Southern District of New York
Press releases recorded for this federal judicial district.
Four Defendants Charged in Panama Papers Investigation for Their Roles in Panamanian-Based Global Law Firm’s Decades-Long Scheme to Defraud the United StatesRead the Press Release
Four individuals have been charged in an indictment unsealed today in the Southern District of New York with wire fraud, tax fraud, money laundering and other offenses in connection with their alleged roles in a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and related entities.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Chief Don Fort of IRS Criminal Investigation (IRS-CI), and Special Agent in Charge Angel M. Melendez of U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations (HSI) New York made the announcement today.
Ramses Owens, 50, a Panamanian citizen; Dirk Brauer, 54, a German citizen; Richard Gaffey, 74, a U.S. citizen, of Medfield, Massachusetts; and Harald Joachim Von Der Goltz, 81, a German citizen, have been charged in an 11-count indictment. Owens, Gaffey and Von Der Goltz are charged with one count of conspiracy to commit tax evasion, one count of wire fraud, and one count of money laundering conspiracy. Owens and Brauer have been charged with one count of conspiracy to defraud the United States and one count of conspiracy to commit wire fraud. Gaffey and Von Der Goltz are additionally charged with four counts of willful failure to file an FBAR. Von Der Goltz has been additionally charged with two counts of making false statements.
Three of the four defendants named in the indictment have been arrested. Brauer, who worked as an investment manager for Mossfon Asset Management, S.A. (“Mossfon Asset Management”), an asset management company closely affiliated with Mossack Fonseca, was arrested in Paris, France, on Nov. 15. Von Der Goltz, a former U.S. resident and taxpayer, was arrested in London, United Kingdom, on Dec. 3. Gaffey, a U.S.-based accountant, was arrested in Boston, Massachusetts earlier today. Owens, a Panamanian attorney who worked for Mossack Fonseca, remains at large.
“Law firms, asset managers, and accountants play key roles enabling entry into the global financial system,” said Assistant Attorney General Benczkowski. “The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crime across international borders and the tax cheats who utilize their services.”
"As alleged, these defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients,” said Manhattan U.S. Attorney Berman. “For decades, the defendants, employees and a client of global law firm Mossack Fonseca allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes. In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes.”
“The unsealing of this indictment sends a clear message that IRS-CI is actively engaged in international tax enforcement, and more investigations are on the way,” said IRS-CI Chief Don Fort. “IRS-CI specializes in unraveling these intricate offshore tax schemes and following the money around the globe wherever it may lead. Cases like this help maintain the public’s confidence in our tax system by letting them know that we investigate and prosecute those who evade their tax obligation.”
“Today we announce the indictment of four individuals who allegedly defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme, associated with Mossack Fonseca and its affiliates,” said HSI Special Agent-in-Charge Angel M. Melendez. “HSI’s El Dorado Task Force, together with the IRS, built a case that uncovered an alleged complex trail of offshore shell corporations and bogus foundations used to disguise the beneficial ownership of huge amounts of money. These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminals regardless of where they are in the world.”
According to the indictment, from at least in or about 2000 through in or about 2017, Owens and Brauer conspired with others to help U.S. taxpayer clients of Mossack Fonseca conceal assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means. To conceal their clients’ assets and income from the IRS, Owens and Brauer allegedly worked to establish and manage opaque offshore trusts and undeclared bank accounts on behalf of U.S. taxpayers who were clients of Mossack Fonseca. Owens and Brauer allegedly marketed, created, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands, to conceal from the IRS and others the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts. As structured by Mossack Fonseca, the sham foundations typically “owned” the shell companies that nominally held the undeclared assets on behalf of the U.S. taxpayer clients of Mossack Fonseca. The names of Mossack Fonseca’s clients generally did not appear anywhere on the incorporation paperwork for the sham foundations or related shell companies, although the clients in fact beneficially owned, and had complete access to, the assets of those sham entities and accounts.
In furtherance of the scheme, and in exchange for additional fees, Owens and Brauer allegedly provided support to clients who had purchased the sham foundations and related shell companies by providing corporate meeting minutes, resolutions, mail forwarding, and signature services. Moreover, Owens and Brauer are alleged to have purposefully established the bank accounts in locations with strict bank secrecy laws, which impeded the ability of the United States to obtain bank records for the accounts. Owens and Brauer also allegedly instructed U.S. taxpayer clients of Mossack Fonseca about how to repatriate funds to the United States from their offshore bank accounts in a manner designed to keep the undeclared bank accounts concealed. Among other things, Owens and Brauer instructed clients to use debit cards and fictitious sales to repatriate their funds covertly, the indictment alleges.
Von Der Goltz was allegedly one of Mossack Fonseca’s U.S. taxpayer clients. At 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. U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file a Report of Foreign Bank and Financial Accounts, commonly known as an FBAR, disclosing the account. Von Der Goltz is alleged to have 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 allegedly made investments totaling tens of millions of dollars. According to the indictment, Von Der Goltz was assisted in this scheme by Owens and by Gaffey, a partner at a U.S.-based accounting firm. In furtherance of Von Der Goltz’s fraudulent scheme, Von Der Goltz, Gaffey, and Owens are alleged to have 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.
As alleged in the indictment, Gaffey, in addition to assisting Von Der Goltz evade U.S. income taxes and reporting requirements, also worked closely with Owens to help another U.S. taxpayer client (“Client-1”) of Mossack Fonseca defraud the IRS. Client-1 allegedly maintained a series of offshore bank accounts, which Mossack Fonseca helped Client-1 conceal from the IRS for years. The indictment further alleges that, upon the advice of Owens and Gaffey, Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company. After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by IRS-CI and HSI with significant assistance by the Justice Department’s Tax Division and the FBI. The Justice Department’s Office of International Affairs and law enforcement partners in France and the United Kingdom secured the arrests of the defendants located overseas.
This case is being prosecuted by Trial Attorneys Michael Parker and Parker Tobin of the Criminal Division’s Money Laundering and Asset Recovery Section of the Justice Department and Assistant U.S. Attorneys Sarah E. Paul, Nathan Rehn, Kristy Greenberg and Andrew Adams of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit, with substantial support from previous co-counsel, Assistant U.S. Attorney Ann Marie Blaylock of the Western District of Kentucky.
Four Defendants Charged in Panama Papers InvestigationRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, Don Fort, Chief, Internal Revenue Service-Criminal Investigation (“IRS-CI”), and Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today the unsealing of an indictment charging RAMSES OWENS, DIRK BRAUER, RICHARD GAFFEY, and HARALD JOACHIM VON DER GOLTZ, with wire fraud, tax fraud, money laundering, and other offenses in connection with their roles in a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (“Mossack Fonseca”), a Panamanian-based global law firm, and related entities.
Three of the four defendants named in the indictment have been arrested. BRAUER, who worked as an investment manager for Mossfon Asset Management, S.A., an asset management company closely affiliated with Mossack Fonseca, was arrested in Paris, France, on November 15, 2018. VON DER GOLTZ, a former U.S. resident and taxpayer, was arrested in London, United Kingdom, on December 3, 2018. GAFFEY, a U.S.-based accountant, was arrested in Medfield, Massachusetts, this morning. OWENS, a Panamanian attorney who worked for Mossack Fonseca, remains at large.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients. For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through off-shore accounts and created shell companies to hide fortunes. In fact, as alleged, they had a playbook to repatriate un-taxed money into the U.S. banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes.”
AAG Brian A. Benczkowski said: “Law firms, asset managers, and accountants play key roles enabling entry into the global financial system. The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crimes across international borders and the tax cheats who utilize their services.”
IRS-CI Chief Don Fort said: “The unsealing of this indictment sends a clear message that IRS-CI is actively engaged in international tax enforcement, and more investigations are on the way. IRS-CI specializes in unraveling these intricate offshore tax schemes and following the money around the globe wherever it may lead. Cases like this help maintain the public’s confidence in our tax system by letting them know that we investigate and prosecute those who evade their tax obligation.”
HSI Special Agent-in-Charge Angel M. Melendez said: “Today we announce the indictment of four individuals who allegedly defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme, associated with Mossack Fonseca and its affiliates. HSI’s El Dorado Task Force, together with the IRS, built a case that uncovered an alleged complex trail of offshore shell corporations and bogus foundations used to disguise the beneficial ownership of huge amounts of money. These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminal regardless where they are in the world.”
According to the Indictment, which was unsealed today in Manhattan federal court[1]:
From 2000 through 2017, OWENS and BRAUER conspired with others to help U.S. taxpayer clients of Mossack Fonseca conceal assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means. To conceal their clients’ assets and income from the IRS, OWENS and BRAUER worked to establish and manage opaque offshore trusts and undeclared bank accounts on behalf of U.S. taxpayers who were clients of Mossack Fonseca. OWENS and BRAUER marketed, created, and serviced sham foundations and shell companies formed under the laws of countries such as Panama, Hong Kong, and the British Virgin Islands, to conceal from the IRS and others the ownership by U.S. taxpayers of accounts established at overseas banks, as well as the income generated in those accounts. As structured by Mossack Fonseca, the sham foundations typically “owned” the shell companies that nominally held the undeclared assets on behalf of the U.S. taxpayer clients of Mossack Fonseca. The names of Mossack Fonseca’s clients generally did not appear anywhere on the incorporation paperwork for the sham foundations or related shell companies, although the clients in fact beneficially owned, and had complete access to, the assets of those sham entities and accounts.
In furtherance of the scheme, and in exchange for additional fees, OWENS and BRAUER provided support to clients who had purchased the sham foundations and related shell companies by providing corporate meeting minutes, resolutions, mail forwarding, and signature services. Moreover, OWENS and BRAUER purposefully established the bank accounts in locations with strict bank secrecy laws, which impeded the ability of the United States to obtain bank records for the accounts. OWENS and BRAUER also instructed U.S. taxpayer clients of Mossack Fonseca about how to repatriate funds to the United States from their offshore bank accounts in a manner designed to keep the undeclared bank accounts concealed. Among other things, OWENS and BRAUER instructed clients to use debit cards and fictitious sales to repatriate their funds covertly.
VON DER GOLTZ was one of Mossack Fonseca’s U.S. taxpayer clients. At 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. 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 by OWENS and by GAFFEY, a partner at a U.S.-based accounting firm. In furtherance of VON DER GOLTZ’s fraudulent scheme, VON DER GOLTZ, GAFFEY, and OWENS 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.
GAFFEY, in addition to assisting VON DER GOLTZ evade U.S. income taxes and reporting requirements, also worked closely with OWENS to help another U.S. taxpayer client (“Client-1”) of Mossack Fonseca defraud the IRS. Client-1 maintained a series of offshore bank accounts, which Mossack Fonseca helped Client-1 conceal from the IRS for years. The indictment further alleges that upon the advice of OWENS and GAFFEY, Client-1 covertly repatriated approximately $3 million of Client-1’s offshore money to the United States by falsely stating on Client-1’s federal tax return that the money represented proceeds from the sale of a company. After Client-1 repatriated approximately $3 million in this manner, approximately $1 million still remained in Client-1’s offshore account, the existence of which remained hidden from the IRS.
