Southern District of New York
Press releases recorded for this federal judicial district.
Yonkers Man Convicted of March 2011 MurderRead 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 DARNELL KIDD a/k/a “Black,” a/k/a “Donney,” a/k/a “Donney Black,” on one count of an indictment charging him with the 2011 murder of Jonathan Johnson, 21, in White Plains, New York. U.S. District Judge Nelson S. Román presided over the eight-day trial.
U.S. Attorney Damian Williams said: “Darnell Kidd shot and killed Jonathan Johnson during a robbery. He now stands guilty of that murder. We will continue to work with our law enforcement partners to vigorously investigate gun violence and pursue justice for the victims of violent crimes.”
According to the allegations in the Indictment and the evidence at trial:
On or about March 18, 2011, DARNELL KIDD murdered Jonathan Johnson by shooting him during the course of an armed robbery for marijuana in White Plains, New York. KIDD’s co-defendant MARCUS CHAMBERS arranged by phone to purchase the marijuana from Johnson. CHAMBERS and KIDD met with Johnson to rob him of marijuana, and during the robbery, KIDD shot and kill Johnson.
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KIDD, 31, of Yonkers, New York, was convicted of one count of murder through the use of a firearm, which carries a mandatory minimum prison term of five years and a maximum prison term of life.
The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
CHAMBERS previously pled guilty for his role in the murder. CHAMBERS was sentenced to 20 years in prison.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s Westchester County Safe Streets Task Force, which comprises Special Agents and Task Force Officers from the FBI, United States Probation Office, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County Department of Public Safety, Westchester County District Attorney’s Office, Putnam County Sheriff’s Office, Rockland County District Attorney’s Office, New York City Police Department, Yonkers Police Department, Mount Vernon Police Department, Peekskill Police Department, Greenburgh Police Department, New Rochelle Police Department, White Plains Police Department, Clarkstown Police Department, and Ramapo Police Department. Mr. Williams also thanked the White Plains Police Department and the Westchester County District Attorney’s Office for their assistance in this matter.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Olga I. Zverovich, Christopher Brumwell, Steven J. Kochevar, and Hagan Scotten and Paralegal Specialist Shannon Becker are in charge of the prosecution.
New York Veterinarian and Racehorse Trainers Sentenced to Prison in Federal Doping CaseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that defendants LOUIS GRASSO, RICHARD BANCA, and RENE ALLARD were sentenced to 50 months in prison, 30 months in prison, and 27 months in prison, respectively, for their roles in distributing adulterated and misbranded drugs in service of a racehorse doping scheme. Each defendant previously pled guilty to felony drug misbranding and adulteration charges. U.S. District Judge P. Kevin Castel imposed the sentences in Manhattan federal court.
U.S. Attorney Damian Williams said: “Illegally doping racehorses is animal abuse in the service of greed. Such corruption threatens the health of racehorses and undermines the integrity of the sport. Today, three defendants have been sentenced for their roles in perpetuating, and profiting from, the mistreatment of animals. The sentences each defendant received appropriately reflects the seriousness of these offenses in the eyes of the law.”
According to the statements in the Superseding Indictment, charging instruments, other filings in this case, and statements during court proceedings:
The charges in the Grasso case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, distributors of performance enhancing drugs (PEDs), 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, all to the detriment and risk of the health and well-being of the racehorses. GRASSO, a veterinarian, not only accepted payment in exchange for prescriptions for powerful and medically unnecessary PEDs, but he also created, distributed, and administered custom-made PEDs that were all misbranded and adulterated substances designed solely to improve racehorse performance. Through this fraudulent scheme, GRASSO helped corrupt trainers collect over $47 million in ill-gotten purse winnings. As standardbred racehorse trainers, BANCA and ALLARD purchased and administered adulterated and misbranded drugs to racehorses under their control, and as a result of their crimes, their horses earned approximately $16 million and $25 million in purse winnings, respectively. BANCA and ALLARD 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.
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In addition to their prison terms, LOUIS GRASSO, 65, of Pine Bush, New York, was sentenced to two years’ supervised release. RICHARD BANCA, 47, of Middletown, New York, and RENE ALLARD, 35, of Canada, were each sentenced to one year of supervised release. LOUIS GRASSO was further ordered to pay restitution in the amount of $47,656,576.
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 United States Attorneys Sarah Mortazavi and Anden Chow are in charge of the prosecution.
Bronx Gang Member Charged with 2013 MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging LAMAR WILLIAMS with racketeering conspiracy, murder in aid of racketeering, and murder with a firearm. The charges relate to WILLIAMS’ murder of Rasheed Barton on August 11, 2013, in the Bronx, New York.
WILLIAMS was arrested today and presented before Magistrate Judge Jennifer E. Willis. The case is assigned to U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Damian Williams said: “As alleged, the defendant shot and murdered Rasheed Barton as part of the defendant’s gang membership and crack cocaine dealing. We will continue to work with our law enforcement partners to investigate and prosecute those who commit these horrific acts of violence.”
NYPD Commissioner Keechant L. Sewell said: “Today’s charges highlight what the NYPD and our partners in the U.S. Attorney’s Office for the Southern District can accomplish when we focus on the relatively few people responsible for much of the crime and violence in New York City. Together, we remain committed to identifying, arresting, and prosecuting those who partake in any form of gang activity, from drug distribution to murder. Make no mistake: Severe consequences await anyone who dares to jeopardize the safety of our neighborhoods.”
According to the allegations in the Indictment unsealed today in Manhattan federal Court:[1]
From at least 2013 to 2022, LAMAR WILLIAMS, a/k/a “Black,” a/k/a “Little Black,” a/k/a “Chase Money Marz,” was a member of the Mac Ballers, which is a set of the national Bloods gang. The Mac Ballers operated primarily in the northeast United States, including in the Bronx, and in jails and prisons of New York City and the State of New York.
Members of the Mac Ballers committed acts of violence, including murder, to protect and expand the gang’s territory, to retaliate against rival gang members, to keep victims and potential victims in fear of the gang, and to otherwise promote the gang’s reputation. They also distributed controlled substances in order to enrich themselves. Mac Ballers members promoted and celebrated the gang’s criminal conduct — including acts of violence, drug distribution, and firearm usage — on social media.
On August 11, 2013, WILLIAMS shot and killed Rasheed Barton in the vicinity of East 174th Street and Bronx River Avenue in the Bronx, New York. WILLIAMS murdered Barton in connection with WILLIAMS’ membership in the Mac Ballers gang and his conspiring to sell crack cocaine.
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WILLIAMS, 31, of the Bronx, New York, is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison; one count of murder in aid of racketeering, which carries a statutory maximum sentence of death or life in prison and mandatory minimum sentence of life in prison; and one count of murder through use of a firearm, which carries a statutory maximum sentence of death or life in prison and a mandatory minimum sentence of five years in prison.
The minimum and maximum potential sentences 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 investigative work of the NYPD.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Mathew Andrews and Jim Ligtenberg 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
Ten Charged with Crack Cocaine Distribution in Mount VernonRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Frank A. Tarentino III, the Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), Glenn Scott, Commissioner of the Mount Vernon Police Department (“MVPD”), and Terrance Raynor, Acting Commissioner of the Westchester County Department of Public Safety (“WCDPS”), announced today the unsealing of a Superseding Indictment and a Complaint charging 10 defendants with narcotics distribution and firearm offenses in and around Westchester County, New York. The defendants, ESTEBAN MORALES, TRAVIS SWAIN, BOBBY BROWN, ISHMAEL MORALES, JONATHAN LONG, SR., DAYSHAWN RIVERS, SHANNA LEWIS, DWAYNE HUDSON, SHONTEEA WALKER, and MICHAEL VEGA will be presented in federal court today before United States Magistrate Judge Paul E. Davison.
U.S. Attorney Damian Williams said: “As alleged, these defendants trafficked crack cocaine, an addicting and potentially deadly product that devastates communities throughout the Southern District of New York, and used firearms to protect their operation. Thanks to the FBI, the DEA, the Mount Vernon Police Department, and the Westchester County Department of Public Safety, the defendants are in custody and facing federal criminal charges.”
FBI Assistant Director Michael J. Driscoll said: "These small groups of drug dealers are contributing to the spike in violent crime across our communities. The work being done by the FBI Westchester County Safe Streets Task Force and our law enforcement partners is vital to stopping the vicious cycle of shootings, robberies, and illicit drug sales. We are determined to bring these criminals to justice and make Mount Vernon a safer place."
DEA Special Agent-in Charge Frank A Tarentino III said: “This investigation has shut down a violent drug trafficking organization based in Mount Vernon, New York. Drugs and guns cause irreparable damage in our communities, and law enforcement is committed to keeping the public safe and healthy.”
MVPD Commissioner Glenn Scott said: “The Mount Vernon Police Department is dedicated to solving violent crime and removing guns and drugs from our city streets. This operation is an example of what we can accomplish when we utilize all of our law enforcement partners. We thank our partner agencies in this operation, FBI Westchester Safe Streets Task Force, the U.S. Drug Enforcement Agency, U.S. Probation, and the Westchester County Police Department, and we look forward to continuing to work together to make Mount Vernon safer.”
WCDPS Acting Commissioner Terrance Raynor said: “Joint investigations with federal and local partners are one of the most effective tools we can use to take illegal weapons and narcotics off our streets. I applaud the officers and agents involved in this case for the difficult and dangerous work that led to these indictments and arrests. By sharing resources and working collaboratively, we can make Mount Vernon and Westchester safer for all.”
As alleged in the Superseding Indictment and the Complaint unsealed today in White Plains federal court:[1]
From at least January 2022 until November 2022, ESTEBAN MORALES, TRAVIS SWAIN, BOBBY BROWN, ISHMAEL MORALES, JONATHAN LONG, SR., DAYSHAWN RIVERS, SHANNA LEWIS, DWAYNE HUDSON, and SHONTEEA WALKER conspired to distribute over 280 grams of crack cocaine. In or about November 2022, MICHAEL VEGA possessed with intent to distribute over 1,500 grams of crack cocaine. In addition, on occasions between March 2022 and June 2022, ESTEBAN MORALES, BOBBY BROWN, ISHMAEL MORALES, and DAYSHAWN RIVERS each possessed a firearm in furtherance of the narcotics conspiracy.
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A chart containing the names and ages of the defendants who were charged today, the charges, and the minimum and maximum penalties they face is attached.
The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force, the MVPD, the DEA, and the WCDPS. The Westchester County Safe Streets Task Force comprises Special Agents and Task Force Officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County DPS, Westchester County DAs Office, Putnam County Sheriff’s Office, Rockland County DA’s Office, New York City PD, Yonkers PD, Mount Vernon PD, Peekskill PD, Greenburgh PD, New Rochelle PD, White Plains PD, Clarkstown PD, and Ramapo PD.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Kaiya Arroyo, Qais Ghafary, and Stephanie Simon are in charge of the prosecution.
The charges contained in the Indictment and Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Charges
Minimum and Maximum Penalties
ESTEBAN MORALES
22
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base and Possession of a Firearm in Furtherance of a Controlled Substance Offense
Life in prison; mandatory minimum term of five years in prison (to run consecutively to any other prison term imposed); five years supervised release; $250,000 or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss; $100 special assessment
ISHMAEL MORALES
22
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base; Unlawful Possession of a Firearm; and Possession of a Firearm in Furtherance of a Controlled Substance Offense
Life in prison; mandatory minimum term of five years in prison (to run consecutively to any other prison term imposed); five years supervised release; $250,000 or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss; $100 special assessment
TRAVIS SWAIN
29
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base
Life in prison; mandatory minimum term of 10 years in prison; five years supervised release; $10,000,000 fine; $100 special assessment
BOBBY BROWN
45
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base and Possession of a Firearm in Furtherance of a Controlled Substance Offense
Life in prison; mandatory minimum term of five years in prison (to run consecutively to any other prison term imposed); five years supervised release; $250,000 or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss; $100 special assessment
JONATHAN LONG, SR.
53
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base
Life in prison; mandatory minimum term of 10 years in prison; five years supervised release; $10,000,000 fine; $100 special assessment
DAYSHAWN RVERS
32
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base and Possession of a Firearm in Furtherance of a Controlled Substance Offense
Life in prison; mandatory minimum term of five years in prison (to run consecutively to any other prison term imposed); five years supervised release; $250,000 or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss; $100 special assessment
SHANNA LEWIS
31
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base
Life in prison; mandatory minimum term of 10 years in prison; five years supervised release; $10,000,000 fine; $100 special assessment
DWAYNE HUDSON
38
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base and Possession of a Firearm in Furtherance of a Controlled Substance Offense
Life in prison; mandatory minimum term of five years in prison (to run consecutively to any other prison term imposed); five years supervised release; $250,000 or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss; $100 special assessment
SHONTEEA WALKER
22
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base
Life in prison; mandatory minimum term of 10 years in prison; five years supervised release; $10,000,000 fine; $100 special assessment
MICHAEL VEGA
36
Conspiracy to Distribute and Possess with Intent to Distribute 280 Grams or More of Cocaine Base
Life in prison; mandatory minimum term of 10 years in prison; five years supervised release; $10,000,000 fine; $100 special assessment
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint constitutes only allegations, and every fact described herein should be treated as an allegation.
Middletown Physician’s Assistant Sentenced to 25 Years for Enticement of MinorsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JONATHAN WEISS, a/k/a “Ian_Jameson,” was sentenced to 25 years in prison by United States District Judge Philip M. Halpern for his enticement of seven minors to engage in sexual activity. The sentencing today followed WEISS’s guilty plea on December 9, 2021.
U.S. Attorney Damian Williams said: “Weiss’s crimes are the nightmare of every parent. Weiss created a false online identity, portraying himself as a young teen, and used this false identity to exploit minors for his own sexual gratification. As today’s sentencing underscores, we will continue to use every tool available to law enforcement to prosecute and punish those who seek to hide behind the wall of the Internet to sexually exploit children.”
According to documents filed in this case and statements made in related court proceedings:
In September 2019, WEISS communicated online via Snapchat with a 13-year-old minor (“Victim-1”) and directed Victim-1 to take and send sexually explicit photographs of Victim-1 to WEISS. WEISS utilized the Snapchat screen name “Ian_Jameson” and posed as a minor. WEISS told Victim-1 that if she did not send more nude pictures to WEISS, he would send the pictures she had already sent to others. In response to the threats to send her pictures to others, Victim-1 “blocked” “Ian_Jameson” on Snapchat. Shortly thereafter, people began telling her that they had received her nude images.
WEISS engaged in the same type of activity with six other minors: a 13-year-old minor (“Victim-2”) in August 2019, a 13-year-old minor (“Victim-3”) in May 2020, a 14-year-old minor (“Victim-4”) in June 2018, a 16-year-old minor (“Victim-5”) in February 2020, a 13-year-old minor in February 2019 (“Victim-6”), and a 14-year-old minor (“Victim-7”) in June 2019.
At the sentencing today, Judge Halpern underscored that there was “no excuse” for the defendant’s “despicable conduct.”
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In addition to the prison term, Judge Halpern sentenced WEISS, 32, of Middletown, New York, to 25 years of supervised release.
Mr. Williams praised the efforts of Homeland Security Investigations, the Putnam County Sheriff’s Office, the Clay County Sheriff’s Office in Orange Park, Florida, the Orange County Child Advocacy Center, and the Longview Texas Police Department in Longview, Texas, in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Marcia S. Cohen is in charge of the prosecution.
Drug Dealer Charged with Trafficking 19 Kilos of FentanylRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Frank A. Tarentino III, the Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), announced that JUSTO VARGAS was charged for possessing nearly 20 kilograms of fentanyl with the intent to distribute it, in concert with others. VARGAS was arrested on Sunday and presented yesterday before Magistrate Judge Paul E. Davison.
U.S. Attorney Damian Williams said: “As alleged, the defendant conspired to distribute fentanyl, one of the deadliest drugs on Earth. Thanks to our law enforcement partners, nearly 20 kilograms of this poison have been taken off the street.”
As alleged in the Complaint:[1]
On or about November 13, 2022, VARGAS met with a confidential source to sell that confidential source approximately 19 kilograms of fentanyl. VARGAS arrived at the Cross County Center parking lot in Yonkers, New York, and parked adjacent to the confidential source’s vehicle. The parties exited their respective vehicles and stood next to the open trunk of VARGAS’s vehicle, which contained what appeared to the confidential source to be 19 kilograms of fentanyl. Agents and officers then intervened and arrested VARGAS and seized the fentanyl, which is pictured below:
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VARGAS, 31, of New York, New York, is charged with one count of possession with intent to distribute 400 grams and more of fentanyl and one count of conspiring to do the same. Those offenses carry mandatory minimum sentences of 10 years in prison and maximum potential sentences of life in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the DEA’s New York Drug Enforcement Task Force comprising agents and officers of the DEA, New York City Police Department, and New York State Police. Mr. Williams also thanked the Office of the Special Narcotics Prosecutor at the Manhattan District Attorney’s Office and the Yonkers Police Department for their assistance in this case.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Ben Arad 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, constitutes only allegations, and every fact described therein should be treated as an allegation.
Two Defendants Charged for Nationwide Online Marketing Scheme That Fraudulently Enrolled Customers in Credit Monitoring Monthly SubscriptionRead 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 the indictment of MICHAEL BROWN and ANDREW LLOYD for wire fraud charges in connection with a nationwide online marketing scheme to post fake advertisements for rental properties across the United States on a classified advertisements website. The purpose of the scheme was to fraudulently induce potential customers to enter their credit card information on credit monitoring websites owned by BROWN and obtain a credit report under false pretenses in order to automatically enroll the customers in a monthly membership for credit monitoring services. BROWN was arrested at Newark Liberty International Airport in New Jersey on October 27, 2022, after he arrived on a flight from Mexico and was detained pending trial. LLOYD was arrested earlier today in Pennsylvania and will be presented in the United States District Court for the Western District of Pennsylvania later today. The case is assigned to United States District Judge Katherine Polk Failla.
U.S. Attorney Damian Williams said: “Online scams have spiraled out of control, to the point where nearly every online interaction must be approached with weariness of its validity. Nevertheless, as alleged, Michael Brown and Andrew Lloyd gave their victims no opportunity to suspect a scam as they enrolled thousands of victims to a nearly $30 a month fee using seemingly reputable websites and deceptive practices. I commend the efforts of this Office and our law enforcement partners in prosecuting these scams that have become a near-daily frustration, and today’s arrests show that we will continue to zealously investigate consumer fraud.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, the defendants operated a complex scheme, using phony advertisements to trick victims into unknowingly enrolling in a monthly credit monitoring service. The FBI remains steadfast in our efforts to investigate and eliminate online scams and hold the fraudsters accountable in the criminal justice system.”
According to allegations in the Indictment filed in Manhattan federal court:[1]
MICHAEL BROWN owned and operated Credit Bureau Center, LLC, formerly known as MyScore LLC (“MyScore”), a Delaware limited liability company which provided credit reports and credit monitoring services via the websites eFreeScore.com, FreeCreditNation.com, and CreditUpdates.com, among other sites (collectively, the “MyScore Websites”). ANDREW LLOYD was an affiliate that worked with a co-conspirator (“CC-1”), the owner of an affiliate marketing company, to drive potential customers to the MyScore Websites. In affiliate marketing, a seller of goods or services such as MyScore uses other firms or individuals known as “affiliates” to market the seller’s goods or services by attracting customers to the seller’s websites. BROWN contracted with CC-1 in order to increase customer traffic to the MyScore Websites.
From at least in or about 2014 through at least on or about January 10, 2017, BROWN, LLOYD, and CC-1 engaged in a nationwide online marketing scheme to post fake advertisements for rental properties across the United States on a classified advertisements website (the “Advertising Website”). The purpose of the scheme was to fraudulently induce prospective renters to enter their credit card information on the MyScore Websites and obtain a credit report under false pretenses in order to automatically enroll them in a monthly membership for credit monitoring services.
The advertisements used in the scheme typically contained photos of the rental properties and showcased properties in desirable locations for below-market prices in order to attract interest. The advertisements were posted for rental properties in metropolitan areas across the United States, including, among other locations, New York City, Miami, Atlanta, Houston, Los Angeles, and San Diego. In actuality, the rental properties did not exist as advertised or were not actually available for rent through the posts on the Advertising Website. The advertisements also did not disclose the specific address of the rental properties but instead contained a contact email address inviting prospective renters to contact the property owner if they were interested in the rental property.
