Southern District of New York
Press releases recorded for this federal judicial district.
Senior Operations Executive Pleads Guilty to Defrauding International Cargo Airline EmployerRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of CARLTON LLEWELLYN in connection with a massive scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of tens of millions of dollars in revenue and the honest services of its employees. LLEWELLYN pled guilty today to conspiracy to commit wire fraud before U.S. District Judge Jesse M. Furman.
U.S. Attorney Damian Williams said: “Carlton Llewellyn was a senior executive entrusted with running the operations of a leading cargo airline. He betrayed that trust and engaged in a kickback scheme to defraud his employer and enrich himself, and his plea is another step toward rooting out corporate fraud.”
According to the allegations contained in the Indictment and statements made in public filings and public court proceedings:
From at least in or about 2009 through in or about July 2021, LLEWELLYN and nine other individuals participated in a massive scheme to defraud Polar. At all relevant times, LLEWELLYN and three co-defendants were senior executives of Polar (the “Executive Defendants”), and six co-defendants (the “Vendor Defendants”) owned and operated various Polar vendors and customers. LLEWELLYN was the Vice President of Operations, System Performance, and Quality for Polar.
The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants and reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favorable business arrangements with Polar. The fraud they perpetrated, which involved a substantial portion of Polar’s senior management and at least 10 customers and vendors of Polar, led to pervasive corruption of Polar’s business, touching nearly every aspect of the company’s operations, for over a decade.
As a result of the scheme, the Executive Defendants, along with two co-conspirators who also worked as senior executives at Polar, received unlawful payments either directly or through various limited liability companies they controlled in excess of approximately $23 million in kickback payments or disbursements as a result of their ownership of conflicted companies.
LLEWELLYN is the sixth defendant to plead guilty in the case thus far.
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LLEWELLYN, 55, of Highland Mills, New York, pled guilty to one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison. LLEWELLYN also agreed to pay forfeiture in the amount of $347,879.44 and make restitution to Polar in the amount of $305,800. LLEWELLYN is scheduled to be sentenced by Judge Furman on May 7, 2024.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Katherine Reilly, Danielle Kudla, Kevin Mead, and Qais Ghafary are in charge of the prosecution.
Former CEO of Defense Company Sentenced to 15 Months in Prison for Defrauding Investors and CreditorsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that BAREND OBERHOLZER, a/k/a “Barry Oberholzer,” was sentenced to 15 months in prison by U.S. District Judge Andrew L. Carter, Jr. for soliciting investments in his defense technology start-up company on the basis of fraudulent misrepresentations regarding its financial solvency, access to cash, and use of investor funds. OBERHOLZER was arrested in February 2021 and pled guilty in March 2023.
U.S. Attorney Damian Williams said: “The defendant lied continuously about his company’s funding, endorsements, and capitalization to attract financing for his defense technology start-up. Soon, he will begin serving a federal sentence. Let this case be a warning to any entrepreneur who thinks that they can ‘fake it until they make it:’ this Office will protect investors and the public from lies designed to take their money.”
According to the allegations in the Indictment and other filings and statements made in court:
Beginning in or around 2018, OBERHOLZER began soliciting investment in his defense technology start-up company (“Start-Up-1”), and a purported security device it had developed (“Security Device-1”), from at least two venture capital firms on false pretenses. OBERHOLZER sent multiple emails to the firms, posing as a retired, four-star General in the United States Army (“Retired General-1”), who was employed by a private equity investment firm based in New York, New York. Therein, OBERHOLZER, posing as Retired General-1, endorsed and solicited investment in Start-Up-1 and Security Device-1, a smartphone case that purportedly permitted its users to detect at a distance weapons or other dangerous items concealed on another person.
OBERHOLZER and his co-conspirator, Jaromy Pittario, a/k/a “Jaromy Jannard-Pittario,” also solicited investments in and loans for Start-Up-1 and Security Device-1 by falsely representing, among other things, their financial solvency, access to cash, and capitalization. For instance, the pair repeatedly provided falsified financial statements to potential creditors to secure funding.
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In addition to the prison term, OBERHOLZER, 40, of Calabasas, California, was fined $100, ordered to forfeit $252,862, and ordered to pay restitution in an amount to be determined by the court.
Mr. Williams praised the outstanding investigative work of the New York Office of the U.S. Postal Inspection Service.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Jilan J. Kamal and Timothy V. Capozzi are in charge of the prosecution.
U.S. Attorney Announces Agreements with Morgan Stanley and Former Senior Employee, Pawan Passi, in Connection with Deceptive Practices in Block Trades BusinessRead the Press Release
Morgan Stanley & Co. LLC To Enter into a Non-Prosecution Agreement and to Pay $153 Million in Financial Penalties
Pawan Passi, Former Head of Morgan Stanley’s U.S. Equity Syndicate Desk, Admits Misconduct and Agrees to Enter into a Deferred Prosecution Agreement
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that Morgan Stanley & Co. LLC (“MORGAN STANLEY”) entered into a non-prosecution agreement (the “NPA”) with the U.S. Attorney’s Office and agreed to pay more than $153 million to the United States for making false statements in connection with the sale of certain “block trades” (the “Relevant Blocks”) from 2018 through August 2021. The NPA requires MORGAN STANLEY to forfeit $72,515,141 to the United States, representing its profits from the Relevant Blocks; to pay $64,016,082 in restitution, representing the harm it caused to the sellers of the Relevant Blocks; and to pay a $16,900,000 fine. The NPA requires MORGAN STANLEY to continue to cooperate with and provide information to the United States for at least three years from the date of the agreement. In the event that MORGAN STANLEY violates the NPA, the U.S. Attorney’s Office may prosecute MORGAN STANLEY.
Today’s corporate action reflects a careful weighing of factors relevant to the appropriate corporate resolution. The NPA recognizes that while the serious conduct to which MORGAN STANLEY has admitted was uncovered by the Government and was not voluntarily self-disclosed, (i) MORGAN STANLEY has provided extraordinary cooperation with this Office’s investigation; (ii) the investigation has not uncovered evidence of corporate management’s complicity in or knowledge of the wrongdoing; (iii) MORGAN STANLEY’s controls, while ultimately unsuccessful in uncovering the misconduct, were designed in part to detect misconduct in the block trades business and were applied in good faith; (iv) in 2022, MORGAN STANLEY implemented a series of remedial measures to create clearer policies governing its ability to communicate with the buy-side in advance of block trades and trained its employees on those policies; (v) MORGAN STANLEY has no prior criminal history of any kind, including no prior NPA or DPA; and (vi) MORGAN STANLEY has accepted full responsibility for its conduct and agreed to resolve with the U.S. Securities and Exchange Commission (“SEC”).
U.S. Attorney Williams also announced that PAWAN PASSI, the MORGAN STANLEY employee that supervised block trades during the relevant time, entered into a deferred prosecution agreement (the “DPA”) with the U.S. Attorney’s Office, pending court approval. In the DPA, PASSI admitted that, from 2018 through August 2021, he promised sellers of certain equity blocks that MORGAN STANLEY would keep information concerning their potential sales confidential, knowing that he would disclose that information to buy-side investors and that those investors would use the information to trade in advance of the block sales. The DPA provides that criminal prosecution of PASSI will be deferred during a period in which PASSI must demonstrate good behavior and fulfill the terms of the DPA, in which case PASSI will not be further prosecuted criminally. The case has been assigned to U.S. District Judge Analisa Torres, and a court appearance has been scheduled before U.S. Magistrate Judge Robyn F. Tarnofsky today at 11:00 a.m.
U.S. Attorney Damian Williams said: “Morgan Stanley, through the supervisor of its block trades business, Pawan Passi, deceived block sellers by promising confidentiality knowing that they would turn around and share that information with others to use to trade. As the Statement of Facts makes clear, the Government’s investigation uncovered the misconduct at Morgan Stanley. This fact serves as a reminder that we are watching. And we will continue to use all the tools at our disposal to root out fraud in our financial markets. Today’s actions show too that while we continue to act aggressively to enforce our nation’s laws, we evaluate each case and each prosecution on its facts and circumstances and will, where appropriate, consider alternatives to criminal prosecution, including declination, an NPA or DPA, whether for a corporation or an individual. Here, with respect to Morgan Stanley, while many factors weighed in Morgan Stanley’s favor, including extraordinary cooperation and remediation, the misconduct was not uncovered and voluntarily disclosed. Morgan Stanley now must comply with the terms of the NPA for the next three years and have a criminal resolution with the U.S. Attorney’s Office on its permanent record.”
Assistant Director in Charge James Smith said: “The integrity of our financial markets requires a level playing field, and when individuals and institutions intentionally tip the scales there must be consequences. Morgan Stanley and Mr. Passi, as admitted in the agreements, utilized confidential information regarding block trades to benefit themselves. The FBI, in order to maintain the public’s trust in our economic system, will hold any individual or financial entity engaging in complex financial crimes accountable in the criminal justice system.”
As part of the NPA, MORGAN STANLEY agreed to a statement of facts describing the deceptive conduct and the remedial measures that it took in response to learning of that conduct.
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Mr. Williams praised the outstanding work of the FBI. Mr. Williams further thanked the SEC, which today announced resolutions with MORGAN STANLEY and PASSI.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Justin Rodriguez, and Samuel P. Rothschild are in charge of the prosecution.
Sullivan County Heroin Dealer Sentenced to 200 Months in Prison for Overdose of 26-Year-Old WomanRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that STEVEN JONES was sentenced to 200 months in prison by U.S. District Judge Kenneth M. Karas for his distribution of heroin and fentanyl that resulted in the death of Jamie Elliott, a 26-year-old woman from Cochecton, New York. Today’s sentencing followed JONES’s guilty plea on November 29, 2021.
U.S. Attorney Damian Williams said: “Steven Jones sold the fentanyl-laced heroin that killed Jamie Elliott, a 26-year-old mother. Even after Jones’s drugs killed Jamie Elliott, he continued to peddle dangerous opioids. This senseless tragedy could have been avoided, and we will continue to seek lengthy prison terms for those who poison others and add to the death toll of the opioid epidemic.”
According to documents filed in this case and statements made in related court proceedings:
On June 1, 2018, the defendant sold fentanyl-laced heroin stamped “Dorney Park,” to Elliott, the mother of one of the defendant’s children. Ms. Elliott was found dead inside her bedroom the following morning. An autopsy conducted following Ms. Elliott’s death revealed that she had died from a lethal dose of fentanyl. New York State Police (“NYSP”) investigators recovered additional bags of “Dorney Park” fentanyl-laced heroin in Ms. Elliott’s clothing.
Facebook Messenger messages reflected that Ms. Elliott had purchased narcotics from JONES the evening before her death. The day Ms. Elliott’s death was discovered, the defendant deactivated his Facebook account. But the defendant did not stop selling dangerous drugs. Shortly before his September 2, 2018, arrest the defendant obtained 500 more glassine envelopes of heroin for sale.
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In addition to the prison term, JONES, 37, of Monticello, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s Hudson Valley Safe Streets Task Force and the NYSP in connection with this investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution.
Man Who Carried Out Machete Attack on NYPD Officers in Times Square on NYE 2022 Pleads Guilty to Terrorism ChargesRead the Press Release
Trevor Bickford Traveled to the Times Square New Year’s Eve Celebration in 2022 for the Purpose of Killing U.S. Officials in the Name of Radical Islamic Jihad and Used a Machete-Style Knife to Attack Three NYPD Officers Working in Coordination with Federal Authorities to Protect the New Year’s Eve Event
Trevor Bickford, 20, of Wells, Maine, today pleaded guilty to multiple counts of attempting to kill officers and employees of the U.S. government and persons assisting them based on his jihadist attack using a machete-style knife against three New York City Police Department (NYPD) officers in Times Square on New Year’s Eve, Dec. 31, 2022.
“Last New Year’s Eve, Trevor Bickford attacked courageous NYPD officers protecting those celebrating in Times Square as part of his effort, as he later told law enforcement, to commit jihad in New York City,” said Attorney General Merrick B. Garland. “Today’s guilty plea should serve as a warning: terrorists who target and attack law enforcement and endanger the American people will be held accountable to the fullest extent of the law.”
“The defendant in this case, motivated by violent extremist views, traveled to New York City for the sole purpose of committing acts of violence and attacked three police officers causing serious injuries,” said FBI Director Christopher Wray. “Police officers bravely protect the American people and attacks against them cannot be tolerated. The FBI will work tirelessly with our law enforcement partners to hold accountable all those who engage in acts of terrorism.”
“As he admitted in court today, Trevor Bickford attempted to murder three NYPD officers while they were on duty protecting the thousands of civilians who flocked to Times Square just over a year ago to celebrate the New Year with friends and family,” said U.S. Attorney Damian Williams for the Southern District of New York. “Bickford targeted the iconic yearly celebration to carry out brazen acts of violence and hatred in the name of jihad. Bickford, as with countless others who have carried out acts of terrorism in support of misguided ideologies, is now going to spend lengthy time exactly where he deserves – in federal prison.”
According to court documents, in December 2022, Bickford, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible. After considering his options, researching his target location, and settling on his plan of attack, he packed a large machete-like blade and went to one of the most densely populated areas in the United States at one of the most densely populated times possible: Times Square on New Year’s Eve. Bickford then chose to ambush three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and attacked them with his blade, seriously injuring all three officers. One of the officers managed to shoot Bickford in the shoulder, halting his violent rampage. Bickford later declared that he carried out his attack to wage jihad and admitted that his goal was to kill as many military-aged men who worked for the U.S. government as he could before himself becoming a martyr. The machete-style knife with a blade over a foot long that Bickford used to carry out his jihadist attack is shown below:
Bickford spent months consuming materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplating ways to wage jihad. As he immersed himself deeper into this propaganda, Bickford devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, Bickford focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims, and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Ultimately, Bickford decided that he would not travel overseas and instead turned his attention to an attack in the United States. After months of radicalization, this decision resulted in Bickford perpetrating his attack in Times Square on New Year’s Eve just over a year ago. Near the scene of the attack, law enforcement recovered a book from Bickford’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”
Bickford pleaded guilty to three counts of attempted murder of officers and employees of the U.S. government and persons assisting them, each of which carries a maximum sentence of 20 years in prison; and three counts of assault of officers and employees of the U.S. government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 120 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s New York Joint Terrorism Task Force is investigating the case.
Assistant U.S. Attorneys Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky for the Southern District of New York and Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section are prosecuting the case.
Man Who Carried Out Machete Attack on NYPD Officers in Times Square on NYE 2022 Pleads Guilty to Terrorism ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today that TREVOR BICKFORD pled guilty to multiple counts of attempting to kill officers and employees of the U.S. Government and persons assisting them based on his jihadist attack using a machete-style knife against three New York City Police Department (“NYPD”) officers in Times Square on New Year’s Eve, December 31, 2022. BICKFORD pled guilty today before U.S. District Judge P. Kevin Castel.
U.S. Attorney Damian Williams said: “A year and one day ago today, this Office charged Trevor Bickford with attempting to murder three NYPD officers while they were on duty protecting the thousands of civilians who flocked to Times Square just over a year ago to celebrate the New Year with friends and family. Bickford targeted the iconic yearly celebration to carry out brazen acts of violence and hatred in the name of jihad. Bickford, as with countless others who have carried out acts of terrorism in support of misguided ideologies, is now going to spend lengthy time exactly where he deserves – in federal prison.”
Attorney General Merrick B. Garland said: “Last New Year’s Eve, Trevor Bickford attacked courageous NYPD officers protecting those celebrating in Times Square as part of his effort, as he later told law enforcement, to commit jihad in New York City. Today’s guilty plea should serve as a warning: terrorists who target and attack law enforcement and endanger the American people will be held accountable to the fullest extent of the law.”
FBI Assistant Director in Charge James Smith said: “Trevor Bickford deliberately plotted to bring terror to the streets of New York by targeting law enforcement officers purely carrying out their oath to protect and serve. His plea today is a stark reminder of the threat terrorists, and those they inspire, pose to our country. In this case, as in all others, the FBI's Joint Terrorism Task Force, along with our partners, remain unyielding in fulfilling our mission to protect the American people.”
According to the Complaint, the Indictment containing the charges to which BICKFORD pled guilty, and other documents and information in the public record:
In December 2022, BICKFORD, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible. After considering his options, researching his target location, and settling on his plan of attack, he packed a large machete-like blade and went to one of the most densely populated areas in the U.S. at one of the most densely populated times possible: Times Square on New Year’s Eve. BICKFORD then chose to ambush three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and attacked them with his blade, seriously injuring all three officers. One of the officers managed to shoot BICKFORD in the shoulder, halting his violent rampage. BICKFORD later declared that he carried out his attack to wage jihad and admitted that his goal was to kill as many military-aged men who worked for the U.S. Government as he could before himself becoming a martyr. The machete-style knife with a blade over a foot long that BICKFORD used to carry out his jihadist attack is shown below:
BICKFORD spent months before the attack consuming materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplating ways to wage jihad. As he immersed himself deeper into this propaganda, BICKFORD devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, BICKFORD focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims, and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Ultimately, BICKFORD decided that he would not travel overseas and instead turned his attention to an attack here in the U.S. After months of radicalization, this decision resulted in BICKFORD perpetrating his attack in Times Square on New Year’s Eve just over a year ago. Near the scene of the attack, law enforcement recovered a book from BICKFORD’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”
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BICKFORD, 20, of Wells, Maine, pled guilty to three counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison, and three counts of assault of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 120 years in prison. BICKFORD is scheduled to be sentenced by Judge Castel on April 11, 2024.
The statutory 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. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force (“JTTF”), which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, and thanked the FBI’s Maine JTTF and the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky are in charge of the prosecution, with assistance from Trial Attorney D. Andrew Sigler of the Counterterrorism Section.
Leaders of International Drug Trafficking and Firearms Smuggling Organization Sentenced to 21 and 20 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that FRANCISCO JAVIER MECINA BARRERA, a/k/a “Angel,” was sentenced to 21 years in prison for MECINA’s leadership of a large-scale firearms trafficking and methamphetamine distribution and importation operation he called the “Cartel de Houston” — Spanish for “Houston Cartel” — or “CDH.” The organization smuggled substantial quantities of firearms to Mexico to trade them for hundreds of kilograms of methamphetamine, which they then distributed throughout the United States, while using firearms of their own to protect their organization and threaten others. In June 2023, MECINA pled guilty before U.S. District Judge Victor Marrero, who imposed today’s sentence. On December 1, 2023, Judge Marrero sentenced co-defendant ADALID CABRERA HUATO, a/k/a “China,” who was the CDH’s second-in-command, to 20 years in prison.
U.S. Attorney Damian Williams said: “These defendants sought nothing less than the establishment of a heavily armed drug cartel based in the United States, importing massive quantities of deadly drugs while exporting weapons to some of the most violent criminal organizations in the world. They believed Satan was watching over them because they knew what they were doing was evil — plain and simple. These crimes cause immense harm to communities on both sides of the border, all across the United States, and right here in New York City. Our Office continues its unwavering commitment to dismantling all organizations that look to line their pockets through drugs, guns, and violence.”
According to court filings and statements made in court proceedings:
From at least in or about March 2020 to at least in or about April 2021, MECINA was the leader of an international narcotics importation and distribution organization that imported hundreds of kilograms of crystal and liquid methamphetamine from Mexico into Texas and further distributed it throughout the United States, including to New York. MECINA called his group the Cartel de Houston, or “CDH,” because it was based in Houston and had ties to Mexico-based drug trafficking cartels.
CDH was also an international supplier of firearms. At MECINA’s direction, members of CDH smuggled numerous firearms into Mexico and delivered them to Mexico-based drug traffickers, often in exchange for methamphetamine that they then smuggled back into the United States for distribution, hidden in the gas tank of a car that MECINA provided to his couriers. A photograph of some of these firearms as they were packaged by members of CDH to be smuggled into Mexico is included below:
MECINA and other members of CDH also used firearms to threaten and intimidate a narcotics customer of CDH who owed MECINA money for drugs, intimidating him with an assault-style rifle with a 50-round drum magazine. When MECINA was arrested, that rifle and loaded drum magazine were found in his apartment, as shown in the below photographs:
After establishing CDH, MECINA appointed co-defendant Cabrera as his right-hand man in Houston, and MECINA recruited others, including co-defendants GIOVANNI DE LA MORA and JAIME SANTILLANO, to acquire and transport numerous guns from the United States into Mexico, trade them for substantial quantities of methamphetamine, and transport the drugs into the United States, where they would distribute them throughout the country, including to the Bronx, New York. MECINA provided his co-conspirators with vehicles and instructed them on how to hide the guns and drugs in the fuel tank to avoid detection.
MECINA also utilized a Mexico-based religious figure known as “Lucifer” to bless the CDH’s members and drugs as they were crossing the border. To exert control over his criminal organization, MECINA created a CDH Initiation Agreement that he sent to those working for him, marked it with a purportedly Satanic symbol, and detailed the “Rite of Initiation for New Applications to Enter the Fraternity of CDH,” as depicted below:
MECINA also created a logo for his criminal organization that he shared with co-conspirators, which had the same Satanic icon at the top:
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MECINA, 32, of Michoacán, Mexico, and Houston, Texas, pled guilty to (i) conspiracy to distribute and possess with intent to distribute methamphetamine; (ii) conspiracy to illegally import methamphetamine into the United States; and (iii) use, carrying, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy and the narcotics importation conspiracy, which was brandished.
CABRERA, 26, of Houston, Texas, pled guilty to narcotics conspiracy.
As part of the same case, DE LA MORA and SANTILLANO, both of Houston, Texas, previously pled guilty to narcotics conspiracy. DE LA MORA and SANTILLANO were sentenced by Judge Marrero to 90 months and 86 months in prison, respectively. In addition to the prison terms, Judge Marrero sentenced DE LA MORA and SANTILLANO each to four years of supervised release.
Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration (“DEA”) and the Department of Homeland Security, Homeland Security Investigations New York City Border Enforcement Security Task Force, which is comprised of local, state, and federal law enforcement agencies, including the New York City Police Department. Mr. Williams also thanked the Department of Alcohol, Tobacco, Firearms, and Explosives, the Houston Police Department, and the DEA Houston Division for their invaluable assistance in this investigation.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Michael R. Herman, Mitzi S. Steiner, and Jane Y. Chong, with the assistance of Paralegal Specialist Jacqueline Hauck, are in charge of the prosecution.
Former Employee of Two Leading Global Financial Institutions and His Associate Plead Guilty to Insider TradingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty pleas of ANTHONY VIGGIANO and his co-conspirator, STEPHEN FORLANO, Jr., in connection with their participation in a scheme to commit insider trading securities fraud based on information that VIGGIANO misappropriated from two leading global financial firms while VIGGIANO was employed at the firms. VIGGIANO and FORLANO were arrested in May 2023 and pled guilty to securities fraud based on insider trading before U.S. District Judge Valerie E. Caproni. CHRISTOPHER SALAMONE previously pled guilty for his role in the scheme.
U.S. Attorney Damian Williams said: “Anthony Viggiano was placed in trusted positions by not one, but two leading global financial institutions. Viggiano broke that trust repeatedly, illegally tipping Stephen Forlano, Jr., with material, confidential information. Viggiano and Forlano knew their conduct was wrong but sought to cheat the system anyway. Protecting the sanctity and integrity of the financial markets continues to be a cornerstone initiative for this Office, and we will continue to bring anyone attempting to illicitly disclose non-public information to justice.”
According to the allegations contained in the Indictment, other public court documents, and statements made during court proceedings:
ANTHONY VIGGIANO was employed at two different, leading global financial institutions located in New York, New York, specifically an investment management firm (“Firm-1”) and an investment bank (“Firm-2,” and together with Firm-1, the “Firms”). VIGGIANO worked as an analyst in Firm-1’s New York, New York, office between in or about April 2021 and in or about October 2021 and then worked at Firm-2 in New York, New York, as an associate in the asset management department. While working at the Firms, VIGGIANO received confidential internal communications that contained detailed information about non-public potential strategic partnerships involving Firm-1 and acquisitions involving Firm-2.
VIGGIANO attended college with FORLANO and was a childhood friend of SALAMONE. In violation of the duties that he owed to each of the Firms, VIGGIANO tipped FORLANO and SALAMONE with material, non-public information (“MNPI”) relating to the names of potential counterparties for Firm-1’s strategic partnerships and, later, information that VIGGIANO learned during his employment at Firm-2 about companies that were potential acquisition targets. After VIGGIANO started working at Firm-2, he continued tipping STEPHEN FORLANO, Jr., with MNPI that VIGGIANO obtained through his employer. In total, VIGGIANO tipped FORLANO and/or SALAMONE with inside information in advance of at least eight different transactions involving publicly traded companies.
FORLANO and SALAMONE each used MNPI provided by VIGGIANO to purchase shares in companies and to trade call options, including short-dated, out-of-the-money call options. VIGGIANO and SALAMONE agreed to split the profits from their illegal trading, which yielded total illegal profits of over approximately $300,000. FORLANO further provided this MNPI to friends and family through, among other means, a video game console’s audio chat function in order to evade detection by law enforcement. FORLANO himself illegally profited at least approximately $100,000 from the scheme.
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VIGGIANO, 26, of Baldwin, New York, and FORLANO, 27, of Tampa, Florida, each pled guilty to one count of securities fraud under Title 15, which carries a maximum sentence of 20 years in prison.
The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI. He also expressed appreciation for the SEC, which separately initiated civil proceedings against the defendants.
This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Peter J. Davis and Jared Lenow are in charge of the prosecution.
U.S. Attorney Williams Announces Enforcement Priorities and SDNY Whistleblower Pilot ProgramRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today SDNY’s criminal enforcement priorities for 2024. In addition, U.S. Attorney Williams announced the creation of a Whistleblower Pilot Program designed to proactively uncover criminal conduct in the District. A copy of the Whistleblower Pilot Program is attached to this press release and is available here on the SDNY website.
U.S. Attorney Damian Williams said:
“When I was sworn in as U.S. Attorney in 2021, I announced three co-equal priorities for my tenure. First, I pledged that we would do everything possible to protect the people of this District from violent crime. Second, I promised that we would be equally relentless in rooting out corruption in our financial markets. And third, I promised to better connect with the communities we serve and to do more through enhanced civil rights enforcement to push back on the forces of hate that are on the march. Fast forward to 2024 and these priorities are as urgent today as they were at the start of my tenure. But SDNY, as always, continues to evolve – and be nimble – to meet new threats to the people of this District. That’s why I am announcing that, in addition to these three priorities, SDNY will add two more for 2024: fighting the fentanyl epidemic and public corruption.
The Fight Against Fentanyl
Fentanyl continues to inflict too much harm on too many people. This Office has sought to and will continue to fight the problem on all levels. We have brought groundbreaking charges against the leadership of the Sinaloa cartel and against some of the Chinese precursor chemical companies that fuel the cartels. But even as we address the criminal networks that fuel the epidemic, we are also focused on addressing the devastation fentanyl brings to everyday people here in this District. For instance, we brought a heartbreaking case involving the overdose death of a baby at a daycare center in the Bronx – a case that truly shocked the conscience of this city. Our work is far from done. In 2024, SDNY will continue to attack the fentanyl epidemic in a comprehensive way – from root to branch.
The Fight Against Public Corruption
SDNY remains committed to aggressively rooting out corruption in our financial markets. But, in this District, corruption doesn’t just pollute our financial markets, it also pollutes our politics and our public institutions. It’s time to clean it up. This Office has a long tradition of bringing complex public corruption cases. We’re going to continue that focus in 2024. We will proceed without fear or favor, and without any regard to partisan politics. That’s in our DNA.
SDNY Whistleblower Pilot Program
This Office is always looking for new ways to enhance our effectiveness and stay ahead of the curve. We are pleased to announce a new tool in our toolkit that will enhance our 2024 enforcement efforts: SDNY’s Whistleblower Pilot Program. The program encourages early and voluntary self-disclosure of criminal conduct by individual participants in certain non-violent offenses. In exchange for self-disclosure and cooperation against others involved in the criminal conduct, SDNY will enter into a non-prosecution agreement where certain specified conditions are met, including, importantly, the condition that the Government was not previously aware of the criminal conduct that is the subject of the disclosure. By providing clarity on the requirements and the benefits of such self-disclosure, we seek to incentivize individuals and their counsel to provide actionable and timely information. That will, in turn, help us bring more misconduct to light and better protect the communities we serve. We encourage people who qualify for the Whistleblower Pilot Program to take advantage of the opportunity to come clean, cooperate, and get on the right side of the law. Our message to the world remains: Call us before we call you."
Registered Sex Offender Sentenced to 15 Years in Prison for His Enticement of an Orange County MinorRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that MATTHEW MILLS was sentenced to 15 years in prison by U.S. District Judge Nelson Román for his enticement of an 11-year-old minor. Today’s sentencing followed MILLS’s guilty plea on September 29, 2023.
U.S. Attorney Damian Williams said: “Matthew Mills’s crimes are the nightmare of every parent. Even after registering as a sex offender, Mills was able to prey on a young child from across the country, but the career prosecutors of this Office and our investigative partners were relentless in pursuing this predator. Today’s lengthy sentence ensures that Mills will face justice for his reprehensible conduct.”
According to documents filed in this case and statements made in related court proceedings:
From on or about July 30, 2020, up to and including on or about July 31, 2020, MATTHEW MILLS exchanged text messages with an 11-year-old minor (“Victim-1”) and directed Victim-1 to take and transmit sexually explicit photographs and videos of Victim-1 to MILLS. At the time of these communications, MILLS was in Colorado and Victim-1 was in Orange County.
Earlier in 2020, MILLS pled guilty to Sexual Exploitation of a Child, a Class 4 Felony, in the state of Colorado. As a result of this offense, on or about July 10, 2020, MILLS was sentenced to an eight-year term of probation and was required to register as a sex offender in Colorado.
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In addition to the prison sentence, MILLS, 32, of Aurora, Colorado, was sentenced to a lifetime of supervised release.
Mr. Williams praised the efforts of the Federal Bureau of Investigation (“FBI”), the FBI Hudson Valley Safe Streets Task Force, the Orange County Sheriff’s Office, and the Denver Police Department in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Marcia S. Cohen is in charge of the prosecution.
California Man Sentenced to Four Years in Prison for Submitting False Sexual Assault Declarations to Court in $100 Million LawsuitRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROVIER CARRINGTON was sentenced today by U.S. District Judge Valerie E. Caproni to four years in prison for submitting false declarations to the Court in connection with a civil lawsuit. CARRINGTON previously pled guilty to making a false declaration before a court.
U.S. Attorney Damian Williams said: “Rovier Carrington submitted fake evidence and lied in an effort to win a $100 million sexual assault lawsuit. Carrington now faces prison time for his brazen attempt to manipulate the court system.”
According to the Indictment and statements made in court proceedings and filings:
CARRINGTON filed a civil lawsuit (the “Civil Case”) in which he accused Hollywood executives of sexually assaulting and defrauding him. CARRINGTON sought $100 million in damages in the Civil Case. To support his allegations, CARRINGTON submitted several falsified email chains that purported to show that he had been sexually assaulted and defrauded.
When confronted about those fake emails, CARRINGTON submitted a false affidavit to the Court in the Civil Case, swearing that the emails were real. To cover up his lie, CARRINGTON deleted two of the email accounts, returned the phone he had used to send the emails to Apple, and failed to appear for the Court’s questioning about the emails.
The Court in the Civil Case ultimately dismissed the Civil Case and imposed sanctions on CARRINGTON, ruling, “these emails were fabricated, and that was bad enough, but the deactivation of the accounts, the efforts undertaken to really foreclose what is necessary discovery in this case, and the stream of lies to me, necessitate the sanctions that I am imposing.”
After the Court in the Civil Case imposed those sanctions, CARRINGTON attempted to pursue his claims in another court, violated an injunction issued by the Court in the Civil Case, and accused the Court in the Civil Case of taking bribes.
Then, even after pleading guilty in this case, CARRINGTON filed a lawsuit seeking over $1 billion and making similar allegations.
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In addition to the prison term, CARRINGTON, 34, of Los Angeles, California, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Kevin Mead and Thomas S. Burnett are in charge of the prosecution.
Former Pharmaceutical Executive and Doctor Sentenced for Insider Trading Around Alexion Pharmaceuticals’ Acquisition of Portola PharmaceuticalsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSEPH DUPONT and SLAVA KAPLAN, a/k/a “Stanley Kaplan,” were sentenced to three years’ probation and five months in prison, respectively, for securities fraud in connection with their participation in an insider trading scheme surrounding the announcement of Alexion Pharmaceutical, Inc.’s acquisition of Portola Pharmaceuticals, Inc. DUPONT and KAPLAN were arrested June 2023 and pled guilty before U.S. District Judge Gregory H. Woods in September 2023.
U.S. Attorney Damian Williams said: “This Office continues to keep a watchful eye over Wall Street, and we will work quickly to prosecute those who choose to cheat to make a quick buck. These sentences reflect our commitment to ensuring fairness in the stock market and combatting corruption.”
According to the allegations in the Indictment and statements made in public court proceedings:
In 2020, DUPONT, KAPLAN, and others engaged in an insider trading scheme surrounding the announcement of Alexion’s acquisition of Portola. DUPONT was a vice president at Alexion and, on January 31, 2020, was informed of Alexion’s upcoming acquisition of Portola. Before that acquisition was publicly announced, in April 2020, DUPONT provided material, non-public information (“MNPI”) that he misappropriated from Alexion about the acquisition to a friend so that the friend could use the information to trade profitably in securities.
In turn, DUPONT’s friend provided KAPLAN, who was also known to DUPONT, the MNPI about Portola’s pending acquisition, both so that KAPLAN could trade in advance of the acquisition and so that KAPLAN would assist DUPONT’s friend in formulating trading strategies to maximize DUPONT’s friend’s own trading profits. KAPLAN further shared MNPI about the upcoming acquisition with a family member and a friend and colleague. After Alexion’s acquisition of Portola was publicly announced on the morning of May 5, 2020, causing Portola’s stock price to increase significantly, KAPLAN and others who had purchased shares and options based on DUPONT’s inside information sold their shares of Portola and call options for Portola stock, reaping millions of dollars of illegally obtained trading profits.
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Additionally, JOSEPH DUPONT, 45, of Rehoboth, Massachusetts, was fined $75,000. SLAVA KAPLAN, 45, of Hopewell Junction, New York, was sentenced to three years of supervised release and was ordered to forfeit $472,053.61.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Sarah Mortazavi, and Samuel P. Rothschild are in charge of the prosecution.
Former Metropolitan Correctional Center Inmates Found Guilty at Trial for Bribery and Prison Contraband SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ANTHONY ELLISON and STARLIN NUNEZ, two former inmates of the Metropolitan Correctional Center (“MCC”), a federal jail, were found guilty today in Manhattan federal court for perpetrating wide-ranging bribery and prison contraband conspiracies with other inmates and MCC employees at the jail. Six additional former MCC inmates and three former MCC employees previously pled guilty in this case. NUNEZ will be sentenced by U.S. District Judge Andrew L. Carter, Jr., on June 6, 2024, and ELLISON will be sentenced by Judge Carter on July 9, 2024.
U.S. Attorney Damian Williams said: “Our federal detention centers are entrusted to provide care, custody, and order over inmates. Anthony Ellison, Starlin Nunez, and their co-conspirators undermined the MCC’s mission through wide-ranging schemes of bribery and distribution of dangerous contraband, including drugs and cellphones. Today’s unanimous verdict convicting Ellison and Nunez, and the convictions of their co-conspirators through guilty pleas, demonstrates that correctional officers and inmates who corrupt our detention centers will be held accountable.”
According to the Indictment, public court filings and proceedings, and the evidence presented at trial:
NUNEZ, a/k/a “Chino,” and ELLISON, a/k/a/ “Harv,” were both inmates at the MCC and perpetrated with other inmates and MCC guards an extensive bribery and contraband distribution scheme within the jail between approximately 2018 and 2021. During the course of the conspiracy, between approximately 2019 and 2020, at least 10 MCC inmates, including NUNEZ and ELLISON, paid nearly $80,000 in bribes to Perry Joyner, a corrupt MCC correctional officer. The inmates paid the bribes through friends and relatives outside the jail, who used money transfer applications such as CashApp to transfer money to associates of Joyner. The associates then provided the bribes to Joyner himself. In exchange for those bribes, Joyner smuggled large amounts of contraband into the MCC. That contraband included drugs (such as oxycodone, alprazolam, Suboxone, marijuana, and synthetic cannabinoids, commonly known as “K2”), dozens of cellphones, and cartons of cigarettes, among other contraband. MCC inmates, including NUNEZ and ELLISON, then sold much of that contraband to other inmates at a profit as part of a widespread illicit market within the MCC. For example, ELLISON charged other inmates as much as $100 for a single cigarette and as much as $5,000 for a used iPhone.
In approximately early 2020, Joyner left the MCC, and the jail initiated a series of lockdowns, first to search for contraband and then in response to the COVID-19 pandemic. As a result of those lockdowns and Joyner’s departure, the contraband market in the MCC dried up until ELLISON found a new source of contraband. In particular, between approximately 2020 and 2021, ELLISON conspired and had a sexual relationship with another corrupt MCC employee, Sharon Griffith-McKnight, who provided contraband to ELLISON, most of which he then re-sold to other inmates.
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ELLISON, 36, from Brooklyn, New York, was convicted of one count of conspiring to commit honest services wire fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiring to possess and provide prison contraband, including marijuana and other controlled substances, which carries a maximum sentence of five years in prison.
NUNEZ, 47, originally from the Dominican Republic, was convicted of one count of conspiring to commit honest services wire fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiring to possess and provide prison contraband, including cellphones, which carries a maximum sentence of one year in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the Department of Justice’s Office of the Inspector General, the Special Agents from the U.S. Attorney’s Office for the Southern District of New York, and the U.S. Customs and Border Protection in New York.
The prosecution of this case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Aline R. Flodr, Jessica Greenwood, Jonathan E. Rebold, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialists Rachel Wechsler, Christopher de Grandpre, Andrea Gieseman, and Connor Hamill.
Two California Men Sentenced for Insider Trading Using Information Stolen from LumentumRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that SRINIVASA KAKKERA and ABBAS SAEEDI were sentenced by U.S. District Judge Gregory H. Woods to 18 months and five months, respectively, for their participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that a third co-defendant, Amit Bhardwaj, misappropriated from Bhardwaj’s employer, Lumentum Holdings Inc. (“Lumentum”). Judge Woods previously sentenced Bhardwaj to 24 months in prison and a fine of $975,000.
U.S. Attorney Damian Williams said: “Srinivasa Kakkera and Abbas Saeedi traded on valuable material, non-public information about Lumentum’s planned acquisitions, knowing that their friend had stolen this information from his employer, Lumentum. Kakkera and Saeedi used their informational advantage to make millions in combined illegal gains in the stock market. But insider trading is not easy money: if you try to illegally profit from material, non-public information, there’s a price to be paid.”
According to the allegations in the Indictment and statements made in public court proceedings:
In approximately December 2020, Bhardwaj learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”). Based on this information, Bhardwaj himself purchased Coherent stock and call options, and Bhardwaj tipped three associates, including SAEEDI, and these individuals all traded in Coherent securities as a result.
In or about October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition. Bhardwaj provided this information to KAKKERA, SAEEDI, and Ramesh Chitor, and these individuals all traded in Neophotonics securities. KAKKERA also caused other friends and family to purchase Neophotonics securities. When Neophotonics’ stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, KAKKERA, SAEEDI, and Chitor closed their positions in Neophotonics securities and made collectively approximately $4.3 million in realized and unrealized profits. In particular, KAKKERA made $2,453,687.99 and SAEEDI made $691,104.73.
After they were interviewed by the Federal Bureau of Investigation (“FBI”) and served with federal grand jury subpoenas on approximately March 29, 2022, Bhardwaj, KAKEKRA, and SAEEDI took steps to obstruct the federal investigation of their conduct. They met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme as well as creating false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.
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In addition to the prison sentence, KAKKERA, 48, of Pleasanton, California, was ordered to forfeit $2,453,687.99. SAEEDI, 48, of Fremont, California, was ordered to forfeit $691,104.73.
Mr. Williams praised the outstanding work of the FBI. He also acknowledged the assistance of the Securities and Exchange Commission, which separately initiated civil proceedings against KAKKERA and SAEEDI.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Adam Hobson and Noah Solowiejczyk are in charge of the prosecution.
New Rochelle Man Pleads Guilty to Bronx ShootingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TYRIEK SKYFIELD pled guilty today to one count of illegally possessing ammunition after a felony conviction. The charge of conviction arises from SKYFIELD’s firing two shots at an individual (“Victim-1”), one of which hit Victim-1, on a residential street in the Bronx on July 22, 2023. SKYFIELD pled guilty before U.S. District Judge Lewis J. Liman and is scheduled to be sentenced on May 7, 2024.
U.S. Attorney Damian Williams said: “On a summer night in the Bronx last July, Tyriek Skyfield fired two shots from a handgun at an individual from close range. One shot struck the victim in the foot, injuring him. Today’s plea underscores an important priority of my Office: We will not tolerate gun violence in the Southern District of New York.”
According to court filings and statements made in court proceedings:
On or about July 22, 2023, at approximately 9:56 p.m., TYRIEK SKYFIELD fired two shots with a handgun at Victim-1 near the intersection of Needham Avenue and East 223rd Street in the Bronx, New York. Surveillance video from a building overlooking the scene showed SKYFIELD brandishing a firearm at Victim-1 seconds before shooting at him.
Surveillance video then captured SKYFIELD fleeing down Needham Avenue and onto East 222nd Street. During a canvass of the scene of the shooting on the following day, officers from the New York City Police Department recovered a 9mm Luger shell casing from one of the gunshots in the yard of a residential building near the shooting.
SKYFIELD was not permitted to possess ammunition because of prior felony convictions.
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TYRIEK SKYFIELD, 31, of New Rochelle, New York, pled guilty to one count of possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison.
The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York State Police and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York, and he thanked the New York City Police Department for its assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Adam Z. Margulies and Joseph H. Rosenberg are in charge of the prosecution.
Founder and Former CEO of Tingo Companies Charged with Securities FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging ODOGWU BANYE MMOBUOSI, a/k/a “Dozy Mmobuosi,” with securities fraud, making false filings with the Securities and Exchange Commission (“SEC”), and conspiracy charges. MMOBUOSI is still at large.
U.S. Attorney Damian Williams said: “Dozy Mmobuosi allegedly orchestrated a massive scheme to inflate Tingo Group’s financial statements and make it appear as though the cellular and agriculture companies he founded were profitable and cash rich companies when, in fact, they were not. With this Indictment, Mmobuosi’s alleged deceitful scheme comes to an end.”
FBI Assistant Director in Charge James Smith said: “Mmobuosi’s alleged fraud is an unseemly display of greed and corruption of our financial markets. Securities schemes like this can be devastating for victim investors. That’s why the FBI is committed to bringing financial fraud to light and perpetrators like Mmobuosi to justice.”
