Southern District of New York
Press releases recorded for this federal judicial district.
Massachusetts Man Convicted of Trafficking Four Tons of Cocaine Hidden Inside FurnitureRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction yesterday in Manhattan federal court of ABEL MONTILLA for his participation in a cocaine trafficking scheme between 2018 and 2021. The jury convicted MONTILLA following a one-week trial before U.S. District Judge P. Kevin Castel. Sentencing of MONTILLA is scheduled for March 22, 2023.
U.S. Attorney Damian Williams said: “The unanimous jury verdict holds Abel Montilla accountable for his role in a widespread cocaine trafficking organization that flooded the streets with four tons of cocaine. Montilla was a coordinator of the drug trafficking organization who traveled around the country to manage the delivery of the organization’s cocaine-filled furniture. He now faces the prospect of a lengthy prison sentence for his crime.”
According to the allegations contained in the Superseding Indictment and the evidence presented in court during the trial:
Between 2018 and 2021, MONTILLA was a member of a drug trafficking organization (“DTO”) that engaged in a drug-trafficking scheme involving the concealment of cocaine inside custom-built furniture. Between in or about September 2018 and June 2019, the DTO sent approximately 27 shipments of cargo from Puerto Rico to the continental United States. The cocaine was concealed in more than approximately 70 custom cube-shaped coffee tables or other furniture. The organization falsely represented that the cargo contained furniture, but that furniture in fact concealed hundred-kilogram quantities of cocaine. In total, the trafficking organization shipped approximately 4,000 kilograms of cocaine, worth at least $120,000,000 on the street. Eight of the organization’s shipments were sent to addresses in the Southern District of New York, including in Yonkers and the Bronx. Those eight shipments contained a total of approximately 775 kilograms (1,704 pounds) of cocaine.
Photographs introduced into evidence during trial of furniture containing cocaine and seized cocaine are below:
MONTILLA was a Massachusetts-based coordinator of cocaine shipments who managed the recipients of the organization’s deliveries of cocaine shipments and the distribution of the cocaine concealed inside the furniture. At times, MONTILLA drove straight through the night from Massachusetts to Florida to be present for a cocaine delivery, then flew or drove back to Massachusetts to handle additional cocaine deliveries there. In total, MONTILLA coordinated at least a dozen drug shipments in Massachusetts and Florida, and at least twelve of the 27 shipments were sent to addresses affiliated with MONTILLA.
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MONTILLA, 49, of Springfield, Massachusetts, was found guilty of conspiracy to distribute and possess with the intent to distribute narcotics, which carries a maximum sentence of life in prison and a mandatory minimum sentence of ten years in prison.
The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the United States Postal Inspection Service in this investigation.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Juliana N. Murray and Ryan B. Finkel are in charge of the prosecution.
Immigration Attorney and CEO of Immigration Services Company Convicted at Trial of Conspiring to Commit Immigration FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ULADZIMIR DANSKOI, the CEO of an immigration services firm, and JULIA GREENBERG, an immigration attorney, were found guilty yesterday in Manhattan federal court of conspiracy to defraud the United States and conspiracy to commit immigration fraud following a two-week trial before United States District Judge J. Paul Oetken.
U.S. Attorney Damian Williams said: “Asylum is an incredibly important benefit designed to protect the world’s most vulnerable people. The defendants, a CEO of an immigration services firm with offices in both Manhattan and Brooklyn and a licensed attorney, exploited that system for financial gain by knowingly peddling false claims and coaching clients to lie under oath. Yesterday, a unanimous jury convicted them both for these crimes.”
According to the allegations in the Indictment and evidence presented at trial:
A New York City immigration services firm, “Russian America,” 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, Russian America advised certain of their clients in 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 asylum application documents and affidavits, often including fraudulent allegations of past persecution. 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.
ULADZIMIR DANSKOI and previously convicted codefendant Yury Mosha operated and maintained Russian America’s Brooklyn and Manhattan offices, respectively. Each advised and aided their clients to seek asylum under fraudulent pretenses. Among other things, DANSKOI advised a client, a confidential FBI source (the “Source”), to seek asylum on the fraudulent basis that the client was persecuted in Ukraine for being a gay male, when in fact DANSKOI fully understood that the Source was a heterosexual male who suffered no such persecution. DANSKOI submitted the Source’s fraudulent asylum application and Affidavit, filed under penalty of perjury, to USCIS.
Meanwhile, Mosha encouraged a second client, a Government cooperator (the “Cooperator”), to establish and maintain online blogs that were critical of the client’s home country as a way to generate a false claim that, based on the client’s invented political opinion, it was unsafe for him to return to his native country. Mosha also personally prepared and submitted the Cooperator’s asylum application, Affidavit, and related paperwork under penalty of perjury, knowing that these documents contained material falsehoods.
When the Source and Cooperator needed to prepare for an interview, conducted under oath by a USCIS asylum officer, DANSKOI and Mosha connected each to JULIA GREENBERG, a New York immigration attorney, who coached both clients to lie to Asylum Officers and provided legal representation to these clients during immigration proceedings. For example, GREENBERG, understanding that the Source was a heterosexual male who did not suffer persecution in his home country, prepared the Source for questioning by an Asylum Officer, advised the Source how to falsely answer certain anticipated questions from the Asylum Officer, and instructed the Source to dress and change the Source’s appearance in a manner that comported with GREENBERG’s vision of a gay male.
DANSKOI and Mosha also agreed to help certain Russian America clients obtain employment visas by creating fake leases and staging offices to create the impression to USCIS that these clients had legitimate jobs waiting for them in the United States.
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DANSKOI, 55, and GREENBERG, 42, each originally from Belarus and currently residing in Staten Island, New York, were convicted of one count of conspiring to defraud the United States and conspiring to commit immigration fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI’s New York Eurasian Organized Crime Task Force, Homeland Security Investigations, and USCIS’s New York Asylum Office and Fraud Detection and National Security Unit. Mr. Williams also 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.
U.S. Attorney Announces Arrest of Lamor Whitehead for Fraud, Extortion, and False StatementsRead 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 today the unsealing of an Indictment charging LAMOR WHITEHEAD with defrauding one of his parishioners out of part of her retirement savings, attempting to extort and defraud a businessman, and lying to the FBI. WHITEHEAD was arrested this morning and will be presented in federal court today before United States Magistrate Judge Gabriel W. Gorenstein. The case is assigned to United States District Judge Lorna G. Schofield.
U.S. Attorney Damian Williams said: “As we allege today, Lamor Whitehead abused the trust placed in him by a parishioner, bullied a businessman for $5,000, then tried to defraud him of far more than that, and lied to federal agents. His campaign of fraud and deceit stops now.”
FBI Assistant Director Michael J. Driscoll said: “As we allege today, Whitehead carried out several duplicitous schemes in order to receive funds from his victims. Additionally, when speaking with authorities, Whitehead consciously chose to mislead and lie to them. If you are willing to attempt to obtain funds through false promises or threats, the FBI will ensure that you are made to face the consequences for your actions in our criminal justice system.”
According to the Indictment unsealed today in Manhattan federal court and publicly available information:[1]
LAMOR WHITEHEAD, who leads a church in Brooklyn, New York, has engaged in a course of conduct in which he sought money and other things of value from victims on the basis of either threats or false promises that the victims’ investments would benefit the victims financially. First, WHITEHEAD induced one of his parishioners to invest approximately $90,000 of her retirement savings with him but instead spent the investment on luxury goods and other personal purposes. Second, WHITEHEAD extorted a businessman for $5,000, then attempted to convince the same businessman to lend him $500,000 and give him a stake in certain real estate transactions in return for favorable actions from the New York City government, which WHITEHEAD knew he could not obtain. In addition, when speaking with FBI agents who were executing a search warrant, WHITEHEAD falsely claimed that he had no cellphones other than the phone he was carrying when, in fact, WHITEHEAD owned a second phone, which he regularly used to communicate — including to send a text message describing it as “my other phone” shortly after telling the agents he had no other phones.
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WHITEHEAD, 45, of Paramus, New Jersey, is charged with two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; one count of extortion, which carries a maximum sentence of 20 years in prison; and one count of making material 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 defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the FBI.
The prosecution of this case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Hagan Scotten, Celia V. Cohen, and Andrew Rohrbach 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 Indictment and the descriptions of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Pennsylvania Man Sentenced to Prison for Threatening to Kill United States Congressman and Perpetrating Online Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSHUA HALL was sentenced today by United Stated District Judge Gregory H. Woods to 20 months in prison for making threats to kill a member of the United States Congress and impersonating family members of the then-President of the United States on social media to fraudulently raise funds for a fictitious political organization. HALL previously pled guilty to one count of making interstate communications with a threat to injure and one count of wire fraud.
According to the Information, Superseding Information, and statements made in court proceedings and filings:
Threat Offense
On August 29, 2022, HALL placed a series of telephone calls from in or around Yonkers, New York, to the California office of a member of the United States Congress (the “Congressman”). During those telephone calls, HALL conveyed threats to kill the Congressman to at least three different members of the Congressman’s staff (“Staff Member-1,” “Staff Member-2,” and “Staff Member-3”).
On a telephone call with Staff Member-1 and Staff Member-2, HALL stated, in substance and in part, that he had a lot of AR-15s; that he wanted to shoot the Congressman; that he intended to come to the Congressman’s office with firearms; and that if he saw the Congressman, he would kill him. He further stated, in substance and in part, that he wanted to “beat the shit out of” the Congressman and that he would find the Congressman wherever he was and hurt him. On a telephone call with Staff Member-3, HALL stated, in substance and in part, that he intended to come to the Congressman’s office to kill the Congressman with firearms.
Fraud Offense
From September 2019 until December 2020, HALL defrauded hundreds of victims by making false representations in the course of raising funds for a purported political affinity organization (“the Fictitious Political Organization”) for the ostensible purpose of supporting the reelection of the individual who was at that time serving as President of the United States (“the President”). However, the Fictitious Political Organization did not exist, and HALL used the funds for his own personal living expenses.
Central to the scheme was the impersonation by HALL of members of the President’s family, including the President’s minor child, among others, through his creation and use of social media accounts bearing those family members’ names and photographs. HALL used those accounts to amass more than 100,000 followers on social media and to obtain media coverage, a public platform he then exploited to confer on himself and the Fictitious Political Organization a false imprimatur of close ties with the President’s family and to encourage victims to make monetary contributions to the Fictitious Political Organization.
In total, the scheme devised and executed by HALL yielded thousands of dollars from hundreds of victims located throughout the United States, including in the Southern District of New York.
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In addition to the prison term, HALL, 23, of Mechanicsburg, Pennsylvania, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the United States Capitol Police and thanked the City of Yonkers Police Department for their assistance.
The case is being handled by the Office’s Public Corruption Unit and General Crimes Unit. Assistant US Attorneys Robert B. Sobelman and Alexandra S. Messiter are in charge of the prosecution.
Two Tennessee Individuals Charged in Manhattan Federal Court with Violating the Freedom of Access to Clinic Entrances ActRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging BEVELYN BEATTY WILLIAMS and EDMEE CHAVANNES (together, the “Defendants”) with violating the Freedom of Access to Clinic Entrances Act (the “FACE Act”) and conspiring to do the same in connection with a multi-year campaign to interfere with individuals seeking to obtain and provide lawful reproductive health services in New York and in several other states. WILLIAMS and CHAVANNES surrendered today and will be presented in the United States District Court for the Eastern District of Tennessee. The case is assigned to U.S. District Judge Jennifer L. Rochon.
U.S. Attorney Damian Williams said: “As alleged, the defendants repeatedly attempted — including by using threats, and on at least one occasion, force — to prevent individuals from accessing their legal right to reproductive health services. This Office will remain committed to ensuring that healthcare facilities, their staff, and those seeking to obtain reproductive health services can continue to do so without unlawful interference.”
FBI Assistant District in Charge Michael J. Driscoll said: “As we allege today, Ms. Williams and Ms. Chavannes violated the FACE Act by willfully interfering with individuals seeking to obtain or provide lawful reproductive health services. In one instance, Ms. Williams injured a health-center employee while obstructing access to the reproductive health center. The FBI will continue to investigate these types of allegations to ensure individuals who seek legal reproductive health services may do so without fear or intimidation.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From at least in or about 2019 up to and including at least in or about 2022, WILLIAMS and CHAVANNES agreed to and did use unlawful means — including force, threats of force, and physical obstruction — to injure, intimidate, and interfere with individuals because those individuals were seeking to obtain lawful reproductive health services or were providing such services.
As part of that agreement, on or about June 19, 2020, and June 20, 2020, WILLIAMS and CHAVANNES threatened and used force against patients and staff members at a reproductive health center located in lower Manhattan (the “Health Center”), and blocked patients and staff members from accessing the Health Center. In one instance, WILLIAMS pressed her body against the door of the Health Center’s patient entrance and refused to move, preventing a Health Center volunteer from entering the Health Center. As a Health Center staff member (“Victim-1”) attempted to open the door for the volunteer, WILLIAMS purposefully leaned against the door, crushing Victim-1’s hand. Victim-1 yelled, “She’s crushing my hand,” but WILLIAMS remained against the door, trapping Victim-1’s hand and injuring it.
At various times on June 19 and 20, 2020, WILLIAMS and CHAVANNES stood directly in front of the Health Center entrances. WILLIAMS and CHAVANNES initially blocked the main entrance used by patients, causing the Health Center to have to divert patients to enter through the staff entrance. WILLIAMS and CHAVANNES responded by moving in front of the staff entrance and directing others to do so as well. In addition, on or about June 19, 2020, CHAVANNES threatened Victim-1 by leaning her body toward Victim-1 at close range, forcing Victim-1 against metal barricades, while yelling “do not touch me” within inches of Victim-1’s face.
WILLIAMS and CHAVANNES livestreamed some of their conduct on June 19 and 20, 2020, on a social media account. On the livestream on June 19, 2020, WILLIAMS stated, in part, “This is going to be a wonderful day. We are going to terrorize this place. And I want the manager to hear me say that. We are going to terrorize this place. More people are coming.” The following day, WILLIAMS stated, in part, “We gonna stand here and we ain’t moving. We not moving. We’re standing here, so I guess no women will be coming in for abortions today. It’s a warzone.”
In addition to the defendants’ conduct in Manhattan, New York, WILLIAMS and CHAVANNES’ unlawful agreement to use prohibited means to injure, intimidate, and interfere with individuals because those individuals were seeking to obtain or provide reproductive health services has extended to other locations, including Florida, Tennessee, Georgia, and Brooklyn, New York. For example, in January 2022, WILLIAMS and CHAVANNES travelled to and were present outside a health center in Fort Myers, Florida, where they directed other individuals to block health center entrances. In addition, in July 2022, WILLIAMS and CHAVANNES blocked patient access to a health center in Atlanta, Georgia, by standing inside the center’s vestibule and yelling threatening comments at individuals believed to be health center patients.
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WILLIAMS, 31, and CHAVANNES, 41, both of Ooltewah, Tennessee, are charged with conspiracy to violate the FACE Act, which carries a maximum sentence of five years in prison. In addition, WILLIAMS is charged with violating the FACE Act through force, threats of force, and physical obstruction, resulting in bodily harm, which carries a maximum sentence of 10 years in prison. CHAVANNES is charged with violating the FACE Act through threats of force and physical obstruction, which carries a maximum sentence of one year in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorney Jamie Bagliebter is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
New York Attorney and Doctor Convicted of Defrauding New York City-Area Businesses and Their Insurance Companies of More Than $31 Million Through Massive Trip-And-Fall Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the convictions today in Manhattan federal court of GEORGE CONSTANTINE, a New York lawyer, and ANDREW DOWD, a New York orthopedic surgeon, for their participation in a massive trip-and-fall fraud scheme between 2013 and 2018. The jury convicted CONSTANTINE and DOWD following a three-week trial before U.S. District Judge Sidney H. Stein. Co-conspirators Marc Elefant, Sady Ribeiro, Adrian Alexander, Kerry Gordon, and Peter Kalkanis previously pled guilty before Judge Stein for their involvement in the same trip-and-fall fraud scheme. Co-conspirators Bryan Duncan, Ryan Rainford, and Robert Locust were convicted at trial in May 2019 before Judge Stein for their participation in the same trip-and-fall fraud scheme. Sentencing of CONSTANTINE and DOWD is scheduled for March 21, 2023.
U.S. Attorney Damian Williams said: “Today’s unanimous jury verdict holds George Constantine, a lawyer, and Andrew Dowd, a doctor, accountable for their participation in a widespread fraud scheme that preyed upon poor, vulnerable, and at-times homeless individuals. These individuals were recruited to stage trip-and-fall accidents and undergo medically unnecessary surgeries performed by Dowd that were designed to increase the value of fraudulent personal injury lawsuits filed by Constantine. Constantine and Dowd abused their professional licenses, degrees, and titles to line their own pockets with millions of dollars, and they now face the prospect of lengthy prison sentences for their crimes.”
According to the allegations contained in the Superseding Indictment and the evidence presented in Court during the trial:
Between 2013 and 2018, CONSTANTINE and DOWD, among others, engaged in an extensive fraud scheme, in which individuals (the “Patients”) were recruited to stage trip-and-fall accidents and then undergo medically unnecessary surgeries in order to increase the value of the fraudulent personal injury lawsuits that were filed on their behalf against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”). During the course of the fraud scheme, CONSTANTINE and DOWD, together with others known and unknown, attempted to defraud the Victims of more than $31 million.
CONSTANTINE and DOWD relied upon a team of “runners” who were paid cash kickbacks by CONSTANTINE to recruit the Patients to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area. Common accident sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes” in front of commercial establishments, such as gas stations, diners, and other businesses.
After their staged accidents, the Patients were directed to go to the hospital to obtain discharge papers and then were brought to CONSTANTINE’s office, by the carloads, where they met with CONSTANTINE briefly, after which CONSTANTINE would uniformly accept their case. CONSTANTINE failed to ask even the most basic questions during the intake process, including the locations of the purported accidents, and yet, would file fraudulent lawsuits, under penalty of perjury, on behalf of the Patients against the Victims. During the course of the scheme, CONSTANTINE filed nearly 200 fraudulent lawsuits and earned more than $5 million dollars in settlement fees from these fraudulent cases.
Following the Patients’ meeting with CONSTANTINE, the Patients were driven to various medical appointments, including visits with chiropractors, physical therapists, and to obtain MRIs, all of which was designed to justify the surgical procedures on their knees, shoulders, and backs that Patients were required to have as part of the scheme.
The Patients were then driven to meet with DOWD, an orthopedic surgeon, who would perform arthroscopic knee and shoulder surgeries on Patients within one to two weeks of first meeting the Patients. DOWD paid hundreds of thousands of dollars in kickbacks for these Patient referrals. DOWD performed no physical exams on the Patients and fabricated his medical reports to make it seem like the Patients were injured, when in reality they were not. To incentivize the Patients to get surgery, the Patients were paid approximately $1,000 after each surgery. During the course of the scheme, DOWD performed nearly 300 medically unnecessary surgeries and earned more than $3.2 million dollars. DOWD received approximately $10,000 per surgery.
The surgeries, as well as the other medical procedures, were funded by litigation funding companies, including a funding company owned by co-conspirator Adrian Alexander, even when the Patient maintained medical coverage through an insurance company or a government-subsidized program. The funding companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement. In exchange for funding Patients’ medical and legal costs, the funding companies charged the Patients high interest rates. The interest rates were so high that oftentimes the majority of the proceeds that were awarded in the fraudulent lawsuits were paid to the Funding Companies, CONSTANTINE, and other scheme participants, with the Patients receiving a much smaller percentage of the remaining recovery.
The Patients were overwhelmingly poor – individuals desperate enough to submit to surgeries in exchange for the small payments they would receive after surgery. It was common for the Patients to ask for food or money when they would appear for their intake meetings with CONSTANTINE. Patients were recruited from homeless shelters and often suffered from drug and alcohol addiction as well.
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CONSTANTINE, 60, of Plainview, New York, and DOWD, 67, of Miller Place, New York, were found guilty of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, each of which carries a maximum term of 20 years in prison. DOWD was also found guilty of additional counts of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation. Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas Folly, Danielle Kudla, Alexandra Rothman, and Nicholas Chiuchiolo are in charge of the prosecution.
Defendant Charged with Attempted Enticement of Nine-Year-Old BoyRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced charges against EFREM ZELONY-MINDELL for attempted enticement of one minor boy in Manhattan, New York, and possession and distribution of child pornography. ZELONY-MINDELL was arrested this morning and will be presented in Manhattan federal court today before U.S. Chief Magistrate Judge James L. Cott.
U.S. Attorney Damian Williams said: “Zelony-Mindell allegedly attempted to engage in sexual activity with a nine-year-old boy. The protection of children from predation remains of critical importance to this Office, and we will continue to use our resources and work with our law enforcement partners to bring offenders to justice.”
FBI Assistant Director Michael J. Driscoll said: “As alleged, Mr. Zelony-Mindell’s actions are nearly unfathomable. Through a series of conversations with undercover FBI agents conducted on encrypted messaging platforms, he stated his desire to have sex with minor children, and he ultimately met with one of the agents who he believed would provide him an opportunity to do so. Today’s action should serve as a reminder to anyone who seeks to prey on children - the FBI Human Trafficking and Child Exploitation Task Force and our law enforcement partners will continue to aggressively pursue you and hold you accountable.”
According to the allegations in the Complaint charging ZELONY-MINDELL:[1]
On or about April 29, 2022, an individual identified to be ZELONY-MINDELL initiated a series of conversations with an undercover FBI Special Agent (“UC-1”) on an encrypted messaging service. In these conversations, ZELONY-MINDELL repeatedly expressed, in graphic and unambiguous terms, his desire to engage in sexual activity with minor children and sent UC-1 numerous images and videos containing child pornography.
On or about May 9, 2022, UC-1 sent ZELONY-MINDELL, over the encrypted messaging service, the username of a second undercover FBI Special Agent (“UC-2”), posing as the father of a nine-year-old boy. ZELONY-MINDELL contacted UC-2 over the encrypted messaging service the same day and made clear that he was interested in having sex with the nine-year-old child. Subsequently, ZELONY-MINDELL and UC-2 had numerous communications, including over the encrypted messaging service, by text message, and over the phone. During these conversations, ZELONY-MINDELL made clear that he wanted to engage in sexual activity, including specifically anal sex, with UC-2’s purported child. When told by UC-2 that the child would be “knocked out a little bit” on sleep medication during the planned sexual activity, ZELONY-MINDELL agreed to have sex with the drugged child.
UC-2 and ZELONY-MINDELL arranged to meet at on a street corner in lower Manhattan on the morning of December 16, 2022, with the understanding that they would return to UC-2’s apartment afterward and ZELONY-MINDELL would then engage in sexual activity with the child. On the morning in question, ZELONY-MINDELL met a third FBI Special Agent (“UC-3”) at the agreed-upon location, at which time law enforcement arrested ZELONY-MINDELL.
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ZELONY-MINDELL, 35, of Fayetteville, Arkansas, is charged with one count of attempted enticement of a minor to engage in illegal sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison.
The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI, and, in particular, the members of the Human Trafficking and Child Exploitation Task Force.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Lisa Daniels is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Co-Founder of Multi-Billion-Dollar Cryptocurrency Pyramid Scheme “OneCoin” Pleads GuiltyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARL SEBASTIAN GREENWOOD, who co-founded OneCoin with RUJA IGNATOVA, a/k/a “the Cryptoqueen,” pled guilty today in Manhattan federal court to wire fraud and money laundering charges in connection with his participation in the massive OneCoin fraud scheme. OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network. As a result of misrepresentations that GREENWOOD, IGNATOVA, and others made about OneCoin, victims invested over four billion dollars worldwide in the fraudulent cryptocurrency. Today, District Judge Edgardo Ramos accepted GREENWOOD’s guilty plea. IGNATOVA, who was added to the Federal Bureau of Investigation’s Top Ten Most Wanted List in June 2022, remains at large.
U.S. Attorney Damian Williams said: “As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated. Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’ In fact, OneCoins were entirely worthless. Greenwood’s lies were designed with one goal, to get everyday people all over the world to part with their hard-earned money — real money — and to line his own pockets to the tune of hundreds of millions of dollars. This guilty plea by the co-founder of OneCoin caps a week at SDNY that sends a clear message that we are coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”
According to the allegations in the Superseding Information and other filings and statements made in court:
In 2014, GREENWOOD and IGNATOVA co-founded OneCoin,[1] a company based in Sofia, Bulgaria, that marketed a purported cryptocurrency by the same name, which was in fact a fraudulent pyramid scheme. OneCoin operated as a MLM network through which members received commissions for recruiting others to purchase cryptocurrency packages. This MLM structure influenced rapid growth of the OneCoin member network. Indeed, according to OneCoin’s promotional materials, over three million people invested in fraudulent cryptocurrency packages. OneCoin records show that, between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 billion in sales revenue and earned “profits” of €2.735 billion.
IGNATOVA served as OneCoin’s top leader until her disappearance from public view, in October 2017. GREENWOOD was OneCoin’s “global master distributor” and the leader of the MLM network through which the fraudulent cryptocurrency was marketed and sold. In a video posted online, IGNATOVA attributed to GREENWOOD the idea of marketing and selling OneCoin through an MLM network structure. GREENWOOD earned approximately €20 million a month in his role as the top MLM distributor of OneCoin.