When prospective renters inquired about the rental properties posted on the Advertising Website by responding to the advertisements, they received a form email purporting to be from the property owner requiring the prospective renter to obtain a copy of their credit report, and referring the prospective renter to one of the MyScore Websites to obtain a credit report, before scheduling a tour of the property. The form email typically described purported features of the advertised property and falsely informed the prospective renter, in substance and in part, that he or she was the second person to respond to the advertisement, that the first responder no longer needed the property, and that the property owner was ready to lease the property to the prospective renter with flexible terms and had just completed all new renovations.
Once a prospective renter clicked on the hyperlink in the form email from the purported property owner to obtain a copy of their credit report, the prospective renter was directed to the “landing page” of one of the MyScore Websites. The landing page of the MyScore Websites typically featured a large banner that stated, in substance and in part, “Get Your Free Credit Score and Report” with significantly smaller text referencing an unspecified “7-day trial” and a “Monthly membership of $29.94 automatically charged after trial.” In order to get the credit report, prospective renters were required to enter identifying information and credit card information through a series of webpages. Once the prospective renter entered credit card information, the prospective renter was charged $1.00 and was automatically enrolled in a monthly membership for credit monitoring services with recurring charges of typically $29.94 per month until the membership was cancelled.
When prospective renters responded to the purported property owner asking to schedule a tour of the advertised property now that they had a copy of their credit report, there was typically no response, as the property was not actually available for rent as advertised and the scheme had succeeded in fraudulently generating a monthly membership subscription for MyScore. Many prospective renters who obtained a credit report from the MyScore Websites as a result of the scheme did not realize that they had been automatically enrolled in MyScore’s membership until they discovered the monthly charges on their credit card statements. Some prospective renters also had difficulties canceling the membership when they contacted MyScore’s customer service department.
BROWN, LLOYD, and CC-1 continued to execute the scheme through at least on or about January 10, 2017, despite numerous complaints during the course of the scheme from customers and consumer organizations about the fraudulent nature of the rental advertisements on the Advertising Website, the automatic enrollment of customers in MyScore’s monthly membership with recurring charges without their knowledge, and the difficulties in cancelling the monthly membership.
In total, the scheme caused over approximately 2.7 million unique visits to the MyScore Websites and generated approximately $6.8 million in revenue from approximately 169,000 customers who were automatically enrolled in MyScore’s monthly membership for credit monitoring services through the scheme.
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BROWN, 37, who was residing in Mexico, and LLOYD, 30, of Beaver, Pennsylvania, were each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, which each carry a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI. Mr. Williams also thanked the Federal Trade Commission for their assistance with the case.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Sagar K. Ravi is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety 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 Gang Member Sentenced to 37 Years for Racketeering, Narcotics Conspiracy, and MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT WILSON, a/k/a “RO,” a/k/a “Sin,” a member of a racketeering enterprise known as the Stevenson Commons Crew, was sentenced today by U.S. District Judge Jesse M. Furman to 37 years in prison. WILSON previously pled guilty to participating in a racketeering conspiracy, narcotics conspiracy, and a firearms offense. Co-defendant KEVIN CROSBY, a/ka/ “Sama,” was previously sentenced to 25 years in prison, and co-defendant MARQUIS YOHANIS, a/k/a “DG,” was previously sentenced to over 24 years in prison. Co-defendant YEFREL BRITO, a/k/a “Mini,” is scheduled to be sentenced on December 7, 2022.
U.S. Attorney Damian Williams said: “For years, Robert Wilson filled the Soundview neighborhood of the Bronx with drugs and violence. He then helped plan and execute the cold-blooded murder of Nelson Ramos in January 2019. Today, Wilson was rightly sentenced to 37 years in prison for these horrific crimes. We thank our law enforcement partners at the New York City Police Department, Homeland Security Investigations, and the New York City Department of Investigation for their outstanding work pursuing justice for Mr. Ramos and his family.”
According to the allegations in the Indictment and other filings and statements made in court:
WILSON is a member of a racketeering enterprise known as the Stevenson Commons Crew. In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Stevenson Commons Crew committed, conspired, attempted, and threatened to commit acts of violence against rival gangs, including murder and robbery; conspired to distribute and possess with intent to distribute narcotics; and obtained, possessed, and used firearms, including by brandishing and discharging them.
On September 13, 2018, WILSON and others carried out a robbery, during which WILSON and others repeatedly punched, kicked, and stomped on the victim, causing serious physical injuries to the victim.
On January 6, 2019, WILSON and others helped plan and carry out a shooting, which resulted in the death of Nelson Ramos in the vicinity of 800 Soundview Avenue in the Bronx, New York.
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In addition to the prison term, Judge Furman sentenced WILSON, 31, of the Bronx, New York, to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the New York City Police Department, Homeland Security Investigations, and the New York City Department of Investigation.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan, Justin V. Rodriguez, Emily A. Johnson, and Jun Xiang are in charge of the prosecution.
Bank Insider Pleads Guilty to Bank Bribery for Facilitating Multimillion Dollar Wire Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that earlier today LUIS RIVAS pled guilty to conspiring to commit bank bribery in connection with a business email compromise scheme that defrauded businesses of millions of dollars. RIVAS was the seventh person charged in this international scheme.
U.S. Attorney Damian Williams said: “Bank employee Luis Rivas used his inside knowledge and access to open bank accounts for fake businesses so that his co-conspirators could receive and launder millions of dollars from victims who had been deceived. Now, Rivas is rightly being held accountable for his crime. Today’s guilty plea reflects this Office’s commitment to investigating and prosecuting individuals who abuse positions of trust at financial institutions to engage in corrupt criminal conduct.”
According to the Indictment and other public filings and proceedings in the case:
From at least in or about 2018 through at least in or about May 2020, LUIS RIVAS, who at the time of the offense was a financial sales advisor at a Houston branch of a national bank, agreed to accept payments in exchange for helping others open business bank accounts for phony companies. Those bank accounts were then used to receive more than $2.2 million in fraud proceeds. The money came from a business email compromise scheme in which businesses were defrauded by co-conspirators who impersonated, via email, individuals and businesses in the course of otherwise ordinary financial transactions, thereby fraudulently inducing the victims to transfer funds to bank accounts that the perpetrators controlled. The names of the phony companies used for the bank accounts that RIVAS helped open were purposefully chosen to mirror the names of the true counterparties in those business transactions.
RIVAS also helped the perpetrators access and launder the fraud proceeds. In particular, RIVAS assisted with unfreezing, transferring, and withdrawing money in transactions designed to conceal and disguise the funds’ source, ownership, and control.
RIVAS was generally paid between $500 to $1,500 for each account that he helped open and each transaction where he provided assistance. He received, in total, approximately $45,000 for his corrupt insider services.
* * *
RIVAS, 36, of Houston, Texas, pled guilty to one count of conspiracy to commit bank bribery, which carries a maximum sentence of five years in prison. As part of his guilty plea, RIVAS agreed to forfeit $45,000 to the United States.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as RIVAS’s sentence will be determined by the judge. RIVAS is scheduled to be sentenced by U.S. District Judge P. Kevin Castel on March 21, 2023.
Mr. Williams praised the work of Homeland Security Investigations for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being handled by the Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Emily Deininger is in charge of the prosecution.
Two Men Arrested for Committing Armed Robbery of Bronx Jewelry Store Using Bear Spray, A Gun, and HammersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Keechant L. Sewell, Police Commissioner for the City of New York (“NYPD”), announced the unsealing of a three-count Complaint today charging two members of an armed robbery crew operating in the Bronx, New York, with robbery, conspiracy to commit robbery, and brandishing a firearm during and in relation to a crime of violence. Specifically, PABLO ARMANDO VALENZUELA and AARON MILLER stole more than $800,000 worth of jewelry while armed with a firearm, bear spray, and hammers. MILLER was arrested yesterday, and VALENZUELA was arrested today and will be presented before Magistrate Judge Sarah L. Cave.
U.S. Attorney Damian Williams said: “As alleged, the defendants and their co-conspirators committed a violent robbery using any weapons they could get their hands on that left employees of a Bronx jewelry store injured and their store destroyed. This Office will continue to aggressively prosecute robberies, especially those that are accompanied with violence.”
FBI Assistant Director in Charge Michael J. Driscoll said: “We allege Valenzuela and Miller carried out a robbery at a jewelry store, stole more than $800,000 in merchandise, violently trashed the business, and injured employees by using bear spray. Smash and grab robberies have become more brazen, and the criminals responsible must be held responsible. This investigation should serve as a warning to anyone contemplating a similar crime - you will face justice in the federal system for breaking the law.”
NYPD Police Commissioner Keechant L. Sewell said: “This violence will never be tolerated in our city. And actions must have consequences. Today’s charges reflect our commitment to safeguarding the people and businesses of New York City, and our relentless pursuit of anyone who would seek to do them harm. I want to thank the U.S. Attorney’s Office for the Southern District of New York, the New York Office of the FBI, and every investigator who worked on this important case.”
According to the allegations contained in the Complaint:[1]
On August 10, 2022, VALENZUELA and MILLER, along with at least four other co-conspirators, committed an armed robbery of a jewelry store in the Bronx, New York, using a firearm, bear spray, and hammers. On the evening of August 10, VALENZUELA entered the jewelry store wearing a ski mask and sprayed a can of bear spray into the eyes of jewelry store employees, temporarily blinding them. Five other masked robbers entered the jewelry store, including MILLER, and used hammers to destroy glass display cases. At least one robber brandished a firearm. VALENZUELA, MILLER, and the other robbers then stole over $800,000 worth of jewelry before fleeing on mopeds, in cars, and by foot.
Photographs of VALENZUELA (Photographs 1 and 2) and MILLER (Photograph 3) are below:
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VALENZUELA, 32, and MILLER, 23, both of the Bronx, New York, are charged with one count of Hobbs Act robbery and one count of conspiracy to commit Hobbs Act robbery, both of which carry a maximum sentence of 20 years in prison, and one count of brandishing a firearm during and in relation to a crime of violence, which carries a maximum sentence of life in prison and a mandatory minimum term of seven years in prison, which must be served consecutively to any other prison term imposed.
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 a judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, particularly the Albany FBI – Binghamton Resident Agency, the U.S. Marshals Service New York/New Jersey Regional Task Force, and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U. S. Attorney Amanda C. Weingarten is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation.
U.S. Attorney Announces Historic $3.36 Billion Cryptocurrency Seizure and Conviction in Connection with Silk Road Dark Web FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Tyler Hatcher, the Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Los Angeles Field Office (“IRS-CI”), announced today that JAMES ZHONG pled guilty to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 Bitcoin from the Silk Road dark web internet marketplace. ZHONG pled guilty on Friday, November 4, 2022, before United States District Judge Paul G. Gardephe.
On November 9, 2021, pursuant to a judicially authorized premises search warrant of ZHONG’s Gainesville, Georgia, house, law enforcement seized approximately 50,676.17851897 Bitcoin, then valued at over $3.36 billion. This seizure was then the largest cryptocurrency seizure in the history of the U.S. Department of Justice and today remains the Department’s second largest financial seizure ever. The Government is seeking to forfeit, collectively: approximately 51,680.32473733 Bitcoin; ZHONG’s 80% interest in RE&D Investments, LLC, a Memphis-based company with substantial real estate holdings; $661,900 in cash seized from ZHONG’s home; and various metals also seized from ZHONG’s home.
U.S. Attorney Damian Williams said: “James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery. Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin.”
IRS-CI Special Agent in Charge Tyler Hatcher said: “Mr. Zhong executed a sophisticated scheme designed to steal bitcoin from the notorious Silk Road Marketplace. Once he was successful in his heist, he attempted to hide his spoils through a series of complex transactions which he hoped would be enhanced as he hid behind the mystery of the ‘darknet.’ IRS-CI Special Agents are the best in the world at following the money through cyberspace or wherever our financial investigations lead us. We will continue to work with our partners at the US Attorney’s Office to track down these criminals and bring them to justice.”
According to the allegations contained in filings in Manhattan federal court and statements made during court proceedings:
ZHONG’s Scheme to Defraud
Silk Road was an online “darknet” black market. In operation from approximately 2011 until 2013, Silk Road was used by numerous drug dealers and other unlawful vendors to distribute massive quantities of illegal drugs and other illicit goods and services to many buyers and to launder all funds passing through it. In 2015, following a groundbreaking prosecution by this Office, Silk Road’s founder Ross Ulbricht was convicted by a unanimous jury and sentenced to life in prison.
In September 2012, ZHONG executed a scheme to defraud Silk Road of its money and property by (a) creating a string of approximately nine Silk Road accounts (the “Fraud Accounts”) in a manner designed to conceal his identity; (b) triggering over 140 transactions in rapid succession in order to trick Silk Road’s withdrawal-processing system into releasing approximately 50,000 Bitcoin from its Bitcoin-based payment system into ZHONG’s accounts; and (c) transferring this Bitcoin into a variety of separate addresses also under ZHONG’s control, all in a manner designed to prevent detection, conceal his identity and ownership, and obfuscate the Bitcoin’s source.
While executing the September 2012 fraud, ZHONG did not list any item or service for sale on Silk Road, nor did he buy any item or service on Silk Road. ZHONG registered the accounts by providing the bare minimum of information required by Silk Road to create the account; the Fraud Accounts were merely a conduit for ZHONG to defraud Silk Road of Bitcoin.
ZHONG funded the Fraud Accounts with an initial deposit of between 200 and 2,000 Bitcoin. After the initial deposit, ZHONG then quickly executed a series of withdrawals. Through his scheme to defraud, ZHONG was able to withdraw many times more Bitcoin out of Silk Road than he had deposited in the first instance. As an example, on September 19, 2012, ZHONG deposited 500 Bitcoin into a Silk Road wallet. Less than five seconds after making the initial deposit, ZHONG executed five withdrawals of 500 Bitcoin in rapid succession — i.e., within the same second — resulting in a net gain of 2,000 Bitcoin. As another example, a different Fraud Account made a single deposit and over 50 Bitcoin withdrawals before the account ceased its activity. ZHONG moved this Bitcoin out of Silk Road and, in a matter of days, consolidated them into two high-value amounts.
Nearly five years after ZHONG’s fraud, in August 2017, solely by virtue of ZHONG’s possession of the 50,000 Bitcoin that he unlawfully obtained from Silk Road, ZHONG received a matching amount of a related cryptocurrency — 50,000 Bitcoin Cash (“BCH Crime Proceeds”) — on top of the 50,000 Bitcoin. In August 2017, in a hard fork coin split, Bitcoin split into two cryptocurrencies, traditional Bitcoin and Bitcoin Cash (“BCH”). When this split occurred, any Bitcoin address that had a Bitcoin balance (as ZHONG’s addresses did) now had the exact same balance on both the Bitcoin blockchain and on the Bitcoin Cash blockchain. As of August 2017, ZHONG thus possessed 50,000 BCH in addition to the 50,000 Bitcoin that ZHONG unlawfully obtained from Silk Road. ZHONG thereafter exchanged through an overseas cryptocurrency exchange all of the BCH Crime Proceeds for additional Bitcoin, amounting to approximately 3,500 Bitcoin of additional crime proceeds. Collectively, by the last quarter of 2017, ZHONG thus possessed approximately 53,500 Bitcoin of total crime proceeds (the “Crime Proceeds”).
The Government’s Seizure of Forfeitable Property
On November 9, 2021, pursuant to a judicially authorized premises search warrant (the “Search”), IRS-CI agents recovered approximately 50,491.06251844 Bitcoin of the Crime Proceeds from ZHONG’s Gainesville, Georgia, house. Specifically, law enforcement located 50,491.06251844 Bitcoin of the approximately 53,500 Bitcoin Crime Proceeds (a) in an underground floor safe; and (b) on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet. In addition, law enforcement recovered $661,900 in cash, 25 Casascius coins (physical bitcoin) with an approximate value of 174 Bitcoin, 11.1160005300044 additional Bitcoin, and four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin.
Beginning in or around March 2022, ZHONG began voluntarily surrendering to the Government additional Bitcoin that ZHONG had access to and had not dissipated. In total, ZHONG voluntarily surrendered 1,004.14621836 additional Bitcoin.
Forfeiture Actions
In connection with ZHONG’s guilty plea, on November 4, 2022, Judge Gardephe entered a Consent Preliminary Order of Forfeiture as to Specific Property and Substitute Assets/Money Judgment forfeiting ZHONG’s interest in the following property:
- ZHONG’s 80% interest in RE&D Investments, LLC, a Memphis-based company with substantial real estate holdings;
- $661,900 in United States currency seized from ZHONG’s home on November 9, 2021;
- Metal items, consisting of four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin, all seized from ZHONG’s home on November 9, 2021;
- 11.1160005300044 Bitcoin seized from ZHONG’s home on November 9, 2021;
- 25 Casascius coins (physical Bitcoin) with an approximate value of 174 Bitcoin, collectively, seized from ZHONG’s home on November 9, 2021;
- 23.7112850 Bitcoin provided by ZHONG on April 27, 2022;
- 115.02532155 Bitcoin provided by ZHONG on April 28, 2022; and
- 4.57427222 Bitcoin provided by ZHONG on June 8, 2022.
Today, in United States v. Ross Ulbricht, S1 14 Cr. 68 (LGS), the Government filed a motion for entry of an Amended Preliminary Order of Forfeiture, seeking to forfeit approximately 51,351.89785803 Bitcoin traceable to Silk Road, valued at approximately $3,388,817,011.90 at the time of seizure, as follows:
- 50,491.06251844 Bitcoin seized from ZHONG’s home on November 9, 2021;
- 825.38833159 Bitcoin provided by ZHONG on March 25, 2022; and
- 35.4470080 Bitcoin provided by ZHONG on May 25, 2022.
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ZHONG, 32, of Gainesville, Georgia, and Athens, Georgia, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ZHONG is scheduled to be sentenced by Judge Gardephe on February 22, 2023, at 3:00 p.m.
Mr. Williams praised the outstanding work of the Internal Revenue Service, Criminal Investigation’s Western Cyber Crimes Unit of the Los Angeles Field Office. Mr. Williams also thanked the Athens-Clarke County Police Department in Athens, Georgia, for its support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney David R. Felton is in charge of the case.
Three Arrested for International Gun Trafficking and Obstruction of JusticeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today the arrests of ELVIS GUERRERO, a/k/a “E,” JEMYNI TRUE, a/k/a “Jemy,” and TRENTON MICHAEL JUDKINS, for trafficking firearms from New York City to the Dominican Republic. As alleged in the Complaint filed last Friday, the defendants obtained firearms from straw purchasers and then shipped six handguns and an AR-15 style rifle from New York City to the Dominican Republic inside a cargo shipping container. TRUE and JUDKINS also conspired to delete evidence regarding their scheme after JUDKINS was contacted by law enforcement. GUERRERO and TRUE were arrested after flying into JFK Airport from the Dominican Republic last Thursday and were presented before Magistrate Judge Barbara C. Moses in Manhattan federal court. GUERRERO was ordered detained and TRUE was detained pending release on conditions. JUDKINS was arrested last Friday in Maine.
U.S. Attorney Damian Williams said: “International gun traffickers endanger our community by putting dangerous weapons in the hands of those who often use them for violence. As demonstrated by these arrests, our Office will continue to investigate and prosecute gun traffickers who seek to profit from the illegal gun trade, which endangers the lives of law-abiding citizens everywhere.”
HSI New York Special Agent in Charge Ivan J. Arvelo said: “These three defendants are alleged to have conspired to obtain and traffic firearms to the Dominican Republic, and then attempted to cover their tracks to evade detection. HSI New York will continue to leverage the full breadth of its investigative authorities and maximize our investigative partnerships to combat the exportation of illegal firearms across our borders. Those who wish to engage in the illicit purchasing, trafficking, or shipping of illegal firearms will be held accountable to the fullest extent of the law.”
NYPD Commissioner Keechant L. Sewell said: “Illegal guns pose a grave public-safety threat to every community, here in New York City and across the globe. With these charges, the NYPD and our law-enforcement partners are sending a clear and definitive message: If you traffic in these deadly weapons, you will be arrested and prosecuted to the fullest extent of the law. I want to thank the U.S. Attorney’s Office for the Southern District of New York, HSI’s New York Field Office, and all of the investigators who worked on this important case.”
According to the allegations in the Complaint filed in Manhattan federal court:[1]
TRUE and GUERRERO obtained firearms from multiple straw purchasers located in the United States, including JUDKINS. GUERRERO and JUDKINS discussed that GUERRERO would pay JUDKINS for a firearm with narcotics.
On or about October 6, 2022, a shipping container that had been transported by cargo ship from New York City to the Dominican Republic was inspected in the Dominican Republic. Inside a box that was reported to contain food and other items, inspectors found six handguns and an AR-15 style rifle. A photograph of the firearms is below:
Law enforcement in the Dominican Republic searched a location where the firearms were intended to be received and found a paper containing a phone number associated with TRUE.
