Southern District of New York
Press releases recorded for this federal judicial district.
CEO of Security Company Sentenced to Five Years in Prison for International Boiler Room Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROGER RALSTON, the CEO of DirectView Holdings, Inc. (“DirectView”), a Florida-based video surveillance and security company, was sentenced to five years in prison for defrauding elderly victims in connection with an international telemarketing scheme that caused losses of nearly $16 million. RALSTON previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed the sentence. Co-defendants Christopher Wright and Steven Hooper previously pled guilty and were sentenced to 52 months in prison and 42 months in prison, respectively, for their roles in the fraud.
According to the allegations in the Indictment, court filings, and statements made in Court:
Between approximately 2009 and 2015, RALSTON and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom of nearly $16 million through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds of the fraud through bank accounts in multiple foreign jurisdictions. RALSTON and his co-conspirators used the services of telemarketing call centers to identify and cold-call potential victims, who were primarily elderly or retired individuals residing in the United Kingdom. Over a series of telephone calls, the telemarketers persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious. Many victims were persuaded to make additional investments under the false pretense that they would be permitted to sell their holdings if (and only if) they purchased more. In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States, including in the Southern District of New York, in the names of corporate entities controlled by RALSTON. RALSTON then mailed and emailed documents related to the fraudulent investments, including purchase contracts and investment certificates, to the victims. Victims who tried to sell their investments found that they were unable to do so. The victims never received a refund on their principal or any return on their investments.
In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, RALSTON regularly transferred a substantial portion of the fraud proceeds from bank accounts in the United States, including in the Southern District of New York, to overseas bank accounts, including accounts in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies controlled by RALSTON’s co-conspirators.
The nature of the particular fraudulent investment vehicles being marketed to the victims changed over time. From in or about 2009 until in or about 2011, RALSTON and his co-conspirators sold DirectView stock to the victims based on telemarketers’ false representations and promises that the shares were a no-risk, short-term investment in a debt-free company and that the shares were likely to increase over 100% in value in a short period of time. In contrast to what RALSTON represented to victims, DirectView’s annual report filed with the United States Securities and Exchange Commission for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView and the risk attendant in purchasing stock, including that the company “may be forced to cease operations” due to losses and cash flow problems, and purchasers “may find it extremely difficult or impossible to resell our shares.”
From in or about 2011 until in or about 2015, RALSTON and his co-conspirators engaged in the sale of fraudulent carbon credits and offsets. The boiler room callers appealed to victims by claiming that the investments would be environmentally friendly and help address the climate crisis. The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return. In fact, the carbon credits and offsets that were sold to the victims were fake and did not represent any actual carbon credits or offsets. RALSTON caused fraudulent carbon certificates to be created and sent to the victims.
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In addition to the prison term, RALSTON, 54, of Riviera Beach, Florida, was sentenced to three years of supervised released and ordered to pay restitution in the amount of $15,714,859 and forfeiture in the amount of $15,713,621.20.
Mr. Williams praised the outstanding investigative work of Internal Revenue Service-Criminal Investigation in this case.
This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises and Complex Frauds and Cybercrime Units. Assistant U.S. Attorneys Jessica Feinstein, Olga I. Zverovich, and David Felton are in charge of the prosecution.
Associate of Sanctioned Oligarch Indicted for Sanctions Evasion and Money LaunderingRead the Press Release
A federal court in New York unsealed an indictment today charging a citizen of the Russian Federation and legal permanent resident of the United States with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.
According to court documents, Vladimir Voronchenko, aka Vladimir Vorontchenko, 70, of Moscow, Russia; New York, New York; Southampton, New York; and Fisher Island, Florida, is additionally charged with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena requiring his personal appearance and testimony.
According to allegations in the indictment, Voronchenko, who resided at various times in New York, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Vekselberg.
On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Viktor 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 in or about 2008 and in or about 2017, Vekselberg, through a series of shell companies, acquired real properties in the United States, specifically, (a) an apartment on Park Avenue in New York, New York, (b) an estate in Southampton, New York, (c) an apartment on Fisher Island, Florida, and (d) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of the indictment, the Properties were worth approximately $75 million.
Voronchenko retained an attorney (the Attorney), who practiced in New York, New York, in connection with the acquisition of the Properties. The Attorney 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 the Attorney’s interest on lawyer’s trust account (IOLTA account).
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, the Attorney 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 $4 million were sent to the IOLTA account. Although the source of the payments changed, the management of the payments remained the same as before: Voronchenko and his family member directed the Attorney to use these funds to make various U.S. dollar payments to maintain and service the Properties. Additionally, after Vekselberg was sanctioned in 2018, Voronchenko and others tried to sell both the Park Avenue apartment and Southampton estate. No licenses from OFAC were applied for or issued for these payments or attempted transfers.
On or about May 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which called for his personal appearance for testimony and his production of documents. Approximately nine days later, on or about May 22, 2022, Voronchenko took a flight from Miami, Florida to Dubai, United Arab Emirates, and then went to Moscow, Russia. Voronchenko failed to appear before the grand jury and has not returned to the United States.
Voronchenko charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (IEEPA); violating IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison. Voronchenko was also charge with contempt of court, which carries a maximum sentence within the discretion of the court. The indictment also provides notice of the United States’ intention to forfeit from Voronchenko the proceeds of his offenses, including the Properties.
U.S. Attorney Damian Williams for the Southern District of New York, Task Force KleptoCapture Director Andrew C. Adams, Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York Field Office, and Acting Special Agent in Charge Maged Behnam of the FBI Miami Field Office made the announcement.
The FBI and HSI are investigating the case with valuable assistance provided by the Justice Department’s National Security Division and Office of International Affairs, and OFAC.
Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett for the Southern District of New York are prosecuting the case.
This case was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022 and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Associate of Sanctioned Oligarch Indicted for Sanctions Evasion and Money LaunderingRead the Press Release
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 Maged Behnam, Acting Special Agent in Charge of the Miami Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging VLADIMIR VORONCHENKO, a/k/a “Vladimir Vorontchenko,” a citizen of the Russian Federation and legal permanent resident of the United States, with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties. The Indictment also charged VORONCHENKO with contempt of court in connection with his flight from the United States following receipt of a Grand Jury subpoena requiring his personal appearance and testimony.
U.S. Attorney Damian Williams said: “The indictment unsealed today signals the United States’ continued commitment to holding individuals who violate sanctions to account. Vladimir Voronchenko and others illegally funneled millions of dollars into the United States to maintain luxury U.S. residences owned by Russian oligarch Viktor Vekselberg. With these charges, the United States sends a strong message that it will continue to vigorously enforce economic sanctions, including those imposed in response to Russia’s illegal and unjustified aggression in Ukraine.”
Director of Task Force KleptoCapture Andrew C. Adams said: “Shell companies, strawmen, and professional money launderers did not shield Voronchenko or the illicit transactions charged today from the investigative persistence of HSI, FBI, and the attorneys of the Southern District of New York. Today’s indictment is yet another reminder of the priority that the Department of Justice places on uncovering the proceeds of kleptocracy and sanctions evasion and on prosecuting those who would take a paycheck in exchange for facilitating money laundering and sanctions evasion.”
HSI Special Agent in Charge Ivan J. Arvelo said: “Russian illicit finance is a threat to U.S. national and homeland security, one that expands fissures of vulnerability in our financial system. With the advent of the Ukrainian invasion, such global threats were made increasingly more domestic, as Putin’s enablers were revealed to have sequestered billions in illicit wealth in U.S. based real property and luxury assets. HSI will not allow the American financial system to unknowingly facilitate dark money transfers, and today we have charged another oligarch facilitator for his alleged actions in support of the corrupt regime.”
According to the allegations in the Indictment unsealed in Manhattan federal court today:[1]
VORONCHENKO, who resided at various times in New York, New York, Southampton, New York, Fisher Island, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Viktor Vekselberg.
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 in or about 2008 and in or about 2017, Vekselberg, through a series of shell companies, acquired real properties in the United States, specifically, (i) an apartment on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) an apartment on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties”). As of the date of this Indictment, the Properties were worth approximately $75 million.
VORONCHENKO retained an attorney (the “Attorney”), who practiced in New York, New York, in connection with the acquisition of the Properties. The Attorney 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 the Attorney’s interest on lawyer’s trust account (“IOLTA account”).
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, the Attorney 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 VOROCHENKO, “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 $4 million were sent to the IOLTA account. Although the source of the payments changed, the management of the payments remained the same as before: VORONCHENKO and his family member directed the Attorney to use these funds to make various U.S. dollar payments to maintain and service the Properties. Additionally, after Vekselberg was sanctioned in 2018, VORONCHENKO 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.
On or about May 13, 2022, federal agents served VORONCHENKO on Fisher Island with a Grand Jury subpoena, which called for his personal appearance for testimony and his production of documents. Approximately nine days later, on or about May 22, 2022, VORONCHENKO took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia. VORONCHENKO failed to appear before the Grand Jury and has not returned to the United States.
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VORONCHENKO, 70, of Moscow, Russia, New York, New York, Southampton, New York, and Fisher Island, Florida, was charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (“IEEPA”); violating the IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison. VORONCHENKO was also charged with contempt of court, which carries a maximum sentence within the discretion of the Court. The Indictment also provides notice of the United States’ intention to forfeit from VORONCHENKO the proceeds of his offenses, including the Properties.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding 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.
The allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
New York Man and Alabama Woman Sentenced for Attempting to Provide Material Support to ISISRead the Press Release
James Bradley, aka Abdullah, 21, of the Bronx, New York, and Arwa Muthana, 30, of Hoover, Alabama, were sentenced to 11 years in prison followed by 10 years of supervised release and nine years in prison followed by 10 years of supervised release, respectively, for attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS).
In September 2022, Bradley and Muthana pleaded guilty to attempting to provide material support to ISIS before U.S. District Judge Paul A. Engelmayer. According to court documents, Bradley and Muthana are ISIS supporters who sought to travel to the Middle East to join and fight for ISIS. Bradley expressed violent extremist views since at least 2019, including his desire to support ISIS by traveling overseas to join the group or committing a terrorist attack in the United States. In May 2020, Bradley stated to an undercover law enforcement officer (UC-1) a belief that ISIS may be good for Muslims because ISIS was establishing a caliphate. Bradley also expressed his desire to conduct a terrorist attack in the United States and discussed potentially attacking the United States Military Academy in West Point, New York. Bradley explained that if he could not leave the United States, he would do “something” in the United States instead, referring to carrying out an attack.
In June 2020, Bradley reaffirmed his interest to UC-1 in attacking a military base and that doing so would be his contribution to the cause of jihad. In January 2021, Bradley mentioned to UC-1 another university in New York State where he frequently saw Reserve Officer Training Corps (ROTC) cadets training. Bradley stated that he could use his truck in an attack along with Muthana, take “out” all of the ROTC cadets.
In late January 2021, Bradley married Muthana in an Islamic marriage ceremony. Beginning before and continuing after their marriage, Bradley and Muthana discussed, planned, and ultimately attempted to travel to the Middle East together to join ISIS. In or about early March 2021, Bradley traveled from New York to Alabama to visit Muthana. They returned to New York together to travel from New York to join ISIS in the Middle East. Thereafter, Bradley raised the possibility of UC-1 helping the couple board a cargo ship to travel to the Middle East or Africa. UC-1 subsequently put Bradley in contact with a purported associate who could assist in making travel arrangements via cargo ship. In reality, the purported facilitator was a law enforcement officer acting in an undercover capacity (UC-2).
Later in March 2021, Bradley met with UC-2 and expressed his desire to travel via cargo ship and to “fight among the rank[s] of the Islamic State.” Bradley subsequently provided UC-2 $1,000 in cash as travel costs. Bradley told UC-2 that he and Muthana both planned to be “fighting” after arriving in the Middle East. Bradley also told UC-2 that he had a dream that he had given “bay’ah,” an Arabic term meaning the oath of allegiance, to Abu Ibrahim al-Hashimi al-Qurashi, the former leader of ISIS.
On March 25, 2021, UC-2 told Bradley that the cargo ship would be leaving on March 31 from a seaport in Newark, New Jersey. Bradley praised Allah and confirmed he and Muthana planned to travel on the ship. On March 31, 2021, Bradley and Muthana met with UC-2 en route to the seaport. During this meeting, Muthana confirmed to UC-2 that she was traveling to the Middle East to fight for ISIS. Bradley and Muthana were arrested as they walked on a gangplank to board the cargo ship. After Muthana was arrested, she waived her Miranda rights and stated during an interview that she was willing to fight and kill Americans if it was for Allah. Also on March 31, 2021, in connection with court-authorized searches, the FBI seized from a bedroom previously used by Bradley a hand-drawn image of a jihadi flag commonly used by ISIS and a hand-drawn map of the Pakistan region. The FBI also recovered a machete from a truck used by Bradley.
In the months and years prior to their arrests, Bradley and Muthana also accessed, posted, and distributed extremist online content, including materials indicative of their support for ISIS. Such material included Bradley’s postings of images of ISIS fighters, Usama Bin Laden, and terrorist attacks. Bradley also distributed to UC-1 videos of ISIS fighters, a 2020 stabbing attack against a New York City Police Department (NYPD) officer, and extremists shooting a uniformed soldier. Content on Muthana’s cellphone, which was searched pursuant to a court-authorized search warrant, included images of an ISIS flag with Arabic writing, ISIS propaganda, firearms, quotations of the deceased former al Qaeda in the Arabian Peninsula member Anwar al-Awlaki, and a video showing an individual in prisoner garb being chained and then burned alive.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York, Assistant Director Robert R. Wells of the FBI Counterterrorism Division and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.
The New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state and local agencies, investigated the case.
Assistant U.S. Attorneys Kaylan E. Lasky and Jason A. Richman for the Southern District of New York are prosecuting the case with valuable assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.
New York City Man and Alabama Woman Sentenced to 11 and Nine Years in Prison for Attempting to Provide Material Support to ISISRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES BRADLEY, a/k/a “Abdullah,” and ARWA MUTHANA were sentenced to 11 and nine years in prison, respectively, for attempting to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS”). BRADLEY pled guilty on September 9, 2022, and MUTHANA pled guilty on September 12, 2022, before United States District Judge Paul A. Engelmayer in Manhattan federal court. Judge Engelmayer sentenced BRADLEY on February 2, 2023, and sentenced MUTHANA earlier today.
U.S. Attorney Damian Williams said: “James Bradley and Arwa Muthana were determined to travel to the Middle East to fight in the name of hate and terror. Even worse, if they failed in making it to the Middle East, Bradley was prepared to carry out an attack on American soil. I commend the FBI New York Joint Terrorism Task Force for investigating and arresting these two individuals before they had the opportunity to wage violence on behalf of a brutal terrorist organization. Bradley and Muthana’s sentences reemphasize this Office’s determination to thwart those who wish to cause suffering and create destruction through terror.”
According to the Complaint, Indictment, and other public documents in the case, as well as statements made during court proceedings:[1]
BRADLEY and MUTHANA are ISIS supporters who attempted to travel to the Middle East to join and fight for ISIS. BRADLEY expressed violent extremist views since at least 2019, including his desire to support ISIS by traveling overseas to join the group or committing a terrorist attack in the United States. In May 2020, BRADLEY stated to an undercover law enforcement officer (“UC-1”) that he believed that ISIS may be good for Muslims because ISIS was establishing a caliphate. BRADLEY further expressed his desire to conduct a terrorist attack in the United States and discussed potentially attacking the United States Military Academy in West Point, New York. BRADLEY explained that if he could not leave the United States, he would do “something” in the United States instead, referring to carrying out an attack.
In June 2020, BRADLEY reaffirmed his interest to UC-1 in attacking a military base and that doing so would be his contribution to the cause of jihad. In January 2021, BRADLEY mentioned to UC-1 another university in New York State where he frequently saw Reserve Officer Training Corps (“ROTC”) cadets training. BRADLEY stated that he could use his truck in an attack and that he, along with MUTHANA, could take all of the ROTC cadets “out.”
In late January 2021, BRADLEY married MUTHANA in an Islamic marriage ceremony. Beginning before and continuing after their marriage, BRADLEY and MUTHANA discussed, planned, and ultimately attempted to travel to the Middle East together in order to join and fight with ISIS. In or about early March 2021, BRADLEY traveled from New York to Alabama to visit MUTHANA, and BRADLEY and MUTHANA traveled back to New York together in order to travel from New York to join ISIS in the Middle East. Thereafter, BRADLEY raised the possibility of UC-1 helping BRADLEY and MUTHANA get on a cargo ship to travel to the Middle East or Africa for the purpose of ultimately joining and fighting for ISIS. UC-1 subsequently put BRADLEY in contact with a purported associate who could assist BRADLEY in making arrangements for BRADLEY and MUTHANA to travel to the Middle East via cargo ship. In reality, the purported facilitator was a law enforcement officer acting in an undercover capacity (“UC-2”).
Later in March 2021, BRADLEY met with UC-2 and expressed his desire to travel via cargo ship and to “fight among the rank[s] of the Islamic State.” BRADLEY subsequently provided UC-2 $1,000 in cash as travel costs for BRADLEY and MUTHANA to take a cargo ship to Yemen. BRADLEY told UC-2 that he and MUTHANA both planned to be “fighting” after arriving in the Middle East. BRADLEY also told UC-2 that he had a dream that he had given “bay’ah,” an Arabic term meaning the oath of allegiance, to Abu Ibrahim al-Hashimi al-Qurashi, the former leader of ISIS.
On March 25, 2021, UC-2 told BRADLEY that the cargo ship would be leaving on March 31 from a seaport in Newark, New Jersey. BRADLEY praised Allah and confirmed he and MUTHANA planned to travel on the ship. On March 31, 2021, BRADLEY and MUTHANA met with UC-2 en route to the seaport. During this meeting, MUTHANA confirmed to UC-2 that she was traveling to the Middle East to fight for ISIS. BRADLEY and MUTHANA were arrested as they walked on a gangplank to board the cargo ship. After MUTHANA was arrested, she waived her Miranda rights and stated during an interview that she was willing to fight and kill Americans if it was for Allah. Also on March 31, 2021, in connection with court-authorized searches, the Federal Bureau of Investigation (“FBI”) seized from a bedroom previously used by BRADLEY a hand-drawn image of a jihadi flag commonly used by ISIS and a hand-drawn map of the Pakistan region, and the FBI also recovered a machete from a truck used by BRADLEY.
In the months and years prior to their arrests, BRADLEY and MUTHANA also accessed, posted, and distributed extremist online content, including materials indicative of their support for ISIS. Such material included BRADLEY’s postings of images of ISIS fighters, Usama Bin Laden, and terrorist attacks, and his distribution to UC-1 of videos of ISIS fighters, a 2020 stabbing attack against a New York City Police Department (“NYPD”) officer, and extremists shooting a uniformed soldier. Content on MUTHANA’s cellphone, which was searched pursuant to a court-authorized search warrant, included images of an ISIS flag with Arabic writing, ISIS propaganda, firearms, quotations of the deceased extremist preacher and former al Qaeda in the Arabian Peninsula member Anwar al-Awlaki, including, for example, a copy of the cover of a book authored by al-Awlaki, titled “44 Ways to Support Jihad,” and a video showing an individual in prisoner garb being chained and then burned alive.
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In addition to the prison term, BRADLEY, 21, of the Bronx, New York, and MUTHANA, 30, of Hoover, Alabama, were each sentenced to 10 years of supervised release.
Mr. Williams praised the outstanding efforts of the FBI New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies. Mr. Williams also thanked the Counterterrorism Section of the Department of Justice’s National Security Division.
The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Kaylan E. Lasky and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorney Jennifer Burke of the Counterterrorism Section.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part.
Man Charged in $110 Million Cryptocurrency SchemeRead the Press Release
A Puerto Rico man is scheduled to make his initial appearance this afternoon at the federal courthouse in Manhattan to face commodities fraud, commodities market manipulation, and wire fraud charges in connection with the manipulation of the Mango Markets decentralized cryptocurrency exchange.
According to court documents, Avraham Eisenberg, 27, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts. He was previously arrested on Dec. 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal complaint and ordered detained.
“Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”
Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products. Mango Markets is run by the Mango Decentralized Autonomous Organization (the Mango DAO). The Mango DAO has its own crypto token named MNGO, which investors can buy and sell. Holders of the MNGO token are allowed to vote on changes to the Mango Markets platform and issues related to the governance of the Mango DAO.
“As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself,” said U.S. Attorney Damian Williams for the Southern District of New York. “Through his scheme, Eisenberg left others holding the bag. Market manipulation is illegal in all of its forms, and this office is committed to prosecuting such schemes wherever they occur – including the cryptocurrency markets.”
“The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency,” said Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office. “The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”
Eisenberg is charged in the Southern District of New York with one count of commodities fraud, one count of commodities manipulation, and one count of wire fraud. If convicted, he faces a maximum penalty of 10 years in prison for the commodities fraud count, maximum penalty of 10 years in prison for the commodities manipulation count, and maximum penalty of 20 years in prison for the wire fraud count.
The FBI is investigating the case with assistance from Homeland Security Investigations and IRS Criminal Investigation. The Commodity Futures Trading Commission and the Securities and Exchange Commission initiated parallel civil proceedings.
National Cryptocurrency Enforcement Team (NCET) Trial Attorney Jessica Peck and Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk for the Southern District of New York are prosecuting the case.
The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Under the Criminal Division, the NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecutorial focus, and leads the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
General Contractor and Real Estate Developer Plead Guilty in Connection with Worker Death on Construction Site in PoughkeepsieRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ONEKEY, LLC, a New Jersey construction company, and its principal, FINBAR O’NEILL, pled guilty 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. The defendants pled guilty before U.S. Magistrate Judge Paul E. Davison, to whom the case is assigned. The defendants are scheduled to be sentenced on May 12, 2023.
U.S. Attorney Damian Williams said: “Onekey, a construction company, and its principal, Finbar O’Neill, endangered the safety of their workers by willfully disregarding regulations and taking shortcuts to sidestep their safety obligations. This conduct led to the tragic death of a worker on a construction site. Today’s guilty plea should serve as a reminder to all businesses that failure to comply with safety regulations endangers their workers and unfairly disadvantages business that are following the rules, and this Office will hold you accountable.”
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.
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ONEKEY, LLC, a New Jersey corporation, pled guilty to one count of willful violation of OSHA regulations resulting in death. The foregoing count carries a maximum fine of $500,000. FINBAR O’NEILL, 57, of Paramus, New Jersey, pled guilty to one of count of willful violation of OSHA regulations resulting in death. The foregoing count carries a maximum sentence of six months in prison and a maximum fine of $250,000.
The maximum potential penalties 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 a judge.
Mr. Williams praised the outstanding work of OSHA and the Department of Labor, Office of the Inspector General (“DOL-OIG”).
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.
Former Employee of Technology Company Pleads Guilty to Stealing Confidential Data and Extorting Company for RansomRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that NICKOLAS SHARP pled guilty today in Manhattan federal court to multiple federal crimes in connection with a scheme he perpetrated to secretly steal gigabytes of confidential files from a public New York-based technology company where he was employed (“Company‑1”). While purportedly working to remediate the security breach for Company-1, SHARP extorted the company 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 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 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.
U.S. Attorney Damian Williams said: “Nickolas Sharp’s company entrusted him with confidential information that he exploited and held for ransom. Adding insult to injury, when Sharp wasn’t given his ransom demands, he retaliated by causing false news stories to be published about the company, which resulted in his company’s market capitalization plummeting by over $4 billion. Sharp’s guilty plea today ensures that he will face the consequences of his destructive actions.”
As alleged in the Indictment and based on statements and filings 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. NICKOLAS 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, SHARP repeatedly misused his administrative access to download gigabytes of confidential data from his employer. For the majority of this cybersecurity incident (the “Incident”), SHARP used a virtual private network (“VPN”) service that he subscribed to from a company named Surfshark to mask his Internet Protocol (“IP”) address when he accessed Company-1’s AWS and GitHub infrastructure without authorization. At one point during the exfiltration of Company-1 data, SHARP’s home IP address became unmasked following a temporary internet outage at SHARP’s home.
