Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM SADLEIR pled guilty to two counts of wire fraud in connection with his participation in two schemes relating to investments made by a New York-based investment fund (the “Fund”) in Aviron Pictures, LLC and its affiliated entities (collectively, “Aviron”). SADLEIR is scheduled for sentencing on May 10, 2022, at 10:30 a.m., by U.S. District Judge Paul A. Engelmayer, who presided over yesterday’s plea.

U.S. Attorney Damian Williams said:  “William Sadleir used his talent for selling stories to con a New York investment fund out of over $30 million using a fake company, fake documents, and even a fake identity.  In a brazen plot that could be ripped from one of the films he distributed, Sadleir even made up a character that he named ‘Amanda Stevens,’ and masqueraded as her in an effort to get away with his fraud. We called a wrap on Sadleir’s scheming, and he now faces significant time in federal prison.”

According to the Complaint, Indictment, and other court filings:

The Fund is a publicly traded, closed-end investment fund.  Shares in the Fund trade on the New York Stock Exchange.  As of in or about December 2019, the Fund had approximately $649.1 million in assets.

WILLIAM SADLEIR was the chairman and chief executive officer of Aviron, and oversaw its operations from in or about 2015 until in or about December 2019.  Aviron participated in the distribution of a number of films in the United States, including My All American (2015), Kidnap (2017), The Strangers: Prey at Night (2018), A Private War (2018), Destination Wedding (2018), Serenity (2019), and After (2019).

SADLEIR engaged in two fraudulent schemes relating to an approximately $75 million investment made by the Fund in Aviron.

In one of the schemes (the “Advertising Scheme”), SADLEIR misappropriated millions of dollars in funds from Aviron that had been invested in Aviron by the Fund.  SADLEIR represented to the Fund that this money had been invested by Aviron in pre-paid media credits with the advertising placement company MediaCom Worldwide (“MediaCom”), which is a subsidiary of the advertising and media agency GroupM Worldwide.  Instead, using the bank account for a sham entity he had created, SADLEIR illicitly transferred out of Aviron over $25 million of those funds.  Specifically, SADLEIR created a sham New York-based company called GroupM Media Services, LLC (the “Sham GroupM LLC”) designed to appear to be the legitimate entity, GroupM Worldwide, and a corresponding bank account in the name of that sham entity.  SADLEIR then used a significant portion of those illicitly transferred funds for his personal benefit, including to purchase a private residence in Beverly Hills for approximately $14 million.  SADLEIR then falsely represented to the Fund that Aviron had purchased an approximately $27 million balance in pre-paid media credits with MediaCom that were available to promote future Aviron films, and pledged a portion of those credits to the Fund as collateral for additional loans, when in fact the claimed credits did not exist.  As part of these false representations, SADLEIR also created a fake identity of a purported New York-based female employee of the Sham GroupM LLC named “Amanda Stevens” who corresponded with a representative of the Fund, assuring the Fund that Aviron had an approximately $27 million balance in pre-paid media credits with the Sham GroupM LLC.  But SADLEIR himself posed as Amanda Stevens when engaging in email exchanges with a representative from the Fund.

In the other scheme (the “UCC Scheme”), SADLEIR engineered the illicit and fraudulent sale and refinancing of assets worth over $3 million that secured the Fund’s loans to Aviron.  The Fund had secured its investment in Aviron by, among other means, obtaining UCC liens in 2017 and 2018 on certain intellectual property and other assets relating to Aviron’s films.  In 2019, SADLEIR used the forged signature of one of the Fund’s portfolio managers on releases to remove the Fund’s UCC liens on certain of these secured assets.  SADLEIR did so in order to sell or refinance the assets without the Fund’s consent, thus depriving the Fund of its collateral on outstanding loans.  Aviron ultimately defaulted on those loans.

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SADLEIR, 67, of Beverly Hills, California, pled guilty to two counts of wire fraud, each of 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 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 work of the Federal Bureau of Investigation.  He also 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 Jared Lenow and Elizabeth Hanft are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced charges against RICHARD VIET NGUYEN for attempted enticement of one minor boy in Manhattan, New York.  NGUYEN was arrested this morning and presented in Manhattan federal court today before U.S. Magistrate Judge Sarah L. Cave.

U.S. Attorney Damian Williams said: “The conduct alleged against Richard Nguyen is as chilling and disturbing as one can imagine. The protection of our youth from predators has been and will remain of critical importance to this Office and our law enforcement partners.”

FBI Assistant Director Michael J. Driscoll said: "It's unfathomable to believe anyone would see a five-year-old boy as a sexual being. What's more despicable in this investigation, we allege the subject brought Benadryl to drug the child. The work these agents do is truly difficult, but so tremendously important to protecting children from predators. I want to commend what they do, and the fact that they show up every day despite how difficult their job can be."

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

On or about October 20, 2021, an individual identified to be NGUYEN initiated a series of conversations on an instant messaging platform with an undercover FBI agent (“UC-1”), posing as the father of an 8-year-old boy and a 5-year-old boy. Thereafter, UC-1 and NGUYEN had numerous communications, include one oral communication, via the instant messaging platform.

In these conversations, NGUYEN expressed his desire to engage in sexual activity with both children – including both oral and anal sex – and discussed potential arrangements for NGUYEN to engage in sexual activity with either child. 

UC-1 and NGUYEN arranged to meet at a coffee shop in Manhattan on the morning of January 20, 2022, with the understanding that they would return to UC-1’s apartment afterward and NGUYEN would then engage in sexual activity with the youngest boy.  On the morning in question, NGUYEN met UC-1 at the agreed-upon location.  After the two of them left the coffee shop and began walking toward UC-1’s purported apartment, law enforcement arrested NGUYEN. NGUYEN was in possession of, among other things, children’s Benadryl and a condom in his pocket.

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NGUYEN, 29, of Manhattan, New York, is charged with one count of attempted enticement of a minor to engage in illegal sexual activity, in violation of Title 18, United States Code, Sections 2422(b) and 2, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

Mr. Williams praised the outstanding investigative work of the FBI Child Exploitation and Human Trafficking Task Force. 

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Edward C. Robinson Jr. is in charge of the prosecution.

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

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

A federal grand jury in New York returned an indictment today charging four Belarusian state officials with conspiracy to commit aircraft piracy.

According to court documents, Leonid Mikalaevich Churo, Oleg Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu, all of Belarus, allegedly engineered the diversion of Ryanair Flight 4978 (the Flight) – which was carrying four U.S. nationals and more than 100 other passengers on board – while it was in flight on May 23, 2021, to arrest a dissident Belarusian journalist who was on board.

“Since the dawn of powered flight, countries around the world have cooperated to keep passenger airplanes safe,” said U.S. Attorney Damian Williams for the Southern District of New York. “The defendants shattered those standards by diverting an airplane to further the improper purpose of repressing dissent and free speech. Thanks to the extraordinary investigative work of a joint team of FBI counterterrorism and counterintelligence investigators, today’s indictment provides a prompt and public explanation of what actually happened to the Flight. We are committed to holding accountable these central participants in a shocking conspiracy to commit aircraft piracy that not only violated international norms and U.S. criminal law, but also potentially endangered the lives of four U.S. citizens and scores of other innocent passengers on board.”         

“We allege the defendants carried out an elaborate scheme to fake a bomb scare which forced an airplane to make an emergency landing in their country so they could arrest a dissident journalist,” said Assistant Director Michael J. Driscoll of the FBI’s New York Field Office. “During the course of our investigation, the FBI identified a detailed operation that subjected passengers from many countries, including the U.S., to the realities of terroristic threats. Not only is what took place a reckless violation of U.S. law, it’s extremely dangerous to the safety of everyone who flies in an airplane. The next pilot who gets a distress call from a tower may doubt the authenticity of the emergency – which puts lives at risk. The FBI and our foreign partners will continue to hold perpetrators responsible for actions which directly threaten the lives of our US citizens and jeopardize the stability of our national security.”

Overview of the Plot

While on its regularly scheduled passenger route between Athens, Greece, and Vilnius, Lithuania, on May 23, 2021, the Flight was diverted to Minsk, Belarus, by air traffic control authorities in response to a purported threat of a bomb on board the aircraft. There was, in fact, no bomb on board the aircraft. Belarusian government authorities fabricated the threat as a means to exercise control over the Flight and force it to divert from its course toward the original destination of Vilnius, and instead land in Minsk.

The purpose of the Belarusian government’s plot diverting the Flight to Minsk was so that Belarusian security services could arrest a Belarusian journalist and political activist (Individual-1) – who was critical of the Belarusian government, living in exile in Lithuania, and wanted by the Belarusian government on allegations of fomenting “mass unrest” – as well as Individual-1’s girlfriend (Individual-2). The Belarusian government conspiracy to divert the Flight was executed by, among others, officers of the Belarusian state security services working in coordination with senior officials of the Belarusian state air navigation authority.

The Defendants

The defendants, all Belarusian government officials and critical participants in this conspiracy, are identified as: Leonid Mikalaevich Churo, Oleg Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu. At all times relevant to the indictment, Churo was the Director General of Belaeronavigatsia, the Belarusian state air navigation authority. As alleged, Churo personally communicated the false bomb threat to staff at the Minsk air traffic control center before the Flight even took off from Athens, and directed the control center to instruct the Flight divert to Minsk in response to the purported threat.

Kazyuchits was the Deputy Director General of Belaeronavigatsia, and his role in the conspiracy included directing Belarusian air traffic authorities to falsify incident reports regarding the diversion of the Flight in order to conceal the fabrication of the bomb threat and to omit the role of Belarusian security services in directing the diversion.

Andrey Anatolievich Lnu and Fnu Lnu were officers of the Belarusian state security services. Fnu Lnu participated with Churo in conveying the false bomb threat to the Minsk air traffic control tower, personally directed the specific radio communications from the Minsk tower to coerce the Flight to divert to Minsk, and relayed contemporaneous updates on the diversion of the Flight and the progress of the plot to Andrey Anatolievich Lnu, who was Fnu Lnu’s superior in the Belarusian state security services.  

The Diversion of the Flight

On May 23, 2021, at approximately 6:45 UTC, Churo and Fnu Lnu arrived at the operations room of the Minsk area air traffic control center with responsibility for Belarusian airspace. Churo and Fnu Lnu conveyed the purported bomb threat to the controllers on duty, even though the Flight had not yet departed Athens. Churo and Fnu Lnu specifically crafted the threat to coerce the pilots of the Flight to avoid continuing to their final destination of Vilnius, by claiming that the purported bomb would explode if the Flight landed there.

In addition, Churo and Fnu Lnu took the telling steps of directing that the Flight be diverted specifically to Minsk, and even though the Flight was still in the adjacent airspace of Ukraine, prohibiting the Minsk air traffic control center from making any notification to Ukrainian authorities of the purported bomb threat. This helped to ensure that the Flight would enter Belarusian airspace, and the plot to obtain and exercise control over the Flight could be executed. Fnu Lnu remained in the operations room at the Minsk air traffic control center from the time that he and Churo conveyed the purported bomb threat and directed that the Flight divert to Minsk, until shortly before the Flight landed in Minsk after being diverted, in order to ensure that the diversion plot was successfully executed.

Once the Flight reached Belarusian airspace, Fnu Lnu instructed the senior air traffic controller who was responsible for communicating with the Flight to inform the pilots of the purported bomb threat, describe that the threat had been sent by email, and make specific statements to ensure the threat seemed credible and to coerce the Flight to divert to Minsk. For example, Fnu Lnu directed that the air traffic controller should falsely inform the pilots that the threat to the aircraft was a level “red” – the most specific and credible category of threat. Fnu Lnu provided updates on the execution of the plot in real time to his superior in the Belarusian security services, Andry Antolievich Lnu, at one point expressing concern that the pilots might be stalling for time and the Flight might soon leave Belarusian airspace, which would jeopardize the success of their diversion scheme. In response to the false information conveyed as part of the defendants’ plot, the pilots of the Flight ultimately declared an emergency and diverted to Minsk National Airport, in accordance with the directives from Churo and Fnu Lnu.

Once the Flight landed in Minsk, Fnu Lnu left the air traffic control operations room and went to the airport tarmac. The Flight was met by Belarusian security services personnel, including individuals dressed in camouflage military-style uniforms, some of whom were wearing ski masks and carrying visible firearms. Fnu Lnu remained on the tarmac supervising the security forces and monitoring the screening of the passengers as they disembarked. Belarusian security services personnel then instructed the passengers to board one of several airport passenger buses.

Belarusian authorities boarded one of the buses and asked Individual-1 to come forward and identify himself, demonstrating that Belarusian authorities were aware that Individual-1 was on board the Flight. Individual-1 was escorted off the bus, where uniformed Belarusian officers separately searched him again on the airport tarmac. Belarusian officers then escorted Individual-1 back onto the bus and traveled with Individual-1 and the rest of the passengers to the airport terminal. Once the bus arrived at the terminal, the Flight’s passengers were detained in an area of the terminal secured by Belarusian security services. Additional Belarusian security officers met Individual-1 and the officers accompanying him, escorted Individual-1 away from the remaining passengers and detained Individual-1. One group of passengers from the Flight, including multiple U.S. nationals and Individual-2, was detained in a narrow hallway for approximately three hours at the airport. During that time, Belarusian authorities also escorted Individual-2 away from the other passengers and detained Individual-2. The Flight was ultimately allowed to depart from Minsk and continue to its original destination of Vilnius later that evening. No bomb was ever on the Flight.

The Cover-Up

Soon after the diversion of the Flight, Belarusian government officials began to cover up what had happened. On or about May 24, 2021, the day after the Flight was diverted, Churo appeared at a press conference in Belarus with other Belarusian officials to address the Flight’s diversion. During the press conference, Churo stated falsely the Belarusian authorities had “done everything according to their technology and their job responsibilities” in handling the Flight. In reality, Churo knew that he and his co-conspirators had contrived the false bomb threat and had directed the Flight to divert to Minsk so that Belarusian security services could arrest Individual-1 and Individual-2. To further conceal the defendants’ plot, Kazyuchits directed Belarusian air traffic authorities to create false incident reports, including by doctoring the reports to misrepresent that the bomb threat was received at approximately the same time that the Flight entered Belarusian airspace and omit the fact that Fnu Lnu of the Belarusian security services was present in the operations room and directed activity during the Flight’s diversion.

Churo, Kazyuchits, Andrey Anatolievich Lnu and Fnu Lnu, all of Belarus, are charged with conspiring to commit aircraft piracy, which carries a minimum sentence of 20 years and maximum statutory penalty of life. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The defendants remain at large. The United States looks forward to working with our foreign partners to bring them to justice.

This case was jointly investigated by the FBI’s New York Field Office, Counterintelligence Division Foreign Influence Task Force and the New York Joint Terrorism Task Force, which principally consists of special agents from the FBI and detectives from the NYPD; as well as the FBI Legal Attaché Offices in Riga, Latvia; Warsaw, Poland; Athens, Greece; Kiev, Ukraine; and London; the National Transportation Safety Board; the Justice Department’s National Security Division Counterterrorism Section and Criminal Division’s Human Rights and Special Prosecutions Section, and the Office of International Affairs. Poland’s Internal Security Agency and the Mazowieckie Regional Prosecutor’s Office; and Lithuanian authorities provided valuable assistance with this investigation.

Assistant U.S. Attorneys David W. Denton Jr. and Elinor L. Tarlow for the Southern District of New York are prosecuting the case, with assistance from Trial Attorneys Jennifer Burke of the National Security Division’s Counterterrorism Section, and Jamie Perry and Christian Levesque of the Criminal Division’s Human Rights and Special Prosecutions Section.

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, Assistant Attorney General for National Security Matthew G. Olsen, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, Assistant Director-in-Charge Michael J. Driscoll of the Federal Bureau of Investigation (“FBI”) New York Office, and Commissioner Keechant Sewell of the New York City Police Department (“NYPD”), announced the filing of a one-count indictment charging LEONID MIKALAEVICH CHURO, the Director General of Belaeronavigatsia Republican Unitary Air Navigation Services Enterprise (“Belaeronavigatsia”), the Belarusian state air navigation authority; OLEG KAZYUCHITS, the Deputy Director General of Belaeronavigatsia; and two officers of the Belarusian state security services, ANDREY ANATOLIEVICH LNU and FNU LNU, with conspiracy to commit aircraft piracy for engineering the diversion of Ryanair Flight 4978 (the “Flight”)—which was carrying four U.S. nationals and more than 100 other passengers on board—while it was in flight over Belarus on May 23, 2021, for the purpose of arresting a dissident Belarusian journalist who was on board the Flight.  The case is assigned to U.S. District Judge Paul A. Engelmayer.  The defendants are based in Belarus and remain at large. 

U.S. Attorney Damian Williams said: “Since the dawn of powered flight, countries around the world have cooperated to keep passenger airplanes safe.  The defendants shattered those standards by diverting an airplane to further the improper purpose of repressing dissent and free speech.  Thanks to the extraordinary investigative work of a joint team of FBI counterterrorism and counterintelligence investigators, today’s indictment provides a prompt and public explanation of what actually happened to the Flight.  We are committed to holding accountable these central participants in a shocking conspiracy to commit aircraft piracy that not only violated international norms and U.S. criminal law, but also potentially endangered the lives of four U.S. citizens and scores of other innocent passengers on board.”          

FBI Assistant Director Michael J. Driscoll said:  “We allege the defendants carried out an elaborate scheme to fake a bomb scare which forced an airplane to make an emergency landing in their country so they could arrest a dissident journalist. During the course of our investigation, the FBI identified a detailed operation that subjected passengers from many countries, including the U.S., to the realities of terroristic threats. Not only is what took place a reckless violation of U.S. law, it’s extremely dangerous to the safety of everyone who flies in an airplane. The next pilot who gets a distress call from a tower may doubt the authenticity of the emergency -- which puts lives at risk. The FBI and our foreign partners will continue to hold perpetrators responsible for actions which directly threaten the lives of our US citizens and jeopardize the stability of our national security.”

According to the indictment filed today in Manhattan federal court:[1]

Overview of the Plot

While on its regularly-scheduled passenger route between Athens, Greece, and Vilnius, Lithuania, on May 23, 2021, the Flight was diverted to Minsk, Belarus by air traffic control authorities in Belarus in response to a purported threat of a bomb on board the aircraft.  There was, in fact, no bomb on board the aircraft.  Belarusian government authorities fabricated the threat as a means to exercise control over the Flight and force it to divert from its course toward the original destination of Vilnius, and instead land in Minsk.  The purpose of the Belarusian government’s plot diverting the Flight to Minsk was so that Belarusian security services could arrest a Belarusian journalist and political activist (“Individual-1”)—who was critical of the Belarusian government, living in exile in Lithuania, and wanted by the Belarusian government on allegations of fomenting “mass unrest”—as well as Individual-1’s girlfriend (“Individual-2”).  The Belarusian government conspiracy to divert the Flight was executed by, among others, officers of the Belarusian state security services working in coordination with senior officials of the Belarusian state air navigation authority.

The Defendants

LEONID MIKALAEVICH CHURO, OLEG KAZYUCHITS, ANDREY ANATOLIEVICH LNU, and FNU LNU, the defendants, are Belarusian government officials who were critical participants in this conspiracy.  At all times relevant to the indictment, CHURO was the Director General of Belaeronavigatsia, the Belarusian state air navigation authority.  CHURO personally communicated the false bomb threat to staff at the Minsk air traffic control center before the Flight even took off from Athens, and directed the Minsk air traffic control center to instruct the Flight to divert to Minsk in response to the purported threat.  KAZYUCHITS was the Deputy Director General of Belaeronavigatsia, and his role in the conspiracy included directing Belarusian air traffic authorities to falsify incident reports regarding the diversion of the Flight in order to conceal the fabrication of the bomb threat and to omit the role of Belarusian security services in directing the diversion.  ANDREY ANATOLIEVICH LNU and FNU LNU were officers of the Belarusian state security services.  FNU LNU participated with CHURO in conveying the false bomb threat to the Minsk air traffic control tower, personally directed the specific radio communications from the Minsk tower to coerce the Flight to divert to Minsk, and relayed contemporaneous updates on the diversion of the Flight and the progress of the plot to ANDREY ANATOLIEVICH LNU, who was FNU LNU’s superior in the Belarusian state security services.     

The Diversion of the Flight

On the day the flight was diverted, May 23, 2021, at approximately 6:45 UTC, CHURO and FNU LNU arrived at an operations room of the Minsk area air traffic control center with responsibility for Belarusian airspace.  CHURO and FNU LNU conveyed the purported bomb threat to the controllers on duty, even though the Flight had not yet departed Athens.  CHURO and FNU LNU specifically crafted the threat to coerce the pilots of the Flight to avoid continuing to their final destination of Vilnius, by claiming that the purported bomb would explode if the Flight landed there.  In addition, CHURO and FNU LNU took the telling steps of directing that the Flight be diverted specifically to Minsk, and even though the Flight was still in the adjacent airspace of Ukraine, prohibiting the Minsk air traffic control center from making any notification to Ukrainian authorities of the purported bomb threat.  This helped to ensure that the Flight would enter Belarusian airspace, and the plot to obtain and exercise control over the Flight could be executed.  FNU LNU remained in the operations room at the Minsk air traffic control center from the time that he and CHURO conveyed the purported bomb threat and directed that the Flight divert to Minsk, until shortly before the Flight landed in Minsk after being diverted, in order to ensure that the diversion plot was successfully executed.

Once the Flight reached Belarusian airspace, FNU LNU instructed the senior air traffic controller who was responsible for communicating with the Flight to inform the pilots of the purported bomb threat, describe that the threat had been sent by email, and make specific statements to ensure the threat seemed credible and to coerce the Flight to divert to Minsk.  For example, FNU LNU directed that the air traffic controller should falsely inform the pilots that the threat to the aircraft was a level “red”—the most specific and credible category of threat.  FNU LNU provided updates on the execution of the plot in real time to his superior in the Belarusian security services, ANDREY ANTOLIEVICH LNU, at one point expressing concern that the pilots might be stalling for time and the Flight might soon leave Belarusian airspace, which would jeopardize the success of their diversion scheme.  In response to the false information conveyed as part of the defendants’ plot, the pilots of the Flight ultimately declared an emergency and diverted to Minsk National Airport, in accordance with the directives from CHURO and FNU LNU. 

Once the Flight landed in Minsk, FNU LNU left the air traffic control operations room and went to the airport tarmac.  The Flight was met by Belarusian security services personnel, including individuals dressed in camouflage military-style uniforms, some of whom were wearing ski masks and carrying visible firearms.  FNU LNU remained on the tarmac supervising the security forces and monitoring the screening of the passengers as they disembarked.  Belarusian security services personnel then instructed the passengers to board one of several airport passenger buses. 

