Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JELANI WRAY, a senior leader of a conspiracy in which he and his co-conspirators bribed 911 operators, medical personnel, and police officers for the confidential information of tens of thousands of motor vehicle accident victims, was sentenced today to 84 months in prison.  WRAY was sentenced by United States District Judge Paul G. Gardephe.  He previously pled guilty on October 12, 2021, to making payments of bribes and gratuities to an agent of a federally funded organization. 

U.S. Attorney Damian Williams said: “Jelani Wray and the other leaders of this scheme brazenly exploited New York’s no fault automobile insurance laws by lining their pockets with millions of dollars in illegal profits.  In the process, they corrupted 911 operators, hospital workers and police officers; injured accident victims by depriving them of a choice in medical providers and attorneys, lying to them, and subjecting these victims to unwanted medical treatments; and caused licensed drivers in the state of New York to suffer higher insurance premiums by enabling the submission of millions of dollars in false medical reimbursement claims.  Wray and his coconspirators will now pay for their crimes, and this Office will never stop pursuing those who seek to profit by corrupting our public institutions.”

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

JELANI WRAY was one of several leaders of a massive no fault automobile insurance scheme spanning New York and New Jersey from at least in or about 2013 through in or about 2019.  As part of the scheme, WRAY personally bribed and arranged for others to bribe 911 operators, medical personnel, and police officers for the confidential information of tens of thousands of motor vehicle accident victims.  Using this information, WRAY and his co-conspirators contacted victims, lied to them, and steered them to clinics and lawyers handpicked by WRAY and his associates.  These clinics and lawyers then paid WRAY and his associates kickbacks for these referrals, which they distributed to coconspirators as payments and bribes.

 Specifically, in approximately 2013, while WRAY was working as the manager of a medical clinic, WRAY and a coconspirator, ANTHONY ROSE, a/k/a “Todd Chambers,” reached an agreement that for each patient ROSE sent to the clinic, WRAY would pay him approximately $2,000 to $3,000 in illegal referral fees.

Thereafter, in or about 2016, WRAY began to recruit and acquire his own “lead sources,” which were individuals willing to sell the confidential information of motor vehicle accident victims.  From approximately 2016 through in or about December 2017, WRAY bribed at least five NYPD 911 operators to provide him with the names and numbers of motor vehicle accident victims.  WRAY then transferred this information to an illegal call center that was operated by ROSE and funded in part by WRAY.  ROSE’s call center called the unsuspecting accident victims, lied to them, and then steered them to particular clinics and lawyers that were part of ROSE and WRAY’s illegal referral network.  The clinics and lawyers then paid ROSE and WRAY kickbacks by cash and check.  WRAY also similarly recruited attorneys and clinics to participate in this portion of the scheme.

Among other things, WRAY concealed his bribery of the 911 operators by providing them with prepaid “burner” phones, using encrypted messaging applications to communicate with them, and by assigning them code names.  ROSE and WRAY also received further kickbacks for steering accident victims to a particular magnetic resonance imaging (MRI) facility.  In addition, in or about 2017, ROSE, WRAY, a paralegal (“Paralegal-1”), and a physician (“Physician-1”) agreed to open a medical clinic in the Bronx (“Clinic-1”). WRAY funded Clinic-1, steered accident victims to Clinic-1, and exercised substantial control over its medical operations, which is illegal under New York law, because WRAY is not a physician. 

WRAY received millions of dollars in illegal profits from his involvement in the various aspects of this scheme.  In addition to his prison sentence, WRAY, 37 of Brooklyn, New York, was sentenced to 3 years of supervised release.  He was also ordered to forfeit $2,200,000 and pay a fine of $250,000.

*                *                *

The United States Attorney’s Office charged JELANI WRAY and 26 other defendants in November 2019.  All 27 defendants admitted guilt; 25 of 27 defendants pleaded guilty and the remaining two defendants had their prosecutions deferred.  WRAY is the sixteenth defendant to have been sentenced; ten defendants have been sentenced to serve time in prison.  The principal aspects of each defendant’s sentence are reflected in the chart below.  To date, the defendants have also been ordered to pay approximately $5 million in forfeiture from this scheme. 

Mr. Williams praised the work of the FBI, the New York State Police, the New York City Police Department, the New York City Department of Financial Services, the Westchester County District Attorney’s Office, and the National Insurance Crime Bureau. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit, and the White Plains Division.  Assistant United States Attorneys Mathew Andrews and Louis A. Pellegrino are in charge of the prosecution.

Defendant

Age

Hometown

Principal Aspects of  Sentence

 

JELANI WRAY,

a/k/a “Lani,”

a/k/a “J.R.” 

37

Brooklyn, NY

 

• 7 years prison
• 3 years supervised release
• $250,000 fine
• $2,200,000 forfeiture ordered

 

 

NATHANIEL COLES,

a/k/a “Nat”

 

69

Cortlandt Manor, NY

 

• 5 years prison
• 3 years supervised release
• $100,000 fine
• $2,594,000 forfeiture ordered

 

 

ANTHONY ROSE, Jr.,

a/k/a “Sean Wells”

34

Cambria Heights, NY

 

• 2 years prison
• 2 years supervised release
• $69,000 forfeiture ordered

 

 

CHRISTINA GARCIA,

a/k/a “Cindy”

37

Jersey City, NJ

 

• 366 days prison
• 3 years supervised release
• $3,000 fine
• $30,000 forfeiture ordered

 

 

LEON BLUE,

a/k/a “Boochie”

56

Brooklyn, NY

 

• Time served prison (approx. two years)
• 3 years supervised release
• $8,310 forfeiture ordered

 

 

CLARENCE FACEY,

a/k/a “Face”

36

Brooklyn, NY

 

• 6 months prison
• 2 years supervised release
• $25,000 forfeiture ordered

 

 

ANGELA MELECIO,

a/k/a “Angie,”

a/k/a “P5”

 

43

Amityville, NY

 

• Time served prison
• 3 years supervised release, with 6 months’ home confinement
• 250 hrs. community service
• $8,000 forfeiture ordered

 

 

STEPHANIE PASCAL,

a/k/a “Steph,”

a/k/a “P2”

49

Brooklyn, NY

• Time served prison
• 2 years supervised release
• $2,000 forfeiture ordered

 

EDWARD ABAYEV,

a/k/a “Eddie”

 

54

 

Staten Island, NY

 

• 366 days prison
• 3 years supervised release
• $20,000 fine
• $18,000 forfeiture ordered

 

 

TONJA LEWIS,

a/k/a “J1”

 

55

Belleville, NJ

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $8,310 forfeiture ordered

 

 

BERLISA BRYAN,

a/k/a “Lisa”

 

55

Edison, NJ

 

• Time served prison
• 3 years supervised release
• 250 hrs. community service
• $20,000 forfeiture ordered

 

 

ANGELA MYERS,

a/k/a “Angie”

 

40

Brooklyn, NY

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $10,000 forfeiture ordered

 

 

SHAKEEMA FOSTER

 

29

Brooklyn, NY

 

• Time served prison
• 2 years supervised release
• 250 hrs. community service
• $3,000 forfeiture ordered

 

 

KOURTNEI WILLIAMS

 

35

Brooklyn, NY

 

 

• 6 months prison
• 2 years supervised release
• $20,000 forfeiture ordered

 

 

 

MAKKAH SHABAZZ, a/k/a “Mecca”

 

45

Long Island City, NY

 

• 6 months prison
• 2 years supervised release
• $36,000 forfeiture ordered

 

 

YANIRIS DELEON, a/k/a “Jen”

             

32

New York, NY

• 6 months prison
• 2 years supervised release
• $10,000 forfeiture ordered

 

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that MAY SALEHI, a former State Department employee, was sentenced today to 12 months in prison for conspiring to commit honest services fraud.  SALEHI was a longtime State Department employee who was involved in evaluating bids for critical overseas government construction projects such as U.S. embassies and consulates.  SALEHI gave confidential inside bidding information to a Government contractor, and received $60,000 in kickback payments in return. SALEHI was sentenced by United States District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said:  “As a State Department employee, May Salehi was entrusted to serve the public.  Instead, she abused her position to line her own pockets.  Salehi revealed, and traded on, confidential information—corrupting the bidding process and receiving lucrative kickbacks in return.  Thanks to our partners at the State Department’s Office of Inspector General, Salehi’s crime of deception has been uncovered, and Salehi has now been sentenced to prison.”

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

From 1991 until mid-2021, MAY SALEHI was a State Department employee.  For many years, SALEHI worked as an engineer in the State Department’s Overseas Building Operations division (“OBO”), which directs the worldwide overseas building program for the State Department and the U.S. Government community serving abroad. 

In 2016, the State Department solicited bids for a multimillion-dollar construction project known as a compound security upgrade to be performed at the U.S. Consulate in Bermuda (the “Bermuda Project”).  The bidding process involved the submission of blind, sealed bids from various bidders.  Six companies submitted sealed bids, one of which was named Montage, Inc. (“Montage”). 

SALEHI was involved in the Bermuda Project in several respects.  Among other things, SALEHI served as the Chair of the Technical Evaluation Panel (“TEP”)—a panel of experts that evaluates the technical aspects of bids, including whether they meet the State Department’s structural and security needs.  In connection with the Bermuda Project, the TEP determined that five bids—including Montage’s bid—were technically acceptable.

In September 2016, the State Department’s employees who evaluate the cost of bids gave these five bidders—including Montage—the opportunity to re-bid, if they wished to do so.  Montage had two days to decide whether to submit a re-bid.  During that two-day window, Montage’s principal, Sina Moayedi, contacted SALEHI by phone to seek confidential inside bidding information about the relationship between Montage’s bid and those of its competitors.  SALEHI agreed to meet Moayedi in person during the work day.  In response to Moayedi’s inquiry, SALEHI told him that all five bids were low, and that his bid was lowest by about a million dollars.  Moayedi said that he would give SALEHI 1% of the contract value if he won; and as she walked away, SALEHI proposed a cover story by stating: “I have rugs to sell.”  SALEHI knew that it was unlawful to provide this confidential bidding information to a bidder.  After Moayedi received this inside information from SALEHI, Montage immediately increased its bid by nearly $1 million.  In its revised bid to the State Department, Moayedi and Montage lied as to the reason it had increased its bid by nearly $1 million, falsely claiming that it had discovered “an arithmetic error” in its estimates.  Montage was ultimately awarded the Bermuda Project with a revised bid of $6.3 million. 

In the months that followed, Moayedi provided SALEHI a total of $60,000 in kickbacks, which he paid in three installments.  In making these kickback payments, Moayedi used intermediaries to obscure the link between him and SALEHI.  To conceal the true purpose of the kickback payments, as she had suggested, SALEHI gave Moayedi a Persian rug, by providing it to an intermediary who passed it to Moayedi.  SALEHI did not report the $60,000 kickback payments on her taxes, her State Department financial disclosure forms, or her application to renew her top-secret national security clearance.

*                *                *

In addition to her prison sentence, SALEHI, 66, of Washington, D.C., was sentenced to three years of supervised release.  SALEHI was also ordered to forfeit $60,000 and to pay a $500,000 Fine.

Sina Moayedi has been charged with wire fraud, conspiracy to commit wire fraud, conspiracy to commit honest services wire fraud, and major fraud against the United States.  The charges against Moayedi are pending.  See 22 Cr. 188 (JSR).

Mr. Williams praised the outstanding investigative work of the State Department OIG, Special Agents from the United States Attorney’s Office for the Southern District of New York, and IRS‑CI. 

The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case.  Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the arrests of TAKESHI EBISAWA, SOMPHOP SINGHASIRI, SUKSAN JULLANAN, a/k/a “Bobby,” and SOMPAK RUKRASARANEE, for international narcotics and weapons trafficking offenses. EBISAWA, a Japanese national, JULLANAN, a United States and Thai national, and RUKRASARANEE, a Thai national, were arrested in Manhattan on April 4, 2022. SINGHASIRI, a Thai national, was arrested in Manhattan on April 5, 2022. EBISAWA, JULLANAN, and RUKRASARANEE were presented before Magistrate Judge Jennifer Willis on April 5, 2022, and were ordered detained, and SINGHASIRI was presented before Judge Willis on April 6, 2022, and was ordered detained.

U.S. Attorney Damian Williams said: “We allege Mr. Ebisawa and his co-conspirators brokered deals with an undercover DEA agent to buy heavy-duty weaponry and sell large quantities of illegal drugs. The drugs were destined for New York streets, and the weapons shipments were meant for factions in unstable nations. Members of this international crime syndicate can no longer put lives in danger and will face justice for their illicit actions.”

DEA Administrator Anne Milgram said: “The expansive reach of transnational criminal networks, like the Yakuza, presents a serious threat to the safety and health of all communities. Ebisawa and his associates intended to distribute hundreds of kilograms of methamphetamine and heroin to the United States, using deadly weapons to enable their criminal activities, at a time when nearly 300 Americans lose their lives to drug overdose every day. These arrests represent the unwavering determination of the DEA, together with our U.S. and international partners, to target and bring to justice violent criminals who lead transnational drug trafficking organizations that continue to flood our country with dangerous drugs.”

According to the allegations contained in the Complaint charging the defendants, which was unsealed today in Manhattan federal court:[1]

Since at least in or about 2019, the DEA has been investigating EBISAWA, a leader within the Japanese transnational organized crime syndicate also known as Yakuza, in connection with large-scale narcotics and weapons trafficking. The Yakuza is a network of highly organized, transnational crime families with affiliates in Asia, Europe, and the Americas, and is involved in various criminal activities, including weapons trafficking, drug trafficking, human trafficking, fraud, and money laundering. Over the course of the investigation, EBISAWA introduced an undercover DEA agent (“UC-1”), posing as a narcotics and weapons trafficker, to associates in EBISAWA’s international criminal network, which spans Japan, Thailand, Burma, Sri Lanka, and the United States, among other places, for the purpose of arranging large-scale narcotics and weapons transactions. EBISAWA and his associates—including SINGHASIRI, JULLANAN, and RUKRASARANEE—have negotiated multiple narcotics and weapons transactions with UC-1.

EBISAWA, JULLANAN, and RUKRASARANEE conspired to broker the purchase from UC-1 of United States-made surface-to-air missiles (“SAMs”), as well as other heavy-duty weaponry, for multiple ethnic armed groups in Burma, and to accept large quantities of heroin and methamphetamine for distribution as partial payment for the weapons. EBISAWA, JULLANAN, and RUKRASARANEE understood the weapons to have been manufactured in the United States and taken from United States military bases in Afghanistan and planned for the narcotics to be distributed in the New York market.

In addition, EBISAWA and SINGHASIRI conspired to sell 500 kilograms of methamphetamine and 500 kilograms of heroin to UC-1 for distribution in New York. In furtherance of that transaction, on or about June 16, 2021, and on or about September 27, 2021, SINGHASIRI provided samples of approximately one kilogram of methamphetamine and approximately 1.4 kilograms of heroin. SINGHASIRI conspired to possess and use firearms, including machine guns, to protect narcotics shipments. EBISAWA also worked to launder $100,000 in purported narcotics proceeds from the United States to Japan.

* * *

A table containing the charges and maximum penalties for EBISAWA, 57, of Japan; SINGHASIRI, 58, of Thailand; JULLANAN, 53, of the United States and Thailand; and RUKRASARANEE, 55, of Thailand, is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

COUNT

DEFENDANT(S)

MAX. TERM OF IMPRISONMENT

Count One: narcotics importation conspiracy (21 U.S.C. § 963)

EBISAWA and SINGHASIRI

Life imprisonment; Mandatory minimum sentence of ten years’ imprisonment

Count Two: conspiracy to possess firearms, including machine guns and destructive devices (18 U.S.C. § 924(o))

SINGHASIRI

Life imprisonment

Count Three: conspiracy to acquire, transfer, and possess SAMs (18 U.S.C. § 2332g)

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment; Mandatory minimum sentence of 25 years’ imprisonment

Count Four: narcotics importation conspiracy (21 U.S.C. § 963)

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment; Mandatory minimum sentence of ten years’ imprisonment

Count Five: conspiracy to possess firearms, including machine guns and destructive devices (18 U.S.C. § 924(o))

EBISAWA, JULLANAN, and RUKRASARANEE

Life imprisonment

Count Six: money laundering (18 U.S.C. § 1956)

EBISAWA

20 years’ imprisonment

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit. Mr. Williams also thanked the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, the Japanese Narcotics Control Department, the Royal Thai Police Narcotics Suppression Bureau, Japan Police, and the Indonesian National Police Satuan Tugas Khusus Merah Putih/Merah Putih Special Task Force for their assistance.

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.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant United States Attorneys Kaylan E. Lasky and Alexander Li are in charge of the prosecution, with assistance from Trial Attorney Lauren B. Goddard of the Counterterrorism Section.

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

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

“Twelve years ago, Larry Ray moved into his daughter’s dorm room at Sarah Lawrence College.  And when he got there, he met a group of friends who had their whole lives ahead of them.  For the next decade, he used violence, threats, and psychological abuse to try to control and destroy their lives.  He exploited them. He terrorized them. He tortured them. Let me be very clear. Larry Ray is a predator. An evil man who did evil things. Today’s verdict finally brings him to justice.  

This verdict would not have been possible without the victims who testified in court.  We are in awe of their bravery in the face of incredible trauma.  I also want to thank the career prosecutors in my Office, the Southern District of New York, and our law enforcement partners, who stood with those victims and worked tirelessly to ensure that justice was done. Thank you.” 

A Russian national is charged with violating U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine.

According to the indictment, which was unsealed today in the Southern District of New York, Konstantin Malofeyev, 47, of Russia, is charged with conspiracy to violate U.S. sanctions and violations of U.S. sanctions in connection with his hiring of an American citizen, Jack Hanick, to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. As alleged, Malofeyev also conspired with Hanick and others to illegally transfer a $10 million investment that Malofeyev made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Malofeyev’s assets from being transferred. Along with the indictment, the United States issued a seizure warrant for Malofeyev’s U.S. investment. Malofeyev remains at large and is believed to be in Russia.

“The Justice Department will work relentlessly to counter Russian aggression, including by enforcing U.S. sanctions law,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, Konstantin Malofeyev is a Russian oligarch who has been sanctioned since 2014 for threatening Ukraine and providing financial support to the Donetsk separatist region. Malofeyev knowingly violated U.S. sanctions by paying for services of a U.S. person and by seeking to transfer money that had been invested in the United States.”

“Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine,” said U.S. Attorney Damian Williams for the Southern District of New York. “The United States sanctions on Malofeyev prohibit him from paying or receiving services from United States citizens, or from conducting transactions with his property in the United States. But as alleged, he systematically flouted those restrictions for years after being sanctioned. The indictment unsealed today shows this office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

“The allegations in this case go back many years showing just how much effort the FBI and its partners put into investigating these crimes,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “According to the indictment, the defendant used shell companies and other means to hide his deceptions and evade important sanctions meant to ensure the territorial integrity of Ukraine. While this case is about violating sanctions, it’s also about bringing people to justice who think they can violate our laws with impunity.”

“Kremlin-linked Russian oligarch Konstantin Malofeyev played a leading role in supporting Russia’s 2014 invasion of eastern Ukraine, continues to run a pro-Putin propaganda network, and recently described Russia’s 2022 military invasion of Ukraine as a ‘holy war,’” said Assistant Director Michael J. Driscoll of the FBI’s New York Field Office. “The FBI works tirelessly to protect our national interests, and we will continue to use all the resources at our disposal to aggressively counter Russia’s malign activity around the world.”

According to court documents, 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 and interest in property that came within the United States or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in actions or policies that threatened the peace, security, stability, sovereignty or territorial integrity of Ukraine, or who materially assist, sponsor or provide financial, material or technological support for, or goods and services to, individuals or entities engaging in such activities.

Executive Order 13660, along with certain regulations issued pursuant to it (the Ukraine-Related Sanctions Regulations) prohibits, among other things, making or receiving any funds, goods or services by, to, from or for the benefit of any person whose property and interests in property are blocked.

On Dec. 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Konstantin Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the indictment, Malofeyev hired a U.S. citizen named Jack Hanick in 2013 to work on a new Russian cable television news network (the Russian TV Network) that Malofeyev was creating. Malofeyev negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa, and Malofeyev paid Hanick through two separate Russian entities through the end of 2018.

After OFAC designated Malofeyev as a SDN in December 2014, Malofeyev continued to employ Hanick on the Russian TV Network, in violation of the Ukraine-Related Sanctions Regulations. Malofeyev also dispatched Hanick to work on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives and reported directly back to Malofeyev on his work. For instance, in November 2015, Hanick wrote to Malofeyev that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with Malofeyev’s efforts to acquire the Bulgarian television network, Malofeyev instructed Hanick to take steps to conceal Malofeyev’s role in the acquisition by conducting the negotiations through a Greek associate of Malofeyev (the Greek Business Associate), so that it would appear the buyer was a Greek national rather than Malofeyev.

Malofeyev also employed Hanick to assist Malofeyev in transferring a $10 million investment in a Texas-based bank holding company (the Texas Bank) to the Greek Business Associate in violation of the Ukraine-Related Sanctions Regulations. In 2014, Malofeyev used a shell company to make the investment, and beginning in or about March 2015, Malofeyev began making plans to transfer ownership of the shell company to the Greek Business Associate as a means to transfer the investment in the Texas Bank. In or about May 2015, Malofeyev’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 Malofeyev had Hanick physically transport a copy of Malofeyev’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. Malofeyev signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of U.S. sanctions. Malofeyev’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though Malofeyev and his attorney well knew that the transfer of the shell company was executed in June 2015.

Along with the unsealed indictment, a seizure warrant was issued in the Southern District of New York for Malofeyev’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked U.S. bank account. The United States recovered those funds pursuant to the warrant and will seek forfeiture of those funds as property that constitutes or is derived from proceeds traceable to the commission of the offenses alleged in the indictment.

Each of the two sanctions charges in the indictment carry a maximum penalty 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.

The FBI is investigating the case, with valuable assistance provided by the Justice Department’s National Security Division and Office of International Affairs.

Assistant U.S. Attorneys Thane Rehn, Jessica Greenwood, and Vladislav Vainberg for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Nathan Swinton of the National Security Division’s Counterintelligence and Export Control Section.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation, announced today the unsealing of a criminal indictment charging a violation of United States sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine. KONSTANTIN MALOFEYEV is charged with conspiracy to violate United States sanctions and violations of United States sanctions in connection with his hiring of an American citizen, Jack Hanick, to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. MALOFEYEV also conspired with Hanick and others to illegally transfer a $10 million investment that MALOFEYEV had made in a United States bank to a business associate in Greece, in violation of the sanctions blocking MALOFEYEV’s assets from being transferred. Along with the Indictment, the United States Attorney announced the seizure of MALOFEYEV’s United States investment.

U.S. Attorney Damian Williams said: “Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine. The United States sanctions on Malofeyev prohibit him from paying or receiving services from United States citizens, or from conducting transactions with his property in the United States.  But as alleged, he systematically flouted those restrictions for years after being sanctioned. The Indictment unsealed today shows this Office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This Office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

FBI Assistant Director Michael J. Driscoll said: “Kremlin-linked Russian oligarch Konstantin Malofeyev played a leading role in supporting Russia’s 2014 invasion of eastern Ukraine, continues to run a pro-Putin propaganda network, and recently described Russia’s 2022 military invasion of Ukraine as a ‘holy war.’  The FBI works tirelessly to protect our national interests, and we will continue to use all the resources at our disposal to aggressively counter Russia’s malign activity around the world.”

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

In 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any United States person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13660, along with certain regulations issued pursuant to it (the “Ukraine-Related Sanctions Regulations”) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked. 