During the course of 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. 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, a cryptocurrency — 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. During the execution of that search, SHARP made numerous false statements to FBI agents, including, among other things, in substance, that he was not the perpetrator of the Incident and that he had not used Surfshark VPN prior to the discovery of the Incident. When confronted with records demonstrating that SHARP purchased the Surfshark VPN service in July 2020, approximately six months prior to the Incident, SHARP falsely stated, in part and substance, that someone else must have used his PayPal account to make the purchase.
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 and related disclosures. In those stories, SHARP identified himself as an anonymous whistleblower within Company-1 who had worked on remediating the Incident. In particular, SHARP 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 had taken Company-1’s data using credentials to which he had access in his role as Company‑1’s AWS cloud administrator, 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 March 30, 2021, and March 31, 2021, Company-1’s stock price fell approximately 20%, losing over $4 billion in market capitalization.
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SHARP, 37, of Portland, Oregon, pled guilty today 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. These offenses carry a total maximum sentence of 35 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. SHARP is scheduled to be sentenced by Judge Failla on May 10, 2023, at 3:00 p.m.
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.
Alleged Perpetrator of $100 Million Crypto Market Manipulation Scheme to Make Initial Appearance in the Southern District of New YorkRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General of the Justice Department’s Criminal Division, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that AVRAHAM EISENBERG will make his initial appearance in the Southern District of New York later today in connection with an Indictment charging him with commodities fraud, commodities market manipulation, and wire fraud in connection with EISENBERG’s manipulation of the Mango Markets decentralized cryptocurrency exchange. As alleged in the Indictment filed on January 9, 2023, EISENBERG engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts. EISENBERG was previously arrested on December 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal Complaint. EISENBERG will appear in federal court in Manhattan today and will be presented on the charges before United States Magistrate Judge Jennifer E. Willis. The case has been assigned to United States District Judge Richard Berman.
U.S. Attorney Damian Williams said: “As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself. Through his scheme, Eisenberg left others holding the bag. Market manipulation is illegal in all of its forms, and this Office is committed to prosecuting such schemes wherever they occur – including in the cryptocurrency markets.”
Assistant Attorney General Kenneth A. Polite, Jr. said: “Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain. With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”
FBI Assistant Director Michael J. Driscoll said: “The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency. The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”
As alleged in the Indictment and the Complaint:[1]
Background on Mango Markets
Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products. Mango Markets is run by the Mango Decentralized Autonomous Organization (the “Mango DAO”). The Mango DAO has its own crypto token called MNGO, which investors could buy and sell. Holders of the MNGO token are allowed to vote on changes to Mango Markets and issues related to the governance of the Mango DAO.
Investors on Mango Markets can, among other things, buy and sell perpetual futures contracts (“Perpetuals”). When an investor buys or sells a Perpetual for a particular cryptocurrency, the investor is not buying or selling that cryptocurrency but is, instead, buying or selling exposure to future movements in the value of that cryptocurrency relative to another cryptocurrency. An investor who buys a Perpetual based on the relative value of the stablecoin USDC and MNGO (a “MNGO Perpetual,” for short) at a price of 0.02 USDC/MNGO is “long” on MNGO, and the value of that position will rise if the value of MNGO rises above 0.02 USDC/MNGO. Conversely, the investor who sold that Perpetual is “short” on MNGO, and the value of that position will rise if the value of MNGO falls relative to USDC. Either party to a Perpetual can settle the Perpetual at any time and realize their gain or loss.
To determine the settlement price of Perpetuals, Mango Markets uses an “oracle,” which is a computer program that calculates the relative value of two cryptocurrencies by looking at the exchange rate of those cryptocurrencies on various cryptocurrency exchanges (the “Oracle”). When the Oracle price changes for a particular cryptocurrency pairing, the settlement price of Perpetuals based on that cryptocurrency pairing also changes on Mango Markets. Each party to a Perpetual on Mango Markets also regularly makes or receives payments known as “funding” payments. Funding payments are calculated based on the midprice of bids and asks for that Perpetual compared to the Oracle price for that Perpetual. Funding payments are designed to ensure the purchase price for Perpetuals stays close to settlement prices.
Investors can also engage in “spot” trades on Mango Markets. In a spot trade, an investor exchanges one cryptocurrency for another, at whatever the prevailing exchange rate between those two cryptocurrencies is at the time of the transaction.
Mango Markets also allows investors to use their deposits and positions as collateral for borrowing and withdrawing cryptocurrency from the Mango Markets exchange. To borrow through Mango Markets, an investor accesses the Mango Markets website and clicks a button labeled “borrow” that allows the investor to borrow cryptocurrency. The investor can then withdraw the borrowed cryptocurrency by clicking another button labeled “withdraw.” The borrowed cryptocurrency comes from cryptocurrency that other investors have deposited in Mango Markets accounts. The amount that an investor on Mango Markets can withdraw is determined by a formula that looks at, among other things, the value of the cryptocurrency deposited in the investor’s account, the value of the investor’s positions on Mango Markets, and the amount of cryptocurrency that the investor has already borrowed through Mango Markets. Mango Markets uses a formula to track the relationship between these assets and liabilities, which Mango Markets labels the “health” of the account. If the “health” of a Mango Markets account falls below a certain threshold, the investor’s positions on Mango Markets can be liquidated
EISENBERG’s Market Manipulation Scheme
EISENBERG engaged in a scheme to steal approximately $110 million by artificially manipulating the price of MNGO Perpetuals on Mango Markets. To achieve this objective, EISENBERG took a number of steps. First, EISENBERG used an account that he controlled on Mango Markets to sell a large amount of MNGO Perpetuals and used a separate account on Mango Markets to purchase those same MNGO Perpetuals. One account that EISENBERG controlled held a “long” position, the value of which would rise if the value of MNGO relative to USDC rose above the threshold of 0.0382 USDC/MNGO (the “Long MNGO Perpetual Position”). The second account that EISENBERG controlled held a “short” position, the value of which would rise if the value of MNGO relative to USDC fell below 0.0382 USDC/MNGO (the “Short MNGO Perpetual Position”). EISENBERG was the owner of both positions and had sold to himself, from himself, the MNGO Perpetuals.
Second, EISENBERG made a series of large purchases of MNGO using the stablecoins USDC and USDT on multiple cryptocurrency exchanges with the objective of artificially increasing the price of MNGO relative to USDC and, in turn, the price of MNGO Perpetuals on Mango Markets. EISENBERG’s manipulative trading caused the price of MNGO Perpetuals on Mango Markets to rise approximately 1300% in a period of approximately 20 minutes.
Finally, as the price of MNGO Perpetuals on Mango Markets rose due to the manipulative purchasing by EISENBERG, the apparent value of the MNGO Perpetuals that EISENBERG had purchased for himself also rose. Because Mango Markets allows investors to borrow and withdraw cryptocurrency based on the value of their assets on the platform, the artificial increase in the value of the MNGO Perpetuals EISENBERG had purchased from himself allowed him to borrow, and then withdraw, approximately $110 million worth of various cryptocurrencies from Mango Markets, which came from deposits of other investors in the Mango Markets exchange. EISENBERG withdrew nearly all then-available funds from Mango Markets. When Eisenberg borrowed and withdrew this cryptocurrency, he had no intention of repaying the borrowed funds but rather intended to steal those funds.
After EISENBERG stopped purchasing MNGO with USDC in connection with his fraudulent scheme, the price of MNGO Perpetuals on Mango Markets – which was no longer being artificially propped up by EISENBERG – collapsed.
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AVRAHAM EISENBERG, 27, of San Juan, Puerto Rico, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison; one count of commodities manipulation, which carries a maximum sentence of 10 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the investigative work of the FBI and further thanked the Department of Homeland Security’s Homeland Security Investigations and the Internal Revenue Service-Criminal Investigation for their assistance with the investigation. Mr. Williams further thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission, both of which have initiated civil proceedings against EISENBERG, for their cooperation and assistance in the investigation.
This case is being handled by Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk of the Office’s Securities and Commodities Fraud Task Force and Jessica Peck of the National Cryptocurrency Enforcement Team (NCET).
The NCET was created by the Criminal Division to combat the growing illicit use of cryptocurrencies and digital assets. Under the supervision of the Criminal Division, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers.
The allegations in the Indictment and 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 Indictment and the Complaint, and the description of the Indictment and the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Queens Jeweler Convicted in Luxury Watch Robbery and Money Laundering SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict today against STANISLAV YAKUBOV, a/k/a “Steve,” on three counts in a Superseding Indictment, including one count of money laundering conspiracy and two counts of making false statements to federal law enforcement agents. YAKUBOV is scheduled to be sentenced on June 1, 2023, by U.S. District Judge Edgardo Ramos, who presided over the eight-day trial.
U.S. Attorney Damian Williams said: “Stanislav Yakubov agreed to purchase hundreds of thousands of dollars’ worth of diamond-encrusted, stolen luxury watches that had been taken during violent robberies, the victims of which included jewelers from Yakubov’s own community. Yakubov’s actions fueled a year-long robbery spree that targeted nearly a dozen victims, and his conviction sends a message to the community that the purchase and laundering of stolen property will be vigorously investigated and prosecuted.”
Photographs of some of the stolen watches are set forth below. If you believe you know the whereabouts of any of these watches, please contact the U.S. Attorney’s Office for the Southern District of New York at 1-866-874-8900, and reference this case:
According to the Superseding Indictment and the evidence presented at trial:
From at least in or about October 2019 up to and including November 2020, STANISLAV YAKUBOV, and others known and unknown, agreed to purchase stolen watches worth up to hundreds of thousands of dollars, each that had been taken during armed robberies. The watches owned by victims targeted in the robberies included diamond-encrusted Richard Mille, Rolex, Audemars Piguet, and Patek Philippe watches owned by jewelers as part of the jewelers’ businesses based in Manhattan’s Diamond District and elsewhere.
The robberies and attempted robberies included the following:
- On October 3, 2019, a jeweler in Long Island City, New York, was robbed of, among other things, a Richard Mille watch worth over $150,000.
- On October 25, 2019, a jeweler in Jamaica, New York, was robbed of, among other things, a Rolex watch worth over $118,000.
- On December 10, 2019, a jeweler in Brooklyn, New York, was robbed of, among other things, a Patek Philippe watch worth over $160,000 and a diamond necklace worth over $77,000.
- On January 14, 2020, a jeweler in Rego Park, New York, was robbed of, among other things, a Richard Mille watch worth over $500,000.
- On February 16, 2020, a jeweler in Jamaica Estates, New York, was robbed of, among other things, an Audemars Piguet watch worth over $28,000.
- On February 20, 2020, an individual in Long Island City, New York, was robbed of, among other things, an Audemars Piguet watch worth over $125,000.
- On June 11, 2020, a jeweler in Brooklyn, New York, was robbed of, among other things, a Richard Mille watch worth over $148,000.
- On July 6, 2020, a jeweler in Hoboken, New Jersey, was robbed of, among other things, a Richard Mille watch worth over $81,000.
- On July 20, 2020, a jeweler in Queens, New York, was the victim of an attempted robbery involving a Richard Mille watch worth over $180,000.
- On August 2, 2020, a food critic/social media influencer was robbed of, among other things, a Richard Mille watch worth over $250,000 in the vicinity of Englewood Cliffs, New Jersey.
In addition, on or about October 20, 2020, and March 24, 2021, YAKUBOV knowingly and willfully made false statements to federal law enforcement officers investigating the robbery spree. YAKUBOV falsely said, among other things, that he never purchased any watches from the robbery crew and that the robbers were merely customers who had purchased jewelry from YAKUBOV in the past.
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YAKUBOV, 42, of Queens, New York, was convicted of one count of conspiracy to commit money laundering, which carries a maximum prison term of 20 years, and two counts of making false statements to federal law enforcement agents, each of which carry a maximum prison term of five years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department. Mr. Williams also thanked the Bergen County, New Jersey, Prosecutor’s Office, the Englewood Cliffs, New Jersey, Police Department, the Weehawken, New Jersey, Police Department, and the Nassau County Police Department for their assistance.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Mathew Andrews, Andrew K. Chan, and Thomas John Wright, with the assistance of Paralegal Specialist Grayson Glogoff, are in charge of the prosecution.
Owner of Home Health Agency Sentenced to 54 Months in Prison for over $100 Million Health Care FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that MARIANNA LEVIN was sentenced to 54 months in prison for her leadership role in a broad fraud scheme that defrauded Medicaid for home health and personal care services that were not actually rendered, resulting in the loss of more than $100 million. United States District Judge John P. Cronan imposed the sentence. LEVIN pled guilty to wire fraud on June 1, 2022.
U.S. Attorney Damian Williams said: “For years, Marianna Levin, the owner of a Brooklyn-based home health agency, defrauded taxpayers through a massive, fraudulent home health scheme. As part of the scheme, Levin billed tens of millions of dollars to Medicaid for home health services that were not actually rendered. As a result, the scheme diverted much-needed resources meant to support services for vulnerable individuals. Today’s sentence sends a message that those who engage in health care fraud schemes will face stiff penalties.”
According to statements and filings in federal court:
Since in or about 2015, LEVIN engaged in a widespread fraud scheme through which she and her co-conspirators defrauded Medicaid for home health and personal care services that were not actually rendered. During the course of the scheme, LEVIN served in a senior, executive role at a licensed home care service agency based in Brooklyn, New York (“Agency-1”). In or about 2016, LEVIN and her co-conspirators opened a second licensed home care service agency based in Brooklyn (“Agency-2” and, together with Agency-1, the “Agencies”). LEVIN served as the owner of Agency-2 and also continued in her leadership role at Agency-1.
The Agencies purported to provide home health and personal care services to patients residing in all five boroughs of New York City and Nassau County. Combined, the Agencies employed approximately 3,000 home health and personal care aides (the “Aides”). Most of the Aides were licensed to provide home health aide services and personal care services.
Home care is a health service provided in the patient’s home to promote, maintain, or restore health or to lessen the effects of illness and disability. Home care includes personal care services, administered by Aides, including housekeeping, meal preparation, bathing, toileting, and grooming.
From in or about 2015 to in or about December 2020, Medicaid reimbursed the Agencies hundreds of millions of dollars for home health and personal care services. A significant portion of the Agencies’ billings were fraudulent. In particular, the Agencies billed Medicaid for “no-show” cases in which Aides claimed to be performing home health or personal care services when they were not. At times when Aides falsely claimed to be performing home health or personal care services, they, in fact, stayed home, ran personal errands, vacationed, and socialized with family and friends. The fraud at the Agencies coincided with ballooning costs on home care in New York State. In or about January 2020, New York’s State budget director announced, in substance and in part, that spending in the home health space tripled between the 2013 and 2019 fiscal years, representing a $4.8 billion increase.
With no-show cases at the Agencies, an Aide’s fraudulently obtained wages were often split between the no-show Aide and the no-show patient. In addition to paying kickbacks to no-show patients, no-show Aides sometimes paid kickbacks to conspirators who referred no-show cases to Aides at the Agencies.
LEVIN and her co-conspirators also engaged in other fraudulent activity to boost the Agencies’ billing and increase the amount of money paid out to the Agencies.
Over the course of the scheme, LEVIN received more than $5 million in compensation from the Agencies.
In imposing the sentence, Judge Cronan emphasized the seriousness of LEVIN’s involvement in the fraud, the losses it caused, and the need to deter other home care businesses and workers from engaging in similar crimes.
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In addition to her prison term, MARIANNA LEVIN, 49, of Brooklyn, New York, was ordered to forfeit $1,496,000 and pay restitution of $36,328,183.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas W. Chiuchiolo and Daniel G. Nessim are in charge of the prosecution.
U.S. Attorney Announces $1.3 Million Settlement of Civil Fraud Lawsuit Against Apparel Importer for Underreporting Value of Goods to Avoid Paying Customs DutiesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director of CBP Field Operations New York, announced that the United States has entered into a settlement agreement to resolve a civil fraud lawsuit against HIGH LIFE LLC (“HIGH LIFE”), an apparel design and import company headquartered in Manhattan, for underreporting to CBP the value of apparel imported into the United States. The settlement resolves claims that HIGH LIFE underreported the value of 67 apparel shipments in order to avoid paying the full customs duties owed. Under the settlement agreement approved by U.S. District Judge Victor Marrero, HIGH LIFE has agreed to pay $1.3 million to the United States and has made admissions regarding certain conduct alleged in the Government’s Complaint.
U.S. Attorney Damian Williams said: “Rather than comply with the law, High Life chose to underreport the value of apparel imported into this country to avoid paying legally mandated customs duties. This Office will continue to hold companies accountable when they make misrepresentations to CBP to enhance their own bottom line.”
HSI Special Agent-in-Charge Ivan J. Arvelo said: “This settlement should serve as a warning to companies that attempt to bolster their bottom line by cheating and defrauding the United States. Individuals or organizations that knowingly and willfully use tactics such as undervaluing or misclassifying goods to avoid paying lawful customs charges are violating the laws of international commerce and HSI will not stand by idly. Our special agents will work diligently with our law enforcement partners to protect legitimate businesses by apprehending those that exploit our trade systems and rob our government of vital revenues.”
CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “Importers need to know that manipulating the values they report to CBP can come with serious consequences. This case is a great example of the collaborative trade enforcement efforts between teams at CBP, who identified the original pattern of misconduct, and the U.S. Attorney’s Office.”
CBP Director of Field Operations Francis Russo said: “U.S. Customs and Border Protection has a cadre of dedicated professionals – import specialists and regulatory auditors – with expertise in the financial details surrounding imports, including terms of sale and their effect on the dutiable value of goods when they arrive in the United States. Our trade experts found anomalies in High Life’s value calculations based on the terms of sale to its foreign suppliers and paved the way for the Justice Department and Homeland Security Investigations to move this case forward and bring it to a successful conclusion. Their knowledge and collaboration with our law enforcement partners stopped High Life’s efforts to defraud the United States of hundreds of thousands of dollars in revenue.”
As alleged in the Complaint filed in Manhattan federal court:
HIGH LIFE purchases apparel from foreign vendors (the “Vendors”), who in turn contract with overseas factories to manufacture the apparel. In December 2015, after CBP had detained numerous HIGH LIFE shipments due to concerns that the declared values were fraudulent, HIGH LIFE decided to transition its business model. Instead of purchasing the apparel on Landed Duty Paid (“LDP”) terms — meaning that HIGH LIFE paid the Vendors a price inclusive of all costs associated with importing the merchandise — HIGH LIFE began purchasing the merchandise on Free on Board (“FOB”) terms. Under the new FOB model, HIGH LIFE assumed importation responsibilities, including the responsibility to declare the value of the imported goods and pay the associated customs duties.
As the importer of record, HIGH LIFE was permitted, if certain criteria were met, to declare the value of the imported goods based on the price the Vendors paid the factories (“First Sale Price”), instead of the price HIGH LIFE paid the Vendors. However, HIGH LIFE could only declare the First Sale Price as the value of the orders if the goods were the subject of a bona fide sale between the Vendors and the factories, the goods were clearly destined for export to the United States, and the factories and the Vendors dealt with each other at arm’s length, in the absence of any non-market influences that affected the legitimacy of the sales price.
From January 21, 2016, through June 1, 2016 (the “Relevant Time Period”), HIGH LIFE materially underreported the value of previously ordered apparel in 67 imported shipments. In transitioning from LDP to FOB terms, HIGH LIFE developed a formula that worked backwards from a previously negotiated LDP price to calculate what HIGH LIFE wanted the FOB price and First Sale Price to be and then used that First Sale Price to declare the values of 67 shipments. The prices used by HIGH LIFE for customs reporting purposes were determined after the orders for the apparel had been placed, after the pricing structure had been negotiated, and after the apparel was in production. It was improper to declare the imported merchandise using these values because the prices were not based on a bona fide sale between the Vendors and the overseas factories and were not the result of arm’s length negotiations between those Vendors and the factories in the absence of any non-market influences. Indeed, HIGH LIFE instructed the Vendors on how to calculate and report the prices that HIGH LIFE ultimately used to declare the values to CBP.
As part of the settlement, HIGH LIFE admits, acknowledges, and accepts responsibility for the following conduct:
- Once HIGH LIFE transitioned to an FOB model, it assumed importation responsibilities for the shipments. As the importer of record, HIGH LIFE could then, if certain criteria were met, declare the value of the imported goods based on the price the Vendors paid the factories, instead of the price HIGH LIFE paid the Vendors. However, HIGH LIFE could only declare the First Sale Price as the value of the orders if the goods were the subject of a bona fide sale between the Vendors and the factories, clearly destined for export to the United States, and the factories and the Vendors dealt with each other at arm’s length, in the absence of any non-market influences that affected the legitimacy of the sales price.
- In transitioning from LDP to FOB terms, HIGH LIFE developed a formula that worked backwards from a previously negotiated LDP price to calculate what HIGH LIFE wanted the FOB price and First Sale Price to be and then used that First Sale Price to declare the values of 67 shipments made during the Relevant Time Period (the “Subject Orders”). HIGH LIFE requested the Vendors to delay shipping merchandise while the First Sale Prices for the Subject Orders were finalized. Indeed, on December 24, 2015, HIGH LIFE’s Production Manager asked the Vendors to “hold as many shipments as possible until we finalize the First Sale.”
- Beginning in late December 2015 and continuing through January 2016, HIGH LIFE instructed the Vendors to apply HIGH LIFE’s formula to calculate the First Sale Price that HIGH LIFE would report to CBP for purposes of calculating the duties owed by HIGH LIFE.
- After the Vendors emailed spreadsheets to HIGH LIFE that purported to reflect the First Sale Prices for the Subject Orders, a member of HIGH LIFE’s production team sent an email to the Vendors directing them to “rework your FOB and [First Sale Price] based on the Highlife Estimate freight.” Following their receipt of these emails, the Vendors replied to HIGH LIFE within 24 hours with revised First Sale Prices for the merchandise included in the Subject Orders.
- When importing the Subject Orders, HIGH LIFE ultimately declared to CBP that the duties owed should be calculated based on the First Sale Prices the Vendors reported to HIGH LIFE.
- If HIGH LIFE had paid duties to CBP based on the prices HIGH LIFE itself paid for the merchandise included in the Subject Orders, instead of calculating the duties based on the purported First Sale Prices reported by the Vendors pursuant to HIGH LIFE’s instructions, HIGH LIFE would have paid significantly higher customs duties for the Subject Orders.
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Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, HSI, and CBP.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jessica Jean Hu and Anthony J. Sun are in charge of the case.
U.S. Attorney Announces Settlement of Civil Fraud Lawsuit Against Former Hunter College Professor and Hunter College for Fraudulently Using Federal Research FundsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that the United States has filed and settled a civil fraud lawsuit against HUNTER COLLEGE (“HUNTER”) and JEFFREY T. PARSONS-HIETIKKO (“PARSONS”), a former HUNTER psychology professor who served as Director of Hunter’s Center for HIV Educational Studies (“CHEST”). The lawsuit resolves the United States’ allegations that for many years: (i) PARSONS improperly invoiced personal expenses to National Institutes of Health (“NIH”) funds, including expenses related to scuba diving trips, international flights for his family, a tropical birthday celebration, and travel for his work as a private consultant; (ii) HUNTER used NIH funds to pay PARSONS over $90,000 in retention bonuses without disclosing these payments to NIH as required; and (iii) PARSONS and HUNTER submitted false timekeeping records that misrepresented the time that CHEST staff spent working on NIH grant-related projects, resulting in the use of NIH grant funds to compensate CHEST staff for work performed for private clients. The lawsuit alleges that these impermissible uses of NIH funds violated HUNTER’s certifications to NIH and the U.S. Department of Health and Human Services (“HHS”) that the NIH funds would be used only for allowable research and academic purposes.
Under the settlement approved by U.S. District Judge Ronnie Abrams, PARSONS, 55, of Teaneck, New Jersey, and HUNTER agreed to pay $375,000 and $200,000, respectively, to the United States and made detailed factual admissions regarding their conduct.
U.S. Attorney Damian Williams said: “NIH provides funding to academic institutions for the purpose of furthering important research that impacts communities and improves lives. For years, Jeffrey Parsons-Hietikko obtained these funds under false pretenses, then used them to cover his personal expenses and for other purposes totally unrelated to research. Hunter College improperly used NIH funds to pay undisclosed bonuses to Parsons and for other expenses unrelated to NIH-funded work. When individuals and institutions abuse federal grant money, this Office will hold them accountable.”
