Southern District of New York

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 Indictment charging MONA FAIZ MONTRAGE for her role in a series of romance schemes and for laundering the proceeds of those schemes.  MONTRAGE was arrested in the United Kingdom on November 10, 2022, and was extradited from the United Kingdom on May 12, 2023.  MONTRAGE will be presented before U.S. District Judge Paul A. Crotty, to whom the case is assigned, later today.

U.S. Attorney Damian Williams said: “As alleged, Mona Faiz Montrage was a member of a criminal conspiracy that specifically targeted older Americans through romance scams.  These scams can be both financially and emotionally devastating for vulnerable victims.  Thanks to the efforts of our law enforcement partners, Montrage was arrested abroad and has been brought to the United States to face justice.”

FBI Assistant Director in Charge Michael J. Driscoll said: “We alleged today that Ms. Montrage participated in multiple romance scams – often targeting elderly victims – resulting in more than $2 million in fraudulent funds under her control.  Romance scams – especially those that target older individuals – are of major concern.  The FBI will be tireless in our efforts to hold fraudsters accountable in the criminal justice system.”

As alleged in the Indictment and other publicly filed materials:[1]

From at least in or about 2013 through in or about 2019, MONTRAGE was a member of a criminal enterprise (the “Enterprise”) based in West Africa that committed a series of frauds against individuals and businesses in the United States, including romance scams. 

Many of the Enterprise’s romance scam victims were vulnerable, older men and women who lived alone.  The Enterprise frequently conducted the romance scams by sending the victims emails, text messages, and social media messages that deceived the victims into believing that they were in romantic relationships with a person who had, in fact, a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had successfully convinced victims that they were in a romantic relationship and had gained their trust, they convinced the victims, under false pretenses, to transfer money to bank accounts the victims believed were controlled by their romantic interests, when, in fact, the bank accounts were controlled by members of the Enterprise.

MONTRAGE is a Ghanaian public figure who rose to fame as an influencer through her Instagram profile, under the username “Hajia4Reall,” which at one point had approximately 3.4 million Instagram followers and was among the top 10 profiles with the most followers in Ghana.

MONTRAGE received money from several victims of romance frauds whom members of the Enterprise tricked into sending money.  Among the false pretenses used to induce victims to send money to MONTRAGE were (i) payments to transport gold to the United States from overseas; (ii) payments to resolve a fake FBI unemployment investigation; and (iii) payments to assist a fake United States army officer in receiving funds from Afghanistan.

As to one victim, MONTRAGE used her real name and spoke to the victim several times by phone.  MONTRAGE sent the victim a tribal marriage certificate purporting to show that MONTRAGE and the victim had been married in Ghana.  The victim sent MONTRAGE approximately 82 wire transfers totaling approximately $89,000 to purportedly help with costs associated with MONTRAGE’s father’s farm in Ghana.

In total, MONTRAGE controlled bank accounts that received over $2 million in fraudulent funds from the Enterprise.

*                *                *

MONTRAGE, 30, of Accra, Ghana, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of money laundering conspiracy, and one count of money laundering, each of which carry a maximum sentence of 20 years in prison.  MONTRAGE is also charged with one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams also thanked the United States Marshals Services, the National Extradition Unit, United States Customs and Border Protection, and the FBI Legal Attaché in London for their assistance in the investigation.  The U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from the United Kingdom.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and L. Scott Moreland, Special Agent in Charge of the Department of the United States Army Criminal Investigation Division’s (“Army CID”) Major Procurement Fraud Field Office, announced today the arrest YOUNG BEOM KIM, a native of the Republic of Korea (“Korea”) and a United States citizen, on charges of honest services wire fraud, bribery, and money laundering.  As alleged in an Indictment unsealed today in Manhattan federal court, KIM, while acting in his capacity as Chief of the Design Branch at Army Garrison Yongsan/Casey in Korea (“USAG-Y/C”), schemed to enrich himself through bribes and kickbacks from various manufacturers and suppliers of parts used in U.S. Army contracts.  KIM is expected to be presented today before United States Magistrate Judge James L. Cott.  The case has been assigned to United States District Judge Richard M. Berman.  

U.S. Attorney Damian Williams said: “As alleged in the Indictment, Young Beom Kim was responsible for overseeing construction contracts, including for the repair of bunkers, at Army Garrison Yongsan/Casey in Korea, located just miles from the North Korean border.  The importance of Kim’s work and duties to the Army and its troops cannot be overstated.  Kim betrayed those duties in exchange for a quick buck.  Individuals who would betray their positions of trust for personal financial gain will continue to be held to account by this Office.”

Special Agent in Charge L. Scott Moreland said: “Today’s arrest should serve as a stark reminder that our agents are relentless in their pursuit of those who choose to defraud the government.  We have a very robust group of highly trained special agents and analysts who are masters at combating and uncovering fraud, deception, and other criminal acts associated with government contracting and purchasing.  CID will continue to see to it that anyone suspected of contract fraud and corruption is brought to justice.”

According to the allegations in the Indictment unsealed today in Manhattan federal court and other publicly filed documents: [1]

From at least May 2017 through at least August 2021, KIM was a civilian employee for the U.S. Army, primarily serving as Chief of the Design Branch for the Directorate of Public Works at USAG-Y/C in Korea.  KIM’s responsibilities included designing, reviewing, approving, and/or amending various maintenance, repair, and construction contracts at USAG-Y/C.  While acting in that capacity, KIM helped ensure that certain Army contracts included the use of parts manufactured or supplied by specific companies.  Some of these parts included blast doors, blast valves, shock mounts, and shock isolators (i.e., equipment designed to protect Army personnel in the event of an attack).  In return, the companies manufacturing or supplying those parts collectively sent over $400,000 in kickbacks to KIM.  A significant portion of these funds were laundered through bank accounts controlled by KIM’s adult relatives – including one account held in the name of a shell company (i.e. a company which existed in name only and which performed no legitimate business functions) – and were ultimately used to enrich KIM and to pay for bills and expenses incurred by KIM.

*                *                *

KIM, 62, a resident of Korea, is charged with one count of conspiracy to commit honest services wire fraud and bribery, which carries a maximum sentence of five years in prison; two counts of honest services wire fraud; each of which carry a maximum sentence of 20 years in prison; two counts of bribery, each of which carry a maximum sentence of 15 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding work of Army CID and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams thanked the Antitrust Division of the U.S. Department of Justice for its assistance in this case.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Frank J. Balsamello and Jonathan E. Rebold are in charge of the prosecution. 

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth 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 today that ONEKEY, LLC, a New Jersey construction company, was sentenced to three years of probation and ordered to pay a $218,417 fine and its principal, FINBAR O’NEILL, was sentenced to three months in prison today by U.S. Magistrate Judge Paul E. Davison, following their guilty plea to willfully violating Occupational Safety and Health Administration (“OSHA”) regulations, resulting in the death of a construction worker (“Victim-1”) in Poughkeepsie, New York, on or about August 3, 2017. 

According to statements and filings in federal court:

In 2017, ONEKEY and O’NEILL implemented a soil compaction plan at a construction site at 1 Dutchess Avenue in Poughkeepsie.  The soil compaction plan involved piling large quantities of dirt, called “surcharges,” on top of the sites of three future buildings.  An engineering firm designed a plan for the use of the surcharges.  ONEKEY and O’NEILL did not follow this plan.  Instead, they built a wall to hold back one of the surcharges, so workers could get started on the buildings next to it.  ONEKEY and O’NEILL did not consult with any qualified person to see if the wall could withstand the weight to be placed on it by the surcharge. 

While people were working next to the wall, ONEKEY kept using construction machinery to add dirt to the surcharge pressing up against the wall.  The people working near the wall were not warned about the dangers it created.  ONEKEY and O’NEILL heard from people working at the site that the wall was not safe.  They did not fix the wall.

On August 3, 2017, workers complained that construction machines were driving on top of the surcharge, adding dirt to it.  Later that day, the wall collapsed.  As it fell, Victim-1 ran away from the wall, but he could not get away in time and was killed.

*                *                *

In addition to the prison term, O’NEILL, 57, of Paramus, New Jersey, was sentenced to one year of supervised release.

Mr. Williams praised the outstanding work of OSHA and the Department of Labor, Office of the Inspector General.

The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Steven J. Kochevar and Stephanie Simon are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of VIRGIL WARDLOW for paying for sex with a minor with fentanyl-laced pills.  WARDLOW was arrested yesterday evening in the Bronx, New York, and will be presented today before U.S. Magistrate Judge Valerie Figueredo. 

U.S. Attorney Damian Williams said: “The defendant’s alleged conduct is reprehensible: He allegedly used pills laced with fentanyl to pay for sex with a 16-year-old minor victim.  The victim’s 19-year-old friend ingested one of those pills and died shortly thereafter.  Worse, the defendant’s conduct was allegedly part of a pattern of similar behavior in which he exchanged or attempted to exchange dangerous narcotics for sex.  This Office will be relentless in its efforts to seek justice for victims of child sexual exploitation and for the families facing the horrific tragedy of losing a loved one to fentanyl poisoning.”

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

WARDLOW engaged in a pattern of paying for sex with illicit pills laced with fentanyl.  On or about March 25, 2023, at a hotel room in the Bronx, New York, WARDLOW provided two of those pills to a 16‑year-old female (“Victim-1”) in exchange for sex.  After Victim-1 had sex with WARDLOW and WARDLOW left the hotel room, Victim-1 and her 19-year-old female friend (“Victim-2”) ingested the pills he provided.  Thereafter, Victim-1 and Victim-2 became ill, and Victim-2 died.

Between at least on or about February 8, 2023, and on or about April 7, 2023, WARDLOW exchanged multiple messages with other individuals in which WARDLOW offered to provide pills in exchange for sex and otherwise sell pills.  WARDLOW sent these messages using an anonymized cellphone number that masked his identity from his intended victims.

*                *                *

WARDLOW, 31, of the Bronx, New York, is charged with one count of sex trafficking of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of unlawful distribution of narcotics, which carries a maximum sentence of 20 years 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 New York State Police, the New York City Police Department, and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.

This case is being handled by the Office’s General Crimes Unit and Narcotics 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.

[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 Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing today of an Indictment charging JAMES ELLINGSON, a/k/a “redandwhite,” with narcotics trafficking and money laundering offenses in connection with his sale of large quantities of narcotics on the “Silk Road” online marketplace.  In connection with his drug trafficking on Silk Road, ELLINGSON claimed to have arranged for the murder of five people for Silk Road founder Ross Ulbricht, a/k/a “Dread Pirate Roberts,” for which he was paid hundreds of thousands of dollars in Bitcoin.  Law enforcement does not possess any evidence that the purported murders actually took place.  ELLINGSON was previously arrested in Canada.  The case is assigned to U.S. District Judge Jennifer L. Rochon.   

U.S. Attorney Damian Williams said: “As alleged, Ellingson used the Dark Web to ship dangerous drugs around the world, including to New York City.  He discussed with Silk Road’s founder a plot to kill five people and received hundreds of thousands of dollars in Bitcoin in exchange.  Others who would try to hide in the shadows of the Internet should know that federal law enforcement will continue to uncover crime, wherever and however committed.”

IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Ellingson’s alleged criminal actions are far more egregious than just money laundering or the large quantities of narcotics trafficked through the ‘Silk Road’ online marketplace.  He also claimed to have acted as the middleman between the Silk Road founder and murderers-for-hire.  Now, Ellingson will face the consequences of his actions.”

According to the allegations in the Indictment:[1]

ELLINGSON is a Canadian citizen who lived in the vicinity of Vancouver, Canada.  From 2011 to 2013, ELLINGSON sold large quantities of narcotics through the Silk Road online marketplace under the usernames “MarijuanaIsMyMuse” and “Lucydrop.”  Through his Silk Road usernames, ELLINGSON sold more than four kilograms of methamphetamine, more than 100 grams of heroin, more than two kilograms of cocaine, more than six grams of LSD, approximately seven kilograms of the drug commonly known as “ecstasy” or “MDMA,” and more than 19 kilograms of marijuana, among other narcotics, to Silk Road customers in exchange for Bitcoin, including to customers in New York City.       

In March 2013, ELLINGSON, using the Silk Road username “redandwhite,” contacted Ulbricht, Silk Road’s founder, regarding a purported Silk Road user who had threatened to release personal identifying information of Silk Road drug vendors and customers.  In these messages, Ellingson claimed to have control over most drug trafficking in Western Canada. 

In one message, Ulbricht informed ELLINGSON that “[the murder target] is a liability and I wouldn't mind if he was executed.”  In another message, Ulbricht stated: “[the murder target] is causing me problems . . . I would like to put a bounty on his head if it’s not too much trouble for you.  What would be an adequate amount to motivate you to find him?”  ELLINGSON responded, “[the p]rice for clean is 300k+ USD,” and the “[p]rice for non-clean is 150-200k USD depending on how you want it done.”  ELLINGSON further explained, in part, that “[t]hese prices pay for 2 professional hitters including their travel expenses and work they put in.” 

Ulbricht later sent ELLINGSON $150,000 worth of Bitcoin to pay for the purported murder.  ELLINGSON and Ulbricht agreed on a code to be included with a photograph to prove that the murder had been carried out.  In April 2013, ELLINGSON and Ulbricht exchanged messages reflecting that ELLINGSON had sent Ulbricht photographic proof of the murder.  A thumbnail of a deleted photograph purporting to depict a man lying on a floor in a pool of blood with tape over his mouth was recovered from Ulbricht’s laptop after his arrest.  A piece of paper with the agreed-upon code written on it is shown in the photograph next to the head of the purportedly dead individual.

Later in April 2013, ELLINGSON and Ulbricht exchanged additional messages regarding a plot to kill four additional people in Canada.  Ulbricht sent ELLINGSON an additional $500,000 worth of Bitcoin for the murders.  ELLINGSON claimed to Ulbricht in online messages that the murders had in fact been committed.  

Law enforcement does not possess any evidence that the purported murders ELLINGSON claimed to have arranged actually took place. 

*                *                *

ELLINGSON, 47, of Vancouver, British Colombia, Canada, is charged with one count of narcotics trafficking conspiracy and one count of narcotics importation conspiracy, which each carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding investigative work of IRS-CI’s New York Field Office and thanked the U.S. Department of Justice’s Office of International Affairs for their assistance in the extradition proceedings. 

This case is being handled by the Office’s Complex Frauds & Cybercrime Unit.  Assistant U.S. Attorneys Sagar Ravi and Drew Skinner are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ABDI HUSSEIN AHMED, a citizen of Kenya, was sentenced to 48 months in prison for conspiring to traffic large quantities of rhinoceros horns and elephant ivory — both protected wildlife species — worth millions of dollars that involved the illegal poaching of more than approximately 35 rhinoceros and more than 100 elephants, as well as for conspiring to distribute and possess with intent to distribute one kilogram or more of heroin.  The sentence was imposed earlier today by U.S. District Judge Gregory H. Woods.

AHMED is the fifth and final member of these conspiracies to be sentenced in a case prosecuted over the course of several years, and which has involved the extradition of multiple individuals from several countries in Africa.  AHMED’s co-conspirators were previously sentenced to substantial prison terms by Judge Woods.  Specifically, MOAZU KROMAH, a/k/a “Ayoub,” a/k/a “Ayuba,” a/k/a “Kampala Man,” a citizen of Liberia, was sentenced to a prison term of 63 months; AMARA CHERIF, a/k/a “Bamba Issiaka,” a citizen of Guinea, was sentenced to a prison term of 57 months; MANSUR MOHAMED SURUR, a/k/a “Mansour,” a citizen of Kenya, was sentenced to a prison term of 54 months; and BADRU ABDUL AZIZ SALEH, a/k/a “Badro,” a citizen of Kenya, was sentenced to a prison term of 42 months.

U.S. Attorney Damian Williams said: “Wildlife trafficking is a serious threat to the natural resources and the ecological heritage shared by communities across the globe, and heroin trafficking poses deadly risks to countless individuals.  Moazu Kromah, Amara Cherif, Mansur Mohamed Surur, Badru Abdul Aziz Saleh, and Abdi Hussein Ahmed chose profit over compliance with various United States and international laws that prohibit both of these crimes.  This case demonstrates the crossover between cases involving wildlife trafficking and other kinds of transnational crime.  And the substantial sentences received by these defendants show the resolve of this Office to use every tool at our disposal to ensure the protection of endangered species and the safety of our communities.”

According to the charging and other documents filed in the case, as well as statements made in court proceedings:

KROMAH, CHERIF, SURUR, and AHMED were members of a transnational criminal enterprise (the “Enterprise”) based in Uganda and surrounding countries that was engaged in the large-scale trafficking and smuggling of rhinoceros horns and elephant ivory, both protected wildlife species.  Trade involving endangered or threatened species violates several U.S. laws, as well as international treaties implemented by certain U.S. laws.

From at least in or about December 2012 through at least in or about May 2019, KROMAH, CHERIF, SURUR, and AHMED conspired to transport, distribute, sell, and smuggle at least approximately 190 kilograms of rhinoceros horns and at least approximately 10 tons of elephant ivory from or involving various countries in East Africa, including Uganda, the Democratic Republic of the Congo, Guinea, Kenya, Mozambique, Senegal, and Tanzania, to buyers located in the United States and countries in Southeast Asia.  Such weights of rhinoceros horn and elephant ivory are estimated to have involved the illegal poaching of more than approximately 35 rhinoceros and more than approximately 100 elephants.  In total, the estimated average retail value of the rhinoceros horns involved in the conspiracy was at least approximately $3.4 million, and the estimated average retail value of the elephant ivory involved in the conspiracy was at least approximately $4 million.

Typically, the defendants exported and agreed to export the rhinoceros horns and elephant ivory for delivery to foreign buyers, including a buyer represented to be in Manhattan, in packaging that concealed the rhinoceros horns and elephant ivory in, among other things, pieces of art such as African masks and statues.  The defendants received and deposited payments from foreign customers that were sent in the form of international wire transfers, some of which were sent through U.S. financial institutions, and paid in cash.

On or about March 16, 2018, law enforcement agents intercepted a package containing a black rhinoceros horn sold by the defendants that was intended for a buyer represented to be in Manhattan: 

From in or about March 2018 through in or about May 2018, the defendants offered to sell additional rhinoceros horns of varying weights, including horns weighing up to approximately seven kilograms.  On or about July 17, 2018, law enforcement agents intercepted a package containing two rhinoceros horns weighing over five kilograms that were sold by the defendants and intended for a buyer represented to be in Manhattan:

Separately, from at least in or about August 2018 through at least in or about May 2019, SURUR, AHMED, and SALEH conspired with others to distribute and possess with intent to distribute a large quantity of heroin to a buyer represented to be located in New York.

KROMAH was arrested in Uganda on June 12, 2019, and expelled to the United States on June 13, 2019.  CHERIF was arrested in Senegal on June 7, 2019, and extradited to the United States on April 2, 2020.  SURUR was arrested in Kenya on July 29, 2020, and extradited to the United States on January 25, 2021.  SALEH was arrested in Kenya on May 30, 2022, and extradited to the United States on June 17, 2022.  AHMED was arrested in Kenya on August 1, 2022, and extradited to the United States on September 3, 2022.  The defendants all have been detained since their arrest and arrival in this country.

*                *                *

KROMAH, 53, of Liberia; CHERIF, 58, of Guinea; SURUR, 62, of Kenya; and AHMED, 49, of Kenya, each pled guilty to one count of conspiracy to commit wildlife trafficking.  In addition, KROMAH and CHERIF both pled guilty to two counts of wildlife trafficking.  SALEH, 52, of Kenya, SURUR, and AHMED each pled guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.

Mr. Williams praised the outstanding investigative work of the U.S. Fish and Wildlife Service and the U.S. Drug Enforcement Administration, and he thanked law enforcement authorities and conservation partners in Uganda and Kenya, including the Uganda Wildlife Authority, the Uganda Office of the Director of Public Prosecution, the Uganda Police Force, the Kenya Directorate of Criminal Investigations, and the Kenyan Office of the Director of Public Prosecutions, for their assistance in this investigation.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs and the Department of State for their invaluable assistance, which made it possible to secure the arrest and return of these five defendants from Kenya, Senegal, and Uganda to the United States.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sagar K. Ravi and Jarrod L. Schaeffer are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MARCELO MARIN VARGAS was sentenced yesterday by U.S. District Judge Cathy Seibel to 20 years in prison following VARGAS’s guilty plea in September 2022 to three counts of coercion and enticement of minors to engage in illegal sexual activity.  

U.S. Attorney Damian Williams said: “This sentence sends a clear message to those who would coerce and entice minors to engage in illegal sexual conduct over the internet: Hiding behind a screen will not save you.  We will find you and we will put an end to your victimization of children.  Crimes like these cause real pain and create real victims.”

According to the Information to which VARGAS pled guilty:

VARGAS used a computer and the internet to persuade, induce, entice, and coerce three minor girls to send images and videos of themselves engaging in sexual activity to VARGAS over the internet.

*                *                *

In addition to the prison term, VARGAS, 45, of Putnam County, New York, was ordered to pay restitution for one of VARGAS’s victims in the amount of $3,000.

Mr. Williams praised Homeland Security Investigations for their outstanding investigative work. 

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Benjamin A. Gianforti is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ARDAE HINES, a/k/a “Young Money,” a/k/a “YM,” pled guilty today to conspiracy to commit murder in aid of racketeering and distribution of narcotics in connection with his involvement in the August 1, 2016, murder of Deandric Little in Newburgh, New York.  As part of his guilty plea, HINES admitted that he knowingly and intentionally agreed to kill Little and that Little died as a result.  HINES pled guilty before U.S. District Judge Cathy Seibel.

U.S. Attorney Damian Williams said: “On August 1, 2016, Ardae Hines, a leader of the violent Southside street gang in Newburgh, directed a juvenile gang member to murder Deandric Little in what is considered to be Southside’s territory.  Today’s guilty plea, which comes nearly six years after Hines was initially arrested on federal racketeering charges shows that we will continue to vigorously pursue justice for as long as it takes and hold accountable those who commit acts of violence in our communities.  I commend the tenacity of our law enforcement partners, who worked tirelessly to investigate Deandric Little’s murder.”

