Southern District of New York
Press releases recorded for this federal judicial district.
Two Former Executives Sentenced for Committing Years-Long Fraud Against Their EmployerRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that SHAWN RAINS and JOSEPH MAHARAJ were sentenced by U.S. District Judge Nelson S. Román to 12 years and 90 months in prison, respectively, for their participation in a scheme to steal millions of dollars from a White Plains company where they were formerly high-ranking executives. RAINS was previously convicted, following a two-week jury trial, of mail fraud conspiracy, mail fraud, and money laundering conspiracy. MAHARAJ previously pled guilty to one count of mail fraud conspiracy.
U.S. Attorney Damian Williams said: “Shawn Rains and Joseph Maharaj, former executives at a White Plains healthcare consulting company, betrayed the trust of their employer by stealing millions of dollars. Along with co-conspirators, Rains and Maharaj used sham companies to submit fake invoices and trick their employer into paying for work that never happened, then laundered the proceeds. Prosecuting cases like this is crucial to maintaining trust in business and protecting the integrity of financial systems upon which countless individuals and institutions rely.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
RAINS and MAHARJ were executives at OrthoNet, a healthcare claims processing company based in White Plains, New York. Between approximately 2009 and 2017, RAINS and MAHARAJ designed and executed a scheme to defraud OrthoNet of over $4 million and to launder the fraud proceeds. RAINS and MAHARAJ conspired with others to create fake vendors that purported to do work on behalf of OrthoNet. RAINS, MAHARAJ, and their co-conspirators then signed invoices approving payment for the fake work, and OrthoNet sent payments to the fake vendors. RAINS, MAHARAJ, and their co-conspirators then converted the money to cash to hide the source of the fraud proceeds and split it up amongst themselves.
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In addition to the prison sentence, RAINS, 57, of Le Bouscat, France, was ordered to forfeit $4,043,798.69 and pay restitution in the amount of $4,636,150.69. MAHARAJ, 42, of Goldens Bridge, New York, was ordered to forfeit $4,034,411.19 and pay restitution in the amount of $4,034,411.19.
Mr. Williams thanked the Federal Bureau of Investigation for their outstanding work on the investigation.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Stephanie Simon, Benjamin Klein, Jim Ligtenberg, and Jamie Bagliebter are in charge of the prosecution, with the assistance of Paralegal Specialist Shannon Becker.
Recidivist Child Pornography Offender Who Sent Threatening Powder-Filled Letter to FBI Agent Sentenced to 130 Months in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that OKAMI LANDA was sentenced to 130 months in prison for possession of child pornography and for sending a threatening, powder-filled letter to a federal agent who previously investigated and arrested him. LANDA previously pled guilty before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Okami Landa has twice been convicted in this District of possessing child pornography. Today’s sentence holds Landa accountable not only for his participation in the exploitation and victimization of young children, but also for his intolerable decision to retaliate against the FBI by sending a terrifying, powder-filled letter to the agent who investigated him. This Office stands shoulder-to-shoulder with the dedicated FBI agents who investigate crimes against children. Their work should never make them targets of reprisal.”
According to court documents and statements made during court proceedings:[1]
In November 2021, LANDA, who had previously been convicted and sentenced to two years in prison for possession of child pornography in 2016, mailed a threatening letter filled with white powder to a Federal Bureau of Investigation (“FBI”) agent (the “FBI Agent”) who was assigned to a squad responsible for investigating crimes against children. The FBI Agent had interviewed and arrested LANDA in connection with his previous child pornography conviction. The threatening letter, which the FBI Agent opened inside a forensic laboratory at an FBI office in Manhattan, contained a white powdery substance and a message that said, among other things: “Hope you and your ugly cracker children and family get what you deserved, a slow, painful and terminal disease to end your sorry life.” The letter and powder prompted an emergency response from the FBI’s weapons and mass destruction team, which sealed the forensic laboratory before examining the powder and determining that it was safe. The FBI Agent and other FBI personnel in the area were quarantined and hospitalized for medical evaluation.
Through the FBI’s investigation, law enforcement examined the serial number of the stamp affixed to the threatening letter and learned that it was purchased using a credit card belonging to LANDA’s mother, who lived with LANDA at their residence in the Bronx. At the time, LANDA was on federal supervised release for his previous child pornography conviction and had previously made threatening statements about law enforcement, including about a desire to “blow up Federal Plaza because I hate the feds and they ruined my life.” Following an interview at his residence by FBI agents, the U.S. Probation Office conducted a search of LANDA’s residence, where they recovered multiple electronic devices, including a USB drive that contained 11 files with child pornography. The child pornography on LANDA’s USB drive included depictions of prepubescent minor females and adult males engaging in sex acts.
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In addition to the prison term, LANDA, 41, of the Bronx, New York, was sentenced to 10 years of supervised release.
Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley and Matthew J.C. Hellman are in charge of the prosecution.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part.
Former Godfather of 59 Brims Gang Sentenced to 20 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIE EVANS was sentenced today by U.S. District Judge George B. Daniels to 20 years in prison for racketeering offenses related to his leadership role as the former godfather of the 59 Brims gang, a set of the violent Bloods street gang that operates throughout the U.S., including New York City. During his eight-year run as godfather of the 59 Brims, EVANS oversaw the gang’s day-to-day operations and supervised its most violent and dangerous crimes. EVANS was the last of 22 defendants in the 59 Brims case before Judge Daniels to have been convicted and sentenced.
U.S. Attorney Damian Williams said: “Willie Evans’s sentencing marks a pivotal moment in our ongoing battle against organized crime. While the 59 Brims and other gangs may still linger, they do so on borrowed time. With each conviction, their power weakens, and we will continue to dismantle these networks piece by piece until our streets are safe for all.”
According to the Indictments, public court filings, and statements made in court:
The 59 Brims operated in and around Manhattan, the Bronx, Queens, and Brooklyn, New York. Members of the 59 Brims engaged in a series of violent disputes with rivals, including those within the 59 Brims who they deemed disloyal. During these disputes, members and associates of the gang committed multiple murders, shootings, robberies, and assaults against their rivals and fellow members. Members of the 59 Brims sold heroin, fentanyl, crack cocaine, and marijuana and committed, or attempted to commit, acts of violence to protect and expand their narcotics business.
Among other crimes committed by the gang, the 59 Brims was responsible for the following:
On November 29, 2018, after a victim was lured to JERLAINE LITTLE’s apartment building, JAMARR SIMMONS and other 59 Brims gang members, including MARKQUEL SIMMONS, MARKELL BOBIAN, TYRONE ERVIN, and SEAN GAMBRELL, robbed the victim at gunpoint and pistol-whipped the victim.
On March 30, 2019, JAMARR SIMMONS and TIMOTHY COLEMAN committed a stabbing of a rival gang member outside of a bar at 145 East 149th Street in the Bronx. Surveillance video captured COLEMAN and JAMARR SIMMONS committing the stabbing.
In July 2019, LITTLE was kicked out of the 59 Brims over a dispute with a fellow gang member. Shortly thereafter, LITTLE joined the Mac Baller Brims, a rival gang. EVANS ordered members of the 59 Brims to slash LITTLE. JAMARR SIMMONS and SYLVESTER WINT discussed having LITTLE slashed. Thereafter, members of the gang successfully slashed LITTLE on or about August 8, 2019.
On August 24, 2019, EVANS conspired with WINT and SHAMARE REID to commit a shooting of rival gang members. Shortly after midnight on August 24, 2019, two victims were shot multiple times outside of a bodega in front of 755 East 216th Street in the Bronx (both victims survived). Surveillance video captured WINT and REID committing the shooting of the rival gang members. EVANS, as the godfather of the 59 Brims, subsequently criticized WINT for letting himself be caught on camera: “Why y’all was walking Back & forth like that Bammy [camera] kaught ya Face Good.”
In the early morning hours of September 28, 2019, JAMARR SIMMONS and MARKQUEL SIMMONS told Bradford Mensah to come to Crotona Park in the Bronx to receive gang discipline from others, including EVANS, because Mensah had been seen hugging LITTLE after he had been kicked out of the gang. Sometime after Mensah arrived at Crotona Park, he was shot at point blank range in the back of the head and died.
On January 11, 2020, JAMARR SIMMONS, DARON GOODMAN, JOSE RODRIGUEZ, DARNELL COOPER, and Jason Parris were together on the sidewalk near 1437 Webster Avenue in the Bronx. A rival gang member punched Jason Parris and a fight broke out that continued into the middle of the street on Webster Avenue. While the fight was ongoing in the middle of the street, GOODMAN fired a shot that errantly struck Parris in the throat, killing him.
All 22 defendants in the 59 Brims case before Judge Daniels have been convicted and sentenced. In addition to EVANS’s sentence, Judge Daniels has imposed the following sentences, among others:
- JAMARR SIMMONS was sentenced to 20 years in prison;
- GOODMAN was sentenced to 12 years in prison;
- COLEMAN was sentenced to eight years in prison;
- and WINT, ERVIN, JAVARIS JENKINS, REID, and MARCUS AYALA were each sentenced to seven years in prison.
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In addition to the prison term, EVANS, 32, of the Bronx, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the New York City Police Department and Homeland Security Investigations.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Peter J. Davis are in charge of the prosecution.
Mount Vernon Mother and Daughter Sentenced to Prison for $1.7 Million COVID-19 Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ALICIA AYERS and ANDREA AYERS were sentenced today to two years in prison followed by six months of home confinement and 42 months in prison, respectively, for conspiracy to commit wire fraud, wire fraud, and making false statements in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”), resulting in a loss to the SBA of approximately $1.7 million. ALICIA AYERS and ANDREA AYERS previously pled guilty before U.S. District Judge Nelson S. Román, who imposed today’s sentences.
U.S. Attorney Damian Williams said: “These defendants stole from a taxpayer-funded program intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic. As their convictions and sentences reflect, my Office is determined to continue to work to bring to justice those who exploit and defraud government programs during a national emergency. I thank the FBI and the career prosecutors of this Office for their outstanding work investigating and prosecuting this scheme.”
According to the Indictment, other public filings, and statements made in court:
The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program. In response to the COVID-19 pandemic, Congress expanded the SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020 in order to provide vital economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19. Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA generally provided while the loan application was pending.
In June and July 2020, ALICIA AYERS and her mother, ANDREA AYERS, a former Code Enforcement Officer for the City of Mount Vernon Police Department, used the identities of approximately 300 other individuals (the “Applicants”) to submit approximately 315 online applications to the SBA, seeking over $3 million of funds through the SBA’s EIDL Program (the “EIDL Applications”). In connection with the EIDL Applications, ALICIA AYERS and ANDREA AYERS falsely represented to the SBA that the applicants were the owners of businesses with 10 or more employees. However, that was a lie – as ALICIA AYERS and ANDREA AYERS knew, the applicants did not employ the number of people reported, and the majority of the applicants did not own businesses or have any employees. Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $1,690,000 to the applicants, who then kicked back a portion of the advance payments to ALICIA AYERS and ANDREA AYERS.
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In addition to the prison terms, ALICIA AYERS, 37, and ANDREA AYERS, 57, both of Mount Vernon, New York, were each sentenced to three years of supervised release and ordered to pay forfeiture in the amount of $1,690,000 and to pay restitution to the SBA in the amount of $1,690,000.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Jeffrey C. Coffman and Courtney L. Heavey are in charge of the prosecution.
Leader of $50 Million Health Care Fraud Pleads GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MANISHKUMAR PATEL pled guilty today in connection with a $50 million health care fraud and kickback scheme involving the sale of fraudulent prescriptions for durable medical equipment, among other medical supplies, to suppliers, pharmacies, and laboratories who obtained payment for those fraudulent prescriptions from Medicare. PATEL pled guilty before U.S. Magistrate Judge Ona T. Wang and is scheduled to be sentenced on July 26, 2024, at 10:00 a.m. before U.S. District Judge Lorna Schofield.
U.S. Attorney Damian Williams said: “Behind every dollar siphoned through fraud lies a patient denied rightful care. Manishkumar Patel cost Medicare nearly $50 million in resources that could have been used to provide genuine care to those in need. His guilty plea today is a step toward restoring integrity and trust in our health care system.”
According to the charging documents and other filings and statements made in court:
Between 2019 and 2022, PATEL and a co-conspirator (“CC-1”) fraudulently sold prescriptions and doctors’ orders for durable medical equipment, pharmaceuticals, and laboratory tests (collectively, “scripts”) to durable medical equipment suppliers, pharmacies, and laboratories (collectively, the “Medicare Providers”).
PATEL obtained the scripts from call centers that called Medicare beneficiaries and asked them perfunctory questions designed to justify a script that would be reimbursed by Medicare. PATEL turned the information from those calls into scripts by arranging cursory telemedicine appointments with the beneficiaries — a practice called “doctor chasing,” in which the information was sent to a doctor who signed the script without seeing the patient and who was frequently unaware of what they were signing — and obtaining forged scripts. PATEL then sold the scripts to Medicare Providers, which filled the orders and billed Medicare.
Because the scripts were fraudulently obtained, many beneficiaries rejected the items they were sent by the Medicare Providers, many doctors threatened to report PATEL for fraud, and Medicare frequently refused to pay for the scripts.
The Medicare Providers made payments to PATEL for the scripts in violation of the Anti-Kickback Statue. PATEL and the Medicare Providers entered into sham contracts for generic marketing services at flat rates in an attempt to conceal their illegal kickback scheme.
PATEL was a leader of the scheme, which resulted in losses to Medicare of nearly $50 million.
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PATEL, 44, of Pelham Manor, New York, pled guilty to one count of conspiracy to commit health care fraud, one count of wire fraud, and one count of violating the Anti-Kickback Statute, each of which carries a maximum sentence of five years in prison. In addition, PATEL was ordered to pay $48,150,692.49 in restitution to the U.S. Centers for Medicare and Medicaid Services and forfeit $6,839,900.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding work of the Department of Health and Human Services, Office of Inspector General.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Kevin Mead is in charge of the prosecution.
Colombian National Sentenced to 14 Years in Prison for Conspiring to Import Tons of Cocaine into the United StatesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ÁLVARO FREDY CÓRDOBA RUÍZ was sentenced to 14 years in prison today for conspiring to import cocaine into the United States. CÓRDOBA RUÍZ pled guilty on January 2, 2024, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Today’s sentence demonstrates this Office’s commitment to prosecuting drug traffickers like Córdoba Ruíz, who seek to import tons of cocaine into the United States. Those who seek to flood our streets with narcotics will face serious consequences, especially when they partner with violent drug trafficking organizations like the FARC. I commend the efforts of our law enforcement partners and the career prosecutors of this Office who work tirelessly to investigate and disrupt these complex drug importation networks. Their work has a profound impact on countless lives in our communities.”
According to court documents and statements made during court proceedings:[1]
CÓRDOBA RUÍZ conspired with his co-defendants and other individuals associated with the Fuerzas Armadas Revolucionarias de Colombia (“FARC”) — a violent organization based in Colombia that was dedicated to the overthrow of the Colombian government and responsible for the production and distribution of the majority of the cocaine that eventually reached the United States — to source and distribute tons of cocaine destined for the United States. CÓRDOBA RUÍZ negotiated with individuals he believed to be narcotics traffickers from a Mexico-based drug trafficking organization (the “Mexican DTO”) seeking to establish a cocaine supply line from Venezuela to the United States. These individuals, however, were actually confidential sources working at the direction of the U.S. Drug Enforcement Administration (“DEA”).
In recorded communications during the investigation, CÓRDOBA RUÍZ agreed to assist the planned cocaine venture through his political and logistics connections in Colombia. With respect to the former, CÓRDOBA RUÍZ connected confidential sources purporting to be members of the Mexican DTO with a Colombian politician, conveying that, in exchange for financial and political support, the politician would help to facilitate a cocaine partnership between the defendant, his co-conspirators, and the confidential sources purportedly functioning as the Mexican DTO. CÓRDOBA RUÍZ also connected the confidential sources with individuals who offered to provide large quantities of cocaine and security for the promised cocaine loads. In December 2021, to prove their bona fides and establish the quality of their supply, CÓRDOBA RUÍZ sold the confidential sources a five-kilogram sample of cocaine containing a high level of purity — lab tests demonstrate the cocaine was between 86.6% to 89.1% pure — from a FARC-associated farm outside of Medellín. CÓRDOBA RUÍZ was arrested in Colombia in February 2022, while negotiating a much larger partnership with the Mexican DTO, which contemplated the shipment of approximately 500 kilograms of cocaine per week.
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In addition to the prison term, CÓRDOBA RUÍZ, 65, of Medellín, Colombia, was sentenced to four years of supervised release.
Mr. Williams praised the outstanding investigative work of the DEA’s Special Operations Division Bilateral Investigations Unit and Bogotá Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley, Kaylan E. Lasky, and Kevin T. Sullivan are in charge of the prosecution.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part, and many of these conversations occurred in Spanish.
Second Defendant Pleads Guilty to Hacking Fantasy Sports and Betting WebsiteRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of KAMERIN STOKES, a/k/a “TheMFNPlug,” in connection with a scheme to hack user accounts at a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts in order to steal hundreds of thousands of dollars from them. STOKES pled guilty today to conspiracy to commit computer intrusion before U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Damian Williams said: “With today’s guilty plea, this Office has successfully prosecuted a second member of a scheme to hack fantasy sports and betting accounts and sell access to them online. Kamerin Stokes and his co-defendants greedily lined their own pockets by profiting off of harmful hacks that drained victims of hundreds of thousands of dollars and erode the public’s trust in online platforms. Hackers and cybercriminals who sell stolen information online should be warned that this Office is watching and will continue to protect internet-users from malicious actors.”
According to the charging documents and other filings and statements made in court
On or about November 18, 2022, several individuals launched a “credential stuffing attack” on the Betting Website. During a credential stuffing attack, a cyber threat actor collects stolen credentials, or username and password pairs, obtained from other large-scale data breaches of other companies, which can be purchased on the darkweb. The threat actor then systematically attempts to use those stolen credentials to obtain unauthorized access to accounts held by the same user with other companies and providers in order to compromise accounts where the user has maintained the same password. Here, in connection with the attack on the Betting Website, there was a series of attempts to log into the Betting Website accounts using a large list of stolen credentials.
Those individuals successfully accessed approximately 60,000 accounts at the Betting Website (the “Victim Accounts”) through the credential stuffing attack. In some instances, the individuals who unlawfully accessed the Victim Accounts were able to add a new payment method on the account, deposit $5 into that account through the new payment method to verify that method, and then withdraw all the existing funds in the Victim Account through the new payment method (i.e., to a newly added financial account belonging to the hacker), thus stealing the funds in the Victim Account.
Access to the Victim Accounts were sold on various websites that traffic in stolen accounts, which are frequently referred to as “Shops.” STOKES controlled his own Shop, used the alias, “TheMFNPlug,” and purchased Victim Accounts in bulk. STOKES obtained Victim Accounts from the Betting Website with a total listed account value of over $125,000 and then offered access to those accounts for sale on his Shop.
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STOKES, 21, of Memphis, Tennessee, pled guilty to one count of conspiracy to commit computer intrusion, which carries a maximum sentence of five years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. STOKES is scheduled to be sentenced by Judge Buchwald on August 15, 2024, at 11:00 a.m.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead and Micah Fergenson are in charge of the prosecution.
Manhattan Fentanyl and Methamphetamine Trafficker Sentenced to 270 Months in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MOUNIR MRABET was sentenced yesterday by U.S. District Judge Jed S. Rakoff to 270 months in prison for trafficking wholesale quantities of fentanyl and methamphetamine in and around midtown Manhattan. On November 9, 2023, a jury convicted MRABET of narcotics conspiracy, narcotics trafficking, and a firearms offense.
U.S. Attorney Damian Williams said: “The defendant flooded the streets of New York with methamphetamine and fentanyl and kept a gun as part of his drug operations. He sold these dangerous drugs to other dealers in wholesale quantities and even stored and sold these drugs in hotel rooms with abject disregard for those he endangered. This sentence is a just punishment for an individual who chose to profit from destroying others and actively contributed to a drug crisis that continues to claim lives across our city and our nation.”
According to public filings and the evidence presented at trial:
From at least late 2021 to January 2023, MRABET coordinated with suppliers in Mexico and California to receive boxes of crystal methamphetamine and fentanyl in the mail. He then worked with co-conspirators to distribute wholesale quantities of these drugs to other drug dealers in New York City, and he kept a gun and used threats to promote his drug operations. For example, in October 2022, he texted a fellow dealer, “I will fucking shoot u one day,” and “Now bring me a pound.” MRABET’s voice was also captured on a video depicting stacks of cash, bundles of apparent drugs, and a revolver. Additional videos, photographs, and text messages confirmed that MRABET stored and sold drugs out of hotel rooms.
After MRABET was recorded selling drugs to an undercover detective, including fake oxycodone pills laced with fentanyl, law enforcement agents conducted a search of his Manhattan apartment and seized 24 pounds of crystal methamphetamine and, from the scaffolding outside his window, approximately half a pound of fentanyl powder.
The evidence at trial included the defendant’s own texts arranging sales to co-conspirators and texts from customers who described being sickened by his drugs. The evidence also included numerous videos and photographs of drugs and drug proceeds, including some that depicted MRABET pouring and weighing containers of crystal methamphetamine and wrapping and spritzing a scented spray on stacks of cash.
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In addition to the prison term, MRABET, 40, of New York, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of Task Force Officers assigned to the U.S. Attorney’s Office for the Southern District of New York, Homeland Security Investigations, the New York City Police Department, and the Drug Enforcement Administration.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Jane Y. Chong and Edward C. Robinson Jr. are in charge of the prosecution.
Suspended DEA Special Agent Sentenced to Four Years in Prison for Taking BribesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHN COSTANZO JR. was sentenced today by U.S. District Judge J. Paul Oetken to four years in prison for participating in a scheme in which his co-defendant, MANUEL RECIO, and others funneled tens of thousands of dollars to COSTANZO in exchange for COSTANZO providing sensitive law enforcement information to assist defense lawyers.