Belarusian authorities boarded one of the buses and asked Individual-1 to come forward and identify himself, demonstrating that Belarusian authorities were aware that Individual-1 was on board the Flight.  Individual-1 was escorted off the bus, where uniformed Belarusian officers separately searched him again on the airport tarmac.  Belarusian officers then escorted Individual-1 back onto the bus and traveled with Individual-1 and the rest of the passengers to the airport terminal.  Once the bus arrived at the terminal, the Flight’s passengers were detained in an area of the terminal secured by Belarusian security services.  Additional Belarusian security officers met Individual-1 and the officers accompanying him, escorted Individual-1 away from the remaining passengers, and detained Individual-1.  One group of passengers from the Flight, including multiple U.S. nationals and Individual-2, was detained in a narrow hallway for approximately three hours at the airport.  During that time, Belarusian authorities also escorted Individual-2 away from the other passengers and detained Individual-2.  The Flight was ultimately allowed to depart from Minsk and continue to its original destination of Vilnius later that evening.  No bomb was ever on the Flight.

The Cover-Up

Soon after the diversion of the Flight, Belarusian government officials began to cover up what had happened.  On or about May 24, 2021, the day after the Flight was diverted, CHURO appeared at a press conference in Belarus with other Belarusian officials to address the Flight’s diversion.  During the press conference, CHURO stated falsely that the Belarusian authorities had “done everything according to their technology and their job responsibilities” in handling the Flight.  In reality, CHURO knew that he and his co-conspirators had contrived the false bomb threat and had directed the Flight to divert to Minsk so that Belarusian security services could arrest Individual-1 and Individual-2.  To further conceal the defendants’ plot, KAZYUCHITS directed Belarusian air traffic authorities to create false incident reports, including by doctoring the reports to misrepresent that the bomb threat was received at approximately the same time that the Flight entered Belarusian airspace and omit the fact that FNU LNU of the Belarusian security services was present in the operations room and directed activity during the Flight’s diversion. 

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CHURO, KAZYUCHITS, ANDREY ANATOLIEVICH LNU, and FNU LNU, all of Belarus, are charged with conspiring to commit aircraft piracy, which carries a maximum penalty of life in prison, and a mandatory minimum 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 a judge.

The defendants remain at large.  The United States looks forward to working with our foreign partners to bring them to justice.

Mr. Williams, Mr. Olsen, and Mr. Polite praised the outstanding efforts of a joint investigative team from the FBI’s New York Field Office, Counterintelligence Division and the New York Joint Terrorism Task Force, which principally consists of special agents from the FBI and detectives from the NYPD.  They also thanked the FBI Legal Attaché Offices in Riga, Latvia; Warsaw, Poland; Athens, Greece; Kiev, Ukraine; and London, England; the National Transportation Safety Board; the Counterterrorism Section of the Department of Justice’s National Security Division; the Office of International Affairs and the Human Rights and Special Prosecutions Section of the Department of Justice’s Criminal Division; Poland’s Internal Security Agency and the Mazowieckie Regional Prosecutor’s Office; and Lithuanian authorities for their assistance with this investigation.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys David W. Denton, Jr. and Elinor L. Tarlow are in charge of the prosecution, with assistance from Trial Attorneys Jennifer Burke of the Counterterrorism Section and Jamie Perry and Christian Levesque of the Human Rights and Special Prosecutions Section.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.   

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that VICTOR RIVERA pled guilty to participating in a conspiracy to commit Hobbs Act robbery between October 2019 and November 2020. RIVERA is scheduled to be sentenced on April 28, 2022, by U.S. District Judge Alvin Hellerstein.

U.S. Attorney Damian Williams said: “As he has now admitted, Victor Rivera committed a year-long spree of armed robberies and attempted robberies of jewelers and other owners of luxury watches, threatening his victims with guns and, during the course of one robbery, shooting a victim. Now Rivera awaits sentencing for this terrifying conduct.”

According to the Superseding Indictment, statements made in court, as well as other publicly filed documents in this case:

From at least in or about October 2019 up to and including November 2020, VICTOR RIVERA, and others known and unknown, agreed to rob victims of luxury watches worth up to hundreds of thousands of dollars each.  The watches owned by victims targeted in the robberies included Richard Mille, Rolex, Audemars Piguet, and Patek Philippe watches owned by jewelers as part of the jewelers’ businesses based in Manhattan’s Diamond District.  RIVERA used guns to commit several of the robberies, and in one robbery, shot a victim, who survived. 

The eleven robberies and attempted robberies included the following: 

1. On October 3, 2019, RIVERA and a co-conspirator robbed a jeweler in Long Island City, New York, of, among other things, a Richard Mille watch worth over $250,000.

1. On October 25, 2019, RIVERA and a co-conspirator robbed a jeweler in Jamaica, New York, of, among other things, a Rolex watch worth over $150,000.

1. On December 10, 2019, RIVERA and two co-conspirators robbed a jeweler in Brooklyn, New York, of, among other things, a Patek Philippe watch worth over $160,000 and a diamond necklace worth over $77,000.  During the robbery, a firearm was shown to the victim.

1. On January 14, 2020, RIVERA and a co-conspirator robbed a jeweler in Rego Park, New York, of, among other things, a Richard Mille watch worth over $500,000.

1. On February 16, 2020, RIVERA and a co-conspirator robbed a jeweler in Jamaica Estates, New York, of, among other things, an Audemars Piguet watch worth over $28,000.

1. On February 20, 2020, RIVERA and a co-conspirator robbed an individual in Long Island City, New York, of, among other things, an Audemars Piguet watch worth over $125,000.

1. On June 11, 2020, RIVERA and a co-conspirator robbed a jeweler in Brooklyn, New York, of, among other things, a Richard Mille watch worth over $148,000.  During the robbery, a firearm was shown to the victim and a victim was shot.

1. On July 6, 2020, RIVERA and a co-conspirator robbed a jeweler in Hoboken, New Jersey, of, among other things, a Richard Mille watch worth over $81,000.  Following the robbery, RIVERA and others transported the stolen watch from New Jersey to New York.

1. On July 20, 2020, RIVERA and a co-conspirator participated in an attempted robbery of a jeweler in Queens, New York, attempting to steal a Richard Mille watch worth over $180,000.

1. On August 2, 2020, RIVERA and a co-conspirator robbed an individual in the vicinity of Englewood Cliffs, New Jersey, of, among other things, a Richard Mille watch worth over $250,000.  During the robbery, a firearm was shown to a victim.  Following the robbery, RIVERA and others transported the stolen watch from New Jersey to New York.

1. On October 27, 2020, RIVERA and a co-conspirator robbed a jeweler in the vicinity of Woodbury, New York, of, among other things, an Audemars Piguet watch worth over $26,000 and assorted jewels and gold links worth over $60,000.  During the robbery, a firearm was shown to a victim.     

*          *          *

RIVERA, 30, of Brooklyn, New York, pled guilty to one count of conspiracy to commit Hobbs Act robbery, which carries a maximum prison term of twenty 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.

Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department.  Mr. Williams also thanked the Bergen County Prosecutor’s Office, the Englewood Cliffs Police Department, the Weehawken Police Department, and the Nassau County Police Department for their assistance.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Mathew Andrews, Andrew K. Chan, and Celia Cohen are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Jonathan Mellone, Special Agent in Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General (“DOL-OIG”), Daniel B. Brubaker, Inspector in Charge, New York Division of the United States Postal Inspection Service  (“USPIS”), and Sharon MacDermott, Special Agent in Charge of the New York Regional Office of the U.S. Social Security Administration Office of Inspector General (“SSA-OIG”), announced today the unsealing of a complaint charging YOHAURIS RODRIGUEZ HERNANDEZ with conspiracy to commit wire fraud, conspiracy to commit theft of government benefits, and aggravated identity theft in connection with a COVID-19 unemployment benefit scheme that attempted to steal more than $1.9 million from the New York State Department of Labor (“NYS DOL”) and various other states’ agencies tasked with the administration of unemployment benefits.  YOHAURIS RODRIGUEZ HERNANDEZ was arrested this morning in Goshen, New York, and will be presented later today before United States Magistrate Judge Paul E. Davison.

U.S. Attorney Damian Williams said: “As alleged, the defendant participated in a scheme to fraudulently obtain COVID-19 unemployment benefits under the names and social security numbers of at least 100 other people, which attempted to steal more than $1.9 million and resulted in the fraudulent disbursement of more than $500,000.  The defendant is now in custody and facing serious federal charges.”

DOL-OIG Special Agent in Charge Jonathan Mellone said: “The Unemployment Insurance Program exists to provide needed assistance to qualified individuals who are unemployed due to no fault of their own.  Fraud against the Unemployment Insurance Program distracts state workforce agencies from ensuring benefits go to individuals who are eligible to receive them. The Office of Inspector General will continue to work closely with our law enforcement partners to investigate those who exploit the Unemployment Insurance Program.”

USPIS Inspector in Charge Daniel B. Brubaker said: “This defendant allegedly took advantage of the urgent need to assist those struggling financially during the coronavirus pandemic; allegedly stealing identities and using those identities to file for unemployment benefits in a scheme to enrich their own lifestyle while others suffered. Postal Inspectors and their law enforcement partners are committed to bring those to justice who break the law, and in this case justice has been served.”

SSA-OIG Special Agent in Charge Sharon MacDermott said: “Today’s arrest demonstrates that pursuing and prosecuting those who allegedly abuse the identities of innocent people and damage the integrity of the Social Security number for their own selfish gain remains a priority for us. We are committed to working with our law enforcement partners, and I thank New York Department of Labor, Department of Labor, Office of the Inspector General, United States Postal Inspectors, Homeland Security Investigations, the New York Police Department, and the Yonkers Police Department for their efforts in this major investigation. I also thank the U.S. Attorney’s Office for pursuing justice in this case.”

As alleged in the Complaint:[1]

From February 2020 through December 2020, YOHAURIS RODRIGUEZ HERNANDEZ and a co-conspirator (“CC-1”) engaged in a scheme to obtain COVID-19 unemployment benefits through the fraudulent filing and verification of applications using the names and social security numbers of at least 100 other people.  Law enforcement agencies were first alerted to the scheme after YOHAURIS RODIRGUEZ HERNANDEZ and CC-1 fled a Yonkers hotel in December 2020 leaving behind in their previously occupied room over 500 pieces of NYS DOL mail containing information and NYS DOL-issued debit cards for approximately 76 individuals.  Over the course of the relevant time period, YOHAURIS RODRIGUEZ HERNANDEZ and CC-1 exchanged text messages, images, and other communications that included, among other things, personal identifying information—such as names, social security numbers, and dates of birth—that were used in connection with the filing and verification of fraudulent applications for unemployment benefits.  The scheme resulted in fraudulent claims for approximately $1.9 million and the fraudulent disbursement of over $500,000 in COVID-19 unemployment benefits.

*                *                *

YOHAURIS RODRIGUEZ HERNANDEZ, 40, is charged with (1) conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, (2) conspiracy to commit theft of government benefits, which carries a maximum sentence of 10 years in prison, and (3) aggravated identity theft, which carries a mandatory two-year consecutive 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 defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the DOL-OIG, the USPIS, the SSA-OIG, the NYS DOL, the City of Yonkers Police Department, Homeland Security Investigations, and the New York City Police Department.  Mr. Williams noted that the investigation is ongoing.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorney Kevin Sullivan is in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York,  announced that SETH ANDREW pled guilty today to wire fraud, before United States District Judge John P. Cronan, in Manhattan federal court.

U.S. Attorney Damian Williams said: “Seth Andrew, a former White House advisor, admitted today to devising a scheme to steal from the very same schools he helped create.  Andrew now faces time in federal prison for abusing his position and robbing those he promised to help.”      

According to previous filings in this case:

In 2005, SETH ANDREW helped create “School Network-1,” a series of public charter schools then based in New York City.  In the Spring of 2013, ANDREW left School Network-1 and accepted a job in the United States Department of Education and, thereafter, as a senior advisor in the Office of Educational Technology at the White House.  In November 2016, ANDREW left his role in the White House and, shortly thereafter, in January 2017, ANDREW officially severed his relationship with School Network-1.

School Network-1’s New York based charter schools must maintain an “escrow account” that may be accessed only if the school dissolves.  Three such escrow accounts, for three New York City based-School Network-1 schools, were opened by ANDREW and other School Network-1 employees, at  “Bank-1” in 2009, 2011 and 2013.  As to each of those three accounts ‑- Escrow Account-1, Escrow Account-2 and Escrow Account-3 -- ANDREW was a signatory and had access to the funds in them.  However, pursuant to the charter agreement, the funds in the Escrow Accounts were reserved in case the school dissolved, and the funds could not be moved by ANDREW, or anyone, without proper authorization.

After he severed his relationship with School Network-1, on March 28, 2019, ANDREW entered a Bank-1 branch in New York City and closed both Escrow Account-1 and Escrow Account-2.  Bank-1 provided ANDREW a bank check in the amount of $71,881.23 made payable to “[School Network-1] Charter School” (“Check-1”) and a second bank check in the amount of $70,642.98 to “[School Network-1] Harlem Charter” (“Check-2”). 

The same day that ANDREW closed Escrow Account-1 and Escrow Account-2, ANDREW entered a Manhattan branch of a different FDIC insured bank (“Bank-2”) and opened a business bank account in the name of “[School Network-1] Charter School” (“Fraud Account‑1”).  To open that account, ANDREW misrepresented to a Bank-2 employee that he was a “Key Executive with Control of” School Network-1 Charter School and supported that misrepresentation with emails sent to the Bank-2 employee.  ANDREW then deposited Check-1 into the account. Five days later, on April 2, 2019, ANDREW used an ATM machine in Baltimore, Maryland to deposit Check-2 into Fraud Account‑1. 

On October 17, 2019, ANDREW closed out Escrow Account-3 and received a check (“Check-3”) made payable to “[School Network-1] Endurance” in the amount of $75,481.10.  On October 21, 2019, ANDREW deposited Check-3 into an account that he opened at a third bank (“Fraud Account-2”). 

Approximately one month later, ANDREW obtained a check from Bank-2 for $144,473.29, which constituted the funds stolen from Escrow Account-1 and Escrow Account-2, and ANDREW ultimately deposited those funds into Fraud Account-2.  Five days later, ANDREW rolled the funds in Fraud Account-2 into a certificate of deposit.  That certificate of deposit matured on May 20, 2020, which earned ANDREW $2,083.52 in interest.  ANDREW then transferred the funds from the certificate of deposit -- including the funds stolen from the Escrow Accounts -- into a bank account held in the name of a particular civic organization that ANDREW then-controlled thereby concealing the money’s association with School Network-1, and depositing the stolen money into an account under Andrew’s complete control.

*                      *                     *

ANDREW, 42, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  ANDREW has agreed to pay restitution to the Charter School Network from which he stole.  ANDREW is scheduled to be sentenced before Judge Cronan on April 14, 2022.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Ryan B. Finkel is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Tim Foley, Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced that SUCRE ALMANZAR-ALBA was charged in a criminal complaint today with possession of fentanyl with the intent to distribute it.  ALMANZAR-ALBA was arrested yesterday and presented today before the Hon. Barbara Moses, United States Magistrate Judge for the Southern District of New York.

U.S. Attorney Damian Williams said: “As alleged, the defendant trafficked huge quantities of fentanyl, the major driver of the opioid epidemic plaguing this country.  Thanks to our law enforcement partners, nearly 20 kilograms of this deadly drug – which amounts to millions of lethal doses – have been taken off the street.”

DEA Acting Special Agent-in-Charge Tim Foley said: “This seizure and arrest have already saved lives in New York. Allegedly, hidden in Almanzar-Alba’s apartment was the equivalent of nearly 10 million doses of the most dangerous illegal drug to ever hit the streets – FENTANYL.  I applaud the New York Strike Force, U.S. Attorney’s Office Southern District of New York, and our law enforcement partners for their collaborative and swift efforts in this investigation.”

NYPD Commissioner Keechant Sewell said: “Illicit fentanyl distribution destroys lives and devastates communities. Today’s federal complaint reflects the unrelenting focus by the NYPD and its law enforcement partners, working together, to rid our city of these and other deadly drugs and to build strong cases against those who would deal in them. I want to thank all the investigators and prosecutors who worked on this important investigation.”

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

On or about January 13, 2022, ALMANZAR-ALBA met with a confidential source to give that confidential source approximately one kilogram of fentanyl.  Law enforcement later searched ALMANZAR-ALBA’s house and recovered approximately 19 additional kilograms of fentanyl.

ALMANZAR-ALBA, 43, of the Bronx, New York, is charged with possession with intent to distribute a controlled substance, which carries a maximum sentence of life imprisonment.  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 Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force.  The OCDETF New York Strike Force is a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. 

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Kevin Mead is in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Lisa Garcia, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has filed a civil lawsuit against CISNE NY Construction, Inc., CISNE JE Construction, Inc., CISNE Contracting, Inc., and their principals Jose Pancha and Edison Ruilova (together, the “CISNE Defendants”), alleging that the CISNE Defendants repeatedly violated the federal Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”).  TSCA and the RRP Rule impose safety requirements to minimize the risk that young children, tenants, and renovation workers are exposed to toxic lead paint dust during renovations of residential buildings.

Exposure to lead paint dust is the most common cause of lead poisoning.  Lead poisoning—particularly in children—can lead to severe, irreversible health problems.  Lead exposure can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems. 

U.S. Attorney Damian Williams said: “As alleged, the CISNE Defendants repeatedly violated rules designed to protect children and others from lead poisoning during renovations of residential buildings.  Their actions threatened the most vulnerable with severe lifelong injury.  This Office will vigorously enforce the laws designed to protect the health of children against violators who disregard the public health and put children at risk.”

EPA Regional Administrator Garcia stated: “EPA recognizes that all people deserve protection from the hazards of lead-based paint, especially our most vulnerable communities. This case involves allegations of multiple violations in hundreds of NYC apartments. Reducing childhood lead exposure and addressing associated health impacts are one of EPA’s top priorities and we are committed to the robust enforcement of standards that are intended to protect individuals and families.”

The Complaint filed today in Manhattan federal court alleges that the CISNE Defendants repeatedly failed to use legally required safety precautions when renovating apartments that are presumed by law to contain lead paint because they were built prior to 1978.  EPA and New York City Department of Health and Mental Hygiene inspectors observed that the CISNE Defendants failed to contain debris and dust during their work, creating exposure hazards.  Construction dust was found not just in the units being worked on, but also in the public hallways accessible to other building residents.  Testing demonstrated that dust exceeded both local and federal safety standards.  The CISNE Defendants also failed to post warning signs at these jobs or take other steps required by law to protect tenants and workers.  In all of this, the CISNE Defendants risked exposing tenants and workers to lead paint dust and violated TSCA and the RRP Rule.

The Complaint also alleges that for years, in violation of TSCA and the RRP Rule, the CISNE Defendants performed renovations in New York City apartment buildings without the training and certifications required to perform such work, and that they failed to provide EPA with legally mandated records that would allow EPA to audit their work.   

*          *          *

The Complaint filed by the United States seeks an injunction barring the CISNE Defendants from performing further work governed by the TSCA and the RRP Rule without complying with mandated safety requirements. The Complaint also seeks an order requiring the CISNE Defendants to mitigate the harms caused by their prior illegal renovation work.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant United States Attorney Zack Bannon is in charge of the case.

Damian Williams, United States Attorney for the Southern District of New York, announced that YUDITH REYNOSO-HICIANO, a/k/a “La Classica,” was convicted today in Manhattan federal court of kidnapping conspiracy and kidnapping.  REYNOSO-HICIANO was convicted after a four-day jury trial before U.S. District Judge Denise L. Cote.

U.S. Attorney Damian Williams said:  “Yudith Reynoso-Hiciano and others tied up a victim and assaulted him following a drug deal gone bad.  Thanks to the U.S. Department of Homeland Security, Homeland Security Investigations, and the New York City Police Department, Reynoso-Hiciano was apprehended, prosecuted, and now stands convicted of these violent crimes.”

According to the allegations contained in the Indictment and the evidence presented at trial:

In May 2019, REYNOSO-HICIANO and others kidnapped an individual (“Victim-1”), in connection with a dispute between REYNOSO-HICIANO’s brother and Victim-1 relating to the sale of a kilogram of cocaine.  REYNOSO-HICIANO and others kept Victim-1 at her apartment, where they tied his wrists together, assaulted him, and threatened to beat him with a crowbar and to press a hot clothing iron against his chest.    

*                      *                      *

REYNOSO-HICIANO, 43, of the Bronx, New York, was convicted by a jury of one count of kidnapping conspiracy and one count of kidnapping.  Each count carries a maximum term of  life in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge.

REYNOSO-HICIANO is scheduled to be sentenced on April 15, 2022.

Mr. Williams praised the outstanding investigative work of the Department of Homeland Security, Homeland Security Investigations, and the New York City Police Department. 

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Daniel H. Wolf and Alexander Li are in charge of the prosecution, with the assistance of paralegal specialist Sarah Rosenberg.

Damian Williams, the United States Attorney for the Southern District of New York,  Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Miriam E. Rocah, the Westchester County District Attorney, Kevin P. Bruen, Superintendent of the New York State Police (“NYSP”), and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of two indictments charging 13 individuals – including an NYPD police officer, licensed physicians, an attorney, and others – in connection with a $100 million automobile insurance fraud scheme. 

Of the 13 defendants, eight are charged in an indictment detailing conspiracies to commit healthcare fraud, money laundering, bribery, and obstruction, making false statements to federal authorities, and aggravated identity theft.  The charges are set forth in United States v. Alexander Gulkarov, et al., 22 Cr. 20 (the “Gulkarov Indictment”), which has been assigned to U.S. District Judge Failla.  Five additional defendants are separately charged in United States v. Bradley Pierre, et al., 22 Cr. 19 (the “Pierre Indictment”), which has been assigned to U.S. District Judge Torres.

Of those defendants, ten were arrested this morning in New York and New Jersey and are scheduled to appear before U.S. Magistrate Barbara Moses in Manhattan federal court later today.  An eleventh defendant, Alexander Gulkarov, was arrested in Miami, Florida, and is scheduled to appear before a U.S. Magistrate Judge in the Southern District of Florida later today.

U.S. Attorney Damian Williams said:  “The thirteen defendants charged in today’s indictments are alleged to have collectively perpetrated one of the largest no-fault insurance frauds in history.  In carrying out their massive scheme, among other methods, they allegedly bribed 911 operators, hospital employees, and others for confidential motor vehicle accident victim information. With this information, they then endangered victims by subjecting them to unnecessary and often painful medical procedures, in order to fraudulently overbill insurance companies. Schemes exploiting no-fault insurance laws – which ironically exist to make insurance more affordable – also result in higher costs, and unfairly burden all consumers in the auto insurance market.” 