According to the allegations in the Superseding Information and other documents filed in federal court as well as statements made in public court proceedings:

From at least 2014 through June 2017, HINES was a member of the Southside Gang, a criminal enterprise centered in and around the intersection of South Street and Chambers Street in an area of Newburgh known as the “Southside.”  In order to enrich the members of the enterprise; preserve and protect the power, territory, and profits of the enterprise; and to keep victims and potential victims in fear of the enterprise, Southside members and associates committed, conspired, attempted, and threatened to commit acts involving murder, assault, robbery, and other acts of violence; possessed and used firearms; distributed controlled substances, including crack cocaine and heroin; and committed acts of intimidation and made threats to deter and punish potential witnesses to their crimes.

On or about August 1, 2016, as part of his membership in Southside, ARDAE HINES orchestrated the murder of Deandric Little in Newburgh.  During the course of an argument with Little on South Street, the heart of Southside territory, HINES instructed a juvenile member of Southside to murder Little.  The juvenile shot Little, and Little died of his injuries soon thereafter. 

*                *                *

ARDAE HINES, 34, of Newburgh, New York, pled guilty to narcotics trafficking, which carries a maximum sentence of 20 years in prison, and conspiracy to commit murder in aid of racketeering, which carries a maximum sentence of 10 years in prison.  HINES will be sentenced before Judge Seibel later this year.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s Hudson Valley Safe Streets Task Force and the City of Newburgh Police Department.  Mr. Williams thanked the Orange County District Attorney’s Office for its invaluable ongoing assistance in the case.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Town of Newburgh Police Department, the New York State Police, the Orange County Sheriff’s Department, the Town of New Windsor Police Department, and the New York Department of Corrections and Community Supervision for their assistance in the case. 

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Lindsey Keenan, Jacqueline Kelly, and Samuel Raymond are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NICKOLAS SHARP, a former employee of a public New York-based technology company (“Company‑1”) was sentenced today to six years in prison.  In December 2020, SHARP secretly stole gigabytes of Company-1’s data.  While purportedly working to remediate the security breach he created, SHARP extorted the company, as an anonymous hacker, for nearly $2 million for the return of the files and the identification of a remaining purported vulnerability.  SHARP subsequently re-victimized his employer by causing the publication of misleading news articles as a purported anonymous whistleblower about the company’s handling of the breach that he perpetrated, which were followed by the loss of over $4 billion in Company-1’s market capitalization.  SHARP previously pled guilty to intentionally damaging a protected computer, wire fraud, and making false statements to the Federal Bureau of Investigation (“FBI”) before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Nickolas Sharp was paid close to a quarter million dollars a year to help keep his employer safe.  He abused that trust by stealing a massive amount of sensitive data, attempting to implicate innocent employees in his attack, extorting his employer for ransom, obstructing law enforcement, and spreading false news stories that harmed the company and anyone who invested into the company.  Sharp now faces serious penalties for his callous crimes.”

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

At all times relevant to the Indictment, Company-1 was a technology company headquartered in New York that manufactured and sold wireless communications products and whose shares were traded on the New York Stock Exchange.  SHARP was employed by Company-1 from in or about August 2018 through on or about April 1, 2021.  SHARP was a senior developer who had access to credentials for Company-1’s Amazon Web Services (“AWS”) and GitHub Inc. (“GitHub”) servers.

In about December 2020, while interviewing for a position at another company, SHARP repeatedly misused his administrative access to download gigabytes of confidential data from his employer.    During the course of this cybersecurity incident (the “Incident”), SHARP caused damage to Company-1’s computer systems by altering log retention policies and other files in order to conceal his unauthorized activity on the network.  SHARP modified session file names to attempt to make it appear as if other coworkers were responsible for his malicious sessions. 

In or about January 2021, while working on a team remediating the effects of the Incident, SHARP sent a ransom note to Company-1, posing as an anonymous attacker who claimed to have obtained unauthorized access to Company-1’s computer networks.  The ransom note sought 50 Bitcoin — which was the equivalent of approximately $1.9 million, based on the prevailing exchange rate at the time — in exchange for the return of the stolen data and the identification of a purported “backdoor,” or vulnerability, to Company-1’s computer systems.  After Company-1 refused the demand, SHARP published a portion of the stolen files on a publicly accessible online platform.

On or about March 24, 2021, FBI agents executed a search warrant at SHARP’s residence in Portland, Oregon, and seized certain electronic devices belonging to SHARP, including a laptop SHARP had used to steal Company-1’s data.  During the execution of that search, SHARP made numerous false statements to FBI agents.

Several days after the FBI executed the search warrant at SHARP’s residence, SHARP caused false news stories to be published about the Incident and Company-1’s response to the Incident.  In those stories, SHARP identified himself as an anonymous whistleblower within Company-1 who had worked on remediating the Incident and falsely claimed that Company-1 had been hacked by an unidentified perpetrator who maliciously acquired root administrator access to Company-1’s AWS accounts.  In fact, as SHARP well knew, SHARP himself had taken Company-1’s data using credentials to which he had access, and SHARP had used that data in a failed attempt to extort Company-1 for millions of dollars.

Following the publication of these articles, between approximately March 30, 2021, and March 31, 2021, Company-1’s stock price fell approximately 20%, losing over $4 billion in market capitalization.  SHARP also attempted to cause domestic and foreign regulators to investigate Company-1 based on his false allegations about the security breach he secretly caused.

*                *                *

SHARP, 37, of Portland, Oregon, pled guilty on February 2, 2023, to one count of transmitting a program to a protected computer that intentionally caused damage, one count of wire fraud, and one count of making false statements to the FBI.  In addition to the prison sentence, SHARP was sentenced to three years of supervised release and ordered to pay restitution of $1,590,487 and to forfeit personal property used or intended to be used in connection with these offenses.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Vladislav Vainberg and Andrew K. Chan are 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, and Ismail J. Ramsey, the United States Attorney for the Northern District of California, announced today the extradition and guilty plea of JOSEPH JAMES O’CONNOR, a/k/a “PlugwalkJoe,” a U.K. citizen.  O’CONNOR was extradited from Spain on April 26, 2023, and pled guilty earlier today before U.S. District Judge Jed S. Rakoff to two sets of charges: (i) conspiracy to commit computer hacking and other charges pending in the Southern District of New York relating to a fraudulent scheme perpetrated by O’CONNOR and his co-conspirators to use a cyber intrusion technique known as a SIM swap attack to steal approximately $794,000 worth of cryptocurrency from a Manhattan-based cryptocurrency company and then to launder the proceeds of the scheme (the “SDNY Case”) and (ii) a set of charges filed in the Northern District of California, and transferred to the SDNY under Federal Rule of Criminal Procedure 20, relating to O’Connor’s role in the July 2020 hack of Twitter, computer intrusions related to takeovers of TikTok and Snapchat user accounts, and cyberstalking two separate victims (the “NDCA Case”).

U.S. Attorney Damian Williams said: “Joseph O’Connor, a/k/a “PlugwalkJoe,” used his sophisticated technological abilities for malicious purposes – conducting a complex SIM swap attack to steal large amounts of cryptocurrency, hacking Twitter, conducting computer intrusions to take over social media accounts, and even cyberstalking two victims, including a minor victim.  O’Connor’s guilty plea today is a testament to the importance of law enforcement cooperation, and I thank our law enforcement partners for helping to bring to justice those who victimize others through cyber-attacks.” 

Assistant Attorney General Kenneth A. Polite, Jr. said: “O’Connor’s criminal activities were flagrant and malicious, and his conduct impacted multiple people’s lives.  He harassed, threatened, and extorted his victims, causing substantial emotional harm.  Like many criminal actors, O’Connor tried to stay anonymous by using a computer to hide behind stealth accounts and aliases from outside the United States.  But this plea shows that our investigators and prosecutors will identify, locate, and bring to justice such criminals to ensure they face the consequences for their crimes.”  

NDCA U.S. Attorney Ismail J. Ramsey said: “O’Connor has left an impressive trail of destruction in the wake of his wave of criminality.  This case serves as a warning that the reach of the law is long, and criminals anywhere who use computers to commit crimes may end up facing the consequences of their actions in places they did not anticipate.”  

According to the allegations in the publicly filed charging documents against O’CONNOR, court filings, and statements made in court:

The SDNY Case

During a cyber intrusion known as a SIM swap attack, cyber threat actors gain control of a victim’s mobile phone number by linking that number to a subscriber identity module (“SIM”) card controlled by the threat actors, resulting in the victim’s calls and messages being routed to a malicious unauthorized device controlled by the threat actors.  The threat actors then typically use control of the victim’s mobile phone number to obtain unauthorized access to accounts held by the victim that are registered to the mobile phone number.

Between approximately March 2019 and May 2019, JOSEPH JAMES O’CONNOR and his co-conspirators perpetrated a scheme to use SIM swaps to conduct cyber intrusions in order to steal approximately $794,000 worth of cryptocurrency from a Manhattan-based cryptocurrency company (“Company-1”), which, at all relevant times, provided wallet infrastructure and related software to cryptocurrency exchanges around the world. 

As part of the scheme, O’CONNOR and his co-conspirators successfully perpetrated SIM swap attacks targeting at least three Company-1 executives.  Following a successful SIM swap attack targeting one of the executives on or about April 30, 2019, O’CONNOR and his co-conspirators successfully gained unauthorized access to multiple Company-1 accounts and computer systems.  On or about May 1, 2019, through their unauthorized access, O’CONNOR and his co-conspirators stole and fraudulently diverted cryptocurrency of various types (the “Stolen Cryptocurrency”) from cryptocurrency wallets maintained by Company-1 on behalf of two of its clients.  The Stolen Cryptocurrency was worth at least approximately $794,000 at the time of the theft. 

After stealing and fraudulently diverting the Stolen Cryptocurrency, O’CONNOR and his co-conspirators laundered it through dozens of transfers and transactions and exchanged some of it for Bitcoin using cryptocurrency exchange services.  Ultimately, a portion of the Stolen Cryptocurrency was deposited into a cryptocurrency exchange account controlled by O’CONNOR.

The NDCA Case

Between 2019 and 2020, O’CONNOR participated in a variety of crimes associated with exploitation of social media accounts, online extortion, and cyberstalking.

In July 2020, O’CONNOR participated in a conspiracy to gain unauthorized access to social media accounts maintained by Twitter, Inc. (“Twitter”).  In early July 2020, O’CONNOR’s co-conspirators used social engineering techniques to obtain unauthorized access to administrative tools used by Twitter to maintain its operations.  Those co-conspirators were able to use the tools to transfer control of certain Twitter accounts from their rightful owners to various unauthorized users.  In some instances, the co-conspirators took control themselves and used that control to launch a scheme to defraud other Twitter users.  In other instances, the co-conspirators sold access to Twitter accounts to others.  O’CONNOR communicated with others regarding purchasing unauthorized access to a variety of Twitter accounts, including accounts associated with public figures around the world.  A number of Twitter accounts targeted by O’CONNOR were subsequently transferred away from their rightful owners.  O’CONNOR agreed to purchase unauthorized access to one Twitter account for $10,000.

O’CONNOR also accessed without authorization one of the most highly visible TikTok accounts in August 2020, which was associated with a public figure with millions of followers (“Victim-1”).  O’CONNOR and his associates obtained unauthorized access to Victim-1’s account via a SIM swap after discussing a variety of celebrities to target, and O’CONNOR used his unauthorized access to Victim-1’s platform to post self-promotional messages, including a video in which O’CONNOR’s voice is recognizable.  O’CONNOR also stated publicly, via a post to Victim-1’s TikTok account, that he would release sensitive, personal material related to Victim-1 to individuals who joined a specified Discord server.

O’CONNOR targeted another public figure (“Victim-2”) in June 2019.  O’CONNOR and his associates obtained unauthorized access to Victim-2’s account on Snapchat via a SIM swap.  They used that access to obtain sensitive materials, to include private images, that Victim-2 had not made publicly available.  O’CONNOR sent copies of these sensitive materials to his associates.  O’CONNOR and his associates also reached out to Victim-2 and threatened to publicly release the stolen sensitive materials unless Victim-2 agreed to publicly post messages related to O’CONNOR’s online persona, among other things.

Lastly, O’CONNOR stalked and threatened a minor victim (“Victim-3”) in June and July 2020.  In June 2020, O’CONNOR orchestrated a series of swatting attacks on Victim-3.  A “swatting” attack occurs when an individual makes a false emergency call to a public authority in order to cause a law enforcement response that may put the victim or others in danger.  On June 25, 2020, O’CONNOR called a local police department and falsely claimed that Victim-3 was making threats to shoot people.  O’CONNOR provided an address that he believed was Victim-3’s address, which would have the result of causing a law enforcement response.  That same day, O’CONNOR placed another call to the same police department and stated that he was planning to kill multiple people at the same address.  In response to that call, the department dispatched every on-duty officer to that address in reference to an armed and dangerous individual.  O’CONNOR sent other swatting messages that same day to a high school, a restaurant, and a sheriff’s department in the same area.  In those messages, O’CONNOR represented himself as either Victim-3 or as a resident at the address he believed was Victim-3’s.  The following month, O’CONNOR called multiple family members of Victim-3 and threatened to kill them.

The NDCA Case was transferred to the Southern District of New York pursuant to Federal Rule of Criminal Procedure 20 and consolidated with the SDNY Case before Judge Rakoff.

*                *                *

O’CONNOR, 23, of the United Kingdom, pled guilty before Judge Rakoff to the following charges: (i) as part of the SDNY Case — conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and (ii) as part of the NDCA Case — conspiracy to commit computer intrusion and two counts of committing computer intrusions, each of which carries a maximum sentence of five years in prison; making extortive communications, which carries a maximum sentence of two years in prison; two counts of stalking, each of which carries a maximum sentence of five years in prison; and making threatening communications, which carries a maximum sentence of five years in prison.  As part of his guilty plea, O’CONNOR agreed to forfeit a sum of money equal to $794,012.64 and to make restitution to victims of his crimes.  O’CONNOR is scheduled to be sentenced by Judge Rakoff on June 23, 2023, at 3:30 p.m.

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

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  He also thanked the Justice Department’s Office of International Affairs for its assistance in the extradition.

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 being handled by the United States Attorney’s Office for the Northern District of California and the Computer Crime and Intellectual Property Section (“CCIPS”) of the Department of Justice.  Assistant United States Attorney Andrew F. Dawson and CCIPS Assistant Deputy Chief Adrienne L. Rose are in charge of the prosecution of the NDCA Case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ISHAN WAHI, a former product manager at Coinbase Global, Inc. (“Coinbase”), was sentenced by U.S. District Judge Loretta A. Preska to two years in prison for providing Coinbase’s confidential business information about upcoming Coinbase crypto asset listings to his brother and his friend so that they could place profitable trades in advance of Coinbase’s listing announcements.  WAHI previously pled guilty to two counts of conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – violated the trust placed in him by his employer by tipping others with valuable confidential information regarding Coinbase’s planned token listings.  Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.  The Southern District of New York will hold those who engage in insider trading to full account, regardless of whether their illegal conduct occurs in the equity markets or in the market for crypto assets.”

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

At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world.  Coinbase users could acquire, exchange, and sell various crypto assets through online user accounts with Coinbase.  Periodically, Coinbase added new crypto assets to those that could be traded through its exchange, and the market value of crypto assets typically significantly increased after Coinbase announced that it would be listing a particular crypto asset.  Accordingly, Coinbase kept such information strictly confidential and prohibited its employees from sharing that information with others, including by providing a “tip” to any person who might trade based on that information.

Beginning in approximately October 2020, ISHAN WAHI worked at Coinbase as a product manager assigned to a Coinbase asset listing team.  In that role, WAHI was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges and had detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings. 

On multiple occasions between June 2021 and April 2022, WAHI violated his duties of trust and confidence to Coinbase by providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges.  Following Coinbase’s public listing announcements, on multiple occasions, Nikhil Wahi and Ramani sold the crypto assets for a profit. 

On April 12, 2022, a Twitter account that is well known in the crypto community tweeted regarding an Ethereum blockchain wallet “that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published.”  The trading activity referenced in the April 12 tweet was trading previously conducted by Ramani based on tips provided by WAHI.  Coinbase thereafter publicly replied on Twitter, noting that it had already begun investigating the matter and, a few weeks later, stated in a public blog post that any Coinbase employee who leaked confidential company information would be “immediately terminated and referred to relevant authorities (potentially for criminal prosecution).”  On May 11, 2022, Coinbase’s director of security operations emailed WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington, office on May 16, 2022.  WAHI confirmed he would attend the meeting.

On the evening of May 15, 2022, WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before WAHI was supposed to be interviewed by Coinbase.  In the hours between booking the flight and his scheduled departure, WAHI called and texted Nikhil Wahi and Ramani about Coinbase’s investigation and sent both of them a photograph of the messages he had received on May 11, 2022, from Coinbase’s director of security operations.  Prior to boarding the May 16, 2022, flight to India, WAHI was stopped by law enforcement and prevented from leaving the country.

*                *                *

In addition to the prison sentence, ISHAN WAHI, 32, of Seattle, Washington, was ordered to forfeit various crypto assets that he received in connection with the scheme.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  He also acknowledged the assistance of the Justice Department’s National Cryptocurrency Enforcement Team, as well as that of the Securities and Exchange Commission, which separately initiated civil proceedings against WAHI.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Noah Solowiejczyk and Nicolas Roos are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHRISTIAN VARELA, a former owner of a construction firm, was sentenced yesterday by U.S. District Judge Philip M. Halpern to two years in prison for failing to pay to the Internal Revenue Service (“IRS”) more than $4.4 million of payroll taxes he collected from his employees.  VARELA pled guilty to one count of failure to pay payroll taxes in September 2022.

According to the Information to which VARELA pled guilty and statements made in court:

VARELA owned and operated Gibraltar Contracting, Inc. (“Gibraltar”), a contracting firm with more than 55 employees that handled federal and state government construction contracts.  VARELA was responsible under federal law for collecting, truthfully accounting for, and paying to the IRS federal income tax and contributions to Social Security and Medicare withheld from Gibraltar’s employees’ pay.  In 10 different quarters from 2015 through 2018, VARELA failed to pay to the IRS a total of more than $4.4 million of these payroll taxes.   

*                *                *

In addition to his prison term, VARELA, 48, of Staten Island, New York, was sentenced to three years of supervised release and 12 months of home confinement.  The Court also imposed restitution to the IRS of $4,404,564.60.

Mr. Williams praised the outstanding investigative work of the IRS-Criminal Investigation in this case.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MICHAEL PASCHAL was found guilty of all four counts at trial, including sex trafficking a minor and conspiracy to commit sex trafficking of a minor.  The verdict followed a seven-day trial before U.S District Judge Vernon S. Broderick.

U.S. Attorney Damian Williams said: “Michael Paschal targeted a vulnerable teenager and prostituted her with others for his own profit.  He induced the minor victim with promises of food and shelter and then immediately exploited her.  The jury’s guilty verdict and the Court’s immediate remand of the defendant send a clear message to the public that those who prostitute minors will be held accountable.  We thank and commend the brave victim who came forward to law enforcement and testified at trial.  Her testimony was critical in holding the defendant accountable and ensuring that he cannot harm other victims, including minors, again.”

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

In or around July 2020, PASCHAL and a co-conspirator (“CC-1”) met a 17-year-old minor victim (“Minor Victim-1”) in another state.  PASCHAL and CC-1 induced Minor Victim-1 to travel with him from another state to his house in the Bronx with promises of food and shelter and with the intent to prostitute Minor Victim-1 from his Bronx residence. 

PASCHAL operated a prostitution business from his residence in the Bronx.  Minor Victim-1 stayed at PASCHAL’s residence for several weeks in July 2020, during which time PASCHAL prostituted Minor Victim-1. 

When Minor Victim-1 became sick, PASCHAL transported Minor Victim-1 to a children’s hospital for medical care.  PASCHAL communicated with employees of the Administration for Children’s Services while Minor Victim-1 was in the hospital in an attempt to have Minor Victim-1 released into his custody.

That effort was unsuccessful, and Minor Victim-1 was returned to her home state.  However, several weeks later, PASCHAL again began prostituting Minor Victim-1 from his residence in the Bronx.  PASCHAL posted prostitution ads with sexually explicit photographs of Minor Victim-1 and communicated with sex buyers to facilitate commercial sex with Minor Victim-1.

PASCHAL prostituted Minor Victim-1, and worked with others to prostitute Minor Victim-1, for weeks until she was recovered from PASCHAL’s residence in or about December 2020.  When confronted, PASCHAL told law enforcement, in substance, “what’s the big deal, she’s about to turn 18 anyway.”

*                *                *

PASCHAL, 52, of the Bronx, New York, was convicted of one count of conspiracy to commit sex trafficking of a minor, which carries a maximum sentence of life in prison; one count of sex trafficking of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of transporting a minor for the purpose of prostitution, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and one count of enticing an individual to travel interstate for the purpose of prostitution, which carries a maximum sentence of 20 years in prison.  The defendant was remanded into custody after the guilty verdict.

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  PASCHAL is scheduled to be sentenced on September 6, 2023.

Any individuals who believe they have information that may be relevant to this case should contact the U.S. Attorney’s Office at 1-866-874-8900 and reference this case.

Mr. Williams praised the outstanding work of Homeland Security Investigations. 

The case is being prosecuted by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Kevin Mead, Jackie Delligatti, and Jane Kim are in charge of the prosecution, with the assistance of Paralegal Specialist Isabel Loftus.

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN O’NEILL, a Maryland attorney and escrow agent, was sentenced today by U.S. District Judge Valerie Caproni to nine years in prison for defrauding his clients of funds he was holding for them in escrow.  O’NEILL pled guilty to two counts of wire fraud in November 2022. 

According to the allegations contained in the Complaint and matters included in public filings:

Beginning at least as early as August 2020, O’NEILL engaged in two related fraudulent schemes.

First, O’NEILL engaged in a scheme to defraud a medical equipment company (“Victim-1”) by falsely promising to hold over $5 million of the company’s funds in escrow.  Specifically, in August 2020, Victim-1 entered into an agreement with a Florida-based medical wholesale company (“Seller-1”) for the purchase of personal protective equipment (“PPE”).  In connection with the transaction, Victim-1 and Seller-1 entered into an escrow agreement (the “Escrow Agreement”) with O’Neill & Partners, the firm at which O’NEILL was the managing partner.  Pursuant to the Escrow Agreement, O’Neill & Partners was to act as escrow agent for the transaction and hold $5.1 million deposited by Victim-1 in escrow.  Instead of holding that money as required, however, O’NEILL secretly used the funds to execute personal deals for the purchase of PPE and completely dissipated the funds by approximately November 2020.   

