Southern District of New York
Press releases recorded for this federal judicial district.
More Than 40 Gang Members from Newburgh and Poughkeepsie Sentenced to Prison for Racketeering, Violence, Narcotics, and Firearms OffensesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today the last sentencing of gang members and narcotics distributors as a result of a long-running investigation conducted by the Federal Bureau of Investigation (“FBI”) in Newburgh and Poughkeepsie, New York. 26 of the defendants were convicted of being members, associates, and co-conspirators of the violent street gang the Young Gunnaz (“YG”), including YG leader Kashad Sampson. 12 of the defendants were convicted of being members and associates of the violent street gang the Double Nine Grim Reapers (“Grimz”), including Grimz leaders Jeremy Williams, Randy Jones, and James White. U.S. District Judge Kenneth M. Karas imposed the sentences in the YG case, United States v. Kashad Sampson, et al., 22 Cr. 640, and U.S. District Judge Philip M. Halpern imposed the sentences in the Grimz case, United States v. Jeremy Williams, et al., 22 Cr. 641. RODNEY GEORGE, a defendant in the Sampson case, was the last in this series to be sentenced and received 108 months in prison.
“For years, members and associates of the Young Gunnaz and the Double Nine Grim Reapers brought shootings, armed robberies, narcotics trafficking, and fraud to communities across the Hudson Valley,” said U.S. Attorney Jay Clayton. “Today’s final sentencing marks the end of a years-long prosecution that removed over 40 of these violent gang members and drug traffickers from our streets. No gang should get to claim a block, a neighborhood, or a city as its own, and this Office will continue to work with our federal, state, and local partners to dismantle violent criminal organizations and protect the communities they prey upon.”
As alleged in the Indictments, other court filings, and statements made during court proceedings:
Since at least 2018, the Grimz has been a brutally violent street gang. The Grimz was founded by co-defendants Jeremy Williams, a/k/a “Dubs,” and Randy Jones, a/k/a “Nickelz,” and has hundreds of members across New York State, including throughout Orange County, Dutchess County, and the New York State prison system. The Grimz is a highly organized and efficient street gang with an organizational commitment to violence that strictly enforces its internal laws and celebrates gun violence. The highest-ranking members and leaders of the Grimz, like co-defendants James White, a/k/a “Infared,” and Octavious Griffin, a/k/a “Tate,” have so-called “serial numbers” within the Grimz, which include the name of a 9-millimeter firearm.
Since at least 2019, the YG has been a violent street gang that operated through New York State and engaged in large-scale narcotics trafficking, wire fraud, armed robberies, and shootings. For the most part, the YG defendants were part of the PlayBoyGzz subset of YG, which was led by, among others, co-defendant Kashad Sampson, a/k/a “Shoca.” Like the Grimz, senior members of YG glorified violence and demanded action from its members.
For years, the Grimz and YG terrorized communities in this District and demonstrated a complete disregard for human life. The Grimz defendants were responsible for multiple armed robberies and shootings in the City of Newburgh, including the November 3, 2020, attempted murder of a rival gang member. During that attempted murder, which involved co-defendants Justice Jackson, a/k/a “Tweak,” Tyrell Simon, a/k/a “Rello,” a/k/a “Insane,” Thomas Rodriguez, a/k/a “Tom Tom,” a/k/a “Checks,” and others, Rodriguez shot a rival gang member multiple times while the rival gang member sat in his vehicle. The rival gang member survived after receiving life-saving medical treatment at two different hospitals. The Grimz were also responsible for trafficking large amounts of deadly narcotics, like crack cocaine and heroin, on the streets and for trafficking K2, a synthetic cannabinoid, within the New York State prison system.
The YG defendants were responsible for at least approximately 13 shootings, three armed robberies, and a large-scale narcotics trafficking conspiracy responsible for flooding the streets with fentanyl, heroin, crack cocaine, and other drugs. In addition, some of the YG defendants also participated in a widespread scheme to defraud the New York state unemployment insurance program during the COVID-19 pandemic. In total, these defendants made just over $1,000,000 through this scheme and caused at least one of their victims to fall into financial ruin because, as a result of YG’s fraud, the victim lost her total disability social security payment.
* * *
The counts of conviction and sentences imposed on the defendants in the Sampson and Williams cases are contained in the chart below.
Mr. Clayton praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, City of Newburgh Police Department, New York State Police, Town of New Windsor Police Department, Town of Newburgh Police Department, New York City Police Department, and Nassau County Police Department. Mr. Clayton also thanked the FBI’s Westchester Safe Streets Task Force, the New York City Department of Correction, Correction Intelligence Bureau, the Department of Labor Office of the Inspector General, and the City of Poughkeepsie Police Department for their assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jennifer N. Ong, Ryan W. Allison, and Margaret N. Vasu are in charge of the prosecution.
United States v. Kashad Sampson, et al., 22 Cr. 640 (KMK)
Defendant
Age
Counts of Conviction
Sentence
Kashad Sampson,
a/k/a “Shoca”
27
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
200 months in prison
Five years’ supervised release
George Delgado,
a/k/a “Groc”
26
Racketeering Conspiracy
Assault with a Deadly Weapon in Aid of Racketeering
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
144 months in prison
Three years’ supervised release
Gabriel Roman,
a/k/a “Gabe”
26
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Crime of Violence
Aggravated Identity Theft
160 months in prison
Three years’ supervised release
Dallas Archer,
a/k/a “Muggas”
29
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
90 months in prison
Three years’ supervised release
Bruce Allen,
a/k/a “Bam”
28
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
Brandishing a Firearm in Furtherance of a Crime of Violence
154 months in prison
Three years’ supervised release
Syncere Tatum,
a/k/a “Syn”
25
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
160 months in prison
Three years’ supervised release
John Lalanne,
a/k/a “JJ”
27
Racketeering Conspiracy
Brandishing a Firearm in Furtherance of a Crime of Violence
120 months in prison
Four years’ supervised release
Raekwon Jackson,
a/k/a “Tree”
26
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
170 months in prison
Four years’ supervised release
Bashir Mallory,
a/k/a “BG,”
a/k/a “Bear”
22
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
140 months in prison
Five years’ supervised release
Mekhi McDonald,
a/k/a “Khi”
22
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
168 months in prison
Four years’ supervised release
Christopher Tate,
a/k/a “Bag”
23
Racketeering Conspiracy
Narcotics Conspiracy
140 months in prison
Four years’ supervised release
Kristopher Burgess Cunningham,
a/k/a “KG”
32
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
90 months in prison
Three years’ supervised release
Dejon Scott,
a/k/a “Red Dot”
30
Racketeering Conspiracy60 months in prison
Three years’ supervised release
Davon Waddell,
a/k/a “Spotem,”
a/k/a “Light Skin Day Day”
28
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Crime of Violence
Brandishing a Firearm in Furtherance of a Crime of Violence
164 months in prison
Four years’ supervised release
Zyrell Williams,
a/k/a “Zabb”
21
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
96 months in prison
Three years’ supervised release
Demetrius Ware,
a/k/a “Doom Doom”
21
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
90 months in prison
Three years’ supervised release
Antonio Pittman,
a/k/a “Ant”
24
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Crime of Violence
84 months in prison
Three years’ supervised release
Daquan Cueto24
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
108 months in prison
Three years’ supervised release
Christopher Johnson,
a/k/a “Brisko”
32
Brandishing a Firearm in Furtherance of a Crime of Violence and Drug Trafficking Crime
Hobbs Act Robbery
Narcotics Conspiracy
144 months in prison
Four years’ supervised release
Harry Pimentel24
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Crime of Violence
130 months in prison
Four years’ supervised release
Eric Steadman,
a/k/a “Little Man”
25
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Crime of Violence
120 months in prison
Three years’ supervised release
Donald Leid,
a/k/a “Big Lip Day Day”
32
Narcotics Conspiracy
Brandishing a Firearm in Furtherance of a Crime of Violence and a Drug Trafficking Crime
94 months in prison
Five years’ supervised release
Tevin George,
a/k/a “Tev Roc”
32
Brandishing a Firearm in Furtherance of a Crime of Violence84 months in prison
Five years’ supervised release
Devin Williams,
a/k/a “Twin,”
a/k/a “Dev”
29
Racketeering Conspiracy54 months in prison
Three years’ supervised release
Dante Johnson,
a/k/a “D Rose”
28
Racketeering Conspiracy60 months in prison
Three years’ supervised release
George Tatum,
a/k/a “Buddy”
48
Narcotics Conspiracy140 months in prison
Five years’ supervised release
Coleridge Lewter,
a/k/a “Korrupt”
45
Narcotics Conspiracy72 months in prison
Three years’ supervised release
Rodney George,
a/k/a “Taco”
49
Narcotics Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
108 months in prison
5 years’ supervised release
United States v. Jeremy Williams, et al., 22 Cr. 641 (PMH)
Defendant
Age
Counts of Conviction
Sentence
Jeremy Williams,
a/k/a “Dubs”
37
Racketeering Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
300 months in prison
Three years’ supervised release
James White,
a/k/a “Infared”
47
Racketeering Conspiracy
Narcotics Conspiracy
300 months in prison
Three years’ supervised release
Messiah Jackson,
a/k/a “Two”
25
Racketeering Conspiracy
Narcotics Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
210 months in prison
Five years’ supervised release
Justice Jackson,
a/k/a “Tweak”
25
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
180 months in prison
Five years’ supervised release
Octavious Griffin,
a/k/a “Tate”
39
Racketeering Conspiracy
Brandishing a Firearm in Furtherance of a Crime of Violence
234 months’ imprisonment
Five years’ supervised release
Markell Williams,
a/k/a “15”
25
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
204 months in prison
Five years’ supervised release
Tyrell Simon,
a/k/a “Insane,”
a/k/a “Rello”
25
Racketeering Conspiracy
Discharge of a Firearm in Furtherance of a Crime of Violence
180 months in prison
Five years’ supervised release
Joshua Hendrick.
a/k/a “Hendrix”
26
Racketeering Conspiracy121 months in prison
Three years’ supervised release
Elijah Briggs,
a/k/a “Eli”
29
Racketeering Conspiracy87 months in prison
Three years’ supervised release
Shamell Williams,
a/k/a “Mello Trend”
33
Racketeering Conspiracy87 months in prison
Three years’ supervised release
Thomas Rodriguez,
a/k/a “Tom Tom,”
a/k/a “Checks”
34
Racketeering Conspiracy
Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
Discharge of a Firearm in Furtherance of a Crime of Violence
Narcotics Conspiracy
Possession of a Firearm in Furtherance of a Drug Trafficking Crime
360 months in prison
Five years’ supervised release
Former Afghan General and First Deputy House Speaker Extradited to U.S. to Face Charges of Conspiring to Traffic Hundreds of Kilograms of Heroin and Methamphetamine and Provide Arsenal of Military-Grade WeaponryRead the Press Release
A complaint was unsealed today charging Abdul Zahir Qadeer, also known as “Haji Abdul Zahir,” a former general in Afghanistan’s Border Force and First Deputy Speaker of Afghanistan’s National Assembly’s House of the People, with conspiring to import heroin and methamphetamine and related firearms offenses. Qadeer is expected to appear in federal court in Manhattan today following his arrest in Nairobi, Kenya, on April 15, 2025, and extradition to the United States on July 10, 2026.
“While purporting to be a political leader of Afghanistan, Abdul Zahir Qadeer was allegedly leading a criminal enterprise dealing in dangerous and addictive narcotics and heavy weapons,” said Acting Attorney General Todd Blanche. “The Drug Enforcement Administration led an investigation that ended Qadeer’s audacious criminal activity, and now he will face justice in the United States.”
“Abdul Zahir Qadeer, a former high-ranking Afghan government official, allegedly also held a dual role as a large-scale international narcotics and military-grade weapons trafficker,” said U.S. Attorney Jay Clayton for the Southern District of New York. “In an attempt to traffic massive amounts of poison and weaponry — including heavy machine guns and rocket-propelled grenade launchers — Qadeer allegedly sold a two-kilogram test shipment to a buyer, which was delivered in South Africa. Unbeknownst to Qadeer, that buyer was working with the DEA. The scale of potential devastation Qadeer was attempting to bring to the U.S. is terrifying. This brazen effort underscores the need for the commitment and expertise of our career prosecutors and DEA partners.”
“"The world is safer now that Abdul Zahir Qadeer is facing justice in the United States. As a former General for Afghanistan's Border Force, Qadeer was entrusted to protect his country's borders — instead, he exploited his position to facilitate drug and weapons trafficking that fueled violence and instability,” said Administrator Terrance C. Cole of the Drug Enforcement Administration (DEA). “Make no mistake; we will use the full weight of the United States government to bring such individuals to justice. No matter where you are, no matter how powerful you think you are — you are not out of our reach.”
According to the allegations contained in the complaint and other public filings: Qadeer is a former member of Afghanistan’s National Assembly, which functioned as the legislature of Afghanistan until the Taliban regained control of the country in or about August 2021, and he was elected First Deputy Speaker of the National Assembly’s House of the People in or about 2012. Qadeer previously served as a general in Afghanistan’s Border Force, a paramilitary police organization responsible for securing Afghanistan’s border, commanding its Eighth Border Battalion in Takhar Province, Afghanistan. Qadeer is pictured below, dressed in blue, toward the left of the image:
Photo of Qadeer (in blue and on the left) with the Eighth Border Battalion. From the complaint.Qadeer was also, until his arrest, a large-scale international narcotics and weapons trafficker. As alleged in the complaint, Qadeer engaged in extensive negotiations with an individual who purported to be a member of an international drug trafficking organization (the “DTO”) but, unbeknownst to Qadeer, was in fact a confidential source (CS-1) working at the direction of the DEA.
In or about November 2024, CS-1 began communicating with Qadeer about their potential partnership in trafficking hundreds of kilograms of heroin and methamphetamine for importation into and sale in the United States for the purported DTO. As an early step in their partnership, on or about Dec. 10, 2024, Qadeer sold a two-kilogram test shipment of methamphetamine delivered to CS-1’s associate in Johannesburg, South Africa, in exchange for approximately $14,000.
Photo of two-kilogram test shipment of methamphetamine allegedly sold by Qadeer. From the complaint. Screenshot of message thread between Qadeer and CS-1. From the complaint.Thereafter, Qadeer continued to negotiate with CS-1 regarding the sale to the DTO of hundreds of kilograms of heroin and methamphetamine, along with hundreds of heavy machine guns, assault rifles, sniper rifles, rocket-propelled grenade launchers, pistols, and grenades, which CS-1 represented would be used by the DTO to protect its drug trafficking activities from interdiction by the United States government. Pictured below is a purported weapons order from CS-1 that Qadeer agreed to fulfill:
Screenshot of a purported weapons order that Qadeer allegedly agreed to fulfill. From the complaint.Upon receiving the weapons order, Qadeer provided CS-1 with quotes of how much he would charge to source each weapon, including, for example, $11,579 for one sniper rifle, $9,670 for one type of machine gun, and $1,770 for 10 grenades in one box.
In or about April 2025, Qadeer attended a meeting in Nairobi, Kenya, with several individuals who he believed to be members of the DTO he would supply with narcotics and weapons. In reality, it was a meeting between Qadeer and multiple DEA confidential sources. Kenyan law enforcement officers arrested Qadeer immediately following the meeting.
Qadeer has been charged with narcotics importation conspiracy, which carries a minimum penalty of 10 years in prison and a maximum penalty of life in prison; using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the narcotics-importation conspiracy, which carries a minimum penalty of 30 years in prison and a maximum penalty of life in prison; and conspiring to use and carry machine guns and destructive devices during, and possess machine guns and destructive devices in furtherance of, the narcotics-importation conspiracy, which carries a maximum penalty of life in prison.
The statutory maximum and mandatory minimum penalties in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
DEA’s Special Operations Division Bilateral Investigations Unit investigated the case. The FBI’s Tactical Aviation Unit assisted with Qadeer’s extradition to the United States from Kenya. The Office of International Affairs of the Department of Justice’s Criminal Division and Kenya’s Office of the Director of Public Prosecutions and Directorate of Criminal Investigations also provided assistance.
Assistant U.S. Attorneys Jonathan L. Bodansky and Chelsea L. Scism for the Southern District of New York are prosecuting the case.
The charges contained in a complaint are merely accusations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Afghan General and First Deputy House Speaker Extradited to U.S. to Face Charges of Conspiring to Traffic Hundreds of Kilograms of Heroin and Methamphetamine and Provide Arsenal of Military-Grade WeaponryRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Acting Attorney General for the United States, Todd Blanche, and Administrator of the U.S. Drug Enforcement Administration (“DEA”), Terrance C. Cole, announced today the unsealing of a Complaint charging ABDUL ZAHIR QADEER, a/k/a “Haji Abdul Zahir,” a former general in Afghanistan’s Border Force and First Deputy Speaker of Afghanistan’s National Assembly’s House of the People, with conspiring to import heroin and methamphetamine and related firearms offenses. QADEER was presented earlier today before U.S. Magistrate Judge Henry J. Ricardo and ordered detained pending trial, following his arrest in Nairobi, Kenya, on April 15, 2025 and extradition to the United States on July 10, 2026.
“Abdul Zahir Qadeer, a former high-ranking Afghan government official, allegedly also held a dual role as a large-scale international narcotics and military-grade weapons trafficker,” said U.S. Attorney Jay Clayton. “In an attempt to traffic massive amounts of poison and weaponry—including heavy machine guns and rocket-propelled grenade launchers—Qadeer allegedly sold a two-kilogram test shipment to a buyer, which was delivered in South Africa. Unbeknownst to Qadeer, that buyer was working with the DEA. The scale of potential devastation Qadeer was attempting to bring to the U.S. is terrifying. This brazen effort underscores the need for the commitment and expertise of our career prosecutors and DEA partners.”
“While purporting to be a political leader of Afghanistan, Abdul Zahir Qadeer was allegedly leading a criminal enterprise dealing in dangerous and addictive narcotics and heavy weapons,” said Acting Attorney General Todd Blanche. “The Drug Enforcement Administration led an investigation that ended Qadeer’s audacious criminal activity, and now he will face justice in the United States.”
“The world is safer now that Abdul Zahir Qadeer is facing justice in the United States,” said DEA Administrator Terrance C. Cole. “As a former General for Afghanistan’s Border Force, Qadeer was entrusted to protect his country's borders—instead, he exploited his position to facilitate drug and weapons trafficking that fueled violence and instability. Make no mistake; we will use the full weight of the United States government to bring such individuals to justice. No matter where you are, no matter how powerful you think you are—you are not out of our reach.”
According to the allegations contained in the Complaint and other public filings:(1)
QADEER is a former member of Afghanistan’s National Assembly, which functioned as the legislature of Afghanistan until the Taliban regained control of the country in or about August 2021, and he was elected First Deputy Speaker of the National Assembly’s House of the People in or about 2012. QADEER previously served as a general in Afghanistan’s Border Force, a paramilitary police organization responsible for securing Afghanistan’s border, commanding its Eighth Border Battalion in Takhar Province, Afghanistan. QADEER is pictured below, dressed in blue, toward the left of the image:
QADEER was also, until his arrest, a large-scale international narcotics and weapons trafficker. As alleged in the Complaint, QADEER engaged in extensive negotiations with an individual who purported to be a member of an international drug trafficking organization (the “DTO”) but, unbeknownst to QADEER, was in fact a confidential source (“CS-1”) working at the direction of the DEA.
In or about November 2024, CS-1 began communicating with QADEER about their potential partnership in trafficking hundreds of kilograms of heroin and methamphetamine for importation into and sale in the United States for the purported DTO. As an early step in their partnership, on or about December 10, 2024, QADEER sold a two-kilogram test shipment of methamphetamine delivered to CS-1’s associate in Johannesburg, South Africa, in exchange for approximately $14,000. Thereafter, QADEER continued to negotiate with CS-1 regarding the sale to the DTO of hundreds of kilograms of heroin and methamphetamine, along with hundreds of heavy machine guns, assault rifles, sniper rifles, rocket-propelled grenade launchers, pistols, and grenades, which CS-1 represented would be used by the DTO to protect its drug trafficking activities from interdiction by the United States government. Pictured below is a purported weapons order from CS-1 that QADEER agreed to fulfill:
Upon receiving the weapons order, QADEER provided CS-1 with quotes of how much he would charge to source each weapon, including, for example, $11,579 for one sniper rifle, $9,670 for one type of machine gun, and $1,770 for 10 grenades in one box.
In or about April 2025, QADEER attended a meeting in Nairobi, Kenya, with several individuals who he believed to be members of the DTO he would supply with narcotics and weapons. In reality, it was a meeting between QADEER and multiple DEA confidential sources. Kenyan law enforcement officers arrested QADEER immediately following the meeting.
* * *
ABDUL ZAHIR QADEER, 52, of Afghanistan, has been charged with narcotics importation conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the narcotics-importation conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and conspiring to use and carry machine guns and destructive devices during, and possess machine guns and destructive devices in furtherance of, the narcotics-importation conspiracy, which carries a maximum sentence of life in prison.
The statutory maximum and mandatory minimum penalties in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit. Mr. Clayton also thanked the Federal Bureau of Investigation’s Tactical Aviation Unit, which assisted with QADEER’s extradition to the United States from Kenya; the Office of International Affairs of the Department of Justice’s Criminal Division; and Kenya’s Office of the Director of Public Prosecutions and Directorate of Criminal Investigations for their assistance.
The prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jonathan L. Bodansky and Chelsea L. Scism are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
^
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.
Chief Financial Officer Pleads Guilty to Conspiracy to Launder $67 Million Dollars in Fraud ProceedsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that WEIDONG GUAN, a/k/a “Bill Guan,” the former Chief Financial Officer of The Epoch Times Association, Inc. (the “Epoch Times”), an international media company headquartered in New York, New York, pled guilty yesterday to participating in a conspiracy to engage in transactions involving criminal proceeds as part of a transnational scheme to launder at least approximately $67 million of illegally obtained funds to benefit, among others, the Epoch Times. GUAN pled guilty before District Judge Victor Marrero. Sentencing has not yet been scheduled.
“Weidong Guan orchestrated an elaborate multimillion-dollar money laundering scheme to increase revenues at the company where he served as Chief Financial Officer,” said U.S. Attorney Jay Clayton. “Corporate leaders like Guan should take notice: boosting revenues through crime will not pay. This Office is committed to holding perpetrators of financial crimes accountable and compensating victims.”
According to the charging documents and statements made in public filings and public court proceedings:
From at least in or about 2019, through in or about May 2024, GUAN, while serving as Chief Financial Officer of the Epoch Times, conspired with others to participate in a sprawling, international scheme to launder at least approximately $67 million of illegally obtained funds to bank accounts in the names of the Epoch Times and related entities. GUAN did so by using the Epoch Times’ funds to purchase crime proceeds loaded onto gift cards and prepaid debit cards at discounted rates of approximately 70 to 80 cents on the dollar, and then laundering those crime proceeds back to the Epoch Times under the guise of fake “donations” to the Epoch Times. When banks notified GUAN that the transactions at issue were suspicious and asked GUAN to explain their source, GUAN knowingly misled the banks to believe the transactions were legitimate rather than criminal.
* * *
GUAN, 63, of Secaucus, New Jersey, pled guilty to one count of conspiring to engage in transactions involving criminal proceeds, which carries a maximum sentence of ten years in prison. GUAN also agreed to forfeit at least $67 million, representing property involved in the offense, and separately to pay restitution up to $67 million. The criminal conduct at issue does not relate to the Epoch Times’ newsgathering activities.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
One of GUAN’s co-conspirators, Le Van Hung, a/k/a “Hung Van Le,” a/k/a “Van Hung Le,” pled guilty on June 29, 2026, to participating in a conspiracy to commit identity theft based on his role in the money laundering scheme. HUNG is scheduled to be sentenced on October 9, 2026.
Mr. Clayton praised the outstanding investigative work of the Department of Labor’s Office of Inspector General, the Department of State’s Diplomatic Security Service, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Benjamin M. Burkett, Rebecca T. Dell, Paul M. Monteleoni, Daniel C. Richenthal, and Amanda C. Weingarten are in charge of the prosecution, with the assistance of Paralegal Specialists William Spehr and Emma Vorchheimer.
U.S. Attorney Jay Clayton Announces Appointment of James McDonald as Deputy United States Attorney; SDNY Plans Leadership TransitionRead the Press Release
Appointment of James M. McDonald
Jay Clayton, the United States Attorney for the Southern District of New York, announced today that James M. McDonald will rejoin the Office as Deputy U.S. Attorney for the Southern District of New York for a period of transition.
“Mr. McDonald, an alumnus of the Office, is a remarkably accomplished, highly respected, and widely sought after counselor, strategist, and advocate, inside and outside the courtroom,” said U.S. Attorney Jay Clayton. “Jamie is President Trump’s choice to be the next U.S. Attorney for the Southern District of New York, and he is an outstanding choice to lead the women and men of the Office in their efforts to serve New York families and all Americans.”
Jamie McDonald’s experience as a lawyer and manager is vast. In addition to serving as an Assistant U.S. Attorney in the Southern District of New York, Mr. McDonald served as the Director of Enforcement at the Commodity Futures Trading Commission, as a Deputy Associate Counsel in the Office of the White House Counsel, and as a law clerk to Chief Justice John G. Roberts, Jr., of the U.S. Supreme Court and Chief Judge Jeffrey S. Sutton, Jr., of the U.S. Court of Appeals for the Sixth Circuit.
