Southern District of New York
Press releases recorded for this federal judicial district.
Leader of Nine Trey Gangsta Bloods Sentenced to 17 Years in PrisonRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ALJERMIAH MACK, a/k/a “Nuke,” was sentenced to 204 months in prison in connection with his participation in the Nine Trey Gangsta Bloods (“Nine Trey”) and the distribution of narcotics, including heroin and fentanyl. MACK was convicted following a three-week jury trial in October 2019 before U.S. District Judge Paul A. Engelmayer, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Aljermiah Mack was a leader of the Nine Trey Gangsta Bloods, a violent gang that wreaked havoc across New York City. Now, thanks to the outstanding work of our partners at the NYPD, HSI, and ATF, he will spend the next 17 years in federal prison.”
According to court documents and the evidence presented at the trial of MACK and co-defendant Anthony Ellison:
Nine Trey was a criminal enterprise involved in committing numerous acts of violence, including shootings, robberies, and assaults in and around Manhattan and Brooklyn. Members and associates of Nine Trey engaged in violence to retaliate against rival gangs, to promote the standing and reputation of Nine Trey, and to protect the gang’s narcotics business. Members and associates of Nine Trey enriched themselves by committing robberies and selling drugs, such as heroin, fentanyl, furanyl fentanyl, MDMA, dibutylone, and marijuana.
The leadership structure of Nine Trey is divided into two parts: the Prison Lineup, which consists of incarcerated members, and the Street Lineup, which consists of members who are not incarcerated. MACK was one of the highest-ranking members of the Street Lineup.
MACK was found guilty after trial of racketeering conspiracy for his participation in the Nine Trey enterprise and conspiracy to distribute and possess with intent to distribute one kilogram and more of mixtures and substances containing heroin.
* * *
In addition to the prison term, MACK, 34, of Brooklyn, New York, was sentenced to five years of supervised release.
Mr. Berman praised the outstanding investigative work of the New York City Police Department, Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Mr. Berman also praised the New York City Department of Correction, Correction Intelligence Bureau, and the Kings County District Attorney’s Office for their assistance in the investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Michael Longyear, Jacob Warren, and Jonathan Rebold are in charge of the prosecution.
Yonkers Man Charged with Bronx KidnappingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment charging OWEN DRAIN, a/k/a “Whiteboy,” a/k/a “Tommy,” with the November 19, 2019, gunpoint kidnapping of a victim in the Bronx. The case has been assigned to United States District Judge Victor Marrero. DRAIN was arrested this afternoon, and will be presented today before United States Magistrate Judge Barbara C. Moses.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the Indictment, the defendant kidnapped a victim in a car at gunpoint. Thanks to the outstanding work of the FBI and the NYPD, the defendant is now charged in federal court for this extremely serious crime.”
Police Commissioner Dermot Shea said: “This arrest and indictment reflects the hard work that members of the NYPD engage in each day to hold responsible the small number of individuals committing much of the violence in New York City. I commend the efforts of the NYPD investigators and our law enforcement partners involved in this investigation.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
As alleged, on November 19, 2019, OWEN DRAIN kidnapped a victim at gunpoint and zip tied the victim during the course of the kidnapping.
* * *
DRAIN, 35, of Yonkers, New York, is charged with kidnapping, which carries a maximum sentence of life imprisonment. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD and FBI.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Ni Qian and Michael D. Longyear are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Poughkeepsie Men Sentenced for Selling Fentanyl That Led to the Deaths of at Least Four UsersRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that FRANK MOSS, a/k/a “Jigga,” a Poughkeepsie drug dealer whose fentanyl led to the overdose deaths of two women, was sentenced to almost 22 years in prison, and ARNOLD MELENDEZ, a/k/a “Frankie,” another Poughkeepsie drug dealer whose fentanyl led to the overdose deaths of two men, was sentenced to almost 16 years in prison, following their pleas of guilty to conspiracy to distribute and possess with the intent to distribute fentanyl. MOSS and MELENDEZ were sentenced on January 29, 2020, by U.S. District Judge Kenneth M. Karas and U.S. District Judge Vincent L. Briccetti, respectively.
According to the allegations in the Information to which MOSS pled guilty, public court filings, and statements made in court:
Beginning in February 2017 – right after being released from prison – MOSS agreed with others to sell fentanyl. By August 2017, MOSS was selling mixtures of fentanyl with the stamp “Go Time.” However, he switched to selling fentanyl with the stamp “No Days Off.” MOSS knew that “No Days Off” contained pure fentanyl, even warning one of his co-conspirators. One of MOSS’s co-conspirators learned that people – including himself – were overdosing on “No Days Off” and warned MOSS that people were “falling out,” which is a street term for overdosing. MOSS replied, “That’s what the people want.”
Not having heeded the warning, MOSS continued to sell “No Days Off.” Two of his customers, Aracelis Batista and Julie Mach, overdosed and died in August 2017 as a result of using MOSS’s fentanyl.
According to the allegations in the Information to which MELENDEZ pled guilty, public court filings, and statements made in court:
Beginning no later than December 2017 – the month after his most recent release from prison – MELENDEZ began selling fentanyl to customers in Poughkeepsie, New York, some of which he misrepresented to be heroin. On multiple occasions, MELENDEZ’s customers told MELENDEZ that users of his drugs were overdosing, and MELENDEZ continued to sell fentanyl. On at least one occasion, one of MELENDEZ’s customers told MELENDEZ, in substance and in part, that “his sh*t was killing people,” and MELENDEZ responded, in substance and in part, that “I don’t give a sh*t, it’s not my problem.”
Several of MELENDEZ’s customers – whether direct customers or customers of others who purchased drugs from MELENDEZ – overdosed on MELENDEZ’s drugs, but survived after the administration of naloxone. Two indirect customers – that is, customers of others who purchased drugs from MELENDEZ – overdosed and died after taking MELENDEZ’s drugs.
The MELENDEZ and MOSS cases are unrelated.
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In addition to his prison term, MOSS was ordered to serve five years of supervised release, and to forfeit $50,000 in criminal proceeds.
In addition to his prison term, MELENDEZ was ordered to serve five years of supervised release, and to forfeit $20,395 in criminal proceeds, as well as his right to a loaded firearm found at the time of his arrest.
Mr. Berman thanked the Drug Enforcement Administration and the Dutchess County Drug Task Force – which consists of the Dutchess County Sheriff’s Office, the City of Beacon Police Department, the Town of East Fishkill Police Department, the City of Poughkeepsie Police Department, the Town of Poughkeepsie Police Department, and the Town of Hyde Park Police Department – for their outstanding work on the investigations. This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Michael D. Maimin is in charge of the prosecutions.
Former NYPD Officer and 4 Others Charged in White Plains Federal Court with Distributing Methamphetamine and GBLRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), and Thomas Gleason, Commissioner of the Westchester County Police (“WCP”), announced the unsealing of an Indictment yesterday charging five defendants, including former New York City Police Department (“NYPD”) officer JOHN CICERO, with narcotics distribution offenses in and around Westchester County and New York City.
Three of the defendants, MARCO CASO, ERIC BAKER, and MATHEW MATTEO, a/k/a “Matthew Mateo,” were arrested yesterday and presented in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith. CICERO has not been arrested and remains at large. The fifth defendant, IRMA MATERASSO, is in state custody on other charges and will be transferred to federal custody at a later date. The case has been assigned to United States District Judge Kenneth M. Karas.
U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants trafficked large quantities of methamphetamine and GBL – a liquid date-rape drug – throughout Westchester and New York City. Methamphetamine devastates communities and GBL spreads danger all over the Southern District of New York, which is why the defendants face serious federal charges.”
FBI Assistant Director William F. Sweeney Jr. said: “As a former police officer, sworn to protect others, Mr. Cicero has seen firsthand the harm these drugs do to our society which makes the charges announced today even more egregious. He now faces the same grim reality criminals he once locked up did - a long prison sentence, this time in a federal jail cell.”
Westchester County Police Commissioner Thomas Gleason said: “We are pleased that our partnership with the FBI and other federal, state and local law enforcement agencies continues to support our efforts to stem the flow of illegal drugs into Westchester County.”
As alleged in the Indictment unsealed yesterday in White Plains federal court[[1]]:
From at least 2017 through February 2020, MARCO CASO, JOHN CICERO, IRMA MATERASSO, ERIC BAKER, and MATHEW MATTEO, a/k/a “Matthew Mateo,” conspired to distribute 500 grams and more of methamphetamine. In addition, from at least 2017 through February 2020, MARCO CASO, JOHN CICERO, IRMA MATERASSO, and MATHEW MATTEO, a/k/a “Matthew Mateo,” conspired to distribute gamma-butyrolactone (known as “GBL”), which is a liquid date-rape drug.
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CASO, 48, of New York, New York, CICERO, 38, of Bronxville, New York, MATERASSO, 36, of New Rochelle, New York, BAKER, 37, of Somerset, New Jersey, and MATTEO, 22, of the Bronx, New York, are each charged with conspiring to distribute 500 grams and more of methamphetamine, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. CASO, CICERO, MATERASSO, and MATTEO are also charged with conspiring to distribute GBL, 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. Berman praised the outstanding investigative work of the FBI Westchester County Safe Streets Task Force and the Westchester County Police Department. The Westchester County Safe Streets Task Force comprises Special Agents and Task Force Officers from the FBI, U.S. Probation, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York State Police, Westchester County Police Department, Westchester County DA’s Office, NYPD, Yonkers Police Department, Mount Vernon Police Department, Peekskill Police Department, Greenburgh Police Department, and New Rochelle Police Department. He also thanked the New York State Department of Corrections Office of Special Investigations, Drug Enforcement Administration, and U.S. Customs and Border Protection for their assistance.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys David R. Felton and Daniel G. Nessim are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Indictment, and the description of the Imndictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces Guilty Plea of U.S. Taxpayer in Panama Papers InvestigationRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York and Brian A. Benczkowski, Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, announced today that HARALD JOACHIM VON DER GOLTZ, a/k/a “H.J. von der Goltz,” “Johan von der Goltz,” “Jochen von der Goltz,” “Tica,” “Tika,” pled guilty today before U.S. Magistrate Judge Barbara Moses to wire fraud, tax fraud, money laundering, false statements, and other charges. VON DER GOLTZ, a former U.S. resident and taxpayer, is charged along with Ramses Owens, Dirk Brauer, and Richard Gaffey, a/k/a “Dick Gaffey,” in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and its related entities.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Harald Joachim von der Goltz went to extraordinary lengths to circumvent U.S. tax laws in order to maintain his wealth and hide it from the IRS. Using the specialized criminal services of global law firm Mossack Fonseca, von der Goltz set up shell companies and off-shore accounts to conceal millions of dollars. Now, after years of concealment from the United States, von der Goltz has admitted guilt in a U.S. court and awaits sentencing that could result in a term in a U.S. prison.”
AAG Brian A. Benczkowski said: “Over nearly two decades, von der Goltz conspired to keep his income hidden from U.S. tax authorities and law enforcement. Today’s guilty plea demonstrates the Department’s steadfast commitment to prosecute taxpayers who use offshore structures to obscure their wealth and evade their tax obligations.”According to the allegations contained in the Indictments[1], other filings in this case, and statements during court proceedings, including VON DER GOLTZ’s guilty plea hearing:
Since at least 2000 through 2017, VON DER GOLTZ conspired with others to conceal his assets and investments, and the income generated by those assets and investments, from the Internal Revenue Service (“IRS”) through fraudulent, deceitful, and dishonest means. During all relevant times, VON DER GOLTZ was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts. Nevertheless, VON DER GOLTZ evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS. These shell companies and bank accounts made investments totaling tens of millions of dollars. VON DER GOLTZ was assisted in this scheme through the use of Mossack Fonseca, including Ramses Owens, a Panamanian lawyer who previously worked at Mossack Fonseca, and by Richard Gaffey, a partner at a U.S.-based accounting firm. Specifically, in furtherance of VON DER GOLTZ’s efforts to conceal his assets and income from the IRS, VON DER GOLTZ engaged the services of Mossack Fonseca, including Owens, to create a sham foundation and shell companies formed under the laws of Panama and the British Virgin Islands to conceal from the IRS and others the ownership by VON DER GOLTZ of accounts established at overseas banks, as well as the income generated in those accounts. VON DER GOLTZ, Gaffey, and Owens also falsely claimed that VON DER GOLTZ’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike VON DER GOLTZ – was not a U.S. taxpayer.
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VON DER GOLTZ, 82, a citizen of Germany and Guatemala who resided in Needham, Massachusetts, and Key Biscayne, Florida, pled guilty to one count of conspiracy to commit tax evasion, which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison; four counts of willful failure to file Reports of Foreign Bank and Financial Accounts, FINCEN Reports 114, each of which carries a maximum sentence of five years in prison; and two counts of false statements, each of which carries a maximum sentence of five years in prison.
VON DER GOLTZ is scheduled to appear before Judge Richard M. Berman on February 24, 2020, at 9:30 a.m., at which time it is anticipated Judge Berman will set a sentencing date.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Gaffey is scheduled to proceed to trial on March 9, 2020, before Judge Berman.
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U.S. Attorney Berman praised the outstanding investigative work of IRS - Criminal Investigation and HSI, and thanked the Justice Department’s Tax Division and the Federal Bureau of Investigation for their significant assistance in the investigation. Mr. Berman also thanked the Criminal Division’s Office of International Affairs, which provided significant assistance in securing the defendant’s extradition from the United Kingdom. He also thanked law enforcement partners in France, the United Kingdom, Panama, and Germany for their assistance in the case.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, working in partnership with the Money Laundering and Asset Recovery Section of the Criminal Division. Assistant United States Attorneys Eun Young Choi and Thane Rehn, along with Trial Attorneys Michael Parker and Parker Tobin of the Money Laundering and Asset Recovery Section, are in charge of the prosecution.
The charges as to Owens, Brauer, and Gaffey are merely accusations, and they are presumed innocent unless and until proven guilty.
[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 as to Owens, Brauer, and Gaffey, and every fact described should be treated as an allegation.
Leaders of 59 Brims Gang Among 18 Defendants Charged in Manhattan Federal Court with Racketeering OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), and Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging 18 members of the 59 Brims gang, including the gang’s leaders, with committing various racketeering, narcotics, and firearms offenses, including murder and attempted murder.
WILLIE EVANS, a/k/a “Mills,” JAMARR SIMMONS, a/k/a “Show Off,” ALBERT SHOULDERS, a/k/a “Bundy,” RANELL SLOAN, a/k/a “Rah,” DARNELL COOPER, a/k/a “Jeez,” JOSE RODRIGUEZ, a/k/a “Meso,” SYLVESTER WINT, a/k/a “Vesta,” YONETTE RESPASS, a/k/a “Yonette Davis,” a/k/a “Star Brim,” MARKELL BOBIAN, a/k/a “Kellz,” TIMOTHY COLEMAN, a/k/a “LA,” TYRONE ERVIN, a/k/a “Shoota,” SEAN GAMBRELL, a/k/a “Kash,” DARON GOODMAN, a/k/a “Handsome,” JAVARIS JENKINS, a/k/a “JayBz,” JERLAINE LITTLE, a/k/a “Noni,” SHAMARE REID, a/k/a “Sha,” MARKQUEL SIMMONS, a/k/a “Shellz,” and TYRIQUE SNOWDEN, a/k/a “Ty,” are members of a racketeering enterprise known as the 59 Brims.
The Indictment charges WILLIE EVANS, the gang’s godfather, or highest-ranking, non-incarcerated member, and JAMARR SIMMONS, the highest-ranking member in the Bronx, with the September 28, 2019, murder of Bradford Mensah, 22, in the vicinity of Crotona Park in the Bronx, New York. JAMARR SIMMONS and DARON GOODMAN were previously charged with the January 11, 2020, murder of Jason Parris, 36, in the vicinity of East 170th Street and Webster Avenue in the Bronx, New York.
In addition to EVANS and JAMARR SIMMONS, the Indictment also charges YONETTE RESPASS, the gang’s godmother, or highest-ranking female member, with participating in the racketeering conspiracy and with ordering a slashing.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the Indictment, the defendants were responsible for brutal acts of violence – murders, attempted murders, a maiming, and robberies – in service of the 59 Brims gang. Thanks to the extraordinary work of our partners at the NYPD and HSI, the defendants, who include the leaders of the gang, now face federal charges for their crimes.”
NYPD Commissioner Dermot Shea said: “Targeting and dismantling gangs and crews, and preventing the violence so often associated with their illegal activities, continues to be one of our highest priorities. By using precision policing we are targeting the small percentage of people responsible for committing much of the violence in New York, and making the safest large city in America even safer. I’d like to thank our law enforcement partners for their efforts in helping us achieve this goal.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said: “The list of allegations against those arrested today includes murder, attempted murder, narcotics violations, firearms offenses, and robbery. The 59 Brims gang acts with no apparent regard for human life and today’s arrests hopefully put an end to their senseless violence. As law enforcement, we build investigations to identify not only those who carry out monstrous acts, but also to get the leaders in the organization who facilitate the horrific crimes. Today, due to the great investigative activity in this case, HSI and its partners are happy to announce that those allegedly responsible from the street level to the highest-ranking members of the 59 Brims gang are facing justice, ultimately making the community safer.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
On January 11, 2020, DARON GOODMAN and JAMARR SIMMONS shot and killed Jason Parris in the vicinity of 1441 Webster Avenue in the Bronx, and aided and abetted the same. GOODMAN and SIMMONS killed Parris in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On September 28, 2019, WILLIE EVANS and JAMARR SIMMONS shot and killed Bradford Mensah in the vicinity of Crotona Park in the Bronx, and aided and abetted the same. EVANS and SIMMONS killed Mensah in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On September 2, 2019, JAVARIS JENKINS shot at a rival gang member in the Bronx, and aided and abetted the same. JENKINS shot at the rival in part to maintain and increase his position in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On August 28, 2019, TYRIQUE SNOWDEN shot at an individual while attempting to rob the individual of narcotics and narcotics proceeds in the Bronx, and aided and abetted the same.
On August 24, 2019, SYLVESTER WINT and SHAMARE REID shot at rival gang members in the Bronx, and aided and abetted the same. WINT and REID shot at the rivals in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On August 8, 2019, JAMARR SIMMONS, ALBERT SHOULDERS, SYLVESTER WINT, YONETTE RESPASS, and SHAMARE REID maimed and assaulted an individual with a dangerous weapon, and aided and abetted the same, by slashing the individual in the face. SIMMONS, SHOULDERS, WINT, RESPASS, and REID slashed the individual in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On August 1, 2019, JAVARIS JENKINS shot at rival gang members in the Bronx, and aided and abetted the same. JENKINS shot at the rival in part to maintain and increase his position in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On May 21, 2019, JAMARR SIMMONS, TYRONE ERVIN, and SEAN GAMBRELL robbed at gunpoint individuals who were playing a dice game, and shot at the individuals while robbing them, in the vicinity of Davidson Avenue in the Bronx, and aided and abetted the same. SIMMONS, ERVIN, and GAMBRELL robbed and shot at the individuals in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On March 30, 2019, JAMARR SIMMONS and TIMOTHY COLEMAN stabbed a rival gang member in the Bronx, and aided and abetted the same. SIMMONS and COLEMAN stabbed the individual in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On December 6, 2018, JERLAINE LITTLE and others pistol-whipped an individual while robbing the individual at gunpoint in the Bronx, and aided and abetted the same. LITTLE robbed the individual in part to maintain and increase her position in the 59 Brims racketeering enterprise operating in the Southern District of New York.
On November 29, 2018, JAMARR SIMMONS, MARKELL BOBIAN, TYRONE ERVIN, SEAN GAMBRELL, JERLAINE LITTLE, and MARKQUEL SIMMONS pistol-whipped an individual while robbing the individual at gunpoint in the Bronx, and aided and abetted the same. JAMARR SIMMONS, BOBIAN, ERVIN, GAMBRELL, LITTLE, MARKQUEL SIMMONS robbed the individual in part to maintain and increase their positions in the 59 Brims racketeering enterprise operating in the Southern District of New York.
Between January 2019 and September 2019, SYLVESTER WINT made the unauthorized sale of multiple firearms that had been transported in interstate commerce, including at a location in the Bronx.
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EVANS, 28, SHOULDERS, 23, RODRIGUEZ, 26, BOBIAN, 22, ERVIN, 19, GAMBRELL, 22, JENKINS, 22, LITTLE, 28, REID, 18, and MARKQUEL SIMMONS, 23, were arrested today and will be presented before United States Magistrate Judge Barbara Moses. GOODMAN, 22, JAMARR SIMMONS, 33, and SNOWDEN, 20, were already in federal custody. COLEMAN, 32, is in New York City custody and will be transferred to federal custody at a later date. SLOAN, 27, COOPER, 28, and WINT, 21, have not been arrested and remain at large. RESPASS, 28, has not been arrested at this time. This case is assigned to United States District Judge George B. Daniels.