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A chart outlining the charges against each defendant is below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge. The charges in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
COUNT
DEFENDANT
AGE & CITIZENSHIP
MAXIMUM SENTENCE
Count One: Conspiracy to Defraud the United States
18 U.S.C. § 371
RAMSES OWENS
DIRK BRAUER
50, Panamanian Citizen
54, German Citizen
Five years in prison
Count Two: Conspiracy to Commit Wire Fraud
18 U.S.C. § 1349
RAMSES OWENS
DIRK BRAUER
50, Panamanian Citizen
54, German Citizen
20 years in prison
Count Three: Conspiracy to Commit Tax Evasion
18 U.S.C. § 371
RAMSES OWENS
RICHARD GAFFEY
HARALD JOACHIM VON DER GOLTZ
50, Panamanian Citizen
74, U.S. Citizen
81, German Citizen
Five years in prison
Count Four: Wire Fraud
18 U.S.C. § 1343
RAMSES OWENS
RICHARD GAFFEY
HARALD JOACHIM VON DER GOLTZ
50, Panamanian Citizen
74, U.S. Citizen
81, German Citizen
20 years in prison
Count Five: Money Laundering Conspiracy
18 U.S.C. § 1956
RAMSES OWENS
RICHARD GAFFEY
HARALD JOACHIM VON DER GOLTZ
50, Panamanian Citizen
74, U.S. Citizen
81, German Citizen
20 years in prison
Counts Six-Nine: Willful Failure to File an FBAR
31 U.S.C. §§ 5314 & 5322(a)
RICHARD GAFFEY
HARALD JOACHIM VON DER GOLTZ
74, U.S. Citizen
81, German Citizen
10 years in prison for each count
Counts Ten-Eleven: False Statements
18 U.S.C. § 1001
HARALD JOACHIM VON DER GOLTZ
81, German Citizen
Five years in prison for each count
Mr. Berman praised the outstanding investigative work of IRS-CI 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 U.S. Justice Department’s Office of International Affairs and law enforcement partners in France and the United Kingdom for their assistance in securing the arrests of the defendants located overseas.
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 Sarah E. Paul, Thane Rehn, Kristy Greenberg, and Andrew Adams, along with Trial Attorneys Michael Parker and Parker Tobin of the Money Laundering and Asset Recovery Section, are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
New Windsor Man Sentenced to 20 Years in Prison for Child EnticementRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CLINT EDWARDS was sentenced on November 30, 2018, to 20 years in prison for enticing a child to engage in illegal sexual activity. EDWARDS pled guilty on July 2, 2018, before United States District Judge Cathy Seibel, who also imposed the sentence.
According to the Superseding Information, Complaint, and other documents filed in the case to which EDWARDS pled, as well as statements made during the plea proceeding:
In May and June of 2017, EDWARDS used social media and texting applications on his iPhone to entice a 14-year-old minor (the “Victim”) to engage in sexual activity with him. During their text message conversations, EDWARDS solicited sexually explicit photos and videos from the Victim, and sent the Victim a video of himself engaged in sexual activity. Despite knowing that the Victim was 14 years old, EDWARDS arranged to meet the Victim in order to have sex.
On June 6, 2017, EDWARDS met the Victim at her apartment building and engaged in sexual activity with her in the building’s basement. EDWARDS used his iPhone to film a portion of his sexual activity with the Victim. The basement’s surveillance cameras captured EDWARDS’s sexual conduct with the Victim, as well as his use of a smartphone to film a portion of that conduct. EDWARDS later traveled with the Victim to his residence in New Windsor, New York, where EDWARDS continued to engage in sexual conduct with the Victim over the course of several days.
On June 13, 2017, law enforcement recovered the Victim from EDWARDS’s residence. EDWARDS had entered a backyard area of his home shortly before law enforcement arrived, and he fled upon observing law enforcement’s presence. EDWARDS was arrested on June 16, 2017.
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Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation. He thanked the Portchester Police Department and the New Windsor Police Department for their assistance throughout the investigation.
Any individuals who believe they have information concerning the exploitation of children may contact the Federal Bureau of Investigation at 1-212-384-1000 or https://tips.fbi.gov/.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Gillian Grossman is in charge of the prosecution.
Manhattan U.S. Attorney Announces Indictment and Arrest of Vascular Surgeon for Healthcare FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that FENG QIN, M.D. (“QIN”), a vascular surgeon with practices in Lower Manhattan and Far Rockaway, Queens, has been indicted for healthcare fraud and that the United States has filed a civil fraud complaint against him and his medical practice, QIN MEDICAL P.C., under the False Claims Act. Specifically, the Indictment and Civil Complaint charge QIN with fraudulently billing Medicare for performing vascular surgery procedures on patients that were not medically reasonable and necessary or covered under Medicare rules. QIN will be presented before U.S. Magistrate Judge Ona T. Wang this afternoon. QIN’s case is assigned to U.S. District Judge Ronnie Abrams.
In 2015, this Office filed and simultaneously settled a civil fraud lawsuit against QIN and his previous employer for engaging in fraudulent billing practices during the time period 2010 through 2012. As part of that settlement, QIN paid $150,000 and admitted that he was familiar with the applicable Medicare rules and that he had regularly performed vascular surgeries on patients who had not exhibited symptoms justifying the procedures. As charged in the Indictment and Civil Complaint, QIN later opened his own surgical practice and continued to engage in the same fraudulent conduct.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Feng Qin clearly did not learn his lesson from the previous civil suit this Office filed against him for healthcare fraud – that he must follow Medicare rules and stop billing for surgical procedures that are not clinically justified. He is now being charged criminally for his alleged failure to do so.”
HHS-OIG Special Agent in Charge Scott Lampert said: “Performing medically unnecessary services for the purposes of financial gain will not be tolerated. HHS-OIG is committed to holding providers accountable and protecting the integrity of our nation’s federal healthcare programs.”
According to the Indictment[1] and the Civil Complaint:
Patients with end-stage renal disease (“ESRD”) who are receiving dialysis may require vascular access surgical procedures, such as fistulagrams, where dye is injected into the patient’s vein or artery to visualize blood flow, and percutaneous transluminal angioplasties, in which wires and balloons are inserted into blood vessels that have narrowed in order to restore blood flow. However, as Medicare billing guidelines made clear, it is not reasonable and necessary for physicians to bill the program for fistulagrams and angioplasties unless the patient has specific and documented clinical problems, such as significant difficulty receiving dialysis properly.
The patients at QIN’s medical practice primarily consisted of ESRD patients undergoing dialysis treatment. During the relevant period, from 2015 to 2016, QIN routinely scheduled patients for fistulagrams and angioplasties three months in advance, and performed fistulagrams and angioplasties on these patients as a matter of routine, regardless of whether there was a justifiable clinical reason to do so. Furthermore, he sometimes misrepresented the medical conditions of patients in their medical records to make it seem as if they suffered from symptoms that would warrant the procedures when they did not. QIN’s practice unlawfully billed and received payment from Medicare for these procedures, which were excluded from Medicare coverage, as he knew.
* * *
FENG QIN, 54, of New York, New York, is charged with one count of healthcare fraud, and faces a maximum sentence of 10 years. The charge contained in the Indictment against QIN is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
The allegations of fraud stated in the Civil Complaint were first brought to the attention of federal law enforcement by a whistle-blower who filed a lawsuit under the False Claims Act.
The criminal case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Jean-David Barnea and Michael K. Krouse are in charge of the case. The civil case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Barnea is in charge of the case.
[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.
Tax Preparer Pleads Guilty for Fraudulent Scheme to Steal over $1 Million from His ClientsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that TOM SHIN pled guilty to charges of aiding the preparation of a false tax return and wire fraud. SHIN pled guilty before U.S. District Judge Valerie E. Caproni.
U.S. Attorney Geoffrey S. Berman said: “Tom Shin admitted today that he violated his clients’ trust by filing false tax returns on their behalf in a scheme to defraud his clients of more than $1.3 million that was intended to pay taxes owed to the federal and state governments. Shin will now have to answer for his actions.”
According to the allegations in the Complaint and Indictment to which SHIN pled guilty:
SHIN was hired to prepare joint federal and state tax returns for two individuals (the “Clients”) for tax year 2017. SHIN showed the Clients completed tax return forms indicating that the Clients owed approximately $1.3 million in taxes. However, SHIN actually filed false returns on behalf of the Clients without their knowledge, which concealed the Clients’ tax liability. SHIN then, in connection with applications for extensions of time to file his personal tax returns, directed tax authorities to withdraw approximately $1.3 million from the Clients’ bank account, and then filed personal tax returns seeking an approximately $1.3 million refund. The net result of the alleged scheme would have been a transfer of approximately $1.3 million from the Clients’ bank account to SHIN.
* * *
SHIN, 36, of Staten Island, New York, pled guilty to one count of aiding the preparation of a false tax return, which carries a maximum penalty of three years in prison, and one count of wire fraud, which carries a maximum penalty of 20 years in prison. As a condition of his plea, SHIN also agreed to forfeit $335,894.
SHIN is scheduled to be sentenced by Judge Caproni on March 4, 2019, at 12:00 p.m.
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 thanked the Internal Revenue Service and the New York State Department of Taxation and Finance for their outstanding work.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Brett M. Kalikow is in charge of the prosecution.
Manhattan U.S. Attorney Announces Distribution of More Than $695 Million to Victims of Madoff Ponzi SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), announced today that the Madoff Victim Fund established by the Department of Justice began the distribution of $695.4 million in funds forfeited to the United States Government in connection with the Bernard L. Madoff Investment Securities LLC (“BLMIS”) fraud scheme. These funds will be sent to more than 27,000 victims worldwide, the third in a series of payments from the Madoff Victim Fund to victims of the BLMIS fraud that will ultimately total more than $4 billion. Another $5 billion in assets recovered by the U.S. Attorney’s Office are being separately paid to Madoff victims through the BLMIS Customer Fund administered by the Securities Investor Protection Act Trustee.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Bernie Madoff committed history’s largest Ponzi scheme. This Office prosecuted Madoff and others who helped perpetrate his fraud, and we assisted in recovering billions of dollars in proceeds from the fraud. Today’s payment of more than $690 million is this Office’s third installment in a series of distributions that represent our ongoing commitment to find relief for victims of Madoff’s heinous crimes.”
Assistant Attorney General Brian A. Benczkowski said: “Bernie Madoff’s scheme devastated retirement and pension funds, charitable organizations, and thousands of individual investors spread across 49 States, the District of Columbia, and 121 other countries. The payments announced today could not have happened without the prosecutors’ relentless pursuit of proceeds of Madoff’s fraud through civil forfeiture – and, as a result of their efforts and those of the Criminal Division’s Money Laundering and Asset Recovery Section, victims who would not have seen a dime in other compensation programs will now recover more than half of their losses.”
FBI Assistant Director William F. Sweeney Jr. said: “While today’s distribution of funds is indeed significant in scope, we understand no amount of money could ever restore the damage done by Madoff as a result of his selfish behavior and unforgivable financial crimes. To all of his many victims and their families, we realize this gesture may not provide the consolation necessary to remove the pain and suffering you have been brought to bear, but we are hopeful it provides some sense of relief, and we remain committed to achieve justice for all victims of inexcusable financial crimes.”
Since the early 1970s, BERNARD L. MADOFF (“MADOFF”) used his position as Chairman of BLMIS, the investment advisory business he founded, to steal billions from his clients. On March 12, 2009, MADOFF pled guilty to 11 federal felonies, admitting that he had turned his wealth management business into the world’s largest Ponzi scheme, benefitting himself, his family, and select members of his inner circle. On June 29, 2009, United States District Judge Denny Chin sentenced MADOFF to 150 years in prison for running the largest fraudulent scheme in history. Judge Chin ordered MADOFF to forfeit $170,799,000,000 as part of MADOFF’s sentence.
The Madoff Victim Fund is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings. The two prior distributions from the Madoff Victim Fund have already returned nearly $1.3 billion to Madoff victims, and this third distribution will increase that total to almost $2 billion.
Of the approximately $4.05 billion that will ultimately be made available to victims through the Madoff Victim Fund, approximately $2.2 billion was collected as part of the civil forfeiture recovery from the estate of deceased MADOFF investor Jeffry Picower. An additional $1.7 billion was collected as part of a Deferred Prosecution Agreement with JPMorgan Chase Bank N.A. for MADOFF-related Bank Secrecy Act violations. Additional funds were collected through criminal and civil forfeiture actions against MADOFF and his co-conspirators, and certain MADOFF investors.
Mr. Berman praised the work of the FBI and the Madoff Victim Fund, and thanked the Money Laundering and Asset Recovery Section of the Department of Justice’s Criminal Division for their assistance.