Prior to his appointment, Mr. McDonald was a Partner at Sullivan & Cromwell LLP where he was Co-Head of both the firm’s Securities & Commodities Investigations Practice and its Commodities, Futures and Derivatives Group. He currently serves as an Adviser to the American Law Institute’s Principles of Compliance, Risk Management, and Enforcement. Mr. McDonald previously served as a Visiting Scholar at Harvard Business School and as a Senior Fellow at New York University Law School’s Program on Corporate Compliance and Enforcement.
Mr. McDonald, originally from Oklahoma, graduated from the University of Virginia School of Law and from Harvard College.
SDNY Leadership Transition
U.S. Attorney Jay Clayton, who has led the Office since April 2025, was recently nominated by President Trump to serve as the Director of National Intelligence. To best serve the public and ensure a seamless transition in Office leadership, Deputy U.S. Attorney McDonald will begin to supervise the work and operations of the Office while Mr. Clayton attends to the Senate confirmation process.
During this transition period, the executive leadership team of Sean Buckley, Amanda Houle, Jeff Oestericher, and Karl Metzner will continue to lead the Office’s work.
“Under Sean, Amanda, Jeff, and Karl’s leadership, the Office has thrived,” said U.S. Attorney Jay Clayton. “Their strategic allocation of resources, coordination with the NYPD, the FBI, HSI and other law enforcement partners, and their mentorship of our AUSAs have made our streets safer, combatted the efforts of terrorists and drug cartels, and pursued perpetrators of sexual exploitation and hate crimes in all aspects of our society. We have steadfastly protected the interests of the United States, including rooting out fraud and abuse, and ensuring those entitled to benefits receive them. It has been my great pleasure to work with Sean, Amanda, Jeff, and Karl, and I know that, with the addition of Jamie, they will continue to be an extremely effective leadership team.”
Jay Clayton Applauds the Work of the SDNY and its Law Enforcement Partners
Statement of U.S. Attorney Jay Clayton:
“In my first days as U.S. Attorney in April 2025, I asked the members of the Office ‘Where would New York families want us to focus our resources?’ Their answers led to setting the following priorities for the Office:
- Removing career, gun-toting criminals from our streets;
- Combating the deadly fentanyl epidemic by bankrupting drug cartels and incarcerating gang leaders and their deadly soldiers;
- Pursuing foreign adversaries who are committed to harming Americans, sowing dissent, and undermining our freedoms; and
- Uncovering and prosecuting sex crimes and hate crimes across our communities.
We also turned our ‘white collar’ resources on the most egregious fraudsters, insider traders, and abusers of our financial systems, public trust, and benefits programs — focusing on individual accountability and the interest of victims.
Through the round the clock efforts of the women and men of the Office, and in partnership with the NYPD (the greatest police force in the world), our DOJ colleagues, the FBI, Homeland Security, the DEA, the Department of State, the Department of the Treasury, and our many other law enforcement colleagues, we have delivered on these priorities for our fellow New Yorkers and our fellow Americans. I am grateful to every member of the Office and the tens of thousands of officers, agents, and others who wake up every day with a commitment to ensuring our safety and protecting our freedoms. Their dedication to the public, expertise in the law, skills in advocacy, and most importantly, mutual support, are unparalleled.”
Below are some examples of the results of this team effort in our priority areas.
Removing Career, Gun-Toting Criminals from Our Streets
In April 2025, the SDNY joined with the Gun Violence Strategies Partnership (GVSP), an important New York City-led organization where representatives of over twenty city, state, and federal law enforcement bodies meet seven days a week to immediately and collectively address gun violence from the previous day. Dedicated SDNY personnel work continuously with the GVSP and the NYPD to identify gun crimes where federal charges will remove career, gun-toting criminals from our streets immediately and continuously.
Through our efforts to combat gun violence, in the past 15 months, over 250 individuals with career criminal histories have been charged with federal gun crimes and detained pending trial. More importantly, compared to 2024, the murder rate in New York City is down by 25% and trending lower. New York is our safest large city. This is what New York families want and deserve.
Combatting the Deadly Fentanyl Epidemic; Bankrupting Drug Cartels; Incarcerating Gang Leaders and their Deadly Soldiers
The illegal drug trade is a scourge on America. The international drug cartels are committed to flooding all aspects of our society — schools, businesses, public housing, etc. — with addictive drugs. These are billion dollar, often foreign government-enabled criminal organizations that have vast production and distribution networks. Hooking Americans, corrupting government and business leaders, and brutally defending their turf is their stock-in-trade. They knowingly embrace the death and destruction that follow.
We have joined the Administration’s whole of government approach to combatting these enemies of America. From New York City, Yonkers, White Plains, and Newburgh, to South and Central America, to China and the Middle East, our prosecutors and law enforcement partners are on a mission to bankrupt the cartels and take back our parks, schools, and housing projects. We are winning. Provisional reporting shows overdose deaths in New York in 2025 were down by approximately 25% compared to 2024 and continue to drop to their lowest levels in years. The Office is committed to continuing this trend.
In October 2025, together with the NYPD and the DEA, we shut down open-air drug dealing in Washington Square Park and charged over 15 individuals with federal drug crimes involving multiple overdose deaths. Children can now play safely in Washington Square Park, and we have taken that model to other parks and housing projects. Drug gangs in New York now know our truth: if you deal in fentanyl, you deal in death, and we will hold you accountable.
In April of 2026, we charged nine current and former Mexican officials with drug trafficking, weapons offenses, and related federal crimes. These allegations center on coordination with the Sinaloa Cartel, an organization responsible for the deaths of tens of thousands of Americans. We also charged drug trafficking and weapons offenses involving Nicolas Maduro and other Venezuelan officials and Mexico’s Jalisco New Generation Cartel (CJNG).
The drug cartels affiliate with large-scale gangs, including Tren de Aragua (TDA), in their bloodthirsty efforts to expand and protect drug distribution. Our focus on incarcerating gang leaders and their soldiers has resulted in charges against more than 40 alleged gang members in the past year. In December 2025, we charged a top leader of TDA with racketeering, terrorism, and drug trafficking offenses. We also charged leaders of the Anti-Tren splinter gang with similar offenses and have overall secured convictions against more than 10 TDA-related gang members, including multiple convictions for murder, drug-trafficking, and sex-trafficking.
Some believe we must accept cartels, gangs, and deadly drugs as part of our community. They have been proven wrong.
Pursuing Foreign Adversaries Who Threaten our Safety and Seek to Sow Discontent
Hamas, Hezbollah, Al-Qaeda, the IRGC, and ISIS are terrorist organizations and sworn enemies of the United States and western society, seeking to kill Americans at home and abroad. Together with partners across the federal government, we are bringing their leaders to justice.
In May 2026, Mohammad Al-Saadi, an alleged senior operative of Kata’ib Hezbollah and the IRGC, was arrested on terrorism charges involving multiple attacks and attempted attacks in Europe, Canada, and the U.S. Al-Saadi is now detained in the United States and awaits trial in Manhattan. This is one of several recent actions by our Office to disrupt the IRGC threat, including in the cybersecurity space.
These terrorist organizations rely on foreign governments and others for funding. Our Office is working with our federal partners to cut off their access to funds and to charge those who provide financial and other support for terror. We recently charged Reda Sabassi in connection with his efforts to divert funds raised through purported charitable campaigns to Hamas and for personal use, and, together with our federal partners, we are pursuing similar targets.
Our social media platforms and on-line networks are being exploited by terrorists, hostile foreign governments, and their proxies to commit offensive hacking of critical infrastructure networks and to radicalize young men and women and sow political and social discontent. This activity is pervasive. The costs to our foreign adversaries to radicalize and inflame using social media are low and the “benefits” to our adversaries can be great.
In March 2026, we charged two men with multiple federal terrorism charges for allegedly throwing bombs into a crowd outside the New York City Mayor’s residence (Gracie Mansion). Our Indictment alleges that these young men, residents of Pennsylvania, were radicalized on-line, including by watching ISIS propaganda, and intended to kill in upwards of sixty people.
We also continue in our investigations of efforts by foreign adversaries to wage influence campaigns within the United States, to affect U.S. public policy and opinion, and to interfere with government functions.
A great challenge we all face, and one our Office is facing head on, is protecting our sacred freedoms of speech, free association, and privacy while combatting foreign actors who use criminal means in efforts to exploit our open communications and other networks to harm us.
Uncovering and Prosecuting Sex Crimes and Hate Crimes Across Our Communities
Sex crimes, including the sexual exploitation of minors, are all too prevalent in our communities, including our schools, our hospitals, and our places of worship — the places we must trust most and must keep free from predators. Our Office has dedicated substantial resources to this mission and adopted a victim-oriented approach to uncovering and prosecuting sexual predators.
In the past 18 months, our Office has charged 41 individuals with federal sex crimes, including teachers, licensed therapists, bankers, and others in positions of significant trust, as well as gang members and others involved in violent crime. Our Office, including through our Civil Rights and Human Trafficking Unit, has focused on advocating for victims by holding accountable perpetrators of sex crimes from all corners of society, including drug dealers and gang members, well-resourced financial industry leaders, real estate professionals, and public media personalities. In addition, our prosecutors and our Civil Division AUSAs are working with our schools, hospitals, and other institutions to ensure that processes for identifying predators are improved and victims feel safe coming forward.
In the past 18 months, the Office has also prosecuted several significant hate-based crimes in New York City, including a defendant charged with three hate crimes in connection with repeated assaults of Jewish victims in New York City between 2024 and 2025; a violent attack on a visiting Israeli rabbi on the street outside a well-known kosher restaurant, allegedly based on his religion; and an alleged attack on a gay man in the Bronx. To further our work in this area, we hosted a conference with community leaders at NYU Law School on June 8, 2026. The conference, titled Combatting Hate Crimes in NYC, brought together approximately 100 leaders from a diverse range of religious, ethnic, and other backgrounds to discuss federal and state efforts to prevent, investigate, and prosecute hate crimes.
When someone is attacked because of who they are — because of their faith, their ethnicity, their race, their sexual orientation — the message is not just directed at that one victim. The message is sent to an entire community: you are not safe here. You do not belong here. You are vulnerable.
That message is unacceptable — in New York City, or anywhere else in the United States.
Prosecuting and Deterring Fraud, Waste, and Abuse
The world-leading success of our financial markets is a direct result of their integrity and the public trust. Our Office has had a remarkably active role in ensuring market integrity in the last 18 months, criminally charging 27 CEOs and corporate leaders with fraud, charging 12 individuals with insider trading, and doubling the number of insider trading investigations year over year. Beyond our financial markets, we have relentlessly pursued and charged those responsible for defrauding consumers, investors, and lenders of more than $1 billion in the past year alone, as well as those who cheat taxpayers by defrauding our local and federal government out of millions more.
Our Civil Division has continued its exemplary efforts to combat benefits fraud — a scourge that wastes billions of taxpayer dollars every year. In April 2025, we obtained a judgment after trial of nearly one billion dollars against Omnicare for fraudulently billing Medicare and Medicaid for drugs dispensed without a proper prescription. In December 2025, we entered into a $37.76 million health care fraud settlement with CVS Pharmacy, Inc. for dispensing more insulin than patients needed and improperly receiving reimbursements from Medicare and Medicaid. And just last month, we obtained a $36.5 million settlement of a False Claims Act suit against Matrix Medical Network for submitting false and invalid patient diagnoses to the Government to artificially inflate its Medicare payments.
We have also improved our program that incentivizes companies to report misconduct so that it can quickly be addressed, individuals can be held accountable, and victims can be made whole. Since its launch on February 24, 2026, SDNY’s Corporate Enforcement and Voluntary Self‑Disclosure Program for Financial Crimes has quickly gained traction and yielded tangible results. Companies have a mechanism through which they can quickly commit to cooperation, restitution, and remediation and, in exchange, have prompt and predictable results. Following the announcement of our program, our self-reports have substantially increased. Importantly, several of the resulting investigations have led to the identification of criminal conduct well beyond the reporting companies that, absent the self-report, may have gone undetected.
A first public and flagship example of the benefits of this program to the public is Telekom Malaysia Berhad, which self-reported a fraud scheme and promptly received a declination conditioned on full cooperation, and, just weeks later, we were able to charge senior leaders at the company’s U.S. subsidiary with fraud.
Our efforts to root out misconduct and build public trust have extended to prosecution of public officials who prioritize greed over the public good. In January 2026, we charged a former high-ranking City Hall official with abusing his position to commit bribery and fraud. In February 2026, we secured an indictment charging the former commanding officer of the New York City Police Department School Safety Division and a Florida businessman with bribery offenses. We have also secured convictions and sentences of former high-ranking chiefs in the New York City Fire Department for soliciting and accepting bribes; 70 NYCHA employees charged with bribery, fraud, or extortion offenses; and defendants who have defrauded federal programs and charities out of millions.
Conclusion
“Working with the women and men of the SDNY and our partners on behalf of New York families and all Americans to keep them safe from harm, protect their freedoms, and improve their quality of life, has been an immense privilege. The Office is in great hands, has remarkable professionals, and will deliver more and more for the people of New York and America in the days to come.
I thank President Trump for entrusting me with this important role, Acting Attorney General Todd Blanche for his leadership, my colleagues at the SDNY for their unwavering commitment to the priorities of the Office, and the people of New York for their partnership, including, importantly, Police Commissioner Jessica Tisch and the women and men of the NYPD. New York is the greatest city on Earth, in the greatest country on Earth, because we support each other’s safety and freedom.”
U.S. Attorney Announces Return of Two Looted 8th Century Sculptures to the Republic of IndonesiaRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today the return of two antiquities which were stolen from the Republic of Indonesia as part of an organized looting network and sold by antiquities dealer Douglas Latchford to an American collector (the “Collector”). In or about late 2021, the Collector voluntarily relinquished a total of 34 Cambodian and Southeast Asian antiquities purchased from Latchford. The two antiquities were returned to Indonesia today at a ceremony celebrating their repatriation at the Indonesian consulate.
“Today, we celebrate the return of Indonesia’s cultural heritage to the Indonesian people,” said U.S. Attorney Jay Clayton. “This Office is committed to thwarting the illicit trafficking of looted and stolen art and antiquities. We will continue to partner with HSI to end callous profiteering from stolen artworks of cultural significance, and we thank the collector of these works for their voluntary safe return. It is with great pleasure that we send these artworks on the final leg of their journey home.”
The antiquities returned to Indonesia today are two 8th Century standing bronze Buddhist sculptures depicting Avalokiteshvara, approximately 16 and 20 inches tall. The sculptures were illicitly removed from archeological sites in Indonesia by a team of looters decades ago and then sold to Latchford, who was based in Bangkok. Between 2003 and 2007, Latchford sold these and other Southeast Asian antiquities to the Collector. Over the years, Latchford lied to and withheld information from the Collector to conceal that the pieces were stolen. The two bronze sculptures returned to Indonesia were the subject of a civil forfeiture action filed in this District, United States v. A Late 12th Century Bayon-Style Sandstone Sculpture Depicting Eight-Armed Avalokiteshvara, et al., 22 Civ. 229 (JMF), and identified as “Sculpture-12” and “Sculpture-27” in the civil forfeiture complaint.
Since 2012, the U.S. Attorney’s Office for the Southern District of New York, in partnership with Homeland Security Investigations (“HSI”), has successfully investigated, identified, and repatriated dozens of stolen and illegally imported Cambodian and other Southeast Asian antiquities in the possession of individuals and institutions in the United States. Latchford was previously indicted in the Southern District of New York in 2019 for orchestrating a multi-year scheme to sell looted Cambodian and other Southeast Asian antiquities on the international art market. The Indictment was later dismissed due to Latchford’s death.
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Mr. Clayton thanked HSI for its outstanding work to recover and repatriate the stolen and looted cultural property.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Cecilia Vogel is in charge of the case.
Bronx Man Charged with Sex Trafficking of A Minor and Child PornographyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of a six-count Indictment charging SEAN CHISOLM, a/k/a “Slutty,” with the sex trafficking of a 16-year-old victim (“Minor Victim”), coercion and enticement of the Minor Victim, transportation of the Minor Victim from another state to New York for unlawful sexual activity, sexual exploitation of a child, and two counts of receipt and distribution of child pornography. CHISOLM was arrested today and will be presented at a later date. The case is assigned to U.S. District Judge George B. Daniels.
“As alleged, Sean Chisolm lured a 16-year-old girl to New York so that he could sexually exploit and traffic her,” said U.S. Attorney Jay Clayton. “Chisolm then had her engage in dangerous sex work, from which he financially profited. Crimes like these, which target and exploit our most vulnerable, are among the worst crimes in our society. The message from our Office and the NYPD is clear: if you sexually abuse a minor, we will find you and you will go to prison.”
“This defendant targeted a minor, coerced her into traveling out of state, and cruelly exploited and trafficked her for money,” said NYPD Commissioner Jessica Tisch. “These crimes are not only illegal, they are absolutely reprehensible, and the NYPD is committed to protecting children from predators like this defendant. I thank our NYPD investigators and law enforcement partners for their work on this case to bring this criminal to justice and prevent other children from being victimized by him.”
As alleged in the Indictment and other public filings:(1)
Beginning around January 2026, CHISOLM enticed the Minor Victim to travel from out-of-state, where she lived with her family, to New York so that the Minor Victim could engage in commercial sex work at CHISOLM’s direction. Before the Minor Victim traveled to the Bronx, CHISOLM obtained from the Minor Victim a photograph and two videos that depicted the Minor Victim naked. CHISOLM also talked with the Minor Victim about the sex acts that he wanted to engage in with her when she arrived.
Between approximately February 2026 through March 2026, CHISOLM acted as Minor Victim’s self-described “pimp,” arranging for multiple acts of commercial sex for the Minor Victim and requiring the Minor Victim to provide him with her earnings. CHISOLM also posted an advertisement on an online classifieds website, featuring naked photos of the Minor Victim, which advertised the Minor Victim as, among other things, “Fetish Friendly.” In addition, during this time, CHISOLM filmed a video of the Minor Victim engaging in a sex act, which he told her he was planning to post online to expand her customer base.
As early as their first conversation, CHISOLM was aware that the Minor Victim was 16 years old and frequently discussed with the Minor Victim the precautions that they would need to take as a result of the Minor Victim’s age. For example, CHISOLM told the Minor Victim, “We just have to move correct ma[.] Because of ya age feel me? Never let anyone know ya real age but me NOBODY.” CHISOLM also instructed the Minor Victim, “My rules is listen to me nd don’t tell nobody your real age nobody but daddy should know that.”
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CHISOLM, 33, of the Bronx, New York, is charged with sex trafficking of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; coercion and enticement of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; transportation of a minor for unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; 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; and two counts of receipt and distribution of child pornography, each of which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison.
The statutory minimum and maximum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding work of the NYPD SVU Citywide Human Trafficking Squad and the Special Agents, Task Force Officers, the Digital Forensics Unit, and the Complex Analytics and Social Media Enhancement Team at the New York/New Jersey High Intensity Drug Trafficking Area from the U.S. Attorney’s Office for the Southern District of New York in connection with this investigation. Mr. Clayton also thanked the Bronx County District Attorney’s Office and the FBI-NYPD Child Exploitation and Human Trafficking Task Force in New York.
This case is being handled by the Office’s Civil Rights and Human Trafficking Unit in the Criminal Division. Assistant U.S. Attorneys Ariel Cohen and Meredith Foster are in charge of the prosecution.
The charge contained in the Indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
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As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
U.S. Attorney Announces Recovery of $19.5 Million for Victims of China-Based Pump-And-Dump SchemesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the Nashville Field Office of the Federal Bureau of Investigation (“FBI”), Terence G. Reilly, announced today the filing of two civil forfeiture Complaints for more than $19.5 million in cash and stock obtained through pump-and-dump market manipulation schemes involving CTRL Group Limited (“CTRL Group”) and Dreamland Limited (“Dreamland”), Hong Kong-based companies listed on the Nasdaq stock exchange. The proceeds were previously seized pursuant to judicially-authorized seizure warrants.
“Today’s action demonstrates our unwavering commitment to protecting U.S. investors and safeguarding the integrity of our markets,” said U.S. Attorney Jay Clayton. “These schemes, driven by Asia‑based small‑cap foreign issuers seeking to manipulate share prices and exploit American investors, pose serious risks to those who place their trust in our financial system. Investors should exercise caution when dealing with thinly traded foreign issuers, as these companies can be especially vulnerable to manipulation and can expose investors to significant, often hidden, risks. I want to thank the FBI and our law enforcement partners for their exceptional work and their continued dedication to rooting out this conduct and prioritizing the recovery of funds stolen from victims.”
“Pump-and-dump schemes erode the integrity of our capital markets and cause financial hardship for countless investors,” said FBI Special Agent in Charge Terence G. Reilly. “The recovery of $19.5 million is an important first step toward providing relief for victims and should serve as a reminder that the FBI will vigorously investigate and pursue those who seek to manipulate financial systems for personal gain.”
According to the allegations contained in the Complaints filed in Manhattan federal court today:(1)
CTRL Group
CTRL Group is a British Virgin Islands-registered company that purports to offer marketing and advertising services in Hong Kong, including mobile game promotions. CTRL Group began trading on the Nasdaq stock exchange under the symbol MCTR on January 22, 2025.
In late May and early June 2025, various social media accounts on multiple platforms began to post hundreds of identical comments touting MCTR as a stock that was going to increase in value. For instance, these users would make a post saying “$MCTR Here We Go” or “$MCTR New alerts have been posted in the last hours,” followed by a link to a Discord group chat that purported to offer investment advice.
On June 3, 2025, MCTR stock price and trading volume spiked sharply. MCTR opened at $7.12 per share—up more than 50% from the prior day—hit an intra-day high of $33.69 per share, and closed at $32.90 per share, with approximately 44,200,000 shares trading that day, a jump of more than 70,000% compared to the previous day. Similar price surges occurred on June 4 and June 5. The surge in MCTR’s price and volume was accompanied by a surge in social media activity promoting MCTR. After the social media activity stopped, MCTR’s stock price dropped. By the end of June 2025, MCTR’s stock price had declined to $2.82 per share.
Between MCTR’s initial public offering and June 5, 2025, and primarily during the period of social media promotion discussed above, 10 U.S. brokerage accounts engaged in massive, profitable, and anomalous trading in MCTR, selling a combined total of approximately 1,065,313 shares for total proceeds of approximately $11,966,324.44. These 10 accounts were opened by individuals located in China or Hong Kong. Although the accounts were ostensibly owned and controlled by different people, eight of these accounts logged into their brokerage accounts with the same IP address and/or MAC address as at least one of the other accounts, indicating collusion.
On or about June 1, 2026 and June 23, 2026, the Government seized approximately $10.3 million in cash from the 10 brokerage accounts pursuant to seizure warrants issued by the U.S. District Court for the Southern District of New York.
Dreamland
Dreamland is a Cayman Islands-incorporated company that purports to operate an event management business in Hong Kong. Dreamland began trading on the Nasdaq stock exchange under the symbol TDIC on July 23, 2025.
Between May 13-14, 2026, the share price of TDIC surged more than ten-fold, apparently driven at least in part by social media campaigns promoting TDIC as a “short squeeze” play. Between January 2, 2026, and May 12, 2026, TDIC’s closing price ranged between $0.57 and $2.36 per share, with an average daily trading volume of approximately 2,600,000 shares. On May 13, 2026, TDIC’s stock price suddenly soared to an intra-day high of $30.00 per share, before closing at $23.05 per share, with approximately 109,000,000 shares trading. The following day, May 14, 2026, TDIC’s share price opened at $21.49 and declined to a closing share price of $0.80. By June 12, 2026, TDIC’s price closed at $0.23 per share.
On or about May 14, 2026, during the sudden surge in TDIC’s share price, a U.S. brokerage firm notified the Financial Industry Regulatory Authority (“FINRA”) of unauthorized trades as a result of compromised login credentials, resulting in potential stock manipulation of TDIC. The credentials, which belonged to a third-party financial advisor that used the brokerage’s trading platform, were used to attempt to access eight client accounts and successfully accessed three client accounts, which attempted to purchase a combined total of approximately 1,361,488 shares of TDIC for a total of approximately $22,882,550.70 (an average share price of $16.81). All of the purchases appear to have been cancelled by the brokerage.
Around the same time as the social media promotion of TDIC and the compromised account activity, a brokerage account held in the name of Imperial Vision Fund SPC – Series 1 SP (“Imperial Vision”) sold approximately 1,486,841 shares of TDIC for total proceeds of approximately $17,692,745.89. Imperial Vision purports to be a Hong Kong-based investment fund incorporated in the Cayman Islands, and it previously purchased TDIC shares directly from Dreamland.
On June 15, 2026, the Government seized approximately $8.4 million in cash and approximately $850,000 worth of securities from the Imperial Vision brokerage account pursuant to a seizure warrant issued by the U.S. District Court for the Southern District of New York.
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Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton also expressed appreciation for the assistance of FINRA and the Securities and Exchange Commission’s Cross-Border Task Force.
The two cases are being handled by the Office’s Securities and Commodities Fraud Task Force. Special Assistant U.S. Attorney Michael S. DiBattista is in charge of the CTRL Group action. Assistant U.S. Attorney Alexander Li is in charge of the Dreamland action.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards a judgment in favor of the United States.
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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.