Charts containing the names, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD and HSI. Mr. Berman also praised the New York City Department of Correction, Correction Intelligence Bureau, and the Bronx County District Attorney’s Office for their assistance in the investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Michael D. Longyear, Jacob Warren, and Adam S. Hobson are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
DEFENDANT(S)
MAX. TERM OF IMPRISONMENT
Count One: Conspiracy to Commit Racketeering (18 U.S.C. § 1962(d))
All defendants
Life imprisonment as to all defendants except Respass and Coleman, for whom the maximum term of imprisonment is 20 years
Count Two: Murder in Aid of Racketeering
(18 U.S.C. §§ 1959(a)(1) and 2)
Jamarr Simmons
Daron Goodman
Death or a Mandatory Minimum Sentence of Life Imprisonment
Count Three: Use of a Firearm to Commit Murder (18 U.S.C. § 924(j)(1))
Jamarr Simmons
Daron Goodman
Death or Life Imprisonment; Mandatory Minimum Sentence of 5 years
Count Four: Murder in Aid of Racketeering
(18 U.S.C. §§ 1959(a)(1) and 2)
Willie Evans
Jamarr Simmons
Death or a Mandatory Minimum Sentence of Life Imprisonment
Count Five: Use of a Firearm to Commit Murder (18 U.S.C. §§ 924(j)(1) and 2)
Willie Evans
Jamarr Simmons
Death or Life Imprisonment; Mandatory Minimum Sentence of 5 years
Count Six: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3), (a)(5), and 2)
Javaris Jenkins
20 years’ imprisonment
Count Seven: Possession of a Firearm in Furtherance of a Crime of Violence, which Firearm was Discharged (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), (iii) and 2)
Javaris Jenkins
Life imprisonment; Mandatory Minimum Sentence of 10 years
Count Eight: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3), (a)(5), and 2)
Sylvester Wint
Shamare Reid
20 years’ imprisonment
Count Nine: Possession of a Firearm in Furtherance of a Crime of Violence, which Firearm was Discharged (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), (iii) and 2)
Sylvester Wint
Shamare Reid
Life imprisonment; Mandatory Minimum Sentence of 10 years
Count Ten: Maiming and Assault in Aid of Racketeering (18 U.S.C. §§ 1959(a)(2), (a)(3), and 2)
Jamarr Simmons
Albert Shoulders
Sylvester Wint
Yonette Respass
Shamare Reid
30 years’ imprisonment
Count Eleven: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3), (a)(5), and 2)
Javaris Jenkins
20 years’ imprisonment
Count Twelve: Possession of a Firearm in Furtherance of a Crime of Violence, which Firearm was Discharged (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), (iii) and 2)
Javaris Jenkins
Life imprisonment; Mandatory Minimum Sentence of 10 years
Count Thirteen: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3), (a)(5), and 2)
Jamarr Simmons
Tyrone Ervin
Sean Gambrell
20 years’ imprisonment
Count Fourteen: Possession of a Firearm in Furtherance of a Crime of Violence, which Firearm was Discharged (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), (iii) and 2)
Jamarr Simmons
Tyrone Ervin
Sean Gambrell
Life imprisonment; Mandatory Minimum Sentence of 10 years
Count Fifteen: Attempted Murder and Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3), (a)(5), and 2)
Jamarr Simmons
Timothy Coleman
20 years’ imprisonment
Count Sixteen: Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3) and 2)
Jerlaine Little
20 years’ imprisonment
Count Seventeen: Brandishing a Firearm in Furtherance of a Crime of Violence (18 U.S.C. §§ 924(c)(1)(A)(i), (ii) and 2)
Jerlaine Little
Life imprisonment; Mandatory Minimum Sentence of 7 years
Count Eighteen: Assault with a Dangerous Weapon in Aid of Racketeering (18 U.S.C. §§ 1959(a)(3) and 2)
Jamarr Simmons
Markell Bobian
Tyrone Ervin
Sean Gambrell
Jerlaine Little
Markquel Simmons
20 years’ imprisonment
Count Nineteen: Brandishing a Firearm in Furtherance of a Crime of Violence (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), and 2)
Jamarr Simmons
Markell Bobian
Tyrone Ervin
Sean Gambrell
Jerlaine Little
Markquel Simmons
Life imprisonment; Mandatory Minimum Sentence of 7 years
Count Twenty: Conspiracy to Distribute Controlled Substances (21 U.S.C. § 846)
Willie Evans
Jamarr Simmons
Albert Shoulders
Ranell Sloan
Darnell Cooper
Jose Rodriguez
Sylvester Wint
Markell Bobian
Tyrone Ervin
Sean Gambrell
Javaris Jenkins
Jerlaine Little
Shamare Reid
Markquel Simmons
Tyrique Snowden
Life imprisonment; Mandatory Minimum Sentence of 10 years
Count Twenty One: Possession of a Firearm in Furtherance of a Drug Trafficking Crime (18 U.S.C. §§ 924(c)(1)(A)(i) and 2)
Willie Evans
Jamarr Simmons
Albert Shoulders
Ranell Sloan
Darnell Cooper
Jose Rodriguez
Sylvester Wint
Markell Bobian
Tyrone Ervin
Sean Gambrell
Javaris Jenkins
Jerlaine Little
Shamare Reid
Markquel Simmons
Tyrique Snowden
Life Imprisonment; Mandatory Minimum Sentence of 5 years
Count Twenty Two: Firearms Trafficking (18 U.S.C. §§ 922(a)(1)(A) and 2)
Sylvester Wint
5 years’ imprisonment
Count Twenty Three: Attempted Robbery (18 U.S.C. §§ 1951 and 2)
Tyrique Snowden
20 years’ imprisonment
Count Twenty-Four: Possession of a Firearm in Furtherance of a Crime of Violence, which Firearm was Discharged (18 U.S.C. §§ 924(c)(1)(A)(i), (ii), (iii) and 2
Tyrique Snowden
Life Imprisonment; Mandatory Minimum Sentence of 10 years
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former U.S. Taxpayer Pleads Guilty in Panama Papers InvestigationRead the Press Release
A former U.S. resident and taxpayer who was charged along with three others in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities, pleaded guilty today to wire and tax fraud, money laundering, false statements and other charges.
Harald Joachim von der Goltz, aka “H.J von der Goltz,” “Johan von der Goltz,” “Jochen von der Goltz,” “Tica,” and “Tika,” 82, a citizen of Germany and Guatemala who last resided in Needham, Massachusetts, and Key Biscayne, Florida, pleaded guilty to one count of conspiracy to commit tax evasion, one count of wire fraud, one count of money laundering conspiracy, four counts of willful failure to file reports of foreign bank and financial accounts (Financial Crimes Enforcement Network Reports 114) and two counts of false statements.
“Over nearly two decades, von der Goltz conspired to keep his income hidden from U.S. tax authorities and law enforcement,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s guilty plea demonstrates the Department’s steadfast commitment to prosecute taxpayers who use offshore structures to obscure their wealth and evade their tax obligations.”
“Harald Joachim von der Goltz went to extraordinary lengths to circumvent U.S. tax laws in order to maintain his wealth and hide it from the IRS,” said U.S. Attorney Geoffrey S. Berman of the Southern District of New York. “Using the specialized criminal services of global law firm Mossack Fonseca, von der Goltz set up shell companies and off-shore accounts to conceal millions of dollars. Now, after years of concealment from the United States, von der Goltz has admitted guilt in a U.S. court and awaits sentencing that could result in a term in a U.S. prison.”
According to the allegations contained in the indictments, other filings in this case and statements during court proceedings, including von der Goltz’s guilty plea hearing, since at least 2000 through 2017, von der Goltz conspired with others to conceal his assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful and dishonest means.
During all relevant times, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts. Nevertheless, von der Goltz evaded his tax reporting obligations by setting up a series of shell companies and bank accounts, and hiding his beneficial ownership of the shell companies and bank accounts from the IRS. These shell companies and bank accounts made investments totaling tens of millions of dollars. Von der Goltz was assisted in this scheme through the use of Mossack Fonseca, including Ramses Owens, a Panamanian lawyer who previously worked at the Mossack Fonseca law firm, and by Richard Gaffey, a partner at a U.S.-based accounting firm.
In furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, von der Goltz engaged the services of Mossack Fonseca, including Owens, to create a sham foundation and shell companies formed under the laws of Panama and the British Virgin Islands to conceal from the IRS and others the ownership by von der Goltz of accounts established at overseas banks, as well as the income generated in those accounts. von der Goltz, Gaffey and Owens also falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and — unlike von der Goltz — was not a U.S. taxpayer.
Von der Goltz is scheduled to appear before U.S. District Judge Richard M. Berman on February 24, 2020.
Gaffey is scheduled to proceed to trial on March 9, 2020, before Judge Berman.
Assistant Attorney General Benczkowski praised the outstanding investigative work of IRS-Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and thanked the Justice Department’s Tax Division and the FBI for their significant assistance in the investigation. The Criminal Division’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from the United Kingdom. Assistant Attorney General Benczkowski also thanked law enforcement partners in France, the United Kingdom, and Germany for their assistance in the case.
The Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), working in partnership with the Southern District of New York’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit are handling this case. MLARS Trial Attorneys Michael Parker and Parker Tobin along with Assistant U.S. Attorneys Eun Young Choi and Thane Rehn are in charge of the prosecution.
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 as to Owens, Brauer, and Gaffey, and every fact described should be treated as an allegation.
Brooklyn Owner of Durable Medical Equipment Companies Pleads Guilty to Participating in $9 Million Health Care Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that GREG MILLER pled guilty today to participating in a $9 million scheme to defraud providers of “no-fault” insurance plans. As part of the scheme, MILLER and his co-conspirators billed insurance companies millions of dollars for expensive durable medical equipment that was never provided to patients. MILLER pled guilty before United States District Court Judge Katherine Polk Failla.
U.S. Attorney Geoffrey S. Berman said: “As he admitted in court today, Greg Miller exploited New York’s no-fault auto insurance system by billing millions of dollars for durable medical equipment that was never actually provided to patients, was medically unnecessary, or was far more expensive than the equipment that was provided. Now Miller awaits sentencing for his crime.”
FBI Assistant Director William F. Sweeney Jr. said: “When private health care programs are abused, the financial burden is typically passed on to consumers of these programs by way of increased premiums and other means of supporting services provided by the company. This is in no way a victimless crime, as it translates into very real numbers for those who pay into these health care programs. Miller’s conduct was just another way to make a quick profit at the expense of others, and this type of behavior can’t be tolerated.”
As alleged in the Information filed today in Manhattan federal court:
Between 2014 and 2019, GREG MILLER employed other individuals to serve as the nominal owners of at least two durable medical equipment (“DME”) supply companies located in Brooklyn, New York. MILLER, the true owner and operator of the companies, directed these individuals to submit fraudulent bills to private insurance companies that provided “no-fault” insurance plans. Under New York State law, a company that insures a vehicle involved in an accident is required to provide reimbursement for certain treatments and services provided to the vehicle occupants, regardless of who was at fault in the accident. These treatments and services may include DME if the DME is necessary and actually provided. The bills submitted by MILLER’s companies were fraudulent because, among other things, the bills were for DME that was never provided to patients, for DME that was medically unnecessary, or for expensive DME purportedly provided to patients when the DME in fact provided to patients was inexpensive DME.
MILLER, 60, pled guilty to one count of conspiring to commit health care fraud and faces a maximum sentence of 10 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. As part of his plea, MILLER agreed to forfeit $3,698,010 and to pay at least that amount in restitution.
Mr. Berman praised the outstanding investigative work of FBI’s Healthcare Fraud Task Force.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.
Statement of U.S. Attorney Geoffrey S. Berman on Verdict in Trial of Michael AvenattiRead the Press Release
“Today a unanimous jury found Michael Avenatti guilty of misusing his client’s information in an effort to extort tens of millions of dollars from the athletic apparel company Nike. While the defendant may have tried to hide behind legal terms and a suit and tie, the jury clearly saw the defendant’s scheme for what it was – an old fashioned shakedown.”
Hedge Fund Manager Sentenced to 140 Months in Prison for Defrauding Investors of Millions of DollarsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that NICHOLAS JOSEPH GENOVESE was sentenced on February 11 in Manhattan federal court to 140 months in federal prison for committing securities fraud. GENOVESE induced more than $11.2 million in investments in a hedge fund that he founded, Willow Creek Investments LP (“Willow Creek”), by misrepresenting his qualifications and professional background and concealing that he had prior felony convictions for fraud-related crimes. In February 2018, GENOVESE was charged, arrested, and detained for perpetrating this fraud. In October 2018, GENOVESE pled guilty to one count of securities fraud before United States District Judge William H. Pauley III, who also imposed the sentence.
United States Attorney Geoffrey S. Berman said: “Nicholas Genovese is a recidivist fraudster and con artist who tricked more than ten victims into investing more than $11.2 million dollars into his hedge fund, Willow Creek, based on false claims about his background and credentials. Genovese brazenly lied to his victims, falsely claiming that he was an heir to a multimillion-dollar fortune, that he had an Ivy League MBA, and that he had served in senior roles at major Wall Street firms. In reality, Genovese was a repeat offender with nine prior criminal convictions for fraud-related and other crimes. Genovese now faces more than a decade in prison for defrauding his victims.”
According to the allegations set forth in the Complaint and Indictment filed against GENOVESE in Manhattan federal court, and statements made in public court filings and proceedings including GENOVESE’s sentencing hearing:
In or about 2015, GENOVESE began soliciting individuals to invest in the hedge fund that became Willow Creek, which was based in New York, New York. In doing so, GENOVESE represented, among other things, that he was part of the Genovese family that had owned the Genovese Drug Store chain in the New York area and was an heir to this family’s fortune from the sale of that business for hundreds of millions of dollars in the late 1990s; that he had graduated from Dartmouth College’s Tuck School of Business; and that he had extensive Wall Street experience. In particular, GENOVESE claimed that he had been a Goldman Sachs partner and a Bear Sterns portfolio manager before forming Willow Creek. Based in part on these claims, victims invested $11,211,704 with GENOVESE.
These representations were false. GENOVESE is not related to the Genovese family that owned and sold the Genovese Drug Store Chain, did not attend the Tuck School of Business, and had never worked for Goldman Sachs or Bear Stearns. GENOVESE also did not tell his investors that he had multiple prior felony convictions for fraud-related offenses including forgery, identity theft, and grand larceny.
When investors began to ask for their money back, GENOVESE put them off. He told one investor that he would only return that investor’s funds after “the stars have aligned,” or else there would be a risk that almost all the money would be lost as a result of the purported impracticalities of unwinding unspecified trading positions. Records indicate that GENOVESE lost approximately $8 million trading in TD Ameritrade accounts between January 2015 and December 2017. GENOVESE also used proceeds of his fraud to purchase various luxuries for himself.
* * *
GENOVESE, 54, was born and raised in Illinois and is a resident of New York, New York. In addition to his prison term, GENOVESE was sentenced to three years of supervised release and ordered to pay restitution to his victims in the amount of $11,211,704 in addition to forfeiture of the proceeds of his crime.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the New York Regional Office of the United States Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Samson Enzer is in charge of the prosecution.
13 Defendants Charged with Submitting Millions of Dollars in False Transportation Claims to MedicaidRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent in Charge of the New York Field Office of the Department of Homeland Security Investigations (“HSI”), Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), and Dennis Rosen, New York State Medicaid Inspector General (“OMIG”), announced the unsealing of a Complaint charging thirteen defendants with participating in a scheme to steal millions of dollars from New York State’s Medicaid program through fraudulent claims related to transportation services.
U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants exploited and abused Medicaid, billing millions of dollars for phantom medical transportation services. Medicaid is intended to provide financial assistance to those in need. These defendants allegedly treated the Medicaid program that pays for medical transport as an opportunity to steal from Medicaid, which is indirectly stealing from American taxpayers. Now they face prosecution for their alleged crimes.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “It is alleged that these individuals schemed to defraud the Medicaid program out of millions of dollars, in turn robbing all those who rely on it for their vital healthcare needs. More than a dozen were involved in this plan to charge for services not rendered, and HSI working with its law enforcement partners arrested those who sought to make a profit at the expense of those in need and will continue to do so.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Millions of people in New York depend on Medicaid for vital services, and taxpayers across the country pay for that care. We will continue close cooperation with our State and Federal law enforcement partners to preserve this essential funding.”
NYS Medicaid Inspector General Dennis Rosen said: “Today’s arrests send an unmistakable message to those who seek personal gain by preying upon vulnerable New Yorkers and exploiting the Medicaid program. My office will continue to work closely with our federal partners to protect Medicaid recipients, save taxpayer dollars, and hold wrongdoers fully accountable.”
As alleged in the criminal Complaint unsealed today:
From in or about August 2017 to February 2020, KJ Transportation C Services Inc. (“KJ”) was paid more than $20 million for providing transportation services for Medicaid enrollees in the New York City area.
JORGELINA ABREU GIL, 32, of Yonkers, New York, is the owner of KJ. Her husband, JULIO ALVARADO, 59, of Yonkers, is a manager at the company. Beginning in August 2017, KJ began submitting claims to Medicaid for purported medical transportation services for eligible people in the New York area. From August 2017 to February 2020, KJ submitted more than 100,000 claims related to hundreds of thousands of trips. However, a large percentage of those claims were fraudulent. In some instances, the Medicaid recipient was deceased or out of the country when KJ claimed it was transporting that person to medical appointments. In other instances, the Medicaid recipient had never heard of KJ and had never taken any rides with the company. In yet other instances, the Medicaid recipient had received unlawful “kickbacks” from defendants in exchange for either giving KJ his/her Medicaid information, or for fraudulently scheduling trips he/she did not take.
In hundreds of instances, defendants called Medicaid’s transportation management company for the New York City area and scheduled trips on behalf of Medicaid enrollees. On these calls, the defendants tried to schedule reoccurring trips several times per week that would go on for months, allowing them to bill dozens of trips to Medicaid without having to schedule each trip individually. In other instances, defendants scheduled trips online. ABREU GIL attested to nearly all of the trips, fraudulently certifying that the trips actually took place when, in fact, most did not.
HECTOR SALAZAR HERRERA, 27, of the Bronx, New York, ZORAIDA GONZALEZ, 44, of Yonkers, New York, YESENIA RODRIGUEZ, 37, of Yonkers, JOSE RIVERA, 26, of the Bronx, FABIAN MORGAN, 39, of the Bronx, VICTORIA PALMA BREA, 32 of the Bronx, CRISTOPHER SANTOS FELIX, 28, of the Bronx, JOHN MANUEL MEJIA, 41, of the Bronx, JOSE JIMENZ HIDALGO, 42, of the Bronx, FRANCISCO SALAZAR, 68, of the Bronx, and NELSON DIAZ, a/k/a “Abdul Alamin,” 56, of the Bronx, acted as “drivers” or “recruiters” of Medicaid enrollees. As detailed in the Complaint, the defendants variously paid Medicaid enrollees to schedule fraudulent trips, paid unlawful kickbacks to Medicaid enrollees, and fraudulently scheduled trips that never took place. In exchange for their work, the “drivers” or “recruiters” were paid up to hundreds of thousands of dollars.
* * *
ABREU GIL, ALVARADO, GONZALEZ, RODRIGUEZ, RIVERA, MORGAN, PALMA BREA, MEJIA, JIMENEZ HIDALGO, SALAZAR, and DIAZ were arrested this morning and will be presented later today before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court. SANTOS FELIX was already in federal custody on unrelated charges and will be presented at a later date.
ABREU GIL, ALVARADO, SALAZAR HERRERA, GONZALEZ, RODRIGUEZ, RIVERA, MORGAN, PALMA BREA, SANTOS FELIX, MEJIA, JIMENZ HIDALGO, SALAZAR, and DIAZ are each charged with one count of submitting false claims, in violation of 18 U.S.C. § 287; one count of theft of government funds, in violation of 18 U.S.C. § 641; one count of aggravated identity theft, in violation 18 U.S.C. § 1028A; one count of wire fraud, in violation of 18 U.S.C. § 1343; one count of health care fraud, in violation of 18 U.S.C. § 1347; one count of conspiracy to commit wire fraud and health care fraud, in violation of 18 U.S.C. § 1349; and one count of violating the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. In addition, ABREU GIL and ALVARADO are each charged with one count of money laundering, in violation of 18 U.S.C. § 1957.
The crime of submitting false claims carries a maximum sentence of five years in prison. The crimes of theft of government funds, health care fraud, money laundering, and violating the Anti-Kickback Statute each carry a maximum sentence of 10 years in prison. The crime of wire fraud carries a maximum sentence of 20 years in prison. The crime of aggravated identity theft carries a mandatory two 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.
On February 14, 2020, law enforcement officers also executed seizure warrants in an effort to recover millions of dollars in fraud proceeds obtained by the defendants.
Mr. Berman praised the outstanding work of HSI, HHS-OIG, and OMIG. He also thanked the City of Yonkers Police Department, the New York City Police Department, the New York Attorney General’s Medicaid Fraud Control Unit, and United States Customs and Border Protection for their assistance in the case.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Kedar S. Bhatia is in charge of the prosecution.
As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein are only allegations, and every fact described should be treated as an allegation.
Two Members of Bronx Gang Charged with Racketeering, Firearms, and Narcotics OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging two members of the Woodycrime gang (“Woodycrime”) with various racketeering, firearms, and narcotics offenses, including assault with a deadly weapon and attempted murder in aid of racketeering for committing a June 7, 2018, shooting in Nelson Playground in the Bronx, during which two individuals, including a 13-year-old child, were struck by gunfire.