As alleged in the Complaint filed in Manhattan federal court:
During his time at HUNTER, where he was promoted on multiple occasions and achieved the status of Distinguished Professor in 2012, PARSONS proved himself to be singularly proficient at obtaining NIH funding to support his and CHEST’s research. HUNTER considered PARSONS to be one of its most prized faculty members and offered him a number of perks, including discretionary spending accounts financed by NIH funds, a high level of personal control over CHEST’s federal grant funds, and special accommodations in the approval process for obtaining reimbursements from federal funds for his expenses. PARSONS then abused his authority and influence by repeatedly drawing from these discretionary accounts to fund personal expenses.
From January 1, 2010, through May 17, 2018 (the “Covered Period”), PARSONS and HUNTER defrauded the United States by materially misusing federal funds obtained from NIH and making false certifications and statements to NIH and HHS. First, PARSONS defrauded the Government by improperly using NIH funds that HUNTER had certified to HHS would only be used to support the facilities and administrative costs associated with HUNTER’s NIH grants (the “Indirect Cost Funds”) to reimburse himself for his personal travel expenses, including expenses relating to personal scuba diving trips, international flights for his family, and a tropical birthday celebration. PARSONS falsely represented that these reimbursement requests all had an academic or research purpose. PARSONS also improperly used Indirect Cost Funds to double the reimbursement he received for travel relating to his non-NIH-related work as a private consultant to external clients.
From December 2010 through December 2013, HUNTER improperly used the Indirect Cost Funds to pay PARSONS over $90,000 in undisclosed retention bonuses, even though NIH rules and regulations prohibited the Indirect Cost Funds from being used to make such payments. HUNTER never disclosed and, indeed, took steps to hide its use of the Indirect Cost Funds to pay these bonuses to PARSONS.
During the Covered Period, PARSONS also misused CHEST’s NIH grant funds to pay CHEST staff for time they spent working for CHEST’s private consulting clients, rather than on NIH grant-related projects. In order to obtain NIH funds for this purpose, PARSONS approved timekeeping records representing that those staff spent their time and effort working on NIH-funded research projects. In reality, however, CHEST staff had also spent time working on unrelated projects commissioned by third parties, which were not properly reimbursable from the NIH grant funds and were not accurately reflected on the documents PARSONS submitted to obtain reimbursement. Although HUNTER was on notice that CHEST staff performed work on outside projects, it nevertheless sought and received NIH funds to improperly pay CHEST staff for this outside work. The third parties that commissioned CHEST to work on the outside projects separately paid for the work performed by CHEST staff. HUNTER directed those payments into discretionary accounts to benefit CHEST and PARSONS, including one account used to reimburse PARSONS for alcohol expenses. Moreover, even after HUNTER became aware that NIH-funded CHEST staff had been improperly utilized to perform work for PARSONS’s private consulting company, HUNTER never took steps to investigate or report to NIH this misuse of NIH funding.
As part of the settlement, PARSONS admits, acknowledges, and accepts responsibility for the following conduct:
- From 2013 through 2017, PARSONS requested reimbursement from Indirect Cost Funds for scuba diving trips to the Cayman Islands, Bonaire, Cuba, Costa Rica, Fiji, Cozumel, and Belize (the “Scuba Trips”). As part of his request for reimbursement from Indirect Cost Funds, PARSONS represented that the Scuba Trips had a research purpose. However, PARSONS did not create any documents, data, or records reflecting research he conducted while he was on the Scuba Trips.
- In addition to the Scuba Trips, from 2016 through 2017, PARSONS also requested reimbursement from Indirect Cost Funds for travel to Cape Town (the “Cape Town Trip”) and Puerto Rico (the “Puerto Rico Trip,” and together with the Cape Town Trip, the “Personal Trips”). As part of his request for reimbursement from Indirect Cost Funds for the Personal Trips, PARSONS represented that the Personal Trips had an academic purpose.
- From 2016 through 2018, PARSONS sought and received reimbursement from Indirect Cost Funds to reimburse himself for travel to Denver, Chicago, and Los Angeles. However, during these trips, PARSONS was not working on projects relating to CHEST’s NIH grants and, instead, was working as a consultant for other institutions. PARSONS did not reimburse HUNTER or NIH for any of the Indirect Cost Funds he received relating to his travel to Denver, Chicago, and Los Angeles as a consultant for other academic institutions.
- Throughout the Covered Period, PARSONS caused HUNTER to request NIH grant funds to pay the salaries of CHEST staff ostensibly working on CHEST’s NIH-funded research. PARSONS approved a spreadsheet that purported to reflect the percentage of time and effort that CHEST staff spent working on CHEST’s NIH-funded research (the “Staff Allocation Spreadsheet”). During the Covered Period, CHEST staff not only worked on projects connected to HUNTER’s own NIH-funded research, but also on unrelated projects commissioned by third parties (“Outside Projects”). During the Covered Period, the Staff Allocation Spreadsheet failed to accurately reflect the time and effort CHEST staff spent working on the Outside Projects. Instead, during the Covered Period, the Staff Allocation Spreadsheet reflected CHEST staff as working entirely on CHEST’s NIH-funded research.
As part of the settlement, HUNTER admits, acknowledges, and accepts responsibility for the following conduct:
- During the Covered Period, HUNTER was aware that CHEST staff worked on Outside Projects and received payments from third parties for that work. However, the staff’s work on many of the Outside Projects was not reflected on the Staff Allocation Spreadsheet at all, and when it was, the Staff Allocation Spreadsheet understated the time that CHEST staff spent working on those Outside Projects. Instead, the time and effort of CHEST’s staff on the Outside Projects was incorrectly allocated on the Staff Allocation Spreadsheet to projects that NIH funded directly through NIH grants. HUNTER, in reliance on these incorrect Staff Allocation Spreadsheets, sought and received reimbursement from the NIH for staff time and effort expended on the Outside Projects.
- HUNTER deposited the funds it received as payment for CHEST’s staff work on the Outside Projects into accounts to benefit CHEST and PARSONS, and one of these accounts was used to reimburse PARSONS for expenses for alcohol at CHEST-related events.
- From December 2010 through December 2013, HUNTER used Indirect Cost Funds to pay PARSONS over $90,000 of retention bonuses, which were never disclosed to NIH. Throughout the Covered Period, NIH rules and regulations prohibited the use of Indirect Cost Funds to pay faculty retention bonuses not previously disclosed to NIH.
In connection with the filing of the lawsuit and settlement, the Government joined a whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
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Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Office of Inspector General for HHS.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jessica Jean Hu is in charge of the case.
U.S. Attorney Announces $22.8 Million Settlement of Civil Fraud Lawsuit Against Vitamin Importer for Underpaying Customs Duties Owed on Products Imported into the United StatesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie R. Highsmith, Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, and Francis Russo, Director of CBP Field Operations New York, announced today that the United States has filed and settled a civil lawsuit against International Vitamins Corporation (“IVC”), a United States-based company that imports and sells vitamins and nutritional supplements from China. The settlement resolves claims that, for years, IVC defrauded the United States by misclassifying more than 30 of its products under the Harmonized Tariff Schedule (“HTS”) in order to avoid paying customs duties and by failing to pay back duties owed to the United States even after IVC finally corrected its longstanding misclassifications.
Under the settlement agreement approved by U.S. District Judge Mary Kay Vyskocil, IVC will pay $22,865,055 to the United States. As part of the settlement agreement, IVC also made admissions regarding its conduct. IVC admitted that, between 2015 and 2019, it utilized HTS classifications for 32 products it imported from China (the “Covered Products”) that carried duty-free rates, even though those products, if accurately classified, would have been subject to the payment of duties. IVC also admitted that even after it retained a consultant in 2018 who informed IVC that it had been misclassifying the Covered Products, IVC did not implement the correct classifications for over nine months and never remitted duties that it had underpaid to the United States because of its misclassification of the Covered Products.
U.S. Attorney Damian Williams said: “IVC engaged in a fraudulent scheme to avoid customs duties owed to the United States by misclassifying many of its products as duty-free when importing them from China. Worse yet, IVC made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed. This Office is committed to combatting customs fraud by holding companies accountable when they attempt to avoid paying what they owe when importing goods from abroad.”
CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “This case reflects a pattern of behavior in which this company knowingly misclassified imported merchandise to avoid paying duties. They did so despite clear prior rulings by CBP on the correct classification for this specific type of product. Their failure to adhere to the customs laws, which are designed to protect U.S. revenue and U.S. consumers, will cost the company more than $22.8 million under the terms of a civil settlement with the United States. The dedication of the men and women of the CBP Office of Trade, the Office of Chief Counsel New York, and the United States Attorney’s Office to protect a fair and competitive trade environment is vital to facilitating lawful trade.”
CBP Director of Field Operations Francis Russo said: “U.S. Customs and Border Protection provided the critical link to an ongoing investigation into an attempt to circumvent payment of proper duties. This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle enterprises that seek to defraud the United States government for personal gain while causing economic harm to their competitors.”
As alleged in the Complaint filed in Manhattan federal court:
From January 1, 2015, through September 13, 2019 (the “Covered Period”), IVC made thousands of entries of the Covered Products (consisting of raw and bulk vitamins and nutritional supplements) into the United States from China while materially misreporting to CBP the duty rates applicable to those products under the HTS. IVC knowingly submitted or caused its customs brokers to submit entry documents to CBP that contained false classifications of the Covered Products in order to avoid paying duties owed and failed to remit underpaid duties even after IVC confirmed that the classifications it had used were incorrect.
IVC utilized inaccurate HTS classifications for the Covered Products despite receiving repeated notices from CBP informing IVC that the classifications it had been using for similar goods were erroneous. After continuing to use the incorrect HTS classifications for more than three years, IVC retained a consultant to analyze the propriety of its classifications. Even after the consultant confirmed that IVC had been misclassifying the Covered Products under the HTS, IVC persisted in using its incorrect classifications for these goods for over nine months. Throughout, IVC provided the incorrect classifications to its customs brokers, knowing that they would rely on those classifications when preparing documents to be submitted to CBP on IVC’s behalf.
When IVC finally adopted the correct classifications for the Covered Products, IVC made no effort to pay back the duties that it had long owed to the United States because of its pervasive misclassifications. As a result, IVC underpaid millions of dollars of duties owed to CBP for its imports.
In the settlement agreement, IVC admitted, acknowledged, and accepted responsibility for the following conduct:
- During the Covered Period, IVC’s customs brokers used information provided by IVC to prepare and submit customs entry summaries to CBP relating to imports of the Covered Products. IVC knew that its customs brokers would rely on the information it provided when classifying the Covered Products and preparing the entry summaries to be submitted to CBP.
- During the Covered Period, IVC provided its customs brokers with HTS classifications for the Covered Products that applied to medicaments and vitamins and that would incur no duties. The Covered Products should have been classified as food preparations subject to the payment of duties. IVC continued providing its customs brokers with these inaccurate HTS classifications even after CBP issued Notices of Action to IVC in 2016 and 2017 regarding classification errors made by IVC for similar non-Covered Products, namely, incorrectly classifying the similar non-Covered Products as duty-free when the correct classifications were for food preparations subject to duties.
- In the fall of 2018, IVC retained a consultant to review the HTS classifications IVC was using for all of the products IVC was then importing into the United States, including the Covered Products. After analyzing the 134 products, the consultant provided IVC with the correct HTS classifications for each of the Covered Products. The corrected codes carried higher duty rates than the HTS classifications IVC was using at the time. As a result, IVC had underpaid duties on the Covered Products.
- IVC did not implement the corrected codes for the Covered Products that were imported into the United States on entry documentation submitted to CBP until around September 13, 2019. Soon after, an IVC executive explained his view “that as each item is reviewed and corrected,” IVC had “a very strong go forward but the clean up is tough.” IVC never remitted the duties it had underpaid for the Covered Products, apart from in response to several discrete Notices of Action.
- As a result, IVC, through its customs brokers, misclassified the Covered Products on entry documents filed with CBP and, throughout the Covered Period, routinely underpaid customs duties on the Covered Products.
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In connection with the filing of the lawsuit and settlement, the Government joined a whistleblower lawsuit that had been previously filed under seal pursuant to the False Claims Act.
Mr. Williams thanked CBP for its investigative efforts and ongoing support and assistance with the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Zachary Bannon is in charge of the case.
Statement of U.S. Attorney Damian Williams on the Conviction of Billy OrtegaRead the Press Release
"Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day. Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product, yet continued sending the drugs to his victims. As a unanimous jury determined, Ortega will now be held accountable for the victims’ tragic and untimely deaths. This case exemplifies that the national fentanyl epidemic continues to claim lives and inflict havoc on families from all walks of life. Drug dealers don’t label their drugs as poison, they just sell them with indifference to the tragedy left in their wake. Combatting the fentanyl epidemic in our communities is one of my Office’s top priorities."
Leader of Drug Delivery Service Responsible for Three Fentanyl Poisoning Deaths ConvictedRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of BILLY ORTEGA, a/k/a “Jason,” for distributing the fentanyl that killed three young New York City professionals: Julia Ghahramani, Amanda Scher, and Ross Mtangi. The jury convicted ORTEGA following a two-week trial before U.S. District Judge Ronnie Abrams.
U.S. Attorney Damian Williams said: “Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day. Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product, yet continued sending the drugs to his victims. As a unanimous jury determined, Ortega will now be held accountable for the victims’ tragic and untimely deaths. This case exemplifies that the national fentanyl epidemic continues to claim lives and inflict havoc on families from all walks of life. Drug dealers don’t label their drugs as poison, they just sell them with indifference to the tragedy left in their wake. Combatting the fentanyl epidemic in our communities is one of my Office’s top priorities.”
According to the allegations in the Indictment and the evidence presented at trial:
From at least in or about 2015 to at least in or about February 2022, BILLY ORTEGA was the leader of a narcotics delivery service in the New York City area that principally distributed cocaine. ORTEGA used his mother’s apartment in Manhattan as his stash house, employing family members and close friends to manage his drugs and cash and to deliver his drugs to customers. In order to protect his drug business, ORTEGA supplied the guns that were kept at the stash house. Over a span of years, ORTEGA ran his drug delivery service over text message, acting as the central contact who, like a dispatcher, coordinated drug deliveries by texting his couriers and his customers.
In the course of a single day – March 17, 2021 – ORTEGA delivered, through one of his couriers, fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan. All three victims died after consuming the drugs distributed by ORTEGA.
On the day of the three poisonings – and prior to the fentanyl being delivered to any of the three victims – ORTEGA received the following text message from a different customer warning ORTEGA that his drugs had almost killed someone else. Specifically, at approximately 2:29 p.m. on March 17, 2021, that other customer sent ORTEGA the following text message: “Hey man. Just on a follow up from yesterday - I gave most of my last bag to my buddy and he just called me this second to say he ended up in hospital last night. [. . .] He had to get a Narcan shot and was released in the early hours.”[1] ORTEGA read this text message prior to coordinating the three deliveries of the drugs, from the same fentanyl-tainted batch of cocaine, that killed the three victims in this case.
Later that night on March 17, 2021, after the victims had stopped responding to ORTEGA’s text messages, ORTEGA offered the fentanyl-tainted batch of cocaine to another drug dealer so he could test it out on “some girls.” Specifically, at approximately 10:25 p.m. on March 17, 2021, ORTEGA texted the drug dealer: “If you[’re] going to be around way let me know have some every one is saying it’s to[o] Strong . . . Give it to some girls and you let me know lol bro.”
* * *
BILLY ORTEGA, 35, of West Milford, New Jersey, was convicted of one count of narcotics conspiracy resulting in death, three counts of narcotics distribution resulting in death, and one count of use and carrying of a firearm in furtherance of the narcotics conspiracy. The charges carry a mandatory minimum sentence of 25 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 investigative work of the New York City Police Department (“NYPD”), the Organized Crime Drug Enforcement Task Forces (“OCDETF”) New York Strike Force, and the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”) Intelligence Analysts for their support and assistance in this matter.
This investigation was conducted by the OCDETF New York Strike Force in partnership with the Drug Enforcement Administration’s (“DEA”) law enforcement partners. The OCDETF New York Strike Force comprises federal, state, and local law enforcement agencies supported by OCDETF and the New York/New Jersey High Intensity Drug Trafficking Area. The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, NYPD, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Micah F. Fergenson, Michael R. Herman, and Robert B. Sobelman, with the assistance of Analyst Kelsey Opozda and Paralegal Specialists Alex Frenchman and Christine Woods, are in charge of the prosecution.
[1] “Narcan” is an opiate blocker, used to counteract the deadly effects of drugs like fentanyl.
وزارت دادگستری از اتهامات و دستگیری جدید در ارتباط با طرح ترور به کارگردانی ایران خبر دادRead the Press Release
یک دادگاه فدرال در نیویورک امروز اتهامات قتل اجاره ای و پولشویی را علیه سه عضو یک سازمان جنایی اروپای شرقی به دلیل برنامه ریزی ترور یک شهروند آمریکایی که توسط دولت ایران به دلیل صحبت علیه نقض حقوق بشر رژیم هدف قرار گرفته بود، اعلام کرد.
طبق اسناد دادگاه، رفعت امیروف، با نام مستعار فرخالدین میرزایف، ملقب به ریم و رم، ۴۳ ساله، اهل ایران؛ پولاد عمروف، با نام مستعار آراز علی اف، با نام مستعار پولاد قاقا، با نام مستعار هاچی قاقا، ۳۸ ساله، از جمهوری چک و اسلوونی و خالد مهدی اف، ۲۴ ساله، از یونکرز، نیویورک، در یک کیفرخواست جایگزین که امروز در ناحیه جنوبی نیویورک منتشر شد، به پولشویی و قتل اجاره ای متهم شدند. امیروف که مقیم ایران است، در ۲۶ ژانویه وارد ناحیه جنوبی نیویورک شد و امروز با اتهامات وارده نزد قاضی سارا ال. کیو محاکمه خواهد شد. مهدی اف در تاریخ ۲۹ جولای ٬ ٬۲۰۲۲ به اتهامات موجود در یک شکایت جنایی اساسی دستگیر شد و در تاریخ ۳۱ ژانویه٬ ٬۲۰۲۳ در ساعت ۴ بعد از ظهر نزد کالین مک ماهون محترم به اتهامات موجود در کیفرخواست جایگزین محاکمه خواهد شد. عمروف در ۴ ژانویه٬ ٬۲۰۲۳ در جمهوری چک دستگیر شد و ایالات متحده درخواست استرداد او را به اتهامات موجود در کیفرخواست جایگزین خواهد کرد.
” قربانی در این پرونده به دلیل استفاده از حقوقی که هر شهروند آمریکایی از آن برخوردار است، هدف قرار گرفت. قربانی نقض حقوق بشر؛ رفتار تبعیض آمیز با زنان؛ سرکوب مشارکت و بیان دموکراتیک؛ و استفاده از زندان، شکنجه و اعدام خودسرانه، که توسط دولت ایران انجام میشوند را بااطلاع عمومی می رساند “ ٬ مارک برنان گارلند، دادستان کل ایالات متحده گفت. ” وزارت دادگستری تلاشهای یک رژیم استبدادی را برای تضعیف آن حمایتها و حاکمیت قانون که دموکراسی ما بر آن استوار است را تحمل نخواهد کرد. ما تلاش های یک قدرت خارجی برای تهدید، ساکت کردن یا آسیب رساندن به آمریکایی ها را تحمل نخواهیم کرد. ما برای شناسایی کردن، یافتن و به دست عدالت سپاریدن کسانی که امنیت مردم آمریکا را به خطر می اندازند، کوتاهی نخواهیم کرد. “
لیزا او. موناکو، معاون دادستان کل امریکا، گفت: "کیفرخواست امروز یک تهدید خطرناک برای امنیت ملی را آشکار میکند - یک تهدید دوگانه که توسط یک گروه جنایتکار بینالمللی وحشی که از آنچه تصور میکرد پناهگاه امن یک کشور متقلب: ایران، عمل میکنند، ایجاد شده است."
با ادامه ادغام تهدیدات امنیتی ملی و کیفری، وزارت دادگستری از همه ابزارهای خود برای محافظت جدی از آزادی و پاسخگویی به همه کسانی که از خشونت برای تضعیف آن استفاده میکنند، استفاده خواهد کرد.
کریستوفر رای، مدیر افبیآی، گفت: ”کیفرخواستی که امروز اعلام شد نشاندهنده تعهد افبیآی به دنبال کردن حقایق به هر کجا که منجر شود، برای رسیدن به سران توطئههای جنایتکارانه در هر کجا که هستند، و استفاده از دسترسی دوربردمان برای آوردن مسئولین به اینجا برای رویارویی با عدالت در ایالات متحده است. رفتار متهم نشان می دهد که بازیگران ایرانی تا چه حد حاضرند منتقدان را ساکت کنند، حتی اقدام به ترور یک شهروند آمریکایی در خاک آمریکا کنند. ما مصمم هستیم که از حقوق همه آمریکایی ها در برابر نفوذ ظالمانه رژیم های متخاصم محافظت کنیم. “
متیو جی. اولسن، دادیار دادستان کل از بخش امنیت ملی وزارت دادگستری، گفت: ”اتهامات امروز بر تعهد وزارت برای محافظت از آمریکایی ها و ارزش های اساسی ما در برابر همه شکلهای سرکوب و فشار فراملی تأکید می کند. برای بازیگران خارجی، که با این تصور که از دسترس ما دور هستند، نقشه خشونت را در خاک ما میکشند، بدانید، که ما شما را در هر کجا که باشید، تعقیب خواهیم کرد تا زمانی که عدالت را اجرا کنیم. “
دامیان ویلیامز، دادستان ایالات متحده در ناحیه جنوبی نیویورک گفت: ”همانطور که گفته می شود، متهمان اعضای یک گروه جنایتکار سازمان یافته هستند که برای ترور، در همین شهر نیویورک، یک شهروند آمریکایی ایرانیتبار که منتقد استبداد رژیم و نادیده گرفتن آن به حقوق بشر است، استخدام شده اند. این دومین بار در دو سال گذشته است که این دفتر و شریکان ما در افبیآی توطئههایی را که از داخل ایران برای ربودن یا کشتن این قربانی بهخاطر ”جنایت“ استفاده از حق آزادی بیان، تفکر مستقل سیاسی و دفاع از حقوق ستمدیدگان و محرومان در داخل ایران سرچشمه میگیرد، مختل کردهاند. به لطف تلاشهای فوقالعاده دادستانهای حرفهای و ماموران افبیآی که تحقیقات را رهبری میکردند، این توطئه جدید برای ساکت کردن قربانی مختل شده و متهمان در دادگاه آمریکایی با عدالت روبرو خواهند شد. “
به توجه به ادعاهای مندرج در کیفرخواست جایگزین، سایر پرونده های دادگاه و اظهارات بیان شده در جریان دادرسی:
امیروف یکی از رهبران یک سازمان جنایی اروپای شرقی (سازمان) است که در ایران اقامت دارد. عمروف همچنین نقش رهبری در سازمان دارد و در اروپای شرقی اقامت دارد. مهدی اف، یکی از اعضای سازمان، ساکن یونکرز، نیویورک است. این سازمان با ایران ارتباط دارد و خشونت آمیز است و در قتل، آدم ربایی، حمله و اخاذی شرکت می کند و اعضا معمولاً خود را با خالکوبی و سایر نمایش های ستاره های هشت پر معرفی می کنند.
حداقل از جولای ۲۰۲۲، این سازمان موظف به انجام قتل یک شهروند آمریکایی ایرانیتبار (قربانی) بود که قبلاً هدف توطئههای دولت ایران برای هراساندن، آزار و اذیت و ربودن قربانی قرار گرفته بود. قربانی یک روزنامه نگار، نویسنده و فعال حقوق بشر، ساکن بروکلین، نیویورک است که نقض حقوق بشر و سرکوب بیان سیاسی توسط دولت ایران، از جمله در ارتباط با تداوم اعتراضات علیه رژیم در سراسر ایران را به اطلاع عموم رسانده است. در سالهای ۲۰۲۰ و ۲۰۲۱، مقامات اطلاعاتی و داراییهای ایران نقشهای برای ربودن قربانی از داخل ایالات متحده برای تحویل به ایران در تلاش برای خاموش کردن انتقاد قربانی از رژیم داشتند. این توطئه توسط افبیآی مختل و افشا شد و منجر به تشکیل اتهامات توطئه آدم ربایی و اتهامات دیگر فدرال در ناحیه جنوبی نیویورک علیه چندین شرکت کننده در توطئه در ایالات متحده علیه فراهانی و همکاران، ٬۲۱جنایی ٬۴۳۰ گردید.