According to the allegations contained in the Indictment unsealed in Manhattan federal court and court filings:[1]
From at least in or about 2019 through in or about 2023, ODOGWU BANYE MMOBUOSI orchestrated a scheme to enrich himself by falsely representing that Nigerian companies he founded, Tingo Mobile and Tingo Foods, were operational, profitable businesses generating hundreds of millions of dollars in revenue respectively. MMOBUOSI then sold Tingo Mobile and Tingo Foods to companies listed in the United States, including Tingo Group (listed on Nasdaq as “TIO”) and Agri-Fintech Holdings (traded in the Over-the-Counter Markets under symbol “TMNA”). As a result, MMOBUOSI caused Tingo Group and Agri-Fintech to issue financial statements that falsely portrayed Tingo Mobile and Tingo Foods to be cash-rich, revenue-generating companies when, in fact, they were not. MMOBUOSI then looted Tingo Group and Agri-Fintech by misappropriating cash from those companies and engaged in well-timed sales of their shares at inflated prices, generating millions of dollars of profits from his scheme.
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MMOBUOSI, 45, of Nigeria, has been charged with one count of conspiracy, which carries a maximum sentence of five years in prison, one count of securities fraud under Title 15, which carries a maximum sentence of 20 years in prison, and one count of making false filings with the SEC, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purpose only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI. He also expressed appreciation for the SEC, which separately initiated civil proceedings against the defendant.
This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Peter Davis and Kiersten A. Fletcher are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
New Jersey Man Charged with Attempting to Provide Material Support to Al ShabaabRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Complaint charging KARREM NASR, a/k/a “Ghareeb Al-Muhajir,” with attempting to provide material support to al Shabaab, a designated foreign terrorist organization. NASR, a U.S. citizen, was taken into custody in Nairobi, Kenya, on December 14, 2023, and was transported to the United States yesterday, December 28, 2023. NASR will be presented before U.S. Magistrate Judge Barbara Moses in Manhattan federal court later today.
U.S. Attorney Damian Williams said: “As alleged, Karrem Nasr, motivated by the heinous terrorist attack perpetrated by Hamas on October 7, devoted himself to waging violent jihad against America and its allies. Nasr, a citizen of this country, traveled from Egypt to Kenya bent on joining and training with al Shabaab so that he could execute his jihadist mission of death and destruction. Nasr was prepared to kill and be killed to support the jihadist cause, and in his own words, he described America as ‘evil’ and the ‘head of the snake.’ Thanks to the extraordinary efforts of the career prosecutors in my Office and our law enforcement partners who led the investigation, Nasr’s plan to train with a terrorist organization and wage violent jihad has been disrupted. Make no mistake: My Office is committed to investigating, disrupting, and prosecuting anyone who is inspired by Hamas’s October 7 attack and seeks to harm Americans, whether here or abroad.”
FBI Assistant Director in Charge James Smith said: “Karrem Nasr traveled across the globe in an alleged attempt to join the ranks of a foreign terrorist organization – an organization that has repeatedly expressed its desire to harm Americans around the world. This investigation highlights the ongoing efforts of the FBI’s New York Joint Terrorism Task Force and our domestic and international law enforcement partners to protect the U.S. against any form of terrorism and ensuring the safety of our community.”
NYPD Commissioner Edward A. Caban said: “Instead of embracing all that the United States had to offer him, Mr. Nasr allegedly moved abroad and committed himself to supporting a foreign terrorist organization. The provision of support to such a group – particularly by an American citizen – is a heinous threat to our entire country and way of life. In the face of this, NYPD investigators and our law enforcement partners on the FBI-led New York Joint Terrorism Task Force will remain relentless in our efforts to identify and investigate anyone who so clearly considers our nation their sworn enemy.”
As alleged in the Complaint:[1]
NASR is a 23-year-old U.S. citizen who moved from New Jersey to Egypt in or about July 2023. NASR is a supporter of al Shabaab, a designated foreign terrorist organization that has attacked Americans and American allies. Since at least in or about November 2023, NASR has repeatedly expressed his desire and plans to join al Shabaab and wage jihad, including in communications with an FBI confidential source (the “CS”), who was posing as a facilitator for terrorist organizations.[2]
In communications exchanged with the CS and postings online, NASR stated that he had been thinking about engaging in jihad for a long time, and he was particularly motivated to become a jihadi by the October 7, 2023 Hamas terrorist attack in Israel. For example, in communications with the CS, NASR stated that the number one enemy was “evil America,” which he called the “head of the snake.” In recent public social media posts, NASR warned that “Jihad” was “coming soon to a US location near you,” posting airplane, bomb, and fire emojis:
In further communications with the CS, NASR expressed his intent to join al Shabaab to receive military training and engage in jihad, that he was prepared to kill and be killed, and that he specifically aspired to be a martyr for the jihadist cause. Other examples of NASR’s online posts supportive of jihad and terrorist ideology are shown below:
NASR took specific steps to join and receive military training from al Shabaab, including making flight and lodging reservations for travel to Kenya, where he planned to meet members of al Shabaab for further travel to Somalia to join and train with the group. NASR booked a flight for December 14, 2023, from Egypt to Kenya for purposes of ultimately joining and training with al Shabaab. In addition, approximately thze day before his flight, NASR told the CS that he planned to delete data from his cellphone and computer to ensure that if he were detained, law enforcement would not be able to recover evidence of his jihadist activities from those devices. On December 14, 2023, NASR flew from Egypt to Kenya, where he planned to transit into Somalia and join and train with al Shabaab. Later that day, NASR was taken into custody by Kenyan authorities.
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NASR, 23, of Lawrenceville, New Jersey, is charged with attempting to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the 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. Mr. Williams also thanked the FBI’s Legal Attaché Office in Nairobi, Kenya, the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, and the Kenyan Directorate of Criminal Investigations, including the Anti-Terrorism Police Unit and the Joint Terrorism Task Force-Kenya, for their assistance.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Camille L. Fletcher and Kimberly J. Ravener are in charge of the prosecution, with assistance from Trial Attorneys Jennifer Burke and Lesley Woods of the Counterterrorism Section.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
[2] Communications referenced herein are described in substance and in part.
Founder of Cryptocurrency Ponzi Scheme “IcomTech” Pleads GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of DAVID CARMONA for his role in founding and promoting a large-scale cryptocurrency Ponzi scheme known as IcomTech. CARMONA pled guilty today before U.S. District Judge Jennifer L. Rochon to one count of conspiracy to commit wire fraud.
U.S. Attorney Damian Williams said: “IcomTech was a large-scale cryptocurrency scam founded by David Carmona that defrauded numerous investors. Carmona and his co-defendants founded IcomTech on lies, and siphoned money away from victims at every opportunity. Today’s guilty plea should send a clear message to those who engage in Ponzi schemes — whether in the cryptocurrency markets or elsewhere — that this Office is committed to rooting out fraud in all its forms and holding those responsible to full account.”
According to the allegations in the Indictment and statements made in public court proceedings:
CARMONA started IcomTech in 2018, and MARCO RUIZ OCHOA — who pled guilty in September 2023 — was represented to be IcomTech’s CEO until 2019, when a new CEO replaced him. IcomTech was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products. CARMONA and the other promoters of IcomTech, including his co-defendants OCHOA, JUAN ARELLANO, MOSES VALDEZ, and DAVID BREND, falsely promised their respective Victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments. In reality, IcomTech did not engage in cryptocurrency trading or mining for its Investors, and CARMONA and Icomtech’s other promoters used Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.
Icomtech promoters, including CARMONA, traveled throughout the United States and internationally where they hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York. During larger-scale events, IcomTech promoters presented on purported investment products and the compensation plan, encouraged Victims to invest as a means of achieving financial freedom, and boasted about the amount of money they were earning. IcomTech promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from IcomTech. The atmosphere of these events was festive and designed to generate excitement about the schemes.
Victims invested in IcomTech by purchasing investment products from promoters using cash, checks, wire transfers, and actual cryptocurrency. Following a Victim’s investment, a Victim would be provided with access to an online portal where the Victim could monitor the purported returns. While Victims saw “profits” accumulate on the online portal, most Victims were unable to withdraw any of these so-called profits and ultimately lost their entire investments. By contrast, IcomTech’s promoters, including CARMONA, siphoned off, in some cases, hundreds of thousands of dollars in Victim funds, which they withdrew as cash, spent on IcomTech promotional expenses, and used for personal expenditures such as luxury goods and real estate.
CARMONA worked with his co-defendant, GUSTAVO RODRIGUEZ, to build IcomTech’s website and online portal, where Victims were provided with personal accounts. CARMONA and RODRIGUEZ discussed how to structure IcomTech’s compensation plan and investment products. For example, RODRIGUEZ advised CARMONA on where CARMONA should set the purported daily returns on Victims’ investment packages and on the size of the investment packages that CARMONA should offer for sale.
In or about September 2018, CARMONA and OCHOA entered into a contract on behalf of IcomTech to purchase cryptocurrency mining equipment from a legitimate supplier and then began touting that investment as a means of generating interest among Victims to invest. However, IcomTech did not meet its payment obligations to the supplier and never received any hardware. Indeed, in or about July and August 2018, CARMONA admitted that his negotiations with the supplier were just for appearances and that he was just “using them.” Even though RODRIGUEZ warned CARMONA that this would only work for a limited time before the supplier found out, CARMONA and OCHOA continued to promote IcomTech’s purported investment with the supplier.
At least as early as August 2018, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so, and when they complained to promoters, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all. Despite these complaints, IcomTech promoters, including CARMONA, continued to promote IcomTech and accept Victims’ investments. As complaints mounted, IcomTech began offering a proprietary crypto-token for sale as a means of injecting liquidity into IcomTech. Promoters of the schemes claimed that these tokens, known as “Icoms,” would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services. This was false. In reality, “Icoms” were essentially worthless and resulted in further financial loss to Victims. By in or about the end of 2019, IcomTech stopped making payments to Victims and IcomTech collapsed.
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CARMONA, 40, of Queens, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force. Mr. Williams also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance.
If you believe you are a victim of the IcomTech fraud, updated information regarding the case and victims’ rights, as well as contact information for the victim witness coordinator is available here.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Michael D. Maimin, Cecilia E. Vogel, T. Josiah Pertz, and Benjamin A. Gianforti are in charge of the prosecution.
Rhode Island Man Sentenced to 68 Months in Prison for Trafficking over One Hundred “Ghost Guns” to the Dominican RepublicRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROBERT ALCANTARA was sentenced today by U.S. District Judge Vernon S. Broderick to 68 months in prison for trafficking firearms. ALCANTARA previously pled guilty to conspiring to traffic firearms and conspiring to launder money.
U.S. Attorney Damian Williams said: “Robert Alcantara alone trafficked over 100 untraceable ghost guns to the Dominican Republic. The proliferation of unlawful ghost guns is a threat to public safety, and our response is clear: we will not let up.”
According to the charging documents and other filings and statements made in court:
From approximately 2017 until January 2022, ALCANTARA operated a “ghost gun” factory out of his home in Rhode Island. ALCANTARA purchased ghost gun kits at gun shows and other places and then machined the kits into working firearms. Once he had completed the untraceable firearms, he exported and sold them to the Dominican Republic. Most of those guns were handguns, but a number were rifles. ALCANTARA and others then laundered the proceeds of his gun sales.
On November 20, 2021, ALCANTARA was stopped in his vehicle in possession of kits to build approximately 45 ghost guns.
ALCANTARA was interviewed by law enforcement agents and stated that he was planning to turn the 45 kits into working firearms, and he had 50 additional similar ghost guns at his home. A photograph of the 45 ghost gun kits is below:
Below are photographs of ALCANTARA’s home ghost gun factory:
Below are photos ALCANTARA sent of firearms he had available for sale in the Dominican Republic:
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In addition to the prison term, ROBERT ALCANTARA, 36, of Providence, Rhode Island was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Department of Commerce’s Office of Export Enforcement, New York Field Office. Mr. Williams also thanked the New York City Police Department, the New York State Police Department, the Providence Police Department, and the U.S. Attorney’s Office for the District of Rhode Island for their assistance in the case.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Kevin Mead is in charge of the prosecution.
Owner and Employee of Medical Supply Distributor Charged with Medical Device and Over-The- Counter Drug Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Fernando McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations (“FDA-OCI”), and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOSES RABINOWITZ, a/k/a “Mark Rabin,” and MENACHIM SAMBER with conspiracy to commit wire fraud and conspiracy to obtain pre-retail medical products by fraud or deception in connection with a scheme to obtain medical devices and over-the-counter (“OTC”) drugs not approved for sale in the U.S. at discounted prices under the false pretense that they would be sold outside the U.S. RABINOWITZ and SAMBER were arrested today and will be presented before U.S. Magistrate Judge Victoria Reznick.
U.S. Attorney Damian Williams said: “As alleged, the defendants defrauded manufacturers producing medical devices and over-the-counter drugs of millions of dollars and sold foreign medical products not approved for sale in the U.S. to unwitting consumers. These charges should serve as a warning to fraudsters who think they can benefit financially by undermining the safety of our country’s medical supply chain.”
FDA-OCI Special Agent in Charge Fernando McMillan: “The FDA is fully committed to the vigorous criminal investigation and prosecution of individuals who threaten the health and safety of American consumers by causing misbranded drugs and medical devices to be distributed. Our office will continue to pursue and bring to justice those who place profits above the public health.”
USPIS Inspector in Charge Daniel B. Brubaker: “One of the USPIS's top priorities is to protect consumers from individuals who seek to profit from selling FDA-regulated products not intended for sale in the U.S. Postal Inspectors relentlessly pursue criminals who further their criminal enterprises through the U.S. Mail. In this case, Postal Inspectors collaborated with agents from FDA-OCI to help safeguard both the U.S. health care industry and American public. I applaud their efforts on this investigation.”
According to the allegations contained in the Indictment:[1]
RABINOWITZ was the owner and president of medical supply distributor Trasco, LLC (“Trasco”) and the owner of Trasco affiliates GlobalMed International, Ltd. (“GlobalMed”) and Panamedica Trading, Inc. (“Panamedica”). SAMBER was an employee of Trasco whose functions included purchasing and sales.
From at least in or about January 2014 up to and including on or about January 3, 2019, RABINOWITZ and SAMBER engaged in a conspiracy to obtain FDA-regulated medical devices and OTC drugs that were not intended for sale in the U.S. at deeply discounted prices from manufacturers (the Victim Companies”) by falsely and fraudulently representing that the products would be sold and distributed outside of the U.S. when, in fact, RABINOWITZ and SAMBER, from the outset, intended to and did sell and distribute those medical devices and OTC drugs at a substantial profit to wholesalers, distributors, and others in the U.S.
The manufacturers relied on RABINOWITZ, SAMBER, and other co-conspirators’ false and fraudulent representations and sold their products to RABINOWITZ, SAMBER, Trasco, GobalMed, and Panamedica at deeply discounted prices, resulting in losses of more than $5 million.
RABINOWITZ, SAMBER, and other co-conspirators created and caused to be created false and fraudulent documentation, which they provided and caused to be provided to the Victim Companies to conceal their fraudulent scheme. At times, RABINOWITZ, SAMBER, and other co-conspirators arranged for the fraudulently obtained products to be diverted directly to locations within the U.S. and for “dummy” shipments to be exported instead in order to generate documentation to provide to the Victim Companies as proof of export.
RABINOWITZ, SAMBER, and other Trasco employees acting at their direction often removed the foreign language packaging or labeling on the medical devices and OTC drugs so that the provenance of the foreign medical products would also be hidden from the domestic consumers and distributors to whom they were sold.
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RABINOWITZ, 42, of Clifton, New Jersey, and SAMBER, 29, of Hollywood, Florida, were both charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to obtain pre-retail medical products by fraud or deception, which carries a maximum sentence of 15 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FDA-OCI and the USPIS.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.
Former Swiss Executive Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, announced that ROLF SCHNELLMANN, a Swiss former executive, pled guilty today to conspiring to defraud the United States in connection with a scheme to help high-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts and to evade U.S. income taxes. SCHNELLMANN pled guilty before U.S. District Judge Gregory H. Woods.
According to the allegations in the Indictment, court filings, and statements made in Court:
SCHNELLMANN was the former head of Allied Finance Trust AG, a Zurich-based financial services company that was a subsidiary of the Allied Finance Group in Liechtenstein. From in or about 2008 to in or about 2014, SCHNELLMANN and his co-conspirators defrauded the IRS by concealing income and assets of high-value U.S. taxpayer-clients with undeclared bank accounts at Privatbank IHAG Zurich AG (“IHAG”), a Swiss private bank. In order to assist the U.S. taxpayer-clients, SCHNELLMANN and his co-conspirators devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. taxpayer-clients, their assets, and their income from U.S. authorities. In furtherance of the fraudulent scheme, SCHNELLMANN and his co-conspirators conspired to transfer more than $60 million from undeclared IHAG bank accounts of the U.S. taxpayer-clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that a co-conspirator helped establish. The U.S. taxpayer-clients paid large fees to IHAG and others to help them conceal their funds and assets and evade taxes.
SCHNELLMANN was arrested in August 2023 in Italy and extradited to the United States.
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SCHNELLMANN, 61, of Switzerland, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. SCHNELLMANN is scheduled to be sentenced by Judge Woods on July 19, 2024, at 10:00 a.m.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as SCHNELLMANN’s sentence will be determined by the judge.
Mr. Williams praised the outstanding work of the Internal Revenue Service, Criminal Investigation. Mr. Williams also thanked the Department of Justice’s Office of International Affairs, Interpol, Italian law enforcement authorities, the Prosecutor General’s Office of Trieste, and the Italian Ministry of Justice for their assistance in the extradition of the defendant. Mr. Williams thanked the Department of Justice’s Tax Division for their partnership on this case.
This prosecution is being handled by the Complex Frauds and Cybercrime Unit and the Department of Justice’s Tax Division. Assistant U.S. Attorney Olga I. Zverovich and Senior Litigation Counsel Nanette Davis of the Tax Division are in charge of the prosecution.
U.S. Attorney Announces Terrorism Charges Against High-Ranking Hizballah Member Who Helped Plan 1994 Bombing in Buenos Aires, ArgentinaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of terrorism charges against SAMUEL SALMAN EL REDA, a/k/a “Samuel Salman El Reda El Reda,” a/k/a “Salman Raouf Salman,” a/k/a “Sulayman Rammal,” a/k/a “Salman Ramal,” a/k/a “Salman Raouf Salman,” a/k/a “Hajj,” a dual Colombian-Lebanese citizen and member of Hizballah’s Islamic Jihad Organization (“IJO”), in connection with EL REDA’s alleged role leading decades of terrorist activity on behalf of Hizballah and the IJO. EL REDA is charged with, among other offenses, conspiring to provide and providing material support to Hizballah, a designated foreign terrorist organization. The charges are contained in an Indictment unsealed today in Manhattan federal court. EL REDA is based in Lebanon and remains at large.
U.S. Attorney Damian Williams said: “As alleged, for decades, Samuel Salman El Reda has led terrorist operations on behalf of the Islamic Jihad Organization of Hizballah, including a 1994 bombing in Buenos Aires that massacred 85 innocent victims. The career prosecutors of this Office have not forgotten the pain and suffering that El Reda has allegedly caused, and we thank the dedication of our law enforcement partners for pursuing this important case. The Southern District of New York continues to be a leader in prosecuting violent terrorists and terrorist organizations, and we will not rest until those who create chaos and destruction are brought to justice.”
Assistant Attorney General Matthew G. Olsen said: “Nearly three decades ago, long-time Hizballah terrorist operative Samuel Salman El Reda allegedly helped plan and execute the heinous attack on a Buenos Aires Jewish community center that murdered 85 innocent people and injured countless others. This indictment serves as a message to those who engage in acts of terror: that the Justice Department’s memory is long, and we will not relent in our efforts to bring them to justice.”
FBI Assistant Director in Charge James Smith said: “The evil and horror wrought by terrorism reaches all corners of the globe. Samuel Salman El Reda was allegedly involved in carrying out terrorist activity on behalf of Hizballah throughout the world. The New York Joint Terrorism Task Force and our law enforcement partners are unwavering in our determination to bring any individual who supports the evils of terrorism to justice.”
NYPD Commissioner Edward A. Caban said: “As alleged, El Reda was an on-the-ground coordinator of the fatal attack against South America’s largest Jewish center nearly 30 years ago. In the decades after that attack, he allegedly continued to direct and support terrorism activities in the Western Hemisphere on behalf of Hizballah and has been involved in plots all across the world. We want this alleged killer brought to justice.”
According to the allegations contained in the Indictment charging the defendant and other public court documents:[1]
Hizballah is a Lebanon-based Shia Islamic organization with political, social, and terrorist components. Hizballah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon. Since Hizballah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel. In 1997, the U.S. Department of State designated Hizballah as a foreign terrorist organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today. In 2001, pursuant to Executive Order 13224, the U.S. Department of the Treasury designated Hizballah as a Specially Designated Global Terrorist entity. In 2010, State Department officials described Hizballah as the most technically capable terrorist group in the world and a continued security threat to the United States.
The IJO, which is also known as the External Security Organization and “Unit 910,” is a component of Hizballah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hizballah outside of Lebanon. In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria, killing six people and injuring 32 others. Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including through the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, the seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative, and the seizure of approximately three tons of ammonium nitrate in London in the fall of 2015. Since June 2017, multiple IJO operatives have been arrested, charged, and convicted in the Southern District of New York for terrorism-related offenses.