The defendants, MARVIN GAMONEDA, a/k/a “June,” and LUILLY FERNANDEZ, a/k/a “Luigi,” were taken into custody yesterday evening. They will be presented today before U.S. Magistrate Judge Robert W. Lehrburger. The case is assigned to U.S. District Judge John G. Koeltl.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the indictment, the defendants carried out a shooting in a playground that injured two individuals, including a child. Thanks to the extraordinary work of the FBI and the NYPD, the defendants now face federal charges for their crimes.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, these men fired off weapons at a playground, and a child was hit, all because they wanted to protect their turf. It’s not their turf, it’s not their land, they don’t own it, and everything they’re allegedly doing is illegal and potentially deadly. I want to commend the outstanding work of the New York FBI/NYPD Metro Safe Streets Task Force for the investigation that led to the arrest of these two men, and doing all they can to get alleged criminals who show no respect for anyone’s life out of the communities they’re terrorizing.”
NYPD Police Commissioner Dermot Shea said: “The NYPD, in close cooperation with our federal partners, is making New Yorkers safer by focusing significant resources on the relatively small percentage of criminals responsible for much of our city’s crime and disorder. I commend the NYPD officers, federal investigators, and prosecutors whose hard work resulted in these arrests and charges.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
Woodycrime was a criminal enterprise involved in committing numerous acts of violence, including attempted murders and assaults, as well as drug dealing in the Bronx. Members and associates of Woodycrime engaged in violence to retaliate against rival gangs, to preserve and expand the gang’s territory, and to protect the gang’s narcotics business. Members and associates of Woodycrime enriched themselves by selling drugs, such as crack cocaine, marijuana, oxycodone, and MDMA or “ecstasy.”
The Indictment charges GAMONEDA and FERNANDEZ in Count One with participating in a racketeering conspiracy. Counts Two through Four charge the defendants with conspiracy to commit murder, assault with a deadly weapon and attempted murder in aid of racketeering, and a related firearms offense in connection with the Nelson Playground shooting. Counts Five and Six charge the defendants with narcotics conspiracy and a related firearms offense. Count Seven charges GAMONEDA with being a felon in possession of ammunition.
* * *
Charts containing the names, ages, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD and the FBI.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Karin Portlock and Andrew Chan are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
MARVIN GAMONEDA (33)
LUILLY FERNANDEZ (26)
20 years in prison
2
Conspiracy to commit murder in aid of racketeering
18 U.S.C. § 1959
MARVIN GAMONEDA
LUILLY FERNANDEZ
10 years in prison
3
Assault with a deadly weapon and attempted murder in aid of racketeering
18 U.S.C. § 1959
MARVIN GAMONEDA
LUILLY FERNANDEZ
20 years in prison
4
Using and carrying firearms during and in relation to, and possessing firearms in furtherance of, a crime of violence, which firearms were discharged
18 U.S.C. § 924(c)
MARVIN GAMONEDA
LUILLY FERNANDEZ
Life in prison
Mandatory minimum of 10 years in prison
5
Narcotics trafficking conspiracy
21 U.S.C. § 846
MARVIN GAMONEDA
LUILLY FERNANDEZ
5 years in prison
6
Using and carrying firearms during and in relation to, and possessing firearms in furtherance of, a drug trafficking crime
18 U.S.C. § 924(c)
MARVIN GAMONEDA
LUILLY FERNANDEZ
Life in prison
Mandatory minimum of 5 years in prison
7
Possessing ammunition after being convicted of a felony
18 U.S.C. § 922(g)
MARVIN GAMONEDA
10 years in prison
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
Gang Leader Sentenced to 20 Years for Racketeering and Related Offenses, Including an Attempted Murder in A Subway StationRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL WHITE, a leader of a violent street gang known as the “Young Gunnaz,” was sentenced to 20 years in prison for his participation in the Young Gunnaz, including an attempted murder of three individuals at a subway station on October 28, 2012. WHITE was convicted of racketeering conspiracy, attempted murder in aid of racketeering, and a firearms offense following a two-week trial in October 2018 before U.S. District Judge Robert W. Sweet. U.S. District Judge Analisa Torres imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Michael White, a gang leader, was responsible for a shooting spree in and around NYCHA’s Mill Brook Houses. He shot rival gang members in front of a public school, in a community center, and in a subway station. Today’s sentence recognizes the serious impact of gun violence in our communities. We will continue to aggressively prosecute all who engage in these senseless acts of violence.”
According to the evidence presented in court during the trial:
From at least in or about 2010 through in or about October 2017, WHITE was a member of the Young Gunnaz set of the YGz based in the Mill Brook Houses. WHITE was also a member of MBG, also known as “Money Bitches Guns,” a local gang based in the Mill Brook Houses. As part of his membership in both gangs, WHITE shot seven people. Specifically, on January 25, 2010, WHITE shot and injured a 16-year-old rival on a street corner in the Mill Brook Houses. On January 31, 2010, WHITE shot and injured an 18-year-old rival at a baby shower. Later on January 31, 2010, WHITE shot a rival gang member near a building in the Mill Brook Houses, causing the individual to suffer life threatening injuries. On February 12, 2010, WHITE shot and injured an 18-year-old rival outside a public school. On October 28, 2012, WHITE shot and injured three individuals in the Cypress Avenue Subway Station.
* * *
Mr. Berman praised the outstanding investigative work of the New York City Police Department.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Alexandra Rothman, Jordan Estes, and Gina Castellano are in charge of the prosecution.
Bank Insider Pleads Guilty to BriberyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the guilty plea of VICTOR PHILLIPS for conspiracy to commit bank bribery. PHILLIPS pled guilty before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court.
U.S. Attorney Geoffrey S. Berman said: “As he admitted in court today, banker Victor Phillips conspired to facilitate the laundering of what he believed were the proceeds of criminal activity. Thanks to the FBI, Phillips now awaits sentencing for his crime.”
According to the allegations in the Indictment, court filings, and statements made during court proceedings:
Between at least June 2019 and September 2019, PHILLIPS, who was employed at an Atlanta-area branch of a national bank (“Bank-1”), opened bank accounts in the names of shell companies and fictitious persons in exchange for a percentage of fraud proceeds that others laundered through those accounts. PHILLIPS, in exchange for bribe payments, opened one of these laundering accounts at the behest of a codefendant, who plotted to move approximately $2 million in fraud proceeds through PHILLIPS’s corruptly established account. PHILLIPS, along with his co-conspirators, were ultimately identified and arrested in the course of a money laundering investigation overseen by the Federal Bureau of Investigation’s (“FBI”) New York Money Laundering Investigation Squad.
PHILLIPS, 39, pled guilty to one count of conspiracy against the United States, which carries a maximum punishment 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 a judge. Sentencing is scheduled for June 4, 2020, at 2:00 p.m., before U.S. District Judge William H. Pauley III, to whom the case is assigned.
Mr. Berman praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Kiersten A. Fletcher, Jonathan E. Rebold, and Andrew A. Rohrbach are in charge of the prosecution.
Two Defendants Sentenced in Manhattan Federal Court for International Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MARTINS APSKALNS and IGORS PIRINS were sentenced to 108 months and 66 months in prison, respectively, for their leadership roles in a broad scheme that defrauded victims of millions of dollars. APSKALNS and PIRINS previously pled guilty to conspiracy to commit bank and wire fraud before United States District Judge Jesse M. Furman, who imposed the sentences. APSKALNS was sentenced on January 31, 2020, and PIRINS was sentenced on February 10, 2020.
U.S. Attorney Geoffrey S. Berman said: “Martins Apskalns and Igors Pirins were ringleaders in an international conspiracy that victimized people who thought they were buying classic cars on legitimate internet auction and trading sites. They admitted to bilking millions of dollars from their victims, and now they are both headed to prison for their crimes.”
According to the allegations in the Indictments, other documents filed in federal court, and statements made in public court proceedings:
From at least January 2016 through December 2018, the defendants participated in a fraudulent scheme that most commonly operated as follows: First, co-conspirators impersonated automotive dealers and collectors and claimed to be selling classic cars on various well-known internet auction and trading websites. Victims responding to the ads were in fact corresponding with a fraud scheme participant. After the victims and co-conspirators came to terms on a sale price, including down payment and shipping costs, victims were next directed to purported automotive transportation companies and were told that these companies would accept payment and transport the cars. These companies were in fact shell corporations established by the conspiracy to help perpetrate the fraud, whose corporate bank accounts were established and controlled by the defendants and co-conspirators, awaiting wired funds from the fraud’s victims. After victims had wired payment, the defendants and co-conspirators went to the banks to drain the victim’s funds, often starting the same day payment had been transmitted, withdrawing from different bank branches in numerous withdrawals on the same day, and withdrawing in denominations that were varied and often kept to an amount that they believed would prevent the financial institutions from recording and reporting the fraud. The defendants and other co-conspirators then sent the fraud proceeds outside the United States to Eastern European countries, from where the defendants and many of their co-conspirators originated. Some of the defendants maintained managerial roles, recruiting co-conspirators to participate and providing directions and victim information to scheme participants once the co-conspirators were inside the United States. Victims never received the goods they believed they had purchased, and many were unable to recover their money or were left paying loans for cars that were never truly for sale.
APSKALNS and PIRINS served as managers in this scheme, who, in addition to opening bank accounts of their own that received victim funds, directed and coordinated the activities of cells of co-conspirators in the United States. APSKALNS and PIRINS continued their criminal activity and management role when they left the United States and returned to Latvia.
APSKALNS and PIRINS were arrested in Latvia in November 2018. At the time of their arrest, evidence recovered from APSKALNS revealed that he was continuing to direct co-conspirators until the time of his arrest. This information led to the arrest of four co-conspirators in the United States as they attempted to flee the United States from John F. Kennedy airport. APSKALNS and PIRINS were extradited to the United States in December 2018.
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In addition to their prison terms, APSKALNS was also sentenced to three years of supervised release, ordered to pay $4,952,172.37 in restitution, and ordered to forfeit $164,900.04. PIRINS was also sentenced to three years of supervised release, ordered to pay $3,095,000.94 in restitution, and ordered to forfeit $166,251.94.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation, Customs and Border Protection, and the New York City Police Department.
The investigation was conducted in close cooperation with the International Cooperation Department and the Criminal Investigation Department of the Central Criminal Police Department, State Police of Latvia; Prosecutor’s General Office of Latvia, International Cooperation Division; Police Department of Lithuania, Vilnius County Police Headquarters, Crimes Against Property Board; Lithuanian Criminal Police Bureau, International Liaison Board; Prosecutor General’s Office of the Republic of Lithuania; Vilnius Regional Prosecution Office; and the National Bureau of Investigation of Finland. The Department of Justice’s Criminal Division’s Office of International Affairs also provided significant assistance.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Matthew Hellman, Emily Johnson, and Daniel Nessim are in charge of the prosecution.
Tennessee Man Arrested for Engaging in Multi-Year Cyberstalking and Computer Hacking CampaignRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of TRISTAN ROWE, a/k/a “Angus,” for engaging in a years-long campaign of cyberstalking, harassment, and computer intrusions against multiple New York City residents and a high school. ROWE was arrested today in Tennessee and presented before a United States Magistrate Judge in U.S. District Court for the Western District of Tennessee.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Tristan Rowe terrorized a victim from hundreds of miles away by ‘swatting’ – having police respond to a purported emergency at the victim’s residence. Rowe also allegedly sent disturbing text messages to the victim, threatening to buy an assault rifle, to kill the victim, and to bomb the victim’s school. Thanks to the NYPD, Rowe is now in custody and facing serious criminal charges.”
NYPD Commissioner Dermot Shea said: “These allegations are a reminder of the threats posed by malicious cyber activity. I commend our NYPD investigators, and federal partners, for remaining vigilant in collaborating to thwart Internet-facilitated crime.”
According to the allegations in the Complaint[1] unsealed yesterday in Manhattan federal court:
From 2015 through 2019, ROWE engaged in a persistent online stalking and harassment campaign that targeted a particular victim (referred to as “Victim-2” in the Complaint), and involved illegally accessing online accounts belonging to Victim-2 and friends and family members of Victim-2, and obtaining unauthorized access to the computer systems of Victim-2’s former high school.
Among other things, ROWE sent threatening text messages to Victim-2, including a text message containing a photograph of a large kitchen knife and text messages that stated, in sum and substance, “You don’t deserve to live.” ROWE also sent Victim-2 a map with a detailed route mapped out from Tennessee to Victim-2’s home address in the Bronx, New York.
ROWE also subjected Victim-2 and friends and family members of Victim-2 to multiple “swatting” incidents at their homes. “Swatting” refers to a harassment tactic of deceiving an emergency service into sending a police or emergency service response team to another person’s address. As a result, on multiple occasions, armed police officers responded to false reports of emergency situations at Victim-2’s home. ROWE sent text messages to Victim-2 referencing this harassment, including messages reading, in sum and substance, “u wanna get swatted,” “even better I’ll swat the nypd,” and recognized the safety risks posed by swatting, warning Victim-2 that “your choice u can wind up dead cause the armoured cops will come raid u.”
As part of this harassment campaign, ROWE also compromised the grading system and online educational platform used by Victim-2’s high school. A search of ROWE’s computer, conducted pursuant to a judicially authorized search warrant, revealed that ROWE possessed student grading information taken from Victim-2’s high school, as well as hundreds of usernames and passwords associated with the high school.
In addition, ROWE conducted a number of computer intrusions of government and private sector websites. Evidence obtained from ROWE’s computer indicated that he had launched, or was planning to launch, unauthorized intrusions of various websites, including an inmate tracking website used by federal and local law enforcement, a website for a state Department of Motor Vehicles, a police department website, and the website for a hospital in the Bronx, New York.
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ROWE is charged with one count of cyberstalking, which carries a maximum sentence of five years in prison, and one count of unauthorized access to a computer, which carries a maximum sentence of five years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD in this case.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Dina McLeod 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 phase 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.
Seven Defendants Plead Guilty to Defrauding Federal Program That Provided Technology Funding for Rockland County SchoolsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the guilty pleas of all seven defendants previously charged with defrauding the federal “E-Rate” program, designed to provide information technology to underprivileged schools, in connection with private religious schools in Rockland County, New York. PERETZ KLEIN, SUSAN KLEIN, SIMON GOLDBRENER, MOSHE SCHWARTZ, BEN KLEIN, SHOLEM STEINBERG, and ARON MELBER, each pled guilty in White Plains federal court to one count of conspiring against the United States.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Each of these defendants has now admitted his or her role in a massive scheme that stole millions of dollars from the E-Rate program. That money should have been spent to help educate underprivileged children. Instead, it went to line the defendants’ pockets. Now they will answer for their crimes.”
According to the allegations made in the Indictment and the Informations to which the defendants pled guilty, as well as the defendants’ admissions in court:
The E-Rate program distributes funds to schools and libraries mostly serving economically disadvantaged children, so that those institutions can afford needed telecommunication services, internet access, and related equipment. Over 30,000 applications from schools and libraries seeking funds to serve economically disadvantaged children were received each year during the relevant time period; every year, requests for E-Rate funds have exceeded funds available. In order to obtain those funds, educational institutions certify that they are purchasing equipment and services from a private vendor; if approved, the program defrays the cost by up to 90%. The educational institution is supposed to enter into an open bidding process in order to select a vendor, and the educational institution and vendor submit a series of certifications that they comply with a number of requirements of the E-Rate program. A school applying for E-Rate funds may employ a consultant, but that consultant must be independent of the vendors competing to sell E-Rate funded equipment and services.
The schools at issue in this case never received millions of dollars’ worth of these items and services for which the defendants billed the E-Rate program. In other cases, the schools and the defendants requested hundreds of thousands of dollars of sophisticated technology that served no real purpose for the student population. For example, from 2009 through 2015, one day care center that served toddlers from the ages of 2 through 4 requested over $700,000 – nearly $500,000 of which was ultimately funded – for equipment and services – including video conferencing and distance learning, a “media master system,” sophisticated telecommunications systems supporting at least 23 lines, and high-speed internet – from companies controlled by certain defendants. In still other instances, the schools received equipment and services that fulfilled the functions for which the schools had requested E-Rate funds (such as providing the school with internet access), but the schools and the defendants materially overbilled the E-Rate program for the items provided, in order to enrich themselves at the expense of the underprivileged children the program was designed to serve.
The defendants also perverted the fair and open bidding process required by the E‑Rate program. Defendants who held themselves out as independent consultants working for the schools in truth worked for and were paid by other defendants who controlled vendor companies. These defendants presented the schools with forms to sign or certify, awarding E-Rate funded contracts to companies owned by several defendants. As a result of false and misleading filings, the defendants received millions of dollars in E-Rate funds for equipment and services that they did not in fact provide and which the schools did not use, and the defendants purporting to act as consultants accepted payments totaling hundreds of thousands of dollars from the vendors, despite falsely presenting themselves as independent of the vendors.
In return for their participation in the scheme to defraud the E‑Rate program, certain schools and school officials received a variety of improper benefits from certain defendants , including: a percentage of the funds fraudulently obtained from E-Rate for equipment and services that were not in fact provided to the schools; free items paid for with E-Rate funds but not authorized by the program, such as cellphones for school employees’ personal use and alarm systems and security equipment (which the E-Rate program does not authorize) installed at the schools; and free services for which the E-Rate program authorizes partial reimbursement (such as internet access) but for which the Schools did not – contrary to their statements in filings – make any payment at all.
PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, and SHOLEM STEINBERG held themselves out as vendors to schools participating in the E‑Rate program. Corporations controlled by these defendants requested over $35 million in E‑Rate funds, and received over $14 million in E‑Rate funds, from in or about 2010 to in or about 2016. Each of these defendants has now admitted that the companies they controlled did not in fact provide much of the equipment for which they billed the federal government.
SIMON GOLDBRENER and MOSHE SCHWARTZ held themselves out as consultants who worked for educational institutions, supposedly helping schools to participate in the E-Rate program by, among other things, holding a fair and open bidding process to select cost-effective vendors. GOLDBRENER and SCHWARTZ have now admitted that they were in fact paid hundreds of thousands of dollars by the vendors to complete and file false E-Rate documents that circumvented the bidding process and resulted in the payment of millions of dollars to the vendors.
ARON MELBER was an official at a private religious school in Rockland County, New York, that participated in the E-Rate program with some of the defendants. MELBER has now admitted that he filed false certifications with the E-Rate program, falsely claiming to have obtained authorized E‑Rate funded equipment and services from vendors selected through a fair and open bidding process.
Each defendant pled guilty to one count of a conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 371, which carries a maximum sentence of five years in prison and a $250,000 fine. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentence for each defendant will be determined by United States District Judge Kenneth M. Karas, to whom the case is assigned.
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PERETZ KLEIN, 66, of Spring Valley, New York, pled guilty today before United States Magistrate Judge Judith McCarthy. As part of his plea agreement, PERETZ KLEIN also agreed to forfeit $1,144,288.37, and to pay restitution of the same amount. PERETZ KLEIN is scheduled to be sentenced by Judge Karas on June 17, 2020.
SUSAN KLEIN, 59, of Spring Valley, New York, also pled guilty today before Judge McCarthy. As part of her plea agreement, SUSAN KLEIN also agreed to forfeit $1,144,288.37, and to pay restitution of the same amount. SUSAN KLEIN is scheduled to be sentenced by Judge Karas on June 17, 2020.
SIMON GOLDBRENER, 57, of Monsey, New York, pled guilty on February 3, 2020, before United States Magistrate Judge Paul E. Davison. As part of his plea agreement, GOLDBRENER also agreed to forfeit $479,357.18, and to pay restitution of the same amount. GOLDBRENER is scheduled to be sentenced by Judge Karas on June 8, 2020.
MOSHE SCHWARTZ, 46, of Monsey, New York, pled guilty on February 6, 2020, before Judge Davison. As part of his plea agreement, SCHWARTZ also agreed to forfeit $275,160.00, and to pay restitution of the same amount. SCHWARTZ is scheduled to be sentenced by Judge Karas on June 8, 2020.
BEN KLEIN, 41, of Monsey, New York, pled guilty on January 24, 2020, before United States Magistrate Judge Lisa Margaret Smith. As part of his plea agreement, BEN KLEIN also agreed to forfeit $412,586.37, and to pay restitution of the same amount. BEN KLEIN is scheduled to be sentenced by Judge Karas on May 22, 2020.
SHOLEM STEINBERG, 41, of Monsey, New York, pled guilty on January 30, 2020, before Judge McCarthy. As part of his plea agreement, STEINBERG also agreed to forfeit $191,423.50, and to pay restitution of the same amount. STEINBERG is scheduled to be sentenced by Judge Karas on May 12, 2020.
ARON MELBER, 44, of Monsey, New York, pled guilty on January 30, 2020, before Judge McCarthy. As part of his plea agreement, STEINBERG also agreed to forfeit $127,654.55, and to pay restitution of the same amount. STEINBERG is scheduled to be sentenced by Judge Karas on May 8, 2020.
Mr. Berman thanked the Federal Bureau of Investigation, the Federal Communications Commission - Office of the Inspector General, and the Rockland County District Attorney’s Office for their outstanding work on the investigation. This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael D. Maimin, Hagan Scotten, and Vladislav Vainberg are in charge of the prosecution.