Miles Guo Sentenced to 30 Years in Prison for Leading Billion-Dollar FraudRead the Press Release
Attorney for the United States, Sean S. Buckley, Acting under Authority Conferred by 28 U.S.C. § 515, announced that MILES GUO, a/k/a “Ho Wan Kwok,” a/k/a “Guo Wengui,” a/k/a “Brother Seven,” a/k/a “The Principal,” a/k/a “Boss,” was sentenced yesterday by U.S. District Judge Analisa Torres to 30 years in prison for racketeering conspiracy, conspiracy to commit wire fraud, securities fraud, and money laundering, among other charges, for leading an expansive and complex scheme to solicit more than $1 billion of investments in various entities and programs through false statements and misrepresentations to thousands of GUO’s online followers. On July 16, 2024, GUO was convicted following a seven-week jury trial.
“Miles Guo led a massive scheme to steal more than $1 billion through lies and deception from thousands of Americans and victims around the world,” said Attorney for the United States Sean S. Buckley. “After immigrating to this country, rather than being satisfied with the many legitimate opportunities afforded to him, Guo exploited the trust that thousands had placed in him for his own greed. This sentence shows that fame and wealth do not place you above the law, and that fraudsters who victimize families to enrich themselves will be met with significant consequences.”
According to the charging documents, public court filings, statements made in court, and evidence admitted at GUO’s trial:
GUO’s schemes began when he announced the founding in 2018 of purported charitable organizations—the Rule of Law Foundation and Rule of Law Society—by falsely promising potential donors that he was contributing the first $100 million to their cause. Trading on the Rule of Law groups’ purported charitable works, GUO launched an unregistered offering of stock in his media venture, GTV.
When the GTV stock offering came under scrutiny by the U.S. Securities and Exchange Commission, GUO and his co-conspirators turned to other schemes. GUO obtained another $100 million through a program in which victims were told they could lend money to networks of GUO’s supporters and receive GTV stock in addition to interest payments. At around the same time, GUO raised at least approximately $240 million by selling memberships in G|CLUBS, a purported membership club that promised GTV stock in exchange for members’ dues and offered little to no other material benefits. In a 2021 broadcast on GTV, GUO launched the Himalaya Exchange, a purported cryptocurrency ecosystem where people could trade “H Coin” and “H Dollar,” which were phony digital assets that were fraudulently described as blockchain-native cryptocurrencies but were in fact little more than made-up figures on an internal company spreadsheet.
GUO perpetuated these interrelated fraud schemes over approximately five years by installing figurehead executives at companies that GUO actually controlled, promising investors that he would personally guarantee their funds against loss, and broadcasting serial lies about everything from the benefits available to G|CLUBS members to the made-up gold reserve that he claimed stood behind the value of his phony digital assets. Along the way, GUO and his family spent victims’ stolen funds on a $26.5 million mansion in New Jersey, an $832,000 Lamborghini, two multimillion-dollar sports cars for GUO’s son, and a $2 million yacht, among many other extravagant purchases. Between 2022 and 2023, the United States seized more than $630 million of GUO’s criminal proceeds in addition to luxurious items such as sports cars, a mansion, and expensive furniture, some of which are pictured below:
If you believe you are a victim of GUO’s fraud, please find more information here: https://www.justice.gov/usao-sdny/united-states-v-ho-wan-kwok-aka-miles-guo-and-kin-ming-je-aka-william-je.
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In addition to the prison term, GUO, 55, originally from the People’s Republic of China, was ordered to pay a $900 special assessment. GUO was ordered to forfeit $889 million in proceeds from his illegal schemes, as well as his interest in specific property including a $26.5 million mansion in New Jersey, a Lamborghini, a Rolls Royce Phantom, and a Bugatti sports car.
Mr. Buckley praised the investigative work of the Federal Bureau of Investigation. Mr. Buckley further thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action against GUO.
The case is being handled by the Complex Frauds and Cybercrime Unit of the Office’s Criminal Division. Assistant U.S. Attorneys Micah F. Fergenson, Ryan B. Finkel, Justin Horton, and Juliana N. Murray are in charge of the prosecution.
Former USPS Mail Carrier Sentenced to 39 Months in Prison for Mail Theft and Fraud SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that Tameka Babulal, a/k/a “Tameka Williams,” a/k/a “Sharniece Williams,” a/k/a “Meek Williams,” a former United States Postal Service (“USPS”) mail carrier assigned to Mount Vernon, New York, was sentenced to 39 months in prison by U.S. District Judge Cathy Seibel for abusing her position as a mail carrier to steal checks, credit cards, financial mail, and personal identifying information from victims on her mail route, and using that stolen mail and information to commit fraud and aggravated identity theft. The sentence imposed by Judge Seibel included 15 months on BABULAL’s mail theft, fraud, and false statement offenses, followed by a mandatory consecutive 24-month sentence for aggravated identity theft.
“Postal workers are entrusted with some of the most sensitive materials Americans send and receive: checks, credit cards, tax documents, Social Security information, and financial mail,” said U.S. Attorney Jay Clayton. “Tameka Babulal betrayed that trust by stealing from the very people on the mail routes she was paid to serve and then using their mail and identities to commit fraud. Today’s sentence makes clear that those who corrupt the mail system from within and exploit the public’s trust for personal gain will be held accountable.”
According to the allegations contained in the Indictment, public filings, and statements made in court proceedings:
From in or about December 2022 through May 23, 2024, BABULAL conspired with others in a scheme to possess, steal, and misuse mail stolen from the USPS in Mount Vernon, New York. BABULAL stole hundreds of mail items from hundreds of victims whose mail she touched, including checks, credit cards, financial mail, tax documents, Social Security cards, and other sensitive materials. She kept those items at the Hempstead, New York, residence she shared with her husband and co-conspirator, Joel Babulal. BABULAL’s victims included elderly people in their 90s, young adults in their early 20s, business owners, churchgoers, military personnel, and other everyday people.
When law enforcement executed a search warrant at the Babulal residence on May 23, 2024, officers recovered, among other things, dozens of checks, treasury checks, and money orders in victims’ names, including blank or washed checks; 51 credit cards in other people’s names; unopened financial mail appearing to contain credit cards or checks; several Social Security cards and tax documents in other people’s names; bundles of unopened mail and packages; and a USPS postal bin filled with victims’ undelivered mail.
Using the mail and other items she stole from victims on her mail route, BABULAL carried out an extensive credit card, check, and identity theft fraud scheme involving dozens of victims. BABULAL’s credit card scheme involved at least around $40,922.41 in fraudulent transactions using stolen credit cards. Additionally, BABULAL’s check fraud scheme involved $13,510 in fraudulent transactions using stolen checks, and her possession of an additional at least $78,705.05 in checks and money orders. To commit her crimes, BABULAL used various means of identification of her victims. For example, BABULAL and her co-conspirators used their victims’ names, dates of birth, Social Security numbers, addresses, and other identifying information to fraudulently open accounts, submit credit-card applications, activate payment cards, and attempt transactions.
The Government’s investigation also revealed that BABULAL made false statements to obtain her USPS position. In her USPS employment application, she falsely claimed that she had previously worked at a Taco Bell restaurant under a supervisor named “Mark Khan.” In fact, “Mark Khan” was not a real person, and both the name “Mark Khan” and the phone number she listed for him were used by BABULAL’s husband and co-conspirator, Joel Babulal.
On March 18, 2026, BABULAL pled guilty before Judge Seibel to conspiracy to steal and unlawfully possess mail, theft of mail by a postal employee, unlawful possession of mail, conspiracy to commit wire fraud and bank fraud, wire fraud, bank fraud, aggravated identity theft, and false statements. BABULAL’s husband, Joel Babulal, pled guilty to conspiring with his wife and is scheduled to be sentenced on September 14, 2026.
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In addition to the prison term, BABULAL, 38, of Hempstead, New York, was sentenced to three years of supervised release and ordered to pay restitution and forfeiture.
Mr. Clayton praised the outstanding investigative work of the USPS, Office of Inspector General, and the United States Postal Inspection Service.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Reyhan Watson, John Sarlitto, and James McMahon are in charge of the prosecution.
Eight Charged in International Cargo Theft ConspiracyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today the unsealing of an Indictment charging eight defendants—VAGAN GULIAN, ZHIRAYR GUMRUYAN, SEVAK KOCHARIAN, ARAIK SETRAKIAN, VITALY KOSHELAN, ARKADIY PASTIN, JASHANPREET SINGH, and EDGAR BEZHANIAN—with conspiracy to transport and possess stolen property in connection with an international, organized scheme to steal cargo from commercial shippers.
GULIAN, GUMRUYAN, and SETRAKIAN were arrested in California and will be presented in the Central District of California; KOSHELAN was arrested in Florida and will be presented in the Southern District of Florida; SINGH was arrested in Pennsylvania and will be presented in the Eastern District of Pennsylvania; PASTIN was arrested in New York and will be presented before U.S. Magistrate Judge Stewart D. Aaron; and KOCHARIAN is in custody in connection with a pending case and will be presented in the Southern District of New York. BEZHANIAN is at large. The case has been assigned to U.S. District Judge Andrew L. Carter.
“As alleged, the defendants were members of a sophisticated, international enterprise whose members stole millions of dollars’ worth of merchandise and sold those stolen goods on the black market,” said U.S. Attorney Jay Clayton. “Organized cargo theft is an attack on the integrity of our nation’s commercial supply chain and our markets more generally. Those who conspire to disrupt commerce and harm consumers will be met with a coordinated law enforcement response. Our Office is committed to ridding our supply chains of organized crime, and we will pursue those who exploit global commerce for illicit gain.”
“These eight defendants allegedly were members of an international network to steal merchandise and resell these stolen goods at the direct expense of sellers, shippers, and buyers,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI’s Eurasian Organized Crime Task Force works to dismantle illegal operations designed to generate illicit profits both domestically and internationally.”
As alleged in the Indictment and documents submitted to Court:
Between in or around March 2023 and the present, the defendants, together with others known and unknown, carried out a large-scale, organized scheme to steal cargo from commercial shippers (the “Cargo Theft Enterprise”). In total, the Cargo Theft Enterprise stole goods worth at least approximately $10 million. The Cargo Theft Enterprise operated throughout the United States and targeted high-value merchandise including electronics, liquor, meat, fish, eggs, clothing, skincare products, and cryptocurrency mining machines, among numerous other items. The defendants and other members of the Cargo Theft Enterprise perpetrated their scheme by diverting, possessing, transporting, and selling numerous loads of stolen merchandise. The Cargo Theft Enterprise relied on the coordinated efforts of at least one “dispatcher” located abroad and facilitators, drivers, and workers located in the United States.
In a typical theft, at least one member of the Cargo Theft Enterprise fraudulently impersonated a legitimate shipping carrier, or other shipping supply chain personnel and companies, to obtain a contract to transport goods from a shipping company to a customer. Other members of the Cargo Theft Enterprise then picked up the load or otherwise diverted the truck containing the load away from its intended destination, including by altering the delivery address and other information on shipping paperwork, and by removing geolocation tracking devices affixed to shipped cargo to track its location and ensure it reaches its proper destination. Once the truck reached the Cargo Theft Enterprise’s intended destination, members of the scheme offloaded and sold the stolen merchandise—including to co-conspirators known as “fences,” who knowingly purchased and resold stolen merchandise on the secondary market—for an illicit profit.
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VAGAN GULIAN, 37, of Glendale, California; ZHIRAYR GUMRUYAN, 36, of Northridge, California; SEVAK KOCHARIAN, 37, of Brooklyn, New York; ARAIK SETRAKIAN, 36, of Los Angeles, California; VITALY KOSHELAN, 56, of Dania Beach, Florida; ARKADIY PASTIN, of Brooklyn, New York; JASHANPREET SINGH, 29, of Oaklyn, New Jersey; and EDGAR BEZHANIAN, 46, of Yerevan, Armenia, are each charged with one count of conspiracy to transport and possess stolen merchandise, which carries a maximum sentence of five years in prison.
KOCHARIAN is separately charged with one count of conspiracy to commit extortion, which carries a maximum sentence of twenty years in prison. That case is pending before U.S. District Judge Naomi Reice Buchwald.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the FBI’s Eurasian Organized Crime Task Force. Mr. Clayton also thanked the New York City Police Department, the New Jersey State Police, the Port Authority Police Department, the Manhattan District Attorney’s Office, Homeland Security Investigations, and U.S. Immigration and Customs Enforcement.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Kevin Grossinger and David Steinbach 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.
Yonkers Man and Convicted Felon Found Guilty at Trial of Gun CrimeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that KWANE REYNOLDS was convicted of possessing ammunition after a felony conviction. REYNOLDS was found guilty following a three-day trial before U.S. District Judge Jeannette A. Vargas.
“Kwane Reynolds, who had previously been convicted of a felony, shot a victim in the stomach at point-blank range on a busy public street in the Bronx,” said U.S. Attorney Jay Clayton. “This Office is committed to prosecuting to the maximum extent of the law gun violence committed by violent felons.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
On December 30, 2024, on a public sidewalk in the Bronx in broad daylight, the defendant fired two shots at another individual (the “Victim”). The shooting was captured on surveillance video, which showed that, following a verbal dispute between the defendant and the Victim, REYNOLDS drew a firearm and shot the Victim in the stomach at close range. REYNOLDS then fled the scene on a bicycle. REYNOLDS has previously been convicted of a felony.
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REYNOLDS, 58, of Yonkers, New York, was convicted of knowingly possessing ammunition after having been convicted of a felony, which carries a maximum penalty of 15 years in prison. A sentencing date has not yet been scheduled.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Cameron Molis, Joe Zabel, and Jacob R. Fiddelman are in charge of the prosecution, with assistance from Paralegal Specialist Frank Mastroianni.
Vietnamese National Pleads Guilty to Conspiring to Commit Identity Theft in Connection with $67 Million Dollar Money Laundering SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that LE VAN HUNG, a/k/a “Hung Van Le,” a/k/a “Van Hung Le,” pled guilty to participating in a conspiracy to commit identity theft based on his role in a transnational scheme to launder at least approximately $67 million of illegally obtained funds to benefit, among others, a multinational media company headquartered in New York, New York (the “Media Company”). HUNG pled guilty today before U.S. Magistrate Judge Stewart D. Aaron and is scheduled to be sentenced by U.S. District Judge Victor Marrero on September 29, 2026.
“For nearly four years, Le Van Hung oversaw an operation that stole the identities of thousands of Americans for use in a sprawling money laundering conspiracy,” said U.S. Attorney Jay Clayton. “Today’s guilty plea, together with Hung’s agreement to forfeit $67,000,000 and make restitution to victims of this scheme, demonstrate the commitment of this Office to hold perpetrators of financial crimes accountable and to stand up for victims.”
According to the charging documents and statements made in public filings and public court proceedings:
From at least in or about 2020, through in or about May 2024, HUNG, while working for the Vietnamese office of the Media Company, conspired with others to participate in a sprawling, transnational scheme to launder at least approximately $67 million of illegally obtained funds to bank accounts in the names of the Media Company and related entities. In order to further the money laundering scheme, HUNG exploited stolen personally identifiable information and documents of thousands of U.S. residents in order to, among other things, open and maintain financial accounts that were used to launder fraud proceeds. HUNG also recruited and managed various co-conspirators, including co-conspirators who worked with the Media Company’s “Make Money Online” team.
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HUNG, 31, of Vietnam, pled guilty to one count of conspiring to commit identity theft, which carries a maximum sentence of five years in prison. HUNG also agreed to forfeit at least $67 million, representing proceeds traceable to the offense, and separately to pay restitution up to $67 million.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the Department of Labor’s Office of Inspector General, the Department of State’s Diplomatic Security Service, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Benjamin M. Burkett, Rebecca T. Dell, Paul M. Monteleoni, Daniel C. Richenthal, and Amanda C. Weingarten are in charge of the prosecution.
Meat Distributor Required to Pay $120,500 Civil Penalty for Violating Food Safety Consent DecreeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Administrator of the Food Safety and Inspection Service of the U.S. Department of Agriculture (“USDA-FSIS”)’s Office of Investigation, Enforcement and Audit, William Griffin, announced today that U.S. District Judge Edgardo Ramos has imposed civil penalties on defendants FIRST GOLD COAST CORPORATION d/b/a GOLD COAST TRADING COMPANY (“First Gold”), KWABENA ASAMOAH ADJEI, CHRISTOPHER AHENKORA, and MICHAEL AHENKORA for violating a previously entered judicial consent decree requiring the defendants to comply with food safety laws at their meat and poultry business. The order imposes a $120,500 civil penalty on the defendants for continuing to sell uninspected and misbranded poultry products and for failing to complete mandatory food safety training.
“This Office has no tolerance for parties who continue in their unlawful ways after they commit to come into compliance,” said U.S. Attorney Jay Clayton. “This conduct is all the worse where, as here, it endangers the safety of the food that families put on their tables. The imposed financial penalty should serve as notice to all parties that they must live up to their legal commitments and comply with the law.”
“As the USDA agency responsible for ensuring that America’s meat, poultry, and egg products remain the safest in the world, FSIS is committed to taking swift action to protect consumers and carry out our public health mission,” said FSIS Assistant Administrator for the Office of Investigation, Enforcement and Audit William Griffin. “The work of our inspection personnel and investigators to enforce Federal regulations, along with our partnerships with state and local governments, will continue to ensure the safety of our food supply.”
The Federal Meat Inspection Act (“FMIA”) and Poultry Products Inspection Act (“PPIA”) protect public health by ensuring the nation’s commercial supply of meat and poultry is safe, wholesome, and accurately labeled and packaged. These requirements allow consumers to have confidence in the safety of their meat and poultry products and permit public health officials to trace problems to their source.
This Office first sued First Gold and its then-owner, Daniel Ahenkora, in October 2015, alleging that they had violated the FMIA and the PPIA by selling uninspected and misbranded meat and poultry products. The Court promptly entered a consent decree enjoining First Gold, Daniel Ahenkora, and affiliated parties from further violations. In December 2024, First Gold and three of Daniel Ahenkora’s sons—KWABENA ASAMOAH ADJEI, CHRISTOPHER AHENKORA, and MICHAEL AHENKORA, who had taken over the business around May 2023—signed an amended consent decree, which was approved by the Court on December 3, 2024. Among other things, the amended consent decree prohibited the defendants from selling, offering for sale, or receiving in commerce any uninspected or misbranded meat or poultry and required them to complete mandatory training on the FMIA and PPIA.
The defendants, however, proceeded to violate the amended consent decree. Specifically, on or about June 26, 2025, First Gold sold approximately 120 pounds of uninspected, misbranded poultry products—namely, 30 pounds of smoked turkey drums, 30 pounds of smoked turkey wings, 30 pounds of fresh turkey wings, and 30 pounds of fresh turkey drums—to a New Jersey retailer. First Gold used a bandsaw in the store to slice the turkey products without the benefit of federal inspection and then misbranded the products by repackaging them into the original manufacturer boxes that bore the marks of federal inspection, in violation of the amended consent decree. The defendants also failed to complete the training required by the amended consent decree.
The Court’s June 26, 2026, order requires the defendants to pay a total civil penalty of $120,500—comprising $60,000 for the sale of 120 pounds of misbranded, uninspected turkey products and $60,500 for the defendants’ failure to complete the amended consent decree’s training requirements. The order also requires the defendants to present a plan for coming into compliance with the amended consent decree's training requirements.
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Mr. Clayton praised the outstanding investigative work of the USDA.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorney Mark Osmond is in charge of the case.
Los Angeles Director and Writer Sentenced to Prison for $11 Million Production FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that CARL ERIK RINSCH, a Los Angeles-based director and writer, was sentenced today by U.S. District Judge Jed S. Rakoff to 30 months in prison for fraudulently stealing $11 million from a subscription video-on-demand streaming service (“Streaming Company-1”) in connection with a planned science-fiction television show called “White Horse,” and then laundering that money. RINSCH was convicted following a week-long trial in December 2025 before Judge Rakoff.
“Carl Erik Rinsch orchestrated a scheme to steal millions by seeking $11 million from a subscription streaming service, falsely claiming that money would be used to finance a television show that he was creating,” said U.S. Attorney Jay Clayton. “Instead of using the money to make the show, Rinsch made risky bets on highly speculative stock options and cryptocurrency, and spent millions of dollars on luxury goods for himself. Today’s sentence sends a deterrent message: fraud will not be tolerated.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
RINSCH is a film and television writer and director who partially completed a science-fiction television show called “White Horse.” In 2018, RINSCH reached an agreement with Streaming Company-1 in which Streaming Company-1 would both pay RINSCH for the existing episodes of White Horse and also fund completion of the rest of the show. Between 2018 and 2019, Streaming Company-1 paid approximately $44 million for White Horse.
Between late 2019 and early 2020, RINSCH demanded even more money from Streaming Company-1 to complete White Horse. Streaming Company-1 ultimately agreed to pay another $11 million, and transferred those funds to a company RINSCH controlled on or about March 6, 2020. The entirety of those funds was to be spent on the completion of White Horse.
But RINSCH did not use those funds to make the show. Instead, within days, RINSCH began transferring the funds through numerous bank accounts before consolidating them in a personal brokerage account. RINSCH then used those funds to speculate on stock options. His trading was unsuccessful, and in less than two months after receiving $11 million from Streaming Company-1, RINSCH had lost more than half of that money.
Even after losing most of the $11 million, RINSCH still did not spend the remaining funds he had stolen on White Horse. Instead, he used the money to speculate on cryptocurrency, and on personal expenses and luxury items, including at least $1.7 million on credit card bills; at least $3.3 million on furniture, antiques, and mattresses; at least $387,000 on a Swiss watch; and at least $2.4 million on five Rolls Royces and a red Ferrari.
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In addition to the prison term, RINSCH, 48, of Los Angeles, California, was sentenced to three years of supervised release, $11 million in forfeiture, and $700 in mandatory special assessments.
Mr. Clayton 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 Timothy V. Capozzi, Jackie Delligatti, David A. Markewitz, Kevin Mead, and Adam Sowlati are in charge of the prosecution, with the assistance of Paralegal Specialists Maria Larracuente and William Coleman.
Recidivist Fraudster Pleads Guilty for Stealing Gustave Courbet PaintingRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that THOMAS DOYLE, a/k/a “AJ” or “Austin Doyle,” pled guilty to wire fraud in connection with a scheme by DOYLE to defraud the owner of the painting “Mother and Child on a Hammock” by the 19th-century French Realist painter Gustave Courbet. DOYLE was previously convicted in the Southern District of New York in 2011 of a separate art-related fraud. DOYLE pled guilty today before U.S. District Judge Arun Subramanian and is scheduled to be sentenced on November 9, 2026.
“Thomas Doyle defrauded the owner of a valuable painting by telling a series of brazen lies to get the painting and then sell it so he could keep the profits for himself,” said U.S. Attorney Jay Clayton. “Today’s guilty plea reflects the commitment of this Office and its law enforcement partners to hold all fraudsters accountable, including bad actors seeking to conduct fraud schemes in the U.S. art market.”
According to the Indictment, plea agreement, and statements made in public court proceedings:
Between December 2022 and March 2025, DOYLE defrauded an art dealer (“Victim-1”) in connection with the sale of the painting “Mother and Child on a Hammock” (the “Hammock”) by Gustave Courbet. In June 2024, Victim-1 agreed to let DOYLE take custody of the Hammock to facilitate its viewing by a potential buyer. Soon after, DOYLE told Victim-1 that he had a potential buyer for the Hammock, and Victim-1 authorized DOYLE to sell the painting on his behalf for $550,000. By early August 2024, DOYLE falsely informed Victim-1 that he had sold the Hammock for that price.
Instead, DOYLE’s associate (“Associate-1”), acting on DOYLE’s behalf, offered the Hammock for consignment to a Manhattan gallery (“Gallery-1”). DOYLE provided Associate-1 with a false provenance for the Hammock that was passed on to Gallery-1. Gallery-1 sold the Hammock on October 1, 2024, for $125,000 to an art collector, and most of the proceeds from the sale went to DOYLE.
DOYLE never remitted to Victim-1 any proceeds from the sale of the Hammock. Instead, by February 2025, DOYLE had spent all the proceeds from the sale of the Hammock on personal expenses and his own debts. DOYLE subsequently falsely blamed his failure to pay Victim-1 on the purported buyer, fraudulently claiming the buyer had yet to pay when in fact DOYLE had been paid and was spending the proceeds of the Hammock sale.
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DOYLE, 68, of Connecticut, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. DOYLE also agreed to forfeit all proceeds from the offense and pay $125,000 in restitution to the victim.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation’s Art Crime Team.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Cecilia Vogel is in charge of the prosecution.
Manhattan Man Charged with Dealing Fentanyl Resulting in the Deaths of Two VictimsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Pete Gizas, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of an Indictment charging JERMAINE BROWN with drug-trafficking crimes that led to two fatal overdoses. BROWN was presented today before U.S. Magistrate Judge Ona T. Wang and ordered detained. The case has been assigned to U.S. District Judge Katherine Polk Failla.
“As alleged, for years, Jermaine Brown dealt dangerous drugs, including heroin laced with fentanyl, to New Yorkers,” said U.S. Attorney Jay Clayton. “Today’s unsealed indictment against Brown reiterates our Office’s clear message: if you deal in fentanyl, you deal in death, and our office will hold you accountable.”
