Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that JASON KURLAND, a New York lawyer, and CHRISTOPHER CHIERCHIO were sentenced today and yesterday for their participation in schemes to defraud KURLAND’s prominent lottery-winning clients of more than $100 million.  KURLAND, who was convicted at trial in July 2022 of wire fraud, honest services wire fraud, money laundering, and conspiracy to commit wire fraud and money laundering, was sentenced to 13 years in prison.  CHIERCHIO, who pled guilty to one count of conspiracy to commit wire fraud and money laundering, was sentenced to five years in prison.  U.S. District Judge Nicholas G. Garaufis imposed both sentences.

U.S. Attorney Damian Williams said: “The trial of Jason Kurland proved that Kurland violated his solemn duties as a lawyer and as an officer of the Court by stealing and misappropriating more than $100 million from his clients, who were some of the largest lottery winners in U.S. history.  Just before trial, Christopher Chierchio pled guilty to assisting Kurland in this fraud, while personally pocketing more than $25 million of the lottery winners’ money.  Now, the sentences imposed by Judge Garaufis show that for these defendants who made the lottery winners their victims, their luck has run out, and this Office will prosecute anyone who chooses to engage in fraud – no matter their title or degree.”  

According to the Indictment, the evidence presented in court during trial, and other statements made during court proceedings:

Between mid-2018 and mid-2020, KURLAND was a successful partner at a Long Island law firm, earning approximately $500,000 in annual compensation.  Through public advertisements and self-promotion, KURLAND built a niche practice representing lottery jackpot winners across the country.  KURLAND marketed himself widely in the national media as the “Lottery Lawyer,” touting expertise in counseling individuals and families who had won lotteries and consequently achieved sudden wealth.  KURLAND purported to represent dozens of lottery winners throughout the country with total winnings of approximately $3 billion.

Beginning in mid-2018, KURLAND retained three major lottery winners — one won the $1.5 billion Mega Millions lottery, another won the $245 million Powerball jackpot, and the third won the $150 million jackpot (together, the “Lottery Victims”).  The Lottery Victims each paid KURLAND and his law firm hundreds of thousands of dollars so that he could advise them on how to safely invest their money.  Instead, after gaining their trust, KURLAND steered his clients to invest in various risky businesses that he secretly co-owned and controlled with co-defendants Francis Smookler and Frangesco Russo, among others.  In addition to ownership profits from these businesses, KURLAND received undisclosed kickbacks based on a percentage of the Lottery Victims’ investments.  The defendants then used the money from the Lottery Victims’ investments to keep their scheme going and to support their lavish lifestyles, purchasing, among other things, expensive vacations and luxury vehicles, including two yachts and a Porsche.

In text messages and intercepted phone calls, KURLAND and his co-defendants brazenly gloated about defrauding the Lottery Victims.  For example, when KURLAND learned that he had retained the first Lottery Victim, he texted Russo, “Have to figure out how to have this get to us,” referring to KURLAND’s desire to direct the Lottery Victim’s money to their businesses.  KURLAND used the unique attorney-client relationship, which is founded on principles of honesty and loyalty, to his advantage, ensuring that he and his co-defendants secured multimillion-dollar investments.  Following a pre-investment client meeting with one Lottery Victim, KURLAND texted Smookler and Russo, “haven’t talked about the investment yet, but I could not have teed it up better[.]”  Shortly thereafter, that Lottery Victim invested $5 million in one of the defendants’ businesses without knowledge of KURLAND’s ownership in the business.  On a separate occasion, after KURLAND convinced one of the Lottery Victims to unknowingly purchase his and his co-defendants’ entire business for $2 million — a transaction that resulted in a large payout to KURLAND and his co-defendants — KURLAND bragged to Smookler in a text: “Like looking at my bank statement today. Not gonna lie.”  Motivated by greed, KURLAND and the co-defendants haphazardly invested the Lottery Victims’ money in high-risk deals, which turned out to be a Ponzi scheme.  As it became apparent that their high-risk investments were in peril, KURLAND texted Smookler, “let me know if I’m keeping the Panamera [a Porsche model], or have to go back to my Lexus.”  Within a little more than a year, a large portion of the Lottery Victims’ investment capital, totaling more than $40 million, was lost.

In April 2020, in an effort to try to recoup their losses and conceal their fraud from the Lottery Victims, KURLAND, Russo, and Smookler resorted to investing in Personal Protective Equipment (“PPE”) deals.  CHIERCHIO was the middleman for the PPE deals.  CHIERCHIO quickly capitalized on KURLAND’s precarious situation and need for quick returns, egging him on to “go deep with me here” and promising that KURLAND could “make all [his] losses back.”  In turn, KURLAND stole $19.5 million from one of the Lottery Victims’ accounts.  Only a portion of this money was ever used for the purported PPE deals while millions of dollars were skimmed off the top by CHIERCHIO and the other co-defendants.  In total, KURLAND’s misrepresentations, along with the actions of his co-defendants, caused the Lottery Victims losses in excess of $80 million, as well as an additional $19.5 million that was stolen by KURLAND directly from one of the Lottery Victims.  

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In addition to their prison terms, KURLAND, 49, of Dix Hills, New York, and CHIERCHIO, 54, of Queens, New York, were sentenced to three years of supervised release.  KURLAND was ordered to pay $64,600,000 in forfeiture, and his restitution will be determined by the Court within 90 days of today’s sentencing.  CHIERCHIO was further ordered to pay $26,550,000 in forfeiture and $30,550,000 in restitution.

Mr. Williams praised the work of the Federal Bureau of Investigation on this case.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Danielle Kudla, Louis A. Pellegrino, and Olga Zverovich from the Southern District of New York, and Assistant U.S. Attorney Brian Morris from the Eastern District of New York are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN GARCIA, a/k/a “Jayo,” was found guilty at trial of the May 2017 murder of Joshua Flores in aid of racketeering.  GARCIA shot and killed Flores in front of a playground on a residential street in Queens, New York, while Flores was running away from GARCIA.  The verdict followed a four-day trial before U.S. District Judge Valerie E. Caproni.

U.S. Attorney Damian Williams said: “Jonathan Garcia gunned down his victim, 23-year-old Joshua Flores, to gain standing within the violent Latin Kings street gang.  Then, Garcia bragged about the murder for years as he advanced in the ranks of the Latin Kings and engaged in additional violence and drug trafficking with his fellow gang members.  Today, a unanimous jury held Garcia accountable for his brutal killing of Joshua Flores and the devastating impact of his crimes on the community.  This Office remains fully committed to working with our law enforcement partners to root out gang violence from the streets of New York City.”

According to court filings and the evidence presented in court during the trial:

GARCIA is a member of a racketeering enterprise known as the Latin Kings and, specifically, the set or “tribe” of the Latin Kings known as the Black Mob, which operates in the Bronx, Manhattan, Queens, Brooklyn, and Long Island.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.  In December 2019 and April 2021, several members and associates of the Black Mob, including its senior-most leaders, were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.

GARCIA has been a member of the Latin Kings since at least 2012.  On May 18, 2017, GARCIA brought a firearm to a meeting with other Latin Kings members with whom he had been arguing and who intended to revoke his membership in the Latin Kings.  During the meeting, next to a park in a residential area of Queens, GARCIA began arguing with other gang members.  When the argument escalated, one of GARCIA’s associates fired a warning shot into the air, and gang members immediately began running away.  GARCIA then took the firearm from his associate and shot at the fleeing gang members, hitting Joshua Flores, who was trying to run away.  The bullet went through Flores’s back, into his jaw, and killed him.  The murder elevated GARCIA’s status within the Latin Kings, including the Black Mob, with whom GARCIA committed additional crimes in the years after the murder. 

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GARCIA, 29, of Queens, New York, was found guilty of (i) conspiracy to commit racketeering, which carries a maximum term of life in prison; (ii) murder in aid of racketeering, which carries a mandatory term of life in prison or death; (iii) narcotics conspiracy, which carries a maximum term of life in prison and a mandatory minimum term of 10 years in prison; and (iv) use of a firearm in furtherance of a drug trafficking offense, which carries a maximum term of life in prison and a mandatory minimum term of seven years in prison, which must be served consecutively to any other term of in prison. 

The minimum and 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 Federal Bureau of Investigation and the New York City Police Department. 

This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.  

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Adam Hobson, David Robles, and Patrick Moroney, with the assistance of Paralegal Specialist Sam Dobro, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll,  the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Steven A. Nigrelli, the Acting Superintendent of the New York State Police (“NYSP”), announced today the arrest of NICHOLAS ORSINI and JAMIE ORSINI, who were each charged in a Complaint with one count of carjacking resulting in death and one count of conspiracy, each related to the 2020 murder of JAMIE ORSINI’s ex-husband, Steven Kraft.  The ORSINIs will be presented in federal court later today.

U.S. Attorney Damian Williams said: “A little over three years ago, Nicholas and Jamie Orsini allegedly plotted to and did kill Jamie’s ex-husband, Steven Kraft.  Their alleged scheme was sophisticated — it involved burner phones, stealing and dumping Kraft’s car, and, ultimately, disposing of Kraft’s body.  In doing so, the Orsinis denied Kraft’s family — including Kraft’s children with Jamie — the dignity of having a proper burial.  This complaint shows that no matter how well you cover up your heinous act, law enforcement will not relent until they have uncovered your crimes.”

FBI Assistant Director in Charge Michael J. Driscoll said: “The charges today allege that the defendants planned, practiced, and carried out a heinous series of actions in an attempt to get away with murdering Steven Kraft.  This complaint today demonstrates our continued commitment to the community – the FBI will ensure those involved in such horrendous violence are held responsible in the criminal justice system.”

NYSP Acting Superintendent Steven A. Nigrelli said: “I commend our State Police members and our partners with the FBI and the U.S. Attorney’s Office for their tireless efforts to find justice for the grieving loved ones of Mr. Kraft.  These two murderous individuals allegedly deliberately took the life of another person and will now be held accountable for their actions.  State Police and our partners will continue to work together to keep our communities safe and make sure those who commit senseless, violent acts are placed behind bars.”

According to the allegations made in the Complaint:[1]

In 2020, JAMIE ORSINI and NICHOLAS ORSINI planned to, and did, murder Steven Kraft — who was JAMIE ORSINI’s ex-husband and the father of two children with her — take and get rid of Kraft’s car, and dispose of Kraft’s body, covering their tracks.

During the days leading up to April 28, 2020, the ORSINIs began preparing to murder Steven Kraft at their home in Beacon, New York, and to cover up that murder.  Among other things, they purchased a 10x100 foot paint tarp, duct tape, a Tyvek suit and boots, and a “burner phone,” all paid for in cash.  They also drove from their home in Beacon, New York, to a location in the City of Newburgh, New York, in what would be a “dry run” for how they ultimately got rid of Kraft’s car.  On April 28, 2020, the ORSINIs carjacked and murdered Kraft.  That afternoon, Kraft picked up his children from the ORSINIs’ home in Beacon.  The ORSINIs followed Kraft and activated their burner phone before returning home.  Kraft brought his children back to the ORSINIs’ at approximately 7:00 p.m.; he was never seen again.  After falsely telling a co-worker that he was not coming to work because his wife’s car broke down, NICHOLAS ORSINI drove Kraft’s car along the same circuitous route the pair travelled in their dry run the day before from their home in Beacon to the same location in Newburgh.

After leaving Kraft’s car on the street, NICHOLAS ORSINI walked over a mile to a gas station.  He used the burner phone to call a taxi to take him home and then threw out the burner phone.

In the days after the murder and carjacking, the ORSINIs continued to cover up their crimes.  Among other things, they bought a new burner phone (changing the number on it at least once), drove repeatedly to and from Amsterdam, New York — where NICHOLAS ORSINI had family — which is more than 120 miles north of Beacon, staying for no more than a few hours before returning to Beacon, and purchased equipment that can be used to chop up and burn a body.

In particular, on April 29, 2020, NICHOLAS ORSINI — who, like JAMIE ORSINI, left his own phone at home in Beacon — purchased a new burner phone and then drove approximately two-and-a-half hours to Amsterdam either by himself or with JAMIE ORSINI, stayed for less than three hours, and then drove back to Beacon.  The next day, on April 30, 2020, NICHOLAS ORSINI used his phone to search for “How to view your location history in google maps.”  On May 1, 2020, the ORSINIs again drove to and from Amsterdam, again leaving their personal phones behind but using their burner phone.  Later that day, the ORSINIs changed the phone number of their burner phone in an apparent attempt to hide their tracks.

The next day, NICHOLAS ORSINI used his phone to search for “Orange County News” (the City of Newburgh is in Orange County) and “Montgomery County News” (Amsterdam is in Montgomery County).  At about the same time that he was conducting those searches, NICHOLAS ORSINI texted his mother: “Who did u tell I was coming up.”  He then went to a Home Depot and a Walmart before using Google to search for “is galvanized steel fireproof.”  Not long thereafter, NICHOLAS ORSINI returned to the Home Depot and purchased two 31-gallon galvanized steel round trash cans, a coarse stainless-steel rod, an angle grinder with grinding wheel, five metal disks, three 32-ounce bottles of odorless charcoal grates, an axe, and a flame lighter.  The next morning, he returned to the Home Depot to purchase 16 bundles of firewood.

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NICHOLAS ORSINI, 35, and JAIME ORSINI, 36, both of Amsterdam, New York, are each charged with one count of carjacking resulting in death, which carries a maximum potential sentence of life in prison or death, and one count of conspiracy, which carries a maximum potential sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by a judge.

Mr. Williams praised the NYSP and the FBI for their outstanding work on the investigation.  Mr. Williams also thanked the Dutchess County District Attorney’s Office.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Kaiya Arroyo and Michael D. Maimin are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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[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. Jamie and Nicholas Orsini Complaint

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging RAWINDER DHILLON and AMNINDER SINGH, the owners of a construction company, with participating in a scheme to submit fraudulent bonds to the New York State Governor’s Office of Storm Recovery (“GOSR”) in order to obtain payments on false pretenses in connection with construction projects funded by the United States Department of Housing and Urban Development (“HUD”).  The defendants were arrested this morning and will be presented in Manhattan federal court later today before U.S. Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Damian Williams said: “New Yorkers rely on the New York State Governor’s Office of Storm Recovery and the construction companies and subcontractors supported by GOSR to rebuild after devastating storms.  As alleged, Rawinder Dhillon and Amninder Singh greedily defrauded GOSR and obtained more than $5 million of construction payments on false pretenses.  Thanks to our partnership with the Federal Bureau of Investigation, Dhillon and Singh will now be brought to justice for their conduct.”

FBI Assistant Director in Charge Michael J. Driscoll said: “The defendants allegedly conspired to obtain over five million dollars from the state of New York based on phony construction surety bonds.  Unfortunately, this is another example of a program intended to help communities recover from disaster being targeted for manipulation and fraud.  The FBI is committed to ensuring that individuals who conspire to commit fraud against the government face the consequences for their schemes.”

According to the allegations contained in the Complaint:[1]

GOSR was established in 2013 – following Hurricane Irene, Tropical Storm Lee, and Superstorm Sandy – to centralize recovery and rebuilding efforts in impacted areas of New York State.  GOSR utilizes federal funding to provide aid for housing recovery, small businesses, community reconstruction, and infrastructure.  DHILLON and SINGH owned and operated a construction company based in Staten Island, New York (“the Construction Company”).  The Construction Company was awarded contracts by GOSR in connection with certain construction projects (the “Construction Projects”) funded by HUD. 

For each of the Construction Projects, the Construction Company was required to obtain surety performance bonds (meant to ensure satisfactory completion of a construction company’s contractual obligations) and payment bonds (meant to ensure payment by a construction company to subcontractors and/or vendors supplying labor and/or materials).  In or about April 2021, the Construction Company emailed to GOSR documents purporting to be the required performance bonds and payment bonds for the Construction Projects.  Following the submission of the purported bonds, GOSR paid the Construction Company more than approximately $5.4 million in connection with the Construction Projects.

In or about February 2022, a subcontractor (the “Subcontractor”) that had contracted with the Construction Company to perform roofing work in connection with one of the Construction Projects contacted GOSR to report that the Construction Company had not paid the Subcontractor for its work.  In response, GOSR provided the Subcontractor with a copy of one of the purported bonds so that the Subcontractor could obtain payment from the insurance carrier.  However, when the Subcontractor contacted the insurance broker that allegedly issued the bond, the insurance broker informed the Subcontractor, in substance and in part, that the insurance broker had no record of issuing the bond and that the bond was fraudulent.  Thereafter, the insurance broker informed GOSR, in substance and in part, that each of the purported payment and performance bonds provided by the Construction Company to GOSR were fraudulent.  Accordingly, on or about February 20, 2022, GOSR terminated its contracts with the Construction Company.

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DHILLON, 32, of Staten Island, New York, and SINGH, 37, of New Hyde Park, New York, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence. 

The minimum and maximum potential sentences 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.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Alexandra S. Messiter is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.

U.S. v. Dhillon and Singh Complaint

An Ohio man today pleaded guilty to attempting to provide material support to a designated foreign terrorist organization and attempting to murder U.S. military service members based on his efforts to help the Islamic State of Iraq and al-Sham (ISIS) to attack and kill U.S. soldiers in the Middle East.

Cole Bridges, aka Cole Gonzales, 22, of Stow, pleaded guilty before U.S. District Judge Lewis J. Liman. According to court documents, Bridges joined the U.S. Army in approximately September 2019 and was assigned as a cavalry scout in the Third Infantry Division based in Fort Stewart, Georgia. Beginning in at least 2019, Bridges began researching and consuming online propaganda promoting jihadists and their violent ideology. Bridges also expressed his support for ISIS and jihad on social media. In or about October 2020, Bridges began communicating with an FBI online covert employee (the OCE), who was posing as an ISIS supporter in contact with ISIS fighters in the Middle East. During these communications, Bridges expressed his frustration with the U.S. military and his desire to aid ISIS. Bridges then provided training and guidance to purported ISIS fighters who were planning attacks, including advice about potential targets in New York City. Bridges also provided the OCE with portions of a U.S. Army training manual and guidance about military combat tactics, for use by ISIS.

In or about December 2020, Bridges began to supply the OCE with instructions for the purported ISIS fighters on how to attack U.S. forces in the Middle East. Among other things, Bridges diagrammed specific military maneuvers intended to help ISIS fighters maximize the lethality of attacks on U.S. troops. Bridges further provided advice about the best way to fortify an ISIS encampment to repel an attack by U.S. Special Forces, including by wiring certain buildings with explosives to kill the U.S. troops. Then, in January 2021, Bridges provided the OCE with a video of himself in his U.S. Army body armor standing in front of a flag often used by ISIS fighters and making a gesture symbolic of support for ISIS. Approximately a week later, Bridges sent a second video in which Bridges, using a voice manipulator, narrated a propaganda speech in support of the anticipated ambush by ISIS on U.S. troops.

Attempting to provide material support to ISIS carries a maximum sentence of 20 years in prison, and attempting to murder U.S. military service members carries a maximum sentence of 20 years in prison. Bridges is scheduled to be sentenced on Nov. 2.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York and Assistant Director Robert R. Wells of the FBI Counterterrorism Division made the announcement.

The FBI’s New York Joint Terrorism Task Force, which primarily consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state and local agencies, is investigating the case. The U.S. Army Counterintelligence, the FBI Washington Field Office, the FBI Atlanta Field Office and its Savannah Resident Agency, the FBI Cleveland Field Office, the FBI’s Counterterrorism Division, the U.S. Attorney’s Office for the Southern District of Georgia, the Air Force Office of Special Investigations, U.S. Army Criminal Investigation Command and the U.S. Army Third Infantry Division provided valuable assistance.

Assistant U.S. Attorneys Sam Adelsberg and Matthew Hellman for the Southern District of New York and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that COLE BRIDGES, a/k/a “Cole Gonzales,” pled guilty to attempting to provide material support to a designated foreign terrorist organization and attempting to murder U.S. military service members based on BRIDGES’s efforts to assist the Islamic State of Iraq and al-Sham (“ISIS”) to attack and kill U.S. soldiers in the Middle East.  BRIDGES pled guilty today before U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams said: “As he admitted in court today, Cole Bridges attempted to orchestrate a murderous ambush on his fellow soldiers in service of ISIS and its violent ideology.  Bridges’s traitorous conduct was a betrayal of his comrades and his country.  Thanks to the incredible work of the prosecutors of this Office and our partners at the FBI and the U.S. Army, Bridges’s malign intent was revealed, and he now awaits sentencing for his crimes.”    

According to the Complaint, the Indictment to which BRIDGES pled guilty, and other documents in the public record, as well as statements made in public court proceedings:

BRIDGES joined the U.S. Army in approximately September 2019 and was assigned as a cavalry scout in the Third Infantry Division based in Fort Stewart, Georgia.  Beginning in at least 2019, BRIDGES began researching and consuming online propaganda promoting jihadists and their violent ideology.  BRIDGES also expressed his support for ISIS and jihad on social media.  In or about October 2020, BRIDGES began communicating with a Federal Bureau of Investigation (“FBI”) online covert employee (the “OCE”), who was posing as an ISIS supporter in contact with ISIS fighters in the Middle East.  During these communications, BRIDGES expressed his frustration with the U.S. military and his desire to aid ISIS.  BRIDGES then provided training and guidance to purported ISIS fighters who were planning attacks, including advice about potential targets in New York City.  BRIDGES also provided the OCE with portions of a U.S. Army training manual and guidance about military combat tactics, for use by ISIS.

In or about December 2020, BRIDGES began to supply the OCE with instructions for the purported ISIS fighters on how to attack U.S. forces in the Middle East.  Among other things, BRIDGES diagrammed specific military maneuvers intended to help ISIS fighters maximize the lethality of attacks on U.S. troops.  BRIDGES further provided advice about the best way to fortify an ISIS encampment to repel an attack by U.S. Special Forces, including by wiring certain buildings with explosives to kill the U.S. troops.  Then, in January 2021, BRIDGES provided the OCE with a video of himself in his U.S. Army body armor standing in front of a flag often used by ISIS fighters and making a gesture symbolic of support for ISIS.  Approximately a week later, BRIDGES sent a second video in which BRIDGES, using a voice manipulator, narrated a propaganda speech in support of the anticipated ambush by ISIS on U.S. troops.

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BRIDGES, 22, of Stow, Ohio, pled guilty to attempting to provide material support to ISIS, which carries a maximum sentence of 20 years in prison, and attempting to murder U.S. military service members, which carries a maximum sentence of 20 years in prison.  BRIDGES is scheduled to be sentenced by Judge Liman on November 2, 2023, at 2:00 p.m.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which primarily consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked U.S. Army Counterintelligence, the FBI Washington Field Office, the FBI Atlanta Field Office and its Savannah Resident Agency, the FBI Cleveland Field Office, the FBI’s Counterterrorism Division, the U.S. Attorney’s Office for the Southern District of Georgia, the Air Force Office of Special Investigations, U.S. Army Criminal Investigation Command, the U.S. Army Third Infantry Division, and the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg and Matthew Hellman are in charge of the prosecution, with assistance from Trial Attorney Michael Dittoe of the Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MIHAI IONUT PAUNESCU, a/k/a “Virus,” was sentenced to three years in prison today in Manhattan federal court for conspiracy to commit computer intrusion in connection with running a “bulletproof hosting” service that enabled cybercriminals to distribute the Gozi Virus, the Zeus Trojan, the SpyEye Trojan, and the BlackEnergy malware, all of which were designed to steal confidential financial information.  PAUNESCU also enabled other cybercrimes, such as initiating and executing distributed denial of service (“DDoS”) attacks and transmitting spam.  PAUNESCU previously pled guilty before U.S. Magistrate Judge Valerie Figueredo on February 24, 2023.  He was sentenced today by U.S. District Judge Lorna G. Schofield.