حدود یک سال پس از ثبت اتهامات فرحانی، سازمان وظیفه ترور قربانی را در خاک ایالات متحده بر عهده گرفت. تقریباً در اواسط جولای ۲۰۲۲، امیروف اطلاعات هدفگیری را - که امیروف از افراد دیگر در ایران دریافت کرده بود - در مورد قربانی و محل سکونت قربانی برای عمروف ارسال کرد. عمروف نیز به نوبه خود اطلاعات هدف گیری را به مهدی اف منتقل کرد تا نظارت بر قربانی و شناسایی محل سکونت قربانی و محله اطراف آن را آغاز کند. مهدی اف عکسها و فیلمهایی از محل اقامت قربانی برای عمروف فرستاد تا با امیروف و طراحان توطئه در ایران به اشتراک بگذارد.
پس از نظارت اولیه مهدی اف از محل سکونت قربانی، امیروف و عمروف قرار گذاشتند که مبلغ ۳۰۰۰۰ دلار نقدی به مهدی اف در شهر نیویورک برای پیشبرد نقشه تحویل دهند. مهدی اف بخشی از این پرداخت نقدی را برای خرید یک تفنگ تهاجمی به سبک AK-47 به همراه دو خشاب مهمات و حداقل ۶۶ گلوله استفاده کرد. مهدی اف در ارتباطات الکترونیکی به خود می بالید که یک ”ماشین جنگی“ برای خود تهیه کرده است.
بین ۲۰ تا ۲۸ جولای٬ ۲۰۲۲، مهدی اف بارها به محله قربانی سفر کرد تا نظارت و شناسایی انجام دهد و گزارشهایی از فعالیتها، عکسها و فیلمهای قربانی را برای توضیح بیشتر به امیروف برای عمروف ارسال کرد. در ۲۴ جولای٬ ۲۰۲۲، مهدی اف پس از رسیدن به اقامتگاه قربانی، به عمروف گزارش داد که مهدی اف ”در صحنه جنایت“ است. عمروف مهدی اف را تشویق کرد: ”تو مردی! “مهدی اف به عمروف توضیح داد که ما از هر دو طرف جلوی آن را گرفتیم، زمانی که او از خانه خارج شود نمایشی خواهد بود. “عمروف این گزارش را برای امیروف ارسال کرد و او در پاسخ گفت:” انشاءالله “.
مهدی اف در آن روز نتوانست ترور را انجام دهد و چند روز بعد برای یافتن فرصتهایی برای انجام مأموریت قتل بازگشت. امیروف، عمروف و مهدی اف راهبردهای مختلفی را برای بیرون کشیدن قربانی طراحی کردند، از جمله تلاش برای درخواست گل از قربانی از باغ قربانی. مهدی اف در ۲۸ جولای ۲۰۲۲ ویدئویی را که از داخل ماشینی که مهدی اف در حال رانندگی بود گرفت و به عمروف فرستاد که تفنگ تهاجمی را به همراه پیام "ما آماده ایم" نشان می داد. قربانی پس از مشاهده فعالیت مشکوک در خارج از محل سکونت، منطقه را ترک کرد و مهدی اف مدت کوتاهی پس از آن از محل خارج شد. پس از اینکه مهدی اف از محل اقامت قربانی دور شد، پس از یک تخلف رانندگی متوقف شد و در بازرسی بعدی خودرو، افسران پلیس تفنگ تهاجمی، ۶۶ گلوله، حدود ۱۱۰۰ دلار پول نقد و یک ماسک اسکی مشکی را پیدا کردند.
امیروف، عمروف و مهدی اف به موارد زیر متهم می شوند: (۱) قتل اجارهای که حداکثر مجازات آن ۱۰ سال زندان است؛ (۲) توطئه برای انجام قتل اجارهای، که حداکثر مجازات آن ۱۰ سال زندان است؛ و (۳) توطئه برای ارتکاب پولشویی که حداکثر مجازات آن ۲۰ سال زندان است. مهدی اف همچنین به داشتن اسلحه گرم با شماره سریال محو شده متهم است که حداکثر پنج سال زندان است.
افبیآی و بخش ضدجاسوسی-سایبری دفتر ساحویی آن در نیویورک، گروه ویژه ضد تهدیدات ایران افبیآی در نیویورک، گروه ویژه ضد جاسوسی افبیآی نیویورک و گروه ویژه و مشترک عملیات تروریستی افبیآی نیویورک در حال بررسی این پرونده هستند، با کمکهای ارزندهای که توسط پلیس شهر نیویورک (NYPD) واداره اطلاعات NYPD، همچنین بخش امنیت ملی و دفتر امور بین الملل وزارت دادگستری ارائه شدهاند.
مایکل دی. لاکارد، جیکوب اچ. گوتویلیگ، و متیو جی. سی. هلمن، دستیاران دادستانی ایالات متحده برای ناحیه جنوبی نیویورک، با کمک های ارزشمندی که توسط دادستان محاکمه کریستوفر ام. ریگالی از بخش ضد جاسوسی و کنترل صادرات بخش امنیت ملی ارائه شده است، این پرونده را تحت تعقیب قرار می دهند
کیفرخواست صرفا یک ادعاست. همه متهمان تا زمانی که مجرمیت آنها فراتر از شک معقول در دادگاه ثابت نشود بی گناه فرض می شوند.
به روز شده در ۲۷ ژانویه٬ ۲۰۲۳
U.S. Attorney Announces Charges and New Arrest in Connection with Assassination Plot Directed from IranRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Lisa O. Monaco, the Deputy Attorney General of the United States, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the FBI, announced the unsealing of murder-for-hire and money-laundering charges against RAFAT AMIROV, a/k/a “Farkhaddin Mirzoev,” a/k/a “Pᴎᴍ,” a/k/a “Rome,” POLAD OMAROV, a/k/a “Araz Aliyev,” a/k/a “Polad Qaqa,” a/k/a “Haci Qaqa,” and KHALID MEHDIYEV, and firearms offenses against MEHDIYEV. The charges are contained in a Superseding Indictment unsealed today in Manhattan federal court. The case is pending before U.S. District Judge Colleen McMahon. AMIROV was taken into custody in the Southern District of New York on January 26, 2023, and will be arraigned on the charges in the Superseding Indictment by Magistrate Judge Sarah L. Cave today. MEHDIYEV was arrested on July 29, 2022, on charges contained in an underlying criminal complaint and will be arraigned on the charges in the Superseding Indictment before Judge McMahon on January 31, 2023, at 4:00 p.m. OMAROV was arrested in the Czech Republic on January 4, 2023, and the United States will request his extradition on the charges in the Superseding Indictment.
U.S. Attorney Damian Williams said: “As alleged, the defendants are members of an organized crime group hired to assassinate, right here in New York City, a U.S. citizen of Iranian origin who has been critical of the regime’s autocracy and its disregard for human rights. This is the second time in the past two years that this Office and our partners at the FBI have disrupted plots originating from within Iran to kidnap or kill this victim for the ‘crime’ of exercising the right to free speech, to independent political thought, and to advocating for the rights of the oppressed and disenfranchised inside Iran. Thanks to the extraordinary efforts of the career prosecutors and FBI agents who led the investigation, this new plot to silence the victim has been disrupted and the defendants will face justice in an American court.”
Attorney General Merrick B. Garland said: “The Victim in this case was targeted for exercising the rights to which every American citizen is entitled. The Victim publicized the Iranian Government's human rights abuses; discriminatory treatment of women; suppression of democratic participation and expression; and use of arbitrary imprisonment, torture, and execution. The Department of Justice will not tolerate attempts by an authoritarian regime to undermine those protections and the rule of law upon which our democracy is based. We will not tolerate attempts by a foreign power to threaten, silence, or harm Americans. We will stop at nothing to identify, find, and bring to justice those who endanger the safety of the American people.”
Deputy Attorney General Lisa O. Monaco said: “Today’s indictment exposes a dangerous menace to national security – a double threat posed by a vicious transnational crime group operating from what it thought was the safe haven of a rogue nation: Iran. As national security and criminal threats continue to blend, the Department of Justice will use all its tools to zealously protect freedom and hold accountable all those who would use violence to undermine it.”
Director Christopher A. Wray said: “The indictment unsealed today reflects the FBI’s commitment to follow the facts wherever they lead, to work our way up to the leaders of criminal plots wherever they are, and to use our long reach to bring those responsible here to face justice in the United States. The conduct charged shows how far Iranian actors are willing to go to silence critics, even attempting to assassinate a U.S. citizen on American soil. We are determined to safeguard the rights of all Americans from the oppressive reach of hostile regimes.”
Assistant Attorney General Matthew G. Olsen said: “Today’s charges underscore the Department’s commitment to protecting Americans and our fundamental values in the face of all forms of transnational repression. To foreign actors who plot violence on our soil believing they are out of reach, know that we will pursue you, wherever you may be, until we deliver justice.”
FBI Assistant Director Michael J. Driscoll said: “We allege the defendants are members of an organized crime group that was tasked with carrying out the coldblooded murder of an American citizen in our city who has long been a target of the Iranian regime. This plot was an attempt to silence a voice critical of Iranian authoritarianism and human rights atrocities. The FBI, along with our partners in law enforcement, will continue to aggressively pursue individuals tasked by Iran or other hostile foreign governments to perform illegal action inside our borders or against our citizens. The FBI will not tolerate foreign governments attempting to violate our laws and freedom.”
According to the allegations contained in the Superseding Indictment, other court filings, and statements made during court proceedings:[1]
AMIROV is a leader in an Eastern European criminal organization (the “Organization”) who resides in Iran. OMAROV also holds a leadership role in the Organization and resides in Eastern Europe. MEHDIYEV, a member of the Organization, resides in Yonkers, New York. The Organization has ties to Iran and is violent, engaging in murders, kidnappings, assaults, and extortions, and members typically identify themselves with tattoos and other displays of eight-pointed stars.
Since at least July 2022, the Organization was tasked with carrying out the murder of a U.S. citizen of Iranian origin (the “Victim”), who previously has been the target of plots by the Government of Iran to intimidate, harass, and kidnap the Victim. The Victim is a journalist, author, and human rights activist, residing in Brooklyn, New York, who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran. As recently as 2020 and 2021, Iranian intelligence officials and assets 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. That plot was disrupted and exposed by the FBI and led to the filing of federal kidnapping conspiracy and other charges in the Southern District of New York against several participants in the plot in United States v. Farahani, et al., 21 Cr. 430 (RA) (S.D.N.Y.).
About one year after the Farahani charges were filed, the Organization was tasked with carrying out the Victim’s assassination on U.S. soil. Beginning in approximately mid-July 2022, AMIROV sent targeting information – which AMIROV had received from other individuals in Iran – about the Victim and the Victim’s residence to OMAROV. OMAROV, in turn, communicated the targeting information to MEHDIYEV in order to begin conducting surveillance of the Victim and reconnaissance of the Victim’s residence and surrounding neighborhood. MEHDIYEV sent photographs and videos of the Victim’s residence to OMAROV for further sharing with AMIROV and the plot’s orchestrators in Iran.
After MEHDIYEV’s initial surveillance of the Victim’s residence, AMIROV and OMAROV arranged for the delivery of a $30,000 cash payment to MEHDIYEV in New York City in furtherance of the plot. MEHDIYEV used a portion of this cash payment to buy an AK-47-style assault rifle, along with two magazines for ammunition and at least 66 rounds. MEHDIYEV bragged in electronic communications that he had procured for himself a “war machine.”
Between July 20 and 28, 2022, MEHDIYEV repeatedly traveled to the Victim’s neighborhood to conduct surveillance and reconnaissance, sending reports of the Victim’s activities, photographs, and videos to OMAROV for further distribution to AMIROV. On July 24, 2022, after arriving at the Victim’s residence, MEHDIYEV reported to OMAROV that MEHDIYEV was “at the crime scene.” OMAROV encouraged MEHDIYEV, “You are a man!” MEHDIYEV described to OMAROV that “we blocked it from both sides, it will be a show once she steps out of the house.” OMAROV forwarded this report to AMIROV, who responded, “God willing.”
MEHDIYEV was unable to carry out the assassination that day and returned on several subsequent days to seek out opportunities to complete the murder mission. AMIROV, OMAROV, and MEHDIYEV schemed different strategies to attempt to draw the Victim out, including by attempting to ask the Victim for flowers from the Victim’s garden. On July 28, 2022, MEHDIYEV sent OMAROV a video taken from inside the car MEHDIYEV was driving showing the assault rifle, along with the message that “we are ready.” The Victim, after observing suspicious activity outside the residence, left the area, and MEHDIYEV drove away shortly afterwards. After MEHDIYEV drove away from the Victim’s residence, he was stopped after a traffic violation, and during a subsequent search of the car, police officers found the assault rifle, 66 rounds of ammunition, approximately $1,100 in cash, and a black ski mask.
* * *
AMIROV, 43, of Iran, OMAROV, 38, of the Czech Republic and Slovenia, and MEHDIYEV, 24, of Yonkers, New York, have each been charged with: (i) murder-for-hire, which carries a maximum sentence of 10 years in prison; (ii) conspiracy to commit murder-for-hire, which carries a maximum sentence of 10 years in prison; and (iii) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. MEHDIYEV is also charged with possessing a firearm with an obliterated serial number, which carries a maximum sentence of five years in prison.
The potential maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by Judge McMahon.
Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office Counterintelligence-Cyber Division, the New York FBI Iran Threat Task Force, the New York FBI Counterintelligence Task Force, and the New York FBI Joint Terrorism Task Force. Mr. Williams also thanked the New York City Police Department (“NYPD”) and the NYPD Intelligence Bureau, as well as the Department of Justice’s National Security Division and the Department of Justice’s Office of International Affairs for their assistance.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig, and Matthew J.C. Hellman are in charge of the prosecution, with assistance from Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section.
The charges in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Justice Department Announces Charges and New Arrest in Connection with Assassination Plot Directed from IranRead the Press Release
A federal court in New York today unsealed murder-for-hire and money laundering charges against three members of an Eastern European criminal organization for plotting the murder of a U.S. citizen who has been targeted by the Government of Iran for speaking out against the regime’s human rights abuses.
According to court documents, Rafat Amirov, aka Farkhaddin Mirzoev, aka Pᴎᴍ, aka Rome, 43, of Iran; Polad Omarov, aka Araz Aliyev, aka Polad Qaqa, aka Haci Qaqa, 38, of the Czech Republic and Slovenia; and Khalid Mehdiyev, 24, of Yonkers, New York, are charged with money laundering and murder-for-hire in a superseding indictment unsealed today in the Southern District of New York. Amirov, who resides in Iran, arrived in the Southern District of New York on Jan. 26, and will be arraigned on charges before Magistrate Judge Sarah L. Cave today. Mehdiyev was arrested on July 29, 2022, on charges contained in an underlying criminal complaint and will be arraigned on the charges in the superseding indictment before the Honorable Colleen McMahon on Jan. 31, 2023, at 4 p.m. ET. Omarov was arrested in the Czech Republic on Jan. 4, 2023, and the United States will request his extradition on the charges in the superseding indictment.
“The Victim in this case was targeted for exercising the rights to which every American citizen is entitled. The Victim publicized the Iranian Government's human rights abuses; discriminatory treatment of women; suppression of democratic participation and expression; and use of arbitrary imprisonment, torture, and execution,” said Attorney General Merrick B. Garland. “The Department of Justice will not tolerate attempts by an authoritarian regime to undermine those protections and the rule of law upon which our democracy is based. We will not tolerate attempts by a foreign power to threaten, silence, or harm Americans. We will stop at nothing to identify, find, and bring to justice those who endanger the safety of the American people.”
“Today’s indictment exposes a dangerous menace to national security – a double threat posed by a vicious transnational crime group operating from what it thought was the safe haven of a rogue nation: Iran,” said Deputy Attorney General Lisa O. Monaco. “As national security and criminal threats continue to blend, the Department of Justice will use all its tools to zealously protect freedom and hold accountable all those who would use violence to undermine it.”
“The indictment unsealed today reflects the FBI’s commitment to follow the facts wherever they lead, to work our way up to the leaders of criminal plots wherever they are, and to use our long reach to bring those responsible here to face justice in the United States,” said FBI Director Christopher Wray. “The conduct charged shows how far Iranian actors are willing to go to silence critics, even attempting to assassinate a U.S. citizen on American soil. We are determined to safeguard the rights of all Americans from the oppressive reach of hostile regimes.”
“Today’s charges underscore the Department’s commitment to protecting Americans and our fundamental values in the face of all forms of transnational repression,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “To foreign actors who plot violence on our soil believing they are out of our reach, know that we will pursue you, wherever you may be, until we deliver justice.”
“As alleged, the defendants are members of an organized crime group hired to assassinate, right here in New York City, a U.S. citizen of Iranian origin who has been critical of the regime’s autocracy and its disregard for human rights,” said U.S. Attorney Damian Williams for the Southern District of New York. “This is the second time in the past two years that this office and our partners at the FBI have disrupted plots originating from within Iran to kidnap or kill this victim for the ‘crime’ of exercising the right to free speech, to independent political thought, and to advocating for the rights of the oppressed and disenfranchised inside Iran. Thanks to the extraordinary efforts of the career prosecutors and FBI agents who led the investigation, this new plot to silence the victim has been disrupted and the defendants will face justice in an American court.”
According to the allegations contained in the superseding indictment, other court filings, and statements made during court proceedings:
Amirov is a leader in an Eastern European criminal organization (the Organization) who resides in Iran. Omarov also holds a leadership role in the Organization and resides in Eastern Europe. Mehdiyev, a member of the Organization, resides in Yonkers, New York. The Organization has ties to Iran and is violent, engaging in murders, kidnappings, assaults, and extortions, and members typically identify themselves with tattoos and other displays of eight-pointed stars.
Since at least July 2022, the Organization was tasked with carrying out the murder of a U.S. citizen of Iranian origin (the Victim), who previously has been the target of plots by the Government of Iran to intimidate, harass and kidnap the Victim. The Victim is a journalist, author and human rights activist, residing in Brooklyn, New York, who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran. As recently as 2020 and 2021, Iranian intelligence officials and assets 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. That plot was disrupted and exposed by the FBI and led to the filing of federal kidnapping conspiracy and other charges in the Southern District of New York against several participants in the plot in United States v. Farahani, et al., 21 Cr. 430.
About one year after the Farahani charges were filed, the Organization was tasked with carrying out the Victim’s assassination on U.S. soil. Beginning in approximately mid-July 2022, Amirov sent targeting information – which Amirov had received from other individuals in Iran – about the Victim and the Victim’s residence to Omarov. Omarov, in turn, communicated the targeting information to Mehdiyev in order to begin conducting surveillance of the Victim and reconnaissance of the Victim’s residence and surrounding neighborhood. Mehdiyev sent photographs and videos of the Victim’s residence to Omarov for further sharing with Amirov and the plot’s orchestrators in Iran.
After Mehdiyev’s initial surveillance of the Victim’s residence, Amirov and Omarov arranged for the delivery of a $30,000 cash payment to Mehdiyev in New York City in furtherance of the plot. Mehdiyev used a portion of this cash payment to buy an AK-47-style assault rifle along with two magazines for ammunition and at least 66 rounds. Mehdiyev bragged in electronic communications that he had procured for himself a “war machine.”
Between July 20 and 28, 2022, Mehdiyev repeatedly traveled to the Victim’s neighborhood to conduct surveillance and reconnaissance, sending reports of the Victim’s activities, photographs, and videos to Omarov for further distribution to Amirov. On July 24, 2022, after arriving at the Victim’s residence, Mehdiyev reported to Omarov that Mehdiyev was “at the crime scene.” Omarov encouraged Mehdiyev, “You are a man!” Mehdiyev described to Omarov that “we blocked it from both sides, it will be a show once she steps out of the house.” Omarov forwarded this report to Amirov, who responded, “God willing.”
Mehdiyev was unable to carry out the assassination that day and returned on several subsequent days to seek out opportunities to complete the murder mission. Amirov, Omarov and Mehdiyev schemed different strategies to attempt to draw the Victim out, including by attempting to ask the Victim for flowers from the Victim’s garden. On July 28, 2022, Mehdiyev sent Omarov a video taken from inside the car Mehdiyev was driving showing the assault rifle, along with the message that “we are ready.” The Victim, after observing suspicious activity outside the residence, left the area, and Mehdiyev drove away shortly afterwards. After Mehdiyev drove away from the Victim’s residence, he was stopped after a traffic violation, and during a subsequent search of the car, police officers found the assault rifle, 66 rounds of ammunition, approximately $1,100 in cash, and a black ski mask.
Amirov, Omarov, and Mehdiyev are charged with: (1) murder-for-hire, which carries a maximum sentence of 10 years in prison; (2) conspiracy to commit murder-for-hire, which carries a maximum sentence of 10 years in prison; and (3) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. Mehdiyev is additionally charged with possessing a firearm with an obliterated serial number, which carries a maximum sentence of five years in prison.
The FBI and its New York Field Office Counterintelligence-Cyber Division, the New York FBI Iran Threat Task Force, the New York FBI Counterintelligence Task Force and the New York FBI Joint Terrorism Task Force are investigating the case, with valuable assistance provided by the New York City Police Department (NYPD) and the NYPD Intelligence Bureau, as well as the Justice Department’s National Security Division and Office of International Affairs.
Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig, and Matthew J.C. Hellman for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Christopher M. Rigali of the National Security Division’s Counterintelligence and Export Control Section.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Leaders of Violent Drug Cartel Sentenced to Life and 50 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JULIO MARQUEZ ALEJANDRO, a/k/a “Chino,” was sentenced to life in prison, and LUIS BLONDET was sentenced to 50 years in prison, each for their leading roles in a brutal drug cartel that is responsible for dozens of murders, the bribery of corrupt police officers in Puerto Rico, and the distribution of thousands of kilograms of cocaine in New York, Puerto Rico, and elsewhere. In April 2022, a jury convicted MARQUEZ ALEJANDRO and BLONDET of racketeering and murder-related charges after a three-week trial before U.S. District Judge Jesse M. Furman, who sentenced MARQUEZ ALEJANDRO yesterday and BLONDET earlier today.
U.S. Attorney Damian Williams said: “For years, Julio Marquez Alejandro and Luis Blondet repeatedly resorted to heinous murder for their own benefit. Dozens of people died as a result of the reign of terror their organization carried out. But this Office is committed to seeking justice for otherwise forgotten victims, no matter how long it takes. Thanks to outstanding work from our law enforcement partners, Marquez Alejandro and Blondet will rightly spend decades in prison.”
According to the evidence at trial and other filings in the case:
MARQUEZ ALEJANDRO was one of the founding fathers of “La Organizacion de Narcotraficantes Unidos,” or “La ONU,” a criminal enterprise whose members and associates engaged in, from in or about 2004 to in or about 2016, dozens of murders, the bribery of corrupt police officers in Puerto Rico, and the distribution of thousands of kilograms of cocaine, including the shipment of cocaine from Puerto Rico to New York. Cocaine supplied by La ONU was distributed in New York City, including out of a children’s daycare center in the Bronx. BLONDET was also a member and leader of La ONU and one of MARQUEZ ALEJANDRO’s closest allies.
The evidence at trial established that MARQUEZ ALEJANDRO personally ordered, authorized, or otherwise helped facilitate the murders of at least 15 people to maintain or expand his power and profits. The evidence also showed that BLONDET personally participated in or helped facilitate the murders of seven people. For example:
On or about April 9, 2005, BLONDET murdered Crystal Martinez Ramirez at a party in San Juan, Puerto Rico. After Martinez Ramirez refused BLONDET’s sexual advances, BLONDET shot Martinez Ramirez in the head twice and dumped her body on a street corner.
On or about December 28, 2006, Israel Crespo Cotto was murdered on the orders of MARQUEZ ALEJANDRO because Crespo Cotto was believed to be cooperating with law enforcement. MARQUEZ ALEJANDRO’s assassins killed Crespo Cotto, a double amputee, while he was sitting in his wheelchair in the Manuel A. Perez public housing projects in San Juan, Puerto Rico. Crespo Cotto was shot 24 times.