GREENWOOD and IGNATOVA conceived of and built the OneCoin business fully intending to use it to defraud investors. For example, in the summer of 2014, when GREENWOOD and IGNATOVA were developing the concept for OneCoin, they referred to the cryptocurrency in email correspondence as “trashy coin.” On June 11, 2014, IGNATOVA wrote to GREENWOOD concerning the OneCoin business plan, stating in part:
It might not be [something] really clean or that I normally work on or even can be proud of (except with you in private when we make the money) – but . . . I am especially good in this very borderline cases [sic], where the things become gray - and you as the magic sales machine - and me as someone who really can work with numbers, legal and back you up in a good and professional way - we could really make it big - like MLM meets bitch of wall street ;-)
In an August 9, 2014, email between GREENWOOD and IGNATOVA, IGNATOVA described her thoughts on the “exit strategy” for OneCoin. The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .” And in a September 11, 2016, exchange with IGNATOVA’s brother, Konstantin Ignatov, GREENWOOD referred to OneCoin investors stating, “These ppl are idiots,” to which Ignatov responded, “as you told me, the network would not work with intelligent people ;)”
As a result of misrepresentations made by GREENWOOD, IGNATOVA, and other OneCoin representatives, victims throughout the world wired investment funds to OneCoin-controlled bank accounts in order to purchase OneCoin packages. OneCoin falsely claimed that the value of OneCoin was based on market supply and demand, when in fact, the value of the cryptocurrency was simply set by OneCoin itself. For example, on June 9, 2014, in an email sent by IGNATOVA to a representative of a blockchain development company, copying GREENWOOD, IGNATOVA stated, “we are building our own cryptocurrency - and would like to set up an internal exchange service for them. We would like to be able to set the price manually and automatically and also control the traded volume.” On March 21, 2015, IGNATOVA wrote an email to GREENWOOD, in which IGNATOVA stated, “We can manipulate the exchange by simulating some volatility and intraday pricing.” (bold in original). And in an August 1, 2015, email, IGNATOVA wrote to GREENWOOD, and included as part of a section of the email entitled “Goals”: “6. Trading coin, stable exchange, always close on a high price end of day open day with high price, build confidence - better manipulation so they are happy.” The purported value of a OneCoin grew steadily from €0.50 to approximately €29.95 per coin. The purported price of OneCoins never decreased in value.
GREENWOOD and other OneCoin leaders also claimed that the OneCoin cryptocurrency was “mined” using mining servers maintained and operated by the company. In fact, OneCoins were never mined using computer resources. For example, in an email to IGNATOVA dated August 11, 2014, GREENWOOD proposed, “Get members to think that they are mining their OneCoin via crunching (exchanging) tokens for OneCoin. This storey [sic] is good as ppl will then not go super crazy and just try and sell tokens all the time.” GREENWOOD emailed IGNATOVA the following day, writing, “The concept of converting tokens into OneCoin is an important phase for validity and truth behind the OneCoin. The so called ‘mining’ of coins is a concept that is very familiar in the industry and a story we can sell to the members.” IGNATOVA then wrote to GREENWOOD, “We are not mining actually - but telling people shit,” to which GREENWOOD responded, “how can this be investigated and found out?” and “Can any member (trying to be clever) find out that we actually are not investing in machines to mine but it is merely a piece of software doing this for us?”
GREENWOOD and other OneCoin leaders further claimed that OneCoin maintained a private “blockchain,” or a digital ledger identifying OneCoins and recording historical transactions. But OneCoin lacked a true blockchain, that is, a public and verifiable blockchain. Indeed, by approximately March 2015, IGNATOVA and GREENWOOD had started allocating to OneCoin members coins that did not even exist in OneCoin’s purported private blockchain, referring to those coins as “fake coins.”
GREENWOOD and IGNATOVA promoted OneCoin, including at official OneCoin events all over the globe. One such event, called “Coin Rush,” was held at Wembley Arena in London on June 11, 2016. Thousands of OneCoin members attended Coin Rush. During the event, GREENWOOD introduced IGNATOVA to the crowd, stating in part: “This is the creator, the mastermind, the founder of cryptocurrency, of OneCoin . . . Now, this will be the biggest welcoming on stage that we’ve ever done in history.” Then, to the tune of Alicia Keys’s “Girl on Fire,” and surrounded by actual onstage fireworks, IGNATOVA strode onto the Wembley Arena stage wearing a red ball gown. She proceeded to repeatedly and favorably compare her fraudulent cryptocurrency to Bitcoin, stating, among other things, “OneCoin . . . is supposed to be the Bitcoin killer” and “In two years, nobody will speak about Bitcoin anymore.”
On July 4, 2015, a federal holiday commemorating the independence of the United States, IGNATOVA announced the official opening of the United States market for OneCoin. In early July 2015, GREENWOOD sent IGNATOVA an email stating in part, “I thought this could go out tonight, problem is I don’t have the access to send out to the members,” and attaching a document which announced a July 4, 2015, online webinar hosted by IGNATOVA and others to mark the official opening of the United States market for OneCoin. Thereafter, on July 4, 2015, IGNATOVA participated in an online webinar, later posted to YouTube.com, in which IGNATOVA announced the official opening of the United States market for OneCoin. During the webinar, IGNATOVA said, among other things, “[I]f we want to go and catch Bitcoin, we never can do this without being strong in the U.S. and without being part of the community. So, um, this is actually why I am so excited about the U.S. as the market. It’s something that is about prestige. It’s a huge market. And, um, it is, I think, a place of innovation, of Wall Street, a place where we have to be if we want to be big.” Many victims in the United States invested in fraudulent OneCoin cryptocurrency packages, including residents of the Southern District of New York.
GREENWOOD was arrested at his residence on the island of Koh Samui, Thailand, in July 2018, and was extradited to the United States to face fraud and money laundering charges in October 2018. GREENWOOD has been detained since his arrest in July 2018.
On October 12, 2017, IGNATOVA was charged with OneCoin-related fraud and money laundering charges in the United States District Court for the Southern District of New York and a federal warrant was issued for her arrest. On October 25, 2017, IGNATOVA traveled on a commercial flight from Sofia, Bulgaria, to Athens, Greece, and has not been seen publicly since. IGNATOVA was added to the FBI’s Top Ten Most Wanted List in June 2022. The FBI is offering a $100,000 reward for information leading to IGNATOVA’s arrest.
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GREENWOOD, 45, a citizen of Sweden and the United Kingdom, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison, one count of wire fraud, which carries a maximum potential sentence of 20 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge. Sentencing before Judge Ramos is scheduled for April 5, 2023.
Mr. Williams praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office. Mr. Williams also thanked the Royal Thai Police for their assistance in the arrest of GREENWOOD.
If you have any information about IGNATOVA’s whereabouts, please contact your local FBI office or the nearest American Embassy or Consulate. Tips can be reported anonymously and can also be reported online at tips.fbi.gov.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Christopher J. DiMase, Nicholas Folly, Juliana N. Murray, and Kevin Mead, and Special Assistant U.S. Attorney Julieta V. Lozano of the New York County District Attorney’s Office, are in charge of the prosecution.
[1] OneCoin has operated using several corporate entities and d/b/a names, including “OneCoin Ltd.,” “OnePayments Ltd.,” “OneNetwork Services Ltd.,” “OneAcademy,” and “OneLife.” These entities and d/b/a names ar ereferred to collectively here as “OneCoin.”
Former Green Haven Correction Officer and Former Supervisor Charged in Connection with 2020 Assault on InmateRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging TAJ EVERLY, a former correction officer at Green Haven Correctional Facility (“Green Haven”), and ROSITA ROSSY, a former sergeant at the same facility, in connection with EVERLY’s May 28, 2020, assault of an inmate at Green Haven.
In October 2022, EVERLY was charged in a one-count indictment alleging that he falsified records in connection with the May 28, 2020, assault. The Superseding Indictment – in addition to charging EVERLY with falsifying records – charges EVERLY with deprivation of rights under color of law and charges ROSSY with falsifying records, witness tampering, and conspiracy to falsify records.
ROSSY was arrested this morning and was presented before Magistrate Judge Andrew E. Krause. EVERLY is released on bail and will be arraigned on the Superseding Indictment at a later date. The case is assigned to U.S. District Judge Nelson S. Román.
U.S. Attorney Damian Williams said: “Correction Officer Taj Everly allegedly assaulted an inmate in his charge. Instead of upholding his duty to guard and protect that inmate, he deprived him of a constitutional right to be free from excessive force. Afterwards, Everly and his supervisor, Sergeant Rosita Rossy, attempted to cover up the assault by falsifying their reports, and in Rossy’s case, directing other correction officers under her supervision to do the same. Today’s Superseding Indictment underscores our Office’s unwavering commitment to protecting the civil rights of all individuals, including those repaying their debt to society in prison.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As previously alleged, Mr. Everly violated his oath to conceal his malicious actions – actions we allege today deprived the victim of his constitutional rights. We further allege Ms. Rossy made false reports – and instructed correctional officers she supervised to make similarly false reports – in a concerted effort to conceal Mr. Everly’s actions. The FBI will continue to work to ensure those in positions of trust who misuse their authority are made to face the consequences of their abuses in the criminal justice system.”
According to the allegations in the Superseding Indictment unsealed today in White Plains federal court:[1]
On May 28, 2020, EVERLY, who was then a correction officer at Green Haven, located in Stormville, New York, assaulted an inmate in the care and custody of the New York State Department of Corrections and Community Supervision (“DOCCS”) (“Inmate-1). As Inmate-1 exited a room at Green Haven, EVERLY approached Inmate-1 and, without provocation, punched Inmate-1, causing both EVERLY and Inmate-1 to fall to the ground. EVERLY’s actions deprived Inmate-1 of his constitutional right to be free from excessive force amounting to cruel and unusual punishment.
After the assault, EVERLY, ROSSY, and other correction officers prepared reports describing the incident. In EVERLY’s report (the “Everly Report”), EVERLY falsely stated that Inmate-1 had first punched him and that EVERLY responded with force. Despite receiving information from multiple correction officers that contradicted EVERLY’s statements, ROSSY also prepared a report that mirrored the statements made in the Everly Report. ROSSY further directed at least two other correction officers — both of whom reported to ROSSY — to prepare similarly false and misleading reports.
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EVERLY, 32, of Cortlandt Manor, New York, is charged with one count of deprivation of rights under color of law, which carries a maximum sentence of 10 years in prison, and one count of falsifying records in connection with a federal investigation, which carries a maximum sentence of 20 years in prison.
ROSSY, 49, of Monticello, New York, is charged with one count of falsifying records in connection with a federal investigation, which carries a maximum sentence of 10 years in prison, two counts of witness tampering, which each carry a maximum sentence of 20 years in prison, and one count of conspiracy to falsify records, 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 a judge.
Mr. Williams praised the outstanding investigative work of the FBI and the DOCCS Office of Special Investigations.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Lindsey Keenan and Kaiya Arroyo are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Sentenced to 15 Years in Prison for Using Illegal Gun to Shoot Two VictimsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that BATISE BOYCE was sentenced to 15 years in prison by U.S. District Judge Lewis J. Liman. BOYCE pled guilty on September 8, 2022, to one count of possessing a firearm after having previously been convicted of a felony and one count of possessing a firearm in a school zone.
U.S. Attorney Damian Williams said: “Today’s sentence demonstrates the importance and success of the Triggerlock program in bringing together state, local, and federal law enforcement to ensure that repeat firearm offenders receive appropriate sentences for their crimes. I greatly appreciate our law enforcement partners as they work with us to ensure that deadly firearms and violent offenders stay off the streets of our communities.”
According to the allegations in the Indictment and statements made during court proceedings and filings:
BOYCE, 45, of the Bronx, New York, possessed an illegal semiautomatic handgun from at least August 2, 2020, until November 6, 2020, when he was arrested with the gun by officers of the New York City Police Department. Prior to possessing the gun, BOYCE had been convicted of at least six prior felonies, including robbery, an assault with a firearm, and a slashing attack with a knife. On August 2, 2020, BOYCE used the gun to shoot a victim in the head, although the victim fortunately survived. The next night, during an argument, BOYCE struck a second victim in the face with the gun, causing him to bleed, then shot the victim in the back as he attempted to walk away. One of the victim’s legs was amputated as a result.
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Mr. Williams praised the outstanding work of the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Hagan Scotten is in charge of the prosecution.
Wildlife Trafficker Sentenced to 57 Months for Large-Scale Trafficking of Rhinoceros Horns and Elephant IvoryRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that AMARA CHERIF, a/k/a “Bamba Issiaka,” a citizen of Guinea, was sentenced to 57 months for conspiring to traffic in millions of dollars in rhinoceros horns and elephant ivory, both endangered wildlife species, which involved the illegal poaching of more than approximately 35 rhinoceros and more than 100 elephants. The sentence was imposed by U.S. District Judge Gregory H. Woods. CHERIF’s co-conspirators, MOAZU KROMAH, a/k/a “Ayoub,” a/k/a “Ayuba,” a/k/a “Kampala Man,” a citizen of Liberia, and MANSUR MOHAMED SURUR, a/k/a “Mansour,” a citizen of Kenya, were previously sentenced to prison terms of 63 months and 54 months, respectively, by Judge Woods.
U.S. Attorney Damian Williams said: “Amara Cherif, Moazu Kromah, and Mansur Mohamed Surur decided that their profit was more important than the protected wildlife and natural resources that they chose to traffic, and two endangered species suffered because of that repugnant decision. These sentences show that this Office takes seriously our responsibility to use every tool at our disposal to do our part in reducing threats to the survival of endangered animals by bringing their poachers and traffickers to justice.”
According to the charging and other documents filed in the case, as well as statements made in court proceedings:
KROMAH, CHERIF, and SURUR were members of a transnational criminal enterprise (the “Enterprise”) based in Uganda and surrounding countries that was engaged in the large-scale trafficking and smuggling of rhinoceros horns and elephant ivory, both protected wildlife species. Trade involving endangered or threatened species violates several U.S. laws, as well as international treaties implemented by certain U.S. laws.
From at least in or about December 2012 through at least in or about May 2019, KROMAH, CHERIF, and SURUR conspired to transport, distribute, sell, and smuggle at least approximately 190 kilograms of rhinoceros horns and at least approximately 10 tons of elephant ivory from or involving various countries in East Africa, including Uganda, the Democratic Republic of the Congo, Guinea, Kenya, Mozambique, Senegal, and Tanzania, to buyers located in the United States and countries in Southeast Asia. Such weights of rhinoceros horn and elephant ivory are estimated to have involved the illegal poaching of more than approximately 35 rhinoceros and more than approximately 100 elephants. In total, the estimated average retail value of the rhinoceros horn involved in the conspiracy was at least approximately $3.4 million, and the estimated average retail value of the elephant ivory involved in the conspiracy was at least approximately $4 million.
Typically, the defendants exported and agreed to export the rhinoceros horns and elephant ivory for delivery to foreign buyers, including a buyer represented to be in Manhattan, in packaging that concealed the rhinoceros horns and elephant ivory in, among other things, pieces of art such as African masks and statues. The defendants received and deposited payments from foreign customers that were sent in the form of international wire transfers, some of which were sent through U.S. financial institutions, and paid in cash.
On or about March 16, 2018, law enforcement agents intercepted a package containing a black rhinoceros horn sold by the defendants that was intended for a buyer represented to be in Manhattan. From in or about March 2018 through in or about May 2018, the defendants offered to sell additional rhinoceros horns of varying weights, including horns weighing up to approximately seven kilograms. On or about July 17, 2018, law enforcement agents intercepted a package containing two rhinoceros horns weighing over five kilograms sold by the defendants that were intended for a buyer represented to be in Manhattan.
Separately, from at least in or about August 2018 through at least in or about May 2019, SURUR conspired with others to distribute and possess with intent to distribute a large quantity of heroin to a buyer represented to be located in New York.
KROMAH was arrested in Uganda on June 12, 2019, and expelled to the United States on June 13, 2019. CHERIF was arrested in Senegal on June 7, 2019, and extradited to the United States on April 2, 2020. SURUR was arrested in Kenya on July 29, 2020, and extradited to the United States on January 25, 2021. The defendants have been detained since their arrest and arrival in this country.
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KROMAH, 52, of Liberia; CHERIF, 57, of Guinea; and SURUR, 62, of Kenya, each pled guilty to one count of conspiracy to commit wildlife trafficking. In addition, KROMAH and CHERIF both pled guilty to two counts of wildlife trafficking, and SURUR also pled guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.
Mr. Williams praised the outstanding investigative work of the U.S. Fish and Wildlife Service and the U.S. Drug Enforcement Administration, and he thanked law enforcement authorities and conservation partners in Uganda and Kenya, including the Uganda Wildlife Authority, the Uganda Office of the Director of Public Prosecution, the Uganda Police Force, the Kenya Directorate of Criminal Investigations, and the Kenyan Office of the Director of Public Prosecutions, for their assistance in this investigation. Mr. Williams also thanked the U.S. Department of State and the U.S. Department of Justice’s Office of International Affairs for their assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sagar K. Ravi and Jarrod L. Schaeffer are in charge of the prosecution.
U.S. Attorney Announces Fraud and Money Laundering Charges Against the Founders and Promoters of Two Cryptocurrency Ponzi SchemesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of the Department of Homeland Security (“HSI”), announced charges in two separate Indictments against the founders and promoters of two cryptocurrency Ponzi schemes known as IcomTech and Forcount (and later known as Weltsys). United States v. David Carmona, et al., 22 Cr. 551 (JLR), charges DAVID CARMONA, MARCO RUIZ OCHOA, MOSES VALDEZ, JUAN ARELLANO, DAVID BREND, and GUSTAVO RODRIGUEZ with conspiracy to commit wire fraud based on their involvement with IcomTech from in or about mid-2018 until in or about the end of 2019. United States v. Francisley da Silva, et al., S1 22 Cr. 622 (AT), charges FRANCISLEY DA SILVA, JUAN TACURI, and ANTONIA PEREZ HERNANDEZ with conspiracy to commit wire fraud and wire fraud based on their involvement with Forcount from in or about mid-2017 until at least in or about the end of 2021. SILVA and TACURI are also charged with conspiracy to commit money laundering, and HERNANDEZ is also charged with making false statements.
U.S. Attorney Damian Williams said: “With these two indictments, this Office is sending a message to all cryptocurrency scammers: We are coming for you. Stealing is stealing, even when dressed up in the jargon of cryptocurrency. Thanks to the efforts of federal, state, and international law enforcement, IcomTech and Forcount’s founders and promoters are being held to account.”
HSI Special Agent in Charge Ivan J. Arvelo said: “The excitement around cryptocurrency and the potential to make huge profits attracted would-be investors to the alleged schemes run by the individuals indicted today. With high end clothes and cars, these individuals are alleged to have presented a life of luxury to potential investors, but instead of a lucrative investment opportunity, the victims were fleeced of their savings and left with nothing to show for it. Homeland Security Investigations works tirelessly to uncover financial crimes and bring perpetrators to justice.”
As alleged in the Indictments:[1]
IcomTech and Forcount were both purported cryptocurrency mining and trading companies that promised to earn their respective victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products. The founders and promoters of each scheme falsely promised their respective Victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments and the doubling of those investments within six months. In reality, neither company was engaging in cryptocurrency trading or mining, and the founders and promoters of both schemes were using Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.
Both the IcomTech and Forcount defendants fraudulently induced their victims to invest in sham cryptocurrency activities using similar methods. The founders and promoters of the two schemes traveled throughout the United States and internationally where they hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York. During larger-scale events, the schemes’ promoters would present the schemes’ investment products and compensation plan, encourage Victims to invest as a means of achieving financial freedom, and boast about the amount of money they were earning. The schemes’ promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from the schemes. The atmosphere of these events was festive and designed to generate excitement about the schemes.
Victims invested in the IcomTech and Forcount schemes by purchasing investment products from promoters using cash, checks, wire transfers, and actual cryptocurrency. Following a Victim’s investment, they would be provided with access to an online portal where they could monitor their purported returns. While Victims saw “profits” accumulate on the schemes’ respective online portals, most Victims were unable to withdraw any of these so-called profits and ultimately lost their entire investments. By contrast, IcomTech and Forcount’s promoters siphoned off, in some cases, hundreds of thousands of dollars in Victim funds, which they withdrew as cash, spent on promotional expenses for the schemes, and used for personal expenditures such as luxury goods and real estate.
At least as early as August 2018 with respect to the IcomTech scheme, and in or about April 2018 with respect to the Forcount scheme, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so and, when they complained to promoters, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all. Despite these complaints, IcomTech and Forcount’s promoters, including the defendants, continued to promote their respective fraudulent schemes and accept Victims’ investments. As complaints mounted in both schemes, IcomTech and Forcount both began offering proprietary crypto-tokens for sale as a means of injecting liquidity into the schemes. Promoters of the schemes claimed that these tokens, known as “Icoms” in the IcomTech scheme and “Mindexcoin” in the Forcount scheme, would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services. This was false. In reality, they were essentially worthless and resulted in further financial loss to Victims. By in or about the end of 2019 with respect to IcomTech, and in or about 2021 with respect to Forcount, the schemes had stopped making payments to Victims and their chief promoters, including the defendants, stopped promoting the schemes, and, in some instances, stopped responding to Victims’ complaints altogether.
In addition to promoting the Forcount scheme, SILVA and TACURI also sought to conceal their fraud by laundering Victim funds through shell companies and making large personal expenditures on things like real estate and bulk cellphone purchases. On or about June 27, 2022, law enforcement officers with HSI stopped and interviewed HERNANDEZ as she was returning to the United States from Mexico. During the interview, HERNANDEZ falsely denied, among other things, being a Forcount promoter, recruiting investors, and taking money from them.
On November 8, 2022, United States v. David Carmona, et al., 22 Cr. 551 (JLR), was unsealed. As alleged in the Carmona indictment, CARMONA was the founder of IcomTech; OCHOA, VALDEZ, ARELLANO, and BREND were promoters of the scheme; and RODRIGUEZ was hired by CARMONA to build and maintain IcomTech’s website and online portal. On November 8, 2022, CARMONA was arrested in Queens, New York, and presented before United States Magistrate Judge Sarah L. Cave of the Southern District of New York; OCHOA was arrested in the District of New Hampshire; VALDEZ, ARELLANO, and RODRIGUEZ were arrested in the Central District of California; and BREND was arrested in the Middle District of Florida. The Carmona matter has been assigned to United States District Judge Jennifer L. Rochon.
On December 14, 2022, United States v. Francisley da Silva, et al., S1 Cr. 622 (AT), was unsealed. As alleged in the Silva indictment, SILVA was the founder of Forcount and TACURI and HERNANDEZ were promoters of the scheme. On December 14, 2022, TACURI was arrested in the Southern District of Florida. SILVA, a Brazilian national, has been in custody in Brazil since on or about November 3, 2022. HERNANDEZ remains at large. The Silva matter has been assigned to United States District Judge Analisa Torres.
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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 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, particularly HSI New York El Dorado Task Force/Securities Investigations Group, HSI Brasilia, HSI Tampa, and HSI Orlando; the New York City Police Department; the New York City Sheriff’s Office; the Bureau of Insurance Fraud, Property, and Casualty in the Division of Investigative and Forensic Services of the Florida Department of Financial Services; and the Florida Office of Financial Regulation. Mr. Williams also thanked the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Brazilian Federal Police for their assistance.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Benjamin A. Gianforti and Cecilia Vogel are in charge of the prosecution of the Carmona matter. AUSA Gianforti is also in charge of the prosecution of the Silva matter.
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 IcomTech and/or Forcount schemes, 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
United States v. David Carmona, et al., 22 Cr. 551 (JLR)
Defendant
Age
Charges
Maximum Penalties
DAVID CARMONA,
Queens, NY
39
Count 1: Conspiracy to commit wire fraud
20 years in prison
MARCO RUIZ OCHOA,
Nashua, NH
34
Count 1: Conspiracy to commit wire fraud
20 years in prison
MOSES VALDEZ,
Hesperia, CA
26
Count 1: Conspiracy to commit wire fraud
20 years in prison
JUAN ARELLANO,
Chino, CA
46
Count 1: Conspiracy to commit wire fraud
20 years in prison
DAVID BREND,
Tampa, FL
48
Count 1: Conspiracy to commit wire fraud
20 years in prison
GUSTAVO RODRIGUEZ,
North Hollywood, CA
46
Count 1: Conspiracy to commit wire fraud
20 years in prison
United States v. Francisley da Silva, et al., S1 22 Cr. 622 (AT)
FRANCISLEY DA SILVA, Curitiba, Brazil
37
Count 1: Conspiracy to commit wire fraud
Count 2: Wire fraud
Count 3: Conspiracy to commit money laundering
20 years in prison
20 years in prison
20 years in prison
JUAN TACURI,
Orlando, FL
44
Count 1: Conspiracy to commit wire fraud
Count 2: Wire fraud
Count 3: Conspiracy to commit money laundering
20 years in prison
20 years in prison
20 years in prison
ANTONIA PEREZ HERNANDEZ,
Tampa, FL
47
Count 1: Conspiracy to commit wire fraud
Count 2: Wire fraud
Count 4: False statements
20 years in prison
20 years in prison
Five years in prison
[1] As the introductory phrase signifies, the entirety of the text of the Indictments and the description of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Defendants Plead Guilty to COVID-19 FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TATIANA BENJAMIN and HEAVEN WEST pled guilty to defrauding New York City’s COVID-19 Hotel Room Isolation Program. BENJAMIN pled guilty yesterday to conspiracy to commit wire fraud, while WEST pled guilty today to wire fraud. Both defendants pled guilty before United States Magistrate Judge James L. Cott. Both defendants’ case is assigned to United States District Judge Lewis A. Kaplan.
U.S. Attorney Damian Williams said: “As they admitted today, the defendants abused a program designed to provide shelter to the sick and needy during the height of the COVID-19 pandemic. In connection with the fraud, Tatiana Benjamin even purchased the personal identifying information of several medical professionals. For their brazen misconduct, the defendants now face possible prison time.”
According to the allegations contained in the Indictment, court filings, and statements made during plea proceedings:
From approximately April 2020 through July 2020, the defendants defrauded the COVID-19 Hotel Room Isolation Program (the “Program”). In response to the COVID-19 pandemic, New York City created the Program. Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City. The Program was open to (a) healthcare workers who needed to isolate because of exposure to COVID-19; (b) patients who had tested positive for COVID-19; (c) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (d) individuals who lived with someone who contracted COVID-19. As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.” Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform.