On November 3, 2022, law enforcement agents approached JUDKINS, who admitted to selling the AR-15 style rifle recovered in the Dominican Republic to GUERRERO and that TRUE had recently asked him to provide a second firearm. After speaking with law enforcement agents, JUDKINS communicated with TRUE, advising her that he had spoken with federal law enforcement agents and to “be careful.” In response, TRUE asked him to “delete all our chats on Facebook and here please / And text / And your s*** w [GUERRERO].” JUDKINS agreed to do so.
On November 3, 2022, law enforcement agents seized cellphones possessed by GUERRERO and TRUE after they flew into JFK Airport from the Dominican Republic. Substantially all of the data on TRUE’s cellphone had been deleted.
On GUERRERO’s phones, law enforcement found multiple photographs of firearms, including the following photograph of GUERRERO posing with a rifle:
Law enforcement agents also found communications between GUERRERO and TRUE regarding firearms and notes GUERRERO kept regarding quantities of narcotics.
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GUERRERO, 21, of Lowell, Massachusetts; TRUE, 20, of Corinth, Maine; and JUDKINS, 18, of Garland, Maine, are each charged with one count of conspiring to commit an offense against the United States, namely, gun trafficking, which carries a maximum sentence of five years in prison and one count of gun trafficking, which carries a maximum sentence of five years in prison. TRUE and JUDKINS are additionally charged with one count of obstruction of justice, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence will be determined by a judge.
Mr. Williams praised the outstanding investigative work of HSI and the NYPD.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorney Jun Xiang is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint constitutes only allegations, and every fact described herein should be treated as an allegation.
Doctor Convicted at Trial of Illegally Distributing Oxycodone from Midtown Manhattan PracticeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced earlier today that a federal jury found HOWARD ADELGLASS guilty for his participation in a conspiracy to illegally prescribe oxycodone. The defendant was found guilty following a two-week trial before U.S. District Judge Jed S. Rakoff. Sentencing is scheduled for March 8, 2023, before Judge Rakoff.
U.S. Attorney Damian Williams said: “Doctor Howard Adelglass was a drug dealer, but instead of peddling drugs on the street corner, he distributed drugs with a prescription pad from his Central Park South ‘pain-management clinic.’ For years, the defendant prescribed enormous quantities of highly addictive and deadly opioids to people he knew were suffering from substance abuse disorders or were dealers. By distributing mammoth quantities of oxycodone pills to people without a legitimate medical purpose, the defendant destroyed lives and families. Along with our law enforcement partners, we will continue to hold accountable those responsible for fueling the opioid crisis that is ravaging our community and nation.”
According to the allegations contained in the Indictment, the evidence offered at trial, and matters included in public filings:
HOWARD ADELGLASS was a licensed physician. Together with Marcello Sansone, the defendant operated a pain-management clinic located in Midtown Manhattan (the “Clinic”). The Clinic serviced purported patients seeking oxycodone and other pain-relief medications commonly diverted for illicit purposes. In exchange for cash payments, and in some instances for cocaine, ADELGLASS wrote thousands of prescriptions for large quantities of oxycodone, and many he wrote to individuals whom ADELGLASS knew did not need the pills for a legitimate medical purpose. When they occurred, ADELGLASS’s examinations were perfunctory. The defendant’s purported patients included individuals addicted to opioids and, in some cases, who sold oxycodone on the street. Even when faced with clear evidence of his purported patients’ drug abuse and diversion, ADELGLASS continued to prescribe large quantities of oxycodone to them.
Initially, ADELGLASS staffed the Clinic with inexperienced young women, some of whom he addicted to oxycodone. In approximately October 2018, after serving as a primary source of patient referrals, Sansone took over as the Clinic’s office manager. In that role, Sansone helped to control access to ADELGLASS and the lucrative prescriptions he wrote for medically unnecessary oxycodone. With particularly vulnerable patients, the defendants solicited and, in some instances, received sex acts in exchange for oxycodone prescriptions.
Between in or about November 2017 and in or about September 2020, ADELGLASS prescribed more than 1.3 million oxycodone pills.
On October 13, 2022, Sansone pled guilty to conspiracy to illegally distribute oxycodone. Sansone is scheduled to be sentenced on February 13, 2023, before Judge Rakoff.
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ADELGLASS, 67, of New York, New York, was convicted of conspiracy to illegally distribute oxycodone, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, and the Department of Health and Human Services, Office of the Inspector General.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Marguerite B. Colson, and Daniel G. Nessim are in charge of the prosecution.
Bronx Gang Member Charged with 2021 MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging JALEEL SHAKOOR with racketeering conspiracy, murder in aid of racketeering, murder with a firearm, and illegal possession of ammunition. The charges relate to SHAKOOR’s murder of Gerry Mazzella on June 3, 2021, in the Bronx, New York. As alleged in the Indictment, SHAKOOR shot Mazzella in the back of the neck from point-blank range.
SHAKOOR, who was already in federal custody, will be presented today before Magistrate Judge Barbara C. Moses. The case is assigned to U.S. District Judge Colleen McMahon.
U.S. Attorney Damian Williams said: “As alleged, the defendant committed a murder as part of his gang membership: he shot Gerry Mazzella from point-blank range, killing him. With these charges, we continue our daily work of investigating and prosecuting those who perpetrate these senseless acts. We hope this prosecution brings some measure of comfort to the victim’s loved ones.”
NYPD Commissioner Keechant L. Sewell said: “This case is an outstanding example of what the NYPD and our law enforcement partners can accomplish when we strike back at the relatively few people responsible for spreading violence and fear in New York City. Together, we remain committed to thwarting gang activity in all its forms, and to reinforcing the severe consequences that await anyone who dares to jeopardize safety in our neighborhoods.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From at least 2020 to 2022, JALEEL SHAKOOR, a/k/a “Midnight,” was a member of the Untouchable Gorilla Stone Nation (“Gorilla Stone”), which is a set of the national Bloods gang. Gorilla Stone operated primarily in the northeast United States, including in the Bronx, and in the jails and prisons of New York City and the State of New York.
Members of Gorilla Stone committed robberies and distributed controlled substances in order to enrich themselves. They also murdered and assaulted members of rival gangs and members of Gorilla Stone in order to resolve disputes within the gang. Gorilla Stone members promoted and celebrated the gang’s criminal conduct — including drug distribution, acts of violence, and firearms usage — on social media.
On June 3, 2021, in the vicinity of West 165th Street and Woodycrest Avenue in the Bronx, SHAKOOR shot Mazzella in the back of the neck, causing Mazzella’s death. SHAKOOR committed this murder to maintain and increase his position in Gorilla Stone.
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SHAKOOR, 27, of the Bronx, New York, is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison; one count of murder in aid of racketeering, which carries a statutory maximum sentence of death or life in prison and a mandatory minimum sentence of life in prison; one count of murder through use of a firearm, which carries a statutory maximum sentence of death or life in prison and a mandatory minimum sentence of five years in prison; and one count of possessing ammunition after a felony conviction, which carries a statutory maximum of 10 years in prison.
The minimum and maximum potential sentences 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 investigative work of the NYPD. He also thanked the Bronx District Attorney’s Office for its assistance.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant United States Attorneys Christopher D. Brumwell, Emily A. Johnson, and Patrick R. Moroney 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
United States Attorneys Available to Receive Election ComplaintsRead the Press Release
United States Attorneys Damian Williams and Breon Peace announced today that Assistant United States Attorneys (AUSAs) will lead the efforts of their Offices in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2022, general election. AUSA David J. Kennedy has been appointed to serve as the District Election Officer (DEO) for the Southern District of New York, and AUSA Erik Paulsen has been appointed to serve as the DEO for the Eastern District of New York. In their capacity as DEOs, these AUSAs are responsible for overseeing the Districts’ handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.
United States Attorney Williams said: “Free and fair elections are principal to democracy, and every vote counts. It is the solemn privilege of this Office to work together with our law enforcement partners to ensure that New Yorkers are able to exercise their inherent right to select their representatives unencumbered by unlawful intimidation or interference. We encourage anyone who finds their civic voting protections subject to hindrance to please contact the numbers below.”
United States Attorney Peace said: “The right of all citizens in the district to cast their votes and have their votes counted fairly and without interference, discrimination or threat of violence, is a cornerstone of our democracy and this Office will vigorously defend that right with the full force of federal law.”
The Department of Justice plays an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud. The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.
Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).
United States Attorneys Williams and Peace stated that: “The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSAs will be on duty in this District while the polls are open.”
In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 8, 2022, and to ensure that such complaints are directed to the appropriate authorities, the United States Attorneys said that their Offices will be available to receive complaints at the following numbers through Tuesday, November 8, 2022:
(646) 369-4739 (for Manhattan, Bronx, Dutchess, Orange, Putnam, Rockland, Sullivan, and Westchester counties) and
(718) 254-7000 (for Brooklyn, Queens, Staten Island, Nassau, and Suffolk counties)
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at (212) 384-1000.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/.
Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
The United States Attorneys also noted that the following additional telephone numbers are available on Election Day for citizens to call for routine inquiries, such as where to vote or how late the polls are open, or to register complaints that may concern violations of New York State election laws:
IN NEW YORK CITY
City Board of Elections
Main Office (866) 868-3692
TTY #: 212-487-5496
IN COUNTIES OUTSIDE NEW YORK CITY
County Boards of Elections
Dutchess (845) 486-2473
Nassau (516) 571-8683
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NYCHA Superintendents Plead Guilty to Accepting BribesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that LEROY GIBBS and JULIO FIGUEROA each pled guilty to accepting bribes for awarding no-bid contracts at the New York City Housing Authority (“NYCHA”) facilities at which they served as superintendents. GIBBS pled guilty before United States Magistrate Judge Gabriel W. Gorenstein on October 7, 2022, and will be sentenced by United States District Judge Colleen McMahon on January 25, 2023. FIGUEROA pled guilty today before United States District Judge Denise L. Cote and will be sentenced by Judge Cote on February 9, 2023.
U.S. Attorney Damian Williams said: “Leroy Gibbs and Julio Figueroa betrayed the trust placed in them by the New York City Housing Authority by accepting bribes in exchange for awarding no-bid contracts. Gibbs and Figueroa now stand convicted of federal felonies and will face sentencing for their crimes.”
According to the Complaints, Informations, and statements made in court:
In February 2020, GIBBS, who was then employed as the Resident Buildings Superintendent at Douglass Houses in New York, New York, solicited and accepted approximately $2,000 in bribes from a confidential informant (the “CI”) in exchange for awarding no-bid contracts to the CI worth a total of approximately $9,950 from NYCHA for work at that NYCHA facility.
Between July 2021 and August 2022, FIGUEROA, who was then employed as the Assistant Resident Buildings Superintendent at the Ft. Independence St.-Heath Ave. Houses in the Bronx, New York, solicited and accepted approximately $6,000 in bribes from the CI in exchange for awarding no-bid contracts to the CI worth a total of approximately $46,622 from NYCHA for work at that NYCHA facility.
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GIBBS, 58, of Bay Shore, New York, and FIGUEROA, 45, of East Stroudsburg, Pennsylvania, each pled guilty to one count of solicitation and receipt of a bribe, which carries a maximum sentence of 10 years in prison. Under the terms of their plea agreements, GIBBS agreed to forfeit $2,000 and make restitution in the amount of $2,000, and FIGUEROA agreed to forfeit $6,000 and make restitution in the amount of $6,000.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation, the United States Department of Housing and Urban Development’s Office of Inspector General, 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 Public Corruption Unit. Assistant United States Attorneys Catherine Ghosh and Robert B. Sobelman are in charge of the prosecution.
Founder of Cyberfraud Prevention Company Sentenced to Five Years in Prison for Defrauding Investors Out of over $100 MillionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM ROGAS, the co-founder and former CEO, CFO, and member of the board of directors of a Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), was sentenced today in Manhattan federal court to five years in prison for engaging in securities fraud by creating and using fraudulent financial data to obtain over $123 million in financing for NS8, of which he personally obtained approximately $17.5 million. ROGAS pled guilty on March 16, 2022, before United States District Judge John P. Cronan, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Adam Rogas took the ‘fake-it-till-you-make-it’ saying to a criminal extreme. While claiming to be in the fraud prevention business, Rogas himself faked nearly all of his company’s customers, revenue, and assets. In doing so, he defrauded investors out of over $100 million. Now Rogas will report to prison to be held accountable for his fraudulent scheme.”
In handing down ROGAS’s sentence, Judge Cronan characterized the defendant’s fraud as “brazen, calculated, and long-running.”
According to the Complaint, Indictment, other publicly filed documents, and statements made in court:
ADAM ROGAS was a co-founder of NS8 and served as its CEO, CFO, and as a member of its board of directors. ROGAS was also primarily responsible for the company’s fundraising activities. NS8, which was based in Las Vegas, Nevada, was a cyberfraud prevention company that developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions. In the fall of 2019 and the spring of 2020, NS8 engaged in fundraising rounds through which it issued Series A Preferred Shares and obtained approximately $123 million in investor funds. ROGAS used the materially misleading financial statements to raise those funds.
Specifically, ROGAS maintained control over a bank account into which NS8 received revenue from its customers and periodically provided monthly statements from that account to NS8’s finance department so that NS8’s financial statements could be created. ROGAS also maintained control over spreadsheets that purportedly tracked customer revenue, which were also used to generate NS8’s financial statements.
During the fundraising process in the fall of 2019 and spring of 2020, ROGAS altered the bank statements before providing them to NS8’s finance department to show tens of millions of dollars in both customer revenue and bank balances that did not exist. In the period from January 2019 through February 2020, between at least approximately 40% and 95% of the purported total assets on NS8’s balance sheet were fictitious. In that same period, the bank statements that ROGAS altered reflected over $40 million in fictitious revenue. ROGAS also falsified nearly all of NS8’s purported customers on internal tracking spreadsheets.
Additionally, ROGAS provided the falsified bank records he had created to auditors who were conducting due diligence on behalf of potential investors. After these fundraising rounds concluded, NS8 conducted a tender offer with the funds raised from investors, and ROGAS received $17.5 million in proceeds from that tender offer, personally and through a company he controlled. After ROGAS’s fraud was uncovered, NS8 ultimately entered bankruptcy proceedings. ROGAS used his fraudulent proceeds to purchase, among other things, luxury goods and a residence in the Dominican Republic.
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In addition to his prison term, ROGAS, 45, of Las Vegas, Nevada, was sentenced to three years’ supervised release and ordered to forfeit $17,542,259.
Mr. Williams praised the outstanding investigative work of the FBI in this investigation. Mr. Williams further thanked the Securities and Exchange Commission for its 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 Richard Cooper and Jared Lenow are in charge of the prosecution.
Former Rikers Correction Officer Sentenced to More Than Two Years in Prison for Taking Bribes to Smuggle Contraband to InmatesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that RASHAWN ASSANAH was sentenced today to 27 months in prison and more than $18,000 in financial penalties for taking bribes from inmates to smuggle contraband into a Rikers Island facility. ASSANAH previously was arrested on May 26, 2021, and later pled guilty to bribery and conspiracy charges. United States District Judge Colleen McMahon imposed today’s sentence.
U.S. Attorney Damian Williams said: “Rashawn Assanah violated his oath to protect inmates in his care when he accepted cash bribes to smuggle dangerous contraband into Rikers Island. That conduct was outrageous and unacceptable. His prison sentence should send a clear message to any correction officer who may be tempted to smuggle contraband to inmates: this is a serious crime that leads to serious jail time.”
As reflected in the Indictment, public filings, and statements made in public proceedings:
RASHAWN ASSANAH abused his position as a correction officer to smuggle contraband, including cigarettes, K2, and a weapon, into the Robert N. Davoren Center on Rikers Island in return for over $7,500 in bribes from at least in or about November 2020 up through and including in or about February 2021.
Following ASSANAH’s guilty plea and before sentencing, and in order to adjourn his sentencing, ASSANAH lied to the court by claiming to have cancer and be undergoing chemotherapy — even submitting a forged note from a doctor who does not exist to substantiate his bogus claims.
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ASSANAH, 26, of Queens, New York, pled guilty on October 22, 2021, to one count of conspiracy to commit federal crimes and one count of federal program bribery. In addition to his prison term, ASSANAH was sentenced to three years of supervised release, ordered to forfeit $7,500.00, and directed to pay $10,935.60 in restitution to the New York City Department of Correction.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Department of Investigation.
This case is being handled by the Office’s Public Corruption Unit, and Assistant United States Attorneys Marguerite Colson and Jarrod L. Schaeffer are in charge of the prosecution.
Restaurateur Pleads Guilty to Large-Scale COVID-19 Pandemic Loan Fraud and Interstate ThreatsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that restaurateur BESIM KUKAJ pled guilty today to bank fraud conspiracy and making interstate threats. KUKAJ pled guilty before U.S. District Judge Andrew L. Carter.
U.S. Attorney Damian Williams said: “As he admitted in court today, Besim Kukaj conspired with others to try to secure more than $3.5 million dollars in government-backed loans intended for businesses devastated by the COVID-19 pandemic. Kukaj told banks that his restaurants operated with dozens of employees, when in fact he employed far fewer people. These brazen lies tricked banks into sending him approximately $1.5 million in loans. Even after his arrest, Kukaj continued to submit false loan applications. Kukaj now faces the possibility of a significant term of incarceration for these serious crimes.”
According to the allegations contained in filings in Manhattan federal court:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s Paycheck Protection Program (“PPP”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application.
From at least in or about April 2020 through at least in or about July 2020, KUKAJ, working with others, submitted applications for PPP loans to multiple banks on behalf of various restaurants KUKAJ or a relative of his owned. He did so on behalf of restaurants that were no longer operating or that had far fewer employees than were listed on the PPP loans. In total, KUKAJ and his co-conspirators applied for dozens of PPP loans, totaling approximately $3.9 million, from numerous financial institutions, using many different corporate entities, and they successfully received at least $1.5 million in PPP loans. KUKAJ was arrested in October 2020 and charged with bank fraud conspiracy and later indicted for the same charges in December 2020. He was released on pretrial release pursuant to an order that notified him of the potential effect of committing a criminal offense while on pretrial release.
In January 2021, however, KUKAJ filed another false loan application for one of the same restaurants he had previously filed a false application for in July 2020. The same month, KUKAJ also requested PPP loans for six businesses he owned and submitted false documentation about each of the six businesses. These January 2021 applications and requests were not funded by the banks to whom he submitted the false paperwork.
Separately, on November 6, 2019, at the urging of KUKAJ, a co-conspirator of his placed a telephone call, which traveled in interstate commerce, to a victim, during which call the co-conspirator threatened physical violence against the victim. KUKAJ instructed his co-conspirator to place this call because KUKAJ owed money to the victim.
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KUKAJ, 42, of New Jersey, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 40 years in prison, and one count of making interstate threats, which carries a maximum sentence of five years in prison. Under the terms of his plea agreement, KUKAJ also agreed to pay forfeiture in the amount of $1,500,000.
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. KUKAJ is scheduled to be sentenced by Judge Carter on March 9, 2023, at 2:00 p.m.
Mr. Williams praised the outstanding work of FBI New York’s Balkans and Middle East Organized Crime Squad, as well as the Small Business Administration Office of the Inspector General, the Social Security Administration Office of the Inspector General, and the New York State Liquor Authority for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Samuel L. Raymond and David R. Felton are in charge of the case.
Recidivist Fraudster Convicted at Trial of over $10 Million COVID-19 Loan Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that earlier today a federal jury found ADEDAYO ILORI guilty of all six counts of an Indictment for his participation in a fraudulent scheme to obtain more than $10 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic. The defendant was found guilty following a one-week trial before U.S. District Judge Mary Kay Vyskocil. The jury further found that ILORI committed these crimes while on pretrial release. Sentencing is currently scheduled for January 31, 2023, before Judge Vyskocil.
U.S. Attorney Damian Williams said: “Adedayo Ilori used the stolen identities of innocent victims to steal Government money that was set aside to help small businesses stay afloat during the COVID-19 pandemic. Ilori illegally profited from a national emergency. Making matters worse, he did so while on pretrial release in another serious criminal case brought by this Office. Thanks to the hard work of the Department of Justice-Office of Inspector General and the career prosecutors in this Office, a unanimous jury has found Ilori guilty of committing another fraud scheme.”