U.S. Attorney Damian Williams said: “Paunescu ran a ‘bulletproof’ hosting service that enabled cyber criminals throughout the world to spread malware that stole confidential financial information, crashed websites, and caused other harm.  By allowing cybercriminals to acquire online infrastructure for their unlawful activity without revealing their true identities, Paunescu’s bulletproof hosting service shielded his criminal customers from both law enforcement and cybersecurity professionals, while enriching himself.  Paunescu now faces prison time and will be required to forfeit his ill-gotten gains.”

In imposing today’s sentence, Judge Schofield said that PAUNESCU facilitated the distribution of “some of the most serious malware circulating at the time” and “made considerable money from it.”

As alleged in the Complaint, the Indictment, other documents in this case, and statements made in court:

The Gozi Virus is malicious computer code or “malware” that stole personal bank account information, including usernames and passwords, from the users of affected computers.  The Gozi Virus infected over one million victim computers worldwide, among them at least 40,000 computers in the United States, including computers belonging to the National Aeronautics and Space Administration (“NASA”), as well as computers in Germany, Great Britain, Poland, France, Finland, Italy, Turkey, and elsewhere.  The Gozi Virus caused tens of millions of dollars in losses to the individuals, businesses, and government entities whose computers were infected.  Once installed, the Gozi Virus – which was intentionally designed to be undetectable by anti-virus software – collected data from the infected computer in order to capture personal bank account information, including usernames and passwords.  That data was then transmitted to various computer servers controlled by the cyber criminals who used the Gozi Virus.  These cyber criminals then used the personal bank account information to transfer funds out of the victims’ bank accounts and ultimately into their own personal possession.

Similar to the Gozi Virus, the Zeus Trojan and the SpyEye Trojan were designed to steal confidential financial information from victims’ computers.  BlackEnergy was initially designed to launch World Wide Web-based DDoS attacks and later upgraded to include the ability to steal account access credentials.

“Bulletproof hosting” services helped cyber criminals distribute the Gozi Virus with little fear of detection by law enforcement.  Bulletproof hosts provided cyber criminals using the Gozi Virus with the critical online infrastructure they needed, such as Internet Protocol (“IP”) addresses and computer servers, in a manner designed to enable them to preserve their anonymity.

PAUNESCU operated a “bulletproof hosting” service that helped cyber criminals to distribute some of the world’s most harmful malware, including the Gozi Virus, the Zeus Trojan, the SpyEye Trojan, and BlackEnergy, as well to as commit other cybercrimes, such as transmitting spam, which is an often used means of distributing malware.  PAUNESCU rented servers and IP addresses from legitimate Internet service providers and then, in, turn rented those resources to cybercriminals; provided servers that cyber criminals used as command-and-control servers to conduct DDoS attacks; monitored the IP addresses that he controlled to determine if they appeared on a special list of suspicious or untrustworthy IP addresses; and relocated his customers’ data to different networks and IP addresses, including networks and IP addresses in other countries, to avoid being blocked as a result of private security or law enforcement scrutiny. 

*                *                *

In imposing the sentence, Judge Schofield gave PAUNESCU credit for the approximately one year and two months that the defendant was held in Romanian and Colombian custody prior to his extradition to the United States.  In addition to his prison sentence, PAUNESCU, 39, of Bucharest, Romania, was ordered to forfeit $3,510,000 and pay restitution in the amount of $18,945.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the NASA Office of Inspector General and the Colombian National Police.  In addition, Mr. Williams thanked the Department of Justice’s Computer Crime and Intellectual Property Section for its partnership in this matter.  The U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the Narcotic and Dangerous Drug Section Judicial Attachés in Bogota, Colombia, and the U.S. Marshal Service provided significant assistance in securing the defendant’s extradition from Colombia.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Sarah Lai is in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General for the Department of Justice’s Criminal Division, Ismail J. Ramsey, the United States Attorney for the Northern District of California, James C. Lee, the Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), William Mancino, the Special Agent in Charge of the U.S. Secret Service’s Criminal Investigative Division (“USSS”), and Katrina W. Berger, the Acting Executive Associate Director of Homeland Security Investigations (“HSI”), announced the unsealing of charges against ALEXEY BILYUCHENKO and ALEKSANDR VERNER, both Russian nationals.  BILYUCHENKO and VERNER are charged in the Southern District of New York with conspiring to launder approximately 647,000 bitcoins from the 2011 hack of Mt. Gox (the “SDNY Case”).  BILYUCHENKO is separately charged in the Northern District of California with conspiring with Alexander Vinnik to operate the illicit cryptocurrency exchange BTC-e from 2011 to 2017 (the “NDCA Case”).  The SDNY Case has been assigned to U.S. District Judge P. Kevin Castel.  The NDCA Case has been assigned to U.S. District Judge Chhabria. 

U.S. Attorney Damian Williams said: “As cyber criminals have become more sophisticated in their methods of thievery, our career prosecutors and law enforcement partners, too, have become experts in the latest technologies being abused for malicious purposes.  As alleged, Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, a novel technology at the time, but the charges unsealed demonstrate our ability to tenaciously pursue these alleged criminals, no matter how complex their schemes, until they are brought to justice.”

Assistant Attorney General Kenneth A. Polite, Jr. said: “This announcement marks an important milestone in two major cryptocurrency investigations.  As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency.  Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide.  These indictments highlight the department’s unwavering commitment to bring to justice bad actors in the cryptocurrency ecosystem and prevent the abuse of the financial system.”

NDCA U.S. Attorney Ismail J. Ramsey said: “For years, Bilyuchenko and his coconspirators operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars.  The Department of Justice will work tirelessly to identify cyber criminals, no matter where they are.  And Bilyuchenko and his coconspirators will learn that the Department of Justice has long arms and an even longer memory for crimes that harm our communities.”

IRS-CI Chief James C. Lee said: “Cryptocurrency offers a new way for criminals to steal and launder money, but greed and deceit are nothing new.  IRS-CI is specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed.  IRS-CI is proud to stand with our law enforcement partners to announce these indictments.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged in the indictment, the defendants gained unauthorized access to a server used by Mt. Gox to house cryptocurrency wallets.  Mt. Gox was the world’s largest bitcoin exchange at the time, and the defendants used their unauthorized access to steal the bulk of the bitcoins held by Mt. Gox customers.  The FBI and our partners will continue to work tirelessly to protect the integrity of all of our financial markets.”

USSS Special Agent in Charge William Mancino said: “The Secret Service has a long tradition of pursuing and bringing to justice those who aim to exploit our financial systems and target innocent victims.  Working together with our local, state, and federal law enforcement partners, we will continue to investigate criminal organizations that operate in the ever-evolving cyber domain.”

HSI Acting Executive Associate Director Katrina W. Berger said: “Homeland Security Investigations continues to investigate cyber criminals illicitly operating in virtual spaces, and we are proud to have worked collaboratively with our law enforcement partners to bring these two individuals to justice.  Our special agents continue to investigate transnational criminal organizations operating in emerging technologies, leveraging our broad authorities to identify and dismantle those behind sophisticated crypto scams.”

The SDNY Case

According to the allegations in the Indictment unsealed in the Southern District of New York:[1] 

In or about September 2011, BILYUCHENKO, VERNER, and their co-conspirators gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox.  At the time, Mt. Gox was the largest bitcoin exchange in existence, servicing thousands of users worldwide, including users in the Southern District of New York.  Mt. Gox stored the cryptocurrency wallets containing its customers’ bitcoin and the corresponding private keys used to authorize bitcoin transfers from those wallets on a computer server in Japan.

BILYUCHENKO, VERNER, and their co-conspirators used their unauthorized access to Mt. Gox’s server to fraudulently cause bitcoins to be transferred from Mt. Gox’s wallets to bitcoin addresses controlled by BILYUCHENKO, VERNER, and their co-conspirators.  From September 2011 through at least May 2014, BILYUCHENKO, VERNER, and their co-conspirators caused the theft of at least approximately 647,000 bitcoins from Mt. Gox, representing the vast majority of the bitcoins belonging to Mt. Gox’s customers.  BILYUCHENKO, VERNER, and their co-conspirators laundered the bulk of the bitcoins stolen from Mt. Gox principally through bitcoin addresses associated with accounts BILYUCHENKO, VERNER, and their co-conspirators controlled at two other online bitcoin exchanges (“Exchange-1” and “Exchange-2”), as well as a particular user account on Mt. Gox itself.

In furtherance of the money laundering scheme, in or about April 2012, BILYUCHENKO, VERNER, and their co-conspirators negotiated and entered into a fraudulent contract (the “Advertising Contract”) to provide purported advertising services to a bitcoin brokerage service based in the Southern District of New York (the “New York Bitcoin Broker”).  Under the guise of the Advertising Contract, in order to conceal and liquidate the bitcoins stolen from Mt. Gox, BILYUCHENKO and VERNER made regular requests to the owner and operator of the New York Bitcoin Broker to make large wire transfers into various offshore bank accounts, including in the names of shell corporations, controlled by BILYUCHENKO, VERNER, and their co-conspirators.  In accordance with these requests, between in or about March 2012 and in or about April 2013, the New York Bitcoin Broker transferred more than approximately $6.6 million to overseas bank accounts controlled by BILYUCHENKO, VERNER, and their co-conspirators.  In exchange for the wire transfers, the New York Bitcoin Broker received “credit” on Exchange-1, through which BILYUCHENKO, VERNER, and their co-conspirators laundered more than 300,000 of the bitcoins stolen from Mt. Gox.  The fraudulent Advertising Contract with the New York Bitcoin Broker enabled BILYUCHENKO, VERNER, and their co-conspirators to conceal and liquidate bitcoins stolen through the Mt. Gox hack. 

Mt. Gox ceased operations in 2014 after the theft was revealed. 

The NDCA Case

According to the allegations in the Indictment unsealed in the Northern District of California:[2] 

BILYUCHENKO worked with Alexander Vinnik and others to operate the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017.  During that time period, BTC-e was one of the world’s largest cryptocurrency exchanges and was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities.

BTC-e served over one million users worldwide, moving millions of bitcoin worth of deposits and withdrawals and processing billions of dollars’ worth of transactions.  BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.

*                *                *

The SDNY Indictment charges BILYUCHENKO, 43, and VERNER, 29, both Russian nationals, with conspiracy to commit money laundering.  If convicted of the charge in the SDNY Indictment, each defendant faces a maximum penalty of 20 years in prison.

The NDCA Indictment charges BILYUCHENKO with conspiracy to commit money laundering and operating an unlicensed money services business.  If convicted of the charges in the NDCA Indictment, BILYUCHENKO faces a maximum penalty of 25 years in prison.

The maximum potential sentences set forth above are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the Court.

Mr. Williams praised IRS-CI and the FBI for their work in investigating the SDNY Case.

The SDNY Case is being handled by the Complex Frauds and Cybercrime Unit of the United States Attorney’s Office for the Southern District of New York.  Assistant U.S. Attorney Olga I. Zverovich is in charge of the prosecution of the SDNY Case. 

The NDCA Case is behind handled by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California and the Criminal Division’s Computer Crime and Intellectual Property Section (“CCIPS”).  CCIPS Trial Attorney C. Alden Pelker and NDCA Assistant U.S. Attorney Claudia Quiroz, both members of the National Cryptocurrency Enforcement Team, and NDCA Assistant U.S. Attorney Katherine Lloyd-Lovett are prosecuting the case.  The FBI; IRS-CI Oakland Field Office and Cyber Crime Unit in Washington, D.C.; U.S. Secret Service Criminal Investigative Division; and Homeland Security Investigations are investigating the case.  The Justice Department’s Office of International Affairs provided invaluable assistance.

The charges in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

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[1]  As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

[2]  As the introductory phrase signifies, the entirety of the text of the 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. Bilyuchenko and Verner Indictment

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging ADONYS CASTILLO, a/k/a “Candela,” GERARD VALENTINE FRIAS, a/k/a “Monkey,” JADEL ARAUJO, a/k/a “Negro,” a/k/a “Negromoneymaker,” HENRY MARCANO, a/k/a “KC,” JOSHUA TORRES, EDWIN RAMIREZ, RANDY BAUTISTA, JARYLIZ ORTEGA, ELVIO TORIBIO, and CLAUDY BRATINI, a/k/a “Cilantro,” with conspiring to kidnap a minor in the Bronx, New York.  The defendants have been charged in the violent abduction of a 16-year-old victim (the “Victim”).  The Indictment is assigned to United States District Judge Laura Taylor Swain.

CASTILLO, FRIAS, MARCANO, TORRES, BAUTISTA, ORTEGA, AND TORIBIO were arrested last night and this morning and are expected to be presented later today before U.S. Magistrate Judge Sarah Netburn.  ARAUJO, who is currently in federal custody in connection with a separate firearms offense, and BRATINI, who was previously in state custody and has been transferred to federal custody, will also be presented later today.  RAMIREZ is a fugitive.   

U.S. Attorney Damian Williams said: “As alleged, a 16-year-old child was beaten and kidnapped over the course of 19 hours before he was dumped on a desolate street under an overpass.  The charges announced today hold the perpetrators responsible for their reprehensible crimes.”

According to the allegations in the Indictment unsealed today and statements previously made on the record in this case and related matters:[1]

In the early morning hours of April 26, 2022, the Victim, along with two others, robbed a location where marijuana was sold.  The defendants immediately gave chase, including EDWIN RAMIREZ and JOSHUA TORRES, who discharged a firearm as they pursued the Victim and his friends who had just stolen bags of marijuana from the drug-selling location.  The defendants were able to capture the Victim.  The defendants then held the Victim against his will for approximately 19 hours.  During this time, the Victim was severely beaten and transported from one building in the Bronx to another before being dropped off under an overpass.  The Victim was found by a bystander the next morning on April 27, 2022, after having been left on the street, hog-tied and drifting in and out of consciousness, the night before.  According to a doctor who treated the 16-year-old Victim, the Victim suffered from lacerations to his brain.

All 10 defendants have been charged with conspiracy to kidnap a minor, and RAMIREZ and TORRES have been charged with the use and discharge of a firearm during and in relation to a drug trafficking crime.

*                *                *

A chart containing the names and ages of the defendants who were charged today, the charges, and the minimum and maximum penalties they face is attached.  All of the defendants are residents of the Bronx, New York. 

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.

Mr. Williams praised the outstanding investigative work of the NYPD.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Ni Qian and Jim Ligtenberg 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.

Defendant

Age

Charges

Minimum and Maximum Penalties

ADONYS CASTILLO

27

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

GERARD VALENTINE FRIAS

28

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

JADEL ARAUJO

23

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

HENRY MARCANO

27

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

JOSHUA TORRES

27

Kidnapping conspiracy; use and discharge of a firearm during and in relation to a drug trafficking crime

Mandatory minimum of 30 years in prison; maximum of life in prison

EDWIN RAMIREZ

28

Kidnapping conspiracy; use and discharge of a firearm during and in relation to a drug trafficking crime

Mandatory minimum of 30 years in prison; maximum of life in prison

RANDY BAUTISTA

21

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

JARYLIZ ORTEGA

28

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

ELVIO TORIBIO

27

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

CLAUDY BRATINI

27

Kidnapping conspiracy

Mandatory minimum of 20 years in prison; maximum of life in prison

 

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[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. Castillo et al Indictment

Damian Williams, the United States Attorney for the Southern District of New York, and Patrick J. Freaney, the Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), announced today the unsealing of an Indictment charging TETIANA BERRIORS with conspiring to commit money laundering and bank fraud in connection with laundering the proceeds of a series of business email compromise (“BEC”) scams that sought to deceive victims into sending nearly $10 million to bank accounts that she and others opened using fake and stolen identities.  The defendant was arrested and will be presented tomorrow before U.S. Magistrate Judge Sarah Netburn in the Southern District of New York.  The case is assigned to U.S. District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “Tetiana Berriors exploited the United States financial system to launder millions of dollars of fraud proceeds.  In doing so, she helped victimize over 15 different individuals, businesses, government entities, and public institutions.  In furtherance of her illegal money laundering enterprise, she lied repeatedly to banks and stole the identities of at least three other innocent victims.  Thanks to the efforts of this Office and its law enforcement partners, the defendant will be prosecuted to the full extent of the law.”

USSS Special Agent in Charge Patrick J. Freaney said: “Despite the defendant’s alleged efforts to conceal the wide range of criminal activity targeting individuals, businesses, and government alike, such attempts against discovery were no match for this investigation’s expert professional team.  Today, I am privileged to recognize the invaluable partnerships that fuel the New York law enforcement community’s essential work to fight fraud, and the Secret Service’s New York Field Office especially thanks the Financial Crimes Task Force of the New York City Police Department for their critical assistance in this case.”

As alleged in the Indictment:[1]

From at least in or about December 2020 through at least in or about October 2022, TETIANA BERRIORS laundered funds on behalf of individuals engaged in a series of frauds, primarily BECs, that targeted individuals, public institutions, government entities, and businesses located across the United States.  The victims included, among others, a public research university in Pennsylvania, a housing developer in Texas, and a county-level government in California.

To launder those funds, BERRIORS created over a dozen fraudulent bank accounts, used those accounts to receive funds from victims of the frauds, and rapidly depleted those accounts through cash withdrawals, wire transfers, and cashier’s checks.  Typically, the wire transfers and cashier’s checks were made payable to shell companies that BERRIORS or her co-conspirators controlled.  In total, BERRIORS opened at least 13 fraudulent bank accounts in the name of at least five shell companies using four different female aliases.  Three of those aliases were identities stolen from real individuals.

As a result of the frauds, more than 15 victims were directed to transfer nearly $10 million to bank accounts under the control of BERRIORS and her co-conspirators.  Out of those nearly $10 million, BERRIORS and her co-conspirators successfully stole over $3.5 million in victim funds.

*                *                *

BERRIORS, 49, of Smallwood, New York, was charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison.  BERRIORS was also charged with one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.

The statutory minimum and maximum 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 work of the USSS.  Mr. Williams also recognized the assistance of the New York City Police Department.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Matthew J. King 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.

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[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. Berriors Indictment

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of Indictments charging DAGOBERTO SOTO-RAMIREZ, a/k/a “Pito,” SAUL ARISMENDY DE LA CRUZ, a/k/a “Nene,” a/k/a “Venom,” EDWIN LUCIANO RODRIGUEZ-GENAO, a/k/a “Pantalla,” SANTIAGO XAVIER MALDONADO, a/k/a “Xavier,” and DIEGO MUELAS-GONZALEZ, a/k/a “Menor,” for their participation in a violent theft crew.  DE LA CRUZ, RODRIGUEZ-GENAO, MALDONADO, and MUELAS-GONZALEZ were arrested this morning and arraigned before U.S. Magistrate Judge Judith C. McCarthy.  SOTO-RAMIREZ has not been arrested at this time.

DAGOBERTO SOTO-RAMIREZ: WANTED BY THE FBI

U.S. Attorney Damian Williams said: “As alleged, this crew stole substantial quantities of cash and valuables from dozens of families in New York and across the country, predominantly targeting Asian-American small business owners.  And, as alleged, they bribed an NYPD detective in an attempt to get away with it.  Corruption, violence, and racially targeted crime are intolerable, and this Office stands with our law enforcement partners in the fight against all three.  Dagoberto Soto-Ramirez, the alleged leader of this violent crew, remains at large.  We encourage anyone who may have additional information regarding Dagoberto Soto-Ramirez’s whereabouts to please call the FBI at 1-800-CALL-FBI.”

FBI Assistant Director in Charge Michael J. Driscoll said: “Over an extended period, the defendants allegedly participated in a string of violent armed robberies and additional crimes designed to conceal the thefts.  The crew went so far as to entice a member of law enforcement to help them evade capture.  The FBI will continue to work diligently everyday to remove violent criminals from our communities.”

NYPD Commissioner Keechant L. Sewell said: “Violent criminal acts like the type alleged today are a disgrace.  When such behavior involves a former police officer who shamelessly exploits their position of power for personal gain, it erodes public trust in law enforcement and tarnishes the reputations of the many thousands of women and men who honorably serve New Yorkers each day.  There will always be zero tolerance in the NYPD for corruption of any kind.  And our investigators, in close partnership with all of our local, state, and federal law enforcement partners, will continue to ensure that it is punished to the fullest extent possible.”

As alleged in the Indictment and Superseding Indictments unsealed in White Plains federal court:[1]

Between 2017 and 2022, SOTO-RAMIREZ organized a crew that committed residential burglaries and home invasion robberies, repeatedly targeting small business owners.  The majority of the targeted victims were Asian-American.  Armed with guns and other weapons, members of the crew stole money, jewelry, and other property from scores of homes in states across the country.  RODRIGUEZ-GENAO, MALDONADO, and MUELAS-GONZALEZ took part in the crew’s criminal scheme, which also included the use of false identification, bank fraud, and laundering theft proceeds.  In addition, SOTO-RAMIREZ and other members of the conspiracy bribed DE LA CRUZ, first an officer and later a detective of the NYPD, who helped members of the crew escape arrest.  As part of his activities with the crew, SOTO-RAMIREZ committed two gunpoint home invasion robberies in Queens.

*                *                *

SOTO-RAMIREZ, 41, of the Bronx, New York, DE LA CRUZ, 31, RODRIGUEZ-GENAO, 48, MALDONADO, 43, and MUELAS-GONZALEZ, 26, all of Queens, New York, are each charged with one count of racketeering conspiracy, which carries a maximum sentence of 20 years in prison.  SOTO-RAMIREZ is additionally charged with two counts of assault with a dangerous weapon in aid of racketeering, each of which carry a maximum sentence of 20 years in prison, and two counts of possession of a firearm, which was brandished, in furtherance of a crime of violence, each of which carry a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

Mr. Williams praised the investigative work of the FBI, the Westchester County Joint Organized Crime Task Force, the New York Public Corruption Task Force, the Westchester County Department of Public Safety, the NYPD, the Nassau County Police Department, the New York State Police, and the Fort Lee Police Department.  He added that the investigation is ongoing.  

The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Josiah Pertz and Jeffrey C. Coffman are in charge of the prosecution.

The charges contained in the Indictment and Superseding Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the description of the Indictment and the other charging documents set forth in this release constitute only allegations, and every fact described should be treated as an allegation.

U.S. v. Soto-Ramirez et al Indictment U.S. v. Muelas-Gonzalez Indictment U.S. v. Maldonado Indictment

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging six defendants — SALIF NDAMA-TRAORE, KYLE EMORDI, KEITH EMORDI, AMADOU TIDIANE BA, MOHAMMED NABI ELIKPLIM AKINOTCHO, and IBRAHIM BOCOUM — with conspiring to commit wire fraud and money laundering in connection with a business email compromise (“BEC”) scheme that used spoofing attacks to deceive victims into sending a total of approximately $5.8 million to bank accounts that had been opened using fake and stolen information.  All six defendants were arrested and will be presented today before U.S. Magistrate Judge Peter Bray in the Southern District of Texas.  The case is assigned to U.S. District Judge Richard M. Berman.

U.S. Attorney Damian Williams said: “Sitting behind their computer screens, the defendants and others used email spoofing to insert themselves into legitimate business transactions and deceived victims across the country into sending millions of dollars to fraudulent bank accounts.  Thanks to the efforts of this Office and its law enforcement partners, the defendants now face the long arm of justice.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants engaged in a business email compromise scheme in which they induced the victims to make fraudulent payments totaling more than $5 million.  Additionally, in an attempt to conceal their actions, the defendants withdrew their ill-gotten gains in a manner intended to evade federal reporting requirements.  As today’s action demonstrates, the FBI remains committed to bringing those who engage in fraudulent activity to justice.”

NYPD Commissioner Keechant L. Sewell said: “Business email compromise and money laundering schemes, although not violent, are not victimless and can be devastating to the organizations and individuals who fall prey to them.  While the network of online criminals targeting unsuspecting victims is growing every day, today’s charges should send a clear message to scammers committing fraud – wherever they are based – that they will be identified and held fully accountable.  The NYPD will continue to work tirelessly with all of our law enforcement partners to address this pervasive threat head-on.”