Jermaine Myrie, a/k/a “Rapp,” Sentenced to over 11 Years in Federal Prison for Sex Trafficking of A MinorRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JERMAINE MYRIE was sentenced today to 135 months in prison for sex trafficking of a minor female. MYRIE was sentenced by U.S. District Judge Kimba M. Wood, before whom he previously pled guilty to one count of conspiracy to engage in sex trafficking of a minor. As part of his plea, MYRIE acknowledged that he trafficked a minor female.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Jermaine Myrie previously admitted to unconscionable conduct involving the exploitation of a minor girl who had resided in New York State’s social services system. Today’s lengthy prison term exemplifies the seriousness of Myrie’s crimes against his vulnerable minor victim. We will continue to advocate for the victims of these crimes and urge anyone who might have information that may be relevant to this investigation to contact the FBI at 1-212-384-1000 or https://tips.fbi.gov.”
According to the allegations contained in the Indictment and other court documents filed in Manhattan federal court:
From at least in or about January 2016 to in or about April 2016, JERMAINE MYRIE, a/k/a “Rapp,” the defendant, participated in a conspiracy to engage in sex trafficking and sexual exploitation of one minor victim (“Minor Victim-1”). The defendant recruited, enticed, harbored, transported, provided, obtained, and maintained Minor Victim-1 for the purpose of commercial sex. Prior to being trafficked by MYRIE, Minor Victim-1 previously resided at a residential treatment facility located in Westchester County, which provided housing for at-risk troubled children and adolescents on behalf of department of social services for certain counties in New York State.
The defendant recruited Minor Victim-1 to engage in commercial sex by conveying that he was romantically interested in her. Subsequently, the defendant used the website Backpage.com, an online classifieds website, to post advertisements of Minor Victim-1 for commercial sex. MYRIE directed Minor Victim-1 to engage in commercial sex in particular locations in the Bronx, New York. The defendant used physical violence with Minor Victim-1, including to discourage Minor Victim-1 from working directly for any other pimps.
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In addition to his prison sentence, MYRIE, 35, was sentenced to five years of supervised release.
MYRIE is the second defendant to be sentenced in this case by Judge Wood for his participation in the sex trafficking of minors.
- Reuben Sands, who pled guilty to conspiracy to violate the Travel Act, was sentenced on December 18, 2019, to a term of 60 months in prison.
This case is part of an ongoing prosecution of 19 defendants, set forth in eight indictments, for the sex trafficking of at least 20 minor girls and young adults in New York State’s social services system. All 19 of the defendants have been convicted, either via guilty plea or following trial. In addition to MYRIE and Sands, three other defendants have also been recently sentenced:
- Christopher Bullock, who pled guilty to conspiracy to violate the Travel Act, was sentenced by U.S. District Judge Jesse M. Furman on December 6, 2019, to 54 months in prison.
- Cimmie Wright, who pled guilty to conspiracy to violate the Travel Act, was sentenced by U.S. District Judge John F. Keenan on January 15, 2020, to 51 months in prison.
- Dariel Braham, who pled guilty to conspiracy to violate the Travel Act, was sentenced by Judge Furman on January 29, 2020, to 48 months in prison.
Any individuals who believe that they have information that may be relevant to this investigation should contact the FBI at 1-212-384-1000 or https://tips.fbi.gov.
Mr. Berman thanked the FBI and the NYPD for their outstanding work in this matter and, in particular, the New York Child Exploitation and Human Trafficking Task Force.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Mollie Bracewell, Elinor Tarlow, Jacob Gutwillig, and Peter Davis are in charge of the prosecution.
Former President of Labor Union Sentenced to 2 Years in Prison for Demanding and Accepting BribesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that GLENN BLICHT, the former president of a labor union (the “Union”), was sentenced to 24 months in prison for violating the Taft-Hartley Act by demanding and accepting approximately $150,000 in bribe payments from an employer (the “Employer”). In exchange for these bribes, BLICHT did not represent Union members’ interests. BLICHT previously pled guilty before United States District Judge Analisa Torres, who also imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As the president of a labor union, Glenn Blicht’s duty was to fight for his union members. Instead, he repeatedly sold them out in exchange for cash bribes, which he spent on luxury items. For this betrayal, he has been sentenced to federal prison.”
According to the allegations in the Indictment to which BLICHT pled guilty, public court filings, and statements made in court:
From 2009 through 2019, BLICHT served as an officer of the Union, including as its president for many years. In that role, BLICHT had a duty to act in the best interests of the Union and its members, including by avoiding personal financial conflicts of interest with the Union. Nevertheless, BLICHT demanded and received cash payments from the Employer, which employed a number of members of the Union. For instance, on July 26, 2019, BLICHT received a $10,000 cash bribe from an official of the Employer at a restaurant in New York, New York; BLICHT was arrested outside this restaurant, in possession of the $10,000 bribe.
In exchange for these bribes, BLICHT repeatedly declined to represent Union members’ interests, such as declining to pursue arbitration claims on their behalf. In total, BLICHT received approximately $150,000 in bribes from the Employer over about 10 years.
BLICHT used the monies he received to purchase luxury items, such as designer watches, custom clothing, tickets to sporting events, meals at expensive restaurants, and cigars.
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In addition to his prison term, BLICHT, 57, of Wilton, Connecticut, was ordered to serve two years of supervised release. BLICHT was also ordered to forfeit $150,000 in criminal proceeds. Under the terms of his plea agreement, BLICHT has also agreed to a 13-year ban, which generally prohibits him from, among other things, being employed by a labor union or employee benefit plan, pursuant to 29 U.S.C. §§ 504 and 1111.
Mr. Berman praised the Department of Labor’s Office of Inspector General and Employee Benefits Security Administration, the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation for their outstanding work on the investigation. Mr. Berman also thanked the Department of Justice’s Labor-Management Racketeering Unit of the Organized Crime and Gang Section for its assistance in this case.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.
Former Chief Operating Officer Pleads Guilty to Defrauding Asset Management Company and Its ClientsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RICHARD DIVER pled guilty earlier today to fraud charges in connection with his embezzlement from the asset management company where he served as chief operating officer. Specifically, DIVER pled guilty to investment adviser fraud in connection with his fraudulently overbilling the company’s clients by hundreds of thousands of dollars and rerouting those funds into his personal account, and wire fraud for diverting millions of dollars in the company’s payroll to which he was not entitled to his personal account over a period of several years. DIVER pled before Judge Loretta A. Preska in Manhattan federal court.
Manhattan U.S. Geoffrey S. Berman said: “As he admitted today, Richard Diver betrayed his employer and his company’s clients, all to enrich himself to the tune of millions of dollars. This kind of fraud will not be tolerated.”
According to statements in the Indictment and Complaint in this case, and statements made in public court proceedings:
DIVER was the chief operating officer (“COO”) of a Manhattan-based asset management company (“Company-1”) that offers its customers investment planning and wealth management services. As COO, DIVER’s responsibilities included overseeing the company’s payroll and billing functions.
Beginning in 2011 and continuing into December 2018, DIVER fraudulently caused Company-1’s third-party payroll vendor to pay him salary significantly beyond his authorized salary and bonus. Over that period, DIVER caused over $4.5 million to be routed to his personal checking account above and beyond his approved compensation.
In 2017, DIVER began to also defraud Company-1’s clients. Typically, Company-1 billed its clients quarterly, in most cases having been authorized by the clients to deduct its investment advisory fees directly from their custodial accounts. DIVER began to cause an employee to run the billing process, which was based on a fixed percentage of the assets the clients had under the company’s management, at off-cycle intervals as to certain clients in addition to the regular quarterly intervals at which it billed legitimately. These billings were not accompanied by any notice. The clients affected by this practice therefore had their accounts debited twice, but were only notified of the single legitimate billing in periodic reports and correspondence from the company. DIVER routed the excess funds to his own personal bank accounts through the company’s payroll system. Through this mechanism, DIVER defrauded the clients of over $700,000.
In December 2018, certain clients noticed the overbilling and complained to Company-1’s president, who confronted DIVER. DIVER admitted to both fraudulent practices, stating that the funds he had stolen were consumed by his own “wild” spending. More recently, law enforcement agents recorded a conversation in which DIVER acknowledged having defrauded the company of $4.5 million through the payroll fraud and certain clients of over $700,000 through the billing fraud.
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DIVER, 63, of New York New York, pled guilty to one count of investment adviser fraud and one count of wire fraud. The wire fraud count carries a maximum potential sentence of 20 years in prison. The investment adviser fraud count carries a maximum sentence of five years in prison. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.
Mr. Berman praised the investigative work of the U.S. Postal Inspection Service and thanked the New York Regional Office of the U.S. Securities and Exchange Commission, which has filed civil charges against DIVER in a separate action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Martin S. Bell is in charge of the prosecution.
Former CEO Sentenced in Scheme to Defraud Elderly Victims in the Sale of Worthless StockRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that KEITH ORLEAN was sentenced today in Manhattan federal court to 32 months in prison for participating in a scheme to use false statements to promote and sell stock in his company. ORLEAN pled guilty on September 26, 2019, to one count of securities fraud and one count of securities fraud conspiracy before U.S. District Judge Vernon S. Broderick, who also imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Keith Orlean and his co-conspirators obtained more than $2 million by taking advantage of innocent investors – many of them elderly – through blatant lies. As this prosecution and today’s sentence reflect, this kind of predatory fraud will not be tolerated.”
According to the allegations contained in the Complaint, the Indictment, and statements made in related court filings and proceedings:
For several years, ORLEAN and his codefendants operated a fraudulent scheme in which a salesman named “Mike Palmer” would call elderly persons on the phone and offer them what he claimed was a time-sensitive opportunity to buy stock in certain companies. In fact, there was no “Mike Palmer,” and the salesman was actually Vladimir Ziskind or Kevin Weinzoff, co-conspirators of the defendant who were taking turns using the fake alias. The purported time-sensitive investment opportunity was also fabricated by the defendants, as the company in which they solicited investments were actually companies under their control. In one intercepted phone call conversation, Ziskind described to KEITH ORLEAN his strategy for a successful investor sales pitch as: “You ram it down their fucking throat.” In another intercepted call between Ziskind and ORLEAN, upon learning that a particular victim investor died, Ziskind remarked: “I knew I should have pulled the last $10,000 out of him.”
The most recent version of the defendants’ phony sales pitch included false representations about an impending initial public offering, or “IPO,” for their company, Digital Donations Technologies, Inc. For example, in April 2018, one of the defendants assured a victim investor that “our company is doing great,” that the company had an offer for an IPO valued at approximately $300 million, and that defendant KEITH ORLEAN was considering a private sale of the company for more than $1.5 billion. In truth, however, the defendants knew that the company had little or no actual commercial value and that no such IPO or sale was taking place.
The Federal Bureau of Investigation (“FBI”) estimates that since April 2014, the defendants have convinced more than approximately 57 persons, many of whom were elderly, to purchase stock in companies controlled by one or more of the defendants based on false representations. During the period of the conspiracy, the defendants successfully solicited more than $2 million in stock purchases from victims.
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In addition to a prison term, ORLEAN, 62, of Hauppauge, New York, was sentenced to three years of supervised release, ordered to pay restitution in the amount of $2,080,771, and ordered to pay a forfeiture money judgment in the amount of $883,700.
Vladimir Ziskind and Kevin Weinzoff, who each previously pled guilty to his participation in the scheme, await sentencing.
Mr. Berman praised the outstanding work of the FBI.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Robert Boone and Andrew Thomas are in charge of the case.
Dark Web Narcotics Trafficker Sentenced to 3½ Years in Prison in Connection with Laundering More Than $19 MillionRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that HUGH BRIAN HANEY was sentenced to 42 months in prison for money laundering charges, based on his attempt to launder the proceeds of a narcotics trafficking operation that HANEY ran on the Dark Web site known as “Silk Road.” HANEY previously pled guilty to the money laundering charges before United States District Judge Jed S. Rakoff, who also imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Hugh Haney used the Dark Web site Silk Road to sell drugs illegally and avoid detection. He then laundered more than $19 million in profits through cryptocurrency. Now Haney is headed to prison for his crimes.”
As alleged in the underlying Complaint, Indictment, and statements made in open court:
Silk Road was an online criminal marketplace designed to be outside the reach of law enforcement or governmental regulation. All transactions on Silk Road could be completed only through use of the cryptocurrency Bitcoin. During its two-and-a-half years in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars derived from these unlawful transactions. Law enforcement shut down Silk Road in or about October 2013.
One prominent narcotics vendor on Silk Road was called “Pharmville.” HANEY was one of the operators of Pharmville, which supplied a dedicated community of individuals who often traded illicit narcotics. HANEY had previously been convicted on federal charges for distributing narcotics via the Internet. In 2018, pursuant to a judicially authorized search of Haney’s house in Ohio, law enforcement agents found on a computer in Haney’s house a document entitled “HBH DAILY TO DO LIST,” which among other things referred to Silk Road, Pharmville, and large scale narcotics trafficking including of the deadly opioid fentanyl, as well as a ledger of customers whom HANEY had supplied with fentanyl and pharmaceutical drugs.
In 2017 and 2018, HANEY transferred Bitcoins representing narcotics proceeds he had earned through his control of Pharmville from Bitcoin addresses connected to Silk Road to an account HANEY controlled at a company involved in the exchange of Bitcoins and other digital currency (“Company-1”). In correspondence with Company-1, HANEY falsely claimed that he had legitimately earned these Bitcoins through cryptographically creating them and from fair transfers with others, while in reality the Bitcoin were derived from transfers from Silk Road. After HANEY transferred the Bitcoins to cash worth more than $19 million through Company-1, law enforcement seized the money pursuant to a judicially authorized seizure warrant from a custodial account at a bank (“Bank-1”).
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In addition to his prison term, HANEY, 61, of Westerville, Ohio, was sentenced to three years of supervised release, and ordered to forfeit approximately $19 million and pay a fine of $10,000.
Mr. Berman praised the outstanding investigative work of Homeland Security Investigations.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Tara M. La Morte and Samuel L. Raymond are in charge of the prosecution.
United States Attorney Announces Money Laundering Charges Against Operators of Multimillion-Dollar Nationwide High-End Prostitution EnterpriseRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent in Charge of the Department of Homeland Security’s (“DHS”) Homeland Security Investigations (“HSI”) in New York, and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of TRACY REYNOLDS, a/k/a “Sara,” and IZHAK COHEN, for money laundering and conspiracy to commit money laundering in connection with their ownership and operation of VIP Escorts, a nationwide multimillion-dollar business offering high end prostitution services, as well as the seizure of bank accounts and 391 websites related to the VIP Escorts business. REYNOLDS was arrested this morning at Tampa International Airport while boarding a flight to Mexico and was presented today in Tampa federal court. COHEN was arrested by Israeli authorities in Hadera, Israel. The United States Attorney’s Office will seek COHEN’s extradition to stand trial in the United States.
According to the allegations in the Complaint sworn out in Manhattan federal court:[1]
From at least 2012 to the present, REYNOLDS and COHEN have operated an online high-end prostitution business through their company and its affiliates known as “VIP Escorts.” VIP Escorts maintains a website, http://wvvw.vipescorts.com (the “VIP Escorts Website”), which it used to promote its prostitution services and was registered to COHEN. VIP Escorts also operates an array of affiliated escort websites, which also advertised its prostitution services, with names such as “Prestige Escorts,” “American Escorts,” “Russian Escorts,” and “Manhattan Exotics,” all of which are registered to COHEN.
As part of their prostitution business, REYNOLDS and COHEN arranged for escorts to meet clients in Manhattan and in numerous other locations for prostitution services, charging them thousands of dollars. REYNOLDS and COHEN required escorts to deposit the proceeds of their commercial sex acts into a large number of bank accounts that they controlled, many of them in the name of fake entities. REYNOLDS and COHEN then laundered the money through thousands of domestic and international financial transactions. In total, over $10 million passed through various personal and business accounts controlled by REYNOLDS during the course of this conspiracy, and over $1 million was sent from REYNOLDS in the United States to COHEN in Israel in thousands of small transactions designed to conceal the nature, location, source, ownership, and control of the proceeds.
REYNOLDS and COHEN then used the proceeds of the prostitution scheme for personal gain and to further their illegal prostitution business. They paid, for example, over $295,000 from bank accounts under their control to advertise the VIP Escorts business on a known advertising platform for the prostitution industry.
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REYNOLDS, 45, of Alamosa, Colorado, and Cohen, 53, of Hadera, Israel, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and two counts of money laundering, each of 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. Berman praised the outstanding investigative work of HSI, NYPD, and the El Dorado Task Force, and expressed his sincere gratitude to the Israel National Police and the Israel Ministry of Justice for their support and assistance with the investigation. He also thanked the Office of International Affairs of the U.S. Department of Justice for their assistance in the arrest of COHEN.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Michael R. Herman is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Men Charged with Bronx MurderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an indictment charging RALPH BERRY and FRANK LOPEZ with the murder of Caprice Jones in the vicinity of 751 East 161 Street, Bronx, New York. BERRY was arrested on Friday in Bethlehem, Pennsylvania, and was presented before U.S. Magistrate Judge Henry S. Perkin. LOPEZ was arrested on Friday in Plano, Texas, and was taken into federal custody on Monday. He will be presented tomorrow before U.S. Magistrate Judge Christine A. Nowak. The case is assigned to U.S. District Judge Alison J. Nathan.
U.S. Attorney Geoffrey S. Berman said: “Many years have passed since Caprice Jones was murdered, but the detectives of the NYPD continued investigating, working to see that justice would be done. Now, thanks to their extraordinary efforts, in partnership with the Special Agents of our Office, Ralph Berry and Frank Lopez face federal murder charges.”
As alleged in the Indictment[[1]] unsealed today in Manhattan federal court:
On June 21, 2000, BERRY handed LOPEZ a gun and LOPEZ fired shots in the vicinity of 751 East 161st Street in the Bronx, New York. The shooting was in furtherance of a conspiracy to distribute crack cocaine. Jones was hit during the shooting, and ultimately died from his wounds in 2010 at the age of 42.
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BERRY, 52, and LOPEZ, 43, are each charged with murder through use of a firearm, which carries a maximum penalty of death or life in prison and a mandatory minimum sentence of five years in prison, and murder in connection with a drug trafficking crime, which carries a maximum penalty of death or life in prison and a mandatory minimum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for information purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding work of the NYPD and the Special Agents of the United States Attorney’s Office for the Southern District of New York. He also thanked the United States Marshals Service and the Plano Police Department for their assistance with the arrests.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Dominic A. Gentile and Maurene Comey are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.
Mexican Drug Trafficker Charged with Drug Trafficking Crime Based on Seizure of over 500 Kilograms of MethamphetamineRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Raymond P. Donovan, Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), Peter C. Fitzhugh, Special Agent in Charge of the New York Office of Homeland Security Investigations (“HSI”), Keith M. Corlett, Superintendent of the New York State Police (“NYSP”), and Dermot Shea, Police Commissioner of the City of New York (“NYPD”), announced that ANGEL GUADALUPE RAMOS‑RAMIREZ was charged in a criminal complaint in Manhattan federal court with conspiring to import more than 500 kilograms of methamphetamine into the United States. The charge arises from a February 8, 2020, seizure by Mexico’s Secretaría de Marina (the “Mexican Navy”) of more than 500 kilograms of methamphetamine off the coast of San Felipe, Mexico.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Angel Guadalupe Ramos-Ramirez is charged with conspiring to import more than half a ton of methamphetamine into the U.S. Thanks to our partners in this case, those dangerous drugs have been seized before they got here, and Ramos-Ramirez is in custody.”
DEA Special Agent in Charge Raymond P. Donovan said: “Five hundred kilograms of crystal methamphetamine is a significant seizure that will save lives and take over $12 million of drug proceeds out of traffickers’ hands. Methamphetamine is a fierce animal on the loose throughout the nation and a major threat to public health, which is why DEA and our law enforcement partners will not relent pursing drug trafficking organizations until they are brought to justice.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “This case prevented large amounts of methamphetamine, a highly addictive and dangerous narcotic, from harming the public, regardless of where they happen to live. Investigations like these are a great example of what can be accomplished with incredible cooperation among multiple agencies, and HSI is committed to collaboration in order to keep these deadly drugs out of our communities.”
State Police Superintendent Keith M. Corlett said: “This investigation has prevented a large amount of dangerous drugs from reaching our shores, where they would have damaged lives and communities. Our strong law enforcement partnerships are responsible for the success of this case, and I commend all the members and agencies involved for their outstanding work.”
Police Commissioner Dermot Shea said: “This was a significant operation to interdict the kind of illegal drugs that cause so much harm on our streets. I want to thank our detectives and law enforcement partners, here and abroad, for working together against this common threat.”
As alleged in the Complaint unsealed in federal court[1]:
On or about February 7, 2020, the Mexican Navy began tracking a boat traveling northwest through the Gulf of California from Sinaloa, Mexico toward Baja California, Mexico. On February 8, 2020, the Mexican Navy interdicted the vessel off the coast of San Felipe, Mexico, in Baja California, and arrested RAMOS-RAMIREZ. Mexican Navy officers seized approximately 26 plastic packages, each of which contained approximately 20 kilograms of methamphetamine, from the water around the boat. In total, the Mexican Navy recovered more than 500 kilograms of methamphetamine from the water.