On December 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) designated KONSTANTIN MALOFEYEV as a Specially Designated National (“SDN”) pursuant to Executive Order 13660. OFAC’s designation of MALOFEYEV explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the Indictment, MALOFEYEV hired a United States citizen named Jack Hanick in 2013 to work on a new Russian cable television news network (the “Russian TV Network”) that MALOFEYEV was creating. MALOFEYEV negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa, and MALOFEYEV paid Hanick through two separate Russian entities through the end of 2018.

After OFAC designated MALOFEYEV as a SDN in December 2014, MALOFEYEV continued to employ Hanick on the Russian TV Network, in violation of the Ukraine-Related Sanctions Regulations. MALOFEYEV also dispatched Hanick to work on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At MALOFEYEV’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives, and reported directly back to MALOFEYEV on his work. For instance, in November 2015, Hanick wrote to MALOFEYEV that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with MALOFEYEV’s efforts to acquire the Bulgarian television network, MALOFEYEV instructed Hanick to take steps to conceal MALOFEYEV’s role in the acquisition by conducting the negotiations through a Greek associate of MALOFEYEV (the “Greek Business Associate”), so that it would appear the buyer was a Greek national rather than MALOFEYEV.

MALOFEYEV also employed Hanick to assist MALOFEYEV in transferring a $10 million investment in a Texas-based bank holding company (the “Texas Bank”) to the Greek Business Associate in violation of the Ukraine-Related Sanctions Regulations. In 2014, MALOFEYEV had used a shell company to make the investment, and beginning in or about March 2015, MALOFEYEV began making plans to transfer ownership of the shell company to the Greek Business Associate as a means to transfer the investment in the Texas Bank. In or about May 2015, MALOFEYEV’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar. In June 2015 MALOFEYEV had Hanick physically transport a copy of MALOFEYEV’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. MALOFEYEV signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of United States sanctions. MALOFEYEV’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though MALOFEYEV and his attorney well knew that the transfer of the shell company was executed in June 2015.

Along with the unsealed Indictment, the United States Attorney announced the issuance of a seizure warrant for MALOFEYEV’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked United States bank account. The United States recovered those funds pursuant to the warrant and will seek forfeiture of those funds as property that constitutes or is derived from proceeds traceable to the commission of the offenses alleged in the Indictment.

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MALOFEYEV, 47, of Russia, remains at large, and is believed to be in Russia. Each of the two sanctions charges in the Indictment carries a maximum penalty 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.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and thanked the support and expertise of the Department of Justice’s National Security Division and Office of International Affairs in the conduct of this matter.

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

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Thane Rehn, Jessica Greenwood, and Vladislav Vainberg are in charge of the prosecution. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the conviction in federal court of LAWRENCE RAY, a/k/a “Lawrence Grecco,” for racketeering conspiracy, a violent crime in aid of racketeering, extortion, sex trafficking, forced labor, tax evasion, and money laundering offenses.  After less than a day of deliberations, the unanimous jury convicted RAY of every count presented to the jury after a four-week trial before U.S. District Judge Lewis J. Liman. 

U.S. Attorney Damian Williams said:  “Twelve years ago, Larry Ray moved into his daughter’s dorm room at Sarah Lawrence College.  And when he got there, he met a group of friends who had their whole lives ahead of them.  For the next decade, he used violence, threats, and psychological abuse to try to control and destroy their lives.  He exploited them.  He terrorized them.  He tortured them.  Let me be very clear.  Larry Ray is a predator.  An evil man who did evil things. Today’s verdict finally brings him to justice.  This verdict would not have been possible without the victims who testified in court.  We are in awe of their bravery in the face of incredible trauma.  I also want to thank the career prosecutors in my Office, the Southern District of New York, and our law enforcement partners, who stood with those victims and worked tirelessly to ensure that justice was done.”

According to the Indictment and the evidence at trial:

From in or about 2010 through the present, LAWRENCE RAY, a/k/a “Lawrence Grecco,” the defendant, subjected a group of college students and other victims to sexual and psychological manipulation and physical abuse.  RAY’s tactics included sleep deprivation, psychological and sexual humiliation, verbal abuse, threats of physical violence, physical violence, threats of criminal legal action, alienating the victims from their families, and exploiting the victims’ mental health vulnerabilities. 

Through this manipulation and abuse, RAY extracted false confessions from the victims to causing purported damages to RAY and his family and associates, and then extorted payment for those purported damages through several means.  The victims made payments to RAY by draining their parents’ savings, opening credit lines, soliciting contributions from acquaintances, selling real estate ownership, and at RAY’s direction, performing unpaid labor for RAY and earning money through prostitution. 

Through fear, violence, and coercion, RAY forced one female victim to engage in commercial sex acts to pay damages to RAY that she did not actually owe.  Beginning when she was just a college student, RAY sexually groomed this victim, and collected sexually explicit photographs and other personal information which he then used to coerce her into continued commercial sex acts.  RAY also used physical violence.  On one occasion, RAY tied his victim to a chair, placed a plastic bag over her head, and nearly suffocated her.  RAY collected millions of dollars in forced prostitution proceeds from this victim.

In addition, RAY forced multiple victims to perform unpaid labor on a family member’s property in North Carolina.  Through a course of psychological and physical abuse, RAY forced these victims to do extensive physical labor, sometimes in the middle of the night, for no pay.

Associates of RAY helped RAY collect and transfer the criminal proceeds, which RAY shared with at least two associates.  RAY then laundered his criminal proceeds through an internet domain business and evaded paying taxes on his proceeds. 

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RAY, 62, of Piscataway, New Jersey, was returned to the custody of the U.S. Marshals following the return of the verdict.  RAY was convicted of the following crimes: racketeering conspiracy, which carries a maximum of life in prison; conspiracy to commit extortion, which carries a maximum sentence of 20 years in prison; extortion, which carries a maximum sentence of 20 years in prison; sex trafficking, which carries a maximum sentence of life in prison, and a mandatory minimum sentence of 15 years in prison; obtaining forced labor, which carries a maximum sentence of 20 years in prison; forced labor trafficking, which carries a maximum sentence of 20 years in prison; conspiracy to obtain forced labor, which carries a maximum sentence of 20 years in prison; violating the Travel Act, which carries a maximum sentence of five years in prison; four counts of tax evasion, each of which carries a maximum of 5 years in prison, and money laundering, which carries a maximum sentence of 20 years in prison.

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

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Danielle Sassoon, Mollie Bracewell, and Lindsey Keenan are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that PUNEET DIKSHIT, a former partner in McKinsey & Company, was sentenced today to 24 months in prison by U.S. District Judge Colleen McMahon.  DIKSHIT pled guilty on December 15, 2021, to one count of securities fraud in connection with his scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that The Goldman Sachs Group, Inc. – which DIKSHIT and McKinsey were advising – would be acquiring GreenSky, Inc. 

U.S. Attorney Damian Williams said:  “With today’s sentence, Puneet Dikshit must face the consequences of his egregious crime.  We will continue to vigorously protect the integrity of our capital markets and hold accountable those who cheat by trading on inside information.  This conviction shows Wall Street and Main Street that corporate advisors who steal information entrusted to them and use it for their personal gain will be caught and prosecuted.”

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

GreenSky was a publicly traded financial technology company that provided technology to banks and merchants to make loans to consumers for home improvement, solar, healthcare, and other purposes.  GreenSky’s common stock traded under the symbol “GSKY” on the NASDAQ.

Between November 2019 and July 2020, and again between April 2021 and September 2021, Goldman Sachs, the investment bank, engaged McKinsey, the management consulting firm, to provide services related to the potential acquisition of GreenSky by Goldman Sachs and the post-acquisition integration of GreenSky.  DIKSHIT was one of the McKinsey partners leading these engagements.  In that role, he had access to material nonpublic information, which he misappropriated and, in violation of the duties that he owed to Goldman Sachs and McKinsey, used to trade GreenSky call options. 

DIKSHIT engaged in this trading between July 26 and September 15, 2021 – at the same time he was leading the McKinsey team that was advising Goldman Sachs about its potential acquisition of GreenSky.  At various times between July 26 and September 13, 2021, DIKSHIT purchased and sold relatively small numbers of GreenSky call options, which had expiration dates weeks or months from the time of purchase.  However, in the two days before the September 15, 2021, public announcement that Goldman Sachs would be acquiring GreenSky, DIKSHIT sold all of these longer-dated GreenSky call options and purchased approximately 2,500 out-of-the-money GreenSky call options that were due to expire just a few days later, on September 17, 2021.  After the deal to purchase GreenSky was announced on September 15, 2021, DIKSHIT sold these options and realized profits of approximately $450,000.

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In addition to his prison sentence, DIKSHIT, 41, of New York, New York, was ordered to pay forfeiture in the amount of $455,017.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the U.S. Securities and Exchange Commission for its assistance and cooperation in this investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Joshua A. Naftalis and Matthew Podolsky are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALVIN MAXWELL pled guilty today to one count of conspiracy to commit wire fraud in connection with a scheme to fraudulently obtain over $30 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.  MAXWELL is the fifth defendant to plead guilty in the case.  Four other defendants—APOCALYPSE BELLA, a/k/a “Dias Yumba,” MACKENZY TOUSSAINT, a/k/a “Mack,” BRANDON JACKSON, and AMOS MUNDENDI, a/k/a “Mos,” a/k/a “El Ashile Mundi”—pled guilty earlier this year.  TOUSSAINT, JACKSON, and MUNDENDI each pled guilty to one count of conspiracy to commit wire fraud on March 8, March 30, and April 4, 2022, respectively.  BELLA pled guilty to one count of money laundering conspiracy on March 21, 2022.  All of the defendants pled guilty before U.S. District Judge Paul A. Engelmayer.

According to allegations in the Complaints, the Indictments, and the Superseding Information, filed in the case:

APOCALYPSE BELLA, a/k/a “Dias Yumba,” MACKENZY TOUSSAINT, a/k/a “Mack,” AMOS MUNDENDI, a/k/a “Mos,” a/k/a “El Ashile Mundi,” and ALVIN MAXWELL, were involved in an extensive scheme to prepare and submit fraudulent applications to the Small Business Administration (“SBA”) and to at least one company which processes loan applications under the SBA’s Paycheck Protection Program (“PPP”), in order to fraudulently obtain at least approximately $30 million in government-guaranteed loans for various companies through the PPP, designed to provide financial relief to qualifying companies during the COVID-19 pandemic. 

This scheme resulted in the approval of fraudulently procured loans for two companies (“Company-1” and “Company-2”), both located in the Southern District of New York, totaling approximately $4 million, and the distribution of the proceeds of these fraudulently obtained funds to a series of bank accounts located in the United States and elsewhere, including bank accounts controlled by TOUSSAINT and BELLA. 

The PPP loan applications for Company-1 and Company-2 were false, containing lies designed to maximize proceeds paid to the fraud scheme participants.  Specifically, applications for both Company-1 and Company-2 contained material differences from loan applications submitted for both companies for the Economic Injury Disaster Loan (“EIDL”) program just months earlier.  For instance, the PPP loan application for Company-1, dated on or about June 30, 2020, represented that Company-1 had over 100 employees.  However, an earlier EIDL loan application for Company-1, dated on or about March 30, 2020, represented that Company-1 had only four employees.

BELLA, TOUSSAINT, and MUNDENDI devised and executed this fraudulent scheme by conspiring with individuals who owned, operated or otherwise were affiliated with businesses, such as Company-1 and Company-2.

In addition, TOUSSAINT and JACKSON engaged in a scheme to submit fraudulent Economic Injury Disaster Loan (“EIDL”) applications, often through the use of synthetic identities (i.e., a fake name used in combination with true personal identifying information of another person).  JACKSON and TOUSSAINT frequently used Social Security Numbers belonging to minors as part of the synthetic identities created for use in the fraud scheme.  At least approximately $1.7 million in EIDL loan funds were disbursed as a result of this fraud scheme.

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TOUSSAINT, MUNDENDI, MAXWELL, and JACKSON, all residents of Texas, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years.  BELLA, an Oregon resident, pled guilty to one count of money laundering conspiracy, 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 defendants will be determined by the judge.

BELLA is scheduled to be sentenced at 10:30 a.m. on July 7, 2022.  TOUSSAINT is scheduled to be sentenced at 10:30 a.m. on June 16, 2022.  JACKSON is scheduled to be sentenced at 11:00 a.m. on August 17, 2022.  MAXWELL is scheduled to be sentenced at 11:00 a.m. on September 8, 2022.  MUNDENDI is scheduled to be sentenced at 11:00 a.m. on September 9, 2022.  Each of the defendants will be sentenced by U.S. District Judge Paul A. Engelmayer.

Mr. Williams praised the outstanding work of the FBI, SBA-OIG and IRS-CI.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging MELVILLE TEN CATE with tender offer fraud, securities fraud, and wire fraud in connection with several schemes on behalf of his company, Xcalibur Aerospace Ltd. (“Xcalibur”), including a fraudulent tender offer worth more than $14 billion.  TEN CATE remains at large.

U.S. Attorney Damian Williams said: “Fraudsters talk big and hope no one looks too closely at the bottom line. We allege Mr. ten Cate attempted to make his company look profitable and bluffed his way through the proposed purchase of a multi-billion dollar company. But it was all based on a lie. Instead of collecting on a hefty payday, he’s now facing serious federal charges.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The filing of this indictment alleges that ten Cate sold lies to raise cash - swindling investors and companies along the way through multiple fraud schemes. Time and time again this fraudster believed he could outsmart unwitting pools of investors, luring them with phony stock tenders and a variety of false promises.  Justice caught up with him and he is now facing charges for his criminal acts.  HSI will never stop in its mission to pursue these unscrupulous actors anywhere in the world to keep the public safe and to preserve and protect the American financial system.”

According to the allegations contained in the Indictment filed today in Manhattan federal court:

From in or about August 2019 until in or about November 2020, MELVILLE TEN CATE, the defendant, executed fraudulent schemes designed to induce others to invest in, or otherwise transfer money to, Xcalibur and TEN CATE.  First, TEN CATE attempted to secure $500 million in debt financing from U.S. banks and third-party debt issuers. In doing so, TEN CATE materially misrepresented Xcalibur’s business activities and finances to the banks and other potential investors, including by falsely claiming that Xcalibur’s financial records had been audited by an international accounting firm, that Xcalibur had outside investors, and that Xcalibur had cash reserves of almost £9.8 billion.

In a second scheme, in and about November 2020, TEN CATE placed an advertisement in a national newspaper (the “Newspaper”) in which he falsely claimed that Xcalibur had secured billions of dollars in financing and was making a tender offer to acquire a multibillion-dollar U.S. corporation (the “Target Company”).  In furtherance of his scheme to issue the false tender offer for the Target Company, TEN CATE sent fabricated payment confirmations to the Newspaper and to a New York, New York-based printer (the “Printer”) that TEN CATE had hired to file the false tender offer with the U.S. Securities and Exchange Commission (“SEC”).  The Newspaper published the false tender offer, but neither the Newspaper nor the Printer ever received payment and TEN CATE never completed the tender offer.    

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TEN CATE, 53, of Dubai, United Arab Emirates, is charged with one count of tender offer fraud, one count of securities fraud, and two counts of wire fraud.  TEN CATE faces a maximum sentence of 20 years’ imprisonment on each count.   

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

Mr. Williams praised the investigative work of HSI.  Mr. Williams also thanked the Securities & Exchange Commission, which brought a related civil action against TEN CATE that was filed today.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Kiersten A. Fletcher and Andrew Jones 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN SKOLNICK pled guilty today to child enticement and possession of child pornography.  SKOLNICK pled guilty today before U.S. District Judge Colleen McMahon who will also sentence the defendant.  

U.S. Attorney Damian Williams said: “Jonathan Skolnick, a teacher and former middle school associate principal, admitted today to reprehensible crimes connected to his coercing of own students, minor children, to sending him nude photos of themselves. No parent should ever need to worry about the safety of their children from child predators when sending them off to school; I commend our law enforcement partners for their efforts in bringing Skolnick’s career as an educator to an end.”  

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

Between in or around August 2012 and in or around June 2018, SKOLNICK worked as a high school teacher at a school in Brooklyn, New York (“School-1”).  In or around July 2018, SKOLNICK became an associate principal at a middle school in the Bronx, New York (“School-2”), where he worked until in or around September 2019. 

Over the course of approximately seven years, SKOLNICK induced, enticed, and coerced minor children (the “Minor Victims”) to send him nude and sexually explicit photographs and videos of themselves over the Internet.  SKOLNICK abused his position of trust as a teacher and mentor at School-1 and School-2 in order to access Minor Victims. 

Between in or around 2012 and in or around September 2019, the Minor Victims sent SKOLNICK nude and sexually explicit photographs and videos that he possessed.

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SKOLNICK, 39, of the Bronx, New York, pled guilty to: (1) one count of child enticement, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and (2) one count of possession of child pornography, which carries a maximum sentence of 10 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Sentencing is scheduled for September 22, 2022.

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. 

Damian Williams, the United States Attorney for the Southern District of New York, today announced the appointment of Andrea Griswold as Chief Counsel to the United States Attorney. 

Since March 2013, Ms. Griswold has served as an Assistant U.S. Attorney in the Southern District of New York.  Since June 2020, she has served as the Deputy Chief and then Co-Chief of the Securities and Commodities Fraud Task Force.  Prior to assuming a supervisory position in that unit, Ms. Griswold investigated and prosecuted a wide variety of significant securities fraud and public corruption cases, and also served as an Acting Chief of the Narcotics Unit.  Prior to her public service, she worked for more than five years as an associate at Simpson Thacher & Bartlett.  Ms. Griswold received her B.A. from Georgetown University and her J.D. from New York University School of Law.   

In making the appointment, U.S. Attorney Damian Williams said: “I am thrilled to have Andrea Griswold join my senior leadership team as Chief Counsel to the United States Attorney.  Andrea is a star.  She is a brilliant lawyer, a natural leader, and a wise counselor.  I am confident that she will bring her trademark excellence to this new role.”    

Ms. Griswold will continue to serve as Co-Chief of the Securities and Commodities Fraud Task Force for the next several months as she transitions into her new position.

Damian Williams, the United States Attorney for the Southern District of New York, Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), Keechant L. Sewell, Commissioner of the New York City Police Department (“NYPD”), and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of an Indictment charging KAI JOHNSON with racketeering conspiracy, murder in aid of racketeering, attempted murder and assault with a deadly weapon in aid of racketeering, being a felon in possession of ammunition, and firearms offenses, relating to JOHNSON’s participation in: (1) the murders of Price Tunstall and Malik Tunstall in the vicinity of the James Monroe Houses in the Bronx on August 31, 2021; and (2) a non-fatal shooting of a 16-year-old in the vicinity of the James Monroe Houses in the Bronx on April 4, 2021.

JOHNSON was already in state custody relating to other charges and will be presented today before Magistrate Judge Sarah L. Cave.  The case is assigned to U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams said:  “As alleged in the indictment, the defendant is responsible for the cold-blooded murders of Price Tunstall and Malik Tunstall, just a few months after shooting and injuring a 16-year-old in the same neighborhood.  We continue our daily work with our law enforcement partners to keep our communities safe and to vigorously investigate and prosecute those who bring violence to our streets.”

HSI Acting Special Agent-in Charge Ricky J. Patel said:  “It is alleged that Johnson participated in multiple shootings in and around public housing facilities in the Bronx, including a double murder. The residents of New York City’s public housing developments deserve a safe living space, free from violence and the influence of dangerous gang members’ desire to instill fear throughout the community. This indictment against Johnson is an example of bringing the strength of federal racketeering statutes in the fight to secure the streets of New York and stem the tide of violence plaguing the citizens of New York City. HSI is proud to partner in this fight with our colleagues at the United States Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York City Department of Investigation.”

NYPD Commissioner Keechant L. Sewell said:  “At a time of rising violent crime, increasing numbers of shootings, and too many young people victimized by illegal guns, today’s federal indictment illustrates the NYPD’s commitment to using the combined strength of all of our tools to help New Yorkers, hold trigger-pullers accountable, and attain justice for victims. We commend our investigators, our federal law enforcement partners and the work of the prosecutors of the United States Attorney’s Office in the Southern District of New York for their sustained work in this important case.”   

DOI Commissioner Jocelyn E. Strauber said:  “Gang violence terrorizes New Yorkers and destabilizes communities.  The allegations in this Indictment make clear the dangerous impact of gang warfare in the Soundview neighborhood of the Bronx and the critical need to protect all of New York City’s neighborhoods.  I am proud that DOI’s partnership with the United States Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York Office of Homeland Security Investigations led to these charges, and we will continue to work together with our law enforcement partners to prioritize and promote public safety.” 

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

KAI JOHNSON is a member or associate 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 assault; conspired to distribute and possess with intent to distribute narcotics; and obtained, possessed and used firearms, including by brandishing and discharging them. 

On August 31, 2021, JOHNSON murdered Malik Tunstall and Price Tunstall in the vicinity of 805 Taylor Avenue in the Bronx, New York.

On April 4, 2021, JOHNSON shot at rival gang members in the vicinity of 877 Taylor Avenue in the Bronx, New York, which resulted in a 16-year-old being grazed in the head with a bullet.

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JOHNSON, 27, is charged with one count of racketeering conspiracy, which carries a statutory maximum sentence of life in prison; two counts of murder in aid of racketeering, which carries a statutory maximum sentence of the death penalty or life in prison, and a mandatory minimum sentence of life in prison; two counts of murder through use of a firearm, which carries a statutory maximum sentence of the death penalty or life in prison, and a mandatory minimum sentence of five years in prison; two counts of being a felon in possession of ammunition, which carries a statutory maximum of ten years in prison; and one count of using and carrying a firearm in furtherance of a crime of violence, which was brandished and discharged, which carries a statutory maximum of life in prison and a mandatory minimum sentence of ten years in prison. 

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

Mr. Williams praised the investigative work of HSI, DOI, and the NYPD.

This case is being handled by the Office’s Violent & Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Emily A. Johnson, and Justin V. Rodriguez 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.

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[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.

Damian Williams, United States Attorney for the Southern District of New York, Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Ricky J. Patel, Acting Special Agent-in-Charge of Homeland Security Investigations (“HSI”) in New York, announced the unsealing of a fifteen-count indictment today charging ten individuals—ANDREW DONE, a/k/a “Caballo,” VICTOR ALMONTE, a/k/a “Flaco Capone,” MOISES FONTANEZ, a/k/a “Goya,” OLBENY DIAZ, a/k/a “Sosbrito,” FRAILYN CAPELLAN, a/k/a “Frek,” JOEL ORTIZ, a/k/a “Brooklyn,” EDWIN JIMENEZ, a/k/a “Pac,” MALVIN RESTITUYO, a/k/a “Puto,” and ANDERSON BURDIER, a/k/a “Canela,” and JOSEPH RIVERA, a/k/a “Shorty,”—with racketeering conspiracy, murder, attempted murder, firearms offenses, and narcotics conspiracy.  The defendants are charged for their roles in the “Shooting Boys” gang and an associated narcotics conspiracy.  Among other crimes, DONE is charged for the November 5, 2020 murder of Angel Barreiro in the Bronx.  The crimes charged against each of the ten defendants are specified in the chart below.  The case is assigned to United States District Judge Jed S. Rakoff. 

In a coordinated operation, eight defendants were arrested in New York and Pennsylvania earlier this morning.  The defendants arrested in New York will be presented later this afternoon before U.S. Magistrate Judge Sarah L. Cave in Manhattan federal court.  CAPELLAN will be presented in federal court in Philadelphia.  FONTANEZ was in custody on state charges and was transferred to federal custody today.  DONE and ALMONTE remain at large.