In November 2020, Victim-1 cancelled the transaction and sent a letter to O’Neill & Partners requesting that the $5.1 million in escrowed funds be returned to Victim-1.  When O’Neill & Partners refused to return Victim-1’s money, Victim-1 filed a civil action in U.S. District Court for the Southern District of New York (the “Civil Action”).  In connection with the Civil Action, the Court ordered O’Neill & Partners to deposit the $5.1 million with the Clerk of the Court.  On September 22, 2021, O’NEILL deposited $3.3 million with the Clerk.   

The $3.3 million deposited with the Clerk, however, formed the basis of O’NEILL’s second scheme to defraud.  That money was neither part of the $5.1 million Victim-1 had deposited nor was it O’NEILL’s own money.  Instead, it consisted of funds being held by O’NEILL in escrow for a separate transaction.  In other words, O’NEILL stole $3.3 million from a separate set of escrow clients in an attempt to satisfy the Court’s order in the Civil Action and repay Victim-1. 

*                *                *

In addition to his prison term, O’NEILL, 49, of Chevy Chase, Maryland, was sentenced to three years of supervised release.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Maggie Lynaugh, Amanda C. Weingarten, and Aline Flodr are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant ERIC LIRA pled guilty today for his role in providing banned performance-enhancing drugs (“PEDs”) to Olympic athletes in advance of the 2020 Olympic Games held in Tokyo in the summer of 2021.  LIRA is the first defendant to be charged under the Rodchenkov Anti-Doping Act, signed into law on December 4, 2020, which proscribes doping schemes for the purpose of influencing international sports competitions, including the Olympic Games.  LIRA pled guilty before U.S. Magistrate Judge Valerie Figueredo.

U.S. Attorney Damian Williams said: “This conviction is a watershed moment for international sport.  Lira provided banned performance-enhancing substances to Olympic athletes who wanted to corruptly gain a competitive edge.  Such craven efforts to undermine the integrity of sport subverts the purpose of the Olympic games: to showcase athletic excellence through a level playing field.  Lira’s efforts to pervert that goal will not go unpunished.”

According to the allegations contained in the Complaint, the Indictment, other filings in this case, and statements during court proceedings:

The charges in this case arise from an investigation of a scheme to provide Olympic athletes with PEDs, including drugs widely banned throughout competitive sports, such as human growth hormone and the “blood building” drug erythropoietin, in advance of and for the purpose of corrupting the 2020 Olympic Games, which convened in Tokyo in the summer of 2021.  LIRA, who claims to be a “kinesiologist and naturopathic” doctor operating principally in and around El Paso, Texas, obtained unapproved versions of these, and other, prescription drugs from sources in Central and South America before bringing those drugs into the United States and distributing them to, among others, the two athletes referred to in the Indictment.  Throughout the scheme, LIRA and an athlete competing for Nigeria communicated via encrypted electronic communications regarding the sale, shipment, and use of LIRA’s illegal drugs and specifically discussed the “testability” of those drugs by anti-doping authorities.  LIRA separately communicated with an athlete competing for Switzerland, also via encrypted electronic communications, discussing the use of human growth hormone and erythropoietin.  Both athletes tested positive for prohibited substances, and in both cases, LIRA directly and indirectly advised that the athletes should blame the positive drug test on contaminated meat, knowing full well that the drug tests had accurately detected the presence of banned, performance-enhancing drugs.

LIRA is the first defendant charged and convicted pursuant to the recently enacted Rodchenkov Act.  On December 4, 2020, the Rodchenkov Act was signed into law, Pub. L. 116-206, and incorporated into Title 21 of the United States Code at sections 2401 through 2404.  The Rodchenkov Act prohibits any person, other than an athlete, to knowingly carry into effect, attempt to carry into effect, or conspire with any other person to carry into effect a scheme in commerce to influence by use of a prohibited substance or prohibited method any major international sports competition. 21 U.S.C. § 2402.

*                *                *

LIRA, 43, of El Paso, Texas, pled guilty to violating the Rodchenkov Act, which carries a maximum potential sentence of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”) and the FBI’s Integrity in Sports and Gaming Initiative.  Mr. Williams also thanked the United States Anti-Doping Agency for their support of this investigation.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Sarah Mortazavi and Benjamin Gianforti are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES JEREMY BARBERA, the founder and former chief executive officer (“CEO”) of a New York-based nanotechnology company, Nanobeak Biotech, Inc. (“Nanobeak”), was sentenced today to 48 months in prison by U.S. District Judge John G. Koeltl.  BARBERA was previously convicted following a one-week trial of securities fraud, wire fraud, and conspiracy offenses.

According to the Indictment, evidence presented during trial, court documents, and statements made in open court:

From in or about 2013 and in or about 2019, BARBERA was the founder and CEO of Nanobeak, a privately held nanotechnology company that represented to investors that the company had developed a breathalyzer sensor technology that could detect cancer and narcotics in human breath.

From at least in or about 2013 through in or about 2020, BARBERA and others perpetrated a scheme to defraud dozens of investors out of at least approximately $7 million (i) by soliciting investments through false and misleading statements, (ii) by failing to use investors’ funds as promised, and (iii) by converting investors’ money for his own use.  Specifically, BARBERA falsely represented that Nanobeak had developed a breathalyzer sensor that could detect narcotics and cancer in a person’s breath and that the company was expected to earn millions of dollars in sales revenue through distribution contracts.  In truth and in fact, Nanobeak never developed the purported technology, and it was impossible for the company to generate revenue because there was no breathalyzer device to sell and, accordingly, no distribution contracts.

BARBERA also falsely represented that he had undergraduate and graduate degrees in physics from New York University, that he had a business degree from the Massachusetts Institute of Technology, and that Nanobeak would soon have an initial public offering (“IPO”), which would result in large profits to investors.  In truth and in fact, the company was not close to an IPO, BARBERA was permanently barred from serving as the CEO of a public company as a result of a prior, unrelated proceeding brought by the U.S. Securities and Exchange Commission (“SEC”), and BARBERA never finished college and never attended MIT.

BARBERA converted for his own use approximately half of the investor funds raised in the form of cash withdrawals and to pay personal expenses, including private school and college tuition for his children, mortgage payments on his Central Park West apartment, and for other personal items, such as credit card bills, jewelry, automobiles, and daily living expenses.

*                *                *

In addition to his prison sentence, BARBERA, 67, of New York, New York, was ordered to pay more than $7 million in forfeiture. 

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the National Aeronautics and Space Administration’s Office of Inspector General, and he also thanked the SEC for its assistance.

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

“Nathaniel Chastain exploited his advanced knowledge of which NFTs would be featured on OpenSea’s website to make profitable trades for himself.  Although this case involved trades in novel crypto assets, there was nothing particularly innovative about his conduct — it was fraud.  A jury has found that Chastain is guilty of using inside information for his own personal gain, and he now faces time in federal prison.” 

Damian Williams, the United States Attorney for the Southern District of New York, John Gay, the Inspector General of the Port Authority of New York and New Jersey, Office of Inspector General (“PA-OIG”), 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 Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the unsealing of a Complaint charging JASMIN GADSON, an employee of the Port Authority of New York and New Jersey, with wire fraud and theft of government funds for submitting fraudulent applications to obtain unemployment insurance benefits from the New York State Department of Labor at the height of the COVID-19 pandemic in 2020 and 2021.  During that period, GADSON also allegedly submitted fraudulent applications for loans under the United States Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”).  GADSON was arrested this morning and will be presented this afternoon before U.S. Magistrate Judge Stewart D. Aaron in Manhattan federal court.  

U.S. Attorney Damian Williams said: “Jasmin Gadson, an employee of the Port Authority of New York and New Jersey, allegedly stole government funds intended to help those who were struggling as a result of a national emergency.  This Office will continue to prosecute those who used the COVID-19 pandemic as an opportunity to line their pockets with fraudulently obtained taxpayer money.”

PA-OIG Inspector General John Gay said: “We are appalled that a toll collector, on her own time, allegedly filed for fraudulent government benefits.”  

DOL-OIG Special Agent in Charge Jonathan Mellone said: “An important part of the mission of the U.S. Department of Labor, Office of Inspector General is to investigate allegations of fraud related to Pandemic unemployment insurance programs.  We will continue to work with our law enforcement partners to investigate these types of allegations.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Jasmin Gadson not only fraudulently claimed unemployment benefits while actively employed by the Port Authority of New York and New Jersey, but this defendant also defrauded a program intended to assist hardworking Americans who were financially impacted due to the unprecedented COVID-19 health crisis.  HSI will not abide those who engage in theft of federal funds destined to help the financially vulnerable.  I am extremely grateful to our partners at the Port Authority of NY/NJ, Office of the Inspector General and the U.S. Department of Labor, Office of the Inspector General, as well as HSI New York’s Document & Benefit Fraud Task Force for uncovering and investigating Gadson’s criminal scheme that allegedly defrauded U.S. taxpayers out of $78,000.” 

According to the Complaint unsealed today in Manhattan federal court and publicly available information:[1]

JASMIN GADSON is currently employed by the Port Authority of New York and New Jersey, where she has worked since 2015.  Beginning in the summer of 2020 through the fall of 2021, she submitted fraudulent applications for unemployment insurance benefits to the New York State Department of Labor and fraudulent applications for PPP loans to the SBA.  In support of her fraudulent unemployment insurance applications, GADSON falsely claimed, in an initial application and weekly verifications, that the last date that she worked was during the onset of the COVID-19 pandemic in March 2020.  At all times from March 2020 through the present, GADSON was employed by the Port Authority of New York and New Jersey and received salary or paid sick leave or was on unpaid protected parental leave.  During that period, she received full health benefits and was not eligible for unemployment insurance benefits.  In addition, GADSON falsely claimed five-figure net revenues for a business that did not exist in support of her fraudulent PPP loan applications.  

Between both of these schemes, GADSON stole more than $78,000 from the New York State Department of Labor, the SBA, and financial institutions that issued SBA-guaranteed loans.

*                *                *

JASMIN GADSON, 29, of Queens, New York, is charged with wire fraud, which carries a maximum penalty of 20 years in prison, and theft of government funds, which carries a maximum penalty of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of the PA-OIG, the DOL-OIG, and HSI.  The investigation was conducted by HSI’s Document and Benefit Fraud Task Force (“DBFTF”), a specialized investigative group comprising personnel from various state, local, and federal agencies with expertise in detecting, deterring, and disrupting organizations and individuals involved in various types of document, identity, and benefit fraud schemes.

The case is being prosecuted by the Office’s General Crimes Unit.  Assistant U.S. Attorney Amanda C. Weingarten is in charge of the prosecution.

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

[1] As the introductory phrase signifies, the Complaint and the descriptions of the Complaint set forth herein constitutes 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 STEVEN SHORT, the former head of Florida-based E.M. Systems & Services LLC and affiliated companies (collectively, “E.M. Systems”), was sentenced today to 78 months in prison for conspiracy to commit wire fraud and bank fraud in connection with his participation in a fraudulent scheme to obtain credit card processing services for his deceptive Florida-based telemarketing operation through a California-based company called CardReady LLC (“CardReady”).  SHORT previously pled guilty to the conspiracy charge and was sentenced today before United States District Judge Loretta A. Preska. 

U.S. Attorney Damian Williams said: “Over a two-year period, Steven Short and his co-conspirators used shell companies to deceive credit card payment processors into processing more than $19 million obtained from more than 19,000 victims nationwide.  Short preyed on vulnerable people in credit card debt, charging fees up to $1,495 in exchange for guaranteeing to reduce their debt and lower their interest rates, but instead generally sent them cookie-cutter booklets with ordinary budgeting advice.”

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

SHORT controlled E.M. Systems.  From approximately 2012 through 2015, SHORT and E.M. Systems carried out a telemarketing fraud scheme in which they used telemarketers to cold-call consumers, targeting consumers with outstanding credit card debt.  In exchange for fees up to $1,495, the cold-callers offered the customers services, including debt consolidation and interest-rate reduction on their debts, which were prohibited by the applicable guidelines from a bank used by SHORT (“Bank-1”) and associated processing entities (the “Guidelines”), and which — as SHORT knew — would produce chargebacks from dissatisfied customers far in excess of the number and rate of chargebacks permitted under the Guidelines.  SHORT and E.M. Systems generated over $19 million in fraud proceeds from more than 19,000 customers through this scheme, resulting in thousands of complaints by customers of fraud and deceptive tactics and requests for millions of dollars in refunds and chargebacks.

In order to charge for E.M. Systems’ purported services via credit cards, SHORT sought access to the credit card processing market through CardReady, a Los Angeles-based company acting as a sales agent in the credit card processing industry.  As part of its business as a sales agent, CardReady found merchants who wanted credit card processing services, such as SHORT, and submitted merchant applications on behalf of those merchants to a Manhattan-based Independent Sales Organization (the “New York ISO”).  The New York ISO then evaluated the merchant applications and referred acceptable merchant accounts up the chain to a payment processor (“Payment Processor-1”) and Bank-1.  Bank-1 and Payment Processor-1, in turn, processed payments to merchants for purchases by customers who had used credit cards.  Under E.M. Systems’ deal with CardReady, CardReady kept approximately one-third of the credit card sale transactions of SHORT and E.M. Systems in exchange for providing them access to the credit card processing network.  

In securing credit card processing for E.M. Systems to process the fees paid by its customers, SHORT and CardReady concealed that E.M. Systems was the true underlying merchant.  Instead, SHORT and his co-conspirators, over a period of more than 20 months, created approximately 26 sham merchant companies, each headed by a “signer” (the “Sham Merchants” and the “Sham Merchant Accounts”).  The 26 signers for the 26 Sham Merchants typically had no business of their own and knew little or nothing about E.M. Systems’ business.  In return for signing paperwork, the signers were paid a nominal fee by CardReady.  These false merchant applications also concealed the Sham Merchant’s true association with E.M. Systems.

By steering E.M. System’s payment processing through these Sham Merchant Accounts, SHORT and CardReady accomplished a number of fraudulent purposes.  First, the use of these Sham Merchant Accounts made it possible for E.M. Systems to conceal its identity from Payment Processor-1 and Bank-1 and to maintain payment card processing.  This was particularly relevant as Payment Processor-1 repeatedly required CardReady to close individual Sham Merchant Accounts because of excessive chargebacks and reports of sales of prohibited services.  SHORT and CardReady then quickly replaced the closed Sham Merchant Accounts with new Sham Merchant Accounts, precluding Payment Processor-1 from shutting down its processing of high-risk merchants.  Second, the fraudulent processing scheme enabled E.M. Systems to spread out its charges, refunds, and chargebacks across multiple Sham Merchant Accounts.  SHORT and CardReady thus enabled E.M. Systems to evade chargeback monitoring programs operated by Bank-1, Payment Processor-1, and the New York ISO.

*                *                *

SHORT, 46, of Tampa, Florida, pled guilty on August 16, 2022, to one count of conspiracy to commit wire fraud and bank fraud.  In addition to the prison sentence, SHORT was sentenced to three years of supervised release and ordered to pay restitution of $1,912,090.05 and forfeiture of $8,833,889.69.

Also charged in this case is Brandon Becker, 51, of Los Angeles, California, whose trial is scheduled to begin on December 4, 2023, before Judge Preska.  Becker is presumed innocent unless and until proven guilty.

Mr. Williams praised the work of the Federal Bureau of Investigation and thanked the Federal Trade Commission for its assistance.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys David Raymond Lewis, Vladislav Vainberg, and Sarah Y. Lai 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 Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today that MICHAEL ROWE, a/k/a “MJ,” was charged with being a felon in possession of ammunition during a shooting that occurred on Saturday afternoon, April 29, 2023, on a crowded sidewalk near 46th Street and Ninth Avenue in Manhattan.  ROWE surrendered last night and was presented today before United States Magistrate Judge Stewart D. Aaron.    

U.S. Attorney Damian Williams said: “As alleged, this past Saturday afternoon, Michael Rowe opened fire on a busy sidewalk in Hell’s Kitchen, endangering the life of his intended victim and the lives of countless bystanders.  Thanks to the swift action of our law enforcement partners, the defendant is now being held accountable for his actions.”

FBI Assistant Director in Charge Michael J. Driscoll said: "Rowe's alleged actions endangered numerous innocent people simply attempting to live their lives safely - something we all should feel free to do.  The charges today should serve as a warning to any individual willing to settle arguments in a similar fashion - the FBI and our partners in law enforcement will hold you accountable in the criminal justice system."

NYPD Commissioner Keechant L. Sewell said: “The NYPD will never relent in our fight against gun violence in our city.  And anyone who threatens our public safety with such reckless behavior must be held accountable to the fullest extent of the law.  This work is critically important, and I want to thank the U.S. Attorney’s Office for the Southern District of New York, the New York Field Office of the FBI, and everyone else who aided in this arrest.”

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

On or about April 29, 2023, MICHAEL ROWE got into a disagreement with another individual on the sidewalk in the vicinity of 650 Ninth Avenue in Manhattan.  Video footage from the scene reveals ROWE appearing to express annoyance and then brandishing a firearm on the crowded sidewalk and shooting at the other individual.  Screenshots of video footage showing the argument and ROWE’s subsequent shooting of the individual are below:

A discharged shell casing was recovered from the ground at the scene of the shooting. ROWE was not permitted to possess ammunition because of prior state and federal felony convictions.

*                *                *

MICHAEL ROWE, 23, of the Bronx, New York, is charged with possessing ammunition after a felony conviction, which carries a mandatory minimum sentence of 15 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.

Mr. Williams praised the outstanding work of the FBI and the NYPD.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New York County District Attorney’s Office for their assistance in this case.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Frank Balsamello, Peter Davis, and Jamie Bagliebter 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, announced that ANAND SINGH was arrested today and charged with one count of attempted enticement of a minor.  The Complaint charges that SINGH communicated with an individual, who he believed to be a 14-year-old girl, on Hily, a dating application, and via text message and made plans to meet the individual at an apartment building to engage in sexual activity.  SINGH was presented today before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court and detained pending a bail hearing on Wednesday.

U.S. Attorney Damian Williams said: “33-year-old Anand Singh allegedly attempted to entice an individual, who he believed to be a 14-year-old, to meet for sexual purposes, via dating and text apps.  Today’s arrest is a reminder of the inherent danger the internet could potentially pose to our youth and the critical importance to protect them from online predators.”

As alleged in the criminal Complaint:[1]

In December of 2022, SINGH, then an employee of the Westchester County Board of Legislators, used a mobile dating application called “Hily” and text messages to entice an individual posing as a 14-year-old girl to engage in sexual activity with him.  SINGH used the screen name “Anon” to communicate with the individual on the Hily application.  During these communications, SINGH repeatedly expressed, in graphic and unambiguous terms, his desire to engage in sexual activity with the individual and made a plan to meet her at an apartment building in Newark, New Jersey, for the purposes of engaging in sexual activity.  In the early hours of December 17, 2022, SINGH went to the location where he and the individual posing as a 14-year-old girl planned to meet.

*                *                *

ANAND SINGH, 33, of Tarrytown, New York, is charged with one count of attempted enticement of a minor, which carries a mandatory minimum sentence of 10 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.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s (“FBI”) Westchester County Safe Streets Task Force.  He also thanked the Westchester County Police Department and Westchester County District Attorney’s Office for their participation and support in this investigation. 

The investigation is ongoing and there may be other victims of this alleged conduct.  If you have information to report concerning ANAND SINGH, please contact the FBI at 1-800-CALL-FBI.

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

The allegations 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 are 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 today’s conviction in federal court of PAUL FISHBEIN of multiple counts of fraud and aggravated identity theft.  FISHBEIN stole hundreds of thousands of dollars from rental assistance programs administered by New York City’s Human Resources Administration (“HRA”) and New York City’s Housing Preservation & Development (“HPD,” and with HRA, the “Agencies”) by renting out properties throughout the City that he falsely claimed to own and by collecting made-up broker fees.  FISHBEIN was also convicted of Medicaid fraud.  The jury convicted FISHBEIN today following a nearly two-week trial before U.S. District Judge Paul A. Crotty.

U.S. Attorney Damian Williams said:  “New York City assists millions of low-income and vulnerable New Yorkers through different types of programs, including rental assistance programs and Medicaid.  These programs were designed to help New Yorkers in need.  But, as a jury has now found, for years, Fishbein abused those programs to enrich himself.  To do that, he told lie after lie after lie.  He stole money, including federal funds, from the City’s rental assistance programs by lying about being the landlord of homes he didn’t actually own.  He stole the identity of a real estate broker to get the City to pay him made-up broker fees.  And he stole Medicaid benefits by lying to the City about how much money he made.  Today, a unanimous jury has held Fishbein accountable for his yearslong fraudulent schemes.”

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

From in or about 2013 through May 4, 2021, FISHBEIN rented out properties in New York City to low-income New Yorkers through the Agencies’ rental assistance programs, collecting rent payments from the Agencies as the purported owner of the properties.  In fact, FISHBEIN was never the owner of those properties and lied to the Agencies to collect the rent payments.  In addition, FISHBEIN lied to HRA that he used the services of a real estate broker to rent out certain properties in order to collect broker fee payments from HRA, also through its rental assistance program.  FISHBEIN used an actual real estate broker’s license and name without her authority to collect these made-up broker fees from the City.  In-need New Yorkers were placed in these properties, which FISHBEIN, because he was not actually the owner of the properties, failed to maintain.  In one instance, the ceiling completely collapsed while a tenant and her family were living in a property FISHBEIN claimed to own.  Through these two schemes, FISHBEIN fraudulently obtained hundreds of thousands of dollars from HRA and HPD, including more than $90,000 in federal funds. 

FISHBEIN was also convicted of healthcare fraud because, from 2014 through May 4, 2021, he lied to New York City’s Medicaid program about how much money he made in order to collect Medicaid benefits.  Medicaid is meant for low-income New Yorkers.  FISHBEIN, each year, told the City that he made only $150 a week, or $7,200 a year, when in reality, he was raking in hundreds of thousands of dollars each year from his rental assistance and broker fee schemes described above.  By lying about his income and assets, the defendant received at least approximately $49,524.80 in Medicaid benefits to which he was not entitled.