BENJAMIN and WEST defrauded the Program in several respects. First, BENJAMIN and WEST each secured free Program hotel rooms for themselves by falsely claiming to be a respiratory therapist and a hospital employee, respectively. Second, BENJAMIN and WEST each sold fraudulently obtained hotel rooms to customers who were ineligible for the Program. Third, BENJAMIN purchased inside information from co-defendant Chanette Lewis, who worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020. Lewis was hired specifically for the Program, which gave her access to legitimate healthcare workers’ identifying information. Lewis sold BENJAMIN, for $800, personal identifying information of at least five healthcare professionals, as well as certain “codes” to use when booking hotel reservations through the Program, such as an employee ID number and license number.
BENJAMIN and WEST used Facebook to advertise the sale of fraudulently obtained Program hotel rooms and to communicate directly with customers. For example, BENJAMIN told a Facebook user, “Friend at 311 gave me the juice for the hotel so I been booking ppl rooms,” and when WEST was asked whether she had “rooms” available, she replied, “Nah I dead don’t bro / All essential hotels are clipped” and added, “They finding out we was scamming the system lol.”
* * *
BENJAMIN, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. Under the terms of her plea agreement, BENJAMIN has agreed to forfeit $51,088 and to pay restitution of $294,624.
WEST, 22, of Atlanta, Georgia, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. Under the terms of her plea agreement, WEST has agreed to forfeit $23,684 and to pay restitution of $59,644.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. The defendants are both scheduled to be sentenced by Judge Kaplan on May 18, 2023, at 3:00 p.m.
Two co-defendants previously pled guilty: Tatiana Daniel previously pled guilty to conspiracy to commit wire fraud and is scheduled to be sentenced by Judge Kaplan on March 29, 2023, at 2:30 p.m. Chanette Lewis previously pled guilty to two counts of conspiracy to commit wire fraud and is scheduled to be sentenced by Judge Kaplan on May 18, 2023, at 3:00 p.m.
Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation (“DOI”), DOI - NYCHA Office of the Inspector General, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation. He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.
Poughkeepsie Street Gang Member Sentenced to 25 Years in Prison for 2012 MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that DIMETRI MOSELEY was sentenced today to 25 years in prison for his participation in the activities of a Poughkeepsie street gang, including the 2012 murder of Caval Haylett and the distribution of heroin. MOSELEY had previously pled guilty to participation in racketeering and narcotics distribution conspiracies and had admitted that he was one of two shooters involved in Haylett’s murder. U.S. District Judge Nelson S. Román, imposed today’s sentence.
MOSELEY was one of 31 members and associates of two rival street gangs who were charged in two separate cases – United States v. Ronald Johnson et al., 17 Cr. 505 (VB) and United States v. Douglas Owen et al., 17 Cr. 506 (NSR) – with racketeering conspiracy, narcotics conspiracy, and firearms offenses. All 31 of those defendants, who were members and associates of two gangs referred to as “Uptown,” and “Downtown,” have now pled guilty to federal charges and been sentenced.
U.S. Attorney Damian Williams said: “This case demonstrates our commitment to dismantling violent gangs who threaten our New York neighborhoods through drug trafficking and the guns and physical violence that often accompanies it. I applaud the extensive effort of our law enforcements partners to rid our streets of these dangers and bring these defendants to justice.”
According to the allegations in the charging documents and statements made in court filings and during court proceedings:
The FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, and the Dutchess County Special Narcotics Unit conducted a joint investigation into the gang war between Uptown and Downtown, which led to multiple fatal and non-fatal shootings between 2012 and 2017 in the City of Poughkeepsie.
Uptown is a criminal organization whose members referred to themselves by, and were known by, several different names. Those names include the “Spready Gang,” the “400 Savages,” the “Boogotti Boys,” the “Young Bosses” or “YB’s,” and the “Mob Stars.” Uptown gang members referred to themselves by different combinations of these names, all of which referred to the same criminal enterprise: the Uptown street gang. Uptown is based within the eastern portion of Poughkeepsie, from east of Hamilton Street to the city line and, more specifically, within the Hudson Gardens housing development (commonly referred to as the “Bricks”). Uptown gang members and associates control the narcotics trade within the Bricks, distributing heroin, crack cocaine, and marijuana, primarily. Uptown gang members stored shared guns in various locations known to gang members to protect the narcotics business, to protect each other from rival gangs, and to strike against rival gangs. The case of United States v. Douglas Owens et al. charged 13 members and associates of Uptown, including its leaders: DOUGLAS OWENS, a/k/a “Born Truth,” and JIHAD WILLIAMS, a/k/a “Goodie.”
Downtown, like Uptown, is the name of a large-scale criminal organization that went by many different names. Those names include the “420 Boys,” “L-Block,” “Most Hated,” “Mobile Mafia,” “Hamo Gang,” the “Young Gunnas,” or “YG’s,” the “C-Eazy Gang,” and the “Bully Hard Hunna” faction of the Bloods street gang. Despite the existence of several different names, each one referred to the same criminal enterprise: the Downtown street gang. Downtown’s base of operations was located in the western portion of Poughkeepsie, from west of Hamilton Street to the Hudson River and, particularly, within the Martin Luther King and Rip Van Winkle housing developments (commonly referred to as the “Ville” and “Rip,” respectively). Downtown gang members and associates controlled the narcotics trade within the Ville, Rip, and the surrounding area, also distributing resale amounts of heroin, crack cocaine, and marijuana, primarily. Downtown gang members also stored their shared firearms in different locations known to members and associates. This allowed Downtown gang members to arm themselves quickly when confronted by rivals and to protect each other and their narcotics business. The case of United States v. Ronald Johnson et al. charged 18 members and associates of Downtown, including its leaders: RONALD JOHNSON, a/k/a “Top Gun,” and CARLOS OCASIO, a/k/a “Leak,” a/k/a “Pimp.”
In addition to countless non-fatal acts of violence against rival gang members and innocent victims, the rivalry between Uptown and Downtown has led to the following murders, among others:
- The murder of Downtown gang member Daquell LeBlanc, a/k/a “Hamo,” who was killed by a single gunshot wound to the chest at the age of 16 in the vicinity of Main Street, between Academy and North Hamilton Streets on or about December 23, 2012; and
- The murder of Caval Haylett, an innocent bystander and local high school basketball star, who was killed by a single gunshot wound to the head at the age of 18 while attending a barbeque in the vicinity of Winnikee Avenue and Harrison Street on or about March 9, 2016.
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All 31 of the charged defendants have pled guilty and been sentenced, as set forth below. Charts identifying each defendant, the charges of conviction, and the sentences imposed are below.
Mr. Williams praised the outstanding work of the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County Sheriff’s Office, the Dutchess County Drug Task Force, and the Dutchess County District Attorney’s Office.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Christopher J. Clore, Maurene Comey, and Emily Deininger are in charge of the prosecution.
United States v. Douglas Owens et al., 17 Cr. 406 (NSR)
DEFENDANT
CHARGE OF CONVICTION
SENTENCE
DOUGLAS OWENS
Racketeering Conspiracy
90 Months
JIHAD WILLIAMS
Racketeering Conspiracy
180 Months
NICHOLAS HARRIS
Racketeering Conspiracy, Conspiracy to Distribute Heroin
240 Months
DIMETRI MOSELEY
Racketeering Conspiracy, Conspiracy to Distribute Heroin
300 Months
JAHQUEZ HILL
Racketeering Conspiracy, Conspiracy to Distribute Crack Cocaine
240 Months
MARKEL GREEN
Racketeering Conspiracy, Conspiracy to Possess a Stolen Firearm
240 Months
RAHEIM MILLER
Racketeering Conspiracy, Conspiracy to Possess a Stolen Firearm
216 Months
CHRISTIAN BLADES
Racketeering Conspiracy
98 Months
ASHANTI BUNN
Racketeering Conspiracy
114 Months
RAYSHAWN CASANOVA
Possession of a Firearm in Furtherance of a Crime of Violence
60 Months
TREQUON DANCY
Racketeering Conspiracy
27 Months
RASHMI RUPARELIA
Conspiracy to Distribute Crack Cocaine, Possession of a Firearm in Furtherance of Narcotics Trafficking
75 Months
United States v. Ronald Johnson et al., 17 Cr. 505 (VB)
DEFENDANT
CHARGE OF CONVICTION
PRISON SENTENCE
RONALD JOHNSON
Racketeering Conspiracy
82 Months*
SAVON BAGBY
Racketeering Conspiracy
50 Months
NATQUAN CATTS
Racketeering Conspiracy
48 Months
JAHQUEZ COLEMAN
Racketeering Conspiracy
21 Months*
WALTER COLEMAN
Racketeering Conspiracy
30 Months*
CHEVEZ DERELLO
Racketeering Conspiracy
52 Months
LEONARD DERELLO
Racketeering Conspiracy
30 Months*
TYRECK DOUGLAS
Racketeering Conspiracy, Possession of a Firearm in Furtherance of a Crime of Violence
92 Months*
ERVING FERZAN
Racketeering Conspiracy
46 Months*
RAKEE JOHNSON
Conspiracy to Distribute Heroin
42 Months
GLORIOUS LANDRUM
Conspiracy to Distribute Heroin
45 Months
COREY LATIMER
Racketeering Conspiracy, other violations
Time Served
ANTOINNE MCKINNON
Racketeering Conspiracy, Conspiracy to Distribute Marijuana
Time Served
WAYNE MORGAN
Racketeering Conspiracy
Time Served
CARLOS OCASIO
Conspiracy to Distribute Heroin
120 Months
GORDON RIDDICK
Possession of a Firearm in Furtherance of Narcotics Trafficking
60 Months
KEENAN WATTS
Racketeering Conspiracy
24 Months
KWAMENE WILLIAMS
Conspiracy to Distribute Heroin
40 Months
*Sentence included a downward adjustment to account for a prison term served, or being served, on related state charges.
Member of Money Laundering Operation Pleads Guilty in Connection with $5 Million Online Vehicle Sale ScamRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that Lithuanian national STANISLAV TUNKEVIC pled guilty today in Manhattan federal court to conspiracy to commit bank fraud in connection with a scheme to launder fraud proceeds derived from an online vehicle sale scam that generated at least $5.3 million from dozens of defrauded consumers. TUNKEVIC pled guilty before U.S. District Judge Analisa Torres.
U.S. Attorney Damian Williams said: “Tunkevic and his co-defendants have admitted to getting paid to use fake documents and shell companies to open bank accounts in order to receive criminal proceeds. Without their knowing involvement, online fraudsters would not be able to profit from their illegal schemes. Tunkevic and his co-defendants will now face prison terms and be required to forfeit their ill-gotten gains.”
As alleged in the Complaint and the Indictments and based on statements made in court:
At various times from at least March 2019 through approximately March 2021, TUNKEVIC and co-defendants KAROL KAMINSKI, ARTURAS GILYS, and SVETLANA VAIDOTIENE were Lithuanian nationals who were recruited in Lithuania to travel to New York City in order to participate in a money laundering operation based in Brooklyn. The operation was coordinated in New York City by co-defendant NATALIA KORZHA and also involved her son and co-defendant VLADISLAV NECEAEV. Under the direction of KORZHA, NECEAEV, TUNKEVIC, KAMINSKI, GILYS, VAIDOTIENE, and other co-conspirators opened numerous bank accounts in the name of shell companies for the purpose of laundering money stolen from consumers who were trying to buy vehicles online. In exchange, the defendants received a cut of the victims’ money.
Other members of the conspiracy, pretending to represent car dealerships, advertised vehicles that they did not own and were not authorized to sell on fake websites with domain names that sounded like legitimate car dealerships or through online marketplaces like Craigslist and eBay. Victims who responded to those advertisements and negotiated a purchase price were instructed by the purported sellers to wire payment to accounts that NECEAEV, KAMINSKI, TUNKEVIC, GILYS, VAIDOTIENE, and other co-conspirators opened. Once the payments cleared, the defendants quickly withdrew the funds before the victims realized they had been defrauded. The victims never received the vehicles they thought they had bought or any refunds from the fake sellers. In total, dozens of victims were defrauded of a total of at least $5.3 million.
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TUNKEVIC, 48, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud and agreed to pay forfeiture and restitution in the amount of $405,000. TUNKEVIC is scheduled to be sentenced by Judge Torres on March 15, 2023.
KORZHA, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on May 4, 2022. She was sentenced by Judge Torres on September 7, 2022, to 48 months in prison and was ordered to pay forfeiture and restitution in the amount of $5,386,538.
NECEAEV, 29, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022. He was sentenced by Judge Torres on September 7, 2022, to 18 months in prison and was ordered to pay forfeiture and restitution in the amount of $458,300.
KAMINSKI, 32, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on November 9, 2022, and agreed to pay forfeiture and restitution in the amount of $338,700. KAMINSKI is scheduled to be sentenced by Judge Torres on March 15, 2023.
GILYS, 41, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on November 15, 2022, and agreed to pay forfeiture and restitution in the amount of $321,700. GILYS is scheduled to be sentenced by Judge Torres on March 15, 2023.
VAIDOTIENE, 55, of Vilnius, Lithuania, pled guilty to one count of conspiracy to commit bank fraud on September 20, 2022, and agreed to pay forfeiture and restitution in the amount of $271,000. VAIDOTIENE is scheduled to be sentenced by Judge Torres on January 18, 2023.
The offense of conspiracy to commit bank fraud carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000. The crime of conspiracy to commit money laundering carries a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the value of the property involved in the transaction.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations and the New York City Police Department. He also thanked the U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the United States Marshals Service, the Prosecutor General’s Office of the Republic of Lithuania, and the Lithuanian Criminal Police Bureau for their assistance in this investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Sarah Lai is in charge of the prosecution.
Manhattan Man Sentenced to 120 Months in Prison for Role as Leader of Gun Trafficking ConspiracyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES THOMAS, a/k/a “Spazz,” was sentenced to 120 months in prison for his leadership of a gun trafficking conspiracy that was responsible for the illegal purchase and trafficking of approximately 89 firearms from at least in or around August 2020 up to and including April 2021. THOMAS pled guilty to one count of interstate travel with intent to engage in gun trafficking on May 20, 2022, before U.S. District Judge Sidney H. Stein, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “James Thomas participated in the trafficking of dozens of guns to New York, and some of the guns that he trafficked can directly be tied to violent crimes. Thomas exacerbated the scourge of gun crime in New York, and for that he is rightly facing a lengthy prison sentence.”
According to public filings and statements made in court:
From at least in or around August 2020 up to and including April 2021, the defendants used Georgia-resident DUVAUGHN WILSON, a/k/a “Dupree,” as a straw purchaser to buy at least 87 firearms from at least six federal firearms licensees (“FFLs”) in Georgia. Over the course of the scheme, during which WILSON completed approximately 30 different transactions, WILSON attested that he was the true purchaser of the firearms, when in fact, he was buying the guns on behalf of the defendants, who in turn illegally resold many of the guns to others.
Prior to purchases, the defendants coordinated with WILSON to place orders for specific firearms and pay for the weapons using cash, mobile banking applications, and through wire payments. When communicating about the firearms, the defendants used coded language, referring to the weapons as “tvs,” “knocks,” and “situations.” In some instances, the defendants referred to the caliber or model of a firearm by referencing the jersey numbers of famous athletes.
After purchasing the weapons, WILSON transferred the firearms to defendants JAMES THOMAS, a/k/a “Spazz,” COURTNEY SCHLOSS, a/k/a “Bway” a/k/a “Balenci,” and others who sold some of the guns in Georgia and transported other firearms, primarily by bus, to New York for resale. In many instances, the guns were transferred to members of the Brooklyn-based “Blixky Gang” — a group comprised primarily of aspiring rappers. Some of these guns later appeared in music videos filmed by members of the Blixky Gang. The videos, which include some of the defendants, show Blixky Gang members brandishing loaded firearms and displaying stacks of cash.
On some occasions, law enforcement successfully interdicted firearms being transported by the defendants before they reached New York. For example, in November 2020, law enforcement in South Carolina stopped a bus in Wellford, South Carolina, from which they seized five firearms, four pistol magazines, a high capacity .40 caliber magazine, and a nine-millimeter drum magazine — all of which was being transported by the defendants in a single backpack.
Law enforcement seized other firearms purchased in Georgia by WILSON in New York City. On at least two occasions, in the wake of violent crimes, the New York City Police Department (“NYPD”) seized firearms trafficked to New York as part of this scheme. As alleged, in February 2021, the NYPD seized a gun that WILSON had bought after a fleeing suspect discharged it at responding officers in the Bronx. In April 2021, following a shooting in the Bronx, the NYPD seized another pistol purchased by WILSON.
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In addition to the prison term, THOMAS, of New York, New York, was sentenced to three years of supervised release.
Eight of THOMAS’s co-defendants were previously sentenced in this case. A chart containing the names and imposed sentences is set forth below.
Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and NYPD, in particular, the Joint Firearms Task Force, which is composed of agents and officers of the ATF and the NYPD.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Ashley C. Nicolas and Matthew J. King are in charge of the prosecution.
Name
Sentence
COURTNEY SCHLOSS, a/k/a “Bway,” a/k/a “Balenci”
120 months in prison; three-year term of supervised release
DUVAUGHN WILSON, a/k/a “Dupree”
48 months in prison; three-year term of supervised release
KEN ALEXANDER, a/k/a “Ryu”
37 months in prison; two-year term of supervised release
ARGAM TAJ, a/k/a “Sour”
60 months in prison; two-year term of supervised release
SAMUEL TAJ, a/k/a “Sosa”
48 months in prison; three-year term of supervised release
CHRISTOPHER MACHADO, a/k/a “Chris Elite”
36 months in prison; two-year term of supervised release
ANTONIO EADDY, a/k/a “Storm”
24 months in prison; three-year term of supervised release
HARLIE RAMOS, a/k/a “White Girl”
18 months in prison; three-year term of supervised release
Insider at Major Financial Services Organization and Retired Financial Professional Charged with Multimillion Dollar Front-Running SchemeRead 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 today that LAWRENCE BILLIMEK, a trader at a major financial services organization (the “Employer’), and ALAN WILLIAMS, a retired financial professional and active day-trader, were charged in an indictment in Manhattan federal court with securities fraud and wire fraud in connection with an extensive insider trading scheme, in which they stole confidential information about the trade orders of the Employer in order to conduct over a thousand timely, profitable securities trades in the same stocks as the Employer. BILLIMEK attempted to hide his conduct by using prepaid, unregistered “burner” phones, and WILLIAMS sent millions of dollars back to BILLIMEK for sharing the confidential information. BILLIMEK was arrested today in the Western District of Texas and WILLIAMS was arrested in the District of Oregon.
U.S. Attorney Damian Williams said: “By stealing confidential trade information from a major financial services organization, Lawrence Billimek betrayed the trust and confidence of his employer and schemed with Alan Williams to make tens of millions of dollars of illegal profit. Billimek and Williams tried to cover their tracks by using burner phones and secret payments, but their scheme has now been laid bare.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants engaged in a years-long scheme in which Mr. Billimek obtained information regarding his employer’s intent to make relatively large trades in certain stocks. In turn, this allowed Mr. Williams to trade in the same stocks in advance and realize substantial ill-gotten profits. These types of insider-trading schemes satisfy the greedy ambitions of nefarious actors at the expense of average investors. The FBI remains steadfast in our efforts to ensure our financial markets are a level playing field for all by bringing to justice those who would seek to illegally exploit them.”
As alleged in the Indictment unsealed today in Manhattan federal court:[1]
LAWRENCE BILLIMEK has been employed at the Employer since approximately 2012. The Employer is a major financial services organization that provides asset management services with over $200 billion in assets. ALAN WILLIAMS spent years working as a trader in the financial services industry. WILLIAMS is currently retired but is an active day-trader.
The Front Running Scheme
Based on his position as a trader at the Employer, BILLIMEK had access to the trade information and trade orders of the Employer. Like most large asset managers, the Employer had rules and regulations concerning employees’ personal trading, including requirements about the confidentiality of client information and prohibitions against insider trading and personal trading in the same securities as the Employer. Because of the size of the Employer’s trade orders, trades by the Employer often caused temporary movements in the price of the securities they traded. For example, if the Employer engaged in a large purchase of stock, the increased demand could cause a rise in the stock price, and if the Employer engaged in a large sale of stock, the increased supply could cause a drop in the stock price. Because BILLIMEK had access to the Employer’s trade orders, he knew in advance when a particular stock price would move up or down based on that trading.
WILLIAMS was an active day trader through at least two retail brokerage accounts. From at least 2016 through 2022, after obtaining information about the Employer’s upcoming trading activity from BILLIMEK, WILLIAMS bought or sold the same securities that the Employer would be buying or selling in order to profit through the subsequent movement of the stock that would occur along with the Employer’s trading. WILLIAMS would then exit those positions once the Employer’s trading was underway or complete, often within minutes. For example, if WILLIAMS learned from BILLIMEK that the Employer would be buying a particular stock, WILLIAMS purchased that stock beforehand. Then, as the Employer made relatively large purchases, the stock price would increase and WILLIAMS would sell those same stock, on the same day, at a profit.
BILLIMEK and WILLIAMS engaged in these front-running trades on at least over a thousand occasions between 2016 and 2022. In order to hide their communication throughout the scheme, BILLIMEK used prepaid, unregistered “burner” phones to provide confidential information as well as trading instructions to WILLIAMS. In total, WILLIAMS’ trading based on the confidential trade information from BILLIMEK generated tens of millions of dollars in profits, and WILLIAMS shared millions of dollars of those profits with BILLIMEK through checks and wire transfers. At times, BILLIMEK also provided false and misleading information to financial institutions about the purpose and nature of those transfers, including referring to them as gifts.
* * *
LAWRENCE BILLIMEK, 51, of Hailey, Idaho, and ALAN WILLIAMS, 77, of West Linn, Oregon, are each charged with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud, which carry a total maximum sentence of 45 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the work of the FBI. Mr. Williams further thanked the Office of United States Securities and Exchange Commission for their cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jason Richman and Daniel Tracer are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
11 Members of Bronx “Wash” Gang Charged with Murder, Racketeering, and Related Violent OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, Special Agent in Charge of the New York Office of the Drug Enforcement Administration (“DEA”), and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of a Superseding Indictment charging Boss Terrell, a/k/a “Sauce,” Yaurel Centeno, a/k/a “Flex,” Lydell Seymore, a/k/a “Bugout,” Darrell Spencer, a/k/a “Rell,” Isaiah Thomas, a/k/a “Zay,” a/k/a “Chicago,” Jacob Baker, Tyshawn Brogdon, a/k/a “Shawn,” Rasheed Chapman, a/k/a “Ra,” Mamadou Diallo, a/k/a “Haji,” a/k/a “Aladje,” Antwan Mosley, a/k/a “Ant,” and Noel Carr, a/k/a “Noey,” with racketeering conspiracy and other crimes related to their membership in “WashSide” or “Wash,” a street gang based in the Bronx, New York. TERRELL, CENTENO, and SPENCER were also charged with the murder of Tyrone Almodovar, who was shot to death on June 26, 2020, in the Morrisania neighborhood in the South Bronx. TERRELL, THOMAS, BAKER, CHAPMAN, MOSLEY, and CARR were further charged with multiple other violent crimes in aid of racketeering, including attempted murder and assault with a dangerous weapon, arising from three further shootings and one slashing similarly committed in the South Bronx between July 2020 and August 2022. CENTENO, SEYMORE, THOMAS, BROGDON, and DIALLO were also charged for their role in committing four robberies, two of which were carjackings. The case is assigned to United States District Judge Jesse M. Furman.
TERRELL was already in custody in connection with charges contained in a previous indictment in this case. SEYMORE is in federal custody in connection with charges filed in another case in Manhattan federal court. CENTENO and DIALLO are in federal custody serving prison sentences in connection with prior federal cases in this District. THOMAS and CARR are in state custody and will be transferred into federal custody. SPENCER, BROGDON, CHAPMAN, and MOSLEY were arrested this morning in the South Bronx and East Harlem and are expected to be presented later today before Chief United States Magistrate Judge James L. Cott. BAKER is a fugitive.
U.S. Attorney Damian Williams said: “The members of ‘Wash,’ as alleged in today’s charges, terrorized neighborhoods in the Bronx and beyond by killing, shooting, slashing, and robbing other people. Through these charges, we will hold Wash’s members accountable not only for the murder of Tyrone Almodovar, but for countless other crimes they committed in New York City and other states across the country.”
DEA Special Agent in Charge Frank A. Tarentino III said: “Gang violence and drug trafficking are plagues to New Yorkers quality of life. The gang members charged today spread violence, terror, and dangerous drugs like Spice/K2 and crack cocaine throughout our city streets. Thanks to the tenacity of the New York City Police Department, members of DEA’s Group D-22, and U.S. Attorney’s Office for the Southern District of New York, eleven members of the “Wash” Gang are facing the consequences of their alleged crimes.”
NYPD Commissioner Keechant L. Sewell said: “Today, New York City is safer because of the dedicated efforts of our NYPD investigators and our law enforcement partners. This case is further proof that the deadly combination of gangs, guns, and drugs will never be tolerated in our city, and that the NYPD will always work to hold every violent offender accountable for their actions. I want to thank the U.S. Attorney’s Office for the Southern District of New York, the Drug Enforcement Administration’s New York Division, and everyone else who contributed to this important investigation.”
According to the allegations in the Superseding Indictment filed today in federal court and statements previously made on the record in this case and related matters:[1]
From at least 2015 to 2022, the members of “WashSide” or “Wash,” a criminal enterprise based in the Bronx, New York, committed multiple acts of violence against members of rival street gangs and others. To make money for the gang, protect the gang’s territory, and promote the gang’s standing, members of Wash engaged in, among other things, armed robberies and carjackings, drug trafficking, wire fraud, and violence, including murder, attempted murder, and assaults with dangerous weapons. The members of Wash also travelled outside New York City and New York State, robbing and stealing from stores across the Northeast and in other states. In social media posts, the members of Wash celebrated all of the above criminal conduct.