U.S. Attorney Damian Williams said:  “As alleged, the ‘Shooting Boys’ are responsible for a rampage of violence in the Bronx, including a murder and several other shootings.  Today’s arrests will protect the public from these defendants and send a message to others who would commit violence:  law enforcement is watching and you will be prosecuted.”   

NYPD Commissioner Keechant L. Sewell said:  “Dismantling gangs and targeting the illegal acts associated with their activities continues to be one of the highest priorities for the NYPD and our law enforcement partners. Today’s charges again show that we are accurately identifying and arresting the relatively small percentage of people responsible for the majority of the violence in New York – and we will remain relentless in our pursuit of meaningful consequences for these criminals.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said:  “The allegations in these indictments show the unrepentant violence of the ‘Shooting Boys’ and their complete disregard for human life. Today, members of violent gangs are put on notice that HSI and the New York City Police Department will not sit idly by as gangs and violent criminals terrorize our communities.  HSI will continue the mission to dismantle violent criminal gangs, and along with the NYPD and its partners, will work together to eradicate the fear caused by these organizations.”

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

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

The “Shooting Boys” sold crack, cocaine, heroin, and marijuana primarily in two areas:  near 192nd Street and Aqueduct Avenue, and 155 Father Zeiser Place in the Bronx.  Only members of the “Shooting Boys” and those authorized by them were permitted to sell drugs in these locations and the gang protected its drug territory through violence and intimidation relying primarily on the use of firearms.

In addition to multiple non-fatal acts of violence against rival gang members and innocent bystanders, the rivalry between the “Shooting Boys” and other chapters of the “Trinitarios” led to the murder of Angel Barreiro, a/k/a “Jay La Sombra” on November 5, 2020. The indictment alleges that DONE shot and killed Barreiro opposite 1365 Cromwell Avenue in the Bronx. 

*              *             *

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

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

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

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

CHARGE

DEFENDANTS

MAXIMUM/MINIMUM PENALTIES

Count One

Racketeering Conspiracy

18 U.S.C. § 1962(d)

 

ANDREW DONE,

VICTOR ALMONTE,

MOISES FONTANEZ,

OLBENY DIAZ,

FRAILYN CAPELLAN,

JOEL ORTIZ,

EDWIN JIMENEZ,

MALVIN RESTITUYO, and

ANDERSON BURDIER

Maximum as to all defendants except RESTITUYO: Life in prison

Maximum as to RESTITUYO: 20 years in prison

 

 

Count Two

Murder in Aid of Racketeering

18 U.S.C. § 1959(a)(1)

 

ANDREW DONE

 

Mandatory life in prison or death

 

Count Three

Murder through Use of a Firearm

18 U.S.C. § 924(j)

 

ANDREW DONE

 

Maximum: Life in prison or death

Minimum: 5 years in prison, which much be consecutive to any other term imposed.

Count Four

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

18 U.S.C. §§ 1959(a)(5), 1959(a)(6), 1959(a)(3)

ANDREW DONE

VICTOR ALMONTE

FRAILYN CAPELLAN

 

Maximum: 20 years in prison

Count Five

Firearms Offense

18 U.S.C. § 924(c)

ANDREW DONE

VICTOR ALMONTE

FRAILYN CAPELLAN

 

Maximum: Life in prison

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

Count Six

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

18 U.S.C. §§ 1959(a)(5), 1959(a)(6), 1959(a)(3)

OLBENY DIAZ

Maximum: 20 years

Count Seven

Firearms Offense

18 U.S.C. § 924(c)

OLBENY DIAZ

Maximum: Life in prison

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

 

Count Eight

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

18 U.S.C. §§ 1959(a)(5), 1959(a)(3)

MALVIN RESTITUYO

Maximum: 20 years

Count Nine

Firearms Offense

18 U.S.C. § 924(c)

MALVIN RESTITUYO

Maximum: Life in prison

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

 

Count Ten

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

18 U.S.C. §§ 1959(a)(5), 1959(a)(3)

MOISES FONTANEZ

Maximum: 20 years

Count Eleven

Firearms Offense

18 U.S.C. § 924(c)

MOISES FONTANEZ

Maximum: Life in prison

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

 

Count Twelve

Assault with a Dangerous Weapon in Aid of Racketeering

18 U.S.C. § 1959(a)(3)

ANDREW DONE

MOISES FONTANEZ

OLBENY DIAZ

JOEL ORTIZ

Maximum: 20 years

Count Thirteen

Firearms Offense

18 U.S.C. § 924(c)

 

ANDREW DONE

MOISES FONTANEZ

OLBENY DIAZ

JOEL ORTIZ

 

Maximum: Life in prison

Minimum: 7 years in prison, which much be consecutive to any other term imposed.

 

Count Fourteen

Narcotics Conspiracy

21 U.S.C. § 846, 841(b)(1)(A), 841(b)(1)(C), 841(b)(1)(D),

 

ANDREW DONE

VICTOR ALMONTE

MOISES FONTANEZ

OLBENY DIAZ

FRAILYN CAPELLAN

JOEL ORTIZ

EDWIN JIMENEZ

ANDERSON BURDIER

JOSEPH RIVERA

 

Maximum: Life in prison

Minimum: 10 years in prison

 

Count Fifteen

Firearms Offense

18 U.S.C. § 924(c)

 

ANDREW DONE

VICTOR ALMONTE

MOISES FONTANEZ

OLBENY DIAZ

FRAILYN CAPELLAN

JOEL ORTIZ

EDWIN JIMENEZ

ANDERSON BURDIER

JOSEPH RIVERA

 

Maximum: Life in prison

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

 

 

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

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that NACHMAN HELBRANS and MAYER ROSNER were sentenced today to 12 years in prison for child sexual exploitation offenses and kidnapping.  The defendants, leaders of an extremist religious sect called Lev Tahor, masterminded a scheme to kidnap a 14-year-old girl (“Minor-1”) and a 12-year-old boy (“Minor-2”) from their mother in Woodridge, New York.  The defendants then smuggled the children across the U.S. border to Mexico, where they reunited Minor-1 with her adult “husband” to allow him to continue his illegal sexual relationship with Minor-1.  HELBRANS and ROSNER were convicted in November 2021 following a four-week jury trial before U.S. District Judge Nelson S. Román. 

U.S. Attorney Damian Williams stated: “No mother should ever have to wake up to find her children missing.  And no child should ever be forced into a sexual relationship.  Today’s sentencings send a clear message: those who kidnap and sexually exploit children will be prosecuted and punished to the full extent of the law.”

According to the allegations contained in the Superseding Indictment, other court filings, and the evidence presented at trial:

NACHMAN HELBRANS and MAYER ROSNER are U.S. citizens and senior leaders of Lev Tahor, an extremist religious sect that has been located in several different jurisdictions, including New York, Israel, Canada, Mexico, and Guatemala.  HELBRANS became the leader of Lev Tahor in or about 2017 and ROSNER served as a top lieutenant.  After HELBRANS and his leadership team took over, they seized tight control over the group and embraced several extreme practices, including child marriages and underage sex.

In or about 2017, HELBRANS arranged for his then-12-year-old niece, Minor-1, to be “married” to a then-18-year-old man.  Though they were never legally married, they were religiously “married” the following year, when Minor-1 was 13 and her “husband” was 19.  Lev Tahor leadership, including HELBRANS and ROSNER, required young brides such as Minor-1 to have sex with their husbands, to tell people outside Lev Tahor that they were not married, and to lie about their ages.  For example, HELBRANS and ROSNER instructed child brides to  deliver babies inside their homes instead of at a hospital, to conceal the mothers’ young ages from outsiders.

In or about October 2018, the mother of Minor-1 determined that it was no longer safe for her children to remain in the Lev Tahor community, which was then living in Guatemala.  The mother escaped from the group’s compound and arrived in the United States in early November 2018, and was eventually joined by all six of her children, including Minor-1.  Also in November 2018, a Brooklyn family court granted her sole custody of the children and prohibited the children’s father, a leader within Lev Tahor, from communicating with the children.

After the mother fled and settled in New York with her children, HELBRANS and ROSNER devised a plan to kidnap Minor-1, then 14 years old, to return her to Guatemala and to her then-20-year-old “husband.”  In December 2018, they kidnapped Minor-1 and her brother in the middle of the night from a home in upstate New York and transported them through various states and, eventually, to Mexico.  In order to carry out the kidnapping, the defendants used disguises, aliases, drop phones, fake travel documents, and an encrypted application.  At the time of the kidnapping, Lev Tahor leadership was seeking asylum for the entire Lev Tahor community in the Islamic Republic of Iran. 

Following a three-week search involving hundreds of local, federal, and international law enforcement entities, Minor-1 and Minor-2 were recovered in Mexico and returned to New York.  In or about March 2019 and March 2021, members of Lev Tahor again tried to kidnap the children but were unsuccessful.

*          *          *

In addition to the prison sentences, NACHMAN HELBRANS, 40, and MAYER ROSNER, 45, were sentenced to five years of supervised release.

Mr. Williams praised the outstanding work of the FBI, the New York State Police, the Sullivan County District Attorney’s Office, United States Customs and Border Protection, the Rockland County Sheriff’s Department, the Village of Spring Valley Police Department, Special Agents with the U.S. Attorney’s Office for the Southern District of New York, the Department of State, the Transportation Security Administration, and our law enforcement partners in Mexico, Guatemala, Canada, and Israel.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Sam Adelsberg, Jamie Bagliebter, Jim Ligtenberg, and Daniel Tracer, and paralegal specialist Shannon Becker, are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, Tim Foley, the Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Kirk Imperati, the Acting Sheriff of the Dutchess County Sheriff’s Office, announced today the unsealing of a criminal complaint in White Plains federal court charging ALLEN PELOQUIN, a/k/a “Ace,” with distributing fentanyl-laced heroin that resulted in the death of a woman in Carmel, New York (“Victim-2”) on or about February 12, 2020 and a man in Poughkeepsie, New York (“Victim-4”) on or about May 10, 2020.  The complaint also charges PELOQUIN with participating in a narcotics conspiracy that distributed fentanyl-laced heroin that resulted in the deaths of Victims-2 and -4 as well as in the death of a man in Poughquag, New York (“Victim-1”) on or about January 2, 2020 and the death of a woman in Poughkeepsie, New York (“Victim-3”) on or about May 4, 2020.  PELOQUIN was arrested this morning in Poughkeepsie, New York, and was presented this afternoon before United States Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As alleged, the defendant and others distributed heroin laced with the deadly synthetic opioid fentanyl and caused the death of four victims.  The defendant is now in custody and facing serious federal charges.  Working with our state, county, and local law enforcement partners, we will continue to hold accountable the dealers who push this lethal poison, exploit addiction, and further the devastating impact of the opioid crisis in our communities.”

DEA Acting Special Agent-in-Charge Tim Foley said: “With a daily rate of nearly 300 drug overdose deaths, it has never been more important to warn the public of the dangers of today’s illegal drugs.  Synthetic drugs like fentanyl are mixed intentionally with other street drugs causing two thirds of overdose deaths.  I applaud the diligent work by all of our law enforcement partners throughout this investigation which has led to Peloquin’s arrest.”

Acting Dutchess County Sheriff Kirk Imperati said: “The prosecution of Mr. Peloquin in connection with these tragic deaths comes as the result of the partnership between various law enforcement agencies and their strong commitment to holding those who sell drugs in our communities responsible.  Distributing illegal narcotics that take lives, and ruin others, will not be tolerated and the prosecution of Mr. Peloquin sends a strong message that law enforcement will stop at nothing to hold those who engage in this activity accountable.”

As alleged in the Complaint:[1]

From at least in or about January 2020 up to and including at least in or about May 2020, PELOQUIN and others distributed and sold fentanyl-laced heroin throughout Dutchess County in glassine bags stamped with distinctive red images and wording and were responsible for the overdose deaths of at least four individuals:  Victims-1, -2, -3 and -4.  After the deaths of Victims-1 and -2, the wording and image of the red stamp changed in an apparent effort to evade law enforcement while continuing to distribute the same lethal narcotics.  Upon further investigation by law enforcement—including several undercover purchases of fentanyl-laced heroin from PELOQUIN and certain of his co-conspirators in which the stamps on the bags purchased matched those on the bags found with Victims-1 and -2—PELOQUIN was identified as the particular dealer who sold fold fentanyl-laced heroin to Victims-2 and -4, which resulted in their deaths.

*                *                *

ALLEN PELOQUIN, a/k/a “Ace,” 34, of Poughkeepsie, New York is charged with two counts of narcotics distribution resulting in the deaths of Victim-2 and Victim-4.  PELOQUIN is also charged with one count of conspiring to distribute and possess with intent to distribute fentanyl and heroin resulting in the deaths of Victims-1, -2, -3, and -4.  Each the foregoing counts carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the DEA, the Dutchess County Drug Task Force (“DCDTF”), the Dutchess County District Attorney’s Office, the New York State Police, the Town of Kent Police Department, the City of Poughkeepsie Police Department, the Dutchess County Probation Department, and the Putnam County Sheriff’s Office.  DCDTF includes agents and officers of the Dutchess County Sheriff’s Office, the City of Beacon Police Department, the Town of Hyde Park Police Department, and the Town of East Fishkill Police Department.  Mr. Williams also thanked the Ulster County Sheriff’s Office, the Town of Lloyd Police, and the Ulster County Regional Gang Enforcement Narcotics Team (“URGENT”) for their invaluable assistance in this case.  URGENT includes agents and officers of the Ulster County Sheriff’s Office, Town of Lloyd Police, Town of Plattekill Police, Town of Woodstock Police, Town of Shandaken Police, Town of New Paltz Police, Village of Ellenville Police, Town of Marlborough Police, the Ulster County District Attorney, and Ulster County Probation.  Mr. Williams noted that the investigation is ongoing.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Michael D. Maimin and Kevin Sullivan are in charge of the prosecution.

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

 

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

Attorney General Merrick B. Garland today announced the appointment of 12 U.S. Attorneys to serve on the Attorney General’s Advisory Committee of U.S. Attorneys (AGAC). Created in 1973, the AGAC advises the Attorney General on matters of policy, procedure, and management impacting the Offices of the U.S. Attorneys and elevates the voices of U.S. Attorneys in Department policies. The first meeting of the AGAC will take place later this spring.

The appointees include U.S. Attorney Damian Williams for the Southern District of New York; U.S. Attorney Cindy K. Chung for the Western District of Pennsylvania; U.S. Attorney Darcie McElwee for the District of Maine; U.S. Attorney Trini Ross for the Western District of New York; U.S. Attorney Sandra Hairston for the Middle District of North Carolina; U.S. Attorney Brandon Brown for the Western District of Louisiana; U.S. Attorney Dawn Ison for the Eastern District of Michigan; U.S. Attorney Gregory Harris for the Central District of Illinois; U.S. Attorney Andrew Luger for the District of Minnesota; U.S. Attorney Gary Restaino for the District of Arizona; U.S. Attorney Cole Finegan for the District of Colorado; and U.S. Attorney Matthew Graves for the District of Columbia. An appointee from a district within the jurisdiction of the Eleventh Circuit of the U.S. Court of Appeals will be announced at a later date, once the Senate has confirmed nominees.

U.S. Attorney Damian Williams will serve as the Chair of the AGAC, and U.S. Attorney Cindy Chung will serve as the Vice Chair.

Attorney General Merrick B. Garland said: “These United States Attorneys will represent the views of dedicated federal prosecutors across the country, and provide advice and insight into essential matters facing the Department. I look forward to working alongside them in carrying out the Department’s core priorities of upholding the rule of law, keeping our country safe, and protecting civil rights.”

Attorney General Advisory Committee Chair Damian Williams said: “I am honored and humbled to accept Attorney General Garland’s appointment as Chair of this vital committee. I look forward to the opportunity to offer insight, along with my outstanding U.S. Attorney colleagues around the country, to continue to ensure that the rule of law is carried out fairly and equally for all Americans.”

A brief bio on each appointee is below:

Damian Williams (Chair)

The Senate confirmed Damian Williams’ appointment as U.S. Attorney for the Southern District of New York in October 2021. Williams began his legal career as a law clerk to then-Judge Merrick Garland when he served in the U.S. Court of Appeals for the District of Columbia Circuit from 2007 to 2008. Williams then served as a law clerk for Justice John Paul Stevens of the U.S. Supreme Court from 2008 to 2009. From 2009 to 2012, he was a litigation associate at Paul, Weiss, Rifkind, Wharton & Garrison. From 2012 to 2021, he served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Southern District of New York. In the role, he served as a chief of the securities and commodities fraud task force from 2018 to 2021. He received his Bachelor of Arts in economics from Harvard University in 2002, a Master of Philosophy in international relations from Emmanuel College at the University of Cambridge in 2003, and a Juris Doctor from Yale Law School in 2007, where he was also an editor of the Yale Law Journal.

Cindy K. Chung (Vice Chair)

The Senate confirmed Cindy K. Chung’s appointment as U.S. Attorney for the Western District of Pennsylvania in November 2021. In 2002 and 2003, Chung served as a law clerk for Judge Myron H. Thompson in the Middle District of Alabama. She then joined the New York County District Attorney’s Office in 2003, serving as an assistant district attorney until 2007 and as investigation counsel in the Official Corruption Unit from 2007 to 2009. From 2009 to 2014, Chung served as a trial attorney in the U.S. Department of Justice Civil Rights Division. She later joined the U.S. Attorney’s Office for the Western District of Pennsylvania, serving as deputy chief of the major crimes division. From 2014 to 2021, she served as an Assistant U.S. Attorney. Chung earned a Bachelor of Arts from Yale University in 1997 and a Juris Doctor from Columbia Law School in 2002.

Darcie McElwee

The Senate confirmed Darcie McElwee’s appointment as U.S. Attorney for the District of Maine in October 2021. McElwee began her legal career as an assistant district attorney for the Penobscot and Piscataquis counties in Maine from 1998 to 2002. Between 2005 and 2008, McElwee was an adjunct professor of advanced trial advocacy at the University of Maine School of Law. From 2002 to 2021, she served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Maine. Since 2005, she has been the coordinator of Project Safe Neighborhoods. McElwee received her Bachelor of Arts from Bowdoin College in 1995 and her Juris Doctor from the University of Maine School of Law in 1998.

Trini Ross

The Senate confirmed Trini Ross’s appointment as U.S. Attorney for the Western District of New York in September 2021. Ross began her career as an appellate attorney for the New York Supreme Court. She was an associate at Hiscock & Barclay LLC before joining the Office of Professional Responsibility as assistant counsel. From 1995 to 2018, Ross served as an Assistant U.S. Attorney for the Western District of New York. She has also been an adjunct professor of law at Buffalo Law School. She has also served as director of the investigations for the National Science Foundation Office of Inspector General since 2018. Ross earned a Bachelor of Arts degree from the State University of New York at Fredonia in 1988, a Master of Arts from Rutgers University in 1990, and a Juris Doctor from the University at Buffalo Law School in 1992.

Sandra Hairston

The Senate confirmed Sandra Hairston as U.S. Attorney for the Middle District of North Carolina in November 2021. Hairston previously served as an assistant district attorney in Columbus County, North Carolina, from 1987 to 1989 and as a special assistant district attorney in Guilford County, North Carolina from 1989 to 1990. From 1994 to 1996, she served as Chief of the Criminal Division of the U.S. Attorney’s Office for the Eastern District of North Carolina before returning to the Middle District of North Carolina in 1996. She joined the U.S. Attorney’s Office for the Middle District of North Carolina in 1990 as an Assistant U.S. Attorney. Hairston previously held the position of First Assistant U.S. Attorney for the Middle District of North Carolina from 2014 to 2021. From March 1, 2021, until her Senate confirmation, she served as the Acting U.S. Attorney for the Middle District of North Carolina. Hairston received her Bachelor of Arts from the University of North Carolina at Charlotte in 1981 and her Juris Doctor from North Carolina Central University School of Law in 1987.

Brandon Brown

The Senate confirmed Brandon Brown as U.S. Attorney for the Western District of Louisiana in December 2021. From 2007 to 2012, Brown served as an assistant prosecuting attorney in the Ouachita Parish District Attorney’s Office. He was also an associate at Hammonds, Sills, Adkins & Guice LLP in Baton Rouge, Louisiana. Since 2012, he has served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Western District of Louisiana. Brown earned a Bachelor of Arts in 2002 and a Master of Business Administration in 2004 from Louisiana Tech University, followed by a Juris Doctor in 2007 from the Southern University Law Center.

Dawn Ison

The Senate confirmed Dawn Ison as U.S. Attorney for the Eastern District of Michigan in December 2021. In 1989 and 1990, Ison was a prehearing attorney for the Michigan Court of Appeals. In 2002, Ison began serving as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the Eastern District of Michigan. She also served as chief of the Drug Enforcement Task Force Unit. Ison earned a Bachelor of Arts from Spelman College and a Juris Doctor from the Wayne State University Law School.

Gregory Harris

The Senate confirmed Gregory Harris as U.S. Attorney for the Central District of Illinois in December 2021. Harris began his career as a lawyer for the Office of the State Appellate Defender in 1976 where he represented indigent criminal defendants on appeal. From 1979 to 1980, he served as legal counsel for the Illinois Governor’s Office of Manpower and Human Development and later as a staff attorney for the Illinois Department of Commerce and Community Development. From 1980 to 1988, he served as an Assistant U.S. Attorney in the U.S Attorney’s Office for the Central District of Illinois. From 1988 to 2001, he was a lawyer for Giffin, Winning, Cohen & Bodewes in Springfield, Illinois. He later rejoined the Central District of Illinois in 2001, where he served as chief of the Criminal Division and Assistant U.S. Attorney. Harris was born in Washington, D.C. He earned a Bachelor of Arts degree from Howard University in 1971 and a Juris Doctor from the University of Illinois Chicago School of Law in 1976.

Andrew Luger

The Senate confirmed Andrew Luger as the U.S. Attorney for the District of Minnesota in March 2022. He previously served in that role during the Obama administration and briefly during the Trump administration from 2014 to 2017. Prior to his appointment, Luger was a partner in the Minneapolis office of Jones Day from 2017 – 2022. Luger has also served as an Assistant U.S. Attorney for the Eastern District of New York, from 1989 to 1992, and for the District of Minnesota from 1992 to 1995, where he prosecuted a wide variety of narcotics and violent crimes, as well as complex white collar frauds. In 1995, Luger joined the law firm of Greene Espel in Minneapolis, where he was a partner until 2014. Luger earned a Bachelor’s degree from Amherst College and a Juris Doctor from Georgetown University Law Center.

Gary Restaino

The Senate confirmed Gary Restaino as U.S. Attorney for the District of Arizona in November 2021. From 1991 to 1993, Restaino served in Paraguay with the Peace Corps. From 1996 to 1999, he provided legal services to seasonal farm workers as a lawyer with Community Legal Services. From 1999 to 2003, he served as a civil rights lawyer in the Arizona Attorney General's Office. He then served as a trial attorney in the Public Integrity Section of the U.S. Department of Justice’s Criminal Division. Restaino joined the U.S. Attorney's Office for the District of Arizona in 2003. He was nominated to serve as U.S. Attorney in October 2021. Restaino earned a Bachelor of Arts degree from Haverford College in 1990 and a Juris Doctor from the University of Virginia School of Law in 1996.

Cole Finegan

The Senate confirmed Cole Finegan as U.S. Attorney for the District of Colorado in November 2021. From 1991 to 1993, Finegan served both as Chief Legal Counsel and Director of Policy and Initiatives for Colorado Governor Roy Romer. From 1993 to 2003, Finegan was a partner for Brownstein Hyatt Farber Schreck’s Denver office. Finegan joined Hogan Lovells (then Hogan & Hartson) in 2007 as a partner. Finegan acted as an adviser to Governor Hickenlooper and U.S. Senator Michael Bennet. Finegan attended the University of Notre Dame from 1974 to 1978, earning a degree in English. Finegan earned a Juris Doctor from Georgetown University Law Center in 1986.

