022, was premeditated. He consumed materials espousing radical Islamic ideology – including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda – and contemplated ways to wage jihad. As he immersed himself deeper into this propaganda, Bickford devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, Bickford focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. government. Ultimately, Bickford decided that he would not travel overseas and instead turned his attention to an attack here in the United States. This decision resulted in Bickford perpetrating his attack in Times Square on New Year’s Eve in 2022.
Near the scene of the attack, law enforcement officers recovered a book from Bickford’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.” In addition, Bickford had used an encrypted application and secure browser on his cellphone to conduct extensive research in advance of his attack, including research about al Qaeda (including internet searches for “Al Qaeda recruitment”); about waging jihad; about his eventual time (New Year’s Eve) and place (Times Square) of attack (including “how often do the police patrol in NYC” and “New Years Eve 2023 itinerary in New York City Times Square”); about potential weapons he could use to carry out his attack (including “[g]un buying laws for New York City” and “Do you need to pass a background check for a used gun”); and various ways to incapacitate, injure, and kill his potential targets (including “[w]hat are the terms for taking slaves in Islam” and whether Islam “permit[s] rape of female prisoners of war”). Finally, less than an hour before his attack, Bickford watched an Al Qaeda propaganda video imploring viewers to “fight” as he finalized his targets.
The FBI New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, investigated the case.
Assistant U.S. Attorneys Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky for the Southern District of New York are prosecuting the case, with valuable assistance from Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section.
Man Who Carried Out Machete Attack on NYPD Officers in Times Square on New Year’s Eve 2022 Sentenced to 27 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced that TREVOR BICKFORD was sentenced today to 27 years in prison for attempting to kill officers and employees of the U.S. Government and persons assisting them during his brazen attack using a machete-style knife against three New York City Police Department (“NYPD”) officers in Times Square on December 31, 2022. BICKFORD pled guilty on January 11, 2024, before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Inspired by radical Islamic extremism, Trevor Bickford brutally attacked three NYPD officers who were just doing their jobs by protecting the public during the Times Square New Year’s Eve festivities. Thankfully, one officer’s quick-thinking actions stopped the defendant’s attack while minimizing risk to the innocent bystanders who easily might have become additional victims of the defendant’s heinous violence. Less than a year and a half after his attack, Bickford has been convicted and now sentenced to 27 years in prison. Bickford’s conviction and sentence demonstrate that cowardly acts of terrorism will be met with law enforcement’s unwavering resolve to protect New York City, our country, and our core values of freedom and democracy.”
Attorney General Merrick B. Garland said: “Today’s sentence holds Trevor Bickford accountable for his premeditated 2022 terrorist attack in Times Square during which he attempted to kill three NYPD officers in a violent rampage. The Justice Department is deeply grateful to the NYPD for its quick actions and bravery in disrupting this New Year’s Eve attack, and for the work it does every day to keep New Yorkers safe. The Justice Department will always stand by its state and local law enforcement partners as we work together to counter the threat of terrorism, and that includes being relentless in prosecuting those who seek to harm officers.”
FBI Director Christopher A. Wray said: “The defendant’s brutal ambush of three New York City police officers keeping watch over New Year’s Eve celebrations was a premeditated act of terrorism. Police officers work tirelessly to protect the communities they serve and assaults on them are reprehensible. He planned, prepared, and traveled to conduct a savage attack in support of his violent ideology, and now he is being held accountable for his actions.”
FBI Assistant Director in Charge James Smith said: “Today, Trevor Bickford was handed a deserved punishment for intentionally committing an act of terrorism against New York City and police officers sworn to protect it. Thankfully, these brave police officers fulfilled their duty and stopped Bickford's brutal attack before he could cause more harm. The FBI’s Joint Terrorism Task Force in New York remains determined to bring to justice anyone attempting to commit violence in the name of terrorism to ensure the safety of New York.”
According to court documents and statements made during court proceedings:
In December 2022, BICKFORD, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible. He targeted one of the most densely populated areas in the U.S. at one of the most densely populated times possible: Times Square on New Year’s Eve. It was there that BICKFORD ambushed three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and swung his blade at their heads, seriously injuring all three officers. BICKFORD also tried to grab one of the NYPD officers’ guns during his attack. One of the victims that BICKFORD struck managed to shoot BICKFORD in the shoulder, halting his brutal rampage before he could attack and possibly kill others. BICKFORD later proudly declared that he carried out his attack to wage jihad and proclaimed that his goal was to kill as many military-aged men who worked for the U.S. Government as he could, before himself becoming a martyr in the attack. The machete-style knife, which has a blade more than a foot long, that BICKFORD used to carry out his attack is shown below:
BICKFORD’s violent rampage on December 31, 2022, was premeditated. He consumed materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplated ways to wage jihad. As he immersed himself deeper into this propaganda, BICKFORD devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, BICKFORD focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Ultimately, BICKFORD decided that he would not travel overseas and instead turned his attention to an attack here in the United States. This decision resulted in BICKFORD perpetrating his attack in Times Square on New Year’s Eve in 2022.
Near the scene of the attack, law enforcement officers recovered a book from BICKFORD’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.” In addition, BICKFORD had used an encrypted application and secure browser on his cellphone to conduct extensive research in advance of his attack, including research about al Qaeda (including internet searches for “Al Qaeda recruitment”); about waging jihad; about his eventual time (New Year’s Eve) and place (Times Square) of attack (including “how often do the police patrol in NYC” and “New Years Eve 2023 itinerary in New York City Times Square”); about potential weapons he could use to carry out his attack (including “[g]un buying laws for New York City” and “Do you need to pass a background check for a used gun”); and various ways to incapacitate, injure, and kill his potential targets (including “[w]hat are the terms for taking slaves in Islam” and whether Islam “permit[s] rape of female prisoners of war”). Finally, less than an hour before his attack, BICKFORD watched an Al Qaeda propaganda video imploring viewers to “fight” as he finalized his targets.
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In addition to the prison term, BICKFORD, 20, of Wells, Maine, was sentenced to a lifetime of supervised release.
Mr. Williams praised the outstanding efforts of the New York Joint Terrorism Task Force of the FBI, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, and thanked the Counterterrorism Section of 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 Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky are in charge of the prosecution, with assistance from Trial Attorney D. Andrew Sigler of the Counterterrorism Section.
Defendant Sentenced to Eight Years in Prison for Two Shootings and Armed CarjackingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CHRISTOPHER SMITH, a/k/a “Christopher Johnson,” a/k/a “Mad Max,” a/k/a “Max,” a/k/a “Trouble,” was sentenced today by U.S. District Judge Ronnie Abrams to eight years in prison in connection with committing two shootings and an armed carjacking in the Bronx and Yonkers, New York.
U.S. Attorney Damian Williams said: “Christopher Smith committed two dangerous shootings and an armed carjacking over the span of two months. He put New Yorkers’ lives in jeopardy and brazenly flouted the rule of law. This Office remains steadfast in its commitment to ending the scourge of gun violence on the streets of New York City and will continue to hold accountable those who endanger public spaces.”
According to the Superseding Indictment, public filings, and statements made in court:
Over a two-month period in the fall of 2022, SMITH committed two shootings and an armed carjacking.