For years, Wash engaged in disputes with rival crews in the South Bronx, which resulted in numerous acts of violence. Among these were the following:
- The murder of Tyrone Almodovar after a car chase in the Bronx on June 26, 2020, in which TERRELL, SEYMORE, CENTENO and SPENCER all participated;
- TERRELL shot at rival gang members on July 29, 2020;
- THOMAS and MOSLEY participated in a drive-by shooting that targeted rival gang members but injured two innocent bystanders on August 21, 2021; and
- BAKER and CHAPMAN participated in another shooting that similarly resulted in an innocent bystander being struck on August 19, 2022.
* * *
A chart containing the names of the defendants who were charged today and the charges and minimum and maximum penalties they face is attached. The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of the NYPD and DEA and also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives as well as the Bronx County District Attorney’s Office for their assistance in this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Courtney L. Heavey and Thomas John Wright are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Charges
Minimum and Maximum Penalties
Boss Terrell,
a/k/a “Sauce”
22
Racketeering Conspiracy, Conspiracy to Commit Murder in Aid of Racketeering, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon
Mandatory life in prison or death
YAUREL CENTENO,
a/k/a “Flex”
21
Racketeering Conspiracy, Conspiracy to Commit Murder in Aid of Racketeering, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death, Robbery
Mandatory life in prison or death
Lydell Seymore,
a/k/a “Bugout”
19
Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery
Maximum of life in prison; mandatory minimum seven years in prison to run consecutive to any other sentence
Darrell Spencer,
a/k/a “Rell”
25
Racketeering Conspiracy, Conspiracy to Commit Murder in Aid of Racketeering, Murder in Aid of Racketeering, Use of a Firearm Resulting in Death
Mandatory life in prison or death
Isaiah Thomas,
a/k/a “Zay,”
a/k/a “Chicago”
24
Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon; Robbery, Use of a Firearm for Robbery
Maximum of life in prison; mandatory minimum 17 years to run consecutive to any other sentence
Jacob Baker
18
Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon
Maximum of life in prison; mandatory minimum 10 years to run consecutive to any other sentence
Tyshawn Brogdon,
a/k/a “Shawn”
20
Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery, Wire Fraud Conspiracy, Aggravated Identity Theft
Maximum of life in prison; mandatory minimum seven years to run consecutive to any other sentence
Rasheed Chapman,
a/k/a “Ra”
19
Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon
Maximum of life in prison; mandatory minimum 10 years to run consecutive to any other sentence
Mamadou Diallo,
a/k/a “Haji,” a/k/a “Aladje”
23
Racketeering Conspiracy, Carjacking, Robbery, Use of a Firearm for Carjacking and Robbery
Maximum of life in prison; mandatory minimum seven years to run consecutive to any other sentence
Antwan Mosley,
a/k/a “Ant”
21
Racketeering Conspiracy, Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering, Use of a Firearm for Attempted Murder and Assault with a Dangerous Weapon, Wire Fraud Conspiracy, Aggravated Identity Theft
Maximum of life in prison; mandatory minimum 12 years to run consecutive to any other sentence
Noel Carr,
a/k/a “Noey,”
22
Racketeering Conspiracy, Assault with a Dangerous Weapon in Aid of Racketeering, Wire Fraud Conspiracy, Aggravated Identity Theft
Maximum of 62 years in prison; mandatory minimum two years to run consecutive to any other sentence
[1] As the introductory phrase signifies, the entirety of the text of 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.
United States Attorney Announces Charges Against FTX Founder Samuel Bankman-FriedRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the United States Attorney General, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging SAMUEL BANKMAN-FRIED, a/k/a “SBF,” with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. The charges in the Indictment arise from an alleged wide-ranging scheme by the defendant to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by the defendant, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by the defendant. BANKMAN-FRIED was arrested yesterday in the Bahamas on these charges and will be presented before a Bahamian magistrate judge today.
U.S. Attorney Damian Williams said: “One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors. Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”
Attorney General Merrick B. Garland said: “The Justice Department has filed charges alleging that Samuel Bankman-Fried perpetrated a range of offenses in a global scheme to deceive and defraud customers and lenders of FTX and Alameda, the defendant’s crypto hedge fund, as well as a conspiracy to defraud the United States government. We allege that the defendant conspired to defraud customers by misappropriating their deposits; to defraud lenders; to commit securities fraud and money laundering; and to violate campaign finance laws. As this indictment demonstrates, the U.S. Department of Justice will aggressively investigate and prosecute alleged criminal wrongdoing in the financial system and violations of federal elections laws. We will continue to work to ensure U.S. capital markets operate honestly and with the integrity that investors, lenders, and the American people are entitled to.”
FBI Assistant Director Michael J. Driscoll said: “As the indictment today alleges, Bankman-Fried knowingly defrauded the customers of FTX.com through the misappropriation of the customer deposits to pay expenses and debts of a different company he also owned as well as make other investments. If you deceive and defraud your customers, the FBI will be persistent in our efforts to bring you to justice.”
As alleged in the Indictment unsealed in Manhattan federal court and court filings:[1]
SAMUEL BANKMAN-FRIED was the founder and chief executive officer of FTX, an international cryptocurrency exchange. Since 2019, the defendant and his co-conspirators perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds. As alleged, the defendant used billions of dollars of FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the defendant. BANKMAN-FRIED also allegedly defrauded lenders to Alameda Research and equity investors in FTX by concealing his misuse of customer deposits in financial information that was provided to them.
SAMUEL BANKMAN-FRIED and his co-conspirators made millions of dollars in political contributions funded by Alameda Research to federal political candidates and committees in advance of the 2022 election. To conceal the fact that those contributions were paid for using funds from a corporation and to evade contribution limits and reporting requirements, BANKMAN-FRIED caused contributions to be reported in the names of co-conspirators rather than in the name of the true source of the funds.
* * *
SAMUEL BANKMAN-FRIED, 30, of Stanford, California, is charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years. He is also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years.
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. He also expressed appreciation for the assistance of the Justice Department’s Office of International Affairs, National Cryptocurrency Enforcement Team, Public Integrity Section, and the Drug Enforcement Administration, as well as that of the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which separately initiated civil proceedings against the defendant today. Mr. Williams further thanked the Bahamas Office of the Attorney-General & Ministry of Legal Affairs as well as the Royal Bahamas Police Force for their assistance.
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 are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Fentanyl Traffickers Sentenced to Almost 22 Years and Almost 17 Years in PrisonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT SHANNON, a/k/a “Tank,” was sentenced to 260 months in prison today for his participation in a large-scale narcotics trafficking operation that sold kilogram quantities of fentanyl, heroin, and cocaine and for possessing firearms to protect the drug operation. SHANNON was convicted following a week-long jury trial in August 2022 before U.S. District Judge John P. Cronan, who imposed today’s sentence. On November 9, 2022, Judge Cronan sentenced co-defendant KAREEM RODERIQUE, a/k/a “Ernest Tucker,” to 200 months in prison.
U.S. Attorney Damian Williams said: “The sentence today reaffirms our judicial system’s unflinching commitment to hold narcotics traffickers accountable. Fentanyl, heroin, and cocaine promote violence, ruin lives, and destroy communities. These defendants sought to profit from trafficking significant quantities of these horrific drugs, using firearms to protect their operation, and were justly punished for their crimes.”
According to court documents and the evidence presented at the trial of SHANNON:
SHANNON, RODERIQUE, co-defendant NIKIA KING, and others ran a large-scale narcotics operation out of a narcotics mill and stash house in East Orange, New Jersey, while obtaining drug supplies and conducting a narcotics deal in the Southern District of New York. The defendants obtained large quantities of fentanyl, heroin, and cocaine and utilized their stash house to mix, bag up, and prepare the drugs to sell to other drug dealers, who sold the drugs in the community. The defendants also obtained and kept two loaded firearms in the stash house to protect their drugs and supplies.
On October 27, 2020, law enforcement agents arrested RODERIQUE in the Bronx as he was attempting to purchase five kilograms of cocaine for the drug trafficking operation. Later that night, law enforcement agents arrived at the East Orange stash house as SHANNON and KING were exiting the residence. Shannon was carrying a weighted black bag from the residence to his car, where he was arrested. Inside of the vehicle, law enforcement agents recovered the weighted bag, which Shannon had attempted to hide behind the car’s dashboard. The black bag contained over 1,000 individual glassines envelopes of fentanyl and an additional bag contained over 1,000 doses of powdered fentanyl. Law enforcement agents searched the East Orange stash house — which was protected by security cameras and a reinforced door. Inside the stash house, law enforcement agents found approximately three kilograms of fentanyl, heroin, black tar heroin, narcotics cutting agent, cash, and two loaded firearms. Agents also discovered narcotics trafficking supplies and equipment used to weigh, package, and sell fentanyl, heroin, and cocaine on the street, such as a large freestanding kilogram press, numerous grinders and blenders, and worktables.
* * *
SHANNON was convicted after trial of narcotics conspiracy and using and carrying firearms during and in relation to, or possessing firearms in furtherance of, the narcotics conspiracy. As part of the same case, RODERIQUE previously pled guilty in March 2022 before Judge Cronan to narcotics conspiracy, and co-defendant KING previously pled guilty in May 2022 before Judge Cronan to narcotics conspiracy. KING was sentenced by Judge Cronan to 60 months in prison in October 2022.
In addition to the prison terms, Judge Cronan sentenced SHANNON, 46, of Jersey City, New Jersey, to five years of supervised release; RODERIQUE, 39, of Raleigh, North Carolina, to five years of supervised release; and KING, 44, of Newark, New Jersey, to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration.
The prosecution of this case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Michael R. Herman, Brandon D. Harper, and Jared Lenow, with the assistance of Paralegal Specialist Samuel Dobro, are in charge of the prosecution.
FTX Founder Indicted for Fraud, Money Laundering, and Campaign Finance OffensesRead the Press Release
A federal grand jury in Manhattan returned an indictment today charging Samuel Bankman-Fried, aka SBF, 30, of Stanford, California, with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.
The charges in the indictment arise from an alleged wide-ranging scheme by Bankman-Fried to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by Bankman-Fried, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by Bankman-Fried. Bankman-Fried was arrested yesterday in the Bahamas on these charges and will be presented before a Bahamian magistrate judge today.
“The Justice Department has filed charges alleging that Samuel Bankman-Fried perpetrated a range of offenses in a global scheme to deceive and defraud customers and lenders of FTX and Alameda, the defendant’s crypto hedge fund, as well as a conspiracy to defraud the United States government,” said Attorney General Merrick B. Garland. “We allege that the defendant conspired to defraud customers by misappropriating their deposits; to defraud lenders; to commit securities fraud and money laundering; and to violate campaign finance laws. As this indictment demonstrates, the U.S. Department of Justice will aggressively investigate and prosecute alleged criminal wrongdoing in the financial system and violations of federal elections laws. We will continue to work to ensure U.S. capital markets operate honestly and with the integrity that investors, lenders, and the American people are entitled to.”
“One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors,” said U.S. Attorney Damian Williams for the Southern District of New York. “Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system. As today’s charges make clear, this was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”
“As the indictment today alleges, Bankman-Fried knowingly defrauded the customers of FTX.com through the misappropriation of the customer deposits to pay expenses and debts of a different company he also owned as well as make other investments,” said Assistant Director Michael J. Driscoll of the FBI New York Field Office. “If you deceive and defraud your customers, the FBI will be persistent in our efforts to bring you to justice.”
According to the indictment, Bankman-Fried was the founder and chief executive officer of FTX, an international cryptocurrency exchange. Since 2019, Bankman-Fried and his co-conspirators perpetrated a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds. Bankman-Fried allegedly used billions of dollars of FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to federal political candidates and committees, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the Bankman-Fried. Bankman-Fried also allegedly defrauded lenders to Alameda Research and equity investors in FTX by concealing his misuse of customer deposits in financial information that was provided to them.
Bankman-Fried and his co-conspirators made millions of dollars in political contributions funded by Alameda Research to federal political candidates and committees in advance of the 2022 election. To conceal the fact that those contributions were paid for using funds from a corporation and to evade contribution limits and reporting requirements, Bankman-Fried caused contributions to be reported in the names of co-conspirators rather than in the name of the true source of the funds.
Bankman-Fried is charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison. He is also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations, each of which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney General Merrick B. Garland, U.S. Attorney Damian Williams for the Southern District of New York, 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 the assistance of the Justice Department’s Office of International Affairs, National Cryptocurrency Enforcement Team, Public Integrity Section, and the DEA, as well as that of the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which separately initiated civil proceedings against Bankman-Fried today. The Bahamas Office of the Attorney-General & Ministry of Legal Affairs as well as the Royal Bahamas Police Force also provided assistance. The Money Laundering and Transnational Criminal Enterprises Unit and Assistant U.S. Attorneys Samuel Raymond and Thane Rehn for the Southern District of New York also contributed to the investigation.
The U.S. Attorney’s Office for the Southern District of New York’s Securities and Commodities Fraud Task Force is handling the case. Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon for the Southern District of New York 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.
Danske Bank Pleads Guilty to Fraud on U.S. Banks in Multi-Billion Dollar Scheme to Access the U.S. Financial SystemRead the Press Release
Danske Bank A/S (Danske Bank), a global financial institution headquartered in Denmark, pleaded guilty today and agreed to forfeit $2 billion to resolve the United States’ investigation into Danske Bank’s fraud on U.S. banks.
According to court documents, Danske Bank defrauded U.S. banks regarding Danske Bank Estonia’s customers and anti-money laundering controls to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia. The Justice Department will credit nearly $850 million in payments that Danske Bank makes to resolve related parallel investigations by other domestic and foreign authorities.
“Today’s guilty plea by Danske Bank and two-billion-dollar penalty demonstrate that the Department of Justice will fiercely guard the integrity of the U.S. financial system from tainted foreign money – Russian or otherwise,” said Deputy Attorney General Lisa O. Monaco. “Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws. We expect companies to invest in robust compliance programs – including at newly acquired or far-flung subsidiaries – and to step up and own up to misconduct when it occurs. Failure to do so may well be a one-way ticket to a multi-billion-dollar guilty plea.”
“Danske Bank lied to U.S. banks about its deficient anti-money laundering systems, inadequate transaction monitoring capabilities, and its high-risk, offshore customer base in order to gain unlawful access to the U.S. financial system,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today, Danske Bank accepted responsibility for defrauding U.S. financial institutions and funneling billions of dollars in suspicious and criminal transactions through the United States. As part of its guilty plea, Danske Bank will forfeit over $2 billion and implement significant changes to its compliance program and AML controls. This coordinated resolution with the Securities and Exchange Commission (SEC) and Danish authorities sends a clear message that the Department of Justice stands ready to work with our partners around the world to investigate corporate wrongdoing and hold bad actors accountable for their criminal conduct.”
“For years, Danske Bank lied and deceived U.S. banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system,” said U.S. Attorney Damian Williams for the Southern District of New York. “In doing so, Danske Bank, the largest bank in Denmark, deliberately disregarded U.S. law of which it is well aware, facilitated the laundering of criminal and suspicious proceeds through the United States, and placed the U.S. financial network at risk, all in the name of its bottom line. The bank is now being held to account. For its years-long criminal conduct, today Danske Bank pleaded guilty to conspiring to commit bank fraud, will forfeit over $2 billion, and will implement and maintain a revamped compliance program and AML controls. Banks and other financial institutions around the world should heed this message: If you want to use the U.S. financial system, you must play by the rules. If you don’t, we will hold you accountable.”
“Danske Bank’s guilty plea for defrauding U.S. banks should serve as a stark warning to others that we will uncover the truth and deliver accountability,” said FBI Deputy Director Paul Abbate. “The FBI, working with international partners, will vigorously investigate any institution, wherever based, which is engaged in manipulating U.S. financial systems to enable money laundering. The FBI remains committed to safeguarding our national and economic security from threats which could cause harm to American institutions.”
According to admissions and court documents, between 2008 and 2016, Danske Bank offered banking services through its branch in Estonia, Danske Bank Estonia. Danske Bank Estonia had a lucrative business line serving non-resident customers known as the NRP. Danske Bank Estonia attracted NRP customers by ensuring that they could transfer large amounts of money through Danske Bank Estonia with little, if any, oversight. Danske Bank Estonia employees conspired with NRP customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of the funds. Access to the U.S. financial system via the U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions. Danske Bank Estonia processed $160 billion through U.S. banks on behalf of the NRP.
U.S. banks required Danske Bank and Danske Bank Estonia to provide information to open and maintain accounts, including information related to anti-money laundering (AML) controls, transaction monitoring, and customers. Danske Bank knew that the U.S. banks expected honest, complete, and accurate responses and that the U.S. banks would not maintain, or open, U.S. dollar accounts for Danske Bank Estonia without the required information.
By at least February 2014, as a result of internal audits, information from regulators, and an internal whistleblower, Danske Bank knew that some NRP customers were engaged in highly suspicious and potentially criminal transactions, including transactions through U.S. banks. Danske Bank also knew that Danske Bank Estonia’s anti-money laundering program and procedures did not meet Danske Bank’s standards and were not appropriate to meet the risks associated with the NRP. Instead of providing the U.S. banks with truthful information, Danske Bank lied about the state of Danske Bank Estonia’s AML compliance program, transaction monitoring capabilities, and information regarding Danske Bank Estonia’s customers and their risk profile.
Today, Danske Bank pleaded guilty to one count of conspiracy to commit bank fraud. Under the terms of the plea agreement, the company has agreed to criminal forfeiture of $2.059 billion. Danske Bank will also enter into separate criminal or civil resolutions with domestic and foreign authorities and the department will credit approximately $850 million in payments the bank makes to the SEC and the Danish authorities.
The department reached its resolution with Danske Bank based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct. This included a bank fraud conspiracy in which Danske Bank misled U.S. banks in order to maintain and in one case open U.S. dollar accounts through which Danske Bank processed $160 billion for its non-resident customers; the bank’s failure to voluntarily and timely disclose the conduct to the department; the state of Danske Bank’s compliance program and the progress of its remediation; the bank’s resolutions with other domestic and foreign authorities, including the imposition of an independent expert by Danish authorities; and the bank’s continued cooperation with the department’s ongoing investigation. Danske Bank received full credit for cooperation and remediation because it provided full cooperation with the investigation and demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct, including by, among other things, providing substantial information from its internal investigation, voluntarily and expediently producing a significant amount of documents located outside the United States in ways that did not implicate foreign data privacy laws, making foreign witnesses available for interviews, collecting and producing voluminous evidence and information including with translations where necessary, and providing detailed analysis of complex, cross-border transactions. Danske Bank has also enhanced and committed to continue improving its compliance programs and has agreed to the appointment of an independent expert selected by its regulator.
Additionally, the SEC announced a separate settlement with Danske Bank today in connection with a related, parallel proceeding. Under the terms of that resolution, Danske Bank agreed to pay approximately $413 million, which includes a civil monetary penalty of $178.6 million, as well as disgorgement that will be credited to any such payments made to the Danish authorities or the department in connection with Danske Bank’s guilty plea.
The FBI is investigating the case.
Trial Attorneys Margaret A. Moeser and Patrick B. Gushue of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Tara M. La Morte and Sheb Swett for the Southern District of New York are prosecuting the case. The Justice Department’s Office of International Affairs provided critical assistance in this case.
The department appreciates the significant assistance provided by the SEC and the authorities in Denmark. The department further appreciates the assistance provided by authorities in Estonia in response to multiple Mutual Legal Assistance requests.
MLARS’ Bank Integrity Unit investigates and prosecutes complex, multi-district, and international criminal cases involving financial institutions. The unit’s prosecutions focus on banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
Danske Bank Pleads Guilty to Fraud on U.S. Banks in Multi-Billion Dollar Scheme to Access the U.S. Financial SystemRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Lisa O. Monaco, the Deputy Attorney General of the United States, 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 Office of the Federal Bureau of Investigation (“FBI”), announced that Danske Bank A/S (“Danske Bank”), a global financial institution headquartered in Denmark, pled guilty today and agreed to forfeit $2 billion to resolve the United States’ investigation into Danske Bank’s fraud on U.S. banks.
According to court documents, Danske Bank defrauded U.S. banks regarding Danske Bank Estonia’s customers and anti-money laundering controls to facilitate access to the U.S. financial system for Danske Bank Estonia’s high-risk customers, who resided outside of Estonia – including in Russia. The Justice Department will credit nearly $850 million in payments that Danske Bank makes to resolve related parallel investigations by other domestic and foreign authorities.
U.S. Attorney Damian Williams said: “For years, Danske Bank lied and deceived U.S. banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system. In doing so, Danske Bank, the largest bank in Denmark, deliberately disregarded U.S. law, of which it is well aware, facilitated the laundering of criminal and suspicious proceeds through the United States, and placed the U.S. financial network at risk, all in the name of its bottom line. The Bank is now being held to account. For its years-long criminal conduct, today Danske Bank pled guilty to conspiring to commit bank fraud, will forfeit over $2 billion, and will implement and maintain a revamped compliance program and AML controls. Banks and other financial institutions around the world should heed this message: If you want to use the U.S. financial system, you must play by the rules. If you don’t, we will hold you accountable.”
Deputy Attorney General Lisa O. Monaco said: “Today’s guilty plea by Danske Bank and two-billion-dollar penalty demonstrate that the Department of Justice will fiercely guard the integrity of the U.S. financial system from tainted foreign money—Russian or otherwise. Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws. We expect companies to invest in robust compliance programs—including at newly acquired or far-flung subsidiaries—and to step up and own up to misconduct when it occurs. Failure to do so may well be a one-way ticket to a multi-billion-dollar guilty plea.”
Assistant Attorney General Kenneth A. Polite Jr. said: “Danske Bank lied to U.S. banks about its deficient anti-money laundering systems, inadequate transaction monitoring capabilities, and its high-risk, offshore customer base in order to gain unlawful access to the U.S. financial system. Today, Danske Bank accepted responsibility for defrauding U.S. financial institutions and funneling billions of dollars in suspicious and criminal transactions through the United States. As part of its guilty plea, Danske Bank will forfeit over $2 billion and implement significant changes to its compliance program and AML controls. This coordinated resolution with the Securities and Exchange Commission (SEC) and Danish authorities sends a clear message that the Department of Justice stands ready to work with our partners around the world to investigate corporate wrongdoing and hold bad actors accountable for their criminal conduct.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As the guilty plea today demonstrates, Danske knowingly defrauded United States based banks as part of an elaborate scheme to enable money laundering from Russia. Despite knowing that transactions of their customers were suspicious and possibly criminal, Danske initially concealed and lied to the U.S. banks. The FBI and our law enforcement partners are committed to ensuring that foreign financial institutions wishing to do business in our system maintain compliance with the rules and regulations of the United States financial system. Those institutions who try to evade these regulations will be held accountable in the criminal justice system.”
According to admissions and court documents:
Between 2008 and 2016, Danske Bank offered banking services through its branch in Estonia, Danske Bank Estonia. Danske Bank Estonia had a lucrative business line serving non-resident customers known as the NRP. Danske Bank Estonia attracted NRP customers by ensuring that they could transfer large amounts of money through Danske Bank Estonia with little, if any, oversight. Danske Bank Estonia employees conspired with NRP customers to shield the true nature of their transactions, including by using shell companies that obscured actual ownership of the funds. Access to the U.S. financial system via the U.S. banks was critical to Danske Bank and its NRP customers, who relied on access to U.S. banks to process U.S. dollar transactions. Danske Bank Estonia processed $160 billion through U.S. banks on behalf of the NRP.
U.S. banks required Danske Bank and Danske Bank Estonia to provide information to open and maintain accounts, including information related to anti-money laundering (“AML”) controls, transaction monitoring, and customers. Danske Bank knew that the U.S. banks expected honest, complete, and accurate responses and that the U.S. banks would not maintain, or open, U.S. dollar accounts for Danske Bank Estonia without the required information.
By at least February 2014, as a result of internal audits, information from regulators, and an internal whistleblower, Danske Bank knew that some NRP customers were engaged in highly suspicious and potentially criminal transactions, including transactions through U.S. banks. Danske Bank also knew that Danske Bank Estonia’s anti-money laundering program and procedures did not meet Danske Bank’s standards and were not appropriate to meet the risks associated with the NRP. Instead of providing the U.S. banks with truthful information, Danske Bank lied about the state of Danske Bank Estonia’s AML compliance program, transaction monitoring capabilities, and information regarding Danske Bank Estonia’s customers and their risk profile.
To resolve the investigation, Danske Bank pled guilty to one count of conspiracy to commit bank fraud. Under the terms of the plea agreement, the company has agreed to criminal forfeiture of $2.059 billion. Danske Bank will also enter into separate criminal or civil resolutions with domestic and foreign authorities, and the Department will credit approximately $850 million in payments the bank makes to the Securities and Exchange Commission (“SEC”) and the Danish authorities.
The Department reached its resolution with Danske Bank based on a number of factors, including the nature, seriousness, and pervasiveness of the offense conduct. This included a bank fraud conspiracy in which Danske Bank misled U.S. banks in order to maintain, and in one case open, U.S. dollar accounts through which Danske Bank processed $160 billion for its non-resident customers; the bank’s failure to voluntarily and timely disclose the conduct to the Department; the state of Danske Bank’s compliance program and the progress of its remediation; the bank’s resolutions with other domestic and foreign authorities; and the bank’s continued cooperation with the Department’s ongoing investigation. Danske Bank received full credit for cooperation and remediation because it provided full cooperation with the investigation and demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct, including by, among other things, providing substantial information from its internal investigation, voluntarily and expediently producing a significant amount of documents located outside the United States in ways that did not implicate foreign data privacy laws, making foreign witnesses available for interviews, collecting and producing voluminous evidence and information, including with translations where necessary, and providing detailed analysis of complex, cross-border transactions. Danske Bank has also enhanced and committed to continue improving its compliance programs and has agreed to the appointment of an independent expert selected by its regulator.