Beginning in at least 1993, EL REDA has led terrorist operations on behalf of Hizballah and the IJO in South America, Asia, and Lebanon. EL REDA was responsible for, among other things, helping to plan and execute the July 18, 1994, bombing of the Asociaión Mutual Israelita Argentina (“AMIA”) building in Buenos Aires, Argentina, which killed 85 people and injured hundreds more. EL REDA’s activities for Hizballah in connection with the AMIA bombing included relaying information to IJO operatives that was used for planning and executing the attack. In the decades following the attack, EL REDA continued to engage in terrorist activity on Hizballah’s behalf by recruiting, training, and managing IJO operatives around the world. EL REDA deployed IJO operatives to Thailand, Panama, and Peru, among other places, to help Hizballah and the IJO conduct pre-operational surveillance in support of attack planning and stockpile explosive precursor chemicals, including ammonium nitrate. For example, in or about May 2009, EL REDA instructed an IJO operative to travel to Thailand to help destroy a cache of ammonium nitrate and other explosive materials that the IJO believed was under law enforcement surveillance. In or about February 2011, EL REDA instructed an IJO operative to travel to Panama to surveil the Panama Canal and Embassies maintained by the United States and Israel, and in or about January 2012, EL REDA instructed an IJO operative to travel again to Panama to conduct additional pre-operational surveillance.
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EL REDA, 58, of Lebanon, has been charged with: (i) providing material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (ii) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (iii) aiding and abetting the receipt of military-type training from a designated foreign terrorist organization, which carries a maximum sentence of 10 years in prison or a fine; and (iv) conspiring to receive military-type training from a designated foreign terrorist organization, 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 sentence would be imposed by a judge.
Mr. Williams praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD. Mr. Williams also thanked the Department of Justice’s National Security Division, Counterterrorism Section, and the Department of Justice’s Office of International Affairs, for their assistance.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jacob H. Gutwillig and Jason A. Richman are in charge of the prosecution, with assistance from Deputy Chief Larry Schneider of the Counterterrorism Section.
The charges in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Members of Bronx Crew Charged with Conducting Round-The-Clock Drug Operation Across the Street from A SchoolRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment today charging three members of a Bronx-based narcotics trafficking organization with conspiring to distribute narcotics and with possessing firearms in furtherance of the narcotics trafficking conspiracy. BRYANT ESTEVEZ, a/k/a “Smack,” and TEREL BYERS, a/k/a “Rell,” a/k/a “Raff,” were arrested yesterday and will be presented today before U.S. Magistrate Judge Stewart D. Aaron. A third defendant, JOHNNY MONTEDEOCA, a/k/a “Chi,” remains at large. This case is assigned to U.S. District Judge Victor Marrero.
U.S. Attorney Damian Williams said: “As alleged, the defendants took over an apartment building in the Bronx and used it to sell fentanyl, heroin, and other drugs, and carried guns to protect their operation. Worse still, they allegedly peddled these incredibly dangerous substances mere feet from a grade school. Today’s arrests make abundantly clear that this level of disregard for the safety and well-being of the communities in this district will not be tolerated. Thanks to the work of law enforcement and the prosecutors of this Office, these defendants now face serious federal penalties.”
NYPD Commissioner Edward A. Caban said: “Today’s charges exemplify the NYPD’s efforts to eliminate illegal drugs and guns from New York City neighborhoods – especially in the vicinity of our schools. I commend our dedicated NYPD investigators and everyone involved in this case from the office of the U.S. Attorney for the Southern District because safeguarding our children will always be at the forefront of our shared public safety mission.”
As alleged in the Indictment unsealed today in Manhattan federal court and in other court filings:[1]
From at least in or about February 2023 through at least in or about December 2023, ESTEVEZ, BYERS, and MONTEDEOCA were part of a narcotics trafficking organization that sold drugs and firearms in the Bronx. This organization (the “Concord Avenue Crew”) operated principally out of a residential building (the “Building”) located on Concord Avenue in the Bronx across the street from an elementary and middle school. The Concord Avenue Crew sold drugs — including fentanyl-laced heroin, crack cocaine, and powder cocaine — from the Building at all hours of the day and night, seven days a week. These sales were conducted, among other places, on the sidewalk in front of the Building; through the window of a street-level apartment in the Building; and inside a side entrance to the Building. The Concord Avenue Crew’s narcotics trafficking operation caused drug customers to line up on the street outside the Building, interfered with residents’ access to the Building, and prompted repeated complaints to the NYPD by residents and by parents whose children attended school across the street.
Members of the Concord Avenue Crew routinely carried firearms in connection with their narcotics trafficking operation, including by carrying firearms on their persons and storing them in areas where they were stashing and selling narcotics. On multiple occasions, members of the Concord Avenue Crew also sold firearms to undercover officers.
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ESTEVEZ, 25, of the Bronx, New York; BYERS, 21, of the Bronx, New York; and MONTEDEOCA, 34, of the Bronx, New York, are each charged with conspiracy to distribute and possess with intent to distribute 40 grams and more of mixtures and substances containing a detectable amount of fentanyl and mixtures and substances containing detectable amounts of heroin, cocaine base, and cocaine. This charge carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison. Each of the defendants is also charged with possessing firearms in furtherance of the narcotics trafficking offense charged in the Indictment, which carries a mandatory minimum sentence of five years in prison, which must be served consecutively to any other sentence imposed, and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Williams praised the outstanding investigative work of the NYPD and thanked the Office of the New York State Attorney General for its assistance.
The prosecution of this case is being handled by the Office’s Violent & Organized Crime Unit and Narcotics Unit. Assistant U.S. Attorneys Patrick R. Moroney and Alexandra S. Messiter are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Justice Department Announces Terrorism Charges Against High-Ranking Hezbollah Member Who Helped Plan 1994 Bombing in Buenos Aires, ArgentinaRead the Press Release
Samuel Salman El Reda Participated in Terrorist Operations for Hezbollah in South America, Asia and Lebanon, and Helped Plan and Execute Hezbollah’s July 18, 1994, Bombing of the Asociación Mutual Israelita Argentina Building in Buenos Aires, Killing 85 People
A Manhattan federal court today unsealed terrorism charges against Samuel Salman El Reda, aka Samuel Salman El Reda El Reda, Salman Raouf Salman, Sulayman Rammal, Salman Ramal, Salman Raouf Salman, and Hajj, 58, a dual Colombian-Lebanese citizen and member of Hezbollah’s Islamic Jihad Organization (IJO), in connection with El Reda’s alleged role leading decades of terrorist activity on behalf of Hezbollah and the IJO.
El Reda is charged with, among other offenses, conspiring to provide and providing material support to Hezbollah, a designated foreign terrorist organization. El Reda is based in Lebanon and remains at large.
“Nearly three decades ago, long-time Hezbollah terrorist operative Samuel Salman El Reda allegedly helped plan and execute the heinous attack on a Buenos Aires Jewish community center that murdered 85 innocent people and injured countless others,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This indictment serves as a message to those who engage in acts of terror: that the Justice Department’s memory is long, and we will not relent in our efforts to bring them to justice.”
“As alleged, for decades, Samuel Salman El Reda has led terrorist operations on behalf of the Islamic Jihad Organization of Hezbollah, including a 1994 bombing in Buenos Aires that massacred 85 innocent victims,” said U.S. Attorney Damian Williams for the Southern District of New York. “The career prosecutors of this office have not forgotten the pain and suffering that El Reda has allegedly caused, and we thank the dedication of our law enforcement partners for pursuing this important case. The Southern District of New York continues to be a leader in prosecuting violent terrorists and terrorist organizations, and we will not rest until those who create chaos and destruction are brought to justice.”
“While it’s been nearly 30 years since this horrific terrorist attack, the FBI and our partners throughout the U.S. government are committed to delivering justice for the victims’ families,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “Our reach and our memory are long, as this investigation shows. The charges unsealed today are a result of the hard work and determination of the men and women of the FBI and Justice Department, and the assistance of our international partners in law enforcement.”
According to court documents, Hezbollah is a Lebanon-based Shia Islamic organization with political, social and terrorist components. Hezbollah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon. Since Hezbollah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel. In 1997, the Department of State designated Hezbollah as a foreign terrorist organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today. In 2001, pursuant to Executive Order 13224, the Department of the Treasury designated Hezbollah as a Specially Designated Global Terrorist entity. In 2010, State Department officials described Hezbollah as the most technically capable terrorist group in the world and a continued security threat to the United States.
The IJO, which is also known as the External Security Organization and “Unit 910,” is a component of Hezbollah responsible for the planning and coordination of intelligence, counterintelligence and terrorist activities on behalf of Hezbollah outside of Lebanon. In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria, killing six people and injuring 32 others. Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including through the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, the seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative, and the seizure of approximately three tons of ammonium nitrate in London in the fall of 2015. Since June 2017, multiple IJO operatives have been arrested, charged and convicted in the Southern District of New York for terrorism-related offenses.
Beginning in at least 1993, El Reda has led terrorist operations on behalf of Hezbollah and the IJO in South America, Asia and Lebanon. El Reda was responsible for, among other things, helping to plan and execute the July 18, 1994, bombing of the Asociaión Mutual Israelita Argentina (AMIA) building in Buenos Aires, which killed 85 people and injured hundreds more. El Reda’s activities for Hezbollah in connection with the AMIA bombing included relaying information to IJO operatives that was used for planning and executing the attack. In the decades following the attack, El Reda continued to engage in terrorist activity on Hezbollah’s behalf by recruiting, training and managing IJO operatives around the world. El Reda deployed IJO operatives to Thailand, Panama and Peru, among other places, to help Hezbollah and the IJO conduct pre-operational surveillance in support of attack planning and stockpile explosive precursor chemicals, including ammonium nitrate. For example, in or about May 2009, El Reda instructed an IJO operative to travel to Thailand to help destroy a cache of ammonium nitrate and other explosive materials that the IJO believed was under law enforcement surveillance. In or about February 2011, El Reda instructed an IJO operative to travel to Panama to surveil the Panama Canal and Embassies maintained by the United States and Israel, and in or about January 2012, El Reda instructed an IJO operative to travel again to Panama to conduct additional pre-operational surveillance.
El Reda is charged with: (i) providing material support to a designated foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (ii) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (iii) aiding and abetting the receipt of military-type training from a designated foreign terrorist organization, which carries a maximum penalty of 10 years in prison or a fine; and (iv) conspiring to receive military-type training from a designated foreign terrorist organization, which carries a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York Police Department, is investigating the case. The Justice Department’s Office of International Affairs provided valuable assistance.
Assistant U.S. Attorneys Jacob H. Gutwillig and Jason A. Richman for the Southern District of New York are prosecuting the case, with valuable assistance from Deputy Chief Larry Schneider of the National Security Division’s Counterterrorism Section.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
El Reda IndictmentDentist Sentenced to Three Years in Prison for Defrauding the NBA Players’ Health and Welfare Benefit Plan of More Than $1.1 MillionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that AAMIR WAHAB was sentenced to three years in prison for his role in a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”). U.S. District Judge Valerie E. Caproni imposed the sentence.
U.S. Attorney Damian Williams said: “Aamir Wahab exploited his dental practice to facilitate a million-dollar health care fraud scheme. Wahab’s goals were ambitious, telling a codefendant to ‘get [him] the whole NBA,’ but the career prosecutors of this Office and our law enforcement partners were relentless in bringing Wahab and his codefendants to justice.”
According to the Information, public court filings, and statements made in court:
The NBA Players’ Health and Welfare Benefit Plan is a health care plan providing benefits to eligible active and former players of the NBA. WAHAB is a dentist licensed in California who owns and operates a dental practice (“Dental Office-1”) located in Beverly Hills, California.
From at least in or about 2018, up to and including at least in or about 2019, WAHAB participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan.[1] WAHAB’s role in the scheme was to document that former NBA players or their spouses received certain dental services, when, in reality, the services were not provided.
WAHAB accomplished his role in the scheme in two ways. First, WAHAB created, and caused others to create, fraudulent invoices for former NBA players or their spouses. The former NBA players would then submit the fraudulent invoices to the Plan to request reimbursements that they were not entitled to. Second, WAHAB charged, and caused others to charge, the Plan-issued debit cards of former NBA players. The Plan-issued debit cards were intended to be used by Plan participants to pay for eligible medical services at the point of service. However, WAHAB charged the Plan-issued debit cards of former NBA players for medical services that were never actually provided. In return for his participation in the scheme, WAHAB received a portion of the fraud proceeds.
As evidenced by text messages recovered in the search of WAHAB’s cellular phone, WAHAB was eager to take part in the fraud scheme, in the hopes of making illicit profits. When Dooling wrote to WAHAB, “Let’s make this thing grow sir,” WAHAB responded “Lol I’m down bro Get me the whole NBA.” Similarly, WAHAB and Williams had explicit conversations about the creation of fraudulent invoices. In March 2019, Williams wanted WAHAB to charge co-conspirators’ Plan-issued debit cards more frequently, but WAHAB was initially reluctant. While disagreeing about whether to charge the debit cards, Williams and WAHAB also argued about whether Williams owed WAHAB approximately $12,000 in fraud proceeds. Annoyed and angry, Williams messaged WAHAB: “YOUVE MADE THOUSANDS OF F[----]ING DOLLARS TO PRINT A[N] INVOICE WITH A NAME AT THE TOP like you f[----]ing kidding me[?!] We not gonna act like you doing dental work.”
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In addition to his prison term, WAHAB, 44, of Los Angeles, California, was ordered to forfeit $458,576.50 and pay restitution of $1,192,522.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel and Daniel G. Nessim are in charge of the prosecution.
[1] Williams and Dooling pled guilty. Williams was sentenced to 10 years in prison, and Dooling was sentenced to 30 months in prison.
U.S. Attorney Announces Charges Relating to Firearms Trafficking and Distribution of Counterfeit Pharmaceutical Pills Containing FentanylRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), Frank A. Tarentino III, Special Agent in Charge Drug Enforcement Administration (“DEA”) New York Division, and Erin Keegan, the Acting Special Agent in Charge of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), announced that a grand jury returned a five-count Indictment charging JYSHUN TROWER with transporting and selling over 40 firearms in New York and TROWER and STIVEN ARTURO MARTINEZ NIN with conspiracy to distribute large quantities of counterfeit pharmaceutical pills containing fentanyl. TROWER and MARTINEZ NIN were arrested on Thursday, December 14, 2023, and presented in Manhattan federal court before U.S. Magistrate Judge Ona T. Wang on Friday, December 15, 2023. The case is assigned to the Honorable Denise L. Cote.
U.S. Attorney Damian Williams said: “Jyshun Trower and Stiven Arturo Martinez Nin are charged with having allegedly peddled two of the deadliest threats to New Yorkers—illegal firearms and fentanyl. The firearms recovered by law enforcement included military-style assault weapons, and the drugs seized included more than a kilogram of counterfeit pharmaceutical pills containing deadly fentanyl and fentanyl analogue. I want to thank the law enforcement agents who investigated this case for their tireless work resulting in today’s charges and reiterate this Office’s commitment to ensuring that those who flood the streets with deadly guns and drugs will be brought to justice.”
NYPD Commissioner Edward A. Caban said: “This indictment shows that the dangerous work conducted by the NYPD and our law enforcement partners is effective, and that the proliferation of illegal guns and drugs on our streets continues. I thank all the members of the OCDETF and the office of the U.S. Attorney’s Office for the Southern District of New York for their tireless dedication to our shared public safety mission.”
DEA Special Agent in Charge Frank Tarentino said: “This investigation resulted in 43 firearms and thousands of fake pills containing fentanyl being taken off the streets and exemplifies law enforcement’s oath to safeguard our communities. I commend the men and women from NYPD, DEA, HSI and the U.S. Attorney’s Office for the Southern District of New York for their diligent work on this investigation.”
HSI Acting Special Agent in Charge Erin Keegan said: “The defendants are accused of crimes that threaten not only the lives of those purchasing these counterfeit drugs, but also potential victims of gun violence in New York City. HSI New York is proud to work closely with our law enforcement partners, including the members of the Organized Crime Drug Enforcement Task Force, every day in preventing deadly narcotics and weapons from reaching the streets and the community.”
According to the allegations in the Indictment and Complaint:[1]
From on or about May 3, 2023, through on or about December 14, 2023, JYSHUN TROWER illegally transported and sold firearms in Manhattan and the New York City area. In almost a dozen transactions, TROWER illegally sold approximately 43 firearms to an undercover law enforcement agent and others. The firearms included multiple semiautomatic pistols, semiautomatic rifles, assault style rifles and pistols, ammunition, high-capacity magazines, a ghost gun, and components used to convert a semiautomatic pistol into a fully automatic pistol, also known as a machine gun. Images of several of the firearms that TROWER sold are below.
Firearms TROWER sold in Manhattan on July 31, 2023.
Firearms TROWER sold in Manhattan on August 17, 2023.
Firearms TROWER sold in Manhattan on August 25, 2023.
Firearms TROWER sold in Manhattan on September 29, 2023.
In addition, TROWER and MARTINEZ NIN conspired to sell 10,000 fentanyl pills to an undercover law enforcement agent. TROWER had also arranged with the undercover agent to include several firearms in the transaction. On or about December 14, 2023, TROWER and MARTINEZ NIN arrived at the sale location. Law enforcement apprehended TROWER. MARTINEZ NIN attempted to flee on foot and discard a bag containing over one kilogram of pills and their packaging.
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JYSHUN TROWER, 27, of Virginia Beach, Virginia, is charged with one count of illegally dealing firearms, which carries a maximum sentence of five years in prison, one count of illegally transporting and distributing firearms, which carries a maximum sentence of five years in prison, one count of conspiring to distribute fentanyl, which carries a maximum sentence of life in prison, one count of using and carrying firearms while engaging in the narcotics conspiracy, which carries a maximum sentence of life in prison, and one count of attempted transfer of a firearm for use in a drug trafficking crime, which carries a maximum sentence of 15 years in prison.
STIVEN ARTURO MARTINEZ NIN, 24, of Carlisle, Pennsylvania, is charged with one count of conspiring to distribute fentanyl, which carries a maximum sentence of life in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the NYPD, DEA New York Division, and HSI New York Field Office.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Lisa Daniels is in charge of the prosecution.
The charges contained in the Indictment and Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint, and the description of the Indictment and Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Florida Siblings Charged in Multimillion-Dollar Medicare Scheme Based on Fraudulent Billing for Durable Medical EquipmentRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services - Office of Inspector General (“HHS-OIG”), announced today the arrests of ERIN FOLEY and TED ALBIN on charges of health care fraud and conspiracy to violate the Anti-Kickback Statute. As alleged in a four-count Indictment unsealed today in federal court, FOLEY and ALBIN ran a Medicare billing company that they used to bill Medicare for more than $25 million in fraudulent claims for durable medical equipment (“DME”), and on which Medicare and related private insurers paid out more than $9 million. FOLEY and ALBIN are also charged with illegally buying such DME orders for use in their own DME supply companies and with introducing buyers to sellers in return for additional kickbacks.
FOLEY is expected to be presented later today before U.S. Magistrate Judge William Matthewman in West Palm Beach, Florida. ALBIN is expected to be presented this afternoon before U.S. Magistrate Judge Shaniek M. Maynard in Fort Pierce, Florida. The case was assigned to U.S. District Judge John G. Koeltl in Manhattan.
U.S. Attorney Damian Williams said: “Medicare is a valuable taxpayer-funded program designed to provide affordable health care to people over 65 or with disabilities, not to line the pockets of those who would enrich themselves through fraud. Here, the defendants are charged with illegally profiting from the purchase and sale of millions of dollars’ worth of bogus orders for medical equipment, bilking Medicare in the process. Such illicit conduct can affect the availability of medical services and drive up the cost of health care, but the career prosecutors of this office and our law enforcement partners will remain diligent in protecting these vital taxpayer-funded programs.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Violations of the Anti-Kickback Statute involving durable medical equipment can waste scarce federal health care program funds and corrupt the medical decision-making process. Individuals who participate in the federal health care system are required to obey laws meant to preserve both the integrity of program funds and the provision of appropriate, quality services to patients.”
According to statements made in court and publicly filed documents in this case:[1]
From at least 2018 through 2021, FOLEY and ALBIN owned and controlled Grapevine Professional Services, Inc. (“Grapevine”), a billing company that they used to bill Medicare for more than $25 million, and to collect more than $9 million, through claims based on orders for DME that had been unlawfully sold and bought. Such billing included both billing directly to Medicare through Medicare Part B and billing to private insurance companies that were reimbursed through Medicare Part C. Most of these unlawful purchases of DME orders were by Grapevine customers that were registered with Medicare as DME supply companies. Additional unlawful purchases were made directly by FOLEY and ALBIN through three DME supply companies that they themselves owned and controlled. Once these DME orders were unlawfully purchased, FOLEY and ALBIN used those orders as the basis for fraudulent claims to Medicare and to private insurers covered by Medicare Part C.
In addition, FOLEY and ALBIN acted essentially as brokers of DME orders, introducing Grapevine customers who wished illegally to buy DME orders to co-conspirators who illegally sold them orders. In return for such introductions of buyers to sellers, FOLEY and ALBIN received additional kickbacks, both in the form of cash and in the form of additional DME orders. FOLEY and ALBIN also profited through these introductions by gaining additional illegal billing business for Grapevine. Following these introductions, FOLEY and ALBIN continued to oversee the relations between buyers and sellers of DME orders, for example by tracking how many orders particular sellers owed to particular buyers.
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FOLEY, 46, of Loxahatchee, Florida, and ALBIN, 46, of Stuart, Florida, are each charged with conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; health care fraud, which carries a maximum sentence of 10 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison.
The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of HHS-OIG.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys David Raymond Lewis and Rushmi Bhaskaran are 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.
[1] As the introductory phrase signifies, the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Trevor Milton Sentenced to Four Years in Prison for Securities Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that TREVOR MILTON was sentenced by U.S. District Judge Edgardo Ramos to four years in prison for engaging in securities and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by the company he founded, Nikola Corporation (“Nikola”). MILTON was previously convicted after a one-month trial before Judge Ramos.