In September 2022, SMITH encountered a group of men standing in front of a convenient store in Yonkers, New York. SMITH asked the men to sell drugs for him, but when the men refused, SMITH brandished a black handgun with a light blue handle, as depicted in the images below:
After SMITH brandished his gun, the group of men dispersed, and SMITH and a friend drove away in the friend’s black Mercedes-Benz. Approximately 30 minutes later, SMITH and his friend drove back to the same area and found the group of men with whom SMITH had gotten into an argument. After another altercation, SMITH fired his gun twice in the vicinity of the group of men, and SMITH and his friend sped off in the Mercedes-Benz.
Approximately 30 minutes later, law enforcement stopped the Mercedes-Benz in Mount Vernon, New York. Although SMITH’s friend was in the driver’s seat, SMITH jumped onto his friend’s lap and attempted to drive the Mercedes-Benz into the police vehicle to flee. When that failed, law enforcement opened the driver’s side door and arrested SMITH’s friend, but SMITH fled the scene on foot while carrying his gun in his pocket. A 30-minute foot chase ensued. Eventually, SMITH ran up to a 70-year-old woman who was exiting her church and placing her belongings into her Jeep. SMITH shouted at the woman to give him her car keys, forcibly ripped her keys out of her hands, climbed into her Jeep, and sped off with her Jeep, as well as her other personal belongings.
Just two months later, in November 2022, SMITH was residing in the Bronx, New York, with a friend whom he had known for approximately 10 years. SMITH argued with his friend over poor quality narcotics and left the apartment. Soon thereafter, SMITH reappeared on the outside balcony of the apartment with a black handgun with a light blue handle. SMITH lifted the window screen, aimed his firearm through the window at his friend’s head, and fired one shot. The friend ducked and ran at SMITH, who fled the scene.
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In addition to his prison term, SMITH, 28, of Mount Vernon, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, the Mount Vernon Police Department, the Yonkers Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Amanda C. Weingarten and Katherine Cheng are in charge of the prosecution.
Statement of U.S. Attorney Damian Williams on the Conviction of Darius PaduchRead the Press Release
U.S. Attorney Damian Williams said: “As a unanimous jury has just found, Darius A. Paduch leveraged his position of trust as a medical doctor for his own perverse gratification. For years, patients seeking needed medical care, many of them children, left his office as victims. I commend the career prosecutors of this Office for bringing this important case to a just conclusion.”
Flight Attendants Charged in Connection with Smuggling Drug Money to the Dominican RepublicRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the unsealing of two Complaints charging flight attendants CHARLIE HERNANDEZ, SARAH VALERIO PUJOLS, EMMANUEL TORRES, and JAROL FABIO with various offenses in connection with their years-long participation in smuggling narcotics trafficking proceeds from the United States to the Dominican Republic on commercial flights. All of the defendants were arrested yesterday. PUJOLS and FABIO were presented yesterday in Manhattan federal court before U.S. Magistrate Judge Gary Stein, and HERNANDEZ and TORRES will be presented later today before Judge Stein.
U.S. Attorney Damian Williams said: “As alleged, these flight attendants smuggled millions of dollars of drug money and law enforcement funds that they thought was drug money from the United States to the Dominican Republic over many years by abusing their privileges as airline employees. Today’s charges should serve as a reminder to those who break the law by helping drug traffickers move their money that crime doesn’t pay.”
HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, the defendants knowingly smuggled large amounts of illicit money linked to the sale of narcotics, to include fentanyl, and took advantage of airport security checkpoints by using their trusted positions as flight attendants. This investigation has exposed critical vulnerabilities in the airline security industry and has illuminated methods that narcotics traffickers are utilizing. Today’s announcement should serve as a warning to all airline personnel: HSI New York will not tolerate employees’ attempts to abuse their power for the sake of transporting illicit goods. I commend El Dorado Task Force’s Transnational Criminal Enterprise Investigations Group and our partners in the public and private sectors for recognizing the seriousness of this issue.”
According to the allegations contained in the Complaints:[1]
During the relevant period charged in the Complaints, 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. In total, the defendants smuggled approximately $8 million in bulk cash from the United States to the Dominican Republic.
Before his or her arrest 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 his or her 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, HSI 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.
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CHARLIE HERNANDEZ, 42, of West New York, New Jersey, SARAH VALERIO PUJOLS, 42, of the Bronx, New York, EMMANUEL TORRES, 34, of Brooklyn, New York, and JAROL FABIO, 35, of New York, New York, are each charged with one count of operation of an unlicensed money transmission business, which carries a maximum sentence of five years in prison, and one count of entering an airport or aircraft area in violation of security requirements, which carries a maximum sentence of 10 years in prison. PUJOLS and HERNANDEZ are additionally charged with one count of conspiracy to operate an unlicensed money transmission business, which carries a maximum sentence of five years in prison, and PUJOLS is further charged with one count of bulk cash smuggling, 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 defendants will be determined by the judge.
Mr. Williams praised the investigative work of HSI and the New York City Police Department.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Benjamin A. Gianforti and Jackie Delligatti are in charge of the prosecution.
The charges contained in the Complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Trinitarios Gang Leader Sentenced to Life in Prison for Murdering A Confidential InformantRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM JONES, a/k/a “Principe,” was sentenced today to life in prison for the December 2019 murder of Frederick Delacruz. JONES, who was a high-ranking member of the Trinitarios gang, lured Delacruz from the Bronx to Suffolk County, New York, where JONES shot and killed Delacruz next to a cemetery because Delacruz was acting as a confidential informant for law enforcement. JONES was sentenced today by U.S. District Judge Edgardo Ramos after being convicted by a jury following an eight-day trial in October 2023.
U.S. Attorney Damian Williams said: “William Jones executed Frederick Delacruz in cold blood because Delacruz had the courage to cooperate with law enforcement. Now, Jones will spend the rest of his life in a federal prison.”
According to court filings and the evidence presented in court during the trial:
WILLIAM JONES was a high-ranking member of the Trinitarios, a racketeering enterprise that has engaged in a pattern of murder, attempted murder, drug trafficking, fraud, and witness tampering and retaliation. On December 28, 2019, JONES and other Trinitarios lured Frederick Delacruz from the Bronx, New York, to Suffolk County, New York, where JONES shot and killed Delacruz because Delacruz was acting as a confidential informant for law enforcement.
Delacruz is the second known person whom JONES has murdered. On October 18, 1993, JONES shot and killed Audrey Walker with a TEC .9mm assault weapon in the lobby of the Manhattan apartment building where Walker resided. On October 26, 1994, JONES was convicted after a bench trial in New York County Supreme Court of intentional murder in the second degree. JONES was sentenced to nine years to life in prison. He was released on parole on September 8, 2008.
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JONES, 45, of the Bronx, New York, was convicted at trial of racketeering conspiracy, murder in aid of racketeering, and murder through the use of a firearm.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, and the Suffolk County Police Department. He also thanked the Suffolk County District Attorney’s Office for their assistance.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Emily A. Johnson, Justin V. Rodriguez, and Christy Slavik are in charge of the prosecution, with the assistance of Paralegal Specialist Grayson Glogoff.
Human Trafficker Working with Mexican “Coyotes” Pleads Guilty to Conspiring to Transport Illegal AliensRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of MARIO ELPIDIO CHAVEZ MILLAN, a human trafficker working with Mexican “coyotes,” for conspiring to transport illegal aliens throughout the United States. As part of his plea, CHAVEZ also admitted to his participation in a kidnapping conspiracy. CHAVEZ pled guilty before U.S. District Judge Vincent L. Briccetti and is scheduled to be sentenced on August 7, 2024.