On or about May 9, 2007, members of La ONU, including MARQUEZ ALEJANDRO, hired corrupt Puerto Rico police officers to participate in the murder of Anthony Castro Carrillo in Carolina, Puerto Rico, in exchange for a cash bonus. Members of La ONU and two corrupt cops stormed Castro Carrillo’s residence while dressed as police officers and shot and killed him.
MARQUEZ ALEJANDRO, BLONDET, and other members of La ONU arranged for the murder of Hommysan Cariño Bruno, a leader of a rival drug organization, paying a driver to kill Cariño Bruno and providing the murder weapon. Cariño Bruno was shot and killed while inside a van on or about April 29, 2008, in San Juan, Puerto Rico.
On or about March 20, 2009, Carlos Barbosa was murdered on the orders of MARQUEZ ALEJANDRO because Barbosa was believed to be plotting to seize power from MARQUEZ ALEJANDRO. Barbosa was shot over a dozen times while getting his hair cut at a barbershop in Levittown, Puerto Rico.
On or about November 27, 2009, Emanuel Correa Romero, a/k/a “Oreo,” was murdered on the orders of MARQUEZ ALEJANDRO. Members of La ONU beat Correa Romero until he appeared dead. After the assault, members of La ONU placed Correa Romero’s body into a suitcase and later reported back that they shot the suitcase dozens of times and then lit it on fire.
At the sentencing of MARQUEZ ALEJANDRO, Judge Furman emphasized MARQUEZ ALEJANDRO’s “stunning disrespect for the value of other human life” and “the scale of human suffering for which he is responsible.”
When sentencing BLONDET, Judge Furman underscored that BLONDET’s murder of Crystal Martinez Ramirez was “grotesque and inhumane.”
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In addition to their prison terms, MARQUEZ ALEJANDRO, 52, of San Juan, Puerto Rico, and BLONDET, 48, of San Juan, Puerto Rico, were ordered to forfeit $11.52 million and $212,000, as proceeds of their crimes, respectively.
Mr. Williams praised the investigative work of the U.S. Postal Inspection Service, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jamie E. Bagliebter, Peter J. Davis, Jacob R. Fiddelman, and Justin V. Rodriguez are in charge of the prosecution and represented the Government at trial with the assistance of Paralegal Specialists William Coleman and Christopher Sykes. Assistant U.S. Attorneys Jordan Estes, Andrew Thomas, Lara Pomerantz, Allison Nichols, and Dina McLeod also participated in the investigation and prosecution of the case.
Sixteen Members of A Washington Heights Narcotics Crew Charged with Narcotics and Firearms OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Patrick Freaney, Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), announced the unsealing of an Indictment today charging 16 members of a Washington Heights-based narcotics trafficking organization with conspiring to distribute narcotics in New York and with possessing firearms in furtherance of the narcotics trafficking conspiracy. ALEXANDER FRANCISCO, a/k/a “Javy,” ARISTIDES RAMIREZ, a/k/a “AR,” DAVID GLOVER, ALEX GARCIA, a/k/a “AG,” ANEUDY ALVARADO, a/k/a “Smiley,” JERIEL ABREU, a/k/a “Jerry Gunz,” LAZARETH PAULINO, a/k/a “Laz,” JOAN MERCEDES, a/k/a “Saul,” and ENMANUEL LIRIANO, a/k/a “Chubster,” a/k/a “Eman,” were arrested today and presented before United States Magistrate Judge Sarah L. Cave. CHRISTOPHER SANTOS, a/k/a “Casper,” was arrested previously in this matter. ALVIN EUSEBIO, a/k/a “Goo,” EDWARD RODRIGUEZ, and JAWAN MILLS, a/k/a “JD,” were already in custody in other jurisdictions. RAY EDUARDO, JONATHAN RODRIGUEZ, a/k/a “JR,” and EDDY CAMINERO, a/k/a “Malibu,” remain at large. This case is assigned to United States District Judge Gregory H. Woods.
U.S. Attorney Damian Williams said: “As alleged in the Indictment, these defendants injected substantial quantities of narcotics into the community, putting dangerous drugs on the streets and putting lives in danger. Thanks to the extraordinary work of our partners at NYPD, HSI, and the USSS, the defendants now face federal charges for their crimes.”
HSI Special Agent in Charge Ivan J. Arvelo said: “The success of today’s operation represents another important stride in our ongoing effort to combat narcotics trafficking and firearms use in New York City and also reinforces our commitment to our law enforcement partners. I’m proud of our agents’ extensive investigative work to apprehend these members from the Washington Heights-based 174th Street Crew - a crew who are known to traffic narcotics and possess firearms. HSI will continue to work closely with the New York City Police Department, the U.S. Secret Service, and all of our local, state, and federal law enforcement partners to dismantle these dangerous criminal enterprises and hold their members accountable for their blatant disregard for the law.”
NYPD Commissioner Keechant L. Sewell said: “This investigation, involving several law enforcement agencies across multiple jurisdictions, is a perfect example of how focused collaboration makes us all safer. The illegal drug trade wreaks havoc in our most vulnerable communities, and our job is to ensure that anyone who peddles this poison be brought to justice swiftly and successfully. This dangerous and exploitative criminal behavior will never be tolerated in our city, and I want to thank the U.S. Attorney’s Office for the Southern District of New York, Homeland Security Investigations New York, the New York Field Office of the United States Secret Service, and everyone else who worked on this case and made New York City safer for all the people we serve.”
USSS Special Agent in Charge Patrick Freaney said: “The Secret Service’s New York Field Office is proud to work with our law enforcement partners in keeping our local neighborhoods safe from the variety of dangerous threats that criminal organizations pose. The Secret Service, HSI, and the NYPD enjoy a robust partnership founded on our mutual dedications to public safety and security, and I can assure the public this partnership makes for a safer New York City for us all.”
As alleged in the Indictment unsealed today in Manhattan federal court and in other court papers and proceedings:[1]
From at least in or about 2019, up to and including January 2023, in the Southern District of New York and elsewhere, ALEXANDER FRANCISCO, ARISTIDES RAMIREZ, DAVID GLOVER, ALVIN EUSEBIO, ALEX GARCIA, ANEUDY ALVARADO, EDWARD RODRIGUEZ, JERIEL ABREU, RAY EDUARDO, LAZARETH PAULINO, JONATHAN RODRIGUEZ, JAWAN MILLS, JOAN MERCEDES, EDDY CAMINERO, ENMANUEL LIRIANO, and CHRISTOPHER SANTOS operated a large-scale narcotics trafficking organization in, among other places, New York City. This organization (the “174th Street Crew”) operated principally in the Washington Heights neighborhood of Manhattan between West 174th and West 175th Streets and Amsterdam and Audubon Avenues (the “Set”). Within the Set, the 174th Street Crew conducted narcotics trafficking on the street and from multiple store fronts. The 174th Street Crew ran an organized, sophisticated narcotics trafficking operation that is best described as a street pharmacy, which sold a variety of narcotics, both illicit and prescription, to its customers, including methamphetamine, cocaine, heroin, crack cocaine, fentanyl, oxycodone, Xanax, and marijuana. The crew operated on the Set at all hours, and its members were assigned to work in designated shifts. Managers ensured that the Set was properly staffed for narcotics distribution and fined and disciplined members who missed work or demanded proof of illness (such as a doctor’s note or picture of a positive COVID-19 test).
Members and managers of the 174th Street Crew frequently carried and used firearms, including to protect the stash of narcotics belonging to the 174th Street Crew. In addition to one firearm seized today, twice in the past 13 months – in December 2021 and August 2022 – NYPD officers recovered handguns possessed by 174th Street Crew members holding stashes of narcotics on the Set.
During simultaneous arrests and searches conducted today in New Jersey and New York, law enforcement agents seized quantities of methamphetamine, cocaine, heroin, oxycodone, Percocet, and suboxone, as well as large sums of cash.
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All defendants are charged with conspiracy to distribute and possess with intent to distribute (i) 500 grams and more of mixtures and substances containing a detectable amount of methamphetamine, its salts, isomers, or salts of its isomers; (ii) 500 grams and more of mixtures and substances containing a detectable amount of cocaine; (iii) mixtures and substances containing a detectable amount of heroin; (iv) mixtures and substances containing a detectable amount of fentanyl; and (v) mixtures and substances containing a detectable amount of oxycodone. This charge carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. All defendants are also charged with possessing firearms in furtherance of the narcotics trafficking offense charged in the Indictment, which carries a mandatory minimum sentence of five years in prison, which must be served consecutively to any other sentence imposed, and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of a defendants would be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department, the U.S. Secret Service, and the Organized Crime Drug Enforcement Task Forces (“OCDETF”). This prosecution is part of an OCDETF operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The prosecution of this case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Ashley C. Nicolas and Andrew W. Jones are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Suffolk County Legislator and Co-Conspirator Convicted of Defrauding Mortgage Lender Out of More Than A Quarter of A Million DollarsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the convictions of GEORGE GULDI, a former Suffolk County legislator and disbarred attorney, and VICTORIA DAVIDSON for defrauding Ditech Financial LLC, a mortgage lender, out of more than a quarter of a million dollars. The jury convicted GULDI and DAVIDSON of all counts following an approximately two-week trial before U.S. District Judge Alvin K. Hellerstein.
U.S. Attorney Damian Williams said: “George Guldi, while in prison, concocted and conducted a scheme along with his co-conspirator, Victoria Davidson, to brazenly steal more than $250,000 through blatant lies. Today, a jury held them accountable for their scheme, and they will both face justice for their shameless misconduct.”
According to the Complaint, the Superseding Indictment, court filings, evidence presented during the trial, and public information:
In February 2017, Ditech Financial LLC (“Ditech”), a mortgage lender, received a payment of approximately $250,000 from JPMorgan Chase in connection with the settlement of a civil lawsuit between several financial institutions. Ditech mistakenly treated the funds as a payment from GULDI toward his own mortgage, and it sent a letter to GULDI in March 2017 stating that it would not credit the payment because he owed more than the payment.
GULDI, who was in state prison at the time for insurance-related offenses and knew that he had not actually sent any money to Ditech, then enlisted his former girlfriend, DAVIDSON, to contact Ditech and try to “break” the funds “loose,” as he put it in a recorded call from prison. In the ensuing weeks, DAVIDSON called Ditech at least 19 times and, during those calls, told multiple lies in an attempt to obtain the funds — including falsely stating that she was an attorney and an officer of GULDI’s company and that GULDI had purportedly sent the funds to Ditech “accidentally” and wanted them returned.
In April 2017, after weeks of DAVIDSON’s misrepresentations, Ditech wired the funds to DAVIDSON’s personal bank account. Within two weeks, DAVIDSON had drained the bulk of the funds out of her account, paying various of her and GULDI’s expenses and purchasing multiple cashier’s checks. Within months, the money was gone.
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GULDI, 69, of Ludlow, Vermont, and DAVIDSON, 57, of Lakeville, Connecticut, were each convicted of one count of conspiracy to commit wire fraud and bank fraud, one count of wire fraud, and one count of bank fraud. The conspiracy and bank fraud counts carry a maximum sentence of 30 years in prison, and the wire fraud count carries a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as sentencing of the defendants will be determined by the judge. GULDI is scheduled to be sentenced on May 30, 2023, and DAVIDSON is scheduled to be sentenced on May 31, 2023.
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 Madison Reddick Smyser, Jonathan L. Bodansky, and Daniel C. Richenthal, with the assistance of Paralegal Specialists Arjun Ahuja and William Sirmon IV, are in charge of the prosecution.
Florida Woman Arrested for Defrauding Holocaust Survivor of $2.8 Million in Connection with Romance ScamRead the Press Release
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 an Indictment today charging PEACHES STERGO with engaging in a years-long scheme to defraud an 87-year-old Holocaust survivor of his life savings. STERGO was arrested today and will be presented in the Middle District of Florida. The case has been assigned to U.S. District Judge Edgardo Ramos.
U.S. Attorney Damian Williams said: “As alleged, for years, Stergo deceived an 87-year-old Holocaust survivor, maliciously draining his life savings so she could become a millionaire through fraud. Stergo forged documents and impersonated a bank employee in exchange for a life of fancy trips, Rolex watches, and luxury purchases. Today’s arrest reemphasizes this Office’s commitment to seeking justice for victims of financial frauds.”
FBI Assistant Director Michael J. Driscoll said: "Today we allege the defendant callously preyed on a senior citizen simply seeking companionship, defrauding him of his life savings. The FBI is determined to get justice for victims of fraud and to ensure that scammers face justice for their actions.”
According to the allegations contained in the Indictment, which was unsealed today in Manhattan federal court:[1]
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.
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STERGO, 36, of Champions Gate, Florida, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Attorneys and Associate of Immigration Law Firm Plead Guilty to Participating in Asylum Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ILONA DZHAMGAROVA, ARTHUR ARCADIAN, and IGOR REZNIK have each pled guilty to conspiracy to commit immigration fraud. DZHAMGAROVA and ARCADIAN pled guilty today, and REZNIK pled guilty on August 24, 2022, each before U.S. District Court Judge Mary Kay Vyskocil.
U.S. Attorney Damian Williams said: “The defendants — a husband and wife team of licensed immigration attorneys and a writer who worked with them — invented offensive lies to cheat our country’s asylum process, which is meant to protect vulnerable people who legitimately fear persecution because of their race, religion, political beliefs, or sexual orientation. When attorneys cynically exploit those fears for financial gain by pedaling false claims and coaching clients to lie under oath, they abuse the trust placed in them and make a mockery of the asylum system. With their guilty pleas, the defendants are being held accountable for their serious crimes.”
According to the Indictment against DZHAMGAROVA, ARCADIAN, and REZNIK, other documents filed in this case, and statements made in open court:
Between November 2018 and December 2021, ILONA DZHAMGAROVA, an immigration attorney, ran the Dzhamgarova Firm, an immigration services firm based in Brooklyn, New York. The Dzhamgarova Firm worked with clients — primarily aliens from Russia and the Commonwealth of Independent States — seeking visas, asylum, citizenship, and other forms of legal status in the United States. Among other things, the Dzhamgarova Firm advised certain of its clients regarding the manner in which they were most likely to obtain asylum in this country, fully understanding that those clients did not legitimately qualify for asylum. The firm also prepared and submitted to United States Citizenship and Immigration Services (“USCIS”) clients’ fraudulent Form I-589 asylum applications, asylum affidavits — statements of an asylum applicant’s personal history and claimed basis for asylum, often including allegations of past persecution — and related supporting documentation. Members and associates of the firm also coached certain clients to lie under oath during interviews conducted by USCIS Asylum Officers and provided legal representation to their clients during various immigration proceedings.
Among other things, DZHAMGAROVA advised clients to seek asylum by falsely claiming that they were members of the lesbian, gay, bisexual, transgender, and queer community who suffered persecution in their native countries, when DZHAMGAROVA fully understood that these clients were not members of that community and suffered no such persecution. Additionally, DZHAMGAROVA and her husband, ARTHUR ARCADIAN, also an attorney, prepared and submitted clients’ fraudulent asylum applications and affidavits to USCIS, under penalty of perjury, fully understanding that these documents at times contained material falsehoods. DZHAMGAROVA, ARCADIAN, and REZNIK also coached certain clients to lie in asylum interviews conducted by USCIS asylum officers and represented these clients as they lied under oath during immigration proceedings.
The Dzhamgarova Firm also employed writers, including IGOR REZNIK, who knowingly concocted and drafted clients’ fraudulent asylum affidavits so that they could be submitted as part of clients’ asylum applications. These affidavits, which were designed to support clients’ persecution claims, conveyed narrations of clients’ personal histories that were filled with falsehoods, including events and incidents of alleged persecution that were completely made up by REZNIK.
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DZHAMGAROVA, 46, ARCADIAN, 44, both of Brooklyn, New York, and REZNIK, 41, of New York, New York, each pled guilty to one count of conspiring to commit immigration fraud and each face a maximum of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. DZHAMGAROVA and ARCADIAN are scheduled to be sentenced by U.S. District Court Judge Mary Kay Vyskocil on May 31, 2023. REZNIK is scheduled to be sentenced by Judge Vyskocil on May 5, 2023.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Eurasian Organized Crime Task Force, USCIS’s New York Asylum Office and Fraud Detection and National Security Unit, and Homeland Security Investigations. Mr. Williams further thanked United States Customs and Border Protection for its assistance.
This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys David R. Felton and Jonathan E. Rebold are in charge of the prosecution.
Vitaly Borker Pleads Guilty to Defrauding Customers of His Eyewear Websites for the Third TimeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that VITALY BORKER, the operator of “EyeglassesDepot.com” and other online retailers of purported designer eyewear, pled guilty today to one count of wire fraud in connection with a scheme to defraud customers of his websites. BORKER pled guilty before United States District Judge Jed S. Rakoff.
U.S. Attorney Damian Williams said: “Once again, Vitaly Borker has pled guilty to crimes relating to his fraudulent operation of eyewear websites. Borker’s plea today demonstrates this Office’s intolerance for recidivism, and we can only hope that the third time is the charm and that Borker finally learns his lesson.”
According to the previously filed Complaint and Indictment in this case and statements made in court:
Beginning in at least June 2020, after being released from federal custody and entering a Residential Reentry Center, VITALY BORKER operated an eyewear sales and repair services website called EyeglassesDepot.com. EyeglassesDepot.com claimed, among other things, that it sold “brand new and 100% authentic designer eyeglasses and sunglasses” and that it had “thousands of pairs of glasses in stock…ready for shipping as early as TODAY.” In truth, however, the eyewear sold to customers of EyeglassesDepot.com was often used or counterfeit. Rather than carrying a large inventory of “brand new and 100% authentic eyewear,” EyeglassesDepot.com filled its customers’ orders by purchasing comparable items on a third-party online marketplace (the “Marketplace”). The eyewear purchased by EyeglassesDepot.com from the Marketplace was often used or counterfeit, but EyeglassesDepot.com passed off the glasses as new and authentic. In addition, while EyeglassesDepot.com claimed to be a “leader in the repair of sunglasses and eyeglasses” and able to “fit any eyeglasses or sunglasses with your custom prescriptions,” customers who sent eyewear to EyeglassesDepot.com either did not have their eyewear repaired at all or otherwise received unsatisfactory work.
In order to conceal his role in operating EyeglassesDepot.com, BORKER – who has twice previously been convicted in this District of crimes relating to his operation of eyewear websites – used the identities of other individuals in connection with the operation of EyeglassesDepot.com.
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BORKER, 46, of Brooklyn, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. BORKER is scheduled to be sentenced at 10:00 a.m. on April 21, 2023, by U.S. District Judge Jed S. Rakoff.
Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Matthew Weinberg, William Kinder, Jeffrey Coyle, and Sarah Mortazavi are in charge of the prosecution.
Statement of U.S. Attorney Damian Williams on the Conviction of Robert HaddenRead the Press Release
“Robert Hadden was a predator in a white coat. For years, he cruelly lured women who sought professional medical care to his offices in order to gratify himself. Hadden’s victims trusted him as a physician, only to instead become victims of his heinous predilection. We thank and commend the brave women who came forward to tell their stories, many of whom testified at trial, to end his years-long cycle of abuse.”
Former CEO of Email Security Company Sentenced to Five Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT BERNARDI, the founder and former Chief Executive Officer of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), was sentenced to five years in prison by United States District Judge Paul G. Gardephe. BERNARDI was sentenced for orchestrating a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer.
U.S. Attorney Damian Williams said: “Robert Bernardi repeatedly lied and impersonated others in order to convince investors and lenders to fund his failing company. Rather than admit that GigaTrust was underperforming, Bernardi concocted multiple schemes to keep the company afloat, defrauding investors and lenders out of millions. Today’s sentence is a just consequence of Bernardi’s fraudulent actions”
According to the allegations in the Indictment and other filings and statements made in court:[1]
From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions. BERNARDI founded GigaTrust and served as its CEO. BERNARDI, along with two co-defendants, NIHAT CARDAK and SUNIL CHANDRA, devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender.
Specifically, BERNARDI sent fabricated audit materials to a New York-based investment firm, and BERNARDI and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars. After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, BERNARDI and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel. Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), BERNARDI and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust. BERNARDI recruited CHANDRA to pose as one of GigaTrust’s alleged customers on a call with Lender-1. BERNARDI and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal.
GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.
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In addition to his prison term, BERNARDI, 68, of McLean, Virginia, was sentenced to three years of supervised release and ordered to forfeit $3,442,264 and to pay restitution to his victims.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case. Mr. Williams further thanked the Securities and Exchange Commission, which has separately filed a civil enforcement action against the defendants, for its assistance in the investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Peter J. Davis and Emily A. Johnson are in charge of the prosecution.
NIHAT CARDAK pled guilty on January 12, 2023, and is scheduled to be sentenced on May 16, 2023. The charges contained in the Indictment are merely accusations as to SUNIL CHANDRA, and CHANDRA is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
Former Special Agent in Charge of the FBI New York Counterintelligence Division Charged with Violating U.S. Sanctions on RussiaRead the Press Release
A former Special Agent in Charge of the FBI New York Counterintelligence Division and a former Soviet and Russian diplomat were arrested Saturday on criminal charges related to their alleged violating and conspiring to violate the International Emergency Economic Powers Act (IEEPA) and conspiring to commit money laundering and money laundering.
According to court documents, Charles F. McGonigal, 54, of New York City, and Sergey Shestakov, 69, of Morris, Connecticut, are charged in a five-count indictment unsealed today in the Southern District of New York with violating and conspiring to violate the IEEPA, and with conspiring to commit money laundering and money laundering.
According to court documents, on April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Oleg Deripaska as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy. According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.
McGonigal is a former Special Agent in Charge (SAC) of FBI’s Counterintelligence Division in New York who retired in 2018. While working at the FBI, McGonigal supervised and participated in investigations of Russian oligarchs, including Deripaska. Sergey Shestakov is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.
In 2021, McGonigal and Shestakov conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following their negotiations with an agent of Deripaska, McGonigal and Shestakov agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, McGonigal, Shestakov and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract and using the same shell companies to send and receive payment from Deripaska.
McGonigal and Shestakov were aware that their actions violated U.S. sanctions because, among other reasons, while serving as SAC, McGonigal received then-classified information that Deripaska would be added to a list of oligarchs considered for sanctions as part of the process that led to the imposition of sanctions against Deripaska. In addition, in 2019, McGonigal and Shestakov worked on behalf of Deripaska in an unsuccessful effort to have the sanctions against Deripaska lifted. In November 2021, when FBI agents questioned Shestakov about the nature of his and McGonigal’s relationship with Deripaska’s agent, Shestakov made false statements in a recorded interview.
McGonigal and Shestakov are charged in the Southern District of New York with one count of conspiring to violate and evade U.S. sanctions, in violation of the IEEPA, one count of violating IEEPA, one count of conspiring to commit money laundering and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. Shestakov is also charged with one count of making false statements, which carries a maximum sentence of five years in prison. Shestakov and McGonigal were arrested in New York on Saturday and will make their initial court appearances this afternoon before Magistrate Judge Sarah L. Cave in Manhattan federal court.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York, Assistant Director Alan E. Kohler Jr. of the FBI Counterintelligence Division, and Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.
The FBI is investigating the case, with valuable assistance provided by the U.S. Customs and Border Protection as well as the New York City Police Department.
Assistant U.S. Attorneys Hagen Scotten, Rebecca T. Dell and Derek Wikstrom for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Special Agent in Charge of the New York FBI Counterintelligence Division Charged with Violating U.S. Sanctions on RussiaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a five-count Indictment charging CHARLES MCGONIGAL and SERGEY SHESTAKOV with violating and conspiring to violate the International Emergency Economic Powers Act (“IEEPA”) and with conspiring to commit money laundering and money laundering. SHESTAKOV is also charged with making material misstatements to the FBI. The defendants were arrested on Saturday evening, and they will be presented this afternoon before Magistrate Judge Sarah L. Cave in Manhattan federal court. The case has been assigned to U.S. District Judge Jennifer H. Rearden.