According to the Superseding Indictment and the evidence presented at trial:
From at least in or about August 2020 through at least in or about October 2021, ILORI and his co-defendant, Chris Recamier, engaged in a rampant COVID-19 loan fraud scheme. Utilizing false identities, sham tax records, and corporate documents, ILORI and Recamier successfully obtained more than $1 million and attempted to obtain more than $10 million through two loan programs of the U.S. Small Business Administration (“SBA”) designed to provide relief to small businesses during the COVID-19 pandemic, namely the Paycheck Protection Program ( “PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program. In particular, ILORI and Recamier applied for 14 PPP and EIDL loans. In applying for these loans, ILORI and Recamier claimed stolen identities of third parties and claimed full control of a number of companies, which they purported, cumulatively, employed more than 200 people and paid monthly salaries of more than $3.2 million in wages. In reality, they did not operate these companies. In submitting these applications, ILORI and Recamier, among other things, submitted falsified tax documents which were never actually filed with the Internal Revenue Service.
ILORI and Recamier transferred the majority of these stolen government funds toward cryptocurrency investments, the purchase of stocks, cash withdrawals, and personal expenses, including leasing luxury apartments and a Mercedes. The investment accounts were also opened by ILORI and Recamier in the stolen identities of third parties.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s PPP. Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application. The CARES Act also expanded the separate EIDL Program, which provides small businesses with low-interest loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19. To qualify for an EIDL loan under the CARES Act, the applicant must have suffered “substantial economic injury” from COVID-19.
ILORI committed these offenses while facing charges in a separate case filed in the Southern District of New York involving fraud, identity theft, and money laundering in United States v. Ilori, 20 Cr 378 (LJL). As part of that case, ILORI was sentenced on March 3, 2022, to 63 months in prison by U.S. District Judge Lewis J. Liman in connection with a commercial loan fraud and bank bribery scheme.
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ILORI, 43, of Queens, New York, was convicted of: (1) major fraud against the United States, which carries a maximum sentence of 20 years in prison; (2) conspiracy to commit wire and bank fraud, which carries a maximum sentence of 40 years in prison; (3) wire fraud, which carries a maximum sentence of 40 years in prison; (4) bank fraud, which carries a maximum sentence of 40 years in prison; (5) aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison; and (6) conspiracy to commit money laundering, which carries a maximum sentence of 30 years in prison.
The maximum potential sentences in this case, which are increased by the jury’s finding that these crimes were committed while ILORI was on pretrial release, are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
ILORI’s co-defendant, Chris Recamier, 59, of New York, New York, previously pled guilty to major fraud against the United States and was sentenced on October 17, 2022, by Judge Vyskocil to nine years in prison.
Mr. Williams praised the investigative work of the DOJ-OIG. Mr. Williams also thanked the U.S. Secret Service, the Drug Enforcement Administration, the New York City Police Department, the Federal Bureau of Investigation, and the Federal Aviation Administration for their assistance in this investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Juliana Murray, David R. Felton, and Daniel G. Nessim are in charge of the prosecution.
Statement of U.S. Attorney Damian Williams on the Conviction of Timothy SheaRead the Press Release
"Timothy Shea and his co-defendants orchestrated a crowdfunding scheme to purportedly raise funds to erect a border wall between Mexico and the United States. We Build The Wall’s public campaign promised that 100% of the funds raised would be used to build the wall, which induced over 100,000 victims to donate. Shea and his co-defendants lied. And they stole over $25 million from their victims.
Months ago, this Office stated our belief in the powerful and compelling evidence that showed Shea’s guilt. Today, a unanimous jury has convicted Shea on all counts in the indictment. I commend the prosecutors of this Office for their perseverance in ensuring justice was done."Pennsylvania Man Pleads Guilty to Making Threats to Kill United States CongressmanRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSHUA HALL pled guilty to a Superseding Information charging him with making threats to kill a member of the United States Congress. HALL previously pled guilty to wire fraud for impersonating family members of the then-President of the United States on social media to fraudulently raise funds for a fictitious political organization (the “Fraud Scheme”). At the time HALL made the threats to kill a member of the United States Congress, he was on pretrial release pending sentencing for the Fraud Scheme. HALL was arrested the same day the threats were made and was subsequently ordered detained pending sentencing. HALL pled guilty before United States District Judge Gregory H. Woods, before whom sentencing will be held on December 8, 2022.
U.S. Attorney Damian Williams said: “Joshua Hall made terrifying threats to the staff of a United States Congressman whom he disliked rather than attempting to effect change through any of the freedoms of expression that all Americans enjoy. These threats of violence endanger our public officials and thwart common decency, which is why this Office will continue to prosecute crimes like those committed by Joshua Hall.”
According to the Superseding Information:
On or about 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.
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HALL, 22, of Mechanicsburg, Pennsylvania, pled guilty to one count of making interstate communications with a threat to injure, which carries a maximum sentence of five years in prison. HALL previously pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the United States Capitol Police and the Federal Bureau of Investigation 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 United States Attorneys Alexandra S. Messiter and Robert B. Sobelman are in charge of the prosecution.
“Wolf of Airbnb” Indicted in Connection with Scheme to Defraud New York City Landlords and PPP FraudRead the Press Release
Damian Williams, 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 the indictment of KONRAD BICHER for two counts of wire fraud and one count of aggravated identity theft in connection with a scheme to defraud New York City landlords (the “Rental Property Scheme”) and a scheme to fraudulently obtain over $565,000 in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic, namely the Paycheck Protection Program (“PPP”). BICHER was arrested in connection with the Rental Property Scheme in late June 2022. The case has been assigned to Judge Lorna G. Schofield.
U.S. Attorney Damian Williams said: “We allege that Bicher brazenly rented at least 18 apartments in Manhattan with the intent to ignore his lease obligations, including by operating the apartments as mini-hotels and skipping rent. When landlords sought to recover rental payments from Bicher, he lied and claimed that he could not make payments during the pendency of the COVID-19 pandemic. At the same time, Bicher obtained hundreds of thousands of dollars in PPP money based on multiple fraudulent applications. Bicher abused Government programs and tenant protections intended to benefit New Yorkers in crisis, and he will have to answer for his conduct.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: "As alleged, the defendant proudly executed multiple schemes to defraud both private entities and the United States government for his own personal benefit. The FBI remains committed to not only exterminating fraud in all its forms, but also to ensuring all those who abused a program designed to aid small businesses during an unprecedented global pandemic are held accountable."
As alleged in the Indictment and previously filed Complaint:[1]
Beginning in at least February 2019, KONRAD BICHER, and/or individuals working in concert with BICHER, began renting apartment units (the “Units”) in Manhattan. The Units were leased pursuant to lease agreements which required that the lessee make monthly rental payments and also included clauses that prohibited the lessee from renting the Units to third parties on a short-term basis and/or included clauses that prohibited the lessee from subletting the Units to third parties without written consent of the owner. Despite the requirement to make monthly rental payments, BICHER failed to make payments as required by the lease agreements. For many of the Units, BICHER also refused to vacate the Units after the expiration of the lease agreements. During the period of time that BICHER failed to make required rental payments, including the period of time after a lease agreement expired and the premises had not been vacated, BICHER derived income by renting the Units on a short-term basis, including by posting the Units for rent on various online marketplaces, including Airbnb, Inc. (“Airbnb”).
Between in or about July 2019 and in or about April 2022, BICHER and his associates failed to make more than $1,000,000 in payments pursuant to the Lease Agreements or, for the period of time after the expiration of the Lease Agreements, based on the estimated fair market value for the Units. During this period, BICHER caused the Units to be listed for short-term rent on Airbnb and at least one other online marketplace for short-term rentals, resulting in at least $1,170,000 in rental income to BICHER and his associates.
Throughout the course of this scheme, the lessors of the Units made numerous efforts to recover rental payments from BICHER and/or to stop BICHER from continuing to rent the Units on a short-term basis, including by initiating civil litigation against BICHER. Despite these efforts, BICHER continued to rent certain Units on a short-term basis.
During the course of the scheme, BICHER referred to himself as the “Wolf of Airbnb” and explained to media outlets that this nickname referred to the fact that he was “hungry and ruthless enough to get on top of the financial ladder” and had the “ferocity…of a wolf, because wolves are territorial, vicious, and show no mercy when provoked.”
In addition, between at least in or about April 2021 until in or about July 2021, BICHER engaged in a scheme to obtain Government-guaranteed loans through a loan program of the United States Small Business Administration designed to provide relief to small businesses during the COVID-19 pandemic, namely the PPP. In furtherance of this scheme, BICHER submitted at least four applications for PPP loans on behalf of at least three entities and obtained over $565,000 in loan proceeds. These PPP applications contained fraudulent documents and false information. For example, in connection with the PPP applications, BICHER submitted tax documents which were purportedly filed with the Internal Revenue Service (“IRS”). These documents were falsified, in that the entities seeking PPP loans had not actually filed the purported tax returns with the IRS, and BICHER has not otherwise reported the purported income to the IRS. In connection with one of the PPP applications, submitted on behalf of NY Approved Rentals, BICHER submitted a copy of a 2019 income tax return which was purportedly filed with the IRS and was signed by a particular accountant (“Accountant-1”) located in the state of Florida. In truth and fact, NY Approved Rentals did not file a tax return of any kind in 2019, and BICHER only requested that Accountant-1 prepare a tax return for NY Approved Rentals after BICHER was asked to provide a copy of the tax return in connection with the PPP loan.
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BICHER, 31, of Hialeah, Florida, is charged with two counts of wire fraud and one count of aggravated identity theft. The two counts of wire fraud each carry a maximum sentence of 20 years in prison. The charge for aggravated identity theft carries an additional mandatory consecutive two-year sentence.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Matthew Weinberg is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Complaint and the description of the Indictment and Complaint set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Former United Nations Employee Sentenced to 15 Years in Prison for Drugging and Sexually Assaulting VictimsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARIM ELKORANY, a former communications specialist with the United Nations (“UN”) in Iraq, was sentenced today in Manhattan federal court by United States District Judge Naomi Reice Buchwald to 15 years in prison for drugging and/or sexually assaulting 20 victims. ELKORANY previously pled guilty on May 24, 2022, to sexually assaulting an internationally protected person and making false statements to cover up another sexual assault. In connection with the plea, ELKORANY also admitted that he drugged and/or sexually assaulted 17 additional victims.
U.S. Attorney Damian Williams said: “Karim Elkorany perpetrated monstrous acts against multiple women over nearly two decades. At today’s proceeding, Elkorany was held accountable by the Court and also by his victims, a number of whom confronted him with powerful statements about the grievous harm he caused through his horrific conduct. We express deep gratitude to all of the victims for their bravery in coming forward and remain committed to doing all we can to bring perpetrators like Elkorany to justice.”
According to the Superseding Indictment, public court filings, and statements during court proceedings:
Since at least in or about 2005 up to at least in or about April 2018, ELKORANY worked in international aid, development, and/or foreign relations. From in or about October 2013 up to in or about April 2016, ELKORANY worked for the UN Children’s Fund (commonly known as UNICEF) in Iraq. From in or about July 2016 up to in or about April 2018, ELKORANY worked as a Communications Specialist for the UN in Iraq.
In or about November 2016, ELKORANY drugged and sexually assaulted a woman (“Victim-1”) in Iraq, where he was stationed while working for the UN. ELKORANY drugged Victim-1 and brought Victim-1 to his apartment. While at ELKORANY’s apartment, ELKORANY sexually assaulted Victim-1 while she was unconscious. In or around December 2016, Victim-1 reported the sexual assault to the UN. The UN initiated an investigation, through which ELKORANY was notified of the substance of Victim-1’s allegations against him.
On or about November 3, 2017, special agents with the New York Field Office of the Federal Bureau of Investigation (“FBI”) conducted a voluntary interview of ELKORANY outside of his residence in New Jersey. During that interview, ELKORANY expressed familiarity with the nature and substance of the allegations made by Victim-1 to the UN but falsely stated that the drugging and sexual assault by ELKORANY that Victim-1 had reported to the UN did not occur.
ELKORANY also engaged in a pattern of similar conduct involving many other women. Between in or around 2014 and in or around 2019, ELKORANY drugged and sexually assaulted a woman (“Victim-2”), who was a contractor for a UN organization at relevant times, in the United States and Iraq, among other locations, on multiple occasions.
In addition to Victim-1 and Victim‑2, ELKORANY drugged and/or sexually assaulted 18 additional victims between in or around 2002 and in or around 2016.
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In addition to the prison sentence, ELKORANY, 39, of West Orange, New Jersey, was sentenced to three years of supervised release and ordered to pay restitution in amounts to be determined.
Mr. Williams praised the outstanding work of the FBI.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Lara Pomerantz, Amanda L. Houle, Daniel C. Richenthal, and Robert B. Sobelman are in charge of the prosecution.
Former Executive Director of Children’s Not-For-Profit Arrested for EmbezzlementRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Michael Alfonso, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), announced that PHILIP DALLMANN, the former executive director of a children’s not-for-profit organization based in New York City, was charged in a complaint with embezzling funds from the organization from 2018 to 2021. DALLMANN was arrested today in Seattle, Washington, and will be presented this afternoon in Seattle federal court.
U.S. Attorney Damian Williams said: “As alleged, Philip Dallmann spent years exploiting his position of trust to line his own pockets with donor funds intended to enrich the lives of children. He also stole for years from his wife’s family, and when he was caught, he claimed he did so in part to help cover the organization’s costs. Dallmann now faces federal charges for this double deception.”
Acting Special Agent-in-Charge Michael Alfonso said: “Dallmann’s insatiable greed led him to allegedly embezzle nearly $100,000 from a not-for-profit organization aimed at helping children participate in the arts. Dallmann betrayed the trust of his employers and took these funds from the hands of children and teachers who deserve them, funding his own lifestyle with the stolen funds. HSI is a leader in federal financial crime investigations, and we will continue to bring our investigative capabilities to expose financial frauds targeting our most vulnerable.”
As alleged in the Complaint unsealed today in Manhattan federal court:[1]
From at least 2018 through 2021, PHILIP DALLMANN served as the executive director of a children’s not-for-profit organization based in Manhattan. The organization is dedicated to providing inclusive arts programming for students of all development profiles, including autistic children.
In 2018, DALLMANN began embezzling funds from the organization’s bank account for unauthorized personal expenses. In or around 2019, the organization began receiving overdraft notices from the bank, which DALLMANN claimed was caused by the bank’s loss of donor checks. The following year, the organization switched banks, and DALLMANN continued his embezzlement. A subsequent audit revealed that DALLMANN stole a total of approximately $98,000.
While serving as the executive director, DALLMANN married a teacher at the not-for-profit organization. In or around the spring of 2020, DALLMANN’s wife learned that DALLMANN had stolen credit cards that belonged to her father and on which she was an authorized user and that DALLMANN had used the credit cards to make unauthorized transactions, later found to total more than $143,000.
DALLMANN claimed that he had used his wife’s credit cards to cover operational expenses for the not-for-profit organization. DALLMANN then impersonated the organization’s treasurer by email to negotiate repayments by the organization to his wife. Based on DALLMANN’s representations, the organization then, in fact, entered into a contract to pay DALLMANN’s wife $30,000.
In sum, DALLMANN made hundreds of unauthorized personal transactions using the not-for-profit organization’s bank accounts, such as payments for pet grooming, food delivery, restaurants, groceries, alcohol, clothing, shoes, transportation, ESPN Plus and Netflix subscriptions, Amazon orders, and wedding photography services. He also withdrew thousands of dollars in cash from the not-for-profit organization’s accounts.
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DALLMANN, 34, of Seattle, Washington, is charged with one count of wire fraud, which carries a maximum potential sentence of 20 years in prison, and one count of access device fraud, which carries a maximum potential sentence of 15 years in prison. He is also charged with one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison, consecutive to any other sentence imposed.
The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of HSI and thanked local law enforcement partners in Seattle and the U.S. Attorney’s Office for the Western District of Washington for their assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Jane Y. Chong 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 constitutes only allegations, and every fact described herein should be treated as an allegation.
New York Lawyer Pleads Guilty to Participating in Trip-And-Fall Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MARC ELEFANT, a New York lawyer, pled guilty today to one count of conspiracy to commit wire fraud in connection with a scheme to obtain millions of dollars in fraudulent insurance reimbursements and other compensation from fraudulent trip-and-fall accidents. ELEFANT is the third defendant to plead guilty this year. Two other defendants — ADRIAN ALEXANDER, the owner of a litigation funding company, and SADY RIBEIRO, a New York-licensed pain management doctor and surgeon — pled guilty earlier this year. ALEXANDER pled guilty to one count of conspiracy to commit wire fraud on August 30, 2022. RIBEIRO pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit mail fraud on September 29, 2022. All defendants pled guilty before U.S. District Judge Sidney H. Stein.
U.S. Attorney Damian Williams said: “We expect lawyers to follow the rules and act ethically on behalf of their clients, but attorney Marc Elefant acted only for himself, abusing his professional license and position of trust to steal over a million dollars from New York City businesses and their insurance companies through a massive trip-and-fall fraud scheme. Elefant and his co-conspirators preyed upon the most vulnerable members of society in order to enrich themselves. Elefant now awaits sentencing for his reprehensible crime.”
According to the Indictment, the Superseding Information filed against ELEFANT, other documents filed in this case, and statements made in court:
MARC ELEFANT, among others, was involved in an extensive fraud scheme through which fraud scheme participants defrauded businesses and insurance companies by staging trip-and-fall accidents and filing fraudulent lawsuits arising from those staged trip-and-fall accidents.
The fraud scheme participants recruited individuals (the “Patients”) to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area (the “Accident Sites”). In the course of the fraud scheme, scheme participants recruited more than 400 Patients. In the beginning, scheme participants would instruct Patients to claim they had tripped and fallen at a particular location, when in fact, the Patients had suffered no such accidents. Eventually, at the direction of the lawyers who filed fraudulent lawsuits on behalf of the Patients, scheme participants began to instruct Patients to stage trip-and-fall accidents, i.e., to go to a location and deliberately fall. Common Accident Sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes.”
After the staged trip-and-fall accidents, Patients were referred to specific attorneys, including ELEFANT, who would file personal injury lawsuits (the “Fraudulent Lawsuits”) against the owners of the Accident Sites and/or insurance companies of the owners of the accident sites (the “Victims”). The Fraudulent Lawsuits did not disclose that the Patients had deliberately fallen at the accident sites or, in some cases, had not fallen at all. During the course of the fraud scheme, the defendants, together with others known and unknown, attempted to defraud the Victims of more than $31,000,000.
The Patients were also instructed to receive ongoing chiropractic and medical treatment from certain chiropractors and doctors, including RIBEIRO. The fraud scheme participants advised the Patients that if they intended to continue with their lawsuits, they were required to undergo surgery. As an incentive to getting surgery, the recruited Patients were offered a payment of typically between $1,000 and $1,500 after they completed surgery (“Post-Surgery Payments”). Patients generally were told to undergo two surgeries. Doctors in the fraud scheme were expected to, and in fact did, conduct these surgeries regardless of the legitimate medical needs of the Patients.
Members of the fraud scheme often recruited individuals who were extremely poor as Patients — individuals desperate enough to submit to surgeries in exchange for the small Post-Surgery Payments. For example, it was common for Patients to ask for food when they would appear for their intake meetings with the lawyers. Many of the Patients did not have sufficient clothing to keep them warm during the wintertime and had poor-quality shoes. Members of the fraud scheme also recruited Patients who were drug addicts. It was also common for scheme participants to recruit Patients from homeless shelters in New York City.
The Patients’ legal and medical fees were usually paid for by litigation funding companies (the “Funding Companies”), including a company owned by ALEXANDER. Funding Companies were used even if the Patient maintained medical coverage through an insurance company or a government-subsidized program. The Funding Companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement. In exchange for funding Patients’ medical and legal costs, the Funding Companies charged the Patients high interest rates, sometimes up to 50% on medical loans and up to 100% on personal loans. The interest rates were so high that oftentimes the majority (if not all) of the proceeds that were awarded in the Fraudulent Lawsuits were paid to the Funding Companies, lawyers, including ELEFANT, doctors, and others, with the Patients receiving a much smaller percentage of the remaining recovery.
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ELEFANT, 51, of Long Island, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. As part of his plea agreement, ELEFANT agreed to forfeit $955,281 to the United States and to make restitution in the amount of $1,486,000.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ELEFANT is scheduled to be sentenced on January 25, 2023, by U.S. District Judge Sidney H. Stein.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Williams also thanked the National Insurance Crime Bureau for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Nicholas Chiuchiolo, Nicholas Folly, Danielle Kudla, and Alexandra Rothman are in charge of the prosecution.
