Southern District of New York
Press releases recorded for this federal judicial district.
Husband and Wife Charged with Multimillion-Dollar Gift Card Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging XULIANG HOU and YUNA LIN with conspiring to commit wire fraud. HOU and LIN were arrested yesterday and will be presented today before U.S. Magistrate Judge Jennifer E. Willis. The case has been assigned to U.S. District Judge Richard M. Berman.
U.S. Attorney Damian Williams said: “For nearly two years, Xuliang Hou, Yuna Lin, and their co‑conspirators allegedly engaged in a brazen scheme to obtain gift card information from their victims through lies. As alleged, they used those gift cards to purchase millions of dollars’ worth of products, including electronic devices. Thanks to the skillful investigative work of HSI and the dedication of the prosecutors of this Office, the defendants’ alleged scheme will be put to an end.”
HSI Special Agent in Charge Ivan J. Arvelo said: “The defendants, along with their co-conspirators, stand accused of swindling victims out of millions of dollars across multiple states over the course of several years. HSI New York remains steadfast in our commitment to thwart criminal organizations seeking to undermine the integrity of American businesses and the stability of our financial system.”
According to the allegations in the Indictment:[1]
From July 2020 through at least May 2022, XULIANG HOU and YUNA LIN carried out a scheme in which victims were induced, under false pretenses, to purchase gift cards redeemable at certain stores. The scheme’s perpetrators used those cards to purchase millions of dollars’ worth of various products, including electronic devices.
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HOU, 32, and LIN, 30, both of Philadelphia, Pennsylvania, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of HSI.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jeffrey W. Coyle and Benjamin M. Burkett 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 below constitute only allegations, and every fact described should be treated as an allegation.
Former Congressman Sentenced to 22 Months in Prison for Insider TradingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that STEPHEN BUYER, a former Indiana Congressman, was sentenced today to 22 months in prison by U.S. District Judge Richard M. Berman. BUYER was previously convicted following trial of four counts of securities fraud for engaging in two insider trading schemes.
U.S. Attorney Damian Williams said: “Stephen Buyer was convicted by a jury of twice engaging in insider trading. He abused positions of trust for illicit personal gain, and today he faced justice for those acts. No insider trader is above the law, and we will continue to bring those who undermine the fairness and integrity of our markets to justice.”
According to the Indictment, evidence presented during trial, court documents, and statements made in open court:
In 2018 and 2019, BUYER engaged in two separate, but interrelated insider trading schemes to steal material non-public information that he obtained through consulting work and to place timely, profitable securities trades based on that stolen information. First, in or about March and April 2018, BUYER purchased shares of Sprint Corporation (“Sprint”) ahead of the April 29, 2018, public announcement that T-Mobile US, Inc. (“T-Mobile”) and Sprint would merge in a deal valued at $26.5 billion. Prior to the public announcement of the transaction by T-Mobile, executives at T-Mobile told a small, trusted group of consultants that they had retained to work on the deal, including BUYER, about the merger and directed them to keep the information confidential. BUYER breached his duty of confidentiality to T-Mobile and misappropriated that information by purchasing shares of Sprint across several brokerage accounts, including his own accounts, an account held jointly with his cousin, and an account in the name of a close, personal friend. Across these accounts, BUYER made more than $126,000 from the purchase and subsequent sale of Sprint stock after the merger was publicly announced.
In or about June through August 2019, BUYER again engaged in insider trading, this time trading in shares of Navigant Consulting, Inc. (“Navigant”) ahead of Navigant’s acquisition by consulting and advisory firm Guidehouse. As with his purchase of Sprint shares, BUYER learned through his consulting work for Guidehouse that Guidehouse intended to acquire Navigant and misappropriated that information by purchasing Navigant shares ahead of the public announcement of the acquisition. BUYER purchased Navigant shares across several brokerage accounts, including accounts in his own name, joint accounts held with family members, and the account of the same close, personal friend whose account he used to trade Sprint shares. In total, Buyer made more than $223,000 from his illegal Navigant trades.
BUYER testified at his March 2023 trial and provided false explanations for his Sprint and Navigant trading, which Judge Berman found at sentencing to constitute obstruction of justice.
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In addition to his prison sentence, BUYER, 64, of Noblesville, Indiana, was ordered to pay more than $350,000 in forfeiture and restitution in an amount to be determined.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and also thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Kiersten A. Fletcher and Margaret Graham are in charge of the prosecution.
Florida Man Sentenced to Three Years in Prison for Participating in Fraud and Money Laundering Scheme Targeting Hedge FundRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MUSTAPHA RAJI was sentenced today by U.S. District Judge Jesse M. Furman to three years in prison for his participation in a $1.7 million business email compromise and money laundering scheme that targeted a Manhattan hedge fund. RAJI was previously convicted after a one-week jury trial of conspiracy to commit wire fraud, wire fraud, receipt of stolen property, and conspiracy to commit money laundering.
U.S. Attorney Damian Williams said: “Today’s sentencing of Mustapha Raji should send a clear message that email scams targeting businesses in this District will not be tolerated. Together with our law enforcement partners, we will continue to zealously prosecute online scammers abroad, and the U.S.-based money launderers they work with, to protect American businesses.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
RAJI participated in an international fraud ring that conducted phishing and other email fraud campaigns.
In April 2017, a company RAJI controlled received over $100,000 in two transfers from another corporate entity, which had itself just received nearly $2 million in stolen money from a public university in Oregon. The university had been conned into sending the payment to an account controlled by one of RAJI’s co-conspirators instead of the bank account of the legitimate vendor it intended to pay.
In July 2018, RAJI was involved in the compromise of the business email account of a hedge fund founder in New York. That compromise resulted in the fraudulent diversion of a $1.7 million wire transfer from the hedge fund to a corporate bank account used to facilitate the scheme. RAJI was a registered officer of the company that received the stolen funds, he fabricated documents to cover up the fraudulent transfer of funds from the hedge fund, and he directed a co-conspirator to launder the stolen funds to other co-conspirators domestically and overseas. RAJI took a $50,000 cut for his participation in the scheme.
Similarly, in May 2018, a hospital system in Missouri fell victim to a business email compromise scheme. As part of that scheme, unauthorized emails were sent from the email account for the hospital’s chief financial officer that purported to direct payments to be issued for false invoices issued by RAJI’s company, causing over $250,000 to be sent directly by the victim to a bank account RAJI controlled.
In September 2018, RAJI learned that a co-conspirator with whom he had worked closely in the scheme had been arrested. Nonetheless, when a cooperating witness approached RAJI in 2019 about a new fraud — a supposed insider job to steal $2.3 million — RAJI agreed to participate and sent the cooperating witness wire instructions for an account to receive the stolen money.
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In addition to his prison term, RAJI, 53, of Hollywood, Florida, was sentenced to three years of supervised release and was ordered to pay restitution in the amount of $711,557.54 and forfeit the same amount.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Catherine Ghosh, Jilan Kamal, Dina McLeod, and Robert B. Sobelman are in charge of the prosecution.
Bronx Man Sentenced to 38 Years in Prison for 2018 Murder During Which He Shot the Victim’s Five-Year-Old SonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSHUA RODRIGUEZ, a/k/a “Suave,” was sentenced by U.S. District Judge Jed S. Rakoff to 38 years in prison for the fatal shooting of Jaquan Millien on October 23, 2018. RODRIGUEZ shot and killed Millien in the Butler Houses in the Bronx, New York, in connection with a drug dispute. During the shooting, RODRIGUEZ shot Millien’s five-year-old son, who was with his father at the time. Thankfully, Millien’s son survived. RODRIGUEZ was convicted following a five-day trial before Judge Rakoff on June 6, 2023.
U.S. Attorney Damian Williams said: “Inside of a residential building in the Bronx, Joshua Rodriguez targeted, ambushed, and callously murdered Jaquan Millien over a drug dispute. Worse still, Rodriguez shot and wounded Millien’s five-year-old son who was standing next to his father. Millien’s son’s gunshot wound has healed, but the scars from witnessing the brutal murder of his father will last a lifetime. Today’s lengthy sentence is yet another example of this Office’s promise to remain relentless in its prosecution of violent drug dealers.”
According to the evidence presented in court during the trial:
Between in or about 2012 and in or about 2018, JOSHUA RODRIGUEZ conspired with others to sell marijuana in an apartment building located at 1408 Webster Avenue (the “Apartment Building”). In connection with his narcotics dealing, on or about October 23, 2018, RODRIGUEZ followed Jaquan Millien and his son into the Apartment Building after Millien picked up his son from school. RODRIGUEZ cornered Millien and his son in the stairwell and fired multiple shots, killing Millien and hitting Millien’s son in the arm.
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In addition to his prison term, RODRIGUEZ, 31, of the Bronx, New York, was sentenced to five years of supervised release.
Mr. Williams thanked the Federal Bureau of Investigation and the New York City Police Department for their outstanding work on the investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Mathew Andrews, Courtney Heavey, and Jim Ligtenberg are in charge of the prosecution, with the assistance of Paralegal Specialist William Coleman.
U.S. Settles False Claims Act Lawsuit Against Cardiologist and His Medical Practice for Paying Millions in Kickbacks for ReferralsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and settled a civil fraud lawsuit against KLAUS PETER RENTROP and his medical practice GRAMERCY CARDIAC DIAGNOSTIC SERVICES P.C. (“GRAMERCY CARDIAC”) for paying millions of dollars in kickbacks to physicians and their practices for patient referrals. The kickbacks took the form of inflated office “rental payments” and fees paid to contracted cardiologists. Specifically, the Complaint alleges that, from 2010 to 2021, RENTROP and Gramercy Cardiac entered into office space rental agreements, often in excess of fair market value, with primary care and other physicians (or their medical practices) in order to induce these physicians to refer patients to GRAMERCY CARDIAC-contracted cardiologists who saw patients at the rented office space. These cardiologists then regularly ordered diagnostic tests and procedures that were performed at GRAMERCY CARDIAC locations and were paid a flat fee for each referral. GRAMERCY CARDIAC provides cardiac diagnostic imaging services, including PET and SPECT scans, and previously operated four offices in New York City. RENTROP founded and owns GRAMERCY CARDIAC and serves as its President.
Under the settlement approved today by U.S. District Judge Jesse M. Furman, RENTROP and GRAMERCY CARDIAC will pay $4,510,678 to the United States and have admitted and accepted responsibility for conduct alleged in the Complaint as further described below. RENTROP and GRAMERCY CARDIAC have also agreed to pay $1,989,362 to the State of New York to resolve the State’s claims, for a total recovery of $6.5 million. The settlement amount is based on the Office’s assessment of RENTROP’s and GRAMERCY CARDIAC’s ability to pay based on the financial information they provided. The parties have also executed a Consent Judgment in the amount of $64,416,515, which may be enforced if Defendants do not make the payments required under the settlement agreement. In addition, RENTROP has agreed to relinquish his ownership and control over GRAMERCY CARDIAC by the end of the calendar year and will pay a portion of the proceeds of any sale of the practice to the United States. Further, RENTROP is indefinitely barred from working for any entity that bills federal healthcare programs. He also entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from, among other things, participating in Medicare, Medicaid, or other federal healthcare programs for five years.
U.S. Attorney Damian Williams said: “Over more than a decade, Klaus Peter Rentrop and Gramercy Cardiac paid millions of dollars to doctors and their medical practices in exchange for patient referrals for cardiac testing and procedures. The Anti-Kickback Statute is meant to ensure that when making medical decisions, a doctor considers only the patient’s best interests — not the doctor’s or others’ financial interests. The defendants violated those doctor-patient relationships through their kickback arrangements, and now they are being held to account.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients. Certain violations of the Anti-Kickback Statute can induce medically unnecessary testing and influence physicians’ decision-making inappropriately.”
According to the Complaint, from 2010 through 2021:
RENTROP and GRAMERCY CARDIAC offered and paid physicians and their practices millions of dollars in kickbacks in the form of inflated “rental payments” and referral fees to induce them to refer patients to Gramercy-contracted cardiologists and to Gramercy Cardiac for diagnostic tests and procedures, in violation of the Anti-Kickback Statute and the Stark Law.
RENTROP and GRAMERCY CARDIAC’s scheme worked as follows. RENTROP and GRAMERCY CARDIAC entered into office space rental agreements, often in excess of fair market value, with primary care and other physicians or their medical practices (the “Rental Practices”). These agreements typically provided for the use of an exam room once or twice a month, as well as for the use of basic equipment (e.g., a telephone and a computer) and front desk staff to assist with scheduling. The defendants often agreed to pay thousands of dollars each month in rent. RENTROP and GRAMERCY CARDIAC also entered into independent contractor agreements with dozens of cardiologists (the “Gramercy-Contracted Cardiologists”) who were sent to see patients at the Rental Practices. In exchange for the purported “rental payments,” the Rental Practices referred patients to the Gramercy-Contracted Cardiologists, who in turn referred many of these patients to a GRAMERCY CARDIAC office to undergo cardiac diagnostic tests and procedures. RENTROP and GRAMERCY CARDIAC paid the Gramercy-Contracted Cardiologists a flat fee for each test or procedure performed on referred patients at a Gramercy Cardiac location, with larger fees paid for tests and procedures for which GRAMERCY CARDIAC received a greater reimbursement. These per-procedure fees were the only compensation paid to some Gramercy-Contracted Cardiologists.
To ensure the kickbacks paid to the Rental Practices were working, RENTROP directed his staff to calculate GRAMERCY CARDIAC’s return on investment from the “rental payments” paid to each Rental Practice. RENTROP insisted on a minimum return on investment of at least 300% from the kickbacks.
These Rental Practices referred tens of thousands of patients to the Gramercy-Contracted Cardiologists, who in turn referred more than 23,000 patients for PET and SPECT scans at GRAMERCY CARDIAC. A significant proportion of these patients were Medicare or Medicaid beneficiaries: GRAMERCY CARDIAC billed Medicare or Medicaid for tests or procedures provided to tens of thousands of Medicare or Medicaid beneficiaries who were referred by the Rental Practices, including for PET and SPECT scans for many thousands of these beneficiaries. As a result, the claims submitted for payment for these tests and procedures were false and violated the federal False Claims Act.
As part of the settlement, RENTROP and GRAMERCY CARDIAC each admits, acknowledges, and accepts responsibility for the following conduct:
- From 2010 through 2021, GRAMERCY CARDIAC, at RENTROP’s direction, entered into rental agreements (the “Rental Agreements”) with more than 130 physicians and medical practices (the “Rental Practices”) under which GRAMERCY CARDIAC leased a portion of the practice’s office space, usually one or two exam rooms for certain days or hours each month. RENTROP took part in the negotiation of the Rental Agreements and signed them on behalf of GRAMERCY CARDIAC. GRAMERCY CARDIAC paid a total of more than $11 million to the Rental Practices pursuant to the Rental Agreements.
- From 2010 through 2021, GRAMERCY CARDIAC, at RENTROP’s direction, entered into independent contractor agreements (the “Independent Contractor Agreements”) with more than 50 cardiologists (the “Gramercy-Contracted Cardiologists”) or their medical practices. RENTROP took part in the negotiation of the Independent Contractor Agreements and signed them on behalf of GRAMERCY CARDIAC.
- GRAMERCY CARDIAC sent the Gramercy-Contracted Cardiologists to the rented office space one or more times each month to see patients who were referred for an assessment by the healthcare providers at the Rental Practice. The Gramercy-Contracted Cardiologists in turn referred these patients to GRAMERCY CARDIAC to undergo diagnostic tests and procedures, such as PET and SPECT scans.
- GRAMERCY CARDIAC paid many of the Gramercy-Contracted Cardiologists a flat fee for each diagnostic test or procedure which the cardiologist referred to GRAMERCY CARDIAC provided that the patient received the test or procedure at a GRAMERCY CARDIAC location. These “per procedure” fees were the only compensation GRAMERCY CARDIAC provided to the Gramercy-Contracted Cardiologists.
- Certain versions of Independent Contractor Agreements stated that the Gramercy-Contracted Cardiologist was to be paid not for the referrals to GRAMERCY CARDIAC, but rather for the “[a]dministration and supervision” of the PET and SPECT scans to be performed at GRAMERCY CARDIAC. However, in many cases, the Gramercy-Contracted Cardiologists did not, in fact, administer and supervise the PET and SPECT scans and were nonetheless paid by GRAMERCY CARDIAC based solely on the number of tests and procedures referred.
- At the time the Rental Agreements were executed, it was understood that the Rental Practices would refer their patients to the Gramercy-Contracted Cardiologists. Indeed, GRAMERCY CARDIAC calculated the number of hours per month that GRAMERCY CARDIAC leased the office space based on the volume of expected patient referrals.
- GRAMERCY CARDIAC calculated its return on investment from its Rental Agreements — which it internally referred to as the “efficiency” of the Rental Agreements — by comparing the revenue GRAMERCY CARDIAC generated from the patient referrals to the payments it made to the Rental Practice.
- When a Rental Agreement’s return on investment fell below the minimum threshold, GRAMERCY CARDIAC, at RENTROP’s direction, would often refuse to pay the Rental Practice the amounts due under the Rental Agreement. In addition, at RENTROP’s direction, GRAMERCY CARDIAC Physician Liaisons advised Rental Practice physicians that if the volume of referrals to Gramercy-Contracted Cardiologists did not increase, rent would be decreased, or the Rental Agreement would be terminated. GRAMERCY CARDIAC terminated a number of Rental Agreements because the return on investment through patient referrals was too low.
- When negotiating or re-negotiating the monthly rental payment to be made under a Rental Agreement, GRAMERCY CARDIAC took into account the expected or historic return on investment based on the volume of patient referrals generated from the Rental Practice.
- The rental fees paid by GRAMERCY CARDIAC under the Rental Agreements were in excess of fair market value for at least some Rental Agreements.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
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Mr. Williams praised the outstanding investigative work of HHS-OIG, and he thanked the Medicaid Fraud Control Unit at the New York State Attorney General’s Office for its extensive collaboration in the investigation.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jacob Lillywhite is in charge of the case.
Russian International Money Launderer Arrested for Illicitly Procuring Large Quantities of U.S.-Manufactured Dual-Use, Military Grade Microelectronics for Russian EntitiesRead 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, David Lim, Co-Director of Task Force KleptoCapture, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Matthew S. Axelrod, the Assistant Secretary of Commerce for Export Enforcement, announced the unsealing of a Complaint charging MAXIM MARCHENKO with conspiring to defraud the United States and with smuggling, wire fraud, and money laundering offenses based on MARCHENKO’s alleged participation in a scheme to unlawfully procure U.S.-sourced, dual-use microelectronics with military applications on behalf of end users in Russia. MARCHENKO was presented before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court earlier today and ordered detained.
U.S. Attorney Damian Williams said: “As alleged, Maxim Marchenko participated in an illicit procurement network that provided military grade microelectronics to end users in Russia. Following Russia’s unjust invasion of Ukraine, Marchenko and his co-conspirators are alleged to have used shell companies and other deceptive measures in order to secure U.S.-manufactured microelectronics, with applications including in rifle scopes, night-vision goggles, thermal optics, and weapon systems, for use by Russians. This Office will relentlessly pursue those who seek to flout U.S. law in order to supply Russia with military technology.”
Assistant Attorney General Matthew G. Olsen said: “According to the complaint, Marchenko employed a web of shell companies as part of an overseas smuggling ring to ship dual-use U.S. technology with military applications to Russia in contravention of U.S. law. Today’s action reinforces the Department’s commitment to protect U.S. security and counter Russian aggression in Ukraine through the vigorous enforcement of our export control laws.”
Co-Director of Task Force KleptoCapture David Lim said: “Disrupting the efforts of facilitators and procurement agents like Marchenko, who use their skills and connections to advance the agenda of the Russian war machine, is one of the most important priorities of this Task Force. Today’s arrest should serve as another reminder that we will leverage and deploy every tool to bring these criminals to justice.”
FBI Assistant Director in Charge James Smith said: “Attempts by individuals to circumvent U.S. law through money laundering and other forms of deception undermine foreign policy established to keep the United States and our allies safe. Marchenko allegedly defied U.S. law by procuring sensitive American-made electronics on behalf of the Russian end users, directly endangering citizens in both Ukraine and the United States. The FBI will not yield in its efforts to stop those who deceive the U.S. government and directly jeopardize our national security.”
Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod said: “We are laser-focused on rooting out the procurement networks fueling the Russian war machine. Working hand-in-hand with our federal law enforcement partners, we will continue to identify and disrupt Russia’s use of front companies in the People’s Republic of China and elsewhere to evade our controls.”
According to the allegations contained in the Complaint unsealed today in White Plains federal court:[1]
MAXIM MARCHENKO is a Russian national who resides in Hong Kong and operates several Hong Kong-based shell companies, including Alice Components Co. Ltd. (“Alice Components”), Neway Technologies Limited (“Neway”), and RG Solutions Limited (“RG Solutions”). MARCHENKO and two co-conspirators (“CC-1” and “CC-2”), who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong, and elsewhere overseas. This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users. To carry out this scheme, MARCHENKO, CC-1, and CC-2 used shell companies based in Hong Kong and other deceptive means to conceal from U.S. Government agencies and U.S. distributors that the OLED micro-displays were destined for Russia. The technology that MARCHENKO and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night-vision googles, thermal optics, and other weapon systems.
To perpetrate the scheme, MARCHENKO and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using MARCHENKO’s Hong Kong-based shell companies, including Alice Components, Neway, and RG Solutions. Members of the conspiracy, including MARCHENKO, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research. In reality, the OLED micro-displays were destined for end users in Russia. MARCHENKO and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.
To conceal the fact that these OLED micro-displays were destined for Russia, MARCHENKO and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by MARCHENKO in third countries, such as Hong Kong. MARCHENKO then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia. In addition, MARCHENKO and other members of the conspiracy used Hong Kong-based shell companies, principally operated by MARCHENKO, to conceal the fact that payments for the OLED micro-displays were coming from Russia. In total, between in or about May 2022 and in or about August 2023, MARCHENKO’s shell companies funneled a total of more than $1.6 million to the United States in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.