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RAMOS-RAMIREZ, 33, of Mexico, is charged with conspiring to import methamphetamine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
Mr. Berman praised the outstanding investigative work of the DEA.
The investigation was conducted by the New York Strike Force in partnership with the DEA Mazatlan Resident Office and law enforcement partners. The 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 based at 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 Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael K. Krouse, Stephanie Lake, Daniel G. Nessim, Benjamin Woodside Schrier, and Kyle A. Wirshba are in charge of the prosecution.
The charge contained in the Complaint is merely an allegation, 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 and statements and filings in court set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation as to the defendant charged in the Complaint.
Mario Estrada, Former Guatemalan Presidential Candidate, Sentenced to 15 Years in Prison in Connection with Scheme to Import Tons of Cocaine into the United StatesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MARIO AMILCAR ESTRADA ORELLANA (“ESTRADA”), was sentenced to 180 months in prison for participating in a conspiracy to import and distribute tons of cocaine to the United States. ESTRADA previously pled guilty to participating in a cocaine importation conspiracy before United States District Judge Jed S. Rakoff, who also imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Mario Estrada conspired to solicit Sinaloa Cartel money to finance a corrupt scheme to get him elected president of Guatemala. Estrada promised to assist the cartel to export tons of cocaine into the U.S., and he attempted to arrange the assassinations of political rivals. Thanks to the DEA, rather than a shot at the presidency in Guatemala, Estrada is headed to prison in the United States.”
According to the allegations in the Indictment to which ESTRADA pled guilty, public court filings, and statements made in court:
While he was running for president of Guatemala in 2018 and 2019, ESTRADA attempted to solicit funding from international drug cartels to support ESTRADA’s presidential campaign (the “Estrada Campaign”). During certain of these negotiations, members of the Estrada Conspiracy, including ESTRADA and his co-defendant, Juan Pablo Gonzalez Mayorga (“Gonzalez”), interacted with purported members and associates of the Sinaloa Cartel – a powerful international drug-trafficking organization based in Mexico – who were, in fact, confidential sources (the “CSes”) acting at the Drug Enforcement Administration’s (“DEA”) direction. At times during the course of his negotiations with the CSes, ESTRADA was polling in the top five of candidates for the Guatemalan presidency.
During the course of their meetings and other communications with the CSes, some of which were video and audio recorded, ESTRADA and Gonzalez requested millions of dollars in drug proceeds from the Sinaloa Cartel to support the Estrada Campaign. In exchange for financial support from the Sinaloa Cartel, ESTRADA and Gonzalez promised that if ESTRADA was elected president of Guatemala, ESTRADA would provide Guatemalan state-sponsored support to the Sinaloa Cartel’s drug-trafficking activities. Among other things, ESTRADA and Gonzalez agreed to provide the Sinaloa Cartel with unfettered access to Guatemalan airports and maritime shipping locations so that the cartel could transport ton quantities of cocaine through Guatemala and ultimately into the United States. ESTRADA also offered to appoint members of the Sinaloa Cartel to high-ranking government positions in Guatemala so that the CSes would be positioned to advance the Sinaloa Cartel’s drug-trafficking activities. ESTRADA also agreed that he would receive a portion of the profits made by the Sinaloa Cartel on the cocaine it transited through Guatemala under his protection. Throughout, ESTRADA believed he was negotiating with representatives from the leadership of the Sinaloa Cartel.
In addition, during the course of his meetings with the CSes, ESTRADA bragged of his other drug cartel connections. More specifically, ESTRADA stated that the Jalisco Nuevo Generación cartel in Jalisco, Mexico, had offered him financial support in connection with his campaign, and also boasted that he was working with a drug trafficker in Guatemala who was supporting his bid for president. Further, at various times during their negotiations with the CSes, ESTRADA and Gonzalez also directed the CSes to hire hitmen to assassinate political rivals and their associates to ensure that ESTRADA was elected president of Guatemala. In particular, ESTRADA and Gonzalez identified specific targets by name and agreed to provide the hitmen with firearms, including AK-47s, to carry out the murders.
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In addition to his prison term, ESTRADA, 59, of Guatemala City, Guatemala, was sentenced to four years of supervised release.
Mr. Berman praised the outstanding efforts of the DEA’s Miami Field Office and its Guatemala Country Office, as well as the U.S. Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Mathew Laroche and Jason A. Richman are in charge of the prosecution.
Leader of Fake Cryptocurrency Investment Scheme Charged with Fraud and Money LaunderingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Michael F. McPherson, Special Agent-in-Charge of the Tampa Division of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment charging MICHAEL ACKERMAN with wire fraud and money laundering. ACKERMAN allegedly defrauded over 100 individuals of more than $35 million through his fake cryptocurrency investment scheme. ACKERMAN will be presented Friday in federal court in the Northern District of Ohio.
U.S. Attorney Geoffrey S. Berman said: “Allegedly touting monthly returns of over 15%, Michael Ackerman was able to raise over $35 million in investments for his fake cryptocurrency scheme. He allegedly falsified documents representing to investors that his fund had a balance of over $315 million worth of cryptocurrencies, when in actuality, he had less than half a million dollars. Today’s arrest should remind would-be investors to take extreme caution and thoroughly vet investment opportunities, especially when promised abnormally high rates of return.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said: “Ackerman is alleged to have defrauded more than 100 investors through a cryptocurrency fraud scheme, doctoring data for appearances to make his investment fund look successful. As a result of this scheme, his victims are left feeling cheated after being swindled out of over $35M collectively. HSI will continue to investigate a plethora of financial fraud cases to ensure that individuals like Ackerman know they will face the consequences for any scheme that victimizes the innocent.”
FBI Special Agent-in-Charge Michael F. McPherson: “This was a classic fraud scheme with a digital twist, using cryptocurrency to take advantage of unsuspecting investors.
The FBI and its partners are committed to protecting investors from scams no matter how the fraudsters try and disguise the scheme.”
According to the allegations in the Complaint and Indictment, both unsealed today[1]:
In or about 2017, MICHAEL ACKERMAN and others started a purported cryptocurrency “investment” fund (the “Fund”) and recruited hundreds of individual investors into the Fund. Under the terms of the Fund, investors were told that they would receive 50% of their trading profits, and that the founders of the Fund, including ACKERMAN, would receive the other 50%. ACKERMAN falsely represented to potential investors that the fund had historical returns of approximately 15% each month. Moreover, during the period alleged in the Complaint and Indictment, ACKERMAN prepared materials falsely purporting to show that the Fund was returning approximately 15% each month, and shared that information with Fund investors. For example, in or about December 2019, ACKERMAN represented to investors and others that the Fund had a balance of over $315 million worth of cryptocurrencies available for trading in a Fund account. Those representations by ACKERMAN included screenshots of trading data doctored by ACKERMAN in order to make it appear that the Fund was operating at that successful level, when its actual trading balance was less than the equivalent of half a million dollars. ACKERMAN, moreover, regularly stole proceeds of this fraud from the Fund, and attempted to conceal those proceeds not only through his false representations to investors, but through the purchase of at least five pieces of real estate, all of which were titled to third parties.
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ACKERMAN, 50, of Sheffield Lake, Ohio, is charged with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force and the Federal Bureau of Investigation in Tampa, and thanked the attorneys and investigators at the Commodity Futures Trading Commission and the Securities and Exchange Commission, whose expertise and diligence were integral to the development of this investigation.
The prosecution of this case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Kiersten Fletcher, Jessica Greenwood, and Sheb Swett are in charge of the prosecution.
The charges contained in the Complaint and 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 Complaint and Indictment, and the description of the Complaint and Indictment set forth below, constitute only allegations, and every fact described should be treated as an allegation.
Lawrence Ray Charged with Multiple Offenses, Including Extortion, Sex Trafficking, Forced Labor, and Money LaunderingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Commissioner of the New York City Police Department (“NPYD”), announced today the unsealing of an indictment charging LAWRENCE RAY, a/k/a “Lawrence Grecco,” with multiple offenses, including extortion, sex trafficking, and forced labor. As alleged in the indictment, RAY used physical and psychological threats and coercion to indoctrinate and exploit a group of college students in Westchester County as well as other victims. RAY extorted approximately $1 million from at least five victims; forced certain victims to perform unpaid labor; and caused, through force, fraud, and coercion, at least one victim to engage in commercial sex acts. He laundered the proceeds of his crimes through an internet domain business. RAY committed these offenses in locations including Westchester County, New York, and New York, New York, as well as Pinehurst, North Carolina.
RAY was arrested this morning in Piscataway, New Jersey. He will be presented this afternoon before United States Magistrate Judge Robert W. Lehrburger. The case is assigned to United States District Judge Lewis J. Liman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, for nearly a decade, Lawrence Ray exploited and abused young women and men emotionally, physically, and sexually for his own financial gain. College is supposed to be a time of self-discovery and new-found independence. But as alleged, Lawrence Ray exploited that vulnerable time in his victims’ lives through a course of conduct that shocks the conscience. Through his manipulative interrogation sessions, Ray made his victims confess to alleged wrongdoing and then compelled them to repay Ray alleged damages owed to him, through payments of hundreds of thousands of dollars, or worse, forced labor and sex trafficking. We hope that today’s charges bring some measure of comfort to the victims and their families. We thank the FBI and the NYPD for their extraordinary work on this case.”
FBI Assistant Director William F. Sweeney Jr. said: “Mr. Ray allegedly used his proximity to his victims to lay the groundwork for psychological conditioning, eventually leading several young adults to become unwitting victims of sexual exploitation, verbal and physical abuse, extortion, forced labor, and an egregious case of prostitution. For the better part of the last decade, we allege there was no limit to the abuse Ray’s victims received, and there is no way of knowing the amount of damage he may have caused them in the years to come. If you or someone you know came into contact with Mr. Ray, we are asking you to get in touch with us at 1-800-CALL-FBI. We want victims to know in the eyes of the FBI, they come first.”
NYPD Commissioner Dermot Shea said: “The NYPD and all of our law enforcement partners share an unwavering commitment to protecting survivors of human trafficking. This crime is among the most heinous, and our job is to ensure that anyone who would seek to profit through the abuse and exploitation of another human is brought to justice.”
According to the allegations in the Indictment[[1]]:
From in or about 2010 through the present, LAWRENCE RAY, a/k/a “Lawrence Grecco,” the defendant, subjected a group of college students and other victims to sexual and psychological manipulation and physical abuse. RAY’s tactics included sleep deprivation, psychological and sexual humiliation, verbal abuse, threats of physical violence, physical violence, threats of criminal legal action, alienating the victims from their families, and exploiting the victims’ mental health vulnerabilities.
Through this manipulation and abuse, RAY extracted false confessions from the victims to causing purported damages to RAY and his family and associates, and then extorted payment for those purported damages through several means. The victims made payments to RAY by draining their parents’ savings, opening credit lines, soliciting contributions from acquaintances, selling real estate ownership, and at RAY’s direction, performing unpaid labor for RAY and earning money through prostitution.
As alleged, through fear, violence, and coercion, RAY forced one female victim to engage in commercial sex acts to pay damages to RAY that she did not actually owe. Beginning when she was just a college student, RAY sexually groomed this victim, and collected sexually explicit photographs and other personal information which he then used to coerce her into continued commercial sex acts. RAY also used physical violence. On one occasion, as alleged, RAY tied his victim to a chair, placed a plastic bag over her head, and nearly suffocated her. In total, RAY collected over $500,000 in forced prostitution proceeds from this victim.
In addition, as alleged, RAY forced three female victims to perform unpaid labor on a family member’s property in North Carolina. Through a course of psychological and physical abuse, RAY forced these three victims to do extensive physical labor, sometimes in the middle of the night, for no pay.
Associates of RAY helped RAY collect and transfer the criminal proceeds, which RAY shared with at least two associates. RAY then laundered his criminal proceeds through an internet domain business.
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RAY, 60, of Piscataway, New Jersey, is charged with the following offenses: conspiracy to commit extortion, which carries a maximum sentence of 20 years in prison; extortion, which carries a maximum sentence of 20 years in prison; sex trafficking, which carries a maximum sentence of life in prison, and a mandatory minimum sentence of 15 years in prison; obtaining forced labor, which carries a maximum sentence of 20 years in prison; forced labor trafficking, which carries a maximum sentence of 20 years in prison; conspiracy to obtain forced labor, which carries a maximum sentence of 20 years in prison; two counts of violating the Travel Act, each of which carries a maximum sentence of five years in prison; and money laundering, which carries a maximum sentence of 20 years in prison. The statutory maximum and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
If you believe you are a victim of Lawrence Ray, please contact the FBI at 1-800-CALL FBI, and reference this case.
Mr. Berman praised the outstanding investigative work of the FBI and the NYPD.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Danielle Sassoon, Mollie Bracewell, and Lindsey Keenan are in charge of the prosecution.
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 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.
Opportunity for Victim Input to Court in Pending Motion by Bernard L. Madoff for Sentence ReductionRead the Press Release
Audrey Strauss, Attorney for the United States acting under authority conferred by 28 U.S.C. § 515, announced today that, pursuant to an order issued by the Honorable Denny Chin, United States Circuit Court Judge, victims of Bernard L. Madoff have the opportunity to provide the Court with their views regarding Madoff’s pending motion for a sentence reduction. A copy of the notice to victims is attached (the “Notice”).
As set forth in the Notice, on June 29, 2009, defendant Bernard L. Madoff was sentenced to a term of imprisonment of 150 years. Madoff has served approximately 10 years of his sentence.
On February 5, 2020, Madoff filed a motion with the Court for a sentencing reduction pursuant to 18 U.S.C. § 3582 and the First Step Act. The motion, which seeks Madoff’s immediate release from prison, is based primarily on his various medical conditions. The Government will file a response to Madoff’s motion. The Court may also order a public hearing on the motion. A copy of the briefs relating to Madoff’s motion for a sentence reduction can be found at:
https://www.justice.gov/usao-sdny/madoff-sentence-reduction
If you are a victim of Madoff’s crimes and you wish to provide your views to Judge Chin with respect to Madoff’s motion for a sentence reduction, you may do so. Please address any such correspondence to the Court, but send the correspondence to the Victim/Witness coordinator for the U.S. Attorney’s Office for the Southern District of New York by email as follows:
Ms. Wendy Olsen-Clancy
Victim/Witness Coordinator
United States Attorney’s Office Southern District of New York
email: [email protected]
The U.S. Attorney’s Office will then provide a copy of any correspondence received to the Court and counsel for Madoff. The Court has set a deadline of February 28, 2020 for the U.S. Attorney’s Office to receive any correspondence from victims. The U.S. Attorney’s Office will also provide notice on the above-noted website of any public hearing date set by the Court.
Manager of Insurance Brokerage Sentenced to 33 Months in Prison for Defrauding More Than 1,100 CustomersRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that NANCY CREDIDIO, the former manager of a car insurance brokerage, was sentenced to 33 months in prison for defrauding more than 1,100 victim customers out of more than $415,000. CREDIDIO previously pled guilty to conspiracy to commit wire and mail fraud before United States District Judge Paul A. Engelmayer, who also imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman stated: “For many years, Nancy Credidio duped car insurance applicants and car insurance companies alike. She lied to them – defrauding insurance applicants out of hundreds of thousands of dollars – to benefit herself. Today’s sentence sends a clear message that those who commit such fraud will face serious consequences.”
According to the allegations in the Information to which CREDIDIO pled guilty, public court filings, and statements made in court:
In order to legally drive a car in New York State, the car must be covered by an insurance policy. From in or around 2010 through in or around 2017, CREDIDIO was a manager at a Queens, New York–based entity that sold such insurance policies. During that period, CREDIDIO participated in various fraudulent practices.
First, CREDIDIO made various misrepresentations that hurt more than 1,100 insurance applicants and deprived them of more than $415,000 in connection with a roadside assistance program (the “RAP”). Specifically, CREDIDIO duped applicants into buying the RAP, whereby applicants spent much more on the RAP than they could possibly have received in return. (Applicants often paid $465 for the RAP for one year, even though the most that they could have possibly received in return was $250.) In some instances, CREDIDIO simply enrolled applicants in the RAP by signing their signature without their consent. In other instances, CREDIDIO lied to applicants by falsely claiming that they were required to purchase the RAP in order to obtain car insurance. On average, each victim spent more than $300 on the RAP and received less than $3 in return. In order to maintain a steady flow of insurance applicants, CREDIDIO also used some of the RAP proceeds to pay cash kickbacks ($50 to $300 per customer) to the car dealerships who referred her business.
In addition, CREDIDIO made various misrepresentations that harmed insurance carriers. For example, on some insurance applications, she falsely claimed that an applicant qualified for certain discounts—such as for defensive driving courses—when the applicant did not in fact qualify for those discounts. On other applications, she misrepresented the identity of the person operating the car, in order to conceal the fact that the true driver had a problematic driving history that would have led the insurance carrier to decline the policy or to charge a higher premium. For instance, CREDIDIO used the name of a relative (of the actual applicant), or a customer with an existing insurance policy who had no connection whatsoever to the policy being purchased.
After her arrest in this case, CREDIDIO’s misconduct in the car insurance industry persisted. While released on bail, she committed more than 215 (additional) instances of fraud and/or theft, which harmed at least two employers and various insurance applicants.
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In addition to her prison term, CREDIDIO, of Flushing, New York, was ordered to serve three years of supervised release. CREDIDIO was also ordered to pay $417,395.70 in restitution and to forfeit $197,400.
Mr. Berman praised the outstanding investigative efforts of the Federal Bureau of Investigation and the New York Automobile Insurance Plan.
The matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.
Queens Man Pleads Guilty to Kidnapping That Resulted in the Murder of 24-Year-Old New Rochelle WomanRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JAVIER ENRIQUE DA SILVA ROJAS (the “defendant” or “DA SILVA”) pled guilty in White Plains federal court to kidnapping Valerie Reyes (the “Victim”) in New Rochelle, New York, and unlawfully transporting her to Connecticut, where her body was found approximately a week later. DA SILVA, who was arrested in Flushing, Queens, in February 2019, pled guilty today before U.S. District Judge Vincent L. Briccetti.
U.S. Attorney Geoffrey S. Berman said: “As he admitted today in court, Javier Da Silva committed a horrid kidnapping that resulted in the tragic death of Valerie Reyes, a young woman with her entire adult life ahead of her. Thanks to the excellent work of the FBI and our local law enforcement partners, Da Silva is now facing serious consequences.”
According to the criminal Information filed today, as well as other public documents, and statements made during today’s court proceeding:
DA SILVA and the Victim were previously in a romantic relationship, which ended in approximately April 2018. In the late evening of January 28, 2019, DA SILVA rented a car from a garage in Flushing, New York, and drove to the Victim’s residence in New Rochelle, New York, arriving in the early morning hours of January 29, 2019. Before he entered the Victim’s home, DA SILVA switched his phone to “airplane mode.” DA SILVA then kidnapped the Victim – covering her mouth with several layers of packing tape and binding her feet and hands with packing tape and twine and putting her in a suitcase – before disposing of her body in Connecticut. Over the ensuing days, DA SILVA used the Victim’s debit card on various occasions to withdraw approximately $5,350 in cash from her bank account. DA SILVA also sold an iPad belonging to the Victim in the days following her death.
On January 30, 2019, Valerie Reyes was reported missing to the New Rochelle Police Department. A few days later, on February 5, 2019, her body was recovered in a red suitcase alongside a public road in the Town of Greenwich, Connecticut. The Connecticut Medical Examiner’s Office later concluded that the Victim died of homicidal asphyxiation.
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DA SILVA, 25, pled guilty to one count of kidnapping. The charge carries a maximum term of life in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. DA SILVA is scheduled to be sentenced by Judge Briccetti on May 21, 2020, at 11:00 a.m.
Mr. Berman praised the outstanding work of the Federal Bureau of Investigation’s (“FBI”) Westchester County Safe Streets Task Force, the FBI New Haven Division, the New Rochelle Police Department, the Greenwich Police Department, the Westchester County District Attorney’s Office, the Westchester County Department of Public Safety, and the Westchester County Real Time Crime Center.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Sam Adelsberg, Mathew Andrews, and Andrew Dember are in charge of the prosecution.
Financial Adviser Sentenced to 30 Months in Prison for Defrauding Clients in Fake Investment SchemeRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced that ELIAS HERBERT HAFEN, a former financial adviser at two investment banks with offices in New York, New York, was sentenced yesterday to 30 months in prison for having defrauded his clients out of more than $1.6 million. HAFEN previously pled guilty to one count of investment adviser fraud before United States District Judge Alvin K. Hellerstein, who imposed yesterday’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Elias Hafen promised to invest his clients’ money in a high-yield fund with guaranteed returns, and propped up his fraud with fake account statements. He never invested his clients’ money, instead using it to line his pockets.”
According to allegations in the Information, other documents filed in federal court, and statements made in public court proceedings, including during HAFEN’s guilty plea:
From 2011 until 2018, HAFEN engaged in a scheme to defraud 11 of his financial advisory clients into believing that HAFEN had access to a high-yield investment fund with guaranteed returns, which was not affiliated with the investment bank at which HAFEN worked. On HAFEN’s advice, these clients transferred approximately $1.6 million directly to HAFEN’s personal bank account for investment in the purported investment fund over the years that HAFEN engaged in his fraudulent scheme. HAFEN also created fictitious “Investor’s Statements” bearing the name of a non-existent investment company purporting to detail the status of his victims’ investments. In reality, however, there was no investment fund at all; HAFEN was using the victims’ funds to pay for personal expenses.