Additionally, the SEC announced a separate settlement with Danske Bank today in connection with a related, parallel proceeding. Under the terms of that resolution, Danske Bank agreed to pay approximately $413 million, which includes a civil monetary penalty of $178.6 million, as well as disgorgement that will be credited to any such payments made to the Danish authorities or the department in connection with Danske Bank’s guilty plea.
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The case is being handled by the Office’s Money Laundering & Transnational Criminal Enterprises Unit in partnership with the Criminal Division’s Money Laundering and Asset Recovery Section. Assistant U.S. Attorneys Tara M. La Morte and Sheb Swett and Trial Attorneys Margaret A. Moeser and Patrick B. Gushue are prosecuting this case.
Mr. Williams praised the investigative work of the FBI and the significant assistance provided by the Criminal Division’s Office of International Affairs, the SEC, and the authorities in Denmark. Mr. Williams also expressed his gratitude for the assistance provided by authorities in Estonia in response to Mutual Legal Assistance requests.
Former President of the New York Building and Construction Trades Council and 10 Other Union Officials Plead Guilty to Accepting Bribes and Illegal PaymentsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Raymond A. Tierney, District Attorney for Suffolk County, announced today that 11 former union officials — JAMES CAHILL, former President of the New York State Building and Construction Trades Council, CHRISTOPHER KRAFT, PATRICK HILL, MATTHEW NORTON, WILLIAM BRIAN WANGERMAN, KEVIN MCCARRON, JEREMY SHEERAN, a/k/a “Max,” ANDREW MCKEON, ROBERT EGAN, SCOTT ROCHE, and ARTHUR GIPSON — have pled guilty to charges stemming from their acceptance of bribes and illegal cash payments from a construction contractor (“Employer-1”) from in or about October 2018 to in or about October 2020 while the defendants were serving as union officers. MCCARRON and EGAN pled guilty earlier today before United States District Judge Colleen McMahon to violating the Taft-Hartley Act, and the remaining defendants previously pled guilty either to honest services fraud conspiracy or to violating the Taft-Hartley Act. Each defendant has or will be sentenced by Judge McMahon in Manhattan federal court.
U.S. Attorney Damian Williams said: “The defendants exploited their union positions and hard-working union members to feed their own greed. They accepted bribes to corruptly favor non-union employers and influence the construction trade in New York. The convictions in this case reflect our continuing commitment to root out corruption and bring to justice those who abuse positions of power out of personal greed. I thank the Suffolk County District Attorney’s Office for their partnership in this case.”
Suffolk County District Attorney Raymond A. Tierney said: “These convictions highlight a shocking level of corruption among powerful labor officials in New York State. Through their greed and self-dealing, these defendants betrayed the hard-working members of their respective unions, and undermined the protections meant to be afforded by organized labor. While their members were performing difficult work at job sites throughout the region, these defendants sold out their membership by accepting bribes and cash payments in restaurant bathrooms. My Office will continue to uncover and prosecute corruption of all kinds, including that committed by union officials. I would like to thank the U.S. Attorney's Office for the Southern District of New York for partnering with my Office on these cases, and for bringing these prosecutions to a successful conclusion."
According to the allegations in the Indictment, statements made in court, and court filings:
JAMES CAHILL was the President of the New York State Building and Construction Trades Council (the “NYS Trades Council”), which represents over 200,000 unionized construction workers, a member of the Executive Council for the New York State American Federation of Labor and Congress of Industrial Organizations (the “NYS AFL-CIO”), and formerly a union representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “UA”). During the charged conspiracy, CAHILL accepted approximately $44,500 in bribes from Employer-1, and as part of his guilty plea, CAHILL acknowledged having previously accepted at least approximately $100,000 of additional bribes from Employer-1 in connection with CAHILL’s union positions.
KRAFT, HILL, NORTON, WANGERMAN, MCCARRON, SHEERAN, and MCKEON were Business Agents, EGAN was the Secretary-Treasurer, and ROCHE was the Business Agent At Large of the Local 638 of the UA (“Local 638”). GIPSON was a Business Agent of the Local Union 200 of the UA (“Local 200”). Each of these defendants accepted thousands and, in some cases, tens of thousands of dollars of cash bribes from Employer-1, a contractor who had projects and potential projects within the jurisdiction of Local 638 and Local 200.
All 11 defendants accepted cash from Employer-1 — usually stuffed in envelopes that Employer-1 handed off inside the restrooms of restaurants. During the meetings at which the payments were made, Employer-1 repeatedly requested favorable action from Local 638 and/or Local 200 including the following: (1) that the relevant union would support Employer-1’s bids on various projects, (2) that the union would consider signing Employer-1 to labor agreements that Employer-1 regarded to be favorable (including agreements that would pay union workers lower rates than their experience merited), and (3) that the union would permit Employer-1 to falsely claim to developers that Employer-1 employed union workers. JAMES CAHILL was the leader of the conspiracy and introduced Employer-1 to many of the other defendants, while advising Employer-1 that Employer-1 could reap the benefits of being associated with the unions without actually signing union agreements or employing union workers.
Employer-1 contracted to work on — or would bid on — projects that could have otherwise employed union workers belonging to Local 638 and/or Local 200. At the time Employer-1 was bribing the defendants, Employer-1’s business employed workers who were not members of Local 638 and/or Local 200 but would have been eligible for membership.
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A chart containing the names, offenses of conviction, maximum penalties for the defendants, and sentencing dates for each is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Special Agents and investigators within the U.S. Attorney’s Office for the Southern District of New York and the Suffolk County District Attorney’s Office.
This case is being handled by the Office’s Violent and Organized Crime Unit and the Public Corruption Unit. Assistant U.S. Attorneys Frank J. Balsamello, Marguerite Colson, Danielle Sassoon, Jason Swergold, and Jun Xiang, and Special Assistant U.S. Attorney Laura de Oliveira, are in charge of the prosecution.
Defendant
Offense of Conviction
Max. Penalty
Date of Sentencing
JAMES CAHILL
Honest Services Fraud Conspiracy
20 years in prison
March 7, 2023, at 4:00 p.m.
CHRISTOPHER KRAFT
Honest Services Fraud Conspiracy
20 years in prison
December 12, 2022, at 4:00 p.m.
PATRICK HILL
Honest Services Fraud Conspiracy
20 years in prison
December 19, 2022, at 2:00 p.m.
MATTHEW NORTON
Taft-Hartley Act Violation (Felony)
Five years in prison
December 13, 2022, at 11:00 a.m.
WILLIAM BRIAN WANGERMAN
Taft-Hartley Act Violation (Felony)
Five years in prison
January 30, 2023, at 4:00 p.m.
KEVIN MCCARRON
Taft-Hartley Act Violation (Misdemeanor)
12 months
in prison
March 14, 2023, at 2:00 p.m.
JEREMY SHEERAN
Taft-Hartley Act Violation (Felony)
Five years in prison
January 13, 2023, at 2:00 p.m.
ANDREW MCKEON
Taft-Hartley Act Violation (Felony)
Five years in prison
January 18, 2023, at 2:00 p.m.
ROBERT EGAN
Taft-Hartley Act Violation (Felony)
Five years in prison
March 14, 2023, at 12:00p.m.
SCOTT ROCHE
Taft-Hartley Act Violation (Misdemeanor)
12 months
in prison
Sentenced on December 6, 2022, to two years’ probation and $10,000 fine
ARTHUR GIPSON
Taft-Hartley Act Violation (Felony)
Five years in prison
March 9, 2023, at 2:30 p.m.
Bronx Man Sentenced to Life in Prison for Fatal Shooting of A Bystander at A Father’s Day BarbecueRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that RALPH BERRY was sentenced today to life in prison for the June 2000 fatal shooting of innocent bystander Caprice Jones in the Bronx, New York. Jones was left paralyzed from the shooting and died from his injuries 10 years later, in November 2010. BERRY was convicted following a jury trial on September 30, 2021, before then-U.S. District Judge Alison J. Nathan. Judge Nathan, now a U.S. Circuit Judge sitting by designation in Manhattan federal court, imposed today’s sentence.
U.S. Attorney Damian Williams said: “Ralph Berry callously ordered the shooting of a rival drug dealer that resulted in the senseless murder of Caprice Jones. Jones was simply enjoying a Father’s Day barbecue when his life was changed forever. As a result of Berry’s actions, Jones was left paralyzed and ultimately died from his injuries 10 years later. Berry has now been sentenced to spend the rest of his life in prison.”
According to the Indictment and evidence presented at trial:
In the summer of 2000, BERRY was the head of a violent drug crew that operated in the McKinley Housing Development in the Bronx. On June 21, 2000, BERRY ordered one of his subordinates to shoot a rival drug dealer with whom BERRY had been feuding over drug territory. That subordinate followed BERRY’s order and fired multiple shots into a Father’s Day barbecue being held on the McKinley Houses basketball courts. Caprice Jones, an innocent bystander who was not involved in the drug dispute, was struck in the spine by one of the bullets. The gunshot injury Jones sustained that day left him paralyzed from the waist down and ultimately caused his death ten years later, in November 2010, at the age of 42.
* * *
In addition to the prison term, BERRY, 55, of the Bronx, New York, was sentenced to five years’ supervised release and a $200 mandatory special assessment.
Mr. Williams praised the outstanding work of the New York City Police Department and the Special Agents of the United States Attorney’s Office for the Southern District of New York.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Dominic A. Gentile, Adam S. Hobson, and Jacob R. Fiddelman are in charge of the prosecution.
Thoroughbred Racehorse Trainer Jason Servis Pleads Guilty in Federal Doping CaseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant JASON SERVIS pled guilty today for his role in the distribution of adulterated and misbranded drugs intended for administration on racehorses he trained, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV). SERVIS pled guilty before U.S. District Judge Mary Kay Vyskocil. SERVIS will be sentenced by Judge Vyskocil on May 18, 2023.
U.S. Attorney Damian Williams said: “Servis’ conduct represents corruption at the highest levels of the racehorse industry. As a licensed racehorse trainer, Servis was bound to protect the horses under his care and to comply with racing rules designed to ensure the safety and well-being of horses and protect the integrity of the sport. Servis abdicated his responsibilities to the animals, to regulators, and to the public. This latest conviction demonstrates the commitment of this Office and of our partners at the FBI to the prosecution and investigation of corruption, fraud, deceit, and endangerment in the racehorse industry.”
According to the allegations contained in the Superseding Indictment, the Superseding Information charging SERVIS, prior charging instruments and other filings in this case, and statements during court proceedings:
The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Kentucky, and Saudi Arabia, all to the detriment and risk of the health and well-being of the racehorses. Trainers, like SERVIS, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control.
SERVIS ordered hundreds of bottles of the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities and contained growth factors that the defendant believed to be undetectable through regular drug screens. Virtually all the horses in SERVIS’ barn received that drug, including the thoroughbred racehorse “Maximum Security,” who crossed the finish line first at the 2019 Kentucky Derby. SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors.” SERVIS approved veterinary bills to racehorse owners that contained concealed charges for SGF-1000, which were falsely billed under the line item “Acupuncture & Chiropractic.” In September 2019, the New York State Gaming Commission released an advisory stating that SGF-1000 was prohibited under the racing rules and had been prohibited since 2012. SERVIS continued to allow the administration of that drug on the horses he trained up until his arrest in March 2020.
Horses trained by SERVIS were regularly administered the prescription drug “Clenbuterol” with no valid prescription, which was part of a deliberate effort to conceal that conduct from racing regulators and avoid mandatory reporting requirements.
SERVIS further obtained and transported a misbranded version of “Clenbuterol,” which he obtained from convicted co-defendant JORGE NAVARRO.
* * *
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative. Mr. Williams also thanked the Food and Drug Administration for their assistance.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Sarah Mortazavi is in charge of the prosecution.
Tech Company CEO Pleads Guilty to Defrauding His Former EmployerRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that SUNI MUNSHANI, the former Chief Executive Officer of a Connecticut-based technology company (the “Victim Company”), pled guilty today in Manhattan federal court in connection with a scheme to defraud the Victim Company of millions of dollars. Pursuant to his plea agreement with the Government, MUNSHANI agreed to pay $10,485,043 in restitution to the Victim Company. District Judge Jed S. Rakoff accepted the defendant’s guilty plea.
U.S. Attorney Damian Williams said: “Not even a year into his appointment as CEO, Suni Munshani began betraying his employer’s trust and breaking the law, stealing millions of dollars to line his pockets. Company executives are given significant amounts of power, but today’s plea should send the message that this Office will be ready to act if an executive chooses to abuse that power.”
According to the allegations in the Superseding Information and other filings and statements made in court:
Between 2011 and 2019, SUNI MUNSHANI was the CEO of the Victim Company, which provided data security services to its clients. Within six months of his appointment as CEO, MUNSHANI and others began an approximately nine-year scheme to defraud the Victim Company. During the scheme, MUNSHANI created an email account associated with a purported third-party contractor controlled by MUNSHANI and used that email account to correspond with the Victim Company and to obtain payments from the Victim Company totaling at least approximately $3 million dollars for services that were never provided to the Victim Company. He also caused the Victim Company to issue a $3.5 million check for a purported tax liability, which check MUNSHANI then deposited into an unauthorized bank account created by MUNSHANI in the name of the Victim Company.
In addition, MUNSHANI defrauded the Victim Company through fraudulent licensing and reseller agreements between the Victim Company and two other companies (the “Licensing Company” and the “Reseller Company,” respectively). Among other things, MUNSHANI instructed another individual to set up the Reseller Company “in the same way as [the Licensing Company],” and then helped create and submit fraudulent invoices from the Reseller Company to the Victim Company.
* * *
MUNSHANI, 61, of Easton, Connecticut, pled guilty to one count of conspiracy to commit wire 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.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.
Four Defendants Arrested for Multimillion Dollar Fraud and Money Laundering SchemeRead 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 Patrick Freaney, Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), announced today that JOEL ZUBAID, DAVID GORAN, JULIAN REBIGA, a/k/a “Iulian Rebiga,” and MARTIN MIZRAHI, a/k/a “Marty Mizrahi” (collectively, the “Defendants”), were arrested for participating in a scheme to defraud businesses, banks, and individuals of more than $9.2 million through business email compromise and credit card fraud schemes. REBIGA was presented yesterday in the United States District Court for the Central District of California, ZUBAID and GORAN will be presented today in the United States District Court for the Central District of California, and MIZRAHI will be presented today in the United States District Court for the District of Nevada. The case is assigned to U.S. District Judge J. Paul Oetken.
U.S. Attorney Damian Williams said: “Joel Zubaid, David Goran, Julian Rebiga, and Martin Mizrahi worked together on multiple schemes that included fleecing legitimate businesses by using compromised email accounts. In tricking them into sending millions of dollars to the defendants’ own bank accounts and using stolen identities and credit card information, they were able to fraudulently charge millions of dollars through business that they controlled. Today, thanks to the efforts of this Office and our law enforcement partners, they now face serious federal charges and justice.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As we allege today, the defendants participated in several schemes designed to defraud multiple businesses of millions of dollars while also deliberately concealing the stolen proceeds of the frauds in a series of transactions. The FBI is determined to discover and disrupt frauds of this – and any – nature and will ensure that perpetrators are held accountable for their actions.”
USSS Special Agent in Charge Patrick Freaney said: “Cyber fraudsters continue to present a real and credible threat through their attempts at sophisticated business email compromise schemes aimed to defraud victims. As demonstrated in this case, collaboration and partnership across law enforcement results in successfully identifying those fraudsters and bringing them before our justice system. The Secret Service is proud to partner with the Federal Bureau of Investigation in having the defendants named in this indictment answer the charges brought against them in the Southern District of New York.”
As alleged in the Indictment unsealed today: [1]
From at least in or about April 2021 through at least in or about June 2021, the Defendants participated in at least three schemes to defraud businesses, banks, credit card companies, and other entities and to launder the fraud proceeds received. The Defendants participated in at least two business email compromise schemes in which co-conspirators sent email messages to victims that fraudulently asked those victims to send money to bank accounts under the Defendants’ control. As a result, the victims of the business email compromise schemes sent wire transfers worth more than $5.4 million to the bank accounts identified by the scheme participants, the majority of which went to the Defendants’ bank accounts. The Defendants, knowing that the money represented fraud proceeds, then transferred those fraud proceeds to other accounts, or converted it into cryptocurrency, in transactions designed to conceal and disguise their source, ownership, and control. When banks froze or sought to recover some of the fraud proceeds, the Defendants made multiple attempts to retain or recover control over the funds by lying to the banks about the purpose of the transfers.
In addition, during the same time period, the Defendants participated in a scheme to fraudulently submit more than $3.8 million in charges using stolen credit card information, without the authorization or consent of the card holders. The charges were conducted through point-of-sale credit card machines associated with companies controlled by MIZRAHI and REBIGA.
* * *
JOEL ZUBAID, 55, of Riverside, California, DAVID GORAN, 56, of Riverside, California, JULIAN REBIGA, a/k/a “Iulian Rebiga,” 55, of Long Beach, California, and MARTIN MIZRAHI, a/k/a “Marty Mizrahi,” 51, of Las Vegas, Nevada, are charged with conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; bank fraud, which carries a maximum sentence of 30 years in prison; conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; money laundering, which carries a maximum sentence of 20 years in prison; and aggravated identity theft, which carries a mandatory minimum sentence of two years in prison consecutive to any other prison terms imposed.
The minimum and maximum potential sentences in these cases 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 FBI and the USSS for their outstanding work on the investigation. The prosecution of this case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Klein and Emily Deininger are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
New York Man Convicted of Robbery and Firearms Offenses in Connection with 14 Armed RobberiesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict yesterday against JUSTIN HAMPTON on robbery, armed robbery, and firearms counts. HAMPTON is scheduled to be sentenced on May 1, 2023, by U.S. District Judge John P. Cronan.
U.S. Attorney Damian Williams said: “Justin Hampton terrorized hardworking New Yorkers with his three-week spree of gunpoint robberies, brandishing a loaded firearm and stealing cash, lottery tickets, and cigarettes. A jury has now found Hampton guilty, and he faces prison time for his crimes.”
According to the superseding Indictment and the evidence at trial:
Between October 18, 2021, and November 10, 2021, HAMPTON and co-conspirators committed 14 robberies of dollar stores, convenience stores, gas stations, and restaurants. HAMPTON operated as the gunman for the robbery crew. He entered each of the commercial establishments late at night or early in the morning, brandished a firearm at employees, and demanded cash, large volumes of lottery tickets, and cigarettes. HAMPTON and his co-conspirators typically fled the scene in HAMPTON’s car and, on multiple occasions, cashed stolen lottery tickets to obtain lottery winnings shortly after the robberies.
After HAMPTON and his crew committed 12 robberies, law enforcement seized HAMPTON’s car and later recovered a gun hidden in the car’s ceiling. Despite the seizure of his car and gun, HAMPTON went on to commit two additional robberies using a motorized scooter and a pellet gun that resembled a real gun.
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HAMPTON, 34, of New York, was convicted on one count of robbery conspiracy, which carries a maximum sentence of 20 years in prison; two counts of robbery, each of which carries a maximum sentence of 20 years in prison; one count of brandishing a firearm during a robbery, which carries a maximum sentence of life in prison and a mandatory minumum sentence of seven years in prison to be served consecutively to any other sentence; and one count of being a felon in possession of a firearm, which carries a maximum sentence of 10 years in prison.
The statutory minumum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determiend by a judge.
Mr. Williams praised the outstanding investigative work of the Joint Robbery Task Force of the Bureau of Alcohol, Tobacco, and Firearms and the New York City Police Department.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Madison Reddick Smyser, Brandon C. Thompson, and Thane Rehn are in charge of the prosecution.
Arizona Man Arrested for Point-Of-Sale Cyber IntrusionsRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of FOSTER COOLEY for charges in connection with a scheme to conduct cyber intrusions targeting a New York-based company that owns and operates hair salons in New York City, New Jersey, Colorado, and elsewhere, which resulted in the theft of over $400,000. COOLEY was arrested this morning and is expected to be presented today or tomorrow before a U.S. magistrate judge in the District of Arizona. The case is assigned to U.S. District Judge Paul A. Crotty.
U.S. Attorney Damian Williams said: “Foster Cooley allegedly participated in a scheme to hack into a salon company’s point-of-sale provider and steal over $400,000 of credit card payments from its customers. And because Cooley was able to steal this money without stepping foot into one of the salons he stole from, his crimes went undetected for weeks. Hacks like this that compromise the integrity of our electronic payment systems cause great harm to businesses and consumers alike. Thanks to this Office’s teamwork with the FBI, Cooley is now facing serious criminal charges for his alleged cybercrimes.”
FBI Assistant Director in Charge Michael J. Driscoll said: "As alleged, the defendant hacked into the victim's business systems and diverted hundreds of thousands of dollars to his own bank accounts. The FBI's Cyber Task Force along with our law enforcement partners are committed to tracking down malicious hackers who target private businesses and ensuring they face the consequences for their actions. If your business is the victim of a cyber intrusion, please report it as soon as possible; the faster we are made aware, the sooner we can provide assistance."
According to the allegations in the Indictment unsealed today in Manhattan federal Court:[1]
In or about May 2022, FOSTER COOLEY perpetrated a scheme to conduct cyber intrusions and steal money from a New York-based company that owns and operates hair salons in New York City, New Jersey, Colorado, and elsewhere (“Victim-1”). COOLEY stole money from Victim-1 by obtaining unauthorized access to Victim-1’s account with Victim-1’s point-of-sale provider (the “Victim-1 POS Account”) and diverting credit card payments from Victim-1’s bank accounts to bank accounts controlled by COOLEY and others.
COOLEY obtained unauthorized access to the Victim-1 POS Account by obtaining usernames and passwords of Victim-1’s employees. Those credentials were stolen using a type of malicious software or malware that secretly steals, among other things, a victim’s usernames, passwords, and credit card information that have been saved in the victim’s internet browser. After COOLEY successfully gained unauthorized access to the Victim-1 POS Account, COOLEY changed the bank accounts designated to receive credit card payments from Victim-1’s hair salons to bank accounts controlled by COOLEY and others. As a result, credit card payments from Victim-1’s hair salons were fraudulently diverted to COOLEY and others.
In or about May 2022, for a period of approximately two weeks until the scheme was discovered by Victim-1, more than $430,000 in customer payments from Victim-1’s hair salons were fraudulently diverted to bank accounts controlled by COOLEY and others.
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COOLEY, 23 of Chandler, Arizona, is charged with one count of computer fraud for causing damage to a protected computer, which carries a maximum sentence of 10 years in prison; one count of computer fraud for unauthorized access to a protected computer to further intended fraud and one count of receipt of stolen money, each of which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of the FBI. Mr. Williams also thanked the FBI New York Cyber Task Force, the NYPD Cyber Task Force, and the FBI Field Office in Phoenix for their assistance in the investigation of this case.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Andrew K. Chan is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
Chief Technology Officer of Blockchain Company Charged with Scheme to Defraud the Company of over $1 Million and CryptocurrencyRead 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 today of an indictment charging RIKESH THAPA with operating a scheme to defraud a start-up technology company (the “Victim Company”) of over $1 million worth of United States currency, cryptocurrency, and utility tokens. THAPA used proceeds of his crime on personal expenses, including nightclubs, travel, and clothing, and falsified records and deleted evidence to conceal his theft. RIKESH THAPA was arrested earlier today in the Southern District of California. The defendant is expected to be presented before U.S. Magistrate Judge Mitchell D. Dembin this afternoon. The case is assigned to U.S. District Judge John P. Cronan.
U.S. Attorney Damian Williams said: “Rikesh Thapa allegedly betrayed his company’s trust, as he was responsible for the safeguarding of substantial amounts of money. Thapa went to great lengths to cover up his frauds, but, thanks to the dedicated work of this Office and our law enforcement partners, he will now have to answer for his crimes.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As we allege today, the defendant repeatedly stole from and defrauded the victim company - which he cofounded - in order to fund a luxurious personal lifestyle. In an attempt to hide his crimes, he also deleted and falsified records. The FBI will continue to work to ensure individuals willing to scam and steal from private businesses are held accountable in the criminal justice system."
As alleged in the Indictment unsealed today in Manhattan federal court:[1]
RIKESH THAPA co-founded and was the Chief Technology Officer (“CTO”) of the Victim Company, which during the relevant period was involved in using blockchain and other technology to provide a ticketing platform for live events. Between December 2017 and September 2019, THAPA used his position to carry out a scheme to defraud the Victim Company.
In 2018, the Victim Company sought to diversify its banking because of its understanding that certain financial institutions were reluctant to maintain relationships with companies, such as the Victim Company, involved in cryptocurrency transactions. In furtherance of that effort, THAPA agreed to receive and hold $1 million of the Victim Company’s money in his personal bank account (the “THAPA Account”) while the Victim Company explored banking options. Soon after receiving the $1 million, however, THAPA began using the funds on personal expenses. Nevertheless, THAPA repeatedly acknowledged what was supposed to be the temporary nature of his possession of the funds, representing to a colleague, in substance and in part, that the money was “a stationary 1mil in my account” that was held “for safe keeping.” THAPA then falsified records to conceal his theft, providing the Victim Company with a forged bank statement, which falsely represented that THAPA held over $21 million, approximately $1 million of which was held in a particular savings account (the “Purported Account”). In fact, THAPA did not have the Purported Account and held much less than $21 million at the relevant bank. In 2019, THAPA refused to return the $1 million, which he spent on, among other things, nightclubs, travel, and clothing.