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MARCHENKO, 51, a Russian citizen who has resided in Hong Kong, is charged with conspiracy to defraud the United States, which carries a maximum sentence of five years in prison; conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; conspiracy to smuggle goods from the United States, which carries a maximum sentence of five years in prison; money laundering, which carries a maximum sentence of 20 years in prison; smuggling goods from the United States, which carries a maximum sentence of 10 years in prison; conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and wire fraud, which carries a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division and the New York Field Office of the Bureau of Industry and Security of the Department of Commerce. Mr. Williams also thanked the FBI’s Legal Attaché office in Australia; the U.S. Department of State’s Diplomatic Security Service; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section; and the Office of International Affairs of the Department of Justice’s Criminal Division for their assistance.
This case is being handled by the Office’s White Plains Division and Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah are in charge of the prosecution, with assistance from Trial Attorney Garrett Coyle of the Counterintelligence and Export Control Section.
Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Attorney Pleads Guilty to Operating $18.8 Million Ponzi Scheme and to Money Laundering, Obstruction of Justice, and Perjury ChargesRead 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 that ROBERT WISNICKI pled guilty today to participating in a $18.8 million Ponzi scheme designed to lure investors to purchase real estate through his New York-based law firms, Wisnicki & Associates LLP and Wisnicki Neuhauser LLP (the “Wisnicki Firms”). WISNICKI also pled guilty to a separate conspiracy to commit money laundering using his law firm trust accounts to conceal the proceeds of healthcare fraud, during which WISNICKI obstructed justice and committed perjury while testifying before a grand jury.
U.S. Attorney Damian Williams said: “As he has now admitted, Robert Wisnicki committed a wide array of criminal acts as part of multiple schemes designed to line his own pockets and cover his tracks. As a practicing attorney, Wisnicki knew better, but he flouted the law anyway, even going so far as to obstruct justice and commit perjury while testifying before a grand jury. Wisnicki now potentially faces years in prison and will pay millions in forfeiture and restitution to atone for his crimes.”
FBI Assistant Director in Charge James Smith said: “Illegal activity involving the investment industry, especially Ponzi schemes, has unfortunately brought financial ruin to many Americans. While Wisnicki’s actions are unacceptable, they are even more egregious considering his position of trust as an attorney. The FBI will continue to work closely with our partners to pursue and prosecute individuals who offer victims false promises and take advantage for their own personal benefit.”
If you believe you are a victim of these crimes, please contact the FBI at 1-800-CALL-FBI and reference this case.
According to the Indictment, plea agreement, and statements made in court:
The Ponzi Scheme
The Wisnicki Firms specialized in real estate transactional work — namely, assisting clients with purchasing and selling property. In or about 2007, WISNICKI began a real estate investment business using the Wisnicki Firms. Existing clients of the Wisnicki Firms (“Investor Clients”) asked WISNICKI to identify potential real estate investment opportunities for them. The Investor Clients then either transferred funds to WISNICKI or asked him to retain their funds that were already held in the Wisnicki Firms’ Interest Only Lawyers Accounts (“IOLA”) accounts. WISNICKI then identified real estate investment opportunities for the Investor Clients, and the Wisnicki Firms represented the Investor Clients in the resulting investment transactions.
The Investor Clients began suffering losses in the investments that WISNICKI had arranged. Rather than notify the Investor Clients of their losses, WISNICKI used funds from the Wisnicki Firms’ clients who did not participate in the real estate investments, which were held in trust in the Firms’ IOLA accounts, and transferred those funds to the Investor Clients to mask their losses. WISNICKI falsely represented to these other clients that their funds were still held in the Wisnicki Firms’ IOLA accounts, when in fact he had transferred those funds to his Investor Clients.
WISNICKI also used funds from new Investor Clients to cover up losses suffered by prior Investor Clients. WISNICKI falsely told the new Investor Clients that their funds would be invested in real estate, when in fact he used those funds to repay his prior Investor Clients.
WISNICKI continued the above-described fraud through at least in or about 2022. WISNICKI owes approximately $18.8 million to certain Investor Clients, which includes approximately $6.3 million to members of his family and approximately $12.5 million to non-family members. He is also owed approximately $6.7 million by various former clients.
The Money Laundering, Obstruction, and Perjury Scheme
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 is below a particular monetary threshold (the “No-Fault Laws”). 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.
Beginning in or about 2014, a criminal organization (the “Gulkarov Conspiracy” or the “Gulkarov Conspirators”) began a scheme to exploit the No-Fault Laws. As part of the scheme, the Gulkarov Conspirators fraudulently owned and controlled more than a dozen medical professional corporations – including medical, acupuncture, and chiropractic practices – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Gulkarov Clinics”). The Gulkarov Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments and lying under oath to insurance company representatives.
The Gulkarov Conspirators laundered the proceeds of the healthcare fraud through, among other ways, the Wisnicki Firms. In or about 2016 and 2017, one of the Gulkarov Conspirators (“CC-1”), using checks, transferred funds from the Gulkarov Clinics to the Wisnicki Firms. WISNICKI deposited the checks into one of his IOLA accounts, despite the fact that the Wisnicki Firms did not represent the Gulkarov Clinics and had no attorney-client relationship with the Gulkarov Conspirators. The Gulkarov Conspirators then arranged for the Wisnicki Firms to use the healthcare fraud proceeds to pay for real estate on behalf of the leaders of the Gulkarov Conspiracy.
In or about April 2021, the Wisnicki Firms were served with a subpoena from a grand jury sitting in the Southern District of New York (the “Subpoena”). Among other things, the Subpoena required the Wisnicki Firms to produce documentation concerning the checks from the Gulkarov Clinics. WISNICKI then communicated with CC-1 and learned that the proceeds of the checks were the proceeds of unlawful activity.
WISNICKI, CC-1, and a second member of the Gulkarov Conspiracy (“CC-2”) agreed to respond to the Subpoena by submitting fabricated documents to the grand jury, lying in communications with the U.S. Attorney’s Office for the Southern District of New York, and committing perjury before the grand jury.
WISNICKI, CC-1, and CC-2 further agreed to re-launder the proceeds of the checks from the Gulkarov Clinics in response to the Subpoena. At the direction of CC-1, WISNICKI wrote checks, drawn on his IOLA, purporting to return the monies that had been previously paid to his firm. The checks were made payable to physicians who purported to be owners of the Gulkarov Clinics and to family members of the Gulkarov Conspirators (together, the “Payees”). WISNICKI wrote the checks under the false pretense that the Payees were clients of the Wisnicki Firms who had previously paid money to the Wisnicki Firms for legal services. WISNICKI and others agreed that the checks to the Payees would be deposited, and the funds would then be withdrawn and returned to the Wisnicki Firms. WISNICKI delivered the checks to CC-1 for this purpose.
Thereafter, on or about April 19, 2021, WISNICKI submitted to the grand jury over a dozen fabricated retainer agreements. The same day, WISNICKI falsely stated to the U.S. Attorney’s Office that the funds paid to the Wisnicki Firms “were originally supposed to be used for a [sic] retainer fees, which is why the agreements were originally prepared,” but that the clients ultimately “instead asked us to hold the funds to be used for future investments.” WISNICKI further represented that the Wisnicki Firms decided to return the retainer fees after receiving the Subpoena.
On or about July 6, 2021, WISNICKI was called to appear before the grand jury as custodian of records for the Wisnicki Firms. WISNICKI falsely testified to the grand jury, among other things, that payments to the Wisnicki Firms had been made for the purpose of opening a “lending platform” that was never completed, and that WISNICKI had not spoken to anyone outside of the Wisnicki Firms about the Subpoena.
* * *
ROBERT WISNICKI, 44, of Forest Hills, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit money laundering, which carries a maximum sentence of five years in prison. As part of his plea agreement, WISNICKI agreed to pay forfeiture of $19,010,548.06 and restitution of $18,800,000.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.
Mr. Williams praised the work of the FBI.
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, Timothy Capozzi, and Ryan Allison are in charge of the prosecution.
U.S. Attorney Charges High School Teacher with Attempted Transfer of Obscene Material and Receipt and Possession of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that KOSTAS FEKKAS, a/k/a “Constantine Fekkas,” a/k/a “C.J. Justice,” was arrested on September 14, 2023, and charged via a criminal Complaint filed in White Plains federal court with possession of child pornography, receipt of child pornography, and attempted transfer of obscene material. FEKKAS was presented in White Plains federal court yesterday before U.S. Magistrate Judge Judith C. McCarthy, who ordered that FEKKAS be detained.
U.S. Attorney Damian Williams said: “Kostas Fekkas’s alleged conduct is despicable. As a teacher, Fekkas was entrusted with the care and well-being of children, who he in turn allegedly sought to victimize. I’m grateful to our diligent law enforcement partners and the dedicated prosecutors of this Office for bringing charges in this important case, and I encourage anyone who believes they may have information regarding Fekkas’s alleged conduct to report this information at 1-866-DHS-2423 or www.ice.gov/webform/ice-tip-form.”
HSI Special Agent in Charge Ivan J. Arvelo said: “As parents, we entrust our children's safety to the school each day, believing they are in safe hands. The accused stands charged with heinous crimes against an individual he believed to be a child, unaware that it was an undercover agent. It brings me a sense of relief to know this individual has been removed from both the streets and the classroom.”
As alleged in the Complaint filed yesterday:[1]
In December 2022, an undercover agent posing as a 13-year-old girl named “Riley” had a conversation on Kik (a mobile messaging application) with someone with the username “C.J.Justice” (“C.J.”). C.J.’s Kik account was registered to the email address [email protected]. Among other things, C.J. introduced himself as a 30-year-old male from New York who teaches high school physics; sent multiple photographs of himself to Riley that resembled a photograph of FEKKAS that had been posted on a public charter school’s website; repeatedly asked Riley for photographs, including photographs of her “body”; sent a video of someone masturbating and several photographs of an erect penis, including one from inside a classroom, to Riley; described the various kinds of sexual acts he wanted to engage in with Riley; and told Riley that he had sex “with a 10th grader once” and had “been searching ever since” to have sex with a minor again.
In March 2023, law enforcement seized FEKKAS’s cellphone and executed a search warrant to review the data extracted from the cellphone. They discovered that FEKKAS used a mobile application called HideU to hide, among other things, (i) a sexually explicit video in which a young female (“Victim-1”) was rubbing and inserting her fingers into her vagina; (ii) a photograph of the same female with her pink sweatshirt pulled up to expose her breasts; and (iii) a photograph of the same female naked from the head down to her knees. In the video and the photographs, she was wearing a bracelet that spelled out an abbreviated version of her first name. The name on the bracelet matched the name of a Snapchat user who had a chat conversation with “Lysol1834,” the Snapchat account username on FEKKAS’s cellphone. After comparing Snapchat records with passport information, law enforcement confirmed that Victim-1 was a girl who was 12 years old at the time the photographs and sexually explicit video was taken.
Prior to his arrest, FEKKAS was a teacher at a public charter high school located in upper Manhattan, New York. It also appears that FEKKAS previously worked at several other schools in the Bronx and Westchester counties.
There may be more victims of this alleged conduct. If you have information to report, contact HSI through its toll-free Tip Line at 1-866-DHS-2423 or by completing its online tip form. Both are staffed around the clock by investigators. From outside the U.S. and Canada, callers should dial 802-872-6199. Hearing-impaired users can call TTY 802-872-6196.
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FEKKAS, 34, of Hartsdale, New York, is charged with attempted transfer of obscene material, which carries a maximum sentence of 10 years in prison; possession of child pornography, which carries a maximum sentence of 10 years in prison; and receipt of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison.
The minimum and maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Williams praised the outstanding investigative efforts of HSI and the Rockland County District Attorney’s Office. He added that the investigation is ongoing.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Timothy Ly is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Sentenced to 70 Months in Prison for Armed Robbery of Jewelry Store Using A Gun, Bear Spray, and HammersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that PABLO ARMANDO VALENZUELA was sentenced by U.S. District Judge Victor Marrero to 70 months in prison for committing an armed robbery of a jewelry store in the Bronx, New York. VALENZUELA previously pled guilty to one count of Hobbs Act robbery.
U.S. Attorney Damian Williams said: “The defendant committed a violent armed robbery of a Bronx jewelry store and injured innocent employees and bystanders by spraying a can of extremely hazardous bear spray directly into their faces. Violent criminals who commit firearms offenses and terrorize hardworking New Yorkers will be prosecuted to the full extent of the law.”
According to the allegations contained in the Complaint and court filings:
On August 10, 2022, VALENZUELA, along with at least five other co-conspirators, committed an armed robbery of a jewelry store in the Bronx, New York, using a firearm, bear spray, and hammers. On the evening of August 10, VALENZUELA entered the jewelry store wearing a ski mask and sprayed a can of bear spray into the eyes of jewelry store employees, temporarily blinding them. As customers, including young children, attempted to flee the jewelry store, five other masked robbers entered the store and used hammers to destroy glass display cases. At least one robber brandished a firearm. VALENZUELA and the other robbers then stole hundreds of thousands of dollars’ worth of jewelry. VALENZUELA fled the jewelry store and sprayed bear spray into the eyes of bystanders, many of whom were then rushed to the hospital. The robbers then fled in various directions on foot, in cars, and on the backs of mopeds driven by co-conspirators who stood nearby as lookout and getaway drivers.
Photographs of VALENZUELA committing the offense are below:
* * *
In addition to his prison term, VALENZUELA, 33, of the Bronx, New York, was sentenced to three years of supervised release.
VALENZUELA’s co-defendant, AARON MILLER, pled guilty to one count of Hobbs Act robbery and will be sentenced on December 1, 2023.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Amanda C. Weingarten is in charge of the prosecution.
Putnam Valley Husband and Wife Indicted for Operating A Prostitution Business at Multiple Massage Parlors in New YorkRead 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 Kevin McConville, the Sheriff of the Putnam County Sheriff’s Office, announced today the unsealing of an Indictment charging HONG RU LIN, a/k/a “Bruce,” and KENA ZHAO, a/k/a “Angela,” with violating the Travel Act and conspiring to do so in connection with their use of facilities of interstate commerce to operate a prostitution business at multiple massage parlors in Putnam, Westchester, New York, and Queens County. LIN and ZHAO were arrested this morning and will be presented before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Damian Williams said: “As alleged, Hong Ru Lin and Kena Zhao operated an extensive prostitution business, using massage parlors as cover for their illegal activities. Today’s Indictment makes clear that my Office will continue to pursue those who operate illicit businesses, especially when they do so behind the closed doors of supposedly legitimate establishments.”
FBI Assistant Director in Charge James Smith said: “This indictment puts an end to an alleged extensive commercial sex enterprise that exploited countless women and repeatedly violated U.S. laws. Let these charges be a message to anyone who seeks to exploit women for monetary gain, the FBI is committed to protecting victims, and will always bring their predators to justice.”
Putnam County Sheriff Kevin McConville said: “We will continue to work with our federal and local law enforcement partners to keep these types of crime out of Putnam County.”
According to the allegations in the Indictment unsealed today in White Plains federal court:[1]
Between at least September 2020 and the present, LIN and ZHAO operated a prostitution business out of multiple massage parlors that they owned in Putnam, Westchester, New York, and Queens County. LIN and ZHAO managed a roster of women who worked at the massage parlors and performed sexual acts for the customers of LIN and ZHAO. LIN and ZHAO communicated by cellphone and private chatroom to manage and operate their prostitution business. Among other things, LIN and ZHAO used cellphones to communicate with potential customers, assign particular employees to customers, monitor the income of their prostitution business, and set performance goals for the women who worked in the massage parlors. In addition, on at least one occasion, ZHAO personally participated in a massage during which a sexual act was offered to a customer.
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HONG RU LIN, 50, and KENA ZHAO, 45, both of Putnam Valley, New York, are charged with violating the Travel Act and conspiring to violate the Travel Act. Each of these counts carries a maximum sentence of five years in prison.
The statutory 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 work of the FBI’s Westchester County Safe Streets Task Force and the Putnam County Sheriff’s Office. Mr. Williams also thanked the Town of Carmel Police Department, the Westchester County Police Department, and the Yonkers Police Department for their assistance in this matter.
Mr. Williams noted that the investigation is ongoing. If you feel you may be a victim of or have information related to the conduct in this case, please contact the FBI Tip Line at 1-800-CALL-FBI or at tips.fbi.gov.
The case is being prosecuted by the Office’s Civil Rights Unit in the Criminal Division and the White Plains Division. Assistant U.S. Attorneys Lindsey Keenan and Ryan W. Allison 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.
Four Members of Ski-Ball Gang Charged with Racketeering and Multiple Gang-Related ShootingsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging KAYSHAWN MASSOP, a/k/a “topski.bz,” a/k/a “Bz,” a/k/a “KB,” a/k/a “Kay Ski,” GREG BROWN, a/k/a “ballout.gg,” a/k/a “GG,” CARL HENRY, a/k/a “Big Ski,” a/k/a “Biggs,” and AMARI JACKSON, a/k/a “Justo,” with racketeering conspiracy, firearms offenses, and other crimes related to their membership in the “Ski-Ball Gang,” a street gang based in the Bronx, New York. MASSOP, BROWN, HENRY, and JACKSON are also charged with attempted murder and assault with a deadly weapon in aid of racketeering in connection with their participation in multiple shootings. MASSOP, BROWN, HENRY, and JACKSON are all in custody, and JACKSON was presented today before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Damian Williams said: “Keeping our community safe from violent crime is a paramount priority of this Office. As alleged, members of the Ski-Ball Gang engaged in brazen acts of violence across this District, including multiple shootings at rival gang members. Thanks to the extraordinary work of our law enforcement partners and the career prosecutors of this Office, the defendants, who include senior members of the gang, now face a slew of federal charges for their crimes.”
FBI Assistant Director in Charge James Smith said: “As alleged, the defendants conspired to not only attempt to increase their standing within a violent street gang through a series of senseless shootings, but also to engage in both bank and wire fraud. We will not allow gang members to engage in reckless violence that endangers innocent lives. The New York FBI’s Westchester County Safe Streets Task Force is committed, through collaboration with our law enforcement partners, to ensuring that brazen gang violence has no place in our communities.”
HSI Special Agent in Charge Ivan J. Arvelo said: "The defendants stand accused of endangering the streets of New York City with violence and defrauding both taxpayers and small business owners in their unlawful pursuit of wealth and influence. HSI NY is proud to work alongside our dedicated law enforcement partners in preventing these criminals from causing further harm. HSI NY remains steadfast in its mission to apprehend violent gang members and disrupt their criminal enterprises."
USPIS Inspector in Charge Daniel B. Brubaker said: “These gang members allegedly led a criminal enterprise, financially exploiting their victims to fund their gang activities and live a lavish lifestyle. This RICO indictment and investigation uncovered the despicable nature in which these gangs operate, highlighting their ruthless behavior and disrespectful attitude for the communities where they commit their crimes. Postal Inspectors and their law enforcement partners will spare no resource to bring these individuals to justice, ensuring they pay for their crimes, while keeping the streets of New York safe from these criminal acts.”
NYPD Commissioner Edward A. Caban said: “Targeting and dismantling gangs, and preventing the crime and violence so often associated with their illegal activities, continue to be among the highest priorities for the NYPD and our law enforcement partners. And we will remain relentless in our efforts to identify and arrest anyone who involves themselves in such senseless acts in our city. I commend and thank everyone involved from USPIS, HSI, FBI, and the office of the U.S. Attorney for the Southern District of New York for their dedication and effort on this important case.”
As alleged in the Indictment unsealed today in White Plains federal court:[1]
KAYSHAWN MASSOP, GREG BROWN, CARL HENRY, and AMARI JACKSON are members of a racketeering conspiracy known as the Ski-Ball Gang.
On January 31, 2020, HENRY, for the purpose of maintaining and increasing his position in the Ski-Ball Gang enterprise, participated in and facilitated the attempted murder of a rival gang member in the Bronx, New York.
On August 23, 2020, HENRY and JACKSON, for the purpose of maintaining and increasing their position in the Ski-Ball Gang enterprise, participated in and facilitated the attempted murder of a rival gang member in the Bronx, New York.
On August 27, 2020, BROWN, for the purpose of maintaining and increasing his position in the Ski-Ball Gang enterprise, participated in and facilitated the attempted murder of rival gang members in the Bronx, New York.
On August 27, 2020, MASSOP, for the purpose of maintaining and increasing his position in the Ski-Ball Gang enterprise, participated in and facilitated the assault of rival gang members in the Bronx, New York.
On June 25, 2021, MASSOP and BROWN, for the purpose of maintaining and increasing their position in the Ski-Ball Gang enterprise, participated in and facilitated the attempted murder of rival gang members in the Bronx, New York.
On January 13, 2022, BROWN, for the purpose of maintaining and increasing his position in the Ski-Ball Gang enterprise, participated in and facilitated a gunpoint robbery in Yonkers, New York.
From at least in or about 2019 through at least in or about 2022, MASSOP, BROWN, HENRY, and JACKSON participated in a bank and wire fraud conspiracy, which included the misuses of others’ means of identification.
* * *
A chart containing the names, charges, and minimum and maximum penalties for the defendants is set forth below. The minimum and maximum potential sentences in this case are prescribed by Congress and 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’s Westchester County Safe Streets Task Force, HSI, USPIS, and the NYPD. Mr. Williams also thanked the U.S. Secret Service and the Department of Labor for their assistance in the investigation.
The case is being prosecuted by the Office’s White Plains Division and Violent and Organized Crime Unit. Assistant U.S. Attorneys Benjamin Klein, Andrew Chan, Christy Slavik, and Ben Arad 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.