FBI Assistant Director Michael J. Driscoll said: “No-fault accident schemes, like the one alleged today, can cost insurance companies millions of dollars in payouts to doctors and clinics who provide phony or unnecessary services to unwitting accident victims. This cost is almost always passed to consumers of private insurance or subsidized programs established to help those in need. This is a dangerous game in which the penalties include federal criminal charges.”

Westchester County District Attorney Miriam E. Rocah said:  “This case is a perfect example of federal, state and local law enforcement working in partnership to investigate and take down two criminal organizations that allegedly defrauded insurance companies and exploited vulnerable individuals by subjecting them to unnecessary, harmful, and sometimes painful, medical treatments for the sake of greed and profit. We will continue to work with our law enforcement partners to hold accountable those who manipulate the insurance system on which so many people depend, especially when the alleged perpetrators are professionals who allegedly violated the oaths they took to serve and protect.” 

State Police Superintendent Kevin P. Bruen said: “These indictments are the result of years of investigative work and could not have succeeded without the collaboration between federal, state and local law enforcement.  Our investigation uncovered a large-scale, complex scheme that resulted in millions of dollars of fraudulent insurance claims. This type of fraud impacts the entire system and results in higher costs for companies and policyholders. I commend our members and our law enforcement partners for their work on this case, and we are sending a clear message that we will not tolerate fraud on any level.”

NYPD Commissioner Keechant Sewell said: “Today’s indictments reflect schemes to profit by exploiting victims’ through fraud. I commend the NYPD detectives, FBI agents and prosecutors of the United States Attorney’s Office in the Southern District of New York for their long-term efforts and cooperation in this investigation into alleged healthcare fraud, money laundering and bribery. Together, we will continue to be relentless in fighting crime that impacts the people we serve wherever, and however, it occurs."

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

Background of the Investigation

Since 2017, the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the Westchester County District Attorney’s Office have been investigating several criminal organizations involved in a widespread healthcare fraud and bribery scheme that utilized the New York and New Jersey no-fault automobile insurance regime to earn millions of dollars in illegal profits.

New York and New Jersey no-fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate, and is below a particular monetary threshold (the “No-Fault Laws”).  Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims, without the need to bill the victims themselves.  This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes, and the costs associated with an extended investigation of the accident. 

The Gulkarov Indictment

The Gulkarov Indictment charges eight individuals (the “Gulkarov Conspirators”) with participating in a scheme to exploit the No-Fault Laws.  As part of the scheme, the Gulkarov Conspirators fraudulently owned and controlled more than a dozen medical professional corporations – including medical, acupuncture, and chiropractic practices – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Gulkarov Clinics”).  The Gulkarov Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments and lying under oath to insurance company representatives.

The Gulkarov Conspirators promoted the scheme through bribery.  The Gulkarov Conspirators paid hundreds of thousands of dollars to co-conspirators (the “Runners”), who used this money to bribe 911 operators, hospital employees, and others for confidential motor vehicle accident victim information.  The Runners then used this information to contact automobile accident victims, lie to them, and induce them to seek medical treatment at, among other places, the Gulkarov Clinics.

The Gulkarov Conspirators laundered the proceeds of the fraud scheme through law firms, check-cashing entities, and shell companies, and used the money to pay for luxury cars, watches, and vacations.  Then, when certain members of the conspiracy learned that they were under federal criminal investigation, they obstructed justice by fabricating documents, lying to law enforcement, and committing perjury before a federal grand jury.

As alleged, the leaders of the Gulkarov Conspirators are non-physicians, including ALEXANDER GULKAROV, a/k/a “Little Alex,” ROMAN ISRAILOV, a/k/a “Roman Matatov,” PETER KHAIMOV, a/k/a “Peter Khaim,” and ANTHONY DIPIETRO.  ROLANDO CHUMACEIRO, a/k/a “Chuma,” and MARCELO QUIROGA are licensed medical practitioners who incorporated medical practices as part of the scheme, prescribed unnecessary and excessive medical treatments, and overbilled insurance companies under the No-Fault Laws.

The Gulkarov Indictment also includes charges against an attorney, ROBERT WISNICKI, Esq., who is the founding partner of two New York-based law firms.  As alleged, WISNICKI laundered hundreds of thousands of dollars of illicit proceeds for the leaders of the Gulkarov Conspiracy and concealed these transfers by fabricating retainer agreements, lying to law enforcement, and committing perjury before a federal grand jury. 

Finally, the Gulkarov Indictment includes a charge against an NYPD police officer, ALBERT ARONOV.  As alleged, as part of the scheme, ARONOV logged into NYPD computers during off-hours and searched for confidential motor vehicle accident reports on the NYPD’s servers.  ARONOV then took photos of the reports using a pre-paid “burner” phone and transmitted the photos to the leaders of the Gulkarov Conspiracy using an encrypted messaging application.  The leaders then used the confidential information contained in these reports to contact the motor vehicle accident victims, lie to them, and steer them to the Gulkarov Clinics for medical treatment.  When later questioned by federal agents, ARONOV lied about his involvement in accessing and disseminating the confidential motor vehicle accident reports.

All told, the Gulkarov Conspirators billed insurance companies for more than $30 million in fraudulent medical treatments.

The Pierre Indictment

The Pierre Indictment separately charges five additional individuals (the “Pierre Conspirators”) with participating in a second criminal scheme to exploit the No-Fault Laws.  The Pierre Conspirators fraudulently owned and controlled five medical services corporations – including medical clinics and a magnetic resonance imaging (“MRI”) center – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Pierre Clinics”).  The Pierre Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments, falsifying clinical injuries in reports, and lying under oath to insurance company representatives.

The Pierre Conspirators promoted the scheme through bribery.  Like the Gulkarov Conspirators, the Pierre Conspirators also paid hundreds of thousands of dollars to the Runners, who used this money to pay bribes for confidential motor vehicle accident victim information.  The Runners then used this information to induce victims to seek medical treatment at, among other places, the Pierre Clinics.

The Pierre Conspirators laundered the proceeds of the fraud scheme through phony loan arrangements and shell companies.

As alleged, the leader of the Pierre Conspiracy is BRADLEY PIERRE, who is not a physician.  PIERRE conducted much of the No-Fault Scheme from his physical office located in a law firm owned by a family member (“Law Firm-2”), where, among other things, he monitored the Pierre Clinics using closed circuit TV cameras, communicated with co-conspirators using Law Firm-2’s email domain, and met with doctors in Law Firm-2’s offices.   PIERRE further openly communicated with Law Firm-2 about the scheme, for instance telling his family member, “I'm going to make sure you ALWAYS make your quota.”  Law Firm-2 paid PIERRE over $4 million in connection with the No-Fault Scheme – typically from Law Firm-2’s Interest on Lawyers Trust Accounts (“IOLA Accounts”) – while maintaining no documentation or ledgers identifying the purpose of these payments.

The Pierre Indictment further charges two licensed medical practitioners with participating in the scheme.  MARVIN MOY is a medical doctor who incorporated a medical practice as part of the scheme and agreed with PIERRE to conduct unnecessary and painful electrodiagnostic testing on patients.  WILLIAM WEINER is a doctor of osteopathic medicine who incorporated a medical imaging facility as part of the scheme and agreed with PIERRE to falsify findings of clinical injuries in MRIs in order to boost patient referrals.

Finally, the Pierre Indictment charges two individuals for conspiring with PIERRE to pay bribes in order to facilitate the scheme.  ARTHUR BOGORAZ is a paralegal and manager at a New York-based personal injury law firm (“Law Firm-1”).  Among other things, BOGORAZ and PIERRE agreed to jointly pay bribes for patient and client referrals to the Pierre Clinics and Law Firm-1.  ANDREW PRIME is a Runner who bribed 911 operators and operated an additional call center as part of the scheme.

All told, the Pierre Conspirators billed insurance companies for more than $70 million in fraudulent medical treatments.

*                *                *

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

Mr. Williams praised the 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.  Mr. Williams noted that the investigation is ongoing.

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.

22-007                                                                                                                                                           ###

Gulkarov Indictment

Defendant

Age

Hometown

Charges (Potential Maximum Term of Imprisonment)

ALEXANDER GULKAROV, a/k/a “Little Alex”

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, obstruction conspiracy, aggravated identity theft

(42 years)

ROMAN ISRAILOV

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

PETER KHAIMOV, a/k/a “Peter Khaim”

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

ANTHONY DIPIETRO

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy; obstruction conspiracy

(40 years)

ROLANDO CHUMACEIRO, a/k/a “Chuma”

Healthcare fraud conspiracy

(10 years)

MARCELO QUIROGA

Healthcare fraud conspiracy

(10 years)

ROBERT WISNICKI

Money laundering conspiracy, obstruction conspiracy

(25 years)

ALBERT ARONOV

False statements

(5 years)

Pierre Indictment

BRADLEY PIERRE

Healthcare fraud conspiracy, money laundering conspiracy, Travel Act conspiracy, aggravated identity theft

(37 years)

MARVIN MOY

Healthcare fraud conspiracy, money laundering conspiracy

(30 years)

WILLIAM WEINER

Healthcare fraud conspiracy, money laundering conspiracy

(30 years)

ARTHUR BOGORAZ

Travel Act Conspiracy

(5 years)

ANDREW PRIME

Travel Act Conspiracy

(5 years)

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

Damian Williams, the United States Attorney for the Southern District of New York, and Keechant Sewell, Commissioner of the New York City Police Department (“NYPD”), announced today that RASHIEM COUNCIL, PARIS FULTON, and TERRENCE MCKEE, were charged by Complaint for their participation in a drug trafficking conspiracy and their use of firearms in connection with that conspiracy.  A fourth defendant, MICHAEL GARCIA, was charged in the same Complaint with possessing with the intent to distribute cocaine.  The defendants were arrested yesterday, GARCIA was presented today in Manhattan federal court before United States Magistrate Judge Barbara Moses. COUNCIL will be presented later today, and FULTON and MCKEE will be presented tomorrow before Judge Moses.

U.S. Attorney Damian Williams said:  “As alleged, three of the defendants posed as law enforcement officers and brandished a firearm during a home invasion in which they took approximately three kilograms of cocaine and proceeds from narcotics dealing.  Such brazen and dangerous conduct will not be tolerated.  Thanks to the work of the NYPD and federal law enforcement, these defendants face significant federal charges for their alleged crimes.”

NYPD Commissioner Keechant Sewell said: “Today’s criminal complaint once again highlights the NYPD’s swift work to neutralize the most violent elements of an alleged narcotics enterprise. Our covenant with New Yorkers is to always answer their calls for help and to work with our partners to ensure justice and I commend the United States Attorney’s Office in the Southern District of New York for their work with our officers in this important case.”

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

On or about January 11, 2022, RASHIEM COUNCIL, PARIS FULTON, and TERRENCE MCKEE, dressed as and pretending to be law enforcement officers, forced their way into an apartment (the “Apartment”) in a building (the “Building”) in the Bronx, where MICHAEL GARCIA, his partner, and their two minor children lived.  COUNCIL, FULTON, and MCKEE were armed.  They handcuffed GARCIA and held him at gun point, while GARCIA’s partner and their two minor children were in the Apartment.  COUNCIL, FULTON, and MCKEE, demanded to know where GARCIA kept his drugs and drug money in the Apartment, and GARCIA showed them.  COUNCIL, FULTON, and MCKEE stole approximately one hundred and sixty thousand dollars in narcotics proceeds and approximately three kilograms of cocaine from GARCIA.

After stealing the drugs and the money, COUNCIL, FULTON, and MCKEE escorted GARCIA, in handcuffs, out of the Apartment and into the building’s elevator.  By then, in response to another individual’s (“Witness-1”) 911 call about the home invasion, officers (the “Officers”) from the New York City Police Department had arrived at the Building, and had just entered the lobby when the elevator door opened.  COUNCIL, FULTON, MCKEE, and GARCIA, walked out of the elevator.  They tried to avoid the Officers and continued walking towards the front door.  The Officers asked COUNCIL, FULTON, and MCKEE what law enforcement unit they were with, and COUNCIL, FULTON, and MCKEE claimed that their sergeant was waiting for them outside.  As soon as they exited the Building, however, they—and GARCIA—began to run.  The Officers pursued them.  After a short pursuit, the Officers caught up to and apprehended COUNCIL, MCKEE, and GARCIA.  During that pursuit, one Officer saw one of the defendants throw a firearm into the street.  Immediately after the Officers apprehended COUNCIL and MCKEE, the Officers found two more firearms near the Building.  Shortly thereafter, the Officers found and arrested FULTON near his car, which he had parked outside the Building.  With FULTON’s consent, the Officers conducted a brief search of the car, where they found a fourth firearm inside a backpack in the car.   

*                *                *

RASHIEM COUNCIL, 31, PARIS FULTON, 29, and TERRENCE MCKEE, 33, all from Connecticut, are charged with one count of narcotics conspiracy, in violation of Title 21, United States Code, Section 846, and one count of brandishing firearms in connection with that narcotics conspiracy, in violation of Title 18, United States Code, Section 924(c).  The narcotics conspiracy charge carries a mandatory minimum sentence of five years and a maximum sentence of 40 years in prison.  The firearms charge carries a maximum sentence of life and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other sentence imposed. 

MICHAEL GARCIA, 36, of the Bronx, New York, is charged with one count of possession with the intent to distribute 500 grams and more of cocaine, in violation of Title 21,  United States Code, Section 841(a)(1) and (b)(1)(B), which carries a mandatory minimum sentence of five years and a maximum sentence of 40 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 would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York, the NYPD’s Bronx Violent Crimes Squad, and the Internal Affairs Bureau, Police Impersonation Unit.  Mr. Williams also praised the patrol officers from the 48th precinct for their outstanding policework in executing the arrests. 

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Sarah L. Kushner is in charge of the prosecution. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, 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 the first criminal charge under the Rodchenkov Anti-Doping Act, signed into law on December 4, 2020, which proscribes doping schemes at international sports competitions, including the Olympic Games. The Complaint unsealed today alleges that ERIC LIRA, a “naturopathic” therapist operating principally in the area of El Paso, Texas, obtained various performance enhancing drugs (“PEDs”) and distributed those PEDs to certain athletes in advance of, and for the purpose of cheating at, the 2020 Olympic Games held in Tokyo in the summer of 2021. LIRA was taken into federal custody today and is expected to be presented in the Western District of Texas today before U.S. Magistrate Judge Miguel A. Torres.  

U.S. Attorney Damian Williams said:  “At a moment that the Olympic Games offered a poignant reminder of international connections in the midst of a global pandemic that had separated communities and countries for over a year, and at a moment that the Games offered thousands of athletes validation after years of training, Eric Lira schemed to debase that moment by peddling illegal drugs. The promise of the Olympic Games is a global message of unification. Today, this Office sends a strong message to those who would taint the Games and seek to profit from that corruption.”

FBI Assistant Director Michael J. Driscoll said: “Performance enhancing substances deprive competitors of a level playing field.  We allege Mr. Lira knew he was breaking the rules when he communicated with Olympians through an encrypted messaging app to hide his illegal activity.  It's not winning if you take illegal substances - it's cheating, and Mr. Lira will now be forced to face the consequences of his alleged criminal actions.”

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

The charges in this Complaint arises from an investigation of a scheme to provide Olympic athletes with PEDs, including drugs widely banned throughout competitive sports such as  human growth hormone and the “blood building” drug erythropoietin, in advance of and for the purpose of corrupting the 2020 Olympic Games, which convened in Tokyo in the summer of 2021. LIRA, who claims to be a “kinesiologist and naturopathic” doctor operating principally in and around El Paso, Texas, obtained misbranded versions of these, and other, prescription drugs from sources in Central and South America, before bringing those drugs into the United States and distributing them to, among other, the two athletes referred to in the Complaint as “Athlete-1” and “Athlete-2.” Throughout the scheme, LIRA and Athlete-1 communicated via encrypted electronic communications discuss the sale, shipment, and use of LIRA’s illegal drugs, and specifically discussed the “testability” of those drugs by anti-doping authorities. For example, on or about June 13, 2021, Athlete-1 wrote to LIRA, “So I took 2000ui of the E [erythropoietin] yesterday, is it safe to take a test this morning?” LIRA replied, “Good day [Athlete-1] . . . . 2000 ui is a low dosage.” Athlete-1 replied further, “Remember I took it Wednesday and then yesterday again / I wasn’t sure so I didn’t take a test / I just let them go so it will be a missed test.”

LIRA and Athlete-1, in particular, explicitly acknowledged the effectiveness of the doping program achieved through the use of LIRA’s illegal drugs. On or about June 22, 2021, Athlete-1 wrote to LIRA, “Hola amigo / Eric my body feel so good / I just ran 10.63 in the 100m on Friday / with a 2.7 wind / I am sooooo happy / Ericccccccc / Whatever you did, is working so well.” Shortly thereafter, and in advance of Athlete-1’s arrival in Tokyo to compete in the 2020 Olympics, LIRA encouraged his client: “What you did . . . is going to help you for the upcoming events. You are doing your part and you will be ready to dominate” (ellipsis in original).

Notwithstanding the attempt to evade anti-doping tests, LIRA and Athlete-1 were discovered in their scheme. On or about July 19, 2021, Athlete-1underwent an out-of-competition blood collection for purposes of drug testing by the Athletics Integrity Unit, a body charged with ensuring fair competition and prevention of doping at the Tokyo Olympics, among other competitions. The results of that testing reflected Athlete-1’s use of human growth hormone. On or about July 30, 2021, Athlete-1 was provisionally suspended from Olympic competition, including in the women’s 100m semi-finals set to take place that same evening.

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

ERIC LIRA, 41, of El Paso, Texas, is, in addition to the charge under the Rodchenkov Act, accused of conspiring with others to violate the drug misbranding and adulteration laws of the United States, in violation 18 U.S.C. § 371 and 21 U.S.C. §§ 331 & 333(a)(2). The maximum term of imprisonment under the Rodchenkov Act is 10 years, and the maximum term of imprisonment for conspiring to violate the misbranding laws is 5 years. These 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 assigned to each case.

*                *                *

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

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Sarah Mortazavi and Andrew C. Adams are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions 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 Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of the Department of Homeland Security (“HSI”), announced today the filing of a civil complaint seeking forfeiture of 35 Cambodian and Southeast Asian antiquities from a private American collection for the purpose of returning the antiquities to their countries of origin.  Antiquities dealer Douglas Latchford sold the collection to its present owner (the “Collector”) with false statements and fake provenance documents intended to hide the fact that the antiquities were the products of looting, and then imported the antiquities through lies on customs paperwork. The Collector has voluntarily relinquished possession of the antiquities.

U.S. Attorney Damian Williams said: “This Office continues to trace and recover the many stolen cultural treasures that Douglas Latchford sold and scattered far from their home countries. Through this action, the United States reaffirms its commitment to redressing the wrongs committed by Latchford and other looters who would exploit and profit from the pain and disruption of war.”

Ricky J. Patel, HSI New York Acting Special Agent in Charge said: “For years, Douglas Latchford operated an illegitimate enterprise by smuggling looted antiquities into the United States with blatant disregard for U.S. Customs laws.  Latchford facilitated this by falsifying customs documentation and providing deceptive paperwork to collectors for sale on the international art market.  Today, we are pleased to see that 35 pieces of cultural property will be repatriated to their rightful setting.  HSI New York will not rest in its efforts to locate all the antiquities related to Latchford’s fraud and see that each piece of history is not just found, but sent home.”

According to the Complaint filed in Manhattan Federal Court on January 7, 2022:

The United States of America seeks the forfeiture of 34 antiquities which Latchford sold to the Collector between in or about 2003 and in or about 2007 (the “Defendants in Rem”).  The Defendants in Rem are bronze and sandstone sculptures and artifacts which originate from countries in Southeast Asia, primarily Cambodia, but also India, Myanmar, and Thailand.  They include a monumental sandstone sculpture of Ganesha from Koh Ker, an ancient capital of the Khmer empire; and bronze sculptures from the vicinity of Angkor Wat. Latchford sold the Defendants in Rem to the Collector as part of a scheme to sell looted antiquities on the international art market.  The Defendants in Rem were either removed illegally from their country of origin; imported into the United States based on false statements to United States Customs and Border Protection (“CBP”), or both.

Over the years, Latchford lied to and withheld information from the Collector in order to conceal that the Defendants in Rem were stolen, and supplied the Collector with false provenance documents and false information about the origin of certain of the Defendants in Rem. After Latchford sold the Defendants in Rem, many of them were then illegally imported into the United States based on false statements Latchford made to CBP and others. 

In 2019, Latchford was indicted in the Southern District of New York with wire fraud conspiracy and other crimes related to a many-year scheme to sell looted Cambodian antiquities on the international art market, primarily by creating false provenance documents and falsifying invoices and shipping documents, including misrepresenting the country of origin of artworks. See United States v. Latchford, 19 Cr. 748 (AT) (the “Indictment”). In September 2020, the Indictment was dismissed due to Latchford’s death.

In 2021, an agent of HSI contacted the Collector about the Defendants in Rem. The Collector promptly cooperated with the Government’s inquiries and allowed the Government to inspect the Defendants in Rem.  After the Collector learned more about the history of Latchford and the Defendants in Rem, including the evidence that the Defendants in Rem were illegally looted and/or illegally imported into the United States, the Collector voluntarily relinquished possession of the Defendants in Rem so that they can be repatriated to their countries of origin.

*                *                *

Mr. Williams thanked HSI for its outstanding work on this investigation, which he noted is ongoing, and praised its ongoing efforts to find and repatriate stolen and looted cultural property. Mr. Williams also thanked the Kingdom of Cambodia’s Ministry of Culture and Fine Arts for its assistance with this investigation.

This matter is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U. S. Attorney Jessica Feinstein is in charge of the case.

The allegations contained in the Complaint are merely accusations.

Damian Williams, the United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that MARIO G. NUNES pled guilty today to tax evasion and filing false federal income tax returns, before United States District Judge Nelson S. Román, in White Plains federal court. 

U.S. Attorney Damian Williams said: “As he admitted in court, the defendant engaged in a scheme to evade paying federal income taxes for years, including by concealing business income, making false statements to the IRS, and filing false federal income tax returns.  Nunes has now pled guilty to federal crimes and faces time in federal prison, another example that attempting to conceal income and filing false returns are ultimately far costlier than filing accurate returns and paying one’s taxes due.”   

IRS-CI Special Agent in Charge Thomas Fattorusso said:  “Mr. Nunes attempted the cheat the system but the system caught up with him.  Thanks to the efforts of our IRS-CI Special Agents, Mr. Nunes will now be held to account for the lies, evasion and false returns he used to shelter more than $1.5 million dollars from taxation.”