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In addition to the prison term, HAFEN, 64, was also sentenced to three years of supervised release, ordered to pay $745,000 in restitution, and ordered to forfeit $806,750.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Jacob R. Fiddelman is in charge of the prosecution.
Pelham- And Bronx-Based Tax Preparer Pleads Guilty in White Plains Federal Court to Preparing and Filing False Income Tax ReturnsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that MICHAEL MAGNALDI, a former Pelham resident and an owner and operator of a Bronx-based tax preparation business, pled guilty to one count of aiding and assisting in the filing of false tax returns for tax years 2014 to 2017 and one count of subscribing to a false tax return for tax year 2016. MAGNALDI pled guilty before U.S. Magistrate Judge Paul E. Davison.
U.S. Attorney Geoffrey S. Berman said: “After serving in the New York City Department of Finance for 15 years, Michael Magnaldi betrayed the public’s trust by engaging in a years-long pattern of preparing false returns for clients and falsely understating his own income the same year he bought a $705,000 home in Pelham. Magnaldi’s fraudulent conduct undermined the government’s ability to fund its mandates and cost the government $476,184 in tax revenue. As we enter tax filing season, Magnaldi now stands convicted of two counts of criminal tax charges and awaits sentencing for his crimes.”
IRS-CI Special Agent-in-Charge Jonathan D. Larsen said: “As the tax season heats up, this is an important reminder to taxpayers to beware of unscrupulous tax return preparers. Fraudulent tax return preparers harm taxpayers, legitimate businesses, and the American public. IRS-CI is steadfast in its commitment to ending such tax fraud and today’s guilty plea shows the serious consequences for violating this nation’s tax laws.”
According to the allegations contained in the Information to which MAGNALDI pled guilty, MAGNALDI’s plea agreement, and statements made in court:
MAGNALDI has years of audit experience in the New York City Department of Finance. Since at least 2014, MAGNALDI owned and operated MGM Tax Solutions, a tax preparation business located in the Bronx, New York.
As charged in Count One of the Information, for the 2014 through 2017 tax years, MAGNALDI prepared for clients 37 false Forms 1040 containing, among other false information, false Schedule D capital losses, false Individual Retirement Account (“IRA”) contribution deductions, and false Education Tax credits. MAGNALDI unsuccessfully attempted to conceal his role in preparing these fraudulent tax returns by not listing his or any name as the return preparer, to make it seem as if the returns were self-prepared. In response to IRS correspondence audits, MAGNALDI caused additional false forms to be sent to the IRS, in an attempt to substantiate the false losses, deductions, and credits claimed on the tax returns. The total tax loss for the 37 false individual income tax returns of MAGNALDI’s clients is $232,767.
As charged in Count Two of the Information, in addition to the false filings prepared on behalf of his clients, MAGNALDI also falsely understated his own and his business’s income on their 2016 tax returns, the same year he bought a roughly $705,000 home in Pelham. Specifically, MAGNALDI falsely understated income on MGM Tax Solutions’ 2016 Form 1120S, which understated flow-through income on MAGNALDI’s 2016 Form 1040. The tax loss for MAGNALDI’s understatement of flow-through income is $243,417.
The total tax loss resulting from both schemes is $476,184.
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MAGNALDI, 54, formerly of Pelham, New York, and currently living in St. Augustine, Florida, pled guilty to one count of aiding and assisting in the filing of false tax returns for tax years 2014 to 2017 and one count of subscribing to a false tax return for tax year 2016, each of which carries a maximum sentence of three years in prison. As part of the plea agreement, MAGNALDI has agreed to pay restitution to the IRS in the amount of at least $476,184 plus interest and penalties. Sentencing is scheduled for May 8, 2020, at 10:00 a.m., before U.S. District Judge Vincent L. Briccetti.
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. Berman praised the outstanding work of IRS Criminal Investigation in this case.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney David R. Felton is in charge of the prosecution.
Man Extradited for 2006 Manhattan MurderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a superseding federal indictment charging EDWIN CORTORREAL, a/k/a “Crazy Ed,” with the October 27, 2006, murder of Kelly Diaz in the Washington Heights neighborhood of New York, and other crimes. CORTORREAL, 33, was extradited to the United States from the Dominican Republic to face the charges in the superseding indictment. CORTORREAL was presented and arraigned today before U.S. District Judge Valerie E. Caproni, to whom the case is assigned.
U.S. Attorney Geoffrey Berman said: “As alleged, the defendant shot and killed Kelly Diaz in his home. We thank the FBI and the NYPD for their outstanding work investigating this terrible murder. We will continue our efforts with our law enforcement partners to prosecute such senseless acts of violence.”
NYPD Commissioner Dermot Shea said: “Edwin Cortorreal was brought to justice as a result of unrelenting investigative work by NYPD officers and FBI agents in partnership with our law enforcement colleagues here and overseas and the outstanding team of prosecutors assembled by U.S. Attorney Berman. I applaud the efforts to bring justice in this case.”
According to the superseding indictment and statements made in related court filings and proceedings[1]:
The Hot Boys were a crew of professional home invaders active in Washington Heights and elsewhere from at least 2006 through 2017. On October 27, 2006, CORTORREAL and four others used a hydraulic pump to silently force open the door of Diaz’s apartment. CORTORREAL and two others then burst into Diaz’s home, subdued Diaz and his wife, and forced Diaz onto the ground. CORTORREAL, armed with a gun, stood over Diaz while the rest of the crew ransacked the apartment. As the crew began to leave, CORTORREAL shot and killed Diaz.
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CORTORREAL is charged with conspiring to commit racketeering through the commission of various criminal acts, including murder, in violation of Title 18, United States Code, Section 1962(d); murder in aid of racketeering, in violation of Title 18, United States Code, Section 1959(a)(1); conspiracy to distribute narcotics, in violation of Title 21, United States Code, Section 846; use of a firearm, resulting in death, during a drug-trafficking crime, in violation of Title 18, United States Code, Section 924(j); and other uses of firearms during a drug-trafficking crime, in violation of Title 18, United States Code, Section 924(c). Each of these crimes carries a maximum term of life in prison, and murder in aid of racketeering carries a mandatory minimum term of life in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI and the NYPD. Mr. Berman also thanked the Dominican authorities, the Office of International Affairs of the Justice Department’s Criminal Division, and the United States Marshals Service for their assistance in the extradition.
The prosecution of this case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Hagan Scotten and David W. Denton Jr. are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Jason Galanis Pleads Guilty in Manhattan Federal Court to Multiple Fraudulent SchemesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JASON GALANIS pled guilty today for his participation in multiple fraudulent schemes. In particular, GALANIS pled guilty for his role in a scheme to manipulate the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company (the “Gerova Scheme”), as well as to defraud the clients of an investment advisory firm. GALANIS also pled guilty today to defrauding a Native American tribal entity and the investing public of tens of millions of dollars in connection with the issuance of bonds by the tribal entity (the “Tribal Bond Scheme”). GALANIS pled guilty to three counts of conspiracy to commit securities fraud, two counts of securities fraud, one count of investment adviser fraud, and one count of conspiracy to commit investment adviser fraud before U.S. District Judge P. Kevin Castel. GALANIS had previously pled guilty, in July 2016, for his participation in the Gerova Scheme and, in January 2017, for his participation in the Tribal Bond Scheme, but those convictions were subsequently vacated.
U.S. Attorney Geoffrey S. Berman said: “As he admitted today, Jason Galanis orchestrated two multimillion-dollar fraud schemes, and put together a team of co-conspirators to carry them out. He and his codefendants engaged in market manipulation and the defrauding of shareholders, and they stole a large portion of the proceeds of tribal bonds that were intended to fund economic development projects. The overriding theme was victimizing others to enrich themselves. Now Jason Galanis awaits sentencing for his criminal greed.”
According to the allegations contained in the Information filed against GALANIS, charging documents filed against GALANIS’s co-conspirators, and statements made in related court filings and proceedings:
The Gerova Scheme
From 2009 to 2011, GALANIS, along with his co-conspirators John Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova and the investing public, by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration to GALANIS and his co-conspirators, without adequate disclosure of GALANIS’s role in directing the transactions or the benefits received by GALANIS and his co-conspirators.
As a part of the scheme to defraud, GALANIS obtained sufficient control over Gerova so as to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock. GALANIS obtained this control without causing himself to be identified as an officer or director of Gerova so as to purport to abide by an SEC-imposed bar that forbade him from holding such positions at publicly traded companies. Among other means and methods, GALANIS, with the assistance of Hirst, caused over 5,000,000 shares of Gerova stock, which represented nearly half the company’s public float and which were intended for GALANIS’s ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for GALANIS. GALANIS, John Galanis, Jared Galanis, Derek Galanis, Hirst, and Shahini understood that the purpose of the stock grant to Shahini was to disguise GALANIS’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.
At the same time, and as a further part of the scheme to defraud, GALANIS’s co-conspirators, with his knowledge and approval, opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public GALANIS’s ownership of and control over the Gerova stock.
GALANIS, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, GALANIS and others were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public. As a result, GALANIS and his co-conspirators reaped nearly $20 million in profits.
The Scheme to Defraud Clients of Investment Firm-1
From 2007 to 2010, GALANIS along with an investment adviser identified in the Information as “CC-2,” participated in a scheme to defraud the clients of CC-2’s investment advisory firm, identified in the Information as “Investment Firm-1.” Oftentimes in exchange for compensation from GALANIS, CC-2 caused Investment Firm-1 clients to invest in notes issued by entities associated with GALANIS.
When obligations owed by entities associated with GALANIS became due, CC-2 used client funds to purchase either notes issued by other entities associated with GALANIS or publicly traded shares held by such entities. The funds generated were then used to pay the original obligations owed to other Investment Firm-1 clients. Through these securities trades, funds in client accounts of one set of Investment Firm-1 investors were used to pay obligations owed to a different set of Investment Firm-1 investors by entities associated with GALANIS.
The Tribal Bond Scheme
From March 2014 through April 2016, GALANIS, along with his co-conspirators Gary Hirst, John Galanis, a/k/a “Yanni,” Hugh Dunkerley, Michelle Morton, Devon Archer, and Bevan Cooney, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by GALANIS and his codefendants to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.
Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, significant portions of the proceeds were misappropriated by GALANIS and his codefendants for their own personal use.
Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”), an entity controlled by Dunkerley and Hirst. Dunkerley transferred more than $38 million from the WAPCC account to an account controlled by GALANIS, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals.
There was no ready secondary market for the Tribal Bonds. Nonetheless, without prior notice to their clients, Morton and Hirst, acting at the direction of GALANIS, used funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”), and Atlantic Asset Management, LLC (“Atlantic”), to purchase the Tribal Bonds, even though GALANIS, Hirst, and Morton were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased. When Hughes and Atlantic clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts. In addition, GALANIS and his codefendants failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.
In addition, a portion of the misappropriated proceeds was recycled and provided by GALANIS to entities affiliated with Archer and Cooney in order to enable Archer and Cooney to purchase subsequent Tribal Bonds issued by the WLCC. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.
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GALANIS, 49, pled guilty to three counts of conspiracy to commit securities fraud, each carrying a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense; and one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense. GALANIS will be sentenced by Judge Castel on May 12, 2020.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Mr. Berman praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Rebecca Mermelstein, and Negar Tekeei are in charge of the prosecution.
U.S. Attorney Announces Tax Charges Against Poughkeepsie Business OwnerRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, Special Agent in Charge of the New York Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), announced federal tax charges against WILLIAM R. GROGG for knowingly and willfully failing to pay over payroll taxes for his company and for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws. GROGG was presented in White Plains federal court yesterday before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Geoffrey S. Berman said: “As alleged, William R. Grogg failed to pay over payroll taxes for his company for years, and then lied to the IRS about it. This cost the government hundreds of thousands of dollars in tax revenue. Grogg now faces 18 counts of criminal tax charges, and the possibility of time behind bars.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said: “As the indictment against Mr. Grogg demonstrates, using employment taxes for personal and business expenses is illegal, and therefore subject to criminal enforcement. Employment tax enforcement is among the IRS’s highest priorities and our Special Agents will continue to vigorously investigate these criminal allegations.”
According to the allegations in the Indictment[1]:
Since at least the late 1980s, GROGG has worked in the printing and publishing industry in and around Poughkeepsie, New York. Over his more than three decades in the industry, GROGG has owned, managed, and/or otherwise had significant control over the financial affairs of a number of printing and publishing companies, including: Hamilton Reproductions, Inc. (“Hamilton Reproductions”), Hamco, which was later called Netpub Corporation (together, “Hamco/Netpub”), Netpublications Inc. (“Netpublications”), and MCA-Netpub (“MCA”). In or around 1994, the IRS assessed a civil penalty of approximately $368,639.93 against GROGG, as a responsible person, for willfully failing to collect, account for, and pay over to the IRS payroll taxes owed by Hamilton Reproductions.
From at least the fourth quarter of 2013 through the fourth quarter of 2017, GROGG was the sole owner, president, and/or controlling officer of Netpublications and MCA, which, at any given time, had approximately 20 to 50 paid employees. As the owner and operator of Netpublications and MCA, GROGG was a responsible person under federal law for collecting, truthfully accounting for, and paying over payroll taxes to the IRS.
GROGG caused Netpublications and, later, MCA to employ a third-party payroll service (the “Payroll Service”), which, among other things, prepared Netpublications’ and MCA’s quarterly payroll tax returns. Those returns were provided to GROGG. Although Netpublications and MCA withheld payroll taxes from employees’ paychecks as directed by the Payroll Service, GROGG failed to pay over the withheld payroll taxes, as well as Netpublications’ and MCA’s matching Social Security and Medicare contributions, to the IRS. Instead, GROGG spent the withheld payroll taxes, which GROGG was required to hold in trust for the United States Government, on personal and business expenses.
In addition, when GROGG was contacted by the IRS in connection with his payroll tax compliance, he made a series of materially false statements to the IRS in writing and during interviews with IRS-CI. These statements included that Netpublications and MCA were originally owned by a deceased Canadian businessman, and that a deceased associate of the Canadian businessman kept certain of Netpublications’ records in a garage until they were destroyed in a flood. These and other false statements that GROGG made were intended to obstruct and impede the IRS.
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GROGG, 69, of Millbrook, New York, is charged with 17 counts of knowingly and willfully failing to pay over Netpublications’ and MCA’s payroll taxes, each of which carries a maximum sentence of five years in prison, and one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, which carries a maximum sentence of three years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Berman praised the outstanding investigative work of special agents from IRS-CI. The prosecution of this case is being handled by the Office’s White Plains Division. Assistant United States Attorney Benjamin A. Gianforti 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.
Senior Adviser to the Operator of the “Silk Road” Website Pleads Guilty in Manhattan Federal CourtRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ROGER THOMAS CLARK, a/k/a “Plural of Mongoose,” a/k/a “Variety Jones,” a/k/a “VJ,” a/k/a “cimon,” pled guilty today to conspiring to distribute massive quantities of narcotics, a charge arising out of his role as the senior adviser to the owner and operator of the “Silk Road” online illicit black market. During its operation from 2011 until 2013, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute illegal drugs and other illicit goods and services to more than 100,000 buyers, and to launder hundreds of millions of dollars derived from those unlawful transactions. CLARK pled guilty before United States District Judge William H. Pauley III.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Silk Road was a secret online marketplace for illegal drugs, hacking services, and a whole host of other criminal activity. As he admitted today, Roger Thomas Clark was a central figure in helping to lead Silk Road and in advocating violence to protect the site. Clark even went so far as to urge, and facilitate, the attempted killing of a co-conspirator suspected of stealing from Silk Road. Clark’s arrest, extradition from Thailand, and conviction should make it clear that the purported anonymity of the dark web is not a protective shield from prosecution.”
According to the allegations in the Superseding Indictment, court filings, statements made in court, and evidence presented during the 2015 trial of Ross Ulbricht, Silk Road’s founder:
Ulbricht created Silk Road in approximately January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet at the time, serving as a sprawling black market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
Silk Road enabled its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement. Silk Road was operated on what is known as “The Onion Router,” or “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the networks’ users. Silk Road also included a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.
CLARK – who went by the online nicknames “Variety Jones,” “VJ,” “Cimon,” “Plural of Mongoose,” and “CaptainSargeant” – was described by Ulbricht as a “real mentor” who advised Ulbricht about, among other things, security vulnerabilities in the Silk Road site, technical infrastructure, the rules that governed Silk Road users and vendors, and the promotion of sales on Silk Road, including the sales of narcotics. CLARK also provided advice to Ulbricht on developing a “cover story” to make it appear as though Ulbricht had sold Silk Road. CLARK also assisted with hiring programmers to help improve the infrastructure of, and maintain, Silk Road. CLARK also was responsible for gathering information on law enforcement’s efforts to investigate Silk Road. And CLARK advised Ulbricht on how to protect the Silk Road empire. For instance, when a Silk Road staff member was suspected of stealing $350,000 in Bitcoin from the site, CLARK suggested to Ulbricht that Ulbricht commission a murder-for-hire. Ulbricht took that suggestion. (Ultimately, unbeknownst to both men, the attempted murder-for-hire did not result in any harm to the target.)
CLARK was paid at least hundreds of thousands of dollars for his assistance in operating Silk Road.
CLARK, 56, a citizen of Canada, pled guilty to one count of conspiracy to distribute narcotics, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. CLARK is scheduled to be sentenced by Judge Pauley on May 29, 2020, at 11:00 a.m.
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Mr. Berman praised the outstanding joint efforts of the Federal Bureau of Investigation, Homeland Security Investigations (“HSI”) Chicago-O’Hare, the Drug Enforcement Administration’s New York Field Division, the Internal Revenue Service Criminal Investigation’s New York Field Office, and the New York City Police Department. Mr. Berman also thanked the HSI Attaché Bangkok, Thailand, for its assistance and support. Mr. Berman also thanked the Royal Thai Police and the U.S. Department of Justice’s Office of International Affairs for their support and assistance.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Michael D. Neff, Vladislav Vainberg, and Eun Young Choi are in charge of the prosecution.
Brooklyn Man Sentenced to More Than 9 Years in Prison for Multimillion-Dollar Identity Theft and Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JAMAL SIMON was sentenced today by United States District Judge Paul A. Crotty to 115 months in prison for his participation in an identity theft scheme. SIMON previously pled guilty before Judge Crotty to one count of conspiracy to commit wire fraud, one count of aggravated identity theft, and one count of wrongfully obtaining individually identifiable health information.
U.S. Attorney Geoffrey S. Berman said: “Jamal Simon and his co-conspirators developed a sophisticated scheme to steal from financial institutions and their customers. Through brazen identity theft and fraud, Simon stole millions of dollars from credit card companies and banks. Thanks to the skilled investigative work of the FBI, the defendants’ crime spree has been brought to a halt.”
According to the allegations in the Indictment, other documents filed in the case, and statements made in court, including during SIMON’s guilty plea:
From March 2017 through at least July 2017, SIMON and his co-conspirators carried out a wide-ranging fraud scheme that involved unlawfully obtaining individually identifiable information of other individuals (including names, addresses, phone numbers, email addresses, birthdates, bank account numbers, credit and debit card numbers, and cellphone service provider account numbers); impersonating those individuals in order to obtain unauthorized access to their bank accounts, credit and debit card accounts, and cellphone service provider accounts; and then using such access to, among other things, facilitate the fraudulent transfer of funds to bank accounts controlled by members of the conspiracy and the unauthorized purchasing of merchandise and gift cards at retail stores. In some cases, SIMON transferred victims’ telephone numbers to a cellphone controlled by SIMON so that he and his co-conspirators could circumvent credit card companies’ standard security measures that confirm suspicious transactions through text message or email to the consumer.
The scheme perpetrated by SIMON and his co-conspirators defrauded financial institutions and individual victims of more than $3.5 million.
* * *
In addition to the prison term, SIMON, 31, was also sentenced to three years of supervised release, ordered to pay $2,430,771.05 in restitution, and ordered to forfeit $500,000.
Mr. Berman praised the outstanding investigating work of the Federal Bureau of Investigation.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Nicholas W. Chiuchiolo and Robert B. Sobelman are in charge of the prosecution.
11 Bronx Gang Members Charged in Manhattan Federal Court with Racketeering, Firearms, and Narcotics OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Dermot F. Shea, Commissioner of the New York City Police Department (“NYPD”), Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Margaret Garnett, Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of an Indictment charging NYSHIEM SPENCER, a/k/a “Willy,” LAFONE ELEY, a/k/a “Fon Fon,” STEFVON ELEY, a/k/a “Balla,” SHALIK JENKINS, a/k/a “Sha Money,” a/k/a “Double O,” MALIK TUNSTALL, a/k/a “Leaky,” PRICE TUNSTALL, a/k/a “P-Black,” NASIR VINCENT, ALLAN GONZALEZ, a/k/a “Bobby,” JONELL DANFORTH, a/k/a “JD,” ELIJAH BURT, a/k/a “Dizzy,” and ASHANAE MCLAUGHLIN with participating in a racketeering conspiracy as members and associates of the Monroe Houses Crew, which operates principally in the James Monroe Houses in the Soundview neighborhood of the Bronx.