COUNT
DEFENDANT(S)
MIN. AND MAX. PENALTIES
Count One: Conspiracy to Commit Racketeering
KAYSHAWN MASSOP
GREG BROWN
CARL HENRY
AMARI JACKSON
20 years in prison
Count Two: Attempted Murder, Assault, and Attempted Assault with a Dangerous Weapon in Aid of Racketeering
CARL HENRY
20 years in prison
Count Three: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
CARL HENRY
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Four: Attempted Murder, Assault, and Attempted Assault with a Dangerous Weapon in Aid of Racketeering
GREG BROWN
20 years in prison
Count Five: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
GREG BROWN
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Six: Assault and Attempted Assault with a Dangerous Weapon in Aid of Racketeering
KAYSHAWN MASSOP
20 years in prison
Count Seven: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
KAYSHAWN MASSOP
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Eight: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
CARL HENRY
AMARI JACKSON
20 years in prison
Count Nine: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
CARL HENRY
AMARI JACKSON
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count 10: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
KAYSHAWN MASSOP
GREG BROWN
20 years in prison
Count 11: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
KAYSHAWN MASSOP
GREG BROWN
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count 12: Conspiracy to Commit Hobbs Act Robbery
GREG BROWN
20 years in prison
Count 13: Hobbs Act Robbery
GREG BROWN
20 years in prison
Count 14: Possession and Brandishing of a Firearm in Furtherance of a Drug Trafficking Crime
GREG BROWN
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count 15: Conspiracy to Commit Bank Fraud
KAYSHAWN MASSOP
GREG BROWN
CARL HENRY
AMARI JACKSON
30 years in prison
Count 16: Conspiracy to Commit Wire Fraud
KAYSHAWN MASSOP
GREG BROWN
CARL HENRY
AMARI JACKSON
20 years in prison
Count 17: Aggravated Identity Theft
KAYSHAWN MASSOP
GREG BROWN
CARL HENRY
AMARI JACKSON
Mandatory minimum of two years in prison to run consecutive to any other sentence imposed
[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 therein should be treated as an allegation.
U.S. Attorney Announces Charges Against Five Individuals for over $20 Million Health Care Fraud, Money Laundering, and Kickbacks SchemeRead 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 Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced the unsealing today of a Superseding Indictment charging acupuncturists JUNYI LIU, a/k/a “Jenny,” and HONGXING WANG, as well as physical therapists JONATHAN LAQUI and MITZY BALDOVINO and insurance company employee VICTOR MAN, a/k/a “Mr. Wen,” with operating an over $20 million health care fraud scheme at medical offices in Manhattan, Brooklyn, and Queens (the “Offices”). As part of the fraud scheme, MAN referred patients to the Offices in exchange for kickbacks and also assisted in paying kickbacks to the patients (the “Paid Patients”), who were insured by Medicare and/or other insurance providers (collectively, the “Insurance Providers”). The defendants and their co-conspirators then billed the Insurance Providers for physical therapy and acupuncture services that were unnecessary or never performed. LIU was additionally charged with unlawfully enriching herself and a family member through a COVID-19 unemployment benefit scheme.
LIU and WANG were previously indicted and arrested on these charges in September 2021. LAQUI, BALDOVINO, and MAN were arrested earlier today and presented and arraigned this afternoon before U.S. Magistrate Judge Sarah L. Cave. The case is assigned to U.S. District Judge Laura Taylor Swain.
U.S. Attorney Damian Williams said: “The defendants allegedly perpetrated a lucrative scheme in which they fraudulently billed for physical therapy and acupuncture services that were never rendered. Thanks to our law enforcement partners and the dedicated work of the prosecutors of this Office, the defendants are now facing an array of serious charges in federal court.”
HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Health care providers who submit fraudulent claims to federally funded insurance plans and bribe patients to participate in kickback schemes put health care benefits for older people and vulnerable populations at risk. HHS-OIG will continue to hold accountable individuals who exploit federal health care programs for their own greed.”
As alleged in the Indictment unsealed today in Manhattan federal court:[1]
Between 2018 and 2021, JUNYI LIU, a licensed acupuncturist, operated the Offices from which LIU and her partners fraudulently billed the Insurance Providers for physical therapy and acupuncture services that were not rendered in the manner represented or not rendered at all. LIU partnered with other licensed medical professionals, including JONATHAN LAQUI and MITZY BALDOVINO, both of whom were licensed physical therapists, and HONGXING WANG, who was a licensed acupuncturist (collectively, the “Partners”). The Partners’ roles in the scheme typically included: (i) allowing the Offices to use their enrollments with the Insurance Providers to submit to the Insurance Providers materially false and fraudulent claims for reimbursement for physical therapy and acupuncture services; (ii) creating materially false medical documentation, which stated that certain physical therapy and acupuncture services had been rendered, when such services in fact were not rendered in the manner represented or were not rendered at all; and (iii) contributing financing for the Offices, including for the payment of cash kickbacks to the Paid Patients to induce those patients to provide their insurance information and receive medically unnecessary and/or non-existent services at the Offices.
In furtherance of the scheme, LIU paid cash kickbacks to MAN and others in exchange for recruiting and referring the Paid Patients, all beneficiaries of the Insurance Providers, to the Offices. The beneficiaries also received cash kickbacks, paid by MAN and others, in exchange for their insurance information and their signatures on sign-in sheets and other documents. In some instances, these Paid Patients visited the Offices, signed in, and received unnecessary physical therapy and acupuncture services. In other instances, the Paid Patients visited the Offices, signed a sign-in sheet and other documents, and then left without receiving any services at all. In yet other instances, the Paid Patients did not visit the Offices at all and instead signed sign-in sheets and other documents brought to them elsewhere by MAN and others. Regardless of whether the Paid Patients received any services or even visited the Offices at all, LIU and her co-conspirators used the Paid Patients’ insurance information to fraudulently bill the Insurance Providers for unnecessary and/or never rendered services.
While LIU and her co-conspirators were defrauding the Insurance Providers of millions of dollars, from April 2020 through September 2021, LIU also engaged in a scheme to obtain COVID-19 unemployment benefits for herself and a family member (the “Family Member”) by fraudulently submitting and causing to be submitted to the New York Department of Labor materially false online applications and certifications for COVID-19 benefits. Among other things, the applications and/or certifications represented that LIU was unemployed when, in fact, she continued to operate the Offices for all or nearly all of this period, and the applications and/or certifications represented that the Family Member was unable to work because of COVID-19 during a five-month period when the Family Member was in China.
* * *
JUNYI LIU, 69, of Great Neck, New York, JONATHAN LAQUI, 46, of Rahway, New Jersey, MITZY BALDOVINO, 46, of the Bronx, New York, HONGXING WANG, 63, of Brooklyn, New York, and VICTOR MAN, 60, of Queens, New York, are all charged with conspiring to commit health care fraud, which carries a maximum sentence of 20 years in prison, and conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison. LIU, LAQUI, WANG, and MAN are also charged with conspiring to violate the Anti-Kickback Statute, which has a maximum penalty of five years in prison. LIU is additionally charged with wire fraud, which has a maximum penalty of 20 years in prison, and theft of Government funds, which has a maximum penalty of 10 years in prison. MAN is further charged with violating the Anti-Kickback Statute, which has a maximum penalty of 10 years in prison.
The statutory maximum sentences are prescribed by Congress and 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 HHS-OIG’s New York Office and the New York Field Office of the Internal Revenue Service, Criminal Investigation. Mr. Williams also thanked the New York State Attorney General’s Medicaid Fraud Control Unit and the U.S. Department of Labor, Office of Inspector General for their assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.
The charges contained in the Superseding 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
Joshua Adam Schulte Convicted After Trial of Multiple Child Pornography CrimesRead 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 conviction of JOSHUA ADAM SCHULTE of three counts — receiving, possessing, and transporting child pornography — in connection with an encrypted cache of more than 3,000 images and videos depicting the sexual abuse of young children found on the defendant’s home desktop computer. The defendant was found guilty following a three-day jury trial before U.S. District Judge Jesse M. Furman. The defendant, a former programmer at the Central Intelligence Agency (“CIA”), was previously found guilty of four counts of espionage, four counts of computer hacking, contempt of Court, and making false statements to the FBI at previous trials conducted in 2020 and 2022 in connection with the defendant’s commission of the largest theft of classified information in the history of the CIA, which information was disseminated by the website WikiLeaks under the names Vault 7 and Vault 8. Sentencing on all counts of conviction is scheduled for January 10, 2024, before Judge Furman.
U.S. Attorney Damian Williams said: “Joshua Schulte has already been held accountable for endangering our nation’s security, and today’s verdict holds him accountable for endangering our nation’s children as well. The outstanding investigative work of the FBI throughout this investigation revealed Schulte as not only a traitor, but as one who participated in the exploitation and victimization of young children as well. The career prosecutors in this Office are dedicated to securing justice for the most vulnerable victims of sexual abuse and exploitation.”
FBI Assistant Director in Charge James Smith said: "The FBI maintains investigating crimes of violence and sexual abuse against children as a top priority. The jury's conviction of Joshua Schulte of having knowingly received, possessed, and transported thousands of files of child sexual abuse material will hopefully provide some measure of comfort to Schulte's victims. Schulte used his expert computer programming skills and training to victimize the most vulnerable members of our society, and the FBI will always vigorously pursue anyone who commits such crimes."
According to court documents and evidence at trial:
While living in Virginia in 2016, SCHULTE built a custom desktop computer, which he used to download and collect more than 15,000 images of child pornography and child erotica. SCHULTE stored his cache of child pornography in various encrypted locations on the computer. In or about November 2016, SCHULTE relocated to New York, New York, and transported his child pornography computer with him. While living in New York, New York, SCHULTE continued to stockpile child pornography from the dark web and Russian websites.
In March 2017, after executing a search warrant for SCHULTE’s apartment in connection with the investigation of his theft of classified information, the FBI recovered and searched SCHULTE’s computer pursuant to another court-issued warrant. Using passwords identified from SCHULTE’s cellphone that SCHULTE used for a variety of personal accounts, including credit cards, online shopping, and email, FBI computer scientists were able to decrypt SCHULTE’s hidden collection of child pornography. The FBI determined that SCHULTE had collected and viewed videos and images depicting the sexual abuse by adults of children as young as two years old, including materials depicting sadomasochism and bestiality inflicted on children.
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SCHULTE, 34, of New York, New York, was convicted today of one count of receipt of child pornography and one count of transportation of child pornography, which each carry a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possession of child pornography, which carries a maximum sentence of 10 years in prison. SCHULTE was previously convicted of one count of gathering national defense information with the intent to harm the United States, two counts of transmitting unlawfully possessed national defense information, one count of attempting to transmit unlawfully possessed national defense information, one count of unauthorized access to a computer to obtain national defense information, one count of unauthorized access to a computer to obtain information belonging to an agency of the United States, two counts of causing transmission of a harmful computer command, one count of making false statements to the FBI, and one count of contempt of Court, which collectively carry a maximum sentence of life in prison.
The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by Judge Furman.
Mr. Williams praised the outstanding efforts of the Counterintelligence Division and the Child Exploitation and Human Trafficking Task Force of the FBI’s New York Field Office, as well as the extraordinary assistance of FBI computer scientists from the Cyber Action Team.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr., Michael D. Lockard, and Nicholas S. Bradley are in charge of the prosecution, with the assistance of Paralegal Specialist Kayla A. Collins.
Bronx Gang Member Sentenced to 40 Years in Prison for Double Murder and Shooting of 16-Year-OldRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that KAI JOHNSON was sentenced today to 40 years in prison in connection with his participation in the murders of Price Tunstall and Malik Tunstall in the vicinity of the James Monroe Houses in the Bronx on August 31, 2021, and a non-fatal shooting of a 16-year-old in the vicinity of the James Monroe Houses in the Bronx on April 4, 2021. On January 20, 2023, JOHNSON pled guilty to racketeering conspiracy and attempted murder and assault with a deadly weapon in aid of racketeering. U.S. District Judge Lewis J. Liman imposed today’s sentence.
U.S. Attorney Damian Williams said: “In broad daylight, Kai Johnson callously murdered two brothers — Price Tunstall and Malik Tunstall — in the courtyard of the James Monroe Houses. He committed these murders just a few months after shooting and injuring a 16-year-old in the same neighborhood. Today’s lengthy sentence sends an important message to gang members who commit violent crimes that they will be apprehended and prosecuted to the fullest extent of the law.”
As alleged in the Indictment and based on statements made in open court:
KAI JOHNSON is a member or associate of a racketeering enterprise known as the “Stevenson Commons Crew.” In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Stevenson Commons Crew committed, conspired, attempted, and threatened to commit acts of violence against rival gangs, including murder and assault; conspired to distribute and possess with intent to distribute narcotics; and obtained, possessed, and used firearms, including by brandishing and discharging them.
On August 31, 2021, JOHNSON murdered Malik Tunstall and Price Tunstall in the vicinity of 805 Taylor Avenue in the Bronx, New York.
On April 4, 2021, JOHNSON shot at rival gang members in the vicinity of 877 Taylor Avenue in the Bronx, New York, which resulted in a 16-year-old being grazed in the head with a bullet.
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In addition to his prison term, JOHNSON, 28, of the Bronx, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations, the New York City Department of Investigation, and the New York City Police Department.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan, Emily A. Johnson, and Justin V. Rodriguez are in charge of the prosecution.
U.S. Attorney Announces Return of Significant Collection of Antiquities to CambodiaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the return of 33 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 family of the late George Lindemann. The collection includes statues dating to the 10th and 12th centuries that were originally looted from religious and archeological sites in Cambodia. The antiquities were turned over to Cambodia on September 11, 2023, and a ceremony celebrating their repatriation will be held in Cambodia at a later date. The Lindemann family has voluntarily agreed to return the antiquities.[1]
The antiquities returned to Cambodia include a monumental 10th century statue of Dhrishtadyumna, stolen from Prasat Chen in Koh Ker, the ancient capital of the Khmer kingdom; statues stolen from Prasat Krachap in Koh Ker, including a 10th century sculpture depicting Ardhanarishvara (half-male, half-female deity) and a 10th century Anantashayana Vishnu (reclining Vishnu with Lakshmi); as well as six heads of devas (angels) and asuras (demons) removed from the gates to Angkor Thom in the Angkor Wat complex; and a kneeling figure from Banteay Srei, a 10th century temple in Angkor Wat (photographs below).
Three of the Angkor Thom Heads
U.S. Attorney Damian Williams said: “For decades, Cambodia suffered at the hands of unscrupulous art dealers and looters who trafficked cultural treasures to the American art market. This historic agreement sets a framework for the return of cultural patrimony in support of the Memorandum of Understanding between the United States and Cambodia. We thank the Lindemann family for their cooperation and assistance in the repatriation of the antiquities to Cambodia.”
Since 2012, the U.S. Attorney’s Office for the Southern District of New York, in partnership with the Department of Homeland Security, Homeland Security Investigations (“HSI”), has successfully investigated, identified, and repatriated 65 stolen and illegally imported Cambodian antiquities in the possession of individuals and institutions in the United States. In 2019, the art dealer Douglas Latchford was indicted in the Southern District of New York with wire fraud conspiracy and other crimes related to a multi-year scheme to sell looted Cambodian antiquities on the international art market. The Indictment was later dismissed due to Latchford’s death.
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, and United States v. A Late 12th Century Bayon-Style Sandstone Sculpture Depicting Eight-Armed Avalokiteshvara, 22 Civ. 229. The statue of Dhrishtadyumna was looted from same temple site as the sculpture of Duryodhana, repatriated in 2014, which was the subject of the forfeiture action United States v. A 10th Century Cambodian Sandstone Sculpture, 12 Civ. 2600. Dhrishtadyumna and Duryodana are figures from the Hindu epic Mahabharata. The Ardhanarishvara and the Anantashayana Vishnu were looted from the same temple site as the Skanda on a Peacock sculpture, repatriated in 2022, which was the subject of the forfeiture action United States v. A 10th Century Cambodian Sandstone Sculpture Depicting Skanda on a Peacock, 21 Civ. 6065.
Anantashayana Vishnu
Dhrishtadyumna from Koh Ker
This announcement supports the Memorandum of Understanding, known as the “U.S.-Cambodia Cultural Property Agreement,” first signed between the U.S. and Cambodia in 2003 and renewed on August 30, 2023.
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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 assistance.
This matter is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U. S. Attorneys Jessica Feinstein and Shiva Logarajah are in charge of the case.
[1] The agreement between the Government and the Lindemanns should not be construed as a legal or factual determination that the members of the Lindemann family have violated any federal law.
Former Law Firm Partner Pleads Guilty to Bankruptcy FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHN ROESSER pled guilty today to abusing the bankruptcy system by making false statements under penalty of perjury and submitting falsified records. ROESSER will be sentenced by U.S. District Judge Analisa Torres, to whom the case is assigned.
U.S. Attorney Damian Williams said: “The United States bankruptcy system does immense public good and provides a backstop for people trying to lawfully navigate their way out of debt. The defendant — who used to be a lawyer and knew exactly what he was doing — manipulated and corrupted a system that helps so many. He lied to the U.S. Bankruptcy Court for the Southern District of New York so that he could use its protections to keep his assets and to avoid paying his bills. This Office will bring to justice those who abuse the public’s trust and use their status to try to place themselves above the law.”
According to the allegations in the Indictment and statements made in public court proceedings:
From in or about March 2013 through in or about January 2018, ROESSER was a partner at three multinational law firms. During his time as a partner at these law firms, ROESSER earned substantial income — and incurred substantial income tax liability. ROESSER resigned from the New York bar in or about June 2020, after admitting to misappropriating client funds.
On or about February 3, 2022, ROESSER filed for Chapter 11 bankruptcy (the “Bankruptcy”) in the U.S. Bankruptcy Court for the Southern District of New York. In a Chapter 11 bankruptcy, a debtor may remain “in possession,” meaning that the debtor keeps possession and control of his assets during the bankruptcy. But a debtor-in-possession must propose a viable plan of reorganization, which creditors then vote to approve or reject. If a debtor fails to comply with the requirements of Chapter 11, a Chapter 11 bankruptcy can be converted to a Chapter 7 bankruptcy or can be dismissed. In a Chapter 7 bankruptcy, an appointed trustee usually converts a debtor’s assets into cash for distribution among creditors. If a bankruptcy is dismissed, the debtor loses the protections of bankruptcy. For example, creditors can take steps to seize a debtor’s assets. ROESSER’s assets included a house he estimated was worth millions of dollars and an Aston Martin Rapide, a luxury sports car.
ROESSER sought to remain a debtor-in-possession during the Bankruptcy, and on or about February 17, 2022, he opened a debtor-in-possession account for the Bankruptcy (the “DIP Account”).
On or about February 17, 2022, ROESSER submitted a declaration (the “Declaration”) in the Bankruptcy. ROESSER declared under penalty of perjury that the Declaration was true and correct. The Declaration stated, in part, that ROESSER “[had] significant tax debt, which I will attempt to deal with in my chapter 11 reorganization.” The Declaration also contained the following statements:
Currently, I am in the real estate business and expect a commission of approximately $9,500,000 of which 45% would inure to my benefit and the other 55% to my partner. I expect payment of this commission in June of 2022.
. . .
The needs and interests of my creditors will best be served by my continued possession of [a house in Bronxville, New York, valued in the Declaration at $2,600,000] and management of my affairs as debtor-in-possession under Chapter 11 until I receive the income that is coming to me.
On or about February 22, 2022, the Internal Revenue Service (“IRS”) filed a Proof of Claim in the Bankruptcy, listing the IRS’s claims against ROESSER. These claims totaled $2,229,971.77 for income taxes assessed between 2014 and 2019. After adding penalties and interest, these claims totaled $3,850,819.07.
On or about March 15, 2022, at a meeting held in the Bankruptcy, ROESSER testified under oath, in substance and in part, that he expected that a limited liability company (the “LLC”) in which he held a 45% interest would receive approximately $9.6 million on or before June 2022. At a continued meeting held in the Bankruptcy on or about April 18, 2022, ROESSER again testified, in substance and in part, that he expected to receive millions of dollars soon.
On or about June 27, 2022, a legal assistant for ROESSER’s lawyer sent an Assistant U.S. Attorney in the Southern District of New York (the “AUSA”), who was representing the IRS in the Bankruptcy, a document (“Bank Record-1”) purporting to show an online banking screenshot relating to a bank account held by the LLC (the “LLC Account”). The legal assistant’s message stated, in sum and substance, that Bank Record-1 had been provided by ROESSER that day. Bank Record-1 showed an available balance of $9,661,090.00 in the LLC Account. But Bank Record-1 was fake. The LLC Account never had more than $200 in it.
On or about July 6, 2022, ROESSER’s lawyer sent the AUSA a document (“Bank Record-2”) purporting to show an online banking screenshot relating to the DIP Account. Bank Record-2 showed an available balance of $9,661,000.00 in the DIP Account. Bank Record-2 was also fake. In reality, the DIP Account never had a positive balance.
On or about August 8, 2022, and August 9, 2022, ROESSER’s lawyer and the AUSA electronically signed a stipulation (the “Stipulation”) stating, in sum and substance, that the secured claims of the IRS would be resolved provided that ROESSER paid $3,923,981.26 to the IRS within seven days after the Stipulation was so ordered by a Judge.
On or about September 8, 2022, ROESSER’s lawyer filed in the Bankruptcy on ROESSER’s behalf a monthly operating report (the “Monthly Operating Report”). The Monthly Operating Report was electronically signed by ROESSER and stated, “I declare under penalty of perjury that the foregoing Monthly Operating Report and its supporting documentation are true and correct and that I have been authorized to sign this report on behalf of the estate.” The Monthly Operating Report listed for “Total receipts (net of transfers between accounts),” the amount $9,662,594, and for “Cash balance end of month,” the amount $9,602,924. Attached to the Monthly Operating Report was a document (“Bank Record-3”), purporting to be an Account Information Report for the DIP Account. Bank Record-3 showed a current balance of $9,578,105.73, a last deposit Amount of $9,661,000.00, and a last deposit date of July 1, 2022. However, the Monthly Operating Report, including the amounts it listed for “Total Receipts” and “Cash balance end of month,” and Bank Record-3, were false. The DIP Account never received $9,661,000.00 on July 1, 2022, or any other date. In fact, the DIP Account never had a positive balance.