As alleged in the Indictment:[1]

From July 2021 through February 2022, the defendants and others engaged in a fraudulent BEC scheme that involved impersonating legitimate business contacts by email to induce five victims — a hospital, a labor union, a law firm, a real estate closing company, and a logistics company — into remitting payments totaling approximately $5.8 million to fraudulent bank accounts.  Each of the fraudulent bank accounts was opened shortly before the diversion of funds, and at least three accounts were opened using a fake driver’s license or stolen social security number.  Internet protocol registration information also shows that the defendants logged into several of the fraudulent accounts online.

The funds were immediately moved from the fraudulent accounts to bank accounts held in the defendants’ own names or in the name of a defendant-owned company.  The funds were then quickly transferred to additional savings or investment vehicles held in the defendants’ names, withdrawn in cash, or sent to co-defendants through ACH transfers or using a P2P payment service.  Withdrawals were usually made in successive increments of less than $10,000 to avoid triggering federal reporting requirements.  Some funds were pulled back after hitting the fraudulent accounts, resulting in the recovery of approximately $3.14 million and a total loss of approximately $2.66 million.

*                *                *

NDAMA-TRAORE, 39, KYLE EMORDI, 26, KEITH EMORDI, 29, and BOCOUM, 32, all of Houston, Texas; AKINOTCHO, 33, of Cypress, Texas; and BA, 35, of Sugar Land, Texas, were each charged with 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 also 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 defendants would be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the FBI and thanked the U.S. Attorney’s Office for the Southern District of Texas; the U.S. Attorney’s Office for the Eastern District of California; the FBI Field Offices in Columbia (Hilton Head Resident Agency), Houston, and Sacramento; and the police departments of New York City, the City of Beaufort, and Houston for their assistance.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jane Yumi Chong 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.

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[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. Ndama-Traore et al Indictment

Damian Williams, the United States Attorney for the Southern District of New York, announced that BHASKARRAY BAROT pled guilty today to wire fraud in connection with engaging in a years-long scheme to defraud his former employer out of approximately $4.4 million.  BAROT pled guilty before U.S. Magistrate Judge Sarah Netburn and is scheduled to be sentenced by U.S. District Judge Andrew L. Carter on September 7, 2023. 

U.S. Attorney Damian Williams said: “For years, Barot created fraudulent invoices and processed them for payment at the Manhattan-based company where he used to work as a procurement manager.  Barot designed the invoices to closely resemble the invoices that the company received from real vendors and other entities owed payment from the company.  But the fraudulent invoices differed in a crucial way: they directed payment into Barot’s pocket.  Today’s guilty plea emphasizes that this Office will seek justice for companies that fall victim to corporate theft.”

According to court filings and statements made in court proceedings:

From at least in or about July 2018, up to and including at least August 2022, BAROT engaged in a scheme to defraud his former employer (the “Company”) of approximately $4.4 million through fake invoices designed to resemble those received from legitimate vendors of the Company.  BAROT used his position as a procurement manager at the Company to process the fraudulent invoices for payment.  When doing so, he often affixed the fake invoices to email messages that he, in some cases, sent in the names of employees of the Company’s real vendors so that it would appear as though the real vendors were seeking payment on the fake invoices.   

The fake invoices, however, stated that payment should be made to entities with names that often differed slightly from those of the real vendor companies.  BAROT then incorporated companies and opened bank accounts in the names of some of the entities listed for payment on the fake invoices so that he could collect the payments that the Company made on the fake invoices.

BAROT repeated these fraudulent tactics with more than a dozen fictitious entities and caused payment from the Company on approximately 40 fake invoices, totaling approximately $4.4 million.

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BAROT, 32, of Queens, New York, pled guilty to wire fraud, which carries a maximum potential sentence of 20 years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.

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.

Damian Williams, the United States Attorney for the Southern District of New York, Jonathan Mellone, the Special Agent in Charge of the Northeast Region of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ELIZABETH TORRES pled guilty today to a workers’ compensation fraud scheme.  TORRES duped the DOL into paying her hundreds of thousands of dollars in federal disability benefits by falsely claiming that she had a debilitating knee injury and, therefore, essentially could not work, but in fact, TORRES was employed full-time for several years during her scheme.  TORRES surrendered today and pled guilty before U.S. District Judge Sidney H. Stein, to whom her case is assigned.

U.S. Attorney Damian Williams said: “The federal workers’ compensation program protects qualifying federal employees who suffer legitimate work injuries.  But some individuals take advantage of this disability benefit program.  As she admitted today, Elizabeth Torres was one such individual.  Torres exploited the program for years by lying, in various respects, in order to steal hundreds of thousands of dollars in disability benefits.  For her crime, Torres now faces potential prison time.”

DOL-OIG Special Agent in Charge Jonathan Mellone said: “Elizabeth Torres defrauded the Office of Workers’ Compensation Programs of hundreds of thousands of dollars by exaggerating the extent of any work-related injury.  She compounded this fraud by failing to inform OWCP for many years about her paid employment.  Protecting the integrity of worker compensation programs administered by the Department of Labor is an important part of the mission of the Office of Inspector General, and we will continue to work with our law enforcement partners to investigate these types of allegations.” 

According to the allegations in the Information, court filings, and statements made in court:

Over the course of several years, ELIZABETH TORRES sought and received compensation under the Federal Employees’ Compensation Act (“FECA”).  FECA provides benefits to civilian federal employees who sustain injuries as a result of their employment.  FECA benefits are administered by the DOL’s Office of Workers’ Compensation Programs (“OWCP”).  In order to receive FECA benefits, a claimant must prove that she is disabled by furnishing medical documentation and other evidence with her claim.

Until approximately 2006, TORRES worked as a Corrections Officer for the Bureau of Prisons (“BOP”).  BOP employees are eligible to receive FECA benefits.  For a number of years, TORRES submitted annual forms to OWCP seeking such benefits.  In these forms, TORRES lied in various respects, including by claiming that: (i) she was significantly disabled; (ii) a dependent was living with her for various years; (iii) she was not receiving any pay for various years; and (iv) she was not working or performing volunteer work.  More specifically, TORRES claimed in substance and in part that she had a debilitating knee injury and was essentially incapable of performing any work because she experienced pain and swelling within 30 minutes of sitting or standing.  But in fact, TORRES was employed full-time from approximately 2015 through 2019 at a drug and alcohol addiction treatment center (the “Clinic”) in New York City, where she served as the Program Director for several years.  On one occasion in 2019, TORRES was caught on video dancing in high-heeled boots, with ease, on the sidewalk outside of the Clinic.  Finally, to conceal her Clinic employment from OWCP, TORRES was paid indirectly through an entity, and her salary payments were disguised as “rent.”

On the basis of TORRES’s false representations to OWCP, TORRES received benefit payments of more than $4,000 per month over the course of several years.

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TORRES, 56, of Brooklyn, New York, pled guilty to one count of federal workers’ compensation fraud, which carries a maximum sentence of five years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  TORRES is scheduled to be sentenced by Judge Stein on September 7, 2023, at 2:30 p.m.

Mr. Williams praised the outstanding efforts of the DOL-OIG and FBI.

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Michael D. Neff and Danielle M. Kudla are in charge of the prosecution.

U.S. v. Torres Information

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging GLENROY WALKER, HOWARD LEVY, SHERRIL BAEZ, NORMA GETTEN, DONNAT POWELL, and GARY WHEELER with conspiring to commit wire fraud by submitting fraudulent applications for loans from the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”).  WALKER and LEVY are also charged with aggravated identity theft.  The defendants were arrested this morning and were presented this afternoon before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court.

U.S. Attorney Damian Williams said: “As alleged, the defendants schemed to steal millions of dollars from a program Congress created to help struggling small businesses weather the COVID-19 pandemic.  As we continue to recover from the COVID-19 pandemic, this Office will pursue and prosecute the fraudsters that took advantage of a global emergency to greedily line their own pockets.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants conspired to fraudulently obtain more than $14 million from the Paycheck Protection Program through applications containing sham documents.  This unfortunately is another example of individuals attempting to scam a program that was designed to help Americans during unprecedented upheaval.  Ensuring that fraudsters who abused the Paycheck Protection Program are brought to justice remains a priority for the FBI.”

According to the Complaint unsealed today:[1]

Between at least July 2020 and February 2022, GLENROY WALKER and HOWARD LEVY operated a scheme to submit fraudulent applications for loans from the SBA’s Paycheck Protection Program.  The PPP was created by Congress to provide billions of dollars in forgivable loans to small businesses struggling to fund payroll and certain other qualifying business expenses because of the effects of the COVID-19 pandemic.  The PPP was overseen by the SBA, which guaranteed loans issued, in the first instance, by commercial lenders.  WALKER and LEVY submitted more than 100 fraudulent PPP loan applications to various financial institutions.  Among other fraudulent misrepresentations, the PPP applications WALKER and LEVY submitted frequently contained phony bank statements and tax documents.  SHERRIL BAEZ, NORMA GETTEN, DONNAT POWELL, and GARY WHEELER all participated in this scheme with WALKER and LEVY by, among other things, participating in the submission of fraudulent applications for their own purported businesses and recruiting other prospective fraudulent PPP applicants into the scheme.  WALKER and LEVY received significant kickbacks from the applicants, including BAEZ, GETTEN, POWELL, and WHEELER, and shared portions of their kickbacks with recruiters, including some of the defendants.

The fraudulent applications submitted by the six defendants collectively sought more than $14.7 million in loans and resulted in the disbursement of more than $4.6 million from various financial institutions, all guaranteed by the SBA.

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WALKER, 65, of New Rochelle, New York, LEVY, 60, of the Bronx, New York, BAEZ, 50, of Freeport, New York, GETTEN, 62, of the Bronx, New York, POWELL, 48, of Paterson, New Jersey, and WHEELER, 46, of Mount Vernon, New York, are each charged with conspiracy to commit wire fraud affecting a financial institution.  That charge carries a maximum penalty of 30 years in prison.  WALKER and LEVY are also charged with a single count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.

The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding work of the FBI.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Jared Hoffman and Derek Wikstrom are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, 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._walker_et_al_complaint.pdf

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of two Complaints charging five defendants with the armed robberies of two Manhattan jewelry stores on the mornings of January 3, 2023, and May 20, 2023, in which approximately $2 million of jewelry was stolen at gunpoint.  The five defendants were arrested this morning in New York and New Jersey.  FRANK DIPIETRO, VINCENT CERCHIO, VINCENT SPAGNUOLO, and MICHAEL SELLICK were charged by Complaint in connection with the January 3, 2023, robbery of a jewelry store on Madison Avenue in Midtown Manhattan.  SAMUEL SORCE was charged by Complaint in connection with the May 20, 2023, robbery of a jewelry store on Elizabeth Street in lower Manhattan.  DIPIETRO, CERCHIO, SPAGNUOLO, SELLICK, and SORCE will be presented in Manhattan federal court later today before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said: “These five defendants allegedly carried out brazen and dangerous daylight robberies of jewelry stores in Manhattan, stealing about $2 million in jewelry at gunpoint.  Dressed as construction workers, the defendants allegedly sought to blend into the busy streets around them before pointing guns at the jewelry stores’ employees and carrying out about $2 million in stolen diamonds and other valuable pieces.  Thanks to the career prosecutors from my Office and our partners at the NYPD and the FBI, the defendants’ alleged armed robbery spree has been shut down.”

FBI Assistant Director in Charge Michael J. Driscoll said: “The defendants allegedly brazenly robbed Manhattan jewelry stores of approximately $2 million worth of merchandise at gunpoint.  Violent robberies, especially those with firearms, will not be tolerated by the FBI and our partners in law enforcement.  The arrests today should serve as a warning to anyone willing to engage in armed robberies – you will face the consequences.”

NYPD Commissioner Keechant L. Sewell said: “The swift arrests in this case reaffirm the NYPD’s steadfast commitment, with its law enforcement partners, to hold everyone accused of violent acts accountable.  The charges these defendants face reflect a callous disregard for life, and they will now be held accountable.  I thank and commend the U.S. Attorney for the Southern District, the New York Field Office of the FBI, and everyone who worked to achieve justice in this case.”

According to the allegations in the Complaints and other publicly filed documents:[1]

On the morning of January 3, 2023, DIPIETRO, CERCHIO, SPAGNUOLO, and SELLICK traveled to Midtown Manhattan together in multiple vehicles.  At approximately 10:20 a.m., an employee of a Midtown Manhattan jewelry store was preparing to place pieces of jewelry into the store’s street-level display case when DIPIETRO and SELLICK, dressed in construction vests, entered the building from Madison Avenue.  As shown in the image below, DIPIETRO pointed a gun at the employee and said “give it to me,” before SELLICK said, “turn around and get in the closet.” 

DIPIETRO and SELLICK fled the store with at least three pieces of high-end diamond jewelry, including an approximately 73-carat necklace (first picture below), an approximately six-carat ring (second picture below), and an approximately 17-carat pair of earrings (third picture below).  DIPIETRO, SELLICK, CERCHIO, and SPAGNUOLO then fled Midtown Manhattan.  Surveillance footage from the area of the robbery indicates that the defendants, including DIPIETRO and CERCHIO, had prepared for the robbery by “casing” the scene the day before.

On the morning of May 20, 2023, employees of a jewelry store on Elizabeth Street in Manhattan had just opened for business when DIPIETRO and SELLICK — again masked and wearing construction vests — entered the store’s street-level front door.  As shown in the image below, SELLICK pointed a gun at the store’s employees and ordered them to the ground, while DIPIETRO gathered jewelry.  After DIPIETRO and SELLICK fled the store with the stolen goods, they first got in a getaway car driven by SORCE — who was also dressed like a construction worker — before switching to a second getaway car driven by SPAGNUOLO.

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CERCHIO, 69, of Howard Beach, New York, DIPIETRO, 65, of Red Bank, New Jersey, SELLICK, 67, of Franklin Square, New York, SORCE, 25, of Florham Park, New Jersey, and SPAGNUOLO, 65, of Monmouth Beach, New Jersey, are each charged with one count of Hobbs Act robbery and one count of conspiracy to commit Hobbs Act robbery, each of which carry a maximum sentence of 20 years in prison, and one count of brandishing a firearm during and in connection with a crime of violence, which carries a mandatory minimum sentence of seven years in prison to be imposed in addition to any sentence imposed for the underlying Hobbs Act robbery. 

The minimum and maximum potential sentences 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 NYPD.  Mr. Williams also thanked the FBI for its assistance in this matter.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Alexandra S. Messiter and Justin Horton are in charge of the prosecution.

The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.

u.s._v._sorce_complaint.pdf u.s._v._dipietro_et_al_complaint.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSHUA RODRIGUEZ, a/k/a “Suave,” was found guilty at trial of the October 23, 2018, murder of Jaquan Millien in connection with a drug trafficking crime.  RODRIGUEZ shot and killed Millien in the Butler Houses in the Bronx, New York.  During the shooting, RODRIGUEZ shot Millien’s five-year-old son, who was with his father at the time.  Thankfully, his son survived.  The verdict followed a five-day trial before U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said: “Jaquan Millien was bringing his five-year-old son to an after-school program — something parents do in New York City every day — when he was gunned down in his building’s stairwell.  His son not only was shot, but he had to see his father die before his eyes.  Today, a unanimous jury returned a verdict within hours that found Rodriguez shot and killed Millien.  While the verdict cannot bring Millien back, we hope today’s verdict brings some measure of justice for Millien’s family and his community.  We remain committed to ridding our neighborhoods of gun violence, and today’s verdict, made possible by the career prosecutors of this Office and our FBI and NYPD law enforcement partners, is an important step in that fight.”

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 and into a stairwell.  RODRIGUEZ then fired multiple shots, killing Jaquan Millien and hitting Millien’s son in the arm.

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RODRIGUEZ, 31, of the Bronx, New York, was found guilty of one count of conspiracy to distribute marijuana, which carries a maximum sentence of 20 years in prison; one count of possessing marijuana with intent to distribute for remuneration, which carries a maximum sentence of five years in prison; and one count of using a firearm to commit murder during a drug trafficking crime, which carries a mandatory minimum of five 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 a defendant will be determined by the judge.  RODRIGUEZ is scheduled to be sentenced on September 19, 2023.

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.

Damián Williams, el Fiscal de los Estados Unidos del Distrito Sur de Nueva York, y Michael J. Driscoll, el Subdirector a Cargo de la Oficina Local en Nueva York del Buró Federal de Investigaciones ("FBI"), han anunciado hoy que JIMMY SOLANO-ARIAS, un ex guardia de seguridad armado en el Jacob K. Javits Federal Office Building ubicado en el 26 de Federal Plaza en Manhattan, fue formalmente acusado por un Gran Jurado Federal, por haber violado los derechos constitucionales de un solicitante de asilo (la "Víctima") por forzar a la víctima, y haber utilizado amenaza de muerte o lesiones corporales graves, para que la misma realizara sexo oral en SOLANO-ARIAS mientras dicha víctima estaba adentro de una oficina cerrada en el 26 de Federal Plaza.  SOLANO-ARIAS fue arrestado y se le imputó un cargo por Querella Federal, el 5 de mayo del 2023.  El caso está asignado al Juez de Distrito de los Estados Unidos, su Señoría, El Honorable Paul G. Gardephe.

El Fiscal de los Estados Unidos, Damián Williams ha dicho: "Como se ha alegado, Jimmy Solano-Arias, un guardia de seguridad armado que tenía la tarea de mantener seguros a los muchos empleados federales y visitantes del 26 de Federal Plaza, usó su uniforme y arma de fuego para obligar a una persona vulnerable que buscaba asilo a que le practicara sexo oral en su persona.  Esta Oficina se compromete a responsabilizar a todos aquellos que actúan bajo el manto de la ley cuando abusan de su poder e infringen los derechos constitucionales de los demás.  Alentamos a cualquier persona que pueda tener información adicional sobre la conducta de Jimmy Solano-Arias, que llame al FBI al 1-800-CALL-FBI".

El Subdirector a Cargo del FBI, Michael J. Driscoll ha dicho: "Como se alega, Solano-Arias, quien estaba empleado como guardia de seguridad armado asignado al 26 de Federal Plaza, agredió sexualmente a la víctima, que había venido al edificio para completar su papeleo de asilo.  Al hacerlo, violó los derechos constitucionales de la víctima a través de la agresión sexual forzada.  Tal y cómo la Acusación Formal por Gran Jurado de hoy debiera demostrar, el FBI nunca tolerará este tipo de actividad, y Solano-Arias se verá obligado a enfrentar las consecuencias de sus acciones".

Según las alegaciones en la Querella y la Acusación Formal por Gran Jurado, que se presentaron en el Tribunal Federal de Manhattan:[1]

En o alrededor del 4 de mayo del 2023, SOLANO-ARIAS, estaba empleado como guardia de seguridad con una empresa que tiene un contrato con el Servicio Federal de Protección para proporcionar servicios de seguridad armada en el 26 de Federal Plaza.  SOLANO-ARIAS estaba vestido de uniforme negro y gris de guardia de seguridad y llevaba su arma de fuego en la cintura, la cual le proveía su empleador.

En o alrededor del 4 de mayo del 2023, la víctima acudió al 26 de Federal Plaza con el fin de presentar una solicitud de asilo.  Una vez allí, SOLANO-ARIAS se ofreció a ayudar a la víctima con su documentación de asilo.  En vez de prestar ayuda, SOLANO-ARIAS, sin embargo, llevó a la víctima a una oficina cerrada en el segundo piso del 26 de Federal Plaza, donde SOLANO-ARIAS exigió que la víctima practicara sexo oral en SOLANO-ARIAS.  Cuando la víctima intentó resistirse a las exigencias de SOLANO-ARIAS, SOLANO-ARIAS tocó su arma de fuego, que estaba enfundada en su cintura.  Temiendo que SOLANO-ARIAS lo matara, la víctima, le practicó sexo oral a SOLANO-ARIAS, lo que causó dolor físico y daños a la víctima.  Después del ataque, cuando la víctima pudo salir de la oficina, inmediatamente denunció la agresión sexual a las autoridades.

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SOLANO-ARIAS, 42, del Bronx, Nueva York, se le ha imputado un cargo de privación de derechos bajo el manto de la ley, lo cual incluyó el secuestro y el abuso sexual agravado, lo que conlleva una condena máxima de cadena perpetua.

La posible condena máxima, está prescrita por el Congreso y se menciona aquí sólo con fines informativos, ya que cualquier sentencia del acusado será determinada por un juez.

El Fiscal Williams elogió el impresionante trabajo de investigación por el FBI.  El Fiscal Williams, al igual, pide que cualquier persona que tenga información con respecto a JIMMY SOLANO-ARIAS, se comunique con la línea de información del FBI llamando al 1-800-CALL-FBI.

El proceso de este caso está siendo dirigido por la Oficina de Derechos Civiles, una unidad en la División Penal.  La Fiscal Auxiliar Lindsey Keenan está a cargo del enjuiciamiento.

El cargo contenido en la Querella y en la Acusación Formal por Gran Jurado, es meramente una acusación, y el acusado es presunto inocente a menos y hasta que se demuestre su culpabilidad.

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[1] Lo que significa la frase introductoria, y la totalidad del texto de la Querella y la Acusación Formal por Gran Jurado y la descripción de la Querella y las acusaciones establecidas en este documento, constituyen sólo alegaciones, y cada hecho descrito debe tratarse como una alegación.

u.s._v._solano-arias_complaint.pdf u.s_v._solano-arias_indictment.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced today that CORNELIO CAZAREZ MADRID and SINOHE ANTONIO ARAJUO MEZA, both citizens of Mexico, were sentenced today to 38 and 30 years in prison, respectively, in connection with their importation of thousands of kilograms of cocaine, heroin, and methamphetamine into the United States.  The defendants pled guilty to the charges in the Indictment on July 30, 2019, which charged them with conspiring to import and distribute controlled substances into the United States.  U.S. District Judge Gregory H. Woods imposed today’s sentences.   

U.S. Attorney Damian Williams said: “Madrid and Meza were two prolific drug traffickers who worked with the Sinaloa Cartel to import thousands of kilograms of heroin, cocaine, and methamphetamine into this country and who relied on brutal violence to protect their drug organization.  Today’s sentence sends a message that anyone who participates in the Sinaloa Cartel’s assault on Americans by flooding our communities with poison will be held accountable and will face significant consequences.  This Office is committed to addressing the ongoing threat posed to the health and safety of all Americans by the Sinaloa Cartel and every partner in its distribution chain.”

According to the allegations in the Indictment, court transcripts, sentencing submissions, and other publicly filed documents:

CORNELIO CAZAREZ MADRID and SINOHE ANTONIO ARAJUO MEZA ran an illicit drug business in coordination with the Sinaloa Cartel — a notorious and violent drug trafficking organization based out of Sinaloa, Mexico.  The defendants sent massive quantities of narcotics to the United States.  Between 2015 and 2016, the defendants and their coconspirators were responsible for trafficking more than 2,000 kilograms of cocaine, more than 130 kilograms of heroin, and more than 300 pounds of methamphetamine.  During the course of the investigation, the Drug Enforcement Administration (“DEA”) seized approximately 675 kilograms of cocaine, 70 kilograms of heroin, and 26 kilograms of methamphetamine.  As the defendants flooded the United States with dangerous and addictive substances, they and other members of the Cartel made millions of dollars.  The DEA seized $3.4 million in cash through its investigation of the defendants and their coconspirators. 