Members of Violent Mac Ballers Gang Charged with Racketeering Conspiracy, Attempted Murder, Robbery, Narcotics, and Firearms OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York; Michael Alfonso, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); John B. DeVito, Special Agent in Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”); and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of a nine-count superseding indictment charging four members of the “Mac Ballers” subset of the national Bloods gang in the Bronx, New York. GLEN CARWELL, a/k/a “Tink,” a/k/a “Tinky,” SHAWNDALE LEWIS, a/k/a “Nore,” COREY BATCHELOR, a/k/a “Corey Balla,” and JORDAN TOWNSEND were charged with racketeering conspiracy, violent crimes in aid of racketeering, and firearms offenses. CARWELL and LEWIS were also charged with narcotics conspiracy. The case is assigned to U.S. District Judge Lewis J. Liman.
CARWELL was already in custody in connection with robbery and firearms charges contained in a previous indictment related to this prosecution. LEWIS was arrested this morning and presented in Manhattan federal court before U.S. Magistrate Judge Robert W. Lehrburger. BATCHELOR was also arrested this morning in North Carolina and presented before a Magistrate Judge in the Western District of North Carolina. TOWNSEND remains at large.
U.S. Attorney Damian Williams said: “We allege that for years, the Mac Baller set of the Bloods has terrorized the New York area, and especially the Bronx, by pouring addictive drugs into our community, committing robberies, and engaging in shootings. These charges reflect our commitment to keeping our community safe by targeting gang members who engage in violence, as we allege these defendants did.”
HSI New York Acting Special Agent in Charge Michael Alfonso said: “Today, we announce the arrests of multiple members of the ‘Mac Ballers’ street gang who, as alleged, have participated in escalating acts of violence, to include attempted homicide, in their efforts to protect and control their territory. HSI is committed to working with our federal, state, and local partners to disrupt and dismantle these dangerous street gangs who terrorize our neighborhoods in an effort to further their criminal enterprises.”
ATF Special Agent in Charge John B. DeVito said: “New York residents deserve to live, work, and thrive free of fear and trauma. This is yet another example of law enforcement’s commitment to ensure just that for our citizens. Thanks to the leadership of HSI and NYPD for their hard work to reduce violent crime. ATF is proud to support and work alongside our partners in the collective cause of public safety. Our neighborhoods deserve to flourish without fear or intimidation caused by violent criminal gangs.”
NYPD Commissioner Keechant L. Sewell said: “Gang violence threatens the safety of New Yorkers and puts communities in the crosshairs of drug trafficking and drug-related crimes. This case highlights the NYPD’s relentless pursuit of those few individuals who drive the violence and disorder in our city, and today’s indictment reflects our continued focus on removing them from our streets. I commend all of our partners in the U.S. Attorney’s Office for the Southern District, the New York Field Office of Homeland Security Investigations, and the New York Field Division of the ATF for their diligence on this important case.”
According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court:[1]
From at least in or about late 2014 through 2022, the Mac Ballers was a criminal enterprise centered in the northeastern United States, including in the Bronx, New York, and in the jails and prisons of New York City and the State of New York. In order to make money for the gang, protect the gang’s territory, and promote the gang’s standing, members of the Mac Ballers engaged in, among other things, narcotics trafficking, fraud and identity theft, and acts of violence, including robberies and attempted murders. To that end, Mac Baller members sold heroin, cocaine, crack cocaine and marijuana, promoted their gang affiliation on social media, possessed firearms, and engaged in shootings as part of their gang membership and narcotics trafficking. As part of their membership in the gang, from 2017 to 2022, all four defendants participated in a conspiracy to commit murder in aid of racketeering, resulting in the attempted murder and assault with a dangerous weapon of a victim on October 19, 2021.
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A chart containing the charges and minimum and maximum penalties each defendant faces is attached. The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of HSI, ATF, the NYPD, and the Special Agents of the United States Attorney’s Office.
The charges are the result of an ongoing Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation led by the United States Attorney’s Office for the Southern District of New York. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jacob R. Fiddelman, Peter J. Davis, Elizabeth A. Espinosa, and Frank J. Balsamello are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Charges
Minimum and Maximum Penalties
GLEN CARWELL, a/k/a “Tink,” a/k/a “Tinky”
37
Racketeering Conspiracy; Conspiracy to Commit Murder in Aid of Racketeering; Narcotics Conspiracy; Use and Brandishing of a Firearm in Furtherance of a Controlled Substance Offense; Hobbs Act Robbery; Conspiracy to Commit Hobbs Act Robbery; Use, Brandishing, and Discharge of a Firearm in Furtherance of a Crime of Violence and Controlled Substance Offense
Maximum of life in prison; mandatory minimum 17 years in prison (to run consecutive to any other sentence)
SHAWNDALE LEWIS, a/k/a “Nore”
36
Racketeering Conspiracy; Conspiracy to Commit Murder in Aid of Racketeering; Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering; Use and Discharge of a Firearm in Furtherance of a Crime of Violence; Narcotics Conspiracy; Use and Brandishing of a Firearm in Furtherance of a Controlled Substance Offense
Maximum of life in prison; mandatory minimum 17 years in prison (to run consecutive to any other sentence)
COREY BATCHELOR, a/k/a “Corey Balla”
24
Racketeering Conspiracy; Conspiracy to Commit Murder in Aid of Racketeering; Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering; Use and Discharge of a Firearm in Furtherance of a Crime of Violence
Maximum of life in prison; mandatory minimum 10 years in prison (to run consecutive to any other sentence)
JORDAN TOWNSEND
26
Racketeering Conspiracy; Conspiracy to Commit Murder in Aid of Racketeering; Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering; Use and Discharge of a Firearm in Furtherance of a Crime of Violence
Maximum of life in prison; mandatory minimum 10 years in prison (to run consecutive to any other sentence)
[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.
Chinatown Meat Distributor Required to Pay $250,000 Civil Penalty for Violating Food Safety Consent DecreeRead the Press Release
Damian Williams, United States Attorney for the Southern District of New York, and Paul Kiecker, Administrator of the Food Safety and Inspection Service of the U.S. Department of Agriculture (“USDA-FSIS”), announced today that a federal district court has approved an agreement (“Agreement”) resolving violations by defendants CHUNG SHING MEATS, INC., a/k/a “New Chung Hing Meats, Inc,” WING HONG CHEUNG, MIAO HE FENG, YIU KWAN CHEUNG, and TIAN LUN FENG (collectively, the “defendants”) of a previously entered judicial consent decree requiring defendants to comply with food safety laws at their meat distributorship in Chinatown, Manhattan. Today’s Agreement imposes a $250,000 civil penalty on defendants, which equals the highest civil penalty ever imposed for such violations.
U.S. Attorney Damian Williams said: “This Office has zero tolerance for defendants who continue in their ways after entering into consent decrees in which they commit to come into compliance. Such conduct is all the worse where, as here, the consent decree was designed to protect the public health. The significant financial penalty should serve as notice to all defendants that they must live up to their commitments and comply with the law.”
FSIS Administrator Paul Kiecker said: “FSIS’s authority to enforce the Federal Meat Inspection Act and the Poultry Products Inspection Act is clear. Our inspection personnel and investigators are on the job daily, verifying that establishments are providing consumers with safe, wholesome, and accurately labeled food. We remain committed to public health, and this civil penalty shows that we will take swift action to protect American consumers.”
The Federal Meat Inspection Act (“FMIA”) and Poultry Products Inspection Act (“PPIA”) protect public health by ensuring the nation’s commercial supply of meat and poultry is safe, wholesome, and accurately labeled and packaged. These requirements allow consumers to have confidence in the safety of their meat and poultry products and permit public health officials to trace problems to their source.
In 2019, this Office filed a civil complaint against defendants, alleging that they routinely prepared and sold meat and poultry products at 19 Catherine Street, New York, New York, without meeting the federal inspection requirements of the FMIA and the PPIA, including by misbranding or repackaging meat and poultry products without the marks of federal inspection. USDA-FSIS had identified FMIA and PPIA violations by the defendants that included selling uninspected or misbranded roast pork, pork chops, roast ducks, beef brisket, chickens, and other beef, poultry, and pork products. In all, USDA-FSIS’s inspections had uncovered over 400 pounds of meat and poultry products sold or offered for sale in violation of the FMIA and PPIA.
Contemporaneously with the 2019 complaint, defendants agreed to resolve the violations by entering into a consent decree that required them to comply with the FMIA and PPIA. Among other things, the consent decree included a permanent injunction prohibiting defendants from “selling, transporting, offering for sale or transportation, or receiving for transportation, any meat, meat food products, poultry, or poultry products required to be inspected and passed by USDA-FSIS that have not been inspected and passed by USDA-FSIS federal inspectors,” and requiring defendants to “prepare and maintain, for each product containing meat, meat food products, poultry, or poultry products, ... business records of all transactions ...” The consent decree included financial penalties that would apply if defendants violated these obligations. On January 7, 2020, the federal district court approved the consent decree, making it a binding court order.
Defendants, however, have repeatedly violated the consent decree. As stated in the Agreement approved by the court today:
- “... Defendants [have] admitted to selling a total of 787.62 pounds of non-federally inspected and misbranded meat and poultry between August 3, 2020, and January 26, 2021, in violation of Paragraph 4(a) of the Consent Decree”
- “... Defendants [have] further admitted that New Chung Hing had generally failed to keep requisite purchase invoices post-dating the Consent Decree, in violation of Paragraph 5 of the Consent Decree”
The Agreement requires defendants to pay $250,000 as a civil penalty for these violations of the Consent Decree. This penalty equals the highest civil penalty ever imposed for violations of a USDA-FSIS consent decree under these food safety statutes, reflecting the gravity of defendants’ violations.
* * *
Mr. Williams thanked the USDA-FSIS for its efforts on this matter.
This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorney Jessica F. Rosenbaum is in charge of the case.
New Jersey Man Sentenced to 78 Months for Laundering Millions from Fraud Schemes Perpetrated by Ghana-Based Criminal EnterpriseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that FREEMAN CELVIN, a/k/a “Celvin Freeman,” was sentenced today to 78 months for his participation in a fraud and money laundering conspiracy based in the Republic of Ghana (“Ghana”) involving the theft of millions of dollars. On March 30, 2022, CELVIN was convicted after a jury trial of all seven counts against him before U.S. District Judge Jed S. Rakoff, who imposed today’s sentence. CELVIN was previously arrested on February 17, 2021, and has been detained since his arrest.
U.S. Attorney Damian Williams said: “Freeman Celvin used an auto business in New Jersey as a front to launder millions of dollars in fraud proceeds to scam artists in Ghana. The online scams perpetrated by Celvin’s partners in Ghana were lucrative and callous, as they targeted vulnerable, elderly men and women and tricked them into transferring their life savings to the defendant, who then took his laundering fee and sent the money abroad. Today’s sentence demonstrates that money launderers who assist online scammers abroad will be held accountable and brought to justice for their crimes.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
From in or about 2014 through in or about February 2021, a criminal enterprise based in Ghana (the “Enterprise”) committed a series of business email compromises and romance scams against individuals and businesses located across the United States, including in the Southern District of New York. The objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses into wiring funds into accounts controlled by the Enterprise through the use of email accounts that “spoofed” or impersonated employees of a victim company or third parties engaged in business with a victim company. The Enterprise also conducted romance scams by using electronic messages sent via email, text messaging, or online dating websites that deluded victims, many of whom were vulnerable, older men and women who lived alone, into believing the victim was in a romantic relationship with a fake identity assumed by members of the Enterprise. Once members of the Enterprise had gained the trust of the victims using the fake identity, they used false pretenses to cause the victims to wire money to bank accounts the victims believed were controlled by their romantic interests, when in fact the bank accounts were controlled by members of the Enterprise, like CELVIN.
CELVIN received fraud proceeds from victims of the Enterprise in personal bank accounts as well as business bank accounts for his company Freeman Autos LLC, a company purportedly involved in, among other things, automobile sales. The defendant also received fraud proceeds from other U.S.-based members of the Enterprise either by wire transfer or cash deliveries. Once CELVIN received fraud proceeds, he took out a percentage fee and then withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad in Ghana. The defendant primarily laundered the fraud proceeds by using the money to purchase automobiles and other goods and shipping those products to Ghana and elsewhere. The defendant’s transactions had the appearance of legitimate business transactions. This trade-based money laundering scheme was designed to obscure the origin of the fraud proceeds as well as the identity of the ultimate beneficiaries of these schemes.
From in or about 2016 through in or about 2021, CELVIN controlled more than eight bank accounts that had deposits that totaled over approximately $5.7 million during that time period. The vast majority of those deposits consisted of large wire transfers and check or cash deposits from U.S.-based individuals and entities that were victims of the Enterprise’s fraud schemes.
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In addition to his prison term, CELVIN, 48, of East Orange, New Jersey, was sentenced to three years of supervised release and further ordered to forfeit $290,604.15. CELVIN’s co-conspirators, FRED ASANTE and LORD ANING, were previously sentenced to 108 months and 24 months in prison, respectively, earlier this year.
Mr. Williams praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Sagar K. Ravi, Katherine C. Reilly, and Mitzi Steiner are in charge of the prosecution.
Former Green Haven Correction Officer Charged with Falsifying Records in Connection with Assault of 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 that TAJ EVERLY, a former correction officer at Green Haven Correctional Facility, was charged in White Plains federal court with falsifying records in connection with EVERLY’s May 28, 2020, assault of an inmate at Green Haven. EVERLY was arrested this morning and presented before Magistrate Judge Judith C. McCarthy. The case is assigned to U.S. District Judge Nelson S. Román.
U.S. Attorney Damian Williams said: “As alleged, Taj Everly abused his position as a correction officer by assaulting an inmate and then lying about his actions in an incident report. This Office has no tolerance for correction officers like Everly who, as alleged, commit acts of violence against inmates in their care and custody and then lie to cover their tracks. Today’s indictment should send a clear message that this Office will continue to investigate and prosecute civil rights abuses wherever we find them.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: “As we allege today, Mr. Everly violated his oath to uphold the law when he willingly filed a false report to conceal his malicious actions. Individuals in a position of authority in our criminal justice system are not above the law. The FBI will continue to investigate these types of allegations and ensure those who abuse their power are held accountable.”
According to the allegations in the Indictment unsealed today in White Plains federal court:[1]
On May 28, 2020, EVERLY, who was then a correction officer at Green Haven Correctional Facility, located in Stormville, New York, assaulted an inmate (the “Inmate”) in the care and custody of the New York State Department of Corrections and Community Supervision (“DOCCS”). As the Inmate exited a room at Green Haven, EVERLY approached the Inmate and, without provocation, punched the Inmate, causing both EVERLY and the Inmate to fall to the ground.
After the assault, EVERLY prepared an incident report, in which EVERLY falsely stated that the Inmate had first punched him and that EVERLY responded with force.
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EVERLY, 32, of Cortlandt Manor, New York, is charged with falsifying records in connection with a federal investigation, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant 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 United States Attorney Lindsey Keenan 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, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Financial Advisor Pleads Guilty to Fraud and False Statement ChargesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM BELARDINO, the chief executive officer of the Maddox Group, pled guilty to two counts of wire fraud and one count of making a false statement to the Internal Revenue Service in connection with separate schemes to defraud clients and to fail to pay contributions made by Maddox Group employees to the Maddox Group 401(k) plan. BELARDINO pled guilty before the Honorable Judith C. McCarthy in White Plains federal court today.
According to the allegations in the Superseding Information to which BELARDINO pled guilty and other court documents:
Embezzlement from Victim 1
BELARDINO had managed Victim 1’s investments at another firm before he founded Maddox in July 2019. In August 2019, BELARDINO convinced Victim 1 to liquidate some of her portfolio and to transfer the liquidated funds to Maddox for investment. Victim 1 then transferred more than $313,000 to Maddox in eight separate transactions between August 2019 and October 2020. Instead of investing Victim 1’s money as he had promised, BELARDINO used her money to pay the operating expenses of Maddox, including payroll and office rent; to pay down prior debt; to pay credit card charges, which consisted primarily of personal items; and to pay for personal travel.
In September 2021, Victim 1 directed BELARDINO to transfer her portfolio at Maddox to her brokerage account at another firm. From September 2021 to February 2022, BERNARDINO indicated to the victim and her family members that he was liquidating the portfolio and would return the funds shortly. He additionally provided documents suggesting that he had made a wire transfer of Victim 1’s funds to her bank and deposited checks drawn on a checking account held by Maddox into Victim 1’s bank account for what he claimed was the full value of her portfolio. Nevertheless, Victim 1 never received any funds by wire, and the checks BELARDINO had deposited were returned due to insufficient funds in Maddox’s account.
Scheme to Obtain Fraudulent Life Insurance Commissions - Victim 2
In or about May 2019, BELARDINO served as the agent for Insurance Company 1 in connection with an application by Victim 2 for a life insurance policy with a face amount of $1 million, which amount was eventually increased to $18 million. As an agent, BELARDINO received commissions from Insurance Company 1 once Victim 2’s application was approved.
In or about April 2020 and January 2021, respectively, BELARDINO applied for two additional life insurance policies with a face amount of $3 million and $5 million on behalf of Victim 2 without Victim 2’s knowledge or authorization. While applying for these policies, BELARDINO made materially false statements regarding Victim 2’s income, net worth, and health. In or about August 2020 and May 2021, respectively, BELARDINO increased the face amount of one insurance policy to $6 million and the other to $12.1 million, again without Victim 2’s knowledge or authorization. He additionally paid and attempted to pay the policy premiums of $194,280 and $105,000 with Victim 2’s funds, and ultimately received approximately $197,497 in commissions from the two Insurance Companies.
False Statement in Connection with Fraudulent Withholding of Employee 401(k) Contributions
BELARDINO adopted a retirement savings plan (the “Plan”) on behalf of the Maddox Group that became effective on January 1, 2020. He served as the trustee of the Plan.
From on or about November 1, 2020, through on or about August 13, 2021, BELARDINO withheld $8,004.67 from the paychecks of the four Maddox employees other than himself who chose to participate in the Plan. BELARDINO failed to deposit these withheld funds into the Plan’s trust account and instead converted those funds to his and Maddox’s use.
On or about October 14, 2021, BELARDINO authorized the Plan administrator to file with the Internal Revenue Service a Form 5500-SF for the 2020 calendar year in which he falsely answered in the negative when asked “During [2020]: Was there a failure to transmit to the plan any participant contributions...?”
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BELARDINO, 37, of New York, New York, pled guilty to two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of making a false statement to the Internal Revenue Service, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. BELARDINO will be sentenced by the Honorable Kenneth M. Karas.
Mr. Williams praised the outstanding investigative work of Special Agents of the FBI and Criminal Investigators of the Employee Benefits Security Administration of the United States Department of Labor.
The prosecution of this case is being handled by the Office’s White Plains Division. Assistant United States Attorney James McMahon is in charge of the prosecution.
Yonkers Doctor Pleads Guilty to Illegal Distribution of More Than 100,000 Oxycodone PillsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MARC LARUELLE pled guilty to one count of distributing Oxycodone, among other narcotics, without a legitimate medical purpose while acting outside the usual course of professional practice. LARUELLE pled guilty before U.S. District Judge Denis L. Cote.
U.S. Attorney Damian Williams said: “Marc Laruelle abused his medical license and violated the oath of his profession when he prescribed more than 100,000 doses of a highly potent and addictive opioid without a legitimate medical need. As this case makes clear, we will aggressively prosecute physicians who are contributing to the national opioid crisis. Laruelle now awaits sentencing for his crime.”
According to the Indictment, LARUELLE’s plea agreement, and statements made in Court:
Between in or about September 2016 up to and including in or about October 2021, MARC LARUELLE, a licensed doctor specializing in psychiatry, prescribed more than 100,000 doses of Oxycodone without a legitimate medical purpose outside of the usual course of professional practice. Oxycodone is a highly potent and addictive opioid that commands high prices in the black market because of demand by drug abusers. LARUELLE often prescribed Oxycodone in combination with Xanax (alprazolam) and/or Adderall (amphetamine), controlled substances that are themselves frequently abused and resold illicitly. LARUELLE failed to perform proper physical examinations or medical tests prior to prescribing Oxycodone to his patients. LARUELLE also charged patients as much as $800 per prescription and prescribed large amounts of Oxycodone with the understanding that the quantity would be resold in the black market.
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LARUELLE, 65, of Yonkers, New York, pled guilty to one count of distributing Oxycodone, Amphetamines, and Xanax, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing will be determined by a judge. LARUELLE is scheduled to be sentenced by Judge Cote on January 26, 2023.
Mr. Williams praised the outstanding work of the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force for their support and assistance in this matter. The OCDETF New York Strike Force is a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area. The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. Mr. Williams also thanked the New York State Department of Health Bureau of Narcotic Enforcement for their assistance in this case.