U.S. Attorney Damian Williams said: “As alleged, Charles McGonigal, a former high-level FBI official, and Sergey Shestakov, a Court interpreter, violated U.S. sanctions by agreeing to provide services to Oleg Deripaska, a sanctioned Russian oligarch. They both previously worked with Deripaska to attempt to have his sanctions removed, and, as public servants, they should have known better. This Office will continue to prosecute those who violate U.S. sanctions enacted in response to Russian belligerence in Ukraine in order to line their own pockets.”
FBI Assistant Director in Charge Michael J. Driscoll said: “The FBI is committed to the enforcement of economic sanctions designed to protect the United States and our allies, especially against hostile activities of a foreign government and its actors. Russian oligarchs like Oleg Deripaska perform global malign influence on behalf of the Kremlin and are associated with acts of bribery, extortion, and violence. As alleged, Mr. McGonigal and Mr. Shestakov, both U.S. citizens, acted on behalf of Deripaska and fraudulently used a U.S. entity to obscure their activity in violation of U.S. sanctions. After sanctions are imposed, they must be enforced equally against all U.S. citizens in order to be successful. There are no exceptions for anyone, including a former FBI official like Mr. McGonigal. Supporting a designated threat to the United States and our allies is a crime the FBI will continue to pursue aggressively.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court:[1]
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support to individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it prohibit making or receiving any funds, goods, or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Oleg Deripaska as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the “OFAC Sanctions”). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.
CHARLES MCGONIGAL is a former Special Agent in Charge (“SAC”) of FBI’s Counterintelligence Division in New York, who retired in 2018. While working at the FBI, MCGONIGAL supervised and participated in investigations of Russian oligarchs, including Deripaska. SERGEY SHESTAKOV is a former Soviet and Russian diplomat who later became a U.S. citizen and a Russian interpreter for courts and government offices.
In 2021, MCGONIGAL and SHESTAKOV conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018. Specifically, following their negotiations with an agent of Deripaska, MCGONIGAL and SHESTAKOV agreed to and did investigate a rival Russian oligarch in return for concealed payments from Deripaska. As part of their negotiations with Deripaska’s agent, MCGONIGAL, SHESTAKOV, and the agent attempted to conceal Deripaska’s involvement by, among other means, not directly naming Deripaska in electronic communications, using shell companies as counterparties in the contract that outlined the services to be performed, using a forged signature on that contract, and using the same shell companies to send and receive payments from Deripaska.
MCGONIGAL and SHESTAKOV were aware that their actions violated U.S. sanctions because, among other reasons, while serving as SAC, MCGONIGAL received then-classified information that Deripaska would be added to a list of oligarchs considered for sanctions as part of the process that led to the imposition of sanctions against Deripaska. In addition, in 2019, MCGONIGAL and SHESTAKOV worked on behalf of Deripaska in an unsuccessful effort to have the sanctions against Deripaska lifted. In November 2021, when FBI agents questioned SHESTAKOV about the nature of his and MCGONIGAL’s relationship with Deripaska’s agent, SHESTAKOV made false statements in a recorded interview.
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CHARLES MCGONIGAL, 54, of New York, New York, and SERGEY SHESTAKOV, 69, of Morris, Connecticut, are charged with one count of conspiring to violate and evade U.S. sanctions, in violation of the IEEPA, one count of violating the IEEPA, one count of conspiring to commit money laundering, and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. SHESTAKOV is also charged with one count of making false statements, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding work of the FBI New York Field Office’s Counterintelligence Division and the valuable assistance from U.S. Customs and Border Protection as well as the New York City Police Department.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Hagan Scotten, Rebecca T. Dell, and Derek Wikstrom are in charge of the prosecution with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.
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 Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Lawrence Ray Sentenced for Years-Long Predatory Crimes Against Students at Sarah Lawrence College and OthersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that LAWRENCE RAY, a/k/a “Lawrence Grecco,” received a sentence of 60 years in prison for racketeering conspiracy, violent crime in aid of racketeering, extortion, sex trafficking, forced labor, tax evasion, and money laundering offenses. RAY was sentenced today by United States District Judge Lewis J. Liman after being convicted at trial in April 2022.
U.S. Attorney Damian Williams said: “Larry Ray is a monster. For years, he inflicted brutal and lifelong harm on innocent victims. Students who had their lives ahead of them. He groomed them and abused them into submission for his own gain. Through physical and psychological abuse, he took control over his victims’ minds and bodies and then extracted millions of dollars from them. The sentence imposed today will ensure that Ray will never harm victims again. I commend the brave victims who testified in Court in the face of incredible trauma. I also thank the career prosecutors in this Office and our law enforcement partners who made the just conviction and sentence in this case possible.”
According to the Indictment and the evidence at trial:
From in or about 2010 through the present, LAWRENCE RAY subjected a group of college students and other victims he met after moving into his daughter’s dorm room at Sarah Lawrence College to sexual and psychological manipulation and physical abuse. RAY’s tactics included sleep deprivation, psychological and sexual humiliation, verbal abuse, threats of physical violence, physical violence, threats of criminal legal action, alienating the victims from their families, and exploiting the victims’ mental health vulnerabilities.
Through this manipulation and abuse, RAY extracted false confessions from the victims to causing purported damages to RAY and his family and associates and then extorted payment for those purported damages through several means. The victims made payments to RAY by draining their parents’ savings, opening credit lines, soliciting contributions from acquaintances, selling real estate ownership, and at RAY’s direction, performing unpaid labor for RAY and earning money through prostitution.
Through fear, violence, and coercion, RAY forced one female victim to engage in commercial sex acts to pay damages to RAY that she did not actually owe. Beginning when she was just a college student, RAY sexually groomed this victim and collected sexually explicit photographs and other personal information, which he then used to coerce her into continued commercial sex acts. RAY also used physical violence. On one occasion, RAY tied his victim to a chair, placed a plastic bag over her head, and nearly suffocated her. RAY collected millions of dollars in forced prostitution proceeds from this victim.
In addition, RAY forced three female victims to perform unpaid labor on a family member’s property in North Carolina. Through a course of psychological and physical abuse, RAY forced these three victims to do extensive physical labor, sometimes in the middle of the night, for no pay.
Associates of RAY helped RAY collect and transfer the criminal proceeds, which RAY shared with at least two associates. RAY then laundered his criminal proceeds through an internet domain business and evaded paying taxes on his proceeds.
At the sentencing today, Judge Liman underscored “the resiliency of the human spirit and the courage of the victims.”
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In addition to the prison term, RAY, 63, of Piscataway, New Jersey, was sentenced to a lifetime of supervised release. He was also ordered to forfeit $2,444,349, the proceeds from the sale of his GoDaddy portfolio, and the Pinehurst, North Carolina, residence where the forced labor took place. Restitution will be decided by the Court within 90 days of today’s sentencing.
Mr. Williams praised the efforts of the Federal Bureau of Investigation and the New York City Police Department.
RAY's co-defendant Isabella Pollok is scheduled to be sentenced on February 22, 2023, at 11:00 a.m.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Danielle Sassoon, Mollie Bracewell, and Lindsey Keenan are in charge of the prosecution.
Man Pleads Guilty to Committing Multi-Million-Dollar Fraud Against Medicare by Selling Bogus Orders for Medical EquipmentRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MATTHEW TAYLOR WITKOWSKI pled guilty today to a one-count criminal Information charging him with conspiracy to commit health care fraud. WITKOWSKI is scheduled to be sentenced on April 20, 2023, before United States District Judge Denise Cote.
U.S. Attorney Damian Williams said: “Medicare is a valuable, taxpayer-funded program designed to provide affordable health care to people over 65 or with disabilities, not to enrich those who would seek to benefit themselves through fraud. Today, Matthew Taylor Witkowski admitted to illegally selling orders for durable medical equipment, which were used to bilk Medicare out of millions of dollars.”
According to the Information, statements made in court, and other publicly filed documents in this case:
From at least August 2019 through the date of his arrest in July 2022, WITKOWSKI and a co-conspirator (“CC-1”) engaged in a scheme to defraud Medicare by illegally obtaining and selling fraudulent written orders for goods and services paid for by Medicare, including for durable medical equipment (“DME”). Using a call center that he 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 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 health-care providers enrolled in the Medicare program, as well as the purported electronic signatures of these providers, which were falsified and created without the authorization or knowledge of these providers.
During the course of the scheme, WITKOWSKI took 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 CC-1, and to Sales Drive Marketing LLC, a company owned and controlled by WITKOWSKI.
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WITKOWSKI, 37, an American citizen who has been residing in the Dominican Republic, and is currently on bail in Florida, pled guilty today to a single count of conspiracy to commit health care fraud. That charge carries a maximum 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 the sentencing judge.
Mr. Williams praised the 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.
Former West Point Staff Sergeant Sentenced to 42 Months in Prison for Possession of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that PATRICK EDWIN GORYCHKA was sentenced to 42 months in prison by United States District Judge Kenneth M. Karas for his possession of child pornography. The sentencing today followed GORYCHKA’s guilty plea on May 23, 2022.
U.S. Attorney Damian Williams said: “The availability of child pornography spread through chatrooms and discreet websites is every modern parent’s worst nightmare. This Office will continue to prioritize protecting our most vulnerable citizens, children, from this kind of exploitation.”
According to documents filed in this case and statements made in related court proceedings:
In October 2019, the Federal Bureau of Investigation (“FBI”) received information from an FBI Online Undercover Employee (“UC-1”) concerning UC-1’s communications with an individual using the Kik username “epg84,” who was later identified as GORYCHKA, in a Kik chat room known to be frequented by individuals with a sexual interest in children. UC-1 identified himself as a 48-year-old uncle who had engaged in sex acts with his niece. GORYCHKA, who identified himself as “Eric G.,” asked UC-1 for photos of UC-1’s niece. UC-1 told GORYCHKA that UC-1 had met a “pedo mom” (“UC-2”) in New York. UC-1 told GORYCHKA that “she keeps kids of illegals while they work for a couple weeks” and “makes some $ on the side.” GORYCHKA stated, “Omg that’s hot” and asked UC-1 to connect him to UC-2.
Thereafter, UC-2, going by the name “Jane,” and GORYCHKA engaged in numerous communications from in or about October 31, 2019, through in or about November 16, 2019. During these communications, GORYCHKA said he was interested in “preteens” and told UC-2, “I heard that you could potentially facilitate certain things.” GORYCHKA said that he was interested in a “similar setup” as UC-1 and told UC-2, “I have money.”
On November 2, 2019, GORYCHKA transmitted two links to Mega, a New Zealand-based cloud storage platform that permits users to store and share electronically stored information, including images and videos.[1] Both links contained numerous images and videos of children engaging in sexually explicit activity.
In imposing the sentence, Judge Karas underscored, “The possession of child pornography feeds a business that exploits the most vulnerable in our society.”
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In addition to the prison term, Judge Karas sentenced GORYCHKA, 40, of Manitowoc, Wisconsin, to five years of supervised release.
Mr. Williams praised the efforts of the FBI, West Point’s Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Town of New Windsor 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.
[1] With respect to Mega, a user can send a link to a Mega cloud account to another person. Once the link to the Mega cloud account is transmitted, the person who clicks on the link to the cloud account can access, view, and download the files contained in that Mega cloud account.
Edward Mullins, Former President of NYPD Sergeants’ Union, Pleads Guilty to Defrauding Union and Its MembersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that EDWARD MULLINS, the former President of the Sergeants Benevolent Association (“SBA”), the union that represents all current and former Sergeants of the New York City Police Department, pled guilty today to one count of wire fraud in connection with a scheme to steal hundreds of thousands of dollars from the SBA through the submission of fraudulent expense reports. MULLINS pled guilty before United States District Judge John G. Koeltl.
U.S. Attorney Damian Williams said: “Edward Mullins promised to look out for the thousands of hard-working NYPD Sergeants who are members of the SBA. Instead, as admitted today in federal court, he stole hundreds of thousands of dollars from them to fund his lavish lifestyle. Thanks to the hard work of the FBI, Mullins’s betrayal has been exposed, and he now faces jail time and significant financial penalties.”
According to the Information filed in the case and statements made in court:
The SBA is the fifth-largest police union in the United States with its headquarters located in lower Manhattan. The SBA’s membership consists of all active and retired Sergeants of the NYPD, with approximately 13,000 members. From 2002 until October 2021, EDWARD MULLINS served as President of the SBA.
Beginning in 2017, MULLINS devised a scheme to steal hundreds of thousands of dollars from the SBA. MULLINS used his personal credit card to pay for meals at high-end restaurants and to purchase luxury personal items, among other things, and then submitted false and inflated expense reports to the SBA, representing that his charges were legitimate SBA expenditures when in fact they were not. MULLINS routinely included meals on his expense reports that were not SBA-related. MULLINS also inflated the costs of his meals – whether SBA-related or not. For example, if the actual cost of a meal was $522.55, MULLINS would seek reimbursement from the SBA for $822.55 and pocket the difference. MULLINS would also take personal expenses like supermarket bills and claim them on his expense reports as SBA-related meals for which he also sought reimbursement.
MULLINS’s fraudulent expenses were paid through the SBA’s Contingent Fund, which is funded primarily through annual dues paid by SBA members. In total, MULLINS stole at least $600,000 from the SBA through the filing of hundreds of fraudulent expense reports.
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MULLINS, 61, of Port Washington, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. As part of his plea agreement, MULLINS agreed to forfeit $600,000 to the United States and to make restitution in the amount of $600,000 to the SBA.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. MULLINS is scheduled to be sentenced at 12:00 p.m. on May 25, 2023, by U.S. District Judge John G. Koeltl.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the FBI/New York City Police Department Public Corruption Task Force.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alexandra Rothman, Andrew Rohrbach, and David Robles and are in charge of the prosecution.
Bronx Man Convicted in Connection with June 2022 Shooting of Man in ElevatorRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of STEPHEN SIMMONS, a/k/a “S-Dot,” for possessing ammunition that he used to shoot a man in the leg on June 16, 2022. The jury convicted SIMMONS following trial before U.S. District Judge Valerie E. Caproni.
U.S. Attorney Damian Williams said: “Stephen Simmons possessed ammunition in furtherance of a violent shooting in the elevator of a residential apartment building. Residents of the Bronx should rest easier tonight knowing that this dangerous recidivist is off the streets.”
According to the allegations contained in the Indictment and the evidence presented during the trial:
On June 16, 2022, SIMMONS chased a man into the elevator of a large apartment building in the Bronx. SIMMONS stood just feet away and fired his gun into the elevator while three individuals stood trapped inside. SIMMONS’s shot hit the victim in the leg, and the victim was thereafter transported to the hospital for emergency medical attention. SIMMONS fled the scene and was subsequently arrested on July 22, 2022.
At the time of the June 16, 2022, shooting, SIMMONS had been previously convicted of a felony.
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SIMMONS, 37, of the Bronx, New York, was convicted of one count of being a felon in possession of ammunition, which carries a maximum penalty 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. SIMMONS is scheduled to be sentenced by Judge Caproni on May 9, 2023.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, and Task Force Officers assigned to the United States Attorney’s Office.
The case is being supervised by the Office’s General Crimes Unit. Assistant U.S. Attorneys Jamie Bagliebter, Courtney Heavey, and Lindsey Keenan, with the assistance of Paralegal Specialist Isabel Loftus, are in charge of the prosecution.
Amazon Cited by OSHA Based on SDNY Referrals for Serious Violations That Exposed Workers to Safety HazardsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Douglas L. Parker, Assistant Secretary of Labor for Occupational Safety and Health, announced that earlier today the United States Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued citations for three facilities to AMAZON.COM SERVICE LLC (“AMAZON”) arising out of referrals received from the United States Attorney’s Office for the Southern District of New York (the “Office”).
These citations are for serious violations of Section 5(a)(1) of the Occupational Safety and Health Act (“OSH Act”) for AMAZON’s failure to furnish a place of employment which was free from recognized hazards that were causing or likely to cause death or serious physical harm to employees. Specifically, the citations explained that employees at three AMAZON facilities were exposed to ergonomic hazards which put them at high risk for lower back injuries and other musculoskeletal disorders (“MSDs”). These hazards resulted from the high frequency with which workers are required to lift packages and other items; the heavy weight of the items; awkward postures, such as twisting, bending, and long reaches while lifting; and long hours required to complete assigned tasks. These facilities are located in New Windsor, New York, Waukegan, Illinois, and Deltona, Florida. Additionally, at the Deltona, Florida, warehouse, OSHA also cited AMAZON for exposing workers to the hazard of being struck by falling boxes with merchandise.
U.S. Attorney Damian Williams said: “Amazon became the nation’s largest online retailer thanks, in no small part, to the hundreds of thousands of Americans who work each year in Amazon’s massive warehouses. Each of these workers has the right to a place of work free from severe safety hazards. These citations are a step toward protecting the hard-working people at Amazon’s warehouses who have been laboring under hazardous conditions. OSHA’s investigation regarding workplace safety hazards at Amazon warehouses continues. And our Office is investigating possible fraudulent conduct designed to hide injuries from OSHA and others. We ask that anyone who has information relevant to this investigation contact the U.S. Attorney’s Office.”
OSHA Assistant Secretary of Labor Douglas L. Parker said: “Each of these inspections found work processes that were designed for speed but not safety, and they resulted in serious worker injuries. While Amazon has developed impressive systems to make sure its customers’ orders are shipped efficiently and quickly, the company has failed to show the same level of commitment to protecting the safety and well-being of its workers. Our hope is that the findings of our investigations inspire Amazon and other warehouses to make the safety and health of their workers a core value.”
These citations arise out of workplace safety inspections at six AMAZON warehouses across the country that OSHA conducted beginning in mid-July and early August of last year in response to referrals received from the Office. OSHA’s investigation at three of AMAZON’s facilities — located outside of Albany, New York, Boise, Idaho, and Denver, Colorado — is ongoing. Per the OSH Act, OSHA has six months from a violation to issue citations. In mid-December, OSHA issued citations for AMAZON’s failure to appropriately log injuries for reporting to OSHA at all six facilities.
The Civil Division of the Office is also investigating worker safety hazards at AMAZON warehouses across the country, as well as whether AMAZON engaged in a fraudulent scheme designed to hide the true number of injuries to AMAZON workers and whether AMAZON made false representations to lenders about those injuries and its safety record to obtain credit.
Members of the public can report workplace safety and injury-related issues at AMAZON warehouses to this Office. Anyone who has information about safety issues — including safety issues related to the pace of work — or a failure to report injuries, or inadequate medical care at AMAZON’s onsite first-aid center or at a clinic recommended by AMAZON can share that information with this Office via the following link: https://www.justice.gov/usao-sdny/webform/sdny-amazon-warehouse-investigation.
The matter is being handled by the Office’s Civil Division. Assistant U.S. Attorneys Jacob Lillywhite, Dominika Tarczynska, Elizabeth J. Kim, and Adam Gitlin are in charge of the investigation.
Disbarred California Attorney Sentenced to Five and A Half Years in Prison for Long-Running Multi-Million-Dollar Investment Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that DEREK JONES, a disbarred California attorney, was sentenced today to five and a half years in prison. JONES ran fraudulent investment funds, including real-estate investment firms and a venture-capital firm, through which he defrauded investors of over $8.6 million over a period of more than seven years, from at least 2012 through 2019. JONES previously pled guilty to one count of wire fraud and was sentenced today before United States District Judge Loretta A. Preska.
U.S. Attorney Damian Williams said: “When investors purchase shares in real-estate funds and other investment funds, those investors have every right to expect that the people promoting and selling those investments are treating them honestly and telling them the truth about their investments. Today, Derek Jones, a disbarred attorney, was held accountable for violating this right over an extended period of time, selling interests in real estate that he falsely claimed to own and defrauding his investors out of millions of dollars.”
According to the Indictment, statements made in court, and other publicly filed documents in this case:
From at least 2012 through at least 2019, JONES deceived his victims into investing in various companies and investment funds that he controlled, including purported real-estate development and investment firms using variations of the names “BlueRidge,” “Living City,” and “Atiswin,” and the purported venture capital firm Realize Holdings (“Realize”).
In fraudulently inducing victims to invest in his funds, JONES routinely lied to investors, including in glossy brochures and legal documents that contained misrepresentations about real estate that JONES falsely claimed was owned or otherwise controlled by BlueRidge, Living City, and Atiswin. For example, JONES falsely told investors and prospective investors that BlueRidge was developing a “resort village” on land it controlled on Semiahmoo Spit in Washington State and, separately, that BlueRidge had purchased an existing hotel in that same location, when in fact neither BlueRidge nor JONES owned or controlled any of that property. In other cases, JONES falsely claimed that his companies were under contract to purchase a ranch in Colorado and that his companies had secured long-term leases for various pieces of property slated for development, including California properties in Santa Monica, Hermosa Beach, and Los Angeles. Instead of using investors’ money as he promised, JONES misappropriated investors’ money, using much of it to make Ponzi-style payments to other investors to whom he owed money in connection with earlier transactions and for personal and family expenses, including the private-school tuition of his children.
In executing his scheme, JONES also sent falsified and counterfeit documents to investors and others. For example, on repeated occasions, JONES provided doctored bank statements showing that he had millions of dollars in various corporate accounts, when in fact he had little or no money in such accounts. On other occasions, he provided counterfeit financial statements that falsely purported to be based on internal audits of companies that he controlled. He also sent investors and others falsified contracts with key pages removed, forged land-leases, and fictional statements of asset allocation. JONES also used the names of other individuals — without those individuals’ authorization or knowledge — to communicate via email with investors and thus foster the illusion that JONES’s businesses were viable operations with real employees.
In total, JONES defrauded investors out of more than $8.6 million.
During the commission of the fraud charged in this case, JONES was suspended from the practice of law by the State Bar Court of California for earlier fraudulent conduct. JONES was ultimately disbarred in July 2022 based on findings by the State Bar Court that he had intentionally misappropriated money belonging to a client in 2011 and that he had made misrepresentations to the client, to the court, and to others.
* * *
JONES, 48, of San Marino, California, pled guilty on November 1, 2021, to a single count of wire fraud. He was sentenced today to five and a half years in prison, three years of supervised release, forfeiture of $8,679,787.66, and restitution to his victims in an amount to be determined within the next 90 days.
Mr. Williams praised the excellent work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys David Raymond Lewis and David M. Abramowicz are in charge of the prosecution.
Oneonta Man Sentenced to 60 Months in Prison for Conspiring to Commit Sex Trafficking of A MinorRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TOBY MURCHISON was sentenced today to 60 months in prison for conspiring to commit sex trafficking of a 16-year-old girl. MURCHISON was sentenced by U.S. District Judge Vincent L. Briccetti. MURCHISON previously pled guilty to one count of conspiracy to commit sex trafficking.
U.S. Attorney Damian Williams said: “Toby Murchison preyed on a 16-year-old girl who had run away from home. Murchison placed this young woman in harm’s way by conspiring to have her engage in commercial sex and benefited financially from her misfortune. It is difficult to imagine more outrageous conduct, and today’s sentence signals the tenacity with which this Office will prosecute those who take advantage of minor victims.”
According to the allegations contained in the Information and other court documents filed in White Plains federal court:
In or about April 2021, MURCHISON conspired with one or more people to recruit a 16-year-old victim (“Minor Victim-1”) to engage in commercial sex acts in and around Newburgh, New York. MURCHISON met Minor Victim-1, who had run away from home, in the Newburgh area. MURCHISON and a co-conspirator helped Minor Victim-1 to procure “dates” (i.e., meetings with men to engage in commercial sex acts) and then secured hotel rooms, including in Newburgh and Fishkill, in which Minor Victim-1 would meet the men for “dates” and perform sex acts in exchange for money. Minor Victim-1 then gave some or all of the proceeds from those commercial sex acts to MURCHISON.
* * *
In addition to his prison sentence, MURCHISON, 43, of Oneonta, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations New York, Resident Agent in Charge Hudson Valley, and the Dutchess County Sherriff’s Office.
The prosecution of this case is being handled by the White Plains Division. Assistant U.S. Attorney Stephanie Simon is in charge of the prosecution.
Former Chief Financial Officer of Email Security Company Pleads Guilty to $50 Million Scheme to Defraud Investors and LendersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIHAT CARDAK, the former Chief Financial Officer (“CFO”) of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), pled guilty today in Manhattan federal court in connection with a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer. U.S. District Judge Paul G. Gardephe accepted the defendant’s guilty plea.