U.S. Attorney Damian Williams said: “With today’s sentence, John Costanzo Jr. finally faces the consequences of selling his office as part of a bribery scheme. By disclosing sensitive information in exchange for money, Costanzo endangered his fellow officers, interfered in significant criminal investigations, and violated the laws he had sworn to uphold. Such conduct demands serious punishment, and today’s sentence does just that. Let this be a message to all public officials who are tempted to profit illegally from their service — there will be serious consequences.”
According to the evidence presented in court during the trial:
JOHN COSTANZO JR. was a Drug Enforcement Administration (“DEA”) special agent most recently assigned to DEA Headquarters. He was a Group Supervisor in the DEA’s Miami Field Office until June 2019. MANUEL RECIO is a former DEA special agent who retired as the Assistant Special Agent in Charge for the Miami Field Office in November 2018. Upon his retirement, RECIO began operating his own business, which provided private investigative services to criminal defense attorneys and also helped defense attorneys to recruit clients. From around the time of RECIO’s retirement through around November 2019, RECIO agreed with COSTANZO to provide benefits to COSTANZO in exchange for COSTANZO providing RECIO with nonpublic information about DEA investigations. COSTANZO provided RECIO with information about nonpublic investigations, such as the identities of individuals charged and the anticipated timing of indictments and arrests, and intelligence which COSTANZO obtained from the Narcotics and Dangerous Drugs Information System (“NADDIS”), a DEA database that contains information about individuals who are or have been under investigation by the DEA. RECIO paid COSTANZO for this information, which RECIO used to help recruit new clients for criminal defense attorneys.
Among the benefits paid to COSTANZO were a $2,500 payment made in November 2018, shortly after RECIO’s retirement from the DEA, which was funneled to COSTANZO through a company owned by a close family member of COSTANZO. At the same time that this payment was made, RECIO began asking COSTANZO to run searches in NADDIS to provide RECIO with nonpublic DEA information about DEA targets and investigations. Following that initial payment, RECIO and others continued to provide benefits to COSTANZO, including tens of thousands of dollars that were funneled from RECIO through a company created by a DEA task force officer and $50,000 that was paid to COSTANZO through a close family member for COSTANZO’s purchase of a condominium in January and February 2019.
In return, COSTANZO continued to provide nonpublic DEA information to RECIO, including information about the timing of forthcoming indictments and information about DEA arrest plans of particular targets. COSTANZO also searched NADDIS for names of particular individuals requested by RECIO on dozens of occasions during the scheme and provided RECIO with information and assistance with particular charged defendants represented by attorneys for whom REICO was working. During the scheme, COSTANZO and RECIO took steps to conceal the existence of the scheme, including by structuring the payments from RECIO to COSTANZO through third parties and through COSTANZO’s use of a cellphone provided by RECIO for communications related to the scheme.
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In addition to the prison term, COSTANZO, 49, of Coral Gables, Florida, was sentenced to three years of supervised release and ordered to forfeit $98,250.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Department of Justice’s Office of the Inspector General and thanked the DEA’s Office of Professional Responsibility for its support in this matter.
The prosecution is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Mathew Andrews, Emily Deininger, and Sheb Swett are in charge of the prosecution.
Founders and CEO of Cryptocurrency Mixing Service Arrested and Charged with Money Laundering and Unlicensed Money Transmitting OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); 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 KEONNE RODRIGUEZ, the Chief Executive Officer and a co-founder of Samourai Wallet (“Samourai”), and WILLIAM LONERGAN HILL, the Chief Technology Officer and also a co-founder of Samourai, with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. These charges arise from the defendants’ development, marketing, and operation of a cryptocurrency mixer that executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets, such as Silk Road and Hydra Market; a web-server intrusion; a spearphishing scheme; and schemes to defraud multiple decentralized finance protocols. RODRIGUEZ was arrested this morning and is expected to be presented today or tomorrow before a U.S. Magistrate Judge in the Western District of Pennsylvania. HILL was arrested this morning in Portugal based on the U.S. criminal charges. The United States will seek HILL’s extradition to stand trial in the United States. The case is assigned to U.S. District Judge Richard M. Berman.
In coordination with law enforcement authorities in Iceland, Samourai’s web servers and domain (https://samourai.io/) were seized. Additionally, a seizure warrant for Samourai’s mobile application was served on the Google Play Store. As a result, the application will no longer be available to be downloaded from the Google Play Store in the United States.
U.S. Attorney Damian Williams said: “As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering. Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns. Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “$2 billion in transactions with an unlicensed money transmitter means $2 billion flowed without any oversight, from whomever to wherever. Because of the company’s disregard for regulation, it’s alleged that Samourai Wallet laundered more than $100 million in criminal proceeds. Special Agents with IRS:CI New York and IRS:CI LA’s Cyber units worked with our federal and international law enforcement partners to not only arrest the founders and CEO, but to also seize their domain. Samourai Wallet is now closed for business.”
FBI Assistant Director in Charge James Smith said: “Threat actors utilize technology to evade law enforcement detection and create environments conducive to criminal activity. For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering. The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”
According to the allegations in the Indictment unsealed today in Manhattan federal Court:[1]
Background on Samourai
From about 2015 through February 2024, RODRIGUEZ and HILL developed, marketed, and operated a cryptocurrency mixing service known as Samourai, an unlicensed money transmitting business from which they earned millions of dollars in fees. Samourai unlawfully combined multiple unique features to execute anonymous financial transactions valued at over $2 billion for its customers. While offering Samourai as a “privacy” service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion. Indeed, as the defendants intended and well knew, a substantial portion of the funds that Samourai processed were criminal proceeds passed through Samourai for purposes of concealment. During the relevant period, Samourai laundered over $100 million of crime proceeds originating from, among other criminal sources, illegal darkweb markets, such as Silk Road and Hydra Market; various wire fraud and computer fraud schemes, including a web-server intrusion, a spearphishing scheme, and schemes to defraud multiple decentralized finance protocols; and other illegal activities.
RODRIGUEZ and HILL began developing Samourai in or about 2015. Samourai is a mobile application that users can download onto their cellphones, and the application has been downloaded over 100,000 times. After users download Samourai, they can store their private keys for any BTC addresses they control inside of the Samourai program. These private keys are not shared with Samourai employees, but Samourai operates a centralized server that, among other things, supervises and facilitates transactions between Samourai users and creates new BTC addresses used during the transactions. Samourai is used by customers all over the world, including customers located in the United States and in the Southern District of New York.
RODRIGUEZ and HILL designed Samourai to offer at least two features intended to assist individuals engaged in criminal conduct to conceal the source of the proceeds of their criminal activities. First, Samourai offers a cryptocurrency mixing service known as “Whirlpool,” which coordinates batches of cryptocurrency exchanges between groups of Samourai users to prevent tracing of criminal proceeds by law enforcement on the Blockchain. Second, Samourai offers a service called “Ricochet,” which allows a Samourai user to build in additional and unnecessary intermediate transactions (known as “hops”) when sending cryptocurrency from one address to another address. This feature similarly may prevent law enforcement and/or cryptocurrency exchanges from recognizing that a particular batch of cryptocurrency originates from criminal activity. Since the start of the Whirlpool service in or about 2019, and of the Ricochet service in or about 2017, over 80,000 BTC (worth over $2 billion applying the BTC-USD conversion rates at the time of each transaction) has passed through these two services operated by Samourai. Samourai collects a fee for both services, estimated to be about $3.4 million for Whirlpool transactions and $1.1 million for Ricochet transactions over the same time period.
RODRIGUEZ and HILL’s Knowledge and Intent for Criminal Proceeds to be Laundered by Samourai
RODRIGUEZ and HILL operated Twitter accounts that encouraged and openly invited users to launder criminal proceeds through Samourai. For example, in or around June 2022, Samourai’s Twitter account — operated by RODRIGUEZ — posted the following message regarding Russian oligarchs seeking to circumvent sanctions:
Similarly, in a private message on or about August 27, 2020, HILL — using a Twitter account with the username “Samourai Dev” — discussed the use of Samourai by criminals operating in online black markets such as Silk Road in private messages with another Twitter user (the “Twitter User”) (emphasis added):
Twitter User: Silk Road is why I first found Bitcoin and the desire to keep engaging in those types of markets is one reason that I want to defend/strengthen those use cases . . .
Samourai Dev: No, not at all. We probably have different views on some basic tenets of bitcoin, you and I – so to each his own so to speak. At Samourai we are entirely focused on the censorship resistance and black/grey circular economy. This implies no foreseeable mass adoption, although black/grey markets have already started to expand during covid and will continue to do so post-covid. . . .
Additionally, in response to Europol highlighting Samourai as a “top threat” to the ability of law enforcement to trace the proceeds of criminal activity, HILL posted a message in or around March 2021 suggesting that Samourai would not change its practices in response to allegations that Samourai was being used for money laundering:
Similarly, RODRIGUEZ and HILL possessed and transmitted to potential investors marketing materials that discussed how Samourai’s customer base was intended to include criminals seeking privacy or the subversion of safeguards and reporting requirements by financial institutions. For example, in Samourai’s marketing materials, RODRIGUEZ and HILL similarly acknowledge that the individuals most likely to use a service like Samourai include individuals engaged in criminal activities, including “Restricted Markets.”
In the below excerpt from Samourai’s marketing materials, RODRIGUEZ and HILL acknowledge that its revenues will be derived from “Dark/Grey Market participants” seeking to “swap their bitcoins with multiple parties” to avoid detection:
In Samourai’s marketing materials, RODRIGUEZ and HILL promoted Samourai’s Wallet and its “Mixing Service” as a “Premium Privacy Service” for transactions involving the proceeds of goods and services that include, among other things, “Illicit Activity.”
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RODRIGUEZ, 35, of Harmony, Pennsylvania, and HILL, 65, a U.S. national who was arrested in Portugal, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to operate an unlicensed money transmitting business, 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 IRS-CI and the FBI. He also acknowledged the assistance of the Justice Department’s Office of International Affairs. Mr. Williams also thanked Europol, the Portugal Judiciary Police, the Icelandic Police, the FBI Field Office in Pittsburgh, the FBI’s International Operations Division, and the IRS-CI Los Angeles Field Office for their assistance in the investigation of this case.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Andrew K. Chan and David R. Felton 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 should be treated as an allegation.
Texas Man Sentenced to 27 Months in Prison for Sending Antisemitic Death ThreatsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JEREMY JOSEPH was sentenced today to 27 months in prison for sending interstate threats to injure or kill two former co-workers. JOSEPH previously pled guilty, two days after his trial on these charges had begun, before U.S. District Judge J. Paul Oetken, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Jeremy Joseph sent hateful, violent, and antisemitic death threats over email to two former co-workers. Joseph made these threats as part of a broader scheme in which Joseph threatened dozens of victims, many of whom were Jewish or were perceived to be Jewish. This prosecution and today’s sentence make clear that this Office will not tolerate crimes of hate and will continue to seek justice for the victims of these offensive and harmful acts.”
According to Indictment, other public filings, and statements made in court:
From in or about December 2022 through at least in or about January 2023, JOSEPH sent terrifying death threats over email to two former colleagues (the “Victims”) that he worked with over 10 years prior. The emails detailed how JOSEPH planned to murder his Victims and included photographs of pipe bombs, ammunition, and a firearm. The emails also included personal information about the Victims and their families.
JOSEPH’s threats towards the Victims were part of a larger pattern of death threats sent to various other individuals from JOSEPH’s life, as well as politicians, judges, and prosecutors. The targets of his threats spanned multiples countries and U.S. states. In these communications, JOSEPH consistently used violent, threatening language that targeted Jewish people.
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In addition to the prison term, JOSEPH, 41, of Houston, Texas, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Jamie Bagliebter and Diarra M. Guthrie are in charge of the prosecution.
Justice Department Charges Four Iranian Nationals for Multi-Year Cyber Campaign Targeting U.S. CompaniesRead the Press Release
An indictment was unsealed today in Manhattan federal court charging Iranian nationals Hossein Harooni (حسین هارونی), Reza Kazemifar (رضا کاظمی فر), Komeil Baradaran Salmani (کمیل برادران سلمانی), and Alireza Shafie Nasab (علیرضا شفیعی نسب) for their involvement in a cyber-enabled campaign to compromise U.S. government and private entities, including the U.S. Departments of Treasury and State, defense contractors, and two New York-based companies. Nasab was charged for the same conduct in a previous indictment that was unsealed on Feb. 29. The defendants remain at large.
Concurrent with today’s unsealing, the U.S. Department of State’s Rewards for Justice program (RFJ) is offering a reward of up to $10 million for information leading to the identification or location of the group and the defendants. The RFJ program seeks information on any person who, while acting at the direction or under the control of a foreign government, engages in certain malicious cyber activities in violation of the Computer Fraud and Abuse Act (CFAA). Additionally, the Treasury Department announced sanctions against the four defendants, among other malicious cyber actors.
“Criminal activity originating from Iran poses a grave threat to America’s national security and economic stability,” said Attorney General Merrick B. Garland. “These defendants are alleged to have engaged in a coordinated, multi-year hacking campaign from Iran targeting more than a dozen American companies and the U.S. Treasury and State Departments. This case represents just one part of the U.S. government’s effort to counter the range of threats originating from Iran that endanger the American people.”
“The FBI is constantly working to detect and counter cyber campaigns like the one described in today’s indictment. From enabling lethal plots and repressing our citizens and residents to targeting our critical infrastructure, we’ve often seen the trail of dangerous cyber-criminal activity lead back to Iran,” said FBI Director Christopher Wray. “Today’s announcement demonstrates the FBI’s commitment to using every lawful tool at our disposal, together with our domestic and international partners, to disrupt the threats posed from Iran to American businesses and citizens.”
“Today’s charges pull back the curtain on an Iran-based company that purported to provide ‘cybersecurity services’ while in actuality scheming to compromise U.S. private and public sector computer systems, including through spearphishing and social engineering attacks,” said Assistant Attorney General Matthew G. Olsen of the Department of Justice’s National Security Division. “The Department is committed to using a whole of government approach to disrupt such malicious activities and impose consequences on the individuals that carry them out. Employees that continue to work at these companies risk arrest and prosecution or a lifetime as an international fugitive from justice.”
“As alleged, the defendants participated in a cyber campaign using spearphishing and other hacking techniques in an attempt to compromise private companies with access to defense-related information,” said U.S. Attorney Damian Williams for the Southern District of New York. “Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this office for continuing to use innovative technologies and investigative measures to disrupt and track down these cybercriminals. If you have information leading to the to the identification or location of Harooni, Kazemifar, Salmani, or Nasab, please reach out to the Department of State at rewardsforjustice.net.”
According to court documents, from at least in or about 2016 through at least in or about April 2021, Harooni, Kazemifar, Salmani, Nasab, and other conspirators were members of a hacking organization that participated in a coordinated multi-year campaign to conduct and attempt to conduct computer intrusions. These intrusions targeted more than a dozen U.S. companies and the U.S. Departments of Treasury and State.
During the conspiracy, Kazemifar, Salmani, and Nasab were employed by Mahak Rayan Afraz (محک رایان افراز), an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations.
The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that have been granted security clearances by the U.S. Department of Defense to access, receive, and store classified information for the purpose of conducting activities in support of U.S. Department of Defense programs. In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.
In conducting their hacking campaigns, the group used spearphishing — tricking an email recipient into clicking on a malicious link — to infect victim computers with malware. During their campaigns against one victim, the group compromised more than 200,000 employee accounts. In another campaign, the conspirators targeted 2,000 employee accounts. In order to manage their spearphishing operations, the group created and used a particular computer application that enabled the conspirators to organize and deploy their spearphishing attacks.
In the course of these spearphishing attacks, the conspirators compromised an administrator email account belonging to a defense contractor (Defense Contractor-1). Access to this administrator account empowered the conspirators to create unauthorized Defense Contractor-1 accounts, which the conspirators then used to send spearphishing campaigns to employees of a different defense contractor and a consulting firm.
In addition to spearphishing, the conspirators utilized social engineering, which involved impersonating others, generally women, to obtain the confidence of victims. These social engineering contacts were another means the conspiracy used to deploy malware onto victim computers and compromise those devices and accounts.
Kazemifar was responsible for testing the tools utilized by the conspiracy to execute its cyber campaigns. For example, Kazemifar was involved in testing spearphishing emails used to target victim companies and was involved in developing malware utilized by the conspiracy in social engineering initiatives. During the course of his involvement in the conspiracy, from at least in or about 2014 through at least in or about 2020, Kazemifar also worked for the Iranian Organization for Electronic Warfare and Cyber Defense (EWCD). EWCD is a component of the Islamic Revolutionary Guard Corps (IRGC), which is itself a component of the Iranian Armed Forces. Among other things, the IRGC is responsible for Iran’s offensive cyber capabilities. The United States has designated the IRGC as a foreign terrorist organization.
Harooni was responsible for procuring, administering, and managing the online network infrastructure, including computer servers and customized software used to facilitate the computer intrusions. Harooni also fraudulently used the identity of a real person (Individual-1), including his use of a copy of Individual-1’s true passport, to conceal his role in procuring online infrastructure used by the conspiracy to facilitate the computer intrusion campaign.
Salmani was responsible for testing tools utilized by the conspiracy to execute spearphishing campaigns, including the campaign against a hospitality company. Salmani was also involved in maintaining infrastructure used by the conspirators.
Nasab was responsible for procuring infrastructure used by the conspiracy, particularly infrastructure used in furtherance of social engineering campaigns. Nasab also used Individual-1’s identity, including Individual-1’s name and passport, to register server and email accounts that were used during malicious cyber campaigns.
The defendants are each charged with conspiracy to commit computer fraud, conspiracy to commit wire fraud, and wire fraud. If convicted, they face up to five years in prison for the computer fraud conspiracy, and up to 20 years in prison for each count of wire fraud and conspiracy to commit wire fraud. Harooni is additionally charged with knowingly damaging a protected computer, which carries a maximum penalty of 10 years in prison. Harooni, Salamani, and Nasab are additionally charged with aggravated identity theft, which carries a mandatory consecutive term of two years in prison. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Cyber Division is investigating the case.
Assistant U.S. Attorneys Ryan B. Finkel, Dina McLeod, and Daniel G. Nessim for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney Matthew Chang of the National Security Division’s National Security Cyber Section.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
IndictmentJustice Department Announces Charges Against Four Iranian Nationals for Multi-Year Cyber Campaign Targeting U.S. CompaniesRead 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”); Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division; and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today the unsealing of an Indictment charging Iranian nationals HOSSEIN HAROONI (حسین هارونی), REZA KAZEMIFAR (رضا کاظمی فر), KOMEIL BARADARAN SALMANI (کمیل برادران سلمانی), and ALIREZA SHAFIE NASAB (علیرضا شفیعی نسب) for their involvement in a cyber-enabled campaign to compromise U.S. government and private entities, including the U.S. Departments of Treasury and State, defense contractors, and two New York-based companies. The case has been assigned to U.S. District Judge Mary Kay Vyskocil. NASAB was charged for the same conduct in a previous Indictment that was unsealed on February 29, 2024. The defendants remain at large.
U.S. Attorney Damian Williams said: “As alleged, the defendants participated in a cyber campaign using spearphishing and other hacking techniques in an attempt to compromise private companies with access to defense-related information. Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this Office for continuing to use innovative technologies and investigative measures to disrupt and track down these cybercriminals. If you have information leading to the to the identification or location of Harooni, Kazemifar, Salmani, or Nasab, please reach out to the Department of State at rewardsforjustice.net.”
Attorney General Merrick B. Garland said: “Criminal activity originating from Iran poses a grave threat to America’s national security and economic stability. These defendants are alleged to have engaged in a coordinated, multi-year hacking campaign from Iran targeting more than a dozen American companies and the U.S. Treasury and State Departments. This case represents just one part of the U.S. government’s effort to counter the range of threats originating from Iran that endanger the American people.”
FBI Director Christopher A. Wray said: “The FBI is constantly working to detect and counter cyber campaigns like the one described in today’s indictment. From enabling lethal plots, and repressing our citizens and residents, to targeting our critical infrastructure, we’ve often seen the trail of dangerous cyber-criminal activity lead back to Iran. Today’s announcement demonstrates the FBI’s commitment to using every lawful tool at our disposal, together with our domestic and international partners, to disrupt the threats posed from Iran to American businesses and citizens.”
Assistant Attorney General Matthew G. Olsen said: “Today’s charges pull back the curtain on an Iran-based company that purported to provide ‘cybersecurity services’ while in actuality scheming to compromise U.S. private and public sector computer systems, including through spearphishing and social engineering attacks. The Department is committed to using a whole of government approach to disrupt such malicious activities and impose consequences on the individuals that carry them out. Employees that continue to work at these companies risk arrest and prosecution or a lifetime as an international fugitive from justice.”
FBI Assistant Director in Charge James Smith said: “Hostile threat actors have become increasingly aggressive in their attempts to infiltrate and disrupt our country’s cyber infrastructure. These four defendants allegedly employed sophisticated techniques in a multi-year cyber hacking campaign targeting the U.S. Departments of Treasury and State and several private sector companies entrusted with supporting the work of the Department of Defense. These charges send a clear message – the FBI prioritizes cybersecurity to protect our sensitive information and will not tolerate threats or cyber-attacks by anyone.”
According to the allegations contained in the Indictment:[1]
From at least in or about 2016 through at least in or about April 2021, HAROONI, KAZEMIFAR, SALMANI, NASAB, and other conspirators were members of a hacking organization that participated in a coordinated multi-year campaign to conduct and attempt to conduct computer intrusions. These intrusions targeted more than a dozen U.S. companies and the U.S. Departments of the Treasury and State.
During the conspiracy, KAZEMIFAR, SALMANI, and NASAB were employed by Mahak Rayan Afraz (محک رایان افراز), an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations.
The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that have been granted security clearances by the U.S. Department of Defense to access, receive, and store classified information for the purpose of conducting activities in support of U.S. Department of Defense programs. In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.
In conducting their hacking campaigns, the group used spearphishing — tricking an email recipient into clicking on a malicious link — to infect victim computers with malware. During their campaigns against one victim, the group compromised more than 200,000 employee accounts. In another campaign, the conspirators targeted 2,000 employee accounts. In order to manage their spearphishing operations, the group created and used a particular computer application that enabled the conspirators to organize and deploy their spearphishing attacks.