As part of the racketeering conspiracy, SPENCER is charged with the October 31, 2017, murder of Luis Vargas. LAFONE ELEY is charged with shooting at a rival gang member on June 25, 2017. STEFVON ELEY is charged with shooting a disfavored member of the Monroe Houses Crew on June 30, 2017, and with shooting at rival gang members on May 30, 2018. VINCENT, DANFORTH, and BURT are charged with slashing a rival gang member on September 14, 2019. SPENCER, JENKINS, MALIK TUNSTALL, PRICE TUNSTALL, VINCENT, GONZALEZ, and DANFORTH are charged with participating in a narcotics conspiracy. MCLAUGHLIN is charged with bank fraud conspiracy and aggravated identify theft. Seven defendants were arrested today and will be presented this afternoon before United States Magistrate Judge James L. Cott. Three defendants are in state custody on other charges and will be transferred to federal custody at a later date. The case has been assigned to United States District Judge Analisa Torres.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged in the indictment, the defendants in this case were members of a violent crew operating in the James Monroe Houses in the Bronx. The violence perpetrated by Monroe Houses Crew members is exemplified by the murder, slashing, and three shootings alleged in today’s indictment. Thanks to the efforts of our partners at the NYPD, HSI, and DOI, the defendants now face federal charges for their crimes.”
NYPD Commissioner Dermot F. Shea said: “Violence in the streets of New York City will not be tolerated. The stellar investigative efforts of our NYPD detectives, working together with our law enforcement partners and federal prosecutors, has shut down a violent crew to maintain safety for all.”
HSI Special Agent-in Charge Peter C. Fitzhugh said: “As alleged in the indictment, the Monroe Houses crew was responsible for multiple acts of violence and other forms of mayhem. The defendants are charged with participating in shootings, a slashing, narcotics distribution, and bank fraud. HSI is allied with our law enforcement partners to hold crew members accountable for the havoc they wreak on our communities, and together we will ensure there are consequences for their actions.”
DOI Commissioner Margaret Garnett said: “DOI is committed to ensuring that New York City public housing remains free from violent gang activity that invades our communities and erodes the safety of residents. We are proud to have partnered with the U.S. Attorney for the Southern District of New York, New York City Police Department, and the New York Field Office of Homeland Security Investigations to secure today’s indictment and protect the residents of the James Monroe Houses.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
NYSHIEM SPENCER, a/k/a “Willy,” LAFONE ELEY, a/k/a “Fon Fon,” STEFVON ELEY, a/k/a “Balla,” SHALIK JENKINS, a/k/a “Sha Money,” a/k/a “Double O,” MALIK TUNSTALL, a/k/a “Leaky,” PRICE TUNSTALL, a/k/a “P-Black,” NASIR VINCENT, ALLAN GONZALEZ, a/k/a “Bobby,” JONELL DANFORTH, a/k/a “JD,” ELIJAH BURT, a/k/a “Dizzy,” and ASHANAE MCLAUGHLIN,” are members and associates of the Monroe Houses Crew, a racketeering enterprise that operates principally in the James Monroe Houses. In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, Monroe Houses Crew members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder; distributed and possessed with intent to distribute narcotics; committed robberies; engaged in fraud; and obtained, possessed, and used firearms.
On or about October 31, 2017, SPENCER and others planned and helped carry out a shooting that resulted in the death of Luis Vargas in the vicinity of 1715 Randall Avenue in the Bronx, New York.
On or about June 25, 2017, LAFONE ELEY and others shot at a rival gang member in the vicinity of the James Monroe Houses in the Bronx, New York.
On or about June 30, 2017, STEFVON ELEY shot and injured a member of the Monroe Houses Crew who had fallen out of favor with other members of the Monroe Houses Crew, in the vicinity of the James Monroe Houses in the Bronx, New York.
On or about May 30, 2018, STEFVON ELEY shot at rival gang members in the vicinity of Rosedale Avenue and Randall Avenue in the Bronx, New York.
On or about September 14, 2019, VINCENT, DANFORTH, BURT, and others slashed a rival gang member in the vicinity of 670 Castle Hill Avenue in the Bronx, New York.
* * *
A chart containing the names, charges, and maximum and minimum penalties for the defendants is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD, HSI, and DOI.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Andrew K. Chan and Justin V. Rodriguez are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTY
Count One
Racketeering conspiracy
18 U.S.C. § 1962(d)
NYSHEIM SPENCER
Life imprisonment
LAFONE ELEY
STEFVON ELEY
SHALIK JENKINS
MALIK TUNSTALL
PRICE TUNSTALL
NASIR VINCENT
ALLAN GONZALEZ JONELL DANFORTH ELIJAH BURT
ASHANAE MCLAUGHLIN20 years’ imprisonment
Count Two
Violent crime in aid of racketeering
18 U.S.C. §§ 1959 and 2
LAFONE ELEY
20 years’ imprisonment
Count Three
Firearms offense
18 U.S.C. §§ 924(c) and 2
LAFONE ELEY
Life imprisonment
Mandatory minimum of ten years’ imprisonment
Court Four
Violent crime in aid of racketeering
18 U.S.C. §§ 1959 and 2
STEFVON ELEY
20 years’ imprisonment
Count Five
Firearms offense
18 U.S.C. §§ 924(c) and 2
STEFVON ELEY
Life imprisonment
Mandatory minimum of ten years’ imprisonment
Count Six
Violent crime in aid of racketeering
18 U.S.C. §§ 1959 and 2
STEFVON ELEY
20 years’ imprisonment
Count Seven
Firearms offense
18 U.S.C. §§ 924(c) and 2
STEFVON ELEY
Life imprisonment
Mandatory minimum of ten years’ imprisonment
Count Eight
Violent crime in aid of racketeering
18 U.S.C. §§ 1959 and 2
NASIR VINCENT
JONELL DANFORTH ELIJAH BURT20 years’ imprisonment
Count Nine
Narcotics conspiracy
21 U.S.C. § 846
NYSHEIM SPENCER
SHALIK JENKINS
MALIK TUNSTALL
PRICE TUNSTALL
NASIR VINCENT
ALLAN GONZALEZ JONELL DANFORTHLife imprisonment
Mandatory minimum of ten years’ imprisonment
Count Ten
Bank fraud conspiracy
18 U.S.C. § 1349
ASHANAE MCLAUGHLIN
30 years’ imprisonment
Count Eleven
Aggravated identity theft
18 U.S.C. § 1028A and 2
ASHANAE MCLAUGHLIN
Mandatory two years’ imprisonment
As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.
Two Mexican Drug Traffickers Charged with the Murder of A Mexican Soldier and Conspiring to Import Cocaine into the United StatesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Raymond P. Donovan, Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), announced that GERMAN GOMEZ-CASTRUITA and BENJAMIN CONTRERAS-RANGEL were charged in a criminal complaint in Manhattan federal court with conspiring to import cocaine into the United States, murdering a Mexican military officer in the course of the cocaine importation conspiracy, and related weapons offenses involving the use and possession of machineguns.
Manhattan U.S. Attorney Geoffrey S. Berman said: “German Gomez-Castruita and Benjamin Contreras-Rangel were allegedly part of a brazen attempt to land a plane full of cocaine on a remote highway in Mexico. When Mexican authorities interceded, the defendants allegedly opened fire with automatic weapons, murdering a member of the Mexican military in the process. We mourn the senseless loss of a military officer committed to justice; and I commend our law enforcement partners for their courageous efforts in bringing these two allegedly dangerous drug traffickers to face criminal charges in the U.S.”
DEA Special Agent in Charge Raymond P. Donovan said: “The murder of SEDENA Corporal Emiliano Medina-Ramirez is devastating to law enforcement worldwide and is symbolic of the risks law enforcement encounter in the line of duty. Violence follows drug trafficking to every country, city, and state. The defendants’ desperate attempts to shoot their way out of arrest failed and the fallout has led them to face the U.S. rule of law. I commend our law enforcement partners in Mexico on this significant seizure and their pursuit to dismantle drug trafficking organizations responsible for fueling countless overdose deaths. And, DEA sends our deepest condolences to Corporal Medina-Ramirez’ family and colleagues at SEDENA.”
As alleged in the Complaint unsealed in federal court[1]:
On or about January 27, 2020, DEA agents began tracking an aircraft traveling northbound from the Caribbean Coast of Venezuela. The aircraft landed on a remote highway in the Mexican State of Quintana Roo. Military Officers with Mexico’s Secretaría de la Defense Nacional (“SEDENA”) met the aircraft near its landing location. Once there, SEDENA personnel observed a large number of vehicles and individuals involved in unloading the aircraft’s cargo.
Several individuals, including GOMEZ-CASTRUITA and CONTRERAS-RANGEL, then engaged in a shootout with the SEDENA officers. In the course of the shooting, SEDENA Corporal Emiliano Medina-Ramirez was killed and three other SEDENA officers were injured. Following the shootout, GOMEZ-CASTRUITA and CONTRERAS-RANGEL and others fled into the nearby jungle. GOMEZ-CASTRUITA and CONTRERAS-RANGEL were subsequently apprehended. Law enforcement searched the vehicles near the aircraft and recovered, among other things, approximately 750 kilograms of cocaine, three assault rifles, and a large amount of ammunition.
* * *
GOMEZ-CASTRUITA, 37, of Mexico, CONTRERAS-RANGEL, 36, of Mexico, are charged with (1) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; (2) murder while engaged in a narcotics importation conspiracy, which carries a mandatory minimum sentence of 20 years and a maximum sentence of death; (3) using and carrying a firearm during and in relation to a drug trafficking crime resulting in death, which carries a maximum sentence of death; (4) using and carrying machineguns and destructive devices during, and possessing machineguns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a mandatory consecutive minimum sentence of 30 years and a maximum sentence of life in prison; and (5) conspiring to use and carry machineguns and destructive devices during, and to possess machineguns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a maximum sentence of life in prison.
Mr. Berman praised the outstanding investigative work of the DEA’s New York Field Division, DEA’s Merida Resident Office, DEA’s Bogota Country Office, and the investigative work and heroic actions of Mexico’s Secretaría de la Defense Nacional.
The case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael K. Krouse, Stephanie Lake, Daniel G. Nessim, Benjamin W. Schrier, and Kyle A. Wirshba are in charge of the prosecution.
The charges contained in the Complaint are merely allegations, 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 and statements and filings in court 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.
Former Partner of Manhattan Accounting Firm Sentenced for Two Fraud SchemesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that STEVEN L. HENNING, a certified public accountant (“CPA”) who was a partner at a Manhattan accounting firm, was sentenced today to 51 months in prison for participating in two wire fraud schemes. In the first, he falsely claimed to have entered into multimillion-dollar intellectual property deals and defrauded investors out of $2 million. In the second, he falsely claimed to have entered into client engagements and defrauded an employer out of over $240,000. HENNING was sentenced by United States District Judge Cathy Seibel.
U.S. Attorney Geoffrey S. Berman said: “Over several years, Steven Henning committed brazen frauds, exploiting his stature and career accomplishments to defraud people who trusted and relied on him. Today he has received a significant prison sentence for his crimes.”
At the sentencing hearing, Judge Seibel said that HENNING is a “thief,” he committed “blatant fraud,” and his conduct was “extremely serious.”
According to the allegations in the Information to which HENNING pled guilty, as well as other public information:
HENNING, a CPA at a Manhattan accounting firm, established his own firm called OpportunIP, which he allegedly told victims was a company specializing in assisting other entities in taking intellectual property to the market. HENNING induced victims to invest in OpportunIP by providing them with fraudulent documents showing OpportunIP’s involvement in multimillion-dollar transactions that would reap millions of dollars in future profits. Ultimately, the victims learned that the deals did not exist, the documents were false and forged, and they were victims of an alleged scheme to defraud them out of millions of dollars.
As further alleged in the information, after leaving the Manhattan accounting firm, HENNING sought employment with a firm in Chicago, Illinois (the “Chicago Firm”). He induced the Chicago Firm to hire him and provide him with $240,000 in draw payments based on false and fraudulent statements about business he would bring to the Chicago Firm, including by sending the Chicago Firm fraudulent contracts.
* * *
In addition to his prison term, HENNING was ordered to serve three years of supervised release, pay $938,246 in restitution and forfeit $938,246.
Mr. Berman praised the outstanding investigative work of the U. S. Postal Inspection Service and the SEC Office of Inspector General.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney Margery B. Feinzig is in charge of the prosecution.
Two Men Charged in Manhattan Federal Court with Bronx MurderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), and Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging DARON GOODMAN and JAMARR SIMMONS with the January 11, 2020, murder of Jason Parris, 36, in the vicinity of East 170th Street and Webster Avenue in the Bronx, New York. The case has been assigned to United States District Judge George B. Daniels. SIMMONS was arrested this morning. GOODMAN was in state custody and was transferred to federal custody. Both defendants were presented today before Judge Daniels and ordered detained.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the indictment, Daron Goodman and Jamar Simmons murdered Jason Parris earlier this month. Thanks to the outstanding efforts of the NYPD and HSI, Goodman and Simmons now face federal murder charges for this terrible crime. We continue our daily work with our law enforcement partners to keep the streets safe, and to vigorously investigate and prosecute those who allegedly engage in acts of violence in our community.”
NYPD Commissioner Dermot Shea said: “This indictment illustrates how committed we are to stopping those engaged in gun violence. The NYPD, together with federal agents and prosecutors, remain vigilant in our fight against violent crime as part of our joint effort to keep the city and its residents safe.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said: “In a most heinous act, both Goodman and Simmons are alleged to have murdered a man in cold blood. HSI will remain committed to work closely with our law enforcement partners on murder investigations in order to bring justice, and maybe some solace, for the victim’s family and loved ones.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
On January 11, 2020, DARON GOODMAN and JAMARR SIMMONS, shot and killed Jason Parris in the vicinity of 1441 Webster Avenue in the Bronx. GOODMAN and SIMMONS killed Parris in part to maintain and increase their position in a racketeering enterprise operating in the Southern District of New York.
* * *
GOODMAN, 22, and SIMMONS, 32, are each charged with using a firearm to commit murder in aid of racketeering, which carries a maximum sentence of death, or life in prison, and a mandatory minimum term 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 defendants would be determined by the judge.
Mr. Berman praised the outstanding investigative work of the NYPD and HSI. Mr. Berman also praised the New York City Department of Correction, Correction Intelligence Bureau, for its assistance in the investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Adam S. Hobson, Michael D. Longyear, and Jacob Warren are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manhattan Doctor Sentenced to Nearly Five Years in Prison for Accepting Bribes and Kickbacks in Exchange for Prescribing Fentanyl DrugRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ALEXANDRU BURDUCEA, a doctor who practiced in Manhattan, was sentenced today in Manhattan federal court to 57 months in prison for conspiring to violate the Anti-Kickback Statute, in connection with a scheme to prescribe Subsys, a potent fentanyl-based spray, in exchange for bribes and kickbacks from Subsys’s manufacturer, Insys Therapeutics. BURDUCEA pled guilty on February 14, 2019, and was sentenced by United States District Judge Kimba M. Wood.
U.S. Attorney Geoffrey S. Berman said: “Before September 2014, Alexandru Burducea, a doctor who practiced in Manhattan, had never prescribed Subsys, a potent fentanyl-based spray. By the second quarter of 2015, however – in exchange for bribes and kickbacks from Subsys’s manufacturer, Insys Therapeutics – Burducea became approximately the 14th-highest prescriber of Subsys in the country. Burducea sacrificed the safety of his patients to satisfy his own greed, and will now spend time in federal prison for his reckless prescribing of this highly addictive and deadly drug.”
According to the allegations contained in the Indictment against BURDUCEA and filings in related proceedings:
The Insys Speakers Bureau
Subsys, which is manufactured by Insys, is a powerful painkiller approximately 50 to 100 times more potent than morphine. The FDA approved Subsys only for the management of breakthrough pain in cancer patients. Prescriptions of Subsys typically cost thousands of dollars each month, and Medicare and Medicaid, as well as commercial insurers, reimbursed prescriptions written by BURDUCEA.
In or about August 2012, Insys launched a “Speakers Bureau,” a roster of doctors who would conduct programs (“Speaker Programs”) purportedly aimed at educating other practitioners about Subsys. In reality, Insys used its Speakers Bureau to induce the doctors who served as speakers to prescribe large volumes of Subsys by paying them Speaker Program fees. Speakers were supposed to conduct an educational slide presentation for other health care practitioners at each Speaker Program. In reality, many of the Speaker Programs were predominantly social affairs where no educational presentation about Subsys occurred. Attendance sign-in sheets for the Speaker Programs were frequently forged by adding the names and signatures of health care practitioners who had not actually been present.
BURDUCEA’s Participation in the Scheme
BURDUCEA, a doctor certified in pain management and anesthesiology, was an Assistant Professor of anesthesiology at a large Manhattan hospital. He also practiced at an anesthesiology and pain management office associated with the hospital. From in or about September 2014 until in or about June 2015, BURDUCEA received approximately $68,400 in Speaker Program fees from Insys in exchange for prescribing large volumes of Subsys. In addition, Insys hired BURDUCEA’s then-girlfriend, now wife, to work as BURDUCEA’s sales representative, and the company paid her large commissions based on the volume of Subsys prescribed by her assigned doctors, which included BURDUCEA.
BURDUCEA, who had never prescribed Subsys before in or about September 2014, became approximately the 14th-highest prescriber of Subsys nationally in the second quarter of 2015, accounting for total net sales of the drug of approximately $621,345 in that quarter.
* * *
In addition to the prison sentence, BURDUCEA, 43, of Little Neck, New York, was sentenced to three years of supervised release and ordered to forfeit $68,400. A restitution order will be entered within 90 days.
BURDUCEA was one of five Manhattan doctors convicted for participating in the Subsys bribery conspiracy. Todd Schlifstein was convicted upon a guilty plea and sentenced by Judge Wood on October 28, 2019, principally to a term of two years in prison. Dialecti Voudouris was convicted upon a guilty plea and is scheduled to be sentenced by Judge Wood on March 5, 2020. Jeffrey Goldstein was convicted upon a guilty plea and is scheduled to be sentenced by Judge Wood on March 12, 2020. Gordon Freedman was convicted following a jury trial and is scheduled to be sentenced before Judge Wood on March 19, 2020.
Mr. Berman praised the investigative work of the FBI, and thanked HHS OIG for its participation in the investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Noah Solowiejczyk and David Abramowicz are in charge of the prosecution.
California Woman Sentenced to 3½ Years in Prison for Operating Wholesaler of Synthetic CannabinoidsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JANELL THOMPSON, the former vice president, chief financial officer, and co-owner of a consumer products wholesaler based in California, was sentenced today by United States District Judge Naomi Reice Buchwald to 42 months in prison for using her business to distribute massive wholesale quantities of smokeable synthetic cannabinoids throughout the U.S. and to laundering the proceeds of that scheme. THOMPSON previously pled guilty before Judge Buchwald to one count of conspiracy to distribute a controlled substance and a controlled substance analogue and one count of conspiracy to commit money laundering.
U.S. Attorney Geoffrey S. Berman said: “Janell Thompson held herself out as a company CFO and vice president, but she was actually a drug trafficker and money launderer. Through her wholesale company, Thompson distributed massive quantities of illegal and potentially dangerous synthetic cannabinoids throughout the U.S. Thompson will now serve time in prison for her crimes.”
According to the allegations in the Superseding Information, other documents filed in the case, and statements made in court:
From February 2014 until February 2019, THOMPSON was the vice president, chief financial officer, and co-owner of JK Wholesale LLC, a consumer products retailer based in Carlsbad, California. During that time period, THOMPSON used JK Wholesale LLC and its affiliated corporate entities to operate a scheme to distribute large quantities of smokeable synthetic cannabinoids (“SSC”), containing controlled substances and controlled substance analogues, throughout the U.S. SSC, colloquially referred to as “K2” or “Spice,” can be addictive, but are often marketed as safe, legal alternatives to marijuana. In fact, SSC are not safe and may affect the brain much more powerfully than marijuana; their actual effects can be unpredictable and, in some cases, more dangerous or even life-threatening.
Some of the SSC distributed by THOMPSON’s scheme were branded with colorful graphics and distinctive names, including “Yolo.” The branded SSC sometimes were misleadingly marketed as “herbal incense.” Other of the SSC were distributed in bulk quantities.
* * *
In addition to a term of imprisonment, THOMPSON, 42, was also sentenced to two years of supervised release and ordered to forfeit $1,000,000.
Mr. Berman praised the outstanding investigative work of the New York City Police Department, the United States Postal Inspection Service, and Homeland Security Investigations. He also thanked the Wilmington, North Carolina, Resident Office of the Drug Enforcement Administration, the Naval Criminal Investigative Service, and the United States Attorney’s Office for the Eastern District of North Carolina for their assistance. The long-term investigation of this case was partially funded by the New York/New Jersey High Intensity Drug Trafficking Area, a federal grant program that invests in law enforcement partnerships to build safe and healthy communities.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Daniel G. Nessim and Robert B. Sobelman are in charge of the prosecution.