“As alleged, Jermaine Brown callously pumped heroin laced with fentanyl into our communities, and in turn contributed to the horrific overdose deaths of two victims,” said HSI Acting Special Agent in Charge Pete Gizas. “His arrest removes an accused ruthless drug trafficker from our streets and provides a measure of long-overdue relief to the victims’ families and the neighborhoods he preyed upon. Every day, HSI New York is relentlessly committed to working with the U.S. Attorney’s Office, the NYPD, and our invaluable law enforcement partners to investigate these heinous crimes and protect our communities from the lethal threat of fentanyl and other narcotics.”
“As alleged, this defendant distributed lethal drugs, including fentanyl-laced heroin, which ultimately led to the overdose deaths of two victims,” said NYPD Commissioner Jessica S. Tisch. “We will not allow drug peddlers to flood our communities with dangerous poisons and put lives at risk without facing consequences. Thanks to the efforts of our NYPD investigators, alongside the U.S. Attorney’s Office for the Southern District of New York, we are holding this criminal accountable.”
As alleged in the Indictment and documents submitted to the Court:
From at least in or around 2022 through at least in or around December 2025, BROWN, a Manhattan-based dealer, sold a variety of controlled substances, including heroin, to numerous customers. BROWN provided drugs to some customers over extended periods of time. Some of BROWN’s customers, however, were unaware that heroin sold by BROWN also at times contained fentanyl. Multiple victims who bought fentanyl-laced heroin from BROWN were poisoned by BROWN’s fentanyl and died. Specifically, BROWN’s drugs caused a least two overdose deaths: (i) the death of a 33-year-old man on or about March 19, 2024, in New York, New York and (ii) the death of a 35-year-old woman on or about December 10, 2025, in Frankin Square, New York.
BROWN relied on multiple coconspirators to facilitate his drug trafficking. Multiple individuals sourced narcotics for BROWN, including in response to explicit requests from BROWN for fentanyl. BROWN also relied on multiple individuals to assist in the distribution of narcotics by delivering or reselling BROWN’s narcotics, including fentanyl, to others.
On June 25, 2026, law enforcement searched Brown’s room in a Manhattan hotel pursuant to a judicially authorized warrant. The search revealed a multitude of narcotics in pill and powder form, along with a duffel bag full of cash. Photographs of some of the seized items are shown below:
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BROWN, 55, of New York, New York, is charged with one count of conspiracy to distribute narcotics resulting in death and two counts of distribution of narcotics resulting in death, all of which carry a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of HSI and the NYPD. Mr. Clayton also thanked the Nassau County Police Department.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Getzel Berger and Lauren Phillips 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.
U.S. Attorney Announces $2.2 Million Settlement with Urologists for Submitting False Claims to MedicareRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), Naomi Gruchacz, announced that the United States has settled a civil healthcare fraud lawsuit against DR. ROBERT SIMON, a New Jersey-based urologist, and DR. NICOLE FLEISCHMANN, a New York-based urologist. The settlement resolves claims that SIMON and FLEISCHMANN violated the False Claims Act by repeatedly subjecting their patients to medically unnecessary surgical procedures in connection with an implantable neurostimulation medical device and then improperly obtaining payments from Medicare for these same unnecessary procedures.
Under the settlement, which was approved yesterday by U.S. District Judge Paul G. Gardephe, SIMON will pay a total sum of $1,112,695.88 plus interest, and FLEISCHMANN will pay a total sum of $1,101,044.80 plus interest. As a part of the settlement, SIMON and FLEISCHMANN also made extensive factual admissions regarding their conduct. Among other things, SIMON and FLEISCHMANN admitted that they each caused Medicare to pay claims for implantations of a neurostimulation medical device that were not medically reasonable and necessary and did not comply with Medicare’s billing rules and guidance.
“Dr. Simon and Dr. Fleischmann performed unnecessary surgical procedures on their patients who suffered from urinary incontinence and then billed a taxpayer-funded program for these procedures,” said U.S. Attorney Jay Clayton. “This illegal scheme violated the trust at the heart of doctor-patient relationships and our healthcare system. This Office is committed to holding medical providers accountable, protecting patient care, and safeguarding the integrity of taxpayer-funded programs.”
“Health care providers who perform medically unnecessary services can pose a significant risk to patients, especially when pre-operative tests are not completed appropriately and follow-up procedures are performed without sufficient justification,” said HHS-OIG Special Agent in Charge Naomi Gruchacz. “HHS-OIG continuously works with key law enforcement partners to seek resolutions that hold accountable individuals who exploit federal health care programs.”
As alleged in the Complaint:
The InterStim device is designed to treat urinary incontinence by sending electrical stimulation to a patient’s sacral nerve. InterStim’s implantable components include a neurostimulator, a battery, and a thin wire—known as a lead—that connects to the sacral nerve, as well as other components that facilitate transmission of electrical impulses to the sacral nerve. Relevant Medicare rules require that before a doctor may permanently implant an InterStim device, the patient must have had a successful test stimulation that met specific defined criteria. The test stimulation is designed to determine whether the InterStim device is likely to be successful in improving the patient’s urinary incontinence.
From January 1, 2011, through December 31, 2022, FLEISCHMANN violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare for medically unreasonable and unnecessary InterStim surgical procedures by failing to perform the required preoperative testing before implanting the InterStim device into patients and unnecessarily implanting two InterStim devices into a patient during the same surgical procedure.
Similarly, from January 1, 2011, through October 18, 2021 (the “Simon Covered Period”), SIMON violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare for medically unreasonable and unnecessary InterStim surgical procedures by: failing to perform the required preoperative testing before implanting the InterStim device into a patient; unnecessarily implanting two InterStim devices into a patient during the same surgical procedure; performing medically unreasonable and unnecessary battery and InterStim device replacement and revision surgeries; and improperly billing Medicare twice for removing the lead used to stimulate a patient’s sacral nerve during preoperative testing.
SIMON frequently performed unnecessary procedures on patients to replace the InterStim batteries after the InterStim device had been implanted into his patients, despite the fact that there was often no indication that these batteries needed to be replaced.
SIMON and FLEISCHMANN also frequently implanted two InterStim devices into a patient during the same surgical procedure, in a procedure known as bilateral implantation. They did this without conducting the required preoperative test to determine that one InterStim device would effectively treat the patient’s urinary incontinence, much less that two InterStim devices would be more effective than one.
As part of the settlement, SIMON and FLEISCHMANN admitted and accepted responsibility for certain of their own respective conduct alleged by the United States, including the following:
- SIMON and FLEISCHMANN were aware that the Centers for Medicare and Medicaid Services (“CMS”) had issued a National Coverage Determination (“NCD”)—which is a binding statement by CMS setting a national policy granting, limiting, or excluding Medicare coverage for a specific medical item or service—concerning the implantation of sacral nerve stimulators, such as InterStim, to treat urinary incontinence.
- Specifically, SIMON and FLEISCHMANN were aware that in 2002 CMS issued NCD 230.18, which stated that in order to establish that a permanent InterStim implantation is medical necessary, a patient must first undergo a successful test stimulation during which the patient demonstrates a 50% or greater improvement. This improvement is measured through voiding diaries, which are used by the patient to record their symptoms of urinary incontinence.
- SIMON and FLEISCHMANN primarily performed a percutaneous nerve evaluation test (“PNE”) before permanently implanting the InterStim device into patients. The PNE is supposed to take place over at least three, and up to seven, days. SIMON and FLEISCHMANN repeatedly billed Medicare for permanent InterStim implantations despite failing to first complete a successful PNE. Instead of completing a full PNE, SIMON and FLEISCHMANN frequently conducted an abbreviated test. Further, SIMON and FLEISCHMANN also failed to collect and keep the voiding diaries required by NCD 230.18.
- SIMON also admitted and accepted responsibility for additional conduct alleged by the United States, including the following:
- During the Simon Covered Period, SIMON rarely concluded that a PNE did not support a permanent implantation—doing so for approximately 3% of his patients who received a PNE. In these instances, SIMON contemporaneously recorded in his office notes that the PNE did not support a permanent InterStim implantation. Nevertheless, in each of these cases, SIMON still performed a permanent implantation of the InterStim device and falsely documented in his surgical notes that the PNE had been successful.
- During the Simon Covered Period, SIMON frequently performed medically unreasonable and unnecessary InterStim device revision and replacement surgeries on his patients and then billed Medicare for these procedures. Specifically, SIMON often surgically removed and replaced InterStim batteries within three years or less of the implantation, despite the fact that InterStim batteries were supposed to last for approximately five years.
- SIMON also frequently replaced InterStim neurostimulators and added a second InterStim device for patients who started with one InterStim device, without any objective evidence that the neurostimulator needed to be replaced or that the patient would benefit from the implantation of a second InterStim device.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
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Mr. Clayton praised the outstanding investigative work of HHS-OIG.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Allison M. Rovner is in charge of the case.
California Man Sentenced to Six Years in Prison for Role in Abduction and Extortion of Victim in PeekskillRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that LEWIS LI was sentenced today to six years in prison by U.S. District Judge Philip M. Halpern for his role in the forceful abduction and extortion of a man in Peekskill, New York.
"Today’s sentence reflects the seriousness of this crime and the fear and trauma that Li inflicted on the victim,” said U.S. Attorney Jay Clayton. “Abducting a man in broad daylight, beating him up, and threatening him and his family is a grave offense that ravages the sense of safety that every community deserves. Our Office remains committed to protecting the public and ensuring that those who endanger our communities face justice.”
According to the charging instruments, other public filings, and statements in public court proceedings:
On January 28, 2025, LI and his co-conspirators forcefully abducted and threatened their business partner (“Victim-1”) in an effort to obtain almost $1 million from Victim-1. LI and his co-conspirators planned and prepared for the abduction for at least five days beforehand, taking steps that included purchasing and placing a GPS tracker on the underside of Victim-1’s car, surveilling Victim-1’s home, and digging through Victim-1’s trash. At approximately 11:30 a.m. on January 28, 2025, LI and three co-conspirators followed and abducted Victim-1 outside of a grocery store on Park Street in Peekskill, New York, forcing Victim-1 into the backseat of a vehicle driven by one of the co-conspirators (“CC-1”) in broad daylight. LI and his co-conspirators restrainedVictim-1 in the Jeep for approximately one hour and 45 minutes, before dropping Victim-1 off on the street in Elmsford, New York. During that time, LI and his co-conspirators beat and used a stun gun on Victim-1 and threatened Victim-1 to return approximately $930,000 in cash that LI believed Victim-1 had stolen.
While Victim-1 was in the vehicle, LI and his co-conspirators also threatened Victim-1, in sum and substance, that the money belonged to people involved in organized crime, that Victim-1 owed them an additional $100,000, and that the lives of Victim-1 and Victim-1’s family were in danger unless Victim-1 paid the additional sum. LI and the others also forced Victim-1 to record a video admitting that Victim-1 had taken the money. As a result of the abduction, force, and threats, Victim-1 arranged for the disputed cash to be picked up by two of LI’s co-conspirators at a location in Peekskill, New York. Only after the cash had been retrieved and counted did LI and his co-conspirators release Victim-1 from the vehicle, dropping Victim-1 on the street in Elmsford, New York.
In the days following the abduction, LI and CC-1 continued to threaten to harm Victim-1 and his family in an ongoing effort to extort $100,000 from him. LI was arrested approximately one week after the abduction, before Victim-1 made any further payments. In the apartment where LI was arrested, officers found, among other items, a stun gun and LI’s phone, which LI had hidden in the oven.
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In addition to the prison term, LI, 36, of Huntington Beach, California, was sentenced to three years of supervised release and ordered to forfeit $910,000.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation’s Westchester Safe Streets Task Force.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jorja Knauer and Benjamin Levander are in charge of the prosecution.
Bronx Man Sentenced to 27.5 Years in Prison for Enticing Two Minors, Committing A Felony Offense While Being A Registered Sex Offender, and Possessing Child PornographyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that JOSE MEDINA was sentenced today by U.S. District Judge Lewis A. Kaplan to 27 and a half years in prison for coercing and enticing two minors, committing a felony offense while being a registered sex offender, and possessing child pornography. MEDINA previously pled guilty on March 11, 2026, before U.S. Magistrate Judge Gary Stein.
“Jose Medina coerced two minors, boys just seven and nine years old, to engage in sexual acts with their mother,” said U.S. Attorney Jay Clayton. “He then created child pornography videos depicting his crimes. Participating in this depraved act of sexual abuse was not the end. The defendant also physically assaulted the boys, including beating and tasing them. Today, I hope that some measure of justice has come for the victims.”
According to the Information, public filings, and statements made in public court proceedings:
In February 2024, while MEDINA was living in a truck with his then-girlfriend (“Female-1”) and Female-1’s two minor children (the “Victims”), he coerced and encouraged the Victims to engage in sexual acts with their mother, Female-1, including vaginal, oral, and anal sex. MEDINA recorded child pornography videos depicting these crimes. After MEDINA and Female-1 ended their relationship in September 2024, MEDINA returned home to the Bronx, New York, where he distributed the child pornography videos to at least three individuals, including a family friend who promptly reported MEDINA to child protective services. Further investigation revealed that MEDINA had been physically, emotionally, and sexually abusing the Victims, while they were in his and Female-1’s care.
At the time MEDINA coerced the Victims to engage in sexual acts with Female-1, he was already a registered sex offender, based on a prior conviction for raping a 14-year-old girl.
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In addition to the prison term, MEDINA, 57, of the Bronx, New York, was sentenced to five years of supervised release.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Remy Grosbard is in charge of the prosecution.
Former CEO of Special Purpose Acquisition Company Sentenced to PrisonRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that VADIM KOMISSAROV, the former Chief Executive Officer of Trident Acquisitions Corp. (“TDAC”), a publicly traded special purpose acquisition company (“SPAC”), was sentenced to three years in prison for committing securities fraud in connection with a scheme to defraud TDAC investors and investors in TDAC’s successor company, Lottery.com Inc., by publicly reporting false and misleading revenue and business information. KOMISSAROV pled guilty to one count of securities fraud on February 3, 2026, before U.S. District Judge Alvin K. Hellerstein, who imposed today’s sentence.
“Vadim Komissarov, the former CEO of Trident Acquisitions Corp., is going to prison for defrauding his shareholders,” said U.S. Attorney Jay Clayton. “This Office will continue to work with our law enforcement partners to hold executives of public companies accountable when they commit fraud and lie about it.”
According to the allegations contained in the Indictment and statements made in public filings and public court proceedings:
From November 2020 through May 2022, KOMISSAROV engaged in a scheme to defraud investors in TDAC and investors in TDAC’s successor company, Lottery.com (the “Revenue Scheme”). In short, KOMISSAROV and his confederates created the false appearance of revenue-generating business activity for AutoLotto, in advance of a vote by TDAC shareholders on a proposed merger between TDAC and AutoLotto, and later for Lottery.com through a series of sham transactions, including a fraudulent $9 million roundtrip transaction that KOMISSAROV engineered using the alias “Vlad.”
KOMISSAROV later schemed to obstruct the U.S. Securities and Exchange Commission (“SEC”)’s investigation. For example, during a call with two Lottery.com executives, KOMISSAROV said he wanted to “sync” his “clock[]” with them and align on a false and misleading narrative that concealed his involvement in some of the sham transactions that were part of the Revenue Scheme. KOMISSAROV warned the Lottery.com executives, “guys, you do understand, you say that I was involved with this transaction . . . . if Trident and me specifically knew about it, then I am in deep, deep, deep, deep water . . . . So, if you come out and say that I was involved, then I am in deep shit.” KOMISSAROV also gave false and misleading sworn testimony to the SEC about his prior communications with the Lottery.com executives and his involvement in the $9 million fraudulent roundtrip transaction that was part of the Revenue Scheme.
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In addition to the prison term, KOMISSAROV, 54, of New York, New York, was sentenced to three years of supervised release and ordered to forfeit $607,028.70, representing the proceeds of KOMISSAROV’s sale of Lottery.com stock before the market was made aware of the fraudulent scheme.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Justin V. Rodriguez and Matthew R. Shahabian are in charge of the prosecution.
Former BOP Contractor Charged with Accepting Bribes in Exchange for Smuggling ContrabandRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the Northeast Region Office of the U.S. Department of Justice Office of the Inspector General (“DOJ OIG”), Ryan T. Geach, announced the unsealing of a Complaint charging TERRI LYNN OUTER, a former contractor with the Bureau of Prisons working at a federal prison in Orange County, New York, with bribery, providing or possessing contraband in prison, and conspiracy to provide or possess contraband in prison. OUTER was arrested today and will be presented this afternoon before U.S. Magistrate Judge Victoria Reznik.
“As alleged, Terri Lynn Outer accepted bribes from federal inmates, their family members, and their associates in exchange for smuggling contraband, including drugs, into a federal prison,” said U.S. Attorney Jay Clayton. “The DOJ refuses to tolerate such corruption in our prisons. It makes our prisons more dangerous and makes rehabilitation more difficult.”
“Outer’s alleged attempt to accept bribes and smuggle contraband jeopardized the safety and security of the institution,” said DOJ OIG Special Agent in Charge Ryan T. Geach. “The DOJ OIG is committed to working with its law enforcement partners to bring to justice any Bureau of Prisons employee or contractor who abuses their authority and attempts to smuggle illegal contraband into federal prisons.”
As alleged in the Complaint:(1)
From January 2024 through August 2025, OUTER was employed as a contractor at FCI Otisville, working as a dental assistant. During her time there, OUTER solicited and received payments in return for smuggling contraband and prohibited objects into the prison. OUTER received more than $163,000 from inmates’ family members and associates, and engaged in extensive communications with inmates, former inmates, and their family members and associates, including discussions with an inmate about having the contents of a package weighing over six pounds smuggled into FCI Otisville.
On or about August 1, 2025, prison staff searched a specific supply room used by the Health Services Department at FCI Otisville, to which OUTER had access. During that search, prison staff found contraband that included approximately 3.2 pounds of marijuana and 6.7 pounds of loose-leaf tobacco, pictured below:
Marijuana discovered at FCI Otisville
Tobacco discovered at FCI Otisville
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OUTER, 50, of Montague, New Jersey, is charged with one count of bribery, which carries a maximum sentence of 15 years in prison; one count of providing or possessing contraband in prison, which carries a maximum sentence of five years in prison; and one count of conspiracy to provide or possess contraband in prison, which also carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of OUTER will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of DOJ OIG; the United States Postal Inspection Service, New York Domicile; the FCI Otisville Special Investigative Services; and the New Jersey State Police.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Carmi Schickler and Timothy Deal are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and OUTER is presumed innocent unless and until proven guilty.
^
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.
Dominican National Arrested on Charges of Identity Theft and Federal Benefits FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Special Agent in Charge of the Boston-New York Field Division of the Social Security Administration, Office of Inspector General (“SSA OIG”), Amy Connelly, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Pete Gizas, and Special Agent in Charge of the Diplomatic Security Service (“DSS”) New York Field Office, Brian Wood, announced today the unsealing of a Complaint charging VERONICA YARASET MOLINA with theft of government funds, healthcare fraud, passport fraud, and aggravated identity theft. YARASET MOLINA was arrested this morning and presented earlier today before U.S. Magistrate Judge Ona T. Wang.
“For nearly two decades, Veronica Yaraset Molina allegedly stole the identity of an American citizen and used it to loot federal benefit programs of nearly $800,000 in taxpayer funds,” said U.S. Attorney Jay Clayton. “This Office will pursue those who defraud federal benefit programs.”
“Veronica Yaraset Molina allegedly used a stolen identity to orchestrate a nearly 20-year fraud scheme to siphon off hundreds of thousands of dollars in benefits meant for vulnerable Americans,” said HSI Special Agent in Charge Pete Gizas. “This kind of calculated fraud is not a victimless crime; it drains taxpayer resources, corrupts vital safety net programs, and inflicts lasting damage on innocent victims who are denied the assistance they need when disaster strikes. HSI New York, as a leading member of the Homeland Security Task Force New York, is fully committed to relentlessly pursuing fraudsters who exploit our systems and our communities, and we will continue to work side-by-side with the U.S. Attorney’s Office and our law enforcement partners to identify, dismantle, and bring to justice anyone who engages in this kind of predatory conduct.”
“The Diplomatic Security Service mandate extends beyond protecting State Department people, property and information—it includes safeguarding the integrity of U.S. travel documents,” said DSS New York Field Office Special Agent in Charge Brian Wood. “Molina's alleged use of a fraudulently obtained U.S. passport to repeatedly enter this country is exactly the kind of threat DSS is uniquely positioned to investigate, and we are proud to have worked alongside our law enforcement partners to bring this case to light.”
“The defendant, a Dominican national, is accused of using a stolen identity to fraudulently obtain approximately $120,000 in Social Security disability benefits, unlawfully enriching herself at the expense of American taxpayers,” said SSA OIG Special Agent in Charge Amy Connelly. “We remain steadfast in our mission to safeguard the integrity of Social Security programs and will continue to aggressively pursue those who exploit vulnerable systems through fraud, identity theft, and other criminal conduct.”
As alleged in the Complaint:
YARASET MOLINA, a Dominican national who has been unlawfully present in the United States since at least approximately 2000, and who assumed the stolen identity of a United States citizen (“Victim-1”), engaged in a nearly 20-year scheme to fraudulently obtain approximately $800,000 in federal benefits, including Social Security disability benefits, Supplemental Nutrition Assistance Program (“SNAP”) benefits, Medicare benefits, and unemployment benefits, to which she was not entitled.
As alleged, YARASET MOLINA repeatedly used Victim-1’s identity to apply for and receive the foregoing benefits across multiple federal programs. YARASET MOLINA also used Victim-1’s identity to apply for and receive a United States passport, which she used to return to the United States from the Dominican Republic on several occasions. Due at least in part to YARASET MOLINA’s identity theft scheme, Victim-1 was unable to receive Federal Emergency Management Agency (“FEMA”) benefits in the wake of Hurricane Maria in or about 2017.
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YARASET MOLINA, 51, of the Dominican Republic, is charged with four counts of theft of government funds, in violation of 18 U.S.C. § 641, each of which carries a maximum sentence of 10 years in prison; healthcare fraud, in violation of 18 U.S.C. § 1347, which carries a maximum sentence of 10 years in prison; passport fraud, in violation of 18 U.S.C. § 1543, which carries a maximum sentence of 10 years in prison; and aggravated identity theft, in violation of 18 U.S.C. § 1028A, which carries a mandatory minimum sentence of two years in prison, to run consecutively to any other term of imprisonment imposed.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the SSA-OIG, HSI, DSS, the U.S. Postal Inspection Service, the U.S. Department of Agriculture’s Office of Inspector General, the U.S. Department of Health and Human Services’ Office of Inspector General, and the U.S. Department of Labor’s Office of Inspector General for their assistance in this case.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Nicholas D. Pavlis 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.
On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.
^
As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitutes only allegations, and every fact described therein should be treated as an allegation.
Bronx Man Sentenced to 33 Years and Four Months in Prison for Kidnapping, Sex Crimes, and Child Pornography OffensesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that ANTHONY WALLACE was sentenced today by U.S. District Judge Mary Kay Vyskocil to 33 years and four months in prison for kidnapping a minor, coercing and enticing a minor, transporting a minor interstate for unlawful sexual activity, and producing and possessing child pornography. WALLACE was convicted following a week-long jury trial in December 2025 before Judge Vyskocil.
“Anthony Wallace met a 15-year-old girl on the street and targeted her for unimaginable abuse and cruelty,” said U.S. Attorney Jay Clayton. “Over the course of weeks, Wallace physically, sexually, and psychologically abused this minor victim, until she courageously escaped out a fire escape. This type of abuse and exploitation is every parent’s worst nightmare. Wallace is now where he belongs and where every New York parent wants him—off our streets. Our office, together with the NYPD and our federal partners, has devoted substantial resources to combatting sex trafficking and sex crimes involving children and our most vulnerable. Our victim-oriented approach has resulted in more prosecutions and more predators off the streets. It also has shown us that we must do more, and we are most effective when we engage as early as practicable with victims and with our communities. If you have been a victim of a sex crime or have information regarding a sex crime, please call 1-866-874-8900.”
According to the allegations contained in the Indictment, the evidence presented at trial, and other statements made in public court proceedings:
In March 2024, WALLACE met a 15-year-old girl (the “Minor Victim”) in Binghamton, New York. Over the next four weeks, WALLACE subjected the Minor Victim to escalating physical, sexual, and psychological abuse. At first, WALLACE kept the Minor Victim against her will in an apartment in Binghamton. There, WALLACE assaulted the Minor Victim and forced her to disguise her appearance by dyeing her hair and wearing a mask. WALLACE also gave the Minor Victim a steady stream of drugs, including methamphetamine and marijuana. While in Binghamton, WALLACE created child pornography of the Minor Victim, which he kept on his cellphone.
On April 1, 2024, WALLACE transported the Minor Victim from Binghamton across state lines, ultimately bringing her to the Bronx, New York, where he kept her in a barricaded apartment. While in the Bronx, WALLACE continued to physically assault the Minor Victim and forcibly raped her.
On April 4, 2024, the Minor Victim escaped through the window of the Bronx apartment while WALLACE was sleeping. The Minor Victim immediately called 911 and was eventually returned home to her parents.
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In addition to the prison term, WALLACE, 33, of the Bronx, New York, was sentenced to 10 years of supervised release, along with $3,000 in restitution and $500 in mandatory special assessments.
Mr. Clayton praised the outstanding investigative work of the FBI’s C20 task force and the NYPD. He also thanked the Broome County Sherriff’s Office for their assistance in this investigation.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Ariana L. Bloom, Remy Grosbard, Joseph H. Rosenberg, and Alexandra N. Rothman are in charge of the prosecution, with the assistance of Paralegal Specialists Samantha Roberts and Benjamin Coolman.