This sprawling drug trafficking operation was not only dangerous in its importation of thousands of kilograms of poison into the United States but also in its use of firearms and violence, including murder, to protect the operation.  Through the course of the investigation, the DEA seized seven guns connected with the defendants’ drug shipments in the United States.  As an example of the violence used by this conspiracy, in April 2015, two Cartel associates exchanged messages with MADRID concerning two individuals suspected of cooperating with law enforcement (the “Victims”).  One of the Cartel associates then sent MADRID messages showing that the Victims had been brutally murdered and sent MADRID photographs of the Victims shot dead in a pool of blood. 

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MADRID and MEZA, both 42 and citizens of Mexico, were convicted of one count of conspiracy to import controlled substances and one count of distribution of controlled substances.  In addition to the prison terms, MADRID and MEZA were each additionally sentenced to five years of supervised release.  

Mr. Williams praised the outstanding work of the DEA’s Los Angeles Field Division, the New York Strike Force, the Hawthorne Police Department, the Los Angeles County Sheriff’s Department, the DEA’s Guatemala Country Office, the DEA’s Costa Rica Country Office, and the DEA’s Bogota Country Office.  Mr. Williams also thanked the Justice Department’s Office of International Affairs for their assistance in securing the extradition of the defendants.    

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Amanda L. Houle and Rebekah Donaleski are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that REGINALD FOWLER was sentenced to 75 months in prison for arranging to process more than $700 million of unregulated transactions on behalf of cryptocurrency exchanges, in violation of federal anti-money laundering laws, lying to U.S. banks to do so, and defrauding the Alliance of American Football (“AAF”), a short-lived professional football league, in connection with his acquisition of a significant ownership stake in the league. 

U.S. Attorney Damian Williams said: “Reginald Fowler evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank.  He did so by lying to legitimate U.S. financial institutions, which exposed the U.S. financial system to serious risk.  He then victimized a professional football league by lying about his net worth in exchange for a substantial portion of the league.  Let it be clear: this Office is committed to prosecuting people who lie to banks and skirt the law as a means to conduct their business.”

According to court filings and statements made in court proceedings:[1]

In or about February 2018, REGINALD FOWLER established Global Trading Solutions LLC (“GTS”) and began working with Crypto Capital and other related companies (the “Crypto Companies”), which were operated by Israeli nationals.  The Crypto Companies marketed themselves as providing a seamless way for individuals to exchange standard currency for cryptocurrency.  A number of cryptocurrency exchanges began using the Crypto Companies to process their fiat-to-cryptocurrency transactions.

Because banks were reluctant to handle cryptocurrency transactions, in reality, the Crypto Companies could not access legitimate financial institutions.  Instead, the Crypto Companies lied to banks in order to open accounts that were used to process cryptocurrency transactions without the banks’ knowledge.  FOWLER opened dozens of such accounts in the United States and around the world.  He did not disclose GTS’s involvement with the Crypto Companies and the fact that it was operating as a payment processor for hundreds of millions of dollars in cryptocurrency transactions.  FOWLER also directed other individuals to include false information on wire transfer instructions to further deceive banks about the nature of GTS’s business.  In less than 10 months, FOWLER processed approximately $750 million in cryptocurrency transactions in various currencies.  At no point were FOWLER, GTS, nor any of the Crypto Companies ever licensed as a money transmitting business in the United States, as required by federal law.      

Additionally, in 2018, FOWLER defrauded the AAF in connection with his acquisition of a significant ownership stake in the league.  In the course of negotiating his investment in the AAF, FOWLER falsely claimed personal ownership of GTS funds that, in fact, belonged to clients of FOWLER’s illegal money transmission service established in support of the Crypto Companies.  As he did when opening bank accounts, FOWLER lied to AAF executives, telling them that the funds in the GTS bank accounts derived from real estate investments as well as government contracts and that the tens of millions of dollars in the GTS accounts were liquid assets he could use to invest in the AAF.  FOWLER did not disclose his involvement with the Crypto Companies.  Moreover, although FOWLER experienced account closures and government seizure of GTS funds in the month leading up to his investment in the AAF, FOWLER did not disclose those facts to the AAF.  FOWLER acquired a significant investment stake in the AAF in November 2018 yet was unable to fund that investment.  Based, in part, on FOWLER’s lies, the AAF declared bankruptcy in about April 2019, ending the season and dashing the hopes of FOWLER’s victims.

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In addition to the prison sentence, FOWLER, 64, of Chandler, Arizona, was ordered to pay forfeiture of $740,249,140.52 and restitution in the amount of $53,189,261.80 to the AAF.

Mr. Williams praised the outstanding investigative work of Special Agents from the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad and Special Agents from the Internal Revenue Service-Criminal Investigations.

The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, Samuel Rothschild, and Sheb Swett are in charge of the case.

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[1] As to FOWLER’s co-defendants, the entirety of the text of the Indictments and the descriptions in the Indictments set forth below constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that JIMMY SOLANO-ARIAS, a former armed security guard at the Jacob K. Javits Federal Office Building located at 26 Federal Plaza in Manhattan, was indicted in federal court for violating the constitutional rights of an asylum seeker (the “Victim”) by forcing the Victim, through the threat of death or serious bodily injury, to perform oral sex on SOLANO-ARIAS while inside a locked office in 26 Federal Plaza.  SOLANO-ARIAS was arrested and charged by Complaint on May 5, 2023.  The case is assigned to U.S. District Judge Paul G. Gardephe.

U.S. Attorney Damian Williams said: “As alleged, Jimmy Solano-Arias, an armed security guard who was tasked with keeping the many federal employees and visitors to 26 Federal Plaza safe, instead used his uniform and firearm to force a vulnerable individual who was seeking asylum to perform oral sex on him.  This Office is committed to holding all those who act under color of law accountable when they abuse their power and violate the constitutional rights of others.  We encourage anyone who may have additional information into Jimmy Solano-Arias’s conduct to please call the FBI at 1-800-CALL-FBI.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, Solano-Arias, who was employed as an armed security guard assigned to 26 Federal Plaza, sexually assaulted the victim, who had come to the building to complete his asylum paperwork.  In doing so, he violated the victim’s constitutional rights through forced sexual assault.  As today’s indictment should demonstrate, the FBI will never tolerate this type of activity, and Solano-Arias will be forced to face the consequences of his actions.”

According to the allegations in the Complaint and Indictment that were filed in Manhattan federal court:[1]

On or about May 4, 2023, SOLANO-ARIAS was employed as a security guard by a company that contracts with the Federal Protective Service to provide armed security services at 26 Federal Plaza.  SOLANO-ARIAS was wearing a black and gray security guard uniform and carrying his employer-issued firearm on his waistband.

On or about May 4, 2023, the Victim went to 26 Federal Plaza for the purpose of submitting an asylum application.  Once there, SOLANO-ARIAS offered to assist the Victim with his asylum paperwork.  Instead of providing assistance, however, SOLANO-ARIAS led the Victim to a locked office on the second floor of 26 Federal Plaza, where SOLANO-ARIAS demanded that the Victim perform oral sex on SOLANO-ARIAS.  When the Victim attempted to resist SOLANO-ARIAS’s demands, SOLANO-ARIAS touched his firearm, which was holstered on his waist.  Fearing that SOLANO-ARIAS would kill the Victim, the Victim performed oral sex on SOLANO-ARIAS, which caused physical pain and injury to the Victim.  After the assault, when the Victim was able to leave the office, he immediately reported the sexual assault to law enforcement.

*                *                *

SOLANO-ARIAS, 42, of the Bronx, New York, is charged with one count of deprivation of rights under color of law, which involved kidnapping and aggravated sexual abuse, and which carries a maximum sentence of life 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.  Mr. Williams requests that any individuals who have information with respect to JIMMY SOLANO-ARIAS contact the FBI Tip Line at 1-800-CALL-FBI.

The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorney Lindsey Keenan is in charge of the prosecution.

The charge contained in the Complaint and the Indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and Indictment and the description of the Complaint and Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

u.s_v._solano-arias_indictment.pdf u.s._v._solano-arias_complaint.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced that FRANCISCO JAVIER MECINA BARRERA, a/k/a “Angel,” pled guilty today to conspiring to import and distribute large quantities of methamphetamine and to using, carrying, and possessing a firearm which was brandished in furtherance of those drug crimes.  The charges stem from MECINA BARRERA’s leadership of a large-scale methamphetamine distribution and importation operation he called the “Cartel de Houston” — Spanish for “Houston Cartel” — or “CDH.”  MECINA BARRERA pled guilty before U.S. District Judge Victor Marrero.

U.S. Attorney Damian Williams said: “The defendant was the leader of a drug and firearms trafficking organization that smuggled large numbers of firearms from the United States into Mexico.  The organization then traded the firearms for hundreds of kilograms of methamphetamine, which were distributed throughout the United States.  Today’s guilty plea reaffirms our Office’s commitment to hold large-scale international drug and firearms traffickers accountable for their crimes.”

According to court filings and statements made in court proceedings:

From at least in or about March 2020 to at least in or about April 2021, FRANCISCO JAVIER MECINA BARRERA was the leader of an international narcotics importation and distribution organization that imported hundreds of kilograms of crystal and liquid methamphetamine from Mexico into Texas and further distributed it throughout the United States, including to New York.  MECINA BARRERA called his group the Cartel de Houston, or “CDH,” because it was based in Houston and had ties to Mexico-based drug trafficking cartels. 

CDH was also an international supplier of firearms.  At MECINA BARRERA’s direction, members of CDH smuggled numerous firearms into Mexico and delivered them to Mexico-based drug traffickers, often in exchange for methamphetamine that they then smuggled back into the United States for distribution.  MECINA BARRERA and other members of CDH also used firearms to threaten and intimidate a narcotics customer of CDH who owed MECINA BARRERA money for drugs. 

After establishing CDH, MECINA BARRERA appointed co-defendant Adalid Cabrera Huato, a/k/a “China,” as his right-hand man in Houston, and MECINA BARRERA recruited others, including co-defendants GIOVANNI DE LA MORA and JAIME SANTILLANO, to acquire and transport numerous guns from the United States into Mexico, trade them for substantial quantities of methamphetamine, and transport the drugs into the United States, where they would distribute them throughout the country, including to the Bronx, New York.  MECINA BARRERA provided his co-conspirators with vehicles and instructed them on how to hide the guns and drugs in the fuel tank to avoid detection.  MECINA BARRERA also utilized a Mexico-based religious figure known as “Lucifer” to bless the CDH’s members and drugs as they were crossing the border.

*                *                *

MECINA BARRERA, 31, of Michoacan, Mexico, and Houston, Texas, pled guilty to (i) conspiracy to distribute and possess with intent to distribute methamphetamine; (ii) conspiracy to illegally import methamphetamine into the United States; and (iii) use, carrying, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy and the narcotics importation conspiracy, which was brandished.  The charges carry a mandatory minimum sentence of 17 years in prison and a maximum sentence of life in prison. 

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

CABRERA HUATO, DE LA MORA, and SANTILLANO previously pled guilty to conspiracy to distribute and possess with intent to distribute methamphetamine.  CABRERA HUATO is scheduled to be sentenced on June 23, 2023.  DE LA MORA and SANTILLANO were previously sentenced by Judge Marrero to 90 months and 86 months in prison, respectively.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-drive, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration (“DEA”), the Department of Homeland Security, Homeland Security Investigations New York City Border Enforcement Security Task Force, which is comprised of local, state, and federal law enforcement agencies, including the New York City Police Department.  Mr. Williams also thanked the Department of Alcohol, Tobacco, Firearms, and Explosives, the Houston Police Department, and the DEA Houston Division for their invaluable assistance in this investigation.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Jane Y. Chong, Michael R. Herman, and Mitzi S. Steiner, with the assistance of Paralegal Specialist Jacqueline Hauck, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today an Indictment charging CURTIS ELLINGTON with enticing a minor to engage in unlawful sexual activity and committing this offense while being a registered sex offender.  ELLINGTON was arrested in Kansas on April 27, 2023, and detained pending his transfer to White Plains federal court.  Today, ELLINGTON was arraigned in White Plains and detained.

U.S. Attorney Damian Williams said: “Curtis Ellington, a convicted rapist, was allegedly undeterred by his previous involvement with the criminal justice system.  This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.  We will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.  We encourage anyone who may have additional information into Curtis Ellington’s conduct to please call the FBI at 1-800-CALL-FBI.” 

As alleged in the Complaint filed on April 26, 2023, and the Indictment filed on May 24, 2023, in White Plains federal court:[1]

CURTIS ELLINGTON was convicted on or about January 12, 2007, in Orange County Court of Rape in the First Degree: Intercourse with A Person Less Than 11 Years Old and sentenced to seven years in prison.  As a result of this conviction, ELLINGTON is required to register as a sex offender. 

On or about April 7, 2023, ELLINGTON slept at the home of a 15-year-old minor (“Victim-1”) and, while there, engaged in sexual activity with Victim-1.  Prior to engaging in sexual activity with Victim-1, ELLINGTON and Victim-1 engaged in numerous communications via Instagram in which ELLINGTON, who used the Instagram screen name “Godson,” discussed his desire to engage in sexual activity with Victim-1.

*                *                *

ELLINGTON, 33, of Junction City, Kansas, is charged in Count One with enticing a minor to engage in unlawful sexual activity and in Count Two with engaging in this offense while a registered sex offender.  Count One carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  Count Two carries a mandatory sentence of 10 years in prison, which must be imposed to run consecutive to any sentence imposed in connection with Count One. 

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 stated that the investigation is ongoing.  Mr. Williams requests that any individuals who have information with respect to CURTIS ELLINGTON contact the Federal Bureau of Investigation (“FBI”) Tip Line at 1-800-CALL-FBI.

Mr. Williams praised the efforts of the FBI, the Geary County Sheriff’s Office, the U.S. Attorney’s Office for the District of Kansas, and the Middletown Police Department in connection with this investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Marcia S. Cohen is in charge of the prosecution.  

The charges contained in the Complaint and the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and Indictment and the description of the Complaint and Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

u.s._v._ellington_complaint.pdf u.s._v._ellington_indictment.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DIEGO MATEO, a/k/a “Casa,” was sentenced to 27 years in prison in connection with his participation in the Black Mob set of the Latin Kings and their distribution of narcotics, including heroin, fentanyl, and cocaine.  MATEO pled guilty on February 23, 2022, before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “For two decades, Mateo ran the largest and most violent set of the Latin Kings in the New York area.  He recruited hundreds of young men into his gang and used them to run a massive drug operation that committed countless acts of violence.  Today’s sentencing — along with the other significant sentences that have been imposed in this case — proves that gang life is not glamorous and will lead to years in prison.”     

According to public filings and statements made in court:

The Black Mob is a New York-based set, or “tribe,” of the nationwide Latin Kings gang.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.

MATEO was the highest-ranking member of the Black Mob.  He founded the gang in 2002 and then grew the Black Mob into the largest Latin Kings set in the New York area with a power base built on massive amounts of drug trafficking and a reputation for violence.  Prior to the instant prosecution, the Black Mob had approximately 300 members.  The fear and power wielded by the Black Mob amplified MATEO’s own personal reputation, making him, at one point, the highest-ranking Latin King in the entire East Coast.  As the leader of the Black Mob, MATEO oversaw the Black Mob’s operations and also ordered and participated in acts of violence and narcotics trafficking.  This violence included multiple arsons and a November 18, 2012, shooting at a gang rival’s funeral that was ordered by MATEO.  Three of the deceased’s family members were shot.

In December 2019, 17 members and associates of the Black Mob were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.  In April 2021, seven additional members and associates of the gang were charged, including MATEO.  The defendants in this case have included the entire senior leadership of the gang and its most violent members.  In addition to today’s sentencing of MATEO, the sentences of the Black Mob leadership have included CARMELO VELEZ (228 months in prison), CHRISTOPHER RODRIGUEZ (210 months in prison), ANGEL LOPEZ (240 months in prison), LUIS SEPULVEDA (180 months in prison), EMMANUEL BONAFE (216 months in prison), MARK WOODS (228 months in prison), WILLIAM GONZALEZ (204 months in prison), ALBERTO BORGES (204 months in prison), RICARDO RICUARTE (168 months in prison), JUAN HERNANDEZ (192 months in prison), RAUL CUELLO (168 months in prison), and PAUL CUELLO (168 months in prison).

MATEO pled guilty to one count of conspiracy to distribute and possess with intent to distribute narcotics.  In connection with his guilty plea, MATEO further stipulated to his involvement in multiple acts of violence: the November 18, 2012, shooting at a gang rival’s funeral and a 2016 arson of a commercial wedding venue in Connecticut.

*                *                *

In addition to the prison term, MATEO, 46, of the Bronx, New York, was sentenced to five 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 Narcotics Unit.  Assistant U.S. Attorneys Adam Hobson, David Robles, Elinor Tarlow, and Patrick Moroney are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, the Special Agent in Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the filing of a Complaint in Manhattan federal court charging JUAN EFREN PAULINO with conspiracy to distribute narcotics and distribution of narcotics.  PAULINO was arrested last night in the Washington Heights neighborhood of Manhattan.  Today, PAULINO was presented before United States Magistrate Judge Katharine H. Parker and detained. 

U.S. Attorney Damian Williams said: “Last night’s seizure not only removed substantial quantities of deadly narcotics from the streets, but it also hit drug dealers in their pockets and potentially saved the lives of countless New Yorkers suffering from addiction.  Thanks to the work of our law enforcement officers, another alleged narcotics trafficker’s operation has been disrupted.” 

DEA Special Agent in Charge Frank A. Tarentino III said: “This pill mill was a ticking time bomb for New Yorkers.  With the amount of fentanyl seized, potentially countless lethal doses were taken off the streets.  This multi-million-dollar seizure was in a prime location for distribution as the operation was being pumped out of the basement of an apartment building near major thoroughfares.  I applaud the hard work and resolve of the agents and officers who worked on this investigation.”

As alleged in the Complaint filed today in Manhattan federal court:[1]

On or about May 31, 2023, law enforcement officers executed a search of the basement of a residential building located in the Washington Heights neighborhood of Manhattan.  During the course of that search, they encountered PAULINO and large quantities of illegal narcotics as well as manufacturing and distribution equipment used to press illegal narcotics into pill form.  In particular, law enforcement officers encountered three commercial-grade pill presses, one commercial mixer, approximately 200,000 pills, and blocks, baggies, and buckets of powder.  The following is a photograph of the various substances seized:    

Although lab testing is pending for the pills and powders discovered during the search, preliminary spectrometry tests reveal that the powders have tested positive for, among other things, fentanyl, methamphetamine, and cocaine.

In post-arrest statements, PAULINO stated that he was in the basement of the building to obtain a sample of cocaine to give to someone.  Additionally, a preliminary review of PAULINO’s cellphone, seized upon his arrest, reveals numerous photographs of what appear to be narcotics, including many of the same types of narcotics found during the search. 

*                *                *

PAULINO, 52, of New York, New York, is charged in Count One with conspiracy to distribute narcotics and in Count Two with narcotics distribution.  Both Count One and Count Two carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the El Dorado Task Force, which is comprised of law enforcement officers from the DEA, HSI, and the New York City Police Department, in connection with this investigation.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney Maggie Lynaugh 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.

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[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._paulino_complaint.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction of KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), and ANDREW BROWN, a/k/a “Drew Brown,” the former financial advisor for LEEBA, for defrauding union members by misappropriating money from LEEBA’s Annuity Fund.  WYNDER was also convicted of personal income tax evasion and conspiring to evade federal taxes, including payroll taxes owed by LEEBA and its employees.  Steven Whittick, LEEBA’s former treasurer and a former police officer for New York City’s Department of Environmental Protection (“DEP”), previously pled guilty to conspiring to commit tax evasion and making false statements to law enforcement.  WYNDER and BROWN were convicted after a five-day jury trial before U.S. District Judge P. Kevin Castel and are scheduled to be sentenced on October 18, 2023, by Judge Castel.    

U.S. Attorney Damian William said: “As the jury unanimously found, Kenneth Wynder and Andrew Brown raided a union-sponsored retirement plan for years, placing their personal interest over the union members they were duty bound to look out for.  The jury also found that Wynder then evaded taxes on income he obtained from the union, including as a product of their theft from the union members’ retirement accounts.”

According to the Indictment, Superseding Indictment, the underlying complaints filed in this case, as well as other publicly available information, prior court filings, and evidence presented during the trial in Manhattan federal court:

Law Enforcement Employees Benevolent Association and the Annuity Fund

LEEBA is a labor union that has acted as the collective bargaining representative principally for law enforce­ment personnel at various City agencies and has entered into agreements on behalf of those law enforcement employees, including agreements for insurance and retirement benefits.  The City agencies whose employees LEEBA represented included, at various times, DEP, the Department of Sanitation (“Sanitation”), and the Department of Transporta­tion (“Transportation”).  

The Annuity Fund is a LEEBA fund that received monthly contributions from the City for the benefit of LEEBA’s members and maintained separate accounts for each fund member.  These accounts were functionally similar to employer-sponsored 401(k) retirement accounts.  WYNDER was a Trustee of the Annuity Fund and signatory to agreements that governed the fund, and BROWN was a Plan Administrator and Financial Advisor of the Annuity Fund.  Under the relevant agreements and plans, the money in the Annuity Fund could be used for no purpose other than funding individual members’ retirement accounts and defraying reasonable administra­tive expenses of the Annuity Fund itself.

WYNDER

WYNDER, a former New York State Trooper, is the founder and former President of LEEBA and a former member of LEEBA’s board of directors.  WYNDER also formerly served as the Fund Administrator of the Annuity Fund and as a member of the board of trustees of the Annuity Fund, pursuant to which he owed a fiduciary duty to act in the best interests of the Annuity Fund and its account holders.  WYNDER also was on the board of trustees of the LEEBA Welfare Fund (the “Welfare Fund,” and collectively with the Annuity Fund, the “LEEBA Funds”), which provided supplemental insurance benefits to its members.  While occupying those positions, WYNDER centralized and controlled major decision-making authority for LEEBA and the LEEBA Funds, often acting without the proper approval of their respective boards of directors or trustees.  WYNDER’s de facto dominance of LEEBA and the LEEBA Funds enabled him to make decisions in his own self-interest and contrary to the interests of the Annuity Fund and individual members.

BROWN

BROWN, the founder of a Westchester-based financial services company, is the former Benefits Administrator and insurance broker for LEEBA and the LEEBA Funds.  As a LEEBA Annuity Fund Plan Administrator and Financial Advisor, BROWN helped manage the investments in the Annuity Fund, receiving a commission for his services, and had a responsibi­lity to act in the best interest of LEEBA’s members.

            WYNDER’s and BROWN’s Fraud Scheme

From at least in or about 2012 up to and including 2020, WYNDER and BROWN participated in a scheme to steal, embezzle, and misappropriate money from the Annuity Fund and individual members’ retirement accounts.  Specifically, WYNDER and BROWN made hundreds of thousands of dollars of fraudulent transfers from the Annuity Fund to LEEBA’s operating account, which WYNDER controlled, and WYNDER regularly used the funds, once transferred from the Annuity Fund, to enrich himself at union members’ expense, including through unauthorized and excessive checks to himself and cash withdrawals for his own benefit and to pay insurance benefits for which BROWN received commissions.  In addition, WYNDER caused the union to pay for various personal expenses such as the purchase of a Lexus automobile, travel expenses to Dallas to watch a Dallas Cowboys football game, and a sailing trip, all paid for by the union, and none of which were contemporaneously reported to the Internal Revenue Service (“IRS”), as required.         

To accomplish this fraudulent scheme, WYNDER and BROWN, acting in their capacity as the Annuity Fund’s Plan Administrators, repeatedly made false and misleading statements to a third-party retirement plan manager that served as the custodian for the Annuity Fund and the retirement accounts of individual union members, including through emails and faxes that WYNDER and BROWN used to withdraw increasingly large sums of money from the Annuity Fund, effectively causing such withdrawals to be made from the retirement accounts of individual members.  From in or about 2014 through in or about 2019, WYNDER and BROWN caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts.  Without these improper withdrawals from the Annuity Fund, the LEEBA operating account would have been insolvent and would have had insufficient funds to pay for WYNDER’s excessive checks to himself and cash withdrawals and the personal expenses he caused to be charged to that account, as well as to pay for benefits for which BROWN made commissions as an insurance broker.