*                *                *

FISHBEIN, 49, of Queens, New York, was convicted of one count of wire fraud, one count of mail fraud, one count of theft of government funds, one count of aggravated identity theft, and one count of healthcare fraud.  The wire fraud and mail fraud charges each carry a maximum sentence of 20 years in prison; the theft of government funds and healthcare fraud charges each carry a maximum sentence of 10 years in prison; and the aggravated identity theft charge carries a mandatory two-year sentence, which must run consecutive to any other prison term imposed.   

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  FISHBEIN is scheduled to be sentenced by Judge Crotty on July 31, 2023.

Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Sarah L. Kushner, Christy Slavik, and Jared Lenow are in charge of the prosecution and were assisted at trial by Paralegal Specialist Joseph Magliocco.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that TAJ EVERLY pled guilty to a deprivation of constitutional rights under color of law.  On May 28, 2020, EVERLY, then a correction officer at Green Haven Correctional Facility, assaulted an individual incarcerated in the custody of the New York State Department of Corrections and Community Supervision (“DOCCS”), striking and tackling the inmate without provocation, and then attempted to obstruct the investigation of his assault by preparing a false report.  EVERLY’s actions deprived the incarcerated individual of the constitutional right to be free from excessive force amounting to cruel and unusual punishment.  EVERLY pled guilty today before U.S. Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As he admitted today, former correction officer Taj Everly violated the constitutional rights of an incarcerated individual by using excessive force amounting to cruel and unusual punishment.  The protections afforded by the U.S. Constitution extend to all Americans, including those who are serving time in prison.  When individuals in power abuse their authority to injure the powerless, we will act aggressively to ensure justice is served.”

According to the Superseding Indictment and other documents in the public record as well as statements made in public court proceedings:

EVERLY previously worked as a correction officer assigned to Green Haven Correctional Facility in Stormville, New York.  On May 28, 2020, while on duty, EVERLY assaulted an incarcerated individual without provocation, striking him with a closed fist and then tackling him to the ground.  After the assault, EVERLY falsified a report about the incident, identifying the inmate as the aggressor, thereby obstructing the investigation into the unjustified use of force.

*                *                *

EVERLY, 32, of Cortlandt Manor, New York, pled guilty to a deprivation of constitutional rights under color of law, which carries a maximum sentence of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the DOCCS Office of Special Investigations.

The case is being handled by the Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorneys Kaiya Arroyo and Lindsey Keenan are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that COOPER MORGENTHAU, the former chief financial officer (“CFO”) of two special purpose acquisition companies (“SPACs”) — African Gold Acquisition Corp. (“AGAC”) and Strategic Metals Acquisition Corp. (“SMAC”) — was sentenced to 36 months in prison for committing wire fraud when he embezzled more than $5 million from the two SPACs.  U.S. District Judge Paul A. Engelmayer imposed today’s sentence

U.S. Attorney Damian Williams said: “With today’s sentencing of Cooper Morgenthau, SPAC promoters have been sent a message that fraud in the SPAC markets will be punished, and greed on Wall Street will be met with serious consequences.”

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

Between approximately June 2021 and August 2022, MORGENTHAU, who was the CFO of AGAC and SMAC, embezzled more than $5 million from the two SPACs.  AGAC had recently had its initial public offering (“IPO”), while SMAC was raising money from private investors in preparation for its anticipated IPO.  MORGENTHAU used the embezzled funds to trade equities and options of so-called “meme stocks” and cryptocurrencies, losing almost all of the money that he stole.  To conceal and facilitate his embezzlement from AGAC, MORGENTHAU fabricated bank statements, which he provided to AGAC’s accountant and auditor; made and caused to be made material misstatements in AGAC’s public filings with the Securities and Exchange Commission (“SEC”); and transferred some of SMAC’s funds to AGAC to cover up the funds he had misappropriated from AGAC. 

*                *                *

MORGENTHAU, 36, of Fernandina Beach, Florida, previously pled guilty to one count of wire fraud.  In addition to his prison term, MORGENTHAU was also ordered to forfeit $5,111,335 and to pay restitution of $5,111,335. 

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and thanked the SEC for its assistance and cooperation in this investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force and Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Joshua A. Naftalis and Anden Chow are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN KOLFAGE and ANDREW BADOLATO were sentenced today by United States District Judge Analisa Torres.  KOLFAGE was sentenced to 51 months in prison, and BADOLATO was sentenced to 36 months in prison, for their respective roles in carrying out a scheme to defraud hundreds of thousands of donors in connection with an online crowdfunding campaign known as “We Build The Wall” by soliciting donations using false statements and then stealing the resulting donations.

U.S. Attorney Damian Williams said: “Brian Kolfage and Andrew Badolato abused the trust of donors to We Build the Wall and stole hundreds of thousands of dollars in donations to line their own pockets.  The defendants have now been held accountable for their criminal conduct.”

According to court filings and evidence introduced during court proceedings:

Starting in approximately December 2018, BRIAN KOLFAGE, ANDREW BADOLATO, their co-defendant TIMOTHY SHEA, and others orchestrated a scheme to defraud hundreds of thousands of donors, including donors in the Southern District of New York, in connection with an online crowdfunding campaign ultimately known as “We Build The Wall” that raised more than $25,000,000 to build a wall along the southern border of the United States.  In particular, to induce donors to donate to the campaign, KOLFAGE repeatedly and falsely assured the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised…will be used in the execution of our mission and purpose.”

Those representations were lies.  In truth, KOLFAGE, BADOLATO, SHEA, and others received hundreds of thousands of dollars in donor funds from We Build the Wall, which they each used in a manner inconsistent with the organization’s public representations.  For example, KOLFAGE covertly took for his personal use more than $350,000 in funds that donors had given to We Build the Wall.  To conceal the payments to KOLFAGE from We Build the Wall, KOLFAGE, BADOLATO, SHEA, and others devised a scheme to route those payments through entities and bank accounts that they controlled.  They took various steps to obscure or conceal these payments, including by using fake invoices and sham contracts — conduct for which SHEA was convicted at trial of obstruction of justice.

In imposing today’s sentences on KOLFAGE and BADOLATO, Judge Torres noted that “this was no ordinary financial fraud,” because when victims donated to We Build the Wall, “they were expressing their views about a political issue that was important to them.”  Noting that the offense cast doubt on the efficacy of political involvement and that the scheme would “undoubtedly have a chilling effect” on political donations, Judge Torres remarked that “the fraud perpetrated by Mr. Kolfage and Mr. Badolato went well beyond defrauding individual donors. They hurt us all.”

*                *                *

KOLFAGE, 41, of Miramar Beach, Florida, and BADOLATO, 58, of Cocoa, Florida, each pled guilty to one count of conspiracy to commit wire fraud.  KOLFAGE also pled guilty to tax and wire fraud charges originally filed by the United States Attorney’s Office for the Northern District of Florida. 

SHEA, 52, of Castle Rock, Colorado, was convicted after trial of conspiracy to commit wire fraud, conspiracy to commit money laundering, and obstruction of justice, and is scheduled to be sentenced by Judge Torres on June 13, 2023.

In addition to the prison terms, KOLFAGE was sentenced to three years of supervised release and ordered to forfeit $17,872,106 and pay restitution in the amount of $2,877,414.  BADOLATO was sentenced to three years of supervised release and ordered to forfeit $1,414,368 and pay restitution in the amount of $1,414,368.  Judge Torres also separately ordered forfeiture of $1,376,597.39 of funds held by We Build the Wall and real property located in Sunland Park, New Mexico, on which We Build the Wall had constructed a portion of a wall.

Mr. Williams praised the outstanding investigative work of the United States Postal Inspection Service and the Special Agents of the United States Attorney’s Office for the Southern District of New York.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Mollie E. Bracewell, Alison G. Moe, Nicolas Roos, Robert B. Sobelman, and Derek Wikstrom are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that EDWIN CORTORREAL, a/k/a “Crazy Ed,” was found guilty of all three counts at trial, including conspiracy to commit racketeering and two counts for robbing and murdering Kelly Diaz in 2006 in Washington Heights.  The verdict followed a five-day trial before U.S. District Judge Valerie E. Caproni.

U.S. Attorney Damian Williams said: “In 2006, Edwin Cortorreal conducted a terrifying, gunpoint home invasion robbery in Washington Heights, during which he shot Kelly Diaz in the head, killing him in front of his wife.  Kelly Diaz was only 24 years old at the time.  We hope today’s verdict will bring some solace to the victim’s family and sends the message that we will not rest until justice is done.”

According to the evidence presented in court during the trial:

From at least 2006 to in or about 2013, a violent robbery crew known as the “Hot Boys” committed countless burglaries and robberies and sold narcotics in the Washington Heights area.  EDWIN CORTORREAL was a trusted associate of the Hot Boys.  In 2006, CORTORREAL and four other members and associates of the Hot Boys broke into Kelly Diaz’s apartment in the middle of the night.  During the course of the robbery, CORTORREAL and his co-conspirators duct-taped Diaz to a chair and threw his wife to the ground.  As they were leaving, CORTORREAL came back and shot Diaz point-blank in the head, killing him instantly as his wife looked on.  Less than a year later, CORTORREAL planned to commit another armed robbery, during which he plotted to kill the victims to avoid leaving behind any witnesses. 

*                *                *

CORTORREAL, 36, of the Dominican Republic, was found guilty of one count of conspiracy to commit racketeering, which carries a maximum term of life in person; one count of murder in aid of racketeering, which carries a mandatory sentence of life in prison; and one count of the use of a firearm resulting in death, which carries a maximum sentence of life in prison.

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

CORTORREAL is scheduled to be sentenced on September 20, 2023.

Mr. Williams thanked the New York Healthcare Fraud Unit of the Federal Bureau of Investigation, the New York City Police Department (“NYPD”), and NYPD Task Force Officers assigned to the United States Attorney’s Office for their work on the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Mathew Andrews, David Denton, Courtney Heavey, Adam Hobson, Emily Johnson, Ni Qian, Justin Rodriguez, and Hagan Scotten are in charge of the prosecution, with the assistance of paralegal specialist Mia Vuckovich.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ESTEBAN CABRERA DA CORTE, a/k/a “Esteban Cabrera,” a/k/a “Esteban Da Corte,” a/k/a “Steban,” pled guilty today to participating in a scheme to steal millions of dollars’ worth of cryptocurrency and trick U.S. banks into refunding the millions used to purchase that cryptocurrency, in part by using personal identifying information stolen from other people. 

U.S. Attorney Damian Williams said: “Esteban Cabrera Da Corte orchestrated a scheme to steal millions of dollars by buying cryptocurrency using false and stolen identities and then deceiving U.S. banks regarding those transactions.  As a result of his guilty plea, Cabrera Da Corte is now being held to account.  Our Office will continue to work vigorously with our law enforcement partners to protect the integrity of U.S. banks and financial markets to the full extent of the law from those who seek to enrich themselves through fraud and deceit, including those who attempt to shroud themselves in the anonymity of digital transactions.”

According to the Indictment and statements made in court:

From at least in or about 2020 through at least in or about March 2020, CABRERA DA CORTE and his co-conspirators engaged in a scheme to deceive U.S. banks and a leading cryptocurrency exchange platform (the “Cryptocurrency Exchange”) by purchasing more than $4 million in cryptocurrency and then falsely claiming that the cryptocurrency purchase transactions were unauthorized, deceiving the U.S. banks and the Cryptocurrency Exchange into reversing those transactions and redepositing the money into the bank accounts that the Defendants controlled.  The Defendants then withdrew the money from the bank accounts.

To carry out this scheme, the Defendants opened accounts with the Cryptocurrency Exchange, frequently using photos of fake U.S. passports, fake drivers’ licenses, and stolen personal identifying information.  The Cryptocurrency Exchange accounts were linked to bank accounts that the Defendants controlled.  The Defendants used money that had been deposited into the linked bank accounts, frequently through a series of cash deposits made using ATMs, to purchase cryptocurrency.  That cryptocurrency was then quickly transferred to other cryptocurrency wallets outside of the Cryptocurrency Exchange that were controlled by the Defendants and their co-conspirators.  After the cryptocurrency was transferred, the Defendants made telephone calls to the U.S. banks during which they falsely represented that the cryptocurrency purchases were unauthorized, leading the banks to reverse the transactions. 

The operation of this scheme by the Defendants resulted in U.S. banks processing more than $4 million in fraudulent reversals and the Cryptocurrency Exchange losing more than $3.5 million worth of cryptocurrency. 

*                *                *

ESTEBAN CABRERA DA CORTE, 26, of Miami, Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison, and agreed to pay restitution of $3,578,786.69 and forfeiture of $1,200,000. 

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

Mr. Williams praised the outstanding work of Homeland Security Investigations’ El Dorado Task Force. 

The matter is being handled by the Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Emily Deininger and Josiah Pertz are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of CAMERON MCEWEN, a 21-year-old convicted sexual offender, in Middletown, New York.  The Complaint charges that MCEWEN persuaded a 16-year-old girl living in Alaska (“Victim-1”) to engage in sexually explicit activity, take photos and videos of herself doing so, and transmit the photos and videos, via Snapchat, to MCEWEN.  MCEWEN threatened to hack into Victim-1’s cell phone and Snapchat account if she did not comply with his demands.  MCEWEN was presented yesterday before U.S. Magistrate Judge Paul E. Davison in White Plains federal court and detained without bail. 

U.S. Attorney Damian Williams said: “Cameron McEwen was on probation following a previous conviction for rape when he allegedly continued to commit sexually abusive and vile crimes, including with a minor victim.  This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them, and this Office is committed to safeguarding children from these predators.”  

According to the criminal Complaint filed yesterday in White Plains Federal Court:[1]

In April 2023, MCEWEN knowingly used a social media platform to communicate with and entice Victim-1, as well as send extortionate interstate threats to Victim-1. 

MCEWEN, using Snapchat display names “X,” “Cam,” and “fendii.kashout,” and posing as multiple different people, initially connected on Snapchat with an 18-year-old individual, who he offered to pay for sexually explicit images and videos.  When that individual sent MCEWEN the requested content, he threatened to leak the images and videos to the individual’s family and friends and harm her if she did not find another person to send MCEWEN sexually explicit material. 

The individual sought out Victim-1, who connected with MCEWEN on Snapchat.  MCEWEN then began sending Victim-1 messages threatening to hack Victim-1’s Snapchat account and cell phone if she did not send him sexually explicit photos and videos.

CAMERON MCEWEN, a/k/a “X,” a/k/a “Cam,” a/k/a “dzys.world,” a/k/a “itsbeendrippy,” a/k/a “fendii,” a/k/a “fendii.kashout,” was convicted in Orange County Court on January 13, 2022, of rape in the second degree and was on New York State probation when he committed the alleged offenses charged herein.

*                *                *

CAMERON MCEWEN, 21, of Middletown, New York, is charged with one count of sexual exploitation of a minor, which carries a maximum sentence of 50 years in prison, and one count of making extortionate interstate communications, which carries a maximum 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 outstanding investigative work of Federal Bureau of Investigation (“FBI”) agents in both Alaska and New York, the New York State Police Troop F, and the Middletown Police Department.  He also thanked the Ketchikan Police Department for its participation and support in this ongoing investigation. 

Mr. Williams stated that the investigation is ongoing and requests that any individuals with information concerning CAMERON MCEWEN and any individuals who may have encountered someone using the Snapchat user names “X,” “Cam,” “dzys.wlrd,” “itzbeendrippy,” “fendii,” and “fendii_kashout,” please contact the FBI at 1-800-CALL-FBI and reference this case. 

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Kathryn Wheelock and Marcia S. Cohen and are in charge of the prosecution.  

The allegations 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 are 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 attorneys GEORGE CONSTANTINE and MARC ELEFANT and orthopedic surgeon ANDREW DOWD were sentenced yesterday and today for their participation in a massive trip-and-fall fraud scheme between 2013 and 2018.  CONSTANTINE and DOWD, who were convicted at trial in December 2022 of mail fraud, wire fraud, and conspiracy to commit mail and wire fraud, were each sentenced to 102 months in prison.  ELEFANT, who pled guilty to one count of conspiracy to commit wire fraud, was sentenced to 24 months in prison.  U.S. District Judge Sidney H. Stein imposed all three sentences.    

U.S. Attorney Damian Williams said: “George Constantine, Andrew Dowd, and Marc Elefant abused their professional licenses and degrees and exploited some of the most vulnerable members of society – many of whom were poor, drug addicts, or homeless – in order to enrich themselves through this egregious trip-and-fall fraud scheme.  As officers of the court, Constantine and Elefant had a duty to honestly represent their clients and uphold the rule of law.  Instead, they filed hundreds of fraudulent lawsuits that were filled with lies and stole millions of dollars from small businesses and insurance companies.  Likewise, Dowd, as a medical doctor, took an oath to do no harm.  But motivated by pure greed, Dowd performed hundreds of medically unnecessary surgeries, earning thousands of dollars per surgery.  These sentences send a clear message to all who chose to engage in fraud – no matter their professional title or degree – that they will be held accountable.”

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

Between 2013 and 2018, CONSTANTINE, ELEFANT, and DOWD, among others, engaged in an extensive fraud scheme (the “Fraud Scheme” or “Scheme”), through which Scheme participants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.  CONSTANTINE and ELEFANT were personal injury lawyers involved in the Scheme, while DOWD was an orthopedic surgeon.

Fraud Scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”).  In the course of the Fraud Scheme, Scheme participants recruited more than 400 Patients.  Members of the Fraud Scheme often recruited Patients who were extremely poor.  For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers.  Many of the Patients did not have sufficient clothing to keep them warm during the winter and had poor quality shoes.  Members of the Fraud Scheme also recruited Patients who were drug addicts, and it was common for Scheme participants to recruit Patients from homeless shelters in New York City.

In the beginning, Scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact, the Patients had suffered no such accidents.  Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, Scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall.  Common Accident Sites used during the Fraud Scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”

After the staged trip-and-fall accidents, Patients were referred to specific attorneys, including CONSTANTINE and ELEFANT, who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”).  The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the Accident Sites or, in some cases, had not fallen at all.  During the course of the Fraud Scheme, the defendants, together with others, attempted to defraud the Victims of more than $31,000,000.  CONSTANTINE personally filed nearly 200 Fraudulent Lawsuits and earned more than $5 million dollars in settlement fees from these fraudulent cases.  ELEFANT likewise filed nearly 200 Fraudulent Lawsuits and earned millions of dollars in settlement fees.

The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including DOWD.  The Fraud Scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery, which was critical to boosting the value of any potential settlement.  Patients generally were told to undergo two surgeries.  Fraud Scheme participants looked for doctors, like DOWD, who were willing to perform surgeries, even when others would not.  During the course of the Scheme, DOWD performed nearly 300 medically unnecessary surgeries and earned more than $3.2 million dollars.  DOWD received approximately $10,000 per surgery.  

*                *                *

In addition to their prison terms, CONSTANTINE, 60, of Plainview, New York, DOWD, 67, of Miller Place, New York, and ELEFANT, 50, of Woodmere, New York, were each sentenced to three years of supervised release.  CONSTANTINE was further ordered to pay $4,774,709 in forfeiture.  DOWD was further ordered to pay $2,900,905 in forfeiture.  ELEFANT was further ordered to pay $955,281.54 in forfeiture.  Restitution will be decided by the Court within 90 days of today’s sentencings.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Chiuchiolo, Nicholas Folly, Danielle Kudla, and Alexandra Rothman are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Andrew C. Adams, the Director of Task Force KleptoCapture, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Jeffrey B. Veltri, Special Agent in Charge of the Miami Field Office of the Federal Bureau of Investigation (“FBI”), announced today that ROBERT WISE, a New York attorney, pled guilty to participating in a scheme to make approximately $3.8 million in U.S. dollar payments to maintain six real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch.  WISE pled guilty before U.S. District Court Judge Mary Kay Vyskocil. 

U.S. Attorney Damian Williams said “With today’s guilty plea, Robert Wise has admitted that he misused his position of trust as a lawyer, laundering money to promote sanctions violations by Viktor Vekselberg’s longtime associate, Vladimir Voronchenko.  This Office is proud to continue its work to enforce the sanctions imposed in response to Russia’s illegal war in Ukraine.”

Director of Task Force KleptoCapture Andrew C. Adams said: “From its inception, the Task Force has targeted those enablers of money laundering and sanctions evasion who aim to hide crime behind a veneer of professionalism.  Admission to the bar carries with it a public trust that attorneys will act with honesty and integrity – a trust that Robert Wise chose to betray in exchange for an easy, illicit paycheck.  The Task Force will continue to pursue those who have made the same poor decision.”

HSI Special Agent in Charge Ivan J. Arvelo said: “The ill-gotten proceeds of Russia’s oligarchs do not move and hide themselves.  Instead, the funds derived from Russia’s crony capitalism are secreted around the world in luxury assets by a professional class of enablers who specialize in secretive methods to shield the true owners and beneficiaries of the assets from detection, investigation, and enforcement.  Today, working with our partners at the Department of Justice, HSI continues to fulfill our promise to hold all individuals accountable for their actions, especially those that betray their ethical codes.” 

According to the allegations in the Information filed in Manhattan federal court today and other public filings:

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Vekselberg as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States.  On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.

Prior to his designation by OFAC, between approximately 2008 and 2017, Vekselberg, through a series of shell companies, acquired six real properties in the United States, specifically, (i) two apartments on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) two apartments on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties”).  As of the date of this Information, the Properties were worth approximately $75 million. 

Voronchenko, Vekselberg’s longtime associate, retained WISE, an attorney who practiced in New York, New York, to assist in the acquisition of the Properties.  WISE also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from WISE’s interest on lawyer’s trust account (“IOLTA account”).

In particular, prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account.  At the direction of Voronchenko and his family member who lived in Russia, WISE used these funds to make various U.S. dollar payments to maintain and service the Properties. 

Immediately after Vekselberg’s designation as an SDN, the source of the funds used to maintain and service the Properties changed.  The IOLTA Account began to receive wires from a bank account in the Bahamas held in the name of a shell company controlled by Voronchenko, Smile Holding Ltd., and from a Russian bank account held in the name of a Russian national who was related to Voronchenko.  Between approximately June 2018 and March 2022, approximately 25 wire transfers totaling approximately $3.8 million were sent to WISE’s IOLTA account.  Although the source of the payments changed, the management of the payments remained the same as before: WISE used these funds to make various U.S. dollar payments to maintain and service the Properties, and he did so knowing that he was promoting sanctions violations.  Additionally, after Vekselberg was sanctioned in 2018, Voronchenko, WISE, and others tried to sell both the Park Avenue apartment and the Southampton estate.  No licenses from OFAC were applied for or issued for these payments or attempted transfers.  