U.S. Attorney Damian Williams said: “Mario Elpidio Chavez Millan and others like him are an integral cog in the human trafficking machine that preys on people who attempt to enter the United States through its southern border each year. The services that Chavez offers are what make it possible for coyotes, the cartels, and others to smuggle people throughout the country, often times for large fees. And in this case — as in many cases involving human traffickers — Chavez and those working with him sought to extort their victims for even more money. This Office will use every tool available to law enforcement to investigate and prosecute those involved in human trafficking.”
According to the Complaint previously filed against CHAVEZ, the Indictment, and other filings:
On about July 10, 2023, the New York State Police in the Town of Cortlandt, New York, received a report from an individual (“Individual-1”) that Individual-1’s relative (“Victim-1”) had entered the country illegally with the assistance of “coyotes” and was being transported by a man in the United States working with the coyotes, who was later identified as CHAVEZ. Individual-1 further informed the State Police that CHAVEZ had told Victim-1 that he was not going to release Victim-1 unless Victim-1 or his/her family paid $1,000 in addition to the money that Victim-1 had already paid to the coyotes.
That evening, State Police executed a traffic stop of CHAVEZ’s vehicle in the Town of Cortlandt. At that time, there were approximately five people in the vehicle in addition to CHAVEZ. After those passengers and Victim-1 were brought to the State Police barracks, each reported that they had illegally entered the United States and that they were being driven by CHAVEZ from in or about New Mexico to other states throughout the country. Several of CHAVEZ’s passengers stated that CHAVEZ threatened them during the drive, telling them that they could not leave without paying him an additional $1,000 and that CHAVEZ told them he had previously killed someone for running away without paying.
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CHAVEZ, 19, of Albuquerque, New Mexico, pled guilty to one count of conspiring to transport aliens throughout the United States, which carries a maximum sentence of 10 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 outstanding investigative work of the Federal Bureau of Investigation’s Hudson Valley Resident Agency and Safe Streets Task Force and the New York State Police.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney David Markewitz is in charge of the prosecution.
Yvette Wang Pleads Guilty to over $1 Billion Fraud ConspiracyRead the Press Release
U.S. Attorney Damian Williams said: “Yvette Wang played a leadership role in a broad and complex scheme to defraud thousands. Through false promises and lies, this scheme collected more than $1 billion from innocent victims located throughout the country and the world. Wang inflicted pain and loss on so many, and she will now be held to account for the harm she and others caused. I want to thank our partners in the FBI and the career prosecutors of this Office for their persistent work investigating and prosecuting this pernicious scheme.”
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WANG, 45, of New York, New York, pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, which together carry a maximum term of 10 years in prison. As part of her guilty plea, WANG agreed to pay restitution of $1,400,000,000 and to forfeit $1,400,000,000 to the United States.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. WANG will be sentenced on September 10, 2024, at 11:00 a.m. by U.S. District Judge Analisa Torres.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Micah F. Fergenson, Ryan B. Finkel, Justin Horton, and Juliana N. Murray are in charge of the prosecution.
Two Extradited British Citizens Plead Guilty to Conspiracy to Defraud Investors in Fraudulent Co-Working Space BusinessRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES ROBINSON and DAVID KENNEDY, both citizens of the United Kingdom, pled guilty to engaging in a conspiracy to defraud victims by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities (“Bar Works”). ROBINSON and KENNEDY were arrested in Spain on November 30, 2022, and were subsequently extradited. ROBINSON pled guilty today before U.S. Magistrate Judge Barbara Moses and is scheduled to be sentenced on September 25, 2024, before U.S. District Judge Lewis A. Kaplan. KENNEDY pled guilty on October 13, 2023, before U.S. Magistrate Valerie Figueredo, and is scheduled to be sentenced on May 7, 2024, before Judge Kaplan.
U.S. Attorney Damian Williams said: “James Robinson and David Kennedy partnered with notorious fraudster Renwick Haddow and used their agent network in Spain to launch a massive Ponzi scheme that lured hundreds of unsuspecting investors from around the world, all in exchange for massive commissions. Today’s plea signifies this Office’s commitment to hold accountable every perpetrator of fraudulent investment schemes, no matter where they operate.”
According to the Indictments and other court documents:
ROBINSON, KENNEDY, and co-conspirators Renwick Haddow and James Moore are citizens of the United Kingdom. At all times relevant to the Indictment, United Property Group and related entities (collectively, “UPG”) constituted a company based in Spain that was controlled in part by ROBINSON and KENNEDY. UPG sold real estate and other investing opportunities to potential investors. Bar Works was a private co-working space company controlled by Haddow, which operated locations in New York City and elsewhere between in or about 2015 through 2017 and accepted millions of dollars in investments from investors recruited through UPG, among others. Prior to launching Bar Works, Haddow had been disqualified as a director of any UK company for eight years and was later sued by the Financial Conduct Authority, a British regulator, for operating investment schemes through misrepresentations that lost investors substantially all of their money. These sanctions and lawsuit were publicized online.
In exchange for millions of dollars in commissions, ROBINSON, KENNEDY, and Moore partnered with Haddow in soliciting investments into workspace leases in Bar Works through material misrepresentations concerning, among other things, the identity of Bar Works’ management and the operations of Bar Works. Specifically, as ROBINSON and KENNEDY knew, notwithstanding Haddow’s control over Bar Works, Haddow caused the Bar Works offering materials to omit his name entirely, list a fictitious individual named “Jonathan Black” as the Chief Executive Officer of Bar Works, and claim that “Black” had an extensive background in finance and past success with start-up companies.
Through UPG, ROBINSON and KENNEDY recruited agents to sell workspace leases in Bar Works and knowingly provided them with fraudulent offering documents and other information. In marketing Bar Works to investors attempting to do due diligence, UPG agents supervised by ROBINSON and KENNEDY represented that ROBINSON and KENNEDY had met “Jonathan Black” in New York as part of UPG’s own due diligence. An account controlled in whole or in part by ROBINSON and KENNEDY received over $2 million in commissions from Bar Works in exchange for soliciting victims to invest at least approximately $7.5 million in this scheme. Separately, Moore received another approximately $1.6 million from Bar Works. Overall, prior to its collapse in or about June 2017, Bar Works obtained over $57 million from over 800 investors worldwide.
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ROBINSON, 47, and KENNEDY, 48, both residents of the UK, each pled guilty to one count of wire fraud conspiracy, which carries a maximum sentence of 20 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 defendants will be determined by a judge.
Renwick Haddow, 55, pled guilty pursuant to a cooperation agreement, on May 23, 2019, to one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme, and one count each of wire fraud and wire fraud conspiracy relating to a separate Bitcoin-related investment scheme. Haddow’s sentencing is currently scheduled for November 1, 2024, before U.S. District Judge Laura Taylor Swain.
James Moore, 63, was found guilty on June 7, 2019, of wire fraud and conspiracy to commit wire fraud following a week-long jury trial before U.S. District Judge Richard M. Berman. On February 1, 2022, Moore was sentenced to 140 months in prison by Judge Berman.