In addition, throughout the duration of this scheme, WYNDER and BROWN repeatedly made and approved false and misleading statements to LEEBA’s members and prospective members about how they were purportedly using and protecting their retirement accounts and the LEEBA Annuity Fund.  WYNDER further concealed the scheme by causing LEEBA to fail to timely file mandatory reports and financial disclosures with the City and public reports to the Annuity Fund’s members and by making false statements to the Annuity Fund’s auditors and accountants.

            WYNDER’s Tax Evasion

From at least in or about 2015 through 2019 WYNDER participated in a conspiracy with LEEBA’s then-Treasurer, Steven Whittick, to cause LEEBA to make payments to WYNDER and Whittick, by check and in cash, and to conceal those payments from the IRS.  WYNDER further conspired to ensure that such payments were made outside of LEEBA’s payroll processor.  WYNDER then concealed these payments from the IRS — including off-the-books payments of more than $400,000 — in order to evade his own personal income taxes and to evade the payroll taxes that were owed by LEEBA and certain LEEBA employees.

*                *                *

WYNDER, 59, of Stroudsburg, Pennsylvania, and BROWN, 55, of Putnam Valley, New York, were each convicted of one count of conspiracy of commit wire fraud and one count of wire fraud, each of which carry a maximum penalty of 20 years in prison.  WYNDER was also convicted of one count of conspiracy to defraud the United States and four counts of tax evasion, each of which carry a maximum penalty of five years in prison.

On November 17, 2021, Whittick was sentenced to 28 months in prison for conspiring to commit tax evasion and making false statements and was ordered to pay $179,766.80 in restitution to the IRS.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the Department of Labor Office of Labor-Management Standards, and IRS-Criminal Investigations.  Mr. Williams also thanked the New York City Comptroller’s Office and the New York City Department of Investigation for their assistance.

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark, Kedar S. Bhatia, Andrew Rohrbach, and David R. Lewis were assigned to the prosecution, with the assistance of Paralegal Specialists Connor Hamill and Lauren Scarff.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ILONA DZHAMGAROVA and ARTHUR ARCADIAN were sentenced today by U.S. District Judge Mary Kay Vyskocil for their roles in an immigration fraud conspiracy.  DZHAMGAROVA, a leader of the scheme and an immigration lawyer, was sentenced to two years in prison, and ARCADIAN, also an attorney, was sentenced to six months in prison. 

U.S. Attorney Damian Williams said: “Out of her Brighton Beach law office, Dzhamgarova, assisted by Arcadian and others, invented offensive lies to cheat our country’s asylum process.  The asylum system is designed to help some of the world’s most vulnerable people — those who justifiably fear imprisonment, assault, torture, or death because of their religion, nationality, ethnicity, political views, gender, or sexual orientation.  When attorneys cynically exploit those fears and line their pockets by preparing and filing fraudulent documents and coaching clients to lie under oath, they abuse the trust placed in them and undermine the asylum system.”

According to the Indictment, other documents filed in this case, and statements made in open court:

Between November 2018 and December 2021, ILONA DZHAMGAROVA, an immigration attorney, ran the Dzhamgarova Firm, an immigration services firm based in Brooklyn, New York.  The Dzhamgarova Firm worked with clients — primarily aliens from Russia and the Commonwealth of Independent States — seeking visas, asylum, citizenship, and other forms of legal status in the United States.  Among other things, the Dzhamgarova Firm advised certain of its clients regarding the manner in which they were most likely to obtain asylum in this country, fully understanding that those clients did not legitimately qualify for asylum.  The firm also prepared and submitted to United States Citizenship and Immigration Services (“USCIS”) clients’ fraudulent Form I-589 asylum applications, asylum affidavits — statements of an asylum applicant’s personal history and claimed basis for asylum, often including allegations of past persecution — and related supporting documentation.  Members and associates of the firm also coached certain clients to lie under oath during interviews conducted by USCIS Asylum Officers and provided legal representation to their clients during various immigration proceedings.

Among other things, DZHAMGAROVA advised clients to seek asylum by falsely claiming that they were members of the Lesbian, Gay, Bisexual, Transgender, and Queer community who suffered persecution in their native countries, when DZHAMGAROVA fully understood that these clients were not members of that community and suffered no such persecution.  Additionally, DZHAMGAROVA and her husband, ARTHUR ARCADIAN, also an attorney, prepared and submitted clients’ fraudulent asylum applications and affidavits to USCIS, under penalty of perjury, fully understanding that these documents at times contained material falsehoods.  DZHAMGAROVA, ARCADIAN, and others, including co-defendant Igor Reznik, also coached certain clients to lie in asylum interviews conducted by USCIS asylum officers and represented these clients as they lied under oath during immigration proceedings.

The Dzhamgarova Firm also employed writers, including Reznik, who knowingly concocted and drafted clients’ fraudulent asylum affidavits so that they could be submitted as part of clients’ asylum applications.  These affidavits, which were designed to support clients’ persecution claims, conveyed narrations of clients’ personal histories that were filled with falsehoods, including events and incidents of alleged persecution that were fabricated by Reznik and his co-conspirators. 

*                *                *

DZHAMGAROVA, 46, and ARCADIAN, 44, both of Brooklyn New York, previously pled guilty on January 25, 2023, before Judge Vyskocil to immigration fraud conspiracy.  As part of their sentences, DZHAMGAROVA was sentenced to two years of supervised release, ordered to forfeit $540,000, and ordered to pay a $15,000 fine, and ARCADIAN was sentenced to two years of supervised release, ordered to forfeit $1,500, and ordered to pay a $5,000 fine.

Reznik, 41, of New York, New York, who also previously pled guilty to immigration fraud conspiracy, is scheduled to be sentenced by Judge Vyskocil on June 7, 2023. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Eurasian Organized Crime Task Force, USCIS’s New York Asylum Office and Fraud Detection and National Security Unit, and Homeland Security Investigations.  Mr. Williams thanked United States Customs and Border Protection for its assistance.

This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys David R. Felton and Jonathan E. Rebold are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, and Paul Kiecker, the Administrator of the Food Safety and Inspection Service of the U.S. Department of Agriculture (“USDA-FSIS”), announced that the United States has sued N and M Food Wholesale Supply, Inc. (“N&M”) and its owners AHMED OMAR, ELSAYED HALIM, and ASHRAF MOUSA (collectively, the “Defendants”) for repeatedly preparing and selling uninspected or misbranded poultry products in violation of the Poultry Products Inspection Act (“PPIA”).  The U.S. has simultaneously entered into a consent decree, approved by U.S. District Judge Denise L. Cote, which requires the Defendants to comply with the PPIA and complete mandatory training and imposes significant civil penalties for any future violations.

U.S. Attorney Damian Williams said: “New Yorkers should be able to eat food from food carts and other retailers with the peace of mind that upstream wholesalers have complied with USDA safety regulations.  Through this lawsuit, we are sending a message to food wholesalers that they must adhere to the law in order to protect the public health.”

USDA-FSIS Administrator Paul Kiecker said: “Every individual deserves the assurance that the food they purchase is properly inspected and safe to eat.  FSIS remains committed to public health and we will take swift action to protect American consumers.”

The PPIA protects public health by imposing requirements on food suppliers regarding the inspection, processing, labeling, and packaging of poultry and poultry products.  These requirements give consumers confidence in the safety of poultry products that they purchase and allow public health officials to trace food safety problems to their source.

According to the complaint filed in Manhattan federal court:

The Defendants repeatedly violated the PPIA by offering for sale over 900 pounds of misbranded poultry that had not been federally inspected.  On multiple occasions, the Defendants prepared marinated chicken kebab skewers in a processing room in N&M’s warehouse without federal inspection.  These products were prepared for sale to N&M’s wholesale customers, including food cart owners, who sell the chicken to consumers.  Despite repeated warnings from USDA-FSIS, N&M continued to offer uninspected poultry products for sale and violate the law.  For example, in May 2021, N&M — which does not have a grant of federal inspection to process poultry products — purchased approximately 280 pounds of chicken leg meat and cut and marinated the chicken in its warehouse before returning it to its original packaging.  N&M then offered this uninspected and misbranded product for sale to wholesale customers.  

In this consent decree, the Defendants admit and accept responsibility for having repeatedly sold or offered for sale non-federally inspected and misbranded poultry products to wholesale customers, in violation of the PPIA.  Among other instances, on or about November 12, 2018, August 26, 2020, February 10, 2021, and May 24, 2021, the Defendants processed, sold, and/or offered for sale non-federally inspected poultry products.  Defendants further admit and accept responsibility for the fact that, on at least one occasion, the poultry product was also misbranded and falsely marked as federally inspected.

Pursuant to the consent decree, the Defendants are enjoined from selling or transporting any uninspected poultry products that are required to be inspected and passed by USDA, selling any mislabeled poultry products, preparing or processing poultry or poultry products in unsanitary conditions, not keeping records regarding poultry or poultry product business transactions, and engaging in any other conduct that would violate the PPIA.  The Defendants are subject to additional actions, including civil monetary penalties and other relief, if they violate the provisions of the consent decree.

*                *                *           

Mr. Williams thanked the Food Safety and Inspection Service of the U.S. Department of Agriculture for its efforts on this matter.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant U.S. Attorney Mollie Kornreich is in charge of the case.

N&M Complaint

 

N&M Consent Decree

 

 

A federal court in the Southern District of New York today unsealed a complaint charging two individuals with acting and conspiring to act in the United States as unregistered agents of the People’s Republic of China (PRC), conspiring to bribe and bribing a public official, and conspiracy to commit money laundering.

According to the complaint, John Chen, aka Chen Jun, 70, a Los Angeles resident and former citizen of the PRC, and Lin Feng, a Los Angeles resident and PRC citizen, allegedly participated in a PRC Government-directed scheme targeting U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC. Chen and Feng were arrested today in the Central District of California.

“The Chinese government has yet again attempted, and failed, to target critics of the PRC here in the United States,” said Attorney General Merrick B. Garland. “We allege the defendants in this case attempted to bribe someone they thought was an IRS agent in order to further the Chinese government’s campaign of transnational repression in the United States. But the individual they attempted to bribe was in fact an undercover law enforcement agent, and both defendants were arrested this morning. The Justice Department will continue to investigate, disrupt, and prosecute efforts by the PRC government to silence its critics and extend the reaches of its regime onto U.S. soil. We will never stop working to defend the rights to which every person in the United States is entitled.”

“The Department of Justice continues to expose the Chinese government’s brazen attempts to perpetrate transnational repression, this time through attempted bribery,” said Deputy Attorney General Lisa O. Monaco. “As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

“China’s government has once again shown its disregard for the rule of law and international norms,” said FBI Director Christopher Wray. “The FBI will not tolerate CCP repression — its efforts to threaten, harass, and intimidate people — here in the United States. We will continue to confront the Chinese government’s efforts to violate our laws and repress the rights and freedoms of people in our country. No other nation poses as severe a threat to the democratic values of the United States as the government of the People’s Republic of China,” said FBI Deputy Director Paul Abbate. “The FBI will not stand by as the PRC attempts to weaponize our institutions and programs and attack the rights of those on U.S. soil. Any attempt to repress or harass individuals runs directly counter to the ideals our nation was founded upon, and it simply will not be tolerated. The FBI and our partners remain committed to confronting the illegal conduct of the PRC government that threatens our national security and freedom.”

“John Chen and Lin Feng allegedly waged a campaign at the behest of the Government of the People’s Republic of China to influence a U.S. Government official in order to further the PRC Government’s repression of practitioners of Falun Gong,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts to manipulate and use the arms of the U.S. Government to carry out the PRC Government’s autocratic aims are as shocking as they are insidious. My office will work vigorously to protect against malign foreign influences.”

The complaint alleges that from at least approximately January 2023 to May 2023, Chen and Feng worked inside the United States at the direction of the PRC government, including an identified PRC government official (PRC Official-1), to further the PRC government’s campaign to repress and harass Falun Gong practitioners. The PRC Government has designated the Falun Gong as one of the “five poisons,” or one of the top five threats to its rule. In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC government, including imprisonment and torture.                 

As part of the PRC government’s campaign against the Falun Gong, Chen and Feng allegedly engaged in a PRC government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (Entity-1). After Chen filed a defective whistleblower complaint with the IRS (the Chen Whistleblower Complaint), Chen and Feng paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was in fact an undercover officer (Agent-1), in exchange for Agent-1’s assistance in advancing the complaint. Neither Chen nor Feng notified the Attorney General that they were acting as agents of the PRC government in the United States.

In the course of the scheme, Chen, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC government, was to carry out the PRC government’s aim of “toppl[ing] . . . the Falun Gong.” During a call intercepted pursuant to a judicially authorized wiretap, Chen and Feng discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if Chen and Feng’s meetings to bribe Agent-1 did not go as planned. Chen and Feng also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, Chen and Feng allegedly met with Agent-1 in Newburgh, New York, on May 14.  During the meeting, Chen gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment. Chen further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful. On May 18, Feng paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. Chen allegedly obtained funding from the PRC government to make bribe payments during his trips to the PRC in the course of the scheme.

Chen and Feng are each charged with (1) one count of conspiring to act as an agent of a foreign government without notifying the Attorney General and to bribe a public official, which carries a maximum sentence of five years in prison; (2) one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; (3) one count of bribing a public official, which carries a maximum sentence of 15 years in prison; and (4) one count of conspiring to commit international money laundering, which carries a maximum sentence of 20 years in prison.

The FBI New York and Los Angeles Field Offices and Counterintelligence Division are investigating the case with valuable assistance provided by the Treasury Inspector General for Tax Administration (TIGTA).

Assistant U.S. Attorneys Shiva H. Logarajah, Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock for the Southern District of New York and Trial Attorney Christina A. Clark of the Counterintelligence and Export Control Section are prosecuting the case.

The charges in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Lisa O. Monaco, the Deputy Attorney General, Matthew G. Olsen, the Assistant Attorney General for National Security, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Paul Abbate, the Deputy Director of the FBI, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the FBI, Donald Alway, the Assistant Director in Charge of the Los Angeles Field Office of the FBI, and J. Russell George, the Treasury Inspector General for Tax Administration (“TIGTA”), announced today the unsealing of a Complaint charging JOHN CHEN, a/k/a “Chen Jun,” a U.S. citizen and former citizen of the People’s Republic of China (“PRC”), and LIN FENG, a PRC citizen, with acting and conspiring to act in the United States as unregistered agents of the PRC Government, conspiring to bribe and bribing a public official, and conspiracy to commit money laundering.  The charges in the Complaint arise from CHEN and FENG’s alleged participation in a PRC Government-directed scheme targeting U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC.  CHEN and FENG were arrested today in the Central District of California and will make an initial appearance later today before Chief U.S. Magistrate Judge Pedro V. Castillo.

U.S. Attorney Damian Williams said: “John Chen and Lin Feng allegedly waged a campaign at the behest of the Government of the People’s Republic of China to influence a U.S. Government official in order to further the PRC Government’s repression of practitioners of Falun Gong.  Efforts to manipulate and use the arms of the U.S. Government to carry out the PRC Government’s autocratic aims are as shocking as they are insidious.  My Office will work vigorously to protect against malign foreign influences.”

Attorney General Merrick B. Garland said: “The Chinese government has yet again attempted, and failed, to target critics of the PRC here in the United States.  We allege the defendants in this case attempted to bribe someone they thought was an IRS agent in order to further the Chinese government’s campaign of transnational repression in the United States.  But the individual they attempted to bribe was in fact an undercover law enforcement agent, and both defendants were arrested this morning.  The Justice Department will continue to investigate, disrupt, and prosecute efforts by the PRC government to silence its critics and extend the reaches of its regime onto U.S. soil.  We will never stop working to defend the rights to which every person in the United States is entitled.”

Deputy Attorney General Lisa O. Monaco said: “The Department of Justice continues to expose the Chines government’s brazen attempts to perpetrate transnational repression, this time through attempted bribery.  As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

Assistant Attorney General Matthew G. Olsen said: “The Department of Justice continues to expose the Chinese government’s brazen attempts to perpetuate transnational repression, this time through attempted bribery.  As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

FBI Director Christopher A. Wray said: “China’s government has once again shown its disregard for the rule of law and international norms.  The FBI will not tolerate CCP repression – its efforts to threaten, harass, and intimidate people – here in the United States.  We will continue to confront the Chinese government’s efforts to violate our laws and repress the rights and freedoms of people in our country.”

FBI Deputy Director Paul Abbate said: "No other nation poses as severe a threat to the democratic values of the United States as the government of the People's Republic of China.  The FBI will not stand by as the PRC attempts to weaponize our institutions and programs and attack the rights of those on U.S. soil.  Any attempt to repress or harass individuals runs directly counter to the ideals our nation was founded upon, and it simply will not be tolerated.  The FBI and our partners remain committed to confronting the illegal conduct of the PRC government that threatens our national security and freedom."

FBI New York Assistant Director in Charge Michael J. Driscoll said: “We allege Chen and Feng, acting on behalf of the Chinese government, attempted to execute a scheme to manipulate a United States government official to repress individuals opposed to the People’s Republic of China.  This appears to be another example of the Chinese government’s willingness to disregard the laws and freedoms of the United States as they attempt to harm anyone with views they oppose.  The FBI will continue to be resolute in protecting people from repressive actions.”

FBI Los Angeles Assistant Director in Charge Donald Alway said: “The alleged activity is antithetical to fundamental American values, and those who practice transnational oppression on behalf of the Chinese government must be held accountable.  The FBI will continue to invest resources to protect the rights of Americans and those who come to live, work, and study in the United States.”

TIGTA Inspector General J. Russell George said: “The attempt to undermine the integrity of our tax administration system is disturbing.  The individuals who thought they could do so have learned a hard lesson.  The Treasury Inspector General for Tax Administration is committed to protecting the Nation’s tax system.  I want to thank our law enforcement partners and the U.S. Attorney’s Office for their efforts.”

According to the allegations contained in the Complaint unsealed today in White Plains federal court:[1]

From at least approximately January 2023 to May 2023, CHEN and FENG worked inside the United States at the direction of the PRC Government, including an identified PRC Government official (“PRC Official-1”), to further the PRC Government’s campaign to repress and harass Falun Gong practitioners.  The PRC Government has designated the Falun Gong as one of the “Five Poisons,” or one of the top five threats to its rule.  In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC Government, including imprisonment.                        

As part of the PRC Government’s campaign against the Falun Gong, CHEN and FENG allegedly engaged in a PRC Government-directed scheme to manipulate the Internal Revenue Service’s (“IRS”) Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (“Entity-1”).  After CHEN filed a defective whistleblower complaint with the IRS (the “Chen Whistleblower Complaint”), CHEN and FENG paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was in fact an undercover officer (“Agent-1”) in exchange for Agent-1’s assistance in advancing the complaint.  Neither CHEN nor FENG notified the Attorney General that they were acting as agents of the PRC Government in the United States.

In the course of the scheme, CHEN, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC Government, was to carry out the PRC Government’s aim of “toppl[ing] . . . the Falun Gong.”  During a call intercepted pursuant to a judicially authorized wiretap, CHEN and FENG discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if CHEN and FENG’s meetings to bribe Agent-1 did not go as planned.  CHEN and FENG also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, CHEN and FENG allegedly met with Agent-1 in Newburgh, New York, on May 14, 2023.  During the meeting, CHEN gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment.  CHEN further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful.  On May 18, 2023, FENG paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. 

*                *                *

CHEN, 70, of the PRC and Los Angeles, California, and FENG, 43, a PRC citizen and resident of Los Angeles, California, are each charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General and to bribe a public official, which carries a maximum sentence of five years in prison; one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; one count of bribing a public official, which carries a maximum sentence of 15 years in prison; and one count of conspiring to commit international money laundering, which carries a maximum sentence of 20 years in prison. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York and Los Angeles Field Offices and Counterintelligence Division and TIGTA.  Mr. Williams thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section and the U.S. Attorney’s Office for the Central District of California for their assistance.

The case is being handled by the Office’s White Plains Division and National Security and International Narcotics Unit.  Assistant U.S. Attorneys Shiva H. Logarajah, Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock are in charge of the case, with assistance from Trial Attorney Christina Clark of the Counterintelligence and Export Control Section.

The charges in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, 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._chen_and_feng_complaint.pdf

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHRISTOPHER MARGAIT was sentenced today to 65 months in prison for conspiracy to commit health care fraud by fraudulently trafficking in orders for durable medical equipment such as back, knee, and wrist braces.  MARGAIT previously pled guilty to the charge and was sentenced today before United States District Judge Denise Cote.

U.S. Attorney Damian Williams said: “Christopher Margait faced justice today for illegally selling orders for durable medical equipment and thus defrauding Medicare of at least $7 million.  Such fraud schemes do real harm to Medicare—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 August 2019 through May 2021, MARGAIT and his co-defendant, Matthew Taylor Witkowski, engaged in a scheme to defraud Medicare by illegally obtaining and selling fraudulent orders for durable medical equipment (“DME”) paid for by Medicare.  Using a business that he jointly owned and operated with Witkowski, and a call center that Witkowski operated in the Dominican Republic, MARGAIT illegally generated and purchased fraudulent orders for DME and then sold those fraudulent orders to pharmacies and DME suppliers, including suppliers in New York City.  Those pharmacies and DME suppliers then used those fraudulent orders as the basis for at least $7 million in fraudulent claims to Medicare.  Many of these fraudulent orders used names and personal health information of actual Medicare beneficiaries, without the beneficiaries’ authorization or prior knowledge.  Many of these fraudulent orders also contained professional information of doctors and other health-care providers enrolled in the Medicare program, as well as the purported electronic signatures of these providers, which were falsified and created without the authorization or knowledge of these providers.

During the course of the scheme, MARGAIT and Witkowski received more than $3.8 million in illegal kickbacks from DME suppliers, who made these payments to True Prospects Marketing, Inc., a company controlled by MARGAIT and Witkowski.

*                *                *

MARGAIT, 45, of West Palm Beach, Florida, pled guilty on June 2, 2022, to a single count of conspiracy to commit health care fraud.  In addition, MARGAIT was sentenced to three years of supervised release and ordered to pay forfeiture of $3,853,442 and restitution of $7,000,000 to the Medicare program.

Witkowski, 38, a U.S. citizen who resided in the Dominican Republic since he was in college, was sentenced on April 20, 2023 to 60 months in prison and three years of supervised release.  He was also ordered to pay forfeiture of $4,065,995 and restitution of $8,131,990 to the Medicare program.

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. 

The U.S. Attorney’s Office for the Southern District of New York (“SDNY”) and the U.S. Department of Housing and Urban Development (“HUD”) are soliciting applications from qualified individuals to serve as monitor for the New York City Housing Authority (“NYCHA”) under the January 31, 2019 settlement agreement (“Agreement”) between HUD, NYCHA, and the City of New York, for the second five-year term of the monitorship.  The Agreement is available here.

The “primary purpose of the [Agreement] is to remedy the deficient physical conditions in NYCHA properties, ensure that NYCHA complies with its obligations under federal law, reform the management structure of NYCHA, and facilitate cooperation and coordination between HUD, NYCHA, and the City during the term of this Agreement.”  Agreement ¶ 8.  The monitor plays a significant role in providing strategic advice, technical support, and oversight necessary to achieve these purposes, in partnership with SDNY and HUD and in close collaboration with NYCHA’s own leadership, NYCHA’s residents and resident groups, and the City of New York.  Together with these and other stakeholders, the monitor is responsible for ensuring the implementation of reform efforts currently underway; developing additional strategies necessary to further the goals of the agreement; and leading data-driven assessments of NYCHA’s progress, including with respect to the obligations and metrics contained in the Agreement.[1]

SDNY and HUD anticipate that this selection will be for a five-year term beginning in early 2024.  Additional detail regarding SDNY and HUD’s expectations for the position is provided in Exhibit A to this notice.