*                *                *

WISE, of Pelham, New York, pled guilty to one count of conspiring to commit international money laundering, which carries a maximum sentence of five years in prison.  WISE also agreed to entry of a forfeiture order in the amount of $3,771,727.67, to be satisfied by a payment of $210,441.

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.

An Indictment charging co-conspirator Vladimir Voronchenko, a/k/a “Vladimir Vorontchenko,” who is a fugitive, was unsealed on February 7, 2023.  A civil forfeiture complaint was filed against the Properties on February 24, 2023.

Mr. Williams praised the outstanding work of HSI and FBI.  Mr. Williams further thanked the Department of Justice’s National Security Division and Office of International Affairs and OFAC for their assistance and cooperation in this investigation.

On March 2, 2022, the Attorney General announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The Task Force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ANGELA CATHERINE HAMBLIN, a citizen of the United Kingdom, was extradited today from Germany to the United States to serve a prison sentence for selling fake works of art through a commercial auction website and in private transactions.  After pleading guilty in 2009, HAMBLIN was sentenced to one year and one day in prison.  However, HAMBLIN failed to report to U.S. prison authorities as ordered and instead fled the United States to the United Kingdom.  She was re-arrested on May 31, 2022, while changing planes at an airport in Frankfurt, Germany.

U.S. Attorney Damian Williams said: “Hamblin went to great lengths to avoid accountability for her crimes, but this Office and the FBI have long memories and benefit greatly from our cooperation with international partners.  Despite some 13 years on the run, Hamblin was apprehended last year as she changed flights in Germany and today returns to face justice and serve her time in prison.”

As alleged in the Indictment and other documents and statements made in Court:

For about five months in 2007, HAMBLIN engaged in a fraudulent scheme to sell at least four paintings that she represented to be works of such artists as Joseph Mallord William Turner (a British watercolorist and printmaker), Milton Avery (an American abstract expressionist painter), Franz Kline (an American abstract painter), and Juan Gris (a Spanish Cubist painter and sculptor), when she knew that the paintings were not authentic works of art by these famed artists.  HAMBLIN made various claims about where she acquired the paintings, including that she or her husband had inherited the paintings from relatives and that they purchased one of the paintings from a then-deceased seller.  With respect to one of the paintings, HAMBLIN claimed that the artist had given it to George Balanchine, the choreographer, who had in turn sold it to her great-grandfather.

HAMBLIN was re-arrested on May 31, 2022, when she changed planes in Frankfurt, Germany, on a flight from Vienna, Austria, to the United Kingdom.  Following an order of extradition by German authorities, HAMBLIN was flown today from Frankfurt to New York City and transported to the custody of the U.S. Bureau of Prisons to serve her prison sentence.

*                *                *

HAMBLIN, 74, of St. Boswells, Scotland, pled guilty on February 16, 2009, to two counts of mail fraud and one count of wire fraud.  She was sentenced on July 14, 2009, by United States District Judge Loretta A. Preska to one year and one day in prison. 

Mr. Williams praised the Federal Bureau of Investigation’s Art Crime Team/New York Major Theft Task Force for their outstanding investigative work on HAMBLIN’s scheme to sell counterfeit art.  Mr. Williams also thanked the Justice Department’s Office of International Affairs, the U.S. Marshals Service, and German authorities for their assistance in the extradition.

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.

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging BRUCE SILVA, a/k/a “Brucie,” BRUCE MELVIN, a/k/a “BG,” JORDAN BENNETT a/k/a “Billy Bandz,” a/k/a “J Bills,” ELIJAH POUGH, a/k/a “Eli,” SHADELL MCBRIDE, a/k/a “Deli,” JUSTIN BALLESTER, a/k/a “J-Gunz,” ALZUBAIR SALEH, a/k/a “Sammy,” GIOVANNI RODRIGUEZ, a/k/a “Karrot,” GABRIEL VALDEZ, a/k/a “Wolf,” and EMMANUEL PEREZ, a/k/a “Manny,” a/k/a “Haven,” with racketeering conspiracy, narcotics conspiracy, firearms charges, and other crimes related to their membership in “Dub City,” a street gang based in the Bronx, New York.  SILVA, MELVIN, POUGH, and MCBRIDE are also charged with attempted murder and assault with a deadly weapon in aid of racketeering in connection with their participation in multiple shootings in the Bronx.  The case is assigned to United States District Judge Lorna G. Schofield.

SILVA and MCBRIDE are currently in federal custody in connection with related federal charges.  VALDEZ is in state custody.  MELVIN, BENNETT, POUGH, SALEH, RODRIGUEZ, and PEREZ were arrested this morning in the Bronx and are expected to be presented later today before Magistrate Judge Jennifer E. Willis.  BALLESTER is currently at large.

U.S. Attorney Damian Williams said: “As alleged, over a span of several years, the members of the Dub City Gang enriched themselves through repeated frauds, poured drugs into the Bronx, carried firearms, and terrorized Bronx neighborhoods by repeatedly shooting at other people.  Through these charges, we will hold Dub City members responsible for their gun violence and other criminal activity that makes our communities less safe for innocent residents.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As laid out in this indictment, these ten individuals engaged in a variety of violent crimes that terrorized the community in furtherance of their Dub City gang enterprise.  Their alleged crimes include robberies, narcotics distribution, racketeering, attempted murder, assault with a dangerous weapon, and eight shootings, one of which radically changed an innocent bystander’s life by permanently paralyzing the individual.  This is yet another example of HSI’s commitment to a continued collaboration with the New York City Police Department to ensure a safer community.”

NYPD Commissioner Keechant L. Sewell said: “Today’s charges highlight the commitment of the NYPD and our law enforcement partners to identify, arrest, and prosecute anyone who takes part in illegal gang activities.  This indictment is another step toward making New York City safer for all the people we serve by ridding our streets of violence and fear.  I thank and commend our NYPD detectives, the HSI investigators, and everyone from the office of the U.S. Attorney for the Southern District for their tireless efforts on this important case.”

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

The “Dub City” gang is a criminal organization based in the Mt. Hope and Morris Heights sections of the Bronx, New York.  A map of Dub City’s territory is below:

Since at least 2019, gang members sold drugs, committed robberies, committed financial frauds, used guns, and committed numerous acts of violence in furtherance of the Dub City Gang, including shootings against members of rival gangs and against other Dub City gang members.  The violence committed by the defendants included shootings where innocent bystanders were hit, in one case causing permanent paralysis.  

The following chart contains the dates of the charged shootings and the defendants charged in connection with those shootings:

Date of Shooting

Defendant(s)

August 13, 2019

BRUCE SILVA, a/k/a “Brucie”

March 16, 2021

ELIJAH POUGH, a/k/a “Eli”

June 2, 2021

BRUCE MELVIN, a/k/a “BG”

May 9, 2021

BRUCE SILVA, a/k/a “Brucie,” and BRUCE MELVIN, a/k/a “BG”

August 12, 2021

ELIJAH POUGH, a/k/a “Eli”

October 13, 2021

BRUCE SILVA, a/k/a “Brucie,” and JORDAN BENNETT a/k/a “Billy Bandz,” a/k/a “J Bills”[2]

May 9, 2022

BRUCE MELVIN, a/k/a “BG”

June 20, 2022

SHADELL MCBRIDE, a/k/a “Deli”

The following photographs depict Dub City members SILVA, MELVIN, and POUGH firing their weapons at rival gang members on Bronx streets:

*                *                *

A chart containing the names of the defendants who are charged today, the charges, and minimum and maximum penalties they face is below.  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 and HSI and thanked the Bronx County District Attorney’s Office for its assistance. 

This case is being handled by the Office’s Violent & Organized Crime Unit.  Assistant U.S. Attorneys Michael R. Herman, Matthew J. King, Jacob R. Fiddelman, and Mathew Andrews 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

BRUCE SILVA, a/k/a “Brucie,”

28

Racketeering Conspiracy

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

Narcotics conspiracy

Use, brandishing, and discharge of a firearm in connection with a violent crime and a drug trafficking crime

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: 35 years in prison, which must be consecutive to any other term imposed

BRUCE MELVIN, a/k/a “BG,”

25

Racketeering Conspiracy

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

Narcotics conspiracy

Use, brandishing, and discharge of a firearm in connection with a violent crime and a drug trafficking crime

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: 35 years in prison, which must be consecutive to any other term imposed

JORDAN BENNETT a/k/a “Billy Bandz,” a/k/a “J Bills,”

30

Racketeering Conspiracy

Accessory After the Fact to Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

ELIJAH POUGH, a/k/a “Eli,”

28

Racketeering Conspiracy

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

Narcotics conspiracy

Use, brandishing, and discharge of a firearm in connection with a violent crime and a drug trafficking crime

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: 25 years in prison, which must be consecutive to any other term imposed

SHADELL MCBRIDE, a/k/a “Deli,”

29

Racketeering Conspiracy

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

Narcotics conspiracy

Use, brandishing, and discharge of a firearm in connection with a violent crime and a drug trafficking crime

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: 15 years in prison, which must be consecutive to any other term imposed

JUSTIN BALLESTER, a/k/a “J-Gunz,”

29

Racketeering Conspiracy

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

ALZUBAIR SALEH, a/k/a “Sammy,”

33

Racketeering Conspiracy

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

GIOVANNI RODRIGUEZ, a/k/a “Karrot,”

25

Racketeering Conspiracy

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

GABRIEL VALDEZ, a/k/a “Wolf,”

25

Racketeering Conspiracy

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

EMMANUEL PEREZ, a/k/a “Manny,” a/k/a “Haven,”

24

Racketeering Conspiracy

Narcotics conspiracy

Use and possession of a firearm in connection with a drug trafficking crime

Maximum: Life in prison

Minimum: Five years in prison, which must be consecutive to any other term imposed

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

[2] BENNETT is charged with being an accessory after the fact to this shooting.

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 Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the arrest today of GERALD SHAW, a convicted felon and disbarred attorney, in connection with his involvement in a multi-million-dollar fraud scheme.  SHAW is accused of serving as the purported “Chief Compliance Officer” for a purported financial institution, Dominion Bank and Trust Company Limited (“Dominion Bank”), which claimed to be able to extend financing for small businesses but, in fact, operated an advance fee fraud scheme.  SHAW was arrested this morning in Claremont, California, and will be presented later today in the United States District Court for the Central District of California.

U.S. Attorney Damian Williams said: “As alleged, Gerald Shaw served as the supposed ‘Chief Compliance Officer’ for Dominion Bank, which held itself out as a legitimate financial institution that could extend or facilitate millions of dollars in financing for small businesses.  But in fact, Dominion Bank was also a fraud.  In his role, Shaw, a disbarred attorney and convicted felon, drafted financial instruments that were worthless.  Shaw knew that Dominion Bank was a fraud, but he continued to draft these financial instruments anyway.  Shaw now faces serious charges for his alleged crimes.” 

FBI Assistant Director in Charge Michael J. Driscoll said: “The defendant is alleged to have participated in a scheme which defrauded clients of millions of dollars through the promise of financing in exchange for an advance fee.  Complex financial frauds of this nature damage faith in our financial systems and institutions, and they can cause untold harm to the victims of the fraud.   The FBI is dedicated to investigating individuals who operate unscrupulous businesses and ensuring that their crimes are answered for in the criminal justice system.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As Dominion Bank and Trust’s purported Chief Compliance Officer, Gerald Shaw is alleged to have participated in a conspiracy that defrauded investors of millions of dollars through the issuance of fraudulent financial instruments.  These types of crimes have devastating effects on the victims and can erode trust in the financial system.  HSI will aggressively pursue individuals and organizations that perpetrate these fraudulent schemes to bring justice to the victims and restore faith in our financial institutions.  I am especially grateful for the dedication and investigative acumen of HSI New York’s El Dorado Task Force and HSI Los Angeles for their support in this investigation.”

According to the allegations in the Complaint:[1]

From its formation in or about late 2015 until in or about July 2020, Dominion Bank (along with its affiliates) was a purported financial institution that claimed to be able to extend and facilitate financing for small businesses in exchange for an advanced fee or deposit.  In fact, Dominion Bank operated an advance fee fraud scheme (the “Scheme”).  As part of the fraud, Scheme members instructed victims to wire tens or hundreds of thousands of dollars to Dominion Bank as a deposit or servicing fee for future financing or credit based on representations that Dominion Bank could provide such services.  Those representations were false.  In fact, no financing existed; the victims did not receive the promised credit; and the victims were generally unable to get their money back, as Dominion Bank typically did not return funds to victims but, instead, kept victims’ money and, in some instances, even responded to refund requests by sending invoices for additional amounts.  Dominion Bank defrauded at least approximately 60 victims in total (individual and corporate) out of more than approximately $4 million. 

One way that Dominion Bank defrauded victims was by issuing them worthless financial instruments — such as a standby letter of credit (“SBLC”) — in exchange for large upfront payments.  An SBLC is a legal document between a bank and its client, in which the bank vouches for the client’s creditworthiness and also becomes the guarantor, i.e., the bank promises that, if its client cannot meet its obligations, the bank will do so.  Among other things, Dominion Bank lacked the assets necessary to issue such financial instruments.  According to several victims of the Scheme, other financial institutions have described SBLCs issued by Dominion Bank as being worthless.  As one victim explained, a potential counterparty described Dominion Bank’s SBLC as a “worthless piece of paper.”  Another individual explained that a potential counterparty described Dominion Bank’s $4 million SBLC as not “worth the paper it’s printed on.”

From at least in or about October 2016 through in or about April 2020, Dominion Bank’s Chief Compliance Officer was SHAW.  In that role, SHAW’s responsibilities included drafting various documents, including SBLCs, that were sent to victims in exchange for payments from the victims.  In June 2018, SHAW sent an email to two Dominion Bank officers in which SHAW acknowledged that Dominion Bank lacked funds.  SHAW wrote that Dominion Bank was “20 weeks behind” in paying SHAW’s “$500 a week salary,” and SHAW added that, “On several occasions, I have indicated to you that I know Dominion does not have the money to pay my $500 a week [salary].”  Nonetheless, SHAW continued his involvement in the Scheme thereafter, despite his awareness that Dominion Bank was selling worthless financial instruments because it lacked the assets and ability to back up its representations.  For instance, in December 2018, SHAW was involved in Dominion Bank’s issuance or sale of an approximately $50 million financial instrument and an approximately $25 million financial instrument.  In each instance, Dominion Bank represented, as guarantor, that it had assets sufficient to cover each financial instrument when it did not.

*                *                *

SHAW, 75, of Claremont, California, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum potential prison sentence of 20 years. 

The maximum potential 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 investigative work of the FBI and HSI.  He also thanked FBI Los Angeles, HSI Los Angeles, and the U.S. Attorney’s Office for the Central District of California for their assistance.

Mr. Williams also noted that the investigation is ongoing.  If you believe you have information about the defendant, this case, or if you believe you are a victim of any crimes related to Dominion Bank, please email: [email protected].

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Michael D. Neff and Sheb Swett are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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, announced that MATTHEW TAYLOR WITKOWSKI was sentenced today to 60 months in prison for conspiracy to commit health care fraud by fraudulently trafficking in orders for durable medical equipment such as back, knee, and elbow braces.  WITKOWSKI previously pled guilty to the conspiracy charge and was sentenced today before United States District Judge Denise L. Cote.

U.S. Attorney Damian Williams said: “Today, Matthew Taylor Witkowski faced justice for illegally selling orders for durable medical equipment and thus bilking Medicare out of more than $8 million.  This sort of fraud substantially harms the Medicare program — and will not be tolerated.”

According to statements made in court and publicly filed documents in this case:

From at least August 2019 through the date of his arrest in July 2022, WITKOWSKI and his co-defendant, Christopher Margait, engaged in a scheme to defraud Medicare by illegally obtaining and selling fraudulent written orders for goods and services paid for by Medicare, particularly including for durable medical equipment (“DME”).  Using a business that he jointly owned and operated with Margait, and a call center that WITKOWSKI owned and operated in the Dominican Republic, WITKOWSKI illegally generated and purchased fraudulent written 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 more than $8 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 healthcare 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, WITKOWSKI and Margait received more than $4 million in illegal kickbacks from DME suppliers, who made these payments to True Prospects Marketing, Inc., a company controlled by WITKOWSKI and Margait, and to Sales Drive Marketing LLC, a company owned and controlled by WITKOWSKI.

*                *                *

WITKOWSKI, 38, a U.S. citizen who resided in the Dominican Republic, pled guilty on January 19, 2023, to a single count of conspiracy to commit health care fraud.  In addition to the prison sentence, WITKOWSKI was sentenced to three years of supervised release and 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. 

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the filing of a five-count indictment today charging three individuals — WANDER RIVERA, a/k/a “Ciru,” EDWARD PEREZ, a/k/a “Perico,” and RAMON RODRIGUEZ, a/k/a “Pollo” — with certain federal crimes, including racketeering conspiracy, murder, attempted murder, and firearms offenses.  The defendants are charged for their roles in the “Shooting Boys” gang and associated acts of violence, including the June 21, 2021, murder of Milton Grant and attempted murder of another victim in Manhattan during a robbery.  In a coordinated operation, PEREZ and RIVERA were arrested last night and this morning.  Both defendants will be presented later this afternoon before U.S. Magistrate Judge Jennifer E. Willis in Manhattan federal court.  RODRIGUEZ remains at large.  The case is assigned to United States District Judge Naomi Reice Buchwald.    

U.S. Attorney Damian Williams said: “As alleged, these defendants committed crimes with a street gang that has engaged in robbery, murder, drug trafficking, and other acts of violence.  The indictment unsealed today alleges that Milton Grant was murdered as a result of this gang’s wave of violence.  Gang violence is a threat to the safety and security of our neighborhoods, and we will continue to work to end it.  These defendants now face substantial time in federal prison for their crimes.”  

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Shooting Boys gang members Wander Rivera, Edward Perez, and Ramon Rodriguez utilized extreme violence and intimidation in furtherance of their criminal activities, acting without remorse or regard for human life.  Gang members prey upon the communities they live in, committing the most heinous acts against their victims.  The New York City metropolitan area is much safer when criminal gang members are arrested and held to account for their crimes.  We appreciate the critically important work of our partners at the New York City Police Department and remain dedicated to working collaboratively to help rid our communities of these unrepentant criminals.”

NYPD Commissioner Keechant L. Sewell said: “Dismantling gangs to prevent the senseless violence so often associated with their illegal activities is among the highest priorities for the NYPD and our law enforcement partners.  We will continue to target the relatively small percentage of people responsible for a disproportionate amount of the crime and disorder committed in New York City.  I commend and thank everyone in the office of the U.S. Attorney for the Southern District of New York and all of the NYPD and HSI investigators involved in this case for their work in leveling these charges today.”

As alleged in the Indictment and other documents filed in federal court and based on statements made in public court proceedings:[1]

The “Shooting Boys” gang is a criminal organization based in the University Heights section of the Bronx.  Since at least 2017, gang members sold drugs, used guns, and committed numerous acts of violence against members of rival gangs.  Originally associated with the “Trinitarios” gang, the Shooting Boys broke off from the “Sunset” chapter of the Trinitarios in about 2018. 

The Shooting Boys sold crack, cocaine, heroin, and marijuana in select areas of the Bronx.  Gang members also specialized in armed robberies, often targeting individuals wearing designer jewelry.  During one early morning robbery, on June 21, 2021, Milton Grant was shot and killed as he sat in his car after exiting a Manhattan nightclub.  After Grant was shot, RODRIGUEZ stole Grant’s Audemars Piguet watch, pictured below: 

Another victim ("Victim-1"), who was with Grant at the time, was also shot during the robbery as he attempted to flee from the robbers.  Victim-1 survived his injuries.   

*                *                *

A chart containing the names, charges, and minimum and maximum penalties for the defendants is set forth below.  The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD and HSI and thanked the New York County District Attorney’s Office for its assistance.    

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Dominic A. Gentile, James Ligtenberg, Adam S. Hobson, and Jamie Bagliebter are in charge of the prosecution.  

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

Charge

Defendants

Minimum and Maximum Penalties

Count One

Racketeering Conspiracy

WANDER RIVERA

EDWARD PEREZ

RAMON RODRIGUEZ

Maximum: Life in prison

Count Two

Murder in Aid of Racketeering

WANDER RIVERA

EDWARD PEREZ

Mandatory life in prison or death

Count Three

Murder through Use of a Firearm

WANDER RIVERA

EDWARD PEREZ

Maximum: Life in prison or death

Minimum: Five years in prison, which much be consecutive to any other term imposed

Count Four

Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering

WANDER RIVERA

Maximum: 20 years in prison

Count Five

Firearms Offense

WANDER RIVERA

Maximum: Life in prison

Minimum: 10 years in prison, which much be consecutive to any other term imposed

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOHN MUESER was sentenced to 25 years in prison by United States District Judge Vincent Briccetti for his enticement of a seven-year-old minor to engage in sexual activity and his possession of child pornography.  The sentencing today followed MUESER’s guilty plea on January 10, 2023.

U.S. Attorney Damian Williams said: “To the world, John Mueser presented himself as a dedicated teacher.  But in reality, Mueser exploited the trust placed in him as an educator in order to gain access to the victim’s home and to carry out his sickening abuse.  As today’s sentencing underscores, we will continue to use every tool available to law enforcement to prosecute and punish those who exploit children.”

According to documents filed in this case and statements made in related court proceedings:

On May 1, 2019, JOHN MUESER, a private school teacher and a private tutor at the time, induced a 7-year-old minor (“Victim-1”), whom he was tutoring, to engage in sexually explicit conduct and used his iPhone to record the activity.   

MUESER’s iPhone was found to contain hundreds of images, many of which were sexually explicit, of Victim-1. 

In addition to the numerous images of Victim-1 found on MUESER’s phone, MUESER’s phone was also found to contain numerous sexually explicit images and videos of other prepubescent children.

Years before his abuse of Victim-1, MUESER sexually abused two other children.  With respect to both of those victims, the abuse continued for years. 