Assistant U.S. Attorney Mitzi S. Steiner is in charge of the prosecution. The case is being handled by the Office’s Narcotics Unit.
United States Files Civil Fraud Lawsuit Against Cigna for Artificially Inflating Its Medicare Advantage PaymentsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that the United States has filed a civil healthcare fraud lawsuit against CIGNA CORPORATION and its subsidiary Medicare Advantage Organizations (collectively, “CIGNA”). The lawsuit seeks damages and penalties under the False Claims Act for CIGNA’s submissions to the Government of false and invalid patient diagnosis codes to artificially inflate the payments CIGNA received for providing insurance coverage to its Medicare Advantage plan members. The Government is intervening in a lawsuit filed by a whistleblower, which was originally filed in the United States District Court for the Southern District of New York and later transferred to the Middle District of Tennessee.
The Government’s complaint alleges that the reported diagnoses codes were based solely on forms completed by vendors retained and paid by CIGNA to conduct in-home assessments of plan members. The healthcare providers (typically nurse practitioners) who conducted these home visits did not perform or order the testing or imaging that would have been necessary to reliably diagnose the serious, complex conditions reported and were prohibited by CIGNA from providing any treatment during the home visit for the medical conditions they purportedly found. The diagnoses at issue were not supported by the information documented on the form completed by the vendor and were not reported to CIGNA by any other healthcare provider who saw the patient during the year in which the home visit occurred. Nevertheless, CIGNA submitted these diagnoses to the Government to claim increased payments and falsely certified on an annual basis that its diagnosis data submissions were “accurate, complete, and truthful.”
U.S. Attorney Damian Williams said: “As alleged, CIGNA obtained tens of millions of dollars in Medicare funding by submitting to the Government false and invalid diagnoses for its Medicare Advantage plan members. CIGNA knew that, under the Medicare Advantage reimbursement system, it would be paid more if its plan members appeared to be sicker. This Office is dedicated to holding insurers accountable if they seek to manipulate the system and boost their profits by submitting false information to the Government.”
Medicare Advantage, also known as the Medicare Part C program, provides health insurance coverage for tens of millions of Americans who opt out of traditional Medicare. Under Medicare Part C, Medicare Advantage Organizations (“MAOs”), typically operated by private insurers like CIGNA, provide coverage for Medicare beneficiaries. In return, MAOs receive capitated payments from the Centers for Medicare and Medicaid Services (“CMS”) based on demographic information and the diagnoses of each plan beneficiary. MAOs submit diagnosis data, typically passed along from beneficiaries’ healthcare providers, to CMS. CMS then uses that diagnosis data, in conjunction with demographic factors, to calculate a “risk score” for each beneficiary and, in turn, the amount of the monthly capitated payment that the MAO will receive for covering that beneficiary. The Medicare Advantage payment model is intended to pay MAOs more to provide healthcare for sicker enrollees (expected to incur higher healthcare costs) and less for healthier enrollees (expected to incur lower costs).
The following allegations are based on the Complaint that was filed in federal court:
CIGNA, through its subsidiaries and affiliates, owns and operates numerous MAOs that administer Medicare Advantage Plans. CIGNA contracted with several vendors to conduct home visits of Medicare Advantage plan members across the country as part of its broader so-called “360 comprehensive assessment” program. The home visits were typically conducted by nurse practitioners, and on occasion by other non-physician healthcare providers such as registered nurses and physician assistants (the “Vendor HCPs”). Based on the visit, the Vendor HCPs completed a CIGNA-created form (“360 form”) that included a check-the-box multi-page list of a wide range of medical conditions. CIGNA had its coding teams identify diagnosis codes that corresponded to the recorded medical conditions and then submitted those to CMS for risk adjustment payment purposes.
CIGNA structured the 360 home visits for the primary purpose of capturing and recording lucrative diagnosis codes that would significantly increase the monthly capitated payments it received from CMS. The purpose of the visits was not to treat patients’ medical conditions, and CIGNA explicitly prohibited the Vendor HCPs from providing actual patient treatment or care. As CIGNA acknowledged in an internal document discussing the program, “[t]the primary goal of a 360 visit is administrative code capture and not chronic care or acute care management.” But this was not disclosed to CIGNA’s plan members when the home visit was scheduled or during the actual visit. When identifying plan members to receive home visits, CIGNA targeted individuals who were likely to yield the greatest risk score increases and thus the greatest increased payment.
The Vendor HCPs spent limited time with the patients and did not conduct a comprehensive physical examination. When completing the assessments and recording the diagnoses, the Vendor HCPs relied largely on the patient’s own self-assessment and their responses to various basic screening questions. Vendor HCPs did not have access to the patient’s full medical history and typically did not obtain or review relevant records from the patient’s primary care physician in advance of the visit.
CIGNA’s 360 home visit program regularly generated false and invalid diagnosis codes for certain serious, complex conditions that cannot be reliably diagnosed in a home setting and without extensive diagnostic testing or imaging. In tens of thousands of instances, CIGNA submitted diagnosis codes that represent serious, complex medical conditions that (a) were based only on the home visits conducted by the Vendor HCPs; (b) required specific testing or imaging to be reliably diagnosed, which was not performed; (c) were not supported by the information documented on the 360 form completed by the Vendor HCPs; and (d) were not reported by any other healthcare provider who saw the plan member during the year in which the home visit occurred (the “Invalid Diagnoses”). The Invalid Diagnoses included, but are not limited to, diagnoses for complex medical conditions such as chronic kidney disease, congestive heart failure, rheumatoid arthritis, and diabetes with renal complications. According to CIGNA’s own clinical guidelines, accurately diagnosing these conditions requires specialized testing.
CIGNA exerted pressure on Vendor HCPs to record high-value diagnoses that significantly increased risk adjustment payments. CIGNA management identified at least twelve classes of generic chronic diagnoses that they thought were “often underdiagnosed” among its Plan members and, through trainings and seminars, encouraged the Vendor HCPs to make these diagnoses during the home visits. CIGNA also closely tracked the volume and nature of the diagnoses generated by each vendor’s home visits, as well as how the diagnoses affected risk-adjusted payments. CIGNA provided trainings to vendors to improve their “performance” when they failed to deliver the expected level of high-value diagnosis codes.
Indeed, CIGNA tracked the return on investment of the 360 home visit program by comparing the costs of the in-home visits (i.e., payments to vendors) against the additional Part C payments generated by increased risk scores. For example, according to an internal report, CIGNA determined that, during the first nine months of 2014, one vendor’s 6,658 in-home visits resulted in more than an additional $14 million in Medicare payments, which dwarfed the approximately $2.13 million that CIGNA paid to the vendor. When specific providers were found to have captured fewer diagnoses than expected, CIGNA asked the vendor to prepare a “performance improvement plan” for the provider.
The Invalid Diagnoses generated by the 360 home visits also did not conform with the International Classification of Diseases (“ICD”) Office Guidelines for Coding and Reporting (the “ICD Guidelines”), as required by applicable federal regulations. The Invalid Diagnoses did not affect patient care, treatment, or management during the home visit, as required under the ICD Guidelines, and thus were ineligible for risk adjustment. In addition, the Invalid Diagnoses were not supported by the minimal information recorded on the 360 forms, in violation of the ICD Guidelines’ medical record documentation requirement. In fact, in some cases, the 360 forms include clinical exam findings that contradict the supposed diagnosis. For example, one patient received a congestive heart failure diagnosis from a home visit even though the 360 form explicitly noted that physical exam results found her heart to be “regular” and “normal” and stated, “cardiac reviewed and unremarkable.”
Through its 360 home visit program, CIGNA submitted diagnosis codes for tens of thousands of Invalid Diagnoses to CMS that constituted false claims for payment. Based on these unlawful false claims, CIGNA improperly received tens of millions of dollars in risk adjustment payments from CMS, in violation of both the False Claims Act and the common law.
Mr. Williams thanked HHS-OIG and the U.S. Attorney’s Office for the Middle District of Tennessee for their assistance with this case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Peter Aronoff is in charge of this case.
United States Attorney Damian Williams Announces the Formation of New Conviction Integrity CommitteeRead the Press Release
“The Conviction Integrity Committee of the Southern District of New York will strive to ensure justice is done in every case both by evaluating claims of factual innocence in our own cases, as well as providing assistance and access to information from SDNY cases that may bear on claims of factual innocence of defendants convicted in other jurisdictions. This committee will be the first of its kind in this Office and only the second formal federal conviction integrity body nationally.
The formation of the committee builds on work the Office has done historically to support credible claims of factual innocence in other jurisdictions, both as a resource for defendants and their counsel and as a liaison to the conviction integrity processes in other prosecutors’ offices. The committee institutionalizes that practice and also aims to bring the same level of rigor to review of our own convictions. Our solemn obligation as prosecutors to protect the community and seek justice for victims of crimes requires that we take every step to ensure that the guilty are held responsible and the innocent are set free.
Though infrequent, wrongful convictions engender mistrust of law enforcement and erode the public’s faith in the fundamental fairness of the criminal justice system. If the committee’s comprehensive review yields but one remedy of an unjust conviction or results in the freedom of even one wrongly incarcerated, innocent individual, we will consider it a successful endeavor to further the cause of justice for all. We also hope to leverage the Committee’s work and leadership to ensure the Office’s practices on investigative techniques and disclosure are designed to prevent wrongful convictions.”
Conviction Integrity Committee
Former Law Firm Partner Convicted of Cyberstalking Multiple VictimsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in federal court of WILLIE DENNIS for cyberstalking three victims, all his former colleagues at a global law firm (the “Law Firm”). The jury convicted DENNIS today following a one-week trial before U.S. District Judge Jed S. Rakoff.
U.S. Attorney Damian Williams said: “Willie Dennis, a former law firm partner in Manhattan, has been convicted of waging a relentless cyberstalking campaign against his own former colleagues. By texts, emails, and other threatening communications — sometimes hundreds per day — Dennis terrified his former colleagues to the point they had serious concerns for their own safety. Today, a unanimous jury has made sure that Dennis is accountable for his years-long harassment of his former law partners.”
According to the Indictment, documents previously filed in the case, and the evidence introduced at trial:
WILLIE DENNIS, a former partner at the Law Firm, engaged in a years-long campaign of harassment, intimidation, and threats against multiple individuals, including the three victims in this case, all partners at the Law Firm. As part of that campaign, DENNIS sent the victims thousands of harassing, threatening, and intimidating emails and text messages, back-to-back, at all hours of the day and night. DENNIS targeted the victims, their families, and threatened their physical safety. He demeaned them, called them racist names, and warned them that they would become “biblical symbols.” In his threats, he told one victim to “sleep with one eye open.”
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DENNIS, 60, of New York, New York, was convicted of three counts of cyberstalking. Each count 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 would be determined by the judge.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Sarah L. Kushner, Stephanie Simon, and Kimberly Ravener are in charge of the prosecution.
Father-And-Son Owners of Orange County Car Dealership Sentenced for FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that SAAED MOSLEM and his father MEHDI MOSLEM were sentenced today to 96 months in prison and 40 months in prison, respectively, for defrauding their lenders and the Internal Revenue Service (“IRS”). The defendants were previously found guilty of multiple offenses following a two-and-a-half-week jury trial in June 2021. U.S. District Judge Cathy Seibel imposed the sentence in White Plains federal court.
U.S. Attorney Damian Williams said: “This father and son duo spent nearly a decade lying about their finances to get millions of dollars in fraudulent loans while hiding their income from the IRS and, in Saaed Moslem’s case, evading his creditors through a fraudulent bankruptcy filing. Today’s sentences send a strong message that perpetrators of fraud will be held accountable and brought to justice for their actions.”
According to statements in the Indictment, evidence presented at trial and sentencing, other public filings, and statements in court:
From 2009 through 2018, MEHDI MOSLEM and SAAED MOSLEM conspired to defraud the United States by concealing profits relating to their car dealership, Exclusive Motor Sports, and other businesses from the IRS. To falsely lower their business income, MEHDI MOSLEM and SAAED MOSLEM, among other things, caused their accountant to prepare partnership tax returns that significantly understated Exclusive Motor Sports’ inventory. The fraudulent business income figures passed through to MEHDI MOSLEM’s and SAAED MOSLEM’s personal tax returns, contributing to a nearly $1 million underpayment in federal and state taxes.
From 2011 through 2019, MEHDI MOSLEM and SAAED MOSLEM also conspired to commit bank fraud by providing falsely inflated net worth statements and fabricated tax returns in connection with loan applications, including for a $1.5 million mortgage on the Exclusive Motor Sports property in Central Valley. SAAED MOSLEM then made numerous false statements to conceal his assets from financial institutions and other creditors when he filed for bankruptcy in 2015. As a result, more than half a million dollars of unsecured debt was fraudulently discharged in the proceedings. In 2019, SAAED MOSLEM committed aggravated identity theft by using a customer’s personal identifying information in connection with a fraudulent car loan application.
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In addition to their prison terms, MEHDI MOSLEM, 73, and SAAED MOSLEM, 39, both of Central Valley, New York, were sentenced to three years of supervised release. MEHDI MOSLEM was further ordered to pay restitution in the amount of $1,040,685.58 and a $100,000 fine. SAAED MOSLEM was ordered to pay forfeiture in the amount of $1,927,303.25 and a $200,000 fine.
Mr. Williams praised the investigative work of the FBI and IRS-CI.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Nicholas S. Bradley, Daniel Loss, and James McMahon are in charge of the prosecution.
Two Bronx Gang Members Charged with MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”) announced today the unsealing of an Indictment charging JUSTIS COLON and ARIEL MARTINEZ with racketeering conspiracy, murder in aid of racketeering, murder with a firearm, attempted murder, assault with a deadly weapon in aid of racketeering, and other firearms offenses relating to COLON and MARTINEZ’s participation in the murder of Joshua Garcia and the non-fatal shooting of two other victims on April 23, 2022, in the Bronx, New York.
COLON and MARTINEZ were taken into federal custody from state custody and will be presented today before Magistrate Judge Katharine H. Parker. The case is assigned to U.S. District Judge Victor Marrero.
U.S. Attorney Damian Williams said: “As alleged, the defendants participated in a gang shooting that killed Joshua Garcia and left two other victims injured. We continue our daily work with our law enforcement partners to vigorously investigate and prosecute those who bring violence to our streets.”
NYPD Commissioner Keechant L. Sewell said: “The fusillade of bullets that killed Joshua Garcia in April and wounded two other victims is a level of violence that shocks the conscience and can never be accepted. Now, thanks to our determined investigation, the two alleged gang members charged in this case will face swift and meaningful punishment – a message to anyone else considering such violence on our city streets. I commend our NYPD investigators, together with the prosecutors in the U.S. Attorney’s Office for the Southern District of New York, for their work in this important case.”
According to the allegations in the Indictment unsealed today in Manhattan federal Court:[1]
From at least 2014 to 2022, JUSTIS COLON, a/k/a “Jus Blaze,” a/k/a “JB,” a/k/a “Bin Laden,” and ARIEL MARTINEZ, a/k/a “Rel,” were members or associates of a gang based in the Castle Hill neighborhood of the Bronx known as “670.”
In order to fund the 670 gang, protect and expand its interests, and promote its standing, members and associates of 670 committed, conspired, attempted, and threatened to commit acts of violence against rival gang members, including murder and assault; conspired to distribute and possess with intent to distribute narcotics, including heroin, “crack” cocaine, oxycodone, and marijuana; committed check fraud and unemployment fraud; committed commercial burglaries; and obtained, possessed, and used firearms, including by brandishing and discharging them.
On April 23, 2022, during a shooting at rival gang members, COLON and MARTINEZ shot and killed Joshua Garcia and wounded two other victims in the vicinity of 1713 Clay Avenue in the Bronx, New York.
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COLON, 25, and MARTINEZ, 23, both of the Bronx, New York, are each charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison; one count of murder in aid of racketeering, which carries a statutory maximum sentence of death or life in prison and a mandatory minimum sentence of life in prison; one count of murder through use of a firearm, which carries a statutory maximum sentence of death or life in prison and a mandatory minimum sentence of five years in prison; two counts of attempted murder and assault with a dangerous weapon in aid of racketeering, which carries a statutory maximum of 20 years in prison; and two counts of using and carrying a firearm in furtherance of a crime of violence, during which the firearm was brandished and discharged, which each carry a statutory maximum of life in prison and a mandatory minimum sentence of 10 years in prison.
The minimum and maximum potential sentences 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 investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and the NYPD. Mr. Williams also thanked the Office of the Bronx District Attorney for its assistance.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant United States Attorneys Michael R. Herman, Emily A. Johnson, and Jun Xiang are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
Former Honduran Congressman Sentenced to 30 Years in Prison for Conspiring to Import Cocaine into the United States and Possessing Machine Guns and Destructive DevicesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that FREDY RENAN NAJERA MONTOYA was sentenced to 30 years in prison for conspiring to import cocaine into the United States and possessing machine guns and destructive devices during the course of that conspiracy. NAJERA previously pled guilty before U.S. District Judge Paul G. Gardephe, who sentenced Najera today.
U.S. Attorney Damian Williams said: “Fredy Najera, a former Honduran congressman, abused his high-powered position by operating a large-scale narcotics trafficking organization that imported tons of cocaine to the United States. Najera oversaw the construction of airfields in Honduras and the use of militia-style tactics and weaponry to protect the illicit shipments. Najera has now been sentenced to 30 years in U.S. federal prison for his conduct in connection to importing over 30 tons of cocaine, which continues to contribute to the devastating cycle of addiction and abuse that affects so many Americans.”
According to the Superseding Indictment, other court filings, and statements made during other court proceedings:
From approximately 2008 through 2015, NAJERA abused his position as a Honduran congressman to lead large-scale and violent drug-trafficking activities in the same part of Honduras that he represented in his government position. NAJERA’s crimes involved the distribution of more than 30 tons of cocaine, which was ultimately imported into the United States. In connection with these activities, NAJERA used, and employed security teams who used military-grade weapons including machine guns and rocket-propelled grenade launchers.
During that same time period, NAJERA constructed, maintained, and staffed clandestine airstrips in Olancho, Honduras, that were used to receive multi-hundred-kilogram shipments of cocaine sent from Venezuela to Honduras. NAJERA facilitated the receipt of cocaine-laden planes and helicopters at his airstrips and coordinated the transportation of the cocaine westward in Honduras so that it could be imported into the United States. Heavily armed security personnel employed by NAJERA participated in the receipt and transportation of these shipments. NAJERA also cultivated criminal relationships with members of the Honduran National Police and the Honduran military in order to support his drug-trafficking activities by obtaining sensitive law enforcement information used by traffickers to avoid arrests and to plan transportation routes for U.S.-bound cocaine.
In 2012, NAJERA introduced members of the Sinaloa Cartel to Honduran officials who provided nearly unfettered access to a major commercial shipping hub in Puerto Cortés, Honduras. The Sinaloa Cartel relied on NAJERA’s connections to transport approximately 10 tons of cocaine through Puerto Cortés.
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In addition to his prison sentence, NAJERA, 46, of Honduras, was sentenced to five supervised release, ordered to forfeit $39,000,000, and ordered to pay a fine of $10,000,000.
Mr. Williams praised the outstanding efforts of the Bilateral Investigations Unit of the Special Operations Division of the Drug Enforcement Administration (“DEA”), New York Strike Force, and DEA Tegucigalpa Country Office, as well as the Department of Justice’s Office of International Affairs.
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.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jacob H. Gutwillig, Michael D. Lockard, Jason A. Richman, and Elinor L. Tarlow are in charge of the prosecution.
U.K. Businessman Graham Bonham-Carter Indicted for Sanctions Evasion Benefitting Russian Oligarch Oleg Vladimirovich DeripaskaRead the Press Release
A U.K. national was arrested today for conspiracy to violate U.S. sanctions imposed on Russian Oligarch Oleg Vladimirovich Deripaska and wire fraud in connection with funding U.S. properties purchased by Deripaska and efforts to expatriate Deripaska’s artwork in the United States through misrepresentations. The U.S. government will seek his extradition to the United States. Deripaska was previously charged with U.S. sanctions violations in an indictment unsealed on Sept. 29.
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Department of the Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty or territorial integrity of Ukraine, or who materially assist, sponsor or provide support for individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it prohibit making or receiving any funds, goods or services by, to, from or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) designated Deripaska as a Specially Designated National (SDN), in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the OFAC Sanctions). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation, and for operating in the energy sector of the Russian Federation economy.