Matthew Graves

The Senate confirmed Matthew Graves as U.S. Attorney for the District of Columbia in October 2021. After graduating law school, Graves began his legal career as a law clerk for Judge Richard W. Roberts of the U.S. District Court for the District of Columbia. From 2002 to 2007, he was an associate at WilmerHale. From 2007 to 2016, Graves worked as an Assistant U.S. Attorney in the District of Columbia, where he served in the office’s fraud and public corruption section, ultimately serving as the acting chief of the section. Since 2016, he has been a partner at DLA Piper. Graves earned a Bachelor of Arts degree from Washington and Lee University in 1998 and a Juris Doctor from Yale Law School in 2001.

Damian Williams, the United States Attorney for the Southern District of New York, and Patrick Freaney, Special Agent-in-Charge of the New York Field Office of the United States Secret Service (“USSS”), announced the indictment of UWEMEDIMO UMOREN in connection with his role in a fraud and money laundering conspiracy based in Nigeria, involving the theft of millions of dollars from victims across the United States.  UMOREN was previously arrested in Georgia on December 17, 2021.  

U.S. Attorney Damian Williams said:  “Uwemedimo Umoren, as alleged, was a member of a multimillion-dollar fraud enterprise built on the cruel exploitation of elder adults. Among other tactics, members of Umoren’s prolific fraud scheme posed as romantic interests to their victims, with the sole purpose of syphoning their bank accounts. We thank our outstanding law enforcement partners at the United States Secret Service for their continued vigilance in the effort to protect elder Americans from fraud.”      

Secret Service Special Agent-in-Charge Patrick Freaney said:  “As alleged, the defendant participated in multiple fraud schemes, including romance and investment scams that targeted some of our most vulnerable community members, the elderly.  While the defendant in this case will answer the charges brought against him in the Southern District of New York, the threat posed by those who seek to financially victimize the elderly persists.  Although elder fraud endures, the U.S. Secret Service remains vigilant in identifying and investigating those who wish to defraud the elder population out of their retirements and savings.”

According to allegations in the criminal complaint and the indictment filed against UMOREN:[1]

From at least in or about 2016 through at least in or about December 2021, the defendant was a member of a criminal enterprise (the “Enterprise”) based in Nigeria that committed a series of business email compromises and investment and romance scams against individuals and businesses located across the United States.  The objective of the Enterprise’s business email compromise fraud scheme was to trick and deceive businesses and individuals 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 conducted the investment scams by contacting victims by phone and email regarding purported investment opportunities that the members of the Enterprise said could generate millions of dollars in returns.  Finally, the Enterprise conducted the 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, they used false pretenses to cause the victims to transfer money to bank accounts controlled by members of the Enterprise.

UMOREN received fraud proceeds from victims of the Enterprise in more than a dozen business bank accounts that he controlled in Georgia.  The business bank accounts were opened in the names of companies formed by the defendant that were purportedly involved in, among other things, automobile sales and health care.  From in or about 2016 through at least in or about December 2021, UMOREN controlled at least 15 bank accounts that received deposits totaling over approximately $8 million. 

Once UMOREN received fraud proceeds in bank accounts under his control, he withdrew, transported, and laundered those fraud proceeds to other members of the Enterprise abroad.  The defendant laundered the fraud proceeds through his businesses by, among other things, using the proceeds to purchase automobiles and other goods from U.S.-based suppliers and distributors of such products and shipping those products to Nigeria and elsewhere.  The defendant’s transactions had the appearance of legitimate business transactions when, in fact, the products had been purchased using the proceeds of fraud schemes.  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. 

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UWEMEDIMO UMOREN, 60, of Hoschton, Georgia, is charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; and one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison.  The case is assigned to U.S. District Judge Victor Marrero.

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

Mr. Williams praised the outstanding investigative work of the USSS.  Mr. Williams also thanked the USSS Field Office in Atlanta, Georgia, for its assistance in the investigation of this case.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Juliana N. Murray is in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that FREEMAN CELVIN, a/k/a “Celvin Freeman,” was convicted today of all seven criminal counts he was charged with for his participation in a fraud and money laundering conspiracy based in the Republic of Ghana (“Ghana”) involving the theft of millions of dollars.  CELVIN was convicted after a jury trial before U.S. District Judge Jed S. Rakoff which lasted approximately one week.  CELVIN was previously arrested on February 17, 2021 and has been detained since his arrest.  

U.S. Attorney Damian Williams said:  “As today’s jury verdict reflects, Freeman Celvin used an auto business in New Jersey as a front to launder millions of dollars in fraud proceeds to online 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.  Together with our law enforcement partners, we will continue to zealously prosecute online scammers abroad and the U.S.-based money launderers they work in order to protect American victims from these scams.”    

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 (the “Enterprise”) based in Ghana 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.  First, 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.  Second, the Enterprise conducted the 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 proceeds 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 when, in fact, the products had been purchased using the proceeds of fraud schemes.  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.  A vast majority of the deposits consisted of large wire transfers and check or cash deposits from U.S.-based individuals and entities that were victims of fraud schemes of the Enterprise.   

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CELVIN, 48, of East Orange, New Jersey, was convicted by a jury of one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, which each carry a maximum sentence of 20 years in prison; one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison; one count of conspiracy to receive stolen money, one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison.

CELVIN is scheduled to be sentenced before Judge Rakoff on July 20, 2022 at 4:00 p.m.

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

Mr. Williams praised the outstanding investigative work of the 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.

A Chinese national is charged in a criminal complaint, which was unsealed today in the Southern District of New York, with conspiring to act in the United States as an illegal agent of the People’s Republic of China (PRC).

According to court documents, Sun Hoi Ying, aka Sun Haiying, 45, of the PRC, from at least February 2017 through February 2022, acted in the United States as an agent of the PRC government, without notifying the U.S. Attorney General as required by law.

“This case demonstrates, once again, the PRC’s disdain for the rule of law and its efforts to coerce and intimidate those it targets on our shores as part of its Operation Fox Hunt,” said Assistant Attorney General for National Security Matthew G. Olsen. “The defendant allegedly traveled to the United States and enlisted others, including a sworn law enforcement officer, to spy on and blackmail his victims. Such conduct is both criminal and reprehensible.”

“The PRC government launched a campaign dubbed ‘Operation Fox Hunt,’ a global plot to repress dissent and to forcibly repatriate so-called ‘fugitives’ – including citizens living legally in the United States – through the use of unsanctioned, unilateral and illegal practices,” said U.S. Attorney Damian Williams for the Southern District of New York. “We allege Mr. Sun, as part of that campaign, attempted to threaten and coerce a victim into bending to the PRC’s will, even using a co-conspirator who is a member of U.S. law enforcement to reinforce that the victim had no choice but to comply with the PRC government’s demands. Today’s charges reflect this office’s continued commitment, working hand in hand with our partners at the FBI, to combat transnational repression and bringing to justice those who perpetrate it.”

“The Chinese government takes advantage of our freedoms — freedoms they deny their own citizens — to advance their authoritarian regime, and calls uncomfortable truths about their behavior rumors and lies,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “There’s nothing false about seeing example after example of the Chinese government’s underhanded and illegal behavior here in the United States. I urge anyone to contact the FBI if you feel you’re a victim of the Chinese government’s illegal Fox Hunt activities.”

“As alleged, Sun Hoi Ying, acting at the direction of the PRC government, engaged in a range of activities designed to pressure individuals in the United States to return to the PRC to face charges brought by the Chinese government,” said Assistant Director in Charge Michael J. Driscoll of the FBI’s New York Field Office. “Our commitment to protecting the freedoms enjoyed by all United States residents is steadfast. Today's action is the latest example of our unwavering determination to combat transnational repression in all its forms.”

According to court documents, the FBI has been involved in an investigation of individuals who, working at the direction of the PRC government, have engaged in an international campaign, known alternatively as “Operation Fox Hunt” and “Operation Skynet,” to pressure individuals located in the United States and elsewhere to return to the PRC to face charges or to otherwise reach financial settlements with the PRC government.

As alleged, from approximately October 2016 through May 2017, Sun conducted operations in the United States on behalf of the PRC government to pressure, threaten and collect personal information regarding victims of Operation Fox Hunt. Among other things, as part of his operations and at the direction of the PRC government, Sun hired private investigators in the United States to gather personal information on Operation Fox Hunt targets, labeled as “fugitives” by the PRC government and provided some of that information to the PRC government.

According to the complaint, Sun provided 35 names to a private investigator (P.I.-1) working at a U.S. company (Firm-1) of individuals described as PRC fugitives, including Victim-1, who is a U.S. citizen that previously lived in the PRC, worked at a PRC-owned company, and was subsequently accused by the PRC government of embezzlement. As alleged, P.I.-1 conducted surveillance at Victim-1’s home and provided a report to Firm-1 and Sun. By June 2018, the PRC government had publicly disseminated personal identifying information of Victim-1 – including case details, a photograph and home address – on PRC-based news media websites.

While Sun was collecting information about Victim-1 for the PRC government, Victim-1’s daughter (Victim-2), who is a U.S. citizen and was pregnant at the time, was held against her will in the PRC for approximately eight months. In or about October 2016, Victim-2, her spouse and her minor child attempted to leave the PRC to return to the United States. However, Victim-2 was told by PRC customs officials and a PRC prosecutor (Prosecutor-1) that she could not leave and was subject to an “exit ban.” While Victim-2’s spouse and minor child were able to return to the United States, Victim-2 was told that, since Victim-1 had committed a crime, the “exit ban” on Victim-2 was a consequence of Victim-1’s fugitive status. The PRC prosecutor further told Victim-2: (1) that she would not be permitted to leave the PRC until she helped cause Victim-1 to return to the PRC to resolve Victim-1’s criminal case; (2) that Victim-2 was not to discuss the “exit ban” with the U.S. government; and (3) that the U.S. Embassy was helpless to address Victim-2’s status in the PRC. When Victim-2 explained to Prosecutor-1 that she was pregnant and wished to deliver her baby in the United States, Prosecutor-1 told Victim-2 she would deliver her baby in the PRC if the conditions were not yet met for the “exit ban” to be lifted.

According to the complaint, on or about Dec. 1, 2019, Sun also sought out, located and met with an Operation Fox Hunt target (Victim-3), in New York City, in coordination with a co-conspirator who is a local U.S. law enforcement officer. During the meeting, Sun threatened and pressured the victim, including by threatening that the PRC government would take certain adverse and retaliatory actions if the victim did not comply with the demands of the PRC government.

Sun is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison, and one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Matthew J.C. Hellman and Kyle A. Wirshba for the Southern District of New York are prosecuting the case, with valuable assistance provided by Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section.

The FBI’s New York Field Office is investigating the case.

A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint charging SUN HOI YING, a/k/a “Sun Haiying” (“SUN”), a citizen of the People’s Republic of China (“PRC”), with acting and conspiring to act in the United States as an unregistered agent of the PRC Government. SUN is at large in China.

U.S. Attorney Damian Williams said: “The PRC Government launched a campaign dubbed ‘Operation Fox Hunt,’ a global plot to repress dissent and to forcibly repatriate so-called ‘fugitives’ – including citizens living legally in the United States – through the use of unsanctioned, unilateral, and illegal practices. We allege Mr. Sun, as part of that campaign, attempted to threaten and coerce a victim into bending to the PRC’s will, even using a co-conspirator who is a member of local U.S. law enforcement to reinforce that the victim had no choice but to comply with the PRC Government’s demands. Today’s charges reflect this Office’s continued commitment, working hand in hand with our partners at the FBI, to combat transnational repression and bring to justice those who perpetrate it.”

Assistant Attorney General Matthew G. Olsen said: “This case demonstrates, once again, the PRC’s disdain for the rule of law and its efforts to coerce and intimidate those it targets on our shores as part of its Operation Fox Hunt. The defendant allegedly traveled to the United States and enlisted others, including a sworn law enforcement officer, to spy on and blackmail his victims. Such conduct is both criminal and reprehensible.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Sun Hoi Ying, acting at the direction of the PRC government, engaged in a range of activities designed to pressure individuals in the United States to return to the PRC to face charges brought by the Chinese government.  Our commitment to protecting the freedoms enjoyed by all United States residents is steadfast.  Today's action is the latest example of our unwavering determination to combat transnational repression in all its forms.”

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

The FBI has been involved in an investigation of individuals who, working at the direction of the PRC Government, have engaged in an international campaign, known alternatively as “Operation Fox Hunt” and “Operation Skynet,” to pressure individuals located in the United States and elsewhere outside the PRC to return to the PRC to face charges brought by the PRC Government or to otherwise reach financial settlements with the PRC Government.

From at least approximately February 2017 to February 2022, SUN acted in the United States as an agent of the PRC Government, without notifying the U.S. Attorney General as required by law. In particular, SUN conducted operations in the United States on behalf of the PRC Government to pressure, threaten, and collect personal information regarding victims of Operation Fox Hunt. Among other things, as part of his operations at the direction of the PRC Government, SUN hired private investigators in the United States to gather personal information on Operation Fox Hunt targets, labeled as “fugitives” by the PRC Government, and provided some of that information to the PRC Government.

For example, at the direction of the PRC Government, SUN used private investigators to conduct surveillance and collect personal information of a U.S. citizen (“Victim-1”) located in New York City who was a target of Operation Fox Hunt.  Personal identifying information of Victim-1 collected by SUN, including Victim-1’s home address and photograph, was later published by the PRC Government in a list of Operation Fox Hunt targets.  During the time SUN was collecting information about Victim-1 for the PRC Government, Victim-1’s daughter (“Victim-2”), a U.S. citizen who was pregnant at the time, was held against her will in the PRC for approximately eight months.  PRC Government representatives told Victim-2 not to request help from the U.S. Government and that she would not be permitted to leave the PRC until Victim-2 helped cause Victim-1 to return to the PRC.

SUN also sought out, located, and met with another Operation Fox Hunt target (“Victim-3”) in New York City, in coordination with a co-conspirator who is a local U.S. law enforcement officer. During those meetings, SUN threatened and pressured Victim-3, including by threatening that the PRC Government would take certain adverse and retaliatory actions if Victim-3 did not comply with the demands of the PRC Government.

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SUN, 53, of China, is charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison, and one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of ten 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 a judge.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Matthew J.C. Hellman and Kyle A. Wirshba are in charge of the case, with assistance from Trial Attorney Scott Claffee of the Counterintelligence and Export Control Section.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that VANIA MAY BELL, the former comptroller and chief compliance officer of Executive Compensation Planners, Inc. (“ECP”), a registered investment adviser and financial planning firm located in New City, New York, pled guilty to 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 pled guilty before U.S. Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As Vania May Bell admitted, for years, she and her father, Hector May, violated the trust of ECP’s clients by taking their money intended for investments and instead spending it for personal and business expenses as part of an illegal Ponzi scheme.  In total, Bell and May stole more than $11 million from over 15 victims that included a pension plan, and vulnerable and elderly individuals.  Now, she has confessed to her crime and faces significant time in prison.”

According to Count One of the Indictment, to which BELL pled guilty, and other statements and submissions in made in Court:          

Beginning in 1982, 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 its role as a broker dealer, Broker Dealer-1 facilitated the buying and selling of securities for clients of Broker Dealer-1’s registered representatives, including clients of May.  Broker Dealer-1 and associated clearing firms maintained securities accounts for ECP’s clients and, through those accounts, held ECP’s clients’ money, executed their securities trades, produced account statements reflecting activity in the clients’ accounts, and forwarded these account statements to ECP’s clients. 

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.  He further represented that by purchasing bonds through ECP directly, the Victims could avoid transaction fees.  Because May lacked the authority to withdraw money directly from the Victims’ accounts with Broker Dealer-1, he persuaded the Victims to withdraw the money themselves and to forward that money to an ECP “custodial” account (the “ECP Custodial Account”), so that he could use the money to 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, May falsely represented that the funds being withdrawn from Victims’ Broker Dealer-1 accounts were the proceeds of prior bond purchases May had made.  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. 

Specifically, in some cases, BELL and May used Victims’ funds to make purported bond interest payments to other Victims.  In other cases, May used Victims’ funds to make payments to other Victims who wished to withdraw funds from their accounts.  BELL and May also 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.

To keep track of the money that the co-conspirators were taking from the Victims, BELL processed the Victims’ payments for the purported bonds, entered them in a computerized accounting program, and, through that program, kept track of how BELL and May received and spent the Victims’ stolen money.  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.

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BELL, 57, of Montvale, New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. Sentencing before Judge Nelson S. Román has been scheduled for July 7, 2022.

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 thirteen years in prison.  He was also ordered to serve three years of supervised release, pay $8,041,233 in restitution and forfeit $11,452,185.  

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

Mr. Williams praised the outstanding investigative work of the 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ERIC SPENCER, was convicted yesterday for his participation in a robbery of a luxury retail store in New York, New York on February 2, 2021. SPENCER was convicted after a one-week jury trial before U.S. District Judge Gregory H. Woods.

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

On February 2, 2021, SPENCER robbed a Chanel store located in the SoHo neighborhood in Manhattan. SPENCER and three other co-conspirators entered the store and began ripping handbags off the cables that secured them to store displays. When an armed security guard confronted SPENCER, he reached into his waistband and intimated he had a firearm, causing store personnel to back off as the perpetrators made off with over $200,000 in luxury goods.

In the days after the robbery, SPENCER took photos of the stolen bags on his phone, bragged on his social media account about acquiring so many bags he “COULD OPEN A SMALL BOUTIQUE,” and sent text messages confirming he had sold the stolen merchandise.

Spencer fleeing the scene of the SoHo store robbery with stolen merchandise in his hands

 

A photo taken by Spencer of a bag stolen in the robbery

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SPENCER, 30, of Brooklyn, New York, was convicted by a jury of one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery. The maximum potential sentence for each count is 20 years in prison and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge. Sentencing is scheduled before Judge Woods for June 30, 2022.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and New York City Police Department.

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Jane Y. Chong, Abigail S. Kurland, and Matthew R. Shahabian are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that STANISLAV TUNKEVIC, of Lithuania, was extradited to the United States on bank fraud and money laundering offenses arising from a scheme to launder money derived from an online vehicle sale scam that took in at least $3.5 million from defrauded consumers.  VLADISLAV NECEAEV, of Brooklyn, New York, recently pled guilty to conspiracy to commit bank fraud in connection with the same scheme.

U.S. Attorney Damian Williams said:  “This case is another reminder that while the Internet has often been a force for the public good, it has also been used by criminals to swindle the unwary.  But online fraudsters who hide behind the anonymity of the Internet still need co-conspirators like Tunkevic and Neceaev, who are willing to launder the loot.  This Office is committed to rooting out both the online scammers and their enablers.”

HSI Acting Special Agent-in-Charge Ricky Patel said:  “As alleged, Tunkevic and Neceaev laundered money for a group of fraudsters that preyed on innocent victims who were simply looking to buy a used car online; an act so common that it allowed the group of crooks to pocket millions off this elaborate scheme from unsuspecting customers.  With the use of Tunkevic and Neceaev’s money laundering services, their criminal partners used fictitious websites to lure victims to fraudulent dealerships, all to profit off the backs of hard-working people looking to make a legitimate purchase.  HSI New York’s El Dorado Task Force coordinated efforts with HSI’s Attaché office in the Hague to assist with this extradition and will work tirelessly to identify and prosecute all co-conspirators that perpetuated this consumer fraud and money laundering scheme.”

As alleged in the Complaint and the Indictments,[1] and based on statements made in court:    

From at least March 2019 through approximately March 2021, STANISLAV TUNKEVIC and VLADISLAV NECEAEV were members of a money laundering crew operating from Brooklyn that was coordinated by NECEAEV’s mother and co-defendant, Natalia Korzha.  Members of that crew, including TUNKEVIC and NECEAEV, opened numerous bank accounts in the name of shell companies for the purpose of laundering money stolen from consumers who were trying to buy vehicles online, in exchange for a cut of the victims’ money.  Other members of the conspiracy, pretending to represent car dealerships, advertised vehicles that they did not own and were not authorized to sell on fake websites with domain names that sounded like legitimate car dealerships, or through online marketplaces like Craigslist and eBay.  Victims who responded to those advertisements and negotiated a purchase price were instructed by the purported sellers to wire payment to accounts that TUNKEVIC, NECEAEV, and other co-conspirators opened.  Once the payments cleared, the account owners, including TUNKEVIC and NECEAEV, quickly withdrew the funds before the victims realized they had been defrauded.  The victims never received the vehicles they thought they had bought or any refunds from the fake sellers.  In total, dozens of victims were defrauded of a total of at least $3.5 million. 

TUNKEVIC was presented today in Manhattan federal court before United States Magistrate Judge Sarah Cave.

NECEAEV pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022, before Magistrate Judge Robert W. Lehrburger.

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STANISLAV TUNKEVIC, 47, of Lithuania, was extradited to the United States on March 25, 2022.  TUNKEVIC is charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering. 

VLADISLAV NECEAEV, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bank fraud on March 14, 2022.

The offense of conspiracy to commit bank fraud carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000.  The crime of conspiracy to commit money laundering carries a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the value of the property involved in the transaction.

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

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations. He also thanked the U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the Prosecutor General’s Office of the Republic of Lithuania, and the Lithuanian Criminal Police Bureau for their assistance in this investigation.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ERIN VERESPY was sentenced to 66 months in prison for her participation in a widespread, $33 million scheme to misappropriate client healthcare funds and defraud multiple lenders through her role as the Chief Financial Officer of Employee Benefit Solutions LLC (“EBS”), an insurance firm located in Wilton, Connecticut. VERESPY previously pled guilty before U.S. District Judge Cathy Seibel, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “For nearly two years, Erin Verespy helped manage a sophisticated, widespread scheme to steal millions of dollars of client healthcare funds, including with false and inflated invoices. As part of that scheme, Verespy also defrauded lenders out of millions. In doing so, she abused a position of trust as a fiduciary of client money that was meant to pay for important healthcare expenses. Thanks to the coordinated and tireless efforts of our law enforcement partners to untangle this fraud, Verespy will now serve a significant sentence in federal prison.”

According to the Information, the Complaint, other court filings, and statements made during court proceedings:

From at least July 2017 and continuing through 2019, ERIN VERESPY served as the CFO of EBS, which offered a variety of healthcare insurance-related services to clients. EBS, among other things, provided third party healthcare claims administration (“TPA”) services to clients that elected to “self-fund” (or self-insure) their employee healthcare plans. As a TPA, EBS would purportedly administer, process, and pay healthcare claims for its clients’ employees in exchange for an administrative fee.

Between at least 2015 and continuing through 2019, EBS represented an automobile dealership chain (“Company-1”) headquartered in Westchester County, New York. During this time period, EBS served as a TPA for Company-1’s self-funded employee healthcare program and purported to process and pay claims to medical providers that treated Company-1’s employees. To do this, EBS generated bimonthly “check register” invoices for Company-1 that listed all employee healthcare expenses from healthcare providers during that two-week period.  EBS also administered a bank account on Company-1’s behalf for the express purpose of paying Company-1 healthcare claims. Company-1 would fund each check register by paying the invoiced amount, expecting that EBS would promptly pay the claims to the healthcare providers.  During this time period, Company-1 transferred approximately $26 million to EBS for the payment of healthcare claims.