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

NUNES was an independent contractor who performed construction work, including as a subcontractor for commercial and residential masonry and concrete projects.  NUNES filed false federal income tax returns for tax years 2012 through 2017 and, from in or about March 2014 through in or about May 2019, orchestrated a scheme to evade payment of his unpaid assessed federal income taxes, including by falsely informing the IRS, in response to its collection efforts, that he was unemployed and relying on family and friends for living expenses.  At the same time, NUNES concealed more than $1.5 million in business income by, among other things, depositing business receipts into personal bank accounts, cashing checks received from customers rather than depositing the funds into a bank account, and instructing customers to pay his suppliers directly. 

*                *                *

NUNES, 59, of Yonkers, New York, pled guilty to one count of tax evasion, which carries a maximum sentence of five years in prison, and six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison.  NUNES has agreed to pay restitution to the IRS, representing the additional tax due and owing as a result of his conduct, in the amount of at least $330,833.  Sentencing before Judge Román is scheduled for April 14, 2022, at 10:00 a.m.

The statutory maximum sentences are prescribed by Congress and are provided here for information purposes only, as any sentence imposed on the defendant will be determined by the judge.

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

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

A Rhode Island man was charged in a criminal complaint unsealed today with conspiring to traffic firearms and with making false statements. According to court documents, Robert Alcantara, 34, of Providence, was arrested today and presented in the District of Rhode Island.

“Untraceable ‘ghost guns’ pose a serious threat to public safety,” said U.S. Attorney Damian Williams. “As alleged, the defendant agreed with others to buy the parts for these firearms, put them together at his home, and then unlawfully sold or attempted to sell over 100 of them. Thanks to our law enforcement partners, the defendant has been arrested, and his deadly ghost gun business has been shut down.”

“As alleged, Robert Alcantara engaged in trafficking untraceable, Privately Made Firearms (PMF’s), commonly called 'ghost guns,'” said Special Agent in Charge John B. DeVito of ATF New York. “Stopping the flow of these firearms is a top priority of ATF, and we will rigorously pursue those who illegally sell these firearms. I applaud the NYSP who initiated this investigation through superb investigative actions, as well as our partners at the U.S. Department of Commerce, Office of Export Enforcement and the NYPD for their vital and continued contributions to the investigations.”    

“As is alleged to have happened here, the trafficking of PMFs poses a danger to our communities,” said Special Agent in Charge Jonathan Carson of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement New York Field Office. “The Office of Export Enforcement will continue to partner with other law enforcement agencies to combat the illegal smuggling of firearms, including ‘ghost guns’ that are difficult to trace.”

According to the allegations in the complaint unsealed today in Manhattan federal court:

From September 2019 up to November 2021, Alcantara and others entered an agreement in which Alcantara purchased the parts for more than 100 ghost guns, machined the ghost guns at his house in Providence, Rhode Island, and then illegally sold the working and completed ghost guns. On Nov. 20, 2021, law enforcement recovered parts for 45 ghost guns from Alcantara’s car. When interviewed by law enforcement, Alcantara falsely told them that he had never sold or transferred ownership of a firearm to any other individual, and that he had never transported a firearm to the Dominican Republic.

Below are photographs of the 45 ghost guns seized from Alcantara’s house, as well as photographs of firearms Alcantara intended to sell to buyers:

Alcantara is charged with: (1) conspiracy to traffic firearms, which carries a maximum sentence of five years in prison, and (2) making false statements, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Damian Williams for the Southern District of New York; Special Agent in Charge John B. DeVito of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and Special Agent in Charge Johnathan Carson of the U.S. Department of Commerce, Office of Export Enforcement’s New York Field Office made the announcement.

U.S. Attorney Williams praised the outstanding investigative work of the ATF and the Department of Commerce. U.S. Attorney Williams also thanked the New York City Police Department, the New York State Police Department, the Providence Police Department and the U.S. Attorney’s Office for the District of Rhode Island for their assistance in the case.

The case is being handled by the office’s Narcotics Unit. Assistant U.S. Attorney Kevin Mead is in charge of the prosecution.

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, John B. DeVito, Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and Johnathan Carson, Special Agent-in-Charge of the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office, announced that ROBERT ALCANTARA was charged in a criminal complaint unsealed today with conspiring to traffic firearms and with making false statements.  ALCANTARA was arrested today and presented in the District of Rhode Island.

U.S. Attorney Damian Williams said: “Untraceable ‘ghost guns’ pose a serious threat to public safety.  As alleged, the defendant agreed with others to buy the parts for these firearms, put them together at his home, and then unlawfully sold or attempted to sell over 100 of them.  Thanks to our law enforcement partners, the defendant has been arrested, and his deadly ghost gun business has been shut down.”

John B. DeVito, ATF New York Special Agent-in-Charge said:  “As alleged, Robert Alcantara engaged in trafficking untraceable, Privately Made Firearms (PMF’s), commonly called ghost guns.  Stopping the flow of these firearms is a top priority of ATF, and we will rigorously pursue those who illegally sell these firearms.  I applaud the NYSP who initiated this investigation through superb investigative actions, as well as our partners at the US Department of Commerce, Office of Export Enforcement and the NYPD for their vital and continued contributions to the investigations.”    

US Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement New York Field Office Special Agent in Charge Jonathan Carson said:  “As is alleged to have happened here, the trafficking of Privately Made Firearms poses a danger to our communities. The Office of Export Enforcement will continue to partner with other law enforcement agencies to combat the illegal smuggling of firearms, including ‘ghost guns’ that are difficult to trace.”

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

From September 2019 up to November 2021, ALCANTARA and others entered an agreement in which ALCANTARA purchased the parts for more than 100 “ghost guns,” machined the ghost guns at his house in Providence, Rhode Island, and then illegally sold the working and completed ghost guns.  On November 20, 2021, law enforcement recovered parts for 45 ghost guns from ALCANTARA’s car.  When interviewed by law enforcement, ALCANTARA falsely told them that he had never sold or transferred ownership of a firearm to any other individual, and that he had never transported a firearm to the Dominican Republic.

Below are photographs of the 45 “ghost guns” seized from ALCANTARA’s house, as well as photographs of firearms ALCANTARA intended to sell to buyers:          

ALCANTARA, 34, of Providence, Rhode Island, is charged with: (1) conspiracy to traffic firearms, which carries a maximum sentence of five years in prison, and (2) making false statements, which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the ATF and the Department of Commerce.  Mr. Williams also thanked the New York City Police Department, the New York State Police Department, the Providence Police Department, and the United States Attorney’s Office for the District of Rhode Island for their assistance in the case.

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorney Kevin Mead is in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions 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, 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 an Indictment charging PIERRE GIRGIS, a dual Egyptian and U.S. citizen, with acting and conspiring to act in the United States as an unregistered agent of the Arab Republic of Egypt. GIRGIS was taken into custody earlier today, and will be presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Damian Williams said:  “As alleged, Pierre Girgis failed to meet his requirements to register as a foreign agent in the United States.  At the behest of Egyptian officials, Girgis’s alleged prohibited conduct included attempting to covertly gather non-public intelligence about the activities of political opponents of Egypt’s president, and attempting to gain access for foreign officials to attend law enforcement-only trainings in Manhattan. This Office will continue to strictly enforce foreign agent registration laws, which remain critically important to ensuring that our government is not secretly influenced by foreign governments.”

Assistant Attorney General Matthew G. Olsen said: “The Department of Justice will not allow agents of foreign governments to operate in the United States to pursue and collect information about critics of those governments. Working at the direction of the Egyptian government, Girgis agreed to target its perceived critics located in the United States. This indictment begins the process of holding him accountable for his actions in contravention of our laws and values.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “Agents of foreign countries are required to register with our government for a good reason - they often act in their home country's interests and against those of the United States.  We allege Mr. Girgis sent non-public information back to Egypt for the benefit of the Egyptian government. Mr. Girgis broke our laws, and we must hold him accountable.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court, and statements made during court proceedings[1]:

From at least approximately 2014 to 2019, GIRGIS, a native of Egypt, acted in the United States as an agent of the Egyptian government, without notifying the U.S. Attorney General as required by law. GIRGIS operated at the direction and control of multiple officials of the Egyptian government in an effort to further the interests of the Egyptian government in the United States. Among other things, at the direction of Egyptian government officials, GIRGIS tracked and obtained information regarding political opponents of Egyptian president Abdel Fattah el-Sisi. GIRGIS also leveraged his connections with local U.S. law enforcement officers to collect non-public information at the direction of Egyptian officials, arranged benefits for Egyptian officials who were visiting Manhattan, and coordinated meetings between U.S. and Egyptian law enforcement in the United States, including by attempting to arrange for Egyptian officials to attend police trainings.

On or about May 7, 2018, GIRGIS discussed his status as an agent of the Egyptian government with an Egyptian official (“Egyptian Official-1”) using an encrypted messaging application. During the conversation, Egyptian Official-1 expressed frustration that GIRGIS had communicated with personnel from a different Egyptian government agency, warned GIRGIS that “it is not possible to open with all the agencies,” and stated that Egyptian Official-1 was “letting you [GIRGIS] open with us only.”[2] Later in the encrypted messaging exchange, Egyptian Official-1 advised GIRGIS that other Egyptian government agencies “want sources for themselves, and you [GIRGIS] have become an important source for them to collect information.” GIRGIS responded, “I know and I see and I learn from you,” and then informed Egyptian Official-1, “it will not be repeated again.”

Approximately one year later, on or about March 8, 2019, in the course of GIRGIS’s continuing operations as an Egyptian agent, GIRGIS and Egyptian Official-1 discussed an upcoming trip of certain Egyptian officials to the United States. During that telephone conversation, GIRGIS stated, “Tell me what you want me to do,” and Egyptian Official-1 responded by inquiring about GIRGIS’s relationship with a particular U.S. law enforcement officer. Egyptian Official-1 then instructed GIRGIS “to ask [the U.S. law enforcement officer] for something. We want you to find out if there are any police trainings happening in Manhattan in the coming days, and if so, who are the people in charge of these trainings? We would like to attend.” Later in the conversation, GIRGIS again asked, “What you want me to do?” Egyptian Official-1 directed GIRGIS, “Make follow up, Ok?” and GIRGIS agreed by responding, “Ok.”

*                      *                     *

GIRGIS, 39, is a resident of Manhattan. GIRGIS 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. 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 Elinor L. Tarlow 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 Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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

[2] The statements described in the Indictment and herein are set forth in substance and in part.

A New York man was arrested today on criminal charges related to his alleged acting and conspiring to act as a foreign agent in the United States.

According to court documents, Pierre Girgis, 39, of Manhattan, acted in the United States as an agent of the Egyptian government, without notifying the U.S. Attorney General as required by law. Girgis operated at the direction and control of multiple officials of the Egyptian government in an effort to further the interests of the Egyptian government in the United States. Among other things, at the direction of Egyptian government officials, Girgis allegedly tracked and obtained information regarding political opponents of Egyptian president Abdel Fattah el-Sisi. As alleged, Girgis also leveraged his connections with local U.S. law enforcement officers to collect non-public information at the direction of Egyptian officials, arranged benefits for Egyptian officials who were visiting Manhattan, and coordinated meetings between U.S. and Egyptian law enforcement in the United States, including by arranging for Egyptian officials to attend police trainings.

“The Department of Justice will not allow agents of foreign governments to operate in the United States to pursue and collect information about critics of those governments,” said Assistant Attorney General for National Security Matthew G. Olsen. “Working at the direction of the Egyptian government, Girgis agreed to target its perceived critics located in the United States. This indictment begins the process of holding him accountable for his actions in contravention of our laws and values.”

“As alleged, Pierre Girgis failed to meet his requirements to register as a foreign agent in the United States,” said U.S. Attorney Damian Williams for the Southern District of New York. “At the behest of Egyptian officials, Girgis’s alleged prohibited conduct included attempting to covertly gather non-public intelligence about the activities of political opponents of Egypt’s president, and attempting to gain access for foreign officials to attend law enforcement-only trainings in Manhattan. This office will continue to strictly enforce foreign agent registration laws, which remain critically important to ensuring that our government is not secretly influenced by foreign governments.”

“Agents of foreign countries are required to register with our government for a good reason – they often act in their home country's interests and against those of the United States,” said Assistant Director in Charge Michael J. Driscoll of the FBI’s New York Field Office. “We allege Mr. Girgis sent non-public information back to Egypt for the benefit of the Egyptian government. Mr. Girgis broke our laws, and we must hold him accountable.”

According to the indictment, on or about May 7, 2018, Girgis discussed his status as an agent of the Egyptian government with an Egyptian official (Egyptian Official-1) using an encrypted messaging application. During the conversation, Egyptian Official-1 expressed frustration that Girgis had met with personnel from a different Egyptian government agency during a recent trip by Girgis to Egypt, warned Girgis that “it is not possible to open with all the agencies,” and stated that Egyptian Official-1 was “letting you [Girgis] open with us only.” Later in the encrypted messaging exchange, Egyptian Official-1 advised Girgis that other Egyptian government agencies “want sources for themselves, and you [Girgis] have become an important source for them to collect information.” Girgis responded, “I know and I see and I learn from you,” and then informed Egyptian Official-1, “it will not be repeated again.”

Approximately one year later, on or about March 8, 2019, in the course of Girgis’s continuing operations as an Egyptian agent, Girgis and Egyptian Official-1 discussed an upcoming trip of certain Egyptian officials to the United States. During that telephone conversation, Girgis stated, “Tell me what you want me to do,” and Egyptian Official-1 responded by inquiring about Girgis’s relationship with a particular U.S. law enforcement officer. Egyptian Official-1 then instructed Girgis “to ask [the U.S. law enforcement officer] for something. We want you to find out if there are any police trainings happening in Manhattan in the coming days, and if so, who are the people in charge of these trainings? We would like to attend.” Later in the conversation, Girgis again asked, “What you want me to do?” Egyptian Official-1 directed Girgis, “Make follow up, Ok?” and Girgis agreed by responding, “Ok.”

Girgis 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.

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

Assistant U.S. Attorneys Elinor L. Tarlow and Kyle A. Wirshba 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, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment charging FILIPPO BERNARDINI with wire fraud and aggravated identity theft, in connection with a multi-year scheme to impersonate individuals involved in the publishing industry in order to fraudulently obtain hundreds of prepublication manuscripts of novels and other forthcoming books.  BERNARDINI was arrested this afternoon when he arrived at John F. Kennedy International Airport.  He will be presented tomorrow before United States Magistrate Judge Robert W. Lehrburger in Manhattan federal court.  The case is assigned to U.S. District Judge Colleen McMahon.

U.S. Attorney Damian Williams said:  “Filippo Bernardini allegedly impersonated publishing industry individuals in order to have authors, including a Pulitzer prize winner, send him prepublication manuscripts for his own benefit. This real-life storyline now reads as a cautionary tale, with the plot twist of Barnardini facing federal criminal charges for his misdeeds.”  

Assistant Director-in-Charge Driscoll said: “Unpublished manuscripts are works of art to the writers who spend the time and energy creating them. Publishers do all they can to protect those unpublished pieces because of their value. We allege Mr. Bernardini used his insider knowledge of the industry to get authors to send him their unpublished books and texts by posing as agents, publishing houses, and literary scouts. Mr. Bernardini was allegedly trying to steal other people's literary ideas for himself, but in the end he wasn't creative enough to get away with it."

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

Beginning in at least August 2016, BERNARDINI, who was based in London and worked in the publishing industry, began impersonating agents, editors, and other individuals involved in publishing to fraudulently obtain prepublication manuscripts.  These prepublication manuscripts are valuable, and the unauthorized release of a manuscript can dramatically undermine the economics of publishing, and publishing houses generally work to identify and stop the release of pirated, prepublication, manuscripts.  Such pirating can also undermine the secondary markets for published work, such as film and television, and can harm an author’s reputation where an early draft of written material is distributed in a working form that is not in a finished state. 

In carrying out this scheme, BERNARDINI created fake email accounts that were designed to impersonate real people employed in the publishing industry, including literary talent agencies, publishing houses, literary scouts, and others.  BERNARDINI created these accounts by registering more than 160 internet domains that were crafted to be confusingly similar to the real entities that they were impersonating, including only minor typographical errors that would be difficult for the average recipient to identity during a cursory review.  Among other things, BERNARDINI often replaced the lower-case letter <m> with the lower-case letters <r> and <n>, which, when placed together as <rn>, resemble an <m>.   For example, in or about September 2020, BERNARDINI utilized a fraudulent email address impersonating a well-known editor and publisher (“Editor-1”) who worked for an imprint of a U.S. publishing house (“Publisher-1”).  Impersonating Editor-1, BERNARDINI emailed a Pulitzer Prize winning author (“Author-1”) and requested a copy of a word version of Author-1’s forthcoming manuscript, which Author-1 sent to BERARDINI, believing him to be Editor-1.  Over the course of this scheme, BERNARDINI impersonated hundreds of distinct people and engaged in hundreds of unique efforts to fraudulently obtain electronic copies of manuscripts that he was not entitled to.

In addition, BERNARDINI engaged in a phishing scheme to surreptitiously gain access to a database maintained by a New York City-based literary scouting company (“Scouting Company-1”).  BERNARDINI created a webpage that impersonated Scouting Company-1’s website.  Then, in or about July 2020, BERNARDINI impersonated a Scouting Company-1 employee and emailed two individuals, directing them to BERNARDINI’s look-alike webpage and prompting the users to provide their usernames and passwords.  BERNARDINI’s webpage was programmed to automatically forward the input usernames and passwords to an email account controlled by BERNARDINI. 

*                      *                      *

FILIPPO BERNARDINI, 29, of London, United Kingdom is charged with (1) wire fraud, which carries a maximum sentence of 20 years in prison; and (2) aggravated identity theft, which carries a mandatory consecutive sentence of 2 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the investigative work of the FBI.  Mr. Williams also thanked the U.S. Customs and Border Protection for its assistance in this investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel G. Nessim is in charge of the prosecution.

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

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

“A unanimous jury has found Ghislaine Maxwell guilty of one of the worst crimes imaginable – facilitating and participating in the sexual abuse of children.  Crimes that she committed with her long-time partner and co-conspirator, Jeffrey Epstein. The road to justice has been far too long.  But, today, justice has been done.  I want to commend the bravery of the girls – now grown women – who stepped out of the shadows and into the courtroom.  Their courage and willingness to face their abuser made this case, and today’s result, possible. I also want to thank the career prosecutors of the Southern District of New York, who embraced the victims’ quest for justice and have worked tirelessly, day in and day out, to ensure that Maxwell was held accountable for her crimes. This Office will always stand with victims, will always follow the facts wherever they lead, and will always fight to ensure that no one, no matter how powerful and well connected, is above the law.”

Damian Williams, the United States Attorney for the Southern District of New York, today announced the appointment of Nicholas V. Biase as the Office’s Chief Public Information Officer, effective January 1, 2022.

Mr. Biase has been with the Office as a senior public affairs officer and director of social media in the Public Information Office.  Prior to his tenure at the U.S. Attorney’s Office, Mr. Biase was an agent, investigator, and director with the Essex County Prosecutor’s Office.

In making the appointment, U.S Attorney Damian Williams said: “Over his 15-plus years of dedicated service, Nick has been a vital liaison for an Office in the media capital of the world, and he has been a trusted counselor and confidante to every U.S. Attorney he has served.  Nick has also developed close working relationships with our law enforcement partners, and he is respected by the press corps for his professionalism, integrity, and candor.  He has been a leader in our press office for years, and it is my pleasure to formally announce his appointment as Chief Public Information Officer.”

Mr. Williams added: “I also want to thank Jim Margolin, the outgoing Chief Public Information Officer, who is retiring after more than eight years of outstanding service to the Office, and nearly 34 years of dedicated public service.  We will miss him dearly, and wish him the best as he embarks on his exciting new chapter.”

Damian Williams, the United States Attorney for the Southern District of New York, Ricky Patel, the Acting Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), Frank Russo, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Superseding Indictment charging VICTOR ALMONTE and MICHAEL ESPOSITO with conspiracy to distribute and possess with intent to distribute synthetic cannabinoids and to distribute controlled substances using the internet.  The case, in which four other individuals previously were charged and arrested, is assigned to United States District Judge J. Paul Oetken.

ALMONTE and ESPOSITO were arrested this morning and will be presented later today in Manhattan federal court before United States Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said: “Trafficking of synthetic cannabinoids – sometimes called K2 or Spice – poses a serious threat to public health and safety.  Packaged attractively to appeal to teenagers and young adults, synthetic cannabinoids are in reality toxic concoctions that can be very dangerous to consume.  As alleged, the defendants used websites they operated to distribute massive quantities of synthetic cannabinoids throughout the United States.  Thanks to our law enforcement partners, the defendants have been arrested and their dangerous business has been dismantled.”

HSI Acting Special Agent-in-Charge Ricky Patel said: “As alleged in the indictment, the defendants purported to sell potpourri and herbs but were instead peddling mass amounts of dangerous synthetic cannabinoids to the public. What made these offenses even more egregious were that the defendants allegedly continued to engage in these illegal activities after the arrest of four co-conspirators involved in the scheme, which displayed a blatant disregard for the rule of law – that will not be tolerated.  HSI, in conjunction with its partners, will stand together and bring to justice malicious actors that use the internet to poison the public and put the health and safety of their customers at risk, just to turn a profit.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “Today’s indictment of Almonte and Esposito is an example of the commitment of Postal Inspectors and their law enforcement partners to keep the streets safe from illegal drugs, while preventing criminal misuse of the mail.”

CBP New York Field Operations Director Frank Russo said: “U.S. Customs and Border Protection is proud of the expertise we provide in support of investigations that result in the takedown of criminal enterprises. Today’s arrest is an example of CBP’s interagency partnerships and collaborative efforts to detect, disrupt, and deter transnational criminal organizations.”

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

From February 2019 until May 2021, Niaz Khan, Noel Sanabria, Andre Gomes, Patrick Patterson, VICTOR ALMONTE, and MICHAEL ESPOSITO (the “Defendants”) operated a scheme to distribute massive quantities of smokeable synthetic cannabinoids (“SSC”), colloquially referred to as “K2” or “Spice,” containing controlled substances and/or a controlled substance analogue, throughout the United States.

The Defendants sold SSC through at least four different websites that they operated, namely K2HerbStore.com, HerbalPlug.com, LegalAromaTherapy.com, and LegalHerbalSmack.com (collectively, the “Websites”).  The SSC the defendants sold through the Websites included dried, shredded plant material onto which synthetic cannabinoid chemicals had been sprayed.  The SSC distributed by the scheme was branded with colorful graphics and distinctive names, including “Train Wrecked,” “Scooby Snax Kush,” “Bizarro,” “AK 47,” “Hi5 Triple X,” “Evil Santa,” “Krazy Turkey,” “Sexy Monkey,” “W.T.F.,” and “COVID-19 Coronavirus Limited Edition.” 