On or about September 23, 2022, Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York so ordered the Stipulation. The same day, a legal assistant for ROESSER’s lawyer sent the AUSA a copy of a check made out to the “U.S. Treasury” in the amount of $3,923,981.26. This check purported to be from the DIP Account. However, the DIP Account did not have a positive balance, let alone sufficient funds to pay the check.
On or about March 3, 2023, Judge Lane dismissed the Bankruptcy. Without the protections of bankruptcy, creditors can now take steps to seize ROESSER’s assets to pay his debts.
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ROESSER, 52, of Bronxville, New York, pled guilty to one count of false oaths and claims in bankruptcy. The charge carries a maximum sentence of five years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Field Office.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Steven J. Kochevar is in charge of the prosecution.
Former Finance Director of Non-Profit Trade Association Sentenced to 18 Months in Prison for Embezzlement SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that DONNA MURRAY was sentenced by U.S. District Judge Paul A. Engelmayer to 18 months in prison for embezzling approximately $490,000 from her employer over the course of a year and a half.
U.S. Attorney Damian Williams said: “Donna Murray’s employer trusted her to safeguard its money as Director of Finance. Instead of protecting her employer, Murray betrayed that trust by siphoning nearly half a million dollars from the organization’s bank account into her own pockets, even as the COVID-19 pandemic ravaged the nation’s economy. Not only did Murray spend her employer’s money on luxury purchases and other items, but she went so far as to doctor the organization’s general ledger to conceal her crimes from her employer and its outside auditor. Today’s sentence sends a message to those entrusted with authority that if you abuse that trust for personal gain, you will be caught, and you will pay a steep price.”
According to the Information and other filings and statements made in court:
From in or about December 2017 until her sudden resignation in or about August 2022, MURRAY was employed as the Director of Finance for a non-profit financial services trade association located in Manhattan. The organization, which has more than 600 institutional members, works to promote industry thought leadership, participate in industry advocacy work, educate members and stakeholders, and establish industry standards and best practices.
As the director of finance, MURRAY was the sole finance department employee and was responsible for maintaining the organization’s books, updating its general ledger, handling accounts receivable and payable, and providing the organization’s financial statements to outside auditors. Out of the organization’s 14-16 employees during the relevant period, MURRAY was also the only employee with access to the organization’s online banking accounts and the only employee with the ability to make wire transfers for the organization.
From at least October 2019 through at least in or about March 2021, MURRAY embezzled $488,177.24 from one of the organization’s bank accounts through 105 unauthorized wire transactions from the organization’s bank account to her personal bank account in amounts that increased over time. To conceal her fraud from her employer and its outside auditor, MURRAY leveraged her knowledge of the outside auditor’s practices and the organization’s vendors and vendor invoicing schemes to generate false, but plausible-sounding, entries in the general ledger. MURRAY also transferred money from her employer’s bank account to her bank account in amounts less than $10,000, which would have triggered bank reporting requirements. Finally, MURRAY altered a bank statement submitted to the organization’s deputy general counsel to falsely reflect that a wire transfer had gone to an employer-funded health plan instead of MURRAY.
After misappropriating hundreds of thousands of dollars from her employer’s bank account to her own, MURRAY withdrew from her bank account over $400,000 in cash on more than 347 occasions — sometimes multiple times a day — and used the remainder of the stolen funds for peer-to-peer online money transfers, personal loan payments, and consumer and luxury items, including Yves Saint Laurent and Michael Kors designer apparel; beauty, wellness, and skincare products and services; home furnishings and décor; online streaming and satellite radio purchases; over 180 Amazon orders; smoke shop purchases; and a $200 treadmill for cats.
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In addition to her prison term, MURRAY, 38, of Staten Island, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jerry J. Fang is in charge of the prosecution.
Former Bronx Public Charter School Teacher Pleads Guilty in Connection with Sexual Abuse of Five Former StudentsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JESUS CONCEPCION pled guilty to 10 charges related to his sexual abuse of five minor victims who attended the public charter middle school where CONCEPCION worked.
U.S. Attorney Damian Williams said: “Jesus Concepcion engaged in a years-long scheme to manipulate, exploit, and sexually abuse young girls at the middle school where he taught. Concepcion abused his position of trust as the students’ teacher to lull them into a false sense of security and to then exploit them for his own sexual gratification. This guilty plea is a reminder that the Southern District of New York will work tirelessly with our law enforcement partners at the FBI to hold predators like Concepcion to account for their heinous crimes.”
According to the Superseding Indictment and statements made in court and in public filings:
CONCEPCION was a music teacher and orchestra instructor at a public charter middle school located in the Bronx, New York, (“School-1”) from in or about 2000 up to and including in or about 2007. During that same time period, CONCEPCION abused his position as a teacher to induce and attempt to induce five of his students (“Minor Victim-1,” “Minor Victim-2,” “Minor Victim-3,” “Minor Victim-4,” and “Minor Victim-5,” and together the “Minor Victims”) to engage in sexual acts. The Minor Victims were as young as 12 years old at the time of the abuse.
To carry out his sexual abuse of the Minor Victims, CONCEPCION singled out the Minor Victims for personal attention. He gave them money, clothing, jewelry, and other gifts, and he provided certain Minor Victims with alcohol to facilitate the abuse. He persuaded the Minor Victims to believe that they were in romantic relationships with him and provided certain Minor Victims with cellphones so that he could communicate with them in secret and to arrange sexual encounters.
CONCEPCION engaged in sexual acts including oral sex and sexual intercourse with Minor Victim-1, Minor Victim-2, Minor Victim-3, and Minor Victim-4 in various locations on multiple occasions, including in School-1’s music room, in the back room of School-1’s auditorium, in his car, at motels, and at his residences. On numerous occasions, CONCEPCION brought Minor Victims from School-1 or other locations in the Bronx to motels in New Jersey. On at least one occasion, CONCEPCION engaged in sexual acts with Minor Victim-3 at a New Jersey motel against her will. In addition, after Minor Victim-1 graduated middle school, CONCEPCION traveled to Minor Victim-1’s high school in Connecticut to have sex with her.
CONCEPCION similarly pursued Minor Victim-5 and sent hundreds of text messages over the course of several months to Minor Victim-5, who was then 13 years old, leading her to believe that they were in a romantic relationship. CONCEPCION arranged to meet Minor Victim-5 during school hours at School-1 and kissed Minor Victim-5 on the mouth.
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CONCEPCION, 50, of Simpsonville, South Carolina, pled guilty to a 10-count Superseding Indictment, including five counts of enticing a minor to engage in illegal sexual activity. Counts One through Four each carry a mandatory minimum term of five years in prison and a maximum term of 30 years in prison. Count Five carries a mandatory minimum term of 10 years in prison and a maximum term of life in prison. CONCEPCION also pled guilty to four counts of transporting a minor to engage in illegal sexual activity. Counts Six through Nine each carry a mandatory minimum term of five years in prison and a maximum term of 30 years in prison. CONCEPCION also pled guilty to Count 10, charging him with traveling with intent to engage in illegal sexual activity with a minor, which carries a maximum term of 30 years in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the efforts of Federal Bureau of Investigation (“FBI”) and the New York City Police Department (“NYPD”) for their outstanding work in this matter, particularly the FBI-NYPD New York Child Exploitation and Human Trafficking Task Force.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Camille L. Fletcher, Alexandra S. Messiter, and Jacqueline Kelly are in charge of the prosecution.
Co-Founder of Multibillion-Dollar Cryptocurrency Scheme “OneCoin” Sentenced to 20 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARL SEBASTIAN GREENWOOD, who co-founded OneCoin with RUJA IGNATOVA, a/k/a “the Cryptoqueen,” was sentenced to 20 years in prison for his orchestration of the massive OneCoin fraud scheme. OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network. As a result of misrepresentations that GREENWOOD, IGNATOVA, and others made about OneCoin, millions of victims invested over $4 billion worldwide in the fraudulent cryptocurrency. Today’s sentence was imposed by U.S. District Judge Edgardo Ramos. IGNATOVA, who was added to the Federal Bureau of Investigation’s (“FBI”) Top Ten Most Wanted List in June 2022, remains at large.
U.S. Attorney Damian Williams said: “As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest fraud schemes ever perpetrated. Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars with promises of a ‘financial revolution’ and claims that OneCoin would be the ‘Bitcoin killer.’ In fact, OneCoins were entirely worthless, and investors were left with nothing, while Greenwood lined his own pockets with over $300 million. We hope this lengthy sentence resonates in the financial sector and deters anyone who may be tempted to lie to investors and exploit the cryptocurrency ecosystem through fraud.”
According to public court filings and statements made in Court:
GREENWOOD and IGNATOVA co-founded OneCoin Ltd. (“OneCoin”) in 2014. OneCoin was based in Sofia, Bulgaria. OneCoin marketed and sold a fraudulent cryptocurrency by the same name. OneCoin began operating in the United States in or around 2015. Between the fourth quarter of 2014 and the fourth quarter of 2016 alone, the scheme took in more than $4 billion from at least 3.5 million victims.
OneCoin marketed its fake cryptocurrency through a global MLM network of OneCoin members. GREENWOOD conceived of OneCoin’s use of an MLM structure and was OneCoin’s global master distributor and the leader of the MLM network through which the fraudulent cryptocurrency was marketed and sold. Through the MLM structure, OneCoin members received commissions for recruiting others to purchase cryptocurrency packages. As the top MLM distributor of OneCoin, GREENWOOD earned 5% of monthly OneCoin sales from anywhere in the world, which totaled more than $200 million from the fourth quarter of 2014 through the fourth quarter of 2016 alone and exceeded approximately $300 million in total. GREENWOOD’s mastery as a salesman and the use of the MLM structure helped contribute to OneCoin’s rapid growth and incredible success.
From OneCoin’s inception, GREENWOOD and IGNATOVA used the notoriety of Bitcoin to convince investors that OneCoin was the next “can’t miss” investment opportunity. GREENWOOD and IGNATOVA wanted investors to believe that OneCoin was a legitimate cryptocurrency like Bitcoin and deliberately drew the comparison between the two cryptocurrencies through their representations to investors and their marketing materials. For example, in a OneCoin PowerPoint presentation prepared by GREENWOOD, OneCoin described itself as “a unique and innovative cryptocurrency, that is born on the success of the pioneering and famous cryptocoin, Bitcoin.” In another slide, OneCoin highlighted the explosive growth of Bitcoin, stating that “Bitcoins increased their value 75 times in 2013,” and including the following quote from The Guardian newspaper, “Man buys $27 of bitcoin, forgets that he had bought and finds that they’re now worth $886,000.”
In reality, unlike legitimate cryptocurrencies, OneCoin had no actual value and was conceived of by GREENWOOD and IGNATOVA as a fraud from day one. The misrepresentations made by GREENWOOD and others to OneCoin investors were legion, and the cryptocurrency was worthless. Among other things, OneCoin lied to its members about how its cryptocurrency was valued, claiming that the price of OneCoin was based on market supply and demand, when in fact OneCoin itself arbitrarily set the value of the coin without regard to market forces. The purported value of a OneCoin grew steadily from €0.50 to approximately €29.95 per coin, as of in or about January 2019. The purported price of OneCoins never decreased in value.
GREENWOOD also lied to investors about the utility of the tokens included in trader packages, claiming that they could be used to secure positions in OneCoin’s “mining pools,” depicted in promotional materials as computer hardware used to “mine” OneCoins. But there were no mining pools and no computers to mine OneCoin either. GREENWOOD knew that this lie was essential to convincing investors that OneCoin was a legitimate cryptocurrency. As he wrote in an email to IGNATOVA, “[t]he concept of converting tokens into OneCoin is an important phase for validity and truth behind the OneCoin. The so called ‘mining’ of coins is a concept that is very familiar in the industry and a story we can sell to the members.” However, as GREENWOOD and IGNATOVA both knew, OneCoin was “not mining actually—but telling people shit.” In the same email exchange, GREENWOOD asked IGNATOVA, “how can this be investigated and found out?” and “Can any member (trying to be clever) find out that we actually are not investing in machines to mine but it is merely a piece of software doing this for us?”
OneCoin also claimed to have a private “blockchain,” or a digital ledger identifying OneCoins and recording historical transactions. But, in reality, OneCoin lacked a true blockchain — that is, a public and verifiable blockchain. Indeed, by approximately March 2015, GREENWOOD and IGNATOVA had started allocating to members OneCoins that did not even exist in OneCoin’s purported private blockchain, referring to these coins as “fake coins.” By at least June 2015, GREENWOOD and IGNATOVA began emailing one another models tabulating current and projected future trader package sales volumes along with outstanding tokens and OneCoins. The spreadsheets identified separate lines for “mined coins,” “mined coins (real),” and “fake coins.” The references to “fake coins” in those records referred to OneCoins that had been distributed to members but did not exist on the OneCoin “blockchain.” Two months later, in August 2015, IGNATOVA wrote to GREENWOOD, in an email with the subject line, “I am afraid this is an issue,” “This is the implication from the big sales 4 weeks ago. 1.3 [billion] fake coins. We are fucked, this came unexpected and now needs serious, serious thinking.”
On July 4, 2015, IGNATOVA announced the official opening of the United States market for OneCoin during an online webinar. During the webinar, IGNATOVA said, among other things: “[I]f we want to go and catch Bitcoin, we never can do this without being strong in the U.S. and without being part of the community. So, um, this is actually why I am so excited about the U.S. as the market. It’s something that is about prestige. It’s a huge market. And, um, it is, I think, a place of innovation, of Wall Street, a place where we have to be if we want to be big.”
Many victims in the United States invested in fraudulent OneCoin cryptocurrency packages, including residents of the Southern District of New York. In total, more than 3.5 million victims invested in OneCoin and lost more than $4 billion dollars from the scheme —money that GREENWOOD, IGNATOVA, and others used to fund extravagant lifestyles. As the top MLM distributor of OneCoin, GREENWOOD earned more than $300 million during the scheme, much of which he spent on his own lavish lifestyle. For example, in or around December 2015, GREENWOOD used approximately $10,000 of fraud proceeds to stay at an exclusive five-star resort in Brazil. Later that month, GREENWOOD used an additional $21,000 of fraud proceeds to stay at a luxury villa with a beach view in Koh Samui, Thailand. Later, when GREENWOOD traveled to Barcelona in May 2016, he used investor funds to stay at another luxury five-star hotel and rented a Range Rover for the duration of his trip.
GREENWOOD also used proceeds from the scheme to purchase luxury designer clothes, footwear, and watches totaling approximately $2 million; pay a down payment of approximately 475,000 British Pound Sterling for a Sunseeker yacht; and to purchase real estate properties in various countries, including in Spain, Dubai, and Thailand. Finally, GREENWOOD used investor funds to travel around the world on a private “OneCoin” airplane and posted promotional videos of his travel online.
GREENWOOD was arrested at his residence on the island of Koh Samui, Thailand, in July 2018 and was extradited to the United States to face fraud and money laundering charges in October 2018. GREENWOOD has been detained since his arrest in July 2018.
On October 12, 2017, IGNATOVA was charged with OneCoin-related fraud and money laundering charges in the U.S. District Court for the Southern District of New York, and a federal warrant was issued for her arrest. On October 25, 2017, IGNATOVA traveled on a commercial flight from Sofia, Bulgaria, to Athens, Greece, and has not been seen publicly since. IGNATOVA was added to the FBI’s Top Ten Most Wanted List in June 2022. The FBI is offering a $100,000 reward for information leading to IGNATOVA’s arrest.
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In addition to his prison term, GREENWOOD, 46, a citizen of Sweden and the United Kingdom, was ordered to pay approximately $300 million in forfeiture.
Mr. Williams praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigation and the FBI, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office. Mr. Williams also thanked the New York County District Attorney’s Office for their assistance throughout the investigation. Mr. Williams further thanked Thai authorities, including the Royal Thai Police and the Office of the Attorney General, for their assistance in the arrest and extradition of GREENWOOD. The Justice Department’s Office of International Affairs worked with law enforcement partners in Thailand to secure the arrest and extradition of GREENWOOD.
If you have any information about IGNATOVA’s whereabouts, please contact your local FBI office or the nearest American Embassy or Consulate. Tips can be reported anonymously and can also be reported online at tips.fbi.gov.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas Folly, Juliana N. Murray, and Kevin Mead are in charge of the prosecution.
Statement of U.S. Attorney Damian Williams on the Guilty Plea of Ryan Salame, Former CEO of FTXRead the Press Release
“Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law. Today’s guilty plea reflects the commitment I made in December that my Office would continue to pursue swift justice against individuals at FTX and its affiliates who engaged in criminal conduct.”
United States Obtains Consent Decree Against Apex Building Company for Violating Lead Paint Safety RegulationsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States filed a civil lawsuit against APEX BUILDING COMPANY, INC. (“APEX”) alleging violations of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”). The United States simultaneously entered into a Consent Decree resolving that lawsuit. The Consent Decree includes a $606,706 civil penalty, the second largest civil penalty ever imposed under the RRP Rule, and requires APEX to take steps to mitigate potential harms caused by its conduct.
U.S. Attorney Damian Williams said: “Apex’s conduct threatened to expose people, including children, to toxic lead paint dust in communities that already suffer disproportionately from public health and environmental hazards. Through this lawsuit and consent decree, we are holding Apex responsible for its legal violations.”
EPA Regional Administrator Lisa F. Garcia said: “This company’s actions were inexcusable; they are also all too common, that is why EPA is partnering with state and local partners to crack down on improper renovation work that can expose our kids to toxic lead. There is no safe level of lead, and lead paint dust is the biggest source of lead exposure for children. As evidenced by this case, if companies think they can get away with endangering our kids, they are wrong.”
The TSCA and the RRP Rule impose safety requirements to minimize the risk that young children, tenants, and renovation workers are exposed to toxic lead paint dust during renovations of residential buildings. Exposure to lead paint dust is the most common cause of lead poisoning, which can lead to severe, irreversible health problems, particularly in children. Lead poisoning can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems.
As alleged in the United States’ complaint filed in the district court:
APEX is a general contractor that conducted renovation work in hundreds of apartment units between 2015 and 2021. In March 2016, the New York City Department of Health and Mental Hygiene inspected an APEX worksite and found that it had failed to contain lead dust, resulting in dust containing lead-based paint in excess of federal standards entering public hallways, in violation of the RRP Rule. The EPA determined that APEX also lacked required certifications, failed to train its workers on lead-safe work practices, and failed to inform the building owner and occupants of the risks of lead poisoning during that renovation. When APEX was informed of these issues, it provided the EPA with inaccurate information about its RRP Rule compliance. Rather than coming into full compliance with the law, APEX continued to violate the RRP Rule through at least 2021. These alleged violations occurred at low-income residential properties, where tenants are already disproportionately burdened by other environmental hazards.
In the Consent Decree, APEX admits, acknowledges, and accepts responsibility for the following conduct:
- Failing to adequately contain construction dust, including dust containing lead in excess of levels permitted under the RRP Rule at one renovation project.
- Failing to assign a certified renovator to oversee the project, in violation of the RRP Rule at one renovation project.
- Failing to provide on-the-job lead safety training to workers, in violation of the RRP Rule at one renovation project.
- Failing to post signs clearly defining its work area and warning occupants and other persons not involved in renovation activities to remain outside of the work area, in violation of the RRP Rule at one renovation project.
- Failing to provide a lead-hazard information pamphlet to the owner or occupants of the building before commencing work, in violation of the RRP Rule at one renovation project.
- Failing to ensure that a certified renovator regularly directed work being performed at these projects and to provide on-the-job training for APEX’s other workers, in violation of the RRP Rule at three projects.
- Failing to maintain documentation showing that it provided lead-hazard information pamphlets to the owners or occupants of the buildings or that it had posted warning signs in the buildings, in violation of the RRP Rule at three projects.
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Pursuant to the Consent Decree, APEX will pay a penalty of $606,706, an amount based on the company’s documented inability to pay the full civil penalty for which it otherwise would be liable. Further, the Consent Decree requires APEX to comply with safe work practices and other RRP Rule requirements in the future and to conduct tenant and worker safety information sessions to mitigate potential harms it caused. Failure to comply with the Consent Decree will give rise to significant additional penalties.
To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the Consent Decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.
Mr. Williams thanked the attorneys and enforcement staff at EPA Region 2 for their critical work on this matter.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Mónica P. Folch and Zack Bannon are in charge of the case.
U.S. v. Apex Complaint U.S. v. Apex Proposed Consent DecreeBronx Man Charged with Shooting Outside of DeliRead 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 a Complaint charging CHRISTOPHER SCOTT with firing a shot at a victim on a commercial street in the Bronx on August 6, 2023. SCOTT will be presented this afternoon before U.S. Magistrate Judge Valerie Figueredo
U.S. Attorney Damian Williams said: “As alleged, Christopher Scott conducted a targeted shooting of an individual on a summer night outside of a deli near the Pelham Parkway Houses in the Bronx. Thanks to the swift action of our law enforcement partners and the prosecutors of this Office, Scott is now facing justice for his alleged violent actions.”
NYPD Commissioner Edward A. Caban said: “The firing of a gun on a public street will never be accepted as a way of life in New York City. Such a grave act of violence demands accountability. I commend the work of our brave NYPD officers who go in harm’s way, removing illegal guns, and those who pull the trigger, from our communities. I am also grateful for our close alignment with the Office of the United States Attorney for the Southern District of New York as we work together to build strong cases and hold the most violent offenders accountable.”
According to the allegations in the Complaint:[1]
On August 6, 2023, shortly before 10:30 p.m., SCOTT fired a gunshot at an individual (“Victim-1”) near Williamsbridge Road in the Bronx.
Surveillance video captured SCOTT approaching Victim-1, brandishing a firearm, and firing a shot at Victim-1, then following Victim-1 inside a nearby building. A still image from the surveillance footage with SCOTT circled in red is below:
Within minutes after SCOTT fired the shot at Victim-1, and shortly after SCOTT appears to have hidden the firearm used in the shooting under the wheel of a nearby vehicle, NYPD officers arrived at the scene of the shooting, and SCOTT proceeded to interact with the NYPD officers.