In reality, a significant amount of purported checks listed on the EBS “check register” invoices were never actually deposited by the healthcare providers. Instead, approximately $17.87 million in Company-1 healthcare payments were misappropriated, with the overwhelming majority simply transferred by EBS into its own operating account, where they were used for non-healthcare expenses by the managers and owners of EBS. For example, a review of bank records indicates that Company-1 healthcare funds were used by VERESPY’s co-conspirators to pay their home mortgage expenses, as well as a personal credit card account with expenses relating to boating, luxury cars, and golf. VERESPY personally made over one million dollars from her participation in the fraudulent scheme.

EBS, through VERESPY and her co-conspirators, made decisions on what few Company-1 healthcare claims they did pay based on which healthcare providers were likely to complain if they did not receive payment, or if the claims were connected to Company-1 executives. VERESPY, for example, discussed the timing of payments for Company-1 “VIPs” as well as a “Not VIP” claim that was nonetheless the subject of complaining phone calls.

The “check registers” sent to Company-1 also contained millions of dollars in fraudulent or inflated healthcare claims that were eventually paid by Company-1. EBS routinely inflated the Company-1 check registers at the direction of VERESPY and her co-conspirators. Such efforts were typically accomplished through VERESPY and her co-conspirators instructing others to manually create fraudulent entries in the EBS claims processing software, including fake claims under the name of a business controlled by VERESPY’s co-conspirators. VERESPY and her co-conspirators also took steps to conceal their fraud from Company-1 by creating and sending manipulated and fabricated bank statements and checks to create the appearance that healthcare claims were being paid by EBS, when in reality they were not.   

By mid-2017, as EBS buckled under mounting outstanding fiduciary obligations, VERESPY and her co-conspirators began an elaborate effort to conceal and perpetuate the ongoing fraud on Company-1 by applying for multiple fraudulent bank loans and merchant cash advances designed in part to pay various fiduciary obligations that EBS owed to Company-1. VERESPY and her co-conspirators fraudulently applied for and received millions of dollars in loans under the auspices of financing the purchase of upgraded billing software for EBS, which included VERESPY and her co-conspirators submitting fabricated invoices from a fake company that supposedly sold the billing software.

In addition to the prison term, ERIN VERESPY, 50, of Trumbull, Connecticut, was sentenced to 5 years of supervised release. The Court also ordered VERESPY to pay $16,053,508.19 in restitution and forfeit $1,066,038.02. On April 14, 2021, VERESPY pled guilty to one count of conspiracy to commit wire fraud and bank fraud, in violation of Title 18, United States Code, Section 1349. 

Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service and the Special Agents of the United States Attorney’s Office. Mr. Williams also thanked the U.S. Department of Labor, Employee Benefits Security Administration; the U.S. Department of Labor, Office of Inspector General; and the United States Secret Service, which are assisting in the investigation, as well as the U.S. Attorney’s Office for the District of Connecticut.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorney Nicholas S. Bradley is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that  ETHAN NGUYEN, a/k/a “Frostie,” a/k/a “Jakefiftyeight,” a/k/a “Jobo,” a/k/a “Joboethan,” a/k/a “Meltfrost,” and ANDRE LLACUNA, a/k/a “heyandre,” were charged in a criminal complaint with conspiracy to commit wire fraud and conspiracy to commit money laundering, in connection with a million-dollar scheme to defraud purchasers of NFTs advertised as “Frosties.”  Rather than providing the benefits advertised to Frosties NFT purchasers, NGUYEN and LLACUNA transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control.  Prior to their arrests in Los Angeles, California, NGUYEN and LLACUNA were preparing to launch the sale of a second set of NFTs advertised as “Embers,” which was anticipated to generate approximately $1.5 million in cryptocurrency proceeds. 

U.S. Attorney Damian Williams said: “NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.”

IRS-CI Special Agent-in-Charge Thomas Fattorusso said: “NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development. You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you. Our team here at IRS-CI and our partners at HSI closely track cryptocurrency transactions in an effort to uncover alleged schemes like this one.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The trending market and demand for NFT investments has not only drawn the attention of real artists, but scam artists as well.  The arrested thieves allegedly hid behind online identities where they promised investors rewards, giveaways, and exclusive opportunities before implementing their ‘rug pull’ scheme – leaving investors with empty pockets and no legitimate investment. HSI New York’s Dark Web & Cryptocurrency Task Force worked closely with our IRS-CI partners to identify and shut down these fraudsters as they prepared to launch the sale of yet another NFT project that would have likely scammed countless others.”

USPIS Inspector-in-Charge Daniel B. Brubaker said: “The rise and popularity of various cryptocurrencies have changed the landscape of buying and selling investments, leading to ample opportunities for new fraud schemes. Today’s arrests involved Non-Fungible Tokens (“NFTs"), opening the door to alternative investment options and substantial risk. These assets may seem like a good deal or a way to become wealthy, but in many cases, as in this situation, only lead to the loss of your money. Postal Inspectors will pursue fraudsters with our law enforcement partners in any consumer market and advise consumers to pursue emerging investment trends with diligence and skepticism."

As alleged in the Complaint[1]:

Since in or about January 2022, IRS-CI and HSI have been investigating a NFT fraud scheme based on reports from purchasers of Frosties utility NFTs[2] that they had been defrauded in what is colloquially referred to as a “rug pull.”  As the term suggests, a “rug pull” refers to a scenario where the creator of an NFT and/or gaming project solicits investments and then abruptly abandons a project and fraudulently retains the project investors’ funds.  According to the official Frosties website, Frosties purchasers would be eligible for holder rewards, such as, inter alia, giveaways, early access to a metaverse game, and exclusive mint passes to upcoming Frosties seasons.  In reality, on or about January 9, 2022, NGUYEN and LLACUNA, whose legal identities were disguised to Frosties NFT purchasers, abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.  A screenshot taken from the Frosties website is shown below:

 

 

Prior to their arrests, NGUYEN and LLACUNA were advertising a second NFT project under the name “Embers,” which, based on similarities to the Frosties NFT project, is believed to be another fraud scheme that was expected to launch on or around March 26, 2022.  A screenshot taken from the Embers website is shown below:

 

 

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ETHAN VINH NGUYEN, 20, and ANDRE MARCUS QUIDDAOEN LLACUNA, 20, are each charged with one count of commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of HSI, IRS-CI, and USPIS. 

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Danielle M. Kudla is in charge of the prosecution.

If you believe that you have been a victim of this crime, please contact HSI Special Agent Paul Nugent at [email protected].

 

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

[2] A “utility” NFT offers holders added benefits, such as reward programs, giveaways, and early access to events for NFT holders.

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the filing of a criminal complaint today charging JAMAR BAKER with illegally possessing a firearm and ammunition.  BAKER, who is on federal supervised release for a prior conviction, was arrested yesterday and was presented today before the Honorable Barbara C. Moses.

U.S. Attorney Damian Williams said:  “For no apparent reason, Jamar Baker allegedly decided to pick a fight with an innocent driver heading to work.  Little did he know, the victim we allege he harassed and shot at is an NYPD officer who was on his way to the precinct to begin his shift.  The random attack and senseless criminal behavior not only put the officer in danger, but we also allege Mr. Baker hid the weapon inside a child’s toy, and put it back in the child’s crib.  Mr. Baker will now face federal justice for his reckless actions.”   

NYPD Commissioner Keechant L. Sewell said:  “Gun violence impacts all New Yorkers – including NYPD police officers, both on and off duty.  The NYPD and our law enforcement partners at the U.S. Attorney’s Office for the Southern District of New York vow to use every resource available to ensure that criminals are always held fully accountable for their reckless actions.”

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

Shortly after 6:30 a.m. on March 23, 2022, an off-duty NYPD Officer (“Victim-1”) was driving his personal vehicle to his NYPD precinct in Manhattan to begin his shift.  While crossing from the Bronx into Manhattan on the Macombs Dam Bridge, BAKER’s vehicle struck Victim‑1’s vehicle multiple times.  BAKER then pulled his vehicle alongside Victim-1’s vehicle, spit towards Victim-1, and shouted a slur at Victim-1.  As the vehicles continued driving, BAKER fired a gun at Victim-1, striking the front bumper and tire of Victim‑1’s vehicle.  Officers later recovered two .380-caliber shell casings from the road where the vehicles had traveled.

Law enforcement identified BAKER’s vehicle using license plate reader photographs.  When officers searched an apartment to which BAKER had gone immediately after the shooting, officers found a .380-caliber pistol concealed inside a teddy bear in a child’s crib.  BAKER is currently on federal supervised release in connection with a 2014 robbery conspiracy conviction, for which he served approximately five years in prison.

 

 

*                      *                      *

BAKER, 26, of Bronx, New York, was charged with one count of possessing a firearm after having been convicted of a felony, and one count of possessing ammunition after having been convicted of a felony.  Each count carries a maximum sentence of ten years in prison.  The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD’s 32nd Precinct Detective Unit, the NYPD’s Firearm Suppression Section, and the Special Agents of the United States Attorney’s Office. 

The case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Patrick R. Moroney is in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, Timothy Foley, the Acting Special Agent-in-Charge of the Drug Enforcement Administration’s New York Division (“DEA”), Kevin P. Bruen, the Superintendent of the New York State Police (“NYSP”), and Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a criminal complaint today charging gang members JERRIN PENA, a/k/a “Rooga,” a/k/a “Perry,” ARIEL OLIVER, a/k/a “8Ball,” a/k/a “Ocho,” JUSTIN DEAZA, a/k/a “Booka,” WILSON MENDEZ, a/k/a “Tati,” JOWENKY NUNEZ, a/k/a “Juju,” BRIAN HERNANDEZ, a/k/a “Malikai,” VICTOR COLON, a/k/a “V,” JOSE GUTIERREZ, a/k/a “G,” ARGENIS TAVAREZ, a/k/a “Nose,” and NIJMAH MARTE, a/k/a “N,” with participating in a conspiracy to traffic narcotics.  Six of the defendants also were charged with using guns in furtherance of that conspiracy.

PENA, MENDEZ, COLON, GUTIERREZ, and MARTE were arrested yesterday in New York, New York and the Bronx, New York and will be presented today before the Hon. Barbara Moses, United States Magistrate Judge for the Southern District of New York.  OLIVER, DEAZA, and HERNANDEZ were already in state custody.  NUNEZ and TAVAREZ remain at large.

U.S. Attorney Damian Williams said:  “As alleged, these defendants were members of a gang that distributed many types of illegal narcotics in a Manhattan neighborhood for years.  Several of the defendants frequently carried firearms while dealing drugs.  Today’s arrests are part of our continued commitment, along with our law enforcement partners, to target narcotics trafficking and firearms use in New York City.” 

DEA Acting Special Agent-in-Charge Timothy Foley said:  “The Own Every Dollar gang used social media to glamorize their drug enterprise, conduct drug transactions and brandish weapons instilling fear in the community.  Our drug trafficking investigations have a way of uncovering links to the threat of gun violence and gang-related criminal activity.  Today’s arrests exemplify law enforcement’s commitment to law and order and people’s right to live without fear.”

NYSP Superintendent Kevin P. Bruen said:  “We have no tolerance for those who bring drugs and the threat of violence to our communities. These arrests are the result of an aggressive strategy to stop the trafficking of narcotics and other deadly drugs on our streets. Together, with our law enforcement partners at all levels, we will continue to work vigilantly to put dangerous individuals like these gang members behind bars.” 

NYPD Commissioner Keechant L. Sewell said:  “The details of this investigation make clear: Criminal gangs, illegal guns, and illicit drugs are a dangerous combination – and will never be tolerated in our city, and any person who deals in the criminal behavior alleged in this case will be held accountable to the fullest extent of the law. I want to thank the U.S. Attorney’s Office for the Southern District of New York, the Drug Enforcement Administration’s New York Division, the New York State Police, and everyone else who worked to take these 10 defendants off our streets, and made New York City safer for all the people we serve.”

As alleged in the Complaint unsealed today[1]:

PENA, OLIVER, DEAZA, MENDEZ, NUNEZ, HERNANDEZ, COLON, GUTIERREZ, TAVAREZ, and MARTE, are members of a criminal gang called “Own Every Dollar” or “OED,” which uses the following logo:

 

 

Between in or about 2019 and in or about 2022, the defendants sold fentanyl, heroin, cocaine, crack cocaine, oxycodone, and marijuana in and around the Washington Heights neighborhood of Manhattan.  The defendants sold drugs to, among others, undercover police officers, and were frequently arrested in possession of drugs packaged for resale.

In addition, PENA, MENDEZ, NUNEZ, HERNANDEZ, COLON, and MARTE each possessed firearms in connection with their drug dealing, and PENA, OLIVER, and NUNEZ regularly posted social media photographs and videos of themselves holding firearms.

On February 24, 2022, DEAZA was arrested in possession of one kilogram of fentanyl.

*                *                *

JERRIN PENA, 20, ARIEL OLIVER, 22, JUSTIN DEAZA, 20, WILSON MENDEZ, 19, JOWENKY NUNEZ, 19, BRIAN HERNANDEZ, 22, VICTOR COLON, 24, JOSE GUTIERREZ, 20, ARGENIS TAVAREZ, 22, and NIJMAH MARTE, 21, all from New York City, are each charged with conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, in violation of Title 21, United States Code, Section 846, which carries a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison.  The defendants are also charged with conspiracy to distribute and possess with intent to distribute heroin, cocaine, crack cocaine, oxycodone, in violation of Title 21, United States Code, Section 846, which carries a maximum sentence of 20 years, and conspiracy to distribute and possess with intent to distribute marijuana, also in violation of Title 21, United States Code, Section 846, which carries a maximum sentence of five years.

PENA, MENDEZ, NUNEZ, HERNANDEZ, COLON, and MARTE are also each charged with possessing a firearm in furtherance of the narcotics conspiracy, in violation of Title 18, United States Code, Section 924(c)(1)(A)(i), which carries a maximum sentence of life in prison, with a mandatory minimum sentence of five years in prison, which must run consecutively to any other sentence.

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

Mr. Williams praised the outstanding investigative work of the DEA, NYSP, and NYPD.  He also thanked the Special Narcotics Prosecutor for the City of New York, the Bronx District Attorney’s Office, the Manhattan District Attorney’s Office, the Massachusetts State Police, and the Worcester County District Attorney’s Office for their assistance in the case.  

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Kevin Mead, Sarah L. Kushner, and Ashley Nicolas are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a superseding indictment charging PATRICK CHELLEL in a conspiracy to commit multiple armed robberies of suspected drug dealers and drug runners in Orange County, New York, the Bronx, New York, and Hartford, Connecticut. CHELLEL was arrested today and was presented before Magistrate Judge Paul E. Davison. The case was assigned to U.S. District Judge Kenneth M. Karas.  

U.S. Attorney Damian Williams said:  “As alleged, Patrick Chellel organized and directed a violent conspiracy to rob suspected drug dealers and associates at gunpoint. Chellel and his robbery crew allegedly engaged in serious acts of violence and sophisticated methods to track their victims, including with a hidden Apple Watch on a victim’s car. Today’s arrest is part of our continued commitment with our law enforcement partners to root out gun violence in our communities.”

As alleged in the Superseding Indictment unsealed today and in other filings[1]:

From at least in or about November 2019 and continuing through at least in or about January 2020, PATRICK CHELLEL, a/k/a “Pat,” DARREN LINDSAY, a/k/a “DJ,” ANTOINE KOEN, a/k/a “Twon,” ROBERT OJEDA, a/k/a “Mini,” ONITAYO ARE, a/k/a “Oni,” INDIGO GRANT, and PATRICIA KONCO, a/k/a “Flacca,” conspired to rob suspected drug dealers and associates of drugs and drug proceeds. As part of the conspiracy, on or about November 14, 2019, CHELLEL organized a plan with LINDSAY to rob suspected drug dealers at their residence in the vicinity of Mount Hope, New York, where the victims were assaulted at gunpoint. Furthermore, on or about December 15, 2019, LINDSAY, KOEN, and OJEDA robbed at gunpoint suspected drug dealers of marijuana at a residence in the Bronx. Finally, on or about January 19, 2020, LINDSAY, KOEN, ARE, GRANT, and KONCO, acting at CHELLEL’s direction, committed a violent gunpoint robbery of a drug runner in a hotel parking garage after surreptitiously tracking the victim’s location with a hidden Apple Watch, resulting in approximately $500,000 in drug proceeds stolen.

CHELLEL, 31, LINDSAY, 31, KOEN, 30, OJEDA, 31, ARE, 29, GRANT, 30, and KONCO, 32, are each charged in the following counts in the Superseding Indictment:

Charge

Defendants

Maximum Possible Sentence

Count One

(Conspiracy to Commit Hobbs Act Robbery, 18 U.S.C. § 1951)

CHELLEL, LINDSAY, KOEN, OJEDA, ARE, GRANT, KONCO

20 years in prison

Count Two

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

CHELLEL, LINDSAY

20 years in prison

Count Three

(Brandishing Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

CHELLEL, LINDSAY

Mandatory minimum sentence of 7 years in prison and maximum sentence of life in prison

Count Four

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

LINDSAY, OJEDA, KOEN

20 years in prison

Count Five

(Brandishing Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

LINDSAY, OJEDA, KOEN

Mandatory minimum sentence of 7 years in prison and maximum sentence of life in prison

Count Six

(Hobbs Act Robbery, 18 U.S.C. §§ 1951 and 2) 

CHELLEL, LINDSAY, KOEN, ARE, GRANT, KONCO

20 years in prison

Count Seven

(Brandishing and Discharging Firearms During and in Relation to a Crime of Violence, 18 U.S.C. §§ 924(c) and 2)

CHELLEL, LINDSAY, KOEN, ARE, GRANT, KONCO

Mandatory minimum sentence of 10 years in prison and maximum sentence of life in prison

Count Eight

(Narcotics Conspiracy, 21 U.S.C. §§ 846, 841(a), 841(b)(1)(A) 

CHELLEL

Mandatory minimum sentence of 10 years in prison and maximum sentence of life in prison

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

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

Mr. Williams praised the outstanding investigative work of the FBI, Homeland Security Investigations, the New York State Police, the New York City Police Department, the Town of Crawford Police Department, and the City of Middletown Police Department.

Mr. Williams stated that the investigation is ongoing.  Mr. Williams requests that any individuals with relevant information should contact the Federal Bureau of Investigation at (800)-CALL-FBI.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Nicholas S. Bradley and Jennifer N. Ong are in charge of the prosecution.

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

A federal jury convicted a New Jersey man for his involvement in a conspiracy to fraudulently obtain U.S. visas for Chinese government employees.

According to court documents and evidence presented at trial, Zhongsan Liu, 59, of Fort Lee, participated in a scheme to fraudulently procure J-1 research scholar visas for employees of the government of the of the People’s Republic of China (PRC) to enable them to unlawfully work for the PRC government in the United States and to conceal that unlawful work from the United States and its agencies.

Liu operated an office of the China Association for the International Exchange of Personnel (CAIEP), an agency of the PRC government, in Fort Lee, New Jersey. Among other activities, CAIEP engages in talent-recruitment for the benefit of the PRC, including recruiting U.S. scientists, academics, engineers and other experts to work in China.

From 2017 up to and including September 2019, Liu worked with others to fraudulently procure J-1 research scholar visas for PRC government employees in order to enable those employees to unlawfully work for CAIEP in the United States and to conceal that unlawful work from the Department of State and the Department of Homeland Security. The J-1 research scholar program permits foreign nationals to come to the United States for the primary purpose of conducting research at a corporate research facility, museum, library, university, or other research institution. Liu worked with others to obtain a J-1 research scholar visa for a prospective CAIEP employee, Sun Li, based on the false representation that Sun Li would conduct research at a U.S. university, and to conceal the unlawful work of another CAIEP employee, Liang Xiao, who was present in the United States on a J-1 visa sponsored by a U.S. university.

In or about April 2018, Liang Xiao applied for and received a J-1 visa to conduct research at that U.S. university. Although Liang represented to the U.S. government that she was entering the United States for the primary purpose of conducting research at the university, Liang’s actual purpose in the United States consisted of working for CAIEP. Liu helped Liang take measures to enhance her false appearance as a research scholar by, among other things, directing Liang to report to the university upon her arrival in the United States; ensuring that Liang obtained a local driver’s license and disguising Liang’s CAIEP salary as a subsidy for a research scholar’s living expenses.

In addition, Liu sought to enable Sun Li to obtain a J-1 research scholar visa under false pretenses. In particular, Liu reached out to contacts at multiple U.S. universities in order to arrange for a university to invite Sun Li to come to the United States as a J-1 research scholar. In truth and in fact, however, Liu intended that Li’s primary purpose in the United States would consist of working for CAIEP.

Liu was convicted of one count of conspiracy to defraud the United States and to commit visa fraud, which carries a maximum sentence of five years. He is scheduled to be sentenced on July 11. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams of the Southern District of New York, Assistant Director Alan E. Kohler Jr. of the FBI's Counterintelligence Division and Assistant Director in Charge Michael J. Driscoll of the FBI's New York Field Office made the announcement.

The FBI investigated the case, with valuable assistance provided by the U.S. Department of State, Department of Homeland Security, Homeland Security Investigations, and the National Security Division’s Counterintelligence and Export Control Section.

Assistant U.S. Attorneys Gillian Grossman and Elinor Tarlow for the Southern District of New York are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ZHONGSAN LIU was convicted yesterday of participating in a conspiracy to defraud the United States by obstructing the lawful functions of the U.S. Department of State and the Department of Homeland Security and with committing visa fraud.  LIU was convicted after a one-week trial before the Honorable Valerie E. Caproni. 

U.S. Attorney Damian Williams stated: “Liu Zhongsan sought to exploit the J-1 research scholar program—which is intended to allow foreign nationals to conduct research at approved U.S. institutions—for the improper purpose of enabling his conspirators to work for the Chinese Government in the United States, against the rules of the research scholar program.  Liu’s conviction reflects this Office’s commitment to holding to account those who seek to defraud this country’s visa system and the agencies responsible for its administration.”

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

LIU participated in a scheme to fraudulently procure J-1 research scholar visas for employees of the government of the of the People’s Republic of China (the “PRC Government”) in order to enable them to unlawfully work for the PRC Government in the United States and to conceal that unlawful work from the United States and its agencies.

LIU operated an office of the China Association for the International Exchange of Personnel (“CAIEP”), an agency of the PRC Government, in Fort Lee, New Jersey.  Among other activities, CAIEP engages in talent-recruitment for the benefit of the PRC, including recruiting U.S. scientists, academics, engineers, and other experts to work in China.

From 2017 up to and including September 2019, Liu worked with others to fraudulently procure J-1 research scholar visas for PRC Government employees in order to enable those employees to unlawfully work for CAIEP in the United States and to conceal that unlawful work from the Department of State and the Department of Homeland Security.  The J-1 research scholar program permits foreign nationals to come to the United States for the primary purpose of conducting research at a corporate research facility, museum, library, university, or other research institution.  LIU worked with others to obtain a J-1 research scholar visa for a prospective CAIEP employee, Sun Li, based on the false representation that Sun Li would conduct research at a U.S. university, and to conceal the unlawful work of another CAIEP employee, Liang Xiao, who was present in the United States on a J-1 visa sponsored by a U.S. university.

In or about April 2018, Liang Xiao applied for and received a J-1 visa to conduct research at that U.S. university.  Although Liang represented to the U.S. Government that she was entering the United States for the primary purpose of conducting research at the university, Liang’s actual purpose in the United States consisted of working for CAIEP.  LIU helped Liang take measures to enhance her false appearance as a research scholar by, among other things, directing Liang to report to the university upon her arrival in the United States; ensuring that Liang obtained a local driver’s license; and disguising Liang’s CAIEP salary as a subsidy for a research scholar’s living expenses.