For more information about the Madoff Victim Fund, compensation to victims of BLMIS, eligibility criteria, and payment information, please visit www.madoffvictimfund.com.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
Former New York City Human Resources Administration Employee and Two Others Charged with Stealing Hundreds of Thousands in Hra FundsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Lesley Brovner, Acting Commissioner of the New York City Department of Investigation (“DOI”), and James D. Robnett, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that ELIANA BAUTA, GERALDINE PEREZ, and ERIC GONZALES were charged in Manhattan federal court with six counts related to their theft of over $300,000 in funds from the New York City Human Resources Administration (“HRA”). BAUTA perpetrated the offenses in her capacity as an HRA employee. PEREZ is also charged with a separate fraudulent scheme involving over $90,000 of stolen or fraudulently issued Treasury checks. BAUTA was arrested by the U.S. Marshals in Florida, and was presented in the United States District Court for the Middle District of Florida this afternoon. PEREZ and GONZALEZ will appear tomorrow for presentment in the Southern District of New York before Magistrate Judge Gabriel W. Gorenstein.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As an HRA employee, Eliana Bauta was supposed to help New Yorkers in need. Instead, she and her co-defendants allegedly helped themselves, stealing hundreds of thousands in emergency benefits funds. As today’s arrests make clear, we will not tolerate alleged abuses of trust in City agencies, and we remain committed to ensuring that federal and local funds go to the intended recipients, not the pockets of unscrupulous employees and their families and friends.”
IRS-CI Special Agent-in-Charge Robnett said: “When stolen identities are used to file fraudulent tax returns, it robs all of us. IRS-CI will investigate these alleged crimes and protect this country’s tax administration.”
According to the allegations in the Complaint filed today in Manhattan federal court:[[1]]
HRA is an agency of the City of New York responsible for administering the majority of the City’s public assistance programs. Among other things, HRA provides temporary, emergency cash assistance to individuals and families with social service and economic needs to assist them in reaching self-sufficiency. The emergency assistance is funded by the federal government as well as by New York State and City.
Since in or about 2015, DOI has been investigating two related schemes in which an HRA employee – ELIANA BAUTA – defrauded HRA and the City of New York by using her position to commit public assistance fraud. BAUTA worked as a Job Opportunity Specialist for HRA from approximately January 2008 to on or about May 23, 2018. As a Job Opportunity Specialist, BAUTA was at various points responsible for interviewing benefits applicants, compiling and submitting applicants’ paperwork, and disbursing applicants’ benefits.
In the first of the two schemes, BAUTA is alleged to have caused the fraudulent issuance of emergency benefits funds to relatives and acquaintances, including GERALDINE PEREZ and ERIC GONZALES, among others, who in truth and in fact did not qualify for those funds. For example, BAUTA altered a police report submitted by an actual HRA client by changing the name of the victim to a family member’s name, and then entered the doctored report into HRA systems in support of a request for benefits to be issued to that family member. On another occasion, BAUTA submitted a request for emergency benefits to be issued to an individual after an alleged disaster, but no such disaster had occurred, and the payments were intended to repay that individual for putting a supernatural curse on BAUTA’s ex-boyfriend. Both PEREZ and GONZALEZ were knowing recipients of such fraudulently issued funds and shared the proceeds with BAUTA.
In the second scheme, BAUTA is alleged to have obtained access to and misappropriated emergency benefits checks issued to actual HRA clients. Instead of providing the checks to the legitimate clients in need of emergency funding, BAUTA gave them to PEREZ and GONZALES, among other of BAUTA’s relatives and associates, who deposited the checks in their own bank accounts and withdrew the funds, and then shared the proceeds with BAUTA. In total, the two schemes resulted in losses to HRA of at least $309,000 in public funds.
In addition to obtaining stolen HRA checks into her bank account and the bank accounts of family members, PEREZ is also alleged to have deposited or caused to be deposited into these same accounts improperly obtained United States Treasury checks that were issued to other individuals as tax refunds. In total, 23 such checks worth over $91,000 were deposited into bank accounts of PEREZ and her family members and associates. PEREZ then split the proceeds with a tax preparer who assisted in the scheme.
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ELIANA BAUTA, 35, GERALDINE PEREZ, 60, and ERIC GONZALES, 26, all of the Bronx, New York, are each charged with one count of conspiracy to commit federal program theft, which carries a maximum sentence of five years in prison; two counts of federal program theft, each of which carries a maximum sentence of 10 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison. BAUTA is also charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. PEREZ is also charged with one count of receiving stolen government money or property, which carries a maximum sentence of 10 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Berman praised the investigative work of DOI and the IRS, and noted that the investigation is continuing.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Paul Monteleoni and Catherine Ghosh are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Sentenced to Life in Prison for 2010 MurderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOSE SANTIAGO-ORTIZ was sentenced today to three consecutive life sentences for murder, participating in a narcotics conspiracy, and firearms offenses. SANTIAGO-ORTIZ was convicted on May 15, 2018, following a one-week jury trial before U.S. District Judge Lewis A. Kaplan, who also imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Over eight years ago, in service of a violent drug crew, Jose Santiago-Ortiz brutally and senselessly murdered Jerry Tide. Now, thanks to the extraordinary work of the FBI, Santiago-Ortiz stands convicted of that murder and other crimes, and will spend the rest of his life in prison.”
According to the Complaint, the Indictment, other filings in Manhattan federal court, evidence at trial, and statements made in court proceedings:
On September 11, 2010, SANTIAGO-ORTIZ shot and killed Jerry Tide in the vicinity of Jerome Avenue and 182nd Street in the Bronx. Between 2010 and November 2015, SANTIAGO-ORTIZ was the leader of a violent heroin trafficking enterprise (the “Flow Heroin Enterprise”) that trafficked kilogram quantities of heroin, stamped “Flow,” in the Bronx and to Rutland, Vermont. SANTIAGO-ORTIZ killed Jerry Tide in part to increase his position within the Flow Heroin Enterprise. Following his arrest on state charges in March 2014, SANTIAGO-ORTIZ continued to direct narcotics trafficking and acts of violence from prison. In addition, in 2015, members of the Flow Heroin Enterprise engaged in several shootings with rival drug dealers in the Bronx.
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In addition to the prison term, SANTIAGO-ORTIZ, 27, was sentenced to five years of supervised release.
Mr. Berman thanked the Federal Bureau of Investigation’s New York Field Division for their work on the investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Shawn G. Crowley, Lauren B. Schorr, and George D. Turner are in charge of the prosecution.
Three Additional Individuals Charged in Manhattan Federal Court with Firearms TraffickingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Superseding Indictment, charging three additional individuals, JOWAYNE TOMLISON, SEAN KNOTT, and ELIZABETH MCCASKILL, with trafficking in firearms, including the trafficking of firearms from South Carolina to the New York City area. A fourth defendant, Dayvon Chestnut, was previously arrested and indicted on the same charges. TOMLISON and KNOTT were arrested today and will be presented today at the United States Courthouse in Manhattan. MCCASKILL was arrested this afternoon in the District of South Carolina.
U.S. Attorney Geoffrey S. Berman said: “The defendants conspired to put illegal firearms on the streets of New York, increasing the risk of gun violence. Today, thanks to our partners at the ATF and the NYPD, they face federal charges for their crimes.”
ATF Special Agent-in-Charge Ashan M. Benedict said: “Protecting Americans from gun violence is central to the ATF mission. The defendants are alleged to have been part of a ring responsible for numerous illegal firearms out on our city streets. The ATF/ NYPD Joint Firearms Task Force is committed to disrupting and dismantling trafficking rings and bringing those responsible to justice. I would like to thank the United States Attorney’s Office for prosecuting this case.”
According to the allegations and information in the public record, including the allegations in the Superseding Indictment[1]:
From 2016 to 2018, Chestnut was unlawfully purchasing firearms in South Carolina for resale, and directing others, such as MCCASKILL, to do the same. In April and May 2018, Chestnut traveled to the New York City area on at least four occasions to distribute those firearms. TOMLISON and KNOTT obtained firearms from Chestnut for further resale to other individuals.
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All four defendants – Chestnut, 25, of Bishopville, South Carolina, TOMLISON, 28, of Brooklyn, New York, KNOTT, 52, of Queens, New York, and MCCASKILL, 29, of Bishopville, South Carolina, are charged with conspiracy to traffic in firearms and firearms trafficking, each of which carries a maximum statutory penalty of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the efforts of the ATF and NYPD in this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorney Sarah Krissoff in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment forth herein constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Sentenced to More Than 12 Years in Prison for Facilitation of Sex Trafficking, Drug Trafficking, Firearms, and Identity Theft CrimesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that KEVIN PINNOCK, a/k/a “Kev Savage,” a/k/a “Sav,” was sentenced yesterday to 12 years and three months in prison for using the internet to facilitate sex trafficking, possessing crack cocaine with intent to distribute, possessing a firearm in furtherance of drug trafficking, and possessing stolen identification documents. PINNOCK previously pled guilty before United States District Judge Deborah A. Batts, who also imposed yesterday’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Kevin Pinnock used violence and coercion to force women to engage in commercial sex for his own profit. He will now serve a substantial prison sentence for his crimes. The prosecution of Kevin Pinnock is part of our determined effort to deliver justice to victims of sex trafficking and other forms of commercial exploitation, and to deter others from engaging in this predatory criminal conduct.”
In sentencing PINNOCK, Judge Batts said: “The nature of the crimes in which the defendant was convicted” were “unspeakable, violent, gratuitous crimes he arrogantly committed on young women for his financial gain,” and that his theft of others’ identities “show[s] a shocking disregard on the part of the defendant for the havoc his crimes create for innocent victims in terms of their ruined credit and long-term ramifications on their financial lives.”
According to the Complaint, Indictment, Superseding Indictment, and other documents filed in the case, as well as statements made during court proceedings:
In 2015 and 2016, PINNOCK posted online advertisements to solicit customers to engage in commercial sex with women PINNOCK forced into prostitution by violence, abuse, and coercion. PINNOCK retained virtually all of the profits from his sex trafficking business.
Since at least November 2016, PINNOCK sold crack cocaine and possessed a loaded firearm, which had been stolen, in order to protect his drug dealing business. He also possessed dozens of stolen identification cards – including driver’s licenses and Social Security cards – which he sold to other individuals who were engaged in identity theft and fraud. Many of the identification cards had been obtained through the commission of robberies.
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In addition to his prison term, PINNOCK, 22, of the Bronx, New York, was sentenced to three years of supervised release, a forfeiture money judgment in the amount of $15,000, and restitution in the amount of $100,000.
Mr. Berman praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and United States Immigration and Customs Enforcement’s Homeland Security Investigations, and thanked the United States Secret Service, the Social Security Administration’s Office of the Inspector General, the New York City Police Department, and the Bronx County District Attorney’s Office for their assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Robert B. Sobelman is in charge of the prosecution.
Father and Son Sentenced to Five Years in Prison for Selling Fentanyl and Oxycodone on the Dark WebRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL LUCIANO and PHILIP LUCIANO, a father and son, were sentenced today to five years in prison for selling fentanyl and oxycodone over the “dark web,” including on the dark web marketplace AlphaBay. The LUCIANOS also sold fentanyl that substantially contributed to a victim’s non-fatal overdose in 2015. Today’s sentences were imposed by U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Geoffrey S. Berman said: “The defendants’ dangerous fentanyl distribution contributed to a victim’s overdose. Fortunately, the victim survived. After this overdose, the defendants continued to deal drugs, using the dark web – a place where some criminals think they can hide – to sell fentanyl and oxycodone, two highly addictive and potentially lethal opioids. For their criminal conduct, this father-son duo has now been sentenced to federal prison.”
According to the allegations in the Complaint and the Indictment to which the LUCIANOS pled guilty, as well as statements made in court:
From at least in or about January 2015 through July 2017, MICHAEL LUCIANO and PHILIP LUCIANO conspired to distribute fentanyl, butyryl fentanyl (a fentanyl analogue), and oxycodone. They sold narcotics both in person and – from at least February 2016 through July 2017 – over the dark web. In March 2015, the LUCIANOS sold fentanyl to a repeat customer who overdosed, was administered naloxone, taken to the hospital, and survived. The overdose victim sent text messages to PHILIP LUCIANO from the hospital, stating, “I called you / Your dad at the house and saw him / I got back home and shot some. I thought it might have been too much, especially considering my last dose of sub was Saturday. I became unresponsive and my friend called an ambulance. They gave me narcan and I’m at the hospital now / Can I settle up and get 60 more tomorrow?” PHILIP LUCIANO replied, “Give me a call when u can.”