In imposing the sentence, Judge Briccetti underscored that the defendant’s criminal conduct was “truly reprehensible,” asking “Is there anything more evil than sexually abusing small children for your own sexual gratification?”  Judge Briccetti recognized that the defendant’s “abuse of these children spanned decades.”  He said that the sentence he imposed “might amount to a life sentence,” and “that does not trouble me at all.”

*                *                *

In addition to the prison sentence, MUESER, 72, of Tuckahoe, New York, was sentenced to a lifetime of supervised release.            

Mr. Williams praised the efforts of the Federal Bureau of Investigation and the Greenwich 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.  

Damian Williams, the United States Attorney for the Southern District of New York, announced that SINA MOAYEDI, the owner of a construction company, Montage, Inc., pled guilty today to a 25-year fraud on the United States Government.  MOAYEDI pled guilty to three counts: conspiracy to commit wire and bank fraud, conspiracy to commit bribery of a public official, and aggravated identity theft.  Under the terms of his plea agreement, MOAYEDI also admitted to obstructing justice by, among other things, deleting electronic evidence of his fraud shortly after his release on bail in this case, which resulted in his pretrial detention.  MOAYEDI pled guilty before United States District Judge Jed S. Rakoff, to whom MOAYEDI’s case is assigned.

U.S. Attorney Damian Williams said: “From 1995 until 2021, Sina Moayedi defrauded the U.S. Government and various of its agencies by lying in various respects.  Moayedi lied that his construction company was woman-owned; he lied about his employees’ qualifications; he lied about his company’s construction experience; and he lied about his company’s financial condition.  He also repeatedly paid bribes to a State Department employee to illegally obtain inside information to help Moayedi’s company win government contracts.  His frauds netted his company at least 27 lucrative government construction contracts, including contracts to build sensitive U.S. embassies and consulates.  And following his arrest in this case, Moayedi obstructed justice by destroying electronic evidence of his frauds less than one month after his release on bail.  Moayedi now faces the consequences of his quarter-century fraud on the federal government, which harmed the government, taxpayers, and his competitors.”

According to the filings and statements made in Manhattan federal court:

In the 1980s, MOAYEDI founded Montage, Inc. (“Montage”), a U.S.-based business that is primarily involved in worldwide Government construction projects, including embassies, military posts, consulates, and similar overseas properties owned and operated by the United States Government.  In total, the U.S. Government has paid Montage more than $200 million on government contracts.  Since 2014, Montage appears to have focused primarily on competing for and obtaining contracts with the State Department.  During that period, the State Department awarded Montage approximately six overseas U.S. Embassy/Consulate construction project contracts totaling $100 million.

MOAYEDI defrauded the U.S. Government — including the State Department, Treasury Department, Department of Defense, and General Services Administration — by lying in various respects.  In submissions to the Government (i.e., bids for contracting work), MOAYEDI mispresented his company’s ownership, his employees’ qualifications, his company’s construction experience, and his company’s financial condition. 

As to ownership, MOAYEDI falsely represented, repeatedly, that Montage was a female-owned business (or a female- and minority-owned business) in order to secure unmerited advantages in the bidding process.  In fact, MOAYEDI founded, owned, ran, and controlled Montage, and he made all material decisions on Montage’s behalf.  As MOAYEDI revealed to a bank that inquired about Montage’s ownership status in 2016, “I am the sole owner and president of Montage and have always been.” 

As to employees’ qualifications, MOAYEDI significantly overstated the qualifications of various Montage employees in order to, among other things, meet State Department and contractual requirements for minimum experience in certain key positions.  For instance, MOAYEDI claimed, falsely, that certain Montage employees possessed engineering degrees, and he claimed, falsely, that certain individuals worked for Montage when, in fact, they did not.

As to Montage’s construction experience, MOAYEDI submitted bids to the Government in which he repeatedly falsified Montage’s purported construction experience in order to burnish its alleged credentials.  To ensure that the U.S. Government did not uncover these lies, MOAYEDI “backstopped” these fabricated prior projects by creating fraudulent email accounts and personas, so that someone else appeared to be “vouching” that Montage had performed this prior work.  This required creating online web domains (the “Fabricated Domains”), so that Montage’s purported references appeared legitimate.  These Fabricated Domains were extremely similar to, but one character or word different from, the legitimate web domain associated with the actual entity.  MOAYEDI purchased the necessary online infrastructure to create these Fabricated Domains.

As to financial condition, MOAYEDI paid a Certified Public Accountant to prepare at least four different sets of books and records, each of which was provided to a different recipient (e.g., one fraudulent set for the U.S. Government, another fraudulent set for the bank, another fraudulent set for a company that sold construction bonds, etc.).

In furtherance of his fraud on the U.S. Government, MOAYEDI also used the identities of at least 10 individuals, including some of his relatives.

In addition, between 2014 and 2020, MOAYEDI repeatedly paid cash bribes and kickbacks to an engineer in the State Department’s Overseas Building Operations division, May Salehi, in exchange for confidential inside information relating to several State Department construction projects, including projects in Ecuador, Spain, and Bermuda.  For instance, in late 2016 and early 2017, MOAYEDI paid approximately $60,000 in cash to Salehi after Salehi provided confidential inside bidding information to MOAYEDI about the relationship between Montage’s original bid and his competitors’ bids — information that allowed Montage to raise its bid by nearly $1 million yet remain the lowest bidder on a construction project that was ultimately awarded to Montage.

MOAYEDI also defrauded his primary bank (“Bank-1”) through various misrepresentations.  MOAYEDI and Montage had a multi-million-dollar line of credit at Bank-1, which they maintained through misrepresentations about Montage’s ownership and the value, progress, status, and existence of construction projects that Montage was performing for the United States Government.  For instance, in or about both 2014 and 2019, MOAYEDI made material misrepresentations to Bank-1 in support of an annual extension of Montage’s line of credit, including misrepresentations about purportedly lucrative “classified” government construction projects which, in fact, did not exist.

MOAYEDI also obstructed justice in multiple respects.  These include: (i) in September 2021, shortly after his release on bail in this case, MOAYEDI destroyed electronic evidence of his fraud on the U.S. Government by deleting at least seven Fabricated Domains, which (as noted) he had used to help inflate Montage’s purported construction experience in bids for U.S. Government construction projects; (ii) shortly after the execution of search warrants at Montage’s offices in September 2020, MOAYEDI attempted to witness tamper by, among other things, pressuring a co-conspirator to lie in order to impede the Government’s ongoing criminal investigation; and (iii) during a civil lawsuit between the State Department and Montage, MOAYEDI lied during a sworn deposition in 2019 by claiming to be the Vice President of Montage and by falsely claiming that a Hispanic woman had been the President of Montage “ever since” 2002.

*                *                *

MOAYEDI, 67, of Chevy Chase, Maryland, pled guilty to three counts: one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit bribery of a public official, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory prison term of two years, which must run consecutively to any other prison term.  

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as MOAYEDI’s sentence will be determined by Judge Rakoff. 

MOAYEDI is scheduled to be sentenced by Judge Rakoff on August 10, 2023, at 4:00 p.m.  Under the terms of his plea agreement, MOAYEDI also agreed to pay restitution of $6,588,679.63 and forfeiture of $17,795,098.50.

May Salehi was previously sentenced to one year in prison, three years of supervised release, a fine of $500,000, and forfeiture of $60,000.

Mr. Williams praised the exceptional investigative work of the State Department, Office of Inspector General; Special Agents from the United States Attorney’s Office for the Southern District of New York; and the Internal Revenue Service. 

The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case.  Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino 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 Robert Gazzola, the Commissioner of the New Rochelle Police Department (“NRPD”), announced that JAYLEEN MOTA was arrested on April 16, 2023, and charged via a criminal Complaint filed in White Plains federal court with making threatening interstate communications, in which MOTA threatened to shoot up a popular nationwide chain restaurant and sports bar located on LeCount Place in New Rochelle on Saturday night.  MOTA will be presented in White Plains federal court later today before United States Magistrate Judge Andrew E. Krause.

U.S. Attorney Damian Williams said: “Actual or threatened gun violence cannot be tolerated.  Simply put, those who place the public in fear by engaging in or threatening the use of violence will be held accountable.  This Office commends the swift action of the New Rochelle Police Department and the FBI in quickly tracking down this threat.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, Ms. Mota sent a series of text messages in which she threatened to commit a mass shooting at a crowded New Rochelle restaurant.  Communicating threats like those we allege she made can waste valuable law enforcement resources and cause unnecessary alarm in our communities.  Today’s charges should serve as a reminder for all that the FBI takes these types of threats seriously, and there will be consequences for those who make them.”

NRPD Commissioner Robert Gazzola said: “I want to commend the New Rochelle Police detectives, members of the Westchester County Department of Public Safety's Real Time Crime Center, the FBI, and the U.S. Attorney's Office.  They worked quickly and diligently to identify and arrest the individual who allegedly made threats of mass violence directed at a local New Rochelle restaurant.  It is a testament to the professional cooperation that exists in law enforcement today.  The New Rochelle Police Department does not tolerate such acts and will make every effort to identify and arrest anyone making such threats.”

As alleged in the Complaint filed today:[1]

On April 15, 2023, the NRPD received a call from an individual (“Caller-1”) who had received an initial text message from an unknown person, later identified as MOTA, threatening to “shoot[] up” a popular nationwide chain restaurant and sports bar located on LeCount Place in New Rochelle (the “Victim Restaurant”).  The text message further stated that there would be a “massacre” and “lots of people are going down.”  A subsequent text message stated that “[t]odays a busy night because of the game DON’T TAKE ME AS A JOKE lots of people will die DON’T CALL THE STORE AND RUIN MY PLANS I’m gonna make the news.”

That same day, the NRPD received a call from a second individual (“Caller-2”) who had received an identical text message from an unknown person threatening to “shooting[] up” the Victim Restaurant and commit a “massacre,” stating, “lots of people are going down.”

The NRPD took the phone number from which the text-message threats were sent and traced the number back to MOTA.  On the evening of April 15, 2023, pursuant to a search warrant, the FBI and New Rochelle Police searched MOTA’s apartment and found both MOTA and the cellphone from which MOTA sent the threats.  After informing MOTA of her Miranda rights, she consented to being interviewed and admitted that she had sent text messages threatening to shoot up the Victim Restaurant to five individuals.

*                *                *

MOTA, 21, of the Bronx, New York, is charged with making threatening interstate communications, which carries a maximum sentence of five years in prison.  

The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Williams praised the outstanding investigative efforts of the NRPD and the FBI’s Westchester Safe Streets Task Force, which consists of investigators and analysts from the FBI and other New York state and local agencies.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that DARNELL KIDD, a/k/a “Black,” a/k/a “Donney,” a/k/a “Donney Black,” was sentenced today to 35 years in prison for the murder of Jonathan Johnson, 21, on March 18, 2011, in White Plains, New York.  On November 16, 2022, KIDD was convicted of one count of murder through the use of a firearm, following a jury trial before U.S. District Judge Nelson S. Román, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “This lengthy investigation is yet another example of this Office’s commitment to prosecuting those who perpetuate gun violence and rob residents of New York of their peace and safety.  We will continue our all-hands-on-deck approach with our law enforcement partners to identify and punish those who commit violent and brutal gun offenses.”

According to the evidence at trial and statements made in public court proceedings and filings:

On March 18, 2011, DARNELL KIDD and his co-defendant MARCUS CHAMBERS murdered Jonathan Johnson by shooting him during an armed robbery for marijuana in White Plains.  In advance of the robbery, CHAMBERS arranged by phone to purchase three ounces of marijuana from Johnson.  Intending to instead rob Johnson, CHAMBERS and KIDD met with Johnson in or near Johnson’s car, which was parked on a suburban street in White Plains.  During the course of the robbery, KIDD drew a loaded gun and fired it, killing Johnson.  KIDD and CHAMBERS then fled from the scene of the murder.   

*                *                *

In addition to his prison term, KIDD, 31, of Yonkers, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the White Plains Police Department and the Federal Bureau of Investigation (“FBI”) Westchester Safe Streets Task Force, which comprises Special Agents and Task Force Officers from the FBI, United States Probation Office, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County Department of Public Safety, Westchester County District Attorney’s Office, Putnam County Sheriff’s Office, New York City Police Department, Yonkers Police Department, Mount Vernon Police Department, Peekskill Police Department, Greenburgh Police Department, New Rochelle Police Department, White Plains Police Department, Clarkstown Police Department, and Ramapo Police Department.  Mr. Williams also thanked the Westchester County District Attorney’s Office for its assistance in this matter.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Olga I. Zverovich, Christopher Brumwell, and Steven J. Kochevar, with the assistance of Paralegal Specialist Shannon Becker, are in charge of the prosecution.        

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 of the United States, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the unsealing of fentanyl trafficking, weapons, and money laundering charges contained in three Indictments charging 28 defendants, including 23 based in Mexico, four based in China, and one based in Guatemala.

Since at least in or about 2014, the Sinaloa Cartel has run a global fentanyl manufacturing and distribution operation, sending massive quantities of fentanyl — a drug that has killed unprecedented numbers of Americans — into the United States.  Cartel leadership includes three sons of the Sinaloa Cartel’s former leader, Joaquín Archivaldo Guzmán Loera, a/k/a “El Chapo,” known as the “Chapitos”: IVAN ARCHIVALDO GUZMAN SALAZAR, JESUS ALFREDO GUZMAN SALAZAR, a/k/a “Alfredo,” and OVIDIO GUZMAN LOPEZ, a/k/a “Raton.”  Together with their co-conspirators, the Chapitos allegedly controlled extensive, multi-faceted, and international operations covering the fentanyl trade, which was designed to pump staggering quantities of fentanyl into the United States — in IVAN ARCHIVALDO GUZMAN SALAZAR’s words, to flood the United States with fentanyl in order to supply “streets of junkies.”  The Indictments returned today charge not only the Chapitos but also top lieutenants and leadership of the Sinaloa Cartel; alleged manufacturers and distributors of the Sinaloa Cartel’s fentanyl; the managers of the violent armed security apparatus that protects the Sinaloa Cartel’s drug trafficking operations; the sophisticated money launderers who repatriate the Sinaloa Cartel’s drug proceeds back to Mexico; and multiple chemical precursor suppliers in China that fuel the Sinaloa Cartel’s fentanyl distribution operation.  Through these efforts, the Chapitos and the Sinaloa Cartel allegedly reaped hundreds of millions of dollars in profits by flooding the United States with fentanyl.  Seven defendants are in custody pending extradition proceedings: OVIDIO GUZMAN LOPEZ was arrested in Mexico; CARLOS OMAR FELIEX GUTIERREZ and SILVANO FRANCISCO MARIANO, a/k/a “Rayo,” were arrested in Colombia; SERGIO DUARTE FRIAS, ANA GABRIELA RUBIO ZEA, and HUMBERTO BELTRAN CUEN, a/k/a “Don Chino,” were arrested in Guatemala; and ANASTACIO SOTO VEGA, a/k/a “Tachin,” was arrested in Greece.  Additionally, JULIO MARIN GONZALEZ was previously arrested in the United States and will be arraigned before U.S. District Judge Katherine Polk Failla.

U.S. Attorney Damian Williams said: “For over a decade, the illicit fentanyl trade has created a plague of addiction, death, and misery for Americans and New Yorkers of all walks of life.  As alleged, the sons of the infamous Sinaloa Cartel leader ‘El Chapo,’ Ivan Archivaldo Guzman Salazar, Jesus Alfredo Guzman Salazar, and Ovidio Guzman Lopez, commanded the Sinaloa Cartel’s fentanyl manufacturing and trafficking operation.  Today’s charges target not only Sinaloa Cartel leadership but the Cartel’s entire fentanyl infrastructure, including the armed enforcers who use abhorrent violence to protect the Cartel, the lab operators who produce untold quantities of fentanyl, the drug traffickers who move their deadly fentanyl into and throughout the United States, the money launderers who funnel proceeds back to the Cartel, and the China-based chemical suppliers who service the Cartel.  I commend the career prosecutors of the Southern District of New York and our partners at the Drug Enforcement Administration for their tireless efforts to disrupt the Sinaloa Cartel’s fentanyl trafficking at all levels.  We hope that today’s charges are a major step toward accountability for those who have for so long pushed this poison into our communities.”

Attorney General Merrick B. Garland said: “Today, the Justice Department is announcing significant enforcement actions against the largest, most violent, and most prolific fentanyl trafficking operation in the world – run by the Sinaloa Cartel, and fueled by Chinese precursor chemical and pharmaceutical companies.  Families and communities across our country are being devastated by the fentanyl epidemic.  Today’s actions demonstrate the comprehensive approach the Justice Department is taking to disrupt fentanyl trafficking and save American lives.”

Deputy Attorney General Lisa O. Monaco said: “The fentanyl crisis in America – fueled in large part by the Sinaloa cartel – threatens our public health, our public safety, and our national security.  Today’s indictments target every element of the Sinaloa Cartel's trafficking network and reflect the Justice Department's commitment to attacking every aspect of this threat: from the chemical companies in China that spawn fentanyl precursors, to the illicit labs that produce the poison, to the networks and money launderers and murderers that facilitate its distribution.  Just as we have gone on offense against terrorists and cyber criminals around the globe, the Department is now waging a relentless campaign to disrupt the production and trafficking of fentanyl – before it can reach its victims.”

DEA Administrator Anne Milgram said: “Today’s indictments send a clear message to the Chapitos, the Sinaloa Cartel, and criminal drug networks around the world that the DEA will stop at nothing to protect the national security of the United States and the safety and health of the American people.  The Chapitos pioneered the manufacture and trafficking of fentanyl – the deadliest drug threat our country has ever faced – flooded it into the United States for the past eight years and killed hundreds of thousands of Americans.  Over the last year and a half, the DEA proactively infiltrated the Sinaloa Cartel and the Chapitos network, obtained unprecedented access to the organization’s highest levels, and followed them across the world.  I am grateful to the men and women of the DEA for their exceptional work on this case, which is the beginning of our work as ‘One DEA’ to dismantle every part of the criminal cartels that are killing Americans at record rates.”

According to the allegations contained in the Indictments, other court filings, and statements made during court proceedings:[1]

The Sinaloa Cartel (the “Cartel”) is one of the most powerful drug cartels in Mexico and is largely responsible for the manufacturing and importing of fentanyl for distribution in the United States.  Fentanyl is a dangerous synthetic opioid that is more than 50 times more potent than heroin.  Fentanyl is now the leading cause of death for Americans ages 18 to 49, and it has fueled the opioid epidemic that has been ravaging families and communities across the United States for the past approximately eight years.  Between 2019 and 2021, fatal overdoses increased by approximately 94%, with an estimated 196 Americans dying each day from fentanyl.

The Cartel is led, in part, by IVAN ARCHIVALDO GUZMAN SALAZAR, JESUS ALFREDO GUZMAN SALAZAR, and OVIDIO GUZMAN LOPEZ, who are sons of the Cartel’s notorious former leader, Joaquín Archivaldo Guzmán Loera, a/k/a “El Chapo,” and are known collectively as the “Chapitos.”

Since in or about 2014, the Chapitos’ alleged fentanyl trafficking operation for the Cartel has grown exponentially in volume, scale, and sophistication.  Under the Chapitos’ leadership, the Cartel operates a vast fentanyl trafficking operation that integrates each step in the fentanyl trade, from manufacture to distribution.  Members and affiliates of the Cartel purchase and import fentanyl precursor chemicals from China directly or through third countries, manufacture fentanyl in laboratories in the mountains of Sinaloa, move that fentanyl across the border into the United States, distribute that fentanyl through various networks operating across the United States, and launder the proceeds back to Mexico.

As a critical part of the fentanyl trafficking enterprise, the Cartel relies on and directs hundreds of violent, heavily armed soldiers (known as sicarios) to protect the Cartel’s fentanyl operations at every step and intimidate others who might attempt to cheat, interfere with, or compete against the Cartel through kidnapping, torture, and murder using machineguns and other weaponry.  As alleged, the Chapitos’ sicarios operated under the direction of the Chapitos and OSCAR NOE MEDINA GONZALEZ, a/k/a “Panu,” NESTOR ISIDRO PEREZ SALAS, a/k/a “Nini,” and JORGE HUMBERTO FIGUEROA BENITEZ, a/k/a “27,” to kidnap, torture, and kill anyone who opposed the Chapitos.

To manufacture fentanyl, the Cartel uses precursor chemicals procured principally from China.  As alleged, the Cartel relies on brokers such as ANA GABRIELA RUBIO ZEA, a/k/a “Gaby,” who procure fentanyl precursor chemicals for the Cartel through Chinese chemical companies and the owners and operators of the Chinese chemical companies, including KUN JIANG, YONGHAO WU, a/k/a “Tim,” YAQIN WU, a/k/a “Lily,” and HUATAO YAO, a/k/a “Yao.”

The Cartel also employs skilled chemists — or “cooks” — who have expertise in synthesizing fentanyl from the China-sourced precursor chemicals.  In one day alone, a Cartel cook can manufacture over 100,000 pills using pill press machines.  In some instances, Cartel traffickers under the Chapitos have tested the purity of their fentanyl by testing it on others.  For example, in or about 2022, PEREZ SALAZ and FIGUEROA BENITEZ experimented on a woman by injecting her repeatedly with doses of fentanyl until she died.

Led by the Chapitos, the trafficking of finished fentanyl powder and pills is a main goal of the Cartel and one of its most lucrative endeavors.  Most often, the Cartel’s fentanyl crosses into the United States at ports of entry, including concealed in secret compartments of cars, disguised among goods in tractor-trailers, hidden in luggage on planes, obscured through fake paperwork in shipping containers, or secreted on or in the bodies of drug mules.

Once the Cartel’s fentanyl is transported into the United States, Cartel traffickers maintain designated stash locations where the fentanyl is stored, and the Cartel’s U.S.-based distribution network then sells the fentanyl wholesale for retail distribution throughout the United States, including in New York City.  In 2022, alone, the DEA seized over 57 million fentanyl-laced pills and over 13,000 pounds of fentanyl powder — the equivalent of approximately 410 million potentially deadly doses of fentanyl.  