After the NYPD officers left the scene of the shooting, one of SCOTT’s associates appears to have retrieved the firearm used in the shooting for SCOTT, and then SCOTT and that associate drove away from the location of the shooting in a grey SUV.
Upon canvassing the scene of the shooting, NYPD officers recovered a shell casing.
On August 14, 2023, shortly before 10:30 p.m., SCOTT was arrested in connection with the above-mentioned shooting. Around the time of his arrest, SCOTT was seen driving the same grey SUV he drove on the night of the shooting. During an inventory search of that SUV, a Springfield Armory model XDS-9 MOD2 OSP 3.3 9mm caliber semi-automatic pistol (the “Firearm”) with eight live rounds of ammunition in the magazine and one live round in the chamber was recovered under the driver’s seat of the vehicle.
The National Integrated Ballistic Information Network of the Bureau of Alcohol, Tobacco, Firearms and Explosives found a preliminary correlation between the shell casing recovered at the scene of the shooting and the Firearm, indicating that the firearm that was used in the shooting was the same firearm found under the driver’s seat of SCOTT’s SUV.
SCOTT was not permitted to possess ammunition or a firearm because of a prior felony conviction for attempted criminal possession of a weapon.
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SCOTT, 26, of the Bronx, New York, is charged with one count of possession of ammunition after a felony conviction and one count of possession of a firearm after a felony conviction, which each carry 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 defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the NYPD. Mr. Williams also thanked the Bronx County District Attorney’s Office for their assistance in this case.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Meredith C. Foster is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Scott ComplaintU.S. Attorney Charges 40-Year-Old Man with Coercion and Enticement of A MinorRead 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 Melvin Padilla, the Chief of the Bedford Police Department, announced the arrest of JOHN LORD. LORD is charged with persuading, inducing, enticing, and coercing a 15-year-old minor to engage in sexual activity. LORD was presented yesterday before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.
U.S. Attorney Damian Williams said: “This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them. As this arrest shows, we will use every tool available to law enforcement to investigate and prosecute those who sexually exploit children.”
FBI Assistant Director in Charge James Smith said: "Lord’s alleged actions, enticing a vulnerable member of our society – a child – for sexual activity, are abhorrent. The FBI takes the alleged crime very seriously, we are tireless in our efforts to investigate and hold accountable any person who harms a child.”
Bedford Police Chief Melvin Padilla said: “The safety and security of our residents is our primary focus, and thanks to the diligent work of our officers and the cooperation and assistance from our federal partners, the defendant was quickly identified and apprehended.”
According to the Complaint filed on August 31, 2023, in White Plains federal court:[1]
On or about August 30, 2023, LORD persuaded and enticed a 15-year-old minor (“Victim-1”), who he had met and communicated with on an online application, to engage in sexual activity with him.
On August 30, 2023, LORD sent text messages to Victim-1 asking to meet to engage in sexual activity. Hours later, LORD was discovered with Victim-1 in a wooded area in Katonah, New York. LORD was naked from the waist down with his penis exposed. Victim-1 was in his underwear. When approached, LORD grabbed his underwear and fled.
Later that evening, LORD was apprehended and arrested by the Putnam County Sheriff’s Office with assistance from the Bedford Police Department. LORD was interviewed by Bedford Police and admitted that he engaged in sexual activity with Victim-1 on August 30, 2023, as well as on prior occasions. On August 30, 2023, LORD was charged in Bedford, New York, with Criminal Sexual Act in the Third Degree.
Mr. Williams stated that the investigation is ongoing. Mr. Williams requests that any individuals who may have encountered JOHN LORD or whose children may have had any communications with LORD to contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.
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LORD, 40, of Sedona, Arizona, is charged with one count of coercion and enticement, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the efforts of the FBI’s Westchester County Safe Streets Task Force, the Bedford Police Department, the Putnam County Sheriff’s Office, and the Westchester County District Attorney’s Office in connection with this investigation. He added that the investigation is ongoing.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Shaun E. Werbelow is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Lord ComplaintRussian-German National Arrested for Illegally Exporting to Russia Sensitive U.S.-Sourced Microelectronics with Military Applications in Violation of U.S. Export ControlsRead the Press Release
The Defendant Allegedly Participated in an Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of U.S.-Sourced Sensitive Microelectronics for a Russian Company That Supplies Manufacturers for the Russian Military
Arthur Petrov, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged by criminal complaint, unsealed today, with export control violations, smuggling, wire fraud, and money laundering offenses based on his alleged participation in an ongoing scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military.
Petrov was arrested on Aug. 26 in the Republic of Cyprus at the request of the United States.
“As alleged in the complaint, Arthur Petrov conspired to smuggle U.S. microelectronics technology with military applications to Russia, the type of components used by the Russian military in its unjust invasion of Ukraine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department will not tolerate efforts to circumvent our export control laws to fuel the Russian war machine and those who try will find no refuge from U.S. justice. We thank our partners in the Republic of Cyprus for their law enforcement cooperation and continued support.”
“Those who evade our export control restrictions to support Putin’s brutal war machine will be held accountable,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “In conjunction with today’s criminal action, we have issued a Temporary Denial Order to shutter this alleged illicit procurement network’s access to the type of U.S. micro-electronics embedded in Russian missiles and drones that have been used in its unprovoked war against the Ukrainian people.”
“Arthur Petrov is alleged to have participated in an international illicit procurement network based in Russia, using shell companies to smuggle shipments from U.S. distributors of microelectronics with military applications through intermediary countries in order to conceal the ultimate destination of these sensitive materials: Russia. As alleged, Petrov knew that the transactions and shipments were in contravention of U.S. export controls relating to Russia,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts to illicitly supply Russia with U.S.-sourced military technology represent an affront to national security and will continue to be met with criminal prosecutions by this office.”
“Petrov’s alleged conduct in the complaint represents a complex, concerted scheme to circumvent U.S. law and export controls,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “The alleged creation and establishment of an intricate network of shell companies demonstrates the elaborate measures adversaries will take to steal sensitive technology. The FBI remains committed to dismantling criminal enterprises’ intent on threatening national security.”
According to court documents, Petrov is a dual Russian-German national who works for LLC Electrocom VPK (Electrocom), a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. Petrov and two co-conspirators (CC-1 and CC-2), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas. As alleged, following Russia’ invasion of Ukraine in February 2022 and continuing until August 2023, they fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom. To carry out the scheme, Petrov, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronics components were destined for Russia. The technology that Petrov and his co-conspirators procured during the course of the conspiracy have significant military applications and include various types of electronics components of the sort that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones, and electronic warfare and communications devices.
To perpetrate the scheme, Petrov first acquired the controlled microelectronics from U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (Astrafteros), which he operates. Petrov procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military. The microelectronics that Petrov procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or reexported to Russia without a license from the Commerce Department. Invoices provided to Petrov by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.
To evade these controls, Petrov, CC-1, and CC-2 worked together to transship the controlled items procured by Petrov using pass-through entities operated by CC-1 and CC-2 in third countries. CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia. At all times, Petrov, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia. During the course of the conspiracy, Petrov, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.
Petrov is charged with one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison; one count of conspiracy to violate the Export Control Reform Act (ECRA), which carries a maximum sentence of 20 years in prison; three counts of violating the ECRA, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to smuggle goods from the United States, which carries a maximum sentence of five years in prison; three counts of smuggling goods from the United States, which each carry a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI and the Department of Commerce’s Bureau of Industry and Security are investigating the case, with valuable assistance provided by the FBI’s Legal Attaché offices in Poland, Germany, and Athens, Greece; the Justice Department’s National Security Division; and the Justice Department’s Office of International Affairs. The Republic of Cyprus National Police also provided critical assistance in effecting the defendant’s arrest and detention at the request of the United States.
Assistant U.S. Attorney Kevin Sullivan for the Southern District of New York is prosecuting the case, with assistance from Trial Attorney Maria Fedor of the Counterintelligence and Export Control Section.
Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Russian-German National Arrested for Illegally Exporting to Russia Sensitive U.S.-Sourced Microelectronics with Military Applications in Violation of U.S. Export ControlsRead the Press Release
Arthur Petrov Allegedly Participated in a Russia-Based Illicit Procurement Network That, Subsequent to Russia’s Invasion of Ukraine, Illegally Procured Large Quantities of Sensitive Microelectronics for a Russian Company That Supplies Manufacturers for the Russian Military
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 Matthew S. Axelrod, the Assistant Secretary for Export Enforcement of the Commerce Department, announced the unsealing of a Complaint charging ARTHUR PETROV with export control violations, smuggling, wire fraud, and money laundering offenses based on PETROV’s alleged participation in a scheme to procure U.S.-sourced microelectronics subject to U.S. export controls on behalf of a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. PETROV was arrested on August 26, 2023, in the Republic of Cyprus at the request of the United States.
U.S. Attorney Damian Williams said: “Arthur Petrov is alleged to have participated in an international illicit procurement network based in Russia, using shell companies to smuggle shipments from U.S. distributors of microelectronics with military applications through intermediary countries in order to conceal the ultimate destination of these sensitive materials: Russia. As alleged, Petrov knew that the transactions and shipments were in contravention of U.S. export controls relating to Russia. Efforts to illicitly supply Russia with U.S.-sourced military technology represent an affront to national security and will continue to be met with criminal prosecutions by this Office.”
Assistant Attorney General Matthew G. Olsen said: “As alleged in the complaint, Arthur Petrov conspired to smuggle U.S. microelectronics technology with military applications to Russia, the type of components used by the Russian military in its unjust invasion of Ukraine. The Justice Department will not tolerate efforts to circumvent our export control laws to fuel the Russian war machine and those who try will find no refuge from U.S. justice. We thank our partners in the Republic of Cyprus for their law enforcement cooperation and continued support.”
FBI Assistant Director in Charge James Smith said: "After Russia’s further invasion of Ukraine in February 2022, we allege Petrov participated in a global scheme to use shell companies from around the world to establish a clandestine procurement network and supply Russia’s military industrial complex with critical U.S. technology, including types of microelectronics recovered in Russian military equipment on the battlefield in Ukraine. Petrov and his co-conspirators knowingly misrepresented their business activities to evade export controls in order to procure and transship components associated with Russian guided missiles, drones, and electronic warfare devices. This is yet another example of Russia using illicit procurement networks to not only advance their military, but ultimately harm the national security of our country. The FBI is resolute in its commitment to stopping Russia from rearming its military with U.S. technology. Along with our international partners, we will bring to justice anyone who evades sanctions or violates the laws of the United States.”
Assistant Secretary for Export Enforcement Matthew S. Axelrod said: “Those who evade our export control restrictions to support Putin’s brutal war machine will be held accountable. In conjunction with today’s criminal action, we are issuing a Temporary Denial Order to shutter this alleged illicit procurement network’s access to the type of U.S. microelectronics embedded in Russian missiles and drones that have been used in its unprovoked war against the Ukrainian people.”
According to the allegations contained in the Complaint unsealed today in Manhattan federal court:[1]
ARTHUR PETROV is a dual Russian-German national who has resided in Russia and Cyprus and works for LLC Electrocom VPK (“Electrocom”), a Russia-based supplier of critical electronics components for manufacturers supplying weaponry and other equipment to the Russian military. PETROV and two co-conspirators (“CC-1” and “CC-2”), who are Russian nationals also working for Electrocom, operated an illicit procurement network in Russia and elsewhere overseas. They have fraudulently procured from U.S. distributors large quantities of microelectronics subject to U.S. export controls on behalf of Electrocom. To carry out the scheme, PETROV, CC-1, and CC-2 used shell companies and other deceptive means to conceal that the electronics components were destined for Russia. The technology that PETROV and his co-conspirators have procured in contravention of export controls during the course of the conspiracy have significant military applications and include various types of electronics components that have been recovered in Russian military hardware on the battlefield in Ukraine, such as Russian guided missiles, drones, and electronic warfare and communications devices.
To perpetrate the scheme, PETROV first acquired the controlled microelectronics from U.S.-based electronics exporters using a Cyprus-based shell company, Astrafteros Technokosmos LTD (“Astrafteros”), which he operates. PETROV procured these sensitive electronics components by falsely representing to the U.S. exporters that Astrafteros was purchasing the items for fire security systems, among other commercial uses, and that the ultimate end-users and destinations of the electronics are companies in Cyprus or other third countries — when in fact the components are destined for Electrocom in Russia, which supplies manufacturers for the Russian military. The microelectronics that PETROV has procured as part of the conspiracy include, among other things, microcontrollers and integrated circuits that are on the Commerce Control List maintained by the Commerce Department and cannot lawfully be exported or reexported to Russia without a license from the Commerce Department. Invoices provided to PETROV by the U.S. distributors expressly noted that these microcontrollers and integrated circuits are subject to U.S. export controls.
To evade these controls, PETROV, CC-1, and CC-2 worked together to transship the controlled items procured by PETROV using pass-through entities operated by CC-1 and CC-2 in third countries. CC-1 and CC-2 then caused the items to be shipped, sometimes through yet another country, to the ultimate destination: Electrocom in Saint Petersburg, Russia. At all times, PETROV, CC-1, and CC-2 concealed from the U.S. distributors that they were procuring the controlled electronics components on behalf of Electrocom and that the items were destined for Russia. During the course of the conspiracy, PETROV, CC-1, and CC-2 procured from U.S. distributors and shipped to Russia more than $225,000 worth of controlled electronics components with military applications.
* * *
PETROV, 33, a dual Russian-German citizen who has resided in Russia and Cyprus, is charged with one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison; one count of conspiracy to violate the Export Control Reform Act (“ECRA”), which carries a maximum sentence of 20 years in prison; three counts of violating the ECRA, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to smuggle goods from the United States, which carries a maximum sentence of five years in prison; three counts of smuggling goods from the United States, which each carry a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division and the New York Field Office of the Bureau of Industry and Security of the Department of Commerce. Mr. Williams also thanked the FBI’s Legal Attaché offices in Poland, Germany, and Athens, Greece; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section; and the Department of Justice’s Office of International Affairs for their assistance. The Cyprus Police also provided critical assistance in effecting the defendant’s arrest and detention at the request of the United States.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorney Kevin Sullivan is in charge of the prosecution, with assistance from Trial Attorney Maria Fedor of the Counterintelligence and Export Control Section.
Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Petrov ComplaintRockland County Resident Arrested for $1.5 Million Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging JEFFREY TOGNETTI, JR., with lying to investors about, among other things, being a licensed Series 3 and 7 broker. TOGNETTI was arrested this morning and will be presented in White Plains federal court later today before U.S. Magistrate Judge Andrew E. Krause. The case is assigned to U.S. District Judge Nelson S. Román.
U.S. Attorney Damian Williams said: “As alleged, Jeffrey Tognetti, Jr., perpetrated a classic investment fraud scheme, lying to victims about his qualifications in order to lure supposed investments, only to misappropriate those funds. The career prosecutors of this Office are experts in prosecuting this kind of financial fraud, and thanks to our law enforcement partners, Tognetti now faces the repercussions of his alleged crime.”
HSI Special Agent in Charge Ivan J. Arvelo said: “The defendant is alleged to have defrauded his victims through an ongoing web of misrepresentations and deceit to fund his lavish lifestyle. HSI will work tirelessly to pursue those who seek to take advantage of their victims for financial gain and to ensure that the integrity of our financial institutions is upheld.”
As alleged in public proceedings and the Indictment unsealed today in White Plains federal court:[1]
From at least in or about July 2022 up to the present, TOGNETTI ran a scheme that defrauded victims out of at least $1.5 million. TOGNETTI solicited and obtained funds from victims based on the misrepresentations that, among other things, TOGNETTI was a licensed Series 3 and 7 broker in New York, New Jersey, and Florida, and that he would invest funds he received from victims in the stock market and cryptocurrency. To induce victims to give him funds, TOGNETTI routinely made materially false oral and written statements, including lies that he worked at a hedge fund known as Parallax Capital Advisors LLC and created technology that allowed him to profitably trade cryptocurrency. Without their knowledge or authorization, TOGNETTI misappropriated his victims’ funds by, among other things, using the funds for personal gain and transferring the funds to other individuals.
* * *
TOGNETTI, 26, of Piermont, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Any individuals who believe they may have been the victim of the alleged crime perpetrated by JEFFREY TOGNETTI, JR., can contact HSI at https://www.ice.gov/webform/ice-tip-form.
Mr. Williams praised the outstanding investigative work of HSI and the New York City Police Department.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Jennifer N. Ong is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Tognetti IndictmentTornado Cash Founders Charged with Money Laundering and Sanctions ViolationsRead the Press Release
A Russian national and a Washington man were charged today with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.
According to the indictment, unsealed today in the Southern District of New York, Roman Storm, 34, of Auburn, Washington, and Roman Semenov, 49, of Russia, created, operated, and promoted Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in money laundering transactions, and laundered hundreds of millions of dollars for the Lazarus Group, the sanctioned North Korean cybercrime organization. Storm was arrested today in the state of Washington and will be presented later today in the Western District of Washington.
“As alleged in the indictment, the defendants operated a $1 billion scheme designed to help other criminals launder and conceal funds using cryptocurrency, including by laundering hundreds of millions of dollars on behalf of a state-sponsored North Korean cybercrime group sanctioned by the U.S. government,” said Attorney General Merrick B. Garland. “These charges should serve as yet another warning to those who think they can turn to cryptocurrency to conceal their crimes and hide their identities, including cryptocurrency mixers: it does not matter how sophisticated your scheme is or how many attempts you have made to anonymize yourself, the Justice Department will find you and hold you accountable for your crimes.”
“Today’s announcement should remind criminal organizations everywhere in the world that they are neither untraceable nor anonymous,” said FBI Director Christopher Wray. “You can’t hide from us behind a keyboard — whether you’re a hacker or facilitator. Those charged today engaged in a conspiracy to launder money for cybercriminals, including for a North Korean cybercrime organization seeking to evade sanctions. As we have with this operation, the FBI is going to keep dismantling the infrastructure used by cyber criminals to commit and profit from their crimes, and holding anyone who assists those criminals accountable.”
“Cryptocurrency mixers have become the go-to method for criminals to conceal their ill-gotten gains. As alleged, the defendants operated Tornado Cash as a safe haven for criminal actors to obfuscate the trail of funds tied to their criminal activities, such as computer hacking and wire fraud,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The Criminal Division will continue to prioritize the investigation and prosecution of those who seek to criminally exploit the cryptocurrency ecosystem.”
“As stated in the indictment, the defendants’ cryptocurrency service facilitated more than $1 billion in illicit transactions and they knowingly allowed a globally sanctioned cybercrime group to launder hundreds of millions of dollars on behalf of the North Korean regime,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department – alongside our domestic and international law enforcement partners – will use every tool in our arsenal to pursue and dismantle the criminal networks that enable U.S. sanctions violations wherever they operate.”
“As alleged, Tornado Cash was an infamous cryptocurrency mixer that laundered more than one billion dollars in criminal proceeds and violated U.S. sanctions,” said U.S. Attorney Damian Williams for the Southern District of New York. “Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated this money laundering. While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes. Today’s indictment is a reminder that money laundering through cryptocurrency transactions violates the law, and those who engage in such laundering will face prosecution.”
Storm and Semenov were two of the three founders of the Tornado Cash service, a cryptocurrency mixer that allowed its customers to engage in untraceable transfers of cryptocurrency. The defendants and their co-conspirators allegedly created the core features of the Tornado Cash service, paid for critical infrastructure to operate the Tornado Cash service, promoted the Tornado Cash service, and made millions of dollars in profits from operating the Tornado Cash service. The Tornado Cash service advertised to customers that it provided untraceable and anonymous financial transactions, and Storm and Semenov chose not to implement know-your customer or anti-money laundering programs as required by law. As a result, the Tornado Cash service was used to launder more than $1 billion in criminal proceeds. Storm and Semenov allegedly knew about these money laundering transactions and received complaints and requests for help from victims of hacking and other cybercrimes. However, they refused to implement any controls and continued to operate the Tornado Cash service and facilitate these money laundering transactions.
In April and May 2022, the Tornado Cash service was allegedly used by the Lazarus Group, a sanctioned North Korean cybercrime organization, to launder hundreds of millions of dollars in hacking proceeds. Storm and Semenov allegedly knew that the Tornado Cash service they were operating was engaging in these sanctions-violating transactions. They implemented a change in the service so they could make a public announcement that they were compliant with sanctions, but in their private chats they agreed that this change would be ineffective. They then continued to operate the Tornado Cash service and facilitate hundreds of millions of dollars in further sanctions-violating transactions, helping the Lazarus Group to transfer criminal proceeds from a cryptocurrency wallet that had been designated by the Office of Foreign Assets Control (OFAC) as blocked property.
Storm and Semenov are each charged with one count of conspiracy to commit money laundering and one count of conspiracy to violate the International Economic Emergency Powers Act, each of which carries a maximum penalty of 20 years in prison. They are also each charged with conspiracy to operate an unlicensed money transmitting business, 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 and the IRS-Criminal Investigation are investigating the case. The Justice Department’s Office of International Affairs provided valuable assistance.
Assistant U.S. Attorneys Thane Rehn and Benjamin Gianforti for the Southern District of New York, and Trial Attorneys Jacques Singer-Emery and Garrett Coyle of the Justice Department's National Security Division are prosecuting the case in partnership with the Criminal Division’s National Cryptocurrency Enforcement Team (NCET).
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecutorial focus, and leads the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Tornado Cash Founders Charged with Money Laundering and Sanctions ViolationsRead 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”), Nicole M. Argentieri, the Acting Assistant Attorney General of the Justice Department’s Criminal Division, 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 FBI, and Bryant Jackson, the Special Agent in Charge of the Cincinnati Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an Indictment charging ROMAN STORM and ROMAN SEMENOV with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business. The charges in the Indictment arise from the defendants’ alleged creation, operation, and promotion of Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in money laundering transactions and laundered hundreds of millions of dollars for the Lazarus Group, the sanctioned North Korean cybercrime organization. ROMAN STORM was arrested today in the state of Washington and will be presented today in the U.S. District Court for the Western District of Washington. The case has been assigned to U.S. District Judge Katherine Polk Failla. SEMENOV remains at large.