Two Florida Men Convicted at Trial of Orchestrating $18 Million Advance-Fee SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that JOSEPH MALVASIO, a/k/a “Joe Cohen,” and GREGG MARCUS, a/k/a “Gregg Pierce,” were convicted of wire fraud and conspiracy to commit wire fraud in connection with a years-long advance-fee scheme through which they defrauded hundreds of victims of at least approximately $18 million. MALVASIO and MARCUS were found guilty following a two-week trial before U.S. District Judge Jesse M. Furman.
“Joseph Malvasio and Gregg Marcus perpetrated an advance-fee scheme whose victims were defrauded into paying millions of dollars for loans the defendants never intended to make,” said U.S. Attorney Jay Clayton. “The victims needed these loans to buy property and build businesses. But the defendants simply charged upfront fees and pocketed their victims’ money—approximately $18 million. This Office is committed to rooting out fraud and holding those responsible accountable.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
From at least in or about March 2017 through at least in or about August 2023, MALVASIO and MARCUS operated an advance-fee scheme that defrauded hundreds of victims of approximately $18 million. MALVASIO and MARCUS operated this fraudulent scheme through their ownership and operation of a business called Global Capital Partners Fund LLC (“GCPF”). MALVASIO and MARCUS falsely represented that GCPF was a legitimate business that would provide loans to individuals who were interested in funding for private commercial projects. Instead, MALVASIO and MARCUS defrauded victims, collecting thousands of dollars in fees from each victim without intending to issue a loan. MALVASIO also committed the same scheme using two other entities, called Harbor Equity and Commercial Private Equity.
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MALVASIO, 68, of Fort Lauderdale, Florida, and Bridgehampton, New York, and MARCUS, 60, of Bay Harbor Islands, Florida, were each convicted of one count of wire fraud and one count of conspiracy to commit wire fraud, each of which carries a maximum sentence of 20 years in prison. MALVASIO was also convicted, separately, of a second count of wire fraud.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Sentencing is scheduled for October 8, 2026.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Georgia V. Kostopoulos, Patrick J. Gallagher, Adabelle U. Ekechukwu, Jaclyn Delligatti, Micah F. Fergenson, and Daniel G. Nessim are in charge of the prosecution, with assistance from Paralegal Specialists Saadhana Jakka and Myrnette Millington.
Third Defendant Sentenced to Prison for Hacking Fantasy Sports and Betting WebsiteRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that NATHAN AUSTAD, a/k/a “Snoopy,” was sentenced to 18 months in prison for his role in a scheme to hack user accounts on a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts, resulting in losses of hundreds of thousands of dollars to the users. On December 12, 2025, AUSTAD pled guilty to one count of conspiring to commit computer intrusion before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.
"Nathan Austad and his co-defendants hacked an online betting website to compromise the accounts of over 60,000 users by purchasing their already stolen credentials on the darkweb and utilizing their previous passwords from other websites,” said U.S. Attorney Jay Clayton. “The defendants acknowledged the federal investigation into their conduct while they were committing their crimes, even having the hubris to say the FBI could not do anything about it. They were wrong. Austad’s prison sentence today demonstrates the commitment of the DOJ, the FBI, and all our federal partners to protecting our on-line markets.”
According to the charging documents and other filings and statements made in court:
On or about November 18, 2022, AUSTAD and others 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 often 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, AUSTAD and his coconspirators made a series of attempts to log into the Betting Website user accounts using a large list of stolen credentials.
AUSTAD and his coconspirators successfully compromised approximately 60,000 user accounts at the Betting Website (the “Victim Accounts”) through the credential stuffing attack. In some instances, AUSTAD and his coconspirators were able to add a new payment method of their own on the account (i.e., to a newly added financial account belonging to the hacker) and then use it to withdraw all the existing funds in the Victim Account to themselves, thus stealing the funds in each affected Victim Account. Using this method, AUSTAD and others stole approximately $600,000 from approximately 1,600 Victim Accounts on the Betting Website for themselves.
Access to the Victim Accounts were also sold on various websites that traffic in stolen accounts, which are frequently referred to as “Shops.” AUSTAD directly controlled and profited from his own shop, which was named after the character Snoopy from the Peanuts comic strip. A photo of AUSTAD’s Shop website with victim companies redacted is below:
On or about December 2, 2022, AUSTAD messaged about the existence of this investigation, “everyone shouldve been prepared for this before cashing out lol,” and a coconspirator replied, “lol fbi can’t do shit.” On or about May 19, 2023, AUSTAD messaged about the existence of this investigation, “like we didnt know the risk when we started lol . . . everyone knows their committing fraud.”
AUSTAD also controlled cryptocurrency accounts that received cryptocurrency worth approximately $465,000, including proceeds of his crimes.
AUSTAD is the third defendant to be sentenced in this investigation. On January 31, 2024, U.S. District Judge Lewis A. Kaplan sentenced Joseph Garrison to 18 months in prison. On April 16, 2026, U.S. District Judge Naomi Reice Buchwald sentenced Kamerin Stokes, a/k/a “TheMFNPlug,” to 30 months in prison.
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In addition to the prison term, AUSTAD, 21, of Farmington, Minnesota, was sentenced to three years of supervised release and ordered to pay $463,684.48 in forfeiture and $1,327,061 in restitution.
Mr. Clayton 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.
Subway Arsonist Sentenced to 66 Months in Prison for Lighting Sleeping Man on FireRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that HIRAM CARRERO was sentenced to 66 months in prison for setting fire to a man who was sleeping on a New York City subway car. CARRERO previously pled guilty to arson on March 5, 2026, and was sentenced today by U.S. District Judge Lewis J. Liman.
“Setting fire to another person is a breathtaking, horrific, and unconscionable crime,” said U.S. Attorney Jay Clayton. “Thanks to first responders and the women and men of the NYPD and the FDNY, the victim’s life was saved, and a horrific tragedy was averted. Subway safety is front of mind for our Office, the NYPD, and our federal partners. Today’s sentence demonstrates that anyone who terrorizes New Yorkers on the subway or anywhere else will face swift justice.”
According to documents filed in this case and statements made in related court proceedings:
In the early morning hours of December 1, 2025, CARRERO boarded a New York City subway car at the 34th Street – Penn Station subway stop. He picked up a piece of paper (depicted in the screenshot below) and used it to set fire to a man asleep on the train. CARRERO stepped back onto the platform as the doors closed, leaving the victim locked inside the car to burn as the train departed.
Video from inside the train car shows that as the train traveled north towards the next station, the fire flared up, engulfing the victim’s legs and a portion of the train car in flames. When the train arrived at 42nd Street – Times Square, the victim emerged, burning from the train (depicted in a screenshot below).
Minutes later, first responders at the station rushed to extinguish the flames. The victim was transported to the hospital in critical condition after sustaining life-threatening injuries from the fire.
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In addition to his prison sentence, CARRERO, 19, of New York, New York, was sentenced to three years of supervised release and ordered to pay restitution.
Mr. Clayton praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department and the New York City Fire Department Fire Marshals.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Cameron Molis is in charge of the prosecution.
Registered Sex Offender Charged with Drugging and Sexually Abusing MinorsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and the Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced the return of a 10-count Indictment charging ANDREW WILKINSON, a/k/a “Steppa,” with convincing and enticing three minor female victims to engage in unlawful sexual activity with him, filming a sexually explicit video of a 15-year-old girl (“Minor Victim-1”), and drugging and sexually assaulting 17-year-old and 16-year-old girls (“Minor Victim-2” and “Minor Victim-3,” respectively). The case is assigned to U.S. District Judge Colleen McMahon. WILKINSON was arraigned on the Indictment before U.S. Magistrate Judge Ona T. Wang earlier today.
“As alleged, Andrew Wilkinson, a registered sex offender and serial predator, used social media to target vulnerable girls so he could drug them, sexually assault them, and film his abuse,” said U.S. Attorney Jay Clayton. “Thankfully, Wilkinson’s illicit conduct was brought to light, and he will now have to answer to these serious charges. Our Office, along with our federal partners and the NYPD, are making a whole-of-government effort to rid our streets of sexual predators. That is what New Yorkers want. That is what we are delivering. The sexual assault of minors and the production and distribution of child pornography are too prevalent. I urge all New Yorkers to assist us in ridding our streets of predators. If you have been a victim of the alleged sexual abuse perpetrated by Wilkinson—or if you know anything about his alleged crimes or think you’ve experienced something similar—we encourage you to contact [email protected] or 212-637-0076.”
“This defendant, who is already a registered sex offender, allegedly used social media to lure underage girls to an unlicensed business for free tattoos and then drugged, raped, and recorded sexually explicit videos of them,” said NYPD Commissioner Jessica S. Tisch. “This horrific behavior—especially the abuse of minors—has no place in our city, and thanks to the relentless work of our NYPD investigators and law enforcement partners, this predator is being held accountable. We will continue to work with the U.S. Attorney’s Office for the Southern District of New York to protect survivors of sexual assault and ensure justice is served in this case.”
As alleged in the Indictment and statements made in Court:(1)
WILKINSON drugged, sexually assaulted, and recorded sexual encounters with minor female victims. WILKINSON, who was 34 years old and a registered sex offender, operated and advertised an unlicensed tattoo service and used his tattoo service as a means by which to gain access to minor victims to sexually abuse. WILKINSON met and communicated with his victims primarily on social media platforms and utilized those platforms to convince his victims to travel to an apartment in the Bronx where he drugged, sexually assaulted, and filmed sexually explicit videos of them. WILKINSON drugged a 16-year-old girl and sexually abused her while she was physically incapacitated.
Between at least in or about December 2024 and May 2025, WILKINSON repeatedly sent promotional messages offering free tattoos to Minor Victim-1, who was 14, and tried to convince Minor Victim-1 to meet him in person. On or about January 27, 2025, after Minor Victim-1 turned 15, WILKINSON convinced Minor Victim-1 to visit him, where he used a cellphone to record a sexually explicit video depicting Minor Victim-1.
In or around May 2025, WILKINSON met a second victim, who was 17 years old, and convinced Minor Victim-2 to travel from Long Island to the Bronx to obtain a tattoo. While in the Bronx, WILKINSON drugged and sexually assaulted Minor Victim-2.
On or about July 23, 2025, WILKINSON persuaded a third victim, who was 16 years old, to travel to the Bronx where WILKINSON told Minor Victim-3 that he would provide a free tattoo if she played and won three card games. WILKINSON provided psilocin psychedelic mushrooms, methamphetamine, and an unidentified beverage to Minor Victim-3, causing her to lose consciousness. While Minor Victim-3 was impaired and unconscious, WILKINSON raped and sexually assaulted Minor Victim-3.
If you have been victimized by WILKINSON, who utilized the Instagram account “@tattzbysteppa,” among others, or have any additional information about his alleged illegal behavior, or if you’ve seen something similar, please contact the U.S. Attorney’s Office for the Southern District of New York at 212-637-0076 or reach out to us at [email protected] and reference this case.
* * *
WILKINSON, 36, of the Bronx, New York, is charged with one count of sexual exploitation of a minor, which carries a mandatory minimum sentence of 15 years in prison; three counts of coercion and enticement of a minor to engage in unlawful sexual activity, which carries a minimum sentence of 10 years in prison; three counts of committing a felony offense involving a minor as a registered sex offender, which carries a mandatory minimum sentence of 10 years in prison which must run consecutively to the other sex offenses; one count of distribution of a controlled substance, which carries a maximum sentence of 20 years in prison; one count of distribution of a controlled substance with intent to commit rape, which carries a maximum sentence of 20 years in prison; and one count of distribution of a controlled substance to a minor, which carries a maximum sentence of 40 years in prison.
The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the NYPD, the Special Agents, Task Force Officers, the Digital Forensics Unit, and the Complex Analytics and Social Media Enhancement Team at the New York/New Jersey High Intensity Drug Trafficking Area from the U.S. Attorney’s Office for the Southern District of New York. Mr. Clayton also thanked the Bronx District Attorney’s Office, the Connecticut State’s Attorney Office for the Judicial District of Ansonia/Milford, the Derby Police Department, the U.S. Marshals Service for the Southern District of New York, and the U.S. Customs and Border Protection for their assistance.
The case is being handled by the Office’s Narcotics Unit. Assistant United States Attorney Dana R. McCann is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
^
As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitutes only allegations and every fact described should be treated as an allegation.
Texas Man Pleads Guilty to Laundering Proceeds of International Fraud Scheme Targeting SeniorsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that CHASE HARRIS pled guilty to participating in a conspiracy to commit money laundering based on his role in laundering proceeds from an international technology-support fraud scheme that targeted elderly victims and resulted in the theft of more than $1.2 million from approximately 25 known victims across the United States. In connection with today’s resolution, the Government is immediately recovering $282,376 in restitution that will be used to compensate victims. HARRIS pled guilty today before U.S. District Judge Philip M. Halpern and is scheduled to be sentenced on October 29, 2026.
“Chase Harris profited from a scheme that preyed on seniors by stoking and exploiting their fear,” said U.S. Attorney Jay Clayton. “After his co-conspirators extracted money from their victims, Harris laundered that money and sent it to India. Today’s plea, together with Harris’s restitution of over $1.2 million for victims, reflects this Office’s commitment to protecting the most vulnerable among us.”
According to the Information, plea agreement, and statements made in public court proceedings:
From at least in or about November 2023 through at least in or about July 2024, HARRIS participated in an IT fraud scheme targeting elderly victims throughout the United States. As part of the scheme, HARRIS’s co-conspirators identified elderly victims and caused pop-up ads to appear on their computers, falsely informing them that their computers had been infected with a virus. At times, HARRIS’s co-conspirators posed as federal agents and threatened their victims with baseless criminal charges. Amid their coercive demands, the co-conspirators told victims that they had to pay for IT services to resolve these fraudulent issues, directing victims to send handwritten checks to various businesses, including several owned or controlled by HARRIS—including CSH Management LLC, C4H Management LLC, and S2J Consulting LLC. However, no services were ever provided.
After receiving checks from the victims, HARRIS transferred most of the proceeds from the scheme, totaling more than $1.2 million, to an India-based company operated by one of his co-conspirators. In return, HARRIS kept a portion of the stolen funds as a fee. While discussing the profitability of the scheme with HARRIS, one of his co-conspirators told him, “We can make millions [i]n [a] [j]iffy.”
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HARRIS, 36, of Keller, Texas, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. HARRIS also agreed to forfeit all proceeds from the offense and make restitution to victims in the amount of $1,240,847.99.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
“Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation's Hudson Valley White Collar Crime Task Force and the Orange County District Attorney's Office in this investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Reyhan Watson and Timothy Deal are in charge of the prosecution.
Former NYPD Officer Sentenced to 90 Months in Prison for Bribery, Narcotics, and Firearms OffensesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that ANDREW NGUYEN, a former officer in the New York City Police Department (“NYPD”), was sentenced to 90 months in prison for conspiring to solicit and receive bribes, conspiring to distribute narcotics, and possessing a firearm in connection with the conspiracy to distribute narcotics, in connection with his role as an NYPD officer. NGUYEN previously pled guilty on January 29, 2026, before U.S. District Judge Analisa Torres, who imposed today’s sentence.
“Andrew Nguyen repeatedly abused his position of public trust by soliciting and accepting tens of thousands of dollars in bribe payments,” said U.S. Attorney Jay Clayton. “In exchange, he helped the leader of a drug trafficking organization, including by transporting kilograms of dangerous drugs, providing armed protection, and using an NYPD police car and equipment to conduct and document a fake car stop and seizure. In short, Nguyen endangered the very community that he swore an oath to protect. The greatest police department in the world does not accept corruption in its ranks, and this Office was proud to partner with them to root it out. Today’s sentencing sends a message from the NYPD and the DOJ: corruption has no place in the world’s greatest police force.”
According to the Indictment, plea agreement, and statements made in court:
For approximately three years, between at least in or about 2020 and at least in or about November 2023, NGUYEN used his position as a police officer in the NYPD to solicit and accept tens of thousands of dollars in bribe payments in exchange for assisting another individual (“CC-1”) with the operation of CC-1’s drug trafficking enterprise. For example, NGUYEN transported drugs, including approximately eight kilograms of cocaine, for CC-1 while NGUYEN was armed with a firearm, including NGUYEN’s NYPD-authorized off-duty firearm, which NGUYEN planned to use to protect CC-1 if violence occurred. While transporting those drugs, NGUYEN also carried his NYPD credentials and an NYPD parking placard, which NGUYEN planned to use to evade arrest in the event he was pulled over by other members of the NYPD. Overall, NGUYEN, who was at all relevant times an officer in the NYPD, accepted more than $30,000 in bribe payments from CC-1 (and solicited tens of thousands of dollars in additional bribes) in connection with NGUYEN’s participation in CC-1’s drug trafficking enterprise.
* * *
In addition to his prison term, NGUYEN, 41, of Harriman, New York, was sentenced to three years of supervised release.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation and the NYPD’s Internal Affairs Bureau.
The case is being handled by the Office’s Public Corruption Unit and Narcotics Unit. Assistant U.S. Attorneys Matthew J. King and Jonathan E. Rebold are in charge of the prosecution.
San Diego Resident Charged with Conspiring to Provide Material Support to HamasRead the Press Release
The Justice Department today announced the unsealing of a five-count complaint charging Reda Mazen Rida Sabassi, 38, of San Diego, California, with terrorism, sanctions-evasion, wire fraud, money laundering, and false statement charges in connection with his efforts to divert funds raised through purported charitable campaigns to Hamas and for personal use. Sabassi was arrested in San Diego yesterday and presented before U.S. Magistrate Judge Steve B. Chu in the Southern District of California.
“As alleged in the complaint, the defendant exploited the barbaric acts of terror perpetrated on October 7, 2023, to attract donors to his fraudulent ‘humanitarian’ causes,” said Assistant Attorney General for National Security John A. Eisenberg. “He allegedly raised hundreds of thousands of dollars through this scheme, which he then funneled to Hamas to help finance that group’s terror and violence and to line his own pockets. As demonstrated by today’s charges, NSD will investigate and prosecute those who fund terrorism.”
“From within the United States, Reda Sabassi is alleged to have solicited and diverted funds to the known foreign terrorist organization, Hamas, which committed the brutal October 7, 2023, massacre” said U.S. Attorney Jay Clayton for the Southern District of New York. “Hamas promotes attacks against the U.S. and has murdered dozens of Americans through acts of terror. Our arrest of Reda Sabassi demonstrates our whole-of-government commitment to prosecute those who provide financial support to a malign terrorist regime that hates America.”
“The defendant allegedly claimed to be raising money for charity but was actually funding the terrorist organization Hamas and also lining his own pockets,” said Assistant Director Donald Holstead of the FBI’s Counterterrorism Division. “The FBI will use all our authorities to put a stop to those who seek to support the violent actions carried out by organizations like Hamas. Today’s announcement should serve as a stark reminder that the FBI and our partners on the Joint Terrorism Task Forces will remain vigilant in our effort to prevent terrorism as well as hold terrorists, and those who provide support to terrorist organizations, accountable for their actions.”
“As alleged, Reda Sabassi raised hundreds of thousands of dollars to fund the death and tragedy Hamas seeks to carry out,” said Assistant Director in Charge James C. Barnacle Jr. of the FBI New York Field Office. “Alongside our federal partners, the FBI New York Joint Terrorism Task Force continues to aggressively eradicate fundraisers financing terrorist organizations, and hold accountable those behind the campaign.”
According to the allegations contained in the complaint, Harakat al-Muqawamah al-Islamiyya, commonly known as Hamas, is a terrorist organization that was founded in 1987, and has been designated as a foreign terrorist organization (FTO) by the United States since 1997. From its inception, Hamas’s stated purpose has been to create an Islamic Palestinian state throughout Israel by eliminating the State of Israel through violent holy war, or jihad. Hamas also promotes attacks against the United States and its citizens, and over more than two decades, Hamas has murdered and injured dozens of Americans as part of its campaign of violence and terror. On Oct. 7, Hamas committed its most violent, large-scale terrorist attack to date (the “October 7 Hamas Massacres”) when Hamas sent more than 2,000 armed fighters into farms and towns in southern Israel, where they carried out the massacres of over a thousand people and the kidnappings of more than 200 others.
Reda Mazen Rida Sabassi has publicly supported Hamas online and has raised money for Hamas using online donation platforms. For example, Sabassi created an hour-long propaganda video of the October 7 Hamas Massacres and then posted that video to at least two of his social media accounts, including a few months after the October 7 Hamas Massacres and again on the two-year anniversary of the terrorist attacks.
Since at least in or about 2022, Sabassi has used his social media accounts, crowdfunding websites, and his putative charity called Ikram — The Arab Charity Foundation Inc. (Ikram) to solicit donations from around the world, including from individuals in the United States and New York. In his online fundraising campaigns, Sabassi claimed to be raising funds to provide humanitarian aid to people in Gaza; however, Sabassi was actually raising funds for Hamas. Sabassi and a co-conspirator joked privately that they should name the fundraiser after Hamas’s al-Qassam Brigades, before agreeing to use Sabassi’s Ikram. Sabassi worked with the Hamas fundraising organization Gaza Now and other co-conspirators to operate these online fundraisers and to send funds to Hamas.*** Between in or about December 2023 and in or about February 2024, Sabassi raised a total of approximately $600,000 through online fundraising campaigns, from which Sabassi sent approximately $116,000 to a Hamas member and attempted to convert approximately $382,000 of the cash he raised into cryptocurrency to send to Hamas through Gaza Now.
Sabassi is charged with (i) conspiring to provide material support to Hamas, a foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (ii) conspiring to violate the International Emergency Economic Powers Act, which carries a maximum penalty of 20 years in prison; (iii) conspiring to commit wire fraud, which carries a maximum penalty of 20 years in prison; (iv) conspiring to commit money laundering, which carries a maximum penalty of 20 years in prison; and (v) false statements, which carries a maximum penalty of five years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
U.S. Attorney Clayton praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force and U.S. Customs and Border Protection. Mr. Clayton also thanked the FBI’s San Diego Joint Terrorism Task Force; the Counterterrorism Section and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division for their assistance with this investigation.
This case is being handled by the Office’s Illicit Finance & Money Laundering Unit and the National Security and International Narcotics Unit. Assistant U.S. Attorneys Jennifer N. Ong, Ben Arad, Sarah L. Kushner, and Juliana N. Murray for the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorney Andrew Briggs of the Counterterrorism Section and Acting Deputy Chief Sean Heiden of the Counterintelligence and Export Control Section.
The charges in the complaint are merely accusations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
***
On March 27, 2024, the United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”) designated Gaza Now and two of SABASSI’s co-conspirators as Specially Designated Global Terrorists (“SDGTs”) pursuant to Executive Order 13224 for being key financial facilitators involved in fundraising for Hamas.
San Diego Resident Charged with Conspiring to Provide Material Support to HamasRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Assistant Attorney General for National Security, John A. Eisenberg, Assistant Director in Charge of the Counterterrorism Division of the Federal Bureau of Investigation (“FBI”), Donald Holstead, and Assistant Director in Charge of the New York Field Office of the FBI, James C. Barnacle, Jr., announced the unsealing of a five-count Complaint charging REDA MAZEN RIDA SABASSI with terrorism, sanctions-evasion, wire fraud, money laundering, and false statement charges in connection with his efforts to divert funds raised through purported charitable campaigns to Hamas and for personal use. SABASSI was arrested in San Diego yesterday and presented before U.S. Magistrate Judge Steve B. Chu in the Southern District of California.
“From within the United States, Reda Sabassi is alleged to have solicited and diverted funds to the known foreign terrorist organization, Hamas, which committed the brutal October 7, 2023, massacre,” said U.S. Attorney Jay Clayton. “Hamas promotes attacks against the U.S. and has murdered dozens of Americans through acts of terror. Our arrest of Reda Sabassi demonstrates our whole-of-government commitment to prosecute those who provide financial support to a malign terrorist regime that hates America.”
“As alleged in the complaint, the defendant exploited the barbaric acts of terror perpetrated on October 7, 2023, to attract donors to his fraudulent ‘humanitarian’ causes,” said Assistant Attorney General for National Security John A. Eisenberg. “He allegedly raised hundreds of thousands of dollars through this scheme, which he then funneled to Hamas to help finance that group’s terror and violence and to line his own pockets. As demonstrated by today’s charges, NSD will investigate and prosecute those who fund terrorism.”
“The defendant allegedly claimed to be raising money for charity but was actually funding the terrorist organization Hamas and also lining his own pockets,” said Assistant Director Donald Holstead of the FBI's Counterterrorism Division. “The FBI will use all our authorities to put a stop to those who seek to support the violent actions carried out by organizations like Hamas. Today’s announcement should serve as a stark reminder that the FBI and our partners on the Joint Terrorism Task Forces will remain vigilant in our effort to prevent terrorism as well as hold terrorists, and those who provide support to terrorist organizations, accountable for their actions.”
“As alleged, Reda Sabassi raised hundreds of thousands of dollars to fund the death and tragedy Hamas seeks to carry out,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “Alongside our federal partners, the FBI New York Joint Terrorism Task Force continues to aggressively eradicate fundraisers financing terrorist organizations, and hold accountable those behind the campaign.”