Despite this overdose in 2015, the LUCIANOS continued to sell drugs, including over the dark web in 2016 and 2017. On AlphaBay, they sold narcotics using the vendor name “Zane61.” AlphaBay customers repeatedly provided positive feedback for fentanyl and oxycodone they purchased from Zane61. One of the LUCIANOS’ AlphaBay customers wrote, for example: “Great stealth, fast shipping, legit product. Perfect 10/10.” In July 2017, MICHAEL LUCIANO gave a confession to agents from the U.S. Department of Homeland Security – Homeland Security Investigations (“HSI”). He admitted, among other things, that PHILIP LUCIANO had handled the technological aspects of their drug transactions over the dark web, PHILIP had reported to MICHAEL drug orders they had received online, and MICHAEL had shipped the narcotics, via the United States Postal Service, to the LUCIANOS’ customers.
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In addition to their prison terms, MICHAEL LUCIANO, 59, and PHILIP LUCIANO, 30, both of Staten Island, were each sentenced to four years of supervised release and forfeiture money judgments of $15,953 along with certain property, such as more than 2.5 Bitcoin.
Mr. Berman praised HSI for its outstanding investigative work. Mr. Berman also thanked the U.S. Postal Inspection Service, U.S. Customs and Border Protection, and the New York City Police Department for their valuable assistance.
This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.
California Man Sentenced to More Than Five Years in Prison for His Role in Multimillion-Dollar Fraud on Film InvestorsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that STEVEN BROWN was sentenced today to 63 months in prison for defrauding victims of over $12.5 million by participating in a fraudulent scheme to solicit investments in feature-length films and documentaries based on misrepresentations and fraudulent documents. BROWN previously pled guilty before U.S. Magistrate Judge Henry B. Pitman, and was sentenced today by U.S. District Judge Kimba M. Wood.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Steven Brown perpetrated a multimillion-dollar fraud by convincing victims to invest in Hollywood films and documentaries with false promises and fraudulent documents. He continued the scheme even after he was arrested, luring another investor with the same lies. Now Brown has been sentenced for his crimes.”
According to allegations in an Indictment and other documents filed in federal court, as well as statements made in public court proceedings:
From at least 2009 through 2017, STEVEN BROWN participated in a scheme in which BROWN, along with co-conspirators, solicited investments in the marketing and production of feature-length films and documentaries from investors, including by furnishing them with fraudulent documents and by promising guaranteed returns, which never materialized.
In order to solicit these investments, BROWN and others made material misrepresentations about, among other things, their own investments in the films for which they were soliciting money, as well as investments that they claimed to have received from other investors. To support their claims, BROWN and his co-conspirators at times sent the victims falsified financial records that reflected investments in the films that had never actually been made. BROWN and his co-conspirators also told certain victims that their investments would be guaranteed by a fictitious entity, and provided falsified documents in support of these purported guarantees. On one occasion, Brown sent an email to a victim attaching what purported to be a current bank statement for an account held by the fictitious entity, as well as an email from an executive at the fictitious entity guaranteeing the victim’s investment. In fact, neither the account nor the executive actually existed.
BROWN continued to solicit investments in film projects based on misrepresentations even after being arrested on the criminal charges brought in this case. In 2017, BROWN solicited an investment from a victim of the scheme in a film production and distribution company with which BROWN was purportedly involved by promising the victim a 50 percent return on the investment. The victim’s funds were never returned and were, in part, used to pay expenses unrelated to any film projects.
In total, BROWN and his co-conspirators solicited millions of dollars from their victims, allegedly to be used for either marketing or production costs associated with the various films. In reality, however, the money that was received from these investors was primarily used to fund other projects, to pay back previously defrauded investors, and to pay the personal expenses of BROWN and his co-conspirators, including, among other things, the purchase of a condominium for BROWN.
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In addition to the prison sentence, BROWN, 48, of Los Angeles, California, was sentenced to three years of supervised release and ordered to forfeit his ownership interest in a California property and $673,028.93 in criminal proceeds. Judge Wood will impose restitution at a later date.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Katherine Reilly, Noah Solowiejczyk, and Ryan Finkel are in charge of the prosecution.
Bronx Man Sentenced to 20 Years in Prison for Possession and Distribution of Child Pornography and His Attempt to Entice A MinorRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), announced that MARK IRIZARRY was sentenced yesterday in Manhattan federal court to 20 years in prison for attempted enticement of a minor to engage in sexual activity and possession and distribution of child pornography. IRIZARRY pled guilty to these charges on June 15, 2018. United States District Court Judge Valerie E. Caproni imposed yesterday’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Mark Irizarry admitted to the unconscionable crime of attempting to entice a nine-year-old child to have sex with him. He will now serve 20 years in prison, where he will be unable to harm children.”
FBI Assistant Director William F. Sweeney Jr. said: “Child predators like Mark Irizarry are among our society’s most heinous offenders, and the conduct in which he attempted to engage almost defies comprehension. Irizzary’s sentence insures he will be locked away in a place where he will be unable to harm children. The FBI, though our Child Exploitation and Human Trafficking Task Force, will continue to work tirelessly to protect our nation’s children.”
According to the Indictment and other filings in Manhattan federal court:
Between November 2017 and December 2017, IRIZARRY used an online social media application to send undercover law enforcement officers more than 80 unique image and video files known to contain child pornography. The child pornography sent by IRIZARRY included depictions of prepubescent children, including infants and toddlers, engaged in sexual activity with other children or adults. During these conversations with one of the undercover officers, IRIZARRY stated that he wanted to have sex with the undercover officer’s nine-year-old child and that he wanted to film the act on his cellphone. IRIZARRY and the undercover officer planned a meeting time and location to carry out IRIZARRY’s plan; IRIZARRY was arrested on the date and at the location that he said he would meet the undercover law officer. When he was arrested, IRIZARRY possessed several bags of candy and condoms. After his arrest, law enforcement officers recovered approximately 18,000 uniquely named image files and 2,700 uniquely named video files, mostly consistent with child pornography, on remote computing platform accounts that IRIZARRY created.
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In addition to his prison term, IRIZARRY, 28, of the Bronx, New York, was sentenced to 10 years of supervised release and restitution in amount to be determined by the Court at a later date.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation, and thanked the New York City Police Department for their assistance.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant U.S. Attorney Nicholas W. Chiuchiolo is in charge of the prosecution.
Former Honduran Congressman and Brother of the Current President of Honduras Charged with Conspiring to Import Cocaine into the United States and Related Firearms OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Raymond Donovan, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that former Honduran congressman Juan Antonio Hernandez Alvarado, a/k/a “Tony Hernandez,” (“HERNANDEZ”) was charged in Manhattan federal court with conspiring to import cocaine into the United States, related weapons offenses involving the use and possession of machineguns and destructive devices, and making false statements to federal agents. HERNANDEZ is the brother of the current president of Honduras, Juan Orlando Hernandez. The case is assigned to U.S. District Judge P. Kevin Castel. HERNANDEZ was arrested on November 23, 2018, in Miami, Florida, and will appear this afternoon in Miami federal court before United States Magistrate Judge Jonathan Goodman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, former Honduran congressman Tony Hernandez was involved in all stages of the trafficking through Honduras of multi-ton loads of cocaine that were destined for the U.S. Hernandez allegedly arranged machinegun-toting security for cocaine shipments, bribed law enforcement officials for sensitive information to protect drug shipments, and solicited large bribes from major drug traffickers. Thanks to the ongoing work of the DEA, Hernandez is now in custody on U.S. soil and facing justice in the U.S. courts.”
Special Agent in Charge Raymond Donovan said: “Drug trafficking and corruption around the world threatens the rule of law, fuels violence and instability, and harms innocent families and communities. Hernandez and his criminal associates allegedly conspired with some of the world’s most deadly and dangerous transnational criminal networks in Mexico and Colombia to flood American streets with deadly drugs. DEA looks forward to Hernandez facing American justice and answering for his alleged crimes.”
As alleged in the Superseding Indictment unsealed in federal court:[1]
From at least in or about 2004, up to and including in or about 2016, multiple drug-trafficking organizations in Honduras and elsewhere worked together, and with support from certain prominent public and private individuals, including Honduran politicians and law enforcement officials, to receive multi-ton loads of cocaine sent to Honduras from, among other places, Colombia via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States. For protection from official interference, and in order to facilitate the safe passage through Honduras of multi-hundred-kilogram loads of cocaine, drug traffickers paid bribes to public officials, including certain members of the National Congress of Honduras.
HERNANDEZ is a former member of the National Congress of Honduras, the brother of the current president of Honduras, and a large-scale drug trafficker who worked with other drug traffickers in, among other places, Colombia, Honduras, and Mexico, to import cocaine into the United States. From at least in or about 2004, up to and including in or about 2016, HERNANDEZ was involved in processing, receiving, transporting, and distributing multi-ton loads of cocaine that arrived in Honduras via planes, go-fast vessels, and, on at least one occasion, a submarine. HERNANDEZ had access to cocaine laboratories in Honduras and Colombia, at which some of the cocaine was stamped with the symbol “TH,” i.e., “Tony Hernandez.” HERNANDEZ also coordinated and, at times, participated in providing heavily armed security for cocaine shipments transported within Honduras, including by members of the Honduran National Police and drug traffickers armed with, among other weapons, machineguns.
As part of his drug-trafficking activities, HERNANDEZ and his co-conspirators bribed law enforcement officials for sensitive information to protect drug shipments and solicited large bribes from major drug traffickers for HERNANDEZ.
In or about February 2014 in Honduras, HERNANDEZ met with Devis Leonel Rivera Maradiaga, the former leader of a violent Honduran drug-trafficking organization known as the Cachiros, for a meeting arranged by, among others, a former member of the Honduran National Police. During a video- and audio-recorded portion of that meeting, HERNANDEZ agreed to help Rivera Maradiaga by causing Honduran government entities to pay money owed to one or more Cachiros money-laundering front companies in exchange for kickback payments from Rivera Maradiaga. Rivera Maradiaga paid HERNANDEZ approximately $50,000 during the meeting.
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The Superseding Indictment charges HERNANDEZ, 40, with four counts: (1) conspiring to import cocaine into the United States, (2) using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, (3) conspiring to use and carry machine guns and destructive devices during, and to possess machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, and (4) making false statements to federal agents. If convicted, HERNANDEZ faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison on Count One, a mandatory minimum sentence of 30 years in prison and a maximum term of life in prison on Count Two, a maximum term of life in prison on Count Three, and a maximum term of five years in prison on Count Four. The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, New York Strike Force, and Tegucigalpa 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 Emil J. Bove III and Mathew J. Laroche are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Bronx Men Plead Guilty in Manhattan Federal Court to Explosives ChargesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CHRISTIAN TORO and TYLER TORO pled guilty to manufacturing and possessing a destructive device, and conspiring to do so, in connection with their stockpiling of explosive materials and manufacture of a destructive device. Both defendants pled guilty today in Manhattan federal court before U.S. District Judge Richard M. Berman. They are scheduled to be sentenced on March 26, 2019, CHRISTIAN TORO at 11:00 a.m. and TYLER TORO at 2:00 p.m.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As admitted in court today, Christian Toro and Tyler Toro sought to build a destructive device that could have caused great damage. Christian Toro used a minor student to assist him in this endeavor. Thanks to the excellent work of the FBI and the NYPD, no one was injured as a result of this grave conduct, and the defendants now await sentencing for their crimes.”
According to the allegations in the Complaint, the Indictment, and statements made during court proceedings:
Between approximately October 2017 and February 2018, CHRISTIAN TORO and TYLER TORO conspired to build and possess a destructive device at their residence in the Bronx, New York (the “Residence”). CHRISTIAN TORO, a former teacher at a high school in Harlem, New York (the “School”), paid students from the School for their assistance in manufacturing the destructive device, doling out approximately $50 per hour in return for the students’ work dismantling fireworks and storing the explosive powder contained within those fireworks in containers. CHRISTIAN TORO also had on his School laptop a copy of a book that provided instructions for, among other things, manufacturing explosive devices.