Interested individuals should submit statements of interest for appointment to the monitorship position no later than July 22, 2023.  Statements of interest should be no longer than 20 pages (exclusive of exhibits), should address the applicant’s qualifications and monitoring plan, including how the applicant will successfully meet the expectations in Exhibit A, and should identify the key individuals and firms anticipated to support the monitorship.  Exhibits to the statement of interest should include a preliminary proposed budget for the first year of the monitorship term and an executed version of the form attached to this notice as Exhibit B. 

Statements of interest should be submitted electronically to [email protected]; please do not submit paper copies. 

---

[1] Materials related to NYCHA’s reform efforts are available on NYCHA’s website, at https://www.nyc.gov/site/nycha/about/reports.page

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging SANDEEP GROVER and SHIKHA SEHGAL with major fraud against the U.S. and conspiracy to commit wire fraud and bank fraud for their participation in a scheme to submit more than 100 applications containing false representations to seven financial institutions and fraudulently obtain over $13 million in government-backed Paycheck Protection Program (“PPP”) loans designed to provide relief to small businesses during the COVID-19 pandemic.  GROVER is also charged with aggravated identity theft for using an employee’s personally identifiable information without authorization to submit a loan application.  GROVER and SEHGAL will be presented today before U.S. Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “Sandeep Grover allegedly used his tax preparation business to steal millions of dollars from a program created by Congress to assist struggling small businesses during the pandemic.  To pull off his scheme, Grover allegedly recruited co-conspirators like Shikha Sehgal, who opened bank accounts for shell companies and lied to banks about those companies’ loan eligibility.  This Office will continue to prosecute those who used the pandemic as an opportunity to defraud American taxpayers.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “The defendants allegedly devised a scheme to exploit the Paycheck Protection Program for millions of dollars for personal use rather than qualifying expenses.  Fraudulent schemes like these defraud not only a program intended to help small businesses weather a global pandemic but also the United States' taxpayers. The FBI will continue to ensure that anyone taking advantage of government backed programs are held responsible in the criminal justice system.”

As alleged in the Complaint[[1]]:

SANDEEP GROVER is the owner of Excellent Business Services Inc.  (“EBS”), a tax preparation business based in Seaford, New York.  From at least April 2020 through at least June 2021, GROVER submitted more than 100 PPP applications containing false representations to at least seven financial institutions, on behalf of dozens of his own companies as well as putative client companies on whose behalf GROVER created false IRS filings.  The applications certified to the United States Small Business Administration (“SBA”) that the companies each had multiple employees and spent tens of thousands of dollars in monthly payroll, but in fact the companies did not report wages to the Social Security Administration during the relevant time period.  Bank records also show that instead of using the PPP loan proceeds for allowable expenses, such as payroll costs, mortgage interest, rent, and utilities, GROVER moved millions of dollars in PPP loan proceeds between his many accounts and used those proceeds to purchase property, pay off personal loans, and pay expenses for other companies under his control.  GROVER used a variety of methods to increase the number of fraudulent loan applications he was able to submit.  Among other things, he recruited SHIKHA SEHGAL and others to open bank accounts for companies that did no business, create fake invoices and other supporting documentation, and submit fraudulent applications for numerous PPP loans.  GROVER also misused the personally identifiable information of one of his employees to obtain a loan.

*          *          *

GROVER, 54, of Massapequa, New York, and SEHGAL, 43, of Deer Park, New York, were each charged with one count of major fraud against the United States, which carries a maximum sentence of ten years in prison, and one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison.  GROVER is also charged with one count of aggravated identity theft, which carries a mandatory sentence of two 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 the judge.        

Mr. Williams praised the investigative work of the FBI and thanked the U.S. Small Business Administration’s Office of Inspector General and the New York Field Office of the Internal Revenue Service, Criminal Investigation, for their assistance.

This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jane Yumi Chong is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VICENTE ESTEVES, a/k/a “El Bori,” was sentenced to 222 months in prison for being a supervisor in a conspiracy to possess with intent to distribute at least 150 kilograms of cocaine, which ESTEVES and his coconspirators hoped to import from Puerto Rico.  ESTEVES was convicted on August 4, 2022 following an eight-day jury trial.  Codefendants Heiver Ruiz-Patozano, Luis Gonzalez-Maldonado, and Alexander Almonte-Macea were previously sentenced for participating in the conspiracy by U.S. District Judge John G. Koeltl, who also imposed today’s sentence. 

U.S. Attorney Damian Williams said: “The business of cocaine ruins lives, destroys families, and foments violence.  Vicente Esteves returned to that business barely a year removed from serving a sentence for trafficking thousands of kilograms of cocaine into our communities.  Today’s sentence makes clear that this Office and our law enforcement partners will work tirelessly to ensure that the business of drug trafficking does not pay for anyone—least of all kingpins like Esteves.” 

According to the Superseding Indictment and the evidence at trial:

Between at least in or about September 2020 and in or about December 2020, ESTEVES belonged to a New York/New Jersey-based drug trafficking organization (“DTO”) that attempted to purchase 150 kilograms of cocaine from purported Colombian suppliers, who were in fact undercover law enforcement agents.  The DTO negotiated for the delivery of the cocaine in Puerto Rico, with the delivery of the purchase money in the Bronx, New York.  On the day of the exchange, December 4, 2020, ESTEVES and coconspirators arrived in the Bronx to complete the transaction with two suitcases stuffed with more than $1.3 million cash, which was intended as a payment for part of the overall 150-kilogram transaction.  A third suitcase, containing more than $644,000 in additional cash, was later recovered in a stash house that ESTEVES and coconspirators met at before the transaction.  During the transaction, a coconspirator described ESTEVES as “El Jefe”—that is, “the boss.”

ESTEVES participated in this conspiracy less than a year after being released on parole from a prior sentence for drug trafficking offenses.  Specifically, ESTEVES previously pled guilty to being the leader of a transnational drug enterprise that trafficked thousands of kilograms of cocaine—worth hundreds of millions of dollars—into the U.S..  In connection with that prior drug trafficking conduct, ESTEVES also admitted to conspiring with his then-defense attorney to kill potential witnesses.   

                          *                      *                      *

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Task Force, the Drug Enforcement Administration, the New York City Police Department, the New York State Police, the Office of the Special Narcotics Prosecutor, Homeland Security Investigations, the Middlesex County Prosecutor’s Office, and the Edison Police Department. 

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Jun Xiang, Ashley Nicolas, and Frank Balsamello are in charge of the prosecution.

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The Justice Department today announced that Alexei Saab, aka Ali Hassan Saab, aka Alex Saab, aka Rachid, 46, was sentenced to 12 years in prison followed by three years of supervised release for receiving military-type training from Hezbollah, marriage fraud, and making false statements.

According to court documents, Saab was convicted by a jury in May 2022 after a two-week trial. The sentence was imposed by the Honorable Paul G. Gardephe, who also presided over the trial.

According to court documents and evidence presented at trial, Hezbollah is a Lebanon-based Shia Islamic organization with political, social and terrorist components. Hezbollah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon. Since Hezbollah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel. In 1997, the U.S. Department of State designated Hezbollah a Foreign Terrorist Organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today. In 2001, pursuant to Executive Order 13224, the U.S. Department of Treasury designated Hezbollah a Specially Designated Global Terrorist entity. In 2010, State Department officials described Hezbollah as the most technically capable terrorist group in the world and a continued security threat to the United States.

The Islamic Jihad Organization (IJO), which is also known as the External Security Organization and “910,” is a component of Hezbollah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hezbollah outside of Lebanon. In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria. The detonation killed six people and injured 32 others. Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, and a seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative. In June 2017, two IJO operatives were arrested in the U.S and charged with terrorism-related offenses in the Southern District of New York. In May 2019, a jury convicted one of those two IJO operatives on all counts, and in December 2019, he was sentenced principally to 40 years in prison.

Saab joined Hezbollah in 1996. Saab’s first Hezbollah operations occurred in Lebanon, where he was tasked with observing and reporting on the movements of Israeli and Southern Lebanese Army soldiers in Yaroun, Lebanon. Among other things, Saab reported on patrol schedules and formations, procedures at security checkpoints, and the vehicles used by soldiers. Saab also, alongside his brother, planted an improvised explosive device that detonated and hit Israeli soldiers, seriously injuring at least one.

In approximately 1999, Saab attended his first Hezbollah training. The training was focused on the use of firearms, and Saab handled and fired an AK-47, an M16 rifle, and a pistol, and threw grenades. In 2000, Saab transitioned to membership in Hezbollah’s unit responsible for external operations, the IJO, and he then received extensive training in IJO tradecraft, weapons, and military tactics, including how to construct and detonate bombs and other explosive devices and how to best use these devices in attacks. Specifically, Saab received detailed instruction in, among other things, triggering mechanisms, explosive substances, detonators, and the assembly of circuits. In pre-arrest interviews with the FBI, Saab was able to diagram multiple improvised explosive devices that would have been viable if constructed as diagrammed.

In 2000, Saab entered the United States. While living in the United States, Saab remained an IJO operative, continued to receive military training in Lebanon, and conducted numerous operations for the IJO. For example, Saab surveilled dozens of locations in New York City — including the United Nations headquarters, the Statue of Liberty, Rockefeller Center, Times Square, the Empire State Building, and local airports, tunnels, and bridges — and provided detailed information on these locations, including photographs, to the IJO. In particular, Saab focused on the structural weaknesses of locations he surveilled in order to determine how a future attack could cause the most destruction. Saab’s reporting to the IJO included the materials used to construct a particular target, how close in proximity one could get to a target, and site weaknesses or “soft spots” that the IJO could exploit if it attacked a target in the future. Saab conducted similar intelligence gathering in a variety of large American cities, including Boston and Washington, D.C., Saab admitted that his surveillance was designed to best position the IJO to attack the U.S. in the future. Saab also was tasked by Hezbollah with opening a front company that he could use to obtain fertilizer in the United States for use as an explosives precursor.

In addition to his attack-planning activities in the United States, Saab conducted operations abroad. For example, in or about 2003, Saab attempted to murder a man he later understood to be a suspected Israeli spy. Saab pointed a firearm at the individual at close range and pulled the trigger twice, but the firearm did not fire. Saab also conducted surveillance in Istanbul, Turkey, and elsewhere.

Finally, in or about 2012, Saab entered into a fraudulent marriage in exchange for $20,000. The purpose of the marriage was for Saab’s purported wife to apply for her citizenship. Saab later falsely affirmed, under penalty of perjury, and in connection with his purported wife’s efforts to obtain status in the U.S., that the marriage was not for any immigration-related purposes.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York, and Assistant Director Robert R. Wells of the FBI Counterterrorism Division made the announcement.

The FBI and its New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department, investigated the case.

Assistant U.S. Attorneys Sam Adelsberg and Jason A. Richman for the Southern District of New York are prosecuting the case, with assistance from Trial Attorneys Jessica Fender and Alexandra Hughes of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXEI SAAB, a/k/a “Ali Hassan Saab,” a/k/a “Alex Saab,” a/k/a “Rachid,” was sentenced today to 12 years in prison for receiving military-type training from Hizballah, marriage fraud, and making false statements.  A jury convicted SAAB of those offenses in May 2022 after a two-week trial.  The sentence was imposed by the Honorable Paul G. Gardephe, who also presided over the trial.

U.S. Attorney Damian Williams said: “Alexei Saab’s actions as a Hizballah operative, both domestically and internationally, were deeply disturbing.  Saab trained extensively on military tactics and weapons use, he specialized in how to construct and detonate explosives, and he surveilled major American landmarks to identify potential attack sites.  But his apprehension by law enforcement before an attack could be carried out is a testament to the importance of our counterterrorism efforts.  We will continue to protect the American people by thwarting terrorist organizations’ pursuits of murder and mass destruction.  Thanks to the hard work of the career prosecutors of this Office and our law enforcement partners, Saab will now spend the coming 12 years in federal prison.”

According to court documents and evidence presented at trial:

Hizballah is a Lebanon-based Shia Islamic organization with political, social, and terrorist components.  Hizballah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon.  Since Hizballah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel.  In 1997, the U.S. Department of State designated Hizballah a Foreign Terrorist Organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today.  In 2001, pursuant to Executive Order 13224, the U.S. Department of Treasury designated Hizballah a Specially Designated Global Terrorist entity.  In 2010, State Department officials described Hizballah as the most technically capable terrorist group in the world and a continued security threat to the U.S.

The Islamic Jihad Organization (“IJO”), which is also known as the External Security Organization and “910,” is a component of Hizballah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hizballah outside of Lebanon.  In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria.  The detonation killed six people and injured 32 others.  Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, and a seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative.  In June 2017, two IJO operatives were arrested in the U.S and charged with terrorism-related offenses in the Southern District of New York.  In May 2019, a jury convicted one of those two IJO operatives on all counts, and in December 2019, he was sentenced principally to 40-years in prison.

SAAB joined Hizballah in 1996.  SAAB’s first Hizballah operations occurred in Lebanon, where he was tasked with observing and reporting on the movements of Israeli and Southern Lebanese Army soldiers in Yaroun, Lebanon.  Among other things, SAAB reported on patrol schedules and formations, procedures at security checkpoints, and the vehicles used by soldiers.  SAAB also, alongside his brother, planted an improvised explosive device that detonated and hit Israeli soldiers, seriously injuring at least one.

In approximately 1999, SAAB attended his first Hizballah training.  The training was focused on the use of firearms, and SAAB handled and fired an AK-47, an M16 rifle, and a pistol, and threw grenades.  In 2000, SAAB transitioned to membership in Hizballah’s unit responsible for external operations, the IJO, and he then received extensive training in IJO tradecraft, weapons, and military tactics, including how to construct and detonate bombs and other explosive devices and how to best use these devices in attacks.  Specifically, SAAB received detailed instruction in, among other things, triggering mechanisms, explosive substances, detonators, and the assembly of circuits.  In pre-arrest interviews with the Federal Bureau of Investigation (“FBI”), SAAB was able to diagram multiple improvised explosive devices that would have been viable if constructed as diagrammed.

In 2000, SAAB entered the U.S.  While living in the U.S., SAAB remained an IJO operative, continued to receive military training in Lebanon, and conducted numerous operations for the IJO.  For example, SAAB surveilled dozens of locations in New York City — including the United Nations headquarters, the Statue of Liberty, Rockefeller Center, Times Square, the Empire State Building, and local airports, tunnels, and bridges — and provided detailed information on these locations, including photographs, to the IJO.  In particular, SAAB focused on the structural weaknesses of locations he surveilled in order to determine how a future attack could cause the most destruction.  SAAB’s reporting to the IJO included the materials used to construct a particular target, how close in proximity one could get to a target, and site weaknesses or “soft spots” that the IJO could exploit if it attacked a target in the future.  SAAB conducted similar intelligence gathering in a variety of large American cities, including Boston and Washington, D.C.   SAAB admitted that his surveillance was designed to best position the IJO to attack the U.S. in the future.  SAAB also was tasked by Hizballah with opening a front company that he could use to obtain fertilizer in the United States for use as an explosives precursor.

In addition to his attack-planning activities in the United States, SAAB conducted operations abroad.  For example, in or about 2003, SAAB attempted to murder a man he later understood to be a suspected Israeli spy.  SAAB pointed a firearm at the individual at close range and pulled the trigger twice, but the firearm did not fire.  SAAB also conducted surveillance in Istanbul, Turkey, and elsewhere. 

Finally, in or about 2012, SAAB entered into a fraudulent marriage in exchange for $20,000.  The purpose of the marriage was for SAAB’s purported wife to apply for her citizenship.  SAAB later falsely affirmed, under penalty of perjury, and in connection with his purported wife’s efforts to obtain status in the U.S., that the marriage was not for any immigration-related purposes. 

*                *               *

In addition to the prison term, SAAB, 46, was sentenced to 3 years of supervised release.

Mr. Williams praised the outstanding efforts of the Federal Bureau of Investigation’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department.  Mr. Williams also thanked the Counterterrorism Section of the Department of Justice’s National Security Division.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorneys Jessica Fender and Alexandra Hughes of the Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of MARIO POWELL for the armed robbery and shooting of a cab driver in the Bronx on March 17, 2018.  The jury convicted POWELL following a four-day trial before U.S. District Judge Paul A. Engelmayer.

U.S. Attorney Damian Williams said: “Over five years ago, Mario Powell robbed and brutally shot an innocent driver of a taxi, running away into the night and leaving the victim to die.  Yesterday, a jury of his peers held Powell accountable for this heinous crime.  We thank our partners in the NYPD and in the SPARTA NYPD/ATF Joint Robbery Task Force for their unwavering pursuit of justice for this victim and the public.  This Office will pursue violent criminals who commit firearms offenses on the streets of New York City with unceasing vigor and determination.”

According to the allegations in the Indictment and the evidence presented during the trial:

On March 17, 2018, POWELL took a cab from one neighborhood in the Bronx to another.  Upon reaching his requested destination, POWELL robbed the cab driver at gunpoint, obtained $23 from the cab driver, and shot the cab driver nine times.  POWELL fled the scene and was subsequently arrested on March 23, 2018.

*                *                *

POWELL, 33, of the Bronx, New York, was convicted of one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison; and one count of the use, carrying, and possession of a firearm, which was brandished and discharged, which carries a mandatory minimum sentence of10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  POWELL is scheduled to be sentenced by Judge Engelmayer on October 3, 2023.

Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the New York City Police Department (“NYPD”), in particular, the Strategic Patterned Armed Robbery Technical Apprehension (“SPARTA”) Task Force, which is composed of agents and officers of the ATF and the NYPD.

This case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Thomas John Wright, Chelsea L. Scism, and Emily A. Johnson are in charge of the prosecution, with the assistance of Paralegal Specialists Chanel-Ashley Foster and Mia Vuckovich.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a six-count criminal Complaint charging JOSEPH GARRISON in connection with a scheme to hack user accounts at a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts in order to steal hundreds of thousands of dollars from them.  GARRISON surrendered this morning in New York, New York, and will be presented this afternoon before United States Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “As alleged, Garrison used a credential stuffing attack to hack into the accounts of tens of thousands of victims and steal hundreds of thousands of dollars.  Today, thanks to the work of my Office and the FBI, Garrison learned that you shouldn’t bet on getting away with fraud.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, Garrison attained unauthorized access to victim accounts using a sophisticated cyber-breaching attack to steal hundreds of thousands of dollars.  Cyber intrusions aiming to steal private individuals’ funds represent a serious risk to our economic security.  Combatting cyberattacks and holding the responsible threat actors accountable in the criminal justice system remains a top priority for the FBI.”

As alleged in the Complaint:[1]

On or about November 18, 2022, GARRISON launched a “credential stuffing attack” on the Betting Website.  During a credential stuffing attack, a cyber threat actor collects stolen credentials, or username and password pairs, obtained from other large-scale data breaches of other companies, which can be purchased on the dark web.  The threat actor then systematically attempts to use those stolen credentials to obtain unauthorized access to accounts held by the same user with other companies and providers in order to compromise accounts where the user has maintained the same password.  Here, in connection with the attack on the Betting Website, there was a series of attempts to log into the Betting Website accounts using a large list of stolen credentials.

GARRISON and others successfully accessed approximately 60,000 accounts at the Betting Website (the “Victim Accounts”) through the credential stuffing attack.  In some instances, the individuals who unlawfully accessed the Victim Accounts were able to add a new payment method on the account, deposit $5 into that account through the new payment method to verify that method, and then withdraw all the existing funds in the Victim Account through the new payment method (i.e., to a newly added financial account belonging to the hacker), thus stealing the funds in the Victim Account.  Using this method, GARRISON and others stole approximately $600,000 from approximately 1,600 Victim Accounts.

Law enforcement executed a search on GARRISON’s home in February 2023.  In that search, they located programs typically used for credential stuffing attacks.  Those programs require individualized “config” files for a target website to launch credential stuffing attacks, and law enforcement located approximately 700 such config files for dozens of different corporate websites on GARRISON’s computer.  Law enforcement also located files containing nearly 40 million username and password pairs on GARRISON’s computer, which are also used in credential stuffing attacks.

On GARRISON’s cellphone, law enforcement also located conversations between GARRISON and his co-conspirators, which included discussions about how to hack the Betting Website and how to profit from the hack of the Betting Website by extracting funds from the Victim Accounts directly or by selling access to the Victim Accounts.  In one particular conversation, GARRISON discussed, in substance and in part, how successful he was at credential stuffing attacks, how much he enjoyed credential stuffing attacks, and how GARRISON believed that law enforcement would not catch or prosecute him.  Specifically, GARRISON messaged the following, in substance and in part: “fraud is fun . . . im addicted to see money in my account . . . im like obsessed with bypassing shit.”

*                *                *

GARRISON, 18, of Madison, Wisconsin, is charged with conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; unauthorized access to a protected computer to further intended fraud, which carries a maximum sentence of five years in prison; unauthorized access to a protected computer, which carries a maximum sentence of five years in prison; wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. 

The minimum and 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 work of the FBI.  Mr. Williams also thanked the United States Attorney’s Office for the Western District of Wisconsin for their assistance in the investigation.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Kevin Mead and Micah Fergenson are in charge of the prosecution.

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.

Damian Williams, the United States Attorney for the Southern District of New York, today announced the selection of Andrea Griswold as Deputy United States Attorney, and Margaret Garnett as Special Counsel to the United States Attorney.  

Since April 2022, Ms. Griswold has served as Chief Counsel to the United States Attorney. From June 2020 until June 2022, Ms. Griswold served as a Chief of the Securities and Commodities Fraud Task Force, first as Deputy Chief and then as Chief or Co-Chief.  In this two-year period, Ms. Griswold supervised a series of significant individual and corporate investigations and prosecutions relating to market manipulation, insider trading, investor fraud, and accounting and valuation fraud.  Many of the cases brought under Ms. Griswold’s leadership related to private funds, SPACs, cryptocurrency and digital assets. Prior to assuming a supervisory position in that unit, Ms. Griswold investigated and prosecuted a wide variety of significant securities fraud and public corruption cases, and also served as an Acting Chief of the Narcotics Unit.  Ms. Griswold began her career as an Assistant U.S. Attorney in the Office in March 2013.  Prior to her public service, she worked for more than five years as an associate at Simpson Thacher & Bartlett LLP.  Ms. Griswold received her B.A. cum laude from Georgetown University and her J.D. from New York University School of Law. 

Following the announcement this week that Margaret Garnett has been recommended to the President for a judgeship in the Southern District of New York, Ms. Garnett has assumed the role of Special Counsel to the United States Attorney.  Since November 2021, Ms. Garnett has served as Deputy United States Attorney. Prior to her return to the Office, Ms. Garnett served as the Commissioner of New York City’s Department of Investigation (“DOI”), one of the oldest municipal anti-corruption agencies in the United States.  Prior to her service at DOI, Ms. Garnett served as Executive Deputy Attorney General for Criminal Justice in the Office of the New York State Attorney General.  Ms. Garnett was an Assistant U.S. Attorney in the Office for 12 years, serving at times as Chief of Appeals and Chief of the Violent and Organized Crime Unit.  She received the Director’s Award for Outstanding Performance and the Stimson Medal for her exceptional service in the Criminal Division.  Prior to her public service, Ms. Garnett worked as an associate at Wachtell, Lipton, Rosen & Katz.  She began her public service career as a law clerk to the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York.  Ms. Garnett received her B.A. from the University of Notre Dame, her M.A. from Yale University, and her J.D. from Columbia University.