In the course of these spearphishing attacks, the conspirators compromised an administrator email account belonging to a defense contractor (“Defense Contractor-1”). Access to this administrator account empowered the conspirators to create unauthorized Defense Contractor-1 accounts, which the conspirators then used to send spearphishing campaigns to employees of a different defense contractor and a consulting firm.
In addition to spearphishing, the conspirators utilized social engineering, which involved impersonating others, generally women, to obtain the confidence of victims. These social engineering contacts were another means the conspiracy used to deploy malware onto victim computers and compromise those devices and accounts.
KAZEMIFAR was responsible for testing the tools utilized by the conspiracy to execute its cyber campaigns. For example, KAZEMIFAR was involved in testing spearphishing emails used to target victim companies and was involved in developing malware utilized by the conspiracy in social engineering initiatives. During the course of his involvement in the conspiracy, from at least in or about 2014 through at least in or about 2020, KAZEMIFAR also worked for the Iranian Organization for Electronic Warfare and Cyber Defense (“EWCD”). EWCD is a component of the Islamic Revolutionary Guard Corps (“IRGC”), which is itself a component of the Iranian Armed Forces. Among other things, the IRGC is responsible for Iran’s offensive cyber capabilities. The U.S. has designated the IRGC as a foreign terrorist organization.
HAROONI was responsible for procuring, administering, and managing the online network infrastructure, including computer servers and customized software used to facilitate the computer intrusions. HAROONI also fraudulently used the identity of a real person (“Individual-1”), including his use of a copy of Individual-1’s true passport, to conceal his role in procuring online infrastructure used by the conspiracy to facilitate the computer intrusion campaign.
SALMANI was responsible for testing tools utilized by the conspiracy to execute spearphishing campaigns, including the campaign against a hospitality company. SALMANI was also involved in maintaining infrastructure used by the conspirators.
NASAB was responsible for procuring infrastructure used by the conspiracy, particularly infrastructure used in furtherance of social engineering campaigns. NASAB also used Individual-1’s identity, including Individual-1’s name and passport, to register server and email accounts that were used during malicious cyber campaigns.
Concurrent with the unsealing of the Indictment, the U.S. Department of State’s Rewards for Justice program (“RFJ”) is offering a reward of up to $10 million for information leading to the identification or location of the group and the defendants. The RFJ program seeks information on any person who, while acting at the direction or under the control of a foreign government, engages in certain malicious cyber activities in violation of the Computer Fraud and Abuse Act.
Anyone with information on these malicious cyber actors, or associated individuals or entities, please contact Rewards for Justice via the Tor-based tips-reporting channel at: he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion . More information about this RFJ reward offer is located on the Rewards for Justice website.
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KAZEMIFAR, 36, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
HAROONI, 34, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of knowingly damaging a protected computer, which carries a maximum sentence of 10 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.
SALMANI, 38, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.
NASAB, 39, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI, including the work of the FBI Cyber Division.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel, Dina McLeod, and Daniel G. Nessim are in charge of the prosecution, with assistance from Trial Attorney Matthew Chang of the National Security Division’s National Security Cyber Section.
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 should be treated as an allegation.
City Employee Pleads Guilty to Check Theft SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today that BRANDON SANTANOO, an employee of the New York City Law Department (the “Law Department”), pled guilty to conspiracy to commit bank fraud in connection with his participation in a scheme to steal checks mailed to the Law Department and then to deposit or attempt to deposit forged, altered, and fraudulently endorsed versions of those checks into bank accounts not associated with the Law Department. SANTANOO pled guilty before U.S. Magistrate Judge Jennifer E. Willis.
U.S. Attorney Damian Williams said: “Brandon Santanoo abused his position of trust as a city employee. As he admitted today in federal court, he stole hundreds of thousands of dollars’ worth of checks made payable to the Law Department and passed them along to others to fraudulently deposit. We will not tolerate any breach of trust or corruption within city agencies.”
DOI Commissioner Jocelyn E. Strauber said: “Brandon Santanoo used his position at the City Law Department to steal approximately 40 checks payable to the City – and valued at approximately $600,000 – and then handed them out to acquaintances to forge, alter, or fraudulently endorse the checks and then deposit into private bank accounts. I thank the Law Department for the referral to DOI that prompted this investigation and our law enforcement partners in the United States Attorney’s Office for the Southern District of New York for their commitment to hold accountable City employees who exploit their access to engage in criminal conduct, and to protect valuable City resources from theft.”
According to the allegations in the Information and the Complaint, the plea agreement, and statements made in court:
Beginning in 2017, SANTANOO worked as a clerk in the mail room at the Law Department’s office in Brooklyn. By virtue of his position, SANTANOO had access to mail that was sent to the Law Department.
From at least in or about June 2021 through at least in or about May 2023, SANTANOO stole checks that had been mailed to the Law Department, including checks made payable to the Law Department’s Worker’s Compensation Division, which is responsible for administering claims of city employees who are injured on the job. SANTANOO then passed those checks onto other people, who deposited or attempted to deposit forged, altered, and fraudulently endorsed versions of those checks into third parties’ bank accounts. Approximately 40 checks, totaling approximately $600,000, were stolen and deposited or attempted to be deposited as part of the scheme.
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SANTANOO, 27, of Queens Village, New York, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum potential sentence of 30 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. Sentencing is scheduled for September 4, 2024, at 10:00 a.m. before U.S. District Judge Richard M. Berman.
Mr. Williams praised the outstanding investigative work of the DOI. Mr. Williams also thanked the Special Agents from the U.S. Attorney’s Office for the Southern District of New York for their assistance on this matter.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Stephanie Simon is in charge of the prosecution.
Pharmacy Owner Sentenced to Four Years in Prison for Health Care FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that NERIK ILYAYEV was sentenced today to four years in prison for his involvement in a multimillion-dollar health care fraud scheme that targeted the Medicare and Medicaid programs and private insurance companies. ILYAYEV owned and operated two different pharmacies and submitted millions of dollars in fraudulent claims to the government health care programs and private insurers. ILYAYEV previously pled guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gregory H. Woods, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Nerik Ilyayev took advantage of our nation’s health care system, which provides payments for critical medications for low-income HIV patients. He paid illegal kickbacks to these patients to use their billing information and took millions of dollars in reimbursements from the Medicare and Medicaid program for medications that he did not actually dispense. This prosecution and today’s sentence are part of our Office’s ongoing work in combating fraud in the health care system and ensuring that public resources are spent on patients who need them, rather than being fraudulently stolen by criminal actors.”
According to the Complaint, Information, court filings, and statements made in public court proceedings:
From approximately February 2021 through March 2022, ILYAYEV owned and operated a pharmacy in Manhattan (“Pharmacy-1”). ILYAYEV used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients to recruit them to fill prescriptions for expensive HIV medications at Pharmacy-1. ILYAYEV did not actually obtain or provide HIV medications to these illegally recruited patients, but instead bought unopened bottles of pills back from the patients at a small fraction of their true value so he could re-use the same pills over and over again. ILYAYEV, on behalf of Pharmacy-1, then submitted fraudulent insurance claims to Medicare and Medicaid to cover the cost of the HIV medications he claimed to be dispensing. In order to conceal his role in the fraud scheme, ILYAYEV used the identity of another person (“Individual-1”) and pretended to be Individual-1 to own and operate Pharmacy-1. Medicare and Medicaid collectively paid approximately $5.2 million in fraudulent claims for HIV medications to Pharmacy-1.
After shutting down Pharmacy-1, ILYAYEV took control of another pharmacy in Queens, New York (“Pharmacy-2”). Again, to conceal his role in the fraud, ILYAYEV used the identity of another person and pretended to be this individual to own and operate Pharmacy-2. Pharmacy-2 submitted fraudulent insurance claims to no-fault automobile insurance providers. Pharmacy-2 defrauded the no-fault automobile insurance providers of approximately $1.2 million. In addition, Pharmacy-2 unlawfully sold pharmaceuticals to other pharmacies that ILYAYEV had obtained from illegitimate sources.
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In addition to the prison term, ILYAYEV, 36, of Queens, New York, was sentenced to three years of supervised release and ordered to pay restitution and forfeit more than $6 million.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General. Mr. Williams also thanked the National Insurance Crime Bureau and the Investigations Medicare Drug Integrity Contractor for their assistance in the investigation.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Cecilia E. Vogel and Thane Rehn are in charge of the prosecution.
Man Convicted for $110M Cryptocurrency SchemeRead the Press Release
A federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange.
According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts.
“Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Manipulative trading puts our financial markets and investors at risk. This prosecution—the first involving the manipulation of cryptocurrency through open-market trades—demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.”
“Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case,” said U.S. Attorney Damian Williams for the Southern District of New York. “This ground-breaking prosecution epitomizes this office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets. The career prosecutors of this office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”
“The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”
Eisenberg is scheduled to be sentenced on July 29 and faces a maximum penalty of 10 years in prison on the commodities fraud count and the commodities manipulation count, and a maximum penalty of 20 years in prison on the wire fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI investigated the case, with assistance from Homeland Security Investigations and IRS Criminal Investigation.
Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorneys Thomas Burnett and Peter Davis for the Southern District of New York are prosecuting the case.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
Man Convicted for $110 Million Cryptocurrency SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Nicole M. Argentieri, the Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; Timothy Langan, the Executive Assistant Director of the Criminal, Cyber, Response, and Services Branch 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 today the conviction of AVRAHAM EISENBERG of commodities fraud, commodities market manipulation, and wire fraud in connection with manipulation on the Mango Markets decentralized cryptocurrency exchange. EISENBERG was found guilty following a 10-day jury trial before U.S. District Judge Arun Subramanian.
U.S. Attorney Damian Williams said: “Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case. This ground-breaking prosecution epitomizes this Office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets. The career prosecutors of this Office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”
Principal Deputy Assistant Attorney General Nicole M. Argentieri said: “Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million. Manipulative trading puts our financial markets and investors at risk. This prosecution — the first involving the manipulation of cryptocurrency through open-market trades — demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.”
FBI Executive Assistant Director Timothy Langan said: “The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions. If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”
FBI Assistant Director in Charge James Smith said: “With today’s conviction, Avraham Eisenberg now rightly faces justice for his duplicitous manipulation of virtual currencies on the Mango Markets exchange. The FBI will continue to ensure that any individual attempting to scheme and take advantage of financial markets, whether traditional or emerging, for personal gain be held accountable.”
According to court documents and evidence presented at trial:
EISENBERG engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts.
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EISENBERG, 28, of Puerto Rico, was convicted of commodities fraud, which carries a maximum penalty of 10 years in prison; commodities manipulation, which carries a maximum penalty of 10 years in prison; and wire fraud, which carries a maximum penalty of 20 years in prison.
The statutory maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. EISENBERG is scheduled to be sentenced on July 29, 2024.
Mr. Williams praised the investigative work of the FBI and further thanked Homeland Security Investigations and the Internal Revenue Service – Criminal Investigation for their assistance.
The case is being prosecuted by the Office’s Securities and Commodities Fraud Task Force and the Criminal Division’s Computer Crime and Intellectual Property Section’s National Cryptocurrency Enforcement Team (“NCET”). Assistant U.S. Attorneys Thomas Burnett and Peter Davis and Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the NCET, are in charge of the prosecution, with assistance from Paralegal Specialists Ryan Sears and Jonathan Oshinsky.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
Mahopac Man Charged with Sexual Exploitation of A Minor and Possession of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging JOHN TOWERS with sexual exploitation of a minor and possession of child pornography. TOWERS was arrested this morning and presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.
U.S. Attorney Damian Williams said: “John Towers’s alleged disturbing conduct violated the public’s trust by placing hidden cameras in a public bathroom and using those cameras to capture sexually explicit images of children. As today’s arrest shows, we will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.”
As alleged in the Complaint filed on April 17, 2024, in White Plains federal court and unsealed today:[1]
From at least on or about July 24, 2018, up to and including at least on or about December 9, 2019, TOWERS placed hidden cameras in a bathroom in a privately owned, public park in Putnam County, New York, to surreptitiously record prepubescent minors in order to capture sexually explicit images of the minors. TOWERS then transferred the recordings to a hard drive.
Following the execution of a search warrant at TOWERS’s residence, law enforcement recovered a hard drive that was found to contain over 800 videos of females, including prepubescent females, using a bathroom. Approximately 78 of the videos had file names that included the term “yung.”
On or about March 29, 2024, TOWERS, while in Putnam County, New York, possessed DVDs containing video files he downloaded from the internet depicting prepubescent minors engaging in sexually explicit activity.
On March 29, 2024, TOWERS was arrested and charged in Carmel Town Court in Putnam Valley with two counts of promoting a sexual performance by a child less than 17 years old, three counts of possessing an obscene sexual performance by a child, and one count of endangering the welfare of a child. He was on bail at the time of today’s arrest.
Anyone who may have relevant information regarding JOHN TOWERS is asked to contact the FBI at 1-800-CALL-FBI (225-5324).
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JOHN TOWERS, 54, of Mahopac, New York, is charged with one count of sexual exploitation of a minor, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the efforts of the Federal Bureau of Investigation, the Putnam County District Attorney’s Office, and the Putnam County Sherriff’s Office in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Marcia S. Cohen is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Leader of Black-Market HIV Medication Fraud Scheme Sentenced to Nine Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that BORIS AMINOV was sentenced today to nine years in prison for engaging in a years-long scheme that exploited vulnerable HIV patients and defrauded Medicaid, Medicare, and private insurance companies out of at least $20 million. AMINOV previously pled guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Mary Kay Vyskocil, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Boris Aminov orchestrated a scheme to get rich by lying to Medicaid, Medicare, and private insurance companies and by depriving vulnerable HIV patients of legitimate and safe medications. He also made millions of dollars through buying and distributing black-market HIV medications to pharmacies all over New York City. Today’s sentencing brings a measure of closure with Aminov now facing the obligation to pay over 13 million in restitution.”
According to the allegations contained in the Superseding Indictments and statements made in court proceedings:
From at least in or about 2017 through at least in or about 2023, AMINOV and others engaged in a scheme that defrauded Medicaid, Medicare, and private insurance companies out of at least approximately $20 million through trafficking in black-market HIV medication. In doing so, they exploited at least hundreds of low-income individuals who had been prescribed HIV medication, jeopardizing the health and safety of those patients.
AMINOV distributed black-market HIV medications to pharmacies that were owned and operated by other co-conspirators. That medication was then dispensed to unknowing patients who believed they were receiving legitimate medication. To further their scheme and conceal their proceeds, co-conspirators used bank accounts associated with their respective pharmacies to funnel money to shell companies controlled by AMINOV.
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In addition to the prison term, AMINOV, 47, of Brooklyn, New York, was sentenced to three years of supervised release, ordered to pay restitution in the amount of $13,270,379.50, and ordered to pay forfeiture in the amount of $4,401,495.00.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jeffrey W. Coyle and Jackie Delligatti are in charge of the prosecution.
Georgian National and Son Charged with Laundering More Than $500,000 They Believed to Be Drug Cartel ProceedsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Spencer L. Evans, the Special Agent in Charge of the Las Vegas Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of YOHANAN ELIGOOLA and DAVID ELIGOOLA in connection with a conspiracy to launder money that the defendants believed to be narcotics proceeds. The individuals who purported to be operatives of a narcotics cartel were in fact undercover law enforcement officers (the “Undercover Agents”), and YOHANAN ELIGOOLA also attempted to sell those individuals various weapons, including surface-to-air missiles. YOHANAN ELIGOOLA was arrested on April 15, 2024, in New York, New York, and presented yesterday before U.S. Magistrate Judge Katharine H. Parker in the Southern District of New York. DAVID ELIGOOLA was arrested yesterday in Miami, Florida, and presented before a U.S. Magistrate Judge in the Southern District of Florida.
U.S. Attorney Damian Williams said: “As alleged, Yohanan Eligoola worked with individuals he believed to be representing a drug cartel to launder hundreds of thousands of dollars and to sell them deadly weapons, including surface-to-air missiles. Unbeknownst to him, those cartel members were in fact undercover FBI agents. Our law enforcement partners and the career prosecutors of this Office work relentlessly to disrupt dangerous criminal activity.”
FBI Special Agent in Charge Spencer L. Evans said: “FBI Las Vegas would like to thank our partners at the SDNY U.S. Attorney’s Office, FBI New York, and FBI Miami for their diligent work leading to these arrests. We are committed to working collaboratively and utilizing our partnerships to combat organized crime groups to stem the illegal flow of weapons that endangers U.S. national security.”
As alleged in the Complaints:[1]
The Undercover Agents represented to YOHANAN ELIGOOLA that they worked for a drug cartel, and YOHANAN ELIGOOLA arranged to launder their narcotics proceeds. Over the course of 2023, YOHANAN ELIGOOLA, DAVID ELIGOOLA — YOHANAN ELIGOOLA’s son — or their co-conspirators received large quantities of cash from the Undercover Agents on five separate occasions. In total, they received more than $500,000 in cash, and returned all of it — minus their fee — back to the Undercover Agents in the form of laundered cryptocurrency and bank wires.
YOHANAN ELIGOOLA informed the Undercover Agents that he could launder up to $1 million in cash per day on behalf of the cartel and that “the bank will never ask you a question” when YOHANAN ELIGOOLA transferred the laundered funds back to them.
Before he had received any money from the Undercover Agents, YOHANAN ELIGOOLA asked one of them if the money was “from drugs.” The Undercover Agents told him that it was and that they were “dealing with Colombians.”
YOHANAN ELIGOOLA also offered to sell the Undercover Agents various munitions and bragged that he controlled a large fraction of the defense industry in a particular country. YOHANAN ELIGOOLA further claimed that he marked up munitions he sold by approximately 500% because they were “black market.” The Undercover Agents informed YOHANAN ELIGOOLA that they “have issues with aircraft,” referred to “the fucking helicopters,” and asked for “stingers.” Because the Undercover Agents represented that they worked for a drug cartel, the Undercover Agents meant that government helicopters had been interdicting the operations of the cartel, and the Undercover Agents wanted Stinger missiles — which are man-portable surface-to-air missile systems that are effective in shooting down helicopters — in order to shoot down those helicopters.
YOHANAN ELIGOOLA asked the Undercover Agents to send him a list of the type of munitions they wanted to purchase and offered to let the Undercover Agents visit him in other countries to see the munitions firsthand.
The Undercover Agents subsequently requested a number of weapons, including rifles, grenades, rocket-propelled grenades, anti-tank weapons, suicide drones, and Stinger missiles. YOHANAN ELIGOOLA responded that he could provide most of those weapons and listed the prices he would charge. As to the Stinger missiles, YOHANAN ELIGOOLA offered FN-6 and FN-16 man-portable surface-to-air missile systems as alternatives.
On April 15, 2024, the Undercover Agents met with YOHANAN ELIGOOLA at a restaurant in New York, New York, in order to make a down payment on the surface-to-air missiles. The Undercover Agents provided YOHANAN ELIGOOLA with $690,000 in cash as a down payment for approximately eight such missiles. YOHANAN ELIGOOLA was then arrested by the FBI.
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YOHANAN ELIGOOLA, 58, of the nation of Georgia, and DAVID ELIGOOLA, 34, of Hallandale Beach, Florida, are each charged with conspiracy to launder money, 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 defendants will be determined by a judge.
Mr. Williams praised the outstanding work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Micah Fergenson and Kevin Mead 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 therein should be treated as an allegation.
Texas Man Pleads Guilty to Wire Fraud Conspiracy Involving over $12 Million in Consumer ElectronicsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that OLUSEUN MARTINS OMOLE, a/k/a “Seun Omole,” pled guilty today to conspiracy to commit wire fraud for his participation in a widespread scheme to defraud thousands of victims in the United States and elsewhere of thousands of consumer electronics and other goods totaling more than $12 million. OMOLE pled guilty before U.S. Magistrate Judge Katharine H. Parker.
U.S. Attorney Damian Williams said: “Over the course of approximately five years, Oluseun Martins Omole received more than $12 million worth of fraudulently obtained consumer electronics and other items. Thousands of victims believed that they were sending these electronics and items to romantic lovers, legitimate buyers, and reputable employers. Instead, they went straight to Omole, who repackaged those electronics and goods and shipped them in bulk to co-conspirators located overseas in exchange for the equivalent of hundreds of thousands of U.S. dollars. Those like Omole who participate in such fraud schemes will find themselves facing prison time.”
According to the allegations contained in the Indictment and Complaint, the plea agreement, and other public filings and statements made in court:
From at least in or about February 2018 through at least in or about March 2023, OMOLE participated in a criminal enterprise based in Nigeria (the “Enterprise”), which orchestrated various scams to defraud thousands of victims in the United States and elsewhere of more than $12 million in consumer electronics, including smartphones, smartwatches, laptops, and tablets, among other items. The scams perpetrated by the members of the Enterprise included (i) romance scams, in which Enterprise members sent electronic communications to victims feigning romantic intentions, gained their trust and affection, and took advantage of that goodwill to induce victims into sending consumer electronics and other money or property to OMOLE; (ii) online marketplace scams, in which Enterprise members sent electronic communications to victims feigning interest in buying consumer electronics, falsely represented to the victim that the items had been paid for, and instructed the victim to send the consumer electronics to OMOLE; and (iii) employment scams, in which Enterprise members posted phony jobs online and informed unwitting victims that they were hired before instructing victims to send electronics to OMOLE under the guise that those electronics were needed for the job (together, the “Fraudulent Electronics Scams”).
During the relevant time period, OMOLE owned and operated a business corporation named Tobylink Impessions, Inc., a/k/a Tobylink Impressions, Inc. (“Tobylink”), which claimed to be a distributor, re-seller, and supplier of satellite communications equipment. In reality, however, Tobylink served as a vehicle through which OMOLE received thousands of fraudulently obtained goods from victims of the Enterprise before repackaging and shipping those items to various co-conspirators located in Nigeria. During his participation in the conspiracy, OMOLE received and sent more than $12 million in consumer electronics and other items to other members of the Enterprise, in exchange for the equivalent of hundreds of thousands of U.S. dollars in fees that OMOLE charged other Enterprise members.
If you believe you are a victim of the Fraudulent Electronics Scams, you may contact the following email address: [email protected].