Savraj Gata-Aura, 37, pled guilty on November 18, 2019, to one count of wire fraud conspiracy for his participation in the scheme and was sentenced to four years in prison on July 27, 2020, by U.S. District Judge Jed. S. Rakoff.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation. He further thanked the Government of Spain for arresting and extraditing ROBINSON and KENNEDY and the Securities and Exchange Commission, which has separately brought civil actions against ROBINSON, KENNEDY, Moore, Haddow, and Gata-Aura. The Department of Justice’s Office of International Affairs also provided substantial assistance in securing ROBINSON and KENNEDY’s arrest and extradition.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Vladislav Vainberg is in charge of the prosecution.
Purported Member of the Cartier Family and Five Colombian Nationals Charged for Their Roles in International Money Laundering and Narcotics ConspiraciesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Kareem A. Carter, the Executive Special Agent in Charge of the Washington, D.C. Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of a Superseding Indictment charging MAXIMILIEN DE HOOP CARTIER, LEONARDO DE JESUS ZULUAGA DUQUE, a/k/a “Rey,” ERICA MILENA LOPEZ ORTIZ, and FELIPE ESTRADA ECHEVERRY, a/k/a “Pepe,” with conspiring to commit money laundering based on their alleged participation in a network that laundered millions in Tether (a stablecoin connected to the U.S. dollar), which constituted the proceeds of drug trafficking, through the U.S. to Colombia. CARTIER is also charged with money laundering, bank fraud, engaging in a monetary transaction in property derived from bank fraud, and operating an unlicensed money transmitting business based on CARTIER’s system of U.S.-based shell companies and bank accounts that he used to operate an unlicensed over-the-counter cryptocurrency exchange. In addition, the Superseding Indictment charges ZULUAGA DUQUE, LOPEZ ORTIZ, ALEXANDER EGIDIO AREIZA CEBALLOS, and ADRIAN FERNANDO AREIZA CEBALLOS with conspiring to import more than 100 kilograms of cocaine into the U.S.
CARTIER, who purports to be a direct descendant of the Cartier family known for luxury jewelry, was arrested on February 22, 2024, in Miami, Florida, and presented before a U.S. Magistrate Judge in the Southern District of Florida. ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, ALEXANDER AREIZA CEBALLOS, and ADRIAN AREIZA CEBALLOS, all Colombian nationals, were taken into custody by Colombian authorities on April 30, 2024. The case is assigned to U.S. District Judge Mary Kay Vyskocil.
U.S. Attorney Damian Williams said: “The charges brought today demonstrate this Office’s commitment to prosecuting international drug traffickers and piercing complicated money laundering networks seeking to exploit the U.S financial system. As alleged, Maximilien de Hoop Cartier, Leonardo de Jesus Zuluage Duque, Erica Milena Lopez Ortiz, and Felipe Estrada Echeverry were members of a network that laundered millions of dollars’ worth of drug trafficking proceeds using cryptocurrency and the U.S. financial system. Cartier is additionally alleged to have committed a series of financial offenses while working with this money laundering network that resulted in hundreds of millions of dollars’ worth of unlawful transactions. I commend the efforts of our law enforcements partners and the career prosecutors from this Office who work tirelessly to investigate and disrupt these money laundering and drug trafficking networks. We will continue to relentlessly protect the U.S. financial system from exploitation.”
FBI Assistant Director in Charge James Smith said: “Maximilien de Hoop Cartier and five Colombian nationals allegedly attempted to import more than 100 kilograms of cocaine and laundered hundreds of millions of dollars – including revenue from drug trafficking operations – through an unlicensed cryptocurrency exchange to transfer illicit funds from the United States to Colombia. This alleged scheme illustrates advancements in criminals’ use of complex financial methods to conceal their profits and other nefarious activity from law enforcement. The FBI is committed to dismantling international criminal enterprises by disrupting the flow of illegal money and narcotics across our borders.”
HSI Special Agent in Charge Ivan J. Arvelo said: “Today’s announcement serves as a reminder that criminals do not fit a certain mold. While Maximilien de Hoop Cartier represents himself as a member of a family associated with wealth and luxury, he stands accused of executing a bank fraud scheme where hundreds of millions in criminal funds were laundered. Both here and in Colombia, he and his co-conspirators allegedly laundered drug-trafficking proceeds to the tune of over $14 million. I commend HSI New York’s El Dorado Task Force and our law enforcement partners for relentlessly pursuing suspected criminals regardless of their names or whereabouts.”
IRS-CI Executive Special Agent in Charge Kareem A. Carter said: “IRS Criminal Investigation is proud to have provided its financial expertise in this investigation. CI and our law enforcement partners are committed to aggressively investigating individuals who engage in money laundering, tax fraud, and other financial crimes.”
According to the allegations contained in the Superseding Indictment, other court filings, and statements made during court proceedings:[1]
CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY are members of a money laundering network that operates in the U.S. and Colombia, among other countries (the “Network”). The Network utilizes a system of money laundering brokers and shell companies in the U.S., Colombia, and elsewhere to, among other things, launder crime proceeds through the U.S. to Colombia. Between in or about May 2023 and November 2023, CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, and others used the Network to launder a total of approximately $14.5 million Tether derived directly from the proceeds of drug trafficking. In particular, ZULUAGA DUQUE, with the assistance of LOPEZ ORTIZ, coordinated and communicated with other members of the Network to convert drug proceeds into Tether to be sent to the U.S. where it was converted into fiat currency by CARTIER and delivered by wire transfers from the U.S. to shell companies in Colombia that were operated or maintained by ESTRADA ECHEVERRY and others.
CARTIER has been a member of the Network since at least about January 2020. As part of his role in the Network, CARTIER operated an unlicensed over-the-counter cryptocurrency exchange. Specifically, CARTIER operated and/or controlled several U.S.-based shell companies, including Bullpix Solutions LLC, Vintech Capital LLC, VC Innovated Technologies LLC, AZ Technologies LLC, Softmill LLC, and Sun Technologies LLC (the “Cartier Shell Companies”), and maintained multiple accounts for the Cartier Shell Companies at several U.S. financial institutions. In opening these bank accounts, CARTIER misrepresented the true nature of the business of the Cartier Shell Companies — i.e., CARTIER claimed to the banks that the Cartier Shell Companies were in the business of software or technology when, in fact, CARTIER was using the companies to operate as an unlicensed money remitting business related to the operation of a cryptocurrency exchange. From January 2020 to the present, CARTIER’s unlicensed money transmitting business executed hundreds of millions of dollars’ worth of unlawful transactions and laundered hundreds of millions in criminal proceeds, including drug trafficking proceeds with ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY between about May and November 2023.
Finally, ZULUAGA DUQUE and LOPEZ ORTIZ conspired with ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS to import more than 100 kilograms of cocaine into the U.S. Specifically, in about November 2023, confidential sources, at the direction of law enforcement, coordinated with LOPEZ ORTIZ and ALEXANDER AREIZA CEBALLOS for the purchase of approximately nine kilograms of cocaine paste, which was to be manufactured into cocaine before being delivered to New York. For that purchase, ADRIAN AREIZA CEBALLOS delivered the narcotics to an undercover officer and ZULUAGA DUQUE received a commission for helping to set up the deal. Additionally, in about February 2024, a confidential source, at the direction of law enforcement, arranged for the purchase of approximately 100 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS. In anticipation of this deal, the Colombian National Police executed two search warrants and recovered approximately 111 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS.