In addition, LIU sought to enable Sun Li to obtain a J-1 research scholar visa under false pretenses.  In particular, LIU reached out to contacts at multiple U.S. universities in order to arrange for a university to invite Sun Li to come to the United States as a J-1 research scholar.  In truth and in fact, however, LIU intended that Sun Li’s primary purpose in the United States would consist of working for CAIEP.

*                *               *

LIU, 59, of Fort Lee, New Jersey, was convicted of one count of conspiracy to defraud the United States and to commit visa fraud, which carries a maximum sentence of five years.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing before Judge Caproni is scheduled for July 11, 2022.

Mr. Williams praised the outstanding investigative work of the FBI, and thanked the U.S. Department of State, Department of Homeland Security, Homeland Security Investigations, and the Counterintelligence and Export Control Section of the U.S. Department of Justice’s National Security Division for their assistance. 

The prosecution of this case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant United States Attorneys Gillian Grossman and Elinor Tarlow are in charge of the prosecution, with assistance from Trial Attorneys Adam Barry and Scott Claffee of the Counterintelligence and Export Control Section.

 

Damian Williams, the United States Attorney for the Southern District of New York, announced the unsealing today of a four-count superseding information charging DEEJAY WHITE with offenses relating to his participation in a May 29, 2019 gunpoint robbery in the Bronx targeting more than 150 kilograms of cocaine, his participation in a conspiracy to smuggle contraband—including narcotics and a firearm—into the Metropolitan Correctional Center (“MCC”), a federal detention facility, and his possession of that firearm while incarcerated.  DEEJAY WHITE pled guilty on July 23, 2021, before U.S. District Judge P. Kevin Castel. 

Mr. Williams also announced the unsealing of a five-count information charging DAWNTIANA WHITE, DEEJAY WHITE’s wife, who pled guilty on July 13, 2021 before U.S. District Judge Katherine Polk Failla to conspiracy to distribute narcotics, conspiracy to provide prison contraband, and conspiracy to commit wire fraud.  DAWNTIANA WHITE also pled guilty on March 17, 2022 before Judge Failla to a one-count superseding information charging her with perjury.

DEEJAY WHITE is scheduled to be sentenced on May 17, 2022, and DAWNTIANA WHITE is scheduled to be sentenced on June 14, 2022.

U.S. Attorney Damian Williams said:  “Deejay White was responsible for a dangerous gunpoint robbery of more than one hundred kilograms of cocaine that left several victims injured.  Even after he was arrested and in jail, facing up to a life sentence on those charges, Deejay White continued to commit crimes.  Deejay White and his wife, Dawntiana White, placed inmates, staff, and court personnel in grave danger by smuggling drugs and a firearm into a federal detention facility.  Individuals who are tempted to defy law and order should be on notice that we will continue working to identify and put an end to their alarming conduct and to hold them accountable.”

According to the Informations unsealed today, court filings, and statements made during earlier court appearances:

In late May 2019, a Bronx-based member of a Puerto Rico-based drug trafficking organization (“DTO”) was expecting a delivery of furniture concealing approximately 176 kilograms of the DTO’s cocaine.  DEEJAY WHITE and others learned of the expected shipment and planned a violent robbery of the DTO’s cocaine.  On May 29, 2019, DEEJAY WHITE parked outside the Bronx apartment where the DTO’s cocaine was stored while four co-conspirators forced entry into the apartment and held up the ten victims, including four children, at gunpoint.  Two victims were pistol-whipped during the robbery and a third sustained serious injuries after jumping out of the apartment’s third-floor window in an attempt to flee to safety.  One of the robbers threw a duffel bag containing kilograms of cocaine into DEEJAY WHITE’s car, which then drove off.

DEEJAY WHITE was arrested on November 25, 2019 on charges relating to the robbery and conspiracy to distribute the stolen cocaine, ordered detained, and housed at the MCC in Manhattan.  Days after entering the MCC, DEEJAY WHITE began using contraband cellphones to conspire with others—including his wife, DAWNTIANA WHITE—to commit additional crimes.  Among other things, DEEJAY WHITE directed DAWNTIANA WHITE to smuggle drugs to DEEJAY WHITE in the MCC, which DAWNTIANA WHITE did on multiple occasions.

In or about January 2020, DEEJAY WHITE conspired with DAWNTIANA WHITE and others to have a firearm (the “Firearm”) and drugs smuggled to DEEJAY WHITE inside the MCC.  After they successfully smuggled the Firearm and contraband into the MCC, DEEJAY WHITE confirmed to DAWNTIANA WHITE that he had received the Firearm. 

On or about February 26, 2020, Bureau of Prisons (“BOP”) officials discovered a contraband cellphone in DEEJAY WHITE’s cell and transferred him to the Specialized Housing Unit (“SHU”).  While in the SHU, DEEJAY WHITE lied to a MCC investigator about his own role in smuggling the Firearm into the MCC and his possession of the Firearm inside the MCC, which led to an extensive lockdown of the MCC while BOP officials searched for the gun and other contraband.  Following a search of the MCC, on or about March 5, 2020, the Firearm, which was loaded, was recovered from inside a wall of DEEJAY WHITE’s MCC cell. 

On or about July 14, 2021, DAWNTIANA WHITE falsely testified before a Grand Jury in the Southern District of New York about how she obtained the Firearm to smuggle to DEEJAY WHITE inside the MCC.

DEEJAY WHITE, 45, of Chappaqua, New York, pled guilty to conspiracy to commit Hobbs Act robbery, which carries a statutory maximum sentence of 20 years in prison; brandishing a firearm in furtherance of a drug trafficking crime, which carries a statutory maximum sentence of life in prison, and a mandatory minimum sentence of seven years in prison to run consecutively to any other term of imprisonment; being a felon in possession of a firearm, which carries a statutory maximum sentence of 10 years in prison; and conspiracy to receive contraband in prison, which carries a statutory maximum sentence of five years in prison.  The maximum potential sentences in DEEJAY WHITE’s case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of DEEJAY WHITE will be determined by the judge.

DAWNTIANA WHITE, 38, of Brooklyn, New York, pled guilty to narcotics conspiracy, which carries a statutory maximum sentence of 20 years in prison; prison contraband conspiracy, which carries a statutory maximum sentence of five years in prison; obstruction of justice, which carries a statutory maximum sentence of 20 years; two counts of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison; and perjury, which carries a statutory maximum sentence of five years in prison.  The maximum potential sentences in DAWNTIANA WHITE’s case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of DAWNTIANA WHITE will be determined by the judge.

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

The prosecutions of DEEJAY WHITE for conspiracy to commit Hobbs Act robbery and brandishing a firearm in furtherance of a drug trafficking crime, and of DAWNTIANA WHITE for narcotics conspiracy and wire fraud, are being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Juliana N. Murray, Ryan B. Finkel, Peter J. Davis, and Kaylan E. Lasky are in charge of the prosecutions.  Mr. Williams praised the outstanding investigative work of the New York City Police Department (“NYPD”), the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), the New York Field Division of the Drug Enforcement Administration (“DEA”), the New York Office of the United States Postal Inspection Service, and the New York State Police (“NYSP”) in this investigation.

The prosecutions of DEEJAY WHITE for conspiring to receive contraband in prison and being a felon in possession of a firearm, and of DAWNTIANA WHITE for participating in a prison contraband conspiracy, obstruction of justice, and perjury are being handled by the Office’s Narcotics and Public Corruption Units.  Assistant United States Attorneys Juliana N. Murray, Ryan B. Finkel, Peter J. Davis, Kaylan E. Lasky, Aline R. Flodr, Daniel H. Wolf, and Jonathan E. Rebold are in charge of the prosecutions.  Mr. Williams praised the outstanding investigative work of the New York Office of the Federal Bureau of Investigation, the Department of Justice Office of the Inspector General New York Field Office, Special Agents from the U.S. Attorney’s Office for the Southern District of New York, the U.S. Customs and Border Protection in New York, the DEA, ATF, NYPD, and NYSP in this investigation.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction today of ASA SAINT CLAIR, a/k/a “Asa Williams,” a/k/a “Asa Sinclair,” following a one-week trial before the Honorable P. Kevin Castel.  SAINT CLAIR devised an investment scheme in which he defrauded more than 60 victims into providing loans to his organization, the World Sports Alliance, tied to a purported digital coin offering called IGObit.  SAINT CLAIR falsely represented to investors that the World Sports Alliance was a close affiliate of the United Nations and that they would receive guaranteed returns on their investment, but instead diverted the investors’ funds for his personal expenses and benefit. 

U.S. Attorney Damian Williams said:  “As a jury has now found, Asa Saint Clair used lies to defraud everyday people out of their hard-earned money by promising them guaranteed returns if they invested in a IGObit, a digital currency he claimed the World Sports Alliance was developing.  Saint Clair touted the WSA as working closely with the UN to promote the values of sports and peace for a better world, while in reality promoting only the balance of his bank accounts.”   

The defendant was charged and convicted in one count with committing wire fraud, in violation of Title 18, United States Code, Section 1343, from in or around November 2017, through in or around September 2019.  SAINT CLAIR solicited investors for the launch of IGObit through promised investment returns, representations that the World Sports Alliance, a purported intergovernmental organization, was a close affiliate and partner with the United Nations, and representations about the World Sport Alliance’s development projects around the world.  World Sports Alliance did not in fact have any relationship with the United Nations and did not, and had not, participated in any international development projects. 

SAINT CLAIR also represented to investors that their money would be used for the development of IGObit, when he in fact diverted those funds to other entities controlled by him and members of his family, as well as to pay his personal expenses, including dinners at Manhattan restaurants, travel, and online shopping.

SAINT CLAIR defrauded more than 60 victims of hundreds of thousands of dollars.

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SAINT CLAIR, 49, of Washington was convicted of one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence for the offense of conviction is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.  Sentencing before Judge Castel is scheduled for July 19, 2022.

Mr. Williams praised the work of Homeland Security Investigations.

The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Tara La Morte, Emily Deininger and Kiersten Fletcher are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Ryan T. Geach, Special Agent-in-Charge of the Department of Justice Office of the Inspector General New York Field Office (“DOJ-OIG”), announced today the unsealing of an indictment charging GREG MCKENZIE, a Bureau of Prisons correctional officer, with obstructing a federal investigation into the smuggling of a firearm into the Metropolitan Correctional Center (“MCC”).  The loaded firearm was recovered from inside the MCC on March 5, 2020.  MCKENZIE was arrested today and will be presented before Magistrate Judge Robert W. Lehrburger later today.  The case has been assigned to U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said:  “Greg McKenzie is alleged to have obstructed justice by lying to federal agents investigating the smuggling of a firearm into the MCC in 2020.  His alleged use of a prepaid cellphone to communicate secretly with an inmate from whose prison cell the firearm was recovered and subsequent false denials about those communications is a serious crime.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “McKenzie allegedly obstructed justice when he lied to federal investigators regarding his contact with a MCC inmate who last occupied a cell in which a loaded firearm was discovered.  As a federal corrections officer, McKenzie was responsible for protecting the welfare of the inmates and his coworkers in the facility.  Instead of fulfilling that duty, he chose to lie to the agents investigating a gravely serious violation of safety protocols.  With today’s charges, he will be forced to face the consequences of his actions.”

DOJ-OIG Special Agent-in-Charge Ryan T. Geach said:  “McKenzie’s alleged lying and obstruction of a federal investigation are serious offenses, especially because a loaded firearm in the hands of an inmate endangers not just the prison, but the entire community.”

According to the Indictment[1] unsealed today:

On or about March 5, 2020, a loaded .22 caliber firearm (the “Firearm”) was recovered from inside an MCC prison cell that had last been occupied by two inmates, including “Inmate-1.”  Several weeks before the Firearm was recovered, Inmate-1 and his wife had each communicated by phone with a particular cellphone used by MCKENZIE (the “McKenzie Prepaid Cellphone”).  However, when law enforcement agents interviewed MCKENZIE regarding the Firearm investigation, MCKENZIE falsely denied having any connection to the McKenzie Prepaid Cellphone.

Specifically, on January 30, 2020, MCKENZIE purchased the McKenzie Prepaid Cellphone from a store in lower Manhattan, just moments after having withdrawn approximately $120 in cash from a nearby ATM.  The next day, MCKENZIE used the McKenzie Prepaid Cellphone to repeatedly exchange calls with Inmate-1 – who was using a contraband cellphone from within the MCC – and Inmate-1’s wife. 

Meanwhile, cellphone location information revealed that the McKenzie Prepaid Cellphone frequently traveled between MCKENZIE’s Danbury, Connecticut residence and the MCC on dates and times consistent with MCKENZIE’s work schedule.  On the evening of January 31, 2020, MCKENZIE and Inmate-1’s wife each briefly traveled to the same location in the Bronx at the same time, and MCKENZIE thereafter traveled directly to the MCC to begin a shift beginning at midnight on February 1, 2020, whereupon he was assigned to the very unit where Inmate-1 was housed and from where the Firearm was later recovered.  

Surveillance video and call detail records further established that after beginning his February 1, 2020, shift, MCKENZIE and a colleague conducted a routine check of Inmate-1’s cellblock.  Moments later, Inmate-1, using a contraband cellphone, called and then texted the McKenzie Prepaid Cellphone.  Within minutes, MCKENZIE briefly returned to Inmate 1’s cellblock – this time alone – while appearing to carry an object under his left arm. 

On November 4, 2021, two federal agents conducted a voluntary interview with MCKENZIE.  During the interview, MCKENZIE falsely denied ownership, possession, and use of the McKenzie Prepaid Cellphone, and falsely denied ever using any prepaid cellphone to communicate with an MCC inmate or inmate’s associate.       

*                *                *

MCKENZIE, 35, of Danbury, Connecticut, is charged with one count of false statements, in violation of 18 U.S.C. § 1001(a)(2), which carries a maximum penalty of five years in prison, and one count of obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2), which carries a maximum penalty of 20 years in prison.

Mr. Williams praised the outstanding work of the FBI, DOJ-OIG, Special Agents from the U.S. Attorney’s Office for the Southern District of New York, and the U.S. Customs and Border Protection in New York.

The prosecution of this case is being handled by the Office’s Public Corruption and Narcotics Units.  Assistant United States Attorneys Aline R. Flodr, Jonathan E. Rebold, and Daniel H. Wolf are in charge of the prosecution, with assistance from Assistant United States Attorney Juliana N. Murray. 

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

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.  The defendant is presumed innocent unless and until proven guilty.

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 Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), pled guilty today in Manhattan federal court to securities fraud.  ROGAS used fraudulent financial data to obtain over $123 million in financing for NS8, of which he personally obtained approximately $17.5 million. ROGAS pled guilty today before U.S. District Judge John P. Cronan, and is scheduled to be sentenced by Judge Cronan on August 10, 2022. 

U.S. Attorney Damian Williams said:  “Today, Adam Rogas admitted to being the proverbial fox guarding the henhouse.  While claiming to be in the fraud prevention business, Rogas himself defrauded investors in his company of over $100 million.  Now Rogas will be held accountable for his fraudulent scheme.”

According to the Complaint, Indictment, and other publicly-filed documents: 

ADAM ROGAS was a co-founder of NS8, and served as its CEO, CFO, and 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 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.

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.

Altered (L) and original (R) bank statements for NS8’s revenue account.  Rogas altered statements for the account to show tens of millions of dollars in revenue (deposits) that did not exist.

ROGAS used these materially misleading financial statements to raise approximately $123 million from investors in the fall of 2019 and the spring of 2020.  During the fundraising process, ROGAS also 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.

*                      *                      *

ROGAS, 44, of Las Vegas, Nevada, pled guilty to one count of securities 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 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.  

Damian Williams, the United States Attorney for the Southern District of New York announced that the Dominican Republic’s former Consul General to Jamaica, JEREMIAS JIMENEZ CRUZ, was sentenced today to 179 months in prison for using his position and contacts in the government of the Dominican Republic to import cocaine into the United States. JIMENEZ CRUZ was sentenced by U.S. District Judge Kimba M. Wood. JIMENEZ CRUZ previously pled guilty to conspiring to import more than five kilograms of cocaine into the United States.

U.S. Attorney Damian Williams said:  “Jeremias Jimenez Cruz abused his position as a government official to traffic vast amounts of cocaine into the United States. Today Jimenez Cruz was rightly sentenced to 15 years in prison for his crime.”

According to the allegations in the Indictment, prior filings in this case, and statements made in Court:

JIMENEZ CRUZ was a high-ranking government official in the Dominican Republic whose positions have included Vice Consul of the Dominican Republic to Germany, Consul General of the Dominican Republic to Jamaica, and president of the National Christian Movement.  He has also held himself out to be the half-brother of a former two-term president of the Dominican Republic. JIMENEZ CRUZ used his position, connections, and planes to traffic large quantities of cocaine, including for importation to the United States, and to launder drug proceeds. During the course of the investigation, JIMENEZ CRUZ was caught on tape admitting that with his government connections, he had the capacity to move up to 600 kilograms of cocaine by airplane and up to one ton of cocaine by boat. JIMENEZ CRUZ admitted that he was a leader of this conspiracy that involved the importation of over 50 kilograms of cocaine, and that he abused his position of public trust to commit the offense.

*                      *                      *

In addition to the sentence, JIMENEZ CRUZ, age 52, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the DEA. The arrest was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force (OCDETF) and the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA).  

The Strike Force is housed at the DEA’s New York Division and includes agents and officers of the DEA, the New York City Police Department, the New York State Police, New York City Sheriff’s Office, Immigration and Customs Enforcement – Homeland Security Investigations, the U. S. Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms, and Explosives , U.S. Customs and Border Protection, U.S. Secret Service, the U.S. Marshals Service, New York National Guard, the Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Adam S. Hobson and Mollie Bracewell are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SINCERE SAVOY was sentenced to 22 years in prison for his participation in the 2016 murder of Shamoya McKenzie and the affairs of the Goonies street gang.  In September 2021, co-defendant DAVID HARDY was sentenced to 31 years in prison for the murder of McKenzie and his participation in a 2012 shooting.  In July 2021 and November 2021, co-defendants MARQUIS COLLIER and JERMAINE HUGHLEY, respectively, were each sentenced to 27 years in prison for their participation in the McKenzie murder and the affairs of the Goonies gang.

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

Between 2007 and 2017, in the Southern District of New York and elsewhere, HARDY, COLLIER, HUGHLEY, and SAVOY were members of a racketeering enterprise known as the “Goonies.”  In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Goonies committed, conspired, attempted, and threatened to commit acts of violence, including murder, attempted murder and robbery; they conspired to distribute and possess with the intent to distribute narcotics; and they obtained, possessed, and used firearms, including by brandishing and firing them. 

The Goonies were engaged in a long-standing and violent feud with several rival Mount Vernon street gangs, including, among others, the “Boss Playa Family,” the “Get Money Gangstas,” the “Gunnas,” and the “Much Better Gang”.  On December 31, 2016, HARDY, COLLIER, HUGHLEY and SAVOY attempted to murder a rival gang member in broad daylight by firing multiple shots at him in the vicinity of Tecumseh Avenue and Third Street in Mount Vernon, New York.  The rival gang member suffered gunshot wounds but survived.  One of the bullets, however, missed the intended target and struck the head of 13-year old Shamoya McKenzie, who was in the front passenger seat of a passing car, which was being driven by her mother.  Shamoya McKenzie died as a result.

*                *                *

HARDY, 27, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering and one count of using a firearm in connection with an assault with a dangerous weapon in aid of racketeering for committing a separate shooting in 2012 in furtherance of the Goonies.  He was sentenced to 372 months’ in prison.

COLLIER, 30, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  He was sentenced to 324 months’ in prison.

HUGHLEY, 28, pled guilty to one count of racketeering conspiracy and one count of discharging a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering.  He was sentenced to 324 months’ in prison.  

SAVOY, 25, pled guilty to one count of using a firearm in connection with the murder of Shamoya McKenzie in aid of racketeering. He was sentenced to 264 months’ in prison.

Mr. Williams thanked the Westchester County District Attorney’s Office for their extraordinary cooperation and assistance with this case, and praised the outstanding investigative work of the Mount Vernon Police Department and the FBI Westchester Safe Streets Task Force which includes 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 PD, Westchester County DA's Office, Putnam County Sheriff's Office, Rockland County DA's Office, the NYPD and the Yonkers, Mount Vernon, Peekskill, Greenburgh, New Rochelle, White Plains, Clarkstown and Ramapo Police Departments.

The case is being handled by the Office’s White Plains Division.  Assistant United States Attorney Anden Chow is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that GANGADAI RAMPERSAUD AZIM, a/k/a “Julie Azim,” was sentenced today to 24 months in prison for her role in a more than decade-long conspiracy to commit bank fraud, defrauding her employer, a Manhattan-based bank, by intentionally falsifying the bank’s books and records in order to misappropriate approximately $1.7 million. AZIM was sentenced by U.S. District Judge Katherine Polk Failla.

According to the allegations in the Complaint, court filings, and statements made during public court proceedings:

Between August 2008 and January 2021, AZIM, a long-time employee of a New York, New York-based bank (“Bank-1”), stole approximately $1.7 million from her employer.  Over the course of approximately 12 years, AZIM executed hundreds of wire transfers of Bank-1 funds to co-conspirators and related companies, who then sent portions of the ill-gotten funds to AZIM’s personal bank account. 

In furtherance of her scheme to defraud Bank-1, AZIM repeatedly made false entries in Bank-1’s systems, misappropriating funds paid to Bank-1 by its clients to satisfy outstanding loan obligations and then extending the maturity dates of those loan obligations, making it appear as though the loan obligations had not yet been paid.  When even the fraudulently extended maturity dates came due, AZIM originated new, fraudulent loans, to help conceal the scheme.  AZIM utilized the proceeds of those fraudulent loans to satisfy the loans for which she had previously stolen the client payments.  Over the course of approximately 12 years, between 2008 and 2020, AZIM caused approximately 200 improper wire transfers of Bank-1’s funds, each for an amount under $10,000, to be sent to third party accounts, including those of co-conspirators and related companies, which then returned portions of those funds to AZIM.  In doing so, AZIM abused her position at Bank-1 and enriched herself at the expense of her employer.   

*                *                *

In addition to the prison sentence, AZIM, 59, of Richmond Hill, New York, was sentenced to three years of supervised release and ordered to pay $1,685,723.18 in restitution and to forfeit $1,523,431.30 in criminal proceeds.

Ms. Williams praised the outstanding investigative work of the New York Field Office of the Federal Bureau of Investigation in this case.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment against ANDREY MURAVIEV, a/k/a “Andrey Muravyov,” a Russian citizen, charging him with making illegal political contributions as a foreign national, and conspiring to make illegal political contributions as a foreign national in the names of straw donors.  Muraviev is charged with conspiring with Lev Parnas, Andrey Kukushkin, and Igor Fruman, and others, who were convicted at trial or have pleaded guilty to these crimes.      

U.S. Attorney Damian Williams said: “As alleged, Andrey Muraviev, a Russian national, attempted to influence the 2018 elections by conspiring to push a million dollars of his foreign funds to candidates and campaigns.  He attempted to corrupt our political system to advance his business interests.  The Southern District of New York is committed to rooting out efforts by foreigners to interfere with our elections.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “As alleged, Muraviev, a Russian foreign national, made illegal political contributions and conspired with Parnas, Kukushkin and Fruman to obscure their true source.  The money Muraviev injected into our political system, as alleged, was directed to politicians with views favorable to his business interests and those of his co-conspirators.  As today’s action demonstrates, we will continue to aggressively pursue all those who seek to illegally effect our nation’s elections.”