In addition, between December 2017 and September 2019, THAPA used his control over the Victim Company’s cryptocurrency holdings to embezzle at least 10 Bitcoin from the Victim Company. For example, in August 2018, THAPA diverted at least one of the Victim Company’s Bitcoin for his own benefit, selling the Bitcoin for approximately $6,500 and depositing the proceeds into the THAPA Account (the “August 2018 Bitcoin Transaction”). To avoid detection, THAPA falsified trading records and deleted emails. In July 2019, THAPA sent the Victim Company’s CEO a fraudulent transaction report that misrepresented the August 2018 Bitcoin Transaction. After the CEO, copying THAPA, thereafter requested and received a transaction report directly from the Victim Company’s cryptocurrency brokerage, THAPA disabled the CEO’s email account at the Victim Company (the “CEO Email Account”), deleted the cryptocurrency brokerage’s email from the CEO Email Account, and then deleted the entire CEO Email Account.
In yet another facet of the scheme, THAPA stole the Victim Company’s utility tokens. Such tokens are a type of cryptocurrency that can be used to access particular services, products, or features. In July 2019, unbeknownst to the Victim Company’s CEO, THAPA set up a meeting in Italy between THAPA and individuals who claimed to be interested in purchasing the Victim Company’s utility tokens. Before the meeting, THAPA provided account information for the THAPA Account so that the purported investors could wire him funds. During the meeting, however, THAPA agreed to receive cash in exchange for utility tokens. After the meeting, THAPA transferred, without authorization, approximately 174,285 of the Victim’s utility tokens to the purported investors. THAPA later determined that the cash he had received from the purported investors was counterfeit.
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RIKESH THAPA, 28, of San Diego, California, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.
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.
Mr. Williams praised the outstanding investigative work of the FBI’s New York Field Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.
The charge contained in the Indictment is merely an accusation, 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.
Fourteen Gang Members and Associates from the Double Nine Grim Reapers Charged with Racketeering, Narcotics, and Firearms OffensesRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a 15-Count Indictment charging 14 members of the Double Nine Grim Reapers Bloods Gang (the “Grimz”), including the gang’s top prison and street leaders, with committing various racketeering, narcotics, and firearms offenses. The case is assigned to U.S. District Judge Philip M. Halpern.
The Indictment charges several Grimz members and associates, including JEREMY WILLIAMS, a/k/a “Dubs,” and RANDY JONES, a/k/a “Nicklez,” two co-founders of the Grimz, with participating in a racketeering conspiracy. The Indictment also charges several Grimz members and associates with acts of violence. This includes JUSTICE JACKSON, a/k/a “Tweak,” TYRELL SIMON, a/k/a “Insane,” THOMAS RODRIGUEZ, a/k/a “Tom Tom,” and MARCUS CARDONA, a/k/a “D,” a/k/a “Honcho,” who are charged with the attempted murder and assault of a rival gang member in connection with a shooting that sent the rival gang member to the hospital with life-threatening injuries. JUSTICE JACKSON, a/k/a “Tweak,” and MARKELL WILLIAMS, a/k/a “15,” are also charged with an armed robbery of a drug dealer in which shots were fired and an individual was hit. In addition to serious acts of violence, the gang was also responsible for trafficking large amounts of narcotics across the City of Newburgh, New York, and New York State to enrich members of the gang.
U.S. Attorney Damian Williams said: “Today’s indictment against 14 members of the Grimz gang includes myriad charges of violence and drug trafficking that typically accompany gang activity and inflict harm in our communities. The charges brought today include two of the gang’s co-founders and are a significant step in the dismantling of this dangerous criminal organization.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants conspired to use violence in order to further their narcotic-trafficking enterprise. Their cold-hearted actions and disregard for human life bring havoc and fear to the streets of our neighborhoods. The FBI’s Hudson Valley Safe Streets Task Force and our law enforcement partners work around the clock to keep our communities safe. Violent criminals who aim to bring mayhem to our communities will be made to face the consequences of their choices in the criminal justice system.”
As alleged in public court filings and the Indictment unsealed today in White Plains federal court:[1]
JEREMY WILLIAMS, a/k/a “Dubs,” RANDY JONES, a/k/a “Nickelz,” JAMES WHITE, a/k/a “Infared,” PAUL AYALA, a/k/a “Mikey,” MESSIAH JACKSON, a/k/a “Two,” JUSTICE JACKSON, a/k/a “Tweak,” OCTAVIOUS GRIFFIN, a/k/a “Tate,” MARKELL WILLIAMS, a/k/a “15,” TYRELL SIMON, a/k/a “Insane,” a/k/a “Rello,” JOSHUA HENDRICKS, a/k/a “Hendrix,” ELIJAH BRIGGS, a/k/a “Eli,” SHAMELL WILLIAMS, a/k/a “Mello Trend,” THOMAS RODRIGUEZ, a/k/a “Tom Tom,” a/k/a “Checks,” and MARCUS CARDONA, a/k/a “D,” a/k/a “Honcho,” are members and associates of a racketeering conspiracy known as the Grimz.
On November 3, 2020, JUSTICE JACKSON, a/k/a “Tweak,” TYRELL SIMON, a/k/a “Insane,” THOMAS RODRIGUEZ, a/k/a “Tom Tom,” and MARCUS CARDONA, a/k/a “D,” a/k/a “Honcho,” for the purpose of maintaining and increasing their positions in the Grimz, attempted to murder and assaulted with a dangerous weapon a rival gang member and discharged a firearm in connection with that offense in the City of Newburgh, New York.
On November 10, 2020, JUSTICE JACKSON, a/k/a “Tweak,” and MARKELL WILLIAMS, a/k/a “15,” committed a gunpoint robbery of a rival drug dealer and discharged a firearm in connection with that offense in the City of Newburgh, New York.
In 2019, OCTAVIOUS GRIFFIN, a/k/a “Tate,” committed a gunpoint robbery of a rival drug dealer and brandished a firearm in connection with that offense in the City of Newburgh, New York.
On January 18, 2020, MESSIAH JACKSON, a/k/a “Two,” committed a gunpoint robbery of a rival drug dealer and brandished a firearm in connection with that offense in the City of Newburgh, New York.
On September 15, 2021, MARKELL WILLIAMS, a/k/a “15,” committed a gunpoint robbery of a rival drug dealer and brandished a firearm in connection with that offense in the City of Newburgh, New York
On October 31, 2021, JUSTICE JACKSON, a/k/a “Tweak,” TYRELL SIMON, a/k/a “Insane,” a/k/a “Rello,” and SHAMELL WILLIAMS, a/k/a “Mello Trend,” committed a gunpoint robbery of a rival drug dealer and brandished a firearm in connection with that offense in the City of Newburgh, New York.
From at least 2018 to the present, JEREMY WILLIAMS, a/k/a “Dubs,” JAMES WHITE, a/k/a “Infared,” PAUL AYALA, a/k/a “Mikey,” MESSIAH JACKSON, a/k/a “Two,” JUSTICE JACKSON, a/k/a “Tweak,” OCTAVIOUS GRIFFIN, a/k/a “Tate,” MARKELL WILLIAMS, a/k/a “15,” TYRELL SIMON, a/k/a “Insane,” a/k/a “Rello,” JOSHUA HENDRICKS, a/k/a “Hendrix,” ELIJAH BRIGGS, a/k/a “Eli,” SHAMELL WILLIAMS, a/k/a “Mello Trend,” THOMAS RODRIGUEZ, a/k/a “Tom Tom,” a/k/a “Checks,” and MARCUS CARDONA, a/k/a “D,” a/k/a “Honcho,” participated in a conspiracy to distribute a substantial among of narcotics, including crack cocaine, heroin, Oxycodone, marijuana, and synthetic cannabinoids, commonly known as “K2.” These individuals also possessed numerous firearms in connection with this narcotics conspiracy.
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JEREMY WILLIAMS, 33, JONES, 34, AYALA, 30, SHAMELL WILLIAMS, 29, and RODRIGUEZ, 31, were all arrested yesterday and today and will be presented today before United States Magistrate Judge Paul E. Davison. WHITE, 43, MESSIAH JACKSON, 22, JUSTICE JACKSON, 20, GRIFFIN, 35, MARKELL WILLIAMS 21, SIMON, 21, and HENDRICKS, 22, are already in custody on other charges. BRIGGS, 25, and CARDONA, 24, have not been arrested at this time.
A chart containing the names, charges, and minimum and maximum penalties for the defendants is set forth below. The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, New York State Police, Town of New Windsor Police Department, Orange County Sheriff’s Office, City of Newburgh Police Department, Town of Newburgh Police Department, and Nassau County Sheriff’s Office. Mr. Williams also thanked the FBI’s Westchester County Safe Streets Task Force, the New York City Department of Correction, Correction Intelligence Bureau, Department of Labor – Office of Inspector General, the Poughkeepsie Police Department, and the New York City Police Department for their assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jennifer N. Ong, Nicholas S. Bradley, and Ryan W. Allison are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
DEFENDANT(S)
MIN. AND MAX. TERM OF IMPRISONMENT
Count One: Conspiracy to Commit Racketeering
JEREMY WILLIAMS
RANDY JONES
JAMES WHITE
PAUL AYALA
MESSIAH JACKSON
JUSTICE JACKSON
OCTAVIOUS GRIFFIN
MARKELL WILLIAMS
TYRELL SIMON
JOSHUA HENDRICKS
ELIJAH BRIGGS
SHAMEL WILLIAMS
THOMAS RODRIGUEZ
MARCUS CARDONA
20 years in prison
Count Two: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
JUSTICE JACKSON
TYRELL SIMON
THOMAS RODRIGUEZ
MARCUS CARDONA
20 years in prison
Count Three: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
JUSTICE JACKSON
TYRELL SIMON
THOMAS RODRIGUEZ
MARCUS CARDONA
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Four: Hobbs Act Robbery
JUSTICE JACKSON MARKELL WILLIAMS
20 years in prison
Count Five: Possession and Brandish of a Firearm in Furtherance of a Crime of Violence
JUSTICE JACKSON MARKELL WILLIAMS
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count Six: Hobbs Act Robbery
OCTAVIOUS GRIFFIN
20 years in prison
Count Seven: Possession and Brandish of a Firearm in Furtherance of a Crime of Violence
OCTAVIOUS GRIFFIN
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count Eight: Hobbs Act Robbery
MESSIAH JACKSON
20 years in prison
Count Nine: Possession and Brandish of a Firearm in Furtherance of a Crime of Violence
MESSIAH JACKSON
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count Ten: Hobbs Act Robbery
MARKELL WILLIAMS
20 years in prison
Count Eleven: Possession and Brandish of a Firearm in Furtherance of a Crime of Violence
MARKELL WILLIAMS
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count Twelve: Hobbs Act Robbery
JUSTICE JACKSON TYRELL SIMON SHAMELL WILLIAMS
20 years in prison
Count Thirteen: Possession and Brandish of a Firearm in Furtherance of a Crime of Violence
JUSTICE JACKSON TYRELL SIMON SHAMELL WILLIAMS
Life in prison; Mandatory minimum of seven years in prison to run consecutive to any other sentence imposed
Count Fourteen: Conspiracy to Distribute Controlled Substances
JEREMY WILLIAMS
JAMES WHITE
PAUL AYALA
MESSIAH JACKSON
JUSTICE JACKSON
OCTAVIOUS GRIFFIN
MARKELL WILLIAMS
TYRELL SIMON
JOSHUA HENDRICKS
ELIJAH BRIGGS
SHAMEL WILLIAMS
THOMAS RODRIGUEZ
MARCUS CARDONA
Life in prison; Mandatory minimum of 10 years in prison
Count Fifteen: Possession of a Firearm in Furtherance of a Drug Trafficking Crime
JEREMY WILLIAMS
JAMES WHITE
PAUL AYALA
MESSIAH JACKSON
JUSTICE JACKSON
OCTAVIOUS GRIFFIN
MARKELL WILLIAMS
TYRELL SIMON
JOSHUA HENDRICKS
ELIJAH BRIGGS
SHAMEL WILLIAMS
THOMAS RODRIGUEZ
MARCUS CARDONA
Life in prison; Mandatory minimum of five years in prison to run consecutive to any other sentence imposed
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Chief Financial Officer of Global Public Relations Firm Sentenced to 52 Months in Prison for Fraud and Falsification of Corporate RecordsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that FRANK OKUNAK, the former chief financial officer of one of the world’s leading global public relations firms, was sentenced today to 52 months in prison by U.S. District Judge P. Kevin Castel. OKUNAK pled guilty on July 27, 2022, to one count of wire fraud and one count of falsification of the books and records of a public corporation, in connection with a decade-long scheme to embezzle over $16 million from his employer.
U.S. Attorney Damian Williams stated: “Frank Okunak conducted a nearly decade-long conspiracy to embezzle millions of dollars from his employer and the public shareholders of his employer. Today’s sentence should serve as a warning to executives that if they use their company’s money as if it were their own, they will face lengthy prison time.”
According to the allegations in the Information, statements made in court, and court filings:
For nearly a decade, FRANK OKUNAK, who was the chief financial officer and later chief operating officer of a leading global public relations firm (the “PR Firm”), embezzled over $16 million from the PR Firm and, ultimately, the shareholders of the PR Firm’s publicly traded parent corporation. OKUNAK used the embezzled funds to finance his personal lifestyle and his own private business ventures. OKUNAK concealed and facilitated his theft by preparing and causing others to prepare materially false accounting books and records, including invoices and payment records that falsely described expenditures as having been undertaken for the benefit of the PR Firm, when funds were actually used for OKUNAK’s personal benefit or for the benefit of his personal business associates.
Specifically, from 2011 through 2020, OKUNAK used his authority as an officer of the PR Firm to cause the PR Firm to make unauthorized payments for OKUNAK’s personal and business ventures unrelated to the activities of the PR Firm or its corporate parents. OKUNAK used the PR Firm’s assets to provide the start-up capital for his personal, independent business ventures, to purchase tickets and luxury boxes at sporting events, and even to cover donations to his alma mater. To hide the illicit nature of these expenditures, OKUNAK frequently prepared or caused others to prepare false or misleading invoices and other documentation to suggest, falsely, that the funds were used for legitimate corporate purposes.
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In addition to his prison sentence, OKUNAK, 56, of Lyndhurst, New Jersey, was sentenced to three years of supervised release. As part of his guilty plea, OKUNAK also agreed to forfeit $10,823,575.57 and to pay restitution of $16,043,603.71.
Mr. Williams praised the outstanding work of the FBI. Mr. Williams further thanked the U.S. Securities and Exchange Commission and the victim PR Firm and its corporate parent for their cooperation and assistance in this investigation.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Scott Hartman and Matthew Podolsky are in charge of the case.
California Executive Compensation Consultant Sentenced to Prison for Committing Insider TradingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that FRANK GLASSNER, a principal of an executive compensation consulting firm based in Novato, California (the “Consulting Firm”), was sentenced to one year and one day in prison by U.S. District Judge Lewis J. Liman. Glassner pled guilty on August 19, 2022, to one count of securities fraud in connection with his scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that Kadmon Holdings, Inc. (“Kadmon”) – which GLASSNER and the Consulting Firm were advising – would be acquired by Sanofi, S.A. (“Sanofi”).
U.S. Attorney Damian Williams said: “With today’s sentence, Frank Glassner must face the consequences of trading on inside information. This conviction and sentence demonstrates once again that we will continue to vigorously protect the integrity of our markets and hold accountable those who cheat by trading on inside information.”
According to the allegations in the Information, the complaint that was filed in this case, and statements made during court proceedings and filings:
Between July 2021 and September 2021, Kadmon, which, prior to its acquisition by Sanofi, was a publicly-traded biopharmaceutical company traded under the ticker symbol “KDMN” on the NASDAQ, engaged GLASSNER and the Consulting Firm to provide executive compensation consulting services related to a potential acquisition. In connection with this engagement, GLASSNER had access to material, non-public information, which he misappropriated and, in violation of the duties that he owed to Kadmon, used to trade Kadmon stock and call options between on or about August 3, 2021, and on or about August 23, 2021. On September 8, 2021, Kadmon publicly announced that it had agreed to be acquired by Sanofi for a per-share price significantly above the share price at which Kadmon was trading. That day, Kadmon’s share price increased by approximately 71%, and GLASSNER ultimately profited $368,000 on the Kadmon stock and call options he had previously purchased.
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In addition to his prison sentence, GLASSNER, 68, of Novato, California, was ordered to pay forfeiture in the amount of $368,000.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams further thanked the U.S. Securities and Exchange Commission, which brought a related civil action against GLASSNER.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Gina Castellano is in charge of the prosecution.
Bully Hard Gang Member Charged with Murder of A Minor Victim in PoughkeepsieRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, William Grady, the District Attorney for Dutchess County, and Michael J. Driscoll, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the filing of a superseding Indictment charging ELIJAH BERMUDEZ, a/k/a “Quiet,” with murder in aid of racketeering, the use of a firearm resulting in death, racketeering conspiracy, and illegal possession of ammunition, for the June 20, 2020, murder of a minor victim in the vicinity of Charles Street in Poughkeepsie, New York, in furtherance of BERMUDEZ’s participation in the Bully Hard Hunna Blood (“Bully Hard”) racketeering conspiracy.
U.S. Attorney Damian Williams said: Gangs like Bully Hard reward violence with promotions within the group, which often leads to tragic deaths, including the minor victim in this case. We hope this investigation and prosecution brings some measure of closure to the family of Bermudez’s alleged victim.”
Dutchess County Chief Assistant District Attorney Matthew Weishaupt said: “Our office has worked for many years with our partners in the United States Attorney’s Office for the Southern District of New York when the federal system brings an advantage in evidentiary matters, resources, or sentencing options. We will continue to work collaboratively to eradicate the scourge of ongoing violence within our communities. We remain focused on making our communities a safer place for everyone through our continued joint efforts.
We extend thanks to all the law enforcement agencies who diligently pursued this investigation and brought it to a successful outcome. We also thank the Assistant United States Attorneys who were assigned to this case for their diligent work and effort through the investigative process.”
FBI Assistant Director in Charge Michael J. Driscoll said: "As alleged, the defendant callously took the life of a minor as a member of a violent street gang. The FBI's Westchester County Safe Streets Task Force and our law enforcement partners are committed to ensuring the safety of our communities. Violent actors will be held accountable for their wanton behavior in our criminal justice system."
According to allegations in the Indictment unsealed in White Plains federal court:[1]
BERMUDEZ was a member or associate of a racketeering enterprise known as Bully Hard, a criminal organization whose members and associates engaged in, among other things, murder, robberies, narcotics trafficking, and fraud.
On June 20, 2020, BERMUDEZ murdered a minor victim in the vicinity of Charles Street in Poughkeepsie, New York, in furtherance of his membership in the Bully Hard racketeering enterprise.
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BERMUDEZ, 29, of New York, New York, is charged with one count of murder in aid of racketeering, which carries a maximum sentence of death or life in prison and a mandatory minimum sentence of life in prison; one count of racketeering conspiracy, which carries a maximum sentence of life in prison; one count of murder through the use of a firearm, which carries a maximum sentence of death or life in prison and a mandatory minimum sentence of five years in prison; and one count of being a felon in possession of ammunition, which carries a maximum sentence of 10 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, US Probation, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County DAs Office, Putnam County Sheriff's Office, Rockland DAs Office and the New York City, Westchester County, Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Courtney L. Heavey, David R. Felton, Kevin T. Sullivan, and Shiva H. Logarajah are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Brooklyn Woman Pleads Guilty to COVID-19 Fraud Scheme and to Separate Fraud Against NYCHARead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CHANETTE LEWIS pled guilty today to two counts of conspiracy to commit wire fraud. LEWIS participated in a scheme to commit COVID-19 pandemic fraud by, among other things, defrauding New York City’s COVID-19 Hotel Room Isolation Program. LEWIS also committed a fraud in which she submitted fabricated documents to the New York City Housing Authority (“NYCHA”) — such as purported Orders of Protection bearing Judges’ names, purported letters from a District Attorney, and purported letters from healthcare professionals attesting to alleged medical issues — in order to secure public housing benefits for herself and her customers. LEWIS pled guilty before United States Magistrate Judge Stewart D. Aaron. LEWIS’s case is assigned to United States District Judge Lewis A. Kaplan.
U.S. Attorney Damian Williams said: “Chanette Lewis took advantage of multiple lifelines offered to New York City residents in need during the COVID-19 pandemic. Each of her schemes misappropriated identifying information of hardworking individuals, including medical professionals whose services were vital during the pandemic. For her brazen crimes, Lewis now faces possible prison time.”
According to the allegations contained in the Superseding Information, court filings, and statements made during plea proceedings:
LEWIS’s COVID-19 Pandemic Fraud Scheme
From April 2020 through September 2021, LEWIS conspired to commit COVID-19 pandemic fraud by, among other things, defrauding the COVID-19 Hotel Room Isolation Program (the “Program”). In response to the COVID-19 pandemic, New York City created the Program. Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City. The Program was open to (a) healthcare workers who needed to isolate because of exposure to COVID-19; (b) patients who had tested positive for COVID-19; (c) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (d) individuals who lived with someone who contracted COVID-19. As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.” Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform.
LEWIS defrauded the Program in several respects. First, she secured free Program hotel rooms for herself by falsely claiming to be a healthcare worker. Second, she sold at least approximately 1,936 nights’ worth of fraudulently obtained hotel rooms to customers who were ineligible for the Program. Third, LEWIS abused her employment, which was supposed to be in service of the Program. Specifically, LEWIS worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020. LEWIS was hired specifically for the Program, and as a result of her employment, she had access to legitimate healthcare workers’ identifying information. LEWIS abused her position, including by misappropriating healthcare workers’ identifying information, revealing the Program’s inner workings to co-conspirators, and making unauthorized sales of Program hotel rooms to ineligible individuals. For instance, LEWIS sold a co-defendant, for $800, personal identifying information of at least five healthcare professionals, as well as certain “codes” to use when booking hotel reservations through the Program, such as an employee ID number and license number. LEWIS admitted, in Facebook messages, that she had stolen doctors’ identifying information in furtherance of the scheme, writing: “I work for 311 oem [i.e., the Office of Emergency Management] that how I got doctors licenses and stuff . . . I work in the part that I collect they information and I do and approval the booking . . . I take doctors and stuff certificate numbers and stuff.” LEWIS also advertised to potential customers that, when hotels asked for a healthcare worker’s identification, LEWIS would supply a purported paystub and a letter falsely asserting that the individual was a healthcare worker.
LEWIS’s Fraud against NYCHA
From in or around July 2020 until October 2021, LEWIS participated in a conspiracy to defraud NYCHA. LEWIS submitted fabricated documents to NYCHA — such as purported Orders of Protection bearing Judges’ names, purported letters from a District Attorney, and purported letters from doctors attesting to alleged medical issues — in order to secure public housing benefits for both herself and others, such as transfers to larger NYCHA apartments. In total, LEWIS submitted fraudulent applications to NYCHA on behalf of approximately 35 individuals, a number of whom in fact received the public housing benefit they requested based on fraudulent documentation.
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LEWIS, 31, of Brooklyn, New York, pled guilty to two counts of conspiracy to commit wire fraud, each of which carries a maximum sentence of five years in prison. Under the terms of her plea agreement, LEWIS has agreed to forfeit $289,536 and to pay restitution of $360,916.
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. LEWIS is scheduled to be sentenced by Judge Kaplan on May 18, 2023, at 3:00 p.m.
One of LEWIS’s co-defendants, Tatiana Daniel, previously pled guilty to conspiracy to commit wire fraud and is scheduled to be sentenced by Judge Kaplan on March 29, 2023, at 2:30 p.m. LEWIS’s two other co-defendants are currently scheduled to proceed to trial before Judge Kaplan on January 17, 2023.
Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation (“DOI”), DOI – NYCHA Office of the Inspector General, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation. He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.
Two Defendants Plead Guilty to Conspiring to Bribe High-Level Officials of the Republic of the Marshall IslandsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that CARY YAN, a/k/a “Hong Hui Yan,” a/k/a “Chen Hong,” and GINA ZHOU, a/k/a “Chaoting Zhou,” a/k/a “Angel Zhou,” pled guilty to conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) in connection with a multi-year scheme to bribe government officials in the Republic of the Marshall Islands (the “RMI”) to pass legislation that would benefit the business interests of YAN, ZHOU, and their associates. In November 2020, Thai authorities arrested YAN and ZHOU in Thailand at the request of the United States pursuant to the U.S.-Thailand extradition treaty, and following court proceedings, the Thai government extradited YAN and ZHOU to the United States on September 2, 2022. Both defendants pled guilty today before District Judge Naomi Reice Buchwald.
U.S. Attorney Damian Williams said: “As they have now admitted, the defendants sought to undermine the democratic processes of the Republic of the Marshall Islands through bribery in order to advance their own financial interests. I commend the career prosecutors of this Office and our law enforcement partners for bringing this corruption to light and ensuring that justice is done.”
According to the Indictment filed in the case and publicly available information:
Beginning at least in 2016, YAN and ZHOU began communicating and meeting with RMI officials in both New York City and the RMI concerning the development of a semi-autonomous region within a part of the RMI known as the Rongelap Atoll. The creation of the proposed semi-autonomous region was intended by YAN, ZHOU, and those associated with them to obtain business by, among other things, allowing YAN and ZHOU to attract investors to participate in economic and social development projects that YAN, ZHOU, and others promised would occur in the semi-autonomous region.
As proposed by YAN and ZHOU, the so-called Rongelap Atoll Special Administrative Region (the “RASAR”) would be created by legislation (the “RASAR Bill”) that, if enacted by the RMI legislature, would significantly change the laws on the Rongelap Atoll to attract foreign businesses and investors, such as by lowering or eliminating taxation and relaxing immigration regulations. In or about mid-August 2018, certain RMI legislators officially introduced the RASAR Bill. Starting before that date, and continuing until at least on or about November 1, 2018, YAN and ZHOU offered and provided a series of cash bribes and other incentives to obtain the support of RMI legislators for the RASAR Bill.
On or about November 18, 2019, the RMI held elections for the legislature. As a result of these elections, on or about January 13, 2020, the then-President of the RMI left office. Shortly thereafter, YAN and ZHOU began emailing and meeting with certain RMI officials to continue their plan to create the RASAR. In or about late February 2020, the RMI legislature began considering a resolution that would endorse the concept of the RASAR (the “RASAR Resolution”), a preliminary step that would allow the RMI legislature to enact the more detailed RASAR Bill at a later date.