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OMOLE, 57, of Sugar Land, Texas, 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 plea agreement, OMOLE agreed to pay restitution in an amount to be ordered by the Court and to forfeit an amount of U.S. currency to be ordered by the Court, as well as various consumer electronics and other goods seized by law enforcement.
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. OMOLE’s sentencing is scheduled for July 30, 2024, before U.S. District Judge Jesse M. Furman.
Mr. Williams praised the work of the Federal Bureau of Investigation. Mr. Williams also thanked Homeland Security Investigations for their assistance with the investigation.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jerry J. Fang is in charge of the prosecution.
Former NYPD Officer Pleads Guilty to Distributing Fentanyl and HeroinRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that GRACE ROSA BAEZ pled guilty today to conspiracy to distribute and possess with intent to distribute heroin, fentanyl, and para-fluorofentanyl. BAEZ pled guilty before U.S. District Judge Denise L. Cote.
U.S. Attorney Damian Williams said: “Fentanyl and heroin are driving this nation’s deadly opioid crisis and are responsible for thousands of tragic deaths in this city and around the nation. Rather than protect and serve the people of New York City, former NYPD officer Grace Rosa Baez peddled deadly poison for personal gain. Today, Baez is held accountable for her selfish and reckless betrayal.”
According to the filings and statements made in Manhattan federal court:
In 2012, BAEZ became an active member of the New York City Police Department (“NYPD”). In 2020, due to alleged misconduct, BAEZ was placed on modified duty and was under departmental investigation. On three occasions in October 2023, while on modified desk duty at a particular NYPD facility, BAEZ sold a confidential source working with law enforcement (the “CS”) packages containing over one kilogram of heroin, over 400 grams of fentanyl, and over 100 grams of fentanyl analogue. BAEZ negotiated the price and quantity of the narcotics and arranged to deliver the narcotics to the CS while she was on duty with the NYPD. BAEZ sold the narcotics to the CS outside of her homes in the Bronx and Yonkers, New York. Upon her arrest, BAEZ resigned from the NYPD.
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BAEZ, 38, of the Bronx, New York, pled guilty to one count of conspiracy to distribute and possess with intent to distribute mixtures and substances containing a detectable amount of heroin, fentanyl, and para-fluorofentanyl, which carries a maximum sentence of 20 years in prison. BAEZ is scheduled to be sentenced by Judge Cote on July 18, 2024.
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 exceptional investigative work of the Federal Bureau of Investigation and the NYPD.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Amanda C. Weingarten is in charge of the prosecution.
Former NBA Player William Bynum Sentenced to 18 Months in Prison for Making False Statements to the NBA Players’ Health and Welfare Benefit PlanRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that WILLIAM BYNUM was sentenced to 18 months in prison for his role in a scheme to make false statements to the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”). On November 15, 2023, BYNUM was found guilty of conspiring to make false statements relating to health care matters following a three-week trial before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “The defendant took part in this broad criminal scheme targeting a health care benefit plan. He also took the stand at trial and lied to the jury while under oath. His sentence stands as a stark warning that prison time awaits any who seek to defraud and obstruct justice.”
According to the Indictment, trial testimony and exhibits, public court filings, and statements made in court:
The Plan is a health care plan providing benefits to eligible active and former players of the NBA. BYNUM is a former NBA basketball player who was eligible to obtain reimbursement for certain eligible health care expenses from the Plan.
From at least in or about 2018, up to and including at least in or about 2019, BYNUM participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan. In late 2018, Terence Williams sent BYNUM fake invoices that purported to relate to $200,000 in medical services BYNUM received at a Los Angeles-area chiropractor. In reality, BYNUM had not received these services and the invoices were false. BYNUM submitting these false claims to the Plan, seeking reimbursement. The Plan reimbursed BYNUM for the majority of his false claims.
BYNUM and his co-defendant Ronald Glen Davis proceeded to trial in November 2023. During the course of the trial, BYNUM took the stand in his own defense. During the course of his trial testimony, BYNUM committed perjury and obstructed justice.
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In addition to his prison term, BYNUM, 41, of Bensenville, Illinois, was ordered to forfeit $182,224.09 and pay restitution of $182,224.09.
Williams and Dooling previously pled guilty and were sentenced to 10 years and 30 months in prison, respectively. Davis was convicted of conspiracy to commit health care fraud, wire fraud, health care fraud, and conspiring to make false statements relating to health care matters and is scheduled to be sentenced on May 9, 2024, at 11:00 a.m.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel and Daniel G. Nessim are in charge of the prosecution.
Bronx Man Charged with Sexual Exploitation of A Child and Receipt and Possession of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging WINSTON COLON CORREA with sexual exploitation of a child, receipt of child pornography, and possession of child pornography. COLON CORREA was arrested this morning and will be presented before U.S. Magistrate Judge Katharine H. Parker later today.
U.S. Attorney Damian Williams said: “As alleged, Winston Colon Correa repeatedly sought out minor girls — some as young as 12 years old — to engage in sexually explicit conversations and convince them to send pornographic videos of themselves. Colon Correa allegedly knew that his victims were minors, and to earn their trust, he lied to them about his own age. This Office will relentlessly pursue predators who sexually exploit children, whether online or in person.”
As alleged in the Complaint:[1]
Since at least on or about May 28, 2022, COLON CORREA, a 31-year-old male, engaged in sexually explicit text message conversations with numerous minor girls. In the course of these conversations, COLON CORREA induced the production of child pornography, received child pornography, and possessed child pornography, including videos of minor girls engaged in sexually explicit conduct. Law enforcement’s review of a cellphone seized from COLON CORREA has revealed the existence of sexually explicit text messages between COLON CORREA and over approximately 15 individuals believed to be minor girls and over approximately 20 files believed to contain child pornography. COLON CORREA engaged in this conduct despite having reason to know and knowing that he was communicating with minors. On multiple occasions, COLON CORREA falsely represented to minor girls that he was only 17 years old.
Any individuals with information concerning WINSTON COLON CORREA, or whose child may have had any communications with COLON CORREA, are asked to contact the Federal Bureau of Investigation (“FBI”) at 1-800-CALL-FBI (225-5324) or https://tips.fbi.gov.
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COLON CORREA, 31, of the Bronx, New York, is charged with one count of sexual exploitation of a child, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison; one count of receipt of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 10 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding work of the FBI and the Washington, D.C. Metropolitan Police Department in connection with this investigation.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney William C. Kinder is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the 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.
Former President and Head Bookkeeper of Moving Company Convicted of Multimillion-Dollar Payroll Tax Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against JOSEPH EUGENE LEMAY, a/k/a “Gene Lemay,” and JOEL LINGAT for criminal tax conspiracy. LEMAY is the former president of a company that provides moving and storage services (“Company-1”), and LINGAT is Company-1’s head bookkeeper. LEMAY and LINGAT conspired to perpetrate a long-running scheme to evade more than approximately $7.7 million in federal payroll taxes owed by Company-1 and affiliated companies to the Internal Revenue Service (“IRS”). The defendants were found guilty following a two-week trial before U.S. District Judge Mary Kay Vysckocil.
U.S. Attorney Damian Williams said: “Gene Lemay and Joel Lingat cheated the systems that are in place to protect hardworking Americans at the end of their careers. As a result, Social Security and Medicare were deprived of millions in payroll taxes. This Office will not stand by when employers violate the public trust by refusing to pay taxes meant to support their workers.”
According to the allegations in the Indictment, the criminal Complaint previously filed against LINGAT (where LEMAY is identified as CC-1), and the evidence at trial:
From in or about 2010 through in or about December 2016, LEMAY, LINGAT, and other co-conspirators perpetrated a scheme to defraud the U.S. government of payroll and income taxes due and owing to the IRS by Company-1 and affiliated companies. As part of the criminal scheme, LEMAY, LINGAT, and their co-conspirators created front companies, nominally owned by close associates or family members of LEMAY or others at Company-1; assigned (on paper only) foremen and movers working for Company-1 to the sham companies; and fraudulently made it appear that the sham companies were independent contractors, including by creating fake invoices by which the sham companies purportedly billed Company-1 for labor. Because the conspirators fraudulently made it appear that the labor was performed by independent contractors, Company-1 was able to deduct the cost of the labor as an expense on its tax returns, without withholding or paying over any payroll taxes to the IRS. Through the criminal scheme, Company-1 and affiliated companies evaded in excess of approximately $7.7 million in payroll taxes, including FICA and Medicare contributions, during the charged period.
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LEMAY, 63, of Delray Beach, Florida, and LINGAT, 62, of Jersey City, New Jersey, were convicted of one count of conspiracy to defraud the IRS, 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 defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the IRS-Criminal Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Timothy V. Capozzi, Jilan Kamal, and Steven Kochevar are in charge of the prosecution, with assistance from Paralegal Specialists Geoffrey Mearns and Julia Gutierrez.
Bronx Tax Preparer Charged with Filing Tens of Thousands of False Tax Returns Causing over $100 Million in Fraudulent Tax LossRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Trevor R. Nelson, the Deputy Inspector General for Investigations for the Treasury Inspector General for Tax Administration (“TIGTA”), announced today the unsealing of an Indictment charging RAFAEL ALVAREZ, a/k/a “the Magician,” with conspiracy to defraud the United States, aiding and abetting the filing of false federal tax returns, attempting to interfere with the administration of the internal revenue laws, making false statements, and aggravated identity theft. These charges arise from ALVAREZ’s alleged orchestration of a wide-ranging scheme to file tens of thousands of federal individual income tax returns that included false information designed to fraudulently reduce the individuals’ tax burden and to make false statements to the IRS. ALVAREZ was arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.
U.S. Attorney Damian Williams said: “Rafael Alvarez was allegedly so prolific in falsifying his customers’ tax returns that he came to be known as ‘the Magician’ for his ability to make customers’ tax burden disappear. But, Alvarez’s sleight of hand was criminal tax fraud, a serious federal tax crime he was allegedly committing for over a decade, depriving the IRS of more than $100 million in tax revenue. Today’s charges, on Tax Day, should serve as an important reminder to tax professionals that when they try to cheat the public fisc they will face grave consequences.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “While Alvarez may have been known as the ‘magician,’ he can’t say abracadabra and make these charges disappear. This one person is charged with creating a criminal enterprise that defrauded the government of more than $100 million. The evidence points to Alvarez’s alleged scheme to file tens of thousands of fraudulent tax returns, while his company, ATAX, grossed over $15 million in revenue in just three years. Today’s arrest was no magical illusion, and Alvarez now faces the reality of his actions.”
FBI Assistant Director in Charge James Smith said: “Rafael Alvarez, the CEO, owner, and manager of ATAX New York, allegedly orchestrated one of the largest ever tax fraud schemes by submitting false federal tax returns that ultimately cost the IRS over $100 million in revenue while simultaneously generating $15 million for his own company. Alvarez’s alleged 10-year fraudulent operation is not a magic act, but rather a deliberate slight against the integrity of our country’s tax system. Today, Alvarez must pay the price for his actions – the FBI does not tolerate those who steal from the government for personal economic fortune.”
TIGTA Deputy Inspector General Trevor R. Nelson said: “The Treasury Inspector General for Tax Administration aggressively investigates tax preparers who attempt to corrupt our Nation’s tax system. Our mission at TIGTA is to protect the integrity of our Nation’s system of tax administration. We are committed to working with our law enforcement partners to ensure those who endeavor to corrupt Federal tax administration are prosecuted to the fullest extent of the law.”
As alleged in the Indictment unsealed in Manhattan federal court and court filings:[1]
From at least in or about 2010, up to and including in or about 2020, RAFAEL ALVAREZ was the CEO, owner, and manager of ATAX New York, LLC, also doing business as ATAX New York-Marble Hill, ATAX Marble Hill, ATAX Marble Hill NY, and ATAX Corporation (together, “ATAX”). ATAX was a high-volume tax preparation company located in the Bronx, which prepared approximately 90,000 federal income tax returns for its customers during this period. ALVAREZ both prepared tax returns for ATAX customers and recruited, supervised, and directed other ATAX personnel who in turn prepared tax returns for customers. During this period, ALVAREZ oversaw a sweeping fraudulent scheme, whereby he and his employees submitted false information to the IRS in ATAX customers’ tax returns. This false information, which included, among other things, bogus itemized tax deductions, made-up capital losses, phony business expenses, and fraudulent tax credits, served to fraudulently reduce the customers’ tax liability and increase the customers’ tax refunds from the IRS. In total, ALVAREZ oversaw ATAX’s fraudulent submission of tax returns on behalf of customers that deprived the IRS of substantially more than $100 million in tax revenue. ALVAREZ was so consistent at falsifying ATAX customer tax returns that he became known to ATAX’s customers as “the Magician.” Additionally, as part of ALVAREZ’s unlawful operation of ATAX, he and an ATAX employee made false statements to an IRS Revenue Agent. ALVAREZ’s operation of ATAX helped the company generate at least approximately $15 million in gross revenues over the period of in or about 2016 to in or about 2019.
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RAFAEL ALVAREZ, 60, of Cortlandt Manor, New York, is charged with one count of conspiracy to defraud the United States and making false statements, each of which carries a maximum sentence of five years in prison. He is also charged with four counts of aiding and assisting preparation of false and fraudulent U.S. individual income tax returns and attempting to interfere with the administration of the internal revenue laws, each of which carries a maximum sentence of three years in prison. He is further charged with aggravated identity theft, which carries a mandatory minimum sentence of two 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 IRS-CI, FBI, and TIGTA.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys David R. Felton and Samuel Raymond 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.
Georgia Man Sentenced to Three Years in Prison for Laundering Millions in Proceeds from Fraud Schemes Perpetrated by Nigeria-Based Criminal EnterpriseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that UWEMEDIMO UMOREN was sentenced to three years in prison for his participation in an international wire fraud conspiracy based in Nigeria, involving the theft of millions of dollars from victims across the U.S., by U.S. District Judge Victor Marrero. UMOREN pled guilty to conspiracy to commit wire fraud on August 28, 2023, before U.S. Magistrate Judge Robert W. Lehrburger.
U.S. Attorney Damian Williams said: “The multimillion-dollar fraud enterprise Uwemedimo Umoren participated in preyed on the trust of elder Americans and others, using deceitful tactics to drain their hard-earned savings. The impact of this financial exploitation on the victims is devastating. With today’s sentencing, justice is served, but our fight isn’t over. This case underscores the importance of collaboration between law enforcement agencies in combatting complex fraud schemes and safeguarding Americans from financial fraud and exploitation.”
According to allegations in the Indictment and other filings and statements made in court:
From at least in or about 2016 through at least in or about December 2021, UMOREN participated in a criminal enterprise (the “Enterprise”) based in Nigeria that conducted a series of scams against individuals and businesses located across the U.S. UMOREN facilitated the laundering of proceeds of the Enterprise’s investment, business email compromise, and romance scams. Members of the Enterprise used electronic messages sent via email, text messaging, or online dating websites to gain the trust of the victims, many of whom were vulnerable older men and women who lived alone, and caused the victims to transfer money to bank accounts controlled by members of the Enterprise.
UMOREN received fraud proceeds from victims of the Enterprise in more than a dozen business bank accounts that he controlled in Georgia. The business bank accounts were opened in the names of companies formed by the defendant that were purportedly involved in, among other things, automobile sales and health care. From in or about 2016 through at least in or about December 2021, UMOREN controlled at least 15 bank accounts held in the name of shell companies he controlled that received deposits totaling over approximately $8 million.
At least 17 individual and corporate victims lost money as part of UMOREN and his co-conspirators’ schemes. The victims include vulnerable, isolated, and elderly victims who entered into relationships after the deaths of their spouses and, over a period of several years, were induced to drain their entire retirement savings. Many victims experienced severe emotional harm, including a now-deceased man whose stress from losing his life savings to the schemes contributed to his suffering a stroke.
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In addition to the prison term, UMOREN, 62, of Hoschton, Georgia, was sentenced to three years of supervised release. UMOREN was also ordered to forfeit a money judgment in the amount of $8,230,516.04 and was ordered to pay $1,246,072 in restitution.
Mr. Williams praised the outstanding investigative work of the U.S. Secret Service (“USSS”). Mr. Williams also thanked the USSS Field Office in Atlanta, Georgia, for its assistance in the investigation of this case.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Juliana N. Murray is in charge of the prosecution.
Former Security Engineer Sentenced to Three Years in Prison for Hacking Two Decentralized Cryptocurrency ExchangesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that SHAKEEB AHMED was sentenced today to three years in prison by U.S. District Judge Victor Marrero for hacking two separate decentralized cryptocurrency exchanges and stealing cryptocurrency worth over $12 million. AHMED previously pled guilty to computer fraud.
U.S. Attorney Damian Williams said: “Today, Shakeeb Ahmed was sentenced to prison in the first ever conviction for the hack of a smart contract and ordered to forfeit all of the stolen crypto. No matter how novel or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice. And as today’s sentence shows, time in prison — and forfeiture of all the stolen crypto — is the inevitable consequence of such destructive hacks.”
According to the charging documents and other filings and statements made in court:
On or about July 2 and 3, 2022, AHMED carried out an attack on a decentralized cryptocurrency exchange (the “Crypto Exchange”), in which he used fake pricing data to generate approximately $9 million worth of inflated fees, then withdrew those fees in the form of cryptocurrency. After he stole the fees, AHMED had communications with the Crypto Exchange in which he agreed to return all of the stolen funds except for $1.5 million if the Crypto Exchange agreed not to refer the attack to law enforcement.
On or about July 28, 2022, a few weeks after the hack of the Crypto Exchange, AHMED carried out an attack on a second decentralized cryptocurrency exchange called Nirvana Finance (“Nirvana”). AHMED used an exploit he discovered in Nirvana’s smart contracts to allow him to purchase cryptocurrency from Nirvana at a lower price than the contract was designed to allow. He then immediately resold that cryptocurrency to Nirvana at a higher price. Nirvana offered AHMED a “bug bounty” of as much as $600,000 to return the stolen funds, but AHMED instead demanded $1.4 million, did not reach agreement with Nirvana, and kept all the stolen funds. The $3.6 million AHMED stole represented approximately all the funds possessed by Nirvana, which as a result shut down shortly after AHMED’s attack.
AHMED laundered the millions that he stole from the Crypto Exchange and from Nirvana to conceal their source and ownership, using sophisticated techniques including token-swap transactions; “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain; exchanging fraud proceeds into Monero, an anonymized cryptocurrency that is particularly difficult to trace; using overseas cryptocurrency exchanges; and using cryptocurrency mixers, such as Samourai Whirlpool.
At the time of both attacks, AHMED, a U.S. citizen, was a senior security engineer for an international technology company, whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills AHMED used to execute the hacks.
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In addition to the prison term, AHMED, 34, of New York, New York, was sentenced to three years of supervised release. AHMED was also ordered to forfeit approximately $12.3 million and a significant quantity of cryptocurrency and pay restitution to the Crypto Exchange and Nirvana in the amount of over $5 million.
Mr. Williams praised the outstanding work of Homeland Security Investigations and Internal Revenue Service – Criminal Investigation.
The case is being prosecuted by the Office’s Illicit Finance and Money Laundering Unit and Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys David R. Felton and Kevin Mead are in charge of the prosecution.
Extradited Colombian National Sentenced to 14 Years in Prison for Conspiring to Import Cocaine into the United StatesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that LIBIA AMANDA PALACIO MENA was sentenced to 14 years in prison for conspiring to import cocaine into the U.S. PALACIO MENA pled guilty on December 21, 2023, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Libia Amanda Palacio Mena's sentence marks a significant blow to drug trafficking networks, demonstrating our steadfast commitment to dismantling criminal enterprises. Through the collaborative efforts of law enforcement, this Office and our partners uncovered the complex network Palacio Mena and others orchestrated alongside FARC operatives and other violent drug trafficking organizations. This outcome underscores that those who conspire to flood our streets with narcotics will face stiff consequences for their actions.”
According to court documents and statements made during court proceedings:[1]
PALACIO MENA conspired with her co-defendants and other individuals associated with the Fuerzas Armadas Revolucionarias de Colombia (“FARC”) — a violent organization based in Colombia that was dedicated to the overthrow of the Colombian government and responsible for the production and distribution of the majority of the cocaine that eventually reached the U.S. — to source and distribute tons of cocaine destined for the U.S. PALACIO MENA negotiated with individuals she believed to be narcotics traffickers from a Mexico-based drug trafficking organization (the “Mexican DTO”) seeking to establish a cocaine supply line from Venezuela to the U.S. These individuals, however, were actually confidential sources working at the direction of the U.S. Drug Enforcement Administration (the “DEA”).
In dozens of communications recorded during the investigation, PALACIO MENA presented herself to the Mexican DTO as a broker for large cocaine and weapons transactions. PALACIO MENA touted her connections to, among others, Colombian political leaders, the FARC, and the Cartel of the Suns — a group of high-ranking Venezuelan officials who abused the Venezuelan people and corrupted the legitimate institutions of Venezuela to facilitate the importation of tons of cocaine into the U.S. in partnership with the FARC. After exploring working with various drug traffickers and introducing the confidential sources to several possible partners for sourcing and transporting cocaine, PALACIO MENA ultimately introduced the confidential sources to one of her co-defendants, who agreed to use his political and logistics connections in Colombia to assist the venture.
In December 2021, to prove their bona fides and establish the quality of their supply, PALACIO MENA sold the confidential sources a five-kilogram sample of extremely pure cocaine from a FARC-associated farm outside of Medellín. PALACIO MENA was arrested in Colombia in February 2022, in the midst of negotiating a much larger partnership with the Mexican DTO, which they envisioned entailing the shipment of approximately 500 kilograms of cocaine per week.
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In addition to the prison term, PALACIO MENA, 50, of Medellín, Colombia, was sentenced to four years of supervised release.
Mr. Williams praised the outstanding investigative work of the DEA’s Special Operations Division Bilateral Investigations Unit and Bogota Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s Office in Bogota.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (“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.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley, Kaylan E. Lasky, and Kevin T. Sullivan are in charge of the prosecution.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part, and many of these conversations occurred in Spanish.