U.S. Attorney Damian Williams said: “Trevor Milton lied to investors again and again — on social media, on television, on podcasts, and in print. But today’s sentence should be a warning to start-up founders and corporate executives everywhere — ‘fake it till you make it’ is not an excuse for fraud, and if you mislead your investors, you will pay a stiff price.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
From at least in or about November 2019 up through and including at least in or about September 2020, TREVOR MILTON engaged in a scheme to defraud investors by inducing them to purchase shares of Nikola Corporation, the electric- and hydrogen-powered vehicle and energy company that MILTON founded, through false and misleading statements regarding Nikola’s product and technology development. MILTON’s scheme targeted individual, non-professional investors — so-called “retail investors” — by making false and misleading statements directly to the investing public through social media and television, print, and podcast interviews.
MILTON made these false and misleading statements regarding Nikola’s products and capabilities to induce retail investors to purchase Nikola stock. MILTON took advantage of the fact that Nikola went public by merging with a Special Purpose Acquisition Company or “SPAC,” rather than through a traditional IPO, by making many of his false and misleading claims during a period where he would have not been allowed to make public statements under rules that govern IPOs.
MILTON made false claims regarding nearly all aspects of Nikola’s business, including: (i) false and misleading statements that the company had early success in creating a “fully functioning” semi-truck prototype known as the “Nikola One,” when MILTON knew the prototype was inoperable; (ii) false and misleading statements that Nikola had engineered and built an electric- and hydrogen-powered pickup truck known as “the Badger” from the “ground up” using Nikola’s parts and technology, when MILTON knew that was not true; (iii) false and misleading statements that Nikola was producing hydrogen and was doing so at a reduced cost, when MILTON knew that in fact no hydrogen was being produced at all by Nikola, at any cost; and (iv) false and misleading claims that reservations made for the future delivery of Nikola’s semi-trucks were binding orders representing billions in revenue, when the vast majority of those orders could be cancelled at any time.
For example, when Nikola’s stock was publicly traded in 2020, MILTON claimed that Nikola had defied expectations as a young, disruptive company when it managed to build its prototype hydrogen-powered semi-truck, the Nikola One, which Nikola unveiled on or about December 1, 2016, at a large event that was filmed and broadcast on the internet. During that event and later, MILTON claimed that the prototype Nikola One “fully functions and works, which is really incredible.” In fact, the Nikola One prototype was never completed and never functioned. Rather, the prototype was wholly missing significant parts, including gears and motors, and the control system (i.e., the system that communicates the driver’s directions to the vehicle) and other significant systems were missing or incomplete. Later, in or about January 2018, and despite the fact that the Nikola One prototype was never completed or operational, MILTON published on Twitter and also published on his own Twitter account a video in which the Nikola One appeared to be driving on its own power down a road with no incline. In fact, to film these clips, the Nikola One was towed to the top of a hill, at which point the “driver” released the brakes, and the truck rolled down the hill until being brought to a stop in front of the stop sign.
Also in 2020, at the same time he was spreading misinformation to investors generally to increase Nikola stock price, MILTON also made false and misleading statements about Nikola’s business and technology to a particular individual as part of an effort to use Nikola stock to make purchases, even when MILTON was subject to a lockup and so could not yet sell his stock. Specifically, MILTON made misrepresentations about Nikola’s business to an individual in order to induce that individual to accept options to purchase Nikola stock (the value of which had already been inflated by MILTON’s scheme to defraud retail investors) in lieu of cash for the purchase of a substantial ranch in Utah.
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In addition to the prison sentence, MILTON, 41, of Alpine, Wyoming, was sentenced to three years of supervised release, ordered to forfeit a property in Utah, and ordered to pay a fine of $1 million. Judge Ramos will set restitution in a future proceeding.
Mr. Williams praised the outstanding work of the U.S. Postal Inspection Service, which jointly conducted the investigation in this case with special agents from the U.S. Attorney’s Office. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which filed a parallel civil action, for its cooperation.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew Podolsky and Nicolas Roos are in charge of the case.
New Jersey Man Pleads Guilty to Leading One of the Largest No-Fault Insurance Frauds in New York HistoryRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that BRADLEY PIERRE pled guilty today to conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies. PIERRE pled guilty before the Honorable Paul G. Gardephe and is scheduled to be sentenced on May 7, 2024.
U.S. Attorney Damian Williams said: “For over a decade, Bradley Pierre led one of the largest No-Fault insurance frauds in the history of New York, bribing medical professionals and others, scamming insurance companies, defrauding the IRS, and ultimately denying many accident victims fair and proper treatment because of his rigged system. But innocent victims will not stand alone. Those who seek to shamelessly reap the benefits of scams like this will be brought to justice.”
According to the Indictment, the plea agreement, and statements made in court:
New York and New Jersey No-Fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold. Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves. This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident.
From at least in or about 2008 through in or about 2021, PIERRE agreed with others (the “Clinic Controllers”) to unlawfully own and run medical clinics located in the New York area including, among others, Veda Medical, Sky Medical, Sun Medical, and Rutland Medical (the “Clinics”). PIERRE knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians. PIERRE nonetheless agreed with others, including doctors, to submit bills to insurance companies falsely representing that the Clinics were owned and operated by licensed doctors, and for doctors to lie under oath during Examinations under Oath (“EUOs”) about the ownership, control, and finances of the Clinics. PIERRE personally coached doctors to lie under oath in these EUOs.
PIERRE used his control of the Clinics for personal profit. Between 2008 and 2021, PIERRE took over $20,000,000 from the Clinics by either transferring the funds directly to bank accounts under his control or using the Clinics' bank accounts to pay his personal finances. PIERRE also used his control of the Clinics to steer prescriptions to pharmacies in return for over a million dollars in kickbacks and to steer patients to seek legal representation from his wife’s law firm, the Law Firm of Nonna Shikh (the“Shikh Firm”). The Shikh Firm then filed lawsuits against insurance companies on these patients’ behalf. PIERRE maintained an office at the Shikh Firm and was actively involved in the legal practice as a “manager.”
PIERRE used his control of the Clinics and his managerial role at the Shikh Firm to also steer patients to seek MRIs at a medical facility over which he exercised substantial control (the “MRI Facility”). PIERRE also agreed with the purported sole owner of the MRI Facility, who was a doctor, that the doctor would falsely report injuries in MRI reports. These falsified injuries allowed the Clinics to bill insurance companies for additional, unnecessary medical services and allowed attorneys to falsely claim injuries in lawsuits against insurance companies. PIERRE and the doctor agreed that the doctor would lie to insurance companies during EUOs about PIERRE’s role in the MRI Facility.
PIERRE hid his control over several of the Clinics and the MRI Facility using phony loan arrangements. These agreements claimed that PIERRE was making non-recourse loans to the Clinics and the MRI Facility, which would only have to be paid back if insurance companies paid the medical practices’ claims. The agreements also set PIERRE’s “fee” as twice the amount loaned to the practices. However, in reality, PIERRE took almost $10,000,000 in excess of what these purported loan agreements permitted.
PIERRE further agreed to pay bribes to fill the Clinics and the MRI Facility with patients. From at least in or about 2015 up to and including 2021, PIERRE agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals (collectively, “lead sources”) for the confidential names and numbers of motor vehicle accident victims. PIERRE agreed that others, including Anthony Rose, a/k/a “Todd Chambers,” would then call victims and lie to them to induce victims to receive medical treatment at the Clinics and legal representation from the Shikh Firm. PIERRE helped Rose expand his bribery operation to New Jersey by recommending clinics and attorneys in the state that would pay kickbacks for referrals. PIERRE also recommended that Rose open a shell company to hide the illegality of the payments, which Rose in fact did. PIERRE paid Rose over $800,000 as part of the bribery scheme.
PIERRE further recruited his own lead sources to participate in the bribery scheme. For instance, in or about 2017, PIERRE recruited Andrew Prime, knowing that Prime was bribing 911 operators and a hospital employee for confidential information. PIERRE paid Prime over $800,000 as part of the bribery scheme. PIERRE also personally recruited and bribed several of his own lead sources, including 911 operators and a source in 2019 that PIERRE codenamed the “Motherload” or “ML.”
PIERRE also agreed to bribe medical offices to send patients to the MRI Facility for MRIs. These medical offices included, among others, Epione Medical Center and Modern Brooklyn Medical. PIERRE facilitated these bribe payments through several intermediaries, including Anthony Rose, Jelani Wray, and others. PIERRE paid Jelani Wray over $800,000 in connection with these bribes.
PIERRE then engaged in tax evasion. PIERRE utilized two companies in connection with the healthcare fraud and bribery schemes: Medical Reimbursement Consultants (“MRC”) and Marketing 4 You (“M4Y”). PIERRE hid income from the IRS by concealing multiple bank accounts for MRC and using a series of check cashers for checks made out to MRC and M4Y. PIERRE also paid personal expenses from MRC and M4Y’s bank accounts but improperly reported these payments as “business expenses.” These included payments for his wedding, home renovations, jewelry, furniture, luxury clothing, travel, and gifts. In total, PIERRE underreported income, falsely reported expenses of over $4 million, and deprived the IRS of approximately $1.5 million in taxes due.
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BRADLEY PIERRE, 41, of Closter, New Jersey, pled guilty to one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the work of the Federal Bureau of Investigation and the Internal Revenue Service.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division. Assistant U.S. Attorneys Mathew Andrews, Qais Ghafary, and Michael Lockard are in charge of the prosecution.
Leader of Multiple “Pump and Dump” Securities Fraud Schemes Sentenced to 30 Months in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that EARL INGARFIELD was sentenced to 30 months in prison for orchestrating multiple “pump and dump” stock fraud schemes designed to target retail investors and manipulate trading in penny stock shares, including a scheme to manipulate the shares of Suburban Minerals Corporation (“SUBB”) from which INGARFIELD made more than $1.4 million. INGARFIELD previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Earl Ingarfield engaged in a classic pump and dump scheme that victimized innocent investors and undermined the integrity of our public markets. Those who defraud investors by spreading false and misleading information for their own monetary gain will face stiff punishment for their crimes.”
According to the Indictment, public filings, and statements made in court:
From at least 2013 through March 2014, EARL INGARFIELD was the leader of multiple schemes to manipulate the stock of penny stocks, including the price of SUBB, a public company traded on the over-the-counter (“OTC”) market. In or about 2013, INGARFIELD obtained control of SUBB, installing management at the company that acted at his direction and financing SUBB’s operations. INGARFIELD also obtained convertible promissory notes issued by SUBB, which he then converted into tens of millions of SUBB shares that were nominally held by offshore shell entities. INGARFIELD used these shell entities to conceal his involvement and the fact that he owned and controlled the vast majority of the shares of SUBB.
In early 2014, at INGARFIELD’s direction, SUBB announced that it was purportedly acquiring a producing African diamond mine worth $5 billion. But in reality, no such mine existed. Between January 2014 and March 2014, SUBB issued a series of press releases making false representations regarding that purported mine acquisition and SUBB’s operations. During the same time period, INGARFIELD orchestrated a marketing campaign through which promotional materials echoing the same false claims were distributed to the investing public by email. The false and misleading press releases and email marketing campaign caused SUBB’s share price and trading volume to become artificially inflated.
While SUBB’s price was artificially inflated, INGARFIELD profited by selling millions of his secretly amassed shares, all at the expense of the investing public. Between January and March 2014, he made more than $1.4 million from the sale of SUBB shares.
On March 7, 2014, the Securities and Exchange Commission halted trading in SUBB, after which the share price dropped precipitously and never recovered.
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In addition to his prison term, EARL INGARFIELD, 64, of Las Vegas, Nevada, was sentenced to two years of supervised release and ordered to pay restitution of $1,804,738 and forfeiture of $1,418,473.
Mr. Williams praised the outstanding work of Homeland Security Investigation’s El Dorado Task Force.
The matter is being handled by the Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Emily Deininger, Shiva Logarajah, and Tara La Morte are in charge of the prosecution.
Founder and Managing Director of Tax Lien Investment Firm Charged with Bank Fraud and Wire FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of JOHN ARTHUR HANRATTY for charges in connection with a fraudulent scheme to steal money from a Federal Deposit Insurance Corporation (“FDIC”)-insured bank through lines of credit totaling $20 million granted to HANRATTY’s municipal tax lien investment firm. HANRATTY was arrested this morning and is expected to be presented today before a U.S. Magistrate Judge in the District of Puerto Rico.
U.S. Attorney Damian Williams said: “John Arthur Hanratty, a New York-licensed attorney and the founder of a multi-million-dollar municipal tax lien investment firm, allegedly stole money from a bank to obtain lines of credit totaling $20 million, which he misappropriated by paying back investors who had sued his firm. Thanks to this Office’s teamwork with the FBI, Hanratty is now facing serious criminal charges for his alleged fraud.”
FBI Assistant Director in Charge James Smith said: “Fraudsters are very good at what they do. They are extremely convincing and will jump at every opportunity to defraud a new pool of potential victims. John Hanratty allegedly prioritized his own greed over decency and respect for the laws of our country. The FBI and our law enforcement partners remain dedicated to investigating and holding accountable those who flagrantly disregard our laws by seeking to enrich themselves at the expense of their victims.”
According to the allegations in the Complaint unsealed today in Manhattan federal Court:[1]
HANRATTY was the Founder and Managing Director of Ebury Street Capital, LLC (“Ebury Street Capital”), an investment firm with a portfolio primarily comprised of municipal tax liens. At all relevant times, HANRATTY served as the Managing Director and Principal for Ebury Street Capital, which manages two different funds known as Ebury Fund 1 and Ebury Fund 2. HANRATTY has been an attorney licensed to practice law in the State of New York since 2002 and has previously held legal and compliance positions at well-known investment firms and financial institutions, including serving as the Chief Compliance Officer and General Counsel for a trading broker dealer.
Between 2017 and 2021, HANRATTY participated in a fraudulent scheme to steal money from an FDIC-insured bank (“Victim Bank-1”) by drawing down on $20 million in commercial lines of credit that had been extended to Ebury Street Capital. Specifically, HANRATTY made materially false statements on spreadsheets (known as “borrowing base certificates”) submitted to Victim Bank-1 summarizing the value of the municipal tax liens that Ebury Street Capital was offering as collateral for its commercial line of credit. As a result of these false statements on Ebury Street Capital’s borrowing base certificates, Victim Bank-1 paid Ebury Street Capital large sums of money to which it was not entitled. The false statements on Ebury Street Capital’s borrowing base certificates included, among other things, listing large quantities of municipal tax liens on the borrowing base certificates that Ebury Street Capital did not actually own and double-counting municipal tax liens by listing the same liens on multiple borrowing base certificates.
Additionally, although Ebury Street Capital was contractually required to use money from Victim Bank-1 either to purchase municipal tax liens or for ordinary business expenses, HANRATTY actually used portions of the money obtained from Victim Bank-1 to pay off Ebury Street Capital’s investors who were threatening to sue and who, in fact, ended up suing Ebury Street Capital and HANRATTY after Ebury Street Capital was unable to pay investors who were seeking to pull out their investments from the fund.
Ebury Street Capital’s commercial line of credit has now been completely exhausted, and the entity owes over $20 million in principal and interest to Victim Bank-1.
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HANRATTY, 49, of San Juan, Puerto Rico, is charged with one count of wire fraud affecting a financial institution and one count of bank fraud, each of which carries a maximum sentence of 30 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of the FBI. Mr. Williams also thanked the FBI Field Office in San Juan for their assistance in the investigation of this case.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Andrew K. Chan and Nicholas Chiuchiolo are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint constitutes only allegations, and every fact described herein should be treated as an allegation.
Anti-Doping Charges Filed Against Two Defendants in Manhattan Federal CourtRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging DEWAYNE BARRETT and O’NEIL WRIGHT under the Rodchenkov Anti-Doping Act (“RADA”), which proscribes doping schemes at international sports competitions including the Olympic Games. The Indictment alleges that BARRETT and WRIGHT obtained various performance enhancing drugs (“PEDs”) and distributed those PEDs to certain athletes in advance of, and for the purpose of cheating at, the 2020 Olympic Games held in Tokyo in the summer of 2021. In addition to the charge under the Rodchenkov Act, BARRETT and WRIGHT are alleged to have conspired to violate the drug misbranding and adulteration laws of the U.S., and BARRETT is separately charged for his involvement in a scheme to fraudulently obtain loans through the Small Business Administration’s Paycheck Protection Program (“PPP”).
BARRETT was taken into federal custody last Thursday and presented in federal court in Manhattan before U.S. Magistrate Judge Ona T. Wang. WRIGHT was taken into federal custody last Wednesday and was presented on Thursday in the Northern District of Georgia before U.S. Magistrate Judge Justin S. Anand.
U.S. Attorney Damian Williams said: “As alleged, Barret and Wright’s supposed ‘coaching’ services included providing Olympic-level athletes with prohibited, performance-enhancing drugs. Supplying illegal drugs to athletes is dangerous and illegal. This Office is committed to rooting out corruption in international sporting events. We will continue to prosecute those who engage in illicit doping schemes to the full extent of the law under the Rodchenkov Anti-Doping Act.”
FBI Assistant Director in Charge James Smith said: “Performance enhancing substances deprive competitors of a level playing field. At a moment when the games offered thousands of athletes validation after years of training, Dewayne Barrett and O’Neil Wright allegedly schemed to ruin that moment by peddling illegal drugs. Let me be clear, the FBI and our law enforcement partners will not yield in our efforts to disrupt criminal enterprises that seek to corrupt international competition.”
As alleged in the Indictment:[1]
The charges in this Indictment arise from an investigation of a scheme to provide Olympic athletes with PEDs, including drugs widely banned throughout competitive sports such as human growth hormone, clenbuterol, and the “blood building” drug erythropoietin, in advance of and for the purpose of corrupting the 2020 Olympic Games that convened in Tokyo in the summer of 2021.
BARRETT and WRIGHT purported to coach athletes, including Olympic-level athletes competing on behalf of Nigeria (“Athlete-1”), Switzerland (“Athlete-2”), and the United Kingdom (“Athlete-3”), but instead, in order to obtain an unfair and unlawful advantage, BARRETT and WRIGHT provided those athletes with prohibited, performance-enhancing drugs that were obtained and administered without valid prescriptions.
BARRETT was a track and field coach and personal trainer based in the New York City area who operated a fitness facility located in Manhattan. WRIGHT, a former Olympic-level sprinter, was a track and field coach based in Atlanta, Georgia. Neither BARRETT nor WRIGHT are doctors. CC-1, an individual who held himself out as a naturopathic doctor, but was not a licensed doctor, supplied banned drugs to athletes at BARRETT and WRIGHT’s behest.
The Rodchenkov Act, which was signed into law in December 2020, prohibits any person, other than an athlete, to knowingly carry into effect, attempt to carry into effect, or conspire with any other person to carry into effect a scheme in commerce to influence by use of a prohibited substance or prohibited method any major international sports competition. 21 U.S.C. § 2402.
BARRETT is also charged with his involvement in a scheme to fraudulently obtain loans through PPP. As alleged in the Indictment, between 2020 and 2021, BARRETT submitted online applications seeking over $2.5 million on behalf of individuals whom he represented to be independent contractors on the loan applications. BARRETT provided a falsified Internal Revenue Service Form 1040 in support of each application, showing an inaccurate annual income for the applicant in the prior tax year. In many cases, BARRETT was directly paid by the applicant for having submitted the fraudulent paperwork.
* * *
DEWAYNE BARRETT, 41, of Elmont, New York, and O’NEIL WRIGHT, 43, of Snellville, Georgia, are each charged with one count of conspiracy to violate the Rodchenkov Act, which carries a maximum sentence of 10 years, and one count of conspiracy to violate the misbranding laws, which carries a maximum sentence of five years. BARRETT is further charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI and the FBI’s Integrity in Sports and Gaming Initiative. Mr. Williams also thanked the U.S. Customs and Border Protection, the New York City Police Department, and the U.S. Anti-Doping Agency for their assistance in the investigation.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Sarah Mortazavi, Benjamin Gianforti and T. Josiah Pertz are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.
Albany Man Sentenced to 20 Years in Prison for Sexual Exploitation of ChildrenRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHNNY ROMAN was sentenced today to 20 years in prison for sexual exploitation of children and conspiring to sexually exploit children, including while incarcerated at the Metropolitan Detention Center in Brooklyn. On May 23, 2023, ROMAN pled guilty to one count of sexual exploitation of children and two counts of conspiracy to commit sexual exploitation of a child before U.S. District Judge J. Paul Oetken, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Johnny Roman used multiple fake online personas to convince and, in some cases, threaten young women to create and send him heinous videos in which the women performed oral sex on minors, many of them infants and toddlers. Once he was arrested and detained for that conduct, he continued his disturbing scheme from jail using contraband cellphones. This lengthy prison sentence holds Roman accountable for his horrific crimes and the extraordinary harm and trauma he caused to many minor victims and their families.”
According to the Indictment, court documents, and based on statements made in open court:
Since at least 2020, ROMAN used multiple fake online personas to contact young women about the prospect of a “job” sexting with an older man on encrypted messaging applications and to manipulate the women into creating disturbing pornographic videos in which they performed oral sex on minors, many of them infants or toddlers. ROMAN communicated with at least 3,000 different women on one user account alone. Through that broad outreach, at least eight individuals performed oral sex on minor victims based on ROMAN’s requests or threats. At least 11 minor victims — ranging from 16 years old to four months old — were victims of ROMAN’s criminal conduct, which resulted in the creation of over 50 videos in which women performed oral sex on minors.
On December 22, 2020, ROMAN was arrested on the instant charges. While detained, ROMAN continued to induce women to film themselves performing oral sex on minors using at least three contraband cellphones.
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In addition to his prison term, ROMAN, 37, of Albany, New York, was sentenced to a lifetime of supervised release.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations and the New York City Police Department.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Rebecca T. Dell is in charge of the prosecution.