Finally, as alleged, the Cartel relies on increasingly sophisticated ways of laundering fentanyl proceeds from the United States back into Mexico to enrich the Chapitos.  For example, over the course of approximately two years, a single Cartel trafficker in the United States assisted in the laundering of more than $24 million in narcotics proceeds belonging to OVIDIO GUZMAN LOPEZ by providing to Cartel money launderers in the United States approximately $15 million and by sending approximately $9 million in bulk cash to Mexico hidden in secret compartments in cars.  Other alleged Cartel money launderers, including MARIO ALBERTO JIMENEZ CASTRO, a/k/a “Kastor,” and SERGIO DUARTE FRIAS, have used cryptocurrency wallets to launder hundreds of thousands of dollars in fentanyl proceeds for the Cartel.

*                *                *

A chart containing the charges and minimum and maximum penalties each defendant faces is attached.  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 a judge.

Mr. Williams praised the outstanding investigative work of the DEA’s Special Operations Division, Bilateral Investigations Unit; Atlanta Division Office; Aviation Division; Boston Division Office; Denver Division Office; Imperial County District Office; Indianapolis District Office; Los Angeles Division Office; Nashville District Office; Newark Division Office; New York Division Office; Omaha Division Office; Orlando District Office; Philadelphia Division Office; Phoenix Division Office; Riverside District Office; Salt Lake City District Office; San Diego Division Office; San Ysidro District Office; Madrid Country Office; Athens Country Office; Bogota Country Office; Canberra Country Office; Guatemala City Country Office; Vienna Country Office; and multiple DEA offices throughout Mexico, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division; the U.S. Department of the Treasury, Office of Foreign Assets Control; and the U.S. Department of State, Rewards for Justice Program.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Kyle A. Wirshba, Nicholas S. Bradley, Sarah L. Kushner, David J. Robles, and Alexander Li are in charge of the prosecution.

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

United States v. Ovidio Guzman Lopez, 23 Cr. 42

Defendant

Age

Charges

Minimum and Maximum Penalties

OVIDIO GUZMAN LOPEZ, a/k/a “Raton”

33

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

United States v. Ivan Archivaldo Guzman Salazar, et al., 23 Cr. 180

Defendant

Age

Charges

Minimum and Maximum Penalties

IVAN ARCHIVALDO GUZMAN SALAZAR

39

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

JESUS ALFREDO GUZMAN SALAZAR, a/k/a “Alfredo”

36

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

OSCAR NOE MEDINA GONZALEZ, a/k/a “Panu”

39

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

NESTOR ISIDRO PEREZ SALAS, a/k/a “Nini”

31

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

JORGE HUMBERTO FIGUEROA BENITEZ, a/k/a “27”

31

Continuing criminal enterprise; fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Mandatory life in prison

LIBORIO NUNEZ AGUIRRE, a/k/a “Karateca”

65

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

NOEL PEREZ LOPEZ, a/k/a “Tio”

42

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

SAMUEL LEON ALVARADO

34

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

LUIS JAVIER BENITEZ ESPINOZA, a/k/a “El Fourteen”

22

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

ALAN GABRIEL NUNEZ HERRERA

29

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

JUAN PABLO LOZANO, a/k/a “Camaron”

30

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

CARLOS LIMON

19

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

JESUS TIRADO ANDRADE

26

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

CARLOS OMAR FELIX GUTIERREZ

22

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

SILVANO FRANCISCO MARIANO, a/k/a “Rayo”

41

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

JULIO MARIN GONZALEZ

32

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

MARIO ALBERTO JIMENEZ CASTRO, a/k/a “Kastor”

34

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

SERGIO DUARTE FRIAS

26

Fentanyl importation conspiracy; fentanyl distribution conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices; conspiracy to commit money laundering

Life in prison; mandatory minimum of 40 years in prison

ANA GABRIELA RUBIO ZEA, a/k/a “Gaby”

32

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

KUN JIANG

Unknown

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

YONGHAO WU, a/k/a “Tim”

31

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

YAQIN WU, a/k/a “Lily”

30

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

HUATAO YAO, a/k/a “Yao”

32

Fentanyl importation conspiracy; fentanyl distribution conspiracy; conspiracy to commit money laundering

Life in prison; mandatory minimum of 10 years in prison

United States v. Leobardo Garcia Corrales, et al., S2 23 Cr. 136

Defendant

Age

Charges

Minimum and Maximum Penalties

LEOBARDO GARCIA CORRALES, a/k/a “Leo”

53

Fentanyl importation conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices

Life in prison; mandatory minimum of 40 years in prison

MARTIN GARCIA CORRALES, a/k/a “Tano,” a/k/a “Cachuchas”

43

Fentanyl importation conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices

Life in prison; mandatory minimum of 40 years in prison

HUMBERTO BELTRAN CUEN, a/k/a “Don Chino”

69

Fentanyl importation conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices

Life in prison; mandatory minimum of 40 years in prison

ANASTACIO SOTO VEGA, a/k/a “Tachin”

45

Fentanyl importation conspiracy; possession of machineguns and destructive devices; conspiracy to possess machineguns and destructive devices

Life in prison; mandatory minimum of 40 years in prison

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JEROME WEAH was sentenced today in Manhattan federal court to 46 months in prison for engaging in a scheme to defraud a program of the New York City Human Resources Administration (“HRA”), which provides cash assistance to homeless veterans of the United States armed services (“Veterans”) seeking permanent housing.  Another defendant, RUDEAN WEIR, was sentenced to 30 months in prison on March 30, 2023, for his participation in the scheme.  The sentences were imposed by United States District Judge Denise L. Cote.

U.S. Attorney Damian Williams said: “Rudean Weir and Jerome Weah stole approximately $5.4 million from a New York City program intended to benefit U.S. veterans seeking permanent housing.  These sentences should send a message that individuals who abuse Government programs to enrich themselves at the expense of taxpayers will face serious consequences.”

As alleged in the Complaint, Informations, and other documents in the public record, as well as statements made in public court proceedings:

From at least October 2020 through at least May 2022, RUDEAN WEIR and JEROME WEAH submitted more than 340 fraudulent applications seeking cash assistance pursuant to the Enhanced One Shot Deal (“EOSD”) program administered by the HRA.  The EOSD is an emergency assistance program pursuant to which HRA makes a one-time cash assistance payment to qualifying individuals.  EOSD payments are often used to help individuals move out of homeless shelters and/or other temporary housing into permanent housing.  EOSD payments may be used to cover certain costs associated with the move to permanent housing, including rent, moving expenses, security deposits, broker’s fees, and payments for furniture and other household items.  The HRA also offers and administers services and programs for Veterans, sometimes referred to as “Veteran’s Initiatives.”  In connection with these services, the HRA has a designated group responsible for receiving and reviewing EOSD requests made on behalf of homeless Veterans seeking permanent housing.

Between October 2020 and May 2022, the HRA received at least 340 EOSD applications which claimed that the applicants were homeless Veterans who had entered into a lease agreement with a particular landlord (“Landlord-1”).  Each of these applications (the “Landlord-1 EOSD Applications”) claimed that a particular company provided broker’s services in connection with the lease agreement (“Broker Company-1”).  HRA paid approximately $5.4 million in EOSD payments and broker’s fees pursuant to the Landlord-1 EOSD Applications.

The Landlord-1 EOSD Applications were fraudulent.  Landlord-1 and the Veterans did not, in fact, enter into the lease agreements submitted to HRA in connection with the Landlord-1 EOSD Applications, and Broker Company-1 did not provide real estate brokerage services to either Landlord-1 and/or the Veterans.  The Veterans identified in the Landlord-1 EOSD Applications were not homeless and typically did not live in New York City.  The Landlord-1 EOSD Applications, therefore, contained fake documentation and information and fraudulently induced HRA into making EOSD payments.

*                *                *

In addition to the prison terms, both WEIR, 38, of Atlanta, Georgia, and WEAH, 47, of Trenton, New Jersey, were sentenced to three years of supervised release and ordered to pay restitution in the amount of $5,388,769.60.  WEIR was ordered to forfeit $3,779,489.00, including his interest in two bank accounts and six real estate properties.  WEAH was ordered to forfeit $2,179,922.60, including his interest in two bank accounts and one real estate property.

Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation.  Mr. Williams also thanked the New York City Department of Social Services and the U.S. Department of Veterans Affairs, Office of Inspector General for their assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES ZHONG was sentenced today to one year and one day in prison for committing wire fraud in September 2012 when he unlawfully obtained approximaely 50,000 Bitcoin from the Silk Road dark web internet marketplace.  United States District Judge Paul G. Gardephe imposed today’s sentence. 

As part of the ZHONG investigation, the Government has obtained final orders of forfeiture for, among other items, 51,680.32473733 Bitcoin, valued at over $3.4 billion at the time of seizure and over $1.57 billion today.  

U.S. Attorney Damian Williams said: “Back in 2012, James Zhong committed wire fraud by stealing 50,000 Bitcoin from Silk Road, and for the next 10 years, he managed to conceal what he had done and how he obtained his fortune.  Zhong used a decentralized Bitcoin mixer, an overseas cryptocurrency exchange, and an impressive array of technological tools to frustrate tracing efforts.  But thanks to the relentless and skillful efforts of law enforcement in following the money, the federal government uncovered Zhong’s scheme and obtained final orders of forfeiture for over 51,680 Bitcoin.  Cyber-criminals should heed this message: we will follow the money and hold you accountable, no matter how sophisticated your scheme and no matter how long it takes.” 

According to court filings and statements made in court proceedings:

ZHONG’s Scheme to Defraud

Silk Road was an online “darknet” black market.  In operation from approximately 2011 until 2013, Silk Road was used by numerous drug dealers and other unlawful vendors to distribute massive quantities of illegal drugs and other illicit goods and services to many buyers and to launder all funds passing through it.  In 2015, following a groundbreaking prosecution by this Office, Silk Road’s founder Ross Ulbricht was convicted by a unanimous jury and sentenced to life in prison.  United States v. Ulbricht, 14-cr-68 (S.D.N.Y.). 

In September 2012, ZHONG executed a scheme to defraud Silk Road of its money and property by (i) creating a string of approximately nine Silk Road accounts (the “Fraud Accounts”) in a manner designed to conceal his identity; (ii) triggering over 140 transactions in rapid succession in order to trick Silk Road’s withdrawal-processing system into releasing approximately 50,000 Bitcoin from its Bitcoin-based payment system into ZHONG’s accounts; and (iii) transferring this Bitcoin into a variety of separate addresses also under ZHONG’s control, all in a manner designed to prevent detection, conceal his identity and ownership, and obfuscate the Bitcoin’s source. 

While executing the September 2012 fraud, ZHONG did not list any item or service for sale on Silk Road, nor did he buy any item or service on Silk Road.  ZHONG registered the accounts by providing the bare minimum of information required by Silk Road to create the account; the Fraud Accounts were merely a conduit for ZHONG to defraud Silk Road of Bitcoin.

ZHONG funded the Fraud Accounts with an initial deposit of between 200 and 2,000 Bitcoin.  After the initial deposit, ZHONG then quickly executed a series of withdrawals.  Through his scheme to defraud, ZHONG was able to withdraw many times more Bitcoin out of Silk Road than he had deposited in the first instance.  As an example, on September 19, 2012, ZHONG deposited 500 Bitcoin into a Silk Road wallet.  Less than five seconds after making the initial deposit, ZHONG executed five withdrawals of 500 Bitcoin in rapid succession — i.e., within the same second — resulting in a net gain of 2,000 Bitcoin.  As another example, a different Fraud Account made a single deposit and over 50 Bitcoin withdrawals before the account ceased its activity.  ZHONG moved this Bitcoin out of Silk Road and, in a matter of days, consolidated them into two high-value amounts.

Nearly five years after ZHONG’s fraud, in August 2017, solely by virtue of ZHONG’s possession of the 50,000 Bitcoin that he unlawfully obtained from Silk Road, ZHONG received a matching amount of a related cryptocurrency — 50,000 Bitcoin Cash (“BCH Crime Proceeds”) — on top of the 50,000 Bitcoin.  In August 2017, in a hard fork coin split, Bitcoin split into two cryptocurrencies, traditional Bitcoin and Bitcoin Cash (“BCH”).  When this split occurred, any Bitcoin address that had a Bitcoin balance (as ZHONG’s addresses did) now had the exact same balance on both the Bitcoin blockchain and on the Bitcoin Cash blockchain.  As of August 2017, ZHONG thus possessed 50,000 BCH in addition to the 50,000 Bitcoin that ZHONG unlawfully obtained from Silk Road.  ZHONG thereafter exchanged through an overseas cryptocurrency exchange all of the BCH Crime Proceeds for additional Bitcoin, amounting to approximately 3,500 Bitcoin of additional crime proceeds.  Collectively, by the last quarter of 2017, ZHONG thus possessed approximately 53,500 Bitcoin of total crime proceeds (the “Crime Proceeds”).

The Government’s Seizure of Over 50,000 Bitcoin

On November 9, 2021, pursuant to a judicially authorized premises search warrant, law enforcement agents recovered approximately 50,491.06251844 Bitcoin of crime proceeds from ZHONG’s Gainesville, Georgia, house.  Law enforcement located these crime proceeds in an underground floor safe and on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.  In addition, law enforcement recovered $661,900 in cash, 25 Casascius coins (physical bitcoin) with an approximate value of 174 Bitcoin, 11.1160005300044 additional Bitcoin, four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin.  Photographs of the popcorn tin, single-board computer, underground floor safe, and some of the seized items are included below:

Beginning in or around March 2022, ZHONG began voluntarily surrendering to the Government additional Bitcoin that ZHONG had access to and had not dissipated.  In total, ZHONG voluntarily surrendered 1,004.14621836 additional Bitcoin.

Using a conservative estimate of the lowest spot price of Bitcoin on the seizure dates, the total value of all Bitcoin seized for which the Government has obtained final orders of forfeiture is approximately $3.4 billion. 

Forfeiture Actions

On February 7, 2023, in United States v. Ross Ulbricht, S1 14 Cr. 68 (S.D.N.Y.), District Judge Lorna G. Schofield entered a final order of forfeiture as to the below property seized from ZHONG, vesting all right, title, and interest in the below property in the United States:

• 50,491.06251844 Bitcoin seized from ZHONG’s home on November 9, 2021;
• 825.38833159 Bitcoin provided by ZHONG on March 25, 2022; and
• 35.4470080 Bitcoin provided by ZHONG on May 25, 2022.

On March 14, 2023, District Judge Gardephe entered a final order of forfeiture as to the below property, vesting all right, title, and interest in the below property in the United States:

• ZHONG’s 80% interest in RE&D Investments, LLC, a Memphis-based company with substantial real estate holdings;
• $661,900 in United States currency seized from ZHONG’s home on November 9, 2021;
• Metal items, consisting of four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin, all seized from ZHONG’s home on November 9, 2021;
• 11.1160005300044 Bitcoin seized from ZHONG’s home on November 9, 2021;
• 25 Casascius coins (physical Bitcoin) with an approximate value of 174 Bitcoin, collectively, seized from ZHONG’s home on November 9, 2021;
• 23.7112850 Bitcoin provided by ZHONG on April 27, 2022;
• 115.02532155 Bitcoin provided by ZHONG on April 28, 2022; and
• 4.57427222 Bitcoin provided by ZHONG on June 8, 2022.

*                *                *

ZHONG, 32, of Gainesville, Georgia, and Athens, Georgia, previously pled guilty to one count of wire fraud before Judge Gardephe.

Mr. Williams praised the outstanding work of the Internal Revenue Service, Criminal Investigation’s Western Cyber Crimes Unit of the Los Angeles Field Office.  Mr. Williams also thanked the Athens-Clarke County Police Department in Athens, Georgia, for its support and assistance with the case.  

The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorney David R. Felton is in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced that PEACHES STERGO pled guilty today before United States District Judge Edgardo Ramos in connection with her years-long scheme to defraud an 87-year-old Holocaust survivor of his life savings.

U.S. Attorney Damian Williams said: “Peaches Stergo stole the life savings from an 87-year-old Holocaust survivor who was just looking for companionship.  This conduct is sick – and sad.  Using the millions in fraud proceeds, Stergo lived a life of luxury, purchasing a home in a gated community and a Corvette, taking vacations at hotels like the Ritz Carlton, and buying thousands in designer clothing, while at the same time causing her elderly victim to lose his apartment.  Thanks to the hard work of the FBI and this Office, Stergo is being held accountable for her fraud.”

As alleged in the Indictment:

From at least in or about May 2017, up to and including at least October 2021, STERGO engaged in a scheme to defraud an 87-year-old Holocaust survivor (the “Victim”) of over $2.8 million, which was his life savings. 

STERGO met the Victim on a dating website approximately six or seven years ago.  In or about early 2017, STERGO asked the Victim to borrow money to pay her lawyer, who she claimed was refusing to release funds from an injury settlement.  After the Victim gave her the money, STERGO said the settlement funds had been deposited into her TD Bank account.  In reality, bank records show STERGO never received any money from an injury settlement.

Over the next four and a half years, STERGO continued her lies.  She repeatedly demanded that the Victim deposit money into her bank accounts.  She claimed that if he did not, her accounts would be frozen and he would never be paid back.  In total, the Victim wrote 62 checks — totaling over $2.8 million — that were deposited into one of two of STERGO’s bank accounts.   

In furtherance of the fraud, STERGO created a fake email account, intended to appear as if it belonged to a TD Bank employee.  She also created fake letters from a TD Bank employee and fake invoices.

While the Victim lost his life savings and was forced to give up his apartment, STERGO lived a life of luxury with the millions she received from the fraud: she bought a home in a gated community, a condominium, a boat, and numerous cars, including a Corvette and a Suburban.  During the course of the fraud, STERGO also took expensive trips, staying at places like the Ritz Carlton, and spent many tens of thousands of dollars on expensive meals, gold coins and bars, jewelry, Rolex watches, and designer clothing from stores like Tiffany, Ralph Lauren, Neiman Marcus, Louis Vuitton, and Hermes.

*                *                *

STERGO, 36, of Champions Gate, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  In connection with the guilty plea, STERGO agreed to pay $2,830,775 in restitution and to forfeit the same amount, along with over 100 luxury items she purchased with fraud proceeds, including Rolex watches, designer purses and clothing, and large amounts of gold and jewelry.

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.  Sentencing has been scheduled for July 27, 2023, at 11:00 a.m.

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 Adam Sowlati is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ADRIAN ALEXANDER, a New York litigation funder, was sentenced today to 36 months in prison for his participation in a scheme to obtain large insurance settlements and lawsuit recoveries from fraudulent trip-and-fall accidents.  ALEXANDER is the 11th defendant to plead guilty or be convicted at trial for his participation in this fraud scheme and the fifth defendant to be sentenced.  Defendants Ryan Rainford, Bryan Duncan and Robert Locust, who recruited patients into the scheme and were convicted at trial in May 2019, were previously sentenced on January 7, 2020, July 27, 2020, and July 9, 2021, respectively.  Defendant Sady Ribeiro, a surgeon who participated in the scheme, was previously sentenced on March 23, 2023.  U.S. District Judge Sidney H. Stein imposed all sentences. 

U.S. Attorney Damian Williams said: “Adrian Alexander knowingly exploited some of the most vulnerable members of society – many of whom were poor, drug addicts, or homeless – in order to enrich himself and his investors.  Today’s sentence should serve as a warning to unscrupulous litigation funders that, together with our law enforcement partners, we will hold accountable those who engage in unlawful practices and prey on litigants without the means to avail themselves of the judicial process.”

According to the Indictment, the Superseding Information, evidence presented in court, and statements made in court:

ALEXANDER, among others, was involved in an extensive fraud scheme through which fraud scheme participants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.

The fraud scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”).  In the course of the fraud scheme, scheme participants recruited more than 400 Patients.  Members of the fraud scheme often recruited Patients who were extremely poor.  For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers.  Many of the Patients did not have sufficient clothing to keep them warm during the winter and had poor-quality shoes.  Members of the fraud scheme also recruited Patients who were drug addicts, and it was common for scheme participants to recruit Patients from homeless shelters in New York City.

In the beginning, scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact, the Patients had suffered no such accidents.  Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall.  Common Accident Sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”

After the staged trip-and-fall accidents, Patients were referred to specific attorneys who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”).  The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the Accident Sites or, in some cases, had not fallen at all.  During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of more than $31,000,000.

The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including Ribeiro.  The fraud scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery, which was critical to boosting the value of any potential settlement.  Fraud scheme participants, including ALEXANDER, looked for doctors who were willing to perform surgeries, even when others would not.  For example, in a May 2015 email, after one doctor informed ALEXANDER that a particular patient was “not . . . a surgical candidate,” ALEXANDER directed a Patient recruiter and case manager to “[t]ake him to [another doctor]—Nothing is done until its done.” 

As an incentive to getting surgery, the recruited Patients were offered a payment, in the form of loans, typically between $1,000 and $1,500 after they completed surgery (“Post-Surgery Loans”).  Patients generally were told to undergo two surgeries. 

The Patients’ legal and medical fees were usually paid for by litigation funding companies (the “Funding Companies”), including a funding company owned by ALEXANDER, even if the Patient maintained medical coverage through an insurance company or a government-subsidized program.  The Funding Companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement.  In an April 2015 email about a particular Patient’s staged accident, Alexander wrote to two of the recruiters and case managers, “I am sure you realize I want to do these deals; I am just trying to see how we can, without getting in trouble.”

In exchange for funding Patients’ medical and legal costs, the Funding Companies charged the Patients high interest rates, sometimes up to 50% on medical loans and up to 100% on personal loans.  The interest rates were so high that oftentimes the majority of the proceeds that were awarded in the Fraudulent Lawsuits were paid to the Funding Companies, lawyers, doctors, and others, with the Patients receiving a much smaller percentage of the remaining recovery. 

In addition to the high-interest rates charged by the Funding Companies, ALEXANDER also profited from the Fraud Scheme through an MRI facility that he owned and operated (“MRI Facility-1”).  ALEXANDER pushed the case managers to send Patients to MRI Facility-1, which routinely prepared MRI reports that were “positive” for medical conditions justifying surgery, even though the Patients had not sustained any injuries.  ALEXANDER received $1,000 per MRI that MRI Facility-1 prepared as part of the scheme. 

*                *                *

In addition to the prison term, ALEXANDER, 76, of New York, New York, was sentenced to three years of supervised release.  ALEXANDER was further ordered to pay $659,011 in forfeiture.  Restitution will be determined by the Court within 90 days. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Chiuchiolo, Nicholas Folly, Danielle Kudla, and Alexandra Rothman are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced a voluntary compliance agreement under Title II of the Americans with Disabilities Act (“ADA”) with the City University of New York (“CUNY”) pursuant to which CUNY will provide individual relief to a student with visual impairments who was excluded from full participation in their academic courses and implement systemwide policies to ensure future compliance with the ADA across CUNY’s 25 colleges in the five boroughs of New York City, which collectively serve 243,000 students.