On or about March 7, 2020, YAN and ZHOU met with a close relative of a member of the RMI legislature in the RMI. During the meeting, YAN and ZHOU gave the relative $7,000 in cash to pass on to the official, specifying that this money would be used to induce and influence other RMI legislators to support the RASAR Resolution. YAN and ZHOU further stated, in sum, that they knew that the official needed more than $7,000 for this purpose and that YAN and ZHOU would soon obtain additional cash for the official. YAN and ZHOU also discussed having previously brought larger sums of cash into the RMI through the United States and that they planned to do so again in the future. On or about March 20, 2020, the RMI legislature passed the RASAR Resolution with the support of legislators to whom ZHOU and YAN had provided bribes and other incentives.
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YAN, 51, and ZHOU, 35, both of whom have traveled on passports issued by the RMI, pled guilty to one count of conspiring to violate the FCPA, which carries a maximum sentence of five years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Williams additionally thanked the Royal Thai Government, the U.S. Department of State's Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department's Office of International Affairs for their assistance in securing the arrest and extradition of the defendants.
The case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom are in charge of the prosecution. Trial Attorneys Gerald Moody and Anthony Scarpelli were also assigned to the prosecution.
Two British Citizens Arrested for Conspiracy to Defraud Investors in Fraudulent Co-Working Space BusinessRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the unsealing of an Indictment charging JAMES ROBINSON and DAVID KENNEDY, both citizens of the United Kingdom, with wire fraud and conspiracy to commit wire fraud for engaging in a scheme to defraud victims by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities (“Bar Works”). On November 30, 2022, ROBINSON and KENNEDY were arrested in Spain, and the United States Government will be seeking their extradition to the United States.
According to the Indictment unsealed today in Manhattan federal court and other court documents related to the prosecution of co-conspirators Renwick Haddow and James Moore:[1]
ROBINSON, KENNEDY, and co-conspirators Renwick Haddow and James Moore are citizens of the United Kingdom (the “UK”). At all times relevant to the Indictment, United Property Group and related entities (collectively, “UPG”) was a company based in Spain that was controlled in part by ROBINSON and KENNEDY. UPG sold real estate and other investing opportunities to potential investors. Bar Works was a private co-working space company controlled by Haddow, which operated locations in New York City and elsewhere between in or about 2015 through 2017 and accepted millions of dollars in investments from investors recruited through UPG, among others. Prior to launching Bar Works, Haddow had been disqualified as a director of any UK company for eight years and was later sued by the Financial Conduct Authority, a British regulator, for operating investment schemes through misrepresentations that lost investors substantially all of their money. These sanctions and the lawsuit were publicized online.
In exchange for millions of dollars in commissions, ROBINSON, KENNEDY, and Moore partnered with Haddow in soliciting investments into workspace leases in Bar Works through material misrepresentations concerning, among other things, the identity of Bar Works’ management and the operations of Bar Works. Specifically, as ROBINSON and KENNEDY knew, notwithstanding Haddow’s control over Bar Works, Haddow caused the Bar Works offering materials to omit his name entirely, list a fictitious individual named “Jonathan Black” as the Chief Executive Officer of Bar Works, and claim that “Black” had an extensive background in finance and past success with start-up companies.
Through UPG, ROBINSON and KENNEDY recruited agents to sell workspace leases in Bar Works and provided them with fraudulent offering documents and other information. An account controlled in whole or in part by JAMES ROBINSON and DAVID KENNEDY received over $2 million in commissions from Bar Works in exchange for soliciting victims to invest at least approximately $7.5 million in this scheme. Separately, Moore received another approximately $1.6 million from Bar Works. Overall, prior to its collapse in or about June 2017, Bar Works obtained over $57 million from over 800 investors worldwide.
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ROBINSON, 46, and KENNEDY, 47, both of the UK, are each charged with one count of wire fraud and one count of wire fraud conspiracy. Each charge carries a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Renwick Haddow, 54, pled guilty pursuant to a cooperation agreement on May 23, 2019, to one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme and one count each of wire fraud and wire fraud conspiracy relating to a separate Bitcoin-related investment scheme. Haddow’s sentencing is currently scheduled for April 28, 2023, before United States District Judge Laura Taylor Swain.
James Moore, 62, was found guilty on June 7, 2019, of wire fraud and conspiracy to commit wire fraud following a week-long jury trial before United States District Judge Richard M. Berman. On February 1, 2022, Moore was sentenced to 140 months in prison by Judge Berman.
Savraj Gata-Aura, 36, pled guilty on November 18, 2019, to one count of wire fraud conspiracy for his participation in the scheme and was sentenced to 48 months in prison on July 27, 2020, by United States District Judge Jed. S. Rakoff.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation. He further thanked the Spanish National Police for their assistance. Finally, Mr. Williams thanked the Securities and Exchange Commission.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Vladislav Vainberg is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described should be treated as an allegation.
Russian Citizen Sentenced to 46 Months for Laundering Proceeds of Internet FraudsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TARAS ILYICH BEVZ, a citizen of Russia, was sentenced to 46 months in prison for laundering over a million dollars of proceeds of various internet frauds targeting dozens of U.S. citizens and companies. BEVZ was sentenced today by U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Damian Williams said: “Bevz, a Russian citizen, traveled to the United States on a tourist visa to engage in a crime spree that left over 40 people and entities with over a million dollars in losses. From the day he set foot on American soil, he ran companies and bank accounts that laundered proceeds of various sophisticated internet fraud schemes. Bevz’s illegal journey to America to commit crimes comes to an end with a significant prison sentence.”
According to Count Two of the Indictment, to which BEVZ pled guilty, and other statements and submissions made in Court:
On or about November 12, 2019, BEVZ entered the United States from Russia on a B2 tourist visa, which prohibited him from working in the United States. He immediately set to work preparing for the corrupt scheme to launder proceeds of various internet frauds. On the day of his arrival, BEVZ registered a corporation in New York that would be used to launder proceeds and subsequently registered a second corporation. From December 2019 to March 2021, BEVZ opened bank accounts for one or both of these companies at nine different banks, including in Manhattan bank branches.
From November 2019 through at least April 2021, BEVZ laundered the proceeds of at least two internet fraud schemes operated by co-conspirators: a hacking scheme and a vehicle fraud scheme. The hacking scheme compromised multiple companies’ bank accounts and sent proceeds to BEVZ’s accounts, among others. The fraud scheme targeted victims through internet ads for the sale of cars, RVs, motorcycles, and boats. The victims were directed to send money to BEVZ’s accounts, among others; their money was then withdrawn by BEVZ as cash or transferred to Turkey, among other destinations. The purported cars, motorcycles, and boats were never delivered to the victims. BEVZ supervised at least one other individual who similarly opened bank accounts and transacted with proceeds from the vehicle fraud scheme. BEVZ persisted in this scheme even after at least one bank prevented him from transferring money and shut down his account.
At least 42 victims lost money as part of BEVZ and his co-conspirators’ schemes. They include vulnerable victims whose business and personal savings accounts were drained as a result of the fraud and couples who have had to delay retirement. The victims represent a cross-section of society, including first generation Americans, teachers, and small business owners. They include a family who spent $26,500 to purchase an RV to transport an ailing parent cross-country over the holidays that was never delivered.
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In addition to his prison term, BEVZ, 33, was ordered pay $1,044,924 in restitution and forfeit $1,044,924.
Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations.
The criminal case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Vladislav Vainberg is in charge of the prosecution.
Fourteen Gang Members and Associates from Newburgh and Poughkeepsie Charged with Racketeering, Narcotics, and Firearms OffensesRead 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 Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a 10-Count Indictment charging 14 members of the Young Gunnaz Gang (“YG”), including the gang’s high-ranking street leaders, with committing various racketeering, narcotics, and firearms offenses. The case is assigned to U.S. District Judge Kenneth M. Karas.
The Indictment charges several YG members and associates with acts of violence. This includes KASHAD SAMPSON, a/k/a “Shoca,” a YG leader who is charged with participating in multiple assaults with a dangerous weapon in Poughkeepsie and Newburgh, New York. In addition to serious acts of violence, the gang was also responsible for trafficking large amounts of narcotics across the City of Newburgh and New York State and perpetrating fraud schemes to enrich members of the gang.
U.S. Attorney Damian Williams said: “When I was sworn in as U.S. Attorney, I promised that this Office would be relentless in rooting out violent crime, in every corner of this District. That’s a promise I am determined to keep. Today, we’re announcing a sweeping RICO indictment charging 14 members and associates of a violent gang that we allege was up to no good: Running open air drug markets, engaging in shootouts in the broad daylight, and doing whatever it took to control the streets and do their dirt. Well, not anymore. Let today’s massive takedown be a warning to all gang members. The feds are watching. And you better believe we don’t quit.”
FBI Assistant Director in Charge Michael J. Driscoll said: "Many communities are seeing a dramatic increase in violent crime, putting people on edge. The FBI, and our law enforcement partners, are doing all we can to search out and stop these gangs from terrorizing towns in the Hudson Valley. This investigation should be viewed as a warning to others - we will hold you accountable."
As alleged in public court filings and the Indictment unsealed today in White Plains federal court:[1]
KASHAD SAMPSON, a/k/a “Shoca,” GEORGE DELGADO, a/k/a “Groc,” GABRIEL ROMAN, a/k/a “Gabe,” DALLAS ARCHER, a/k/a “Muggas,” JASIAH WOOTEN, a/k/a “Hov,” BRUCE ALLEN, a/k/a “Bam,” SYNCERE TATUM, a/k/a “Syn,” JOHN LALANNE, a/k/a “JJ,” RAEKWON JACKSON, a/k/a Tree,” BASHIR MALLORY, a/k/a “BG,” a/k/a “Bear,” MEKHI MCDONALD, a/k/a “Khi,” CHRISTOPHER TATE, a/k/a “Bag,” KRISTOPHER BURGESS CUNNINGHAM, a/k/a “KG,” and DEJON SCOTT, a/k/a “Red Dot,” are members and associates of a racketeering conspiracy known as YG.
On August 15, 2020, KASHAD SAMPSON, DALLAS ARCHER, JOHN LALANNE, and RAEKWON JACKSON, for the purpose of maintaining and increasing their positions in the YG enterprise, participated in and facilitated the attempted murder of rival gang members in Poughkeepsie, New York.
On April 27, 2021, SYNCERE TATUM, GABRIEL ROMAN, and CHRISTOPHER TATE, for the purpose of maintaining and increasing their positions in the YG enterprise, attempted to rob and shot at a rival drug dealer in Newburgh, New York.
On November 17, 2021, KASHAD SAMPSON, GEORGE DELGADO, JASIAH WOOTEN, and BRUCE ALLEN, for the purpose of maintaining and increasing their positions in the YG enterprise, shot at four rival gang members in Newburgh, New York.
On November 10, 2020, JOHN LALANNE robbed a narcotics dealer at gunpoint and discharged his firearm in Newburgh, New York.
From at least 2019 to the present, KASHAD SAMPSON, GEORGE DELGADO, GABRIEL ROMAN, JASIAH WOOTEN, BRUCE ALLEN, SYNCERE TATUM, JOHN LALANNE, RAEKWON JACKSON, BASHIR MALLORY, MEKHI MCDONALD, CHRISTOPHER TATE, KRISTOPHER BURGESS CUNNINGHAM, and DEJON SCOTT participated in a conspiracy to distribute a substantial amount of narcotics, including crack cocaine, heroin, Oxycodone, marijuana, and Promethazine HCL mixed with Codeine, commonly known as “lean.” These individuals also possessed numerous firearms in connection with this narcotics conspiracy.
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SAMPSON, 23, DELGADO, 23, ROMAN, 23, ARCHER, 25, ALLEN, 24, TATUM, 22, LALANNE, 23, MALLORY, 19, MCDONALD, 19, TATE, 19, and CUNNINGHAM, 28, were all arrested yesterday, and presented today before United States Magistrate Judges Judith C. McCarthy and Andrew E. Krause. WOOTEN, 24, JACKSON, 22, and SCOTT, 27, have not been arrested at this time.
Charts containing the names, charges, and minimum and maximum penalties for the defendants are set forth below. The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, New York State Police, Town of New Windsor Police Department, Orange County Sheriff’s Office, City of Newburgh Police Department, Town of Newburgh Police Department, and Nassau County Sheriff’s Office. Mr. Williams also thanked the FBI’s Westchester County Safe Streets Task Force, the New York City Department of Correction, Correction Intelligence Bureau, Department of Labor – Office of Inspector General, the Poughkeepsie Police Department, and the New York City Police Department for their assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jennifer N. Ong, Nicholas S. Bradley, and Ryan W. Allison are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
DEFENDANT(S)
MAX. AND MIN. POTENTIAL PENALTIES
Count One: Conspiracy to Commit Racketeering
KASHAD SAMPSON
DALLAS ARCHER
GABRIEL ROMAN
GEORGE DELGADO
JASIAH WOOTEN
BRUCE ALLEN
BASHIR MALLORY
CHRISTOPHER TATE
JOHN LALANNE
RAEKWON JACKSON
SYNCERE TATUM
MEKHI MCDONALD
KRISTOPHER BURGESS CUNNINGHAM
DEJON SCOTT
20 years in prison
Count Two: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering
KASHAD SAMPSON
DALLAS ARCHER
JOHN LALANNE
RAEKWON JACKSON
20 years in prison
Count Three: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
KASHAD SAMPSON
DALLAS ARCHER
JOHN LALANNE
RAEKWON JACKSON
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Four: Assault with a Dangerous Weapon in Aid of Racketeering
SYNCERE TATUM
GABRIEL ROMAN
CHRISTOPHER TATE
20 years in prison
Count Five: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
SYNCERE TATUM
GABRIEL ROMAN
CHRISTOPHER TATE
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Six: Assault with a Dangerous Weapon in Aid of Racketeering
KASHAD SAMPSON
GEORGE DELGADO
JASIAH WOOTEN
BRUCE ALLEN
20 years in prison
Count Seven: Hobbs Act Robbery
JOHN LALANNE
20 years in prison
Count Eight: Possession and Discharge of a Firearm in Furtherance of a Crime of Violence
JOHN LALANNE
Life in prison; Mandatory minimum of 10 years in prison to run consecutive to any other sentence imposed
Count Nine: Conspiracy to Distribute Controlled Substances
KASHAD SAMPSON
GABRIEL ROMAN
GEORGE DELGADO
JASIAH WOOTEN
BRUCE ALLEN
BASHIR MALLORY
CHRISTOPHER TATE
JOHN LALANNE
RAEKWON JACKSON
SYNCERE TATUM
MEKHI MCDONALD
KRISTOPHER BURGESS CUNNINGHAM
DEJON SCOTT
Life in prison; Mandatory minimum of 10 years in prison
Count Ten: Possession of a Firearm in Furtherance of a Drug Trafficking Crime
KASHAD SAMPSON
GABRIEL ROMAN
GEORGE DELGADO
JASIAH WOOTEN
BRUCE ALLEN
BASHIR MALLORY
CHRISTOPHER TATE
JOHN LALANNE
RAEKWON JACKSON
SYNCERE TATUM
MEKHI MCDONALD
KRISTOPHER BURGESS CUNNINGHAM
DEJON SCOTT
Life in prison; Mandatory minimum of five years in prison to run consecutive to any other sentence imposed
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Heads of New York-Based Non-Governmental Organization Plead Guilty to Conspiring to Bribe Elected Officials of the Marshall IslandsRead the Press Release
Two Marshallese nationals pleaded guilty today to conspiring to pay bribes to elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation.
According to court documents, beginning in or around 2016 and continuing until at least August 2020, Cary Yan, 50, and Gina Zhou, 34, the heads of a New York-based non-governmental organization (NGO), conspired with others in connection with a multi-year bribery scheme. Yan and Zhou offered and paid tens of thousands of dollars in bribes to elected RMI officials – including, among others, members of the RMI legislature – in exchange for supporting legislation creating a semi-autonomous region within the RMI called the Rongelap Atoll Special Administrative Region (RASAR) that would benefit the business interests of Yan, Zhou, and their associates. Yan and Zhou carried out the bribery and money laundering scheme using the New York NGO, including the physical use of its headquarters in Manhattan, to meet with and communicate with RMI officials.
In November 2020, Thai authorities arrested Yan and Zhou in Thailand at the request of the United States pursuant to the U.S.-Thailand extradition treaty, and following court proceedings, the Thai government extradited Yan and Zhou to the United States on Sept. 2.
Yan and Zhou each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). They each face a maximum penalty of five years in prison. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Damian Williams for the Southern District of New York, and Assistant Director-in-Charge Michael J. Driscoll of the FBI New York Field Office made the announcement.
The FBI investigated the case. The Royal Thai Government, the U.S Department of State’s Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of the defendants.
Assistant Chief Gerald M. Moody Jr. and Trial Attorney Anthony Scarpelli of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom for the Southern District of New York are prosecuting the case.
The Fraud Section is responsible for investigating and prosecuting FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Florida Man Sentenced to 18 Months for Theft of over $20 Million in SIM Swap SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that NICHOLAS TRUGLIA was sentenced today to 18 months in prison for his participation in the theft of over $20 million worth of cryptocurrency during a SIM swap attack of a victim (the “Victim”) and was further ordered to pay $20,379,007 in restitution to the Victim within 60 days. TRUGLIA was sentenced today by U.S. District Judge Alvin K. Hellerstein.
U.S. Attorney Damian Williams said: “Nicholas Truglia and his associates stole a staggering amount of cryptocurrency from the victim through a complex SIM swap scheme. Nevertheless, today’s sentencing goes to show that no matter how sophisticated the crime is, this Office will continue to successfully prosecute those who choose to defraud others.”
According to Count One of the Indictment, to which TRUGLIA pled guilty, and other statements and submissions made in Court:
In or around January 2018, TRUGLIA participated in a scheme to conduct a cyber intrusion of online accounts of the Victim in order to steal cryptocurrency. During the course of the scheme, participants in the scheme (the “Scheme Participants”) gained unauthorized access to online accounts of the Victim through a cyber intrusion technique referred to as “SIM swapping.” During a SIM swap attack, cyber threat actors gain control of a victim’s mobile phone number by linking that number to a subscriber identity module (“SIM”) card controlled by the threat actors, resulting in the victim’s calls and messages being routed to a device controlled by the threat actors. The threat actors then use control of the victim’s mobile phone number to obtain unauthorized access to accounts held by the victim that are registered to the mobile phone number.
The Scheme Participants successfully gained unauthorized access to online accounts of the Victim via a SIM swap of the Victim’s mobile phone number (the “SIM Swap”). The Scheme Participants then used those online accounts to gain access to a cryptocurrency wallet of the Victim containing over $20 million worth of the Victim’s cryptocurrency. One of the Scheme Participants contacted TRUGLIA and added him to an online call with other Scheme Participants, during which TRUGLIA learned of the SIM Swap and agreed to receive cryptocurrency fraudulently diverted from the Victim’s cryptocurrency wallet into an online account held by TRUGLIA (the “Truglia Account”). Over the next few hours, TRUGLIA made the Truglia Account available to other Scheme Participants to receive the Victim’s stolen cryptocurrency, where it was converted into Bitcoin. Scheme Participants transferred much of this Bitcoin to other accounts controlled by them and left a portion of the criminal proceeds for TRUGLIA. In total, during the SIM Swap, Scheme Participants stole over $20 million worth of the Victim’s cryptocurrency, with the defendant keeping at least approximately $673,000 worth of the stolen funds.
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In addition to his prison term, TRUGLIA, 25, of Ocoee, Florida, was sentenced to three years of supervised release. In addition to his restitution obligation of $20,379,007, TRUGLIA was further ordered to forfeit $983,010.72.
Mr. Williams praised the outstanding investigative work of Special Agents of the United States Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation’s Las Vegas Field Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Timothy V. Capozzi is in charge of the prosecution.
Seventeen New York City and State Public Employees Charged with Fraudulently Obtaining Pandemic Relief LoansRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Thomas M. Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Amaleka McCall-Brathwaite, Eastern Region Special Agent in Charge of the U.S. Small Business Administration, Office of Inspector General (“SBA-OIG”), announced today the unsealing of a Complaint charging RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF with conspiring to commit wire fraud by submitting fraudulent SBA loan applications, as well as Complaints charging BRANDON BOYLE, DELILAH CUMMINGS, VASHAWN FOREMAN, TREVOR GORDON, DIONE HALL, TONI MCCULLOUGH, JAROD OTTLEY, RONETTE SHORT, EDWIN SKEPPLE, and WALTER SUSSWELL individually with wire fraud for submitting fraudulent loans under the SBA’s Economic Injury Disaster Loan (“EIDL”) program and/or its Paycheck Protection Program (“PPP”). Most of the defendants were arrested this morning. BOYLE, CUMMINGS, FOREMAN, GORDON, HALL, MCCULLOUGH, OTTLEY, SHORT, SKEPPLE, and SUSSWELL will be presented this afternoon before Magistrate Judge Stewart D. Aaron in Manhattan federal court. SMITH, GANT, CHARLES, LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF will be presented this afternoon before Magistrate Judge Sarah Netburn in Manhattan federal court. SIMON, SCOTT, and JACKSON are not in custody.
U.S. Attorney Damian Williams said: “Scheming to steal Government funds intended to help small businesses weather a national emergency is offensive. And, as public employees, these folks should have known better. This Office will continue to prosecute those who use fraud to line their pockets with taxpayer money.”
IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Of those arrested today are civil servants, NYPD employees, and a Captain for the Department of Corrections. These are individuals who held positions of trust and had strong, stable jobs while so many people struggled during the pandemic. The message that these arrests are sending should be a clear one. Nobody is above the law and while the pandemic has receded from the headlines, IRS-CI’s commitment to bringing those who defrauded these programs to justice remains unwavering.”
SBA-OIG Special Agent in Charge Amaleka McCall-Brathwaite said: “It is especially egregious when individuals that hold positions of public trust engage in criminal activity. OIG is committed to rooting out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
According to the 11 Complaints unsealed today in Manhattan federal court and publicly available information:[1]
RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF, together with others known and unknown, conspired together to obtain fraudulent SBA loans. GANT, SIMON, SCOTT, YOLANDA RATCLIFF, and ZHANE RATCLIFF were each employees of the New York City Police Department (the “NYPD”); LAWRENCE was an employee of the New York City Human Resources Administration; JACKSON was an employee of the Metropolitan Transit Authority; and CHARLES was an employee of a non-profit organization in New York City. During the summer of 2020, they each conspired with SMITH and others to submit fraudulent applications for loans to the SBA’s EIDL program. The fraudulent loan applications submitted in the names of the defendants made similar false claims about gross revenues and number of employees, and many of the applications claimed that the defendants operated hair and nail salons. Many of the defendants paid kickbacks to SMITH and/or other members of the conspiracy after their fraudulent loans were funded.
BRANDON BOYLE, DELILAH CUMMINGS, VASHAWN FOREMAN, TREVOR GORDON, DIONE HALL, TONI MCCULLOUGH, JAROD OTTLEY, RONETTE SHORT, EDWIN SKEPPLE, and WALTER SUSSWELL each submitted one or more fraudulent applications for loans under the SBA’s PPP and/or EIDL program. BOYLE and SUSSWELL worked for the NYPD; CUMMINGS, MCCULLOGH, and FOREMAN worked for the New York City Department of Education; SKEPPLE worked for the New York City Department of Corrections; GORDON had recently retired from the New York City Department of Corrections; OTTLEY worked for the New York City Department of Transportation; and SHORT worked for the New York City Administration for Children’s Services. Frequently, the applications for these defendants, which were submitted at various times in 2020, were on behalf of purported sole proprietorships in the defendants’ own names. In support of their fraudulent loan applications, the defendants claimed six-figure gross revenues for businesses that actually earned far less, if they existed at all. Many defendants claimed employees that they did not actually have, and many spent the proceeds of their loans on personal expenses, including in-person gambling at casinos, online gambling, personal stock investments, home furniture and electronics, and luxury clothing items.
Across all of these schemes, the defendants collectively stole more than $1.5 million from the SBA and financial institutions that issued SBA-guaranteed loans and intended or attempted to steal hundreds of thousands of dollars more.
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RODNEY SMITH, 54, DENISE GANT, 52, EBONY SIMON, 45, PHYA SCOTT, 51, PRISCILLA JACKSON, 41, YOLANDA LAWRENCE, 48, and ZHANE RATCLIFF, 27, all of Brooklyn, New York, SHARON CHARLES, 56, of Queens, New York, and YOLANDA RATCLIFF, 48, of Inwood, New York, are each charged with conspiracy to commit wire fraud and wire fraud. Each of those charges carries a maximum penalty of 20 years in prison. SMITH is also charged with a single count of aggravated identity theft, which carries a mandatory two-year consecutive sentence. VASHAWN FOREMAN, 40, DIONE HALL, 55, and WALTER SUSSWELL, 28, all of Queens, New York, DELILAH CUMMINGS, 37, TREVOR GORDON, 66, TONI MCCULLOUGH, 39, and RONETTE SHORT, 40, all of Brooklyn, New York, BRANDON BOYLE, 31, of New York, New York, JAROD OTTLEY, 57, of Valley Stream, New York, and EDWIN SKEPPLE, 40, of West Nyack, New York, are each charged with wire fraud, which carries a maximum penalty of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding work of the Special Agents of the U.S. Attorney’s Office and agents from the IRS-CI and the SBA-OIG. Mr. Williams also thanked the NYPD’s Internal Affairs Bureau and the New York City Department of Investigation for their assistance in the investigation of these cases.