U.S. Attorney Announces Return of Collection of Antiquities from the Metropolitan Museum of Art to CambodiaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the return of 13 Khmer antiquities to the Kingdom of Cambodia, pursuant to an agreement between the U.S. Attorney’s Office for the Southern District of New York and the Metropolitan Museum of Art (the “Met”). The Met has voluntarily agreed to return the antiquities, and they are in the process of being turned over.
U.S. Attorney Damian Williams said: “All of the pieces being returned today were tied directly to illicit trafficking, and specifically to a man named Douglas Latchford – a collector and dealer that my Office charged in 2019 for running a vast antiquities trafficking network out of Southeast Asia. I want to thank the Metropolitan Museum of Art, where these pieces were previously housed, for their decision to cooperate and work with my Office to facilitate the return of these pieces to the Kingdom of Cambodia. We look forward to our continued dialogue with the Met on these important issues. My Office will continue to vigorously investigate the illegal trade in stolen antiquities. We urge those in this space, including cultural institutions, to be vigilant. And if you work at one of these institutions or for a private collection and have concerns that certain pieces may be tied to illicit trafficking, do the right thing: come forward and work with us on a voluntary basis to facilitate the return to the rightful owners. That is a far better outcome for you and your institution than if our investigation leads to a knock on your door. In other words, come see us before we come see you.”
HSI Acting Special Agent in Charge Erin Keegan said: “As demonstrated with today's announcement, pieces linked to the investigation of Douglas Latchford continue to reveal themselves. The Metropolitan Museum of Art has not only recognized the significance of these 13 Khmer artifacts, which were shamelessly stolen, but has also volunteered to return them, as part of their ongoing cooperation, to their rightful owners: the People of Cambodia. I want to thank HSI New York’s Cultural Property, Art, and Antiquities unit and the Southern District of New York for their unwavering commitment to reuniting nations with these unforgettable pieces of history.”
All of the antiquities being returned to the Kingdom of Cambodia are linked to the art dealer and collector Douglas Latchford, who was previously indicted in the Southern District of New York in 2019 for orchestrating a multi-year scheme to sell looted Cambodian antiquities on the international art market. The Indictment was later dismissed due to Latchford’s death. Since 2012, the U.S. Attorney’s Office for the Southern District of New York, in partnership with HSI, has successfully investigated, identified, and repatriated dozens of stolen and illegally imported Cambodian antiquities in the possession of individuals and institutions in the United States.
Among the statutes being returned to the Kingdom of Cambodia are statutes from the Koh Ker archaeological site, including a 10th century goddess sandstone statute, as depicted below. The history of Koh Ker and the illicit trafficking in Cambodian cultural patrimony is described in prior forfeiture actions filed in the Southern District of New York, including United States v. A Late 12th Century Khmer Sandstone Sculpture Depicting Standing Prajnaparamita, et al., 21 Civ. 9217; United States v. A Late 12th Century Bayon-Style Sandstone Sculpture Depicting Eight-Armed Avalokiteshvara, 22 Civ. 229; United States v. A 10th Century Cambodian Sandstone Sculpture, 12 Civ. 2600; and United States v. A 10th Century Cambodian Sandstone Sculpture Depicting Skanda on a Peacock, 21 Civ. 6065. In September 2023, Koh Ker — the 10th Century former royal capital of the Angkorian empire — was officially added to the United Nations Education, Scientific, and Cultural Organization’s World Heritage List. Other statutes being returned date from as far back as the 7th Century, including an over-life-size head of Buddha.
10th century goddess sandstone statue from Koh Ker
7th century Head of Buddha
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Mr. Williams thanked HSI for its outstanding work to facilitate the repatriation and praised its ongoing efforts to find and repatriate stolen and looted cultural property. Mr. Williams also thanked the Kingdom of Cambodia’s Ministry of Culture and Fine Arts for its partnership and assistance.
This matter is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U. S. Attorney Shiva Logarajah is in charge of the case.
Owner and Senior Executive of New York Contracting Company Charged for Paying Bribes to Obtain Construction Contracts from A Fortune 500 CompanyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of charges against TROY CARUSO, the owner and chief executive officer of a commercial construction and contracting company headquartered in New York, New York (the “Contracting Company”), and JOHN NOLAN, a senior executive at the Contracting Company, for their participation in a scheme to bribe a senior project manager at a Fortune 500 real estate services firm in order to obtain contracting work. CARUSO was arrested this morning in Melville, New York, and NOLAN was arrested this morning in Brooklyn, New York. Both CARUSO and NOLAN are expected to be presented in federal court in Manhattan later today.
U.S. Attorney Damian Williams said: “As alleged, Troy Caruso and John Nolan bribed a senior-level individual at a Fortune 500 company to award their company favorable contracts, resulting in the parties involved fraudulently obtaining millions. In the construction world, fair bidding is crucial to the success or downfall of a business, and kickback schemes like the one we allege in this case can undermine that process. Those attempting to corrupt the bidding process by gaining an unfair advantage over their law-abiding counterparts will face criminal prosecution.”
According to the allegations in the Indictment:[1]
From at least in or about February 2021, up to and including in or about September 2023, CARUSO and NOLAN agreed to pay and did pay kickbacks to an employee of a global and publicly traded commercial real estate services company (the “Real Estate Firm”) in exchange for assistance and preferential treatment so that the Contracting Company would be awarded projects managed by the Real Estate Firm (the “Kickback Scheme”).
In or about March 2021, CARUSO and NOLAN were introduced by an individual (“CC-1”) to a senior project manager at the Real Estate Firm (“CC-2”). CC-2 managed the process by which contracting companies bid for and were awarded contracts to work on construction projects for various of the Real Estate Firm’s clients. Beginning in or about March 2021 because of the Kickback Scheme, CC-2 took a series of actions CC-2 otherwise would not have taken to ensure that the Contracting Company was awarded a pre-construction contract and a construction contract relating to a certain project (“Project-1”), which was managed by the Real Estate Firm on behalf of its client, a health services business that provides hospital, medical, and other health services to patients. For example, CC-2 ensured that the Contracting Company was on the Real Estate Firm’s “bid list” so that it could submit bids relating to Project-1 that it otherwise could not have submitted. CC-2 also provided non-public information to CARUSO and NOLAN about the bidding process and recommended the Contracting Company for both the pre-construction contract and the construction contract relating to Project-1. As a result of the Kickback Scheme and CC-2’s actions, the Contracting Company was awarded the pre-construction and construction contracts for Project-1, the latter of which was valued at approximately $3.55 million (to be paid to the Contracting Company).
In exchange for CC-2’s assistance and preferential treatment, CARUSO and NOLAN agreed to pay kickbacks to CC-2 in the amount of approximately one percent of the construction value of any project managed by the Real Estate Firm that resulted in a contract award to the Contracting Company. Accordingly, CARUSO and NOLAN agreed to pay CC-2 approximately $35,500 for Project-1 and ultimately paid CC-2 approximately $33,000 in kickbacks for CC-2’s assistance on Project-1. Most of these payments were made in cash at locations around New York City. CARUSO and NOLAN also paid CC-1 approximately $15,000 for CC-1’s assistance in the Kickback Scheme, which included connecting CC-2 with CARUSO and NOLAN.
CARUSO and NOLAN attempted to obtain additional contracts from the Real Estate Firm with CC-2’s assistance as part of the Kickback Scheme. Between in or about 2022 and in or about 2023, in exchange for CARUSO and NOLAN’s promise of payment for any contract awarded to the Contracting Company, CC-2 provided CARUSO and NOLAN with assistance relating to two additional construction projects managed by the Real Estate Firm that did not result in contract awards to the Contracting Company.
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CARUSO, 56, of Smithtown, New York, and Ludlow, Vermont, and NOLAN, 42, of Brooklyn, New York, are each charged with one count of conspiracy to commit honest services wire fraud and one count of honest services wire fraud, which each carry a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the Special Agents and the Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the Federal Bureau of Investigation for their assistance in the investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jane Kim and Nicholas Folly are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Notice to Victims of the Sentencing of Former Nikola Motors CEO Trevor MiltonRead the Press Release
The U.S. Attorney’s Office for the Southern District of New York is providing notice to individuals and entities that bought and sold stock of Nikola Corporation (ticker NKLA) or VectoIQ (tickers VTIQU, VTIQ, and VTIQW) between March and September 2020 of the upcoming sentencing of TREVOR MILTON, the founder and former CEO of Nikola. In October 2022, MILTON was convicted by a jury of securities fraud and wire fraud in connection with his scheme to defraud and mislead investors about the development of products and technology by Nikola.
The sentencing is scheduled for December 18, 2023, at 11:00 a.m. before the Honorable Edgardo Ramos in Courtroom 619 at the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, NY 10007. The proceeding is open to the public. MILTON faces a maximum term of 60 years in prison, and the sentence will be determined by the court. If you believe you are a victim of TREVOR MILTON and have questions about the sentencing or wish to submit a victim impact statement, please email: [email protected].
Former Special Agent in Charge of the New York FBI Counterintelligence Division Sentenced to 50 Months for Conspiring to Violate U.S. Sanctions on RussiaRead the Press Release
A former Special Agent in Charge (SAC) of the FBI Counterintelligence Division in New York, was sentenced to 50 months in prison and ordered to pay a $40,000 fine for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and to commit money laundering in connection with his 2021 agreement to provide services to Oleg Deripaska, a sanctioned Russian oligarch.
According to court documents and statements made in court proceedings, Charles McGonigal, 55, of New York, New York, pleaded guilty in August.
“Charles McGonigal helped advance the interests of a sanctioned Russian oligarch, breaking his oath to safeguard our nation and uphold its laws,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s sentence holds him accountable for this betrayal and demonstrate this department’s commitment to deny designated individuals the means to circumvent U.S. sanctions.”
“Charles McGonigal violated the trust his country placed in him by using his high-level position at the FBI to prepare for his future in business,” said U.S. Attorney Damian Williams for the Southern District of New York. “Once he left public service, he jeopardized our national security by providing services to Oleg Deripaska, a Russian tycoon who acts as Vladimir Putin’s agent. Today’s sentence is a reminder that anyone who violates United States sanctions — particularly those in whom this country has placed its trust — will pay a heavy penalty.”
“Charles McGonigal’s conduct can be summed up in one word – betrayal. He betrayed everything he once swore to protect.” said Executive Assistant Director Larissa L. Knapp of the National Security Branch. “Today’s sentencing is a message to all, no matter who they are, the FBI does not tolerate those who choose to jeopardize US National Security. Prioritizing personal gains over one’s oath to protect the American people and uphold the Constitution, will be prosecuted to the full extent of the law.”
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support to individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it prohibit providing or receiving any funds, goods, or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy. According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy. The U.S. District Court for the District of Columbia affirmed the sanctions against Deripaska. It found, among other things, that OFAC’s determination that Deripaska acted as an agent of Russian President Vladimir Putin was supported by the evidence.
As an FBI official, McGonigal helped investigate Deripaska and other Russian oligarchs. As a SAC, he supervised investigations into sanctions violations. Yet at the same time, he began building a relationship with an agent of Deripaska, in the hopes of doing business with Deripaska after he retired from the FBI.
In 2021, McGonigal conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following his negotiations with Deripaska’s agent, McGonigal agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. While negotiating and performing services for Deripaska, McGonigal and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract, and using the same shell companies to send and receive payment from Deripaska. McGonigal hoped to do millions of dollars in business with Deripaska, but FBI agents from the same division McGonigal used to lead foiled his scheme after only a few months of operation.
The FBI New York Field Office’s Counterintelligence Division investigated the case, with valuable assistance from U.S. Customs and Border Protection as well as the New York City Police Department.
Assistant U.S. Attorneys Hagan Scotten, Rebecca T. Dell, and Derek Wikstrom for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney Christina A. Clark of the National Security Division’s Counterintelligence and Export Control Section.
Former Special Agent in Charge of the New York FBI Counterintelligence Division Sentenced to 50 Months in Prison for Conspiring to Violate U.S. Sanctions on RussiaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division, announced today that CHARLES MCGONIGAL, a former Special Agent in Charge (“SAC”) of the FBI’s Counterintelligence Division in New York, was sentenced by U.S. District Judge Jennifer H. Rearden to 50 months in prison for conspiring to violate the International Emergency Economic Powers Act and to commit money laundering in connection with his 2021 agreement to provide services to Oleg Deripaska, a sanctioned Russian oligarch.
U.S. Attorney Damian Williams said: “Charles McGonigal violated the trust his country placed in him by using his high-level position at the FBI to prepare for his future in business. Once he left public service, he jeopardized our national security by providing services to Oleg Deripaska, a Russian tycoon who acts as Vladimir Putin’s agent. Today’s sentence is a reminder that anyone who violates United States sanctions — particularly those in whom this country has placed its trust — will pay a heavy penalty.”
Assistant Director in Charge James Smith said: “Charles McGonigal was justly punished today for knowingly aiding the agents of foreign adversaries who targeted the United States through his fraud and deception to satisfy his own greed. The FBI is determined to ensure any individual who commits federal crimes – even a former FBI Special Agent in Charge – is held accountable to face the consequences. This sentence marks not only an important outcome by the U.S. justice system, but also reflects the dedication of the men and women of the FBI to investigate crimes, regardless of who commits them.”
Assistant Attorney General Matthew G. Olsen said: “Charles McGonigal helped advance the interests of a sanctioned Russian oligarch, breaking his oath to safeguard our nation and uphold its laws. Today's sentence holds him accountable for this betrayal and demonstrates this department’s commitment to deny designated individuals the means to circumvent U.S. sanctions.”
According to publicly filed court documents and statements made in court proceedings:
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support to individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it prohibit providing or receiving any funds, goods, or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Oleg Deripaska as a Specially Designated National in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy. According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy. The U.S. District Court for the District of Columbia affirmed the sanctions against Deripaska. It found, among other things, that OFAC’s determination that Deripaska acted as an agent of Russian President Vladimir Putin was supported by the evidence.
As an FBI official, MCGONIGAL helped investigate Deripaska and other Russian oligarchs. As an SAC, he supervised investigations into sanctions violations. Yet at the same time, he began building a relationship with an agent of Deripaska, in the hopes of doing business with Deripaska after he retired from the FBI.
In 2021, MCGONIGAL conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following his negotiations with Deripaska’s agent, MCGONIGAL agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. While negotiating and performing services for Deripaska, MCGONIGAL and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract, and using the same shell companies to send and receive payment from Deripaska. MCGONIGAL hoped to do millions of dollars in business with Deripaska, but FBI agents from the same division MCGONIGAL used to lead foiled his scheme after only a few months of operation.
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In addition to the prison sentence, MCGONIGAL, 55, of New York, New York, was ordered to pay a fine of $40,000, to forfeit $17,500, and sentenced to three years of supervised release.
Mr. Williams praised the outstanding work of the FBI New York Field Office’s Counterintelligence Division and the valuable assistance from U.S. Customs and Border Protection as well as the New York City Police Department.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Hagan Scotten, Rebecca T. Dell, and Derek Wikstrom are in charge of the prosecution with assistance from Trial Attorney Christina A. Clark of the National Security Division’s Counterintelligence and Export Control Section.
Former Security Engineer for International Technology Company Pleads Guilty to Hacking Two Decentralized Cryptocurrency ExchangesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of SHAKEEB AHMED in connection with his hack of two separate decentralized cryptocurrency exchanges, one of which was the July 2022 hack of Nirvana Finance. AHMED pled guilty to computer fraud before U.S. Magistrate Judge Ona T. Wang. AHMED also agreed to forfeit over $12.3 million, including forfeiture of approximately $5.6 million in fraudulently obtained cryptocurrency.
U.S. Attorney Damian Williams said: “Five months ago, my Office announced the first ever arrest involving an attack on a smart contract. Today, senior security engineer Shakeeb Ahmed pled guilty and agreed to return all of the stolen crypto to his victims. That arrest is now the first ever conviction for such a hack. Ahmed’s plea has also resulted in him further admitting that he carried out a previously unsolved second multi-million-dollar hack, this time of decentralized finance protocol Nirvana Finance. In total, Ahmed used his technical knowhow to steal over $12 million and tried to cover his tracks by swapping stolen crypto for Monero, using cryptocurrency mixers, hopping across blockchains, and utilizing overseas crypto exchanges. Today’s conviction shows that no matter how sophisticated the methods used, fraud is fraud, and we will swiftly catch and convict you.”
According to the charging documents and other filings and statements made in court:
In July 2022, AHMED executed hacks on two separate decentralized cryptocurrency exchanges, an exchange referred to herein as the “Crypto Exchange” and Nirvana Finance (“Nirvana”). In July 2023, AHMED was publicly charged with the hack of the Crypto Exchange. Today’s guilty plea is the first public filing acknowledging AHMED’s responsibility for a second sophisticated, multi-million dollar hack he executed in July 2022 of Nirvana.
At the time of both attacks, AHMED, a U.S. citizen, was a senior security engineer for an international technology company whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills AHMED used to execute the hacks.
The Crypto Exchange allowed users to exchange different kinds of cryptocurrencies, and paid fees to users who deposited cryptocurrency to provide liquidity on the Crypto Exchange.
On or about July 2 and 3, 2022, AHMED carried out an attack on the Crypto Exchange by exploiting a vulnerability in one of the Crypto Exchange’s smart contracts and inserting fake pricing data to fraudulently cause that smart contract to generate approximately $9 million dollars’ worth of inflated fees that AHMED did not legitimately earn. AHMED was able to withdraw said fees from the Crypto Exchange in the form of cryptocurrency. This conduct defrauded the Crypto Exchange and its users whose cryptocurrency AHMED had fraudulently obtained.
After he stole the fees he never legitimately earned, AHMED had communications with the Crypto Exchange in which he agreed to return all of the stolen funds except for $1.5 million if the Crypto Exchange agreed not to refer the attack to law enforcement.
Nirvana was a second decentralized finance protocol. Nirvana bought and sold its cryptocurrency token, ANA. Nirvana was designed so that when a user purchased a substantial quantity of ANA, the price of ANA increased, and when a user sold a substantial quantity of ANA, the price of ANA decreased.
On or about July 28, 2022, a few weeks after the hack of the Crypto Exchange, AHMED carried out an attack on Nirvana in which he took out a flash loan for approximately $10 million, used those funds to purchase ANA from Nirvana, and used an exploit he discovered in Nirvana’s smart contracts to purchase the ANA at its initial, low price, rather than at the higher price that Nirvana was designed to charge him in light of the size of his purchase. When the price of ANA updated to reflect his large purchase, AHMED resold the ANA he had purchased to Nirvana at the new, higher price, resulting in a profit to him of approximately $3.6 million. Nirvana offered AHMED a “bug bounty” of as much as $600,000 to return the stolen funds, but AHMED instead demanded $1.4 million, did not reach agreement with Nirvana, and kept all the stolen funds. The $3.6 million AHMED stole represented approximately all the funds possessed by Nirvana, which as a result shut down shortly after AHMED’s attack.
AHMED laundered the millions that he stole from the Crypto Exchange and from Nirvana to conceal their source and ownership, using sophisticated techniques including token-swap transactions, “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain, exchanging fraud proceeds into Monero, an anonymized and particularly difficult cryptocurrency to trace, using overseas cryptocurrency exchanges, and using cryptocurrency mixers such as Samourai Whirlpool.
After the attacks, AHMED searched online for information about the hacks, his own criminal liability, criminal defense attorneys with expertise in similar cases, law enforcement’s ability to successfully investigate the attacks, and fleeing the U.S. to avoid criminal charges. For example, approximately two days after the hack of the Crypto Exchange, AHMED conducted an internet search for the term “defi hack,” read several news articles about the hack of the Crypto Exchange, and visited several pages on the Crypto Exchange’s website. In the days after the hack of Nirvana, AHMED conducted internet searches for the term “defi hacks prosecution” and searches related to the charges in the Indictment, including the terms “wire fraud” and “evidence laundering.” Finally, AHMED conducted internet searches or visited websites related to his ability to flee the U.S., avoid extradition, and keep his stolen cryptocurrency. He searched for the terms “can I cross border with crypto,” “how to stop federal government from seizing assets,” and “buying citizenship.” He also visited a website titled “16 Countries Where Your Investments Can Buy Citizenship . . .”
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AHMED, 34, of New York, New York, pled guilty to one count of computer fraud, which carries a maximum sentence of five years in prison. AHMED also agreed to pay restitution to his victims totaling $5,071,074.23.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. AHMED is scheduled to be sentenced by United States District Judge Victor Marrero on March 13, 2024.
Mr. Williams praised the outstanding work of Homeland Security Investigations and Internal Revenue Service – Criminal Investigation. Mr. Williams also thanked the U.S. Attorney’s Office for the Southern District of California for its assistance in the investigation.
The case is being prosecuted by the Office’s Money Laundering & Transnational Criminal Enterprises Unit and Complex Frauds & Cybercrime Unit. Assistant U.S. Attorneys David R. Felton and Kevin Mead are in charge of the prosecution.
Fentanyl Trafficker Sentenced to 22 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ISMAEL BIMBOW was sentenced to 22 years in prison today for his participation in a large-scale narcotics trafficking operation that sold kilogram quantities of fentanyl and heroin and for possessing firearms to protect the drug operation. BIMBOW was convicted following a week-long jury trial in April 2022 before U.S. District Judge J. Paul Oetken, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “The sentence today reaffirms this Office’s commitment to hold large-scale fentanyl traffickers accountable. Armed fentanyl traffickers such as this defendant promote violence, ruin lives, and destroy communities. This defendant sought to profit from trafficking significant quantities of this horrific drug, used multiple firearms to protect his operation, and profited handsomely, but he has now been justly punished for his crimes and will spend many years in federal prison.”