According to the allegations contained in the Complaint:(1)
Harakat al-Muqawamah al-Islamiyya, commonly known as Hamas, is a terrorist organization that was founded in 1987, and has been designated as a foreign terrorist organization (“FTO”) by the United States since 1997. From its inception, Hamas’s stated purpose has been to create an Islamic Palestinian state throughout Israel by eliminating the State of Israel through violent holy war, or jihad. Hamas also promotes attacks against the United States and its citizens, and over more than two decades, Hamas has murdered and injured dozens of Americans as part of its campaign of violence and terror. On October 7, 2023, Hamas committed its most violent, large-scale terrorist attack to date (the “October 7 Hamas Massacres”) when Hamas sent more than 2,000 armed fighters into farms and towns in southern Israel, where they carried out the massacres of over a thousand people and the kidnappings of more than 200 others.
REDA MAZEN RIDA SABASSI has publicly supported Hamas online and has raised money for Hamas using online donation platforms. For example, SABASSI created an hour-long propaganda video of the October 7 Hamas Massacres and then posted that video to at least two of his social media accounts, including a few months after the October 7 Hamas Massacres and again on the two-year anniversary of the terrorist attacks.
Since at least in or about 2022, SABASSI has used his social media accounts, crowdfunding websites, and his putative charity called Ikram – The Arab Charity Foundation Inc. (“Ikram”) to solicit donations from around the world, including from individuals in the United States and New York. In his online fundraising campaigns, SABASSI claimed to be raising funds to provide humanitarian aid to people in Gaza; however, SABASSI was actually raising funds for Hamas. SABASSI and a co-conspirator joked privately that they should name the fundraiser after Hamas’s al-Qassam Brigades, before agreeing to use SABASSI’s Ikram. SABASSI worked with the Hamas fundraising organization Gaza Now and other co-conspirators to operate these online fundraisers and to send funds to Hamas.(2) Between in or about December 2023 and in or about February 2024, SABASSI raised a total of approximately $600,000 through online fundraising campaigns, from which SABASSI sent approximately $116,000 to a Hamas member and attempted to convert approximately $382,000 of the cash he raised into cryptocurrency to send to Hamas through Gaza Now.
* * *
SABASSI, 38, of San Diego, California, is charged with (i) conspiring to provide material support to Hamas, a foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (ii) conspiring to violate the International Emergency Economic Powers Act, which carries a maximum penalty of 20 years in prison; (iii) conspiring to commit wire fraud, which carries a maximum penalty of 20 years in prison; (iv) conspiring to commit money laundering, which carries a maximum penalty of 20 years in prison; and (v) false statements, which carries a maximum penalty of 5 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Mr. Clayton praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force and U.S. Customs and Border Protection. Mr. Clayton also thanked the FBI’s San Diego Joint Terrorism Task Force; the Counterterrorism Section and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division for their assistance with this investigation.
This case is being handled by the Office’s Illicit Finance & Money Laundering Unit and the National Security and International Narcotics Unit. Assistant U.S. Attorneys Jennifer N. Ong, Ben Arad, Sarah L. Kushner, and Juliana N. Murray are in charge of the prosecution, with assistance from Trial Attorney Andrew Briggs of the Counterterrorism Section and Acting Deputy Chief Sean Heiden of the Counterintelligence and Export Control Section.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
^
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.
^
On March 27, 2024, the United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”) designated Gaza Now and two of SABASSI’s co-conspirators as Specially Designated Global Terrorists (“SDGTs”) pursuant to Executive Order 13224 for being key financial facilitators involved in fundraising for Hamas.
Rockland County Man Charged with Receipt and Distribution of Child PornographyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced the unsealing of a Complaint charging CARLOS NOEL with receiving and distributing child pornography, as well as possessing child pornography. NOEL was arrested yesterday and presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.
“As alleged, Carlos Noel exchanged approximately 100 videos of child pornography online, many involving infants and prepubescent minors, and discussed sexually abusing another individual’s one-year-old niece,” said U.S. Attorney Jay Clayton. “Every New Yorker and every American loathes the exploitation of children. Together with our partners, we will deploy every resource to relentlessly get sexual predators off our streets and bring to justice those who prey on our children. If you have information to report about this or any other matter of child sexual abuse, please contact the FBI at 1-800-CALL-FBI (1-800-225-5324) or https://tips.fbi.gov.”
“Carlos Noel allegedly exchanged sexually explicit images and videos, often featuring infants, with other online users as if they were nothing more than trading cards,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI Safe Street's Task Force is dedicated to eliminating sexual predators who abuse those who can't protect themselves.”
As alleged in the Complaint:
NOEL used the online messaging applications Twitter and Telegram to trade videos of child pornography, many involving infants and prepubescent minors. NOEL went by the Twitter name “XavierThotAli” and the Telegram name “xavierthotal1 (X Games).” Among other individuals, NOEL traded child pornography with the Telegram user “L33YA1,” who filmed herself sexually abusing her one-year-old niece. During their exchange of messages, NOEL and L33YA1 discussed their mutual interest in sexually explicit images of minors and further sexually abusing L33YA1’s one-year-old niece.
If you are a victim of NOEL or have any information concerning NOEL, please call 1-800-CALL-FBI (1-800-225-5324) or you can report a tip online at tips.fbi.gov. A photo of the defendant is below.
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NOEL, 35, of New City, New York, is charged with receipt and distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and 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 provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding work of the FBI Westchester Safe Streets Task Force and thanked FBI Philadelphia for their assistance.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Shaun E. Werbelow 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.
Manhattan Men Charged with Conspiracy to Distribute Millions of Doses of Deadly Gamma-ButyrolactoneRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Enforcement Division of the Drug Enforcement Administration (“DEA”), Farhana Islam, announced today the unsealing of an Indictment charging MARK DYGDON and RODRIGO CASTRO in connection with the defendants’ distribution of gamma-butyrolactone (“GBL”) throughout the New York City area. The case is assigned to U.S. District Judge Margaret M. Garnett.
“As alleged, Mark Dygdon and Rodrigo Castro conspired to import and distribute millions of doses of gamma-butyrolactone in Midtown Manhattan and around the New York region,” said U.S. Attorney Jay Clayton. “Even one dose of GBL, also commonly known as a so-called date rape drug, can be lethal; Dygdon and Castro are accused of flooding Midtown with tons of this liquid poison. As the charges in this case show, together with our law enforcement partners, we will relentlessly pursue those who commit drug crimes and will prosecute them to the fullest extent of the law.”
“The seizure of multiple tons of gamma-butyrolactone, is not merely a chemical seizure, it is the prevention of countless tragedies that may have otherwise occurred,” said DEA New York Enforcement Division Special Agent in Charge Farhana Islam. “GBL is a dangerous substance on its own, and can also be converted into GHB. Both are powerful depressants that are often used in drug facilitated sexual assaults. By removing this massive quantity from the supply chain, the DEA and our partners disrupted a significant threat to public safety, and prevented harm to countless people who might otherwise have been victimized. This indictment reflects the commitment we have with our partners in targeting those trafficking drugs and precursor chemicals into our communities.”
As alleged in the Indictment, other court filings, and statements made during court proceedings:(1)
From at least in or about August 2023 through at least in or about June 2026, DYGDON and CASTRO conspired to distribute GBL throughout the New York City area. To date, the charged conspiracy has imported more than approximately seven U.S. tons of GBL between on or about August 2023 and today, or the equivalent of millions of individual doses of GBL.
As part of the investigation, the DEA New York Enforcement Division seized 2.4 tons of GBL, a chemical often times attributed to sexual assaults.
* * *
DYGDON, 48, and CASTRO, 34, both of New York, New York, are each charged with one count of conspiracy to distribute GBL, which carries a maximum sentence of 20 years in prison.
The statutory maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the DEA.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Rebecca R. Delfiner 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.
^
As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Recidivist Fraudster Sentenced to 160 Months in PrisonRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton announced that MATTHEW BLAKE MORROW-WU, a/k/a “Blake Wu,” a/k/a “Blake Ho,” a/k/a “Blake Morrow,” a/k/a “Matthew Wu,” a/k/a “Matthew Ho,” a/k/a “Matthew Blake Morrow,” was sentenced today to 160 months in prison by U.S. District Judge Alvin K. Hellerstein for perpetrating a scheme to defraud a Manhattan architecture firm during the COVID-19 pandemic, after which he obstructed justice and pled from prosecution. On April 28, 2025, MORROW-WU pled guilty to conspiracy to commit wire fraud and mail fraud, substantive wire fraud and mail fraud, impersonation of a federal officer, falsification of records, and obstruction of justice.
“Morrow-Wu, a recidivist, preyed on a small business during the height of the COVID-19 pandemic, receiving hundreds of thousands of dollars in fraudulent proceeds,” said U.S. Attorney Jay Clayton. “When he was caught, Morrow-Wu then tried to cover up his crimes and fled from prosecution. Today’s sentence should make clear to fraudsters that there are significant consequences for their crimes.”
According to the charging documents and other filings and statements made in court proceedings:
Between approximately 2020 and January 2023, MORROW-WU defrauded a Manhattan architecture firm (“Firm-1”) and its owners of nearly $400,000 through fraudulent check deposits and credit card transactions. MORROW-WU carried out his scheme by using inside information obtained from Firm-1, which he used to steal money from Firm-1 and its clients, including by depositing Firm-1’s funds directly into his own bank accounts and accruing tens of thousands of dollars in fraudulent charges on Firm-1’s credit cards.
This scheme was the latest in MORROW-WU’s lengthy history of fraud, including prior convictions for identity theft, check fraud, credit card fraud, passport fraud, and obstruction of justice. In addition to these convictions, MORROW-WU—despite not being a licensed attorney—misappropriated the state bar license of an attorney with a similar name, which he used to fraudulently obtain legal employment and to fraudulently incorporate various law offices.
MORROW-WU also undertook significant efforts to conceal his fraudulent scheme, including by forging correspondence by Firm-1 and using his fake law practices as cover. Moreover, in October 2022, MORROW-WU sent the victims a forged target letter purporting to be from the U.S. Attorney for the Southern District of New York, which threatened the victims with criminal prosecution for committing fraud.
MORROW-WU was arrested and charged with fraud offenses in January 2023. In February 2025, while on bail pending trial, MORROW-WU submitted to the Court a false letter from a purported doctor claiming, inaccurately, that MORROW-WU had metastatic cancer, in an effort to delay his then-upcoming trial. Thereafter, MORROW-WU was charged with obstruction offenses and, after failing to appear for a scheduled court conference, fled to California, where he was apprehended by law enforcement.
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In addition to the prison term, MORROW-WU, 42, of Jersey City, New Jersey, was sentenced to 3 years of supervised release, ordered to forfeit $406,788.08, and ordered to pay $197,965.38 in restitution.
Mr. Clayton praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and the U.S. Postal Inspectors of the U.S. Postal Inspection Service, and thanked the U.S. Marshals Service and the Solano County Sheriff’s Office for their assistance with the apprehension of MORROW-WU.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jerry J. Fang, Michael R. Herman, Henry L. Ross, and Angela Zhu are in charge of the prosecution.
Two Men Charged in Connection with 2025 Scheme to Rob and Murder Bronx VictimRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of an Indictment charging LENYN TORIBIO and WELFY ESPINAL with interstate stalking resulting in death and conspiracy to commit interstate stalking resulting in death in connection with the April 13, 2025, murder of Jeremy Ortega in a residential neighborhood in the Bronx. ESPINAL was arrested this morning in New Jersey and was presented before U.S. Magistrate Judge Jennifer E. Willis, who ordered him detained. TORIBIO remains at large. The case has been assigned to U.S. District Judge Jennifer L. Rochon.
“As alleged, Lenyn Toribio and Welfy Espinal intentionally surveilled and tracked Jeremy Ortega before he was fatally shot in front of his own home—over little more than a bag of diamond jewelry,” said U.S. Attorney Jay Clayton. “New Yorkers deserve to live in neighborhoods free of gun violence. This Office will stop at nothing to hold accountable those who inflict violence on others.”
“As alleged, the stalking and killing of an innocent victim by Lenyn Toribio and Welfy Espinal is horrifying,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “Along with our local partners, the FBI will relentlessly pursue depraved individuals who threaten the safety of our citizens.”
“These defendants orchestrated a scheme to place a GPS tracking device on their victim’s car and followed him for days, ultimately leading to his death,” said NYPD Commissioner Jessica S. Tisch. “Despite attempts to evade law enforcement by using a stolen license plate from a parked car, NYPD investigators worked tirelessly to identify, arrest, and bring those responsible to justice. I am thankful to our partners at the FBI and the U.S. Attorney’s Office for the Southern District of New York for their hard work in holding these criminals accountable.”
According to the allegations in the Indictment and other public filings:
From at least March 2025 through April 13, 2025, TORIBIO and ESPINAL—and other co-conspirators—agreed to, and in fact did, engage in a scheme to surveil Ortega using a GPS tracking device with the intent to rob him, ultimately killing him.
On or about March 28, 2025, TORIBIO activated a GPS tracking device subscribed in his own name. A few days later, ESPINAL adhered that GPS tracker (the “Tracker”) to Ortega’s vehicle as it was parked outside of his residence in the Bronx. The next day, TORIBIO and ESPINAL went to a particular nightclub in upper Manhattan, where Ortega was also located, wearing various items of diamond jewelry.
Less than 10 days later, beginning on or about April 12, 2025, TORIBIO and ESPINAL surveilled Ortega as he traveled to a restaurant in midtown Manhattan, and then they traveled to his neighborhood to conduct surveillance of the area before the murder. TORIBIO and ESPINAL departed the area before returning to Ortega’s neighborhood, where they positioned themselves in anticipation of his arrival. Just over an hour later, Ortega parked in front of his residence and exited his car. Moments after he arrived home, he was chased, shot repeatedly, and robbed of a bag containing his diamond jewelry. In the hours after the murder, the Tracker was recovered from the underside of Ortega’s car.
At different points on the night of the murder, TORIBIO and ESPINAL used multiple vehicles, as well as a license plate stolen from an uninvolved vehicle parked near the George Washington Bridge, to attempt to avoid detection and apprehension by law enforcement.
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TORIBIO, 27, of New York, New York, and ESPINAL, 25, of the Bronx, New York, are each charged with one count of interstate stalking resulting in death and aiding and abetting the same, which carries a maximum sentence of life in prison, as well as one count of conspiracy to commit interstate stalking, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the NYPD, including law enforcement officers from the 45th Precinct and Bronx Homicide Squad, and the Special Agents and Task Force Officers from the FBI’s Violent Threat Initiative.
The case is being handled by the Office’s Violent Organizations and Crime Unit. Assistant U.S. Attorney Kathryn Wheelock is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless or until proven guilty.
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As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Chief Investment Officer Pleads GuiltyRead the Press Release
Deputy United States Attorney for the Southern District of New York, Sean S. Buckley, announced today that S. KENNETH LEECH II, the former Chief Investment Officer of Western Asset Management Company (“WAMCO”), pled guilty to obstructing justice by giving false and misleading testimony to the United States Securities and Exchange Commission (“SEC”) in connection with an investigation into LEECH’s fraudulent scheme to favor certain clients at the expense of others. LEECH pled guilty today before U.S. District Judge Gregory H. Woods.
“Leech willfully and intentionally gave false and misleading testimony to the SEC in an effort to obstruct an investigation into his fraudulent scheme to favor certain clients at the expense of others,” said Deputy U.S. Attorney Sean S. Buckley. “Investment managers, like Leech, are entrusted by the SEC and the public at large to comply with their duty to be honest to regulators and fair to their clients. Today’s plea reflects the commitment of this Office and its law enforcement partners to protecting everyday investors—in New York City and abroad—from investment advisers who violate their legal commitments and seek to deceive clients for their gain or the gain of others.”
As alleged in the Indictment, Superseding Information, and other public filings in this case:
Between 2021 and October 2023, LEECH committed fraud and abused the trust placed in him by clients of the investment-management firm WAMCO. LEECH engaged in a criminal scheme commonly known as cherry-picking to compensate for losses in his marquee investment strategy by assigning trades that performed well during their first day into client accounts associated with that investment strategy, and assigning trades that performed poorly over their first day into the accounts of other clients, who were not aware that LEECH was causing them losses to favor others. LEECH’s victims included institutional and retail investors who entrusted LEECH to manage their savings and pension plans. Over the course of his criminal scheme, LEECH allocated trades with net first-day gains of at least approximately $600 million to his favored strategy and clients, and allocated trades with net first-day losses of at least approximately $600 million to strategies and clients to whom he owed an equal fiduciary duty.
In an effort to obstruct the investigation of that fraudulent scheme, LEECH testified before the SEC that he knew where he planned to allocate trades at the time he placed them. The facts showed differently. LEECH owed a fiduciary duty to all of his clients. But between 2021 and October 2023, LEECH improperly engaged in a scheme to delay his trades in order to allocate them in a manner that benefitted some of his clients, to the detriment of others. LEECH’s scheme defrauded clients for whom he was serving a registered financial advisor.
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LEECH, 72, of Pasadena, California, pled guilty to one count of obstructing justice, which carries a maximum sentence of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. LEECH is scheduled to be sentenced on September 21, 2026.
Mr. Buckley praised the outstanding work of the Federal Bureau of Investigation. Mr. Buckley also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas S. Burnett and Peter J. Davis and Special Assistant U.S. Attorney Lindsey Keenan are in charge of the prosecution.
North Carolina Man Charged with Scheme to Fraudently Obtain Hundreds of Millions of Shares of Technology CompanyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and the Inspector in Charge of the New York Field Office of the U.S. Postal Inspection Service (“USPIS”), Ketty Larco-Ward, announced today the unsealing of an Indictment charging CHARLES COLE with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit securities fraud. COLE was presented this morning in the Western District of North Carolina. The case has been assigned to U.S. District Judge Vernon S. Broderick.
“Fraud is fraud, whether in our public markets or our private markets,” said U.S. Attorney Jay Clayton. “Our private markets are essential engines of growth and ingenuity, and this Office will purse vigorously those who abuse securities markets—public or private, venture, growth, mid-cap or large-cap. As alleged, Charles Cole built a fiction of wealth using fake bank records, sham correspondence, and a fraudulent bank website, then used that fiction to obtain hundreds of millions of shares with no intention of paying for them.”
“Mr. Cole allegedly defrauded an unsuspecting company through a series of lies and misrepresentations,” said USPIS Inspector in Charge Ketty Larco-Ward. “The hard work from our Postal Inspectors that led to this indictment shows the U.S Postal Inspection Service's commitment to protecting individuals and companies from being defrauded.”
As alleged in the Indictment:
From June 2024 through March 2026, COLE perpetrated a scheme to fraudulently obtain at least 239 million shares from Infinite Reality, now known as Napster. As part of that scheme, COLE, and others acting at his direction, repeatedly lied to Infinite Reality about his ability to pay for the shares—fabricating bank records, creating sham correspondence, and establishing a fake website to mirror that of a foreign bank—to deceive Infinite Reality into believing that COLE had billions of dollars he was prepared to invest in the company. Based on those misrepresentations, Infinite Reality issued shares to COLE and entities he controlled. But COLE, who had no intention of paying for the shares, never invested in Infinite Reality. Instead, he used his fraudulently obtained shares as collateral to obtain or try to obtain loans from third parties, fabricated bank records to acquire still more shares of Infinite Reality based on further misrepresentations, and persisted in his efforts to deceive Infinite Reality until it ultimately rescinded the shares it had issued to COLE and his entities.
* * *
COLE, 57, of Mooresville, North Carolina, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of USPIS and the Iredell County Sheriff’s Office. Mr. Clayton further thanked the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Courtney L. Heavey, David J. Robles, and Justin V. Rodriguez 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.
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As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitutes only allegations and every fact described should be treated as an allegation.
Westchester Man Charged with Robbery Spree That Targeted Convenience Stores in Mount Vernon and New RochelleRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today the unsealing of an Indictment charging JABARI CLARKE in connection with a series of gunpoint robberies in Mount Vernon and New Rochelle, New York. CLARKE was arrested today and presented in White Plains federal court before U.S. Magistrate Judge Victoria Reznik, who ordered him detained.
“As alleged, Jabari Clarke carried out a spree of gunpoint robberies of gas stations and convenience stores,” said U.S. Attorney Jay Clayton. “If you use a gun to rob a store, you should expect federal charges and to be off the streets—that’s the message and the reality New Yorkers want and deserve.”
“Jabari Clarke allegedly committed gunpoint robberies threatening the safety of the general public and terrorizing innocent civilians,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI’s Westchester Safe Street’s Task Force continues to target gun violence plaguing our communities.”
As alleged in the Indictment:
Between May and June of 2025, CLARKE robbed four gas stations and convenience stores in Mount Vernon and New Rochelle. In each of these robberies, CLARKE or his accomplices brandished firearms and stole cash before fleeing. Through these gunpoint robberies, CLARKE stole thousands of dollars of cash.
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CLARKE, 22, of New Rochelle, New York, is charged with one count of conspiracy to commit Hobbs Act robbery and four counts of Hobbs Act robbery, each of which carries a maximum sentence of 20 years in prison. CLARKE is also charged with four counts of brandishing a firearm in furtherance of a crime of violence, each of which carries an additional mandatory minimum sentence of seven years in prison that must be served consecutively to any other prison terms imposed.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the efforts of the FBI, the Mount Vernon Police Department, and the New Rochelle Police Department in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Justin L. Brooke and Ioannis D. Drivas 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.
^
As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Taliban Commander Sentenced to 42 Years in Prison for Hostage Taking and Providing Material Support for Acts of Terrorism Resulting in DeathRead the Press Release
Haji Najibullah, 50, of Afghanistan, also known as “Najibullah Naim,” also known as “Abu Tayeb,” also known as “Atiqullah,” also known as “Nesar Ahmad Mohammad,” was sentenced to 42 years in prison and five years of supervised release for terrorism charges based on his role in the hostage taking of an American journalist and two Afghan nationals in Afghanistan and Pakistan in 2008 and 2009, and his leadership of Taliban fighters who carried out attacks on U.S. servicemembers in Afghanistan between 2007 and 2009, resulting in the deaths of American soldiers and other victims. On April 25, 2025, Najibullah pleaded guilty to hostage taking and providing material support for acts of terrorism resulting in death. Today’s sentence was imposed by U.S. District Judge Katherine Polk Failla.
“Those who harm Americans and engage in acts of terrorism will be hunted down and brought to justice, no matter how long it takes,” said Acting Attorney General Todd Blanche. “As a Taliban commander, Najibullah supported brutal terrorist attacks that killed American servicemembers and orchestrated the savage hostage-taking of an American journalist and Afghan civilians. Today’s sentence delivers justice for the victims and their families.”
“This former Taliban commander led fighters who committed acts of terrorism that resulted in the killing of U.S. servicemembers and engaged in hostage-taking, and now he will pay the price for his brutal crimes,” said FBI Director Kash Patel. “The men and women of the FBI will not forget when Americans are killed or taken hostage by terrorists. We will find you no matter where you are and work with our partners to bring you to justice.”
“Najibullah commanded Taliban fighters responsible for enforcing the Taliban’s ruthless reign of terror, including fighters who carried out the 2008 attack that killed three U.S. servicemembers and their interpreter,” said Assistant Attorney General for National Security John A. Eisenberg. “However incomplete, today’s sentence delivers long‑awaited accountability and a measure of justice to the families of the victims.”
“Haji Najibullah, a former Taliban commander, is a convicted terrorist whose conduct resulted in the brutal hostage taking of innocent civilians and the killing of U.S. servicemembers in Afghanistan,” said U.S. Attorney Jay Clayton for the Southern District of New York. “He caused unimaginable harm to the victims of his crimes and their loved ones. Today’s sentence sends a clear message that there will be dire consequences for those who aim to harm Americans and our brave military personnel through acts of terror. Our Office, and our dedicated partners in law enforcement, will continue to investigate, prosecute, and bring to justice terrorists around the world.”
As reflected in the charging instruments, court filings, and statements in the public record:
Starting in or around October 2001, as a result of the U.S. and NATO-led invasion of Afghanistan following the September 11, 2001 terrorist attacks, the Taliban — a militant Islamist organization that provided safe harbor to some of the world’s most dangerous terrorists, including Osama bin Laden —engaged in a deadly insurgency campaign aimed at killing U.S. servicemembers and their allies and terrorizing civilians. As part of that campaign of jihadist violence, the Taliban conducted numerous suicide bombings, targeted killings, assassinations, improvised explosive device (IED) attacks, paramilitary ambushes, and hostage takings against military personnel and civilians.
Between in or around 2007 and 2009, Najibullah served as a Taliban commander in Afghanistan’s Wardak Province, which borders Kabul. During that time, Taliban fighters under his command were prepared to and did carry out deadly attacks against American and NATO troops and their Afghan allies, using, among other things, (i) suicide bombers, (ii) automatic weapons, (iii) IEDs, and (iv) rocket-propelled grenades (RPGs) and other anti-tank weapons and explosives, including against U.S. military helicopters. Najibullah proudly spoke about the brutality of the attacks that he and his men were prepared to conduct, including by stating that his men were “ready to die” and “put on a belt and blow themselves up if we ask them.”
On or about June 26, 2008, Taliban fighters under Najibullah’s command ambushed and attacked a U.S. military convoy in the vicinity of Wardak Province, Afghanistan, with IEDs, RPGs, and automatic weapons, killing three U.S. Army servicemembers: Sergeants First Class Matthew L. Hilton and Joseph A. McKay and Sergeant Mark Palmateer, as well as their Afghan interpreter. Several other servicemembers were also injured in the attack. Najibullah later claimed responsibility for the attack, telling multiple individuals that his men carried out the attack and that it resulted in the deaths of U.S. servicemembers. A few months later, he and fighters under his command attacked and destroyed an Afghan National Police outpost using automatic weapons and rockets, reportedly killing three Afghan police officers.