NYC Restaurateur Pleads Guilty in Manhattan Federal Court to Tax Evasion SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Richard E. Zuckerman, the Principal Deputy Assistant Attorney General for the Tax Division of the Department of Justice, and Jonathan D. Larsen, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that ADEL KELLEL, owner of Raffles Bistro, formerly a restaurant located in New York City, pled guilty today for his role in a tax evasion scheme. KELLEL pled guilty before Chief Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Geoffrey S. Berman said: “As he admitted in court, restaurateur Adel Kellel cooked his books for years, skimming money from his restaurant and salting it away in personal accounts or using it for personal expenses. His scheme was a recipe for making millions in unreported income, but now he will have to pay for his gluttony.”
Principal Deputy Assistant Attorney General Richard E. Zuckerman said: “The defendant funded his lavish lifestyle by failing to pay legally obligated taxes thus causing harm to all Americans. We remain committed to prosecuting tax criminals who refuse to pay their fair share.”
IRS-CI Chief Jonathan D. Larsen said: “When Mr. Kellel chose to hide millions of dollars from the IRS, he unfairly shifted the tax burden to honest American taxpayers. As we start the tax filing season, this is a stark reminder of the serious consequences of tax evasion, including potential imprisonment. IRS-CI will continue to be relentless in our mission to root out tax fraud.”
According to the Information to which KELLEL pled guilty and statements made in court:
In 2011, KELLEL was the President and a 45 percent owner of K&H Restaurant, Inc. (“K&H”), which operated Raffles Bistro (“Raffles”), a restaurant then located in a hotel (the “Hotel”) in Manhattan. From 2012 through 2015, KELLEL was the 100 percent owner of K&H. The gross receipts of K&H consisted primarily of: (a) credit card payments by Raffles’ customers; (b) cash payments by Raffles’ customers; and (c) check payments by the Hotel for various services that Raffles provided to hotel guests and patrons, including room service, banquets, and catering.
KELLEL concealed and did not report to the Internal Revenue Service (“IRS”) a substantial portion of K&H’s gross receipts for the calendar years 2011 through 2015. As part of his tax evasion scheme, KELLEL deposited substantial cash income received from Raffles’ customers into personal bank accounts or spent it directly on personal expenses, without disclosing it to his accountants or paying taxes on it. KELLEL also diverted over 150 Hotel checks, totaling over $2 million in gross receipts, by depositing the checks into approximately a dozen bank accounts that KELLEL did not disclose to his accountants.
KELLEL used the diverted income for various personal expenses, including overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments from his children; shopping at luxury retailers, such as Hugo Boss and Saks Fifth Avenue; payments for luxury cars manufactured by Mercedes, Porsche, and Maserati; and payments for domestic and international travel.
By fraudulently concealing from his accountants the cash and a portion of the Hotel checks received by Raffles, KELLEL caused K&H’s corporate income tax returns and KELLEL’s own individual income tax returns for the calendar years 2011 through 2015 to be materially false. As a result of his conduct, KELLEL admitted to causing a combined tax loss of at least approximately $771,195 to the IRS and the New York State Department of Taxation and Finance (“NYSDTF”).
* * *
KELLEL, 62, of New Hyde Park, New York, pled guilty to one count of tax evasion and faces 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. As part of his plea, KELLEL agreed to pay at least $771,195 in restitution to the IRS and the NYSDTF. KELLEL is scheduled to be sentenced by U.S. District Judge Paul G. Gardephe on April 23, 2020.
Mr. Berman praised the outstanding work of the Internal Revenue Service, Criminal Investigation, in this case. Mr. Berman also thanked the U.S. Department of Justice’s Tax Division for their significant assistance in the investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Olga I. Zverovich and Special Assistant U.S. Attorney Jorge Almonte of the Department of Justice’s Tax Division are in charge of the prosecution.
Manhattan Restauranteur Pleads Guilty to Tax Evasion SchemeRead the Press Release
The owner of a former New York City restaurant pleaded guilty to tax evasion today, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, and Chief of Internal Revenue Service- Criminal Investigation (IRS-CI) Jonathan D. Larsen.
“The defendant funded his lavish lifestyle by failing to pay legally obligated taxes thus causing harm to all Americans,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman. “We remain committed to prosecuting tax criminals who refuse to pay their fair share.”
“As he admitted in court, restaurateur Adel Kellel cooked his books for years, skimming money from his restaurant and salting it away in personal accounts or using it for personal expenses,” said U.S. Attorney Geoffrey S. Berman for the Southern District of New York. “His scheme was a recipe for making millions in unreported income, but now he will have to pay for his gluttony.”
“When Mr. Kellel chose to hide millions of dollars from the IRS, he unfairly shifted the tax burden to honest American taxpayers,” said IRS-CI Chief Jonathan D. Larsen. “As we start the tax filing season, this is a stark reminder of the serious consequences of tax evasion, including potential imprisonment. IRS-CI will continue to be relentless in our mission to root out tax fraud.”
According to the Information and statements made in court, in 2011, Adel Kellel was the President and a minority owner of K&H Restaurant Inc. (K&H), which operated Raffles Bistro (Raffles), a restaurant located at a New York City-based hotel. From 2012 through 2015, Kellel was the sole owner of K&H. K&H’s gross receipts consisted primarily of: (1) credit card payments by Raffles customers; (2) cash payments by Raffles customers; and (3) check payments by the hotel for services that Raffles provided to hotel guests and patrons, including room service, banquets, and catering.
From 2011 through 2015, Kellel concealed a substantial portion of K&H’s gross receipts by not fully reporting the cash received from Raffles’ customers. Kellel further hid the gross receipts by depositing cash into personal bank accounts, by spending funds directly on personal expenses, and by diverting checks paid by the hotel to K&H into non-business bank accounts that Kellel hid from his accountants. During this time, Kellel diverted more than 150 hotel checks, totaling more than $2 million, to more than a dozen bank accounts.
Kellel used the diverted income for personal expenses, including: overseas transfers; condominium fees; rent for a high-end Manhattan apartment; college tuition payments from his children; shopping at luxury retailers, such as Hugo Boss and Saks Fifth Avenue; payments for luxury cars manufactured by Mercedes, Porsche, and Maserati; and to pay for domestic and international travel.
By fraudulently concealing from his accountants the cash and a portion of the hotel checks received by Raffles, Kellel caused K&H’s corporate tax returns, and Kellel’s own tax returns from 2011 through 2015 to be materially false. Kellel admitted that his conduct caused a tax loss of at least $771,195 to the Internal Revenue Service (IRS) and the New York State Department of Taxation and Finance (NYSDTF).
U.S. District Judge Paul G. Gardephe set sentencing for April 23, 2020. At sentencing, Kellel faces a maximum sentence of five years in prison. He also faces a term of supervised release and monetary penalties. As part of his plea agreement, Kellel agreed to pay restitution of $613,478 to the IRS, and to pay restitution of $157,717 to NYSDTF.
Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Berman, and IRS-CI Chief Larsen praised the efforts of IRS-CI, who conducted the investigation, and Assistant Chief Jorge Almonte of the Tax Division and Assistant U.S. Attorney Olga I. Zverovich, who are in charge of the prosecution.
Hubert Dupigny Convicted in Manhattan Federal Court of Sex Trafficking OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that a federal jury yesterday found HUBERT DUPIGNY, a/k/a “Fox,” guilty of sex trafficking of minors and conspiracy to commit sex trafficking of minors, following an eight-day jury trial before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Hubert Dupigny recruited girls who were in foster care, then sexually exploited them for financial profit. Such predatory conduct is repugnant and, as the jury found, deserving of a guilty verdict. Dupigny now awaits sentencing for his crimes.”
According to the allegations contained in the Indictment and evidence presented during the trial in Manhattan federal court:
From at least in or about August 2016 through in or about May 2017, HUBERT DUPIGNY, a/k/a “Fox,” the defendant, engaged in a conspiracy to commit sex trafficking of minors. The defendant recruited, enticed, harbored, transported, advertised, provided, obtained, and maintained two minor victims (“Victim-1” and “Victim-2”) for the purpose of commercial sex.
The defendant recruited Victim-1 and Victim-2 when they were living in foster care facilities or homes in New York City. The defendant used Backpage.com to post advertisements of Victim-1 and Victim-2 for commercial sex, and then directed Victim-1 and Victim-2 to meet customers to engage in commercial sex out of an abandoned home in Brooklyn, New York.
The conviction of HUBERT DUPIGNY is the culmination of the prosecution of 19 defendants, set forth in eight indictments, for the sex trafficking of at least 20 minor girls and young adults in New York State’s social services system. With DUPIGNY’s conviction, all 19 of the defendants have now been convicted, either via guilty plea or following trial.
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DUPIGNY, 36, of Brooklyn, New York, was convicted of two counts of sex trafficking of a minor and one count of conspiracy to commit sex trafficking. The defendant faces a mandatory minimum sentence of 10 years in prison on each count of sex trafficking of a minor, and faces a maximum sentence of life in prison on each of the three counts of conviction. The maximum potential sentences are prescribed by Congress and provided for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing will take place before Judge Furman on May 13, 2020, at 3:30 p.m.
Any individuals who believe they have information that may be relevant to this investigation should contact the Federal Bureau of Investigation (“FBI”) at (212) 384-1000 or https://tips.fbi.gov/.
Mr. Berman thanked the FBI and the New York City Police Department (“NYPD”) for their outstanding work in this matter, particularly the FBI-NYPD New York Child Exploitation and Human Trafficking Task Force.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Mollie Bracewell, Elinor Tarlow, Jacob Gutwillig, Michael Herman, and Alison Moe are in charge of the prosecution.
Founder of Meridian Capital Asset Management Sentenced to Two Years in Prison for Stealing over $1 Million of Investor FundsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOHN GERACI was sentenced today in Manhattan federal court to 24 months in prison for conspiring to commit securities and wire fraud. GERACI participated in a scheme to defraud investors in his company, Meridian Capital Asset Management. GERACI caused two clients (“Victim-1” and “Victim-2”) to invest in a hedge fund through his company called the Meridian Matrix Long Short Fund (the “Meridian Matrix Fund”). Between in or about December 2015 and November 2016, GERACI provided fictitious account statements and updates to Victim-1 and Victim-2, telling them that their investment was worth millions when, in reality, GERACI knew that large portions of it had been stolen by the Meridian Matrix Fund’s co-founder, Nicholas Mitsakos. GERACI eventually liquidated the Meridian Matrix Fund and misappropriated significant portions of the remaining funds. Although GERACI had stolen over $1 million of Victim-1 and Victim-2’s investment for himself, GERACI falsely told them that their entire investment had been taken by Mitsakos. GERACI used the stolen money to pay his own personal and business expenses.
GERACI pled guilty on October 3, 2019, and was sentenced by United States District Judge Alison J. Nathan.
U.S. Attorney Geoffrey S. Berman said: “John Geraci lied to his clients about their investment with Nicholas Mitsakos, and later concealed that he had recovered a significant portion of their investment from Mitsakos. Now Geraci, like Mitsakos before him, is headed to prison.”
According to the Complaint, the Indictment, and other statements made in open court:
GERACI was the principal and founder of Meridian Capital Asset Management. In or about February 2015, GERACI was introduced to Nicholas Mitsakos, who purported to operate a hedge fund called Matrix Capital (“Matrix”). Mitsakos told GERACI that Matrix had tens of millions of dollars under management and had achieved annual returns between 19.4% and 66.3% from 2012 to 2014. GERACI and Mitsakos subsequently entered into an arrangement whereby GERACI would raise money for Mitsakos, Mitsakos would manage that money through a new vehicle, the Meridian Matrix Fund, and GERACI and Mitsakos would then split any fees that the Meridian Matrix Fund generated. As part of this arrangement, GERACI solicited Victim-1 and Victim-2 to invest approximately $2 million in the Meridian Matrix Fund, in large part by relying on Mitsakos’s claims about his supposed fund’s assets under management and performance returns.
By in or about December 2015, however, GERACI learned that Mitsakos had only invested approximately $1.2 million of Victim-1 and Victim-2’s investment, and had misappropriated significant portions of the remaining money. GERACI also learned that Mitsakos never had any actual assets under management, and that his performance returns were accordingly fictitious and misleading. Nonetheless, GERACI never told Victim-1 or Victim-2 that their investment was in jeopardy or had been solicited with misleading information. To the contrary, GERACI sent Victim-1 and Victim-2 updates that hid Mitsakos’s misappropriation and falsely claimed that their investment had appreciated. GERACI sent these fictitious updates even after GERACI had liquidated the Meridian Matrix Fund’s trading positions in or about June 2016. Beginning in or about November 2015, GERACI also misappropriated hundreds of thousands of dollars of Victim-1 and Victim-2’s money for himself.
In or about August 2016, Mitsakos was charged in this District with securities fraud and other offenses. In or about September 2016, GERACI changed course: Instead of providing fictitious account updates to Victim-1 and Victim-2, GERACI told them, in substance and in part, that their entire investment had been wiped out through Mitsakos’s fraud. GERACI did this even though he had ultimately received approximately $1.1 million of Victim-1 and Victim-2’s investment back from Mitsakos, including after liquidating the Meridian Matrix Fund’s trading positions. Rather than returning this amount to Victim-1 and Victim-2, GERACI used it to pay for his own personal and business expenses, including, for example, payments on a BMW automobile, a gym membership, gas, groceries, travel expenses, and his cellphone bill.
In addition to sending false account updates to Victim-1 and Victim-2 even after learning that Mitsakos had lied about his fund’s assets and performance and that Mitsakos had stolen significant portions of Victim-1 and Victim-2’s investment, GERACI continued to try to raise money from others for an investment related to the Meridian Matrix Fund. In attempting to do so, moreover, GERACI relied on the same representations about Matrix’s assets and performance that he knew to be false.
Mitsakos pled guilty to conspiring to commit securities fraud and wire fraud on May 25, 2017, and was sentenced on November 7, 2017, to 30 months in prison by the Honorable Denny Chin, a judge on the United States Court of Appeals for the Second Circuit who was sitting by designation in the Southern District of New York.
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In addition to the prison sentence, GERACI, 62, was sentenced to three years of supervised release. The Court further ordered GERACI to forfeit a sum of $1,098,971.38 and to pay restitution to the victims of the offense.
Mr. Berman praised the investigative work of the United States Postal Inspection Service and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Jared Lenow and Drew Skinner are in charge of the prosecution.
Manhattan Man Pleads Guilty to Attempting to Provide Material Support to Terrorist OrganizationRead the Press Release
John C. Demers, the Assistant Attorney General for National Security and Geoffrey S. Berman, the U.S. Attorney for the Southern District of New York, announced today that Jesus Wilfredo Encarnacion, aka “Jihadistsoldgier,” “Jihadinhear,” “Jihadinheart,” “Lionofthegood,” pleaded guilty to attempting to provide material support to Lashkar e-Tayyiba (LeT), a Pakistan-based designated foreign terrorist organization responsible for multiple high-profile attacks, including the infamous Mumbai attacks in November 2008. Encarnacion pleaded guilty today before United States District Judge Ronnie Abrams.
“Encarnacion admitted to attempting to travel to Pakistan to join a foreign terrorist organization and conspired over the internet with another individual, who’s already plead guilty, to provide that organization with material support,” said Assistant Attorney General for National Security John C. Demers. “The National Security Division is committed to identifying and holding accountable those who seek to join and support designated foreign terrorist organizations.”
“As he admitted today, Jesus Encarnacion plotted to travel abroad to join and train with the terrorist organization Lashkar e-Tayyiba, infamous worldwide for their brutal jihadist murder of innocent civilians, and to carry out shootings, bombings, and beheadings on their behalf,” said U.S. Attorney Geoffrey S. Berman for the Southern District of New York. “Thanks to the excellent work of the FBI and the NYPD, Encarnacion was intercepted before his deadly plot could take flight, and he now awaits sentencing for his crime.”
According to the criminal Complaint, Indictment, and other documents filed in the case, as well as statements made during the plea proceeding:
In November 2018, Encarnacion expressed his desire to join a terrorist group in an online group chat, where he met another individual (CC-1). CC-1 introduced Encarnacion to an individual who, unbeknownst to CC-1 or Encarnacion, was in fact an undercover FBI employee (UC-1). Encarnacion repeatedly expressed, in the course of recorded communications through a social media service with CC-1 and through an encrypted messaging service with UC-1, his allegiance to and support for LeT, which, since approximately 2001, has been designated as a Foreign Terrorist Organization by both the United States Secretary of State and the Immigration and Nationality Act.
Over several months, Encarnacion discussed his desire and plans to join LeT overseas so that he could receive training and participate in violent acts of terrorism. For example, Encarnacion told UC-1 that he was “ready to kill and die in the name of Allah” and sought UC-1’s assistance to help Encarnacion travel abroad to serve as an “executioner” for LeT, stating, “I want to execute. I want to behead. Shoot.” Encarnacion further stated that he aspired to commit terrorist attacks (“a bombing and shooting”) in the United States, but lacked “guidance” and “guns” to do so.
By early 2019, Encarnacion and UC-1 agreed on a plan that Encarnacion believed would allow him to join LeT in Pakistan. Encarnacion told UC-1 that he had made arrangements to travel to a particular city in Europe (the “European City”), as the first step in traveling to Pakistan to join LeT. Encarnacion purchased an airline ticket for a flight scheduled to depart on Feb. 7, 2019, from John F. Kennedy International Airport (JFK Airport) to the European City. On Feb. 7, 2019, Encarnacion traveled to JFK Airport, where he was arrested by the FBI after he attempted to board that flight.
Encarnacion, 30, of New York, New York, pled guilty to one count of attempting to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Encarnacion is scheduled to be sentenced by Judge Abrams on April 24, 2020, at 11:30 a.m.
Assistant Attorney General Demers and Mr. Berman 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 New York City Police Department. Assistant Attorney General Demers and Mr. Berman the New York Office of U. S. Customs and Border Protection.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are in charge of the prosecution.
Manhattan Man Pleads Guilty to Attempting to Provide Material Support to Terrorist OrganizationRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and John C. Demers, the Assistant Attorney General for National Security, announced today that JESUS WILFREDO ENCARNACION, a/k/a “Jihadistsoldgier,” “Jihadinhear,” “Jihadinheart,” “Lionofthegood,” pled guilty to attempting to provide material support to Lashkar e-Tayyiba (“LeT”), a Pakistan-based designated foreign terrorist organization responsible for multiple high-profile attacks, including the infamous Mumbai attacks in November 2008. ENCARNACION pled guilty today before United States District Judge Ronnie Abrams.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As he admitted today, Jesus Encarnacion plotted to travel abroad to join and train with the terrorist organization Lashkar e-Tayyiba, infamous worldwide for their brutal jihadist murder of innocent civilians, and to carry out shootings, bombings, and beheadings on their behalf. Thanks to the excellent work of the FBI and the NYPD, Encarnacion was intercepted before his deadly plot could take flight, and he now awaits sentencing for his crime.”
Assistant Attorney General for National Security John C. Demers said: "Encarnacion admitted to attempting to travel to Pakistan to join a foreign terrorist organization and conspired over the internet with another individual, who’s already pled guilty, to provide that organization with material support. The National Security Division is committed to identifying and holding accountable those who seek to join and support designated foreign terrorist organizations."
According to the criminal Complaint, Indictment, and other documents filed in the case, as well as statements made during the plea proceeding:
In November 2018, ENCARNACION expressed his desire to join a terrorist group in an online group chat, where he met another individual (“CC-1”). CC-1 introduced ENCARNACION to an individual who, unbeknownst to CC-1 or ENCARNACION, was in fact an undercover FBI employee (“UC-1”). ENCARNACION repeatedly expressed, in the course of recorded communications through a social media service with CC-1 and through an encrypted messaging service with UC-1, his allegiance to and support for LeT, which, since approximately 2001, has been designated as a Foreign Terrorist Organization by both the United States Secretary of State and the Immigration and Nationality Act.
Over several months, ENCARNACION discussed his desire and plans to join LeT overseas so that he could receive training and participate in violent acts of terrorism. For example, ENCARNACION told UC-1 that he was “ready to kill and die in the name of Allah” and sought UC-1’s assistance to help ENCARNACION travel abroad to serve as an “executioner” for LeT, stating, “I want to execute. I want to behead. Shoot.” ENCARNACION further stated that he aspired to commit terrorist attacks (“a bombing and shooting”) in the United States, but lacked “guidance” and “guns” to do so.
By early 2019, ENCARNACION and UC-1 agreed on a plan that ENCARNACION believed would allow him to join LeT in Pakistan. ENCARNACION told UC-1 that he had made arrangements to travel to a particular city in Europe (the “European City”), as the first step in traveling to Pakistan to join LeT. ENCARNACION purchased an airline ticket for a flight scheduled to depart on February 7, 2019, from John F. Kennedy International Airport (“JFK Airport”) to the European City. On February 7, 2019, ENCARNACION traveled to JFK Airport, where he was arrested by the Federal Bureau of Investigation (“FBI”) after he attempted to board that flight.
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ENCARNACION, 30, of New York, New York, pled guilty to one count of attempting to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
ENCARNACION is scheduled to be sentenced by Judge Abrams on April 24, 2020, at 11:30 a.m.
Mr. Berman 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 New York City Police Department. Mr. Berman also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, as well as the New York Office of U. S. Customs and Border Protection.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are in charge of the prosecution.