U.S. Attorney Damian Williams said: “As alleged, Tornado Cash was an infamous cryptocurrency mixer that laundered more than $1 billion in criminal proceeds and violated U.S. sanctions. Roman Storm and Roman Semenov allegedly operated Tornado Cash and knowingly facilitated this money laundering. While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes. Today’s indictment is a reminder that money laundering through cryptocurrency transactions violates the law, and those who engage in such laundering will face prosecution.”
Attorney General Merrick B. Garland said: “As alleged in the indictment, the defendants operated a $1 billion scheme designed to help other criminals launder and conceal funds using cryptocurrency, including by laundering hundreds of millions of dollars on behalf of a state-sponsored North Korean cybercrime group sanctioned by the U.S. government. These charges should serve as yet another warning to those who think they can turn to cryptocurrency to conceal their crimes and hide their identities, including cryptocurrency mixers: it does not matter how sophisticated your scheme is or how many attempts you have made to anonymize yourself, the Justice Department will find you and hold you accountable for your crimes.”
FBI Director Christopher A. Wray said: “Today’s announcement should remind criminal organizations everywhere in the world that they are neither untraceable nor anonymous. You can’t hide from us behind a keyboard — whether you’re a hacker or facilitator. Those charged today engaged in a conspiracy to launder money for cybercriminals, including for a North Korean cybercrime organization seeking to evade sanctions. As we have with this operation, the FBI is going to keep dismantling the infrastructure used by cyber criminals to commit and profit from their crimes, and holding anyone who assists those criminals accountable.”
Acting Assistant Attorney General Nicole M. Argentieri said: “Cryptocurrency mixers have become the go-to method for criminals to conceal their ill-gotten gains. As alleged, the defendants operated Tornado Cash as a safe haven for criminal actors to obfuscate the trail of funds tied to their criminal activities, such as computer hacking and wire fraud. The Criminal Division will continue to prioritize the investigation and prosecution of those who seek to criminally exploit the cryptocurrency ecosystem.”
Assistant Attorney General Matthew G. Olsen said: “As stated in the indictment, the defendants’ cryptocurrency service facilitated more than $1 billion in illicit transactions, and they knowingly allowed a globally sanctioned cybercrime group to launder hundreds of millions of dollars on behalf of the North Korean regime. The Justice Department – alongside our domestic and international law enforcement partners – will use every tool in our arsenal to pursue and dismantle the criminal networks that enable US sanctions violations wherever they operate.”
FBI Assistant Director in Charge James Smith said: “Today’s indictment of Tornado Cash co-founders Roman Storm and Roman Semenov highlights their alleged role in creating a cryptocurrency mixer that ultimately served as a gateway for the laundering of more than $1 billion in criminal proceeds. As alleged, when it became clear that a sanctioned North Korean cybercrime organization was using the platform to launder hundreds of millions of dollars derived from cyber heists, Storm and Semenov turned a blind eye to the illicit activity and made public representations that they were compliant with sanctions laws. Today’s enforcement actions remind the public that the FBI, when faced with illegal activity, is committed to tracing the untraceable, and will remain focused on protecting victims of financial crime wherever those crimes are committed — be it through the traditional banking system or the virtual currency blockchain.”
IRS-CI Special Agent in Charge Bryant Jackson said: “As alleged, Tornado Cash was used to launder over $1 billion. IRS Criminal Investigation’s Special Agents use their financial expertise to follow the flow of cryptocurrency transactions and dismantle major money laundering organizations that try to conceal the criminal source of their funds. Today's indictment is a direct result of our collaboration with our law enforcement partners, both in the U.S. and abroad. Through our work together, those who use deceit and fraud to line their pockets with illegal profits will be held accountable.”
As alleged in the Indictment unsealed in Manhattan federal court and court filings:[1]
ROMAN STORM and ROMAN SEMENOV were two of the three founders of the Tornado Cash service, a cryptocurrency mixer that allowed its customers to engage in untraceable transfers of cryptocurrency. The defendants and their co-conspirators created the core features of the Tornado Cash service, paid for critical infrastructure to operate the Tornado Cash service, promoted the Tornado Cash service, and made millions of dollars in profits from operating the Tornado Cash service. The Tornado Cash service advertised to customers that it provided untraceable and anonymous financial transactions, and STORM and SEMENOV chose not to implement know your customer or anti-money laundering programs as required by law. As a result, the Tornado Cash service was used to launder more than $1 billion in criminal proceeds. STORM and SEMENOV knew about these money laundering transactions and received complaints and requests for help from victims of hacking and other cybercrimes. However, they refused to implement any controls and continued to operate the Tornado Cash service and facilitate these money laundering transactions.
In April and May 2022, the Tornado Cash service was allegedly used by the Lazarus Group, a sanctioned North Korean cybercrime organization, to launder hundreds of millions of dollars in hacking proceeds. STORM and SEMENOV knew that the Tornado Cash service they were operating was engaging in these sanctions-violating transactions. They implemented a change in the service so that they could make a public announcement that they were compliant with sanctions, but in their private chats, they agreed that this change would be ineffective. They then continued to operate the Tornado Cash service and facilitate hundreds of millions of dollars in further sanctions-violating transactions, helping the Lazarus Group to transfer criminal proceeds from a cryptocurrency wallet that had been designated by the Office of Foreign Assets Control as blocked property.
* * *
ROMAN STORM, 34, of Auburn, Washington, and ROMAN SEMENOV, 35, a Russian national, are each charged with one count of conspiracy to commit money laundering and one count of conspiracy to violate the International Economic Emergency Powers Act, which each carry a maximum sentence of 20 years in prison. They are also each charged with conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.
The statutory maximum 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 investigative work of the FBI and IRS-CI. He also acknowledged the assistance of the Justice Department’s Office of International Affairs. Mr. Williams further thanked the Joint Chiefs of Global Tax Enforcement (“J5”) for their assistance in the investigation.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit and the Criminal Division’s National Cryptocurrency Enforcement Team (“NCET”). Assistant U.S. Attorneys Thane Rehn and Benjamin Gianforti are in charge of the prosecution.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecutorial focus, and leads the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
The allegations in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Storm and Semenov IndictmentNew Rochelle Man Charged with Bronx ShootingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Steven A. Nigrelli, the Acting Superintendent of the New York State Police (“NYSP”), announced the unsealing of a Complaint charging TYRIEK SKYFIELD with firing two shots at a victim on a residential street in the Bronx, injuring the victim. SKYFIELD will be presented this afternoon before U.S. Magistrate Judge Sarah Netburn.
U.S. Attorney Damian Williams said: “As alleged, Tyriek Skyfield fired two bullets at another individual on a residential street in the Bronx. One of those bullets struck the victim, injuring him. Thanks to the swift action of our law enforcement partners, Skyfield is now being held accountable for his alleged violent actions.”
NYSP Acting Superintendent Steven A. Nigrelli said: “This case sends a clear message that senseless acts of gun violence will not be tolerated, and justice will prevail. Working together with all levels of law enforcement, we can and are making a difference in the fight to end gun violence in our communities. I commend our New York State Police investigators, the U.S. Attorney’s Office, and the NYPD for their swift and diligent work on this case.”
According to the allegations in the Complaint:[1]
On Saturday, July 22, 2023, shortly before 10:00 p.m., SKYFIELD fired two gunshots at another individual (“Victim-1”) in the vicinity of Needham Avenue in the Bronx.
Surveillance video captured SKYFIELD brandishing a handgun at Victim-1 seconds before firing one of the shots. A still image from the surveillance footage is below:
One of the gunshots struck Victim-1 in the foot.
After firing the shots at Victim-1, SKYFIELD fled the scene on foot and was picked up outside a nearby building by a white BMX X6 SUV a few minutes later.
SKYFIELD later traveled to a club in Queens as a passenger in the same car. Video surveillance footage from the club showed SKYFIELD presenting proof of identification and entering the club:
The club’s identification records, in combination with video surveillance footage, indicated that the individual seen entering the club in the above still images was SKYFIELD.
After canvassing the scene of the shooting, NYPD officers recovered a shell casing from one of the gunshots in a nearby yard.
SKYFIELD was not permitted to possess ammunition because of prior felony convictions, one of which was a conviction for an armed robbery.
* * *
SKYFIELD, 31, of New Rochelle, New York, is charged with possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the NYSP and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York and 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. Attorney Adam Z. Margulies is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Skyfield ComplaintFormer Employee of NFT Marketplace Sentenced to Prison in First-Ever Digital Asset Insider Trading SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that NATHANIAL CHASTAIN, a former product manager at Ozone Networks, Inc. d/b/a OpenSea (“OpenSea”), was sentenced today to three months in prison in connection with a scheme to commit insider trading in Non-Fungible Tokens, or “NFTs,” by using confidential information about which NFTs were going to be featured on OpenSea’s homepage for his personal financial gain. CHASTAIN was previously convicted at trial of wire fraud and money laundering.
U.S. Attorney Damian Williams said: “Nathanial Chastain faced justice today for violating the trust that his employer placed in him by using OpenSea’s confidential information for his own profit. Today’s sentence should serve as a warning to other corporate insiders that insider trading – in any marketplace – will not be tolerated.”
According to court filings and statements made in court:
As part of his employment, CHASTAIN was responsible for selecting NFTs to be featured on OpenSea’s homepage. OpenSea kept confidential the identity of featured NFTs until they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially. In violation of the duties of trust and confidence he owed to his employer, OpenSea, CHASTAIN exploited his advanced knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain.
From approximately June to September 2021, CHASTAIN used OpenSea’s confidential business information about what NFTs were going to be featured on its homepage to secretly purchase dozens of NFTs shortly before they were featured. After those NFTs were featured on OpenSea, CHASTAIN sold them at profits of two- to five-times his initial purchase price. To conceal the fraud, CHASTAIN conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on OpenSea.
* * *
In addition to the prison term, CHASTAIN, 31, of New York, New York, was sentenced to three months of home confinement, three years of supervised release, a $50,000 fine, and ordered to forfeiture the Ethereum he made trading the featured NFTs.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas S. Burnett, Allison Nichols, and Nicolas Roos are in charge of the prosecution.
Two Gang Members Charged with 2022 Bronx MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today that GIBRAN GUERRERO, a/k/a “Cojito,” and YORVIN GOMEZ, a/k/a “Julbie,” were charged with racketeering conspiracy, murder in aid of racketeering, committing violent crimes in aid of racketeering, and firearms offenses related to their membership in a street gang known as the “Trinitarios” that operated in or around the Bronx and other locations. GUERRERO and GOMEZ are also charged with participating in a robbery on December 15, 2022. During the robbery, one of the victims, Johnny Gaston, was shot and killed. The other victim was shot but survived. The case has been assigned to U.S. District Judge Lorna G. Schofield.
GUERRERO and GOMEZ were in state custody and were transferred into federal custody today. They were presented this afternoon in Manhattan federal court.
U.S. Attorney Damian Williams said: “Gibran Guerrero and Yorvin Gomez are alleged to have terrorized the Bronx in connection with their membership in the Trinitarios gang. Their alleged violent conduct included engaging in gunpoint robberies of multiple victims, with one robbery resulting in the tragic death of Johnny Gaston. Today’s indictment furthers this Office’s work to chip away at the gang violence that threatens public safety in our community.”
NYPD Commissioner Edward A. Caban said: “Every crime carried out by Trinitarios gang members in New York City is met with tenacious work by the NYPD and our law enforcement partners to ensure justice – and this case is no different. Behind the charges unsealed today against these two defendants is a proactive, aggressive investigation to ensure the strongest possible prosecution. I want to thank our NYPD detectives and all of our partners, including the agents of the HSI New York Field Office and the prosecutors of the United States Attorney’s Office for the Southern District of New York, for their steadfast collaboration in bringing this important case.”
HSI Special Agent in Charge Ivan J. Arvelo said: "Guerrero and Gomez, through their affiliations to the notorious ‘Trinitarios’ street gang, stand accused of perpetrating a multitude of criminal acts, including robberies, narcotics trafficking, and extreme violence, exemplified by a fatal shooting during a December 2022 robbery. This collaborative effort between HSI, the NYPD, and the U.S. Attorney's Office for the Southern District of New York sends a strong message of our commitment to protecting our communities from gang-related crime."
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From at least in or about 2021 up to and including 2023, in the Southern District of New York and elsewhere, GIBRAN GUERRERO and YORVIN GOMEZ were members of the Trinitarios gang. In order to fund the gang, protect its territory, and promote its standing, members of the Trinitarios engaged in, among other things, robberies, frauds, narcotics trafficking, and other acts of violence, including murder.
On December 15, 2022, GUERRERO, GOMEZ, and other Trinitarios members lured two victims to a location in the Bronx and robbed them. During the robbery, one of the victims, Johnny Gaston, was shot and killed. The other victim was shot but survived.
In addition, on or about July 30, 2022, and September 26, 2022, GUERRERO and other Trinitarios members participated in gunpoint robberies of several victims located in the Bronx.
* * *
GIBRAN GUERRERO, 20, and YORVIN GOMEZ, 26, both of the Bronx, New York, are each charged with one count of racketeering conspiracy, which carries a maximum sentence of life in prison; one count of murder in aid of racketeering, which carries a mandatory minimum sentence of life in prison or death; one count of causing death through use of a firearm, which carries a maximum sentence of life in prison or death; and conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison. GUERRERO is also charged with two counts of assault with a dangerous weapon in aid of racketeering, which each carry a maximum sentence of 20 years in prison, and two counts of carrying and brandishing firearms in connection with a crime of violence, which each carry a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and 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 HSI and the NYPD.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Mathew Andrews and Rushmi Bhaskaran 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.
U.S. v. Guerrero and Gomez IndictmentU.S. Attorney Announces Consent Decree with Orange County Horse Racing Training Center for Violating Clean Water ActRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States entered into a Consent Decree settling a civil lawsuit against MARK FORD, MARK FORD STABLES, INC., MARK FORD STAGE ROAD PROPERTY, INC., and FORD EQUINE, LTD. (collectively, the “defendants”), for violations of the federal Clean Water Act (“CWA”) in connection with the defendants’ construction and operation of a horse racing training facility on two adjacent properties in the Town of Wallkill in Orange County.
U.S. Attorney Damian Williams said: “This consent decree puts the defendants down a path to reversing the harm they caused to the environment by filling wetlands on their properties and failing to prevent pollutants from entering public waters. It should serve as a reminder that those who pollute will be held accountable for their actions.”
EPA Regional Administrator Lisa F. Garcia said: “The Defendants in this case irresponsibly polluted and filled in wetlands without authorization or permits, improperly managed waste from their horses, and failed to comply with requirements in the stormwater construction general construction permit that they did hold. The Clean Water Act requires the protection of wetlands precisely because they support healthy ecosystems, provide flood and erosion control, and provide other valuable benefits. EPA will vigorously pursue its enforcement goals to restore illegally filled waters and wetlands and deter future violations.”
The Consent Decree, which is subject to public comment and approval by the Court, will resolve a lawsuit filed in White Plains federal court in 2019. The complaint alleged that from 2007 to 2016, the defendants destroyed existing federal wetlands and rerouted streams in the course of building a horse racing training center at 90 Slaughter Road (“Slaughter Road site”) and 482/484 Stony Ford Road (“Ford Equine Site”) in violation of the CWA. The lawsuit also alleged that the defendants have operated a concentrated animal feeding operation without a permit, allowing horse wash water and process wastewater to be discharged into waters of the United States. The lawsuit further alleges that defendants violated the terms of a stormwater construction general permit during construction work at the Slaughter Road Site from February 2016 to February 2017.
In the Consent Decree, the defendants admit, acknowledge, and accept responsibility for the following:
- From 2007 to 2016, the defendants used or caused the use of mechanized land-clearing and filling equipment to discharge fill material into 18.1 acres of federal jurisdictional wetlands and a tributary that are waters of the United States at the Slaughter Road Site. The defendants never sought or obtained authorization from the U.S. Army Corps of Engineers for the filling of these wetlands.
- From 2007 to 2013, the defendants caused the straightening or alteration of roughly 310 linear feet of a creek on the northern half of the Slaughter Road Site and roughly 1,460 linear feet of the same creek on the southern half of the site. The defendants also discharged approximately 150 linear feet of loose stone below the ordinary high-water mark of the creek. The defendants never obtained authorization from the U.S. Army Corps of Engineers for the rerouting and filling of portions of the creek.
- From 2015 to 2016, the defendants used or caused the use of mechanized land-clearing and earth-moving equipment to discharge fill material into approximately 1.86 acres of federal jurisdictional wetlands at the Ford Equine Site and rerouted roughly 900 linear feet of a stream that flowed southward through the eastern portion of the Ford Equine Site. The defendants never sought or obtained authorization from the U.S. Army Corps of Engineers for the rerouting of the stream and the filling of these wetlands.
- From at least December 12, 2016, to the present, the Slaughter Road Site and the Ford Equine Site constitute a medium concentrated animal feeding operation (“CAFO”), within the meaning of the CWA and its implementing regulations, that has discharged pollutants to navigable waters without a permit.
- Between January 19, 2016, and January 26, 2018, defendants FORD and MARK FORD STAGE ROAD PROPERTY, INC., were required to comply with an applicable general permit governing the discharge of stormwater during construction activity. However, in November 2016, EPA conducted an inspection at the Slaughter Road Site and found non-stabilized stockpiles of soil and mulch in the southwest portion of the Slaughter Road Site that lacked the erosion and sediment controls required by the general permit. Several areas of the Slaughter Road Site lacked erosion or sediment controls that caused turbid stormwater to flow into a catch basin and ditch/stream tributaries in the southwest portion of the site which, in turn, flowed into the creek in violation of the general permit. In addition, monthly inspections required by the general permit had not been conducted from February 2016 to February 2017.
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In addition to the payment of a $200,000 civil penalty, the Consent Decree requires the defendants to create or restore approximately 18 acres of wetlands on their property, to restore two streams to their pre-fill configurations, to take additional measures to ensure the long-term success of the defendants’ restoration work, and to come into compliance with federal CAFO regulations.
Notice of the proposed Consent Decree will be published in the Federal Register and the public will have the opportunity to submit comments on the Consent Decree for a period of at least 30 days before it is submitted for the Court’s approval.
Mr. Williams thanked the attorneys and enforcement staff at EPA Region 2 for their critical work on this matter.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Zachary Bannon and Tomoko Onozawa are in charge of the case.
U.S. v. Ford et al Proposed Consent DecreeDealer of Fentanyl-Laced Heroin That Resulted in the Overdose Death of Actor Michael K. Williams Sentenced to 10 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that IRVIN CARTAGENA, a/k/a “Green Eyes,” was sentenced today to 10 years in prison for conspiring to distribute heroin, fentanyl, and fentanyl analogue. As part of the conspiracy, CARTAGENA distributed the fentanyl-laced heroin that resulted in the death of Michael K. Williams. CARTAGENA pled guilty on April 5, 2023, before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “On September 5, 2021, Irvin Cartagena sold Michael K. Williams a fatal dose of heroin laced with fentanyl and a fentanyl analogue. Michael K. Williams tragically lost his life after using the drugs sold to him by Cartagena. Although their product had already claimed one life, Cartagena and his co-conspirators continued to sell potentially lethal fentanyl-laced heroin. This Office will tenaciously continue our enforcement efforts against unscrupulous drug dealers who distribute poison and exacerbate the scourge of the fentanyl epidemic.”
According to the allegations in the complaints, court filings, and statements made in Court:
Between at least in or about August 2020 and February 2022, a drug trafficking organization (the “DTO”) was operating in the vicinity of 224 South 3rd Street in the Williamsburg neighborhood of Brooklyn, New York. The DTO sold heroin laced with fentanyl and a fentanyl analogue on the street in front of, and from an apartment inside of, the apartment building located at 224 South 3rd Street, among other places. On or about September 5, 2021, in connection with the DTO’s drug sales, CARTAGENA sold Michael K. Williams heroin, which was laced with fentanyl and a fentanyl analogue. Williams died as a result of using that fentanyl-laced heroin. Despite knowing that Williams died after being sold the DTO’s product, CARTAGENA and his co-conspirators continued to sell fentanyl-laced heroin in broad daylight amidst residential apartment buildings in Brooklyn and Manhattan. CARTAGENA fled to Puerto Rico after Williams’ death, where he was ultimately arrested in February 2022.
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In addition to his prison term, CARTAGENA, 40, of Aibonito, Puerto Rico, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding work of the New York City Police Department and the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts. Mr. Williams also thanked the Organized Crime Drug Enforcement Task Force New York Strike Force, the U.S. Marshals Service, the New York/New Jersey Regional Fugitive Task Force, and the New York Division of the Drug Enforcement Administration for their assistance in this case.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Micah Fergenson and David Robles are in charge of the prosecution.
PAC Fundraiser and PAC Treasurer Charged with Multi-Year Schemes to Defraud DonorsRead the Press Release
Richard Zeitlin Allegedly Used His Multimillion-Dollar Telemarketing Call Center Business to Defraud Donors Through False and Misleading Fundraising Calls That Represented Political Action Committees as Charities — And Instructed Employees to Destroy Records to Cover Up His Crimes
Robert Piaro, Treasurer of Four Political Action Committees, Allegedly Defrauded Donors by Falsely Representing How Their Donations Would Be Spent
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 that RICHARD ZEITLIN and ROBERT PIARO were arrested this morning and charged in connection with their schemes to defraud donors while soliciting money for certain political action committees (“PACs”). ZEITLIN was additionally charged with conspiracy to obstruct justice and obstruction of justice. ZEITLIN was arrested this morning in Las Vegas, Nevada, and is expected to be presented in federal court in Nevada this afternoon. The case is assigned to U.S. District Judge Lewis A. Kaplan. PIARO was arrested this morning in Fredonia, Wisconsin, and is expected to be presented in federal court in Wisconsin this afternoon. The case is assigned to U.S. District Judge Arun Subramanian.