Dominic Coluccio, Former President of United Probation Officers Association, Pleads Guilty to Defrauding Union and Its MembersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced that DOMINIC COLUCCIO, the former President of the United Probation Officers Association (the “UPOA”), the union that represents all current and former New York City probation officers, pled guilty today to one count of wire fraud in connection with a scheme to steal hundreds of thousands of dollars from the UPOA and the UPOA’s active welfare fund and retirement welfare fund. COLUCCIO pled guilty before U.S. Magistrate Judge Sarah Netburn.
U.S. Attorney Damian Williams said: “Dominic Coluccio promised to look out for all the hard-working active and retired probation officers who are members of the UPOA. Instead, as admitted today in federal court, he stole hundreds of thousands of dollars from them to fund his lavish lifestyle. Thanks to the hard work of the DOI and the Special Agents and career prosecutors of the Southern District of New York, Coluccio’s betrayal has been exposed, and he now faces jail time and significant financial penalties.”
DOI Commissioner Jocelyn E. Strauber said: “This defendant, former President of the United Probation Officers Association and Administrator of the Association’s Welfare Funds, used his leadership role to steal hundreds of thousands of dollars from the Association and its taxpayer-funded Welfare Funds, intended to benefit current and retired Department of Probation employees and family members. Today he takes responsibility for that conduct and agrees to pay $684,929 in restitution to the Association. DOI thanks the individuals who reported suspicions about misuse of funds to DOI, prompting this investigation, and the Office of the New York City Comptroller and the United States Attorney’s Office for the Southern District of New York for their commitment to hold accountable anyone who misappropriates public funds.”
According to the Information filed in the case and statements made in court:
The UPOA is a non-profit 501(c)(5) labor organization with the intended purpose of advancing the professional, health, and safety interests of its members – officers and supervisors in the New York City Department of Probation (“DOP” or “Probation”). The UPOA’s membership consists of all active and retired Probation Officers and Supervisors within DOP. COLUCCIO was President of the UPOA from in or about 1989 until in or about 2016.
From in or about 2010 until in or about 2019, COLUCCIO also served as Administrator of UPOA’s Active Welfare Fund and UPOA’s Retirement Welfare Fund (together, the “Welfare Funds”). The Welfare Funds, established through an agreement between the City of New York (the “City”) and the UPOA, are benefit plans that provide supplemental health and welfare benefits (principally dental and vision benefits) to eligible retired and current Probation employees, their spouses, and dependents. Both Welfare Funds are almost entirely funded by the City.
From in or about 2012 up to and including in or about 2019, COLUCCIO was engaged in a multi-faceted scheme to embezzle money from the UPOA and the Welfare Funds and to pay his personal expenses through money from the UPOA and Welfare Funds. COLUCCIO did this in several ways.
From in or about 2012 until in or about 2018, COLUCCIO funded his personal expenses charged to his personal American Express credit card, in part, through money obtained from the UPOA and the Welfare Funds. Specifically, COLUCCIO charged his personal credit card for, among other things, high-end meals and retail items, jewelry, luxury vacations and hotels, and a relative’s college tuition. COLUCCIO then caused the UPOA, typically through electronic transfers, to pay down his personal credit card balance.
From in or about 2012 up to and including in or about 2018, COLUCCIO misappropriated funds from the UPOA and Welfare Funds to fund an unauthorized individual retirement account in COLUCIO’s name. In or about 2012, COLUCCIO, without approval or authorization from the UPOA, created an IRA in the name of the UPOA and a sub-account in COLUCCIO’s name. These unauthorized transfers of funds from the UPOA to the IRA account were in addition to the pension payments COLUCCIO received from Probation and the UPOA.
In or about 2016, at or around the time of his retirement as President of the UPOA, COLUCCIO and the Welfare Funds entered into an agreement pursuant to which the Welfare Funds agreed to pay COLUCCIO, as Administrator of the Funds, “an annual salary equal to the Probation Department Commissioner’s salary. . . .” The annual salary was in addition to COLUCCIO’s Probation pension, UPOA pension, and UPOA severance. Notwithstanding this agreement, COLUCCIO, who effectively controlled the Welfare Funds’ bank accounts and payroll, caused the Welfare Funds to pay COLUCCIO a salary higher than the Probation Commissioner’s salary.
From in or about 2000, up to and including 2020, COLUCCIO submitted and sought reimbursement for medical, dental, and vision expenses that he and his dependents incurred. During that time period, COLUCCIO routinely authorized and concealed overpayments to him, his spouse, and his family members, i.e., payments that exceeded policy limits.
Through the scheme, COLUCCIO stole approximately $750,000 from the UPOA and the Funds.
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COLUCCIO, 75, of Bellmore, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. As part of his plea agreement, COLUCCIO agreed to forfeit $750,000 to the United States and to make restitution in the amount of $684,929.00 to the UPOA and the Funds.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of DOI and the Special Agents of the U.S. Attorney’s Office. Mr. Williams also thanked the New York City Comptroller’s Office Unit of Research and Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Nicholas Chiuchiolo is in charge of the prosecution.
U.S. Attorney Announces Arrest and Extradition of David Campbell, Principal Drug and Weapons Supplier for MS-13 in HondurasRead 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; John J. Durham, the Director of Joint Task Force Vulcan (“JTFV”); Anne Milgram, the Administrator of the Drug Enforcement Administration (“DEA”); Katrina W. Berger, the Executive Associate Director of Homeland Security Investigations (“HSI”); and Douglas Williams, the Special Agent in Charge of the Houston Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and extradition of DAVID CAMPBELL, a/k/a “Viejo Dan,” a/k/a “Don David,” one of the principal narcotics and weapons suppliers to MS-13 in Honduras. CAMPBELL was presented today before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court after being extradited yesterday from Honduras.
In addition to CAMPBELL, the Superseding Indictment unsealed today also charges YULAN ANDONY ARCHAGA CARÍAS, a/k/a “Alexander Mendoza,” a/k/a “Porky,” the top leader of MS-13 in Honduras, and three additional MS-13 leaders, JUAN CARLOS PORTILLO SANTOS, a/k/a “Juancy,” VICTOR EDUARDO MORALES ZELAYA, a/k/a “Cuervo,” and JORGE ALBERTO VELASQUEZ PAZ, a/k/a “Chacarron,” for racketeering, narcotics trafficking, and firearms offenses. CAMPBELL and ARCHAGA CARÍAS were previously charged in 2021 in a Superseding Indictment in Manhattan federal court with racketeering, narcotics trafficking, and firearms offenses. ARCHAGA CARÍAS was subsequently placed on the FBI’s Ten Most Wanted Fugitives List, the DEA’s Most Wanted Fugitives List, HSI’s Most Wanted Fugitives List, and a $5 million reward was offered by the U.S. Department of State for information related to his arrest or capture. PORTILLO SANTOS and VELASQUEZ PAZ are in custody in Honduras. MORALES ZELAYA remains at large. The case is assigned to U.S. District Judge Gregory H. Woods.
U.S. Attorney Damian Williams said: “MS-13 is one of the most dangerous criminal organizations in the world. My Office, the Justice Department, and our law enforcement partners will stop at nothing to pursue and hold accountable MS-13’s leaders, members, and associates, who, as alleged in the Superseding Indictment unsealed today, are responsible for large-scale drug trafficking and violence throughout the United States and Central America. As alleged, David Campbell was, until his capture, one of MS-13’s major suppliers of drugs and guns, and he planned and coordinated violent acts with the top leader of MS-13 in Honduras, Archaga Carías. Campbell has now been extradited and will face justice in the United States, and a $5 million reward is offered for information leading to the arrest of Archaga Carías.”
Attorney General Merrick B. Garland said: “Over the course of decades, MS-13 has sowed unspeakable violence in communities here in the United States and abroad. With the arrest and extradition of the alleged principal MS-13 drug and weapons supplier, the Justice Department is making clear that those responsible for flooding our communities with violence and deadly drugs will be held accountable in an American courtroom.”
JTFV Director John J. Durham said: “MS-13’s brutal violence is fueled by firearms, funded by narcotics trafficking, and disguised by money laundering. As alleged in the Superseding Indictment, David Campbell and his co-conspirators procured and sold multi-ton loads of narcotics, deployed firearms, including machine guns, and laundered the drug proceeds, all in furtherance of the organization. Thanks to the tenacious efforts and collaboration of our law enforcement partners, he now will face justice in a United States courtroom.”
DEA Administrator Anne Milgram said: “Today's extradition of David Campbell and the announcement of charges against four other MS-13 leaders for their alleged involvement in trafficking multi-ton loads of cocaine and for allegedly perpetrating unspeakable acts of violence in our communities is a testament to the unwavering commitment of the men and women of DEA to save lives and hold drug traffickers accountable. DEA will continue to seek justice for all Americans suffering the devastating effects of drug poisonings and drug-related violence in our communities.”
HSI Executive Associate Director Katrina W. Berger said: “Campbell’s arrest and extradition should serve as a clear message to those who support MS-13 and other transnational criminal organizations. HSI will not cease its relentless pursuit of all suspects involved in this case until they are captured and brought to justice.”
FBI Special Agent in Charge Douglas Williams said: “Every day, MS-13 ravages American neighborhoods with violence, drugs, and death. David Campbell allegedly enabled the exportation of violence and poison onto American streets as Mara Salvatrucha’s primary supplier of cocaine and weapons. FBI Houston’s work to ensure Campbell now faces U.S. justice sends a simultaneous message to MS-13 around the world — we will not stop pursuing you, we will not stop dismantling your networks, and we will not rest until we’ve eradicated the violence you bring into our society.”
As alleged in the Superseding Indictment unsealed in Manhattan federal court:[1]
MS-13 is a transnational criminal organization that engages in acts of violence, including murders, kidnapping, assaults, extortion, and large-scale drug importation and distribution throughout Central America and the United States. ARCHAGA CARÍAS is the highest-ranking member of MS-13 in Honduras. As the leader and highest-ranking member of MS-13 in Honduras, ARCHAGA CARÍAS is in charge of, among other things, the gang’s drug trafficking operations; ordering and coordinating acts of violence, including numerous murders; and the laundering of drug proceeds. MORALES ZELAYA and VELASQUEZ PAZ are both leaders of MS-13 in Honduras and close associates to ARCHAGA CARÍAS. MS-13’s drug trafficking operations led by ARCHAGA CARÍAS, MORALES ZELAYA, VELASQUEZ PAZ, and others include the processing, receiving, transporting, and distributing of multi-ton loads of cocaine shipped through Honduras and into the United States.
ARCHAGA CARÍAS and other MS-13 members and associates acting at his direction also provided protection for other drug trafficking organizations (“DTOs”) engaged in transporting multi-ton loads of cocaine through Honduras and destined for the United States. ARCHAGA CARÍAS contracted out members of MS-13 as “Sicarios,” or hit men, to other DTOs for payment. In that role, MS-13’s Sicarios committed numerous murders for hire for DTOs trafficking cocaine through Honduras to the United States. ARCHAGA CARÍAS and MS-13 also supplied other DTOs with firearms, including machineguns, that were received from El Salvador, Nicaragua, and elsewhere. ARCHAGA CARÍAS – and MORALES ZELAYA, VELASQUEZ PAZ, and PORTILLO SANTOS, operating under ARCHAGA CARÍAS’s leadership – also ordered and coordinated murders of rival gang members and drug trafficking competitors in Honduras, as well as other members of MS-13 whom ARCHAGA CARÍAS believed had been disloyal to the gang.
CAMPBELL was one of the principal suppliers of cocaine and weapons, including machineguns, to MS-13 in Honduras. As an associate of MS-13 and close confidant of ARCHAGA CARÍAS, CAMPBELL planned and coordinated retaliatory acts of violence with ARCHAGA CARÍAS and assisted MS-13 and ARCHAGA CARÍAS in establishing businesses to launder the gang’s drug proceeds. CAMPBELL and MS-13 used businesses they owned or controlled to launder drug proceeds, including through banks in the United States.
MORALES ZELAYA and VELASQUEZ PAZ were both leaders of MS-13 in Honduras and close associates of ARCHAGA CARÍAS. MORALES ZELAYA and VELASQUEZ PAZ each coordinated the gang’s drug trafficking business, acts of violence (including murders) against rivals, and the movement of proceeds from the gang’s illicit activities.
PORTILLO SANTOS was a high-ranking member of MS-13 in Honduras who reported to MORALES ZELAYA. PORTILLO SANTOS was responsible for leading MS-13 in one of the largest sectors in Honduras, which included the distribution and movement of large shipments of cocaine, acts of violence (including murders and kidnappings) of rival gang members, and contract murders carried out against rival drug dealers.
ARCHAGA CARÍAS and MORALES ZELAYA remain at large. The $5 million reward offered by the U.S. Department of State remains valid today. Anyone with information that may lead to the arrest of ARCHAGA CARÍAS or MORALES ZELAYA can contact the FBI at 1-800-CALL-FBI. More information can be found here: https://www.fbi.gov/wanted/topten, here: https://www.dea.gov/fugitives and here: https://www.ice.gov/most-wanted.
* * *
If convicted, CAMPBELL, 57, of Honduras; ARCHAGA CARÍAS, 42, of Honduras; PORTILLO SANTOS, 35, of Honduras; MORALES ZELAYA, 49, of Honduras; and VELASQUEZ PAZ, 41, of Honduras, face a maximum penalty of life in prison and a mandatory minimum sentence of 40 years in prison.
A chart containing the charges and statutory minimum and maximum penalties for the defendants is set forth below. The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit; the FBI’s San Diego, Houston, Los Angeles, and New York Field Offices; the FBI’s Criminal Investigative Division’s Safe Streets Gang Unit; HSI’s National Gang and Violent Crime Unit; and HSI’s New York and Tegucigalpa, Honduras, Field Offices. Mr. Williams also thanked the FBI Legal Attaché in San Salvador, the Organized Crime Drug Enforcement Task Forces (“OCDETF”) Executive Office, the Department of Justice’s Violent Crime and Racketeering Section, the U.S. Attorney’s Office for the Southern District of Florida, and Customs and Border Protection Air and Marine Operations, for their assistance. The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of CAMPBELL.
The case is being handled by JTFV and the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorney David J. Robles, Special Assistant U.S. Attorney Christopher Eason, and Department of Justice Trial Attorney Jacob Warren are in charge of the prosecution.
Since its creation in August 2019, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with domestic and foreign law enforcement partners; designating priority MS-13 programs, cliques, and leaders who have the most impact on the United States for targeted prosecutions; and coordinating significant MS-13 indictments, including the first use of national security charges against MS-13 leaders. JTFV has been comprised of members from U.S. Attorney’s Offices across the country, including this Office, the Eastern District of New York, the Eastern District of Texas, the District of New Jersey, the Northern District of Ohio, the District of Utah, the District of Massachusetts, the Southern District of Florida, the District of Alaska, the Southern District of California, the District of Nevada, the Eastern District of Virginia, and the District of Columbia, as well as the Department of Justice’s National Security Division and the Criminal Division. All Department of Justice law enforcement agencies are involved in the effort, including the FBI; DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons. In addition, HSI plays a critical role in JTFV. The Department of State, Bureau of International Narcotics and Law Enforcement Affairs, and the U.S. Agency for International Development, Office of Inspector General, have also provided critical support for JTFV’s mission.
OCDETF also supports JTFV in its mission. 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 charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
CHARGE
DEFENDANTS
MIN./MAX. PENALTIES
1
Racketeering conspiracy
YULAN ANDONY ARCHAGA CARÍAS
DAVID CAMPBELL
JUAN CARLOS PORTILLO SANTOS
VICTOR EDUARDO MORALES ZELAYA
JORGE ALBERTO VELASQUEZ PAZ
Maximum of life in prison
2
Narcotics importation conspiracy
YULAN ANDONY ARCHAGA CARÍAS
DAVID CAMPBELL
JUAN CARLOS PORTILLO SANTOS
VICTOR EDUARDO MORALES ZELAYA
JORGE ALBERTO VELASQUEZ PAZ
Mandatory minimum of 10 years in prison
Maximum of life in prison
3
Using or carrying a machinegun during and in relation to, or possessing a machinegun in furtherance of, a narcotics trafficking crime
YULAN ANDONY ARCHAGA CARÍAS
DAVID CAMPBELL
JUAN CARLOS PORTILLO SANTOS
VICTOR EDUARDO MORALES ZELAYA
JORGE ALBERTO VELASQUEZ PAZ
Mandatory minimum of 30 years in prison
Maximum of life in prison
4
Machinegun conspiracy
YULAN ANDONY ARCHAGA CARÍAS
DAVID CAMPBELL
JUAN CARLOS PORTILLO SANTOS
VICTOR EDUARDO MORALES ZELAYA
JORGE ALBERTO VELASQUEZ PAZ
Maximum of life in prison
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Principal Drug and Weapons Supplier for MS-13 in Honduras Arrested and Extradited for Racketeering, Narcotics, and Firearms OffensesRead the Press Release
An indictment was unsealed today charging David Campbell, also known as Viejo Dan and Don David, 57, of Honduras, one of the principal narcotics and weapons suppliers to MS-13 in Honduras, with racketeering, narcotics, and firearms offenses.
Campbell was presented today before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court after being extradited yesterday from Honduras.
In addition to Campbell, the superseding indictment unsealed today also charges Yulan Andony Archaga Carías, also known as Alexander Mendoza and Porky, 42, of Honduras, the top leader of MS-13 in Honduras, and three additional MS-13 leaders, Juan Carlos Portillo Santos, also known as Juancy, 35; Victor Eduardo Morales Zelaya, also known as Cuervo, 49; and Jorge Alberto Velasquez Paz, also known as Chacarron, 41, for racketeering, narcotics trafficking, and firearms offenses.
Campbell and Archaga Carías were previously charged in 2021 in a superseding indictment in Manhattan federal court with racketeering, narcotics trafficking, and firearms offenses. Archaga Carías was subsequently placed on the FBI’s Ten Most Wanted Fugitives List, the DEA’s Most Wanted Fugitives List, HSI’s Most Wanted Fugitives List, and a $5 million reward was offered by the U.S. Department of State for information related to his arrest or capture. Portillo Santos and Velasquez Paz are in custody in Honduras. Morales Zelaya remains at large.
“Over the course of decades, MS-13 has sowed unspeakable violence in communities here in the United States and abroad,” said Attorney General Merrick B. Garland. “With the arrest and extradition of the alleged principal MS-13 drug and weapons supplier, the Justice Department is making clear that those responsible for flooding our communities with violence and deadly drugs will be held accountable in an American courtroom.”
“The FBI and our partners remain committed to the combating the violent criminal activity related to MS-13 occurring in communities across America,” said FBI Director Christopher Wray. “Criminals that engage in illegal activity targeting the American people should take today's announcement as a warning — they cannot hide beyond our borders. We are proud of the close collaboration with our partners which resulted in David Campbell having to face the consequences of his actions.”
“Today’s extradition of David Campbell and the announcement of charges against four other MS-13 leaders for their alleged involvement in trafficking multi-ton loads of cocaine and for allegedly perpetrating unspeakable acts of violence in our communities is a testament to the unwavering commitment of the men and women of DEA to save lives and hold drug traffickers accountable,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to seek justice for all Americans suffering the devastating effects of drug poisonings and drug-related violence in our communities.”
“MS-13 is one of the most dangerous criminal organizations in the world,” said U.S. Attorney Damian Williams for the Southern District of New York. “My office, the Justice Department, and our law enforcement partners will stop at nothing to pursue and hold accountable MS-13’s leaders, members, and associates, who, as alleged in the superseding indictment unsealed today, are responsible for large-scale drug trafficking and violence throughout the United States and Central America. As alleged, David Campbell was, until his capture, one of MS-13’s major suppliers of drugs and guns, and he planned and coordinated violent acts with the top leader of MS-13 in Honduras, Archaga Carías. Campbell has now been extradited and will face justice in the United States, and a $5 million reward is offered for information leading to the arrest of Archaga Carías.”
According to the superseding indictment, MS-13 is a transnational criminal organization that engages in acts of violence, including murders, kidnapping, assaults, extortion, and large-scale drug importation and distribution throughout Central America and the United States. Archaga Carías is the highest-ranking member of MS-13 in Honduras. As the leader and highest-ranking member of MS-13 in Honduras, Archaga Carías is in charge of, among other things, the gang’s drug trafficking operations; ordering and coordinating acts of violence, including numerous murders; and the laundering of drug proceeds. Morales Zelaya and Velasquez Paz are both leaders of MS-13 in Honduras and close associates to Archaga Carías. MS-13’s drug trafficking operations led by Archaga Carías, Morales Zelaya, Velasquez Paz, and others include the processing, receiving, transporting, and distributing of multi-ton loads of cocaine shipped through Honduras and into the United States.
“MS-13’s brutal violence is fueled by firearms, funded by narcotics trafficking, and disguised by money laundering,” said Director John J. Durham of Joint Task Force Vulcan (JTFV). “As alleged in the superseding indictment, David Campbell and his co-conspirators procured and sold multi-ton loads of narcotics, deployed firearms, including machine guns, and laundered the drug proceeds, all in furtherance of the organization. Thanks to the tenacious efforts and collaboration of our law enforcement partners, he now will face justice in a U.S. courtroom.”
Archaga Carías and other MS-13 members and associates acting at his direction also provided protection for other drug trafficking organizations (DTO) engaged in transporting multi-ton loads of cocaine through Honduras and destined for the United States. Archaga Carías contracted out members of MS-13 as “Sicarios,” or hit men, to other DTOs for payment. In that role, MS-13’s Sicarios committed numerous murders for hire for DTOs trafficking cocaine through Honduras to the United States. Archaga Carías and MS-13 also supplied other DTOs with firearms, including machineguns, that were received from El Salvador, Nicaragua, and elsewhere. Archaga Carías – and Morales Zelaya, Velasquez Paz, and Portillo Santos, operating under Archaga Carías’ leadership – also ordered and coordinated murders of rival gang members and drug trafficking competitors in Honduras, as well as other members of MS-13 whom Archaga Carías believed had been disloyal to the gang.
Campbell was one of the principal suppliers of cocaine and weapons, including machineguns, to MS-13 in Honduras. As an associate of MS-13 and close confidant of Archaga Carías, Campbell planned and coordinated retaliatory acts of violence with Archaga Carías and assisted MS-13 and Archaga Carías in establishing businesses to launder the gang’s drug proceeds. Campbell and MS-13 used businesses they owned or controlled to launder drug proceeds, including through banks in the United States.