As alleged in the indictment against MURAVIEV and as proven during the trial against his co-conspirators:

In the spring of 2018, MURAVIEV, Kukushkin, Fruman, and Parnas decided to launch a business aimed at acquiring retail cannabis and marijuana licenses in the United States. As part of that plan, MURAVIEV agreed to wire $1 million, through a series of bank accounts, to Fruman and Parnas to fund hundreds of thousands of dollars in political contributions they had made or promised to make before the elections in November 2018.  The purpose of the donations was to curry favor with candidates that might be able to help MURAVIEV and his co-conspirators obtain cannabis and marijuana licenses.  MURAVIEV’s money was used to reimburse and fund federal and state political donations in Florida, Nevada, and Texas, and MURAVIEV also agreed that the funds would pay for donations to politicians in New York and New Jersey. MURAVIEV traveled to Nevada as part of these efforts, and received regular updates from Kukushkin about the co-conspirators’ progress politically. To obscure the fact that MURAVIEV was the true donor of the money, the funds were sent to a business bank account controlled by FRUMAN’s brother, and then the donations were made in FRUMAN’s and PARNAS’s names.

*                      *                     *

MURAVIEV, 47, of Russia, is charged with (1) conspiring to make contributions and donations by a foreign national and in the name of another person, which carries a maximum sentence of five years in prison; and (2) making contributions by a foreign national, which carries a maximum sentence of five years in prison.  The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

MURAVIEV is believed to be in Russia and remains at large.  The case is assigned to Southern District of New York U.S. District Judge J. Paul Oetken, who presided over the trial of Parnas and Kukushkin.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Rebekah Donaleski, Aline R. Flodr, Nicolas Roos, and Hagan Scotten are in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHNNY NUNEZ GARCIA, a/k/a “Superior,” was sentenced today to 200 months in prison for the June 5, 2009 gang-related murder of 17-year-old Jonathan Ruiz in the Bronx, New York.  Today’s sentence is in addition to the 124 months in prison that NUNEZ GARCIA has already served on a prior sentence for related narcotics and firearms offenses.  NUNEZ GARCIA was sentenced by U.S. District Judge Andrew L. Carter, Jr. NUNEZ GARCIA previously pled guilty to murdering Ruiz as part of NUNEZ GARCIA’s participation in the Dominicans Don’t Play (“DDP”) gang.

U.S. Attorney Damian Williams said: “Today’s sentence shows that senseless gang violence will be met with severe consequences.  Johnny Nunez Garcia participated in the horrific murder of Jonathan Ruiz, who was only 17 years old when he died.  For this crime and others, Nunez Garcia will spend 27 years in federal prison.”

According to the allegations contained in the Superseding Information, prior charging instruments and other filings in this case, and statements during court proceedings:

NUNEZ GARCIA was a member of the “Elder Family” set of the DDP gang—an enterprise that distributed crack cocaine and other drugs, and carried out shootings, robberies, and other acts of violence, on and around Elder Avenue in the Bronx, New York.  On June 5, 2009, members of the DDP gang attended a party and got into an altercation with individuals they understood to be members of the rival Trinitarios gang.  These suspected rivals—who included Jonathan Ruiz—fled down the street, but NUNEZ GARCIA and his accomplices pursued them in a car.  Once the DDPs caught up with Ruiz, one of the DDP members exited the car and shot Ruiz from a distance, causing Ruiz to fall wounded to the ground.  NUNEZ GARCIA then ran over to the wounded Ruiz, stood over him, and shot him again.  NUNEZ GARCIA left Ruiz to bleed out from his injuries.

*                      *                     *

In addition to the prison term, NUNEZ GARCIA, 31 of the Bronx, New York, was sentenced to five years of supervised release.

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

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Frank Balsamello and Adam Hobson are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SAMUEL REED, one of three co-founders and a high-ranking executive of purportedly “off-shore” cryptocurrency derivatives exchange the Bitcoin Mercantile Exchange or “BitMEX,” pled guilty today to violating the Bank Secrecy Act (the “BSA”) by willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX.  Under the terms of his plea agreement, REED agreed to separately pay a $10 million criminal fine representing pecuniary gain derived from the offense.  REED pled guilty today before Chief U.S. District Judge Laura T. Swain, and will be sentenced by U.S. District Judge John G. Koeltl.  The other two founders of BitMEX, Arthur Hayes and Benjamin Delo, previously pled guilty to the same offense in February 2022.

U.S. Attorney Damian Williams said:  “Samuel Reed has now joined his co-founders, Arthur Hayes and Benjamin Delo, in admitting that they caused BitMEX to commit criminal violations of the anti-money laundering laws that govern financial institutions operating in the United States.  As today’s guilty plea reflects, this Office will not permit cryptocurrency exchanges to operate as a shadow financial system that enables criminal actors to move their illicit proceeds without detection, and will vigorously investigate and prosecute the operators of such exchanges who deliberately flout U.S. law.”

According to the Indictment, public court filings, and statements made in court:[1]

REED, together with Arthur Hayes and Benjamin Delo, was one of the three co-founders and the long-time Chief Technology Officer of BitMEX.  BitMEX is an online cryptocurrency derivatives exchange that, during the relevant time period, had U.S.-based operations and served thousands of U.S. customers, notwithstanding false representations to the contrary by the company.  From at least September 2015, and continuing at least through the time of the Indictment in September 2020, REED willfully caused BitMEX to fail to establish and maintain an AML program, including a program for verifying the identify of BitMEX’s customers (or a “know your customer” or “KYC” program).  As a result of its willful failure to implement AML and KYC programs, BitMEX was in effect a money laundering platform.  For example, in about May 2018, REED was notified of allegations that BitMEX was being used to launder the proceeds of a cryptocurrency hack.  Neither REED nor the company filed a suspicious activity report thereafter (indeed, BitMEX filed no suspicious activity reports at all between 2014 and September 2020), nor did BitMEX implement an AML or KYC program in response. 

REED failed to institute AML or KYC programs at BitMEX despite closely following U.S. regulatory developments that made clear his legal obligation to do so if BitMEX operated in the United States, which it did.  Despite repeatedly stating that BitMEX did not serve U.S. customers, including to individuals outside of BitMEX, REED knew that BitMEX’s purported withdrawal from the U.S. market in or about September 2015 was a sham, and that purported “controls” BitMEX put in place to prevent U.S. trading were an ineffective facade that did not, in fact, prevent users from accessing or trading on BitMEX from the United States.  REED not only understood that U.S. customers continued to trade on BitMEX, but derived substantial profits from BitMEX as a result of U.S.-based trading. 

*                *                *

REED, 32, of Massachusetts, pled guilty to one count of violating the Bank Secrecy Act, which carries a maximum penalty of 5 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York Money Laundering Investigation Squad, and thanked the attorneys and investigators at the Commodity Futures Trading Commission whose expertise and diligence were integral to the development of this investigation.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, and Thane Rehn are in charge of the prosecution. 

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[1] Two of REED’s co-defendants, Arthur Hayes and Benjamin Delo, pled guilty to violating the BSA in February 2022. As to REED’s remaining co-defendant, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRY FORMER was sentenced this afternoon to 48 months in prison in connection with the laundering of more than $2.2 million in proceeds of a business email compromise scheme.  FORMER pled guilty to conspiring to commit wire fraud on April 2, 2021, before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Terry Former played an essential role in a scheme to defraud businesses, by organizing a team of co-conspirators to open shell company bank accounts to accept the victims’ funds and clandestinely transfer them to the fraudsters. Today’s sentence demonstrates the severe consequences that will befall those who facilitate criminal conduct by laundering its proceeds.”

According to the Indictment and other public filings in the case: 

From at least in or about October 2018 through at least in or about October 2019, TERRY FORMER participated in a scheme to defraud businesses and by impersonating individuals and businesses in the course of otherwise ordinary financial transactions, thereby fraudulently inducing counterparties to those transactions to transfer funds to bank accounts controlled by FORMER and his co-conspirators (the “Scheme”).  FORMER was one of the primary individuals responsible for coordinating the money side of the Scheme.  In particular, he directed co-conspirators to open up bank accounts in the names of shell companies, which were purposefully chosen to mirror the names of the true counterparties in the business transactions that were targeted by the Scheme.  FORMER also coordinated between the individuals involved in impersonating the true counterparties and the individuals holding the bank accounts to let them know when the accounts would be funded and to funnel the money out of those accounts once received . 

In reliance on the foregoing false and misleading misrepresentations, one of the victims of the Scheme wired more than $2.2 million into a fraudulent bank account opened at FORMER’s direction.  FORMER and his co-conspirators, knowing the money represented fraud proceeds, transferred a portion of those fraud proceeds out of the fraudulent bank account in transactions designed to conceal and disguise their source, ownership, and control.  FORMER’s efforts to drain the account completely were stopped only when the bank froze the funds.

*                *                *

FORMER, 46, of Texas, was also sentenced to three years of supervised release. 

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 United States Attorneys Emily Deininger and Tara La Morte are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that JOHN ALBERT LOAR BARKSDALE was arrested abroad on conspiracy, securities fraud, and wire fraud charges.  The charges arise from a scheme perpetrated by BARKSDALE to sell a cryptocurrency token called Ormeus Coin (asset symbol “ORME”) through false representations regarding the size, value, and purported profitability of Ormeus Coin’s cryptocurrency mining assets.  In particular, through a series of marketing materials designed to sell Ormeus Coin, BARKSDALE and others falsely represented, among other things, that Ormeus Coin was secured by a $250 million cryptocurrency mining operation, which would have been one of the largest such operations in the world, and that its mining revenues exceeded $5 million on a monthly basis.    

U.S. Attorney Damian Williams said:  “As alleged, John Barksdale perpetrated a scheme to sell the cryptocurrency Ormeus Coin to investors around the world through a web of lies, which he spread through in-person roadshows, social media, and even a jumbotron in Times Square.  Among other allegedly false statements he made, Barksdale lied that Ormeus Coin was secured by a $250 million cryptocurrency mining operation that had revenues exceeding $5 million per month, when in fact Ormeus’s mining operations never approached such a value or had such revenues.  Together with our law enforcement partners here and abroad, we will work tirelessly to prosecute those who commit frauds against the public in connection with the sale of cryptocurrencies.”

Acting HSI New York Special Agent in Charge Ricky J. Patel:  “As alleged, Barksdale operated like a traveling salesman and peddled lies, overstatements, and misrepresentations regarding a cryptocurrency called Ormeus Coin, which resulted in duping thousands of investors throughout the world and took in over $70 million.  The men and women of HSI will not allow fraudsters to sell dreams of inflated and unrealistic revenues to innocent investors with the goal of lining their own pockets.  By leveraging federal and international partnerships, Barksdale is now facing prosecution in the Southern District of New York for his alleged criminal acts.”

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

From in or about 2017 through at least in or about October 2021, BARKSDALE and his relative (“CC-1”) perpetrated a scheme to sell Ormeus Coin, an ERC-20 compliant smart contract-based token on the Ethereum blockchain, through false representations.  Ormeus Coin was offered to investors throughout the world, including in the United States and the Southern District of New York, through enrollment packages sold by Ormeus Global, a multi-level marketing company controlled by BARKSDALE and CC-1, various digital currency exchanges, and directly from BARKSDALE and his associates.

Through a series of white papers, in-person roadshows, online webinars and videos, social media platforms, and other marketing materials approved by BARKSDALE and CC-1, BARKSDALE and CC-1 falsely represented, among other things, that Ormeus Coin was a digital money system secured by a $250 million cryptocurrency mining operation, which would have been one of the largest such operations in the world.  In order to backstop the false representations regarding the size and value of cryptocurrency mining assets that purportedly secured the value of Ormeus Coin, BARKSDALE, among other things: (i) approved marketing materials that falsely depicted photos of a purported Ormeus Coin mining facility; (ii) deceptively referenced an “Ormeus Reserve Vault” (“ORV”) that stored over 3,000 Bitcoin purportedly derived from Ormeus Coin’s mining operations, which was represented as securing the value of Ormeus Coin; and (iii) falsely stated that Ormeus Coin’s mining revenues exceeded $5 million on a monthly basis.  For example, on or about February 9, 2018, Ormeus Coin ran an advertisement on a jumbotron in Times Square in Manhattan, New York, which proclaimed, in a caption above a giant ORME symbol, “$250 Million Cryptocurrency Mining Farm Revealed in Legal Audit by Ormeus Coin.”  On or about February 12, 2018, a photograph of the Times Square advertisement was posted to Ormeus Global’s Twitter account with the caption “Live from New York City, Ormeus Coin Advertising its $250 million Cryptocurrency Mining Farm in Times Square, Manhattan!”  In truth, Ormeus’s mining operations never approached a value close to $250 million and never produced revenues exceeding one million dollars in any month, and the Bitcoin stored in the “Ormeus Reserve Vault” belonged to a third party.

Numerous investors purchased enrollment packages through Ormeus Global and purchased Ormeus Coin through digital currency exchanges or directly from BARKSDALE and his associates.  Investors made these purchases based at least in part on BARKSDALE’s false representations regarding the size, value, and purported profitability of the cryptocurrency mining assets controlled by Ormeus Global and Ormeus Coin, as well as the purported security that the ORV provided to the value of Ormeus Coin.  Through this scheme, from in or about June 2017 through at least in or about April 2018, Ormeus Global raised at least approximately $70 million from the sale of enrollment packages to more than 8,000 investors around the world.  From in or about June 2017 through at least in or about October 2021, Ormeus Coin was sold to at least approximately 12,000 investors, including at least 200 U.S.-based investors.  At its peak, Ormeus Coin had a market capitalization of approximately $52 million in or about January 2018.

*                      *                      *

BARKSDALE, 40, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of wire fraud.  Conspiracy to commit securities fraud carries a maximum sentence of five years in prison.  All other charges 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.

Any individuals who believe they may have been the victim of the alleged crimes perpetrated in connection with Ormeus Global or Ormeus Coin can contact HSI at https://www.ice.gov/webform/ice-tip-form or [email protected].

Mr. Williams praised the outstanding investigative work of HSI and USPIS, and thanked the United States Securities and Exchange Commission, which today filed a parallel civil action, for its assistance.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division, the U.S. Department of State, and the U.S. Marshals Service, who all provided significant assistance in this investigation.  

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah Lai, Sagar Ravi, and Olga I. Zverovich 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.

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

A federal court in New York unsealed a complaint today charging a dual Russian and U.S. citizen with acting and conspiring to act in the United States illegally as an agent of the Russian government, willfully failing to register under the Foreign Agents Registration Act (FARA), as well as conspiring to commit visa fraud and making false statements to the FBI.

According to court documents, Elena Branson, 61, beginning in at least 2011, worked on behalf of the Russian government and Russian officials to advance Russian interests in the United States, including by coordinating meetings for Russian officials to lobby U.S. political officials and businesspersons, and by operating organizations in the United States for the purpose of publicly promoting Russian government policies. Branson never notified the Attorney General as she was required to, including by registering under FARA.

“As alleged, Branson engaged in a wide-ranging influence and lobbying scheme with funding and direction from the Russian government – all while deliberately leaving the American people in the dark,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The department will continue to expose these serious crimes and shine a light on foreign malign influence.”

“As alleged, Elena Branson, a dual U.S. - Russian national, actively subverted foreign agent registration laws in the United States in order to promote Russian policies and ideology,” said U.S. Attorney Damian Williams for the Southern District of New York. “The Russian government at its highest levels, up to and including President Vladimir Putin, have made known that aggressive propaganda and recruitment of the Russian diaspora around the world is a Russian priority. In connection with this pursuit, Branson is alleged to have corresponded with Putin himself and met with a high-ranking Russia minister before founding a Russian propaganda center here in New York City, the Russian Center New York. Branson’s promotional outreach, including an ‘I Love Russia’ campaign aimed at American youths, exemplifies her attempts to act at the behest of the Russian government to illegally promote its interests in the United States. All the while, Branson knew she was supposed to register as an agent of the Russian government but chose not to do so and, instead, instructed others regarding how to illegally avoid the same. Particularly given current global events, the need to detect and hinder attempts at foreign influence is of critical importance, and the Southern District of New York is proud to do its part in the fight against tyranny.”

“The evidence gathered in the Branson case shows she is a serial offender in violating the Foreign Agents Registration Act in order to promote Russian interests,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “While living in the United States for nearly a decade, she allegedly took money and direction from Russian government officials –  including some at the Russian Embassy in Washington, D.C. – as she arranged meetings for Russian officials to lobby U.S. officials. The FBI and our partners will continue to investigate and stop individuals who hide their work for foreign governments, like the one in Moscow.”

According to court documents, the Russian government has sought to spread Russian propaganda and to use Russian citizens in the United States and elsewhere to make connections with U.S. community leaders, politicians and businesspersons, in order to advance Russian government objectives. Russian leaders, including President Vladimir Putin, have made public statements acknowledging this foreign policy strategy of the Russian government. 

As part of that Russian government effort, beginning in at least approximately 2011, Branson, a native of Russia, acted illegally as an agent of the Russian government while living in the United States, by not registering pursuant to FARA or otherwise notifying the Attorney General as required by a separate statute. Among other things, in or about 2012, after receiving approval from the highest levels of the Russian government, Branson incorporated an organization headquartered in Manhattan, New York, named the Russian Center New York (RCNY). She sent correspondence to then-Prime Minister Putin and met with a high-ranking Russian government minister in connection with the initiation of her activities for the Russian government in the United States. 

Branson received tens of thousands of dollars in funding from the Russian government for the RCNY and used the RCNY to host events and engage in public messaging at the direction of the Russian government and Russian officials. Branson was directed to, among other things, host events designed to consolidate the Russian-speaking youth community in the United States in exchange for funding. For example, Branson and the RCNY hosted an annual youth forum which was funded in part by an entity controlled by the government of Moscow.

Throughout her work as a Russian agent in the United States, Branson received funding and direction from the Russian government, including from the Russian Embassy in Washington, D.C., and received tasking from high-level Russian government officials and Russian government-run organizations. At the same time, however, Branson actively sought to hide that the Russian government was providing her with tasking and funding her activity, and she instructed her co-conspirators to do the same. She also cautioned others against using language in describing their activities that would draw attention to FARA registration obligations for herself and the organizations.

As alleged, in or about 2019, Branson coordinated through the RCNY a campaign to lobby Hawaiian officials not to change the name of a fort located on the Hawaiian island of Kauai, which is the last remaining formerly Russian fort in the Hawaiian-islands and is significant to the Russian government. Among other things, Branson provided Hawaiian officials with messages from Russian government officials and organized a trip to Moscow for Hawaiian officials responsible for the potential name change to meet with high-ranking Russian government personnel. 

In addition to the RCNY, Branson served as a chairperson of the Russian Community Council of the USA (KSORS), which is funded at least in part by various Russian government-run entities. Among other things, KSORS coordinated an “I Love Russia” campaign in the United States and organized youth forums focused on the promotion of Russian history and culture to American youths. Branson used the KSORS website to promote messages from the Russian Embassy and organized KSORS events approved by the Russian Ambassador to the United States. When Branson sought financial support from a government of Moscow official for the KSORS website, Branson reported that the purpose of the KSORS website was to spread information “about the activities of organizations created by Russian compatriots to form a positive image of Russia and Moscow among Americans.” 

According to the complaint, Branson’s work on behalf of the Russian government also included arranging meetings for herself and other Russian officials with U.S. government officials and executives at businesses based in the United States. For example, in March 2016, Branson worked to arrange meetings for the head of the Department of Foreign Economic Activity and International Relations for the Government of Moscow with, among others, a New York state senator and the management of certain U.S. companies. 

Branson also participated in a scheme to obtain fraudulent visas for Russian officials and their associates, by providing information about RCNY events to those individuals for using as false pretenses to obtain visas to enter the United States. 

The FBI interviewed Branson on Sept. 29, 2020. During this interview, among other things, Branson falsely claimed that she was never asked by Russian officials to coordinate any meetings between U.S. business leaders or politicians and officials from the government of Moscow. Branson subsequently left the United States for Russia. On or about Oct. 15, 2021, during an interview on a Russian government-controlled television station, Branson stated that she left the United States because she thought it was likely that she would be arrested. 

Branson is charged with: (1) conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison; (2) acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; (3) conspiring to evade FARA registration, which carries a maximum sentence of five years in prison; (4) willfully failing to register under FARA, which carries a maximum sentence of five years in prison; (5) conspiring to commit visa fraud, which carries a maximum sentence of five years in prison; and (6) making false statements to the FBI, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Branson left the United States for Russia in 2020 and remains at large.

The FBI’s New York Field Office are investigating the case.

Assistant U.S. Attorney Jason A. Richman for the Southern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a Complaint charging ELENA BRANSON, a dual Russian and U.S. citizen, with acting and conspiring to act in the United States illegally as an agent of the Russian government, willfully failing to register under the Foreign Agents Registration Act (“FARA”), as well as conspiring to commit visa fraud and making false statements to the FBI.  As alleged, beginning in at least 2011, BRANSON worked on behalf of the Russian government and Russian officials to advance Russian interests in the United States, including by coordinating meetings for Russian officials to lobby U.S. political officials and businesspersons, and by operating organizations in the United States for the purpose of publicly promoting Russian government policies, and BRANSON never notified the Attorney General as she was required to, including by registering under FARA.

U.S. Attorney Damian Williams said: “As alleged, Elena Branson, a dual U.S. / Russian national, actively subverted foreign agent registration laws in the United States in order to promote Russian policies and ideology.  The Russian government at its highest levels, up to and including President Vladimir Putin, have made known that aggressive propaganda and recruitment of the Russian diaspora around the world is a Russian priority.  In connection with this pursuit, Branson is alleged to have corresponded with Putin himself and met with a high-ranking Russia minister before founding a Russian propaganda center here in New York City, the Russian Center New York.  Branson’s promotional outreach, including an ‘I Love Russia’ campaign aimed at American youths, exemplifies her attempts to act at the behest of the Russian government to illegally promote its interests in the United States.  All the while, Branson knew she was supposed to register as an agent of the Russian government but chose not to do so and, instead, instructed others regarding how to illegally avoid the same.  Particularly given current global events, the need to detect and hinder attempts at foreign influence is of critical importance, and the Southern District of New York is proud to do its part in the fight against tyranny.”

Assistant Attorney General Matthew G. Olsen said: “As alleged, Branson engaged in a wide-ranging influence and lobbying scheme with funding and direction from the Russian government – all while deliberately leaving the American people in the dark. The Department will continue to expose these serious crimes and shine a light on foreign malign influence.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Branson worked as an illegal agent of the Russian government in circumvention of FARA requirements. At the direction of the Russian government, she led a years long campaign to identify the next generation of American leaders, cultivate information channels, and shape US policy in favor of Russian objectives.  This case highlights the breadth of Russia's relentless intelligence and malign influence activities targeting the United States. The FBI will continue to be just as aggressive in uncovering and dismantling these Russian government networks who seek to harm our national security.”

According to the allegations contained in the Complaint filed today in Manhattan federal court[1]:

The Russian government has sought to spread Russian propaganda and to use Russian citizens in the United States and elsewhere to make connections with U.S. community leaders, politicians, and businesspersons, in order to advance Russian government objectives.  Russian leaders, including President Vladimir Putin, have made public statements acknowledging this foreign policy strategy of the Russian government. 