U.S. Attorney Damian Williams said: “As alleged, Richard Zeitlin and Robert Piaro lied to donors who thought they were giving to groups that were helping veterans, aiding law enforcement officers, and fighting breast cancer. Instead, Zeitlin and Piaro allegedly exploited these important causes and the good intentions of everyday citizens to steal millions of dollars in small donations. Today’s arrests demonstrate this Office’s commitment to ensuring that those who exploit charitable causes and political action committees for their own personal gain will be held responsible for their crimes.”
FBI Assistant Director in Charge James Smith said: “Zeitlin and Piaro are alleged to have made calculated decisions to purposely defraud donors to political action committees with misrepresentations and lies over an extended number of years. Deliberately deceiving those who make such contributions creates unwitting victims out of those interested in voicing an opinion. If you are a victim of Piaro or Zeitlin, please contact us at 1-800-CALL-FBI or tips.fbi.gov. The FBI is committed to ensuring anyone who callously perpetrates fraud on the American public using political action committees are held accountable in the criminal justice system.”
According to the allegations in the Indictments against RICHARD ZEITLIN and ROBERT PIARO unsealed today in Manhattan federal court:[1]
PACs are entities registered with the Federal Election Commission that may be tax-exempt and collect money to advocate on behalf of or against certain causes and political candidates. By contrast, charities, unlike PACs, typically provide direct services to communities or causes.
From at least in or about 2017 up to and including in or about 2020, ZEITLIN used his telemarketing call center business and various associated entities to defraud numerous donors by providing misleading and false information about how the donors’ money would be spent and the nature of the organizations to which they were giving. Specifically, ZEITLIN directed his employees to alter the call scripts used when calling potential donors on behalf of certain PACs in order to mislead potential donors into believing that they would be giving to a direct-services organization (i.e., a charity), rather than to a political advocacy organization (i.e., a PAC). Among other things, when one PAC treasurer confronted ZEITLIN with complaints from donors that solicitation calls falsely represented a PAC as a charity, ZEITLIN falsely denied that the calls were being made, acknowledged that such calls would be inappropriate, and refused to give the treasurer any call recordings that would have revealed his fraud. ZEITLIN directed that these lies, misleading statements, and misrepresentations be made so that donors would be more likely to give money, thereby increasing the funds raised and profits for his businesses – which typically received approximately 90% of the funds donated. In or about May 2022, after learning that ZEITLIN and his businesses were under federal investigation, ZEITLIN directed his employees to delete electronic messages relating to his businesses.
From at least in or about 2017 up to and including at least in or about December 2022, PIARO was the owner and treasurer of four PACs: Americans for the Cure of Breast Cancer, the Association for Emergency Responders & Firefighters, the US Veterans Assistance Foundation, and Standing By Veterans (the “PIARO PACs”). PIARO raised over $28 million from hundreds of thousands of donors nationwide through false statements and misrepresentations about how contributions to the PIARO PACs would be spent. For example, at PIARO’s direction, the PIARO PACs misrepresented to donors that donations would be used to advance specific legislation, educate lawmakers, and conduct and fund research, when PIARO did not and did not intend to follow through on those representations.
If you believe you are a victim of fraud perpetrated by RICHARD ZEITLIN and/or ROBERT PIARO, please contact [email protected] or the FBI at 1-800-CALL-FBI or tips.fbi.gov.
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ZEITLIN, 53, of Las Vegas, Nevada, is charged with one count of conspiracy to commit wire fraud in connection with telemarketing and one count of wire fraud in connection with telemarketing, which each carry a maximum sentence of 30 years in prison, and one count of conspiracy to obstruct justice and one count of obstruction of justice, which each carry a maximum sentence of 20 years in prison.
PIARO, 73, of Fredonia, Wisconsin, is charged with one count of wire fraud in connection with telemarketing and one count of mail fraud in connection with telemarketing, which each carry a maximum sentence of 30 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 FBI.
If you believe you are a victim of fraud perpetrated by ZEITLIN, please find more information here: https://www.justice.gov/usao-sdny/united-states-v-richard-zeitlin.
If you believe you are a victim of fraud perpetrated by PIARO, please find more information here: https://www.justice.gov/usao-sdny/united-states-v-robert-piaro.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Kedar Bhatia, Jane Kim, and Stephanie Simon are in charge of the prosecution.
The charges contained in the Indictments 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 Indictments and the description of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Zeitlin Indictment U.S. v. Piaro IndictmentLeader of “Pump and Dump” Securities Fraud Scheme Pleads GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that EARL INGARFIELD pled guilty today to participating in a “pump and dump” stock fraud scheme designed to target retail investors and manipulate trading in penny stock shares of Suburban Minerals Corporation (“SUBB”).
U.S. Attorney Damian Williams said: “Earl Ingarfield engaged in a classic pump and dump scheme where the price of stock for a worthless company was inflated with paid promotions and fairy tales of riches from a $5 billion African diamond mine. Today’s plea is a reminder that the Southern District of New York will investigate and prosecute all such pernicious market manipulation schemes.”
According to the Indictment and statements made in court:
From at least in or about 2013 through at least in or about March 2014, EARL INGARFIELD engaged in a scheme to manipulate the stock price of SUBB, a public company traded on the over-the-counter market. In or about 2013, the defendant 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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EARL INGARFIELD, 64, of Las Vegas, Nevada, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison, and agreed to forfeiture of $1,418,473.
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 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 and Shiva Logarajah are in charge of the prosecution.
Bronx Man Sentenced to 98 Months in Prison for Committing Multiple ShootingsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that THOMAS DISLA was sentenced by U.S. District Judge Lewis J. Liman to 98 months in prison in connection with a shooting spree he committed on June 3 and 4, 2022. Over the course of 12 hours, DISLA shot an acquaintance in the groin, shot at a stranger who was driving a car, and brandished a firearm in the middle of crowded bar before striking a patron and shooting the firearm at the ceiling. DISLA previously pled guilty to one count of possessing ammunition after conviction for a felony.
U.S. Attorney Damian Williams said: “Last summer, Thomas Disla committed multiple terrifying shootings in the Bronx. He severely injured two people, one of whom he had never even met. And he could have killed a third. As today’s sentence demonstrates, our Office is determined to keeping New York City safe by vigorously prosecuting perpetrators of gun violence.”
According to the Indictment and other filings and statements made in court:
At approximately 3:35 p.m. on June 3, 2022, DISLA approached an acquaintance (“Victim-1”) who was standing in front of a grocery store located on Southern Boulevard in the Bronx. DISLA and Victim-1 exchanged words and DISLA walked away to the street. DISLA then returned, took deliberate aim at Victim-1, and fired, hitting Victim-1 in the groin. Victim-1 was rushed to the hospital and continues to experience discomfort and pain from his injuries.
At approximately 1:00 a.m. on June 4, 2023, DISLA approached a construction worker (“Victim-2”) on Wheeler Avenue in the Bronx. Victim-2 was on his way to a construction site and had briefly exited his vehicle to remove a barricade that was blocking traffic. DISLA told Victim-2 he could not continue driving to the construction site. After Victim-2 returned to his car, he overhead DISLA yell that Victim-2 would “learn [his] lesson.” As can be seen in surveillance footage, DISLA then walked to the sidewalk, turned around, and shot at Victim-2’s car:
At approximately 2:20 a.m. on June 4, 2023, DISLA waived a firearm at patrons of a popular bar located on Manor Avenue in the Bronx. He then approached a stranger who was sitting on a chair, enjoying a drink, and struck him with the firearm in his face, inflicting a wound so deep it went to the bone. As surveillance video shows, DISLA then left the bar:
He returned moments later only to fire one round at the ceiling of the entrance.
DISLA was not permitted to possess ammunition because of his prior New York State conviction for criminal sale of a firearm in the third degree. DISLA has at least 18 prior criminal convictions.
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In addition to his prison term, DISLA, 44, of the Bronx, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
Former NYPD Officer Charged with Accessory After the Fact to Murder, Obstructing A Federal Gang Investigation, and Racketeering ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment today charging GINA MESTRE, a former NYPD Officer, for her participation in a racketeering conspiracy with members of the Shooting Boys gang, including her involvement in obstructing a federal grand jury investigation into the Shooting Boys gang and serving as an accessory after the fact to a murder committed by the Shooting Boys gang. MESTRE was arrested last night and will be arraigned before U.S. District Judge Denise Cote, to whom the case is assigned, later this afternoon in Manhattan federal court.
U.S. Attorney Damian Williams said: “As alleged, Gina Mestre shamelessly exploited her position of public trust to assist gang members in her own NYPD precinct that were terrorizing the Bronx by committing robberies, murders, drug trafficking, and other acts of violence. The Indictment unsealed today alleges that the defendant abused her position as an NYPD police officer by, among other things, obstructing a federal grand jury investigation into the gang and assisting the gang’s leader in evading capture for a cold-blooded murder committed in broad daylight. The defendant’s alleged conduct violates the oath she swore to protect the public – as well as her fellow NYPD officers – from the type of criminal activity she helped the gang commit. This Indictment makes clear that my Office and our law enforcement partners will remain vigilant in fighting all forms of police corruption.”
NYPD Commissioner Edward A. Caban said: “There is no place for corruption of any kind in the NYPD. The arrest today of a former police officer is built upon the steadfast work of our Internal Affairs Bureau, a team driven to root out such betrayals of public trust. I thank IAB, all of our partners, and everyone from the U.S. Attorney’s Office for the Southern District of New York for their sustained collaboration in this important case.”
As alleged in the Indictment and other documents filed in federal court and based on statements made in public court proceedings:[1]
The Shooting Boys gang is a criminal organization based in the University Heights section of the Bronx. Since at least 2017, gang members sold drugs, used guns, and committed numerous acts of violence against members of rival gangs. The gang’s territory and base of operations fell within the jurisdiction of the NYPD’s 52nd Precinct. The recognized leader of the Shooting Boys was Andrew Done, a/k/a “Caballo.”
MESTRE was an NYPD police officer from July 2013 to May 2022 assigned to the 52nd Precinct’s Public Safety Unit. In the summer of 2020, a major focus of the precinct and the Public Safety Unit was the reduction of gun violence, much of which was attributed to members of the Shooting Boys.
In or about June 2020, MESTRE began communicating with Done through secret social media accounts and phone numbers. MESTRE and Done began an intimate relationship, during which MESTRE provided Done and other gang members with confidential non-public law enforcement information about the federal grand jury investigation into the Shooting Boys. For example, MESTRE warned Done, and other gang members, that federal investigators were preparing to bring a federal indictment against the Shooting Boys. MESTRE also warned Done about impending law enforcement operations, enabling Done and other gang members to conceal their criminal activity. In addition, MESTRE disclosed the identity of a witness cooperating with law enforcement and providing information about the gang, which allowed Done and other Shooting Boys to assault and intimidate the witness in an effort to prevent the witness from further cooperation.
On or about November 5, 2020, Done shot and killed a rival gang member (“Victim-1”) as Victim-1 sat in his car on Cromwell Avenue in the Bronx. NYPD Detectives investigating the murder recovered security camera video (the “Video”) capturing Done’s commission of the murder. Several members of the 52nd Precinct were called upon to assist in the identification of the person captured on the Video. MESTRE was one of several officers who identified Done as the perpetrator.
During the manhunt to apprehend Done, of which MESTRE was a part, MESTRE sent Done a copy of the Video to his phone and secretly communicated with Done the day of the murder and in the weeks afterwards. MESTRE warned Done about law enforcement’s efforts to capture him, allowing Done to eventually flee from the United States.
In March 2022, 10 members of the Shooting Boys were charged in a 15-count indictment with various federal crimes, including racketeering conspiracy and murder. Done was charged with the murder of Victim-1 and was apprehended in the Dominican Republic several months later.
On November 17, 2022, Done pled guilty to racketeering conspiracy and admitted to his role in the murder of Victim-1. On February 22, 2023, Done was sentenced to 35 years in prison.
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MESTRE, 33, of Mohegan Lake, New York, is charged with one count of racketeering conspiracy, which carries a maximum sentence of 20 years in prison; one count of conspiracy to obstruct justice, which carries a maximum sentence of five years in prison; one count of conspiracy to obstruct an official proceeding, which carries a maximum sentence of 20 years in prison; and one count of accessory after the fact to murder in aid of racketeering, which carries a maximum sentence of 15 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the NYPD’s Internal Affairs Bureau, Group 25; HSI; and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Dominic A. Gentile and James Ligtenberg are in charge of the prosecution.
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 entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Mestre IndictmentFlorida Business Owner Sentenced to Five Years in Prison for Defrauding Medicare of More Than $11 MillionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ANTHONY CRACCHIOLO was sentenced today to five years in prison for conspiring to defraud the Medicare Program and for illegally possessing an automatic weapon as a convicted felon. CRACCCHIOLO’s fraud conviction related to his involvement in a scheme to pay and receive kickbacks in connection with illegally buying and selling signed orders for durable medical equipment (“DME”), such as leg, arm, and back braces, and then using those orders to file fraudulent Medicare claims for more than $11 million, as well as selling such orders to other DME supply companies so that those companies in turn could also file fraudulent Medicare claims. CRACCHIOLO previously pled guilty to the charges and was sentenced today before U.S. District Judge John P. Cronan.
U.S. Attorney Damian Williams said: “Anthony Cracchiolo faced justice today for illegally trafficking in signed orders for durable medical equipment and thus seeking to defraud Medicare of more than $11 million. Such fraud schemes do real harm to the Medicare program — a vital, taxpayer-funded program that provides affordable health care to people over 65 or with disabilities.”
According to statements made in court and publicly filed documents in this case:
From at least July 2019 through October 2020, CRACCHIOLO and a partner (“Partner-1”) engaged in a scheme to defraud Medicare in at least three ways. First, CRACCHIOLO and Partner-1 illegally paid kickbacks of more than $565,000 to purchase fraudulent DME orders, including orders purportedly “signed” by doctors who never, in fact, signed or authorized those orders and were unaware that their names and identities were being so used. These DME orders were for such equipment as braces for ankles, knees, elbows, wrists, and backs. Second, CRACCHIOLO and Partner-1 resold some of the fraudulent orders to other DME suppliers — receiving more than $425,000 in criminal proceeds — so that those suppliers, in turn, could fraudulently bill Medicare for the DME. Finally, in May and June 2020, CRACCHIOLO and Partner-1 acquired five of their own fraudulent DME supply companies and themselves used fraudulent DME orders to file more than $11 million in fraudulent Medicare claims, seeking payment to the DME suppliers that CRACCHIOLO and Partner-1 controlled. Ultimately, Medicare paid out more than $5.5 million to CRACCHIOLO and Partner-1, along with a substantial sum to the DME suppliers to whom CRACCHIOLO and Partner-1 sold fraudulent DME orders.
When arrested at his residence in Parkland, Florida, on March 1, 2022, CRACCHIOLO was found to be illegally in possession of a semiautomatic firearm, a Palmetto State Armory PA-15, as well as an extended ammunition clip and approximately 130 rounds of ammunition, despite being a previously convicted felon who was not allowed to possess such a firearm.
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In addition to the prison term, CRACCHIOLO, 43, of Parkland, Florida, was sentenced to three years of supervised release and ordered to pay restitution of $5,595,968 to the Medicare program. He was also ordered, on March 15, 2023, to pay forfeiture of $2,399,817, including forfeiting his Florida residence and the seized automatic weapon.
Mr. Williams praised the outstanding investigative work of the Office of the Inspector General of the U.S. Department of Health and Human Services.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney David Raymond Lewis is in charge of the prosecution.
Queens Man Pleads Guilty to Midtown Manhattan ShootingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that STEFAN MELVILLE pled guilty today in connection with firing multiple rounds with a handgun at two individuals outside of a party at a hotel in Midtown Manhattan. MELVILLE pled guilty before United States District Judge Richard M. Berman and is scheduled to be sentenced on November 28, 2023.
U.S. Attorney Damian Williams said: “On a summer night in Midtown Manhattan last July, Stefan Melville used a handgun to fire multiple rounds of ammunition at two individuals walking on the sidewalk near the corner of 42nd Street and Ninth Avenue. The shots sent innocent pedestrians frantically running for cover. Today’s plea sends an important message that we will continue to relentlessly investigate and prosecute gun violence in our city.”
According to court filings and statements made in court proceedings:
On or about July 3, 2022, MELVILLE fired multiple shots with a handgun in the direction of individuals walking on the sidewalk near the corner of 42nd Street and Ninth Avenue. The following images from surveillance footage show MELVILLE firing his handgun.
Upon arriving at the scene, officers of the New York City Police Department (“NYPD”) recovered the upper assembly of a firearm, 3 shell casings and 1 unfired cartridge inside the barrel of the firearm assembly on the sidewalk where MELVILLE engaged in the shooting. The following images show the shell casings and firearm assembly recovered at the scene.
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MELVILLE, 30, of Queens, 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 maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the Metro Safe Streets Task Force, which is composed of agents and officers of the Federal Bureau of Investigation and the NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jeffrey W. Coyle is in charge of the prosecution.
Founder of Artificial Intelligence Start-Up Charged with FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the unsealing of an Indictment charging MICHAEL BRACKETT with lying to investors about the financial condition of Centricity Inc., a technology company that BRACKETT founded in 2019. As alleged in the Indictment, BRACKETT — who also served as Centricity’s CEO — persuaded a victim to invest $500,000 in the company by sending a falsified customer list that included grossly inflated revenue numbers. Days later, BRACKETT resigned from Centricity, which ceased operations soon afterward.
BRACKETT was arrested earlier today in the District of Maine, where he will be presented before making an initial appearance in the Southern District of New York. The case is assigned to United States District Judge John G. Koeltl in the Southern District of New York.
U.S. Attorney Damian Williams said: “Although the industry is cutting edge, the crime was strictly analog: as alleged, Brackett fabricated documents and revenue numbers to persuade victims to invest in his start-up company. As in any other industry, investors in AI deserve transparency and fair dealing when considering if and where to invest in new technologies.”
According to the Indictment unsealed today in Manhattan federal court:[1]
Centricity was a New York City-based technology company that sought to give retailers, especially grocery stores, better insight into consumers’ preferences. According to public statements, Centricity used artificial intelligence algorithms that could analyze some 2.5 billion data points’ worth of internet traffic a day to predict demand for products, so that retailers could stock their shelves accordingly.
While serving as CEO of Centricity, BRACKETT repeatedly misrepresented the company’s financial condition. In spring 2021, BRACKETT sent prospective short-term lenders a bank statement that BRACKETT had manipulated to reflect that Centricity had more funds in its account than it actually did. In June 2021, BRACKETT sent a potential investor (“Victim‑1”) a spreadsheet that purportedly reflected Centricity’s current customers and monthly revenue. In fact, the majority of the 13 companies listed on the spreadsheet were not Centricity’s customers, and Centricity’s revenue was only a fraction of the amount listed on the spreadsheet.
Relying on BRACKETT’s misrepresentations, Victim-1 signed a convertible promissory note and directed an associate to wire $500,000 to Centricity. Within days, however, Victim-1 learned the truth about Centricity’s financial condition and attempted, unsuccessfully, to reverse the wire. Days later, BRACKETT resigned from Centricity, and, soon afterward, Centricity ceased operations. Victim-1 ultimately was unable to recover any of the $500,000 investment.
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BRACKETT, 36, a U.S. citizen residing in Switzerland, is charged with one count of securities fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the 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.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Patrick R. Moroney is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Brackett Indictment
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Special Agent in Charge of the New York FBI Counterintelligence Division Pleads Guilty to Conspiring to Violate U.S. Sanctions on RussiaRead the Press Release
Former Special Agent in Charge (SAC) of the FBI Counterintelligence Division in New York, Charles McGonigal, 54, of New York City, pleaded guilty today to 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, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Russian oligarch Oleg Deripaska for having acted or purported to act on behalf of 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, finding, among other things, that OFAC’s determination that Deripaska had acted as an agent of Russian President Vladimir Putin was supported by the evidence.
“Charles McGonigal, by his own admission, betrayed his oath and actively concealed his illicit work at the bidding of a sanctioned Russian oligarch,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s plea shows the Department of Justice’s resolve to pursue and dismantle the illegal networks that Russian oligarchs use to try to escape the reach of our sanctions and evade our laws.”
“After his tenure as a high-level FBI official who supervised and participated in investigations of Russian oligarchs, Charles McGonigal has now admitted that he agreed to evade U.S. sanctions by providing services to one of those oligarchs, Oleg Deripaska,” said U.S. Attorney Damian Williams for the Southern District of New York. “This office will continue to hold to account those who violate U.S. sanctions for their own financial benefit.”
“Charles McGonigal broke his oath to defend the Constitution and turned his back on his duty to protect the American people in favor of his own greed by working for a sanctioned Russian oligarch,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “Every day, the men and women of the FBI protect the American people and uphold the Constitution. No matter the perpetrator, even if it’s one of our own, the FBI will go to great lengths to investigate individuals who put their own interests above U.S. national security.”
As an FBI official, McGonigal had helped investigate Deripaska and other Russian oligarchs. In 2018, while serving as SAC, McGonigal received a then-classified list of Russian oligarchs with close ties to the Kremlin who would be considered for sanctions. In 2021, McGonigal conspired to provide services to Deripaska, in violation of the U.S. sanctions imposed on Deripaska in April 2018. Specifically, following his negotiations with an agent of Deripaska, McGonigal agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, 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 faces up to five years in prison for each count and is scheduled to be sentenced on Dec. 14. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI New York Field Office investigated the case, with valuable assistance provided by the U.S. Customs and Border Protection and 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 valuable assistance provided by Trial Attorney Christina A. Clark of the National Security Division’s Counterintelligence and Export Control Section.
McGonigal Plea AgreementFormer Special Agent in Charge of the New York FBI Counterintelligence Division Pleads Guilty to Conspiring to Violate U.S. Sanctions on RussiaRead 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, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that CHARLES MCGONIGAL, a former Special Agent in Charge (“SAC”) of the Federal Bureau of Investigation’s (“FBI”) Counterintelligence Division in New York, pled guilty to 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. MCGONIGAL pled guilty today before U.S. District Judge Jennifer H. Rearden.