In making these selections, U.S. Attorney Damian Williams said: “I am pleased to appoint Andrea Griswold as Deputy United States Attorney.  I have worked side-by-side with Andrea through our ascension in the Office, and know her to have the rare combination of not only being an exceptional prosecutor and litigator, but also possessing the exemplary judgement and leadership skills to help lead the most talented group of prosecutors in the country.  Margaret Garnett is an extraordinary lawyer, public servant, and friend.  She is brilliant, fair, kind, and wise.  She has and will continue to exemplify the best of this Office.”

Damian Williams, the United States Attorney for the Southern District of New York, Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and John B. DeVito, the Special Agent in Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), announced the arrest of IGGAL COPELAND for robbing at gunpoint an electronics store in Manhattan while a 74-year-old store employee was opening for business.  COPELAND was arrested this morning and will be presented today before Chief U.S. Magistrate Judge James L. Cott. 

U.S. Attorney Damian Williams said: “The defendant’s alleged conduct was violent and callous.  He and another suspect allegedly forced their way into an electronics store disguised as FedEx workers, held a gun to an elderly store employee’s head, hit the employee in the back of the head with the gun, and threatened that if the employee did not open a safe within the store, they would harm the employee’s young granddaughter while on her way to school.  This Office will continue to aggressively prosecute those who commit violent robberies and terrorize hardworking New Yorkers.” 

NYPD Commissioner Keechant L. Sewell said: “This arrest by the ATF/NYPD SPARTA Join Robbery Task Force is another example of New York City’s strong law enforcement partnerships combatting violent crime and holding accountable anyone who endangers people in our communities.  We vow to remain relentless in identifying and investigating anyone who wields an illegal gun on our streets.  Due to the efforts of our investigators and the prosecutors at the U.S. Attorney’s Office for the Southern District, this defendant now faces the prospect of significant federal prison time.”

ATF Special Agent in Charge John B. DeVito said: “This allegedly brazen and horrendous crime against anyone, let alone a hardworking New York family, is both atrocious and unacceptable within our society.  The men and women of ATF NY’s SPARTA (Strategic Pattern Armed Robbery Technical Apprehension) group will continue to work with our partners at the NYPD Manhattan Robbery Squad to protect the public from those who terrorize our communities.  Swift investigative follow up and this arrest highlight the indispensable work of our collaborative effort to identify and stop violent criminals on the streets of New York.”

According to the allegations contained in the Complaint and court filings:[[1]]

On or about April 21, 2023, COPELAND and another individual (“CC-1”) robbed at gunpoint (the “Robbery”) an electronics store in New York, New York (the “Store”).  COPELAND and CC-1 drove to the Robbery using a vehicle with stolen plates that was abandoned in Brooklyn after the Robbery.  To gain access to the Store, COPELAND and CC-1 disguised themselves as FedEx employees while a 74-year-old store employee (“Victim-1”) was opening the Store for business in the morning.  The FedEx uniforms the defendant wore are pictured below: 

COPELAND and CC-1 forced Victim-1 to a back room and attempted to gain access to a safe.  While CC-1 held a gun to Victim-1’s head, COPELAND said, “Stop yelling” and “Open the door [to the safe] . . . do you want your granddaughter [to overhear] when she comes down for school.”  COPELAND then said, “I’m about to kill his grandbaby . . . he’s fuckin’ playing games.”

After attempting unsuccessfully to gain access to the safe, COPELAND and CC-1 took approximately $1,500 from Victim-1.  They then ran to the front of the Store and CC-1 pushed the 73-year-old female employee of the Store (“Victim-2”) to the ground.  Two individuals outside of the Store heard screams coming from Victim-2 inside the Store, intervened to stop the Robbery, and unsuccessfully attempted to stop COPELAND and CC-1 from fleeing the scene.

*                *                *

COPELAND, 46, of Union City, New Jersey, is charged with one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery, which each carry a maximum sentence of 20 years in prison, and one count of using and brandishing a firearm in the commission of a crime of violence, which carries a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison.

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the ATF and NYPD, in particular, the Strategic Patterned Armed Robbery Technical Apprehension (“SPARTA”) Task Force, which is composed of agents and officers of the ATF and the NYPD.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jeffrey W. Coyle 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.

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[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.

Damian Williams, the United States Attorney for the Southern District of New York, and Raymond A. Tierney, Suffolk County District Attorney, announced today that JAMES CAHILL, former President of the New York State Building and Construction Trades Council, was sentenced to 51 months in prison for accepting bribes and illegal cash payments from a non-union construction contractor (“Employer-1”) while serving as a union officer.  Union officers CHRISTOPHER KRAFT, PATRICK HILL, MATTHEW NORTON, WILLIAM BRIAN WANGERMAN, KEVIN MCCARRON, JEREMY SHEERAN, a/k/a “Max,” ANDREW MCKEON, ROBERT EGAN, SCOTT ROCHE, and ARTHUR GIPSON have previously been sentenced for related conduct by U.S. District Judge Colleen McMahon, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Capitalizing on his position as a high-ranking union official, James Cahill accepted payment after payment to favor non-union labor at the expense of union members.  Whether it was a cash-stuffed envelope or in-kind benefit, each payment reflected a decision to place personal greed over the union interests that Cahill was duty-bound to serve.  Today’s sentence makes clear that this Office and our law enforcement partners will work tirelessly to hold responsible those who exploit their positions of power for personal gain.  I thank the Suffolk County District Attorney’s Office for their partnership in this case.” 

Suffolk County District Attorney Raymond A. Tierney said: “James Cahill repeatedly chose to enrich himself at the expense of the hard-working men and women whose interests he had a sworn duty to protect, and his sentence to a substantial term in federal prison should serve as a message to all others who would consider engaging in similar betrayals of trust.  I want to thank the U.S. Attorney's Office in the Southern District of New York for their collaboration in this investigation, and for their efforts in obtaining this just result.”

According to the allegations in the Indictment, statements made in court, and court filings:

JAMES CAHILL was the President of the New York State Building and Construction Trades Council (the “NYS Trades Council”), which represents over 200,000 unionized construction workers, a member of the Executive Council for the New York State American Federation of Labor and Congress of Industrial Organizations (the “NYS AFL-CIO”), and formerly a union representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “UA”).  During the charged conspiracy from about October 2018 to October 2020, CAHILL accepted approximately $44,500 in bribes from Employer-1, as well as other benefits, including home appliances and free labor on CAHILL’s vacation home.  As part of his guilty plea, CAHILL acknowledged having previously accepted at least approximately $100,000 of additional bribes from Employer-1 in connection with CAHILL’s union positions.  As the leader of the conspiracy, CAHILL introduced Employer-1 to many of the other defendants, while advising Employer-1 that Employer-1 could reap the benefits of being associated with the unions without actually signing union agreements or employing union workers. 

KRAFT, HILL, NORTON, WANGERMAN, MCCARRON, SHEERAN, and MCKEON were Business Agents, EGAN was the Secretary-Treasurer, and ROCHE was the Business Agent At Large of the Local 638 of the UA (“Local 638”).  GIPSON was a Business Agent of the Local Union 200 of the UA (“Local 200”).  Each of these defendants accepted thousands and, in some cases, tens of thousands of dollars of cash bribes from Employer-1, a contractor who had projects and potential projects within the jurisdiction of Local 638 and Local 200.

All 11 defendants accepted cash from Employer-1 — usually stuffed in envelopes that Employer-1 handed off inside the restrooms of restaurants.  During the meetings at which the payments were made, Employer-1 repeatedly requested favorable action from Local 638 and/or Local 200, including the following: (i) that the relevant union would support Employer-1’s bids on various projects, (ii) that the union would consider signing Employer-1 to labor agreements that Employer-1 regarded to be favorable (including agreements that would pay union workers lower rates than their experience merited), and (iii) that the union would permit Employer-1 to falsely claim to developers that Employer-1 employed union workers.  Employer-1 contracted to work on — or would bid on — projects that otherwise could have employed union workers belonging to Local 638 and/or Local 200.  At the time Employer-1 was bribing the defendants, Employer-1’s business employed workers who were not members of Local 638 and/or Local 200 but would have been eligible for membership.

*                *                *

A chart containing the names, offenses of conviction, and sentences imposed by Judge McMahon is below.

Mr. Williams praised the outstanding investigative work of the Special Agents and investigators within the U.S. Attorney’s Office for the Southern District of New York and the Suffolk County District Attorney’s Office.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jun Xiang, Jason Swergold, Danielle Sassoon, Frank J. Balsamello, Marguerite B. Colson, and Special Assistant U.S. Attorney Laura de Oliveira, are in charge of the prosecution.

Defendant

Statute of Conviction

Sentence

JAMES CAHILL

Honest Services Fraud Conspiracy

Sentenced on May 18, 2023, to 51 months in prison and $150,000 fine

CHRISTOPHER KRAFT

Honest Services Fraud Conspiracy

Sentenced on December 12, 2022, to 18 months in prison and $10,000 fine

PATRICK HILL

Honest Services Fraud Conspiracy

Sentenced on December 19, 2022, to 27 months in prison and $10,000 fine

MATTHEW NORTON

Taft-Hartley Act Violation (Felony)

Sentenced on December 13, 2022, to three years’ probation and $10,000 fine

WILLIAM BRIAN WANGERMAN

Taft-Hartley Act Violation (Felony)

Sentenced on April 12, 2023, to four years’ probation and $10,000 fine

KEVIN MCCARRON

Taft-Hartley Act Violation (Misdemeanor)

Sentenced on May 10, 2023, to 60 days in prison

JEREMY SHEERAN

Taft-Hartley Act Violation (Felony)

Sentenced on February 8, 2023, to two years’ probation and $10,000 fine

ANDREW MCKEON

Taft-Hartley Act Violation (Felony)

Sentenced on March 14, 2023, to two years’ probation and $10,000 fine

ROBERT EGAN

Taft-Hartley Act Violation (Felony)

Sentenced on March 14, 2023, to three years’ probation and $10,000 fine

SCOTT ROCHE

Taft-Hartley Act Violation (Misdemeanor)

Sentenced on December 6, 2022, to two years’ probation and $10,000 fine

ARTHUR GIPSON

Taft-Hartley Act Violation (Felony)

Sentenced on May 3, 2023, to 60 days in prison and $4,000 fine

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and settled a civil fraud lawsuit alleging that MORRIS PARK NURSING HOME (“MORRIS PARK”), a skilled nursing facility located in the Bronx, New York, engaged in two fraudulent and illegal schemes that violated the False Claims Act and the Anti-Kickback Statute.  The first scheme involved cash payments made to a supervisor at a nearby hospital for patient referrals, and the second scheme involved switching residents’ Medicare coverage without their consent in order to increase the Medicare payments MORRIS PARK received.  The United States’ complaint also names as defendants TZODIK WEINBERG, a/k/a “Justin Weinberg,” MORRIS PARK’s former Administrator, and MAIER ARM for their roles in the fraudulent conduct.    

Under the settlement agreements approved by U.S. District Judge Jennifer H. Rearden, the estate of the owner of MORRIS PARK at the time of the conduct alleged in the Complaint will pay to the United States $2.85 million, WEINBERG will pay $495,000, and ARM will pay $115,000.  Each defendant also made extensive factual admissions regarding their conduct.  The settlement with the estate took into consideration MORRIS PARK’s prior voluntary self-disclosure of facts related to the improper changes made to residents’ insurance coverage. 

U.S. Attorney Damian Williams said: “Morris Park and its former Administrator prioritized boosting Medicare payments above compliance with the law.  They paid cash kickbacks to obtain patient referrals to fill empty beds and switched residents’ insurance coverage without properly obtaining the residents’ consent in order to increase the amount the facility was paid.  This Office is committed to pursuing all violations of the Anti-Kickback Statute and other laws designed to ensure that medical decisions are based only on the patient’s best interest.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “The misconduct that occurred at Morris Park exhibits the prioritization of profits over residents’ best interests.  This nursing home paid illegal kickbacks to manipulate the resident referral process and changed patients’ health coverage selections without properly obtaining their consent, with no apparent concern for how these events could negatively impact residents.  HHS-OIG and our fellow law enforcement agencies strive to ensure that entities furnishing services to Medicare enrollees are operating in accordance with federal health care laws.”

Medicare beneficiaries may enroll in Medicare Parts A and B, known as Original Medicare, or in Medicare Part C Advantage Plans (“MA Plans”), which are administered by private companies that contract with the government.  Under Original Medicare, the Centers for Medicare & Medicaid Services (“CMS”) directly reimburses healthcare providers, like skilled nursing facilities, on a fee-for-service basis.  In contrast, when reimbursing services provided under MA Plans, CMS pays Medicare Advantage Organizations (“MAOs”), which operate the MA Plans, a fixed, capitated amount each month for each Medicare beneficiary enrolled in the MA Plan.  CMS advises individuals to consider various factors in deciding between enrolling in an MA Plan or Original Medicare, such as differences in out-of-pocket costs and doctor choice.

As alleged in the Complaint filed in Manhattan federal court:

It is well known within the skilled nursing facility industry that it is usually more profitable for the facility to admit residents enrolled in Original Medicare than in MA Plans.  The defendants engaged in two fraudulent and illegal schemes to increase the number of Original Medicare residents at MORRIS PARK.

Payment of Cash Kickbacks for Patient Referrals

From January 1, 2017, through December 31, 2019, MORRIS PARK offered and paid remuneration in the form of cash payments, meals, and sports tickets to a Jacobi discharge planning supervisor (the “Jacobi Manager”) to induce her to refer Original Medicare beneficiaries for admission to MORRIS PARK.  For much of this period, MORRIS PARK paid the Jacobi Manager $150 for each referred patient who was admitted to the facility.  WEINBERG was responsible for delivering the cash payments personally to the Jacobi Manager, often arranging to meet her at a CVS parking lot close to MORRIS PARK.  He regularly reached out to the Jacobi Manager to request patient referrals when MORRIS PARK had empty beds. 

MORRIS PARK paid the Jacobi Manager a total of approximately $5,000 to $10,000 for referring dozens of Original Medicare patients for admission to MORRIS PARK.  In addition, MORRIS PARK offered the Jacobi Manager tickets to Yankees games, invited her and her staff to a MORRIS PARK-sponsored holiday party, and frequently arranged for food to be delivered to her office.

Scheme to Switch Residents’ Medicare Coverage

From January 1, 2018, through December 31, 2019, MORRIS PARK, at the direction of WEINBERG, disenrolled residents from their self-selected MA Plans and enrolled them in Original Medicare without obtaining the consent of the residents or their authorized representatives.  WEINBERG pressured MORRIS PARK staff to disenroll residents from their MA Plans. 

MORRIS PARK staff approached residents, often at their bedside, to try to persuade them to switch their insurance coverage.  When talking to residents and their families, MORRIS PARK staff typically did not fully explain how the change to Original Medicare would impact the resident’s coverage, including potential changes to the resident’s co-payments and deductibles; the potential loss of supplemental coverage available under the resident’s MA Plan; any resulting change in the resident’s drug plan; or limitations on when the resident could re-enroll in the plan after leaving MORRIS PARK.  In most cases, the defendants switched residents’ insurance coverage without getting the residents or their family members to sign a consent form evidencing the resident’s consent to the insurance change.  In certain instances, at the direction of WEINBERG, MORRIS PARK staff offered to reduce or waive the co-payments that would be owed by residents under Original Medicare in order to try to persuade them to agree to disenroll from their MA Plan.   

In the summer of 2018, on WEINBERG’s recommendation, MORRIS PARK retained WEINBERG’s friend, ARM (who worked at another skilled nursing facility) to assist with the improper disenrollments.  MORRIS PARK paid ARM a $1,000 fee for each resident whom ARM helped to switch to Original Medicare.  ARM agreed to split this $1,000 fee with WEINBERG, so WEINBERG would pocket $500 for each resident who was disenrolled. 

The settlement with the estate of the owner of MORRIS PARK at the time of the misconduct includes the following admissions of conduct:

• During the period from 2017 through 2019, MORRIS PARK offered to make, and in fact made, cash payments to the Jacobi Manager for each Original Medicare patient referral that resulted in an admission to the facility.  For much of this period, the Jacobi Manager received the sum of $150 for each referral. 
• During the period from 2017 through 2019, MORRIS PARK admitted dozens of Medicare patients who were referred to the facility by Jacobi.
• In order to persuade residents to disenroll from their MA Plans, in many instances, MORRIS PARK staff did not fully explain to residents and their families how a switch to Original Medicare would affect the resident’s coverage, including potential changes to the resident’s co-payments and deductibles and the potential loss of supplemental coverage that was available under the resident’s MA Plan.  In some instances, MORRIS PARK staff offered inducements to residents or their family members to try to persuade them to agree to the disenrollment.  For example, at the direction of WEINBERG, staff sometimes offered to reduce or waive the co-payments that residents would be required to pay starting on the 21st day of their stay at the facility if they switched to Original Medicare. 
• In most cases, MORRIS PARK disenrolled residents from their MA Plans without obtaining from the resident or any family member a signed disenrollment form or any other document evidencing the resident’s consent to the insurance change.  In several instances, MORRIS PARK disenrolled residents even after the residents and/or their family members had indicated they did not want to switch their Medicare coverage.
• Starting in early 2019, MORRIS PARK paid WEINBERG monthly cash bonuses if the average number of Original Medicare residents at the facility was maintained at a certain level for a given month.  MORRIS PARK also paid bonuses to marketing and admissions staff members that were tied to the admission of new residents with Original Medicare.

As part of his settlement, WEINBERG admits, acknowledges, and accepts responsibility for the following conduct:  

• Starting sometime in 2017, WEINBERG was responsible for delivering the cash payments personally to the Jacobi Manager.  They texted to arrange a time and place to meet in person, often meeting at a CVS parking lot close to MORRIS PARK.  WEINBERG reached out to the Jacobi Manager on numerous occasions to ask for patient referrals so he could fill empty beds at MORRIS PARK.
• During his time at MORRIS PARK, WEINBERG sought to maximize the number of residents who were enrolled in Original Medicare. 
• Shortly after he became Administrator, WEINBERG directed MORRIS PARK’s staff to try to persuade many of the facility’s residents to disenroll from their MA Plans and to enroll in Original Medicare instead.  WEINBERG identified residents who were candidates for disenrollment and then pressured staff to take steps to switch those residents’ insurance coverage. 
• In the summer of 2018, WEINBERG contacted his friend, ARM, who worked full-time at another skilled nursing facility in the Bronx.  WEINBERG asked ARM to assist with the disenrollment process at MORRIS PARK.  MORRIS PARK reached an agreement with ARM under which MORRIS PARK would pay $1,000 to ARM for each MORRIS PARK resident whom ARM helped to disenroll from a Medicare Advantage Plan and enroll in Original Medicare.  WEINBERG and ARM agreed that they would split this $1,000 payment, so that WEINBERG would receive $500 for each resident disenrolled.  WEINBERG did not disclose this arrangement to MORRIS PARK.
• Once ARM was retained, the pace of disenrollments dramatically increased.  WEINBERG continued to exert significant pressure on MORRIS PARK staff to disenroll as many residents from Medicare Advantage Plans as possible.  In one instance in July 2019, WEINBERG directed the facility’s Financial Coordinator to disenroll a resident who clearly lacked the capacity to consent to a change in their insurance coverage.  The Financial Coordinator asked WEINBERG “[h]ow do we do a dis enrollment” when the resident “is not alert” and has no family.  WEINBERG responded: “We just do it.” 

As part of his settlement, ARM admits, acknowledges, and accepts responsibility for the following conduct:  

• ARM understood that MORRIS PARK would benefit from maximizing the number of residents who were enrolled in Original Medicare because the facility typically received a higher daily reimbursement rate for residents enrolled in Original Medicare as compared to MA Plans, and Original Medicare residents were often approved by Medicare for longer stays in the facility.  
• ARM reached an agreement under which MORRIS PARK would pay $1,000 to ARM for each MORRIS PARK resident whom ARM helped to disenroll from a MA Plan and enroll in Original Medicare.  WEINBERG asked ARM to split this $1,000 payment with him, so that WEINBERG would receive $500 for each resident disenrolled.  ARM agreed.  ARM did not disclose this arrangement to anyone else at MORRIS PARK.
• From August 2018 through December 2019, MORRIS PARK paid ARM $1,000 for each MORRIS PARK resident who was disenrolled from their MA Plan and enrolled in Original Medicare.  
• Although ARM usually relied on MORRIS PARK staff to obtain and document the resident’s consent, he did not confirm that the resident had actually consented or signed the disenrollment form before processing the disenrollment.

*                *                *

Mr. Williams thanked HHS-OIG for its assistance with the case. 

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.

Sayfullo Saipov, 34, of Uzbekistan, was sentenced to eight consecutive life sentences, two concurrent life sentences, and a consecutive sentence of 260 years in prison for carrying out a terrorist attack on Oct. 31, 2017, in the name of the Islamic State of Iraq and al-Sham (ISIS), in which Saipov used a truck to murder eight victims and injure many more on a bike path in lower Manhattan.

On Jan. 26, a jury convicted Saipov of all 28 counts in the indictment, which charged Saipov with murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); assault with a dangerous weapon and attempted murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); providing material support to a designated foreign terrorist organization (ISIS) resulting in death; and damage and destruction to a motor vehicle resulting in death. On March 13, 2023, the same jury was unable to reach a unanimous verdict on whether Saipov should be sentenced to death, resulting in a mandatory sentence of life in prison.

“Today’s sentence means that Sayfullo Saipov will spend the rest of his life in federal prison for brutally murdering eight innocent victims during his carefully calculated ISIS terrorist attack,” said Attorney General Merrick B. Garland. “The Department of Justice honors the victims, their families, and the survivors of this horrific attack. We will continue to vigorously defend the American people from threats of terrorism and will work tirelessly to bring those who perpetrate terrorist attacks to justice.”

“Although it has been more than five years since Sayfullo Saipov carried out this horrific, senseless attack in the name of ISIS, the FBI never relented in our pursuit of justice for the victims and their loved ones,” said FBI Director Christopher Wray. “This case demonstrates the FBI’s steadfast commitment to working with our law enforcement partners to hold accountable those who commit acts of violence inspired by terrorist groups.”

“In March 2023, a jury determined that Sayfullo Saipov would spend the rest of his life in prison for his heinous crimes. Today, the court issued the maximum possible penalty on each count of conviction and ordered that eight of Saipov’s life sentences along with 260 years in prison will run consecutively to the other sentences imposed,” said U.S. Attorney Damian Williams for the Southern District of New York. “These eight life sentences account for the eight lives Saipov stole when he committed his vicious ISIS attack. The 260 years in prison constitutes the maximum penalty for the 18 attempted murders Saipov cruelly committed, which included the attempted murders of four children. More than just holding Saipov accountable for his depraved crimes, the proceedings today gave further voice to the victims. More than 20 victims and family members addressed the Court and confronted Saipov. They bravely and boldly shared their pain and devastation. While we cannot make these victims whole after what Saipov stole from them, this office along with our partners in the Department of Justice and the FBI are proud to have served the victims and sought justice on their behalf.”    

As set forth in public documents in the case and statements made during court proceedings:

On Halloween afternoon in 2017, Saipov used a 6,000-pound truck to strike more than 20 innocent people on the Hudson River Bike Path in lower Manhattan. Saipov killed eight of his victims and critically injured many others, including a 14-year-old child. Saipov’s surviving victims suffered amputations, serious brain injuries, life-altering physical injuries, and significant psychological trauma. Saipov committed his attack after years of devotion to the brutal terrorist organization ISIS and after months of careful planning. In the weeks before his attack, for example, Saipov rented a truck to practice maneuvering it so that he could hit as many people as possible. Saipov brought a note to the attack with the ISIS flag and rallying cry written on it. After his attack, while in custody at a hospital, Saipov told the FBI that he committed the attack in response to calls from the leader of ISIS and that he was proud of what he had done. Saipov smiled when describing his attack and sought to hang the ISIS flag in his hospital room.