On February 15, 2018, law enforcement agents searched the Residence pursuant to a judicially authorized search warrant. In a bedroom shared by CHRISTIAN TORO and TYLER TORO, law enforcement agents recovered numerous components for use in building a destructive device and other dangerous substances, including: (i) a glass jar containing low explosive powder; (ii) a strip of magnesium metal; (iii) approximately twenty pounds of iron oxide; (iv) approximately five pounds of aluminum powder; (v) a mixture of iron oxide and aluminum powder, the key ingredients for thermite; (vi) approximately five pounds of potassium nitrate; (vii) a cardboard box containing firecrackers; and (viii) metal spheres, which can be used as fragmentation for a bomb.
Also in the Residence, law enforcement agents found a handwritten diary labeled with TYLER TORO’s name, which stated, among other things, “WE ARE TWIN TOROS STRIKE US NOW, WE WILL RETURN WITH NANO THERMITE” and “I AM HERE 100%, LIVING, BUYING WEAPONS. WHATEVER WE NEED.” Agents also recovered a page inside a notebook found in the Residence labeled “Operation Flash,” with a ledger appearing to delineate the hours worked and payment owed to one of the School’s students.
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CHRISTIAN TORO, 28, and TYLER TORO, 28, both of the Bronx, New York, each pled guilty to one count of conspiracy to manufacture and unlawfully possess a destructive device, which carries a maximum sentence of five years in prison; one count of unlawfully manufacturing a destructive device, which carries a maximum sentence of 10 years in prison; and one count of unlawfully possessing a destructive device, which carries a maximum sentence of 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as the defendants’ sentences will be determined by Judge Berman.
U.S. Attorney Berman praised the outstanding investigative work of the Federal Bureau of Investigation’s (“FBI”) New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorney Elizabeth A. Hanft is in charge of the prosecution.
Dean Jones Sentenced in Manhattan Federal Court to 26 Years in Prison in Connection with Violent Armed Robbery and Narcotics TraffickingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that DEAN JONES, a/k/a “Kurupt,” was sentenced today in Manhattan federal court to 26 years in prison for robbing a restaurant in 2012, during which JONES shot an innocent customer, as well as for JONES’s participation in a wide-ranging conspiracy to distribute crack cocaine, heroin, and other drugs. JONES was convicted of robbery-related and narcotics-related offenses at separate jury trials in April and December 2017 before United States District Judge Vernon S. Broderick.
U.S. Attorney Geoffrey S. Berman said: “While robbing a restaurant, Dean Jones shot and badly injured an innocent civilian. What is more, Jones committed this robbery during the same time that he was selling large amounts of crack, heroin, and other drugs. Thanks to the exceptional work of the ATF, Jones will now spend decades in prison. Today’s sentence sends a strong message that this kind of violent and destructive behavior will not be tolerated.”
* * *
In addition to the prison term, JONES, 37, of Bronx, New York, was sentenced to five years of supervised release. Of the 10 defendants charged in connection to this case, all 10 have pled guilty or been convicted at trial.
Mr. Berman thanked and praised the Bureau of Alcohol, Tobacco, Firearms, and Explosives for its outstanding work in this investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Christopher Clore, Jessica Feinstein, Thomas McKay, and Hagan Scotten are in charge of the prosecution.
Chairman and Ceo of Sham Oil and Gas Company Sentenced to 12 Years in Prison for International Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that RAHEEM J. BRENNERMAN, a/k/a “Jefferson R. Brennerman,” a/k/a “Ayodeji Soetan,” was sentenced yesterday in Manhattan federal court to 12 years in prison for operating a wide-ranging scheme to fraudulently obtain tens of millions of dollars in bank financing. BRENNERMAN was convicted by a jury on December 6, 2017, of conspiracy to commit bank and wire fraud, bank fraud, wire fraud, and visa fraud after a two-week trial before United States Circuit Judge Richard J. Sullivan, who also imposed yesterday’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “For years, Raheem J. Brennerman conned financial institutions and investors into extending loans to his phony businesses. Instead of using that money for his sham business, Brennerman took elaborate steps to disguise his fraud and lined his own pockets with millions of dollars in the process. He will now serve a substantial prison sentence for his crimes.”
In sentencing BRENNERMAN, Judge Sullivan told him: “You’re an inveterate con man. You’re a crook.” Judge Sullivan also told BRENNERMAN, “You’re someone for whom the truth has no value. You’re a liar. Shame on you.”
According to the allegations in the Indictment, other filings in Manhattan federal court, and the evidence presented at trial:
BRENNERMAN, from 2011 until 2017, orchestrated a scheme to defraud financial institutions through his operation of a purported oil and gas company called The Blacksands Pacific Group, Inc. (“Blacksands Pacific”), as well as several subsidiaries and associated corporate entities. BRENNERMAN sought financing for purported business deals by falsely representing that Blacksands Pacific had significant worldwide involvement in the exploration and development of oil and gas reserves, produced over 10,000 barrels of oil per day, had over $1 billion in long-term assets and over 100 million barrels of proved oil reserves, and employed approximately 100 employees, when, in fact, BRENNERMAN knew that Blacksands Pacific lacked any long-term assets, and had, at most, a few employees and minimal involvement in the oil and gas industry. As part of the fraudulent scheme, BRENNERMAN also lied about his name, place of birth, citizenship, and finances, and invented fake employees. Once BRENNERMAN received financing from victims based on his false statements, BRENNERMAN used significant amounts of the money to pay his own personal expenses, including the lease of a luxury condominium in Las Vegas, Nevada, and stays at expensive hotels (including thousands of dollars’ worth of in-room dining service), as well as the purchase of international flights to Europe, chartered car services, fine jewelry, high-end designer clothing, and spa treatments. In total, BRENNERMAN attempted to defraud financial institutions of tens of millions of dollars.
* * *
In addition to his prison term, BRENNERMAN, 40, of Las Vegas, Nevada, was sentenced to three years of supervised release, a forfeiture money judgment in the amount of $4,400,000, and restitution in an amount to be determined by the Court at a later date.
Mr. Berman praised the outstanding investigative work of the Special Agents for the United States Attorney’s Office for the Southern District of New York. He also thanked the United States Department of State’s Diplomatic Security Service, United States Immigration and Customs Enforcement’s Homeland Security Investigations, and the United States Postal Inspection Service for their assistance.
On September 12, 2017, BRENNERMAN and Blacksands Pacific were convicted by a jury of criminal contempt of court after a one-week trial before United States District Judge Lewis A. Kaplan. On May 21, 2018, Judge Kaplan sentenced BRENNERMAN to two years in prison and a $10,000 fine. The sentence imposed by Judge Sullivan will run consecutively to the sentence imposed by Judge Kaplan. On September 17, 2018, Judge Kaplan sentenced Blacksands Pacific to five years of probation and a $1,000,000 fine.
* * *
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Nicolas Roos, Danielle R. Sassoon, Robert B. Sobelman, and Emil J. Bove III are in charge of the prosecution.
Bronx Man Charged with Defacing African Burial Ground National Monument with Threatening Racial SlurRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that IVAN NIEVES has been charged with vandalism and disorderly conduct. NIEVES was arrested this morning and will be presented before United States Magistrate Judge Henry Pitman in Manhattan later this afternoon.
U.S. Attorney Geoffrey S. Berman said: “The protections of the First Amendment allow all Americans to express their opinions without fear of retaliation, censorship, or legal sanction. However, those protections do not apply when you deface federal property in the name of hate. Today’s arrest of Ivan Nieves for allegedly defacing the African Burial Ground National Monument aptly demonstrates the sanctity of those protections; and that those who do not follow the law while expressing their freedom of speech will be charged with federal crimes.”
As alleged in the Information,[1] on or about November 1, 2018, NIEVES defaced a sign on the grounds of the African Burial Ground National Monument by writing a threatening racial slur on it.
* * *
NIEVES, 57, of the Bronx, New York, is charged with one count of vandalism and one count of disorderly conduct. Each charge carries a maximum penalty of six months 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 the New York Regional Office of the Federal Protective Service, the New York Field Office of the United States Park Police, and the New York City Police Department.
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.
The charges contained in the Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Information and the descriptions of the Information constitute only allegations, and every fact described should be treated as an allegation.
Recording Artist and Performer Tekashi 6ix 9ine and Five Other Members and Associates of Violent New York City Gang Charged in Manhattan Federal Court with Racketeering and Firearms OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Angel M. Melendez, Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging six members and associates of the Nine Trey Gangsta Bloods, also known as “Nine Trey,” with racketeering conspiracy and firearms offenses.
Five defendants were taken into custody last night and today; they will be presented and arraigned before U.S. Magistrate Judge Henry B. Pitman later today. A sixth defendant is in state custody and will be transferred to federal custody. The case is assigned to U.S. District Judge Paul A. Engelmayer.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the indictment, this gang, which included platinum-selling rap artist Tekashi 6ix 9ine, wreaked havoc on New York City, engaging in brazen acts of violence. Showing reckless indifference to others’ safety, members of the gang were allegedly involved in robberies and shootings, including a shooting inside the crowded Barclay’s Center, and a shooting in which an innocent bystander was hit. Thanks to the extraordinary work of HSI, ATF, and the NYPD, the defendants will now face justice in federal court.”
HSI Special Agent in Charge Angel M. Melendez said: “Members of Nine Trey, who wielded firearms and pushed highly addictive drugs onto New York City streets, allegedly showed an unprecedented level of violence this year, and for that they are now facing multiple charges, including an incident in which an innocent bystander was shot. This criminal enterprise has no business in our city, and we will continue to work with our partners to ensure that Nine Trey crew members, including the more well-known ‘Tekashi 6ix 9ine,’ are in a place where they cannot inflict further violence on our communities.”
ATF Special Agent in Charge Ashan M. Benedict said: “ATF stands firmly at the frontline in the fight against violent crime. The individuals charged today with racketeering conspiracy and firearms offenses are members and associates of the Nine Trey Gangsta Bloods, also known as ‘Nine Trey.’ The members and associates of this street gang engaged in violent robberies, assaults, and shootings. The ATF/ NYPD Joint Firearms Task Force, with members from HSI, Federal Probation, NYS Parole and NYC Department of Correction, work tirelessly alongside their other law enforcement partners to rid the streets of individuals that spread violence and endanger their fellow citizens. I would like to thank the United States Attorney’s Office for their work in prosecuting in the case.”
As alleged in the Indictment unsealed today in Manhattan federal court[1]:
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, furanly fentanyl, MDMA, dibutylone, and marijuana.
The Indictment charges JAMEL JONES, a/k/a “Mel Murda,” KIFANO JORDAN, a/k/a “Shotti,” JENSEL BUTLER, a/k/a “Ish,” DANIEL HERNANDEZ, a/k/a “Tekashi 6ix 9ine,” FUGUAN LOVICK, a/k/a “Fu Banga,” and FAHEEM WALTER, a/k/a “Crippy,” with racketeering and firearms offenses. Count One of the Indictment charges JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with participating in a racketeering conspiracy for their criminal involvement in Nine Trey. Count Two charges JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with using and carrying firearms, which were brandished and discharged, in connection with the racketeering conspiracy. Counts Three through Five charge JONES, JORDAN, BUTLER, HERNANDEZ, and WALTER with participating in a gunpoint robbery in the vicinity of West 40th Street and 8th Avenue in Manhattan on or about April 3, 2018. Counts Six and Seven charge LOVICK with shooting at rivals of Nine Trey in the Barclays Center in Brooklyn on or about April 21, 2018. Count Eight charges JORDAN, BUTLER, HERNANDEZ, and WALTER with agreeing to shoot an individual who had shown disrespect to Nine Trey, resulting in an innocent bystander being shot, in the vicinity of Fulton Street and Utica Avenue in Brooklyn on or about July 16, 2018.