Najibullah’s campaign of terror also was directed at civilians. On or about Nov. 10, 2008, Najibullah and other Taliban fighters kidnapped an American New York Times journalist (Hostage-1) and two Afghan nationals traveling with Hostage-1 at gunpoint in Afghanistan. For the next approximately seven months, Najibullah held the hostages captive in the Taliban-controlled tribal areas of Pakistan, under the constant watch of guards armed with machineguns. Najibullah and his co-conspirators forced the hostages to make ransom calls and proof of life videos, intended to extort ransom payments and the release of Taliban prisoners by the United States Government, and during which the hostages emotionally pleaded for their lives. In one such video, Najibullah forced Hostage-1 to say, with a machinegun pointed at his head, “If you don’t help me, I will die. Now, the key is in your hand. . . . If you do not meet their demands, you will be responsible for my killing, not the Taliban. Please help me, please have mercy on me. Do not shed my blood. Please, save me. I want to go home.” Eventually, the hostages were able to escape and return to their families.
Mr. Clayton praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD. He also thanked the New York and New Jersey Port Authority Police, the Department of Defense, and the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance with this investigation, as well as the Ukrainian authorities and the Office of International Affairs of the Justice Department’s Criminal Division for their assistance in the arrest and transfer of the defendant.
This prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Jacob H. Gutwillig, and David J. Robles are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the Department of Justice’s Counterterrorism Section of the National Security Division.
Manager of Investment Firm Sentenced to Four Years in Prison for Defrauding Investors in “Pre-IPO” SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that GIOVANNI PENNETTA, the manager of a Manhattan-based investment adviser and private equity firm, was sentenced to four years in prison for committing wire fraud by running a scheme to fraudulently induce multiple investment clients to part with millions of dollars in exchange for economic exposure to shares of non-public companies. PENNETTA pled guilty on March 5, 2026, and was sentenced today by U.S. District Judge Jed S. Rakoff.
“Falsely promising access to sought-after pre-IPO shares is fraud,” said U.S. Attorney Jay Clayton. “The pre-IPO market is a securities market just like the public markets, and there is no place for fraud in any securities market. This Office and our law enforcement partners are watching and will continue to protect investors, no matter the market.”
According to the allegations contained in the Indictment and statements made in public filings and public court proceedings:
Over a period of roughly six years, PENNETTA, the manager of a Manhattan-based investment adviser and private equity firm, engaged in a scheme to defraud investors who had entrusted him with millions of dollars to access shares of private companies. PENNETTA induced investors to contribute capital to his private equity fund by promising them economic exposure to shares of pre-IPO companies. In reality, PENNETTA did not have access to the shares he promised, and the investment interests he sold did not provide the exposure he had guaranteed. Instead, PENNETTA misappropriated more than $10 million in investor money, moving much of it to his personal bank account.
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In addition to the prison term, PENNETTA, 51, of New York, New York, and Italy, was ordered to pay restitution in the amount of $11,928,266.25 and forfeiture in the amount of $12,546,279.86, representing proceeds from his illegal scheme.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Alexandra N. Rothman and Samuel P. Rothschild are in charge of the prosecution.
Jason Khan, Owner of Foot Fetish Company, Charged in Manhattan Federal Court with Sex Trafficking OffensesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of a three-count Indictment charging JASON KHAN with sex trafficking offenses. KHAN was arrested this morning in the Northern District of New York and will be presented this afternoon before U.S. Magistrate Judge Jennifer E. Willis.
“As alleged, Jason Khan lured his victims in under the lucrative promise of being a foot model, before he repeatedly and violently sexually assaulted and raped them,” said U.S. Attorney Jay Clayton. “We commend the victims for their courage in coming forward, and we urge anyone else who has been a victim of Khan, or knows anything about his alleged crimes, to do the same. Our investigation is ongoing.”
“Jason Khan allegedly operated a website to exploit multiple women’s employment aspirations and lure them to hotel rooms before brutally raping them,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI-NYPD Human Trafficking Task Force continues to target sexual predators who abuse women.”
“This defendant lured women to hotel rooms under the false pretense of offering employment opportunities, and then raped and sexually assaulted them,” said NYPD Commissioner Jessica S. Tisch. “This horrific behavior has no place in our city, and we will not allow predators to prey on vulnerable women. The NYPD will always protect survivors of sexual assault and work to stop the deception, exploitation, and abuse of traffickers. I am thankful to the men and women of the NYPD, our partners at the FBI, and the U.S. Attorney’s Office for the Southern District of New York for their tireless work to bring this perpetrator to justice.”
As alleged in the Indictment and other filings and statements made in public court proceedings:
From at least 2019 to 2021, KHAN, who resides primarily in New York City and Albany, operated the foot fetish website FootPadNYC.com. KHAN used his foot fetish website to lure and recruit victims to hotel rooms under the pretense of providing them with job opportunities as foot models. As depicted in the below image, the “Employment” section for KHAN’s website sought to attract foot models with the promise of “get[ting] paid to have your feet worshipped.”
KHAN and others working with him then scheduled meetings with aspiring “foot models” in Manhattan hotel rooms. When the aspiring models showed up to be interviewed by KHAN, he sexually assaulted or raped them.
On at least three occasions, KHAN deployed this playbook: scheduling interviews with women who were seeking professional opportunities as foot models and using the promise of this additional income to lure them to Manhattan hotel rooms. Once in the hotel room, KHAN raped or sexually assaulted the women—penetrating two of the victims vaginally and, among other things, forcibly putting the third victim’s feet on his penis. Each victim expressed her lack of consent to the sexual activity, but her non-consent was ignored by KHAN. Each of the victims reported her assault to law enforcement and others, and two of the victims performed rape kits in a hospital in the aftermath of their rapes.
If you have been victimized by KHAN in any way, or have any additional information about his alleged illegal behavior, please call the FBI at 212-384-2700, reach out to us at [email protected], or fill out this questionnaire. KHAN is depicted below.
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KHAN, 47, of Albany and New York, New York, is charged with three counts of sex trafficking by force, fraud, or coercion, each of which carries a maximum sentence of life in prison and a mandatory minimum sentence of 15 years in prison.
The statutory maximum and mandatory penalties in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the FBI-NYPD Child Exploitation and Human Trafficking Task Force in New York, as well as the assistance of FBI Albany and the Manhattan District Attorney’s Office.
This case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Sam Adelsberg, Lisa Daniels, and Remy Grosbard 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.
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As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitutes only allegations and every fact described should be treated as an allegation.
Former Taliban Commander Sentenced to 42 Years in Prison for Hostage Taking and Providing Material Support for Acts of Terrorism Resulting in DeathRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Acting Attorney General for the United States, Todd Blanche, Assistant Attorney General for National Security, John A. Eisenberg, Director of the Federal Bureau of Investigation (“FBI”), Kash Patel, and Assistant Director in Charge of the New York Field Office of the FBI, James C. Barnacle, Jr., announced today that HAJI NAJIBULLAH, a/k/a “Najibullah Naim,” a/k/a “Abu Tayeb,” a/k/a “Atiqullah,” a/k/a “Nesar Ahmad Mohammad,” was sentenced to 42 years in prison for terrorism charges based on NAJIBULLAH’s role in the hostage taking of an American journalist and two Afghan nationals in Afghanistan and Pakistan in 2008 and 2009, and his leadership of Taliban fighters who carried out attacks on U.S. servicemembers in Afghanistan between 2007 and 2009, resulting in the deaths of American soldiers and other victims. On April 25, 2025, NAJIBULLAH pled guilty to hostage taking and providing material support for acts of terrorism resulting in death. Today’s sentence was imposed by U.S. District Judge Katherine Polk Failla.
“Haji Najibullah’s conduct resulted in the brutal hostage taking of innocent civilians and the killing of U.S. servicemembers in Afghanistan,” said U.S. Attorney Jay Clayton. “Najibullah caused unimaginable harm to the victims of his crimes and their loved ones. Today’s sentence demonstrates again that those who seek to terrorize Americans will face justice.”
“Those who harm Americans and engage in acts of terrorism will be hunted down and brought to justice, no matter how long it takes,” said Acting Attorney General Todd Blanche. “As a Taliban commander, Najibullah supported brutal terrorist attacks that killed American servicemembers and orchestrated the savage hostage-taking of an American journalist and Afghan civilians. Today’s sentence delivers justice for the victims and their families.”
“Najibullah commanded Taliban fighters responsible for enforcing the Taliban’s ruthless reign of terror, including fighters who carried out the 2008 attack that killed three U.S. servicemembers and their interpreter,” said Assistant Attorney General for National Security John A. Eisenberg. “However incomplete, today’s sentence delivers long‑awaited accountability and a measure of justice to the families of the victims.”
“This former Taliban commander led fighters who committed acts of terrorism that resulted in the killing of U.S. servicemembers and engaged in hostage-taking, and now he will pay the price for his brutal crimes,” said FBI Director Kash Patel. “The men and women of the FBI will not forget when Americans are killed or taken hostage by terrorists. We will find you no matter where you are and work with our partners to bring you to justice.”
“Former Taliban commander Haji Najibullah's acts of terror are horrific,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “Najibullah is responsible for the deaths of U.S. servicemembers and the hostage taking of an American journalist. This sentencing demonstrates the FBI New York Joint Terrorism Task Force's relentless pursuit of an overseas terrorist and our commitment to delivering justice for our brave DOW partners whose families have been irreparably harmed by the defendant's actions.”
As reflected in the charging instruments, court filings, and statements in the public record:
Starting in or around October 2001, as a result of the U.S.- and NATO-led invasion of Afghanistan following the September 11, 2001, terrorist attacks, the Taliban—a militant Islamist organization that provided safe harbor to some of the world’s most dangerous terrorists, including Usama bin Laden—engaged in a deadly insurgency campaign aimed at killing U.S. servicemembers and their allies and terrorizing civilians. As part of that campaign of jihadist violence, the Taliban conducted numerous suicide bombings, targeted killings, assassinations, improvised explosive device (“IED”) attacks, paramilitary ambushes, and hostage takings against military personnel and civilians.
Between in or around 2007 and 2009, NAJIBULLAH served as a Taliban commander in Afghanistan’s Wardak Province, which borders Kabul. During that time, Taliban fighters under NAJIBULLAH’s command were prepared to and did carry out deadly attacks against American and NATO troops and their Afghan allies, using, among other things, (i) suicide bombers, (ii) automatic weapons, (iii) IEDs, and (iv) rocket-propelled grenades (“RPGs”) and other anti-tank weapons and explosives, including against U.S. military helicopters. NAJIBULLAH proudly spoke about the brutality of the attacks that he and his men were prepared to conduct, including by stating that his men were “ready to die” and “put on a belt and blow themselves up if we ask them.”
For example, on or about June 26, 2008, Taliban fighters under NAJIBULLAH’s command ambushed and attacked a U.S. military convoy in the vicinity of Wardak Province, Afghanistan, with IEDs, RPGs, and automatic weapons, killing three U.S. Army servicemembers: Sergeants First Class Matthew L. Hilton and Joseph A. McKay, and Sergeant Mark Palmateer, and their Afghan interpreter. Several other servicemembers were also injured in the attack. NAJIBULLAH later claimed responsibility for the attack, telling multiple individuals that his men carried out the attack and that it resulted in the deaths of U.S. servicemembers. A few months later, NAJIBULLAH and fighters under his command attacked and destroyed an Afghan National Police outpost using automatic weapons and rockets, reportedly killing three Afghan police officers.
NAJIBULLAH’s campaign of terror also was directed at civilians. On or about November 10, 2008, NAJIBULLAH and other Taliban fighters kidnapped an American New York Times journalist (“Hostage-1”) and two Afghan nationals traveling with Hostage-1 at gunpoint in Afghanistan. For the next approximately seven months, NAJIBULLAH held the hostages captive in the Taliban-controlled tribal areas of Pakistan, under the constant watch of guards armed with machineguns. NAJIBULLAH and his co-conspirators forced the hostages to make ransom calls and proof-of-life videos, intended to extort ransom payments and the release of Taliban prisoners by the United States Government, and during which the hostages emotionally pleaded for their lives. In one such video, NAJIBULLAH forced Hostage-1 to say, with a machinegun pointed at his head, “If you don’t help me, I will die. Now, the key is in your hand. . . . If you do not meet their demands, you will be responsible for my killing, not the Taliban. Please help me, please have mercy on me. Do not shed my blood. Please, save me. I want to go home.” Eventually, the hostages were able to escape and return to their families.
* * *
In addition to the prison term, NAJIBULLAH, 50, of Afghanistan, was sentenced to five years of supervised release.
Mr. Clayton praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD. He also thanked the New York and New Jersey Port Authority Police, the Department of Defense, and the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance with this investigation, as well as the Ukrainian authorities and the Office of International Affairs of the Justice Department’s Criminal Division for their assistance in the arrest and transfer of the defendant.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Jacob H. Gutwillig, and David J. Robles are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the Counterterrorism Section.
13 Charged in Conspiracy to Sell over 100 Stolen CarsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Pete Gizas, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced the unsealing of an Indictment charging 13 defendants in connection with operating a stolen car ring involving approximately 100 stolen cars worth millions of dollars. The defendants are charged with conspiracy to possess and sell stolen vehicles, wire fraud, and conspiracy to commit wire fraud. Nine of the defendants were arrested today and seven were presented in Manhattan federal court before U.S. Magistrate Judge Jennifer E. Willis. One defendant was arrested in the Western District of New York and detained. The remaining defendant will be presented tomorrow.
“When they head to work, school, or elsewhere, New Yorkers expect to find their cars where they left them,” said U.S. Attorney Jay Clayton. “As alleged, the thirteen defendants charged here shattered that everyday expectation. By acquiring stolen cars, concealing their origin, and selling them to new victims, the defendants fostered a market for rampant theft, disrupted New Yorkers’ lives and security, and bilked innocent buyers out of their hard-earned dollars. New Yorkers have no tolerance for thieves, and neither do the women and men of the SDNY and our law enforcement partners.”
“As alleged, these defendants stole dozens of vehicles from the hardworking public, altered the identification numbers and paperwork, and sold them as legitimate cars to unsuspecting families,” said HSI Acting Special Agent in Charge Pete Gizas. “A stolen vehicle is far more than lost property; this pervasive fraud upends daily routines, drains finances, and erodes the sense of safety that New Yorkers should be able to have in their own neighborhoods. As a lead member of the Homeland Security Task Force, HSI New York will continue to relentlessly target, disrupt, and dismantle the criminal organizations that prey on our communities and threaten our livelihoods.”
“These 13 defendants acquired approximately 100 stolen cars worth millions of dollars and then sold them to unsuspecting buyers,” said NYPD Commissioner Jessica S. Tisch. “This elaborate scheme laundered stolen cars through multiple deceptive and illegal tactics designed to conceal their origins and take advantage of consumers. Thanks to the efforts of our NYPD investigators, along with our partners at HSI and the U.S. Attorney’s Office for the Southern District of New York, this pipeline has been dismantled and those responsible are being held accountable.”
As alleged in the Indictment and other public filings:
From approximately June 2024 through May 2026, the defendants and others acquired cars that had been stolen from victims in New York City, obscured the fact that those cars had been stolen, and, ultimately, sold the cars to unsuspecting buyers in New York and elsewhere. The defendants and their co-conspirators effectively laundered these stolen cars in a variety of ways, including by covering their true Vehicle Identification Numbers (“VINs”) with new, fraudulent VINs and by replacing their federal certification labels with labels containing the new, fraudulent VINs. The defendants and their co-conspirators also created fraudulent titles for the stolen cars; took the stolen cars for oil changes and inspections to generate new, fraudulent histories for those cars; and advertised the stolen cars on a social media marketplace. Through these methods, the defendants and their co-conspirators acquired approximately 100 cars, worth millions of dollars, and resold them to new victims for a huge, criminal profit.
* * *
NORBERTO PENA BRITO, a/k/a “Real,” 40, of the Bronx, New York; WILKINS MARTINEZ VARGAS, 38, of the Bronx; NOEMI SOLANO COMPRES, 41, of the Bronx; PAULA ABAD DIAZ, a/k/a “Mayi,” 35, of Yonkers, New York; MARLIN SEGURA MARTINEZ, a/k/a “Marlin Perez,” 35, of Yonkers; ANGEL HEREDIA PEREZ, 24, of the Bronx; LUIS VARGAS SANCHEZ, 24, of the Dominican Republic; JOEL ABAD BELEN, 28, of the Bronx; LUIS BRITO CAMPUSANO, 37, of the Bronx; TOMAS LORENZO JOSE, 38, of the Bronx; YEREMY LORENZO JOSE, 37, of the Bronx; JHOLKIS MELENCIANO COLON, 23, of the Bronx; and EDUARDO PEREZ ESTRELLA, 58, of the Bronx, are each charged with one count of conspiracy to possess and sell stolen vehicles, 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.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the efforts of the NYPD Auto Crime Division Major Case Team and the special agents and task force officers from the HSI New York Seaport Trade Group.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Robert S. Ruff and Bridget G. Johnston 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.
^
As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manhattan-Based Investment Analyst Charged with Insider TradingRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced today the unsealing of an Indictment charging JIANQING LI, a/k/a “JQ,” an analyst at an asset manager specializing in biomedical and healthcare investments, with two counts of securities fraud. LI was presented today before Magistrate Judge Gary Stein. The case has been assigned to U.S. District Judge Lorna G. Schofield.
“Jianqing Li allegedly turned confidential information into more than $350,000 in illegal trading profits,” said U.S. Attorney Jay Clayton. “Insider trading is unfair and it’s illegal. It harms our markets and our investors.”
“Jianqing Li’s alleged exploitation of sensitive trading information betrayed his employer and established an unfair financial advantage over the unknowing public,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI maintains its steadfast pursuit of those who abuse their positions to generate unlawful profits.”
As alleged in the Indictment:
LI made more than $350,000 in illicit profits by trading in stock and options based on material, nonpublic information he misappropriated from the investment fund where he worked. LI was an analyst at a Manhattan-based asset manager specializing in biomedical and healthcare investments, which routinely received nonpublic information from investment banks in connection with its evaluation of investment opportunities in public companies. Rather than honor restrictions on the use of that information, LI repeatedly used inside information to trade securities for his own profit, in violation of his duties to his employer and to the sources of the information. In particular, LI used nonpublic information about upcoming announcements that he expected would increase a company’s stock price to purchase securities for his brokerage accounts—or in the case of information he expected to negatively affect the stock price, to sell short—and then unwound his position soon after the public announcement, in each case for a profit. To conceal his trading, LI violated his employer’s insider trading policies and code of ethics, including by not seeking preclearance for his illegal trades, not disclosing his trading or profits, and falsely certifying his compliance with those policies annually.
* * *
LI, 40, of New York, New York, is charged with one count of securities fraud under Title 15, which carries a maximum sentence of 20 years in prison; and one count of securities fraud under Title 18, which carries a maximum sentence of 25 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton further thanked the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Kyle A. Wirshba is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
^
As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitutes only allegations and every fact described should be treated as an allegation.
Uzbek Nationals Charged in Human Smuggling and Money Laundering SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., and Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Pete Gizas, announced today the unsealing of an Indictment charging AKMAL RASULOV and ISKANDER SHUKUROV, both Uzbek nationals, with alien smuggling and money laundering. RASULOV and SHUKUROV were arrested this morning. SHUKUROV was ordered detained, and RASULOV has been released on bond. The case has been assigned to U.S. District Judge J. Paul Oetken.
“Smuggling foreign nationals into the United States is a serious crime that puts every American at risk,” said U.S. Attorney Jay Clayton. “Human smuggling also often involves exploitation, drug trafficking, and sexual abuse. It must be stopped. Drug cartels, foreign terrorist organizations, and anyone else who seeks to undermine our sovereignty and security through human trafficking and smuggling will be prosecuted.”
“Akmal Rasulov and Iskander Shukurov allegedly jeopardized our country’s security by providing foreign nationals illegal entry into the United States for a hefty fee,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “Alongside our federal partners, the FBI is committed to disrupting networks attempting to infiltrate our nation's borders.”
“These charges reflect an alleged calculated effort to move people illegally into this country and wash the profits through our financial system, with no regard for the risks to our communities or our national security,” said HSI Acting Special Agent in Charge Pete Gizas. “By arresting these defendants, we are cutting into the command structure of an alleged smuggling operation that treated our borders as a business model. HSI New York, as a leading member of the Homeland Security Task Force, will continue to relentlessly pursue human smugglers and the money they need to operate.”
As alleged in the Indictment:
Between at least 2021 and 2025, RASULOV and SHUKUROV operated an alien-smuggling business. RASULOV, SHUKUROV, and others charged thousands of dollars per person for each foreign national—principally citizens of Uzbekistan—in order to illegally transport them into the United States. RASULOV, SHUKUROV, and their co-conspirators arranged for the foreign nationals to either arrive at a U.S. port of entry without prior permission to enter the United States, or sneak across a land border without the required examination or inspection by immigration officers.
RASULOV and SHUKUROV worked with co-conspirators, including a Mexican citizen living in Mexico (“CC-1”). RASULOV and SHUKUROV repeatedly sent money to CC-1 so that CC-1 would connect aliens and smugglers in Mexico and then facilitate the transportation of the aliens from Mexico into the United States. RASULOV and SHUKUROV used international wire transfers to pay CC-1 for these services, including transfers from financial accounts in New York, New York. Some of the wire transfers included false information indicating that the payments were for “loan repayment” or “legal fees” to conceal the true purpose of the transactions.
* * *
RASULOV, 39, and SHUKUROV, 52, both of Brooklyn, New York, are each charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to commit alien smuggling, which carries a maximum sentence of five years in prison.
The statutory maximum and minimum penalties in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the investigative work of the FBI and HSI. He added that the investigation is ongoing.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Josiah Pertz is in charge of the prosecution.
The charges contained in the Indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
^
As the introductory phrase signifies, the entirety of the Indictment and the descriptions of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
NYPD, ATF, and SDNY Bring Relief to Sotomayor Houses Residents—Charge 10 Members and Associates of Violent Bronx Street GangRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, and Special Agent in Charge of the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), Bryan DiGirolamo, announced today the unsealing of an Indictment charging 10 defendants with participating in a years-long racketeering conspiracy as members of the violent Bronxdale/YDS gang that included multiple attempted murders, assaults, armed robberies, and other crimes between 2020 and May 2026. Two defendants, EDWIN POZO, a/k/a “Swerv,” and SETH COLON, were arrested yesterday, and soon both will have been presented before U.S. Magistrate Judge Gary Stein, COLON yesterday and POZO today. The eight remaining defendants, MODOU TOURAY, a/k/a “LDOT,” JEREMIAH MARTINEZ, a/k/a “JJ,” JERIMIAH MORGAN, a/k/a “Goon,” TYSHAWN MORRIS, a/k/a “YaYa,” DAMION ELLIOT, a/k/a “Upit,” DAVON BEST KELLY, a/k/a “Benz,” NYJAH WYNTER, a/k/a “Glizzy,” and RAEKWON KING, a/k/a “Buzzin,” are in custody in other jurisdictions and will be transferred to the Southern District of New York. The case is assigned to U.S. District Judge Richard M. Berman.
“As alleged, the Bronxdale/YDS gang wreaked havoc on the residents of the Sotomayor Houses for years,” said U.S. Attorney Jay Clayton. “With this indictment, the NYPD, ATF, and SDNY bring some measure of relief to the Sotomayor Houses residents, and the members and associates of the Bronxdale/YDS gang will face justice for their alleged crimes. New York public housing cannot be a haven for gang activity, and the women and men of our Office are fighting every day to rid New York public housing of gun-toting, drug-dealing, violent gangs.”
“For too long, these ten defendants, members of the Bronxdale/YDS gang, treated our communities as their own violent playground,” said NYPD Commissioner Jessica S. Tisch. “They shot a victim in the chest, slashed a rival in the neck, conspired to commit armed robberies of drug dealers, and terrorized the residents at the Sotomayor Houses. Their criminality had no limits as they committed wire fraud and other illegal activities across New York City. Thanks to the hard work of our NYPD investigators, alongside our partners at the ATF and the U.S. Attorney’s Office for the Southern District of New York, we are ensuring violent criminals are held accountable and keeping New Yorkers safe.”
“Violent street gangs thrive on fear, intimidation, and the reckless use of firearms, but these charges send a clear message: those who endanger our communities will be identified, investigated, and held accountable,” said ATF Special Agent in Charge Bryan DiGirolamo. “The success of this year-long investigation is a testament to the exceptional collaboration between the ATF-NYPD Crime Gun Enforcement Team and the United States Attorney’s Office for the Southern District of New York. Together, we are leveraging intelligence, technology, and relentless investigative work to disrupt violent criminal networks and protect the people of New York. ATF remains steadfast in its mission to combat violent gun crime and support our law enforcement partners in pursuing justice.”