U.S. Attorney Damian Williams said: “It is simply unacceptable that any student should be denied equal access to an education because of a disability.  We are pleased that CUNY has agreed to provide relief to the student whose education was compromised and that CUNY is committed to improving the accessibility of its courses, including online and digital content, for all future students.”  

Title II of the ADA prohibits public entities from discriminating against any individual on the basis of disability by excluding the individual from participation in services, programs, and activities.  The ADA requires public entities to make reasonable modifications to avoid such discrimination and to administer their services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities, including by furnishing appropriate auxiliary aids and services to ensure effective communication. 

The out-of-court agreement resolves an investigation during which the U.S. Attorney’s Office determined that CUNY failed to provide reasonable accommodations required under the ADA for a student with visual impairments at CUNY’s John Jay School of Criminal Justice and identified shortcomings in CUNY’s accessibility and reasonable accommodation policies and procedures.  Specifically, the investigation found, among other things, that CUNY failed to make qualified learning assistants available to ensure an integrated learning setting for the student in numerous science and mathematics courses.  Additionally, John Jay instructors required students to use WebAssign, a third-party online learning product, to complete assignments, but that digital platform was not fully capable of reading out mathematical and scientific symbols and equations.  Furthermore, John Jay repeatedly failed to make usable versions of required textbooks and other course materials available to the student by the start of courses.  The student made a number of attempts to bring the deficiencies to the attention of staff at John Jay and CUNY, but neither John Jay nor CUNY had adequate policies and procedures to ensure that reasonable accommodation requests and related complaints are addressed in a timely and appropriate manner.  As a result, the student received unduly poor grades and was forced to forgo taking other desired and required advanced courses for a number of academic years.        

CUNY has agreed to prepare and implement systemwide policies to ensure improved accessibility of educational content to visually impaired students, including digital learning content, proper training of staff and faculty, and effective reasonable accommodation and complaint procedures.   

Under the agreement, CUNY will permanently purge all of the affected student’s grades in the relevant courses in which reasonable modifications were not provided and pay the student $10,000 in compensatory damages.  CUNY will also adopt systemwide policies and procedures to ensure:

• The prompt availability of qualified learning assistants, including by initiating an appropriate and timely search process, involving the relevant affected students in that process, and setting a reasonable level of compensation likely to attract qualified candidates;   
• The prompt availability of accessible course materials by the start of the relevant course or as soon as practicable based upon early consultations with affected students;
• Reasonable accommodation and complaint mechanisms based on clear, short deadlines by which accommodation requests and complaints must be addressed and remaining concerns are promptly escalated to higher-level administrators as necessary;
• Information Technology accessibility consistent with the latest Web Content Accessibility Guidelines, including via verification of the accessibility of third-party learning products and of instructors’ awareness of accessibility requirements for instructor-created content; and
• Training of faculty and accessibility-services staff on ADA requirements.  

*                *                *

This case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney Stephen Cha-Kim is in charge of the case.

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 Thomas Fattorusso, the Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of a four-count Indictment charging LARS WINKELBAUER, ABILASH KURIEN, CARLTON LLEWELLYN, ROBERT SCHIRMER, SKYE XU, BENJAMIN WEI, a/k/a/ “Ben Wei,” ALVARO LOPEZ, FABIOLA CINO, ORLANDO WONG, and PATRICK LAU, a/k/a “Pat Lau,” in connection with a massive scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of tens of millions of dollars in revenue and the honest services of its employees.  Nine defendants were arrested today.  KURIEN, LLEWELLYN, SCHIRMER, and LAU will be presented in federal court in Manhattan this afternoon.  WEI and WONG will be presented later today in federal court in the Central District of California.  LOPEZ and CINO will be presented later today in federal court in the Southern District of Florida.  WINKELBAUER was arrested today in Thailand and is pending extradition to the United States.  SKYE XU remains at large.

U.S. Attorney Damian Williams said: “As alleged, the 10 defendants charged today conducted a widespread scheme that tainted nearly every aspect of Polar Air Cargo Worldwide’s operations and that cost the company an estimated $52 million in losses.  The defendants, all of whom were either employed in high-level positions by Polar or were vendors reliant on business arrangements with Polar, allegedly showed a blatant disregard for the integrity of their companies in favor of lining their own pockets.  Their pervasive fraud ends today, and each defendant now faces substantial prison time for their alleged crimes.” 

FBI Assistant Director Michael J. Driscoll said: “For more than a decade, the defendants allegedly utilized a complex set of schemes at the expense of Polar Air to line their own pockets.  The indictments today serve as a reminder to any unscrupulous actors attempting complex frauds – the FBI will hold you accountable in the criminal justice system.”   

IRS-CI Special Agent in Charge Thomas Fattorusso said: “Today’s charges are the opening salvo against a decade-long scam by a small group of Polar’s executives and others that allegedly tainted every aspect of its business operations.  These arrests and charges today will hopefully begin the process of righting the alleged wrongs of those charged and put the company on a path to integrity, which its hardworking employees and legitimate customers deserve.”

As alleged in the Indictment:[1]

From at least in or about 2009 through in or about July 2021, LARS WINKELBAUER, ABILASH KURIEN, CARLTON LLEWELLYN, ROBERT SCHIRMER, SKYE XU, BENJAMIN WEI, ALVARO LOPEZ, FABIOLA CINO, ORLANDO WONG, and PATRICK LAU participated in a massive scheme to defraud Polar.  At all relevant times, WINKELBAUER, KURIEN, LLEWELLYN, and SCHIRMER (collectively, the “Executive Defendants”) were senior executives of Polar.  XU, WEI, LOPEZ, CINO, WONG, and LAU (collectively, the “Vendor Defendants”) owned and operated various Polar vendors and customers.  The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants and also reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favorable business arrangements with Polar.  The fraud they perpetrated — which involved a substantial portion of Polar’s senior management and at least 10 customers and vendors of Polar — led to pervasive corruption of Polar’s business, touching nearly every aspect of the company’s operations, for over a decade. 

Polar’s business involved numerous outside vendors and customers.  Polar relied heavily on third-party, general sales agents (“GSAs”) in the United States to sell cargo space on its planes.  In turn, the GSAs hired by Polar often sold available cargo space to freight forwarding vendors, which had been hired by downstream customers to coordinate transportation logistics for large quantities of goods.  Polar also contracted with ground handling vendors to load and unload cargo and with trucking vendors to transport cargo from domestic locations to the appropriate airports.  In addition, Polar contracted with other partners for a variety of business reasons, including to secure cargo space on airline routes not serviced by Polar flights.  The scheme to defraud Polar touched on each aspect of these operations.

Together, the Executive Defendants and the Vendor Defendants defrauded Polar by corrupting Polar’s relationships with GSAs, freight forwarders, and other vendors, including those providing ground handling and trucking services.  Unbeknownst to Polar, the Executive Defendants utilized their positions within Polar to secure, among other things, favorable contracts, valuable cargo space, favorable shipping rates, and enrollment in various incentive programs for the Vendor Defendants and their entities.  In return, the Vendor Defendants paid the Executive Defendants kickbacks in various forms, including, for example, in payments calculated per kilo of cargo shipped with Polar or as a percentage of the revenue earned as a result of a vendor’s relationship with Polar.  In addition, the Executive Defendants, in various combinations, held concealed ownership positions in certain companies which contracted with Polar and that were, in at least one case, associated with the Vendor Defendants.  As a result, the Executive Defendants received ownership distributions based, in large part, on revenue derived from contracts with Polar — contracts that had been secured and, often times, renewed due to, in large part, the recommendation of the Executive Defendants with conflicts of interest.

To conceal the kickbacks and conflicted ownership interests from Polar, and thereby to continue the fraud scheme, WINKELBAUER, KURIEN, LLEWELLYN, and SCHIRMER often directed the kickbacks and ownership distributions be paid to limited liability companies with non-descript names that they, in fact, controlled.  Additionally, the Executive Defendants communicated amongst themselves and with the Vendor Defendants about the scheme primarily using personal email accounts, while the Vendor Defendants conducted official Polar business with the Executive Defendants primarily using their professional email accounts. 

As a result of the scheme, the Executive Defendants, along with two co-conspirators who also worked as senior executives at Polar, received unlawful payments, either directly or through various limited liability companies they controlled, in excess of approximately $23 million in kickback payments or disbursements received as a result of their ownership of conflicted companies.  Additionally, a financial analysis conducted at Polar’s direction estimates that, as a result of the fraudulent scheme, Polar suffered at least approximately $52 million in losses between in or about 2009 and in or about July 2021.

In the Summer of 2021, Polar discovered documentary evidence of the conflicted ownership arrangements and kickback agreements.  Shortly thereafter, Polar terminated the employment of WINKELBAUER, KURIEN, LLEWELLYN, and SCHIRMER, and reported the conduct to law enforcement authorities.  Polar has continued to cooperate with law enforcement authorities through the investigation.

*                *                *

WINKELBAUER, 47, of Bangkok, Thailand, KURIEN, 45, of Wilton, Connecticut, LLEWELLYN, 55, of Highland Mills, New York, SCHIRMER, 58, of Port Jefferson Station, New York, XU, 40, of West Covina, California, WEI, 58, of San Marino, California, LOPEZ, 50, of Aventura, Florida, CINO, 45, of Aventura, Florida, WONG, 60, of Manhattan Beach, California, and LAU, 43, of Flushing, New York, are each charged with one count of conspiracy to commit wire fraud and honest services wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.  WINKELBAUER, KURIEN, LLEWELLYN, and SCHIRMER are also charged with one count of honest services wire fraud, 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 work of the FBI and IRS-CI.  Mr. Williams also thanked the United States Attorney’s Offices for the Central District of California and the Southern District of Florida as well as the Justice Department’s Office of International Affairs and Thai authorities for their assistance in the investigation. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Katherine Reilly and Danielle Kudla are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described therein 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 the unsealing today of a four-count Indictment charging DARIUS A. PADUCH, a New York–area urologist, with inducement of a person to travel to engage in unlawful sexual activity and inducement of a minor to engage in unlawful sexual activity for his yearslong sexual abuse of two victims who were his patients and who were minors during part of the period of abuse.  PADUCH was arrested this morning and will be presented before U.S. Magistrate Judge Sarah L. Cave this afternoon.  The case has been assigned to U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “As alleged, for years, Darius Paduch abused the trust of patients, including minors, who saw him for sensitive medical problems.  Paduch took advantage of his victims for his own deviant satisfaction.  Thanks to this morning’s arrest, Paduch’s abuse of his patients ends today.” 

FBI Assistant Director in Charge Michael J. Driscoll said: “The indictment unsealed today against Paduch, a New York-area doctor, details alleged systemic abuse of a number of patients, to include minors, over the course of several years.  Sexual abuse of anyone at any age for any reason is a horrific crime that carries strict penalties.  If you have been victimized by Darius Paduch in any way or have any additional information about his alleged illegal behavior, please call us at 1-800-CALL-FBI, or reach out to us at tips.fbi.gov.”

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

Over the course of several years, PADUCH sexually abused multiple male patients, including minor male patients, while conducting purported urological examinations in his capacity as a medical doctor employed by a prestigious medical institution in New York, New York (“Medical Institution-1”).

From at least in or about 2015 through at least in or about 2019, PADUCH, while working as a urologist, enticed and induced multiple victims to travel to his medical offices at Medical Institution-1, so PADUCH could, among other things, sexually abuse the victims.  In or about 2019, PADUCH began practicing at a different hospital located in Long Island, New York (“Medical Institution-2”), where he continued to sexually abuse patients.  PADUCH used his position as a urologist at prominent medical institutions in New York to make or attempt to make the victims believe that the sexual abuse he inflicted on them was medically necessary and appropriate, when, in fact, it was not.  PADUCH often directed the victims to schedule follow-up visits, and he instructed victims to return to see him again.  As a result, some of the victims attended many appointments with PADUCH over the course of multiple years, at which PADUCH repeatedly abused them.

After appointments, PADUCH sent certain victims — including minor victims — text messages from his personal cellphone.  In those messages, he made inappropriate and sexual comments and jokes, and he directed the victims to schedule follow-up appointments or to visit his office after regular business hours. 

As alleged, PADUCH induced two victims to travel to New York, New York, from or through another state to engage in unlawful sexual activity — in other words, his abuse of the victims.  PADUCH also used a telephone and other means of interstate commerce to induce two minor victims to engage in the unlawful sexual activity.

*                *                *

PADUCH, 55, of North Bergen, New Jersey, is charged with inducement of a victim (“Minor Victim-1”) to travel to engage in unlawful sexual activity, which carries a maximum sentence of 20 years in prison;  inducement of a victim (“Minor Victim-2”) to travel to engage in unlawful sexual activity, which carries a maximum sentence of 20 years in prison; inducement of Minor Victim-1 to engage in unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and inducement of Minor Victim-2 to engage in unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

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

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

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Marguerite B. Colson, Elizabeth A. Espinosa, and Jun Xiang are in charge of the prosecution. 

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment 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, announced today that restaurateur BESIM KUKAJ was sentenced to 57 months in prison for orchestrating a sprawling loan fraud scheme, including while he was on pretrial release, whereby he fraudulently sought at least $6.14 million and received $1.5 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.  KUKAJ was also sentenced for attempting to intimidate a creditor as part of an interstate threats scheme with his already sentenced co-defendant Abduraman Iseni, a/k/a “Diamond.”  U.S. District Judge Andrew L. Carter imposed today’s sentence.

U.S. Attorney Damian Williams said: “Manhattan restaurateur Besim Kukaj took advantage of the hardships created by the COVID-19 pandemic and the federal government’s efforts to help those in need by lining his own pockets with seven figures of illegally obtained funds.  He did this out of pure greed, sending some of this money to a Florida real estate developer and using it to buy luxury items from Cartier and Hugo Boss.  He even continued to commit the same crimes while he was on bail.  And he didn’t stop there.  He directed his co-conspirator to physically threaten a victim to whom he owed money.  For his brazen crimes, Kukaj will serve meaningful time in prison.”

According to court filings and statements made in court proceedings:

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s Paycheck Protection Program (“PPP”) and additional billions for the separate Economic Injury Disaster Loan program (“EIDL”).  Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined in significant part by the number of employees employed by the business and their average payroll costs.  The amount of a loan under the EIDL program is determined in part by a formula based on the date the borrower began operating and the borrower’s gross revenue and cost of goods sold during a period before the pandemic.  The loans can be used only for working capital and other normal operating expenses.  Businesses applying for loans under the PPP and EIDL program must confirm the accuracy of their loan statements. 

From at least in or about April 2020 through at least in or about July 2020, KUKAJ, working with others, submitted applications for loans under the EIDL program and the PPP to multiple banks on behalf of various restaurants KUKAJ or a relative of his owned.  He did so on behalf of restaurants that were no longer operating or that had far less revenue and far fewer employees than were listed on the loan applications.  KUKAJ and his co-conspirators applied for dozens of loans, totaling at least $6.14 million, from numerous financial institutions, using many different corporate entities, and they successfully received at least $1.5 million in loans. 

KUKAJ was arrested in October 2020 and charged with bank fraud conspiracy and later indicted for the same charges in December 2020.  He was released on pretrial release under a court order that notified him of the potential effect of committing a crime while on pretrial release.  KUKAJ violated the terms of his bail for continuing to file false loan applications while on pretrial release for the same conduct.  Specifically, in 2021, while on pretrial release, KUKAJ filed additional false loan applications that inflated the businesses’ number of employees and payrolls and falsely claimed that he was not under indictment. 

Separately, on November 6, 2019, at the urging of KUKAJ, co-defendant Abduraman Iseni placed a telephone call to a victim, in which Iseni threatened physical violence against the victim.  KUKAJ instructed Iseni to place this call because KUKAJ owed money to the victim.

*                *                *

In addition to the prison sentence, KUKAJ, 43, of Fort Lee, New Jersey, was ordered to pay forfeiture of $1,500,000 and restitution in the amount of $1,500,000 to the U.S. Small Business Administration.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation New York’s Balkans and Middle East Organized Crime Squad, as well as the Small Business Administration Office of the Inspector General, the Social Security Administration Office of the Inspector General, and the New York State Liquor Authority for their investigative efforts and ongoing support and assistance with the case.  

The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys David R. Felton and Samuel L. Raymond are in charge of the case.

A California woman was sentenced on April 7 to four years in prison followed by three years of supervised release for conspiring to violate the International Emergency Economic Powers Act (IEEPA) by providing services, including financial services, to Iran and the Government of Iran, in violation of U.S. sanctions against Iran, and for structuring.

According to court documents, Niloufar Bahadorifar, aka Nellie Bahadorifar, 48, of Irvine, pleaded guilty on Dec. 15, 2022, before U.S. District Judge Ronnie Abrams, who imposed the sentence.

“The Government of Iran has shown that it will take extreme measures to silence dissidents and critics around the world exercising their lawful rights, including through the use of violence on U.S. soil,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “We hold accountable an individual who violated U.S. sanctions by providing financial assistance that ultimately supported a failed kidnapping plot directed by the Iranian government, underscoring the Department’s commitment to bringing to justice those who criminally aid the Iranian regime.”

“Niloufar Bahadorifar provided financial support to a brazen plot intended to kidnap an Iranian human rights activist living in the United States whom the Iranian Government has sought to silence for years,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts by malign foreign governments to stifle free speech and peaceful protest by means of intimidation or repression cannot be tolerated. The right to free speech is a core fundamental principle of American ideals, and this office is proud to protect that right with every means at our disposal.”

“Simply put, the defendant provided assistance to individuals who tried to help kidnap a journalist living in New York, who has criticized the regime in Teheran,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “This case demonstrates that the government of Iran will continue to target dissidents and reach beyond their borders, violating U.S sanctions and national security, but more importantly threaten the personal safety of individuals living in our country. The FBI will continue to shield those who are targeted and aggressively pursue anyone who attempts to circumvent our laws and will leverage all our authorities to protect the right to free speech.”

According to the indictment and other documents in the public record, as well as statements made in public court proceedings:

For years, the Government of Iran has targeted a prominent Iranian dissident living in New York City (the Victim). The Victim is a journalist, author and human rights activist who has publicized the Government of Iran’s human rights abuses and suppression of political expression. Beginning in at least 2020, Iranian intelligence officials and assets, including co-defendant Mahmoud Khazein, plotted to kidnap the Victim from within the United States for rendition to Iran in an effort to silence the Victim’s criticism of the regime. As part of that plot, on multiple occasions in 2020 and 2021, agents of the Government of Iran procured the services of private investigators to surveil, photograph, and video record the Victim and the Victim’s household members. These agents of the Government of Iran, including Khazein, procured the surveillance by misrepresenting their identities and the purpose of the surveillance to the investigators and laundered money into the United States from Iran in order to pay for the surveillance, photos and video recordings of the Victim.

Beginning in approximately 2015, Bahadorifar, a U.S. citizen residing in California and originally from Iran, provided financial and other services, including access to the U.S. financial system and U.S. financial institutions, to Iranian residents and entities, including to Khazein. Bahadorifar, who is not charged with participating in the kidnapping conspiracy, provided financial services that ultimately supported the plot. Among other things, Bahadorifar caused a payment to be made to a private investigator for surveillance of the Victim on behalf of Khazein. Bahadorifar’s payment obscured the origin of those who had hired the private investigator, who surveilled the Victim without knowing it was on behalf of Iranian intelligence services. At no time did Bahadorifar obtain permission from OFAC to provide services to Iran.

Beginning in approximately 2019, Bahadorifar also structured cash deposits totaling hundreds of thousands of dollars. In total, Bahadorifar structured at least approximately $476,100 in more than 120 individual deposits. All but two of the deposits were less than $10,000.

The FBI New York Field Office Counterintelligence-Cyber Division and the New York FBI Iran Threat Task Force investigated the case, with valuable assistance provided by the New York City Police Department (NYPD) and the NYPD Intelligence Bureau, the FBI Los Angeles Field Office and the Justice Department’s National Security Division.

Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig and Matthew J.C. Hellman for the Southern District of New York and Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SUNI MUNSHANI, the former Chief Executive Officer of a Connecticut-based technology company (the “Victim Company”), was sentenced to 42 months in prison for his participation in a scheme to defraud the Victim Company of millions of dollars.  The sentence was imposed by U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said: “Suni Munshani believed that he could ransack a company that had put its trust in him.  He lied for years — even impersonating his deceased uncle — to steal from an organization he was supposed to lead.  His sentence shows once again that crime doesn’t pay, and that this Office will bring to justice those who flout the law, even if they have the top job.”

According to public court filings and statements made in Court:     

Between 2011 and 2019, SUNI MUNSHANI was the CEO of the Victim Company, which provided data security services to its clients.  Within six months of his appointment as CEO, MUNSHANI and others began an approximately eight-year scheme to defraud the Victim Company.  During the scheme, MUNSHANI, among other things, created an email account in the name of his deceased uncle but controlled by MUNSHANI.  MUNSHANI, posing as the uncle, used that email account to correspond with the Victim Company and to obtain payments from the Victim Company totaling at least approximately $3 million dollars for services that were never provided.  These purported services were falsely represented to have been rendered by the uncle as well as others, including a marketing executive who had met MUNSHANI in social settings but had never worked for MUNSHANI or the Victim Company and had no idea his identity was being used by MUNSHANI.  MUNSHANI also caused the Victim Company to issue a $3.5 million check for a purported tax liability, which check MUNSHANI then deposited into an unauthorized bank account created by MUNSHANI in the name of the Victim Company.  

In addition, MUNSHANI defrauded the Victim Company through fraudulent licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively).  Among other things, MUNSHANI instructed another individual to set up the Reseller Company “in the same way as [the Licensing Company],” and then helped create and submit fraudulent invoices from the Reseller Company to the Victim Company.

*                *                *

In addition to his prison term, MUNSHANI, 61, of Easton, Connecticut, was sentenced to three years of supervised release.  The Court reserved decision on the amount of restitution.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Office.  

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Timothy V. Capozzi and Steven J. Kochevar are in charge of the prosecution.