U.S. Attorney Damian Williams said: “Nihat Cardak, along with his co-defendants Robert Bernardi and Sunhil Chandra, chose to lie and mislead investors and lenders in order to keep GigaTrust afloat instead of owning up to the company’s financial reality. Their scheme came crashing down in 2019 as GigaTrust filed for bankruptcy, and Cardak and Bernardi have now accepted responsibility for their criminal actions.”
According to the allegations in the Indictment and other filings and statements made in court:[1]
From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions. Robert Bernardi founded GigaTrust and served as its Chief Executive Officer, while CARDAK and Sunil Chandra were GigaTrust’s CFO and Vice President of Business Development, respectively. The defendants devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender.
Specifically, Bernardi sent fabricated audit materials to a New York-based investment firm, and Bernardi and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars. After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, Bernardi and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel. Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), Bernardi and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust. Bernardi recruited Chandra to pose as one of GigaTrust’s alleged customers on a call with Lender-1. Bernardi and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal.
GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.
On August 17, 2022, Bernardi pled guilty to conspiracy to commit securities fraud, bank fraud, and wire fraud before Judge Paul G. Gardephe.
* * *
CARDAK, 52, of Clifton, Virginia, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing for CARDAK is scheduled for May 16, 2023.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case. Mr. Williams further thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendants, for its cooperation and assistance in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Peter J. Davis and Emily A. Johnson are in charge of the prosecution.
The charges contained in the Indictment against Sunil Chandra 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
Five Defendants Arrested for Stealing Millions from Government-Funded Childcare Programs for Low Income FamiliesRead the Press Release
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 Office of the Federal Bureau of Investigation (“FBI”), and Susan A. Frisco, the Acting Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), announced the unsealing of a seven-count Indictment today charging five defendants with participating in schemes to steal millions of dollars from government-funded childcare programs for low-income families, including by stealing proceeds from a fake after-school program that received millions in funding and by using funds to purchase private real estate, items at auction, and a luxury vehicle. Four of the defendants were arrested today and will be presented before U.S. Magistrate Judge Robert W. Lehrburger in federal court in Manhattan. HAROLD SCHWARTZ was arrested and will be presented in the Southern District of Florida. The case has been assigned to U.S. District Judge Jennifer H. Rearden.
U.S. Attorney Damian Williams said: “As alleged, the defendants brazenly participated in schemes that stole from programs meant to benefit society’s most vulnerable members — children — and spent the proceeds of their crimes on items like real estate, cars, and to buy items at auction. Their schemes used children as currency, creating a fake afterschool program and ‘enrolling’ in that program children who never attended it, all so they could line their own pockets. Let me be clear: this Office is committed to rooting out the abuse of government funds intended for the public welfare.”
FBI Assistant Director Michael J. Driscoll said: “Today we allege the defendants operated multiple schemes to enrich themselves by defrauding government-funded childcare programs designed to assist needy families. The FBI remains dedicated to uncovering and eliminating the abuse of government-sponsored programs and ensuring those who exploit programs intended to assist low-income families will be held accountable.”
HHS-OIG Acting Special Agent in Charge Susan A. Frisco said: “The monies that the defendants are alleged to have stolen were intended to support New York families that greatly need financial assistance in securing safe and quality care for their children. HHS-OIG and our law enforcement partners are fervent in our efforts to detect and investigate individuals believed to defraud federally funded childcare programs and deprive deserving enrollees in an attempt to gain personal wealth.”
As alleged in the Indictment unsealed today in Manhattan federal court and statements made in court filings:[1]
MARTIN HANDLER, MENACHEM LIEBERMAN, HAROLD SCHWARTZ, ISIDORE HANDLER, and BEN WERCZBERGER participated in multiple related schemes to steal from and defraud daycares receiving funding from the City of New York’s Administration for Children’s Services (“ACS”) and the U.S. Department of Health and Human Services (“HHS”).
Among their schemes, MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER participated in a scheme to fraudulently claim reimbursement from ACS for the enrollment of children in a fake after-school program purportedly operated by a non-profit daycare provider (“Daycare Provider-1”), resulting in the theft of more than $1,000,000.
MARTIN HANDLER and LIEBERMAN perpetrated another fraudulent scheme against HHS by concealing their secret ownership of Daycare Provider-1, an ostensible “non-profit” entity without any legal owners that has received in excess of $90 million in federal funding since 2009. MARTIN HANDLER’s and LIEBERMAN’s secret ownership of Daycare Provider-1 allowed them to circumvent statutory and regulatory restrictions against less-than-arm’s length partnerships. MARTIN HANDLER and LIEBERMAN steered Daycare Provider-1 into partnerships with their respective for-profit daycares (“Daycare Provider-2 and Daycare Provider-3”), that resulted in millions of dollars of federal funding for Daycare Provider-2 and Daycare Provider-3.
MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER also submitted false information to HHS to hide their fraudulent schemes. In about December 2021, HHS initiated an investigation into Daycare Provider-1 and conveyed allegations that had arisen about LIEBERMAN’s relationship with Daycare Provider-1. MARTIN HANDLER, LIEBERMAN, SCHWARTZ, and ISIDORE HANDLER then conspired to submit a letter to the regional HHS office responding to these allegations that, among other things, falsely denied LIEBERMAN had a less-than-arm’s length relationship with Daycare Provider-1, even though, in fact, LIEBERMAN secretly owned it.
MARTIN HANDLER and BEN WERCZBERGER participated in a scheme to steal, and to launder the proceeds of their theft, from HANDLER’s for-profit daycare, Daycare Provider-2. MARTIN HANDLER and WERCZBERGER stole at least $2.8 million in federal funding intended for childcare services for low-income children in the Bronx. They carried out this theft by funneling a portion of HHS’s monthly funding to WERCZBERGER, by providing no-show jobs to WERCZBERGER’s wife and grandson, and by having Daycare Provider-2 cover the cost of a luxury SUV for WERCZBERGER’s wife.
Finally, MARTIN HANDLER himself stole funds from Daycare Provider-2’s operating expenses, including to purchase real estate, to repay a $500,000 loan to a business associate, to purchase historical items at auction, and to purchase a luxury vehicle.
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A chart containing the names of the defendants who were charged today and the charges and maximum penalties they face is attached. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Defendant
Age
Charges
Maximum Penalties
MARTIN HANDLER
Brooklyn, NY
48
Wire Fraud Conspiracy
Count One
Conspiracy to Defraud the United States
Count Three
Conspiracy to Falsify Documents and Records
Count Four
Theft of Government Funds
Count Five
Money Laundering Conspiracy
Count Six
Theft of Government Funds
Count Seven
20 years
Five years
Five years
10 years
20 years
10 years
MENACHEM LIEBERMAN
Brooklyn, New York
46
Wire Fraud Conspiracy
Count One
Aggravated Identity Theft
Count Two
Conspiracy to Defraud the United States
Count Three
Conspiracy to Falsify Documents and Records
Count Four
20 years
Two-year term consecutive to any other prison term
Five years
Five years
HAROLD SCHWARTZ
Brooklyn, New York
67
Wire Fraud Conspiracy
Count One
Conspiracy to Falsify Documents and Records
Count Four
20 years
Five years
ISIDORE HANDLER
Brooklyn, New York
37
Wire Fraud Conspiracy
Count One
Conspiracy to Falsify Documents and Records
Count Four
20 years
Five years
BEN WERCZBERGER
Brooklyn, New York
70
Theft of Government Funds
Count Five
Money Laundering Conspiracy
Count Six
10 years
20 years
Mr. Williams praised the outstanding investigative work of the FBI and HHS-OIG. Mr. Williams also thanked the U.S. Department of Agriculture, Office of the Inspector General for their assistance with this investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Daniel Wolf and Mollie Bracewell 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
U.S. Attorney Announces Federal Charges Against Man Who Carried Out Machete Attack in Times Square on New Year’s EveRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the FBI, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced today that TREVOR THOMAS BICKFORD has been charged with federal crimes in connection with BICKFORD’s efforts to wage jihad by killing U.S. Government officials and his knife attack on three NYPD officers in Times Square on New Year’s Eve. BICKFORD was charged by Complaint with attempting to kill officers and employees of the U.S. Government and persons assisting them. BICKFORD is currently in state custody and will be transported to and presented in Manhattan federal court at a later date to face the federal charges filed in the Southern District of New York.
U.S. Attorney Damian Williams said: “On this past New Year’s Eve, revelers flocked to Times Square to ring in the New Year with friends and family. But Trevor Bickford allegedly targeted the iconic yearly celebration to carry out a brazen act of violence and hatred in the name of jihad. Bickford’s alleged attack in one of the most visited destinations in the world on its busiest night of the year ironically only served to spotlight the coordination, resolve, and dedication of American law enforcement to guard the wellbeing of the public. We sincerely thank our law enforcement partners for their outstanding work and bravery, and especially wish a full and speedy recovery to the officers injured in this senseless attack.”
Attorney General Merrick B. Garland said: “As detailed in today’s complaint, we allege that the defendant plotted a jihad-inspired attack targeting U.S. government officials, and on December 31st, 2022, attacked three NYPD officers who were part of the joint federal-state law enforcement operation protecting the Times Square New Year’s Eve celebration. We are deeply grateful for the bravery of the officers who were injured in this horrible attack and who put their lives on the line every day to serve their communities. Together with our law enforcement partners at every level of government, the Justice Department will continue to work to disrupt, investigate, and prosecute those who target and attack law enforcement and endanger the American people.”
FBI Director Christopher A. Wray said: “As alleged, three New York City Police Department officers were brutally assaulted in a jihad-inspired attack on New Year’s Eve while they were performing their duties to protect their city and those out celebrating the holiday. Being a law enforcement officer requires brave individuals willing to put their lives on the line every day to keep others safe. We are committed to holding those who would target law enforcement with violence fully accountable.”
FBI Assistant Director Michael J. Driscoll said: “As we allege today, Bickford deliberately planned and executed his violent attack against New York City Police Officers who were simply doing their job protecting the public. Only the quick action of these brave officers prevented further harm. The FBI's New York Joint Terrorism Task Force is unwavering in its mission to combat terrorism to keep our city safe, and we will bring any radicalized individual willing to commit violence to justice.”
NYPD Commissioner Keechant L. Sewell said: “An attack against New York City police officers is an attack against all of us – and today’s charges make it clear that such violence will be prosecuted to the fullest extent of the law. Our NYPD family is thankful our heroic officers survived this premeditated ambush, and the entire city commends them for preventing further bloodshed during one of our nation’s largest public events. Clearly, the threat of jihadist terrorism remains very real, and our country’s security begins with the dedicated local, state, and federal law enforcement officers who are committed to keeping us safe. I applaud our NYPD investigators, our partners on the FBI’s New York Joint Terrorism Task Force, and the prosecutors in the U.S. Attorney’s Office for the Southern District of New York for their combined efforts on this important case.”
According to the allegations contained in the Complaint charging the defendant:[1]
In the summer of 2022, BICKFORD, a 19-year-old U.S. citizen and resident of Maine, began accessing and consuming materials espousing radical Islamic ideology, including materials promoting the Taliban and reflecting the teachings of Abu Muhammad al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda. Over the ensuing months, BICKFORD radicalized, devoting himself to violent Islamic extremism and waging jihad.
By November 2022, BICKFORD was interested in traveling to the Middle East to support the Taliban and took steps towards traveling to Afghanistan to ally himself with the Taliban and work with the Taliban to fight against governments that, in BICKFORD’s view, oppress Muslims. BICKFORD dedicated himself to the mission of waging jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. BICKFORD told a family member that he wanted to travel to the Middle East so that he could be a suicide bomber for his religion. BICKFORD ultimately decided that he would not travel overseas, and instead would wage jihad against the U.S. Government within the United States.
To carry out his jihadist mission, BICKFORD traveled from Maine to New York City in late December. On New Year’s Eve, BICKFORD went to Times Square for the purpose of killing U.S. Government officials, armed with a large, curved knife similar to a machete, known as a kukri, with a blade over one foot long.
Protecting the civilians who attend the annual New Year’s Eve celebration in Times Square requires and involves the coordination, collaboration, and mutual assistance of multiple federal and state law enforcement agencies, including the FBI and NYPD. During this special event, the FBI and NYPD work together and assist each other in the performance of their respective duties, in a collective effort to ensure a safe Times Square New Year’s Eve celebration.
At approximately 10:10 p.m., at 52nd Street and Eighth Avenue, blocks away from the New Year’s Eve celebration in Times Square, BICKFORD attacked three NYPD officers, who were detailed to the joint federal-state law enforcement operation to protect the New Year’s Eve celebration. The location of 52nd Street and Eighth Avenue was an access checkpoint at which spectators could gain entry to the events in Times Square, and both FBI and NYPD personnel were deployed in the area of the checkpoint, including the three officers whom BICKFORD attacked. BICKFORD approached the NYPD officers, declared “Allahu Akbar” — an Arabic phrase meaning “God is great,” which other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks — and stabbed and struck the officers in the head with his kukri. Before BICKFORD could attack more targets, one of the victim officers shot BICKFORD in the shoulder, stopping the attack, and he was taken into state custody. BICKFORD wounded all three officers, who suffered lacerations and other injuries, and each officer had to be taken to a hospital for treatment.
A bag that BICKFORD brought with him to the Times Square area was subsequently recovered by law enforcement from the scene of the attack. BICKFORD’s bag contained, among other things, a book by al-Maqdisi promoting jihad and BICKFORD’s journal. The al-Maqdisi book encourages followers, among other things, to wage jihad against disbelievers and governments ruled by disbelievers, and to use swords on the heads of disbelievers. An entry in BICKFORD’s journal from December 31, 2022 — that is, the day of his attack — states that “this will likely be my last entry” and that BICKFORD believed his brother, a soldier in the U.S. military, had “joined the ranks of my enemy.” A second bag that BICKFORD was carrying, also recovered by law enforcement near Times Square, contained a book espousing violent Islamic extremism, with certain portions highlighted, including the following: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”
The kukri that BICKFORD used in the attack, depicted below, was recovered by law enforcement from the scene of the attack:
After being treated at a local hospital, during a subsequent Mirandized interview, BICKFORD stated, among other things, the following:
- BICKFORD decided not to travel overseas to wage jihad as originally planned, and instead to commit jihad in New York City. In the days leading up to his New Year’s Eve attack, BICKFORD traveled from Maine to New York City.
- On New Year’s Eve, BICKFORD went to Times Square and walked around the area “trying to figure out the right time to kill.” BICKFORD started reciting verses from the Quran in his head to “hype himself up” for his attack.
- BICKFORD identified an NYPD officer who was isolated from civilians and other officers, took out the kukri from his backpack, declared “Allahu Akbar,” and attacked the officer.
- After attacking that officer, BICKFORD charged at another officer and tried but failed to remove that officer’s firearm from the officer’s holster. One of the officer victims then shot BICKFORD in the shoulder, stopping his attack.
- When asked why he conducted the attack, BICKFORD stated that the officer was a man in uniform who had a weapon; all men of military age were his targets; no one can work for the U.S. Government and be a true Muslim because the U.S. Government supports Israel; and he wanted to kill as many of these targets as he could.
- BICKFORD intended to die in the attack, in an effort to achieve martyrdom. BICKFORD believed his attack was unsuccessful, because he did not kill any officers, and he did not die himself.
* * *
BICKFORD, 19, of Wells, Maine, is charged in the Complaint with four counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 80 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies.
The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Sarah L. Kushner and Kaylan E. Lasky are in charge of the prosecution with assistance from Trial Attorney D. Andrew Sigler of the Counterterrorism Section of the Department of Justice’s National Security Division.
The charges contained in the Complaint are merely allegations, 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.
Federal Charges Announced Against Maine Man Who Carried Out Machete Attack in Times Square on New Year’s Eve in Name of JihadRead the Press Release
Trevor Thomas Bickford, 19, of Wells, Maine, has been charged with federal crimes in connection with Bickford’s efforts to wage jihad by killing U.S. Government officials and his knife attack on three NYPD officers in Times Square on New Year’s Eve. Bickford was charged by complaint with attempting to kill officers and employees of the U.S. Government and persons assisting them. Bickford is currently in state custody and will be transported to and presented in Manhattan federal court at a later date to face the federal charges filed in the Southern District of New York.
“As detailed in today’s complaint, we allege that the defendant plotted a jihad-inspired attack targeting U.S. government officials, and on December 31st, 2022, attacked three NYPD officers who were part of the joint federal-state law enforcement operation protecting the Times Square New Year’s Eve celebration,” said Attorney General Merrick B. Garland. “We are deeply grateful for the bravery of the officers who were injured in this horrible attack and who put their lives on the line every day to serve their communities. Together with our law enforcement partners at every level of government, the Justice Department will continue to work to disrupt, investigate, and prosecute those who target and attack law enforcement and endanger the American people.”
“On this past New Year’s Eve, revelers flocked to Times Square to ring in the New Year with friends and family. But Trevor Bickford allegedly targeted the iconic yearly celebration to carry out a brazen act of violence and hatred in the name of jihad,” said U.S. Attorney Damian Williams for the Southern District of New York. “Bickford’s alleged attack in one of the most visited destinations in the world on its busiest night of the year ironically only served to spotlight the coordination, resolve and dedication of American law enforcement to guard the wellbeing of the public. We sincerely thank our law enforcement partners for their outstanding work and bravery, and especially wish a full and speedy recovery to the officers injured in this senseless attack.”
“As alleged, three New York City Police Department officers were brutally assaulted in a jihad-inspired attack on New Year’s Eve while they were performing their duties to protect their city and those out celebrating the holiday,” said FBI Director Christopher Wray. “Being a law enforcement officer requires brave individuals willing to put their lives on the line every day to keep others safe. We are committed to holding those who would target law enforcement with violence fully accountable.”
“As we allege today, Bickford deliberately planned and executed his violent attack against New York City Police Officers who were simply doing their job protecting the public,” said Assistant Director Michael J. Driscoll of the FBI New York Field Office. “Only the quick action of these brave officers prevented further harm. The FBI's New York Joint Terrorism Task Force is unwavering in its mission to combat terrorism to keep our city safe, and we will bring any radicalized individual willing to commit violence to justice.”
“An attack against New York City police officers is an attack against all of us – and today’s charges make it clear that such violence will be prosecuted to the fullest extent of the law,” said NYPD Commissioner Keechang L. Sewell. “Our NYPD family is thankful our heroic officers survived this premeditated ambush, and the entire city commends them for preventing further bloodshed during one of our nation’s largest public events. Clearly, the threat of jihadist terrorism remains very real, and our country’s security begins with the dedicated local, state, and federal law enforcement officers who are committed to keeping us safe. I applaud our NYPD investigators, our partners on the FBI’s New York Joint Terrorism Task Force, and the prosecutors in the U.S. Attorney’s Office for the Southern District of New York for their combined efforts on this important case.”
According to the allegations contained in the complaint charging the defendant:
In the summer of 2022, Bickford, a 19-year-old U.S. citizen and resident of Maine, began accessing and consuming materials espousing radical Islamic ideology, including materials promoting the Taliban and reflecting the teachings of Abu Muhammad al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda. Over the ensuing months, Bickford radicalized, devoting himself to violent Islamic extremism and waging jihad.
By November 2022, Bickford was interested in traveling to the Middle East to support the Taliban and took steps towards traveling to Afghanistan to ally himself with the Taliban and work with the Taliban to fight against governments that, in Bickford’s view, oppress Muslims. Bickford dedicated himself to the mission of waging jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Bickford told a family member that he wanted to travel to the Middle East so that he could be a suicide bomber for his religion. Bickford ultimately decided that he would not travel overseas, and instead would wage jihad against the U.S. Government within the United States.
To carry out his jihadist mission, Bickford traveled from Maine to New York City in late December. On New Year’s Eve, Bickford went to Times Square for the purpose of killing U.S. Government officials, armed with a large, curved knife similar to a machete, known as a kukri, with a blade over one foot long.
Protecting the civilians who attend the annual New Year’s Eve celebration in Times Square requires and involves the coordination, collaboration, and mutual assistance of multiple federal and state law enforcement agencies, including the FBI and NYPD. During this special event, the FBI and NYPD work together and assist each other in the performance of their respective duties, in a collective effort to ensure a safe Times Square New Year’s Eve celebration.
At approximately 10:10 p.m., at 52nd Street and Eighth Avenue, blocks away from the New Year’s Eve celebration in Times Square, Bickford attacked three NYPD officers, who were detailed to the joint federal-state law enforcement operation to protect the New Year’s Eve celebration. The location of 52nd Street and Eighth Avenue was an access checkpoint at which spectators could gain entry to the events in Times Square, and both FBI and NYPD personnel were deployed in the area of the checkpoint, including the three officers whom Bickford attacked. Bickford approached the NYPD officers, declared “Allahu Akbar”—an Arabic phrase meaning “God is great,” which other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks—and stabbed and struck the officers in the head with his kukri. Before Bickford could attack more targets, one of the victim officers shot Bickford in the shoulder, stopping the attack, and he was taken into state custody. Bickford wounded all three officers, who suffered lacerations and other injuries, and each officer had to be taken to a hospital for treatment.
A bag that Bickford brought with him to the Times Square area was subsequently recovered by law enforcement from the scene of the attack. Bickford’s bag contained, among other things, a book by al-Maqdisi promoting jihad and Bickford’s journal. The al-Maqdisi book encourages followers, among other things, to wage jihad against disbelievers and governments ruled by disbelievers, and to use swords on the heads of disbelievers. An entry in Bickford’s journal from December 31, 2022—that is, the day of his attack—states that “this will likely be my last entry” and that Bickford believed his brother, a soldier in the U.S. military, had “joined the ranks of my enemy.” A second bag that Bickford was carrying, also recovered by law enforcement near Times Square, contained a book espousing violent Islamic extremism, with certain portions highlighted, including the following: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”
The kukri that Bickford used in the attack, depicted below, was recovered by law enforcement from the scene of the attack:
After being treated at a local hospital, during a subsequent Mirandized interview, Bickford stated, among other things, the following:
- Bickford decided not to travel overseas to wage jihad as originally planned, and instead to commit jihad in New York City. In the days leading up to his New Year’s Eve attack, Bickford traveled from Maine to New York City.
- On New Year’s Eve, Bickford went to Times Square, and walked around the area “trying to figure out the right time to kill.” Bickford started reciting verses from the Quran in his head to “hype himself up” for his attack. Bickford identified an NYPD officer who was isolated from civilians and other officers, took out the kukri from his backpack, declared “Allahu Akbar,” and attacked the officer.
- After attacking that officer, Bickford charged at another officer, and tried but failed to remove that officer’s firearm from the officer’s holster. One of the officer victims then shot Bickford in the shoulder, stopping his attack.
- When asked why he conducted the attack, Bickford stated that the officer was a man in uniform who had a weapon; all men of military age were his targets; no one can work for the U.S. Government and be a true Muslim, because the U.S. Government supports Israel; and he wanted to kill as many of these targets as he could.
- Bickford intended to die in the attack, in an effort to achieve martyrdom. Bickford believed his attack was unsuccessful, because he did not kill any officers, and he did not die himself.
Bickford is charged with four counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 80 years in prison.
The FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies is investigating the case.
Assistant U.S. Attorneys Sarah L. Kushner and Kaylan E. Lasky for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Defendant Sentenced in Groundbreaking Cryptocurrency Insider Trading CaseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIKHIL WAHI was sentenced by U.S. District Judge Loretta A. Preska to 10 months in prison for his participation in a scheme to commit insider trading in cryptocurrency assets by using confidential information from his brother, a former product manager at Coinbase Global, Inc. (“Coinbase”), about which crypto assets were scheduled to be listed on Coinbase’s exchanges. WAHI previously pled guilty to one count of conspiracy to commit wire fraud.
U.S. Attorney Damian Williams said: “At a time when the cryptocurrency markets have been plagued by fear, uncertainty, and doubt, insider trading creates the impression that everything is rigged and that only people with secret advantages can make a real buck. Today’s sentence makes clear that the cryptocurrency markets are not lawless. There are real consequences to illegal insider trading, wherever and whenever it occurs.”