After the attack, ISIS praised Saipov as an Islamic State soldier and called his attack one of the most prominent attacks in the United States. In the years since his attack, Saipov continued to demonstrate his devotion to ISIS, including though statements in court, recorded telephone calls, and writings seized from his prison cell. In prison, Saipov also made statements confirming his continued belief that enemies of ISIS should be eliminated and threatening to cut the heads off of corrections officers. At the liability and sentencing phases of trial, many of Saipov’s victims and their family members bravely described the terror he caused and the pain and suffering they continue to endure.

While the jury determined that Saipov would be sentenced to life in prison on six counts of conviction, Judge Broderick sentenced Saipov to the statutory maximum penalty on each count of conviction and ordered that Saipov’s sentences on the counts of conviction charging him with murder and attempted murder of particular victims would run consecutively to all other sentences imposed. In total, Saipov was sentenced to eight consecutive life sentences, 260 years in prison to run consecutively, and two additional life sentences to run concurrently to each other and to all other sentences imposed. The judge will issue an order concerning restitution to victims at a later date.

More than 20 victims and family members delivered emotional and powerful victim impact statements at Saipov’s sentencing.

The FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies investigated the case. The Department of Homeland Security’s Homeland Security Investigations; the Justice Department’s National Security Division’s Counterterrorism Section and Criminal Division’s Capital Case Section and Organized Crime and Gang Section provided valuable assistance, as did the Justice Department’s Office of Enforcement Operations and Office of International Affairs.

Assistant U.S. Attorneys Amanda L. Houle, Jason A. Richman, Alexander Li, and Andrew Dember for the Southern District of New York, with the assistance of Paralegal Specialist Daniel Sitko, and Trial Attorney John Cella of the National Security Division’s Counterterrorism Section and Trial Attorney Michael Warbel of the Criminal Division’s Capital Case Section prosecuted the case.

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, and Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), announced today that United States District Judge Vernon S. Broderick sentenced SAYFULLO SAIPOV to eight consecutive life sentences, two concurrent life sentences, and a consecutive sentence of 260 years in prison for carrying out a terrorist attack on October 31, 2017, in the name of the Islamic State of Iraq and al-Sham (“ISIS”), in which SAIPOV used a truck to murder eight victims and injure many more on a bike path in lower Manhattan. 

On January 26, 2023, a jury convicted SAIPOV of all 28 counts in the Indictment, which charged SAIPOV with murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); assault with a dangerous weapon and attempted murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); providing material support to a designated foreign terrorist organization (ISIS) resulting in death; and damage and destruction to a motor vehicle resulting in death.  On March 13, 2023, the same jury was unable to reach a unanimous verdict on whether Saipov should be sentenced to death, resulting in a mandatory sentence of life in prison.     

U.S. Attorney Damian Williams said: “In March 2023, a jury determined that Sayfullo Saipov would spend the rest of his life in prison for his heinous crimes.  Today, the Court issued the maximum possible penalty on each count of conviction and ordered that eight of Saipov’s life sentences along with 260 years in prison will run consecutively to the other sentences imposed.  These eight life sentences account for the eight lives Saipov stole when he committed his vicious ISIS attack.  The 260 years in prison constitutes the maximum penalty for the eighteen attempted murders Saipov cruelly committed, which included the attempted murders of four children.  More than just holding Saipov accountable for his depraved crimes, the proceedings today gave further voice to the victims.  More than 20 victims and family members addressed the Court and confronted Saipov.  They bravely and boldly shared their pain and devastation.  While we cannot make these victims whole after what Saipov stole from them, this Office along with our partners in the Department of Justice and the FBI are proud to have served the victims and sought justice on their behalf.”    

Attorney General Merrick B. Garland said: “Today’s sentence means that Sayfullo Saipov will spend the rest of his life in federal prison for brutally murdering eight innocent victims during his carefully calculated ISIS terrorist attack.  The Department of Justice honors the victims, their families, and the survivors of this horrific attack.  We will continue to vigorously defend the American people from threats of terrorism and will work tirelessly to bring those who perpetrate terrorist attacks to justice.”

FBI Director Christopher A. Wray said: “Although it has been more than five years since Sayfullo Saipov carried out this horrific, senseless attack in the name of ISIS, the FBI never relented in our pursuit of justice for the victims and their loved ones.  This case demonstrates the FBI’s steadfast commitment to working with our law enforcement partners to hold accountable those who commit acts of violence inspired by terrorist groups.”

As set forth in public documents in the case and statements made during court proceedings:

On Halloween afternoon in 2017, SAYFULLO SAIPOV used a 6,000-pound truck to strike more than 20 innocent people on the Hudson River Bike Path in lower Manhattan.  SAIPOV killed eight of his victims and critically injured many others, including a 14-year-old child.  SAIPOV’s surviving victims suffered amputations, serious brain injuries, life-altering physical injuries, and significant psychological trauma.  SAIPOV committed his attack after years of devotion to the brutal terrorist organization ISIS and after months of careful planning.  In the weeks before his attack, for example, SAIPOV rented a truck to practice maneuvering it so that he could hit as many people as possible.  SAIPOV brought a note to the attack with the ISIS flag and rallying cry written on it.  After his attack, while in custody at a hospital, SAIPOV told the FBI that he committed the attack in response to calls from the leader of ISIS and that he was proud of what he had done.  SAIPOV smiled when describing his attack and sought to hang the ISIS flag in his hospital room.  After the attack, ISIS praised SAIPOV as an Islamic State soldier and called his attack one of the most prominent attacks in the United States.  In the years since his attack, SAIPOV continued to demonstrate his devotion to ISIS, including through statements in court, recorded telephone calls, and writings seized from his prison cell.  In prison, SAIPOV also made statements confirming his continued belief that enemies of ISIS should be eliminated and threatening to cut the heads off of corrections officers.  At the liability and sentencing phases of trial, many of SAIPOV’s victims and their family members bravely described the terror he caused and the pain and suffering they continue to endure.

Judge Broderick sentenced SAIPOV to the statutory maximum penalty on each count of conviction and ordered that SAIPOV’s sentences on the counts of conviction charging him with murder and attempted murder of particular victims would run consecutively to each other and to all other sentences imposed.  In total, SAIPOV was sentenced to eight consecutive life sentences, 260 years in prison to run consecutively, and two additional life sentences to run concurrently to each other and to all other sentences imposed.  The Judge will issue an order concerning restitution to victims at a later date.

More than 20 victims and family members delivered emotional and powerful victim impact statements at SAIPOV’s sentencing.

*                *                *

In addition, SAIPOV, 34, of Uzbekistan, was sentenced to five years of supervised release. 

Mr. Williams praised the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the Department of Homeland Security, Homeland Security Investigations, the Department of Justice’s National Security Division, and the Criminal Division’s Capital Case Section, Organized Crime and Gang Section, Office of Enforcement Operations, and Office of International Affairs for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Amanda L. Houle, Jason A. Richman, Alexander Li, and Andrew Dember, with the assistance of Paralegal Specialist Daniel Sitko, are in charge of the prosecution, with assistance from Trial Attorney Michael Warbel of the Criminal Division’s Capital Case Section and Trial Attorney John Cella of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that OFER ABARBANEL was sentenced by U.S. District Judge Lewis A. Kaplan to four years in prison for defrauding investors and prospective investors in a mutual fund he founded and controlled.  ABARBANEL previously pled guilty to one count of investment adviser fraud.

U.S. Attorney Damian Williams said: “Ofer Abarbanel violated the trust placed in him by investors.  He promised investors safe and liquid investments, but instead transferred their money to counterparties he controlled and engaged in risky investments he was not authorized to make.  Today’s sentence should send a strong signal to investment advisers that violations of their fiduciary duties to investors will have consequences.”

According to the allegations in the Indictment, Superseding Information, and statements made in public court proceedings:

Beginning in approximately 2018 through his arrest in June 2021, OFER ABARBANEL engaged in a scheme to defraud investors in a mutual fund he founded and controlled, called “Income Collecting 1-3 Months T-Bills Mutual Fund” (the “Fund”).  ABARBANEL also owned and controlled the investment adviser to the Fund.  In that capacity, ABARBANEL made materially false representations and omitted material information to the largest group of investors (the “Investor Group”) about how their money would be invested. 

Among other things, ABARBANEL falsely represented that investments in the Fund would be placed “primarily” in short-term United States Treasury securities, when instead of investing in such securities directly, ABARBANEL and his confederates transferred the investor funds to counterparties controlled by or otherwise closely associated with ABARBANEL for use, among other things, in trading not authorized by the Fund’s offering documents.

ABARBANEL further represented that, in order to enhance income, the Fund intended to invest in securities lending transactions as well as repurchase and reverse repurchase agreements.  ABARBANEL represented, as to these transactions, that the Fund would receive and maintain in its possession and control safe and secure collateral in the form of Treasury securities that could be quickly liquidated in the event a counterparty defaulted on its obligations.  ABARBANEL, however, failed to obtain for the Fund the promised collateral to secure the investments.  Nonetheless, ABARBANEL repeatedly represented, in substance, that the Fund had possession of the collateral.

In or about May and June 2021, ABARBANEL failed to honor a redemption request by the Investor Group for the entirety of its outstanding investment, totaling more than $100 million, instead placing conditions on the redemption that were contrary to the Fund’s offering document and to the Fund’s practices with respect to prior redemptions.  On or about June 16, 2021, the Fund transferred more than $10 million in investor funds from the Fund to a personal brokerage account of an attorney working with the Fund.

*                *                *

In addition to the prison sentence, OFER ABARBANEL, 48, of Woodland Hills, California, was ordered to forfeit $106 million and to pay restitution to victims in the amount of $106 million.

Mr. Williams praised the investigative work of the U.S. Postal Inspection Service.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Allison Nichols is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today’s conviction in federal court of SIR MURRAY for witness tampering and conspiracy to commit witness tampering.  MURRAY threatened, intimidated, and offered bribes to a sex trafficking victim for the purpose of inducing her to recant testimony she gave in a prior trial against a sex trafficker.  The jury convicted MURRAY today following a three-day trial before U.S. District Judge Lorna G. Schofield.

U.S. Attorney Damian Williams said: “Sir Murray’s conviction sends a clear message to the public that efforts to corrupt the criminal justice system will not be tolerated.  Those who threaten, intimidate, or try to bribe witnesses will be held accountable, and those who engage in such efforts should be on notice that they will be brought to justice.”

According to the Indictment, documents filed previously in the case, and the evidence admitted at trial:

In fall 2021, MURRAY agreed with Justin Rivera, who was convicted of conspiracy to commit sex trafficking following a trial in the Southern District of New York in June 2021, to tamper with a victim (“Victim-1”) who testified at Rivera’s trial.  MURRAY offered Victim-1 bribes, intimidated her, and threatened her for the purpose of persuading her to recant her testimony.  In executing the plan, MURRAY directly contacted Rivera, who was in custody, exclusively through a contraband cellphone that Rivera maintained where he was in custody. 

MURRAY and Rivera are both members of the Bloods street gang, and in his communications with Victim-1, MURRAY offered Victim-1 payment from “every Blood in [Long Island]” in exchange for Victim-1 recanting her testimony.  MURRAY also sent Victim-1 multiple written messages containing veiled threats stating that MURRAY had done an “investigation” of Victim-1, knew where she lived, and knew that Victim-1 had a “beautiful son.” 

MURRAY’s co-conspirator, Rivera, was convicted of one count of conspiracy to commit sex trafficking following a trial in June 2021 before U.S. District Judge Paul A. Engelmayer.  In October 2022, Judge Engelmayer sentenced Rivera to a prison term of 21 years.  Having considered much of the same evidence presented to the jury at MURRAY’s trial, Judge Engelmayer stated at Rivera’s sentencing that “the facts . . . set out a blatant instance of post-trial witness tampering” that “was transparently aimed at subverting a justly returned conviction.” 

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MURRAY, 31, of Suffolk County, New York, was convicted of one count of witness tampering in connection with a criminal case and one count of conspiring to do the same.  The maximum sentence on both counts is life in prison.  

The maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  MURRAY is scheduled to be sentenced on September 18, 2023.

Mr. Williams praised the outstanding work of the Suffolk County Police Department and the Federal Bureau of Investigation’s Child Exploitation and Human Trafficking Task Force. 

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Thomas S. Burnett, Lisa Daniels, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialist Maria Gatica.

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict today against MALEK BALOUCHZEHI, a/k/a “Malek Khan,” on charges of conspiring to import heroin into the United States and distributing heroin for importation into the United States.  U.S. District Judge Jesse M. Furman presided over the one-week trial.  BALOUCHZEHI is scheduled to be sentenced September 12, 2023.

U.S. Attorney Damian Williams said: “Malek Balouchzehi sought to expand his significant drug trafficking operations by importing massive quantities of heroin into the United States and sending it right here, to New York.  Balouchzehi has trafficked drugs around the world for at least a decade.  Today, Balouchzehi stands convicted of his crimes and faces the possibility of a lengthy prison sentence.  We will continue to work diligently with the DEA to curb the importation of heroin, a lethal drug plaguing our communities.”

As reflected in the Indictment, public filings, and the evidence presented at trial:

BALOUCHZEHI is an Iran-based drug trafficker.  In or about September 2019, BALOUCHZEHI and an Iranian drug trafficking partner began communicating with individuals whom BALOUCHZEHI believed were heroin traffickers interested in large quantities of heroin for importation into the United States, as well as methamphetamine for distribution in Australia.  Those individuals were, in fact, a confidential source working at the Drug Enforcement Administration’s (“DEA”) direction and an undercover DEA agent posing as a New York-based heroin distributor.  In December 2019, BALOUCHZEHI sent a courier in Mozambique to deliver a sample of approximately two kilograms of heroin, with the understanding that those drugs would be transported to the United States for testing and sale in New York City.  Following this sample heroin shipment, BALOUCHZEHI planned to supply thousands of kilograms of heroin for importation to and distribution within the United States.  In meetings in Nairobi, Kenya, in October 2021, BALOUCHZEHI agreed to distribute ton quantities of heroin for importation to New York and to provide the heroin via maritime routes, using a fishing company to conceal his narcotics activities, in order to make millions of dollars in profits.  During these meetings in Nairobi, BALOUCHZEHI also described his prior international drug trafficking activities over the last decade, including his loads of thousands of kilograms of heroin, and showed photographs evidencing his large-scale trafficking operation.

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BALOUCHZEHI, 39, of Iran, was convicted of one count of conspiring to import heroin into the United States, and one count of distributing heroin for importation into the United States, each of which carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum 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 Judge Furman.

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division, Bilateral Investigations Unit and New York Field Division; the DEA’s Nairobi, Maputo, Pretoria, Bucharest, and Jakarta Country Offices; the Kenyan National Police; the Mozambique National Criminal Investigation Services; and the Western Australia Police Force.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs for its assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Kaylan E. Lasky, Michael J. Lockard, Kimberly J. Ravener, and Elinor L. Tarlow are in charge of the prosecution.

The former president of a New York-based non-governmental entity (NGO) was sentenced today to three years and six months in prison for paying bribes to elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation.

According to court documents, beginning in or around 2016 and continuing until at least August 2020, Cary Yan, 51, conspired with others – including his assistant, Gina Zhou – in connection with a multi-year bribery scheme. Yan offered and paid tens of thousands of dollars in bribes to high-level RMI officials, including members of the RMI legislature, in exchange for supporting legislation creating a semi-autonomous region within the RMI called the Rongelap Atoll Special Administrative Region (RASAR) that would benefit the business interests of Yan and his associates. Yan carried out the bribery scheme using the New York-based NGO, including the physical use of its headquarters in Manhattan, to meet and communicate with RMI officials.

In December 2022, Yan and Zhou each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practice Act. On Feb. 16, Zhou was sentenced to two years and seven months in prison for her role in the scheme.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Damian Williams for the Southern District of New York, and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.

The FBI New York Field Office investigated the case. The Royal Thai Government, the U.S. Department of State’s Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Yan.

Assistant Chief Gerald M. Moody, Jr. and Trial Attorney Anthony Scarpelli of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom for the Southern District of New York prosecuted the case.

The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CARY YAN, a/k/a “Hong Hui Yan,” a/k/a “Chen Hong,” was sentenced today by United States District Judge Naomi Reice Buchwald to 42 months in prison.  YAN led a multi-year scheme to bribe government officials in the Republic of the Marshall Islands (the “RMI”) to pass legislation that would benefit his business interests.  In addition, on February 16, 2023, Judge Buchwald imposed a sentence of approximately 31 months in prison on YAN’s co-defendant GINA ZHOU, a/k/a “Chaoting Zhou,” a/k/a “Angel Zhou,” for her role in the scheme.

U.S. Attorney Damian Williams said: “Bribery of government officials erodes faith in democracy, and the effects of the corruption of government officials, whether in the United States or abroad, are felt worldwide.  The defendants have now been held accountable for their corrupt and illegal conduct.”

According to court filings in the case and publicly available information:

Between 2016 and 2020, YAN and ZHOU sought to develop a semi-autonomous region within a part of the RMI known as the Rongelap Atoll.  The creation of the proposed semi-autonomous region was intended by YAN, ZHOU, and those associated with them to obtain business by, among other things, allowing YAN and ZHOU to attract investors to participate in economic and social development projects that YAN, ZHOU, and others promised would occur in the semi-autonomous region.

As proposed by YAN and ZHOU, the so-called Rongelap Atoll Special Administrative Region (the “RASAR”) would be created by legislation (the “RASAR Bill”) that, if enacted by the RMI legislature, would significantly change the laws on the Rongelap Atoll to attract foreign businesses and investors, such as by lowering or eliminating taxation and relaxing immigration regulations.  YAN and ZHOU offered and provided a series of cash bribes and other incentives to induce RMI legislators to support the RASAR Bill.  When, despite their bribes, the initial effort to pass the RASAR bill failed, YAN and ZHOU sought, unsuccessfully, to oust the then-President of the RMI, who opposed the bill.  And, in 2020, following elections that resulted in a change in presidential administration, YAN and ZHOU resumed their efforts to create the RASAR.  In the course of these renewed efforts, YAN and ZHOU continued to use bribery, and in March 2020, the RMI legislature passed a resolution endorsing the concept of the RASAR, with the support of legislators to whom YAN and ZHOU had provided bribes and other incentives.

In imposing a 42-month sentence on YAN today, Judge Buchwald remarked that there was “no question that bribery of public officials undermines democracy, and that it is important as a matter of general deterrence to take crimes like this seriously. And the Court does.”

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YAN, 51, and ZHOU, 35, both of whom have traveled on passports issued by the RMI, each pled guilty to one count of conspiring to violate the Foreign Corrupt Practices Act.    

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams additionally thanked the Royal Thai Government, the U.S. Department of State's Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department's Office of International Affairs for their assistance in securing the arrest and extradition of the defendants.  

The case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom are in charge of the prosecution.  Assistant Chief Gerald Moody and Trial Attorney Anthony Scarpelli were also assigned to the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Matthew S. Axelrod, Assistant Secretary for Export Enforcement of the Commerce Department, announced the unsealing of an Indictment charging XIANGJIANG QIAO, a/k/a “Joe Hansen,” with sanctions evasion, money laundering, and bank fraud offenses based on QIAO’s alleged participation in a scheme to use a sanctioned Chinese company to provide materials used in the production of weapons of mass destruction (“WMDs”) to Iran, in exchange for payments made through the U.S. financial system.  QIAO is at large in China.

U.S. Attorney Damian Williams said: “As alleged, Xiangjiang Qiao conspired to send isostatic graphite to Iran, in violation of U.S. sanctions.  Isostatic graphite is a high-tech material used in the nose tips of intercontinental ballistic missiles.  The Iranian regime of terror and repression, and those who facilitate it, pose a grave threat to our national security.  This Office will continue to work relentlessly to bring to justice those who advance the interests of the Iranian regime and thereby threaten the safety and security of the American people.”

Assistant Attorney General Matthew G. Olsen said: “These charges demonstrate the Justice Department’s commitment to preventing sensitive technology from falling into the hands of foreign adversaries, including Russia, China, and Iran.  We will not tolerate those who would violate U.S. laws to allow authoritarian regimes and other hostile nations to use advanced technology to threaten U.S. national security and undermine democratic values around the world.”

FBI Assistant Director in Charge Michael J. Driscoll said: “Qiao, as alleged, participated in a yearslong scheme that directly violated United States sanctions by seeking to provide components used in manufacturing Weapons of Mass Destruction to Iran.  Evasions of sanctions designed to deter hostile foreign nations from producing dangerous weapons is a threat to the national security of the United States and our allies.  The FBI will be aggressive in its pursuit of any individual willing to deliberately violate imposed sanctions.”

Assistant Secretary for Export Enforcement Matthew S. Axelrod said: “Protecting sensitive American technology – like source code for ‘smart’ automotive manufacturing equipment or items used to develop quantum cryptography – from being illegally acquired by our adversaries is why we stood up the Disruptive Technology Strike Force.  The Strike Force actions announced today reflect the core mission of our Export Enforcement team – keeping our country’s most sensitive technologies out of the world’s most dangerous hands.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court:[1]

XIANGJIANG QIAO, a/k/a “Joe Hansen,” is a national of the People’s Republic of China (“China”) and an employee of the China-based company Sinotech Dalian Carbon and Graphite Manufacturing Corporation (“Sinotech Dalian”).  Sinotech Dalian is part of a network of Chinese companies involved in the proliferation of WMDs and that, in particular, provide assistance in the procurement of materials for Iran’s ballistic missile program.  In 2014, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned Sinotech Dalian, adding the company to OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”), explaining that Sinotech Dalian is part of a network of China-based entities used to proliferate WMDs and, specifically, to aid Iranian ballistic missile procurement.  Sinotech Dalian’s inclusion on the SDN List prohibits it from using the U.S. financial system to conduct transactions without authorization from OFAC.  QIAO is an associate of Li Fangwei, a/k/a “Karl Lee,” who managed the Sinotech Dalian network of companies and was charged in 2014 in the Southern District of New York with sanctions evasion and other offenses based on his alleged illicit activities as a principal contributor to Iran’s ballistic missile program through China-based entities that have been sanctioned by the U.S. Government.  See United States v. Li Fangwei, 14 Cr. 144 (S.D.N.Y.).

In willful violation of U.S. sanctions on Iran and Sinotech Dalian, between at least March 2019 and September 2022, QIAO participated in a scheme to use Sinotech Dalian, including through transactions involving the U.S. financial system, to supply isostatic graphite to Iran for the production of WMDs.  Isostatic graphite is a type of graphite with an ultra-fine grain that is used in the manufacture of WMDs.  In particular, isostatic graphite is used in the manufacture of rocket nozzles and reentry vehicle nose tips in intercontinental ballistic missiles.  QIAO further took steps to conceal Sinotech Dalian’s involvement in the transaction by creating a bank account in the name of a front company to receive two transfers from a U.S. bank totaling over $15,000 as part of his efforts to facilitate the supply of isostatic graphite to Iran.

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QIAO, 39, a Chinese national, is charged with one count of conspiracy to violate U.S. sanctions against Iran and Sinotech Dalian, in violation of the International Emergency Economic Powers Act (“IEEPA”), which carries a maximum sentence of 20 years in prison; two counts of violating the IEEPA, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; two counts of attempted bank fraud, which each carry a maximum sentence of 30 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; and two counts of money laundering, which each carry a maximum sentence of 20 years in prison.

The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the 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.  Mr. Williams also thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Gillian S. Grossman and Nicholas S. Bradley are in charge of the prosecution, with assistance from Trial Attorney S. Derek Shugert of the Counterintelligence and Export Control Section.

Today’s actions were coordinated through the Disruptive Technology Strike Force, 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.  Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws. 

The charges in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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[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.