Morales Zelaya and Velasquez Paz were both leaders of MS-13 in Honduras and close associates of Archaga Carías. Morales Zelaya and Velasquez Paz each coordinated the gang’s drug trafficking business, acts of violence (including murders) against rivals, and the movement of proceeds from the gang’s illicit activities.
Portillo Santos was a high-ranking member of MS-13 in Honduras who reported to Morales Zelaya. Portillo Santos was responsible for leading MS-13 in one of the largest sectors in Honduras, which included the distribution and movement of large shipments of cocaine, acts of violence (including murders and kidnappings) of rival gang members, and contract murders carried out against rival drug dealers.
“Campbell’s arrest and extradition should serve as a clear message to those who support MS-13 and other transnational criminal organizations,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “HSI will not cease its relentless pursuit of all suspects involved in this case until they are captured and brought to justice.”
“Every day, MS-13 ravages American neighborhoods with violence, drugs, and death,” said Special Agent in Charge Douglas Williams of the FBI Houston Field Office. “David Campbell allegedly enabled the exportation of violence and poison onto American streets as Mara Salvatrucha’s primary supplier of cocaine and weapons. FBI Houston’s work to ensure Campbell now faces U.S. justice sends a simultaneous message to MS-13 around the world — we will not stop pursuing you, we will not stop dismantling your networks, and we will not rest until we’ve eradicated the violence you bring into our society.”
Archaga Carías and Morales Zelaya remain at large. The $5 million reward offered by the U.S. Department of State remains valid today. Anyone with information that may lead to the arrest of Archaga Carías or Morales Zelaya can contact the FBI at 1-800-CALL-FBI. More information can be found at https://www.fbi.gov/wanted/topten, https://www.dea.gov/fugitives, and https://www.ice.gov/most-wanted.
If convicted, Campbell, Archaga Carías, Portillo Santos, Morales Zelaya, and Velasquez Paz face a maximum penalty of life in prison and a mandatory minimum of 40 years in prison.
The DEA’s Special Operations Division Bilateral Investigations Unit; the FBI San Diego, Houston, Los Angeles, and New York Field Offices; the FBI’s Criminal Investigative Division’s Safe Streets Gang Unit; HSI’s National Gang and Violent Crime Unit; and HSI’s New York and Tegucigalpa, Honduras, Field Offices investigated the case, with assistance from the FBI Legal Attaché in San Salvador, the Organized Crime Drug Enforcement Task Forces (OCDETF) Executive Office, the Justice Department’s Violent Crime and Racketeering Section, the U.S. Attorney’s Office for the Southern District of Florida, and the U.S. Customs and Border Protection’s Air and Maritime Operations, for their assistance. The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Campbell.
The JTFV and U.S. Attorney’s Office for the Southern District of New York’s National Security and International Narcotics Unit are handling the case. Assistant U.S. Attorney David J. Robles and Special Assistant U.S. Attorney Christopher Eason for the Southern District of New York and Trial Attorney Jacob Warren of the Justice Department are prosecuting the case.
Since its creation in August 2019, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with domestic and foreign law enforcement partners; designating priority MS-13 programs, cliques, and leaders who have the most impact on the United States for targeted prosecutions; and coordinating significant MS-13 indictments, including the first use of national security charges against MS-13 leaders. JTFV has been comprised of members from U.S. Attorney’s Offices across the country, including the Southern District of New York, the Eastern District of New York, the Eastern District of Texas, the District of New Jersey, the Northern District of Ohio, the District of Utah, the District of Massachusetts, the Southern District of Florida, the District of Alaska, the Southern District of California, the District of Nevada, the Eastern District of Virginia, and the District of Columbia, as well as the Justice Department’s National Security Division and the Criminal Division. All Justice Department law enforcement agencies are involved in the effort, including the FBI; DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons. In addition, HSI plays a critical role in JTFV. The Department of State, Bureau of International Narcotics and Law Enforcement Affairs, and the U.S. Agency for International Development Office of Inspector General have also provided critical support for JTFV’s mission.
OCDETF also supports JTFV in its mission. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Armed Security Guard at Manhattan Federal Building Pleads Guilty in Connection with Sexual Assault of Asylum SeekerRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of JIMMY SOLANO-ARIAS, an armed security guard at the Jacob K. Javits Federal Office Building located at 26 Federal Plaza in Manhattan, in connection with SOLANO-ARIAS’s sexual assault of an asylum seeker (the “Victim”) on May 4, 2023. SOLANO-ARIAS pled guilty to lying to federal law enforcement agents following his sexual abuse of the Victim. As part of his guilty plea, SOLANO-ARIAS admitted that while acting under color of law as an armed security guard at 26 Federal Plaza, he engaged in a non-consensual sexual act with the Victim. SOLANO-ARIAS was arrested on May 5, 2023, and pled guilty today before U.S. Magistrate Judge Sarah Netburn.
U.S. Attorney Damian Williams said: “Jimmy Solano-Arias abused the trust and privileges bestowed on him as an armed security officer at a federal building. Instead of working to keep the many federal employees and visitors at 26 Federal Plaza safe, Solano-Arias exploited his position of authority to sexually abuse an individual seeking asylum protection in the United States. This Office is committed to holding all those in positions of public trust accountable when they abuse their power and violate the constitutional rights of others.”
According to the allegations in the Indictment, Superseding Information, other public court documents, and statements made during court proceedings:
On May 4, 2023, SOLANO-ARIAS was employed as a security guard by a company that contracts with the Federal Protective Service of the Department of Homeland Security to provide armed security services at 26 Federal Plaza. SOLANO-ARIAS wore a black and gray security guard uniform and carried his employer-issued firearm on his waistband.
Early in the morning on May 4, 2023, the Victim went to 26 Federal Plaza for the purpose of submitting an asylum application. Once there, SOLANO-ARIAS offered to assist the Victim with his asylum paperwork. Instead of providing assistance, however, SOLANO-ARIAS led the Victim through non-public areas of 26 Federal Plaza, eventually secluding the Victim in a locked office on the second floor. Inside the locked office, SOLANO-ARIAS demanded that the Victim perform oral sex on SOLANO-ARIAS. When the Victim attempted to resist SOLANO-ARIAS’s demands, SOLANO-ARIAS reached to the company-issued firearm on his person. Fearing that SOLANO-ARIAS would kill the Victim, the Victim performed oral sex on SOLANO-ARIAS, which caused physical pain and injury to the Victim. Following the assault, when the Victim was able to leave the office, he immediately reported the sexual assault to law enforcement.
The following morning, when SOLANO-ARIAS arrived at 26 Federal Plaza for his shift, law enforcement agents with the Federal Bureau of Investigation (“FBI”) approached SOLANO-ARIAS and asked to speak with him. SOLANO-ARIAS agreed to speak with the federal agents. During the interview that followed, SOLANO-ARIAS lied to the federal agents about his sexual abuse of the Victim, initially disclaiming entirely that he had engaged in a sexual act with the Victim and then falsely claiming that the sexual act was consensual when it was not. SOLANO-ARIAS was arrested after the interview.
* * *
SOLANO-ARIAS, 42, of the Bronx, New York, pled guilty to one count of making false statements to federal law enforcement agents, 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 of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Elizabeth Espinosa and Mitzi Steiner are in charge of the prosecution.
Two Defendants Charged with Orchestrating $2 Million Loan Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Patrick J. Freaney, the Special Agent in Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of an Indictment charging YISROEL HEBER, a/k/a “Scott Heber,” and YECHIEL MESHI-ZAHAV with running an advance-fee loan fraud scheme through which they defrauded dozens of victims of at least approximately $2 million. HEBER and MESHI-ZAHAV were arrested this morning and will be presented later today before U.S. District Judge Lewis A. Kaplan, to whom this case is assigned.
U.S. Attorney Damian Williams said: “Yisroel Heber and Yechiel Meshi-Zahav allegedly brazenly siphoned funds from the bank accounts of dozens of victims after fraudulently inducing them to provide their bank details. Herberand Meshi-Zahav’s victims thought they were securing loans, but instead they were robbed of large sums of cash. No matter the complexity of the scheme or size of the loss amount, this Office will relentlessly investigate fraudsters who dare to illicitly line their own pockets by victimizing others.”
USSS Special Agent in Charge Patrick J. Freaney said: “These individuals allegedly garnered the trust of victims by posing as lending companies, only to turn around and steal millions from them. This kind of fraudulent activity has a very real impact on people’s lives, and the Secret Service appreciates our partnership with the U.S. Attorney’s Office for the Southern District of New York as we work together to deliver justice for these victims.”
According to the allegations contained in the Indictment:[1]
From at least in or about March 2021 through at least in or about December 2021, YISROEL HEBER and YECHIEL MESHI-ZAHAV participated in an advance-fee loan fraud scheme that defrauded dozens of victims of at least approximately $2 million. HEBER and MESHI-ZAHAV operated this fraudulent scheme through purported lending companies called Blue Ribbon Funding, Tru Capital Funding, Fund Capital LLC, a/k/a “Fund Cap LLC,” and Ameriquest Capital (collectively, the “Fraudulent Lenders”). During the course of the scheme, HEBER and MESHI-ZAHAV, through their control of the Fraudulent Lenders, induced victims to provide their bank account information in order to make payments related to loans that the Fraudulent Lenders promised to issue to the victims. Instead, however, HEBER and MESHI-ZAHAV defrauded the victims by withdrawing thousands of dollars from each of the victims’ bank accounts without issuing the promised loans.
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HEBER, 43, of Kings Point, New York, and MESHI-ZAHAV, 32, of Valley Stream, New York, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum 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 defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the USSS.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Alexandra S. Messiter is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Six Defendants Charged for Corruption at Rikers IslandRead 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”); and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of Complaints charging former Rikers Island correction officers CARLOS RIVERA, CHANTAL DE LOS SANTOS, and STEPHANIE DAVILA; former Rikers Island program counselor SHANEQUA WASHIGTON; former Rikers Island contractor KENNETH WEBSTER; and former Rikers Island inmate KRISTOPHER FRANCISCO with federal crimes arising from their involvement in corruption at Rikers Island. RIVERA, DE LOS SANTOS, WASHINGTON, WEBSTER, and DAVILA were arrested earlier today. RIVERA, DE LOS SANTOS, WASHINGTON, and DAVILA will be presented this afternoon before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court, and WEBSTER will be presented tomorrow in Manhattan federal court. FRANCISCO is currently in state custody.
U.S. Attorney Damian Williams said: “Rikers Island is less safe, for inmates and officers alike, when corrections officers and others in positions of public trust accept bribes to smuggle contraband. As alleged, the defendants in these cases engaged in corruption for their own enrichment. In our relentless pursuit of justice, we leave no stone unturned, especially within the confines of jails and prisons, where the safety and dignity of all individuals must be safeguarded. We will not tolerate any breach of trust or corruption that jeopardizes the well-being of inmates and staff.”
FBI Assistant Director in Charge James Smith said: “These defendants allegedly abused their former positions within the Department of Corrections by accepting bribes from multiple inmates - including one charged along with them - to smuggle contraband, including illicit substances, into several jail facilities on Rikers Island. This alleged conspiracy permeated Rikers Island, polluting the integrity of the Department and its institutions, while jeopardizing the trust in other officials with similar job roles. The FBI is committed to pursuing all forms of corruption, especially schemes involving those responsible for safeguarding our corrections system.”
DOI Commissioner Jocelyn E. Strauber said: “As charged, former City Correction officers and employees, and a former employee of a vendor to DOC, used their positions of trust to traffic drugs and cell phones into Rikers Island jail facilities. Contraband in our City’s jails fuels disorder and violence, and DOI has issued recommendations to the Department of Correction intended to improve controls around officers’ and vendors’ entry and access to jail facilities, and to thereby limit the flow of contraband. I thank the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for their continued partnership and commitment to hold accountable those who undermine the stability and security of the City’s jails.”
According to the three Complaints unsealed today in Manhattan federal court:[1]
RIVERA was a correction officer who was assigned to the North Infirmary Command, one of the jail facilities on Rikers Island in the Bronx, New York. From December 2021 through February 2022, RIVERA accepted bribes from an inmate and smuggled contraband, including oxycodone and marijuana, into the jail.
DE LOS SANTOS, a former correction officer who was assigned to the Anna M. Kross Center (“AMKC”), another jail facility on Rikers Island, accepted bribes from multiple inmates to smuggle contraband into the jail from March through June 2022. WASHINGTON, a program counselor at the Department of Correction, also accepted bribes in exchange for smuggling contraband into AMKC, conspiring with DE LOS SANTOS from March through April 2022. In addition, WEBSTER, an employee of a contractor that provided services at Rikers Island, also accepted bribes to smuggle contraband and conspired with DE LOS SANTOS from May through June 2022.
DAVILA, a former correction officer who was assigned to AMKC, and FRANCISCO, then an inmate at the facility, conspired to smuggle contraband into AMKC in exchange for bribes between approximately July and August 2021. Specifically, DAVILA and FRANCISCO bribed another correction officer to induce the officer to smuggle contraband, including fentanyl, marijuana, and synthetic cannabinoids commonly known as “K2,” into AMKC.
* * *
RIVERA, 27, of Yonkers, New York, is charged with conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison, and conspiracy to distribute narcotics and controlled substances, which carries a maximum potential penalty of 20 years in prison.
DE LOS SANTOS, 30, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison, and two counts of conspiracy to commit honest services wire fraud, each of which carry a maximum potential penalty of 20 years in prison.
WASHINGTON, 39, of Brooklyn, New York, is charged with conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison, and conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison.
WEBSTER, 42, of the Bronx, New York, is charged with conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison.
DAVILA, 30, of Brooklyn, New York, and FRANCISCO, 29, of Ossining, New York, are each charged with conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison; conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison; and conspiracy to distribute narcotics and controlled substances, which carries a maximum potential penalty of 20 years in prison.
The maximum potential sentences in these cases 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 and DOI.
The cases are being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Adam Z. Margulies, Jonathan E. Rebold, and Derek Wikstrom are in charge of the prosecutions.
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 Complaints and the descriptions of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Final Defendant Sentenced in Connection with $1.3 Million Fraud Scheme Involving U.S. Postal EmployeesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that NATHANAEL FOUCAULT — a former U.S. Postal Service (“USPS”) letter carrier who was charged with eight other defendants in connection with their theft and unauthorized use of credit cards to defraud several national financial institutions, credit card companies, and major retailers — was sentenced today by U.S. District Judge Paul G. Gardephe. FOUCAULT’s co-defendants, JOHNNY DAMUS, a/k/a “Ace,” RASHAAN RICHARDS, a/k/a “Jay Dee,” a/k/a “JD,” a/k/a “Payso,” DEVON RICHARDS, a/k/a “Dev,” CONRAD HERON, a/k/a “Conny Cash,” LOUIS JEUNE VERLY, a/k/a “Luis Jesus Virola,” KAREEM SHEPHERD, a/k/a “Reem,” a/k/a “Marcus Ford,” a/k/a “Frank James,” FABIOLA MOMPOINT, a/k/a “Lady Fab,” and JOHNATHAN PERSAUD were previously sentenced by Judge Gardephe.
U.S. Attorney Damian Williams said: “These individuals participated in a years-long scheme to manipulate credit card companies and major retailers across New York and New Jersey in order to enrich themselves. The sprawling scheme was sophisticated, organized, and efficient. The USPS employees involved in this scheme abused their positions of trust in order to supercharge the fraud, which caused serious financial loss and compromised the identities of hundreds of victims. Thanks to the diligence of our law enforcement partners and the career prosecutors of this Office, the defendants have now been held accountable for their brazen criminal conduct.”
According to the allegations contained in the Superseding Indictment and statements made in public filings:
The defendants were convicted and sentenced for their participation in a multi-year scheme to steal credit cards from the mail spanning from approximately December 2018 to September 2022; use those stolen credit cards at a variety of stores, including high-end retailers; and sell some of the merchandise purchased with the stolen cards online. In order to obtain credit cards for use in the scheme, beginning in December 2018, RASHAAN RICHARDS, DEVON RICHARDS, and SHEPHERD conspired with USPS letter carriers, including MOMPOINT, FOULCAULT, and PERSAUD, to steal credit cards directly from mail routes. At the direction of DAMUS, members of the conspiracy, including RASHAAN RICHARDS, DEVON RICHARDS, SHEPHERD, HERON, and VERLY used the stolen credit cards at a variety of stores, including high-end retailers in Manhattan, resulting in over $1.4 million in charges to the credit card companies. In order to use the stolen credit cards, the defendants worked together to obtain personal identification information for hundreds of victims using a variety of internet-based sources so that they could provide credit card companies with the information necessary to activate the stolen credit cards. Following their purchases, the defendants transferred some of the fraudulently obtained items to DAMUS who, working together with a close associate, sold the items on a particular website, LuxurySnob.com, which purported to be an “online consignment and personal shopping company” specializing in “pre-owned luxury items,” but, in truth and in fact, many of the items it sells were purchased using stolen credit cards.
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FOUCAULT, 30, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to pay $11,803.91 in restitution and $11,803.91 in forfeiture.
A chart containing the sentences of FOUCAULT’s co-defendants is below.
Mr. Williams praised the outstanding investigative work and diligence of the U.S. Postal Inspection Service, USPS – Office of the Inspector General, and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Ashley C. Nicolas, Madison Reddick Smyser, and Chelsea Scism are in charge of the prosecution.
DEFENDANT
SENTENCE IMPOSED
RASHAAN RICHARDS*
Six years in prison, forfeiture of $536,434.01 and 90 luxury goods and electronics
JOHNNY DAMUS*
63 months in prison, forfeiture of $536,434.01, over 600 luxury items, and the URL www.luxurysnob.com
KAREEM SHEPHERD
Seven years in prison and forfeiture of $536,434.01
DEVON RICHARDS
Three years in prison, forfeiture of $369,543.43 and 15 luxury goods
CONRAD HERON
Three years in prison and forfeiture of $536,434.01
LOUIS JEUNE VERLY
Two years in prison
FABIOLA MOMPOINT
One year in prison and forfeiture of $91,456.39
JOHNATHAN PERSAUD
Three years of probation and forfeiture of $29,104.73
Two Charged in Connection with Scheme to Operate Industrial-Scale Illegal Narcotics Pill Pressing Operations Throughout New York CityRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Darren B. McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), announced today the filing of a Complaint in Manhattan federal court charging JUAN MOISES PEREZ MENDEZ, a/k/a “Caballero,” and ODALIS EUSEBIO PERALTA BAUTISTA, a/k/a “Luis Collazo Santos,” with conspiracy to distribute narcotics and distribution of narcotics. PEREZ MENDEZ and PERALTA BAUTISTA were arrested on Saturday evening, April 6, 2024, in the Bronx. They were presented this afternoon before U.S. Magistrate Judge Stewart D. Aaron.
U.S. Attorney Damian Williams said: “Over the past year, this Office has worked with laser focus to disrupt industrial-scale pill mills that press powdered narcotics into pills. In the process, we have removed millions of deadly fentanyl pills, meant to mimic legitimate prescription drugs, from the street. This past weekend, we acted again, shutting down an alleged pill mill in the Bronx and seizing large amounts of fentanyl and methamphetamine. We also arrested the two individuals who allegedly operated that pill mill. As alleged, one of those individuals, Juan Moises Perez Mendez, is a prolific narcotics trafficker, connected to at least two other major pill presses this Office has disrupted in the last year. I am deeply grateful for the efforts of our law enforcement partners and the career prosecutors of this Office as we work to save lives by keeping fentanyl off the streets of our community.”
HSI Acting Special Agent in Charge Darren B. McCormack said: “These arrests are the result of the exceptional work our El Dorado Task Force does to remove the threat of lethal amounts of fentanyl-laced counterfeit prescription pills that are wreaking havoc in our communities. HSI New York, along with our law enforcement partners, remain determined to shut down these underground poison mills and dismantle the flow of deadly substances into our communities. The criminals who operate these illegitimate manufacturing sites will face justice for their production and distribution of illicit synthetic opioids which are responsible for perpetuating the public safety epidemic across the country.”
DEA Special Agent in Charge Frank A. Tarentino III said: “Over the weekend, the DEA New York and our law enforcement partners conducted another successful operation resulting in two arrests and shutting down another illegal pill mill located near a school in the Bronx. Fake pills, laced with fentanyl and methamphetamine, like the ones seized this weekend, come in every color, shape, and form, and are disguised to mirror the appearance of prescription pills, making them hard to detect by sight and extremely deadly. This operation emphasizes our commitment to protecting communities from these fake pills and those responsible for producing them. I commend our special agents and law enforcement partners on this successful operation.”
As alleged in the Complaint filed today in Manhattan federal court:[1]
Law enforcement has been investigating a network of drug traffickers operating industrial-scale illegal narcotics pill pressing operations in multiple locations throughout New York City. As part of those operations, the traffickers have converted spaces in residential buildings to press large quantities of powder narcotics, including fentanyl and methamphetamine, into pill form for wholesale distribution. At these locations, drug traffickers have manufactured millions of pills for further distribution, sometimes manufacturing hundreds of thousands of pills in a single session.
In or about May 2023, law enforcement searched the basement of a particular building in Washington Heights (the “Washington Heights Building”), where they found large quantities of narcotics, as well as the materials and equipment necessary to press narcotics into pill form, including commercial-grade pill presses. In connection with that search, law enforcement officers arrested Juan Efren Paulino.
PEREZ MENDEZ appears to have entered the basement of the Washington Heights Building in the days leading up to the search and communicated with Paulino regarding narcotics.
A photograph of the narcotics recovered from the Washington Heights Building is below:
In or about October 2023, law enforcement officers searched the basement of a building located on Beaumont Avenue in the Bronx (the “Beaumont Building”) and arrested four individuals. In the basement of the Beaumont Building, law enforcement officers found hundreds of thousands of pills and over 20 kilograms of narcotics, along with three industrial pill press machines, one disassembled pill press, a kilogram press, and narcotics mixing and repackaging materials including blenders, dyes, jars of calcium citrate (frequently used as a narcotics cutting agent), and industrial-grade gas masks (used for protection when handling narcotic powders intended for pill pressing).