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CARTIER, 57, an Argentinian citizen who has resided France, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of money laundering, which a maximum sentence of 20 years in prison; one count of bank fraud, which a maximum sentence of 30 years in prison; one count of engaging in a monetary transaction in property derived from specified unlawful activity, which carries a maximum sentence of 10 years in prison; and one count of operating of an unlicensed money remitting business, which carries a maximum sentence of five years in prison.
ZULUAGA DUQUE, 61, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
LOPEZ ORTIZ, 42, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
ESTRADA ECHEVERRY, 38, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison.
ALEXANDER AREIZA CEBALLOS, 45, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
ADRIAN AREIZA CEBALLOS, 44, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The statutory minimum and maximum penalties 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 investigative work of the FBI’s New York Field Office, HSI’s New York El Dorado Task Force, and IRS-CI, Global Illicit Financial Team. Mr. Williams also thanked the FBI’s Legal Attaché office in Colombia; the Colombian National Police; the Department of Justice’s Office of International Affairs; the U.S. Embassy Colombia; and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Jennifer N. Ong is in charge of the prosecution.
The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Dobbs Ferry Man Charged with Illegal Possession of Numerous Firearms and Ammunition, Including “Ghost Guns,” and Discovered Possessing Suspected Explosive Materials and Readily Assembled Explosive DevicesRead the Press Release
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 JAMES NEFF. The defendant is charged with the possession of a firearm and ammunition after a felony conviction in connection with the discovery by law enforcement of the defendant’s trove of firearms, including multiple personally manufactured firearms, or “ghost guns,” and ammunition. In addition, members of law enforcement discovered, and continue to investigate, suspected explosives, paraphernalia related to improvised explosive devices, and suspected readily assembled explosive devices. NEFF was arrested yesterday and presented earlier today before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Damian Williams said: “As alleged, James Neff, some 23 years after having been convicted on similar state charges for criminal possession of a weapon, has again illegally stockpiled numerous firearms, including what appear to be assault rifles and personally manufactured firearms, or ‘ghost guns,’ a significant amount of ammunition, and suspected materials and paraphernalia consistent with suspected homemade and improvised explosive devices. Our investigation remains ongoing, and I thank the dedication and expertise of our law enforcement partners and the career prosecutors of this Office who are diligently investigating this case and working tirelessly to keep ‘ghost guns’ and homemade explosives out of our communities.”
FBI Assistant Director in Charge James Smith said: “James Neff allegedly amassed and stored an alarming collection of suspected explosives, materials for improvised explosive devices, and more than 30 firearms – some of which were assault rifles and unregistered ‘ghost guns.’ There is no reasonable explanation to justify the arsenal law enforcement discovered, and convicted felons with access to such armaments pose an incredible threat to public safety. The FBI will continue to confiscate weapons from criminals and ensure these devices are not used to inflict harm against our citizens.”
As alleged in the Complaint filed today in White Plains federal court and statements made in court proceedings:[1]
On May 1, 2024, following an investigation, members of law enforcement executed search warrants on the residence of JAMES NEFF and two storage units known to be possessed and rented by him. After executing these searches, members of law enforcement discovered over 30 firearms, including firearms that appear to be personally manufactured and assault rifle-style firearms; a significant amount of ammunition; and suspected explosives-related materials, including multiple books on how to make homemade or improvised explosives, such as “The Anarchist Arsenal, Improvised Incendiary and Explosives Techniques,” “How to Bury Your Goods,” and multiple volumes of the “Improvised Munitions Black Book.” In addition, members of law enforcement also found suspected precursors to explosives, suspected low explosives or smokeless powders, and other items consistent with the preparation of homemade explosive devices, including what appears to be fuse that can be used to initiate a low explosive, cardboard containers with endcaps, a pipe with two endcaps, and grenade bodies, items which could be used to create readily assembled explosive devices. Photographs taken from the storage unit containing these items are below:
After these searches, NEFF admitted to owning these firearms and suspected explosives chemicals and related materials and to storing them at his house in Dobbs Ferry, New York, before moving them to storage units.
If you have any information about this case, please contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.
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NEFF, 61, of Dobbs Ferry, New York, is charged with one count of possession of a firearm and ammunition after a felony conviction, having previously been convicted on New York state charges of a crime punishable for a term longer than one year, which carries a maximum sentence of 15 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding work of the FBI’s Westchester County Safe Streets Task Force and the Westchester County Police Department. Mr. Williams also thanked the Bureau of Alcohol, Tobacco and Firearms; the Greenburgh Drug and Alcohol Task Force; the Dobbs Ferry Police Department; the FBI’s Philadelphia Division; the New York State Police; and the U.S. Postal Inspection Service.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Justin L. Brooke and Margaret N. Vasu 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.
Defendant Sentenced to Nine Years in Prison for Orchestrating 11 Armed Robberies Across New York CityRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSEPH SANDERS was sentenced by U.S. District Judge Katherine Polk Failla to nine years in prison in connection with committing 11 armed robberies of bodegas, smoke shops, and other retail businesses across the Bronx, Queens, and Brooklyn.
U.S. Attorney Damian Williams said: “Joseph Sanders terrorized hardworking New Yorkers across the City, committing 11 armed robberies. On multiple occasions, he brutally pistol whipped his victims. This Office’s career prosecutors continue their exhaustive commitment to keeping those who commit violent robberies off of our streets.”
According to the Indictment, public filings, and statements made in court:
In the spring and fall of 2022, SANDERS committed 11 armed robberies throughout New York City. Between March and April 2022, he committed four armed robberies of bodegas and smoke shops located in Queens, the Bronx, and Brooklyn. Wearing a mask, SANDERS would enter the businesses, brandishing a silver gun and demanding money. At times, he would point the gun directly at the terrified cashier. For three of the robberies, SANDERS was accompanied by co-conspirators, but in all cases, it was SANDERS carrying the firearm.
In November 2022, SANDERS continued his robbery spree. Between November and December 2022, he committed seven armed robberies of a tax preparation business, bodegas, and smoke shops located in the Bronx and Brooklyn. SANDERS would enter the businesses brandishing a firearm and demanding money. During one of those robberies, he kicked open a door, holding a firearm in his hand, then grabbed the sole employee by the arm and led her to a back room. After the victim told SANDERS that the business had no cash on hand, he took her phone and $200 from her wallet.
On two occasions, SANDERS violently pistol-whipped cashiers of the stores that he was robbing, before taking thousands of dollars from the cash registers. Even when not assaulting the victims with a firearm, SANDERS threatened violence, pointing his firearm directly at the victims. One such example is below, from the November 26, 2022, robbery of a deli:
In total, SANDERS stole $22,374. At the time of his arrest, a .40 caliber Iberia pistol, which was loaded with ammunition, was found in his apartment.
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In addition to his prison term, SANDERS, 46, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $22,374 and to forfeit the same amount.
Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco and Firearms (“ATF”) and the New York City Police Department (“NYPD”), in particular, the Strategic Patterned Armed Robbery Technical Apprehension Task Force, which is composed of agents and officers of the ATF and the NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
Bronx Man Sentenced to 12 Years in Prison for ShootingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSEPH ORENGO JR. was sentenced today to 12 years in prison for a shooting on September 7, 2021, on a residential street in the Bronx and conspiracy to distribute narcotics, including fentanyl. ORENGO previously pled guilty before U.S. District Judge Vincent L. Briccetti, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “This Office has been steadfast in its commitment to ending the scourge of gun violence on the streets of New York City. The defendant chose to fire multiple rounds on a residential street in the Bronx in broad daylight. He put the safety of New Yorkers at risk and terrorized a public space. Today’s sentence sends a clear message: this must stop. If you fire a gun on the streets of New York City as part of drug dealing, you will go to prison.”