As alleged in the Indictment and statements made in public court proceedings:
From at least in or about 2020 through at least in or about May 2026, TOURAY, MARTINEZ, MORGAN, COLON, MORRIS, POZO, ELLIOT, KELLY, WYNTER, KING, and others known and unknown were members and associates of Bronxdale/YDS (short for “Youngest” or “Youngins” “Doin Shit”), a street gang and organization that operated principally in the Sotomayor Houses, a public housing development of the New York City Housing Authority (previously named the Bronxdale Houses) in the Bronx, New York. Members and associates of Bronxdale/YDS engaged in, among other activities, acts involving murder, assault, robbery, the distribution of controlled substances, and wire and bank fraud in and around the greater metropolitan area of New York City, including in the Bronx, Manhattan, and Queens, in New York counties north of New York City, and in parts of New Jersey. In addition to being charged with participation in the alleged racketeering conspiracy, several of the defendants are charged with additional offenses, including:
On or about May 24, 2021, MORRIS and POZO slashed a man believed to be a rival gang member with a knife, causing a large laceration on his neck.
On or about May 13, 2022, MORRIS struck a rival gang member in the head with a metal rod, causing a laceration to that rival gang member’s head.
On or about September 29, 2023, TOURAY and MORGAN used a firearm to shoot an individual, striking that individual in the chest.
From at least in or about 2020 through at least in or about 2024, TOURAY, MARTINEZ, MORGAN, ELLIOT, WYNTER, POZO, and MORRIS conspired to commit armed robberies of drug dealers in the Bronx and elsewhere.
On or about October 2, 2024, TOURAY and KELLY committed a gunpoint robbery of a rideshare driver in the Bronx.
* * *
A chart containing the names, 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 provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the NYPD and the ATF. Mr. Clayton also thanked the Federal Bureau of Investigation and the Bergen County, New Jersey, Sheriff’s Office for their assistance in this investigation.
This case is being handled by the Office’s Violent Organizations & Crime Unit. Assistant U.S. Attorneys Brandon D. Harper and Jared D. Hoffman 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.
ChargeDefendantsMinimum and Maximum PenaltiesCount One
Racketeering Conspiracy
18 U.S.C. § 1962(d)
MODOU TOURAY
TYSHAWN MORRIS
JEREMIAH MARTINEZ
JERIMIAH MORGAN
NYJAH WYNTER
DAMION ELLIOT
DAVON BEST KELLY
SETH COLON
EDWIN POZO
RAEKWON KING
Maximum: 20 years in prisonCount Two
Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and (a)(5), and 2
TYSHAWN MORRIS
EDWIN POZO
Maximum: 20 years in prisonCount Three
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
TYSHAWN MORRISMaximum: 20 years in prisonCount Four
Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and (a)(5), and 2
MODOU TOURAY
JERIMIAH MORGAN
Maximum: 20 years in prisonCount Five
Conspiracy to Commit Hobbs Act Robbery
MODOU TOURAY
JEREMIAH MARTINEZ
JERIMIAH MORGAN
DAMION ELLIOT
NYJAH WYNTER
EDWIN POZO
TYSHAWN MORRIS
Maximum: 20 years in prisonCount Six
Hobbs Act Robbery
18 U.S.C. § 1951 and 2
MODOU TOURAY
JERIMIAH MORGAN
Maximum: 20 years in prisonCount Seven
Firearms Offense
18 U.S.C. §§ 924(c)(1)(A)(i), (ii), and (iii), and 2
MODOU TOURAY
JERIMIAH MORGAN
Maximum: Life in prison
Minimum: 10 years in prison, which must be consecutive to any other term imposed
Count Eight
Hobbs Act Robbery
18 U.S.C. § 1951 and 2
MODOU TOURAY
DAVON BEST KELLY
Maximum: 20 years in prisonCount Nine
Firearms Offense
18 U.S.C. §§ 924(c)(1)(A)(i), and (ii), and 2
MODOU TOURAY
DAVON BEST KELLY
Maximum: Life in prison
Minimum: 10 years in prison, which must be consecutive to any other term imposed
Count Ten
Possession of Ammunition after Felony Conviction
18 U.S.C. § 922(g)(1)
JERIMIAH MORGANMaximum: 15 years in prison^
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.
Dealers in Fentanyl Deal in Death—Bronx Man Charged with Trafficking Fentanyl That Caused the Deaths of Three VictimsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, Special Agent in Charge of the New York Task Force Division of the Drug Enforcement Administration (“DEA”), Christopher Roberts, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today the unsealing of a Complaint charging ELVIN VILA with drug-trafficking crimes that led to three fatal overdoses. VILA was arrested and will be presented tomorrow before U.S. Magistrate Judge Gary Stein.
“As a result of more than a million tragedies, we all have learned a simple and deeply disturbing truth: if you deal in fentanyl, you deal in death,” said U.S. Attorney Jay Clayton. “As alleged, Elvin Vila sold fentanyl that killed three people, and he kept dealing even after his customers died from overdoses. He now faces justice. The women and men of the SDNY, the DEA, the NYPD, and all our tri-state area law enforcement partners are committed to holding dealers in death accountable.”
“Today’s arrest of Elvin Vila reflects the DEA’s unwavering commitment to target those individuals responsible for pushing fentanyl into our communities and the devasting harm it causes,” said DEA New York Task Force Division Special Agent in Charge Christopher Roberts. “Mr. Vila’s drug trafficking activities not only allegedly claimed the lives of three individuals; they also left a trail of grief and heartbreak for the families and loved ones now forced to mourn their loss. Every life matters, and it is the DEA’s mission to hold accountable those responsible for taking them. The victims and their families deserve justice, and together with our law enforcement partners, we will work tirelessly to ensure they receive it.”
“This defendant made a business out of selling deadly fentanyl, and his actions contributed to the fatal overdoses of three people,” said NYPD Commissioner Jessica S. Tisch. “He put profit over people’s lives again and again. Thanks to the tireless work of the NYPD detectives and our partners at the DEA and U.S. Attorney’s Office, he is finally out of this deadly business for good.”
According to the allegations contained in the Complaint and in materials submitted to the Court:
On dozens of occasions between 2023 and 2026, VILA was the leader of a drug-trafficking conspiracy whereby he drove from the Bronx to other locations to sell fentanyl to his customers. VILA’s drugs caused at least three overdose deaths: (i) the death of a 57-year-old man (“Victim-1”) on or about April 16, 2025, in Stamford, Connecticut; (ii) the death of a 32-year-old woman (“Victim-2”) on or about April 25, 2025, in Port Chester, New York; and (iii) the death of a 69-year-old man (“Victim-3”) on or about January 21, 2026, in Port Chester, New York.
In the month leading up to Victim-1’s death, VILA drove to sell narcotics to Victim-1 on at least 10 occasions. Several days after the last meeting, VILA sent Victim-1 several text messages asking if Victim-1 was “good” or “ok.” Despite Victim-1 not responding, because Victim-1 had overdosed and died, VILA continued selling deadly fentanyl, ultimately resulting in two additional fatal drug overdoses.
Approximately one day after his last unanswered text message to Victim-1, VILA delivered narcotics to Victim-3, who shared them with Victim-2. Approximately a week later, Victim-2 died of an overdose from the drugs that VILA distributed.
Following Victim-2’s death, VILA continued to make deliveries of narcotics to Victim-3, including on or about January 9, 2026. On January 21, 2026, Victim-3 died of an overdose from the drugs that VILA distributed.
On June 4, 2026, members of law enforcement searched Vila’s house in the Bronx pursuant to a judicially authorized search warrant. Among other things, the search revealed suspected narcotic powders; narcotics mixing and stamping equipment; numerous glassine envelopes for individual packaging; and a safe containing a gun, cash, and a ski mask. Photographs of some of the items recovered during the search warrant are shown below.
Suspected Narcotics and Glassine Envelopes
Stamping and Mixing Equipment
Gun, Cash, and Ski Mask
* * *
VILA, 50, of the Bronx, New York, is charged with conspiracy to distribute narcotics resulting in death and three counts of distribution of narcotics resulting in death, all of which carry a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the DEA and the NYPD. Mr. Clayton also thanked the Port Chester Police Department, the Stamford Police Department, and the New York State Police for their invaluable assistance in this case.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Getzel Berger is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
^
As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
United States Announces $36.5 Million Settlement of Medicare Fraud Lawsuit Against Matrix Medical NetworkRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), Naomi Gruchacz, announced that the United States has settled a civil healthcare fraud lawsuit against COMMUNITY CARE HEALTH NETWORK, LLC, D/B/A MATRIX MEDICAL NETWORK (“MATRIX”), a health services company headquartered in Nashville, Tennessee, that contracts with Medicare Advantage Organizations (“MAOs”) to perform in-home health assessments of Medicare patients. The settlement resolves claims that MATRIX violated the False Claim Act by causing the MAOs to submit to the Government false and invalid patient diagnoses for certain chronic conditions, thereby artificially inflating the Medicare payments the MAOs received for providing insurance coverage to patients enrolled in their plans. The Government alleges that MATRIX focused on reporting diagnoses that could lead to higher payments for its client MAOs, instead of ensuring that all of its diagnoses were appropriate and well-supported.
Under the settlement, which was approved by U.S. District Judge Andrew L. Carter, MATRIX will pay the United States a total sum of $36.5 million. MATRIX made extensive factual admissions in the settlement regarding its conduct, including that in numerous instances MATRIX reported certain conditions where its health assessment forms did not contain sufficient clinical information to support the diagnosis. In connection with the settlement, MATRIX also entered into a five-year Corporate Integrity Agreement (“CIA”) with HHS-OIG. The CIA requires MATRIX to implement numerous accountability and auditing measures. In particular, MATRIX must conduct annual risk assessments and other monitoring, and an independent review organization will conduct compliance reviews focused on MATRIX’s systems, processes, and procedures relating to MATRIX’s risk adjustment activities and MATRIX’s services provided to Medicare Advantage plan enrollees.
“For years, Matrix generated false and invalid diagnoses for patients enrolled in Medicare Advantage plans that were later reported to the Government,” said U.S. Attorney Jay Clayton. “Matrix advertised its ability to identify new diagnosis codes that would boost Medicare Advantage insurers’ payments, and it delivered on that promise by reporting lucrative diagnoses that frequently fell well short of meeting recognized clinical criteria. Matrix did so to generate business for itself, at the expense of the public fisc. New Yorkers hate fraud that drains public funds. Why? Because New Yorkers are smart and they know fraud involving taxpayer-funded programs costs all New Yorkers. This Office is proud to join with the rest of the Department, including the National Fraud Enforcement Division, to hold perpetrators of fraud accountable in Medicare and other contexts.”
“Matrix manipulated Medicare managed care’s reimbursement structure for financial gain,” said HHS-OIG Special Agent in Charge Naomi Gruchacz. “By generating unsupported and clinically invalid diagnoses, Matrix undermined the integrity of federal health care programs and put profits above patients. This settlement demonstrates our unwavering commitment to holding entities accountable when they inflate Medicare payments through improper practices and fail to uphold the standards beneficiaries deserve.”
The Medicare Advantage program, also known as Medicare Part C, allows Medicare beneficiaries to opt out of traditional Medicare and enroll in health plans that are administered by private insurance companies known as MAOs. The MAOs contract with the Centers for Medicare and Medicaid Services (“CMS”) to provide traditional Medicare coverage to beneficiaries enrolled in their plans in exchange for capitated payments. CMS adjusts these capitated payments based on the health status of each beneficiary as determined through diagnoses submitted by the MAOs. Specifically, CMS uses these diagnoses, along with demographic factors, to calculate a Risk Adjustment Factor (“RAF”) score for each member and, in turn, the amount of the monthly payment it will pay the MAO for covering that member, pursuant to the Hierarchical Condition Category (“HCC”) model. In general, CMS pays insurers more for sicker beneficiaries likely to incur higher healthcare expenses and less for healthier beneficiaries. Diagnosis codes submitted to CMS must be supported by the beneficiaries’ medical records and be accurate, complete, and truthful, based on the best knowledge, information, and belief of the MAO making the submission.
As alleged in the Government’s Complaint:
MATRIX contracts with MAOs to conduct health assessments of Medicare Advantage plan members in their homes. Based on these in-home assessments, MATRIX provides diagnosis codes to the MAOs for ultimate submission to CMS as part of the MAOs’ risk adjustment data. The MAOs paid MATRIX a fee, generally in the range of $350 to $450, for each assessment. CMS relies on this risk adjustment data, including the medical diagnosis codes, to determine the payments paid to the MAOs for each beneficiary. As a “first-tier entity” that contracts with MAOs, MATRIX is required to certify the accuracy and truthfulness of the data it generates relating to claims for payment submitted by MAOs.
During the period from 2014 to 2019, MATRIX knowingly caused MAOs to submit false and invalid diagnoses of the following chronic medical conditions to CMS for risk adjustment purposes: proliferative diabetic retinopathy, drug-induced polyneuropathy, rheumatoid polyneuropathy, atrial fibrillation, rheumatoid arthritis, chronic obstructive pulmonary disease, and simple chronic bronchitis (the “Invalid Diagnoses”). MATRIX reported the Invalid Diagnoses to MAOs based on its in-home assessments even though: (a) there was not sufficient information to support the diagnoses; (b) the diagnoses did not conform with the guidelines for coding and reporting diagnoses as required by CMS; and (c) the conditions were frequently not diagnosed by any other healthcare provider who saw the beneficiary during the year in which the home visit occurred or in the preceding two years or subsequent two years. As a result of the reporting of these Invalid Diagnoses, the MAOs obtained inflated risk adjustment payments from CMS to which they were not entitled.
MATRIX’s home visit program was designed in large part to identify additional diagnosis codes that could be reported to CMS to increase patient risk scores, and therefore the capitated payments that the MAOs received for their plan members. MATRIX regularly recorded Invalid Diagnoses for complex conditions without performing the testing, imaging, or other diagnostic clinical steps necessary to establish those diagnoses. The purpose of the home visits was not to treat patients’ medical conditions; indeed, MATRIX did not provide medical treatment or prescribe medications as part of the home visits. Nor did it refer the patients to specialists for follow-up care, other than generalized suggestions that the patient follow up with their doctors.
MATRIX marketed its services to MAOs in part by representing that the in-home assessments would allow MAOs to capture diagnoses for use in the risk adjustment process that had not been reported by the plan members’ other providers. In marketing and other materials provided to MAOs, MATRIX advertised its ability to find and document diagnoses that were not otherwise reported by a patient’s primary care physicians and would therefore increase a patient’s risk adjustment score and the MAOs’ payments. For example, Matrix advertised its ability to secure HCC “Lift,” meaning to make diagnoses that resulted in higher HCC disease scores and, thus, higher risk adjustment payments. MATRIX also advertised and calculated the “increase in RAF score” from MATRIX’s assessments and estimated the amount by which the diagnoses MATRIX identified increased the risk adjustment payments received by the MAOs.
MATRIX’s in-home assessments were typically conducted by nurse practitioners. Based on the visit, the nurse practitioner completed an electronic, check-the-box form concerning the individual’s reported medical history and the results of a basic physical assessment. MATRIX’s coding teams later reviewed the assessment forms and diagnoses listed and identified the applicable diagnosis codes to be sent to the MAOs for ultimate submission to CMS as part of their risk adjustment data. Additionally, after the visits, MATRIX’s “Quality Improvement” staff reviewed the diagnoses entered to assess whether the nurse practitioner had any “missed” diagnoses, which they then urged the nurse practitioner to add. At times, MATRIX even added diagnoses without the nurse practitioner’s signoff.
The Invalid Diagnoses generated by the MATRIX home visits did not conform to the International Classification of Diseases (“ICD”) Official Guidelines for Coding and Reporting (the “ICD Guidelines”), as required by applicable federal regulations. The diagnoses did not affect patient care, treatment, or management during the home visit, as required under the ICD Guidelines, and thus were ineligible for risk adjustment. In addition, the Invalid Diagnoses were not supported by the minimal information recorded on the MATRIX assessment forms, in violation of the ICD Guidelines’ medical record documentation requirement.
Through the operation of its home assessment program, MATRIX reported codes for thousands of Invalid Diagnoses to MAOs, which in turn submitted those codes to CMS. Based on these unlawful false claims, the MAOs improperly received millions of dollars in risk adjustment payments from CMS, in violation of the False Claims Act.
As part of the settlement, MATRIX admitted and accepted responsibility for certain conduct alleged by the Government including the following:
- MATRIX contracted with over 30 MAOs to conduct health assessments of Medicare Part C plan members in their homes.
- The in-home assessments were typically performed by nurse practitioners, who collected health histories and medication information, conducted physical exams, and documented diagnostic information on electronic health assessment forms. The nurse practitioners did not provide clinical medical treatment to the plan members or prescribe medications.
- Certain contracts with MAOs required MATRIX to, among other things, assist the MAO in “capturing Member diagnoses for use in [MAO’s] risk adjustment process” and report on the MAO’s “ROI,” or return on investment. MATRIX calculated an MAO’s ROI based, in part, on the estimated increase in Medicare Part C reimbursements received by the MAO that was attributable to risk score increases resulting from Matrix assessments.
- MATRIX’s in-home assessments resulted in diagnoses of plan members, and the submission to CMS of resulting risk-adjusting diagnosis codes, that frequently had not been reported by any other healthcare provider who treated the plan member during the year in which the home visit occurred or during the two years before and after the calendar year in which the home visit occurred.
- In numerous instances, MATRIX reported the following conditions to MAOs where the health assessment forms did not contain sufficient clinical information to support the diagnosis: proliferative diabetic retinopathy; drug-induced polyneuropathy; rheumatoid polyneuropathy; atrial fibrillation; rheumatoid arthritis; chronic obstructive pulmonary disease; and simple chronic bronchitis. The MAOs in turn frequently submitted the diagnosis codes corresponding to those conditions to CMS for risk adjustment purposes, which often resulted in the MAOs receiving higher Medicare Part C reimbursements.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
In a separate settlement announced today by the Civil Division of the Department of Justice and the United States Attorney’s Office for the Eastern District of Texas, DPN USA d/b/a HealthFair (“HealthFair”), a company acquired by MATRIX in 2018 that performed health assessments on mobile health care buses, and HealthFair’s prior owner Shahriah “James” Ekbatani, are agreeing to resolve separate allegations that HealthFair knowingly reported certain diagnoses to MAOs that were unsupported, unsubstantiated, and/or invalid on the basis of these mobile assessments.
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Mr. Clayton thanked HHS-OIG for its assistance with this case.
This case is being handled by the Civil Frauds Unit within the U.S. Attorney’s Office for the Southern District of New York. Assistant U.S. Attorneys Rachael Doud and Ilan Stein are in charge of the case.
Matrix, HealthFair, and HealthFair Founder Agree to Pay $56.5M to Resolve False Claims Act AllegationsRead the Press Release
Community Care Health Network LLC, doing business as Matrix Medical Network (Matrix), DPN USA, doing business as HealthFair (HealthFair), and Shahriah “James” Ekbatani have agreed to pay a total of $56.5 million to resolve allegations that they violated the False Claims Act (FCA) by causing the submission of false or invalid diagnosis codes to the Medicare Advantage program. Matrix will pay $36.5 million to resolve claims in a qui tam action filed in the Southern District of New York. HealthFair, which was acquired by Matrix, will pay $5 million and Ekbatani will pay $15 million to resolve claims in a qui tam action filed in the Eastern District of Texas.
“When healthcare companies report risk-adjusting diagnoses that are invalid, they siphon money from the Medicare Advantage program,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Justice Department remains vigilant in pursuing MAOs, downstream entities, and responsible individuals who do not play by the rules.”
“Patients should be able to trust that their medical providers are making, documenting, and sending diagnosis information to insurers based on accurate assessment, testing, and what is best for the patient,” said U.S. Attorney Jay R. Combs of the Eastern District of Texas. “It is a breach of trust when providers look to make more money by making their patients appear sicker than they are. Submitting unsubstantiated diagnoses increases costs to the Medicare Advantage program. This case emphasizes our District’s commitment to justice by pursuing anyone who attempts to steal through misrepresentations.”
“For years, Matrix generated false and invalid diagnoses for patients enrolled in Medicare Advantage plans that were later reported to the Government,” said U.S. Attorney Jay Clayton for the Southern District of New York. “Matrix advertised its ability to identify new diagnosis codes that would boost Medicare Advantage insurers’ payments, and it delivered on that promise by reporting lucrative diagnoses that frequently fell well short of meeting recognized clinical criteria. Matrix did so to generate business for itself, at the expense of the public fisc. New Yorkers hate fraud that drains public funds. Why? Because New Yorkers are smart and they know fraud involving taxpayer-funded programs costs all New Yorkers. This Office is proud to join with the rest of the Department, including the National Fraud Enforcement Division, to hold perpetrators of fraud accountable in Medicare and other contexts.”
“The allegations in these matters describe conduct that puts profit ahead of patients and undermines the integrity of the Medicare Advantage program,” said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will not tolerate efforts to divert taxpayer funded health care dollars for personal or corporate gain. We will continue to pursue every available enforcement avenue with our law enforcement partners to ensure that anyone who endangers federal program integrity is met with swift and robust accountability.”
The Medicare Advantage (MA) program, also known as Medicare Part C, allows Medicare beneficiaries to opt out of traditional Medicare and enroll in health plans that are administered by private insurance companies known as Medicare Advantage Organizations (MAOs). The MAOs contract with the Centers for Medicare and Medicaid Services (CMS) to provide traditional Medicare coverage to beneficiaries enrolled in their plans in exchange for capitated payments. CMS adjusts these capitated payments based on the health status of each beneficiary as determined through diagnoses submitted by the MAOs. In general, CMS pays more for sicker beneficiaries likely to incur higher healthcare expenses and less for healthier beneficiaries. Diagnosis codes submitted to CMS must be supported by the beneficiaries’ medical records and be accurate, complete, and truthful, based on the best knowledge, information, and belief of the MAO making the submission.
Matrix, headquartered in Nashville, Tennessee, is a health services company that contracts with MAOs to provide in-home assessments to MA plan beneficiaries. HealthFair, a company founded and managed by Ekbatani, operated mobile health care buses staffed by nurse practitioners and medical technicians and fitted with certain medical equipment. It contracted with MAOs in several states to provide health assessments to MA plan beneficiaries on HealthFair buses. Matrix acquired HealthFair in 2018 and shut down its operations by 2020.
The United States alleges that during the period from 2014 to 2019, Matrix knowingly caused MAOs to submit false and invalid diagnoses of the following chronic medical conditions to CMS for risk adjustment purposes: proliferative diabetic retinopathy, drug-induced polyneuropathy, rheumatoid polyneuropathy, atrial fibrillation, rheumatoid arthritis, chronic obstructive pulmonary disease, and simple chronic bronchitis (the “Invalid Diagnoses”). Matrix reported the Invalid Diagnoses to MAOs based on its in-home assessments even though: (a) there was not sufficient information to support the diagnoses; (b) the diagnoses did not conform with the guidelines for coding and reporting diagnoses as required by CMS; and (c) the conditions were frequently not diagnosed by any other healthcare provider who saw the beneficiary during the year in which the home visit occurred or in the preceding two years or subsequent two years. As a result of the reporting of these Invalid Diagnoses, the MAOs obtained inflated risk adjustment payments from CMS to which they were not entitled.
As to HealthFair and Ekbatani, the United States contends that HealthFair knowingly reported certain diagnoses to MAOs that were unsupported, unsubstantiated, and/or invalid. Specifically, from 2015 to 2017, HealthFair providers (1) made certain diagnoses (including but not limited to HIV/AIDS, metastatic cancer, and Myasthenia Gravis) without documentation establishing or confirming the existence of the condition; (2) made certain diagnoses (including but not limited to morbid obesity, rheumatoid arthritis, coagulation defect, drug dependence, major depressive disorder, and chronic obstructive pulmonary disease) solely based on patient attestation, claims history, past medical history, or medication; (3) diagnosed congestive heart failure and heart arrhythmia despite contradiction by electrocardiogram and echocardiogram results; and (4) diagnosed thrombophilia solely based on separate diagnoses of atrial fibrillation. HealthFair, which acted at the direction of Ekbatani, submitted the diagnoses to its MAO customers, and the MAOs often submitted the diagnoses to CMS for risk-adjusted payments.
The settlement with Matrix resolves claims brought under the qui tam or whistleblower provisions of the FCA by Nancy Cahill, a former employee of Matrix, in United States ex rel. Cahill v. Matrix, No. 19-CV-11153 (S.D.N.Y.). The settlements with HealthFair and Ekbatani resolve claims brought under the qui tam or whistleblower provisions of the FCA by Robert Oristaglio, Jr., D.O., who was the chief medical officer of HealthFair, in United States ex rel. Oristaglio v. Community Care Health Network, Inc., d/b/a Matrix Medical Network et al., No. 4:22-CV-00133-SDJ (E.D. Tex.). Under the FCA, private parties are permitted to sue on behalf of the government for false claims for government funds and to receive a share of the recovery. The settlements in these cases provide for Cahill to receive $7.3 million and Oristaglio to receive $3.6 million.
This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration’s war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division’s FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Civil Division’s FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.
The resolutions obtained in this matter were the result of coordinated efforts between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Southern District of New York and Eastern District of Texas, with assistance from HHS-OIG.
The investigation and resolution of this matter illustrate the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at www.oig.hhs.gov/fraud/report-fraud/ or 800-HHS-TIPS (800-447-8477).
The matters were handled by Trial Attorney Samson Asiyanbi of the Justice Department’s Civil Division, Assistant U.S. Attorneys Rachael Doud and Ilan Stein of the Southern District of New York, and Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Note: The settlement agreement with Matrix Medical Network can be read here, the settlement with HealthFair can be read here, and the settlement with Shahriah Ekbatani can be read here.