According to the allegations in the Indictment and statements made in public court proceedings and filings:
Beginning in approximately October 2020, NIKHIL WAHI obtained from his brother, an employee of Coinbase working on highly confidential crypto asset listings, secret tips about which crypto assets would be listed on Coinbase. Using that insider information, NIKHIL WAHI used anonymous Ethereum blockchain wallets and accounts held under pseudonyms at centralized cryptocurrency exchanges to acquire those crypto assets shortly before Coinbase publicly announced that it was listing these crypto assets on its exchanges. On multiple occasions following Coinbase’s public listing announcements, NIKHIL WAHI sold the crypto assets for a profit.
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In addition to the prison sentence, WAHI, 27, of Seattle, Washington, was ordered to pay $892,500 in forfeiture.
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.
United States Attorney Implements Groundbreaking Settlement with Meta Platforms, Inc., Formerly Known as Facebook, to Address Discrimination in the Delivery of Housing AdsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, along with Kristen Clarke, Assistant Attorney General for the Justice Department’s Civil Rights Division, announced today that the Justice Department has reached a key milestone in its settlement agreement with Meta Platforms, Inc. (“Meta”), formerly known as Facebook, Inc., requiring Meta to change its ad delivery system to prevent discriminatory advertising in violation of the Fair Housing Act (“FHA”). As required by the settlement entered on June 27, 2022, resolving a lawsuit filed in the U.S. District Court for the Southern District of New York, Meta has now built a new system to address algorithmic discrimination. Today, the parties informed the Court that they have reached agreement on the system’s compliance targets. This development ensures that Meta will be subject to court oversight and regular review of its compliance with the settlement through June 27, 2026.
U.S. Attorney Damian Williams said: “This groundbreaking resolution sets a new standard for addressing discrimination through machine learning. We appreciate that Meta agreed to work with us toward a resolution of this matter and applaud Meta for taking the first steps towards addressing algorithmic bias. We hope that other companies will follow Meta’s lead in addressing discrimination in their advertising platforms. We will continue to use all of the tools at our disposal to address violations of the Fair Housing Act.”
“This development marks a pivotal step in the Justice Department’s efforts to hold Meta accountable for unlawful algorithmic bias and discriminatory ad delivery on its platforms,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold Meta accountable by ensuring the Variance Reduction System addresses and eliminates discriminatory delivery of advertisements on its platforms. Federal monitoring of Meta should send a strong signal to other tech companies that they too will be held accountable for failing to address algorithmic discrimination that runs afoul of our civil rights laws.”
The United States’ complaint alleged, among other things, that Meta uses algorithms in determining which Meta users receive ads, including housing ads, and that those algorithms rely, in part, on characteristics protected under the FHA. Specifically, the United States alleged that Meta feeds troves of user information into its ad delivery system, including information related to users’ FHA-protected characteristics such as sex and race, and uses that information in its personalization algorithms to predict which ad is most relevant to which user. As the complaint alleged, Meta’s delivery algorithms introduce bias when delivering ads, resulting in a variance along sex and estimated race/ethnicity between the set of users who are eligible to see housing ads based on the advertiser’s targeted audience and the set of users who actually see the ad.
Pursuant to the settlement, Meta has developed a new system—the Variance Reduction System (“VRS”)—to reduce the variances between the eligible audience and the actual audience. The United States has concluded that the new system will substantially reduce the variances between the eligible and actual audiences along sex and estimated race/ethnicity in the delivery of housing advertisements. The VRS will operate on all housing advertisements across Meta platforms, and the agreement requires Meta to meet certain compliance metrics in stages. For example, by December 31, 2023, for the vast majority of housing ads on Meta platforms, Meta will reduce variances to less than or equal to 10% for 91.7% of those ads for sex and less than or equal to 10% for 81.0% of those ads for estimated race/ethnicity. For more information on the operation of the VRS, read Meta’s technical paper.
As further provided in the settlement agreement, the parties have selected an independent, third-party reviewer, Guidehouse, Inc. (“Guidehouse”), to investigate and verify on an ongoing basis whether the VRS is meeting the compliance metrics agreed to by the parties. Under the agreement, Meta must provide Guidehouse and the United States with regular compliance reports and make available any information necessary to verify compliance with the agreed-upon metrics. The court will have ultimate authority to resolve any disputes over the information that Meta must provide.
Finally, as also required by the settlement agreement, Meta has ceased delivering housing advertisements using the Special Ad Audience tool (which delivered ads to users who “look like” other users), and Meta will not provide any targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics.
This agreement marks the first time that Meta will be subject to court oversight for its ad targeting and delivery system.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt. More information about the U.S. Attorney’s Office for the Southern District of New York is available at www.justice.gov/usao-sdny. Individuals who believe they have been victims of housing discrimination may submit a report to the U.S. Attorney’s Office for the Southern District of New York online at https://www.justice.gov/usao-sdny/civil-rights or by telephone at (212) 637-0840; may submit a report online to the Department of Justice atwww.civilrights.justice.gov; or may contact the Department of Housing and Urban Development at 1-800-669-9777 or through its website at www.hud.gov.
The case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorneys Ellen Blain, David J. Kennedy, and Christine S. Poscablo are in charge of the case.
U.S. Attorney Announces Fraud and Money Laundering Charges Against Additional Cryptocurrency Ponzi Scheme PromotersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the arrest in Spain of NESTOR NUÑEZ, a/k/a “Salvador Molina,” on December 28, 2022, on fraud charges and the surrender of RAMON PEREZ on January 6, 2023, on fraud and money laundering charges. The Government is seeking NUÑEZ’s extradition from Spain. PEREZ was presented earlier today before United States Magistrate Judge Sarah Netburn. On December 14, 2022, U.S. Attorney Damian Williams announced criminal charges against FRANCISLEY DA SILVA, JUAN TACURI, and ANTONIA PEREZ HERNANDEZ in United States v. Francisley da Silva, et al., 22 Cr. 622 (AT). Along with PEREZ and NUÑEZ, all of these defendants were promoters of the cryptocurrency Ponzi scheme known as Forcount. The Silva matter has been assigned to United States District Judge Analisa Torres.
As alleged in the unsealed S2 Superseding Indictment and the unsealed S3 Superseding Indictment:[1]
PEREZ defrauded Forcount’s victim-investors (“Victims”) and then sought to conceal his fraud by laundering Victim funds through shell companies and by making large personal expenditures, including on real estate.
In or about 2018, at the direction of SILVA, NUÑEZ began presenting himself as Forcount’s CEO under the alias “Salvador Molina.” In reality, NUÑEZ was an actor paid by SILVA to promote Forcount.
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PEREZ, 40, of Orlando, Florida, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, each of which carry a maximum sentence of 20 years in prison.
NUÑEZ, 64, of Madrid, Spain, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of HSI New York, HSI Madrid, the New York City Police Department, the New York City Sheriff’s Office, the Florida Department of Financial Services, and the Florida Office of Financial Regulation. Mr. Williams also thanked the Securities and Exchange Commission, the Brazilian Federal Police, and the Spanish Guardia Civil for their assistance.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Benjamin A. Gianforti is in charge of this prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims. If you believe you are a victim of the Forcount scheme, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights. In addition, our Victim/Witness Unit is available to answer questions you might have about these cases and can refer you to available resources.
Wendy Olsen Clancy
Victim/Witness Coordinator
United States Attorney’s Office
One St. Andrew’s Plaza
New York, New York 10007
(866) 874-8900
[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.
Reality Show Cast Member Jennifer Shah Sentenced to 78 Months in Prison for Running Nationwide Telemarketing Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JENNIFER SHAH was sentenced today by United States District Judge Sidney H. Stein to 78 months in prison for running a nationwide telemarketing fraud scheme. SHAH previously pled guilty to one count of conspiracy to commit wire fraud in connection with telemarketing.
U.S. Attorney Damian Williams said: “With today’s sentence, Jennifer Shah finally faces the consequences of the many years she spent targeting vulnerable, elderly victims. These individuals were lured in by false promises of financial security, but in reality, Shah and her co-conspirators defrauded them out of their savings and left them with nothing to show for it. This conviction and sentence demonstrate once again that we will continue to vigorously protect victims of financial fraud and hold accountable those who engage in fraudulent schemes.”
According to the Superseding Indictment and statements made in court proceedings and filings:
From at least 2012 until her arrest in March 2021, SHAH was an integral leader of a wide-ranging, nationwide telemarketing fraud scheme that victimized thousands of innocent people. The scheme principally involved selling those victims so-called “business services” in connection with the victims’ purported online businesses (the “Business Opportunity Scheme”). In particular, SHAH knowingly and intentionally facilitated the sale of “leads” — contact information for potential victims who had been identified as susceptible to the scheme’s lies — to sales floors that were perpetrating the Business Opportunity Scheme and, during the latter portion of her participation in the scheme, owned and operated one of the sales floors that was part of the scheme.
Many of SHAH’s victims were elderly or vulnerable. Many of those people suffered significant financial hardship and damage. At SHAH’s direction, victims were defrauded over and over again until they had nothing left. She and her co-conspirators persisted in their conduct until the victims’ bank accounts were empty, their credit cards were at their limits, and there was nothing more to take.
SHAH was not deterred by the Federal Trade Commission’s investigations or enforcement actions, nor by learning that dozens of her co-conspirators had been arrested by federal law enforcement, pled guilty for their roles in the scheme, and that two were convicted at trial. SHAH was not ignorant of these developments: she took a series of increasingly extravagant steps to conceal her criminal conduct from the authorities. She directed others to lie, she put businesses and bank accounts in the name of others, she required payment in cash, she instructed others to delete text messages and electronic documents, she moved some of her operations overseas, and she tried to put computers and other evidence beyond the reach of investigators. These efforts were not short-lived or narrow in scope. She engaged in a yearslong, comprehensive effort to hide her continued role in the scheme.
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In addition to the prison term, SHAH, 49, of Salt Lake City, Utah, was sentenced to five years of supervised release. She was also ordered to forfeit $6,500,000, 30 luxury items, and 78 counterfeit luxury items, and to pay $6,645,251 in restitution.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations’ El Dorado Task Force.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Kiersten A. Fletcher, Benet J. Kearney, Robert B. Sobelman, and Sheb Swett are in charge of the prosecution.
Italian Citizen Pleads Guilty to Multi-Year Manuscript Theft and Impersonation SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that FILIPPO BERNARDINI pled guilty to one count of wire fraud in connection with a multi-year scheme to impersonate individuals involved in the publishing industry in order to fraudulently obtain more than one thousand prepublication manuscripts of novels and other forthcoming books. The defendant pled guilty before U.S. Magistrate Judge Sarah Netburn. The defendant is scheduled to be sentenced on April 5, 2023, before U.S. District Judge Colleen McMahon.
U.S. Attorney Damian Williams said: “Filippo Bernardini used his insider knowledge of the publishing industry to create a scheme that stole precious works from authors and menaced the publishing industry. Through impersonation and phishing schemes, Bernardini was able to obtain more than a thousand manuscripts fraudulently. I commend the career prosecutors of this Office as well as our law enforcement partners for writing the final chapter to Bernardini’s manuscript theft scheme.”
According to statements and filings in federal court:
Beginning in at least August 2016 and continuing through his January 2022 arrest, BERNARDINI, who was based in London and worked in the publishing industry, impersonated agents, editors, and other individuals involved in publishing to fraudulently obtain prepublication manuscripts. In carrying out this scheme, BERNARDINI created fake email accounts that were designed to impersonate real people employed in the publishing industry, including literary talent agencies, publishing houses, literary scouts, and others. BERNARDINI created these accounts by registering more than 160 internet domains that were crafted to be confusingly similar to the real entities that they were impersonating, including only minor typographical errors that would be difficult for the average recipient to identify during a cursory review. Over the course of this scheme, BERNARDINI impersonated hundreds of distinct people and engaged in hundreds of unique efforts to fraudulently obtain electronic copies of manuscripts that he was not entitled to. BERNARDINI obtained more than a thousand manuscripts through fraud.
In addition, BERNARDINI engaged in a phishing scheme to surreptitiously gain access to a database maintained by a New York City-based literary scouting company (“Scouting Company-1”). BERNARDINI created a webpage that impersonated Scouting Company-1’s website. Then, in or about July 2020, BERNARDINI impersonated a Scouting Company-1 employee and emailed two individuals, directing them to BERNARDINI’s look-alike webpage and prompting the users to provide their usernames and passwords. BERNARDINI’s webpage was programmed to automatically forward the input usernames and passwords to an email account controlled by BERNARDINI. BERNARDINI obtained the login information of approximately 20 users.
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FILIPPO BERNARDINI, 30, of London, United Kingdom, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. As part of his guilty plea, BERNARDINI agreed to pay restitution of $88,000.
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 the judge.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel G. Nessim is in charge of the prosecution.
Bronx Man Sentenced to 40 Months in Connection with COVID-19-Related Tax and Unemployment Fraud SchemesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JUAN CARLOS CASTRO GONZALEZ was sentenced yesterday to 40 months in prison in connection with his participation in COVID-19-related tax fraud and unemployment benefits fraud schemes that resulted in actual losses totaling over $570,000 and intended losses of over $3.3 million. On April 6, 2022, CASTRO GONZALEZ pled guilty to conspiracy to commit wire fraud before U.S. District Judge Paul A. Engelmayer, who imposed the sentence.
U.S. Attorney Damian Williams said: “Juan Carlos Castro Gonzalez exploited the Government’s efforts to help individuals struggling to make ends meet during the COVID-19 pandemic in order to enrich himself and his co-conspirators. Castro Gonzalez’s sentence shows that this Office and our law enforcement partners will work tirelessly to prosecute those who sought to commit pandemic relief fraud.”
According to the allegations in the Information to which the defendant pled guilty, other public filings, and statements made in public court proceedings:
From 2019 to 2021, CASTRO GONZALEZ participated in a conspiracy to commit wire fraud by defrauding government agencies. Between July 2019 and August 2021, CASTRO GONZALEZ worked with others to obtain fraudulent tax refunds and Economic Impact Payments, which were authorized as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, from the Internal Revenue Service (the “Tax Fraud Scheme”). Between June 2020 and August 2021, CASTRO GONZALEZ worked with others to obtain CARES Act unemployment insurance (“UI”) benefits as a result of the ongoing COVID-19 pandemic (the “UI Benefits Fraud Scheme”).
With respect to the Tax Fraud Scheme, CASTRO GONZALEZ controlled several bank accounts under different identities. These accounts were used by CASTRO GONZALEZ to deposit and receive, among other things, U.S. Treasury payments in the names of other individuals. CASTRO GONZALEZ was observed on bank surveillance footage at several of these bank locations depositing U.S. Treasury checks into the accounts. CASTRO GONZALEZ is responsible for $56,648.01 in losses to the Internal Revenue Service.
With respect to the UI Benefits Fraud Scheme, CASTRO GONZALEZ verified CARES Act UI benefit applications to the New York Department of Labor (the “NY DOL”) that had been fraudulently submitted using the names and social security numbers of people who were unaware that such applications had been made using their personal information. Once the NY DOL received and approved the fraudulent UI benefit applications, the funds were sent to specified bank accounts or to pre-paid cards, at least some of which were controlled and received by CASTRO GONZALEZ. CASTRO GONZALEZ and his co-conspirators caused actual losses to the NYL DOL of $500,079 and intended losses of approximately $3,363,000.
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In addition to his prison term, CASTRO GONZALEZ, 35, of the Bronx, New York, was ordered to pay restitution in the amount of $574,202.01 and to forfeit the same amount to the Government.
Mr. Williams praised the outstanding investigative work of the United States Department of Labor, Office of Inspector General; the Internal Revenue Service, Criminal Investigation; and the United States Postal Inspection Service.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Olga I. Zverovich and Danielle M. Kudla are in charge of the prosecution.
Former Chief Financial Officer of Two SPACs Pleads Guilty to Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that COOPER MORGENTHAU, the former chief financial officer of two special purpose acquisition companies (“SPAC-1” and “SPAC-2”), pled guilty to one count of wire fraud in connection with a scheme to embezzle more than $5 million from the two companies. The defendant pled guilty before U.S. District Judge Paul A. Engelmayer.
U.S. Attorney Damian Williams said: “Cooper Morgenthau, the former CFO of two SPACs, has admitted that he breached the trust that he owed to his public and private investors, stealing millions of dollars from them to trade meme stocks and cryptocurrencies. This Office remains committed to rooting out fraud in the SPAC market and to protecting Main Street investors from abuses on Wall Street.”
According to the allegations in the Information and statements made in public court proceedings:
Between in or about June 2021 and in or about August 2022, MORGENTHAU, who was the CFO of SPAC-1 and SPAC-2, embezzled more than $5 million from the two companies. SPAC-1 had recently had its initial public offering, while SPAC-2 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 SPAC-1, MORGENTHAU fabricated bank statements, which he provided to SPAC-1’s accountant and auditor; made and caused to be made material misstatements in SPAC-1’s public filings with the Securities and Exchange Commission (“SEC”); and transferred some of SPAC-2’s funds to SPAC-1 to cover up the funds he had misappropriated from SPAC-1.
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MORGENTHAU, 35, of Fernandina Beach, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. As part of his guilty plea, MORGENTHAU agreed to forfeit $5,111,335 and to pay restitution of $5,111,335.
The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. MORGENTHAU is scheduled to be sentenced by Judge Engelmayer on April 25, 2023.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams further 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.
United States Attorney Announces Extradition of FTX Founder Samuel Bankman-Fried to the United States and Guilty Pleas of Former CEO of Alameda Research and Former Chief Technology Officer of FTXRead the Press Release
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 extradition of SAMUEL BANKMAN-FRIED, a/k/a “SBF,” yesterday from the Bahamas.[1]
Also unsealed are the guilty pleas of CAROLINE ELLISON, former CEO of Alameda Research, and GARY WANG, co-founder and former Chief Technology Officer of FTX. ELLISON and WANG pled guilty before U.S. District Judge Ronnie Abrams on December 19, 2022, to charges arising from their participation in schemes to defraud FTX’s customers and investors, and related crimes, and are cooperating with the Government.
U.S. Attorney Damian Williams said: “Last week, we announced charges against Samuel Bankman-Fried for a sweeping fraud scheme that contributed to FTX’s collapse and for a campaign finance scheme that sought to influence public policy in Washington. As I said last week, this investigation is very much ongoing, and it’s moving very quickly. I also said that last week’s announcement would not be our last, and let me be clear once again, neither is today’s.”
FBI Assistant Director Michael J. Driscoll said: “With the pleas announced today, Ms. Ellison and Mr. Wang admitted they were willing participants in schemes to defraud FTX.com's customers and backers out of their money. The FBI will continue to seek justice for the victims of this case. No matter how fraudsters dress it up or sell the scam, we will continue to make every effort to ensure those responsible for the scheme are held accountable in our criminal justice system.”
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CAROLINE ELLISON, 28, is charged with and has pled guilty to two counts of conspiracy to commit wire fraud, each of which carry a maximum sentence of 20 years in prison; two counts of wire fraud, each of which carry a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
GARY WANG, 29, is charged with and has pled guilty to one count of conspiracy to commit 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; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the investigative work of the FBI and thanked the FBI for its partnership in the extradition of Mr. Bankman-Fried and its investigation of wrongdoing associated with Alameda Research and FTX. Mr. Williams also thanked the Bahamas’ government as well as the United States Embassy in the Bahamas for their extraordinary efforts in the arrest and return of the defendant to the United States to face these charges. He also expressed appreciation for the assistance of the Justice Department’s Office of International Affairs.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon are in charge of the prosecution. The Money Laundering and Transnational Criminal Enterprises Unit and Assistant U.S. Attorneys Samuel Raymond and Thane Rehn also contributed to the investigation.
The allegations in the Indictment against BANKMAN-FRIED are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] The charges against BANKMAN-FRIED are merely accusations, and he is presumed innocent unless and until proven guilty.
Two Men Arrested for Conspiring with Russian Nationals to Hack the Taxi Dispatch System at JFK AirportRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and John Gay, the Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), announced the unsealing of an Indictment charging DANIEL ABAYEV and PETER LEYMAN with two counts of conspiracy to commit computer intrusions. The Indictment charges that ABAYEV and LEYMAN hacked the electronic taxi dispatch system (the “Dispatch System”) at John F. Kennedy International Airport (“JFK”). Taxi drivers are required to wait in a holding lot at JFK before they are dispatched to pick up a fare. A computer system ensures that taxis are dispatched in the order in which they arrived. ABAYEV and LEYMAN conspired with Russian nationals to hack the Dispatch System and move certain taxis to the front of the line, in exchange for payment. ABAYEV and LEYMAN were arrested this morning in Queens, New York, and will be presented this afternoon before United States Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Damian Williams said: “As alleged in the indictment, these two defendants — with the help of Russian hackers — took the Port Authority for a ride. For years, the defendants’ hacking kept honest cab drivers from being able to pick up fares at JFK in the order in which they arrived. Now, thanks to this Office’s teamwork with the Port Authority, these defendants are facing serious criminal charges for their alleged cybercrimes.”
Port Authority Inspector General John Gay said: “This sophisticated, internationally coordinated conspiracy allegedly targeted hard-working taxi drivers trying to earn an honest living. The Port Authority has zero tolerance for bad actors violating the law at our facilities. We thank Damian Williams and the Southern District for their partnership as we continue our relentless commitment to detecting and disrupting illegal behavior at our facilities across the region.”
As alleged in the Indictment:[1]
From at least September 2019 through September 2021, ABAYEV and LEYMAN, who are U.S. citizens residing in Queens, New York, and Russian nationals residing in Russia (the “Russian Hackers”), engaged in a scheme (the “Hacking Scheme”) to hack the Dispatch System at JFK.
At all relevant times, taxi drivers who sought to pick up a fare at JFK were required to wait in a holding lot at JFK before being dispatched to a specific terminal by the Dispatch System. Taxi drivers were frequently required to wait several hours in the lot before being dispatched to a terminal and were dispatched in approximately the order in which they arrived at the holding lot.
Beginning in 2019, ABAYEV and LEYMAN explored and attempted various mechanisms to access the Dispatch System, including bribing someone to insert a flash drive containing malware into computers connected to the Dispatch System, obtaining unauthorized access to the Dispatch System via a Wi-Fi connection, and stealing computer tablets connected to the Dispatch System. The members of the Hacking Scheme also sent messages to each other in which they explicitly discussed their intention to hack the Dispatch System. For example, on or about November 10, 2019, ABAYEV messaged the following to one of the Russian Hackers in Russian: “I know that the Pentagon is being hacked[.]. So, can’t we hack the taxi industry[?]”
At various times between November 2019 and November 2020, ABAYEV and LEYMAN, working with others, successfully hacked the Dispatch System. They used their unauthorized access to alter the Dispatch System and move specific taxis to the front of the line, thereby allowing drivers of those taxis to skip other taxi drivers waiting in the line. ABAYEV and LEYMAN charged taxi drivers $10 each time they were advanced to the front of the line. Taxi drivers learned that they could skip the taxi line by paying $10 to members of the Hacking Scheme through word of mouth, and members of the Hacking Scheme offered some taxi drivers waivers of the $10 fee in exchange for recruiting other taxi drivers to pay the $10 fee to skip the taxi line. The Hacking Scheme also used large group chat threads in order to communicate with taxi drivers. For example, when the Hacking Scheme had access to the Dispatch System for the day, a member of the Hacking Scheme would message the group chat threads, “Shop open.” ABAYEV also sent messages to large groups of taxi drivers on the chat threads instructing them how to avoid detection by law enforcement when using trips purchased from the Hacking Scheme, such as the following:
DEAR DRIVERS !!!! PLEASE !!!!
Do not wait at the gas station in JFK
Please do not go around the CTH [Central Taxi Hold] Lot
Please do not wait at Rockway av
You have to be very very carefully
ABAYEV and LEYMAN’s scheme resulted in large numbers of taxi drivers skipping the taxi line. Over the course of the scheme, they enabled as many as 1,000 fraudulently expedited taxi trips a day.
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ABAYEV, 48, and LEYMAN, 48, both of Queens, New York, are each charged with two counts of conspiracy to commit computer intrusion. The charges carry a maximum sentence of 10 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding work of the Port Authority Office of the Inspector General. Mr. Williams also thanked Homeland Security Investigations for their assistance in the investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead and Steven J. Kochevar 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, constitutes only allegations, and every fact described therein should be treated as an allegation.