According to statements made in public court proceedings and filings and a video of the attempted shooting:
On September 7, 2021, ORENGO confronted a man on a residential street in the Bronx over a disputed drug debt. As that man drove away, ORENGO fired two shots at him:
The shooting occurred at approximately 11:35 a.m., as bystanders were walking down the block.
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In addition to his prison term, ORENGO, 29, of Bronx, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations and the New York City Police Department
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Steven J. Kochevar is in charge of the prosecution.
Regional Leader of Sanctioned Russian Organization Pleads Guilty to Lying to FBIRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of TOMAS IANCHAUSKAS, a regional leader of a sanctioned Russian Organization known as the Tsargrad Society (the “Society”), for lying to the Federal Bureau of Investigation (“FBI”) about his participation in the Society and its predecessor during an in-person interview in the U.S. IANCHAUSKAS pled guilty before U.S. District Judge Coleen McMahon and is scheduled to be sentenced on July 11, 2024.
U.S. Attorney Damian Williams said: “While enjoying the benefits of U.S. permanent residency, Tomas Ianchauskas served as a regional leader of the Tsargrad Society, a sanctioned Russian organization controlled by sanctioned oligarch Konstantin Malofeyev, who was previously indicted by this Office for willfully violating U.S. sanctions laws. On two separate occasions, Ianchauskas lied to the FBI, falsely claiming that he had no involvement in the Tsargrad Society whatsoever, and no involvement in its predecessor entity the Double Headed Eagle Society for the three prior years. Together with our law enforcement partners, we will continue to hold accountable those who seek to undermine critical sanctions put in place to challenge Russia’s aggression.”
According to the Complaint previously filed against IANCHAUSKAS, the Information, and other filings:
IANCHAUSKAS is a U.S. green card holder who principally resides in Russia. By operation of the Ukraine-Related Executive Orders 13660, 13661, 13662, and 14024, IANCHAUSKAS is prohibited from, among other things, making any contribution or provision of funds, goods, or services to or for the benefit of sanctioned Russian oligarch Konstantin Valeryevich Malofeyev or certain Malofeyev-controlled designated entities, including the Society, formerly known as the Double Headed Eagle Society (“DHES”).
The Office of Foreign Assets Control (“OFAC”) initially designated Malofeyev in 2014, explaining that he was one of the main sources of financing for Russians promoting separatism in Crimea and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of, the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk. The Society was designated by OFAC in or about April 2022 for being owned or controlled by, or for having acted or purported to act for or on behalf of, Malofeyev. As described by OFAC, the Society was formerly known as DHES, a Russia-registered organization which has been accused of involvement in espionage on behalf of Russia. OFAC further explained that the Society is part of Malofeyev’s “malign influence ecosystem” and “advocates for Russia to return to a monarchical system of government and counts among its core principles revanchist aims like the ‘reunification of the Russian people’ and ‘returning the Russian Empire to its historical borders’ — to include, in the Society’s definition, Ukraine, Belarus, the Baltic States, Moldova, Central Asia, and the Caucasus.”[1]
Following OFAC’s designations, on or about April 6, 2022, this Office indicted Malofeyev on one count of conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”) and one count of violation of IEEPA.
On or about January 12, 2022, during an in-person interview with FBI agents in the Southern District of New York, IANCHAUSKAS falsely stated, in substance and in part, that he had no involvement in the Society whatsoever, he had no involvement with DHES for approximately three years, and he never had a leadership position at DHES and never did anything on behalf of DHES. In truth and in fact, and as IANCHAUSKAS knew, from at least in or about 2020 through in or about 2022, IANCHAUSKAS served as the head of the Penza Regional Branch of DHES, which in or about November 2020 was renamed the Society. In his leadership capacity, IANCHAUSKAS planned DHES events in Russia and received funding from DHES in or about 2020, among other times.
Subsequent to his interview with the FBI in January 2022, IANCHAUSKAS continued his membership in the Society and provided services to the Society. In or about April 2023, when inviting individuals to attend an event with Malofeyev in Penza, Russia, IANCHAUSKAS wrote, among other things, “we are his regional department,” and distributed a photograph of Malofeyev with the message, in part and substance, “it is thanks to him and his subordinates that Crimea was joined to Russia and Donbass began to be joined.” During a second interview with the FBI on December 22, 2023, IANCHAUSKAS reiterated certain false statements, including that he had never been a member of the Society.
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IANCHAUSKAS, 39, a U.S. green card holder principally residing in Russia, pled guilty to one count of making false statements to special agents of the FBI, which carries a maximum sentence of five 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 outstanding investigative work of the FBI.
The prosecution is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Thane Rehn and Vladislav Vainberg are in charge of the prosecution.
[1] U.S. Department of Treasury, Press Release “U.S. Treasury Designates Facilitators of Russian Sanctions Evasion,” available online https://home.treasury.gov/news/press-releases/jy0731
Newburgh Woman Charged with Defrauding Military Charities and the Veteran’s Administration and with Fraudulently Claiming to Be A Purple Heart RecipientRead the Press Release
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 the unsealing of an Indictment charging SHARON TONEY‑FINCH with defrauding military charities and the Veteran’s Administration (“VA”) and with fraudulently claiming to have received a Purple Heart. TONEY-FINCH was arrested today and will be presented in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Damian Williams said: “As alleged, Sharon Toney-Finch falsely claimed to have received a military award bestowed on those wounded or killed in the line of duty, and she used this lie to drive donations to her charitable organization, which in fact was a ruse the defendant allegedly used to line her own pockets. The defendant’s alleged crimes are dishonorable to the highest degree, and I thank the career prosecutors of this Office and our law enforcement partners for bringing today’s charges and exposing Toney-Finch’s attempt to profit on stolen valor.”
FBI Assistant Director in Charge James Smith said: “Sharon Toney-Finch allegedly engaged in a series of lies in which she misappropriated donations for military charities and falsely nominated herself as a Purple Heart recipient to receive illicit disability benefits. Acts of stolen valor are especially egregious as they distract from sacrifices of those who were truly injured defending our nation. The FBI does not tolerate those who choose to perpetuate fraudulent schemes at the expense of our armed forces and will continue to aggressively investigate those who choose to do so.”
As alleged in public court filings and the Indictment unsealed today in White Plains federal court:[1]
Between at least July 2019 through about September 2023, TONEY-FINCH engaged in a scheme to defraud donors to her charitable organization by falsely claiming that donation funds would be spent solely to support homeless military veterans, when in fact she spent the funds on personal expenses. She further falsely claimed that she survived and was injured in a terrorist attack to a vehicle convoy in Iraq in or about March 2010 and that she is a Purple Heart recipient.
Between at least March 2016 through the present, TONEY-FINCH knowingly obtained hundreds of thousands of dollars in disability benefits from the VA by fraudulently representing that, during her military service in Iraq, she sustained combat-related injuries during a mortar attack in or about February 2010 and a vehicle rollover that occurred in or about March 2010.