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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 HSI, ATF, and the NYPD. He also thanked the Brooklyn District Attorney’s Office and the New York City Department of Correction’s Intelligence Bureau 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, Jonathan Rebold, and Sebastian Swett are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
JAMEL JONES (age 38)
KIFANO JORDAN (age 36)
JENSEL BUTLER (age 36)
DANIEL HERNANDEZ (age 22)
FAHEEM WALTER (age 29)
20 years in prison
2
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was discharged
18 U.S.C. § 924(c)
JAMEL JONES
KIFANO JORDAN
JENSEL BUTLER
DANIEL HERNANDEZ
FAHEEM WALTER
Life in prison
Mandatory minimum of 10 years in prison as to JONES; mandatory minimum of 25 years in prison as to the other defendants
3
Violent crime in aid of racketeering (April 3, 2018)
18 U.S.C. § 1959
KIFANO JORDAN
JENSEL BUTLER
DANIEL HERNANDEZ
FAHEEM WALTER
20 years in prison
4
Violent crime in aid of racketeering (April 3, 2018)
18 U.S.C. § 1959
KIFANO JORDAN
JENSEL BUTLER
DANIEL HERNANDEZ
FAHEEM WALTER
3 years in prison
5
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was brandished
18 U.S.C. § 924(c)
KIFANO JORDAN
JENSEL BUTLER
DANIEL HERNANDEZ
FAHEEM WALTER
Life in prison
Mandatory minimum of 7 years in prison
6
Violent crime in aid of racketeering (April 21, 2018)
18 U.S.C. § 1959
FUGUAN LOVICK (age 40)
20 years in prison
7
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence, which was discharged
18 U.S.C. § 924(c )
FUGUAN LOVICK
Life in prison
Mandatory minimum of 10 years in prison
8
Violent crime in aid of racketeering (July 16, 2018)
KIFANO JORDAN
JENSEL BUTLER
DANIEL HERNANDEZ
FAHEEM WALTER
3 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.
Queens Immigration Attorney Found Guilty of Operating Asylum Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ANDREEA DUMITRU, a/k/a “Andreea Dumitru Parcalaboiu,” an immigration attorney based in Queens, New York, was found guilty today in Manhattan federal court of asylum fraud, making false statements to immigration authorities, and aggravated identity theft following a two-week trial before United States District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Andreea Dumitru, an immigration attorney, scammed the asylum program, which was designed to provide safe harbor for the world’s most vulnerable people. She will now serve time in prison for her crimes.”
According to the Superseding Indictment, other filings in Manhattan federal court, and the evidence presented at trial:
Between March 27, 2013, and 2017, DUMITRU operated a scheme to submit fraudulent I-589 Forms in connection with applications for asylum. Specifically, DUMITRU submitted over 100 applications in which she knowingly made false statements and representations about, among other things, the applicants’ personal narratives of alleged persecution, criminal histories, and travel histories. DUMITRU deliberately fabricated detailed personal stories of purported mistreatment of her clients, forged her clients’ signatures, and falsely notarized affidavits.
* * *
DUMITRU, 43, of Queens, NY, was convicted of one count of asylum fraud, which carries a maximum sentence of 10 years in prison, one count of making false statements, which carries a maximum sentence of five years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of Homeland Security Investigations and United States Citizenship and Immigration Services, and thanked the Federal Bureau of Investigation and the United States Department of Justice’s Executive Office for Immigration Review for their assistance.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Alison G. Moe, and Robert B. Sobelman are in charge of the prosecution.
Manhattan U.S. Attorney Announces Criminal Charges Against Société Générale S.A. for Violations of the Trading with the Enemy ActRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James D. Robnett, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Mark Bialek, Inspector General, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (“IG-FRB/CFPB”), announced criminal charges against Société Générale S.A. (“SG” or the “Bank”) consisting of a one-count felony information charging SG with conspiring to violate the Trading with the Enemy Act (“TWEA”) and the Cuban Asset Control Regulations promulgated thereunder (the “Cuban Regulations”) for SG’s role in processing billions of dollars of U.S. dollar transactions using the U.S. financial system, in connection with credit facilities involving Cuba (the “Cuban Credit Facilities”). The case is assigned to United States District Judge P. Kevin Castel.
Mr. Berman also announced an agreement (the “Agreement”) under which SG agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay penalties totaling $1,340,165,000 to federal and state prosecutors and regulators, refrain from all future criminal conduct, and implement remedial measures as required by its regulators. Assuming SG’s continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of three years, after which time the Government will seek to dismiss the charges. The $1.34 billion in penalties represents the second largest penalty ever imposed on a financial institution for violations of U.S. economic sanctions.
The penalty shall be collected, in part, through SG’s forfeiture to the United States of $717,200,000 in a civil forfeiture action also filed today. Of that amount, one-half shall be transferred to the United States Victims of State Sponsored Terrorism Fund, pursuant to the Justice for United States Victims of State Sponsored Terrorism Act. In addition, SG has reached separate agreements with the New York County District Attorney’s Office (“DANY”), United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”), the Federal Reserve Board of Governors and the Federal Reserve Bank of New York (collectively the “Federal Reserve”), and the New York State Department of Financial Services (“DFS”), under which it shall pay additional penalties of $622,965,000 as follows: $162,800,000 to DANY; $53,900,000 to OFAC; $81,265,000 to the Federal Reserve; and $325,000,000 to DFS.
The Government entered into this resolution due, in part, to SG’s acceptance and acknowledgement of responsibility under the laws of the United States for its conduct, as exhibited by its undertaking of a thorough internal investigation, collecting and producing voluminous evidence located in other countries to the full extent permitted under applicable laws and regulations, and its enhancement of its compliance program and sanctions-related internal controls both before and after it became the subject of a U.S. law enforcement investigation. These factors and SG’s willingness to enter into the commitments set forth in the Agreement, along with all other relevant factors and considerations, collectively weighed in favor of deferral of prosecution, and outweighed in this particular case SG’s failure to self-report all of its violations of United States sanctions laws in a timely manner, as described below.
U.S. Attorney Geoffrey S. Berman said: “Today, Société Générale has admitted its willful violations of U.S. sanctions laws – and longtime concealment of those violations – which resulted in billions of dollars of illicit funds flowing through the U.S. financial system. With today’s resolution, the Bank has accepted responsibility for its criminal conduct and demonstrated its commitment to remedying these failures and enhancing its compliance programs and internal controls. Other banks should take heed: Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this Office and our partner agencies.”
IRS-CI Special Agent in Charge James D. Robnett said: “Today, Société Générale is being held accountable for illegal transactions made through the U.S. financial system on behalf of entities subject to U.S. economic sanctions. Sanctions enforcement is of vital importance to our national security and the integrity of our financial system. IRS-CI will continue to work closely with partner law enforcement agencies, federal regulators and prosecutors to ensure compliance with federal banking laws to promote integrity across financial institutions worldwide.”
FRB/CFPB Inspector General Mark Bialek said: “As today’s agreement makes clear, Société Générale’s knowing and willful violation of U.S. economic sanctions through structuring and concealment has resulted in an agreement to pay over $1.3 billion in monetary penalties. I commend our agents in New York and their law enforcement partners for their hard work, along with the coordination of the Federal Reserve Bank of New York and the Federal Reserve Board, which resulted in this outcome.”
According to the documents filed today in Manhattan federal court:
SG’s Operation of U.S. Dollar Credit Facilities to Finance Cuban Business
From approximately 2004 through 2010, SG, in contravention of U.S. sanctions laws, operated 21 credit facilities that provided significant money flow to Cuban banks, entities controlled by Cuba, and Cuban and foreign corporations for business conducted in Cuba; those facilities (the “Cuban Credit Facilities”) involved substantial U.S.-cleared payments through U.S. financial institutions, in violation of TWEA and the Cuban Regulations. In total, during this time period, SG engaged in more than 2,500 sanctions-violating transactions through U.S. financial institutions, causing those U.S. financial institutions to process close to $13 billion in transactions that otherwise should have been rejected, blocked, or stopped for investigation pursuant to regulations promulgated by OFAC. The majority of these transactions and most of the total value involved a U.S. dollar credit facility designed to finance oil transactions between a Dutch commodities trading firm and a Cuban corporation with a state monopoly on the production and refining of crude oil in Cuba.
SG avoided detection, in part, by making inaccurate or incomplete notations on payment messages that accompanied these sanctions-violating transactions. Indeed, the SG department that managed many of the Cuban Credit Facilities engaged in a deliberate practice of concealing the Cuban nexus of U.S. dollar payments that were made in connection with those facilities. For example, SG routed approximately 500 U.S. dollar-denominated payments through a particular Spanish bank in order to disguise the fact that the transactions violated U.S. sanctions, and employees were instructed to omit any references to Cuba or Cuban entities from the messages that accompanied the fund transfers.
In late 2004, SG began to reconsider its Cuba business in light of U.S. enforcement actions, and began to shift away from U.S. dollar transactions involving Cuba to avoid U.S. scrutiny and possible penalties. In a December 1, 2004, email, a senior leader of SG’s global Group Compliance Department expressed concern to a top executive in the SG group responsible for liaising with SG’s regulators that (1) “any discovery of breach” regarding Cuba “attracts the most stringent punishment,” and (2) U.S. authorities, including “criminal authorities,” were focusing on U.S. dollar payments that had been sent through U.S. banks. Several days later, the same senior leader of Group Compliance, after being alerted to a U.S. dollar transaction between SG Canada and an exporter of goods to Cuba in connection with which “[n]o reference to Cuba is made to [the Canadian bank],” emailed several members of SG’s senior management, noting that “we have lived with the OFAC list for some time and have developed various methods of avoiding it,” and asked whether “given the new regulatory scrutiny in the US on USD payments do we remain satisfied with those methods?”
In mid- to late-December 2004, as a result of these concerns, SG’s top management determined that U.S. dollar transactions in connection with the Cuban Credit Facilities should be eliminated as quickly as possible, but still permitted continued U.S. dollar transactions in the interim. Despite the decision in 2004 to wind down U.S. dollar transactions for the Cuban Credit Facilities, as well as the Bank’s overall Cuban exposure, SG continued to engage in such transactions for almost six more years, until October 2010. The conduct continued despite the ongoing awareness of SG’s Group Compliance, and despite awareness by the participants of ongoing U.S. sanctions enforcement actions. In October 2010, as the last of the Cuban Credit Facilities was being replaced with a non-U.S. dollar facility at the insistence of a senior leader of SG’s Group Sanctions Compliance function, SG sent payment instructions directing that the final $600,000 arrangement fee be paid in U.S. dollars, but “not to mention any reference to [Cuban Corporation] within the references of this settlement.” From 2005 to 2010, SG conducted a total of 1,921 U.S. dollar transactions that violated TWEA and the Cuban Regulations, with a total value of approximately $10.3 billion.
SG’s Failure to Disclose Its Wrongdoing in a Timely Manner
Despite the awareness of both SG’s senior management and Group Compliance that SG had engaged in this unlawful conduct, SG did not disclose its conduct to OFAC or any other U.S. regulator or law enforcement agency until well after the commencement of the Government’s investigation.
This investigation was triggered by the blocking by other U.S. financial institutions, in March 2012, of two transactions that SG processed on behalf of a Sudanese sanctioned entity, and a subsequent February 2013 voluntary disclosure by SG regarding $22.8 million in transactions with the Sudanese entity and a small number of transactions with other sanctioned entities that violated U.S. sanctions. The Bank did not, however, disclose the existence of the Cuban Credit Facilities at that time, but rather did so only in October 2014, after SG performed a detailed forensic analysis based on the scope of investigation required by the Government and the other investigating agencies.
* * *
Mr. Berman praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigations and The Office of Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. He also thanked the Board of Governors of the Federal Reserve, the Federal Reserve Bank of New York, the New York State Department of Financial Services, and the Treasury Department’s Office of Foreign Assets Control for their assistance with this matter. The New York County District Attorney’s Office also conducted its own investigation alongside the United States Attorney’s Office for the Southern District of New York on this investigation.
The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Alexander Wilson and Benet J. Kearney are in charge of the prosecution.