In an effort to conceal their criminal activity and advertise their illegal products, the Defendants used names for certain of the Websites that falsely represented that their SSC products were “legal.”  The defendants also sometimes misleadingly described their SSC products publicly as “not for human consumption,” “potpourri,” “herbal incense,” and “legal aroma therapy,” when, in fact, the defendants intended that the SSC would be consumed by drug users and they knew that their conduct was unlawful.

On May 20, 2021, Khan, Sanabria, Gomes, and Patterson were arrested in connection with the charges contained in the Indictment.  Notwithstanding those arrests and the unsealing of the Indictment, ALMONTE and ESPOSITO continued to perpetrate the SSC distribution scheme until in or about December 2021.

Over the course of the scheme, the Defendants shipped thousands of packages of SSC through the United States mail from the Bronx, New York, to customers in all 50 states and the District of Columbia, which contained a total of hundreds of kilograms of SSC.  The defendants earned more than approximately $1 million from their illegal marketing and sale of SSC during the course of the scheme.

*                      *                      *

ALMONTE, 42, and ESPOSITO, 29, both of Queens, New York, are each charged with conspiracy to distribute and possess with intent to distribute controlled substances and a controlled substance analogue, and to distribute controlled substances using the internet, which carries a maximum sentence of 20 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 defendants will be determined by the judge.  

Mr. Williams praised the outstanding investigative work of the NYPD, HSI, USPIS, and the New York Office of U.S. Customs and Border Protection.  The long-term investigation of this case was partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”), a federal grant program that invests in law enforcement partnerships to build safe and healthy communities.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Rebecca T. Dell and Robert B. Sobelman are in charge of the prosecution. 

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the Superseding Indictment, and the description of the Indictment and the Superseding 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 STEVEN BROWN, a/k/a “BI,” was sentenced to 260 months in prison today for participating in the August 2, 2009, murder of Derrick Moore in the Bronx.  BROWN previously pled guilty before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.  Today’s sentence was imposed in addition to a 115-month sentence that BROWN previously served for related narcotics conduct in the Middle District of Pennsylvania.

U.S. Attorney Damian Williams said: “More than a dozen years ago, Steven Brown, the leader of a violent drug crew, ordered the killing of rival street crew member Derrick Moore.  This prosecution and today’s sentence show that our Office is committed to curbing gang violence and making our neighborhoods safer for the law-abiding residents who make their homes there.”

According to the allegations contained in the Indictment and statements made in court, including at BROWN’s plea proceeding and sentencing:

The Taylor Avenue Crew was a criminal enterprise that operated principally in and around the Bronx from at least 2007 up to and including 2015.  The Taylor Avenue Crew sold cocaine base, commonly known as “crack cocaine,” primarily in and around Taylor Avenue in the Bronx.  The Taylor Avenue Crew controlled crack cocaine sales within this area by prohibiting and preventing non-members, outsiders, and rival narcotics dealers from distributing crack cocaine in the area controlled by the Crew.  The Taylor Avenue Crew also committed acts of violence in the area against rival gangs, including assaults, attempted murder, and murder.

Members and associates of the Taylor Avenue Crew also allied themselves with crews from nearby areas of the Bronx.  One such crew included the Creston Avenue Crew, a criminal enterprise that operated principally in and around the Bronx, New York, from at least 2003 up to and including 2011 and whose members sold cocaine and marijuana primarily in and around Creston Avenue in the Bronx.  Members of the Taylor and Creston Avenue Crews associated with each other and assisted each other by, among other things, carrying out acts of violence on each other’s behalf upon request by the leaders of the respective crews.  One such act of violence was the murder of 22-year-old Derrick Moore.  In August 2009, after escalating violence between the Taylor Avenue Crew and a rival crew, BROWN, who was the head of the Taylor Avenue Crew, ordered the murder of Moore.  To carry out the murder, BROWN requested the assistance of the Creston Avenue Crew, whose members then shot and killed Moore.

*                *                *

In addition to the prison term, BROWN, 42, of the Bronx, New York, was sentenced to five years of supervised release and $6,445 in restitution.

Mr. Williams praised the outstanding investigative work of the New York City Police Department, the Drug Enforcement Administration, Homeland Security Investigations, and the Federal Bureau of Investigation.  Mr. Williams also thanked the United States Attorney’s Office for the Middle District of Pennsylvania for its assistance.

Assistant U.S. Attorneys Maurene Comey, Jason Swergold, and Peter Davis are in charge of the prosecution.  The case is being handled by the Office’s Violent and Organized Crime Unit.

Damian Williams, United States Attorney for the Southern District of New York, announced that MARCUS CHAMBERS, 30, a/k/a “Chino,” a/k/a “Chi D,” a/k/a “SP,” pled guilty today to participating in the murder of Jonathan Johnson, 21, on March 18, 2011, in White Plains, New York.  

U.S. Attorney Damian Williams said: “In March 2011, Jonathan Johnson was shot dead, the victim of senseless drug-related violence.  Marcus Chambers has now admitted to participating in the murder while robbing Johnson of marijuana.  Thanks to the dedication and hard work of our law enforcement partners, Chambers now faces significant prison time for this terrible crime.”

According to the allegations in the Indictment and statements made in public court proceedings[1]:

On or about March 18, 2011, CHAMBERS and his codefendant Darnell Kidd murdered Jonathan Johnson by shooting him during the course of an armed robbery for marijuana in White Plains, New York. CHAMBERS arranged by phone to purchase the marijuana from Johnson.  CHAMBERS and Kidd met with Johnson to rob him of marijuana, and during the robbery, Johnson was shot and killed.

*                      *                     *

CHAMBERS pled guilty to one count of Hobbs Act robbery, in violation of 18 U.S.C. § 1951 and 18 U.S.C. § 2, which carries a maximum penalty of 20 years in prison.  In connection with his guilty plea, CHAMBERS admitted his role in the murder.  CHAMBERS also pled guilty to one count of conspiracy to commit Hobbs Act robbery, in violation of 18 U.S.C. § 371, which carries a maximum penalty of five years in prison. 

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

CHAMBERS will be sentenced on March 22 or 23, 2022, by U.S. District Judge Nelson S. Román, to whom the case is assigned. 

Mr. Williams praised the outstanding investigative work of the White Plains Police Department and the FBI Westchester County Safe Streets Task Force, which comprises agents and task force officers from the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Probation Office, New York State Police, New York City Police Department, Mount Vernon Police Department, Putnam County Sheriff’s Office, Town of Ramapo Police Department, Yonkers Police Department, Greenburgh Police Department, Peekskill Police Department, Westchester County Police Department, and Westchester County District Attorney’s Office.  Mr. Williams also thanked the Westchester County District Attorney’s Office for its assistance in this matter.

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Olga Zverovich and Christopher Brumwell are in charge of the prosecution.

The Indictment against Darnell Kidd is merely an accusation, and he is presumed innocent unless and until proven guilty.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROBERT LEMKE, a California man who threatened members of Congress and journalists in connection with the outcome of the 2020 presidential election, was sentenced to 36 months in prison after previously having pled guilty to making threatening interstate communications.  U.S. District Judge Alvin K. Hellerstein imposed today’s sentence.

U.S. Attorney Damian Williams said: “Robert Lemke, refusing to accept the result of the 2020 presidential election, sent messages threatening dozens of victims, including journalists, elected officials, and their families, for the perceived offense of stating the facts.  Rather than attempting to effect change through the lawful forms of expression that all of us Americans still enjoy, Lemke sought to quell freedom of expression, to intimidate and instill fear in others by threats of violence.  Today, Robert Lemke was rightly sentenced to prison for his conduct.”

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

From November 2020 through early January 2021, LEMKE sent threatening electronic and audio messages to approximately 50 victims, including journalists and politicians, targeting those individuals because of their statements expressing that then-President Trump had lost the 2020 presidential election.  On January 6, 2021, the same day that individuals purporting to protest the 2020 presidential election gathered in Washington, D.C., and stormed the Capitol Building, LEMKE sent a series of these threatening text messages to journalists, members of Congress, other politicians, and their families.

As the attack on the Capitol Building was ongoing, LEMKE sent threatening text messages to a New York City-based family member of a journalist (the “Journalist”), stating: “[The Journalist’s] words are putting you and your family at risk.  We are nearby, armed and ready.  Thousands of us are active/retired law enforcement, military, etc.  That’s how we do it.”

At approximately the same time that LEMKE was sending threats directed at the Journalist, LEMKE also sent threats to the brother of a New York City-based U.S. Congressman (the “Congressman”), citing the Congressman’s statements about the result of the 2020 presidential election.  LEMKE’s text messages, which included a picture of a home in the same neighborhood as the home of the Congressman’s brother, stated:

Your brother is putting your entire family at risk with his lies and other words.  We are armed and nearby your house.  You had better have a word with him.  We are not far from his either.  Already spoke to [the Congressman’s son] and know where his kids are.

. . . your words have consequences.  Stop telling lies; Biden did not win, he will not be president.  We are not[] white supremacists.  Most of us are active/retired law enforcement or military.  You are putting your family at risk.  We have armed members near your home. . . .  Don’t risk their safety with your words and lies.

LEMKE acquired and used at least three different phone numbers and various electronic accounts to mask his identity when sending threats to his victims.  LEMKE was not in fact affiliated with law enforcement or the U.S. military as he claimed in some of his threats.  On or about November 7, 2020, LEMKE posted to Facebook: “Folks.  Be ready for war.  Trump has refused to cede.  Evidence shows fraud occurred and the Supreme Court cases will be successful.  We blockchained and watermarked ballots in 16 states.  Trump will prevail.[] Spread this message. . . . FAITH my fellow Republicans.  Do not give up.”

*                      *                      *

In addition to the prison sentence, LEMKE, 36, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the Federal Bureau of Investigation (“FBI”), the New York City Police Department, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the U.S. Attorney’s Office for the Northern District of California and the FBI’s San Francisco Field Office for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant United States Attorneys Kimberly J. Ravener and Kyle A. Wirshba are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendants JORGE NAVARRO received a sentence of sixty months’ imprisonment today for his leading role in the felony drug misbranding and adulteration charges arising from this Office’s investigation of the abuse of animals through the use of performance enhancing drugs and as charged in United States v. Navarro et al., 20 Cr. 160 (MKV).  NAVARRO was sentenced by U.S. District Judge Mary Kay Vyskocil, who furthered ordered that NAVARRO pay $26,860,514 in restitution for the fraud perpetrated through his doping program. 

U.S. Attorney Damian Williams said:  “Jorge Navarro’s case reflects failings, greed, and corruption at virtually every level of the world of professional horse racing. For money and fame, corrupt trainers went to increasing extremes to dope horses under their care. Unscrupulous owners, who stood to profit directly, encouraged and pressured trainers to win at any cost. Veterinarians sworn to the care and protection of their patients routinely violated their oaths in service of corrupt trainers and to line their own pockets. Assistants and grooms all witnessed animal abuse in the service of greed, but did little to stop such conduct, and engaged in myriad ways to support notoriously corrupt trainers. Structures designed for the protection of the horses abused in this case failed repeatedly; fixtures of the industry – owners, veterinarians, and trainers – flouted rules and disregarded their animals’ health while hypocritically incanting a love for the horses under their control and ostensible protection. Standing as the keystone for this structure of abuse, corruption, and duplicity was Jorge Navarro, a trainer who treated his animals as expendable commodities in the service of his ‘sport.’ Today’s sentence appropriately condemns the danger inherent in Navarro’s crime and reflects the seriousness with which this Office takes the kind of abuse that Navarro practiced.”

According to the allegations contained in the Superseding Indictment, prior charging instruments and other filings in this case[1], and statements during court proceedings:

The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, PED distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses.  Trainers, like NAVARRO, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings, and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Veterinarians, including those whom NAVARRO directed in the corrupt administration of illegal substances, profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances.

NAVARRO operated his doping scheme covertly, importing misbranded “clenbuterol” that he both used and distributed to others, avoiding explicit discussion of PEDs during telephone calls, and working with others to coordinate the administration of PEDs at times that racing officials would not detect such cheating. Among the horses that NAVARRO trained and doped was XY Jet, a thoroughbred horse that won the 2019 Golden Shaheen race in Dubai.  Among NAVARRO’s preferred PEDs were various “blood building” drugs, which, when administered before intense physical exertion, can lead to cardiac issues or death.

NAVARRO’s crime was far from a single lapse in judgment. Rather, NAVARRO engaged in repeated and persistent efforts to cheat over the course of years, cycling through various sources of supply, and pursuing aggressively new means to illegally dope horses. Throughout, NAVARRO maintained a flippant attitude towards his dangerous and illegal conduct. NAVARRO, notoriously known in the horse racing world as the “Juice Man” due to his routine doping, kept a pair of customized shoes in his barn with the words “#JUICE MAN” emblazoned across the front:

* * *

In addition to the prison sentence, NAVARRO was ordered to payment of restitution in the amount of $26,860,514, reflecting winnings obtained through his fraudulent doping scheme.

Mr. Williams praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative. This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Sarah Mortazavi, Andrew C. Adams, Benet Kearney, and Anden Chow are in charge of the prosecution.

[1] As to Navarro co-defendants, the entirety of the texts of the Indictments and the descriptions of the Indictments set forth herein constitute only allegations and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that LUIS MERCED pled guilty today in Manhattan federal court before U.S. District Judge Edgardo Ramos to charges relating to his involvement in the murder of Efren Cardenas on February 10, 1989, in Brooklyn, New York.  William Skinner and Dorian Brooks, a/k/a “Kool-Aid,” also pled guilty, on December 8, 2021, to charges relating to their involvement in the murder of Efren Cardenas.           

U.S. Attorney Damian Williams said: “Luis Merced, William Skinner, and Dorian Brooks were responsible for the murder of Efren Cardenas in the Bedford-Stuyvesant neighborhood of Brooklyn in February 1989.  Today’s guilty plea shows that we will never lose resolve in our pursuit of justice.  I commend the extraordinary efforts of our law enforcement partners and the Special Agents of the U.S. Attorney’s Office, who worked tirelessly to investigate Efren Cardenas’s murder.”

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

On February 10, 1989, MERCED, Skinner, and Brooks participated in a plot to shoot and kill Efren Cardenas, 30, in the vicinity of 280 Herkimer Street in the Bedford-Stuyvesant neighborhood of Brooklyn.  MERCED arranged for Cardenas to deliver multiple kilograms of cocaine to an apartment building in Brooklyn, where he had recruited Skinner and Brooks to gun down Cardenas and steal the cocaine.  When Cardenas arrived at the scene, Skinner and Brooks shot him over 20 times.  MERCED, Skinner, and Brooks committed the murder in furtherance of a conspiracy to distribute more than five kilograms of cocaine.           

*                *                *

MERCED, 50, pled guilty to one count of conspiring to distribute cocaine and crack cocaine, which carries a maximum prison term of 20 years.  During his guilty plea, MERCED admitted to his role in the murder of Efren Cardenas.  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.  

MERCED is scheduled to be sentenced by Judge Ramos on March 24, 2022.

Mr. Williams praised the outstanding investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department’s Cold Case Homicide Squad.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Adam S. Hobson, and Frank J. Balsamello are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Dermot Shea, Police Commissioner of the City of New York (“NYPD”), and Kevin P. Bruen, Superintendent of the New York State Police (“NYSP”), announced today the guilty plea of DAVID KAUFMAN, a/k/a “David Khalifa,” a/k/a “John Morray,” a/k/a “Big Man,” to stalking multiple victims between October 2019 and August 2020.  KAUFMAN pled guilty today before U.S. District Judge Nelson S. Román, to whom the case is assigned.

U.S. Attorney Damian Williams said: “As he admitted in court, David Kaufman is an adherent of the ‘Incels’ who stalked and terrorized two victims, not only harassing them by impersonating them online, but also graphically threatening to murder them.  Thanks to the FBI, the NYPD, the State Police, and other law enforcement partners, Kaufman is in custody and awaiting sentencing for his admitted crime.”

FBI Assistant Director Michael J. Driscoll said: “Kaufman’s overt hatred of women and sickening threats to harm potential victims caught the eye of the FBI’s Joint Terrorism Task Force in New York.  We know acts of violence among those in the Incel community have increased in recent years.  As Kaufman’s guilty plea brings this topic closer to the forefront, we want the public to know the law enforcement community is aware of the threat and working together to confront it.”

NYSP Superintendent Kevin P. Bruen said: “I applaud the hard, difficult work done by law enforcement in this case, which has led to this plea and ensures the defendant will be held accountable for his crimes. We have zero tolerance for anyone who creates fear online, terrorizing victims because of their gender. Together, we will continue to seek justice for those who have been victimized and protect those vulnerable to these types of crimes.”

NYPD Commissioner Dermot Shea said: “The abhorrent acts carried out by David Kaufman are not just isolated offenses but representative of a larger pattern of criminality that tears at the very fabric of our society. I commend our NYPD detectives, our law enforcement partners, those in the FBI’s New York Joint Terrorism Task Force, and the prosecutors in the United States Attorney’s Office in the Southern District of New York for their hard work in ensuring a measure of justice was achieved today."

According to the allegations in the Complaint and the Indictment, as well as statements made in White Plains federal court: 

Background on “Incels”

KAUFMAN self-identifies as a member of the “Incels,” or the “Involuntary Celibate,” which refers to a group of individuals, typically heterosexual, white males, who adhere to a violent and misogynist ideology of male supremacy.  Incels believe they are entitled to sex with women and to women’s bodies, and they blame women for refusing to have sex with them.  Incels have an active online community and over the last seven years, Incels also have committed acts of violence against women across the world, including in the United States.  For example, in 2014, a self-proclaimed Incel named Elliot Rodger declared a “War on Women” and killed six people and injured 14 others near a college campus in California.  Prior to these attacks, Rodger posted a video manifesto online, in which he explained that he planned his attack to punish women for rejecting him and for depriving him of sex, and to punish sexually active men because he envied them.

KAUFMAN Harasses and Threatens Victim-1 and Victim-2

Beginning in or about October 2019, KAUFMAN sent two victims (“Victim-1” and “Victim-2”), among others, violent and threatening messages using various social media accounts.  In these messages, KAUFMAN self-identified as an Incel and expressed his hatred of women.  For example:

• On or about June 24, 2020, KAUFMAN sent the following message to Victim-1:  “Hey wanna hear a joke?  What’s worse than 10 Stacy’s nailed to one tree?  One Stacy nailed to ten trees [laughing crying face emoji].”  “Stacy” is an Incel term that refers to an attractive female who rejects or refuses to have sex with an Incel, is hated by Incels, and is targeted by Incels for harassment, vitriol, humiliation, and violence.

• On or about June 29, 2020, KAUFMAN sent a series of messages to Victim-2.  These messages included an image of one of Elliot Rodger’s victims, a deceased female who had been stabbed to death, accompanied by the following message:  “This is what happened when a woman said ‘no’ to Elliot Rodger . . . . Hopefully [Victim-1] never said no to someone just like Elliot Rodger.” 

• In or about July 2020, KAUFMAN posted the following messages:  “Don’t piss off BIG MAN” and “When [Victim-1] and I are dead, we’ll be in heaven together forever.”

• On or about July 11, 2020, KAUFMAN sent the following message to Victim-1:  “Women have done nothing but spit in my face.  Soon I’ll be getting a gun.”

• On or about July 12, 2020, KAUFMAN posted the following messages:  “A beautiful environment is the darkest hell, if you have to experience it all alone . . . –Elliot Rodger” and “I don’t think [Victim-1] will be laughing too much later on.”

KAUFMAN also created social media accounts using the first and last names of Victim-1 and Victim-2, respectively, and impersonated Victim-1 and Victim-2 online.

In the summer of 2020, law enforcement officers approached KAUFMAN and told him to stop harassing Victim-1 and Victim-2.  On or about July 14, 2020, an order of protection was issued in Westchester County ordering KAUFMAN to, among other things, refrain from communication or any other contact with Victim-1 or Victim-2. 

Notwithstanding the order of protection and warnings by law enforcement, KAUFMAN continued to send harassing and threatening messages to Victim-1 and Victim-2 through in or about August 2020.  On or about August 16, 2020, KAUFMAN posted a picture of himself licking a photograph of Victim-1.  KAUFMAN also conducted online surveillance of Victim-1’s residence and researched how to illegally purchase a gun and assemble a semi-automatic rifle.

*                *                *

KAUFMAN, 27, of Peekskill, New York, pled guilty to one count of stalking, in violation of 18 U.S.C. §§ 2261A(2)(a) and 2261(b)(6), which carries a mandatory minimum sentence of one year in prison and a maximum sentence of five years in prison.  The statutory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  KAUFMAN is scheduled to be sentenced before Judge Román on March 16, 2022, at 2:00 p.m.

Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, as well as the NYSP.  Mr. Williams also thanked the U.S. Postal Inspection Service, the Cortlandt County Police Department, the Stamford Police Department, the Peekskill Police Department, the Mt. Pleasant Police Department, and the Westchester County District Attorney’s Office for their assistance and cooperation.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorney Jane Kim is 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 a global management consulting firm (the “Consulting Firm”), pled guilty 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 an investment bank (the “Investment Bank”) – which DIKSHIT and the Consulting Firm were advising – would be acquiring GreenSky, Inc. (“GreenSky”).  The defendant pled guilty before U.S. District Judge Colleen McMahon.

U.S. Attorney Damian Williams said: “Barely a month after he was charged, Puneet Dikshit admitted in court today that he used his access to material nonpublic information about a pending acquisition of GreenSky, Inc., to trade in GreenSky call options.  This conduct, which netted the defendant nearly half a million dollars in tainted profits, broke the law and violated the defendant’s duties to his firm and its client.  Now Puneet Dikshit awaits sentencing for his admitted crime.”

According to the allegations in the Complaint, Information, 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 on or about November 2019 and on or about July 2020, and again between on or about April 2021 and on or about September 2021, the Investment Bank engaged the Consulting Firm to provide various consulting services related to its consideration of an acquisition of GreenSky and the post-acquisition integration of GreenSky.  DIKSHIT was one of the Consulting Firm 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 the Investment Bank and the Consulting Firm, used to trade GreenSky call options. 

DIKSHIT engaged in this trading between on or about July 26, 2021, and on or about September 15, 2021 – at the same time he was leading the Consulting Firm team that was advising the Investment Bank about its potential acquisition of GreenSky.  At various times between on or about July 26, 2021, and on or about 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 the Investment Bank 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, DIKSHIT sold these options and realized profits of approximately $450,000.