Between about August 2021 through the present, TONEY-FINCH has falsely claimed that she is a Purple Heart recipient in statements made to donors to her charitable organization, an application to the New York Department of Motor Vehicles to obtain a vanity license plate, and an application to the National Purple Heart Hall of Honor to obtain a medallion and recognition on their website. TONEY-FINCH has also used, possessed, and exhibited a military discharge certificate that had been altered to reflect falsely that she is a Purple Heart recipient.
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TONEY-FINCH, 43, of Newburgh, New York, is charged with wire fraud, which carries a maximum potential sentence of 20 years in prison; theft of government funds, which carries a maximum potential sentence of 10 years in prison; stolen valor, which carries a maximum potential sentence of one year in prison; and altering military discharge paperwork, which carries a maximum potential sentence of one year in prison.
The maximum potential sentences 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 Hudson Valley White Collar Crime Task Force, the Orange County District Attorney’s Office, the Orange County Sheriff’s Office, the U.S. Department of Veterans Affairs – Office of Inspector General, and the U.S. Army Criminal Investigation Division.
This case is being handled by the Office’s White Plains Division. Assistant U. S. Attorneys Ryan W. Allison and Margaret N. Vasu 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.
Manhattan Man Charged with Running $43 Million Ponzi SchemeRead the Press Release
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 unsealing of an Indictment charging IDIN DALPOUR with wire fraud in connection with a multi-year Ponzi scheme that defrauded investors of at least $43 million. DALPOUR was arrested this morning and will be presented in Manhattan federal court before U.S. Magistrate Judge Barbara Moses later today.
U.S. Attorney Damian Williams said: “Idin Dalpour told investors that they could reap huge returns by investing through him in a purported Las Vegas hospitality business and a crypto trading operation. As alleged, Dalpour’s promises were a mirage, and he was running a classic Ponzi scheme by paying investors purported returns with other investors’ money. Instead of using investors’ funds as promised, Dalpour spent lavishly on himself, which included racking up gambling losses of approximately $1.7 million and paying for his children’s private school tuition. Now, Dalpour’s gamble has him facing federal criminal charges for his alleged crimes.”
FBI Assistant Director in Charge James Smith said: “For four years, Idin Dalpour allegedly used false promises of high returns to entice victims to invest in his purported hospitality and cryptocurrency trading enterprises, but in reality, used these payments to satisfy other debts or personal expenditures. Cheating investors of millions severs the trust of clients and credibility of prospective advisors, both of which are vital to the success of the investment market. Today’s arrest illustrates the FBI’s dedication to maintaining economic justice and ensuring the actions of one individual are not at the expense of others.”
According to allegations contained in the Indictment:[1]
From at least approximately 2020 through April 2024, DALPOUR ran a Ponzi scheme targeting investors located in the U.S. and abroad. DALPOUR solicited investments from victims through an entity that he controlled (“Entity-1”), which purported to have an interest in two business ventures: a Las Vegas hospitality enterprise and a cryptocurrency trading enterprise. In reality, DALPOUR did not use investors’ funds as promised and paid earlier investors purported returns using funds that were contributed by later investors. DALPOUR defrauded investors of at least $43 million over the course of the scheme.
As part of the purported Las Vegas hospitality enterprise, DALPOUR falsely represented that Entity-1 had contracted with a management company (the “Management Company”) and/or a prominent Las Vegas hotel (the “Hotel”) to rent condominiums to Las Vegas visitors for a fee. DALPOUR further claimed that the Hotel arranged entertainment packages for these visitors, including food, nightlife, and sports events, and that DALPOUR and Entity-1 received a portion of these proceeds. DALPOUR also falsely claimed that he owned shares in several Las Vegas-based sports stadiums (the “Stadiums”) and would receive a portion of concessions revenues when these visitors went to the Stadiums.
DALPOUR lured investors into the Las Vegas hospitality enterprise through false promises of lucrative returns beginning at 42% interest per year. In order to further the fraud, DALPOUR provided certain investors with fabricated contracts between Entity-1, the Management Company, and the Stadiums. DALPOUR also fabricated email correspondence from the Hotel falsely claiming that his company, Entity-1, was owed millions of dollars and created phony bank statements overstating the assets in Entity-1’s bank accounts. DALPOUR also claimed that investors’ money was safe because it was insured and/or would be held in escrow. These statements were false.
In connection with the Ponzi scheme, DALPOUR further misrepresented a so-called cryptocurrency trading enterprise that DALPOUR purportedly operated. As part of the cryptocurrency trading scheme, DALPOUR falsely represented to investors that he purchased cryptocurrency at wholesale and sold the cryptocurrency at a profit to retail investors. As with the Las Vegas hospitality enterprise, DALPOUR promised investors lucrative annual returns and that their money was insured. These statements were false.
In reality, DALPOUR did not use investor money for the Las Vegas hospitality enterprise or the cryptocurrency trading enterprise. Instead, DALPOUR used investor money to pay other investors their expected returns, as well as to pay for his own personal expenses. These personal expenses included, among other things, approximately $1.7 million in gambling losses, over $400,000 from Art Direct, and private school tuition for his children.
DALPOUR also lied to investors when they sought to recoup their money. Among other things, DALPOUR claimed that his company’s funds were temporarily frozen because the Hotel’s servers had been hacked and that the Nevada-based bank allegedly holding Entity-1’s funds would not release the proceeds. In fact, Entity-1 did not even have a bank account with the Nevada-based bank, as DALPOUR well knew.
In or about November 2023, a group of victims confronted DALPOUR about the Ponzi scheme. During this conversation, DALPOUR admitted that he had lied to the victims about the operation of the Las Vegas hospitality business, that he had not used investor money for its intended purpose, and that he had fabricated contracts and bank records that he had provided to the victims. DALPOUR further stated, in his own words, “[w]hat you already have, you have, you can put me in jail now. Like right now.”
If you believe you are a victim of these crimes, please contact the FBI at 1-800-CALL-FBI and reference this case.
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DALPOUR, 39, of New York, New York, 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.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Mathew Andrews and Kingdar Prussien are in charge of the prosecution.
The allegations 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.
Long Island Woman Arrested for Selling Misbranded and Adulterated Weight Loss Drugs, Including Ozempic, on TikTokRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Fernando P. McMillan, the Special Agent in Charge of the New York Field Office of the Office of Criminal Investigations of the U.S. Food and Drug Administration (“FDA”), announced the unsealing of a criminal Complaint in Manhattan federal court charging ISIS NAVARRO REYES, a/k/a “Beraly Navarro,” with receipt of misbranded drugs in interstate commerce and subsequent delivery thereof, dispensing prescription drugs without a prescription, conspiracy to introduce and deliver for introduction misbranded drugs in interstate commerce, and smuggling. As alleged in the Complaint, from about November 2022 through about January 2024, REYES marketed, advertised, and sold various misbranded weight loss drugs that require a prescription, including Ozempic, Mesofrance, and Axcion, to followers on social media. REYES, who is not licensed by law to prescribe or administer prescription medication, obtained the weight loss drugs that she held for sale from Central and South America. None of the weight loss drugs that REYES sold were approved for sale or dispensing in the United States by the FDA. REYES was arrested this morning and will be presented in Manhattan federal court later today before U.S. Magistrate Judge Barbara Moses.