U.S. Attorney Damian Williams said: “After his tenure as a high-level FBI official who supervised and participated in investigations of Russian oligarchs, Charles McGonigal has now admitted that he agreed to evade U.S. sanctions by providing services to one of those oligarchs, Oleg Deripaska. This Office will continue to hold to account those who violate U.S. sanctions for their own financial benefit.”
Assistant Attorney General of the Justice Department’s National Security Division Matthew G. Olsen said: “Charles McGonigal, by his own admission, betrayed his oath and actively concealed his illicit work at the bidding of a sanctioned Russian oligarch. Today’s plea shows the Department of Justice’s resolve to pursue and dismantle the illegal networks that Russian oligarchs use to try to escape the reach of our sanctions and evade our laws.”
FBI Assistant Director in Charge James Smith said: “Economic sanctions are a critical component of our national security policy. They must be fully and fairly applied to effectively limit the resources of those who threaten to harm the United States and our global allies. Sanctions evasion by fraudulent means is a serious criminal offense. By entering a guilty plea today, former FBI official Charles McGonigal has accepted responsibility for his actions. The FBI is committed to rigorously investigating reported sanctions violations and relentlessly pursue anyone engaged in such activity.”
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 making 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 had helped investigate Deripaska and other Russian oligarchs. In 2018, while serving as SAC, MCGONIGAL received a then-classified list of Russian oligarchs with close ties to the Kremlin who would be considered for sanctions. 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 an agent of Deripaska, MCGONIGAL agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, 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, 55, of New York, New York, pled guilty to one count of conspiring to violate the IEEPA and to commit money laundering, which carries a maximum sentence of five years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. MCGONIGAL is scheduled to be sentenced by Judge Rearden on December 14, 2023.
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 and Paralegal Specialist Christopher de Grandpre.
U.S. vs McGonigal InformationBronx Man Charged with Shooting on Webster AvenueRead 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 Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a complaint charging MALCOLM HOGUE with firing four shots in the middle of a crowded street, wounding one victim in the ankle. HOGUE was arrested this morning and presented before United States Magistrate Judge Katharine H. Parker this afternoon.
U.S. Attorney Damian Williams said: “As alleged, Malcolm Hogue—who was previously convicted of attempted murder—fired four bullets in the middle of an unsuspecting crowd on Webster Avenue in the Bronx. One of those bullets struck an innocent bystander. Thanks to the swift action of our law enforcement partners, Hogue is now being held accountable for his alleged violent actions.”
FBI Assistant Director in Charge James Smith said: “As alleged, Hogue recklessly exposed our community to senseless gunfire, putting the lives of multiple innocent people in danger. The charges today serve as a reminder to anyone who threatens the safety of our neighborhoods with violence – the FBI and our law enforcement partners will ensure you face the consequences in the criminal justice system.”
NYPD Commissioner Edward A. Caban said: “Today’s arrest for shooting a gun on a busy Bronx street confirms that this repeat violent offender was a continued threat to the community. Anyone who allegedly commits such acts in New York City will be held fully accountable – there will always be consequences. I commend the work of the NYPD and FBI investigators who removed this criminal from our streets, and the office of the U.S. Attorney for the Southern District for its ongoing work in prosecuting this case.”
According to the allegations in the Complaint:[[1]]
On June 18, 2023, a group of at least 20 people, including HOGUE, were gathered on Webster Avenue in the Bronx.
While walking along Webster Avenue, HOGUE was holding what appears to be a firearm in his right hand. Surveillance video captured HOGUE racking the firearm as he walked along the street in the direction of a nearby Blink Fitness gym. Still images from surveillance footage are below:
HOGUE then fired four shots. After the first gunshot, bystanders began fleeing, running down Webster Avenue away from the Blink Fitness. HOGUE continued firing. Below are still images of HOGUE, as captured by surveillance video, showing HOGUE as he fired a second gunshot.
HOGUE later returned to Webster Avenue, where surveillance video captured him canvassing the ground for bullet fragments and/or shell casings left behind after the shooting.
NYPD officers arrived on the scene where they found a man standing in front of the Blink Fitness who had been shot in his left ankle. The officers recovered a bullet fragment from the victim’s ankle, as well as a 9mm FC Luger shell casing from the sidewalk in front of the Blink Fitness. Below is a photograph of the recovered shell casing:
HOGUE was not permitted to possess ammunition because of prior felony convictions, one of which was a conviction for attempted murder.
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HOGUE, 31, of the Bronx, New York, is charged with possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI and the NYPD and thanked the Bronx County District Attorney’s Office for their assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Benjamin M. Burkett is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
U.S. vs Malcolm Hogue Complaint
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Admits to 2009 and 2012 MurdersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SHAREEF LANDSMARK pled guilty today to conspiring to distribute narcotics in connection with his involvement in the June 29, 2009 murder of Warren Wilbourne and the September 17, 2012 murder of Michael Perez. As part of his guilty plea, LANDSMARK admitted to murdering both Wilbourne and Perez in the Bronx, New York. LANDSMARK pled guilty before U.S. Magistrate Judge Katharine H. Parker.
U.S. Attorney Damian Williams said: “On June 29, 2009, Shareef Landsmark shot and killed Warren Wilbourne. Three years later, Landsmark shot and killed Michael Perez. Today’s guilty plea reaffirms the commitment of my Office to pursing justice and holding accountable those who commit acts of violence in our communities. I commend the New York City Police Department and the career prosecutors of my office for their continued efforts in investigating these murders.”
According to the allegations in the Superseding Information and other documents filed in federal court as well as statements made in public court proceedings:
From at least June 2009 through May 2014, LANDSMARK agreed with others to sell cocaine in the Bronx, New York. In furtherance of his participation in this narcotics conspiracy, LANDSMARK shot and killed Warren Wilbourne on June 29, 2009, and Michael Perez on September 17, 2012.
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LANDSMARK, 38, from the Bronx, New York, pled guilty to narcotics conspiracy, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of five years in prison. LANDSMARK will be sentenced by U.S. District Judge Lorna G. Schofield later this year.
The maximum potential sentence in this case is prescribed by Congress and is provided here for information purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the NYPD. He also thanked the Special Agents of the United States Attorney’s Office for the Southern District of New York for their assistance in the investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Adam Hobson, Alexandra Rothman, and Christy Slavik are in charge of the prosecution.
Two Florida Men Charged with Orchestrating $12 Million Advance-Fee SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging JOSEPH MALVASIO and GREGG MARCUS, a/k/a “Gregg Pierce,” with running a years-long advance-fee scheme through which they defrauded hundreds of victims of at least approximately $12 million. MALVASIO and MARCUS were arrested this morning will be presented later today in the Southern District of New York.
U.S. Attorney Damian Williams said: “As alleged, Joseph Malvasio and Gregg Marcus perpetrated an advance-fee scheme whose victims were defrauded into paying millions of dollars for loans they needed but never received. Instead of keeping their promises to the victims, Malvasio and Marcus allegedly used the victims’ money to fund their lavish lifestyles.”
FBI Acting Assistant Director in Charge Christie M. Curtis said: "The defendants are alleged to have operated a fraudulent loan scheme where they collected fees from victims, however, had no intention of providing such loans. The fees were then used to fund luxury personal expenses. Ensuring that financial fraudsters are held accountable in the criminal justice system remains a top priority of the FBI."
According to the allegations contained in the Indictment:[1]
From at least in or about March 2017 through at least in or about August 2023, JOSEPH MALVASIO and GREGG MARCUS operated an advance-fee scheme that defrauded hundreds of victims of at least approximately $12 million. MALVASIO and MARCUS operated this fraudulent scheme through their ownership and operation of a business called Global Capital Partners Fund LLC (“GCPF”). MALVASIO and MARCUS falsely represented that GCPF was a legitimate business that would provide loans to individuals who were interested in funding for private commercial projects. Instead, MALVASIO and MARCUS defrauded victims, collecting thousands of dollars in fees from each victim without intending to issue a loan.
MALVASIO and MARCUS typically collected several fees from each victim, including a “letter of intent” fee, a “commitment” fee, and an “appraisal” fee. Each fee ranged from a few thousand dollars to tens of thousands of dollars. Once MALVASIO and MARCUS collected these fees, they informed each victim that he or she would not receive a loan and then refused to refund any of the fees each victim had paid.
Once MALVASIO and MARCUS received money from victims, they transferred the funds to their personal accounts and used them to make payments in the tens of thousands of dollars to Porsche, BMW, and Modern Yachts LLC, among other dealers of luxury goods. MALVASIO and MARCUS also used victim funds to make payments in the hundreds of thousands of dollars for personal credit card expenses.
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MALVASIO, 65, of Fort Lauderdale, Florida, and Bridgehampton, New York, and MARCUS, 57, of Bay Harbor Islands, Florida, are each charged with one count of wire fraud and one count of conspiracy to commit wire fraud, each of which carries a maximum sentence of 20 years in prison.
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.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jackie Delligatti is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Malvasio and Marcus IndictmentBronx Man Sentenced to 78 Months in Prison for Shooting Outside of Bronx DeliRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that DEMONT CHRISTIAN was sentenced today to 78 months in prison in connection with a shooting at the corner of Westchester Avenue and Faile Street in the Longwood neighborhood of the Bronx, New York, on October 7, 2022. CHRISTIAN previously pled guilty before U.S. District Judge J. Paul Oetken, who also imposed today’s sentence, to one count of possessing ammunition after conviction for a felony.
U.S. Attorney Damian Williams said: “On October 7, 2022, Demont Christian pulled a loaded handgun from his pocket and opened fire on a pedestrian in front of a Bronx deli. Christian perpetrated this senseless act of violence at a busy intersection filled with New Yorkers on nearby sidewalks and in passing vehicles. Today’s sentence sends an important message that we will continue to vigorously investigate and prosecute gun violence to the fullest extent of the law.”
As alleged in the Indictment and statements made in open court:
At approximately 10:24 pm on October 7, 2022, in the vicinity of a deli located at 1126 Westchester Avenue in the Bronx, CHRISTIAN, wearing a ski mask, pulled a gun from his pocket and fired four shots at a Victim using a .380 caliber handgun. CHRISTIAN fired at the Victim from approximately two to four car lengths away as the Victim walked away across Westchester Avenue. At the time of the first gunshot, the Victim had not even reached the yellow center line, while CHRISTIAN aimed his gun from the sidewalk. Surveillance footage shows that CHRISTIAN took deliberate aim at the Victim while bystanders stood just feet away:
CHRISTIAN was not permitted to possess ammunition because of his prior New York State conviction for attempted assault in the second degree, for which he was sentenced to two to four years in prison. CHRISTIAN has at least 15 prior criminal convictions.
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In addition to his prison term, CHRISTIAN, 28, of the Bronx, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the New York City Police Department.
This case is being supervised by the Office’s General Crimes Unit. Assistant U.S. Attorney William C. Kinder is in charge of the prosecution.
Two Charged in Drug-Related Shooting on Bronx Street That Hit an 11-Month-Old Baby in the FaceRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Christie M. Curtis, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging AHMED ALTOREI, a/k/a “AK,” and SAMUEL BAUTISTA, a/k/a “Sammy,” with distributing narcotics and carrying firearms in connection with a drug trafficking operation based on the Grand Concourse and East 198th Street in the Bronx, New York. In connection with those crimes, ALTOREI and BAUTISTA were involved in a street shooting on January 19, 2022, that targeted a rival drug dealer but resulted in an 11-month-old baby being shot in the face.
ALTOREI was arrested yesterday evening and BAUTISTA was arrested earlier today in an operation conducted by the FBI and NYPD, and both are expected to be presented before U.S. Magistrate Judge Gabriel W. Gorenstein later this afternoon. The case is assigned to Chief U.S. District Judge Laura Taylor Swain.
U.S. Attorney Damian Williams said: “On January 19, 2022, on a day like any other, gunshots rang out in the Bronx. It was a targeted shooting. But one of the bullets hit an innocent victim – a baby girl, who was just 11 months old – who was shot in the face as she sat in a car with her mother. The baby survived, and that’s a miracle. But the emotional and physical trauma will never go away. Safety is a civil right. And like all rights, in order to keep it, we have to enforce it. That is why I am proud to announce that we have arrested and indicted the two men who we allege shot that baby girl. As United States Attorney, I promise you this: we will never abandon our communities. Not a single inch. And our commitment to public safety will never waver. Not for a single second. The people of this great city deserve nothing less.”
FBI Acting Assistant Director in Charge Christie M. Curtis said: “As alleged, the defendants possessed firearms as part of a narcotics trafficking operation that directly led to the shooting of an 11-month-old infant. This is yet another unfortunate example of an innocent bystander being harmed as a result of drugs and guns. The FBI is committed to making our communities safer by removing violent drug traffickers from the streets.”
NYPD Commissioner Edward A. Caban said: “Today’s indictment again proves that violence on our streets will not stand. The men and women of the NYPD will remain relentless in holding accountable anyone who allegedly dares to carry and indiscriminately shoot an illegal gun in New York City. I thank and commend all of our investigators and everyone at the office of the U.S. Attorney for the Southern District whose dedication to justice and public safety is reflected in these charges.”
As alleged in the Indictment:[1]
ALTOREI and BAUTISTA are charged for their involvement in a conspiracy to distribute and possess with intent to distribute both cocaine and crack cocaine from at least in or about May 2018 through at least in or about August 2023 and for carrying firearms in connection with the same, some of which were brandished and discharged, including the firearm that shot the infant on January 19, 2022.
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ALTOREI, 36, and BAUTISTA, 30, both of the Bronx, New York, are each charged with one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using or carrying firearms during and in relation to, or possessing firearms in furtherance of, a drug trafficking crime, some of which were brandished and discharged, which carries a mandatory minimum consecutive sentence of 10 years in prison and a maximum sentence of life in prison; and possessing ammunition after a felony conviction, which carries a maximum sentence of 10 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI and NYPD and thanked the Bronx County District Attorney’s Office for its assistance in this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Michael R. Herman and Thomas John Wright 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.
U.S. v. Altorei and Bautista IndictmentFlorida Woman Charged with Defrauding SNAP RecipientsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced the unsealing of an Indictment today charging GUYATREE SINGH with engaging in a years-long scheme to defraud at least approximately 120 low-income residents of New York City out of tens of thousands of dollars of their Supplemental Nutrition Assistance Program (“SNAP”) benefits. SINGH was arrested yesterday and will be presented today in the Southern District of Florida. The case has been assigned to U.S. District Court Judge Jed S. Rakoff.
U.S. Attorney Damian Williams said: “Over the course of years, Guyatree Singh is alleged to have cheated at least approximately 120 low-income, primarily elderly residents of New York City. Singh allegedly preyed on some of the most vulnerable people in our community, leaving the victims with no money to buy food. Today’s arrest demonstrates this Office’s commitment to ensuring that our justice system protects everyone from fraud.”
DOI Commissioner Jocelyn E. Strauber said: “The SNAP program provides food support to low-income New Yorkers. This defendant posed as a New York State employee to deceive more than a hundred SNAP recipients and gain access to their accounts, defrauding the recipients of about $50,000 in benefits, as charged in the Indictment. I thank HRA for referring the matter to DOI, and the Office of the United States Attorney for the Southern District of New York for their partnership in thwarting such predatory schemes.”
According to the allegations contained in the Indictment:[1]
From at least in or about April 2019 through at least May 2023, SINGH engaged in a scheme to defraud at least approximately 120 SNAP recipients living in the Southern District of New York — a majority of whom appear to be elderly — of their SNAP benefits. In total, SINGH defrauded the victims out of at least approximately $49,754.52 in benefits.
SNAP provides low-income individuals with electronic benefits that can be used like cash to purchase food. People eligible for SNAP benefits are given an electronic benefits transfer (“EBT”) card, which looks like a debit card and gives a person access to his or her SNAP benefits, allowing the SNAP recipient to buy groceries and other items at participating stores.
SINGH called SNAP recipients and pretended to be a New York State employee working for SNAP. SINGH then asked the victims for their personally identifiable information, including their dates of birth and social security numbers. Unbeknownst to the victims, SINGH then used this information to reset the personal identification numbers (“PIN”) on their EBT cards. Once the PINs were reset, SINGH used the victims’ EBT account numbers and new PINs to make purchases for herself at grocery stores in Florida using the victims’ SNAP funds.
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SINGH, 51, of West Palm Beach, Florida, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the DOI and the Special Agents of the U.S. Attorney’s Office.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
U.S. v. Singh IndictmentLeader of Drug Trafficking Organization Responsible for Trafficking More Than 5,000 Kilograms of Cocaine Sentenced to PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CAMILO ENRIQUEZ-NUNEZ, a/k/a “Viejo,” was sentenced today by U.S. District Judge Paul A. Engelmayer to 25 years in prison for trafficking at least 5,000 kilograms of cocaine. ENRIQUEZ-NUNEZ previously pled guilty to conspiracy to distribute cocaine.
U.S. Attorney Damian Williams said: “My Office is dedicated to holding drug kingpins like Enriquez-Nunez accountable. Thanks to our partners at the DEA and the prosecutors of this Office, more than one ton of cocaine was seized before it could hit the streets, and this top cocaine trafficker faces years in prison.”
According to the Superseding Indictment and statements made in court proceedings and filings:
From approximately 2019 through 2022, ENRIQUEZ-NUNEZ was the leader of a drug trafficking organization that transported between 5,000 and 10,000 kilograms of cocaine from Puerto Rico to New York, New Jersey, and Florida. ENRIQUEZ-NUNEZ laundered at least $10 million of proceeds from his drug trafficking organization and personally made millions of dollars in profits.
In September 2021, law enforcement agents seized a shipment of approximately 920 kilograms of cocaine that ENRIQUEZ-NUNEZ had transported from Puerto Rico for distribution in the New York area. A photograph of the seized cocaine is below:
In July 2022, law enforcement agents arrested ENRIQUEZ-NUNEZ in Puerto Rico and seized approximately 338 kilograms of cocaine, $750,000 in drug proceeds, and four assault rifles belonging to him. A photograph of those seized items is below:
ENRIQUEZ-NUNEZ has a prior federal cocaine trafficking conviction and engaged in this cocaine trafficking while on federal supervised release following his prior conviction.
While imposing today's sentence, Judge Engelmayer described the conduct as drug trafficking on an “epic, steroidal level.”
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In addition to the prison term, ENRIQUEZ-NUNEZ, 43, of Puerto Rico, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration. Mr. Williams also thanked the U.S. Attorney’s Office for the District of Puerto Rico for their assistance in the case.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Samuel P. Rothschild, Kevin Mead, and Marguerite B. Colson are in charge of the prosecution.
Six Genovese Organized Crime Family Defendants Sentenced for RacketeeringRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Genovese Family Captains NICHOLAS CALISI and RALPH BALSAMO, Genovese Family Soldiers MICHAEL MESSINA and JOHN CAMPANELLA, and Genovese Family Associates MICHAEL POLI and THOMAS POLI were sentenced by U.S. District Judge John G. Koeltl following their earlier guilty pleas to racketeering conspiracy.
U.S. Attorney Damian Williams said: “La Cosa Nostra and its various Families are criminal organizations that prey on the public. These sentences demonstrate that those who seek to enrich themselves through allegiance to such organizations will face not only jail time but also real financial consequences.”
According to the Superseding Indictment, the defendants’ statements when pleading guilty, and statements made in related court filings and proceedings:
The Genovese Organized Crime Family is part of a nationwide criminal organization known by various names, including La Cosa Nostra (“LCN”) and the “Mafia,” which operates through entities known as “Families.”
Like other LCN Families, the Genovese Organized Crime Family operates through groups of individuals known as “crews.” Each “crew” has as its leader a person known as a “Captain” and consists of “made” members, known as “Soldiers.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family. Associates participate in the various activities of the crew and its members. In order for an associate to become a made member of the Family, the associate typically needs to demonstrate the ability to generate income for the Family and/or that the associate is capable of committing acts of violence.
A Captain is responsible for supervising the criminal activities of his crew, resolving disputes between and among members of the Family, resolving disputes between members of the Family and members of other Families and other criminal organizations, and providing Soldiers and associates with support and protection. In return, the Captain typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates.
At times relevant to the charges in the Superseding Indictment, NICHOLAS CALISI and RALPH BALSAMO were Captains in the Genovese Family, MICHAEL MESSINA and JOHN CAMPANELLA were Soldiers in the Genovese Family, and MICHAEL POLI and THOMAS POLI were associates of the Genovese Family.
Members of the Genovese Family, including CALISI, BALSAMO, MESSINA, and CAMPANELLA, and associates MICHAEL POLI and THOMAS POLI, engaged in extortionate extensions of credit, financing extortionate extensions of credit, collecting extensions of credit by extortion, extortion, operating illegal gambling businesses, and the transmission of gambling information.
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CALISI, 64, of Boca Raton, Florida, was sentenced principally to two years in prison, three years of supervised release, and ordered to forfeit $40,000.
BALSAMO, 52, of the Bronx, New York, was sentenced principally to 34 months in prison, three years of supervised release, and ordered to forfeit $20,000.
MESSINA, 70, of New Fairfield, Connecticut, was sentenced principally to 18 months in prison, three years of supervised release, and ordered to forfeit $200,000.
CAMPANELLA, 48, of the Bronx, New York, was sentenced principally to 13 months in prison, three years of supervised release, and ordered to forfeit $40,000.
MICHAEL POLI, 38, of Hawthorne, New York, was sentenced principally to 31 months in prison, three years of supervised release, ordered to forfeit $175,000, and ordered to pay a $15,000 fine.
THOMAS POLI, 65, of the Bronx, New York, was sentenced principally to 22 months in prison, three years of supervised release, and ordered to forfeit $200,000.
Mr. Williams praised the outstanding investigative work of the Office of the New York Attorney General’s Organized Crime Task Force and the Kings County District Attorney’s Office and thanked the Federal Bureau of Investigation for its assistance in this investigation.
The prosecution of this case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Celia V. Cohen, Rushmi Bhaskaran, and Justin Rodriguez, as well as Special Assistant U.S. Attorney Pamela Murray, are in charge of the prosecution.