*                *                *

DIKSHIT, 40, of New York, New York, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.  The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  DIKSHIT is scheduled to be sentenced by Judge McMahon on March 30, 2022, at 2:00 p.m.

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 today that SERGEI POLEVIKOV, a former analyst employed by an asset management firm, pled guilty to one count of securities fraud in connection with his multi-year scheme to commit insider trading by misappropriating confidential information about pending trades by his former employer.  POLEVIKOV was arrested in September of this year, and pled guilty today in Manhattan federal court before U.S. District Judge Lewis J. Liman. 

U.S. Attorney Damian Williams said: “As he admitted in court today, Sergei Polevikov broke the law when he exploited material, nonpublic information to make personal trades ahead of his employer’s large institutional trades.  Polevikov now awaits sentencing for his crime, and he must also forfeit more than $8 million in illicit profit.”

According to the Information to which POLEVIKOV pled guilty, the complaint that was filed in this case, and statements made during court proceedings:

From at least in or about 2014 through in or about October 2019, POLEVIKOV was employed as a quantitative analyst at an asset management firm with headquarters in New York, New York (the “Employer Firm”).  In his role at the Employer Firm, POLEVIKOV had regular access to information regarding contemplated securities trades on behalf of the Employer Firm’s clients, which included investment companies.  During the period charged in the Complaint, POLEVIKOV engaged in a front-running scheme to misappropriate confidential, material, nonpublic information about the securities trade orders of the Employer Firm on behalf of its clients in order to engage in short-term personal securities trading in a brokerage account opened in his wife’s name.  POLEVIKOV’s trading scheme was designed to take advantage of relatively small price movements in a company’s stock that followed from large securities orders executed by the Employer Firm on behalf of its clients.  In total, POLEVIKOV’s scheme yielded more than $8.5 million in illicit profits.     

As part of his plea agreement, POLEVIKOV has agreed to forfeit $8,564,977 on or before April 1, 2022. 

POLEVIKOV is scheduled to be sentenced by Judge Liman on April 12, 2022.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the Securities & Exchange Commission, which brought a related civil action against POLEVIKOV.

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

Damian Williams, the United States Attorney for the Southern District of New York, Jonathan Mellone, Special Agent in Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General (“DOL-OIG”), Ricky Patel, Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Damon Wood, Inspector in Charge, Philadelphia Division of the United States Postal Inspection Service  (“USPIS”),  announced today the unsealing of a complaint charging MARILUZ FERMIN, BELLANILDA FERMIN, and JUAN NOLASCO with conspiracy to commit wire fraud, theft of government benefits, and aggravated identity theft in connection with a COVID-19 unemployment benefit scheme that attempted to steal more than $1.3 million from the New York Department of Labor (“NY DOL”).  MARILUZ FERMIN, BELLANILDA FERMIN, and NOLASCO were arrested this morning in Yonkers, New York, and will be presented this afternoon before United States Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “As alleged, the defendants, working in concert, fraudulently filed claims for COVID-19 unemployment benefits under the names and social security numbers of at least 75 other people, making off with nearly $700,000 and attempting to steal more than $1.3 million.  Now all three are in custody and facing serious federal charges.”    

DOL-OIG Special Agent in Charge Jonathan Mellone said: “The Unemployment Insurance Program exists to provide needed assistance to qualified individuals who are unemployed due to no fault of their own.  Fraud against the Unemployment Insurance Program distracts state workforce agencies from ensuring that benefits go to individuals who are eligible to receive them. The Office of Inspector General will continue to work closely with our law enforcement partners, to investigate those who allegedly exploit the Unemployment Insurance Program.”  

HSI Acting Special Agent in Charge Ricky Patel said: “As alleged in the Complaint, these individuals attempted to manipulate a program designed to help Americans and U.S. businesses pay their bills, retain employees, and keep afloat on the heels of a global pandemic that took the lives of millions throughout the world.  Each defendant allegedly used the personal information of more than 70 people in this attempt, and succeeded in stealing at least $687,000 in COVID unemployment benefits – stealing not just from the government, but from everyday Americans who need it most.  HSI and our partners will use all of our resources to seek out and bring to justice those that attempt to steal benefits meant to help those struggling to get back on their feet from COVID-19.”

USPIS Inspector in Charge Damon Wood said: “These individuals allegedly took advantage of the pandemic and those truly in need of assistance when they developed a scheme to lie and steal from the government and the American public.  Today, they have been brought to justice for their alleged crimes by Postal Inspectors and their law enforcement partners whose mission is to keep the public safe from criminal activity.”

As alleged in the Complaint[1]:

From May 2020 through October 2020, MARILUZ FERMIN, BELLANILDA FERMIN, and JUAN NOLASCO engaged in a scheme to obtain COVID-19 unemployment benefits by fraudulently filing and verifying applications using the names and social security numbers of at least 75 other people.  The NY DOL was alerted to the suspicious activity based on metadata associated with the applications (the “Fraudulent Applications”), which indicated that the Fraudulent Applications were submitted from the same internet protocol (“IP”) address.  During that same time, the IP Address was used to log into unemployment benefits claims – including the Fraudulent Applications – at least approximately 900 times.  Further, MARILUZ FERMIN, BELLANILDA FERMIN, and JUAN NOLASCO exchanged text messages that included, among other things, personal identifying information – such as names, email accounts, and dates of birth – used in the Fraudulent Applications.  In addition, between in or about June 2020 and in or about August 2020, NOLASCO visited several ATM machines in the Bronx, New York, for the purpose of withdrawing funds issued as a result of the Fraudulent Applications.  The scheme filed claims for more than $1.3 million and succeeded in stealing at least $687,000 in COVID-19 unemployment benefits before the fraud was detected. 

*                *                *

MARILUZ FERMIN, 46, BELLANILDA FERMIN, 41, and JUAN NOLASCO, 37, are each charged with (1) conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, (2) theft of government benefits, which carries a maximum sentence of 10 years in prison, and (3) aggravated identity theft, which carries a mandatory two-year consecutive 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 a judge.

Mr. Williams praised the outstanding investigative work of the DOL-OIG, the Internal Revenue Service - Criminal Investigation, HSI, USPIS, the Social Security Administration - Office of the Inspector General, and the NY DOL.

The case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Mitzi S. Steiner is in charge of the prosecution.

[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.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that GRANT GRANDISON was sentenced to 24 months in prison for making false statements to federal agents, which led to the shooting of two Deputy U.S. Marshals on December 4, 2020.  GRANDISON pled guilty on June 28, 2021, before U.S. Magistrate Judge Debra A. Freeman.  U.S. District Court Judge Kimba M. Wood imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Grant Grandison lied when a team of Deputy U.S. Marshals, NYPD officers, and Massachusetts state troopers came to his apartment early on the morning of December 4, 2020 to arrest Andre Sterling, who was a fugitive from law enforcement.  After Grandison lied to them, two federal agents were shot and injured that fateful morning, and several other agents were placed in serious danger.  Grandison will now serve a meaningful sentence in prison to account for his crimes.  This Office stands firmly behind all of our law enforcement partners, and especially the U.S. Marshals Service, as they work to enforce the laws and keep all New Yorkers safe.”

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

On or about November 20, 2020, Andre Sterling allegedly shot a Massachusetts State Trooper during a traffic stop in Hyannis, Massachusetts. Sterling fled from Massachusetts and was deemed a fugitive.  On or about November 24, 2020, a federal warrant was issued for Sterling’s arrest.

On the morning of December 4, 2020, several Deputy United States Marshals (the “Marshals”), along with officers from the New York City Police Department (“NYPD”) and state troopers from the Massachusetts State Police, traveled to GRANDISON’s apartment in the Bronx (the “Apartment”), where they believed that Sterling was located, in order to arrest Sterling.  The Marshals announced themselves as “U.S. Marshals” and encountered GRANDISON at the door.  The Marshals asked GRANDISON, in sum and substance, if anyone else was in the Apartment, and GRANDISON replied, in sum and substance, that no one else was in the Apartment.  At the time of GRANDISON’s statements to the Marshals, GRANDISON knew that Sterling was a fugitive, and that Sterling was hiding in a bedroom in the Apartment. 

The Marshals proceeded into the Apartment, at which point Sterling came out from a bedroom in the Apartment and began firing at the Marshals, striking and injuring two Marshals.  The Marshals returned fire, and Sterling was killed in the exchange.  Law enforcement agents recovered a firearm from near Sterling.

*              *             *

In addition to his prison sentence, GRANDISON was sentenced to three years of supervised release, and ordered to pay $80,775 in restitution.    

Mr. Williams praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York, the United States Marshals Service, the New York/New Jersey Regional Fugitive Task Force, the New York City Police Department’s 47 Precinct Detective Squad, and the Massachusetts State Police.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorney Alexandra N. Rothman is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSE MARTINEZ-DIAZ, a/k/a “Tony Zinc,” who supplied over 5,000 kilograms of cocaine to the Puerto-Rico-based drug alliance, La Organización de Narcotraficantes Unidos (“La ONU”), was sentenced by U.S. District Judge Jesse M. Furman to 20 years in prison.  MARTINEZ-DIAZ previously pled guilty to participating in a racketeering conspiracy.  

U.S. Attorney Damian Williams said: “Jose Martinez-Diaz supplied a staggering quantity of cocaine, a dangerous and addictive drug, to a violent drug trafficking organization.  Some of the cocaine he supplied came to New York, where it was distributed out of, among other places, a daycare center in the Bronx.  To ensure his drug business flourished, Martinez-Diaz brokered violence and even used corrupt law enforcement officials.  Today Jose Martinez-Diaz was rightly sentenced to a lengthy prison term for his horrific crimes.”

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

MARTINEZ-DIAZ was a high-volume cocaine trafficker who supplied over 5,000 kilograms of cocaine to La ONU, a criminal enterprise involved in shipping thousands of kilograms of cocaine from Puerto Rico to New York.  Cocaine from La ONU was then distributed in New York City, including out of a daycare center in the Bronx, New York.  Members and associates of La ONU also engaged in acts of violence, including murder, to protect and expand the enterprise’s criminal operations and in connection with rivalries with other criminal organizations.  In particular, members of the enterprise were ordered to shoot and kill suspected rival drug trafficking members.

MARTINEZ-DIAZ, or those working on his behalf, smuggled cocaine from the Dominican Republic to Puerto Rico, usually by boat.  The shipments often occurred as frequently as once per week, with such shipments containing 130 to 160 kilograms of cocaine.  MARTINEZ-DIAZ would then parcel out the shipments to La ONU members.

MARTINEZ-DIAZ used the machinery of La ONU to protect his narcotics trade.  For example, MARTINEZ-DIAZ arranged for corrupt members of the Puerto Rico Police Department (“PRPD”) to locate rival drug dealers and effect unwarranted traffic stops to control their movements or to isolate them until others from La ONU could attack them. 

In or about 2007, MARTINEZ-DIAZ ordered a shooting on Avenue Monserrate in Carolina, Puerto Rico.  The target was shot, but survived.

On another occasion, MARTINEZ-DIAZ paid a police officer $5,000 in connection with the attempted murder of a rival drug dealer known as “Taliban.”  The intended victim was shot, but survived.

MARTINEZ-DIAZ funded and assisted La ONU in its fight against its rival, La Rompe ONU.  For example, MARTINEZ-DIAZ provided money to La ONU members to purchase firearms.  In addition, MARTINEZ-DIAZ and others created a fake PRPD patrol car.  Members of La ONU used the fake patrol car to harass and intimidate members of La Rompe ONU, and to conduct shootings. 

MARTINEZ-DIAZ also worked with a corrupt Drug Enforcement Administration (“DEA”) agent, who helped MARTINEZ-DIAZ and others in the narcotics conspiracy evade detection by law enforcement. 

*                *                *

In addition to the prison term, Judge Furman sentenced MARTINEZ-DIAZ, 48, of Puerto Rico, to three years of supervised release, and ordered him to forfeit $6.875 million.

Mr. Williams praised the investigative work of the U.S. Postal Inspection Service, the DEA, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New York City Police Department.  Mr. Williams also thanked the United States Attorney’s Office for the District of Puerto Rico and the Puerto Rico Police Department for their support in this ongoing investigation.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Lara Pomerantz, Justin Rodriguez, and Andrew Thomas are in charge of the prosecution.

Damian Williams, United States Attorney for the Southern District of New York, announced today the conviction of SYLVIA ASH, a justice of the New York State Supreme Court, and former chair of the Board of Directors of Municipal Credit Union (“MCU”), for conspiracy to obstruct justice, obstruction of justice, and making a false statement to a federal agent.  These charges arose from a scheme to impede the federal criminal investigation into fraud and corruption at MCU, a non-profit, multibillion-dollar financial institution, including misconduct committed by Kam Wong, the former chief executive officer (“CEO”), and Joseph Guagliardo, a former New York City Police Department Officer and member of MCU’s Supervisory Committee.  Wong and Guagliardo were charged separately and previously pled guilty to embezzlement from MCU.  ASH was convicted after a two-week jury trial before U.S. District Judge Lewis A. Kaplan and is scheduled to be sentenced on April 20, 2022 by Judge Kaplan. 

U.S. Attorney Damian Williams said: “Today’s conviction demonstrates our resolve in uncovering criminal conduct at the highest levels of MCU and ensuring that those who attempt to thwart a federal investigation face consequences for that corrosive conduct.  As the jury unanimously found, Sylvia Ash took repeated steps, over multiple months, to seek to obstruct the federal criminal investigation into financial misconduct at MCU that took place during Ash’s tenure as chair of the Board of Directors.  Obstruction of justice, particularly by a sitting state court judge, is a serious crime, and Ash now faces punishment for her obstruction scheme.”

According to the Complaint, Indictment, Superseding Indictment, publicly-available information, court filings, and evidence presented during the trial in Manhattan federal court:

Municipal Credit Union

MCU is a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration (“NCUA”).  MCU is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 500,000 members, and with more than $4 billion in member accounts, each of which is insured for at least $250,000 by the National Credit Union Share Insurance Fund, which is administered by the NCUA.  Membership in MCU is generally available to employees of New York City and its agencies, employees of the federal and New York state governments who work in New York City, and employees of hospitals, nursing homes, and similar facilities located within New York State.     

At all relevant times, MCU was overseen by a Board of Directors (the “Board”) and a Supervisory Committee (the “Supervisory Committee”), each of which was composed of members of MCU, who were not supposed to be compensated.  As a result of severe deficiencies in the Board’s and the Supervisory Committee’s oversight of the credit union, which came to light in connection with the federal investigation, the New York Department of Financial Services (“DFS”) removed the members of the Supervisory Committee in May 2018 and the Board in June 2018. Subsequently, DFS appointed NCUA as the conservator for the credit union.

ASH

ASH is a sitting New York State Supreme Court Justice in Kings County.  ASH has served as a judge in the New York State court system since approximately 2006, first as a Kings County Civil Court Judge, and then, starting in 2011, as a Kings County Supreme Court Justice.  In or about January 2016, ASH was appointed as the presiding judge in the Kings County Supreme Court’s Commercial Division.  After the charges in this case were unsealed, ASH was suspended from her position.

ASH served on MCU’s Board from in or about May 2008 until on or about August 15, 2016, when she resigned.  From in or about May 2015 until her resignation, ASH served as the chair of the Board.  ASH resigned after a complaint was filed against her by the New York State Commission on Judicial Conduct arising from a conflict of interest between her position as a state judge and her membership on MCU’s Board.  More than a year before her resignation, ASH had been instructed to resign from MCU’s Board by the Advisory Committee on Judicial Ethics, which instruction she disregarded.

From at least in or about 2012 through 2016, while serving as an MCU Board member and while Wong was CEO, ASH received annually tens of thousands of dollars in reimbursements and other benefits from MCU, including airfare, hotels, food and entertainment expenses for her and a guest to attend conferences both domestically and abroad, annual birthday parties at a minor league baseball stadium, payment for phone and cable bills, and electronic devices.  Even after her resignation from the Board, Wong continued to provide or cause MCU to provide ASH with benefits, such as Apple devices and sports tickets.  As a sitting state judge, ASH was required to report both her board service and gifts and benefits she received from any outside sources on an annual state disclosure form.  But between at least 2012 and 2018, ASH never reported her board service nor any gifts or benefits from MCU.

ASH’s Obstruction of Justice

In January 2018, after Wong, MCU’s then-CEO, had been approached by federal law enforcement agents investigating apparent financial misconduct by Wong, in an attempt to protect Wong, ASH agreed to and did sign a false and misleading memorandum purporting to explain and justify millions of dollars Wong had received from MCU.  Wong subsequently provided that false and misleading memorandum to federal agents in an attempt to demonstrate that the millions of dollars had purportedly been orally approved for him to receive by ASH in June 2015, when she was chair of the Board.  However, in truth, neither ASH nor the Board had approved the payment of those funds.

On March 1, 2018, shortly after Wong was placed on administrative leave by MCU, ASH was interviewed about the memorandum she signed for Wong.  During that interview, ASH admitted that the memorandum was not accurate, but attempted to justify the money that Wong received by stating that MCU’s then-current general counsel had told her that Wong’s employment contract gave him the option of receiving such money.  That statement was false.

On March 13, 2018, ASH was served with a federal grand jury subpoena (the “First Subpoena”), which required the production of documents related to various matters, including Wong’s compensation, and any communications with Wong through the date of the First Subpoena.  On April 6, 2018, during a telephonic interview with a federal agent, ASH falsely stated that she did not have any materials responsive to the First Subpoena.

On June 8, 2018—after Wong was charged with embezzlement from MCU and the Government executed a judicially-authorized search of the residence of Guagliardo—ASH was interviewed by telephone for a second time about the First Subpoena.  During that interview, ASH again falsely stated that she did not have any materials responsive to the First Subpoena. 

On June 18, 2018, ASH was served with a second federal grand jury subpoena (the “Second Subpoena”), which required the production of, among other things, all correspondence with Wong and Guagliardo; all documents regarding any criminal investigation, internal investigation, or audit related to Wong; and all documents regarding items of value ASH received from MCU, Wong, or Guagliardo.  Shortly afterward, ASH went to an Apple store and wiped an iPhone X that Wong had provided her in January 2018.  In addition, ASH deleted emails from her Gmail account, including all of her emails with Guagliardo, none of which she produced in response to either of the two federal grand jury subpoenas directed to her.  ASH also later wiped two MCU-issued iPads she had received.

On July 6, 2018, on ASH’s behalf, her then-counsel produced materials to the Government in response to the Second Subpoena.  This production was materially incomplete, and did not contain text messages, emails, and other documents ASH possessed or had under her custody or control that were responsive to the Second Subpoena.

On July 9, 2018, ASH attended a voluntary interview with the U.S. Attorney’s Office.  During this interview, while accompanied by her then-counsel, ASH made multiple false statements, including repeating false statements regarding her purported conversations with MCU’s former general counsel about Wong’s receipt of cash payments and falsely claiming that she and her aunt took a trip to Las Vegas paid for by MCU, including airfare, lodging, and entertainment expenses, after she resigned because all of her travel arrangements were paid for by MCU before she resigned, when in truth all of the expenses were paid for after she resigned.  

On or about October 11, 2019, ASH was arrested and her cellphone was seized.  After obtaining a judicially-authorized search warrant, ASH’s phone was searched, which revealed, among other things, numerous text messages, including with Wong and Guagliardo, that were concealed in response to the First and Second Subpoenas.

*                *                *

ASH, 64, of Brooklyn, New York, was convicted of one count of conspiracy to obstruct justice, which carries a maximum penalty of five years in prison; one count of obstruction of justice, which carries a maximum penalty of 20 years in prison; and one count of making false statements, which carries a maximum penalty of five years in prison.  The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as sentencing of the defendant will be determined by Judge Kaplan. 

On June 4, 2019, Wong was sentenced to 66 months in prison for embezzlement from MCU and was ordered to forfeit $9,890,375 and to pay restitution in the same amount to MCU.

On July 23, 2020, Guagliardo was sentenced to 27 months in prison for embezzlement from MCU and was ordered to forfeit $425,514 and to pay $468,189 in restitution to MCU. 

U.S. Attorney Williams praised the outstanding work of the Special Agents of the United States Attorney’s Office.  Mr. Williams also thanked the New York County District Attorney’s Office and DFS for their assistance.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark, Daniel C. Richenthal, and Jonathan Rebold are in charge of the prosecution, with the assistance of Special Assistant U.S. Attorney Alona S. Katz from the New York County District Attorney’s Office.

Damian Williams, the United States Attorney for the Southern District of New York, and David P. Berry, Inspector General of the National Labor Relations Board, announced today the unsealing of a Complaint charging ANETT RODRIGUES with honest services fraud and bribery.  The charges stem from a scheme in which RODRIGUES, an employee of the National Labor Relations Board (“NLRB”), provided nonpublic NLRB documents to a co-conspirator in exchange for the regular payment of cash bribes.  RODRIGUES will be presented before United States Magistrate Judge Paul E. Davison in White Plains federal court later today.

U.S. Attorney Damian Williams said: “As alleged, Anett Rodrigues, a trusted employee of a federal agency with access to sensitive nonpublic information, monetized her position to divulge some of that information in exchange for bribes.  Rodrigues’s alleged selling of the information provided a competitive advantage to the alleged bribe payer’s company, but it also leaves Rodrigues facing multiple felony counts.”

As alleged in the Complaint unsealed in White Plains federal court[1]:

The NLRB is a federal agency that enforces United States labor law relating to unfair labor practices and collective bargaining.  Among other functions, the NLRB serves fact-finding and dispute-resolution functions, in which it investigates and resolves disputes between and among labor unions, company management, and company employees throughout the United States, and supervises the formation and elections of labor unions. Employees seeking to engage the NLRB to investigate and resolve a dispute may do so by filing a “charge sheet” outlining their allegations with their local NLRB regional office, and employees seeking the NLRB’s assistance in forming or joining a union can do so by filing a “petition” with their local NLRB regional office.  These charge sheets and petitions are not immediately publicly available, though they are provided to the companies involved, typically within a matter of days, and may be available in redacted form via Freedom of Information Act requests, typically within a matter of weeks.

ANETT RODRIGUES used her employment with the NLRB to provide a competitive advantage to a co-conspirator (“CC-1”) who operated a Westchester County-based company that offered consulting services to clients – principally law firms – appearing before the NLRB. Between approximately 2017 and approximately 2021, RODRIGUES regularly provided cellphone photographs of NLRB charge sheets and petitions to CC-1, before they were otherwise available to CC-1 or to the public.  CC-1 in turn sold the documents to clients for a per-document fee.  In exchange this assistance, CC-1 regularly met with RODRIGUES to provide her with cash bribe payments.