According to court documents and the evidence presented at the trial of BIMBOW:
BIMBOW and his co-conspirators ran a large-scale wholesale fentanyl operation out of numerous residences in New Jersey, while obtaining drug supplies and enlisting co-conspirators to “bag up” for him in the Southern District of New York. BIMBOW also obtained and kept multiple loaded firearms to protect his drugs and drug supplies.
On December 8, 2020, following a months-long investigation into his narcotics trafficking operation, BIMBOW was arrested outside of his stash house in East Orange, New Jersey. Law enforcement agents then searched the vehicle that he was in and recovered a semi-automatic handgun, bundled U.S. currency, and several bundles of fentanyl hidden in the car’s secret compartment, a photograph of which is below:
Officers then searched BIMBOW’s stash house and multiple luxury apartments and residences and recovered large quantities of fentanyl and heroin — including over 50,000 individually packaged doses of fentanyl ready to be distributed into the community — as well as more bricks of fentanyl and equipment used to weigh, package, stamp, and sell fentanyl on the street. Photographs of the over 50,000 doses of fentanyl recovered at the stash house are below:
During the search of BIMBOW’s three luxury apartments throughout northern New Jersey, agents located two additional firearms (including one with an extended magazine) and more fentanyl in one, a gold digital money counter in another, and over $450,000 in narcotics proceeds in the third. A photograph on BIMBOW’s phone showed that same money counter surrounded by cash. Photographs of the seized firearms, some of the seized cash, and the money counter from BIMBOW’s phone are below:
BIMBOW used his massive profits from fentanyl dealing to obtain numerous luxury vehicles, live in his multiple luxury apartments, invest in a club, and show off his earnings. For example, evidence from BIMBOW’s phone showed him taking a video of hundreds of thousands of dollars in the very apartment in which it was seized in an apparent attempt to boast about his criminal proceeds, a screenshot of which is below:
BIMBOW’s phone also contained photographs of at least four additional kilograms of fentanyl, two photos of which are shown below:
Even after BIMBOW was arrested and detained, he continued to traffic fentanyl through the use of multiple contraband phones, which agents seized from his jail cell. Evidence from those devices showed that BIMBOW continued his attempts to sell large quantities of dangerous fentanyl both before and even after he was convicted at trial in this matter.
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ISMAEL BIMBOW, 46, of Newark, New Jersey, was convicted after trial of narcotics conspiracy and using and carrying firearms during and in relation to, or possessing firearms in furtherance of, the narcotics conspiracy. In addition to the prison term, Judge Oetken sentenced BIMBOW to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration.
The prosecution of this case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Michael R. Herman, David J. Robles, and Frank J. Balsamello are in charge of the prosecution.
Brooklyn Cardiologist Charged with Health Care Fraud and BriberyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services – Office of the Inspector General (“HHS-OIG”), Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of an Indictment today charging NIRANJAN MITTAL, a Brooklyn-based cardiologist, in connection with a scheme to fabricate patient records, pay physicians for patient referrals, and bill for medically unnecessary vascular procedures. The U.S. Attorney’s Office for the Southern District of New York also filed a civil fraud complaint today under the False Claims Act against MITTAL, DIVANSHU BANSAL, who manages MITTAL’s medical practice and supervises staff, and NIRANJAN K. MITTAL, PHYSICIAN, PLLC d/b/a/ CARECUBE, and NEW YORK PET IMAGING CENTER LLC, the entities that own MITTAL’s practice and diagnostic testing facility. MITTAL was presented in federal court before U.S. Magistrate Judge Ona T. Wang. The case is assigned to U.S. District Judge Ronnie Abrams.
U.S. Attorney Damian Williams said: “We put our faith in doctors and trust their expertise. As alleged, Dr. Niranjan Mittal betrayed that trust. He subjected patients to surgical procedures that they did not need. He directed his staff to make up patient symptoms in medical records to justify these unnecessary procedures so he could receive lucrative insurance payments, and he bribed other doctors to send him their patients. Thanks to our law enforcement partners, Mittal now faces criminal prosecution and civil penalties for his alleged conduct.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Health care providers who falsify records and recommend medically unnecessary services to drive up profits pose a significant risk to patients. HHS-OIG will continue to work with our law enforcement partners to hold accountable individuals who, to satisfy their own greed, exploit federal health care programs.”
HSI Acting Special Agent in Charge Erin Keegan said: “Niranjan Mittal is accused of defrauding the government and private insurers of millions of dollars while treating his patients like commodities he could use to further enrich himself. He put profit over patient well-being, convincing individuals who sought his care to undergo potentially unnecessary medical procedures. Through partnerships, such as those established within HSI's Document and Benefits Fraud Task Force, we are actively raising awareness among the public and deterring those who aim to exploit the vulnerable.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “While Dr. Mittal may have taken the Hippocratic Oath when he became a doctor, the irony is not lost on the hypocrisy of his alleged fraud, where instead of caring for his patients, he cared for himself and lining his own pockets. Mittal’s alleged schemes were devoid of concern for his patients, and his practice to treat certain patients with unnecessary procedures is outright dangerous. Today’s arrest ensures that he will no longer be able to continue his fraud and victimize those who sought legitimate care and treatment.”
According to the Indictment:[1]
Since at least 2016, MITTAL operated a medical clinic in Brooklyn, New York (the “Brooklyn Clinic”), with a patient base consisting of many individuals of limited economic means who were insured by government health care programs. In order to ensure a steady flow of new patients to the Brooklyn Clinic, MITTAL paid rental payments to other providers pursuant to purported “leases” for office space. Often, however, the timing and amount of the payments bore no relation to the terms of those leases. In fact, MITTAL made the purported lease payments to induce other providers to refer patients to MITTAL’s staff members, who, at the direction of MITTAL, periodically traveled to the providers’ offices, performed basic tests on the referred patients, and convinced the patients to attend follow-up appointments at the Brooklyn Clinic.
Once patients arrived at the Brooklyn Clinic, often without understanding why they had been referred to the practice, they underwent a series of diagnostic tests and follow-up office visits. These tests and office visits generally were not based on the patients’ actual treatment needs. Rather, MITTAL and others acting at his direction ordered these tests and office visits to create documentation sufficient to justify subjecting patients to unnecessary peripheral vascular interventional procedures—surgical procedures focused on clearing purported blockages in the blood vessels in patients’ legs. MITTAL directed others to, among other things, fabricate the descriptions of patients’ symptoms recorded in the practice’s office visit notes, varying the symptoms across patients so that it was not apparent that the symptoms were fake.
As a result of MITTAL’s scheme, patients at the Brooklyn Clinic, many of whom were already in poor health, routinely underwent medically unnecessary vascular interventions at MITTAL’s office, with some patients undergoing ten or more interventional procedures over the course of several years. The patients’ conditions often did not improve, despite these repeated interventions. Through his operating entity, MITTAL billed Medicare, Medicaid, and private insurers over $100 million for the relevant vascular procedures.
According to the Civil Complaint: [2]
In addition to fraudulently billing Medicare and Medicaid for medically unnecessary peripheral vascular procedures, fabricating patient records to make it appear these procedures were justified, and paying kickbacks for patient referrals:
MITTAL, BANSAL, and MITTAL’s operating entities billed Medicare and Medicaid for medically unnecessary cardiac diagnostic imaging studies, including but not limited to PET scans, stress tests, echocardiograms, and carotid artery doppler studies. These tests were repeatedly performed on the same patients without any clinical basis and without taking into account the results of prior, duplicative tests. At the direction of MITTAL and BANSAL, staff prepared fabricated medical records to make it appear that patients exhibited symptoms and complaints that would justify performing these tests. The lawsuit seeks to recover treble damages and civil penalties under the False Claims Act.
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MITTAL, 70, of Brooklyn, New York, is charged with one count of conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison, one count of health care fraud, which carries a maximum sentence of ten years in prison, one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison, and one count of violation of the Anti-Kickback Statute, which carries a maximum sentence of 10 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of HHS-OIG, HSI, and IRS-CI.
The criminal case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Patrick R. Moroney and Matthew Weinberg are in charge of the prosecution. The civil lawsuit is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeffrey K. Powell and Pierre G. Armand are in charge of the civil case.
The charges contained in the Indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
If you or someone you know has information about the conduct at MITTAL’s cardiology practice, please call the HHS-OIG tip line at 1-800-HHS-TIPS.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
[2] 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.
Bronx Woman Convicted at Trial for Laundering over $2 Million in Funds from Victims of Romance Fraud SchemesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against NADINE JAZIMNE WADE on all four counts in the Indictment, which contained money laundering and bank fraud charges. The defendant was found guilty following a two-week trial before U.S. District Judge Katherine Polk Failla.
U.S. Attorney Damian Williams said: “Nadine Wade used a sham women’s clothing company as a front to launder over $2 million in fraud proceeds on behalf of scam artists in Nigeria and South Africa. The romance scams perpetrated by Wade’s partners were cruel, targeting vulnerable, elderly men and women and tricking them into transferring their life savings to the defendant, who then took her cut and sent the money to other members of the scheme. Money launderers who assist online scammers abroad will be held accountable for their crimes by this Office.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
From in or about 2016 through in or about 2021, co-conspirators of WADE based in Nigeria and South Africa committed a series of romance scams against individuals located across the United States. Those co-conspirators used aliases, including the names “Diego Francisco” and “Richard Francisco” (the “Francisco Alias”), to meet victims on various dating websites. The co-conspirators used online photographs of a male model when providing victims with photos of the Francisco Alias. After engaging in romantic conversations with the victims via phone, text, and email, those co-conspirators, posing as the Francisco Alias, asked victims for money. The reasons why the Francisco Alias needed money varied. In one version of the scheme, the Francisco Alias supposedly worked on an oil rig and needed funds to repair the rig. The Francisco Alias then instructed the victims to transfer funds to bank accounts controlled by WADE and others. The means of transfer also varied. In some cases, for example, the Francisco Alias instructed victims to obtain cashier’s checks made payable to WADE or her shell company and to mail those checks to WADE.
WADE received fraud proceeds from victims of the Francisco Alias in personal bank accounts and business bank accounts for her shell company Royal Treasure Chest LLC, a company purportedly involved in, among other things, the sale of women’s clothing and accessories. Once WADE received fraud proceeds, she rapidly depleted her bank accounts of those funds through cash withdrawals, cashier’s checks, and the purchase of vehicles, among other means. After taking her own cut of the money, WADE transferred the bulk of the funds to other members of the scheme.
From in or about 2016 through in or about 2021, WADE controlled more than 18 bank accounts that had deposits totaling over $2 million. Most of those deposits consisted of wire transfers and check or cash deposits from U.S.-based individuals who were victims of the romance fraud scam described above.
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NADINE JAZMINE WADE, 30, of the Bronx, New York, was convicted of one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of money laundering, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; and one count of bank fraud, which carries a maximum sentence of 30 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Mr. Williams praised the outstanding work of the U.S. Secret Service and the Internal Revenue Service – Criminal Investigation for their assistance in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Micah F. Fergenson, Matthew J. King, and Dina McLeod are in charge of the prosecution, with assistance from Paralegal Specialist Jayda Foote.
Venezuelan National Carlos Orense Azocar Convicted After Trial on Drug Trafficking and Weapons ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced that a jury returned a guilty verdict against CARLOS ORENSE AZOCAR yesterday on all three counts in the Indictment, which contained cocaine-importation and weapons charges. The defendant was found guilty following a two-week trial before U.S. District Judge Vernon S. Broderick.
U.S. Attorney Damian Williams said: “For more than a decade, Carlos Orense Azocar worked with some of the largest narcotics traffickers in the world to send tons of cocaine to the United States. He partnered with corrupt high-ranking government and military officials in Venezuela and employed an arsenal of high-powered weapons to protect his cocaine distribution organization. For years, Orense Azocar shipped mountains of poison to this country and made millions of dollars in drug money. But no more. A jury in this district has unanimously held Orense Azocar responsible for his crimes, and now he will face a possible life sentence behind bars.”
DEA Administrator Anne Milgram said: “Orense Azocar and his drug trafficking organization used every means available, including high-powered weaponry, government corruption, and bribery, to safeguard his expansive operation and traffic hundreds of tons of cocaine into the United States. Today’s verdict is another example of the dangerous and vital work DEA does every day across the globe and our relentless pursuit of justice for those responsible for causing harm to the American people.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
Beginning in or about 2003, ORENSE AZOCAR and his drug trafficking organization distributed tons of cocaine destined for importation into the United States. ORENSE AZOCAR helped transport, receive, and distribute loads of cocaine ranging from hundreds to thousands of kilograms from Venezuela to Mexico, the Dominican Republic, and elsewhere, using air and maritime routes. ORENSE AZOCAR operated fincas, or ranches, in Venezuela, where he stored his cocaine in underground tanks, stored hundreds of deadly weapons and thousands of rounds of ammunition, and which had clandestine landing strips from which he dispatched airplanes loaded with cocaine. ORENSE AZOCAR also loaded cocaine on “go-fast” boats that sped from the Venezuelan coastline to intermediate delivery points in the Caribbean, including the Dominican Republic and close to Puerto Rico. To aid in his cocaine distribution, ORENSE AZOCAR worked with and paid bribes to high-ranking officials throughout the Venezuelan government, including military generals and army officials, national police commissioners, and high-ranking officials in the Venezuelan intelligence agencies. ORENSE AZOCAR’s corrupt Venezuelan government connections secured access to military-grade weaponry, protection from military and law enforcement raids, safe passage for ORENSE AZOCAR’s cocaine convoys through checkpoints, and fraudulent airplane transponder codes to permit ORENSE AZOCAR’s cocaine-laden aircraft to freely depart Venezuela en route to Central America and Mexico. ORENSE AZOCAR similarly partnered with armed guerilla forces operating in Colombia and Venezuela to source cocaine and secure safe passage for his cocaine shipments. ORENSE AZOCAR distributed hundreds of tons of cocaine and made tens of millions of dollars through his narcotics trafficking.
To protect and expand his cocaine trafficking organization, ORENSE AZOCAR employed high-powered weaponry. He had armed security teams that guarded his finca; traveled in armored vehicles with armed security; and used armed security, military forces, and police to protect his convoys of cocaine. Among other weapons, ORENSE AZOCAR employed automatic rifles, submachine guns, handguns modified to operate as machine guns, and a 50-caliber mounted machine gun.
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ORENSE AZOCAR, 68, of Venezuela, was convicted on three counts: (i) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum potential sentence of life in prison; (ii) using and carrying machine guns during, and possessing machine guns in furtherance of, the cocaine-importation conspiracy, which carries a mandatory consecutive minimum sentence of 30 years in prison and maximum potential sentence of life in prison; and (iii) conspiring to use and carry machine guns during, and to possess machine guns in furtherance of, the cocaine-importation conspiracy, which carries a maximum potential sentence of life in prison.
The minimum and maximum potential sentences are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendant will be determined by the judge.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.
Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, OCDETF New York Strike Force, and SDNY Digital Forensics Unit, as well as the U.S. Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kaylan E. Lasky, Michael D. Lockard, and Kevin Sullivan are in charge of the prosecution, with assistance from Paralegal Specialist William Sirmon.
U.S. Attorney Announces Distribution of over $158 Million to Nearly 25,000 Victims of Madoff Ponzi SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Nicole M. Argentieri, the Acting Assistant Attorney General of the Justice Department’s Criminal Division, announced today that the Madoff Victim Fund (“MVF”) began its ninth distribution of approximately $158 million in funds forfeited to the U.S. Government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme.
In this distribution, payments will be sent to 24,875 victims across the globe, bringing their total recoveries to 91% of their fraud losses. Through its nine distributions, MVF has paid over $4.22 billion to 40,843 victims as compensation for losses they suffered from the collapse of BLMIS.
U.S. Attorney Damian Williams said: “In 2009, when the Southern District of New York charged Bernie Madoff for his $64 billion securities fraud ‘Ponzi’ scheme, it was one of the most prolific financial crimes in American history. Among Madoff’s many victims were not only wealthy and institutional investors, but charities and pension funds alike – some of which invested money with Madoff on behalf of individuals working paycheck-to-paycheck who were relying on their pension accounts for their retirements. The financial toll on those who entrusted their money with Madoff was devasting, and this Office’s unprecedented efforts to return money to Madoff’s victims has now resulted in clawbacks of 91% of fraud losses to their rightful owners. I commend the career prosecutors of this Office for today’s distribution of over $158 million and for their relentless pursuit of justice for victims of Wall Street fraudsters, like Bernie Madoff.”
Acting Assistant Attorney General Nicole M. Argentieri said: “The department’s Madoff Victim Fund has exceeded expectations in the level of recovery provided to victims of the fraud committed by Bernard Madoff, which devastated thousands of lives. To date, the Madoff Victim Fund has assisted more than 40,800 individual victims in recovering over 90% of victim losses. The department continues to prioritize the use of civil asset forfeiture to ensure compensation is available for victims of fraud.”
According to court documents and information presented in related proceedings:
For decades, BERNARD L. MADOFF used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions of dollars from his clients. On March 12, 2009, MADOFF pled guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle.
On June 29, 2009, MADOFF was sentenced to 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased MADOFF investor, Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family and from civil and criminal forfeiture actions against MADOFF, Peter B. Madoff, and their co-conspirators.
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The MVF’s payouts would not have been possible without the extraordinary efforts of the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Money Laundering and Asset Recovery Section, and the Federal Bureau of Investigation in the prosecution of MADOFF’s crimes and the recovery of assets supporting the forfeiture in the case.
The MVF is overseen by Richard Breeden, former chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Justice Department to assist in connection with the victim remission proceedings. Breeden and his team at MVF provided essential assistance to evaluate over 68,000 remission petitions involving billions in cash flows and to compute each victim’s fraud losses to enable payments to be made.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. The remission of these forfeited funds is being handled by the Office and the U.S. Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section.
More information about MVF and its compensation of BLMIS is available on the MVF website at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or [email protected].
New Jersey Man Who Posed as Nurse Charged with Kidnapping and Abusing Multiple WomenRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today that a grand jury in Manhattan federal court returned an eight-count Indictment charging New Jersey resident HERMAN CALVIN BRIGHTMAN, a/k/a “Nazir Griffiths,” a/k/a “Nazir Luckett,” with kidnapping, interstate travel to commit domestic violence, interstate communication of a threat, cyberstalking, and interstate stalking. BRIGHTMAN’s case is assigned to U.S. District Judge John P. Cronan.
U.S. Attorney Damian Williams said: “As alleged, for over a year, Herman Brightman preyed upon woman after woman using the internet to lure these women into meeting and dating him and posing as a nurse or nurse practitioner to gain their trust. He then quickly became physically abusive towards them, going so far as to kidnap the women at knifepoint and threaten to kill them. Today’s charges put a stop to this abusive and violent behavior. We thank and commend the courageous women who came forward to report Brightman.”
NYPD Commissioner Edward A. Caban said: “The men and women of the NYPD condemn these deeply disturbing and heinous acts allegedly committed by a serial predator. Across jurisdictional boundaries, we and our law enforcement partners take all accusations of abuse seriously and remain dedicated to ensuring justice for the victims.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From between in or about January 2022 to in or about September 2023, BRIGHTMAN used social media platforms such as Facebook and the dating application Hinge to meet, and occasionally date, several women under false pretenses. Specifically, BRIGHTMAN, often used an alias and posed as a nurse or nurse practitioner working at New York City-area hospitals, even sending pictures and videos of himself wearing scrubs and lab coats, and creating false IDs for himself. Some of those photos are included below:
Shortly after he began dating his victims, BRIGHTMAN began to act violently towards them, particularly if they attempted to end the relationship. As set forth in the Indictment, between January 2022 and September 2023, BRIGHTMAN brutalized at least four such women.
In or about July 2022, BRIGHTMAN traveled from New Jersey to the Southern District of New York and forced at knifepoint a woman (“Victim-1”) who had recently decided to break up with him and her minor child (“Minor Victim-1”) to travel from the Southern District of New York to BRIGHTMAN’s residence in New Jersey. Once they arrived at BRIGHTMAN’s residence, BRIGHTMAN threatened to kill Victim-1 if she “made any problems” and literally held onto Victim-1 for an entire evening to prevent her from escaping. Victim-1 eventually did escape the next morning and was able to contact local police after she convinced BRIGHTMAN to let her leave his residence temporarily.
In or about August 2023, BRIGHTMAN brutally attacked a Queens woman he had been dating (“Victim-2”) in her home and held her at knifepoint. During the attack, BRIGHTMAN threatened to “gut” Victim-2 “like a fish.” BRIGHTMAN also bound Victim-2’s hands and attempted to tape Victim-2’s mouth. Approximately one week after this incident, Victim-2 ended her relationship with BRIGHTMAN. In the 24 hours that followed, BRIGHTMAN called Victim-2 over 20 times, including from private blocked numbers. On one particular phone call, BRIGHTMAN repeatedly threatened Victim-2.
In or about early September 2023, BRIGHTMAN traveled from New Jersey to the Bronx, New York, and used his phone to lure a third woman he was dating (“Victim-3”) to his car. While in BRIGHTMAN’s car, BRIGHTMAN forced Victim-3 to call Victim-2. BRIGHTMAN then punched Victim-3, leaving a bruise on her arm. When Victim-3 attempted to escape, BRIGHTMAN chased after her and put her in a choke hold. Victim-3 escaped into her building and called the police.
A few days later, BRIGHTMAN returned to the Bronx to confront Victim-3 at her job. During the confrontation, BRIGHTMAN repeatedly asked Victim-3 if she had contacted the police. BRIGHTMAN then followed Victim-3 home where BRIGHTMAN assaulted her again, pushing Victim-3 to the ground and throwing a traffic cone at her.