In or about August 2023, law enforcement officers observed PEREZ MENDEZ appearing to enter or exit the Beaumont Building.
A photograph of the narcotics recovered from the Beaumont Building is below:
In light of PEREZ MENDEZ’s involvement in the pill mills at the Washington Heights and Beaumont Buildings, law enforcement officers began conducting surveillance of PEREZ MENDEZ. During the course of that surveillance, law enforcement officers identified a storage room (the “Storage Room”) in the basement of a particular building located on Gerard Avenue in the Bronx (the “Gerard Avenue Building”) that was frequented by PEREZ MENDEZ and PERALTA BAUTISTA.
On April 6, 2024, at approximately 7:15 p.m., law enforcement officers arrested PEREZ MENDEZ as he was exiting the Gerard Avenue Building, only minutes after leaving the Storage Room. After the arrest of PEREZ MENDEZ, law enforcement officers approached the door to the Storage Room. A loud pounding sound could be heard emanating from within the Storage Room, which was consistent with the operation of a pill press.
Not long after, the loud pounding sound stopped, and PERALTA BAUTISTA exited the Storage Room. At the time, PERALTA BAUTISTA’s shirt appears to have had white powder on it. As PERALTA BAUTISTA exited the Storage Room, he was placed under arrest.
Law enforcement officers then searched the Storage Room, which was used by PEREZ MENDEZ and PERALTA BAUTISTA to store powdered narcotics, combine the narcotics with other fillers, use dyes to color the combined powders, and then use large industrial-scale pill presses to create hundreds of thousands of deadly pills. Many of the pills appear to have been manufactured to be indistinguishable from prescription medications such as Xanax, Adderall, and OxyContin, though in fact they contain, among other things, varying quantities of fentanyl.
Among other things, law enforcement officers found two industrial-scale pill presses; approximately 130,000 pills, the vast majority of which field tested positive for the presence of fentanyl (the remainder of which field tested positive for the presence of methamphetamine); approximately three kilograms of a powder in zip lock bags that tested positive for the presence of fentanyl; a bucket containing approximately 20 pounds of powdered narcotics, which field tested positive for the presence of methamphetamine; and approximately 3.5 pounds of suspected crystalized methamphetamine. The suspected narcotics and pill presses are depicted, in part, below:
Additionally, law enforcement officers found materials used to mix powdered narcotics with fillers as well as packaging materials used to package narcotics for further distribution. Those items included mixing bowls, a blender, strainers, dyes, thousands of glassine envelopes, and empty bottles of calcium citrate. From on or about June 10, 2023, to on or about March 3, 2024, PEREZ MENDEZ and his girlfriend purchased approximately 1,274 bottles of calcium pills from a particular retail chain of consumer products. This amounts to approximately 356,720 calcium pills.
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JUAN MOISES PEREZ MENDEZ, 56, of the Bronx, New York, and ODALIS EUSEBIO PERALTA BAUTISTA, 53, of New York, New York, are each charged with one count of conspiracy to distribute narcotics and one count of narcotics distribution, both of which carry a mandatory minimum sentence of 10 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 defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the El Dorado Task Force International Narcotics and Money Laundering Unit, which is comprised of law enforcement officers and investigators from HSI, the DEA, the New York City Police Department, the New York State Police, the U.S. Postal Service, the Kings County District Attorney’s Office, and the New York High Intensity Drug Trafficking Area Task Force, in connection with this investigation.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Maggie Lynaugh and Adam Sowlati are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory 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.
Southern District of New York Court Employee and Criminal Defense Attorney Sentenced for Decade-Long Bribery SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that DIONISIO FIGUEROA, a/k/a “Dionicio,” a former employee of the U.S. District Court for the Southern District of New York (“SDNY”) Magistrate Clerk’s Office, and TELESFORO DEL VALLE, JR., a now-disbarred criminal defense attorney who practiced in SDNY and elsewhere for more than 20 years, were sentenced to two years and one year and one day in prison, respectively, following their convictions on conspiracy, bribery, and false statements charges. The defendants were sentenced by U.S. District Judge Mae A. D’Agostino, sitting by designation from the U.S. District Court for the Northern District of New York.
U.S. Attorney Damian Williams said: “The public relies on attorneys and court employees to maintain and validate its faith in our criminal justice system. Del Valle, a former criminal defense attorney, and Figueroa, a longtime employee of the SDNY Clerk’s Office, betrayed criminal defendants, the public, and those who rely on the court to remain impartial. Through their actions, Del Valle and Figueroa undermined the fair administration of justice and the work of the many good people in the courthouse who serve the criminal justice system with honesty and integrity. Let these sentences serve as a warning to those who seek to pervert justice for personal gain.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
As a clerk in the SDNY Magistrate Clerk’s Office since in or about 2002, FIGUEROA was responsible for performing duties that included, among other things, making data entries regarding official case events in criminal cases; making summary entries of documents and proceedings on case dockets; and performing inquiries and furnishing information, either in person or by correspondence, regarding the status of cases. FIGUEROA also played a role with respect to the intake of criminal cases, including by preparing appearance bonds, advising defendants and their family members about the conditions of the bonds, and ensuring that appearance bonds were signed by all parties prior to a defendant’s release.
SDNY District Court personnel policies prohibited FIGUEROA from having outside employment that would pose a conflict of interest; receiving payments, gifts, or other benefits from persons having business before the District Court; and recommending particular attorneys to members of the public. FIGUEROA also was subject to the U.S. Courts’ Code of Conduct for Judicial Employees (the “Code of Conduct”), which cautioned judicial employees that “[a] number of criminal statutes of general applicability govern federal employees’ performance of official duties. These include: 18 U.S.C. § 201 (bribery of public officials and witnesses) . . . .” The Code of Conduct likewise admonished that “[a] judicial employee should never influence or attempt to influence the assignment of cases, or perform any discretionary or ministerial function of the court in a manner that improperly favors any litigant or attorney, nor should a judicial employee imply that he or she is in a position to do so.”
DEL VALLE was a private attorney who, over the course of more than two decades, had appeared in numerous federal criminal cases pending before the SDNY District Court.
Between at least 2011 and 2022, FIGUEROA and DEL VALLE engaged in a scheme whereby FIGUEROA used his position as an employee of the SDNY Magistrate Clerk’s Office to encourage criminal defendants to retain DEL VALLE to represent them in pending criminal cases. In return, DEL VALLE paid FIGUEROA a portion of the fees that referred clients paid to DEL VALLE. Over the course of more than a decade, FIGUEROA referred at least 45 SDNY criminal defendants to DEL VALLE, and, in exchange, DEL VALLE paid FIGUEROA tens of thousands of dollars in bribes. DEL VALLE paid FIGUEROA directly and through FIGUEROA’s romantic partner, who would travel to DEL VALLE’s law office and pick up envelopes of cash for FIGUEROA. Many of the clients who retained and paid DEL VALLE based on FIGUEROA’s referral were originally assigned free, court-appointed counsel. Nevertheless, FIGUEROA encouraged those individuals to change counsel, including by vouching for DEL VALLE’s abilities as a lawyer.
In November 2022, federal law enforcement agents separately interviewed both FIGUEROA and DEL VALLE. After agents advised each that lying to federal law enforcement agents is a crime, FIGUEROA and DEL VALLE each made materially false, fictitious, and fraudulent statements and representations in response to the agents’ questions. In particular, FIGUEROA denied making any referrals to DEL VALLE, except on a small number of occasions concerning close relations or friends, and further denied ever having received payments from DEL VALLE for referrals. DEL VALLE, upon being served with a federal grand jury subpoena requiring the production of records from his law firm, falsely denied having any records reflecting client referrals from, or payments to, FIGUEROA or anyone else.
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In addition to the prison sentence, FIGUEROA, 66, of New York, New York, was sentenced to one year of supervised release and was ordered to forfeit $40,000. DEL VALLE, 65, of Leonia, New Jersey, was sentenced to one year of supervised release and was ordered to pay a fine of $10,000.
Mr. Williams praised the outstanding investigative work of the Special Agents from the U.S. Attorney’s Office for the Southern District of New York.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Frank Balsamello and Stephanie Simon are in charge of the prosecution.
Queens Man Sentenced to Five Years in Prison for Multimillion-Dollar Bank Fraud and Money Laundering SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that CHINWENDU ALISIGWE was sentenced to five years in prison for his role in a wide-ranging bank fraud and money laundering conspiracy, which resulted in the misappropriation of approximately $4.5 million in victim funds. ALISIGWE was previously convicted by a jury following a trial before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Over the course of years, Chinwendu Alisigwe used fake IDs to open dozens of bank accounts, which he then used to launder proceeds obtained from victims of business email compromise and other fraud schemes. Alisigwe’s co-conspirators scammed dozens of victims — including individuals, businesses, a county government, and a charity that provides wheelchairs for children — into sending money to Alisigwe’s network of bank accounts. Alisigwe then laundered the money, spending his cut on shopping sprees and sending the rest to his co-conspirators overseas. As today’s sentence demonstrates, money launderers who assist scammers abroad, like Alisigwe, will be held accountable by this Office.”
According to the allegations contained in the Superseding Indictment, the evidence offered at trial, and statements made in public filings:
From approximately 2017 to 2020, ALISIGWE used fake identifications to open 36 separate bank accounts at six different financial institutions. He opened those accounts with over a dozen fraudulent passports and other fraudulent identity documents bearing his photograph but the names of other individuals. In the course of this criminal conduct, ALISIGWE used the names and social security numbers of real people who were completely unaware that ALISIGWE was using them in his fraud.
After ALISIGWE opened the fraudulent bank accounts, the accounts received millions of dollars from a variety of fraud schemes, including business email compromise schemes. The funds came from numerous victims, including a children’s charity, individual bank accounts, a public company, a life insurance company, and a county government. In total, ALISIGWE received approximately $4.5 million of fraud proceeds into his network of bank accounts.
After the fraud proceeds were deposited into the accounts opened by ALISIGWE, he laundered the proceeds through a series of transactions designed to disguise their nature and source. For example, ALISIGWE consistently transferred large sums of the victims’ money from account to account that he had opened in other people’s names. After disguising the nature and source of the fraud proceeds through these transactions, ALISIGWE wired these funds to bank accounts in foreign countries, including China and the United Kingdom. ALISIGWE also spent large portions of the stolen money on clothing and other personal items. For example, ALISIGWE used fraud proceeds to make approximately $100,000 in purchases from retail stores like Zara, Nordstrom, Macy’s, Best Buy, and Rockaway Liquor. He also withdrew approximately $650,000 of the fraud proceeds in cash. Ultimately, the transactions into and out of the 36 accounts opened by ALISIGWE amounted to nearly $6 million.
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In addition to his prison term, ALISIGWE, 38, of Jamaica, New York, was sentenced to five years of supervised release and ordered to pay $499,949.88 in restitution and $4,463,475.80 in forfeiture.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation in the course of this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys William C. Kinder, Meredith Foster, and Adam Hobson are in charge of the prosecution, with assistance from Paralegal Specialists Phineas Santello and Olivia Sebade.
Former Venezuelan General Sentenced to 260 Months in Prison for Providing Material Support to the FARCRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CLÍVER ANTONIO ALCALÁ CORDONES was sentenced to 260 months in prison for providing material support, including firearms, to the Revolutionary Armed Forces of Colombia (the “FARC”). ALCALÁ CORDONES pled guilty on June 29, 2023, before U.S. District Judge Alvin K. Hellerstein, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “As a high-ranking member of the Venezuelan military and the Cártel de Los Soles, Clíver Antonio Alcalá Cordones and his co-conspirators sought to weaponize cocaine as they helped the FARC arm its members and ship tons of drugs to the United States. Alcalá Cordones corrupted the vital institutions of his own country as he helped the FARC flood this country with cocaine — but no longer. Instead, he will now spend more than two decades in a United States prison.”
According to court documents and statements made during court proceedings:[1]
ALCALÁ CORDONES, a Venezuelan citizen and a former general in Venezuela’s military, along with other high-ranking Venezuelan officials, acted as leaders and managers of the Cártel de Los Soles, or “Cartel of the Suns.” ALCALÁ CORDONES and other Cartel members abused the Venezuelan people and corrupted the legitimate institutions of Venezuela — including parts of the military, intelligence apparatus, legislature, and judiciary — to facilitate the importation of tons of cocaine into the United States in partnership with the FARC, a violent organization based in Colombia that was dedicated to the overthrow of the Colombian government and responsible for the production and distribution of the majority of the cocaine that eventually reached the United States. The Cártel de Los Soles sought not only to enrich its members and enhance their power but also to weaponize cocaine by inflicting the drug’s harmful and addictive effects on users in the United States.
Beginning in or about 2006, ALCALÁ CORDONES took advantage of his position in the Venezuelan military, including his command of thousands of heavily armed military officers, to provide support to the FARC as the FARC distributed tons of U.S.-bound cocaine. Among other things, ALCALÁ CORDONES (i) prevented FARC members and associates from being arrested by Venezuelan law enforcement or being engaged by the Venezuelan military; (ii) provided protection, including freedom of movement and freedom from interference, for FARC members and associates that the defendant knew trafficked cocaine; and (iii) provided high-powered weapons to the FARC, including directly to high-ranking FARC leaders such as Luciano Marín Arango, a/k/a “Iván Márquez,” and Rodrigo Londoño Echeverri, a/k/a “Timochenko.” ALCALÁ CORDONES also directly participated in the FARC’s cocaine distribution. Among other things, ALCALÁ CORDONES participated in meetings with some of the largest drug traffickers in South America, during which they discussed how ALCALÁ CORDONES and other members of the Cártel de Los Soles could assist in their cocaine distribution. ALCALÁ CORDONES also personally intervened to ensure that large shipments — over thousands of kilograms of cocaine — were not interdicted by law enforcement in Venezuela. In exchange, ALCALÁ CORDONES received millions of dollars in cocaine-fueled bribes.
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ALCALÁ CORDONES, 62, of Caracas, Venezuela, pled guilty to providing material support to a designated foreign terrorist organization, the FARC, and for knowingly receiving and transferring firearms, knowing and having reasonable cause to believe that such firearms would be used to commit a federal crime of terrorism, namely, the provision of material support and resources to the FARC. In addition to the prison term, ALCALÁ CORDONES was sentenced to three years of supervised release.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (“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.
Mr. Williams praised the outstanding investigative work of the U.S. Drug Enforcement Administration’s Special Operations Division Bilateral Investigations Unit, Miami Field Division, the OCDETF New York Strike Force, and the U.S. Treasury Department, Office of Foreign Assets Control, as well as the U.S. Department of Justice’s Office of International Affairs, the National Security Division’s Counterterrorism Section, and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s Office.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley, Kaylan E. Lasky, Kevin T. Sullivan, and Kyle A. Wirshba are in charge of the prosecution.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part.
Florida Woman Sentenced to 42 Months in Prison for Defrauding Snap RecipientsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that GUYATREE SINGH was sentenced to 42 months in prison in connection with a years-long scheme to defraud at least approximately 120 low-income residents of New York City out of tens of thousands of dollars of their Supplemental Nutrition Assistance Program (“SNAP”) benefits. SINGH previously pled guilty before U.S. District Judge Jed S. Rakoff, who also imposed today’s sentence, to one count of wire fraud and one count of aggravated identity theft.
U.S. Attorney Damian Williams said: “Guyatree Singh stole SNAP benefits from at least approximately 120 low-income, primarily elderly, residents of New York City, leaving the victims without money to buy food. By preying on those using their benefits for basic needs for survival, Singh showed there was no line she would not cross for a quick buck. Today’s sentence demonstrates this Office’s commitment to ensuring that our justice system protects everyone from fraud, especially the most vulnerable New Yorkers.”
According to the Indictment and other filings and statements made in court:
From at least in or about April 2019 through at least May 2023, SINGH engaged in a scheme to defraud at least approximately 120 SNAP recipients living in the Southern District of New York — a majority of whom appear to be elderly — of their SNAP benefits. In total, SINGH defrauded the victims out of approximately $51,868.39 in benefits.
SNAP provides low-income individuals with electronic benefits that can be used like cash to purchase food. People eligible for SNAP benefits are given an electronic benefits transfer (“EBT”) card, which looks like a debit card and gives a person access to his or her SNAP benefits, allowing the SNAP recipient to buy groceries and other items at participating stores.
SINGH called SNAP recipients and pretended to be a New York State employee working for SNAP. SINGH then asked the victims for their personally identifiable information, including their dates of birth and social security numbers. Unbeknownst to the victims, SINGH then used this information to reset the personal identification numbers (“PIN”) on their EBT cards. Once the PINs were reset, SINGH used the victims’ EBT account numbers and new PINs to make purchases for herself at grocery stores in Florida using the victims’ SNAP funds.
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In addition to her prison term, SINGH, 51, of West Palm Beach, Florida, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $51,868.39 and forfeit the same amount.
Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation and the Special Agents of the U.S. Attorney’s Office.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
Rockland County Drug Dealer Wayne Hicks Sentenced to 17 Years in Prison for Participation in February 2021 AssaultRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that WAYNE HICKS, a/k/a “Weez,” was sentenced to 17 years in prison for drug trafficking and violent crimes, including a brutal beating and robbery of a victim in New City, New York, on February 28, 2021. HICKS pled guilty on August 25, 2023, in White Plains federal court to one count of conspiracy to commit Hobbs Act Robbery, one count of Hobbs Act Robbery, one count of Travel Act Assault, one count of conspiracy to distribute marijuana, and one count of possessing a firearm in furtherance of a drug trafficking crime before U.S. District Judge Cathy Seibel, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Wayne Hicks was a drug dealer who directed multiple violent attacks as retribution for drug robberies. After one such attack, he bragged and circulated gruesome videos of it to bolster his brutal reputation. The substantial sentence imposed by the court makes clear that the law has no tolerance for this kind of brazen violence. Thanks to the tenacious work of our law enforcement partners and the career prosecutors of this Office, all the participants in this attack have now been convicted and brought to justice.”
According to the allegations in the Superseding Indictment and other court filings and based on statements made in public court proceedings:
HICKS, a marijuana dealer, directed two separate acts of violence to support his drug business. First, in November 2020, after a marijuana dealer who worked for HICKS was robbed, HICKS arranged for a co-conspirator to shoot one of the robbers. Second, in February 2021, after JORDAN WOODBINE, another marijuana dealer who worked for HICKS, was robbed, HICKS contacted his brother, co-defendant DWAYNE HICKS, to arrange retribution. Thereafter, DWAYNE HICKS lured a victim, who the conspirators believed had participated in the robbery of WOODBINE, to a residence in New City, New York, where DWAYNE HICKS and multiple other assailants, including TNAIYA WILLIAMS, BRIAN THOMAS, and WOODBINE, physically attacked the victim. At times, WAYNE HICKS monitored the attack over video chat. The assailants forced the victim to strip naked, stole his belongings, including a quantity of marijuana the assailants believed the victim had stolen, then beat the victim with a baseball bat, belts, and their hands and feet, and repeatedly slashed and stabbed the victim with a large knife. The victim ultimately fled after being left, naked and covered in blood, in a pile of snow.
The other individuals who carried out the February 28, 2021, attack at HICKS’s direction were convicted along with HICKS. At a previous sentencing hearing for one of HICKS’s codefendants, Judge Seibel remarked that the February 28, 2021, attack was “sickening,” “vicious,” “stomach turning, and the sort of thing that you really can’t imagine how any human being could partake in.”
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In addition to the prison term, HICKS, 32, of Hawthorne, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”), the Clarkstown Police Department, the Rockland County District Attorney’s Office, and the Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Putnam County Sheriff's Office, Westchester County District Attorney’s Office, Rockland County District Attorney’s Office, and the New York City, Westchester County, Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Timothy Ly, Josiah Pertz, and Derek Wikstrom are in charge of the prosecution.
New York Man Arrested for Murder Occurring in BangladeshRead the Press Release
A Bronx man was arrested today in Manhattan on criminal charges related to the alleged 2021 murder of a man in Bangladesh.
“As alleged in the indictment, the defendant, a U.S. national, murdered another U.S. national while they were both in Bangladesh,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “When an American murders another American abroad, they will face serious consequences. The Criminal Division is committed to investigating and prosecuting violent crimes committed against U.S. nationals wherever they occur and holding perpetrators accountable for their actions.”
According to court documents, on or about June 11, 2021, Ganet Rozario, 52, of the Bronx, New York, killed Michael Rozario in Bangladesh. Ganet Rozario allegedly used and carried a firearm to carry out the murder.
“Ganet Rozario, a citizen of the United States, allegedly murdered another U.S. national in Bangladesh,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s charges demonstrate that the reach of this office and that of our law enforcement partners is vast and that our commitment to protect the men and women of New York City extends far beyond its geographical boundaries. The message is clear: this office and its partners will be relentless in our pursuit of anyone who takes another life, even overseas.”
“The FBI devotes significant resources to investigating crimes that occur overseas which affect U.S. interests and impact American citizens,” said Acting Assistant Director in Charge Mehtab Syed of the FBI Los Angeles Field Office. “Individuals who commit crimes against U.S. citizens abroad will be held accountable through the FBI’s extraterritorial investigations, which exist to deliver justice for victims of crimes beyond U.S. borders.”
“Ganet Rozario allegedly committed the cold and calculated murder of Michael Rozario, a U.S. national, overseas in Bangladesh,” said Assistant Director in Charge James H. Smith III of the FBI New York Field Office. “It’s not up to the discretion of a single individual to take the life of another as this greatly disrupts the scales of justice. Today’s arrest emphasizes the FBI’s promise to aggressively pursue such egregious criminal acts against our citizens, even if they occur in foreign countries.
Ganet Rozario will also make his court appearance today in the Southern District of New York.
Ganet Rozario is charged with one count of foreign murder of a U.S. national and one count of use, carrying, and possession of a firearm during a crime of violence. If convicted, he faces a maximum penalty of life in prison.
The FBI Los Angeles and New York Field Offices investigated the case.
Senior Trial Attorney Frank Rangoussis of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Christy Slavik for the Southern District of New York are prosecuting the case.