*                *                *

RODRIGUES, 53, of Nutley, New Jersey, is charged with one count of conspiracy to commit honest services wire fraud and one count of honest services wire fraud, each of which carries a maximum sentence of 30 years in prison, and one count of bribery, which carries a maximum sentence of 15 years in prison.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NLRB Office of the Inspector General’s investigator and the Special Agents of the U.S. Attorney’s Office.

The case is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Jeffrey C. Coffman and Derek Wikstrom are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of YE HEIN ZAW, a citizen of Myanmar, for his role in a conspiracy to assault and make a violent attack upon Myanmar’s Permanent Representative to the United Nations.  ZAW pled guilty today in White Plains federal court before U.S. District Judge Philip M. Halpern.

U.S. Attorney Damian Williams said: “As he admitted in court today, Ye Hein Zaw participated in a plot to injure or kill Myanmar’s ambassador to the United Nations in a planned attack that was to take place on American soil.  Zaw now awaits sentencing for his crime.  I commend the tireless efforts of our law enforcement partners at all levels of government to ensure the safety of foreign diplomats and officials in the United States and bring the perpetrators of this plot to justice.”

According to the Information to which ZAW pled guilty, the complaint that was filed in this case, and statements made during court proceedings:

Between at least in or about July 2021 through at least on or about August 5, 2021, ZAW, a citizen of Myanmar residing in New York, conspired with others to injure or kill Myanmar’s Permanent Representative to the United Nations (the “Ambassador”).  During the conspiracy, a co-conspirator communicated with an arms dealer in Thailand (the “Arms Dealer”) who sells weapons to the Burmese military, which overthrew Myanmar’s civilian government in or about February 2021.  In the course of those conversations, the co-conspirator and the Arms Dealer agreed on a plan in which the co-conspirator would hire attackers to hurt the Ambassador in an attempt to force the Ambassador to step down from his post.  If the Ambassador did not step down, then the Arms Dealer proposed that the attackers hired by the co-conspirator would kill the Ambassador.

Shortly after agreeing on the plan, ZAW contacted the co-conspirator by cellphone and, using a money transfer app, transferred approximately $4,000 to the co-conspirator as an advance payment on the plot to attack the Ambassador.  Later, during a recorded phone conversation, ZAW and the co-conspirator discussed how the planned attackers would require an additional $1,000 to conduct the attack on the Ambassador in Westchester County, and, for an additional payment, the attackers could, in substance, kill the Ambassador.  In response, ZAW agreed, in substance, to pay the additional $1,000 and to try to obtain the additional money.

ZAW pled guilty to one count of conspiracy to assault and make a violent attack upon a foreign official, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

ZAW is scheduled to be sentenced by Judge Halpern on May 10, 2022.

Mr. Williams praised the outstanding investigative work of the FBI’s Westchester Safe Streets Task Force, which comprises special agents and task force officers from the FBI, NYPD, United States Probation Office, New York State Police, New York State Department of Corrections and Community Supervision, Westchester County Department of Public Safety, Westchester County District Attorney’s Office, Putnam County Sheriff’s Office, and the police departments of Yonkers, Mount Vernon, New Rochelle, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown.  Mr. Williams also thanked the Pelham Manor Police Department and the U.S. Department of State’s Diplomatic Security Service for their assistance in the investigation.

Mr. Williams said that the investigation is ongoing, and asked any individuals with relevant information to contact the FBI at (800)-CALL-FBI.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that TODD CAPSER was sentenced yesterday by U.S. District Judge J. Paul Oetken to 18 months in prison in connection with a $43 million fraud scheme.  CAPSER pled guilty before Judge Oetken on July 2, 2019.

According to the Indictment and other publicly filed documents, from January 2016 through April 2019, CAPSER perpetrated a scheme to defraud a financial institution based in Toronto, Canada (“Financial Institution-1”), by inducing it, through false and misleading representations and omissions, to loan approximately $43.3 million to CAPSER for the purchase of two chemical and oil tankers (the “Tankers”).

After obtaining the loan from Financial Institution-1 and purchasing the Tankers, CAPSER attempted to induce at least nine other Financial Institutions to loan between $46 million and $52 million each to refinance the original loan.

CAPSER fraudulently induced Financial Institution-1 to make the $43 million loan, and attempted to induce the other Financial Institutions to make the $46 million to $52 million refinancing loans, through, among other things: (a) fraudulently obtaining documents from a company that provides wealth management services to private clients (“Trust Company‑1”); (b) altering the Trust Company-1 documents, and forging additional Trust Company-1 documents, to make it appear as though his father held an investment portfolio at Trust Company-1 composed of securities worth tens of millions of dollars, which could serve as collateral for the loans; (c) sending the altered and forged Trust Company-1 documents to certain of the Financial Institutions; (d) creating fake email accounts for employees of Trust Company-1, and sending emails from those accounts to certain of the Financial Institutions to make it appear as though his father held an investment portfolio at Trust Company-1 composed of securities worth tens of millions of dollars; and (e) making false and misleading representations and omissions about the financial assets of CAPSER, his father, and their family to certain of the Financial Institutions, including falsely claiming to own a cattle company and ranch.

In addition, in an effort to engender sympathy, deflect questions, and explain suspicious behavior, CAPSER falsely represented to certain of the Financial Institutions that his daughter was terminally ill with cancer.

After being charged and arrested in connection with the foregoing fraud scheme in May 2019, and pleading guilty in July 2019, CAPSER attempted to commit a distinct fraud while awaiting sentencing.

*                *                *

In addition to yesterday’s prison sentence, CAPSER, 50, of Billings, Montana, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the FBI.  He also thanked the FBI’s Billings Resident Agency for its assistance with the investigation.

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys David J. Robles and Benjamin Woodside Schrier are in charge of the prosecution

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM SKINNER and DORIAN BROOKS, a/k/a “Kool-Aid,” pled guilty today in Manhattan federal court to charges relating to their involvement in the murder of Efren Cardenas on February 10, 1989, in Brooklyn, New York.  SKINNER is scheduled to be sentenced on March 10, 2022, and BROOKS is scheduled to be sentenced on April 6, 2022, by U.S. District Judge Edgardo Ramos, who accepted today’s pleas.           

U.S. Attorney Damian Williams said: “Today, William Skinner and Dorian Brooks admitted their participation in murdering Efren Cardenas over three decades ago, in February 1989.  Today’s guilty pleas demonstrate that law enforcement will never give up on murder victims and their loved ones, no matter how long it takes to achieve justice.”

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

On February 10, 1989, SKINNER and BROOKS killed Efren Cardenas, 30, in the vicinity of 280 Herkimer Street in the Bedford-Stuyvesant neighborhood of Brooklyn.  During the murder, SKINNER and BROOKS shot Cardenas over 20 times.  SKINNER and BROOKS committed the murder in furtherance of a conspiracy to distribute more than five kilograms of cocaine.           

*                *                *

SKINNER, 51, and BROOKS, 51, each pled guilty to one count of conspiring to distribute cocaine and crack cocaine, which carries a maximum prison term of 20 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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the New York City Police Department’s Cold Case Homicide Squad and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Andrew K. Chan, Adam S. Hobson, and Frank J. Balsamello are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Keith A. Bonanno, Special Agent in Charge of the Department of Justice Office of the Inspector General (“DOJ OIG”) Cyber Investigations Office, announced today that an Indictment was filed in Manhattan federal court charging ADEDAYO ILORI and CHRIS RECAMIER for a fraudulent scheme to obtain more than $7 million in Government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic.  In connection with loan applications for relief available from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program, ILORI and RECAMIER falsely represented to the Small Business Administration (“SBA”) and private lenders that they operated a number of companies, used stolen identities, and submitted falsified tax documents.  This case has been assigned to U.S. District Court Judge Mary Kay Vyskocil. RECAMIER and ILORI are both in custody. 

U.S. Attorney Damian Williams said: “As alleged, Adedayo Ilori has made quite a habit of committing loan fraud.  While previously facing similar charges in a separate case involving loan and identity fraud – to which Ilori pled guilty in April of this year – he is once again alleged to have committed similar conduct to defraud the SBA and private lenders in an attempt to steal much-needed COVID-19 financial relief.  Ilori and his co-defendant, Chris Recaimer, now face criminal charges for attempting to steal over $7 million in funds specifically designated to assist small businesses struggling with financial hardships from the worldwide COVID pandemic.”

DOJ OIG Special Agent in Charge Keith A. Bonanno said: “Ilori and Recamier allegedly stole the identities of individuals and companies and fraudulently obtained over a million dollars intended to help those suffering from hardship due to the COVID-19 pandemic. The Pandemic Response Accountability Committee COVID-19 Task Force is dedicated to rooting out these kinds of schemes and bringing the fraudsters to justice.”

According to the Indictment unsealed today in Manhattan federal court, the Complaint filed against RECAMIER on October 8, 2021, and filings made on public court dockets:[1]

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s PPP.  Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and its average payroll costs.  Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application.  The CARES Act also expanded the separate EIDL Program, which provides small businesses with low-interest loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19.  To qualify for an EIDL loan under the CARES Act, the applicant must have suffered “substantial economic injury” from COVID-19.

From at least in or about August 2020 through at least in or about October 2021, ILORI and RECAMIER, prepared to apply, and applied for numerous PPP and EIDL loans.  In applying for these loans, ILORI and RECAMIER claimed stolen identities of third parties.  In the role of these assumed identities, ILORI and RECAMIER claimed full control of a number of companies, which they purported, cumulatively, employed more than 200 people and paid more than $3.2 million in monthly wages.  In reality, they did not operate these companies.  In submitting these applications ILORI and RECAMIER, among other things, submitted falsified tax documents that were never actually filed with the Internal Revenue Service.

ILORI and RECAMIER attempted to obtain over approximately $7.5 million in PPP and EIDL program funds, and successfully obtained more than $1 million as a result of their scheme.  ILORI and RECAMIER transferred the majority of these funds toward (1) cryptocurrency investments, (2) the purchase of stocks, (3) cash withdrawals, and (4) personal expenses.  The investment accounts were also opened by ILORI and RECAMIER in the stolen identities of third parties.

ILORI committed these offenses while facing charges in a separate case filed in the Southern District of New York involving fraud, identity theft, and money laundering in United States v. Ilori, 20 Cr 378 (LJL).  As part of that case, ILORI pled guilty on April 8, 2021, to conspiracy to commit mail and wire fraud and conspiracy to commit money laundering, and is currently awaiting sentencing.    

*                      *                      *

ADEDAYO ILORI, 42, of Queens, New York, and CHRIS RECAMIER, 58, of New York, New York, are charged with (1) major fraud against the United States, which carries a maximum sentence of 10 years in prison; (2) conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison; (3) wire fraud, which carries a maximum sentence of 30 years in prison; (4) bank fraud, which carries a maximum sentence of 30 years in prison; (5) aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison; and (6) conspiracy to commit money laundering, which carries a maximum sentence of 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.           

Mr. Williams praised the investigative work of the DOJ OIG, which conducted the investigation on behalf of the Pandemic Response Accountability Committee (PRAC) COVID-19 Task Force.[2]  Mr. Williams also thanked the U.S. Secret Service, the Drug Enforcement Administration, the New York City Police Department, the Federal Bureau of Investigation, and the Federal Aviation Administration for their assistance in this investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel G. Nessim is in charge of the prosecution.

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

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

[2] Created by the CARES Act, the PRAC serves the American public by promoting transparency and facilitating coordinated oversight of the federal government’s COVID-19 pandemic response. The PRAC’s 22 member Inspectors General identify major risks that cross program and agency boundaries to detect fraud, waste, abuse, and mismanagement in the more than $5 trillion in COVID-19 spending.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MICHAEL MAZUR was sentenced by U.S. District Court Judge Jed S. Rakoff to 216 months in prison for his role in the October 31, 2011, murder of Joshua Rubin in Brooklyn, New York.

U.S. Attorney Damian Williams said: “Michael Mazur participated in the robbery that led to the murder of Joshua Rubin, and then he and his codefendants put Rubin’s body in the trunk of a car, drove it to Pennsylvania, dumped it in a garbage can, and set it afire to cover up the crime.  Thanks to our law enforcement partners and the Special Agents of my Office, Mazur will now serve a lengthy prison sentence for his callous crime.” 

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

On or about October 31, 2011, MICHAEL MAZUR, Kevin Taylor, and Gary Robles agreed to rob Joshua Rubin of a pound of marijuana.  Robles agreed to bring a firearm to the robbery.  Taylor lured Rubin to a Brooklyn apartment where, under the guise of purchasing the marijuana, the trio planned to rob Rubin of the drugs.  On the night of the robbery, Taylor and Robles waited inside the apartment while MAZUR was positioned outside to serve as a lookout.  After Rubin entered the apartment, Taylor and Robles demanded that Rubin surrender the marijuana.  When Rubin refused, Robles shot and killed Rubin.

After the murder, MAZUR, Taylor, and Robles placed Rubin’s body into the trunk of a car and drove to rural Pennsylvania.  There, MAZUR, Taylor, and Robles put Rubin’s body in a garbage can, doused it with an accelerant, and set the body on fire.  MAZUR, Taylor, and Robles then drove back to New York in the early morning hours of November 1, 2011.  Over 230 pounds of marijuana and approximately $200,000 were found in MAZUR’S residence at the time of his arrest.

*                *                *

MAZUR, 27, pled guilty to one count of Hobbs Act robbery, in violation of 18 U.S.C. § 1951, and in connection with his guilty plea admitted to his role in the murder.  In addition to his prison sentence, MAZUR, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the New York City Police Department, and the Special Agents of the United States Attorney’s Office for the Southern District of New York.  He also thanked the Lehigh County District Attorney’s Office, the Pennsylvania State Police, and the South Whitehall Township Police Department for their assistance in the investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Alexandra N. Rothman, Mollie Bracewell, and Dominic A. Gentile are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York (SDNY), along with Kristen Clarke, Assistant Attorney General for the Justice Department’s Civil Rights Division, announced today that the Justice Department has opened a pattern or practice investigation into the Mount Vernon Police Department (MVPD).  The investigation will assess whether MVPD engages in a pattern or practice of discriminatory policing.  The investigation will also assess MVPD’s use of force, strip and body cavity searches, and how it handles evidence.  As part of the investigation, SDNY and the Civil Rights Division will conduct a comprehensive review of MVPD’s systems of accountability, including complaint intake, investigation, review, disposition, and discipline.  SDNY and the Civil Rights Division will also reach out to community groups and members of the public to learn about their experiences with the MVPD.

U.S. Attorney Damian Williams said: “Police officers have tough jobs, and so many do their work honorably, lawfully, and with distinction, respecting the rights of the citizens they have sworn to protect.  But when officers break the law, they violate their oath and undermine a community’s trust.  We ask anyone who has information relevant to the investigation into the Mount Vernon Police Department to contact the Department of Justice via email at [email protected] or to call (866) 985-1378.”

Assistant Attorney General for the Civil Rights Division Kristen Clarke said: “An effective and accountable police department is a hallmark of a healthy and well-functioning democracy.  The Civil Rights Division is committed to ensuring that law enforcement agencies across our country use their authority in a manner that is constitutional, transparent, and free from discrimination.”

This morning, SDNY and Civil Rights Division officials informed Mount Vernon Mayor Shawyn Patterson-Howard, MVPD Chief Marcel Olifiers, City Council President Marcus A. Griffith, Commissioner of Public Safety Glenn Scott, and Corporation Counsel Brian Johnson of the investigation.

The investigation is being conducted pursuant to the Violent Crime Control and Law Enforcement Act of 1994, which prohibits state and local governments from engaging in a pattern or practice of conduct by law enforcement officers that deprives individuals of rights protected by the Constitution or federal law.  The Act allows the Department of Justice to remedy such misconduct through civil litigation.  SDNY and the Civil Rights Division will be assessing law enforcement practices under the Fourth and Fourteenth Amendments to the U.S. Constitution, as well as under the Safe Streets Act of 1968 and Title VI of the Civil Rights Act of 1964.

The Civil Rights Unit in the Civil Division of the U.S. Attorney’s Office for the Southern District of New York and the Special Litigation Section of the Civil Rights Division, in Washington, D.C., are jointly conducting this investigation.  Individuals with relevant information are encouraged to contact the Department of Justice via email at [email protected] or by phone at (866) 985-1378.  Individuals can also report civil rights violations regarding this or other matters using the Civil Rights Division’s reporting portal, available at civilrights.justice.gov.

Additional information about the U.S. Attorney’s Office for the Southern District of New York is available on its website at https://www.justice.gov/usao-sdny.  Additional information about the Civil Rights Division and the Division’s Police Reform Work is available on its website at www.justice.gov/crt and at /media/872116/dl?inline. 

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint in Manhattan federal court charging BRIAN O’NEILL, the managing partner of O’Neill & Partners LLC (“O’Neill & Partners”) with wire fraud, perjury, and making false statements.  As alleged, O’NEILL defrauded two victim companies of over $8 million that he had promised to hold in escrow.  O’NEILL was arrested this morning in Chevy Chase, Maryland, and will be presented later today before United States Magistrate Judge Timothy J. Sullivan in the District of Maryland.

U.S. Attorney Damian Williams said: “As alleged, Brian O’Neill violated the canons of his profession to put self-interest above the interests of his clients; to be blunt, he stole their money.  Further, as alleged, when ordered by the federal court in this District to deposit escrow funds he had failed to return to one client, O’Neill misappropriated escrow funds from a second client to make partial satisfaction of the court’s order pertaining to the first client.  In addition, as alleged, O’Neill lied to the FBI about his robbing Peter to pay Paul.  Now he faces serious criminal charges for his alleged misdeeds.” 

FBI Assistant Director Michael J. Driscoll said: “As alleged, Brian O'Neill didn’t just hold his clients’ money in escrow, he held it hostage, and eventually lied to the FBI about his unlawful deeds. His alleged actions weren’t only unethical, they’re punishable by federal law. Today’s charges reflect our ongoing commitment to weeding out criminals who use other people’s money for their own personal gain.”

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

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

First, O’NEILL engaged in a scheme to defraud a medical equipment company headquartered in Pennsylvania (“Victim-1”) by falsely promising to hold over $5 million of the company’s funds in escrow.  Specifically, in August 2020, Victim-1 entered into an agreement with a Florida-based medical wholesale company (“Seller-1”) for the purchase of Personal Protective Equipment (“PPE”).  Victim-1 sought to purchase PPE from Seller-1 in order to donate the PPE to the Federal Emergency Management Agency (“FEMA”) to help fight the COVID-19 pandemic.  Contemporaneously with the execution of the Purchase Order, Victim-1 and Seller-1 entered into an escrow agreement (“Escrow Agreement-1”) with O’Neill & Partners.  Pursuant to Escrow Agreement-1, O’Neill & Partners was to act as escrow agent for the transaction and hold $5.1 million deposited by Victim-1 in escrow.  Instead of holding the deposited $5.1 million in escrow, however, O’NEILL secretly used the funds to execute personal deals for the purchase of PPE; O’NEILL dissipated the $5.1 million by approximately November 2020. 

In November 2020, Victim-1 served a cancellation notice on O’Neill & Partners and Seller-1 cancelling the transaction (the “Cancellation Notice”).  In light of the Cancellation Notice, counsel for Victim-1 sent a letter to O’Neill & Partners requesting that the $5.1 million in escrowed funds be returned to Victim-1 within 48 hours, pursuant to the terms of Escrow Agreement-1.  When O’Neill & Partners refused to return Victim-1’s deposited funds, Victim-1 filed a civil action in U.S. District Court for the Southern District of New York (the “Civil Action”).  In connection with the Civil Action, the Court ordered O’Neill & Partners to deposit the $5.1 million of escrowed funds with the Clerk of the Court.  On September 22, 2021, O’NEILL deposited $3.3 million with the Clerk.  Because O’NEILL’s deposit was $1.8 million short of the full $5.1 million he had been ordered to deposit, the Court held O’Neill & Partners and O’NEILL in civil contempt and ordered O’NEILL’s arrest.     

Relatedly, O’NEILL engaged in a second scheme that defrauded a Hong Kong-based investor (“Victim-2”) out of over $3 million.  Specifically, on April 19, 2021, a Delaware-based company involved in the PPE market (“Buyer-2”) entered into a sale and purchase agreement to purchase certain PPE from an Australia-based medical supply company (“Seller-2”).  Funding for the deal was to be provided by Victim-2.  At the same time that Buyer-2 and Seller-2 entered into the Sale and Purchase Agreement, they, along with Victim-2, entered into an escrow agreement (“Escrow Agreement-2”) with O’Neill & Partners.  Pursuant to Escrow Agreement-2, O’Neill & Partners was to hold certain funds associated with the transaction in escrow.  Instead of holding the funds deposited by Victim-2 in escrow, however, O’NEILL used $3.3 million of the funds to attempt to satisfy the Court’s order in the Civil Action by Victim-1 directing him to deposit $5.1 million with the Clerk of the Court.     

In an effort to conceal his wrongful conduct, O’NEILL made false statements to the FBI and submitted a false declaration, sworn to under penalty of perjury, to the U.S. District Court for the Southern District of New York in connection with the Civil Action.  In particular, on or about September 10, 2021, O’NEILL stated to FBI agents that the $5.1 million placed in escrow pursuant to Escrow Agreement-1 remained in an escrow account.  Similarly, on or about October 1, 2021, O’NEILL submitted a declaration in the Civil Action stating, under penalty of perjury, that he “still [had] control of the $1.8 million of the subject escrow funds . . . remaining to be deposited pursuant to the interpleader ordered by [the] Court.”  Neither of those statements was true.    

*                      *                      *           

O’NEILL, 48, of Chevy Chase, Maryland, is charged with two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count each of false statements and perjury, each of which carries a maximum sentence of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the investigative work of the FBI. 

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ERIC MALLEY, the founder and former chief executive officer of real estate private equity investment firm MG Capital Management L.P., was sentenced today by United States District Judge Edgardo Ramos to 60 months in prison in connection with a securities fraud scheme in which he fraudulently induced hundreds of individuals to invest a total of approximately $58 million in two real estate investment funds.  MALLEY pled guilty before Judge Ramos on May 20, 2021.

U.S. Attorney Damian Williams said: “For years, Eric Malley swindled investors through false promises about himself, his credentials, his track record, and the state of his real estate investment funds.  Today’s sentence sends an important message that there are grave consequences to such deception.”

According to the allegations contained in the Complaint, the Information to which Malley pled guilty, other court documents, and statements made in public court proceedings:

MALLEY founded MG Capital Management L.P. (“MG Capital”) in approximately January 2013, and served as its chief executive officer and chief investment officer from that time until approximately December 2019.  During that time, MALLEY formed two real estate investment funds (collectively, “the Funds”) – MG Capital Management Residential Fund III (“Fund III”), in approximately February 2014, and MG Capital Management Residential Fund IV (“Fund IV”), in approximately September 2017.