Former Chief Executive Officer of New York Credit Union Pleads Guilty in Manhattan Federal Court to Multimillion-Dollar EmbezzlementRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that KAM WONG, the former chief executive officer (“CEO”) and president of the oldest New York credit union (the “Credit Union”), a non-profit financial institution, pled guilty in Manhattan federal court today to embezzling millions of dollars from the Credit Union. WONG pled guilty before U.S. District Judge John G. Koeltl.
U.S. Attorney Geoffrey S. Berman said: “As he admitted in court today, Kam Wong, the former CEO and president of New York’s oldest credit union, abused his position of trust as a guardian of municipal, state, and federal workers’ financial accounts to enrich himself. In so doing, Wong stole money from the credit union that could have gone to the credit union’s members, and tried to cover up what he had done by making false statements to federal investigators and creating false and misleading documents. I commend the Special Agents of the U.S. Attorney’s Office, and our law enforcement partners, for their tireless efforts in this ongoing investigation.”
According to the Complaint, the Information, statements made in court and publicly available documents:
WONG was the CEO and president of the Credit Union, a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration Board. The Credit Union is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 425,000 members, including municipal, state, and federal workers in New York City. The Credit Union’s earnings are intended to be directed back to its members in the form of more favorable rates and fewer and lower fees for products and services.
From 2013 through January 2018, WONG engaged in a long-running multi-faceted scheme to obtain money from the Credit Union to which he knew he was not entitled, and took steps to seek to conceal what he had done. Among other things, WONG embezzled from and defrauded the Credit Union by submitting sham invoices for dental work never performed on him or paid by him, and, as a result, fraudulently obtained reimbursement for hundreds of thousands of dollars of such nonexistent dental work. In addition, WONG fraudulently caused the Credit Union to pay him additional monies that he knew he was not entitled to receive, including millions of dollars of payments in lieu of purported long-term disability insurance, and for purported taxes owed on these and other employment benefits.
WONG also misapplied money and other things of value from the Credit Union, with respect to, among other things, reimbursement payments for repairs to luxury vehicles the Credit Union leased to WONG, which repair work was already covered by the Credit Union’s insurance; cash advances to which he was not entitled; educational, housing, and living expenses for two of WONG’s friend’s relatives; payments for his leave days that did not comply with and exceeded what was provided for under his employment contract; the purchase of a Mercedes-Benz automobile that was not provided for under his employment contract; the leasing of multiple luxury vehicles at the same time; electronic devices (including, iPhones, iPads, and laptops) for personal use by WONG and others; and reimbursement, as business expenses, of personal expenses, including hotel stays. In addition, WONG obtained controlled substances, for personal use, from a former Credit Union Supervisory Committee member.
In January 2018, after WONG learned about the investigation, WONG sought to obstruct justice by making false statements to federal investigators and creating false and misleading documents to try, after the fact, to explain and justify some of these payments.
* * *
WONG, 62, of Valley Stream, Long Island, pled guilty to one count of embezzlement from a federally insured credit union, which carries a maximum penalty of 30 years in prison. As a condition of his plea, WONG also agreed to forfeit at least $9,890,375 and to pay at least $9,890,375 in restitution to the Credit Union.
WONG is scheduled to be sentenced by Judge Koeltl on April 5, 2019, at 10:00 a.m.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentencing of WONG will be determined by the judge.
U.S. Attorney Berman praised the outstanding work of the Special Agents of the United States Attorney’s Office. Mr. Berman also thanked the New York County District Attorney’s Office, the New York State Department of Financial Services, and the National Credit Union Administration.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark and Daniel C. Richenthal are in charge of the prosecution, with assistance from Special Assistant U.S. Attorney Alona Katz from the New York County District Attorney’s Office.
Bronx Man Charged with 2014 MurderRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced the return of a superseding indictment charging ALEXANDER MELENDEZ, a/k/a “Kiki,” with the murder of Shaquille Malcolm. MELENDEZ, who is already in federal custody on other charges, will be arraigned on the superseding indictment on December 29, 2018, before United States District Judge Lewis A. Kaplan.
U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendant murdered 20-year-old Shaquille Malcolm in the Bronx in 2014. Now, thanks to the outstanding work of the FBI and NYPD, the defendant has been charged with this terrible crime. We will continue to work with our partners in law enforcement to hold violent criminals responsible for their actions.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. stated: “As demonstrated by the addition of murder charges to Melendez’s alleged crimes, the illegal drug trade often leads to additional violent criminal activity that threatens the safety and security of our communities. This individual believed himself to be above the law, and now he will face justice for his alleged crimes. The FBI and our law enforcement partners will continue to root out these violent criminals and ensure they are held accountable to the fullest extent of the law.”
According to the Superseding Indictment[1]:
In early 2014, MELENDEZ was a member of a conspiracy to distribute crack cocaine in the Allerton section of the Bronx, New York. On January 2, 2014, as part of this conspiracy, MELENDEZ and others shot Shaquille Malcolm multiple times in the stairwell of an apartment building located at 2818 Bronx Park East in the Bronx. Malcolm died at the scene.
* * *
MELENDEZ, 23, is charged with one count of conspiring to distribute 280 grams and more of crack cocaine, which carries a mandatory minimum of 10 years in prison and maximum of life in prison; one count of using, carrying, and possessing firearms during and in relation, and in furtherance of, a drug trafficking crime and aiding and abetting the same, which carries a mandatory consecutive 10 year sentence in prison and a maximum sentence of life in prison; one count of use of a firearm to commit murder in furtherance of a drug trafficking crime and aiding and abetting the same, which carries a maximum sentence of life in prison or death; and one count of murder while engaged in a conspiracy to distribute 280 grams and more of crack cocaine and aiding and abetting the same, which carries a maximum sentence of life in prison or death. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI and NYPD.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jessica K. Fender, Michael K. Krouse, and Danielle R. Sassoon are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Statement of U.S. Attorney on the Court’s Denial of the Motion to Approve the Proposed NYCHA Consent DecreeRead the Press Release
Manhattan U.S. Attorney Geoffrey S. Berman said: “We are reviewing the decision of the Court and will respond within the time frame set forth by Judge Pauley. The well-being of the over 400,000 NYCHA residents continues to be our paramount concern.”
New York Man Pleads Guilty to Attempting to Provide and Conspiring to Provide Material Support to ISISRead the Press Release
Adam Raishani, aka “Saddam Mohamed Raishani,” 32, of the Bronx, New York, pleaded guilty to attempting to provide and conspiring to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
Assistant Attorney General for National Security John C. Demers and U.S. Attorney Geoffrey S. Berman for the Southern District of New York made the announcement. Raishani pleaded guilty today to a Superseding Information in Manhattan federal court before U.S. District Judge Ronnie Abrams.
According to the allegations in the Superseding Information, Complaint, other court filings, and statements made during court proceedings:
Beginning in at least the fall of 2015, Raishani conspired with another ISIS supporter (“CC-1”) to provide material support to ISIS by means of CC-1 traveling abroad to join and fight for ISIS. On or about Oct. 30, 2015, CC-1 departed from JFK Airport for Istanbul, Turkey, where he planned to cross into Syria to join ISIS. Raishani arranged for CC-1’s transportation from the Bronx, New York, to John F. Kennedy International Airport (“JFK Airport”), and Raishani accompanied CC-1 from the Bronx to JFK Airport.
Raishani continued communicating with CC-1 following CC-1’s departure. For example, on or about Jan. 2, 2016, Raishani sent an email to CC-1 stating: “Glad tidings brother. Its [sic] been some time since your voyage. I pray to Allah The ALL MIGHTY to grant you success. Until next time.”[1] On or about April 1, 2016, Raishani sent another email to CC-1 stating: “I hope Allah has bestowed you what you were seeking. . . . May Allah grant you sincere and clean intentions and make you among the righteous in Janatal Firdaus [a reference to Islamic paradise]. . . . Please return this email and respond to what we agreed upon before your departure. Until next time.” On or about May 3, 2016, CC-1 responded to Raishani, indicating that he had succeeded in joining the Islamic State. CC-1 informed Raishani that CC-1 was “fine and well,” that CC-1 “wished you [Raishani] were here with me,” and that “here we are living with izza [honor].”
Also in May 2016, CC-1 posted content on a particular social media application (“Application-1”) indicating that CC-1 was living in the Islamic State and fighting on its behalf. For example, CC-1 sent messages to another user of Application-1 stating: “I’m living in the Islamic state safely and secure by the permission of Allah,” “[h]ere we are fighting the kuffars [non-believers],” and “I left the land of kuffars now I’m living in the khilafah [the caliphate].” CC-1 also posted a photograph on Application-1 that shows CC-1 carrying an assault rifle and a flag representative of ISIS.
Between Jan. and June of 2017, Raishani had a series of meetings with individuals who were, unbeknownst to Raishani, a confidential source working at the direction of law enforcement and an undercover law enforcement officer. In the course of those meetings, Raishani admitted that he had previously helped another person (CC-1) travel overseas to join the Islamic State, and stated that he intended to travel overseas to join ISIS himself. During those meetings, Raishani also downloaded and viewed violent ISIS propaganda videos, and indicated his desire to wage jihad and his belief that the Quran can be read to justify the violence, including beheadings, engaged in by ISIS.
By April 2017, Raishani was actively planning to travel abroad to join ISIS. Raishani indicated that he aspired to join ISIS in Syria and that he aimed to travel before the end of Ramadan, an Islamic holy month that ran from approximately May 26 through June 24 of 2017. In June 2017, Raishani made preparations to leave, including by paying off debts and purchasing clothing that he intended to wear for training with ISIS overseas. Raishani indicated his intention to meet an ISIS member in Turkey, who would facilitate Raishani’s joining the terrorist organization in Syria. On June 21, 2017, Raishani attempted to board a flight bound for Turkey (via Portugal) at JFK Airport, at which point law enforcement officers arrested him.
Following Raishani’s arrest, the FBI searched Raishani’s Bronx residence pursuant to a search warrant. Among the evidence recovered was a letter from Raishani addressed to members of his family, which the FBI found in a safe in Raishani’s bedroom. In the letter, Raishani—who left behind his wife and young son when he attempted to travel to Syria to join ISIS—advised his wife that she could still choose to “[j]oin” him in the Islamic State, and he expressed regret that she did not share his radical views and that he had been unable to convince her to accompany him to join ISIS. Raishani also wrote: “Do Not Divulge this document and other documents that I have giv[en] to you to the authorities. Do not believe their plots. Do not divulge my absences but instead say I went to do volunteering outside the country with my medical skills and health background.”
* * *
Raishani, pleaded guilty to one count of attempting to provide material support or resources to a designated foreign terrorist organization, namely, ISIS, which carries a maximum sentence of 20 years in prison, and one count of conspiring to provide material support or resources to ISIS, which carries a maximum sentence of 5 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. Sentencing is scheduled for March 8, 2019, before Judge Abrams.
Mr. 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 NYPD, and the NYPD’s Intelligence Division. Mr. Demers and Mr. Berman also thanked the New York Office of U.S. Customs and Border Protection.
Assistant U.S. Attorneys Sidhardha Kamaraju, Jane Kim, and George D. Turner of the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorney Kevin Nunnally of the Counterterrorism Section of the Department of Justice’s National Security Division.
[1] Communications and conversations discussed herein are described in substance and in part.
Member of the Genovese Crime Family Charged in Superseding Indictment with Destruction of Evidence and Obstruction of JusticeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced the filing of a Superseding Indictment against JOHN TORTORA JR. a/k/a “Johnny T,” charging him with destruction of evidence, falsifying records, and obstruction of justice. TORTORA was previously indicted on charges of racketeering conspiracy, murder in aid of racketeering, and murder for hire in United States v. Tortora, 18 Cr. 537 (SHS). He was arrested on August 2, 2018, and has remained in custody since that time. TORTORA will be arraigned on the new charges on November 19, 2018 before the Honorable Sidney H. Stein at the United States Courthouse in Manhattan.
Manhattan U.S. Attorney Geoffrey Berman said: “As alleged in the Superseding Indictment, in an attempt to hide his illegal racketeering activity, the defendant was willing to destroy evidence and obstruct justice. Thanks to the ongoing efforts of the FBI and the Yonkers Police Department, the defendant’s alleged attempts to impede the criminal justice process have resulted in his being charged with additional federal crimes.”