The cases are being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Kedar S. Bhatia, Rebecca T. Dell, and Derek Wikstrom are in charge of the prosecutions.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Complaints and the descriptions of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Physician Sentenced for Second Health Care Fraud ConvictionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SPYROS PANOS was sentenced to 111 months in prison for health care fraud, wire fraud, and aggravated identity theft. PANOS pled guilty to the charges on October 30, 2020. United States District Judge Kenneth M. Karas imposed the sentence today in White Plains federal court.
U.S. Attorney Damian Williams said: “Spyros Panos, a former surgeon who surrendered his license to practice medicine after a prior conviction for health care fraud in this District, abused our healthcare system for his own personal profit again, and he is now facing a return to prison. The sentence he received appropriately reflects the seriousness of his crime and of recidivism in the eyes of the law.”
According to the Indictment, to which PANOS pled guilty, and other statements and submissions made in Court:
PANOS surrendered his New York State license to practice medicine in 2013 in anticipation of pleading guilty to an indictment charging him with health care fraud. Thereafter, while out on release in that case, and after surrendering his license, he began perpetrating a scheme to defraud six medical peer review companies by impersonating a licensed orthopedic surgeon practicing in Westchester County (“Doctor-1”). Among other things, PANOS submitted Doctor-1’s credentials to peer review companies and conducted peer reviews using Doctor-1’s name and credentials. He stopped engaging in the scheme while he served his prison sentence. After he was released, he resumed perpetrating the scheme. During the course of the scheme, PANOS defrauded the peer review companies of $876,389.97.
According to court documents, in advance of his November 2, 2020, trial, PANOS submitted proposed defense exhibits that included fraudulent emails and records. While on release pending sentencing, PANOS submitted false and fraudulent documents in support of requests for adjournments of sentencing based on false claims that he tested positive for COVID-19 and then suffered from COVID related pneumonia. In July 2022, after the Court revoked his bail conditions and ordered him remanded, PANOS was arrested and placed in custody.
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In addition to the prison term, PANOS, 54, of Hopewell Junction, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the New York Inspector General.
The prosecution of this case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Margery Feinzig and Lindsey Keenan are charge of the prosecution.
Man Pleads Guilty to Defrauding Customers Who Bought Cryptocurrency-Mining Computers and Miner Hosting ServicesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that CHET STOJANOVICH, a/k/a “Chester J. Stojanovich,” pled guilty today to wire fraud for defrauding more than a dozen victims of more than $2 million through fraudulent misrepresentations that he would provide the victims with specialized cryptocurrency-mining computers (“Miners”) and Miner hosting services that would provide the victims with a lucrative stream of “hash power” convertible into cryptocurrency. Instead, STOJANOVICH misappropriated his victims’ money and failed to provide them with the Miners and Miner hosting services they had purchased from him. STOJANOVICH is scheduled to be sentenced on March 2, 2023, before United States District Judge Denise Cote, who presided over today’s guilty plea hearing.
U.S. Attorney Damian Williams said: “Cryptocurrency mining has generated much media attention and public excitement in the past few years, but new forms of money and investment can also generate fresh opportunities for old-fashioned fraud. Chet Stojanovich has pled guilty to using those time-worn fraud techniques on this new financial frontier as he stole millions of dollars from victims who thought they were investing in cryptocurrency mining.”
According to publicly filed documents in this case:
From at least 2019 until his arrest in April 2022, STOJANOVICH controlled various companies, including Chet Mining Co. LLC (“Chet Mining”). Starting in or about March 2019, STOJANOVICH engaged in a scheme to defraud people who were seeking to purchase Miners and Miner hosting services through which they expected to obtain “hash power” convertible into cryptocurrency and money. STOJANOVICH defrauded these victims by falsely telling them that he would purchase, and had purchased, Miners on their behalf and that he would provide them with Miner hosting services and had already obtained such Miner hosting services for them.
In total, STOJANOVICH fraudulently induced more than a dozen customer-victims to pay a total of more than $2 million to STOJANOVICH and his companies, ostensibly in return for Miners and Miner hosting services. Despite fraudulent representations to the contrary, STOJANOVICH: (1) failed to provide many of the Miners that he told customers he had acquired; (2) failed to provide the Miner hosting services and cryptocurrency hash power that he represented he would provide; (3) employed deceptive practices to create the illusion that such Miners had been acquired and were being used to provide hash power to those customers; and (4) misappropriated his customers’ funds and spent the funds on unrelated and personal expenditures, including chartered air flights, hotel rooms, limousines, and private parties.
Defrauding at Least 10 Victims in 2019
In the spring and early summer of 2019, STOJANOVICH fraudulently induced at least 10 customers to pay a total of more than $2 million to STOJANOVICH and Chet Mining in return for Miners and Miner hosting services. Based on these and other misrepresentations, STOJANOVICH issued at least 15 invoices to these 10 victims with instructions to make payment to STOJANOVICH or one of his companies. As directed by STOJANOVICH, these customers paid STOJANOVICH more than $2 million in bank wires and cryptocurrency transfers. However, STOJANOVICH failed to provide the Miners and Miner hosting services that he had agreed to provide and for which he had been paid.
Defrauding Three More Victims in 2021
In or about August and September 2021, STOJANOVICH induced at least three additional customer-victims to pay him a total of approximately $179,880 as payment for a total of 127 Miners. Ultimately, STOJANOVICH provided those customers with only three of the 127 Miners they had paid for and repaid those customers only approximately $61,000 of the $179,880 they had paid, mostly from funds misappropriated from another customer.
The March 2022 Deposition
Several of the victims of the scheme described in the Indictment brought lawsuits against STOJANOVICH in federal court in Manhattan. In one such lawsuit, Holmes et al. v. Chet Mining, Chet Stojanovich, et ano., Case No. 20 Civ. 4448 (LJL) (S.D.N.Y.), STOJANOVICH was ordered by the court to appear for a deposition on March 4, 2022. During that deposition, STOJANOVICH testified falsely on a number of subjects. For example, in response to several questions, STOJANOVICH testified that he did not know the answers without looking in his personal cellphone and falsely testified that his phone was downstairs in his rental car or in storage. The deposition was thereupon adjourned for a half-hour, and STOJANOVICH was instructed to retrieve his cellphone and return to the deposition. Instead, STOJANOVICH left the deposition and loitered in the vicinity of his car until after everyone else participating in the deposition had left. Shortly thereafter, he returned to Canada, where he resided until he was arrested on April 11, 2022, following his attempt to re-enter the United States.
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STOJANOVICH, 38, previously of New York, New York, but residing in California since his release on bail in this case, pled guilty to one count of wire fraud, which carries a maximum penalty of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the sentencing judge.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation in the investigation of this case
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 CEO of Iconix Brand Group Convicted at Trial of Accounting FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced earlier today that a federal jury found NEIL COLE, the former Chief Executive Officer of Iconix Brand Group, Inc. (“Iconix”), guilty of participating in a scheme to fraudulently inflate Iconix’s revenue and earnings per share, making false filings with the U.S. Securities and Exchange Commission (“SEC”), and misleading the conduct of audits. The defendant was found guilty following a four-week retrial before U.S. District Judge Edgardo Ramos. Sentencing has not yet been scheduled.
U.S. Attorney Damian Williams said: “As a unanimous jury has now found, Neil Cole deceived his company’s investors and auditors in order to make his company appear to be performing better than it was. Cole tried to hide his conduct behind tricks and lies, but the truth is now clear: Cole cooked the books. This verdict sends a message that this Office is committed to holding corporate executives accountable when they resort to fraud, no matter how long it takes. Wall Street should know that we will not be deterred from seeking justice in tough cases.”
According to the allegations contained in the Indictment, the evidence offered at trial, and matters included in public filings:
Iconix, whose shares traded on the NASDAQ, was in the business of acquiring various brands, including clothing and fashion brands, and then licensing those brands to retailers, wholesalers, and suppliers who, in turn, produced and sold clothing and other products bearing the brand names.
Iconix utilized joint ventures (“JVs”) to profit from its brands in foreign markets. With respect to these JVs, Iconix transferred ownership of a trademark or brand to the JV while maintaining a 50 percent ownership interest in the JV itself. The other party involved in the JV purchased a 50 percent interest in the JV from Iconix. As part of the JV agreements, each JV partner was generally entitled to 50 percent of the JV’s licensing revenue. When it entered into a JV, Iconix recognized as revenue the buy-in purchase price paid by the JV partner, less Iconix’s cost basis in the trademarks.
Among the most critical financial metrics disclosed in Iconix’s public filings with the SEC were Iconix’s quarterly and annual revenue and non-GAAP diluted earnings per share (“EPS”). Iconix executives, including COLE, publicly identified revenue and EPS as the principal metrics demonstrating Iconix’s growth. They also touted Iconix’s consistent record of revenue and earnings growth and of meeting or exceeding Wall Street analyst consensus with respect to these metrics.
The Accounting Fraud Scheme
COLE engaged in a scheme to falsely inflate Iconix’s reported revenue and EPS by orchestrating a series of “round trip” transactions in which COLE and a senior Iconix executive induced a JV partner, a Hong Kong-based international apparel licensing company (“Company-1”), to pay artificially inflated buy-in purchase prices for JV interests, with the understanding that Iconix would then reimburse Company-1 for the overpayments. COLE executed the scheme for the purpose of enabling Iconix to report fraudulently inflated revenue and EPS figures based on the inflated buy-in purchase prices it obtained from Company-1.
COLE arranged for Iconix to enter into at least two JVs with Company-1 that included inflated buy-in purchase prices from Company-1: (1) an amendment to a preexisting Southeast Asia joint venture, which closed on or about June 30, 2014 (“SEA-2”), and (2) a second amendment to the Southeast Asia joint venture, which closed on or about September 17, 2014 (“SEA-3”) (collectively, the “SEA JVs”). SEA-2 and SEA-3 involved a fraudulent “round trip” transaction, lacking in economic substance, in which Company-1 paid an artificially inflated buy-in purchase price for its interest in the JV, in exchange for COLE’s agreement that Iconix would give back the inflated portion of the purchase price to Company-1. COLE and a senior Iconix executive hid from Iconix’s lawyers and outside auditors that COLE had reached an understanding with Company-1 to artificially increase the consideration Company-1 paid Iconix in exchange for COLE’s agreement to round-trip the overpayment back to Company-1.
Through the scheme, COLE caused Iconix to report fraudulently inflated revenue and EPS figures to the investing public. COLE did so, in part, to ensure that the reported figures met analyst consensus and to fraudulently convey the impression to the investing public that Iconix was growing quarter after quarter, as COLE had touted to the investing public.
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COLE, 65, of New York, New York, was convicted of one count of securities fraud, six counts of making false filings with the SEC, and one count of improperly influencing the conduct of audits. Each count carries a maximum prison term of 20 years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by the judge.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the SEC Office of the Inspector General. Mr. Williams also thanked the SEC Division of Enforcement, which previously brought a separate civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jared Lenow, Justin V. Rodriguez, and Andrew Thomas are in charge of the prosecution.
U.S. Attorney Announces Agreement with New York University to Increase Accessibility of Student Housing FacilitiesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced a voluntary compliance agreement under Title III of the Americans with Disabilities Act (“ADA”) with New York University (“NYU” or the “University”) to increase the accessibility of NYU’s student housing facilities for individuals with disabilities. The agreement covers all of NYU’s student housing facilities in the New York metropolitan area.
Title III of the ADA requires that privately owned places of public accommodation, including colleges and universities, remove physical barriers to access to existing facilities where it is readily achievable to do so, comply with accessibility standards for new construction and alterations, and modify policies and practices where necessary to ensure full and equal enjoyment of services and facilities.
The out-of-court agreement resolves a compliance review during which the U.S. Attorney’s Office identified various aspects of NYU’s student housing facilities that were not in compliance with Title III of the ADA and the ADA Standards for Accessible Design, including violations of the new construction provisions of the ADA and barriers to access to existing facilities.
NYU’s New York-area campuses include student housing facilities in Manhattan, in Brooklyn, and on Long Island for the University’s undergraduate, graduate, and professional schools. The agreement covers a total of more than 4,000 student housing units, which are located within 22 NYU-owned student housing facilities and 10 facilities leased in full or in part by the University.
NYU has agreed to prepare a plan under which it will survey and make alterations to its student housing facilities within five years, update its student housing emergency preparedness plans, and improve the accessibility information related to student housing on its website.
U.S. Attorney Damian Williams said: “The ADA requires colleges and universities to ensure that no individual is discriminated against on the basis of disability in the full and equal enjoyment of their services and facilities. We are pleased that NYU has committed to improving accessibility within the University’s student housing facilities and hope that other colleges and universities will follow suit and increase access to their facilities for individuals with disabilities.”
Under the agreement, NYU will:
- Conduct architectural surveys and seek public comment from the University community and then submit an accessibility plan for review to this Office, outlining how the University will comply with the agreement.
- Ensure that an appropriate number of accessible student housing units (and bathrooms serving those units) are available to students with disabilities and are dispersed throughout the University’s student housing facilities which serve NYU’s (i) general student population, (ii) graduate student population, (iii) Grossman School of Medicine, (iv) Long Island School of Medicine, (v) law school, and (vi) Brooklyn campus.
- Ensure that each student housing facility in which accessible housing units required by the agreement are located has accessible features, including accessible entrances, approaches, bathrooms, and signage; and that an appropriate number of additional housing facilities have an accessible entrance, first floor common area, and bathroom.
- Update its student housing emergency evacuation, sheltering, and shelter-in-place plans for individuals with disabilities after seeking public comment from the University community.
- Update its website to identify accessible entrances, routes, and transportation options for its student housing facilities; identify newly added or renovated accessible features of the student housing facilities; and provide information to assist students and prospective students with disabilities in securing and utilizing accessible housing and housing accommodations at NYU.
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This case is being handled by the Office’s Civil Rights Unit in the Civil Division. Assistant U.S. Attorney Samuel Dolinger is in charge of the case.
Brooklyn Woman Pleads Guilty to Multifaceted COVID-19 Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that TATIANA DANIEL pled guilty today to conspiracy to commit wire fraud. DANIEL participated in a scheme to commit COVID-19 pandemic fraud by (1) defrauding New York City’s COVID-19 Hotel Room Isolation Program; (2) selling fabricated COVID-19 test results, both positive and negative; (3) committing unemployment benefits fraud; and (4) obtaining fraudulent COVID-19 loans from both the United States Small Business Administration’s Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”) program. DANIEL pled guilty before United States Magistrate Judge Ona T. Wang. DANIEL’s case is assigned to United States District Judge Lewis A. Kaplan.
U.S. Attorney Damian Williams said: “As she admitted today, Tatiana Daniel repeatedly took advantage of resources offered to aid people and businesses in crisis. Daniel’s misconduct included selling fabricated COVID-19 test results, which likely put members of the public at risk of contracting the deadly virus from one of Daniel’s customers. Daniel now faces possible prison time for her illegal and dangerous actions.”
According to the allegations contained in the Superseding Information, court filings, and statements made during plea proceedings:
From March 2020 through September 2021, DANIEL conspired to commit COVID-19 pandemic fraud through a variety of different means.
First, DANIEL defrauded the COVID-19 Hotel Room Isolation Program (the “Program”). In response to the COVID-19 pandemic, New York City created the Program. Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City. The Program was open to (a) healthcare workers who needed to isolate because of exposure to COVID-19; (b) patients who had tested positive for COVID-19; (c) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (d) individuals who lived with someone who had COVID-19. As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.” Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform.
DANIEL defrauded the Program in at least two respects. First, she secured free Program hotel rooms for herself by falsely claiming to be a healthcare worker — specifically, a respiratory therapist. Second, she sold at least approximately 144 nights’ worth of fraudulently obtained hotel rooms to customers who were ineligible for the Program. In connection with this scheme, DANIEL used Facebook to advertise the sale of Program hotel rooms, to communicate directly with potential purchasers of Program hotel rooms, and to communicate with a co-defendant who worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020. For instance, at one point, DANIEL wrote to her co-defendant, “We gotta relocate that bitch they keep asking for employee ID.”
Second, DANIEL operated a fraudulent document mill, through which DANIEL sold, among other things, fabricated COVID-19 test results, both positive and negative, in July and August 2021. These fabricated test results included the names of purported medical personnel, and contained misspellings (e.g., “postive”).
Third, between May 2021 and September 2021, DANIEL submitted fraudulent applications for COVID-19 loans, through both the PPP and EIDL programs, resulting in the disbursement of thousands of dollars in pandemic loan funding to DANIEL and a co-conspirator.
Fourth, between March 2020 and September 2021, DANIEL conspired to fraudulently obtain more than approximately $97,000 in unemployment benefits in New York State for both herself and others. She did so by making misrepresentations about herself, and by stealing the identities of more than 10 individuals and collecting unemployment benefits issued for the benefit of those individuals. In addition, DANIEL filed unsuccessful unemployment benefits applications in other states.
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DANIEL, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. Under the terms of her plea agreement, DANIEL has agreed to forfeit $109,655 and to pay restitution of $401,206.
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. DANIEL is scheduled to be sentenced by Judge Kaplan on March 29, 2023, at 2:30 p.m.
DANIEL’s three co-defendants are currently scheduled to proceed to trial before Judge Kaplan on January 17, 2023.
Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation. He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.
Antisemitic Assailant Pleads Guilty to Conspiracy to Commit Hate CrimesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SAADAH MASOUD pled guilty today to one count of participating in a conspiracy to commit hate crime acts in connection with MASOUD’s repeated physical attacks of Jewish victims in New York City between 2021 and 2022. MASOUD was first arrested in this case on June 14, 2022. MASOUD pled guilty before U.S. District Judge Denise L. Cote.
U.S. Attorney Damian Williams said: “Saadah Masoud deliberately targeted three victims because of their religion and nation of origin. There is no place in this country for this offensive and hateful conduct. This Office is dedicated to seeking justice for victims of hate crimes and will aggressively prosecute those who spread hate by criminal means.”
According to the Indictment, other public filings, and statements made in court:
From at least in or about May 2021 through at least in or about April 2022, MASOUD and others conspired to commit hate crime acts in the Southern District of New York and elsewhere. In furtherance of the conspiracy, MASOUD assaulted at least three victims based upon the victims’ actual and perceived religion and national origin. Specifically, as part of his guilty plea, the defendant admitted to committing the following acts of violence that were motivated by the victims’ Jewish or Israeli identity or perceived identity:
- On or about April 20, 2022, in Manhattan, MASOUD assaulted a victim who was wearing an Israeli flag.
- On or about June 2, 2021, in Brooklyn, MASOUD and a co-conspirator assaulted a victim who was wearing clothing traditionally associated with the Jewish religion, including a yarmulke, while the victim was sitting outside the victim’s own home.
- On or about May 20, 2021, in Manhattan, MASOUD assaulted a victim who was wearing a Star of David necklace.
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MASOUD, 29, of Staten Island, New York, pled guilty to one count of participating in a conspiracy to commit hate crime acts, 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. MASOUD is scheduled to be sentenced on March 3, 2023, by U.S. District Judge Denise Cote.
Mr. Williams praised the outstanding investigative work of the New York City Police Department’s Hate Crime Task Force and the Special Agents of the United States Attorney’s Office for the Southern District of New York.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Lindsey Keenan and Mitzi Steiner are charge of the prosecution.
Founder and Former Chief Investment Officer of Infinity Q Pleads Guilty to Securities FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES VELISSARIS, the founder and former chief investment officer of Infinity Q Capital Management (“Infinity Q”), a New York based investment adviser that ran a mutual fund and a hedge fund that purported to have approximately $3 billion in assets under management, pled guilty to securities fraud. VELISSARIS made false and misleading statements to investors and others concerning Infinity Q’s process for valuing certain over-the-counter (“OTC”) derivative positions that made up a substantial portion of the holdings of the mutual and hedge funds and also fraudulently mismarked those securities in ways that did not reflect their fair value. VELISSARIS committed the mismarking scheme in order to inflate the value of the investment funds as reported to investors, to attract and retain capital, and to increase his own compensation. In order to avoid detection of the scheme, VELISSARIS provided both Infinity Q’s auditor and the Securities and Exchange Commission (“SEC”) with falsified or altered documents, including providing the auditor with altered term sheets that served to provide fabricated support for the fraudulently inflated values. Today’s plea was taken by U.S. District Court Judge Denise Cote.
U.S. Attorney Damian Williams said: “Today’s guilty plea demonstrates this Office’s resolve to pursue even the most sophisticated of financial crimes. James Velissaris thought he could get away with mismarking some of the most esoteric derivative products on Wall Street by manipulating sophisticated financial models and computer code. This case has exposed that fraud and shown that Velissaris lied to his investors in order to line his own pockets with inflated fees. Velissaris will now be held accountable for his actions.”
According to the allegations contained in the Indictment, other publicly available information, and statements made in court:
Background
VELISSARIS was the founder and chief investment officer of Infinity Q, an investment adviser that ran both a mutual fund (the “Mutual Fund”), started in about 2014, and a hedge fund (the “Hedge Fund,” and collectively the “Investment Funds”), started in about 2017. As of 2021, the two funds purported to have approximately $3 billion in assets under management. Infinity Q was headquartered in New York, New York, and employed a small staff, including a chief compliance and chief risk officer (“Employee-1”).
A major component of both the Mutual Fund and the Hedge Fund’s holdings were over-the-counter (“OTC”) derivative positions that involved customized contracts that allowed the counterparties to take positions on the volatility, or price movement, of underlying assets or indices. VELISSARIS, through Infinity Q, represented to its investors that it valued these OTC derivative positions based on fair value, and that in order to do so, it utilized the services of an independent third-party provider. In particular, Infinity Q represented to investors and other stakeholders that it used Bloomberg Valuations Service (“BVAL”) to independently calculate the fair value of these positions, in accordance with the terms of the underlying derivative contracts. These OTC derivative positions comprised hundreds of millions of dollars of the Investment Funds’ portfolios.
VELISSARIS’ Scheme to Lie to Investors and Inflate Derivative Swap Positions
In fact, however, VELISSARIS defrauded Infinity Q’s investors by taking an active role in the valuation of Infinity Q’s positions and by modeling the positions in ways that were not based on the actual terms of the underlying contracts and were inconsistent with fair value. VELISSARIS’ input into the BVAL valuation process was inconsistent with Infinity Q’s representations about the independence of the process and allowed VELISSARIS to fraudulently mismark positions in BVAL. VELISSARIS engaged in the mismarking of positions in BVAL by making false entries in BVAL’s system including by secretly altering the computer code employed by BVAL that caused BVAL to alter and disregard certain critical terms. Altering and disregarding terms in this fashion caused BVAL to report values that were artificially inflated and, often, much higher than fair value.
By manipulating OTC derivative positions in BVAL in this way, VELISSARIS caused numerous positions in the Investment Funds to have anomalous and, at times, impossible valuations. For example, at times, VELISSARIS made manipulations in either the Mutual Fund and/or the Hedge Fund that caused certain identical positions that were held by both the Mutual Fund and the Hedge Fund (namely, a position where all the material terms are the same) to have substantially divergent values. In other cases, some of VELISSARIS’ manipulations caused certain positions held by the Investment Funds to have impossible values, such as where, under the true terms of the swap, the value adopted by VELISSARIS could only be true if volatility were negative – a condition which is mathematically impossible.
Ultimately, after VELISSARIS’ mismarking scheme was uncovered in or about February 2021, Infinity Q liquidated the Investment Funds and sold its OTC derivative positions. These positions were sold for hundreds of millions of dollars less than their purported market values in BVAL, thereby resulting in substantial losses to the investors in the Investment Funds.
VELISSARIS Lies to Auditors and Obstructs the SEC’s Investigation
In order to hide this scheme and prevent its detection, VELISSARIS lied to numerous outside stakeholders and regulators. First, in order to prevent Infinity Q’s outside auditor (the “Auditor”) from discovering the fraud, VELISSARIS provided the Auditor with falsified term sheets from counterparties that he had altered to change the true terms of certain OTC derivative positions. In particular, in connection with a number of audits, the Auditor selected certain OTC positions that it would independently value in order to confirm the reasonableness of Infinity Q’s values from BVAL. In order to ensure that the Auditor would not arrive at materially different results when independently valuing positions that VELISSARIS had manipulated in BVAL, VELISSARIS altered the terms of certain deal documents and provided them to the Auditor. After receiving these falsified documents and relying on them in its independent evaluation, the Auditor confirmed the reasonableness of VELISSARIS’ valuations in BVAL.
Furthermore, beginning in May 2020, the SEC opened an inquiry and later an investigation into Infinity Q’s valuation practices. In connection with that investigation, VELISSARIS provided false and misleading information to the SEC. For example, when the SEC asked for original documents that had been provided to investors, VELISSARIS altered the documents before providing them to the SEC, including certain alterations that would help hide his mismarking scheme. For example, Infinity Q’s original investor materials stated that “[o]nce a price is established for a portfolio security, it shall be used for all Funds that hold the security.” As explained above, this was untrue, and on numerous occasions, manipulations in BVAL made by VELISSARIS caused the same positions in the Mutual Fund and the Hedge Fund to have substantially different values. To conceal the falsity of Infinity Q’s disclosures, VELISSARIS, along with Employee-1, removed this line from investor documents that were provided to the SEC.
In June 2020, the SEC requested that Infinity Q provide additional materials, including documents regarding Infinity Q’s valuation committee and all of its meeting minutes. Infinity Q’s investor materials had represented that Infinity Q had a valuation committee, including VELISSARIS, that the committee would meet monthly or more often, and that VELISSARIS would be responsible for preparing minutes of such meetings. In fact, however, VELISSARIS had not kept notes of any such meetings. Accordingly, days before responding to the SEC, VELISSARIS made up notes purporting to be from valuation committee meetings in 2019 and 2020 and submitted them to the SEC.
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VELISSARIS, 38, of Atlanta, Georgia, pled guilty to one count of securities 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. Sentencing has been scheduled for March 3, 2023, in front of Judge Cote.
Mr. Williams praised the work of the Federal Bureau of Investigation. He further thanked the SEC and the Commodity Futures Trading Commission for their cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Daniel Loss, and Daniel Tracer are in charge of the prosecution.