In or about late September 2023, BRIGHTMAN traveled to the Bronx and convinced a fourth woman (“Victim-4”), who had previously ended their relationship, to allow him into her home. Inside Victim-4’s home, BRIGHTMAN assaulted and strangled Victim-4, leaving her with bruising on her neck. BRIGHTMAN also repeatedly threatened to kill Victim-4 and attempted to rape her. Victim-4 was ultimately able to escape with the help of a friend.
If you have been victimized by HERMAN CALVIN BRIGHTMAN, a/k/a “Nazir Griffiths,” a/k/a “Nazir Luckett,” or have any additional information about his alleged illegal behavior, please contact the U.S. Attorney's Office for the Southern District of New York at 1-866-874-8900 and reference this case.
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BRIGHTMAN, 30, of West New York, New Jersey, is charged with one count of kidnapping a minor, which carries a minimum sentence of 20 years in prison and a maximum sentence of life in prison; one count of threatening physical harm by interstate communication, which carries a maximum sentence of five years in prison; one count of cyberstalking, which carries a maximum sentence of five years in prison; two counts of kidnapping, which each carry a maximum sentence of 20 years in prison; two counts of travel in interstate commerce to commit a crime of violence, which each carry a maximum sentence of five years in prison; and one count of travel in interstate commerce to stalk, which carries a maximum potential sentence of five years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the NYPD, Task Force Officers assigned to the U.S. Attorney’s Office for the Southern District of New York, and the Complex Analytics and Social Media Enhancement Team at the New York/New Jersey High Intensity Drug Trafficking Areas office for their work on the investigation. Mr. Williams also thanked the Bronx District Attorney’s Office, the Queens District Attorney’s Office, and the Ocean County District Attorney’s Office in New Jersey for their assistance in the investigation.
The case is being prosecuted by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Patrick Moroney and Ni Qian are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Leader of Black-Market HIV Medication Fraud Scheme Pleads GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that BORIS AMINOV pled guilty today to conspiracy to commit health care fraud in connection with engaging in a years-long scheme to defraud Medicaid, Medicare, and private insurance companies out of at least $20 million. 10 other defendants were charged in connection with the scheme in two separate indictments unsealed in March and October 2023. AMINOV pled guilty before U.S. District Judge Mary Kay Vyskocil and is scheduled to be sentenced on April 17, 2024.
U.S. Attorney Damian Williams said: “Boris Aminov orchestrated a scheme to get rich by lying to Medicaid, Medicare, and private insurance companies and by depriving vulnerable HIV patients of legitimate and safe medications. Aminov also made millions of dollars through buying and distributing black-market HIV medications to pharmacies all over New York City. This Office will be tireless in its pursuit of those who seek to line their pockets by preying on vulnerable members of society.”
According to the allegations contained in the Superseding Indictments and statements made in court proceedings:
From at least in or about 2017 through at least in or about 2023, AMINOV and others engaged in a scheme that defrauded Medicaid, Medicare, and private insurance companies out of at least approximately $20 million through trafficking in black-market HIV medication. In doing so, they exploited at least hundreds of low-income individuals who had been prescribed HIV medication, jeopardizing the health and safety of those vulnerable patients.
AMINOV distributed black-market HIV medications to pharmacies that were owned and operated by other co-conspirators. That medication was then dispensed to unknowing patients who believed they were receiving legitimate medication. To further their scheme and conceal their proceeds, co-conspirators used bank accounts associated with their respective pharmacies to funnel money to shell companies controlled by AMINOV.
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AMINOV, 47, of Brooklyn, New York, pled guilty to one count of conspiracy to commit health care fraud, which carries a maximum potential sentence of 10 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jeffrey W. Coyle and Jackie Delligatti are in charge of the prosecution.
Justice Department Announces Distribution of over $158.9M to Nearly 25,000 Victims of Madoff Ponzi SchemeRead the Press Release
The Justice Department announced today that the Madoff Victim Fund (MVF) began its ninth distribution of over $158.9 million in funds forfeited to the U.S. government in connection with the Bernard L. Madoff Investment Securities LLC (BLMIS) fraud scheme.
In this distribution, payments will be sent to 24,875 victims across the globe, bringing their total recoveries to 91% of their fraud losses. Through its nine distributions, MVF has paid over $4.22 billion to 40,843 victims as compensation for losses they suffered from the collapse of BLMIS.
“The department’s Madoff Victim Fund has exceeded expectations in the level of recovery provided to victims of the fraud committed by Bernard Madoff, which devastated thousands of lives,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “To date, the Madoff Victim Fund has assisted more than 40,800 individual victims in recovering over 90% of victim losses. The department continues to prioritize the use of civil asset forfeiture to ensure compensation is available for victims of fraud.”
“In 2009, when the Southern District of New York charged Bernie Madoff for his $64 billion securities fraud ‘Ponzi’ scheme, it was one of the most prolific financial crimes in American history. Among Madoff’s many victims were not only wealthy and institutional investors, but charities and pension funds alike — some of which invested money with Madoff on behalf of individuals working paycheck-to-paycheck who were relying on their pension accounts for their retirements,” said U.S. Attorney Damian Williams for the Southern District of New York. “The financial toll on those who entrusted their money with Madoff was devasting, and this office’s unprecedented efforts to return money to Madoff’s victims has now resulted in clawbacks of 91% of fraud losses to their rightful owners. I commend the career prosecutors of this office for today’s distribution of over $158 million and for their relentless pursuit of justice for victims of Wall Street fraudsters, like Bernie Madoff.”
According to court documents and information presented in related proceedings, for decades, Bernard L. Madoff used his position as chairman of BLMIS, the investment advisory business he founded in 1960, to steal billions of dollars from his clients. On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle.
On June 29, 2009, Madoff was sentenced to 150 years in prison for running the largest fraudulent scheme in history. Of the over $4 billion that has been made available to victims, approximately $2.2 billion was collected as part of the historic civil forfeiture recovery from the estate of deceased Madoff investor, Jeffry Picower. An additional $1.7 billion was collected as part of a deferred prosecution agreement with JPMorgan Chase Bank N.A. and civilly forfeited in a parallel action. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family, and from civil and criminal forfeiture actions against Madoff, Peter B. Madoff, and their co-conspirators.
The MVF’s payouts would not have been possible without the extraordinary efforts of the Criminal Division’s Money Laundering and Asset Recovery Section, U.S. Attorney’s Office for the Southern District of New York, and FBI in the prosecution of Madoff’s crimes and the recovery of assets supporting the forfeiture in the case.
The MVF is overseen by Richard Breeden, former chairman of the U.S. Securities and Exchange Commission, who serves as Special Master appointed by the Justice Department to assist in connection with the victim remission proceedings. Breeden and his team at MVF provided essential assistance to evaluate over 68,000 remission petitions involving billions in cash flows, and to compute each victim’s fraud losses to enable payments to be made.
More information about MVF and its compensation to victims of BLMIS is at www.madoffvictimfund.com, such as eligibility criteria, process updates, and frequently asked questions. Further questions may be directed to the MVF at 866-624-3670 or [email protected].
District Court Employee Convicted at Trial in Connection with Decade-Long Bribery SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced on December 11, 2023, that a federal jury found DIONISIO FIGUEROA, a/k/a “Dionicio,” an employee of the U.S. District Court for the Southern District of New York (“the SDNY District Court”), guilty of bribery, conspiracy, and false statements charges for his participation in a scheme in which he referred criminal defendants to a criminal defense attorney and encouraged those defendants to retain the attorney, all in exchange for cash bribes. The attorney pled guilty to all counts on November 16, 2023. FIGUEROA will be sentenced by U.S. District Judge Mae A. D’Agostino on April 8, 2024.
U.S. Attorney Damian Williams said: “Figueroa, a longtime clerk at the SDNY District Court, betrayed his employer, the public, and those who rely on the court to remain impartial. His actions violated his duties as a court employee, undermined the fair administration of justice, and undermined the work of the many good people in the courthouse who serve the criminal justice system with honesty and integrity. A federal jury has now held Figueroa accountable for his crimes. This verdict should remind public servants in positions of trust that if you betray the public, my Office will not hesitate to enforce the law.”
According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:
As a clerk in the SDNY Magistrate Clerk’s Office since in or about 2002, FIGUEROA was responsible for performing duties that included, among other things, making data entries regarding official case events in criminal cases, making summary entries of documents and proceedings on case dockets, and performing inquiries and furnishing information, either in person or by correspondence, regarding the status of cases. FIGUEROA also played a role with respect to the intake of criminal cases, including by preparing appearance bonds, advising defendants and their family members about the conditions of the bonds, and ensuring that appearance bonds were signed by all parties prior to a defendant’s release.
SDNY District Court personnel policies prohibited FIGUEROA from having outside employment that would pose a conflict of interest; receiving payments, gifts, or other benefits from persons having business before the District Court; and recommending particular attorneys to members of the public. FIGUEROA was also subject to the U.S. Courts’ Code of Conduct for Judicial Employees (the “Code of Conduct”), which cautioned judicial employees that “[a] number of criminal statutes of general applicability govern federal employees’ performance of official duties. These include: 18 U.S.C. § 201 (bribery of public officials and witnesses) . . . ” The Code of Conduct likewise admonished, among other things, that “[a] judicial employee should never influence or attempt to influence the assignment of cases, or perform any discretionary or ministerial function of the court in a manner that improperly favors any litigant or attorney, nor should a judicial employee imply that he or she is in a position to do so.”
TELESFORO DEL VALLE, JR., was a private attorney who had appeared in numerous federal criminal cases pending before the SDNY District Court.
Between at least 2011 and 2022, FIGUEROA and DEL VALLE engaged in a scheme whereby FIGUEROA used his position as an employee of the SDNY District Court to encourage criminal defendants to retain DEL VALLE to represent them in pending criminal cases. In return, DEL VALLE paid FIGUEROA a portion of the fees clients paid to DEL VALLE. Over the course of more than a decade, FIGUEROA referred at least 45 SDNY criminal defendants to DEL VALLE, and DEL VALLE paid FIGUEROA tens of thousands of dollars in referral fees. DEL VALLE paid FIGUEROA directly and through an intermediary who would pick up envelopes of cash for FIGUEROA from DEL VALLE’s law office. Many of the clients who ended up retaining and paying DEL VALLE were assigned free, court-appointed counsel. Nevertheless, FIGUEROA encouraged those individuals to change counsel, including by vouching for DEL VALLE’s abilities as a lawyer.
FIGUEROA and DEL VALLE were also charged with making false statements to law enforcement during the investigation. In November 2022, federal law enforcement agents separately interviewed both FIGUEROA and DEL VALLE. After advising each that lying to federal law enforcement agents is a federal crime, FIGUEROA and DEL VALLE each made materially false, fictitious, and fraudulent statements and representations in response to the agents’ questions. In particular, FIGUEROA denied making any referrals to DEL VALLE except on a small number of occasions concerning close relations or friends. He further denied ever having received payments from DEL VALLE for referrals. DEL VALLE, upon being served with a federal grand jury subpoena requiring the production of records from his law firm, falsely denied having any records reflecting client referrals from or payments to FIGUEROA or anyone else.
DEL VALLE pled guilty to all charges on November 16, 2023, and is scheduled to be sentenced by Judge D’Agostino on March 12, 2024.
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FIGUEROA, 66, of New York, New York, was convicted of one count of conspiracy to bribe a federal employee and pay illegal compensation to a judicial employee, which carries a maximum potential sentence of five years in prison; one count of federal employee bribery, which carries a maximum potential sentence of 15 years in prison; one count of receiving illegal compensation as a judicial employee, which carries a maximum potential sentence of five years in prison; and one count of making material false statements, which carries a maximum potential sentence of five years in prison.
DEL VALLE, 65, of Leonia, New Jersey, was convicted of one count of conspiracy to bribe a federal employee and pay illegal compensation to a judicial employee, which carries a maximum potential sentence of five years in prison; one count of federal employee bribery, which carries a maximum potential sentence of 15 years in prison; one count of paying illegal compensation to a judicial employee, which carries a maximum potential sentence of five years in prison; and one count of making material false statements, which carries a maximum potential sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the Special Agents from the U.S. Attorney’s Office for the Southern District of New York.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Frank Balsamello, Jarrod L. Schaeffer, and Stephanie Simon, with the assistance of Paralegal Specialist Christopher de Grandpre, are in charge of the prosecution.
Former Lumentum Executive Sentenced to 24 Months for Insider TradingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that AMIT BHARDWAJ, the former Chief Information Security Officer at Lumentum Holdings Inc. (“Lumentum”), was sentenced by U.S. District Judge Gregory H. Woods to 24 months in prison for his participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that BHARDWAJ misappropriated from his employer, Lumentum. BHARDWAJ previously pled guilty to 13 counts relating to the insider trading scheme.
U.S. Attorney Damian Williams said: “Amit Bhardwaj violated the trust placed in him by his employer by tipping his associates with valuable, non-public information regarding Lumentum’s planned corporate acquisitions. Today’s sentence should serve as a stark reminder to corporate executives regularly entrusted with confidential business information that if you try to illegally profit from this information, you will pay a stiff price.”
According to the allegations in the Indictment and statements made in public court proceedings:
In approximately December 2020, BHARDWAJ learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”). Based on this information, BHARDWAJ purchased Coherent stock and call options, then tipped three associates –– his friend Dhirenkumar Patel, another friend, and one of BHARDWAJ’s close family relatives –– and these individuals all traded in Coherent securities as a result. BHARDWAJ and Patel agreed that Patel would pay BHARDWAJ 50% of the profits that Patel earned by trading in Coherent based on the MNPI provided by BHARDWAJ. When Coherent’s stock price increased substantially following the announcement of the Lumentum acquisition, BHARDWAJ, his close family member, his friend Patel, and another friend closed their positions in Coherent securities and collectively profited by nearly $900,000.
In or about October 2021, BHARDWAJ learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition. BHARDWAJ provided this information to Srinivasa Kakkera, Abbas Saeedi, and Ramesh Chitor, and these individuals all subsequently traded in Neophotonics securities. In connection with Chitor’s trading, BHARDWAJ and Chitor agreed that Chitor and BHARDWAJ would split the profits equally. When Neophotonics’s stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, Kakkera, Saeedi, and Chitor closed their positions in Neophotonics securities and collectively made approximately $4.3 million in realized and unrealized profits.
After they were interviewed by the Federal Bureau of Investigation (“FBI”) voluntarily and served with federal grand jury subpoenas on approximately March 29, 2022, BHARDWAJ took steps to obstruct the federal investigation of their conduct. On the day of the March 29, 2022, FBI interviews, BHARDWAJ drove to the homes of certain of his co-conspirators to encourage them not to tell the federal authorities the truth about their insider trading scheme. BHARDWAJ and his associates subsequently met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme. They also created false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.
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In addition to the prison sentence, BHARDWAJ, 49, of San Ramon, California, was ordered to forfeit $547,286 and pay a fine of $975,000.
Mr. Williams praised the outstanding work of the FBI. He also acknowledged the assistance of the Securities and Exchange Commission, which separately initiated civil proceedings against BHARDWAJ.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Adam Hobson and Noah Solowiejczyk are in charge of the prosecution.
Construction Company President Sentenced to 10 Years in Prison for 25-Year Fraud on the U.S. GovernmentRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SINA MOAYEDI, the owner of a construction company, Montage, Inc., was sentenced today to 10 years in prison, stemming from his 25-year fraud on the United States Government. MOAYEDI pled guilty in April 2023 to conspiracy to commit wire and bank fraud, conspiracy to commit bribery of a public official, and aggravated identity theft. MOAYEDI’s sentence was imposed by U.S. District Judge Jed S. Rakoff, who also presided over his guilty plea.
U.S. Attorney Damian Williams said: “From 1995 until 2021, Sina Moayedi defrauded the U.S. Government and various of its agencies through a sprawling, sophisticated scheme. Moayedi lied repeatedly about his company’s ownership and qualifications, including by claiming that it was woman-owned and Hispanic-owned; he lied to obtain a Top-Secret national security clearance; and he repeatedly paid bribes to a State Department employee to illegally obtain inside information. In total, Moayedi’s company fraudulently obtained more than 25 government contracts worth more than $125 million. Even after he was arrested in this case, Moayedi continued to commit crime, destroying electronic evidence of his frauds. For his brazen fraud on the federal government, Moayedi has now been sentenced to prison.”
According to court filings and statements made in Manhattan federal court:
In 1986, MOAYEDI founded Montage, Inc., a U.S.-based business that is primarily involved in Government construction projects, including embassies, consulates, military posts, and marine barracks around the world. From 1995 to 2021, MOAYEDI defrauded the U.S. Government — including the State Department, Treasury Department, Department of Defense, and General Services Administration — by lying in various respects. In bids for contracting work, MOAYEDI mispresented his company’s ownership, his employees’ qualifications, his company’s construction experience, and his company’s financial condition, among other things.
As to ownership, MOAYEDI falsely represented, repeatedly, that Montage was a female-owned business (or a female- and minority-owned business) in order to secure unmerited advantages in the bidding process. In fact, MOAYEDI founded, owned, ran, and controlled Montage, and he made all material decisions on Montage’s behalf. As MOAYEDI revealed to a bank that inquired about Montage’s ownership status in 2016, “I am the sole owner and president of Montage and have always been.”
As to his employees’ qualifications, MOAYEDI significantly overstated the qualifications of various Montage employees in order to, among other things, meet State Department and contractual requirements for minimum experience in certain key positions. For instance, MOAYEDI claimed, falsely, that certain Montage employees possessed engineering degrees. He also claimed, falsely, that certain individuals worked for Montage when, in fact, they did not.
As to Montage’s construction experience, MOAYEDI submitted bids to the Government in which he repeatedly falsified Montage’s purported construction experience in order to burnish the company’s alleged credentials. To ensure that the U.S. Government did not uncover these lies, MOAYEDI “backstopped” this fabricated experience by creating fraudulent email accounts and personas, so that someone else appeared to be “vouching” that Montage had performed this prior work. This required creating online web domains (the “Fabricated Domains”), so that Montage’s purported references appeared legitimate. These Fabricated Domains were extremely similar to, but one character or word different from, the legitimate web domains associated with actual entities.
As to financial condition, MOAYEDI paid a Certified Public Accountant to prepare at least four different sets of books and records, each of which was provided to a different recipient (e.g., one fraudulent set for the U.S. Government, another fraudulent set for the bank, another fraudulent set for a company that sold construction bonds, etc.).
And to ensure Montage’s eligibility for sensitive U.S. Government contracts, MOAYEDI lied to obtain and maintain his Top-Secret national security clearance, including by concealing his ties to Iran, such as his dual citizenship with Iran, his Iranian passport, and his travel to Iran.
Further, between 2014 and 2020, MOAYEDI repeatedly paid cash bribes and kickbacks to an engineer in the State Department’s Overseas Building Operations division, May Salehi, in exchange for confidential inside information relating to several State Department construction projects, including projects in Ecuador, Spain, and Bermuda. For instance, in late 2016 and early 2017, MOAYEDI paid $60,000 in cash to Salehi after Salehi provided confidential inside bidding information to MOAYEDI about the relationship between Montage’s original bid and his competitors’ bids — information that allowed Montage to raise its bid by nearly $1 million yet remain the lowest bidder on a construction project that was ultimately awarded to Montage.
In addition to fraudulently obtaining government contracts, MOAYEDI’s company also committed fraud in the execution of government contracts, including by using substandard materials, using unqualified personnel, and falsifying an architect’s signature and stamp on architectural plans that had not been reviewed by the architect, including plans that related to safety and structural issues, such as fire protection, roof design, and structural steel drawings.
MOAYEDI also defrauded his primary bank (“Bank-1”) through various misrepresentations. Montage had a multimillion-dollar line of credit at Bank-1, which MOAYEDI maintained through misrepresentations about Montage’s ownership and the value, progress, status, and existence of construction projects that Montage was performing for the U.S. Government. For instance, in or about both 2014 and 2019, MOAYEDI made material misrepresentations to Bank-1 in support of an annual extension of Montage’s line of credit, including misrepresentations about purportedly lucrative “classified” government construction projects with distinctive names like “Area 6,” which, in fact, did not exist.
MOAYEDI also obstructed justice in multiple respects: (i) in September 2021, shortly after his release on bail in this case, MOAYEDI destroyed electronic evidence of his fraud on the U.S. Government by deleting six Fabricated Domains, which (as noted) he had used to help inflate Montage’s purported construction experience in bids for U.S. Government construction projects; (ii) shortly after the execution of search warrants at Montage’s offices in September 2020, MOAYEDI witness tampered by pressuring a co-conspirator to lie to investigators; and (iii) during a civil lawsuit between the State Department and Montage, MOAYEDI lied during a sworn deposition in 2019 by falsely claiming that a Hispanic woman had been the President of Montage “ever since” 2002 and that he was merely the Vice President of Montage.
Finally, in October 2023, the Court held a multiday Fatico hearing regarding the quality of construction that MOAYEDI and Montage provided the State Department. The Court determined that MOAYEDI “provided grossly inadequate construction for several of the contracts of which he was in charge” and “that these numerous defects were intentional.” In particular, the Court found that, “[r]epeatedly, Moayedi falsely inflated the credentials of key personnel -- and in some cases, submitted names of people who never even worked for Montage -- that he touted to the State Department to win bids, only to send in their stead people that he knew were patently unqualified for their roles once he secured the contract in question.”
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In addition to his prison sentence, MOAYEDI, 68, of Chevy Chase, Maryland, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $6,588,679.63 and forfeit $17,795,098.50.
May Salehi was previously sentenced to one year in prison, three years of supervised release, a fine of $500,000, and forfeiture of $60,000.
Mr. Williams praised the exceptional investigative work of the State Department, Office of Inspector General; Special Agents from the U.S. Attorney’s Office for the Southern District of New York; and the Internal Revenue Service.
The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case. Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.