U.S. Attorney Damian Williams said: “As alleged, Isis Navarro Reyes used her social media following to sell weight loss drugs unapproved for distribution in the United States. Reyes’s alleged unlawful dispensing of these drugs caused significant, life-threatening injuries to some victims and put all of her victims in harm’s way. Recently, public interest in semaglutide and weight loss drugs has skyrocketed, and criminals have sought to take advantage of this interest for their ends. With this, the first misbranding and adulteration charges brought pertaining to Ozempic, Reyes will be held accountable for her conduct, and criminals should think twice before trying to sell weight loss drugs without a license to do so. This case makes clear that extreme caution and physician consultation should always be taken when purchasing medications, especially on social media.”
FDA Office of Criminal Investigations Special Agent in Charge Fernando P. McMillan said: “Selling misbranded prescription drugs, particularly injectable products that should be sterile, in the U.S. marketplace puts all consumers’ health at risk. We will continue to pursue and bring to justice those who jeopardize the public’s health by selling misbranded drugs.”
As alleged in the Complaint:[1]
From about November 2022 through about November 2023, ISIS NAVARRO REYES, using TikTok, posted dozens of videos about weight loss drugs including, but not limited to, Ozempic, Axcion, and Mesotherapy.
In her videos, REYES showcases the weight loss drugs, instructs viewers how frequently they should be used, describes how they should be taken or injected, and claims to describe her personal experiences — for example, side effects and effectiveness in causing weight loss — in detail. In several of these videos, REYES tells viewers that they can contact her via an encrypted messaging application on her cellphone (the “Cellphone”) if they would like to order the weight loss drugs that she is selling.
On about October 11, 2023, REYES posted a video pertaining to Ozempic. In this video, REYES demonstrates how to inject oneself with the medication and shares her experience using the drug. Toward the end of the video, REYES instructs viewers to contact her on the Cellphone if they are interested in having her obtain Ozempic for them. A screenshot from this TikTok post is below:
In about December 2023, a law enforcement officer acting in an undercover capacity (the “UC”) began messaging REYES on the Cellphone. From about December 2023 through about January 2024, the UC and REYES exchanged several messages concerning REYES’s supply of Ozempic and the UC’s interest in purchasing Ozempic from REYES. On about January 7, 2024, pursuant to instructions from REYES, the UC sent $375 to a Zelle account in the name of “Isis Reyes Navarro.” REYES did not ask the UC to provide a prescription, and the UC did not provide one. On about January 9, 2024, REYES dropped off a package intended for the UC at a post office located in or around Shirley, New York.
On about January 12, 2024, law enforcement received a package addressed to the UC from REYES (the “UC Parcel”) in Manhattan. The UC Parcel contained a box containing what purported to be Ozempic.[2] Photos of packaging containing the purported Ozempic that REYES mailed the UC are below:
All of the labeling accompanying the Ozempic in the UC Parcel was in Spanish, in violation of FDA regulations.
In about November 2022, a woman who had viewed content posted to REYES’s TikTok account (“Victim-1”) called the Cellphone for the purpose of ordering weight loss drugs. The individual who answered Victim‑1’s call identified herself as “Isis Navarro Reyes.” In about February 2023, Victim-1 purchased 30 injections of Mesofrance, an injectable weight loss drug, from REYES. REYES mailed the Mesofrance to Victim-1’s residence in White Plains, New York. REYES did not ask Victim-1 to provide a prescription, and Victim-1 did not provide one.
Between about February 2023 and about June 2023, Victim-1 self-administered 28 injections. In an audio message that she recorded and transmitted, REYES provided Victim-1 with instructions on how to administer the drug. REYES told Victim-1, among other things, to inject herself every three days. All of the labeling of the vials that contained the Mesofrance that Victim‑1 purchased from REYES were in a language other than English, in violation of FDA regulations.
On about July 13, 2023, Victim-1 began developing lesions from administering the Mesofrance. Victim-1 sent messages to REYES about her injuries and sent photos. In about October 2023, Victim-1’s physician diagnosed her with a mycobacterium abscessus infection, which is frequently caused by the contamination of medications, medical products, and medical devices with the mycobacterium abscessus bacterium. In about November 2023, the New York Department of Health tested one of the vials of Mesofrance that Victim-1 purchased from REYES. The substance tested positive for mycobacterium abscessus, a species of rapidly growing, multidrug-resistant, nontuberculous mycobacteria.
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REYES, 36, of Shirley, New York, is charged with one count of smuggling, which carries a maximum sentence of 20 years in prison; one count of receipt of misbranded drugs in interstate commerce and subsequent delivery thereof, which carries a maximum sentence of one year in prison; three counts of dispensing prescription drugs without prescriptions, which each carry a maximum sentence of one year in prison; and one count of conspiracy to introduce and deliver for introduction a misbranded drug in interstate commerce, which carries a maximum sentence of one year in prison.
The maximum potential sentences 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 FDA Office of Criminal Investigations, the U.S. Postal Inspection Service, the New York City Police Department, the Customs and Border Protection Task Force Officers of the Drug Enforcement Administration, and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Brandon C. Thompson 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 herein should be treated as an allegation.
[2] To date, there is no evidence that the Ozempic that REYES sold the UC is not genuine.
Former Cybersecurity Consultant Arrested for $1.5 Million Extortion Scheme Against IT CompanyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that VINCENT CANNADY was arrested in connection with his scheme to extort a publicly traded information technology infrastructure services provider of up to $1.5 million by threatening to publicly disclose the company’s confidential and proprietary information. CANNADY was arrested in El Dorado Springs, Missouri, this morning and is expected to appear in Missouri federal court tomorrow.
U.S. Attorney Damian Williams said: “As alleged, Vincent Cannady used illegal and extortionate threats for the purpose of obtaining over a million dollars in payments from a public company after his engagement was terminated. When those entrusted with sensitive information steal that information on their way out the door, only to extort money with a threat of releasing that information, my Office will hold them responsible for their conduct.”
As alleged in the Complaint:[1]
CANNADY was assigned by a staffing company to work on an engagement with the victim company. Under the engagement, CANNADY’s responsibilities included assessing and remediating potential vulnerabilities that an unauthorized party could use to access the victim’s information systems. As a result, CANNADY had access to the victim company’s sensitive and proprietary information. After about a year, CANNADY’s engagement was terminated. Days after, and while he still had access to the company’s information, CANNADY downloaded the company’s sensitive and proprietary information without its authorization and uploaded the information to a personal cloud storage account.
CANNADY then demanded that the company settle unspecified discrimination and emotional distress claims. He threatened to “upload all of the documents in his possession immediately once the case is filed” if the company did not settle his claims for $1.5 million. He added, “[a]s we all know those documents will imperil [the company’s] reputation and shake investor confidence.” He specifically demanded “a 10 year Certificate of Deposit for 1.5 million dollars,” which would “buy a[n] attestation that all files destroyed by me and a gag order preventing me from ever talking about what I saw or the documents I had in my possession or the documents I had created at [the company] or downloaded.”
At several points during his attempt to get the company to agree to a settlement, CANNADY sought specifically to add in provisions to a draft settlement agreement that would prohibit the company from pursuing criminal charges against him in connection with the settlement.
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VINCENT CANNADY, 57, of El Dorado Springs, Missouri, is charged with Hobbs Act extortion, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams thanked the Federal Bureau of Investigation’s (“FBI”) New York Field Office, Westchester Resident Agency and the FBI’s Kansas City Field Office, Joplin and Springfield Resident Agencies.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Reyhan Watson and James McMahon are in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, 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.