MALLEY promised, when soliciting investors and throughout the life of the Funds, that the Funds represented an opportunity to own an equity interest in hundreds of luxury income-producing properties across Manhattan, following a debt-free investment strategy purportedly informed by sophisticated proprietary analytics that MALLEY had developed over the course of his career in real estate.  MALLEY touted two purportedly extremely successful prior funds he had formed, Fund I and Fund II; assured investors that the Funds would be and were debt-free; and represented that the properties held by the Funds would be and were leased primarily to corporate tenants, including, among others, well known technology companies and a prominent university based in New York City with which Malley had pre-existing agreements.  But MALLEY’s representations were false.  Funds I and II did not exist.  The Funds were not debt-free, but instead held mortgaged properties. The properties that made up the Funds were almost entirely leased to individual, not corporate, tenants.  Malley did not have the corporate relationships or pre-existing agreements he touted.  The Funds held far fewer properties than MALLEY had represented.  And although Malley promised the investments were fully protected from loss, they were not.

MALLEY induced approximately 335 investors to invest a total of approximately $58 million in the Funds through these and other fraudulent misrepresentations.  The Funds together incurred millions of dollars in losses and are currently being liquidated.

*                *                *

In addition to the prison term, MALLEY, 51, of New Canaan, Connecticut, was sentenced to three years of supervised release and ordered to make restitution in the amount of $33,249,822.12 and forfeiture in the amount of $5,625,747.45.

This case is being handled by the Office’s Securities and Commodities Task Force.  Assistant United States Attorney Elizabeth A. Hanft is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that EDWARD HERNANDEZ was sentenced today in Manhattan federal court to 10 years in prison for his role in kidnapping and torturing a Government informant.  WALKIN FRANCISCO ARIAS VILLAR and JOSIEL GUSTAVO MARTINEZ GUZMAN were each sentenced, on September 16, 2021, and September 22, 2021, respectively, to 10 years in prison for their roles in the offense.  HERNANDEZ and ARIAS VILLAR pled guilty on April 6, 2021, and MARTINEZ GUZMAN pled guilty on March 23, 2021, before U.S. District Judge Paul A. Crotty, who also imposed the sentences.  

U.S. Attorney Damian Williams said: “Edward Hernandez now joins his codefendants in being sentenced to spend a decade in federal prison for his admitted role in the brutal and violent kidnapping, torture, and extortion of their victim.  This case illustrates yet again how violence goes hand in hand with the illegal drug trade.”

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

ARIAS VILLAR and MARTINEZ GUZMAN forced a Government informant (the “Victim”) into their car after the Victim – who was acting at the direction of law enforcement – arrived at a meeting in the Bronx, purportedly to retrieve $178,000 in narcotics proceeds to be laundered.  HERNANDEZ, who was driving, sped away after the Victim was forced into the car. 

MARTINEZ GUZMAN and ARIAS VILLAR physically assaulted the Victim in an effort to extort the Victim into transferring money to their co-conspirators.  MARTINEZ GUZMAN burned the Victim with cigarettes, beat him with a handgun, and threatened the Victim’s life.  ARIAS VILLAR pointed the handgun at the Victim repeatedly, threatened the Victim’s life, and demanded that the Victim pay them.  ARIAS VILLAR broke the Victim’s nose when he threw a laptop computer at his face.  HERNANDEZ, ARIAS VILLAR, and MARTINEZ GUZMAN apparently did not know that the Victim was a Government informant, but sought repayment for narcotics proceeds lost to law enforcement seizures.  The Victim, fearing for his life, transferred approximately $16,000 of his own money to accounts his abductors supplied. 

Drug Enforcement Administration (“DEA”) agents located the car in Fairfield, Connecticut, approximately three hours after the Victim was abducted.  MARTINEZ GUZMAN, ARIAS VILLAR, and HERNANDEZ were arrested and the Victim was brought to a hospital for treatment.

*                *                *

HERNANDEZ, 42, ARIAS VILLAR, 31, and MARTINEZ GUZMAN, 29, were each convicted of one count of conspiracy to commit extortion.  In addition to their prison terms, HERNANDEZ, ARIAS VILLAR, and MARTINZ GUZMAN were each sentenced to three years of supervised release.  Charges remain pending against Dacheng Zhen.

Mr. Williams praised and thanked the DEA for its outstanding work locating and safely recovering the Victim.

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Aline Flodr, Stephanie Lake, and Sheb Swett are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of  Investigation (“FBI”), announced the arrest today of NICKOLAS SHARP for secretly stealing gigabytes of confidential files from a New York-based technology company where he was employed (“Company‑1”), and then, while purportedly working to remediate the security breach, extorting the company for nearly $2 million for the return of the files and the identification of a remaining purported vulnerability.  SHARP subsequently re-victimized his employer by causing the publication of misleading news articles about the company’s handling of the breach that he perpetrated, which were followed by a significant drop in the company’s share price associated with the loss of billions of dollars in its market capitalization.

SHARP was arrested earlier today in the District of Oregon and will be presented this afternoon before U.S. Magistrate Judge John V. Acosta.  The case was assigned to U.S. District Judge Katherine Polk Failla.

U.S. Attorney Damian Williams said: “As alleged, Nickolas Sharp exploited his access as a trusted insider to steal gigabytes of confidential data from his employer, then, posing as an anonymous hacker, sent the company a nearly $2 million ransom demand.  As further alleged, after the FBI searched his home in connection with the theft, Sharp, now posing as an anonymous company whistle-blower, planted damaging news stories falsely claiming the theft had been by a hacker enabled by a vulnerability in the company’s computer systems.  Now the alleged theft and lies have been exposed, and Sharp is facing serious federal charges.”

FBI Assistant Director Michael J. Driscoll said: “We allege Mr. Sharp created a twisted plot to extort the company he worked for by using its technology and data against it. Not only did he allegedly break several federal laws, he orchestrated releasing information to media when his ransom demands weren't met. When confronted, he then lied to FBI agents. Mr. Sharp may have believed he was smart enough to pull off his plan, but a simple technical glitch ended his dreams of striking it rich.”

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

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

In about December 2020, SHARP repeatedly misused his administrative access to download gigabytes of confidential data from his employer.  For the majority of this cybersecurity incident (the “Incident”), SHARP used a virtual private network service that he subscribed to from a company named Surfshark to mask his Internet Protocol (“IP”) address when he accessed Company-1’s AWS and GitHub infrastructure without authorization.  At one point during the exfiltration of Company-1 data, SHARP’s home IP address became unmasked following a temporary internet outage at SHARP’s home.

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

On or about March 24, 2021, FBI agents executed a search warrant at SHARP’s residence in Portland, Oregon, and seized certain electronic devices belonging to SHARP.  During the execution of that search, SHARP made numerous false statements to FBI agents, including, among other things, in substance, that he was not the perpetrator of the Incident and that he had not used Surfshark VPN prior to the discovery of the Incident.  When confronted with records demonstrating that SHARP purchased the Surfshark VPN service in July 2020, approximately six months prior to the Incident, SHARP falsely stated, in part and substance, that someone else must have used his PayPal account to make the purchase.

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

Following the publication of these articles, between March 30, 2021, and March 31, 2021, Company-1’s stock price fell approximately 20%, losing over $4 billion in market capitalization.

SHARP, 36, of Portland, Oregon, is charged in four counts.  The first count charges him with transmitting a program to a protected computer that intentionally caused damage, which carries a maximum sentence of 10 years in prison.  The second count charges transmission of an interstate threat, which carries a maximum sentence of two years in prison.  The third count charges wire fraud, which carries a maximum sentence of 20 years in prison.  The fourth count charges the making of false statements to the FBI, which carries a maximum sentence of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the extraordinary work of the FBI.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Vladislav Vainberg is in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, 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 BRYANT BROWN, a/k/a “Trigga,” was sentenced by U.S. District Judge Paul A. Engelmayer yesterday to 24 years in prison for the December 2015 murder of Albendris Nunez and a 2017 armed robbery.  

U.S. Attorney Damian Williams said: “On a Sunday morning in 2015, Bryant Brown shot and killed Albendris Nunez in Devoe Park in the Bronx over $600 of marijuana.  For this senseless killing, Brown will serve a substantial sentence in federal prison.”

According to the allegations in the Indictment and other filings and statements made in court:

On or about December 20, 2015, BROWN attempted to rob Nunez of approximately $600 worth of marijuana in Devoe Park in the Bronx, New York.  BROWN set up the purported drug deal with Nunez over Facebook and instructed Nunez to meet him in Devoe Park.  BROWN brought a gun and planned to rob Nunez during this meeting and, during the planned robbery, shot Nunez in the back, killing him.   

On or about November 18, 2017, BROWN and a co-conspirator robbed a victim of liquid promethazine with codeine, also known as “wock” or “lean,” inside a residential apartment building in the Bronx, New York.  BROWN brought a gun to this robbery and struck the victim in the face with it.   

*                      *                     *

In addition to his prison sentence, BROWN, 26, was sentenced to three years of supervised release. 

Mr. Williams praised the outstanding investigative work of the New York City Police Department in this case. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jamie Bagliebter and Mollie Bracewell are in charge of the prosecution.           

Damian Williams, the United State Attorney for the Southern District of New York, announced today the guilty plea of JEREMY SPENCE, a/k/a “Coin Signals,” a cryptocurrency trader who solicited over $5 million from more than 170 individual investors for various cryptocurrency funds that he operated, after making false representations in connection with these funds. SPENCE pled guilty today before U.S. Magistrate Judge Debra Freeman. The case is assigned to U.S. District Judge Lewis A. Kaplan.

U.S. Attorney Damian Williams said: “Jeremy Spence, a/k/a, ‘Coin Signals,’ admitted today to luring investors to his cryptocurrency investment scam by touting fictitious historical returns of up to 148%.  In reality, Spence’s investments consistently lost money, and his scam left investors with a $5 million loss. The bourgeoning cryptocurrency market can be attractive to investors; however, investors should be aware of the inherent risks, including the risk of fraud.”

According to the Indictment and the Complaint filed in this case, and statements made in open court:       

From November 2017 through April 2019, SPENCE solicited investors in various cryptocurrency investment pools that SPENCE had created and managed (the “Funds”). SPENCE solicited investments for several Funds, the largest and most active of which were the Coin Signals Bitmex Fund, a/k/a the “CS Mex Fund,” the Coin Signals Alternative Fund, a/k/a the “CS Alt Fund,” and the Coin Signals Long Term Fund. Investors who wanted to participate in a Fund would transfer cryptocurrency, such as Bitcoin and Ethereum, to SPENCE in order for SPENCE to invest it. 

SPENCE solicited these investments through false representations, including that SPENCE’s crypto trading had been extremely profitable when, in fact, SPENCE’s trading had been consistently unprofitable.  For example, on January 28, 2018, SPENCE posted a message in an online chat group falsely claiming that his trading of investor funds over the past month had generated a return of more than 148%. As a result of this misrepresentation, investors transferred additional funds to SPENCE. In fact, over that same period of approximately one month, SPENCE’s trading resulted in net losses in the accounts in which he traded investor funds.

To forestall redemptions by investors, and to continue to raise money from investors to fund his scheme, SPENCE generated fictitious account balances, which he made available to investors online. Instead of accurately reporting the trading losses SPENCE was incurring, the account balances falsely indicated to investors that they were making money by investing with SPENCE. To hide his trading losses, SPENCE used new investor funds to pay back other investors in a Ponzi-like fashion. In total, SPENCE distributed cryptocurrency worth approximately $2 million to investors substantially from funds previously deposited by other investors. 

*                      *                      *

SPENCE, 25, pled guilty to commodities fraud, which carries a maximum sentence of ten years in prison.  The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

SPENCE is scheduled to be sentenced at a later date by Judge Kaplan.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and thanked the Commodity Futures Trading Commission, which brought a separate civil action. 

The case is being handled by the Office’s Securities and Commodities Fraud Unit. Assistant U.S. Attorney Christine I. Magdo 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 the Department of Homeland Security (“HSI”), announced today the unsealing of an Indictment charging NORMAN GRAY with wire fraud, in connection with a scheme to induce an individual (“Victim-1”) into wiring him funds through false promises that those funds would be put towards an equity stake in his purported global biomedical company (“Biomedical Company”) and certain purported  investment deals involving the sale of personal protective equipment (“PPE”).  GRAY was arrested this morning and will be presented before U.S. Magistrate Judge Debra Freeman later today.  The case is assigned to United States District Judge Lorna G. Schofield. 

U.S. Attorney Damian Williams said:  “Norman Gray, CEO of a purported global biomedical company, allegedly induced his victim investor to entrust Gray with over $1.2 million by claiming the risk involved in their PPE investment deals was ‘virtually zero.’ But in reality, the deals are alleged to be fictitious, and any chance of actually earning a profit with Gray’s investments was virtually zero. We thank the HSI for their assistance in this investigation and charge.”

Acting HSI Special Agent-in-Charge Ricky J. Patel said:  "As alleged in the indictment, Norman Gray made fake promises and created a fictitious persona to dupe an investor for over a million dollars in real cash, but in the end, Gray’s dishonest imagination led him right into the hands of law enforcement. HSI Special Agents, in conjunction with our partners, will work tirelessly to prevent shameless activities perpetrated by fraudsters like Gray, who sell dreams of making big profits with little risk to unwitting investors.  What made these acts even more deplorable was that he allegedly created this scheme by falsely purporting that the investments were going to legitimate companies providing vital PPE to the public.”

As alleged in the Indictment:[1]

GRAY is the CEO of the Biomedical Company, which is headquartered and incorporated in Hamden, Connecticut.  In or about August 2020, GRAY induced Victim-1 to give him $250,000, supposedly as an equity investment in the Biomedical Company.  In reality, nearly all of the $250,000 was paid out to a company with no apparent affiliation with the Biomedical Company, and Victim-1 received no equity in the Biomedical Company. In the ensuing months, GRAY further solicited a total of approximately $1,200,000 from Victim-1, representing that he would invest those funds in deals involving the procurement of PPE for two major universities in the tristate area.  GRAY represented that the necessary contracts for those deals were in place and that the risk involved with those deals was “virtually zero.”  In reality, the necessary contracts did not exist, and GRAY caused substantially all of Victim-1’s funds to be spent on the Biomedical Company’s general operating expenses, as well as products and services having nothing to do with the Biomedical Company or the procurement of personal protective equipment, including, for example, the cash purchase of an approximately $50,000 luxury SUV. 

As part of his scheme to fraudulently solicit funds from Victim-1, and as a means of dispelling Victim-1’s concern that an investment with GRAY would require Victim-1 to forego the purchase of a home, GRAY offered Victim-1 a mortgage from the “Tranctus Group.” GRAY claimed that “Tranctus Group” was a boutique mortgage company of which he was the sole investor. GRAY directed Victim-1 to his supposed mortgage broker “Benjamin Mabry.”  In fact, “Benjamin Mabry” was a false persona invented by GRAY, and GRAY registered the internet domain associated with the “Tranctus Group” on the very same day that Victim-1 received a purported mortgage commitment letter from “Mabry.”  Ultimately, Victim-1 received no return on Victim-1’s investments, GRAY refused to return Victim-1’s money to Victim-1, and the purported “Tranctus Group” mortgage failed to materialize.    

*                *                *

GRAY, 66, of the Hamden, Connecticut area, is charged with one count of wire fraud, which carries a maximum potential prison sentence of 20 years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only; any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of Special Agents of the United States Department of Homeland Security, Homeland Security Investigations, New York City Police Department, New York City Sheriff's Office, Bronx District Attorney, Greenburgh Police Department, and HSI New Haven. 

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Benjamin A. Gianforti and Tara La Morte are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Scott Lampert, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed a civil fraud lawsuit against Maranatha Human Services, Inc. (“MARANATHA”) and HENRY ALFONSO COLEY (“COLEY”) for falsely claiming that millions of dollars expended to benefit for-profit ventures owned and controlled by COLEY and MARANATHA, as well as payments to cover COLEY’s personal costs and excessive payments to COLEY’s family members, were reasonable and necessary costs in connection with MARANATHA’s provision of Medicaid-funded services to individuals with developmental disabilities.  MARANATHA is a non-profit organization based in Poughkeepsie, New York; COLEY founded MARANATHA in 1988 and served as its chief executive officer until earlier this year. 

Specifically, the Government’s complaint alleges that, with its board’s approval, MARANATHA funded for-profit companies operated by COLEY; paid excessive salaries and consulting fees to COLEY’s family members, often in exchange for little to no work; and paid for tens of thousands of dollars of COLEY’s personal expenses.  The Government further alleges that, from 2010 to 2019, COLEY and MARANATHA submitted to the State of New York cost reports that falsely claimed millions of dollars in these expenses as “allowable” costs, which fraudulently inflated MARANATHA’s Medicaid reimbursement rates and resulted in MARANATHA receiving millions of dollars in Medicaid funds to which it was not entitled.

Simultaneous with the filing of the lawsuit, the United States has resolved its claims against COLEY through a settlement approved by U.S. District Judge Kenneth M. Karas.  Pursuant to the settlement, COLEY will pay $88,000 to the United States and has admitted and accepted responsibility for conduct alleged by the Government in its complaint as further described below.  COLEY has also agreed to pay $132,000 to the State of New York to resolve the State’s claims, for a total recovery of $220,000.  The settlement amount is based on the Office’s assessment of COLEY’s ability to pay based on the financial information he provided.  COLEY also agreed never to work for or accept payments from any entity that receives funds from a federal healthcare program.  In addition, COLEY entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from participating in Medicaid and other federal healthcare programs for 15 years.

 U.S. Attorney Damian Williams said: “For a decade, Henry Alfonso Coley and Maranatha defrauded Medicaid by submitting reports that fraudulently claimed as allowable expenses millions of dollars spent on for-profit companies owned by them, on excessive salaries and fees for Coley’s family members, and on Coley’s personal expenses.  These expenses were not related to providing care or assistance to the individuals with developmental disabilities Maranatha was meant to serve.  This Office will continue to hold entities and their executives accountable when they abuse our federal healthcare programs.”

HHS-OIG Special Agent in Charge Scott Lampert said: “Any threat to the financial health of Medicaid is a threat to the vulnerable people who depend upon it for critical services.  We will continue to hold those who steal from federal health care programs accountable for their actions.”

According to the Government’s complaint, from 2010 through 2019:

MARANATHA was required to submit cost reports, called Consolidated Financial Reports (“CFRs”), to the State of New York each year, specifying the reasonable and necessary costs MARANATHA incurred in providing services for its Medicaid-funded programs.  These costs were to be reported as “allowable” costs.  MARANATHA was required separately to report its other, “non-allowable” costs; “non-allowable” costs include costs unrelated to its Medicaid-funded programs, as well as any unreasonable or unnecessary costs. 

With its board’s approval, MARANATHA funded for-profit companies operated by COLEY and owned by COLEY or MARANATHA, as well as various unincorporated pet projects started by COLEY.  One of the chief purposes of these ventures was to serve as vehicles to funnel money to COLEY’s daughter, as well as others associated with COLEY, whom MARANATHA paid for work they purportedly did to support these ventures and projects.  Over the course of a decade, not one of these ventures ever launched a product or service or earned a single dollar in revenue.  COLEY and MARANATHA hired COLEY’s family members as employees and consultants, some in connection with these for-profit ventures, and others in connection with MARANATHA’s Medicaid-funded services.  COLEY and MARANATHA paid excessive salaries and consulting fees to COLEY’s family members, often in return for little to no work.  MARANATHA also paid for tens of thousands of dollars of COLEY’s personal expenses, including more than $34,000 for personal training sessions at a gym.

COLEY and MARANATHA knowingly submitted CFRs annually to the State of New York fraudulently reporting these expenses – totaling millions of dollars – as “allowable” costs.  On each CFR, COLEY falsely certified to the completeness and accuracy of the report.  COLEY and MARANATHA knew that the State of New York relied on providers’ CFRs when setting provider-specific reimbursement rates for certain Medicaid-funded programs, including MARANATHA’s largest Medicaid-funded program.  As a result of COLEY’s and MARANATHA’s falsely inflated cost reports, the State of New York awarded MARANATHA a higher reimbursement rate and MARANATHA received millions of dollars in Medicaid funds to which it was not entitled.

COLEY has settled the claims against him in the Government’s complaint.  As part of the settlement, COLEY admits, acknowledges, and accepts responsibility for the following conduct:

• COLEY made a presentation to MARANATHA’s board of directors acknowledging that “[i]t was always the plan for Maranatha to use government funds as a launching pad to create private enterprise that would enable it to not be dependent on government while at the same time fulfilling its function” consistent with its mission.
• COLEY was familiar with the requirement that MARANATHA distinguish “allowable costs” from “non-allowable costs” in its CFRs.
• COLEY knew that the CFRs are used by the New York State Department of Health to determine MARANTHA’s reimbursement rates for the provision of Medicaid services.
• In each CFR that MARANATHA submitted since 2010, COLEY certified that the (i) the “information furnished in this report . . . is in accordance with the instructions and is true and correct to the best of my knowledge”; and (ii) the statement attached to the CFR “fully and accurately represents all reportable income and expenditures made for services performed in accordance with the  provision of the Mental Hygiene Law and approved budgets.”
• COLEY signed the certifications set out above in CFRs that reported as “allowable costs” amounts expended not for MARANTHA’s provision of Medicaid services but instead to pursue certain for-profit business ventures.
• In particular, MARANATHA submitted CFRs reporting as “allowable costs” costs expended to benefit certain entities owned and/or operated by COLEY and/or MARANATHA that did not provide Medicaid-funded services (the “Non-Medicaid Ventures”).   
• MARANATHA paid certain employees and contractors, including COLEY’s family members, to perform work related to the Non-Medicaid Ventures.  For example, since 2010,  MARANATHA paid COLEY’s daughter more than $300,000.  Though much of her time was spent on work related to the Non-Medicaid Ventures, COLEY and MARANATHA reported her full compensation as an “allowable cost” in the CFRs.
• Since 2010, COLEY received more than $2 million from MARANATHA in salary and benefits, and MARANTHA claimed the full amount of his compensation as “allowable costs” on its CFRs. However, COLEY devoted much of his to time to working on the Non-Medicaid Ventures.

In connection with the filing of the lawsuit and settlement, the United States joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.

Mr. Williams praised the outstanding investigative work of the HHS-OIG, and he thanked the Medicaid Fraud Control Unit at the New York State Attorney General’s Office for its extensive collaboration in the investigation.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jacob Lillywhite is in charge of the case.