According to court documents, Graham Bonham-Carter, 62, of the United Kingdom, worked for entities controlled by Deripaska from July 2003 through the present. Among other things, Bonham-Carter managed Deripaska’s residential properties located in the United Kingdom and Europe, including a house in Belgravia Square, London. Even after OFAC designated Deripaska, Bonham-Carter continued to work for Deripaska and refer to Deripaska as his “boss.” For example, in an email dated on or about June 18, 2018, Bonham-Carter wrote: “Times a bit tough for my boss as sanctions have hit him from the USA so not an ideal time.” In an email dated on or about Oct. 13, 2021, Bonham-Carter wrote: “It[’]s all good apart from banks keep shutting me down because of my affiliation to my boss Oleg Deripaska.... I have even been advised not to go to the USA where Oleg still has personal sanctions as the authorities will undoubtedly pull me to one side and the questioning could be hours or even days!!”
As alleged in the indictment, after Deripaska’s designation, Bonham-Carter engaged in over $1 million of illicit transactions to fund real estate properties in the United States for Deripaska’s benefit. Between in or about 2005 and in or about 2008, Deripaska purchased three residential properties in the United States, two in New York City and one in Washington, D.C. (the U.S. Properties). The properties were managed by a company named Gracetown Inc. After OFAC imposed sanctions on Deripaska on or about April 6, 2018, Gracetown Inc. continued to manage the properties Deripaska’s benefit. Shortly after Deripaska’s designation, Deripaska instructed Bonham-Carter to set up a new company for managing Deripaska’s properties. On or about May 25, 2018, Bonham-Carter wrote in an email that “OVD [i.e., Deripaska] wants me to set up my own company to run the [Belgravia Square] house and to possibly include Japan, Italy, China and more.” Less than two months later, on or about July 17, 2018, Bonham-Carter incorporated GBCM Limited.
Between in or about March 2021 and in or about December 2021, while in Deripaska’s employ, Bonham-Carter transmitted payments for the upkeep of the U.S. Properties. Bonham-Carter wired payments totaling $1,043,964.30 from a bank account in Russia held in the name of GBCM Limited, to bank accounts held by Gracetown Inc. in New York City. Gracetown Inc. used the funds from GBCM Limited to pay for various expenses associated with the U.S. Properties, including staff salaries, property taxes and other services, and to maintain and keep up the U.S. Properties.
As alleged, Bonham-Carter also attempted to unlawfully transfer artwork purchased by Deripaska from an auction house in New York City to London through misrepresentations concealing Deripaska’s ownership of the artwork. In May 2021, when advised by the auction house that it had reason to believe that the artwork belonged to Deripaska, Bonham-Carter falsely stated that the artwork and a payment of $12,146 that Bonham-Carter had made to ship the Artwork do not belong to Deripaska. In fact, as Bonham-Carter knew, Deripaska had purchased the artwork, it remained his property, and the funds used to pay for shipping would be billed to Deripaska.
Bonham-Carter is charged in a three-count indictment with one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (IEEPA), one count of violating IEEPA and one count wire fraud, each of which counts carries a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Task Force KleptoCapture Director Andrew C. Adams, U.S. Attorney Damian Williams for the Southern District of New York and Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division made the announcement.
The FBI New York Field Office and Counterintelligence Division are investigating the case, with valuable assistance provided by the Justice Department’s National Security Division Counterintelligence and Export Control Section and the Justice Department’s Office of International Affairs. The National Crime Agency of the United Kingdom provided substantial assistance.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
Assistant U.S. Attorneys Anden Chow and Vladislav Vainberg for the Southern District of New York are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.K. Businessman Arrested for Sanctions Evasion Benefitting Russian Oligarch Oleg DeripaskaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging GRAHAM BONHAM-CARTER, a citizen of the United Kingdom, with conspiring to violate United States sanctions imposed on Russian oligarch Oleg Vladimirovich Deripaska and wire fraud in connection with BONHAM-CARTER’s funding of U.S. properties purchased by Deripaska and efforts to expatriate Deripaska’s artwork in the U.S. through misrepresentations. BONHAM-CARTER was arrested today in the United Kingdom, and the United States Government will be seeking his extradition to the United States. Deripaska was previously charged with U.S. sanctions violations in an Indictment unsealed on September 29, 2022 (the “Deripaska Indictment”).
U.S. Attorney Damian Williams said: “As alleged, Graham Bonham-Carter provided property management and other services to his employer, sanctioned Russian oligarch Oleg Deripaska. Bonham-Carter obscured the origin of funding for upkeep and management of Deripaska’s lavish U.S. assets, in violation of the international sanctions. OFAC sanctions preclude supporters of the brutal and unjust Russian war regime from using U.S. dollars in any financial transactions, and we thank our international partners for their continued partnership in enforcing this critical sanctions program.”
Andrew C. Adams, Director of Task Force KleptoCapture said: “The international real estate market, and its infamous opacity, afforded Bonham-Carter no shelter from the diligence and expertise of U.S. law enforcement and our partners. Others who would attempt to move illicit money through international markets should take notice: neither powerful connections nor sophisticated deceptions succeeded in hiding Bonham-Carter’s efforts to illegally service a sanctioned oligarch.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: "With each new action we take, we shine a light on the vast network of individuals willing to work with Russian oligarchs who brazenly break our laws and abuse our financial systems. Bonham-Carter allegedly hid Deripaska's money and assets from federal authorities, and continued to do so even after Deripaska was sanctioned by the U.S. Our work would not be possible without the ongoing and dedicated partnerships with our international counterparts, all of whom are strategically focused on stopping the Russian oligarchs and their criminal kleptocracy."
According to the allegations contained in the Indictment unsealed today in Manhattan federal court and the Deripaska Indictment:[1]
In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property of individuals determined by the U.S. Treasury to be responsible for or complicit in actions or policies that threatened the security, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide support individuals or entities engaging in such activities. Executive Order 13660 and regulations issued pursuant to it, prohibit making or receiving any funds, goods or services by, to, from, or for the benefit of any person designated by the U.S. Treasury.
On April 6, 2018, the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Deripaska as a Specially Designated National (“SDN”), in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the “OFAC Sanctions”). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation, and for operating in the energy sector of the Russian Federation economy.
From approximately July 2003 through the present, BONHAM-CARTER worked for entities controlled by Deripaska. Among other things, BONHAM-CARTER manages Deripaska’s residential properties located in the United Kingdom and Europe, including a house in Belgravia Square, London. Even after OFAC designated Deripaska, BONHAM-CARTER continued to work for Deripaska and refer to Deripaska as his “boss.” For example, in an email dated on or about June 18, 2018, BONHAM-CARTER wrote: “Times a bit tough for my boss as sanctions have hit him from the USA so not an ideal time.” In an e-mail dated on or about October 13, 2021, BONHAM-CARTER wrote: “It[’]s all good apart from banks keep shutting me down because of my affiliation to my boss Oleg Deripaska.... I have even been advised not to go to the USA where Oleg still has personal sanctions as the authorities will undoubtedly pull me to one side and the questioning could be hours or even days!!”
As alleged in the Indictment, after Deripaska’s designation, BONHAM-CARTER engaged in over a million dollars of illicit transactions to fund real estate properties in the United States for Deripaska’s benefit. Between in or about 2005 and in or about 2008, Deripaska purchased three residential properties in the United States, two in New York, New York, and one in Washington, D.C. (the “U.S. Properties”). The properties were managed by a company named Gracetown, Inc. After OFAC imposed sanctions on Deripaska on or about April 6, 2018, Gracetown, Inc. continued to manage the properties for Deripaska’s benefit. Shortly after Deripaska’s designation, Deripaska instructed BONHAM-CARTER to set up a new company for managing Deripaska’s properties. On or about May 25, 2018, BONHAM-CARTER wrote in an email that “OVD [i.e., Deripaska] wants me to set up my own company to run the [Belgravia Square] house and to possibly include Japan, Italy, China and more.” Less than two months later, on or about July 17, 2018, BONHAM-CARTER incorporated GBCM Limited.
Between in or about March 2021 and in or about December 2021, while in Deripaska’s employ, BONHAM-CARTER transmitted payments for the upkeep of the U.S. Properties. BONHAM-CARTER wired payments totaling $1,043,964.30 from a bank account in Russia held in the name of GBCM Limited, to bank accounts held by Gracetown, Inc. in New York, New York. Gracetown, Inc. used the funds from GBCM Limited to pay for various expenses associated with the U.S. Properties, including staff salaries, property taxes, and other services, and to maintain and keep up the U.S. Properties.
As alleged, BONHAM-CARTER also attempted to unlawfully transfer artwork purchased by Deripaska from an auction house in New York City to London through misrepresentations concealing Deripaska’s ownership of the artwork. In May 2021, when advised by the auction house that it had reason to believe that the artwork belonged to Deripaska, BONHAM-CARTER falsely stated that the artwork and a payment of $12,146 that BONHAM-CARTER had made to ship the Artwork do not belong to Deripaska. In fact, as BONHAM-CARTER knew, Deripaska had purchased the artwork, it remained his property, and the funds used to pay for shipping would be billed to Deripaska.
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BONHAM-CARTER, 62, of the United Kingdom, is charged in a three-count Indictment with one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (“IEEPA”), one count of violating IEEPA, and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division. Mr. Williams further thanked the Department of Justice’s National Security Division, Counterintelligence, and Export Control Section and the Justice Department’s Office of International Affairs of the Department’s Criminal Division for their guidance and support throughout this investigation. Finally, Mr. Williams praised the outstanding efforts of the authorities in the United Kingdom, in particular the National Crime Agency.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Anden Chow and Vladislav Vainberg are in charge of the case.
The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Indictments, and the description of the Indictments set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Kuwaiti Diplomat and Wife Charged with Forced Labor of Domestic Workers and Related Fraud OffensesRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Carlos F. Matus, Director of the U.S. Department of State’s Diplomatic Security Service (“DSS”), announced today that BARRAK ABDULMOHSEN ALHUNAIF, a former diplomatic attaché assigned to the Permanent Mission of the State of Kuwait to the United Nations, and his wife KHALEDAH SAAD ALDHUBAIBI were charged in Manhattan federal court with forced labor, visa fraud, fraud in foreign labor contracting, and conspiracy to commit visa fraud and fraud in foreign labor contracting, in connection with their hiring and subsequent abuse of three domestic workers from India and the Philippines. Both ALHUNAIF and ALDHUBAIBI remain at large.
U.S. Attorney Damian Williams said: “Today’s indictment makes clear that no one is above the law. Barrak Abdulmohsen Alhunaif and his wife Khaledah Saad Aldhubaibi are alleged to have lied to obtain visas to bring three domestic workers to the United States and then exploited and abused those workers upon their arrival. This Office is committed to investigating and prosecuting those individuals who commit this type of fraud and abuse of particularly vulnerable foreign workers – no matter the title of the alleged offender.”
DSS Director Carlos F. Matus said: “As the lead agency in this investigation, the Diplomatic Security Service demonstrated its commitment to maintaining the integrity of U.S. travel documents and the rights of visitors to the United States. Our strong relationship with our law enforcement partners and the U.S. Attorney’s Office for the Southern District of New York continues to be essential in the pursuit of justice.”
According to the allegations in the Indictment filed today in Manhattan federal court:[1]
From in or about 2017, up to and including in or about 2020, ALHUNAIF, a Kuwaiti national and diplomatic attaché assigned to the Permanent Mission of the State of Kuwait to the United Nations, and ALDHUBAIBI, ALHUNAIF’s wife, conspired to fraudulently procure visas for three foreign domestic workers, who were from India and the Philippines, to provide household help to their family in Manhattan. ALHUNAIF and ALDHUBAIBI obtained the visas through the submission of fraudulent employment contracts, which, among other things, vastly overstated the domestic workers’ salaries, understated their hours, and falsely guaranteed other benefits, such as paid holidays and private living accommodations.
Once the domestic workers arrived in the United States, ALHUNAIF and ALDHUBAIBI paid the domestic workers far less than what was specified in their contracts and what was the minimum salary required by law. In order to conceal this scheme, ALHUNAIF provided payments to the domestic workers for the amounts set forth in their employment contracts but required the domestic workers to withdraw a portion of their paycheck in cash and to return the cash to either ALHUNAIF or ALDHUBAIBI. As a result, ALHUNAIF and ALDHUBAIBI paid at least two of the domestic workers as little as $700 per month. ALHUNAIF and ALDHUBAIBI also regularly compelled each of the domestic workers to work far in excess of 40 hours per week and without a regular day off.
Further, ALHUNAIF and ALDHUBAIBI subjected the domestic workers to other abusive conditions, including requiring two of them to surrender their passports upon arrival in the United States, restricting their ability to leave their employment, and controlling the domestic workers’ movements by prohibiting them from leaving their residence without their express permission. ALHUNAIF and ALDHUBAIBI also denied two of the domestic workers timely medical care for medical conditions caused by or contracted during their employment.
In addition, ALDHUBAIBI verbally abused each of the domestic workers and physically abused one of the workers. ALHUNAIF and ALDHUBAIBI also threatened at least one domestic worker on several occasions. These threats included, among other things, that ALHUNAIF and ALDHUBAIBI would falsely report the domestic worker to law enforcement for stealing from them or mistreating their children.
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ALHUNAIF, 36, and ALDHUBAIBI, 34, both of Kuwait City, Kuwait, are charged with conspiracy to commit visa fraud, which carries a maximum sentence of five years in prison; conspiracy to commit fraud in foreign labor contracting, which carries a maximum sentence of five years in prison; and forced labor, which carries a maximum sentence of 20 years in prison.
In addition, ALHUNAIF is charged with three counts of visa fraud, which each carry a maximum sentence of 10 years in prison, and three counts of fraud in foreign labor contracting, which each carry 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 Diplomatic Security Service.
The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant United States Attorneys Jamie Bagliebter and Mitzi S. Steiner 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.
Justin Rivera Sentenced to 21 Years in Prison for Conspiring to Commit Sex TraffickingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JUSTIN RIVERA, a/k/a “Denzel Rivera,” a/k/a “Bangout,” a/k/a “Jackie Chan,” was sentenced to 21 years in prison for conspiring to sex traffic two victims. RIVERA was convicted following an eight-day jury trial in June 2021 before United States District Judge Paul A. Engelmayer, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Justin Rivera was responsible for terrorizing young women and coercing them into engaging in commercial sex acts. After Rivera was convicted and in jail, he hatched a plan to subvert the judicial process by attempting to coerce one of his victims—who courageously testified at trial—into recanting her testimony. Today’s sentence holds Rivera accountable for his horrific crimes.”
According to court documents, the evidence presented trial, and the evidence presented at sentencing:
In 2015, RIVERA and his co-conspirators squatted at an abandoned house in Bohemia, New York, where they worked in concert to coerce the young women to engage in commercial sex acts, using false promises of romance, narcotics, violence, threats of violence, and psychological abuse. RIVERA physically assaulted one victim (“Victim-1”) on multiple occasions, pointed a gun at her head, and manipulated her heroin addiction by controlling her access to the drug. RIVERA also played the role of the conspiracy’s enforcer, including on one occasion threatening the mother of a victim (“Victim-2”) who came to the house in Bohemia in an attempt to rescue her daughter.
Both Victim-1 and Victim-2 testified at trial. Following RIVERA’s conviction, RIVERA engaged in witness tampering by conspiring to offer bribes and threaten Victim-1 to induce her to recant her testimony and falsely state that the Government coerced Victim-1 into falsely testifying at trial.
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In addition to today’s prison sentence, RIVERA, 32, of Amityville, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, New York City Police Department, Suffolk County Police Department, and the Special Agents from the United States Attorney’s Office for the Southern District of New York for their assistance on this case.
The case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Daniel H. Wolf and Thomas S. Burnett are in charge of the prosecution.
Former Comptroller of Investment Adviser Firm Sentenced to 80 Months in Multimillion-Dollar Investment FraudRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that VANIA MAY BELL, the former comptroller of Executive Compensation Planners, Inc. (“ECP”), a registered investment adviser and financial planning firm located in New City, New York, was sentenced to 80 months in prison for participating in a conspiracy with her father, HECTOR MAY, the former president of ECP, to defraud certain investment advisory clients (the “Victims”) out of more than $11 million. BELL was sentenced today by U.S. District Judge Nelson S. Roman.
U.S. Attorney Damian Williams said: “Over two decades, Bell and her father Hector May ruthlessly orchestrated a multimillion-dollar Ponzi scheme. They pilfered the retirement savings of over 15 victims, including vulnerable aging couples, close friends, relatives, and an employment pension plan of a construction company. Bell now joins her father in prison to be held accountable for this devastating crime”
According to Count One of the Indictment, to which BELL pled guilty, and other statements and submissions made in Court:
Beginning in 1982, HECTOR MAY was the president of ECP and provided financial advisory services to numerous clients. In 1993, BELL joined ECP, where she held various titles including comptroller and chief compliance officer. ECP worked with a broker dealer (“Broker Dealer-1”), of which MAY became a registered representative in 1994.
In order to obtain money from the Victims’ securities accounts with Broker Dealer-1, MAY advised the Victims, among other things, that they should use money from those accounts to have ECP, rather than Broker Dealer-1, purchase bonds on their behalf. With BELL’s assistance, MAY guided the Victims, first, to withdraw their money from their Broker Dealer-1 accounts, and second, to send that money to the ECP Custodial Account by wire transfer or check. At times, when ECP was running out of cash and desperately needed to make supposed bond interest payments to avoid exposing the Ponzi scheme, BELL reached out to Victims directly. After the Victims sent their money to the ECP Custodial Account, MAY and BELL did not use the money to purchase bonds. Instead, BELL and MAY transferred the money to ECP’s “operating” account and spent it on business expenses, personal expenses, and to make payments to certain Victims in order to perpetuate the scheme and conceal the fraud. In this way, from the late 1990’s through March 9, 2018, BELL and MAY induced Victims to forward them more than $11,400,000.
To help perpetuate the fraud, BELL and MAY created phony “consolidated” account statements that they issued through ECP and sent to the Victims. These “consolidated” account statements purported to reflect the Victims’ total portfolio balances and included the names of bonds MAY falsely represented that he purchased for the Victims and the amounts of interest the Victims were supposedly earning on the bonds. In order to create the phony consolidated account statements, MAY provided BELL with bond names and false interest earnings, and BELL created ECP computerized account statements and had them distributed to the Victims. As part of the scheme, MAY personally drove to the home of a stroke victim he and BELL had been defrauding of millions of dollars in order to retrieve the legitimate statements being sent by Broker Dealer-1 and later replace them with BELL’s fake consolidated statements purporting to show the victim’s investments had been growing.
BELL was instrumental to the scheme in multiple ways. BELL processed and spent client money from ECP’s custodial and operating accounts, watching the money dwindling and helping her father achieve more thefts at many months’ ends; BELL faked account statements that made people believe that they held millions, even when she knew that their money was gone; and BELL wielded her role as Chief Compliance Officer and Comptroller to help conceal the fraud from Broker Dealer-1.
In an audio recording made in 2016, after more than sixteen years in the scheme, BELL said the following about MAY: “I am his daughter, I am his confidante, I am the backbone that saves his butt in every promise he makes out of there. . . . The virtue of my knowledge is just by the presence of time here. There is nothing in this office that I don’t know, haven’t touched, haven’t seen, haven’t done, haven’t taught. Everyone is always intimidated by the time I come in or the things I get to do personally that I’ve earned over time based on my life circumstances. It’s what we call the perk of being the boss’s daughter.” At the end of that year, MAY thanked BELL in a handwritten note: “My Dearest Vania: you have always been there for me. You always watch my back. I couldn’t do it without you[.] Love, Daddy”.
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In addition to her prison term, BELL, 57, of Montvale, New Jersey, was ordered to serve three years of supervised release, pay $8,041,233 in restitution, and forfeit $589,942.
MAY, who pled guilty in a separate case in December 2018 to charges of conspiracy to commit wire fraud and investment advisor fraud, was sentenced on July 31, 2019, to 13 years in prison by Judge Vincent Briccetti. He was also ordered to serve three years of supervised release, pay $8,041,233 in restitution and forfeit $11,452,185.
Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service, Special Agents of the United States Attorney’s Office, and the Federal Bureau of Investigation.
The criminal case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Vladislav Vainberg, Margery Feinzig, and Derek Wikstrom are in charge of the prosecution.