The Justice Department’s Office of International Affairs also provided assistance.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
IndictmentLatin Kings Leader Sentenced to Life Plus Seven Years in Prison for the 2017 Murder of Joshua FloresRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN GARCIA, a/k/a “Jayo,” was sentenced to life plus seven years in prison for the May 2017 murder of Joshua Flores. GARCIA, who was a leader in the Latin Kings gang, shot and killed Flores in front of a playground on a residential street in Queens, New York, while Flores was running away from GARCIA. GARCIA was sentenced by U.S District Judge Valerie E. Caproni after being convicted by a jury following a four-day trial in June 2023.
U.S. Attorney Damian Williams said: “Jonathan Garcia gunned down his victim, 23-year-old Joshua Flores, to gain standing within the violent Latin Kings street gang. Then, Garcia bragged about the murder for years as he advanced in the ranks of the Latin Kings and engaged in additional violence and drug trafficking with his fellow gang members. Gang violence will not be tolerated in this community. This Office remains fully committed to working with our law enforcement partners to root out gang violence from the streets of New York City.”
According to court filings and the evidence presented in court during the trial:
GARCIA is a member of a racketeering enterprise known as the Latin Kings and, specifically, the set, or “tribe,” of the Latin Kings known as the Black Mob, which operates in the Bronx, Manhattan, Queens, Brooklyn, and Long Island. In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms. In December 2019 and April 2021, several members and associates of the Black Mob, including its senior-most leaders, were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.
GARCIA has been a member of the Latin Kings since at least 2012. On May 18, 2017, GARCIA brought a firearm to a meeting with other Latin Kings members with whom he had been arguing and who intended to revoke GARCIA’s membership in the Latin Kings. During the meeting, next to a park and playground in a residential area of Queens, GARCIA began arguing with the other gang members. When the argument escalated, one of GARCIA’s associates fired a warning shot into the air, and gang members immediately began running away. GARCIA then took the firearm from his associate and shot at the fleeing gang members, hitting Joshua Flores, who was trying to run away. The bullet went through Flores’s back, into his jaw, and killed him. The murder elevated GARCIA’s status within the Latin Kings, including the Black Mob, with whom GARCIA committed additional crimes in the years after the murder.
* * *
GARCIA, 29, of Queens, New York, was previously found guilty of conspiracy to commit racketeering, murder in aid of racketeering, narcotics conspiracy, and use of a firearm in furtherance of a drug trafficking offense.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.
This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the 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.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Adam S. Hobson, David J. Robles, and Patrick R. Moroney are in charge of the prosecution.
Bronx Man Charged with Foreign Murder of A U.S. NationalRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Nicole M. Argentieri, the Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; Mehtab Syed, the Acting Assistant Director in Charge of the Los Angeles Field Office of the Federal Bureau of Investigation (“FBI”), and James Smith, the Assistant Director in Charge New York Field Office of the FBI, announced today that GANET ROZARIO was charged with the murder of a U.S. national on foreign soil, specifically, in Bangladesh. ROZARIO was arrested this morning and will be presented later today in Manhattan federal court. The case has been assigned to U.S. District Judge George B. Daniels.
U.S. Attorney Damian Williams said: “Ganet Rozario, a citizen of the United States, allegedly murdered another U.S. national in Bangladesh. Today’s charges demonstrate that the reach of this Office and that of our law enforcement partners is vast and that our commitment to protect the men and women of New York City extends far beyond its geographical boundaries. The message is clear: this Office and its partners will be relentless in our pursuit of anyone who takes another life, even overseas.”
Principal Deputy Assistant Attorney General Nicole M. Argentieri said: “As alleged in the indictment, the defendant, a U.S. national, murdered another U.S. national while they were both in Bangladesh. When an American murders another American abroad, they will face serious consequences. The Criminal Division is committed to investigating and prosecuting violent crimes committed against U.S. nationals wherever they occur and holding perpetrators accountable for their actions.”
FBI Los Angeles Acting Assistant Director in Charge Mehtab Syed said: “The FBI devotes significant resources to investigating crimes that occur overseas which affect U.S. interests and impact American citizens. Individuals who commit crimes against U.S. citizens abroad will be held accountable through the FBI's extraterritorial investigations, which exist to deliver justice for victims of crimes beyond U.S. borders.”
FBI New York Assistant Director in Charge James Smith said: “Ganet Rozario allegedly committed the cold and calculated murder of Michael Rozario, a United States national, overseas in Bangladesh. It’s not up to the discretion of a single individual to take the life of another as this greatly disrupts the scales of justice. Today’s arrest emphasizes the FBI’s promise to aggressively pursue such egregious criminal acts against our citizens, even if they occur in foreign countries.”
According to the allegations contained in the Indictment:[1]
On June 11, 2021, GANET ROZARIO shot and killed Michael Rozario in Bangladesh.
* * *
ROZARIO, 52, of the Bronx, New York, is charged with the foreign murder of a U.S. national, which carries a maximum penalty of life in prison, and use and carrying of a firearm during and in relation to a crime of violence, which was discharged, which carries a mandatory minimum sentence of 10 years in prison and a maximum penalty of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI and thanked the Justice Department’s Office of International Affairs for its assistance.
The prosecution is being handled by the Office’s Violent & Organized Crime Unit, in conjunction with the Criminal Division’s Human Rights and Special Prosecutions Section. Assistant U.S. Attorney Christy Slavik and Senior Trial Attorney Frank Rangoussis of the Human Rights and Special Prosecutions Section 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.
“Head of Legal and Compliance” for Multibillion-Dollar Cryptocurrency Pyramid Scheme “OneCoin” Sentenced to Four Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that IRINA DILKINSKA was sentenced to four years in prison by U.S. District Judge Edgardo Ramos for her role in the massive OneCoin fraud scheme. OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level marketing (“MLM”) network. As a result of misrepresentations made about OneCoin, victims invested over $4 billion in the fraudulent cryptocurrency. DILKINSKA previously pled guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering.
U.S. Attorney Damian Williams said: “Irina Dilkinska's involvement in the sprawling OneCoin pyramid scheme was a flagrant breach of conduct. Rather than upholding the law and embracing her position as the Head of Legal and Compliance, she facilitated and committed money laundering, aiding in the exploitation of millions of victims. As Dilkinska learned today, this Office will hold accountable every perpetrator of the OneCoin scheme, no matter where they may hide.”
According to the allegations in the Superseding Information and other filings and statements made in court:
In 2014, RUJA IGNATOVA, a/k/a “the Cryptoqueen,” and KARL SEBASTIAN GREENWOOD co-founded OneCoin,[1] a company based in Sofia, Bulgaria, that marketed a purported cryptocurrency by the same name, which was in fact a fraudulent pyramid scheme. OneCoin operated as a MLM network through which members received commissions for recruiting others to purchase cryptocurrency packages. This MLM structure influenced rapid growth of the OneCoin member network. According to OneCoin’s promotional materials, over three million people invested in fraudulent cryptocurrency packages. OneCoin records show that between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 billion in sales revenue and earned “profits” of €2.735 billion.
DILKINSKA was the purported Head of Legal and Compliance for OneCoin. But rather than ensuring that OneCoin complied with the law, DILKINKSA assisted in running its day-to-day operations and laundered money for OneCoin, including arranging for the transfer of $110 million in fraudulently obtained OneCoin proceeds to a Cayman Islands entity.
* * *
In addition to the prison term, DILKINSKA, 42, a citizen of Bulgaria, was sentenced to one month of supervised release and ordered to forfeit $111,440,000.
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 Nicholas Folly, Juliana Murray, and Kevin Mead are in charge of the prosecution.
[1] OneCoin has operated using several corporate entities and d/b/a names, including “OneCoin Ltd.,” “OnePayments Ltd.,” “OneNetwork Services Ltd.,” “OneAcademy,” and “OneLife.” These entities and d/b/a names are referred to collectively here as “OneCoin.”
Two Individuals Plead Guilty to Participating in Insider Trading Scheme Based on SPAC Merger with Trump Media & Technology GroupRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that MICHAEL SHVARTSMAN and GERALD SHVARTSMAN each pled guilty to one count of securities fraud, both in connection with their participation in an insider trading scheme surrounding the merger of Digital World Acquisition Corporation (“DWAC”) with Trump Media & Technology Group (“Trump Media”). MICHAEL and GERALD SHVARTSMAN were arrested in June 2023 and pled guilty today before U.S. District Judge Lewis J. Liman.
U.S. Attorney Damian Williams said: “Michael and Gerald Shvartsman admitted in court that they received confidential, inside information about an upcoming merger between DWAC and Trump Media and used that information to make profitable, but illegal, open-market trades. Insider trading is cheating, plain and simple, and today’s convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison.”
According to the allegations in the Indictment and statements made in public court proceedings:
In October 2021, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN together made more than $22 million dollars in illegal profits by trading in securities of DWAC based on material, non-public information (“MNPI”) about DWAC’s planned, but not yet public, business combination with Trump Media, a media company founded by former President Donald J. Trump.
As sophisticated investors, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN were invited to invest in DWAC and another special purpose acquisition company (“SPAC”), and after signing non-disclosure agreements, they were provided confidential information about the SPACs, including that a potential target of the SPACs was Trump Media. As a condition of receiving this information, the defendants were prohibited by the non-disclosure agreements from disclosing the confidential information they learned or using it to buy and sell securities on the open market. After making initial investments into DWAC through the initial public offering process, through placing their associate on DWAC’s board of directors, the defendants continued to learn valuable MNPI about DWAC’s plans to merge with Trump Media, such the status of the merger negotiations and the timing of a public merger announcement.
In violation of the non-disclosure agreements that they had signed, and in contravention of their associate’s duties and responsibilities as a board member, the defendants bought millions of dollars of DWAC securities on the open market before the news of the Trump Media business combination was public. The defendants also tipped others about the upcoming merger, inducing further trades in DWAC securities on the basis of the MNPI they had obtained subject to their non-disclosure agreement and through their associate’s board seat.
* * *
MICHAEL SHVARTSMAN, 53, of Sunny Isles Beach, Florida, and GERALD SHVARTSMAN, 46, of Aventura, Florida, each pled guilty to one count of securities fraud, 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 defendants will be determined by the judge. MICHAEL SHVARTSMAN and GERALD SHVARTSMAN are scheduled to be sentenced by Judge Liman on July 17, 2024, at 2:00 p.m. and 3:00 p.m., respectively.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and Homeland Security Investigations. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.
The prosecution of this case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Elizabeth A. Hanft, Daniel G. Nessim, and Matthew R. Shahabian are in charge of the prosecution.
Former Pharma Executive and Cousin Plead Guilty to Insider Trading of Kodak StockRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of JAMES ANDREW STILES and EDWARD GRAY STILES in connection with a scheme to commit insider trading based on misappropriated information about potential government loans to be made to the Eastman Kodak Company to finance the production of COVID-19-related pharmaceutical components. ANDREW STILES and GRAY STILES were arrested in 2023 and pled guilty today to securities fraud based on insider trading before U.S. District Judge Ronnie Abrams.
U.S. Attorney Damian Williams said: “Andrew Stiles betrayed the trust and confidence of his employer by stealing confidential business information and using it alongside his cousin, Gray Stiles, to make unlawful trades in Kodak’s stock based on inside information. Even secret codes and lies to regulators could not stop them from getting caught. No one is above the law, and this Office’s commitment to protecting the integrity of the financial markets remains a priority.”
As alleged in the Indictment, other public court documents, and statements made during court proceedings:
Between June and July 2020, ANDREW STILES conducted an insider trading scheme in which he misappropriated material, non-public information (“MNPI”) and used it to trade in the stock of the Eastman Kodak Company (“Kodak”). He further provided that MNPI to his cousin, GRAY STILES, so that he would likewise trade on the MNPI.
During that time, ANDREW STILES was an executive at a company (“Company-1”) that was working with Kodak to collaborate on the production of chemicals for pharmaceutical manufacturing in connection with the COVID-19 pandemic. Company-1 was also assisting Kodak in its application for a significant government loan, which ultimately resulted in the news, on July 27, 2020, of a government “letter of interest” to provide Kodak with a loan of $765 million (the “LOI”). In the following days, Kodak’s stock rose substantially, at one point increasing to more than 2,500% above the closing price prior to the news of the LOI.
During June and July 2020, ANDREW STILES was kept apprised of Kodak’s efforts to obtain the government loan, and he both traded using that non-public information and passed that information to GRAY STILES. For example, on July 9, 2020, when Kodak had applied for a loan in the amount of $655 million, ANDREW STILES and GRAY STILES exchanged the following coded text messages:
GRAY: Any update on the film we sent off a few weeks ago to get developed
ANDREW: 600+. Maybe 2 weeks out
GRAY: I can live with that hahaha
Between June 2020, after ANDREW STILES learned about the potential loan to Kodak, and July 27, 2020, the date the LOI was first publicized, ANDREW STILES purchased more than 90,000 shares of Kodak stock, including multiple purchases the day before the LOI was scheduled to be announced. GRAY STILES purchased more than 30,000 shares, more than half of which were purchased the day prior to the scheduled announcement of the LOI. In fact, on July 27, 2020, ANDREW STILES texted GRAY STILES, “Tmw,” indicating the expected date of the announcement. Less than one minute later, GRAY STILES responded, “Hot damn.” Following that exchange, and before the news was announced, ANDREW STILES and GRAY STILES each purchased more than 10,000 additional shares.
ANDREW STILES and GRAY STILES each sold the entirety of their shares in the days and weeks after the announcement. ANDREW STILES realized profits of more than $500,000, and GRAY STILES realized profits of more than $700,000.
* * *
ANDREW STILES, 38, of Charleston, South Carolina, and GRAY STILES, 39, of Richmond, Virginia, each pled guilty to one count of securities 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 defendants will be determined by a judge.
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. Assistant U.S. Attorneys Alex Rossmiller, Nicolas Roos, and Allison Nichols are in charge of the prosecution.
Eight Bronx Men Charged for Participation in Beer Theft EnterpriseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; James E. Dennehy, Special Agent in Charge of the Newark Field Office of the Federal Bureau of Investigation (“FBI”); Edward T. Cetnar, Superintendent of Police and Director of Public Safety of the Port Authority of New York and New Jersey (“PANYNJ”); and Sean Douris, the Chief of Police, Public Safety, and Infrastructure Protection at CSX, announced today the unsealing of a seven-count Indictment charging JOSE CESARI, a/k/a “Cry,” MIGUEL CINTRON, LUIS IZQUIERDO, a/k/a “Luis Zapata,” WAKIEM JOHNSON, a/k/a “Waka,” KEMAR BONITTO, DEYLIN MARTINEZ-GUERRERO, ANTONIO GONZALEZ, and JUSTIN BRUNO with crimes arising from their participation in a multi-year scheme to steal beer — primarily Corona and Modelo shipped from Mexico — from railroad cars and beverage distribution facilities located throughout the Northeast, including in Connecticut, Massachusetts, New Jersey, and New York (the “Beer Theft Enterprise”). Six defendants were arrested today and will be presented this afternoon before U.S. Magistrate Judge Robyn F. Tarnofsky. CESARI remains at large, and BONITTO is in state custody in Connecticut. The case is assigned to U.S. District Judge Edgardo Ramos.
U.S. Attorney Damian Williams said: “For years, the Beer Theft Enterprise has operated brazenly, allegedly breaking into railyards and beverage distribution facilities throughout the Northeast and filling U-Haul box trucks to the brim with cases of beer. That dangerous and disruptive conduct — sometimes allegedly accompanied by the threat of violence — has left several beverage distribution and railroad companies ailing. Today’s arrests reinforce that the Beer Theft Enterprise’s staggering thefts will not be tolerated in the Southern District of New York.”
FBI Special Agent in Charge James E. Dennehy said: “Train heists harken back to the days of the Wild West and gunslingers riding horses, stealing loot from rail cars. The romanticized image has nothing to do with the modern-day criminals we allege took part in a theft ring in New Jersey, New York, and beyond that targeted railyards and beverage distribution centers. They used the cover of night to cut through fencing, off-load pallets of beer, and sold off the stolen goods, costing the victims’ companies hundreds of thousands of dollars. The alleged ringleader Cesari often used a weapon during the robberies. Our team of agents and investigators working on this case has done an outstanding job bringing these alleged thieves' crime spree to the end of the line.”
PANYNJ Superintendent of Police and Director of Public Safety Edward T. Cetnar said: “These brazen thefts result in millions of dollars of lost revenue every year, directly affecting the regional economy and everyone’s safety. The cooperative efforts of law enforcement in this case show our focus on securing our facilities and bringing perpetrators to justice.”
CSX Chief of Police, Public Safety, and Infrastructure Protection Sean Douris said: “CSX is committed to protecting the safety of its property and that of its customers. We take criminal activity very seriously. Railyards are privately owned property and unauthorized activity is considered criminal trespassing and violators will be prosecuted. CSX appreciates the valuable partnerships we have with federal and local law enforcement agencies in New York, and across our network, who are crucial when it comes to investigating incidents and prosecuting individuals responsible for theft.”
According to the allegations in the Indictment:[1]
Between in or about July 2022 and in or about March 2024, the Beer Theft Enterprise carried out dozens of beer thefts throughout the Northeast, which cumulatively resulted in losses to certain beverage distribution companies of at least hundreds of thousands of dollars.
In a typical theft, the Beer Theft Enterprise operated under cover of night. At least some of the members of the Enterprise working that night assembled in the Bronx before travelling to that night’s target railyard or beverage distribution facility. Typically, one or more members working that night drove a vehicle — often a U-Haul box truck — to the target location to be filled with cases of stolen beer. After arriving at the railyard or beverage distribution facility, members of the Enterprise commonly gained unauthorized access by cutting a hole in the fencing surrounding the location. When stealing from a railyard, members frequently cut the lock to railroad cars containing sealed pallets of cases of beer — usually Corona or Modelo — then unsealed the pallets and transported the cases of beer to their waiting vehicles. Generally, they transported the stolen beer to the Bronx, where it was inspected and made available for sale. The participating members of the Beer Theft Enterprise were usually paid hundreds of dollars for the night’s work after assisting in a beer theft.
As a leader of the Beer Theft Enterprise, CESARI was often present during these robberies. Sometimes, during a particular beer theft, CESARI used a police scanner to monitor potential police activity. In addition to participating in many of the Enterprise’s raids over the course of the conspiracy, CESARI sometimes sought to recruit new members to the conspiracy with promises of monetary gain.
CINTRON, IZQUIERDO, JOHNSON, BONITTO, MARTINEZ-GUERRERO, GONZALEZ, and BRUNO were members of the Beer Theft Enterprise. These defendants participated in certain thefts perpetrated by the organization by, for example, renting or driving vehicles that were used in particular thefts, helping plan or execute particular thefts by communicating with CESARI, and otherwise assisting in particular thefts.
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A chart containing the names, ages, charges, and minimum and maximum penalties for the defendants is set forth below.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI, the PANYNJ, and the CSX Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Joseph H. Rosenberg is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Count
Charge
Defendants
Min. and Max. Penalties
1
Conspiracy to steal from interstate or foreign shipments by carrier, and to break and enter carrier facilities with intent to commit larceny therein
CESARI, 27; CINTRON, 32;
IZQUIERDO, 40; JOHNSON, 31;
BONITTO, 38; MARTINEZ-GUERRERO, 28;
GONZALEZ, 33; and
BRUNO, 23
Maximum sentence of five years in prison
2
Theft from interstate or foreign shipments
CESARI, CINTRON,
IZQUIERDO, and
JOHNSON
Maximum sentence of 10 years in prison
3
Theft from interstate or foreign shipments
CESARI, BONITTO,
and GONZALEZ
Maximum sentence of 10 years in prison
4
Theft from interstate or foreign shipments
CESARI and
BRUNO
Maximum sentence of 10 years in prison
5
Conspiracy to commit Hobbs Act robbery
CESARI
Maximum sentence of 20 years in prison
6
Hobbs Act robbery
CESARI
Maximum sentence of 20 years in prison
7
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence
CESARI
Mandatory minimum consecutive sentence of seven years in prison
Maximum sentence
of
life in prison
[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.
New Rochelle Man Sentenced to More Than 19 Years in Prison for Assaulting an FBI Task Force Officer and Related Firearm OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that DARREN SMITH was sentenced today by U.S. District Judge Philip M. Halpern to 230 months in prison for assaulting a Federal Bureau of Investigation (“FBI”) Task Force Officer and related offenses. SMITH was previously convicted after a jury trial on September 12, 2022, of assaulting a federal officer, discharging a firearm in relation to his assault of a federal officer, and unlawfully possessing a firearm.
U.S. Attorney Damian Williams said: “This Office stands shoulder to shoulder with our partners in law enforcement when they come under attack. We will stop at nothing to ensure that those who seek to harm them face justice.”
According to the Indictment, public court filings, evidence presented at trial, and statements made in court:
On September 25, 2020, after officers of the Yonkers Police Department (“YPD”) initiated a lawful stop of the car SMITH was driving, SMITH sped away and led law enforcement officers on a car chase and then foot pursuit through the crowded streets of downtown Yonkers, holding a loaded handgun and refusing multiple law enforcement orders to stop and put down the gun. An FBI Task Force Officer assigned to the FBI’s Westchester-based Safe Streets Task Force was among the law enforcement who responded and pursued SMITH. Eventually, the Task Force Officer and members of the YPD brought SMITH to the ground. While they attempted to restrain SMITH, who still refused to let go of the gun, SMITH fired five shots into the crowded Getty Square area of Yonkers in close proximity to members of law enforcement and bystanders, including a woman pushing a stroller with a baby. While firing his gun, SMITH attempted to turn the gun back towards members of law enforcement, including the Task Force Officer, who were on top of him and trying to restrain him. A photograph of SMITH on foot running with his gun is shown below:
* * *
In addition to the prison term, SMITH, 27, of New Rochelle, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the FBI’s Westchester County Safe Streets Task Force and the Yonkers Police Department. The FBI’s Westchester County Safe Streets Task Force is comprised of special agents and task force officers from the FBI; U.S. Probation; New York State Police; New York State Department of Corrections and Community Supervision; Westchester County District Attorney’s Office; Putnam County Sheriff’s Office; Rockland District Attorney’s Office; and the New York City, Westchester County, Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Shiva H. Logarajah, Kevin T. Sullivan, and Celia V. Cohen are in charge of the prosecution.