As part of that Russian government effort, beginning in at least approximately 2011, BRANSON, a native of Russia, acted illegally as an agent of the Russian government while living in the United States, by not registering pursuant to FARA or otherwise notifying the Attorney General as required by a separate statute. Among other things, in or about 2012, after receiving approval from the highest levels of the Russian government, BRANSON incorporated an organization headquartered in Manhattan, New York, named the Russian Center New York (“RCNY”).  BRANSON sent correspondence to then-Prime Minister Putin and met with a high-ranking Russian government Minister in connection with the initiation of her activities for the Russian government in the United States.  BRANSON received tens of thousands of dollars in funding from the Russian government for the RCNY and has used the RCNY to host events and engage in public messaging at the direction of the Russian government and Russian officials.  BRANSON was directed to, among other things, host events designed to consolidate the Russian-speaking youth community in the United States.  For example, BRANSON and the RCNY hosted an annual youth forum, funded in part by an entity controlled by the Government of Moscow. Throughout her work as a Russian agent in the United States, BRANSON received funding and direction from the Russian government, including from the Russian Embassy in Washington, D.C., and received tasking from high-level Russian government officials and Russian government-run organizations. At the same time, however, BRANSON actively sought to hide that the Russian government was providing her with tasking and funding her activity and she instructed her co-conspirators to do the same. She also cautioned others against using language in describing their activities that would draw attention to FARA registration obligations for herself and the organizations.

As alleged, in or about 2019, BRANSON coordinated through the RCNY a campaign to lobby Hawaiian officials not to change the name of a fort located on the Hawaiian island of Kauai, which is the last remaining formerly Russian fort in the Hawaiian islands and is significant to the Russian government.  Among other things, BRANSON provided Hawaiian officials with messages from Russian government officials and organized a trip to Moscow for Hawaiian officials responsible for the potential name change to meet with high-ranking Russian government personnel. 

In addition to the RCNY, BRANSON has served as a Chairperson of the Russian Community Council of the USA (“KSORS”), which is funded at least in part by various Russian government-run entities.  Among other things, KSORS has coordinated an “I Love Russia” campaign in the United States and organized youth forums focused on the promotion of Russian history and culture to American youths.  BRANSON used the KSORS website to promote messages from the Russian Embassy and organized KSORS events approved by the Russian Ambassador to the United States.  When BRANSON sought financial support from a Government of Moscow official for the KSORS website, BRANSON reported that the purpose of the KSORS website was to spread information “about the activities of organizations created by Russian compatriots to form a positive image of Russia and Moscow among Americans.” 

According to the Complaint, BRANSON’s work on behalf of the Russian government also included arranging meetings for herself and other Russian officials with U.S. Government officials and executives at businesses based in the United States.  For example, in March 2016, BRANSON worked to arrange meetings for the head of the Department of Foreign Economic Activity and International Relations for the Government of Moscow with, among others, a then-New York State Senator and the management of certain U.S. companies.

BRANSON also participated in a scheme to obtain fraudulent visas for Russian officials and their associates, by providing information about RCNY events to those individuals for using as false pretenses to obtain visas to enter the United States. 

The FBI interviewed BRANSON on September 29, 2020.  During this interview, among other things, BRANSON falsely claimed that she had never been asked by Russian officials to coordinate any meetings between U.S. business leaders or politicians and officials from the Government of Moscow.  BRANSON subsequently left the United States for Russia.  On or about October 15, 2021, during an interview on a Russian government-controlled television station, BRANSON stated that she had left the United States because she thought it was likely that she would be arrested. 

*                      *                     *

BRANSON, 61, is charged with (1) conspiring to act as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of five years in prison; (2) acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of ten years in prison; (3) conspiring to evade FARA registration, which carries a maximum sentence of five years in prison; (4) willfully failing to register under FARA, which carries a maximum sentence of five years in prison; (5) conspiring to commit visa fraud, which carries a maximum sentence of five years in prison; and (6) making false statements to the FBI, which carries a maximum sentence of five years in prison.  The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.

BRANSON left the United States for Russia in 2020 and remains at large.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney Jason A. Richman is in charge of the case, with assistance from Trial Attorney Scott Claffee of the Counterintelligence and Export Control Section.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), announced today that SERGIO LORENZO RODRIGUEZ, of Orange County, California, pled guilty to one count of wire fraud in connection with a fraudulent foreclosure rescue scheme that took in at least $5 million in prohibited advance fees from thousands of financially distressed homeowners.  RODRIGUEZ pled guilty before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said:  “As he admitted today, for years, Sergio Lorenzo Rodriguez took advantage of desperate homeowners who were facing foreclosure and eviction to collect from them, in the aggregate, millions of dollars in advance fees based on promises that Rodriguez knew he could not, or would not, keep.  He exploited the financial vulnerability of his victims and is now being held accountable for his crime.”

According to the Complaint, the Indictment,[1] and statements made in court, and publicly available documents:    

From approximately mid-2015 through August 2020, SERGIO LORENZO RODRIGUEZ and a co-conspirator (the Defendants) owned and/or managed a series of mortgage modification companies through which they perpetrated a scheme to defraud and attempt to defraud financially distressed consumers who were facing or were at imminent risk of foreclosure through deceptive marketing practices. Those companies included American Home Servicing Center, National Advocacy Center, National Advocacy Group, and Capital Home Advocacy Center (collectively, the “Companies”).  The Defendants tricked desperate homeowners into paying thousands of dollars each in prohibited advance fees through various misrepresentations, including: falsely claiming that the homeowners had been pre-approved by their lender or servicer for a mortgage modification; misrepresenting prohibited advance fees as closing costs or other non-prohibited costs; fraudulently claiming that the Companies achieved success rates of 95 percent or higher for mortgage modifications; and making empty promises of a no-risk money back guarantee.  As a result of their intentional misrepresentations, and misrepresentations that they encouraged their subordinates to make, the Defendants induced thousands of homeowners to pay, in the aggregate, millions of dollars in prohibited advance fees to the Companies, including a large number of consumers who were ultimately denied mortgage modifications or who received modification offers that were less favorable than they had been led to expect at the time they paid advance fees.

In February 2018, the Federal Trade Commission brought a civil lawsuit against the Defendants, among others, in federal court in Santa Ana, California.  That civil action resulted first in a temporary restraining order and then a permanent injunction barring the Defendants from marketing and selling all debt relief products and services.  As alleged in the Indictment, the Defendants flouted those judicial orders by having a relative create another mortgage modification company named 1st Premier Asset Solutions, which the Defendants operated using aliases and some of the same deceptive practices. 

*                *                *

SERGIO LORENZO RODRIGUEZ, 47, of Laguna Niguel, California, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. 

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

Mr. Williams praised the outstanding and persistent investigative work of the United States Postal Inspection Service and thanked the Federal Trade Commission for their assistance.

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

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[1] As to Rodriguez’s co-defendant Eva Christine Rodriguez, the entirety of the text of the Indictment, and the descriptions of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that RAKIM BROWN, a/k/a “Rah,” pled guilty yesterday to firearms and narcotics offenses, including for his participation in a January 28, 2018 shooting at a woman in an apartment building vestibule in the University Heights neighborhood of the Bronx.  BROWN pled guilty before U.S. District Judge Sidney H. Stein.

U.S. Attorney Damian Williams said:  “For years, Rakim Brown was a violent drug dealer who sold crack cocaine on the streets of the Bronx.  In order to protect his drug crew’s territory and reputation, Brown resorted to violence, including shooting at a woman associated with a rival drug crew in the vestibule of an apartment building in the Bronx.  Brown now faces significant prison time for his crimes and the harm he inflicted on the victim and his community at large.”

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

RAKIM BROWN, a/k/a “Rah,” was a member of a narcotics conspiracy that operated in and around 183rd Street and Davidson Avenue in the University Heights neighborhood of the Bronx.  BROWN and others sold crack cocaine throughout the neighborhood.  In 2017, a rivalry developed between BROWN’s drug crew and another drug crew when a member of the other drug crew shot and paralyzed BROWN’s brother.  In retaliation, on January 28, 2018, BROWN and others chased an associate of the rival drug crew until they cornered her in the vestibule of an apartment building.  BROWN then entered the vestibule, beat the victim, and shot at her multiple times.  The victim sustained multiple injuries to her face and legs.  

In connection with BROWN’s guilty plea, BROWN specifically admitted that he committed perjury at a pre-trial hearing before Judge Stein and that he possessed crack on particular occasions in 2016 and 2017 in connection with the narcotics trafficking conspiracy.

*              *             *

BROWN, 26, pleaded guilty to narcotics conspiracy, which carries a maximum sentence of twenty years in prison, and using and carrying a firearm, which was brandished and discharged, in furtherance of a drug trafficking crime, which carries a maximum sentence of life and a mandatory minimum sentence of ten years in prison, which must be served consecutively to any other sentence imposed.  BROWN will be sentenced before Judge Stein on June 6, 2022.

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

Mr. Williams praised the outstanding work of the New York City Police Department and thanked the Special Agents of the U.S. Attorney’s Office for the Southern District of New York for their assistance with the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Mathew Andrews, Christopher Brumwell, Alexandra Rothman, and Danielle Sassoon are in charge of the prosecution.

A federal court in the Southern District of New York today unsealed the first-ever criminal indictment charging a violation of U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine.

According to court documents, John Hanick, aka Jack Hanick, 71, a U.S. citizen, is charged with violations of U.S. sanctions and false statements in connection with his years-long work for the sanctioned Russian oligarch Konstantin Malofeyev.

“The Justice Department will do everything it can to stamp out Russian aggression and interference,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, the Russian oligarch Konstantin Malofeyev was previously sanctioned for threatening Ukraine and providing financial support to the Donetsk separatist region. The defendant Hanick knowingly chose to help Malofeyev spread his destabilizing messages by establishing, or attempting to establish, TV networks in Russia, Bulgaria and Greece, in violation of those sanctions.”

“Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine,” said U.S. Attorney Damien Williams for the Southern District of New York. “The U.S. sanctions on Malofeyev prohibit U.S. citizens from working for or doing business with Malofeyev but as alleged, Hanick violated those sanctions by working directly for Malofeyev on multiple television projects over the course of several years. The indictment unsealed today shows this office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

“Sanctions imposed by the U.S. government are in place to protect our national interests, as well as the interests of our allies around the world,” said Assistant Director in Charge of the FBI’s New York Field Office. “As alleged, Mr. Hanick worked for the benefit of Konstantin Malofeyev, a Specially Designated National under Executive Order 13,660 who provided significant financing for Russians promoting separatism in Crimea in 2014. The action we have taken today should serve as an example to all that we will use all the resources at our disposal to aggressively enforce our nation's sanctions.” 

According to court documents, in 2014 the President issued Executive Order 13,660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13,660, along with certain regulations issued pursuant to it (the Ukraine-Related Sanctions Regulations) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked. 

On Dec. 19, 2014, OFAC designated Konstantin Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13,660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and materially assisted, sponsored, and provided financial, material or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the indictment, Hanick worked directly for and for the benefit of Malofeyev from at least in or about 2013 through at least in or about 2017, and continued to engage in this conduct after OFAC listed Malofeyev as a SDN, in violation of the Ukraine-Related Sanctions Regulations. Beginning in at least 2013, Malofeyev began planning to create a new Russian cable television news network (the Russian TV Network), and Hanick began traveling to Russian in early 2013 to meet with Malofeyev regarding these plans. In or about July 2013, Hanick moved to Russia to work for Malofeyev on the Russian television network, after negotiating the terms of his employment directly with Malofeyev, including the salary he would receive, payment for his housing in Moscow, and his Russian work visa.

Hanick continued to work for and report directly to Malofeyev after OFAC designated Malofeyev as a SDN in December 2014. For instance, in January 2015, Hanick wrote an email to Malofeyev that a draft policy for the Russian TV Network was meant “to implement your vision and to provide you with information for you to make decisions … You are the founder and chief architect of the project. We, as board members have the responsibility to direct the staff to implement your instructions.” The Russian TV Network went on the air in Russia in or about April 2015. Hanick played a leadership role at the network, described at various times in emails from 2015 through 2017 as “Board Chairman,” “General Producer,” “chairman of the HR committee,” and “General Advisor” for the Russian TV Network. Hanick reported directly to Malofeyev regarding the network’s operations and was listed on organizational charts directly below Malofeyev. Hanick was paid for his work through two Russian entities that were nominally separate from the Russian TV Network, but his compensation was overseen by Malofeyev, negotiated with Malofeyev, and was for his work for Malofeyev’s Russian TV Network. Hanick wired a portion of the payments he received from a Russian bank account to a bank account he held at a bank located in New York, New York.

Hanick also worked for Malofeyev on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’sdirection, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives, andreported directly back to Malofeyev on his work. For instance, in November 2015, Hanick wrote to Malofeyev that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with Malofeyev’sefforts to acquire the Bulgarian television network, Hanick took steps to conceal Malofeyev’s role in the acquisition by arranging to travel to Bulgaria with another person identified by a Greek associate of Malofeyev, so that it would appear the buyer was a Greek national rather than Malofeyev.

In February 2021, FBI agents interviewed Hanick about his work for Malofeyev, and Hanick made false statements about his work for Malofeyev, including the false statements that Malofeyev had no involvement in Hanick’s travel to Bulgaria, and that Hanick did not know that Malofeyev had any connection to the attempt to acquire the Bulgarian television network until afterward. 

Hanick is charged with violating the International Emergency Economic Powers Act, which carries a maximum penalty of 20 years in prison and making false statements which carries a maximum penalty of five years in prison. Pursuant to the request of the United States, Hanick was provisionally arrested on Feb. 3, in London, with a view toward extradition. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case.

Assistant U.S. Attorneys Thane Rehn and Jessica Greenwood for the Southern District of New York are prosecuting the case. 

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

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation, announced today the unsealing of the first-ever criminal indictment charging a violation of United States sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine. JOHN HANICK, a/k/a “Jack Hanick,” a United States citizen, is charged with violations of United States sanctions and false statements in connection with his years-long work for the sanctioned Russian oligarch Konstantin Malofeyev. Pursuant to the request of the United States, HANICK was provisionally arrested on February 3, 2022, in London, the United Kingdom, with a view toward extradition.

U.S. Attorney Damian Williams said: “Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine. The United States sanctions on Malofeyev prohibit United States citizens from working for or doing business with Malofeyev but as alleged, Hanick violated those sanctions by working directly for Malofeyev on multiple television projects over the course of several years. The Indictment unsealed today shows this Office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This Office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

“The Justice Department will do everything it can to stamp out Russian aggression and interference,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, the Russian oligarch Konstantin Malofeyev was previously sanctioned for threatening Ukraine and providing financial support to the Donetsk separatist region. The defendant Hanick knowingly chose to  help Malofeyev spread his destabilizing messages by establishing, or attempting to establish, TV networks in Russia, Bulgaria, and Greece, in violation of those sanctions.”

FBI Assistant Director Michael J. Driscoll said: “Sanctions imposed by the United States government are in place to protect our national interests, as well as the interests of our allies around the world.  As alleged, Mr. Hanick worked for the benefit of Konstantin Malofeyev, a Specially Designated National under Executive Order 13660 who provided significant financing for Russians promoting separatism in Crimea in 2014.  The action we have taken today should serve as an example to all that we will use all the resources at our disposal to aggressively enforce our nation’s sanctions.”

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

In 2014, the President issued Executive Order 13,660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any United States person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in, or who engaged in, actions or policies that threatened the peace, security, stability, sovereignty, or territorial integrity of Ukraine, or who materially assist, sponsor, or provide financial, material, or technological support for, or goods and services to, individuals or entities engaging in such activities. Executive Order 13,660, along with certain regulations issued pursuant to it (the “Ukraine-Related Sanctions Regulations”) prohibits, among other things, making or receiving any funds, goods, or services by, to, from, or for the benefit of any person whose property and interests in property are blocked. 

On December 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) designated Konstantin Malofeyev as a Specially Designated National (“SDN”) pursuant to Executive Order 13,660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.

As alleged in the Indictment, HANICK worked directly for and for the benefit of Malofeyev from at least in or about 2013 through at least in or about 2017, and continued to engage in this conduct after OFAC listed Malofeyev as a SDN, in violation of the Ukraine-Related Sanctions Regulations. Beginning in at least 2013, Malofeyev began planning to create a new Russian cable television news network (the “Russian TV Network”), and HANICK began traveling to Russian in early 2013 to meet with Malofeyev regarding these plans. In or about July 2013, HANICK moved to Russia to work for Malofeyev on the Russian television network, after negotiating the terms of his employment directly with Malofeyev, including the salary he would receive, payment for his housing in Moscow, and his Russian work visa.

HANICK continued to work for and report directly to Malofeyev after OFAC designated Malofeyev as a SDN in December 2014. For instance, in January 2015, HANICK wrote an email to Malofeyev that a draft policy for the Russian TV Network was meant “to implement your vision and to provide you with information for you to make decisions … You are the founder and chief architect of the project. We, as board members have the responsibility to direct the staff to implement your instructions.” The Russian TV Network went on the air in Russia in or about April 2015. HANICK played a leadership role at the network, described at various times in emails from 2015 through 2017 as “Board Chairman,” “General Producer,” “chairman of the HR committee,” and “General Advisor” for the Russian TV Network. HANICK reported directly to Malofeyev regarding the network’s operations and was listed on organizational charts directly below Malofeyev. HANICK was paid for his work through two Russian entities that were nominally separate from the Russian TV Network, but his compensation was overseen by Malofeyev, negotiated with Malofeyev, and was for his work for Malofeyev’s Russian TV Network. HANICK wired a portion of the payments he received from a Russian bank account to a bank account he held at a bank located in New York, New York.

HANICK also worked for Malofeyev on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives, and reported directly back to Malofeyev on his work. For instance, in November 2015, HANICK wrote to Malofeyev that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with Malofeyev’s efforts to acquire the Bulgarian television network, HANICK took steps to conceal Malofeyev’s role in the acquisition by arranging to travel to Bulgaria with another person identified by a Greek associate of Malofeyev, so that it would appear the buyer was a Greek national rather than Malofeyev.

In February 2021, FBI agents interviewed HANICK about his work for Malofeyev, and HANICK made false statements about his work for Malofeyev, including the false statements that Malofeyev had no involvement in HANICK’s travel to Bulgaria, and that HANICK did not know that Malofeyev had any connection to the attempt to acquire the Bulgarian television network until afterward.

*                *                *

HANICK, 71, is a United States citizen who most recently has resided in London. The sanctions charge carries a maximum penalty of 20 years in prison. The false statements charge carries a maximum penalty of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, and thanked the support and expertise of the Department of Justice’s Office of International Affairs in the conduct of this matter.

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Thane Rehn and Jessica Greenwood are in charge of the prosecution. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that AMEET GOYAL, M.D., (“GOYAL”) an ophthalmologist in Rye, New York, was sentenced today to 96 months in prison for orchestrating a seven-year healthcare fraud scheme by falsely billing for millions of dollars of upcoded procedures, and also for fraudulently obtaining two Government-guaranteed loans intended to help small businesses during the COVID-19 pandemic while he was facing charges on pretrial release for the healthcare fraud scheme.  In imposing the sentence today, U.S. District Judge Cathy Seibel noted, “Fraud doesn’t fully capture how blatant this was and how unjustified this was… This was not about need, it was about greed.”  GOYAL previously pled guilty to all charges in a six-count superseding Indictment before Judge Seibel on September 13, 2021.

In addition to the prison term, GOYAL was sentenced today to five years of supervised release, and ordered to pay forfeiture of $3.6 million and restitution of $3.6 million.  GOYAL has already paid approximately $1.79 million toward these obligations.

U.S. Attorney Damian Williams said: “A prominent ophthalmologist and oculoplastic surgeon who has now surrendered his medical license, AMEET GOYAL was blinded by greed.  Over a seven-year period, he preyed on the trust placed in him and cheated patients and insurance companies of $3.6 million in false charges.  To cover his tracks, he created fictitious operative reports, seeded across hundreds of patient files, violating the integrity of patients’ medical records and making it more difficult for subsequent doctors to evaluate their care.  He sent patients who could not pay the upcoded bills to a collection agency, decimating their credit.  He pressured other doctors to join the scheme and threatened to retaliate against their livelihood and careers. Even after being arrested for this scheme, GOYAL committed a breathtaking new fraud and stole $637,200 from the Paycheck Protection Program in the early days of a devastating pandemic.  For his crimes, GOYAL will serve a substantial sentence in prison.”

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

At all relevant times, GOYAL owned and operated the ophthalmology practice Ameet Goyal M.D. P.C., doing business as Rye Eye Associates, with offices in Rye, Mt. Kisco, and Wappingers Falls, New York, and Greenwich, Connecticut (the “Practice”).  Between 2010 and 2017, GOYAL engaged in widespread healthcare fraud by consistently “upcoding” simpler, lower-paying surgical procedures and examinations as complex, higher-paying major operations in fraudulent billings submitted to Medicare, private insurance companies, and patients.  As a result, GOYAL fraudulently obtained at least $3.6 million in payments for procedures he did not perform.  GOYAL failed to obtain proper and, at times, any consent for the upcoded procedures he falsely claimed to have performed.  As part of the scheme, GOYAL routinely falsified patient medical records, authoring fictitious templated operative reports that matched the complex operation he billed rather than the different minor procedure he actually performed.  GOYAL also pressured other employees in his Practice to engage in the scheme, and threatened the livelihood of employees who refused to comply.  GOYAL caused patients to pay thousands of dollars out of pocket for fraudulently billed charges, and initiated debt collection proceedings against patients who did not pay the full amounts of those false charges.  As a result of his fraudulent billings, GOYAL was the highest-billing doctor in the tri-state area for several of his fraudulently billed codes, one of which he billed seven times more frequently than all doctors in the tri-state area combined.  GOYAL was indicted for the healthcare fraud charges in November 2019 and was released on bail.        

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 Paycheck Protection Program (“PPP”).  Applicants with pending criminal charges are ineligible for PPP loans.  The PPP also limits each eligible borrower to one loan, and a maximum loan amount calculated based on a business’s average monthly payroll expenses. 

In or about April 2020, GOYAL applied to the SBA and Bank-1, a federally insured institution, for over $630,000 in Government-guaranteed loans through the PPP.  Specifically, on or about April 21, 2020, GOYAL applied for a loan in the amount of $358,700 for the business “Ameet Goyal,” with his own social security number and e-mail address. On or about April 29, 2020, GOYAL applied for a second loan in the amount of $278,500, with a business name “Rye eye associates,” using the Employer Identification Number for Ameet Goyal, M.D. P.C and a different email address controlled by GOYAL.  To substantiate each loan, however, GOYAL submitted the exact same underlying payroll expense report, showing the same employees and payroll costs. 

On both applications, GOYAL falsely answered that he was not facing any pending criminal charges, and electronically placed his initials “AG” directly under his “No” response.  GOYAL also falsely certified, among other things, that his business would not receive another PPP loan until the end of the year.  After obtaining approval from Bank-1 and the SBA through his fraudulent misrepresentations, GOYAL executed loan notes for two loans.  On May 4, 2020, GOYAL received the first loan of $358,700, and on May 11, 2021, GOYAL received the second loan of $278,500.  GOYAL used the business checking account into which these funds were deposited to pay business and personal expenses, including by making a payment to a country club in Westchester, New York within days of receiving the first loan, as well as payments to a California vineyard and golf merchandise website.          

*                      *                      *

GOYAL, 58, of Rye, New York, pled guilty to all six counts in the Superseding Indictment.  The first count charged healthcare fraud; the second count charged wire fraud; and the third count charged making false statements relating to health care matters.  Counts four, five, and six charged that while on pretrial release, the defendant committed the following offenses, respectively: bank fraud, making false statements on a loan application, and making false statements in a matter within the jurisdiction of the executive branch of the Government of the United States.

Mr. Williams praised the work of the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Office of the Inspector General of the SBA.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Vladislav Vainberg, David Felton, and Margery Feinzig are in charge of the prosecution.  A civil fraud lawsuit relating to healthcare fraud under the False Claims Act is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jeffrey K. Powell is in charge of the pending civil case.