U.S. Attorney Announces Extradition of Malaysian National for Large-Scale Trafficking of Rhinoceros HornsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Edward J. Grace, Assistant Director for the U.S. Fish and Wildlife Service Office of Law Enforcement, announced today that TEO BOON CHING, a/k/a “Zhang,” a/k/a “Dato Sri,” a/k/a “Godfather,” was charged for participating in a conspiracy to traffic in more than 70 kilograms of rhinoceros horns valued at more than $725,000 that involved the illegal poaching of numerous rhinoceros, an endangered wildlife species. In addition, CHING was charged with laundering the proceeds of his illegal rhinoceros horn sales. CHING, a citizen of Malaysia, was arrested in Thailand on June 29, 2022, at the request of the United States pursuant to our bilateral extradition treaty. CHING was extradited to the United States earlier today and will appear before Magistrate Judge Gabriel W. Gorenstein this afternoon. The case has been assigned to U.S. District Judge Paul A. Crotty.
Earlier today, CHING and his associated entities were sanctioned by the U.S. Treasury Department Office of Foreign Assets Control (OFAC) pursuant to E.O. 13581, as amended.
U.S. Attorney Damian Williams said: “Teo Boon Ching is alleged to be the leader of a transnational criminal enterprise trafficking in rhinoceros horns, enriching poachers responsible for the senseless illegal slaughter of numerous endangered rhinoceros, and furthering the market for these illicit products. The protection of endangered wildlife and the preservation of our natural resources is an important priority for this Office. Thanks to the tireless efforts of the U.S. Fish and Wildlife Service, this defendant has been caught and brought to the United States to answer for his alleged crimes.”
U.S. Fish and Wildlife Service Office of Law Enforcement Assistant Director Edward J. Grace said: “This extradition is a major success for wildlife and people. Thanks to our federal and international partners, this wildlife trafficker now will have his day in court. Wildlife traffickers run complex international criminal enterprises that require a multinational law enforcement effort to investigate, arrest and prosecute them for their crimes. I laud the efforts of our special agents, the U.S. Department of Justice, U.S. Department of State Office of Foreign Assets Control, and especially the Royal Thai Police for their commitment in addressing this global problem that is pushing many species to extinction.”
As alleged in the Superseding Indictment unsealed today in Manhattan federal court:[1]
CHING was the leader of a transnational criminal enterprise (the “Enterprise”) based in Asia with significant operations in Malaysia and Thailand which engaged in the large-scale international trafficking and smuggling of rhinoceros horns resulting from the poaching of numerous endangered rhinoceros. Trade involving endangered or threatened species violates several U.S. laws as well as international treaties implemented by certain U.S. laws. CHING served as a specialized smuggler, transporting rhinoceros horns from rhinoceros poaching operations primarily in Africa to the eventual customers primarily in Asia. CHING also claimed to be able to ship rhinoceros horns to the United States.
From at least in or about July 2019 through at least in or about August 2019, CHING conspired to transport, distribute, sell, and smuggle at least approximately 73 kilograms of rhinoceros horns resulting from the poaching of numerous rhinoceros and having an estimated value of at least approximately $725,472.
On a number of occasions, CHING met with a confidential source to negotiate the sale of rhinoceros horns. For example, on July 17 and 18, 2019, the confidential source met with CHING in Malaysia. During those meetings, CHING stated that he served as a “middleman”—one who acquires rhinoceros horns poached by co-conspirators in Africa and ships them to customers around the world for a per-kilogram fee. During their communications, CHING sent the confidential source numerous photographs of rhinoceros horns that CHING had available for sale and shipment, including the following:
In August 2019, the confidential source, at the direction of law enforcement, purchased 12 rhinoceros horns from CHING with money that CHING believed were the proceeds of other illegal wildlife trafficking and was in bank accounts in New York. At CHING’s direction, law enforcement deposited the purported proceeds into numerous Chinese bank accounts at an underground banking facility in Thailand to disguise the origins, source, and purposes of the monetary transactions.
On August 23, 2019, CHING then arranged for his co-conspirators to deliver twelve rhinoceros horn pieces to undercover law enforcement personnel in Bangkok, Thailand. A photograph of the rhinoceros horns delivered by CHING is below:
A United States Fish and Wildlife Service forensics laboratory examined these rhinoceros horns and concluded that two horn pieces were black rhinoceros horns and the other 10 pieces were white rhinoceros horns, both endangered species.
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CHING, 57, of Malaysia, is charged with one count of conspiracy to commit wildlife trafficking, which carries a maximum sentence of five years in prison, and two counts of money laundering, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the outstanding work of the United States Fish and Wildlife Service. In addition, Mr. Williams thanked the Royal Thai Government for its assistance in the extradition of CHING to the United States and commended law enforcement authorities and conservation partners in Thailand, including the Royal Thai Police and the Office of the Attorney General. Mr. Williams also thanked the Embassy of the United States in Bangkok and the U.S. Department of Justice’s Office of International Affairs for providing substantial assistance in securing the arrest and extradition of the defendant and noted that the investigation is ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Michael R. Herman is in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and its description set forth below constitute only allegations, and every fact described should be treated as an allegation.
Man Charged with Setting Chinatown Spa on Fire with Victim Trapped InsideRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, John B. DeVito, Special Agent in Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Laura Kavanagh, Acting Fire Commissioner for the New York City Fire Department (“FDNY”), announced the unsealing yesterday of a one-count Indictment charging MARIO LUCAS with arson. LUCAS was initially charged by Complaint and arrested on August 8, 2022. LUCAS’s case has been assigned to the Honorable Edgardo Ramos.
U.S. Attorney Damian Williams said: “As alleged, Mario Lucas committed a horrific arson of a Manhattan business with a victim trapped inside. Luckily, the victim survived. As reflected by the charge today, this Office is committed to holding individuals who would commit violence in this City accountable for their crimes.”
John B. DeVito, ATF Special Agent in Charge said: “This alleged heinous act of arson is unacceptable. Thankfully, the victim has survived. ATF remains steadfast in our commitment to bring our expertise and resources to investigate and apprehend those who commit violent crimes. We will continue to work alongside our local partners to build safer communities.”
NYPD Commissioner Keechant L. Sewell said: “As alleged, the arson Mario Lucas sparked in June was not just a crime against a single victim in one business, but a violent assault that endangered an entire community and all the first responders who rushed in to help. I commend our NYPD officers for their prompt response in arresting Mr. Lucas and thank them for their outstanding work in this case along with our partners in the U.S. Attorney’s Office for the Southern District of New York, the ATF’s New York Field Division, and the FDNY.”
Acting Fire Commissioner Laura Kavanagh said: “Intentionally setting a fire is a heinous crime, and doing so while knowing there is a person trapped inside is reprehensible. We are grateful to our Fire Marshals and all law enforcement for quickly apprehending this man and keeping him off our city’s streets.”
According to the allegations in the Indictment unsealed today in Manhattan federal court, the Complaint, and statements made in open Court:[1]
At approximately 4:46 p.m. on June 19, 2022, LUCAS entered a spa located in Chinatown (the “Spa”), in Manhattan, New York. LUCAS then appeared to engage in a conversation with an individual working in the Spa (the “Victim”). At approximately 4:55 p.m., the Victim exited the lobby into the back room of the Spa, and LUCAS remained in the lobby. At approximately 4:56 p.m., LUCAS opened his backpack and pulled out a white plastic bag that appeared to contain a plastic container full of liquid. LUCAS then poured that liquid around the lobby of the Spa. After pouring the liquid, LUCAS took a lighter out of his pocket and lit the liquid on fire. The room then went up in flames.
LUCAS tried to open the front door, but the door would not open. The Victim appears to have still been in the back room at this time.
Video from outside the Spa shows, at approximately 4:59 p.m., smoke and fire within the Spa. A crowd gathered around the Spa on the street, and a man used a bar stool to force open the door. At approximately 5:00 p.m., LUCAS escaped from the Spa and ran down Eldridge Street. Approximately one minute later, the Victim exited the Spa.
Law enforcement was able to track LUCAS’s movements through security camera footage collected from various locations in the vicinity of the Spa. This footage showed that LUCAS removed his hooded sweatshirt and shirt and left them on the street. He also dropped his black backpack. LUCAS appeared to be suffering from severe burns and appeared to be trying to remove his clothing as a result.
At a location approximately two blocks from the Spa, members of the NYPD intercepted LUCAS and placed him in an ambulance. LUCAS provided NYPD with a Guatemalan identification card bearing the name “Mario Lucas.”
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LUCAS, 46, of Guatemala, is charged with arson resulting in injury to another person, which carries a mandatory minimum sentence of seven years in prison and a maximum sentence of 40 years in prison.
The maximum and minimum 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 ATF, NYPD, and FDNY. Mr. Williams also thanked the United States Marshals Service for their assistance in this case.
The prosecution is being handled by the Office’s Violent & Organized Crime Unit. Assistant United States Attorney Elizabeth A. Espinosa, Adam S. Hobson, and Dominic Gentile 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 Complaint, and the description of the Indictment and the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Leader of Sunset Trinitarios Gang Pleads Guilty to RacketeeringRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that EDIBERTO SANTANA, a/k/a “Flaco Veneno,” pled guilty to one count of racketeering conspiracy involving murder, arising out of SANTANA’s long-time leadership of the Sunset Trinitarios gang. SANTANA pled guilty before U.S. District Judge Paul A. Crotty.
U.S. Attorney Damian Williams said: “Today’s guilty plea should serve as a reminder that we are committed to seeking justice for victims no matter the passage of time and to holding gang leaders responsible for the violence that they instigate.”
According to the Indictment, SANTANA’s plea agreement, and statements made in Court:
SANTANA is the long-time leader of the Sunset Trinitarios (“Sunset”), a violent set of the national Trinitarios street gang that controlled territory in Manhattan, the Bronx, and Brooklyn, among other places. Under SANTANA’s leadership and at SANTANA’s direction, Sunset perpetrated a near-constant string of violent crime for nearly a decade, including murders, shootings, assaults, and robberies. Among other acts of violence, SANTANA ordered the March 13, 2011, murder of Dennis Marquez, age 16, who was stabbed to death in the Bronx; the October 23, 2013, murder of Michael Beltre, age 17, who was shot and killed in the Bronx; and the November 17, 2013, murder of Rafael Alam, age 23, who was shot and killed in the Bronx.
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SANTANA, 33, of Brooklyn, New York, pled guilty to one count of racketeering conspiracy with murder as a special sentencing factor, which carries a maximum sentence of life in prison.
The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing will be determined by a judge. SANTANA is scheduled to be sentenced by Judge Crotty on February 8, 2023.
Mr. Williams praised the outstanding work of the Drug Enforcement Administration, Homeland Security Investigations, the New York City Police Department, the New York State Police, and the New York City Department of Investigation.
Assistant U.S. Attorneys Celia V. Cohen, Jacqueline C. Kelly, Lindsey Keenan, and Jacob R. Fiddelman are in charge of the prosecution. The case is being handled by the Office’s Violent and Organized Crime Unit.
Former Associate Principal and High School Teacher Sentenced to 15 Years for Child Enticement and Possession of Child PornographyRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN SKOLNICK was sentenced today to 15 years in prison for enticing minor children to send him nude and sexually explicit photographs and videos of themselves over the Internet. On April 5, 2022, SKOLNICK pled guilty before U.S. Judge Colleen McMahon, who imposed his sentence.
U.S. Attorney Damian Williams said: “For approximately seven years, Jonathan Skolnick abused his position of trust as an associate principal and teacher in New York City schools by posing as a teenage girl online and successfully enticing minor victims, including his own students, to send him child pornography. This lengthy prison sentence holds Skolnick accountable for his horrific crimes and the extraordinary harm and trauma he caused to many minor victims and their families.”
According to the Indictment, court documents, and based on statements made in open court:
Between in or around August 2012 and in or around June 2018, JONATHAN SKOLNICK worked as a high school teacher at a school in Brooklyn, New York. In or around July 2018, SKOLNICK became an associate principal at a middle school in the Bronx, New York, where he worked until his arrest in September 2019. While in those roles, SKOLNICK posed as a teenage girl online, contacted minor victims by email, social media message, and text message, engaged in sexually explicit conversations with the minor victims, and enticed the minor victims to send him nude and sexually explicit photographs and videos. Many of the minor victims were students at the schools where SKOLNICK worked.
During the time period of his crimes, SKOLNICK used at least 21 different email and social media accounts to contact nearly 100 different individuals and solicit nude and sexually explicit images and videos. When certain minor victims stopped communicating with SKOLNICK, he threatened to release the photographs and images that the minor victims had sent.
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In addition to his prison term, SKOLNICK, 40, of the Bronx, New York, was sentenced to five years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Elizabeth A. Espinosa and Rebecca T. Dell are in charge of the prosecution.
Bank CEO Sentenced to 14 Months in Prison for Taking Bribes in Connection with Loans Guaranteed by the Small Business AdministrationRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that defendant EDWARD SHIN, a/k/a “Eungsoo Shin,” was sentenced to 14 months in prison for his role in defrauding a Pennsylvania-based bank (the “Bank”) while serving as its CEO. SHIN was convicted after a three-week trial before U.S. District Judge John P. Cronan on all counts, which charged SHIN with taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration (“SBA”) and with causing the Bank to issue SBA-guaranteed and commercial loans to companies in which SHIN had a secret financial interest.
U.S. Attorney Damian Williams said: “As CEO, Edward Shin was entrusted with stewardship of a Pennyslvania-based bank. Instead of promoting and protecting the bank’s interests, Shin used the bank as his own piggy bank, stealing from it to line his pockets and the pockets of his corrupt friends. For violating the trust placed in him, Shin will rightly serve prison time.”
According to the allegations contained in the Criminal Complaint, Indictment, and evidence adduced during trial:
The SBA helps Americans start, build, and grow businesses by guaranteeing certain loans made by banks to help those businesses succeed. Between 2009 and 2013, the Bank offered a range of financial products, including SBA-guaranteed loans to small businesses in the New York-New Jersey area, which the Bank could extend only on the condition that all aspects of those loans complied with SBA regulations and SBA’s standard operating procedures. In particular, SBA regulations and procedures prohibited bank officers, including SHIN, from receiving any payments in connection with SBA-backed loans and prohibited banks from extending such loans to any institution in which a bank officer held an interest.
Notwithstanding these regulations, SHIN, then the CEO of the Bank, secretly solicited and received bribe payments in connection with SBA-guaranteed loans issued by the Bank and caused the Bank to extend SBA-guaranteed and commercial loans to companies in which SHIN had secret ownership interests. Specifically, when the Bank issued business loans that did not involve the use of any actual broker, SHIN nonetheless arranged to have his longtime friend, a real estate and loan broker (the “Broker”), inserted unnecessarily into the transaction solely to generate a broker fee that could be shared with SHIN; in fact, the Broker did no actual work to earn a commission on those transactions but split the “broker’s fee” with SHIN as an illegal kickback.
SHIN also arranged for the Bank to issue SBA-guaranteed loans to several businesses in which he secretly retained an ownership interest, in violation of SBA regulations and procedures. For example, in or about June 2010, the Bank issued an SBA-guaranteed loan for approximately $950,000 to a business in New York, New York. Although documents submitted to the Bank for purposes of securing the loan did not mention SHIN’s financial interest, the business was secretly operated as a partnership between SHIN, the Broker, and another individual. The loan ultimately went into default status, resulting in a loss to the Bank of approximately $591,278.60. On another occasion, in or about 2013, the Bank issued an SBA-guaranteed loan for approximately $1,050,000 to a business in New York, New York. Again, even though the business was secretly operated as a partnership between SHIN and another family member of SHIN’s, the documents submitted to the Bank for purposes of securing the loan did not mention SHIN’s financial interest nor the family member’s relationship to SHIN.
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SHIN, 59, of Ambler, Pennsylvania, was convicted at trial of one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, one count of conspiracy to commit bank bribery, one count of conspiracy to commit loan fraud, another count of conspiracy to commit bank fraud, and one count each of bank bribery and embezzlement of funds by a bank officer. In addition to the prison terms, Judge Cronan sentenced SHIN to three years of supervised release and ordered SHIN to pay forfeiture in the amount of $5,506,050 and a $600 special assessment fee.
Mr. Williams praised the outstanding investigative work of the Federal Deposit Insurance Corporation – Office of Inspector General, Homeland Security Investigations, the SBA Office of the Inspector General, and the Office of the Special Inspector General for the Troubled Asset Relief Program.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Tara La Morte, Anden Chow, and Jessica Greenwood are in charge of the prosecution.
Two Georgia Residents Plead Guilty to Firearms TraffickingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that XAVIER SIMMS and BRYCE MARTIN pled guilty to trafficking firearms from Georgia to New York and conspiring to do the same. SIMMS pled guilty before U.S. District Judge Philip M. Halpern, and MARTIN pled guilty before U.S. District Judge Vincent L. Briccetti.
U.S. Attorney Damian Williams said: “Today, Xavier Simms and Bryce Martin admitted to trafficking guns from Georgia to New York. Their actions contributed to the flow of illegal guns into New York, which too often results in gun violence in our communities. Today’s pleas reflect the commitment of this Office and our law enforcement partners to rid our streets of illegal guns and to prosecute gun traffickers to the fullest extent of the law.”
According to the Complaint, Information against each defendant, and other documents filed in federal court, as well as statements made in public court proceedings:
On April 20, 2022, members of the FBI Westchester Safe Streets Task Force and the City of Yonkers Police Department were investigating illegal firearms activity in the vicinity of Elm and Linden streets in Yonkers, New York. During the course of their investigation, they attempted to interdict members of the conspiracy, including XAVIER SIMMS, BRYCE MARTIN, and a third co-conspirator (“CC-1”). When law enforcement officers approached SIMMS, MARTIN, and CC-1 at a Yonkers deli, CC-1 shot and critically wounded an FBI Task Force Officer at close range. After that, an FBI Special Agent fired his gun at CC-1 and fatally wounded CC-1.
Law enforcement officers recovered four firearms in total from SIMMS, MARTIN, and CC-1 at the Yonkers deli, including a “Ghost Gun” — a type of firearm that is designed to evade law enforcement detection.
SIMMS and MARTIN had previously traveled together with CC-1 from Georgia to New York, arriving in Yonkers on or about April 19, 2022, with multiple firearms to sell. Evidence recovered from their cellphones showed that SIMMS and MARTIN both had access to specialized firearms, including machinegun-style weapons. Once in Yonkers, SIMMS, MARTIN, and CC-1 met with another individual (“Individual-1”) who received from them at least five firearms to sell on consignment.
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SIMMS, 22, of Covington, Georgia, and MARTIN, 23, of Hampton, Georgia, each pled guilty to one count of conspiring to traffic firearms, in violation of 18 U.S.C. § 371, which carries a maximum sentence of five years in prison, and one count of firearms trafficking, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 924(a)(1), which carries a maximum sentence of five years in prison.
SIMMS is scheduled to be sentenced on April 20, 2023. MARTIN is scheduled to be sentenced on January 11, 2023.
The statutory maximum 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 Federal Bureau of Investigation and the City of Yonkers Police Department. He also thanked the Westchester County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Shiva H. Logarajah and Kevin T. Sullivan are in charge of the prosecution.
Yonkers Man Sentenced to 20 Years for March 2011 MurderRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that MARCUS CHAMBERS, a/k/a “Chino,” a/k/a “Chi D,” a/k/a “SP,” was sentenced yesterday to 20 years in prison for the 2011 murder of Jonathan Johnson, 21, on March 18, 2011, in White Plains, New York. On December 20, 2021, CHAMBERS pled guilty before U.S. District Judge Nelson S. Román, who imposed his sentence.
According to the allegations in the Indictment to which the defendant pled guilty and statements made in public court proceedings:[1]
On or about March 18, 2011, CHAMBERS and his co-defendant DARNELL KIDD murdered Jonathan Johnson by shooting him during the course of an armed robbery for marijuana in White Plains, New York. CHAMBERS arranged by phone to purchase the marijuana from Johnson. CHAMBERS and KIDD met with Johnson to rob him of marijuana, and during the robbery, Johnson was shot and killed.
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In addition to his prison term, CHAMBERS, 31, of Yonkers, New York, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the White Plains Police Department and the FBI Westchester County Safe Streets Task Force, which comprises agents and task force officers from the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Probation Office, New York State Police, New York City Police Department, Mount Vernon Police Department, Putnam County Sheriff’s Office, Town of Ramapo Police Department, Yonkers Police Department, Greenburgh Police Department, Peekskill Police Department, Westchester County Police Department, and Westchester County District Attorney’s Office. Mr. Williams also thanked the Westchester County District Attorney’s Office for its assistance in this matter.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Olga I. Zverovich, Christopher Brumwell, and Steven J. Kochevar and Paralegal Specialist Shannon Becker are in charge of the prosecution.
The allegations contained in the Indictment against DARNELL KIDD are merely accusations, and he is presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described regarding DARNELL KIDD should be treated as an allegation.