The charges in the Superseding Indictment[1] arise from TORTORA’s alleged role in destroying video recording evidence, and in the subsequent creation of a letter containing false information about the destruction of that evidence, which was provided to the U.S. Attorney’s Office. As alleged in the Superseding Indictment, these acts were undertaken with the intent to impede the investigation into the racketeering activities of the Genovese Crime Family of La Cosa Nostra.
* * *
In addition to the previous charges of conspiracy to commit racketeering, murder in aid of racketeering, and murder for hire, TORTORA, 61, of Yonkers, New York, is charged with destruction of evidence, which carries a maximum penalty of 20 years in prison, falsifying records, which carries a maximum penalty of 20 years in prison, and obstruction of justice, which carries a maximum penalty of 20 years in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI, the Yonkers Police Department, and the Special Agents of the United States Attorney’s Office for the Southern District of New York.
Assistant U.S. Attorneys Jessica Fender and Anden Chow are in charge of the prosecution. The case is being handled by the Office’s Violent and Organized Crime Unit.
The charges contained in the Superseding 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 Superseding Indictment and the description of the Superseding Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Pleads Guilty in Manhattan Federal Court to Attempting to Provide and Conspiring to Provide Material Support to IsisRead 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 that ADAM RAISHANI, a/k/a “Saddam Mohamed Raishani,” pled guilty to attempting to provide and conspiring to provide material support to the Islamic State of Iraq and al-Sham (“ISIS”). RAISHANI pled guilty today to a Superseding Information in Manhattan federal court before U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As he admitted in court today, Adam Raishani helped another man travel to Syria to join and train with ISIS, and he plotted to make that trip himself to carry out his own desire to wage violent jihad. Thanks to the excellent work of the FBI and the NYPD, Raishani’s trip to ISIS was canceled at the airport. This would-be ISIS terrorist now awaits sentencing for his crimes.”
According to the allegations in the Superseding Information, Complaint, other court filings, and statements made during court proceedings:
Beginning in at least the fall of 2015, RAISHANI conspired with another ISIS supporter (“CC-1”) to provide material support to ISIS by means of CC-1 traveling abroad to join and fight for ISIS. On or about October 30, 2015, CC-1 departed from JFK Airport for Istanbul, Turkey, where he planned to cross into Syria to join ISIS. RAISHANI arranged for CC-1’s transportation from the Bronx, New York, to John F. Kennedy International Airport (“JFK Airport”), and RAISHANI accompanied CC-1 from the Bronx to JFK Airport.
RAISHANI continued communicating with CC-1 following CC-1’s departure. For example, on or about January 2, 2016, RAISHANI sent an email to CC-1 stating: “Glad tidings brother. Its [sic] been some time since your voyage. I pray to Allah The ALL MIGHTY to grant you success. Until next time.”[1] On or about April 1, 2016, RAISHANI sent another email to CC-1 stating: “I hope Allah has bestowed you what you were seeking. . . . May Allah grant you sincere and clean intentions and make you among the righteous in Janatal Firdaus [a reference to Islamic paradise]. . . . Please return this email and respond to what we agreed upon before your departure. Until next time.” On or about May 3, 2016, CC-1 responded to RAISHANI, indicating that he had succeeded in joining the Islamic State. CC-1 informed RAISHANI that CC-1 was “fine and well,” that CC-1 “wished you [RAISHANI] were here with me,” and that “here we are living with izza [honor].”
Also in May 2016, CC-1 posted content on a particular social media application (“Application-1”) indicating that CC-1 was living in the Islamic State and fighting on its behalf. For example, CC-1 sent messages to another user of Application-1 stating: “I’m living in the Islamic state safely and secure by the permission of Allah,” “[h]ere we are fighting the kuffars [non-believers],” and “I left the land of kuffars now I’m living in the khilafah [the caliphate].” CC-1 also posted a photograph on Application-1 that shows CC-1 carrying an assault rifle and a flag representative of ISIS.
Between January and June of 2017, RAISHANI had a series of meetings with individuals who were, unbeknownst to RAISHANI, a confidential source working at the direction of law enforcement and an undercover law enforcement officer. In the course of those meetings, RAISHANI admitted that he had previously helped another person (CC-1) travel overseas to join the Islamic State, and stated that he intended to travel overseas to join ISIS himself. During those meetings, RAISHANI also downloaded and viewed violent ISIS propaganda videos, and indicated his desire to wage jihad and his belief that the Quran can be read to justify the violence, including beheadings, engaged in by ISIS.
By April 2017, RAISHANI was actively planning to travel abroad to join ISIS. RAISHANI indicated that he aspired to join ISIS in Syria and that he aimed to travel before the end of Ramadan, an Islamic holy month that ran from approximately May 26 through June 24 of 2017. In June 2017, RAISHANI made preparations to leave, including by paying off debts and purchasing clothing that he intended to wear for training with ISIS overseas. RAISHANI indicated his intention to meet an ISIS member in Turkey, who would facilitate RAISHANI’s joining the terrorist organization in Syria. On June 21, 2017, RAISHANI attempted to board a flight bound for Turkey (via Portugal) at JFK Airport, at which point law enforcement officers arrested him.
Following RAISHANI’s arrest, the FBI searched RAISHANI’s Bronx residence pursuant to a search warrant. Among the evidence recovered was a letter from RAISHANI addressed to members of his family, which the FBI found in a safe in RAISHANI’s bedroom. In the letter, RAISHANI – who left behind his wife and young son when he attempted to travel to Syria to join ISIS – advised his wife that she could still choose to “[j]oin” him in the Islamic State, and he expressed regret that she did not share his radical views and that he had been unable to convince her to accompany him to join ISIS. RAISHANI also wrote: “Do Not Divulge this document and other documents that I have giv[en] to you to the authorities. Do not believe their plots. Do not divulge my absences but instead say I went to do volunteering outside the country with my medical skills and health background.”
* * *
RAISHANI, 32, of the Bronx, New York, pled guilty to one count of attempting to provide material support or resources to a designated foreign terrorist organization, namely, ISIS, which carries a maximum sentence of 20 years in prison, and one count of conspiring to provide material support or resources to ISIS, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Sentencing is scheduled for March 8, 2019, at 3:00 p.m., before Judge Abrams.
Mr. Berman and Mr. Demers praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division. Mr. Berman and Mr. Demers also thanked 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 Sidhardha Kamaraju, Jane Kim, and George D. Turner are in charge of the prosecution, with assistance from Trial Attorney Kevin Nunnally of the Counterterrorism Section of the Department of Justice’s National Security Division.
[1] Communications and conversations discussed herein are described in substance and in part.
9 Defendants Charged in Manhattan Federal Court with Massive Tax and Identity Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and James D. Robnett, Special Agent in Charge, Internal Revenue Service-Criminal Investigations (“IRS-CI”), announced charges today against nine individuals for their participation in a long-running scheme to file thousands of fraudulent tax returns using the stolen identities of children, resulting in millions of dollars in estimated loss to the United States Treasury. Eight of the defendants were arrested this morning and will be presented before U.S. Magistrate Judge Barbara C. Moses today. MARCOS DE JESUS PANTALEON remains at large.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants used their experience as tax preparers to skirt U.S. tax laws by using the stolen identities of children to help increase their clients’ tax returns. All told, the defendants’ years’ long scheme resulted in tens of millions of dollars in questionable credits. Now the defendants’ businesses are shut down – literally – and the defendants face significant time in prison for tax fraud.”
IRS-CI Special Agent in Charge James D. Robnett said: “Stealing the identities of children to file false tax returns is reprehensible. These individuals allegedly demonstrated a blatant disregard of the integrity of the United States tax system and caused immeasurable hardship to innocent victims. IRS-CI special agents are determined to investigate these crimes and protect the honest taxpayers.”
According to the allegations in the Complaint[1] unsealed this morning and information in the public record:
Under federal law, taxpayers may be entitled to claim certain tax credits, including the Earned Income Tax Credit (“EITC”) available to qualifying low and moderate income working individuals and families. If the individual claims the EITC based on having a child, the individual must list the name and Social Security Number (“SSN”) of the child on his or her tax return, along with completing a separate schedule that contains the child’s name, SSN, year of birth, relationship to the taxpayer, and how many months the child lived with the taxpayer during the tax year.
Starting in 2009, and continuing for multiple years, ARIEL JIEMENEZ, a/k/a “Melo,” IRELINE NUNEZ, ANA YESSENIA JIMENEZ, EVELIN JIMENEZ, LEYVI CASTILLO, CINTHIA FEDERO, GUILLERMO ARIAS MONCION, MARCOS DE JESUS PANTALEON, a/k/a “Junior,” and JOSE CASTILLO, a/k/a “Jairo,” abused the EITC program with their knowledge of the tax system by using the stolen identities of numerous children to file thousands of fraudulent tax returns for their clients. These clients were not supporting, residing with, or related to the children they claimed as a dependent. Rather, they paid the defendants between $1,000 and $1,500 for each child falsely added to their returns. The inclusion of these false dependents allowed clients to claim tax refunds they were not entitled to, chiefly the EITC.
All of the defendants initially worked together at the same tax-preparation business. In approximately 2013, MONCION, PANTALEON, and JOSE CASTILLO started their own tax-preparation business. In approximately 2014, JOSE CASTILLO left to start his own, third tax-preparation business. All three businesses engaged in the same conduct of possessing stolen identities of children and adding those identities to clients’ tax returns in exchange for a fee.
The tax returns filed by the defendants’ associated businesses indicate markedly high rates of returns seeking the EITC. For example, for returns filed from tax year 2010 through 2017, between 56 percent and 74 percent of all returns prepared by the defendants’ businesses claimed the EITC. In contrast, between 34 percent and 39 percent of all tax returns filed in the Bronx, New York, and between 18 percent and 21 percent of all tax returns filed nationwide for the same time period sought the EITC.
In total, between 2009 and the present, the returns filed by the defendants’ businesses claimed more than $44 million in the EITC.
In addition to the fraud described above, EVELIN JIMENEZ, LEYVI CASTILLO, FEDERO, MONCION, and JOSE CASTILLO each fraudulently claimed dependents on their own personal tax returns.
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A chart listing the defendants, and the charges and maximum penalties they face is attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of IRS-CI. He also thanked the New York City Department of Investigation for its assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Daniel G. Nessim, Ni Qian, and Daniel C. Richenthal are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Charges
Maximum Penalties
Ariel Jimenez, a/k/a “Melo” (34, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
32 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Ireline Nunez (36, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
32 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Ana Yessenia Jimenez (36, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
32 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Evelin Jimenez (32, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
Subscribing to a false return
35 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Leyvi Castillo (35, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
Subscribing to a false return
35 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Cinthia Federo (31, of New York, New York)
Conspiracy to defraud the United States with respect to claims
Conspiracy to commit wire fraud
Aggravated Identity Theft
Subscribing to a false return (two counts)
38 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Guillermo Arias Moncion (32, of New York, New York)
Conspiracy to defraud the United States with respect to claims (two counts)
Conspiracy to commit wire fraud (two counts)
Aggravated Identity Theft
Subscribing to a false return (four counts)
74 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Marcos De Jesus Pantaleon, a/k/a “Junior” (28, of New York, New York)
Conspiracy to defraud the United States with respect to claims (two counts)
Conspiracy to commit wire fraud (two counts)
Aggravated Identity Theft
62 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
Jose Castillo, a/k/a “Jairo” (42, of New York, New York)
Conspiracy to defraud the United States with respect to claims (three counts)
Conspiracy to commit wire fraud (three counts)
Aggravated Identity Theft
Subscribing to a false return
95 years in prison
Mandatory minimum of two years in prison to be imposed consecutively to any other sentence
[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.
Man Sentenced in Manhattan Federal Court to More Than 13 Years in Prison for Illegally Trafficking Assault Rifles and Other Firearms, as Well as NarcoticsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ARIEL ACOSTA, a/k/a “A-Loc,” a/k/a “Blue,” a/k/a “True Blue,” was sentenced today to 160 months in prison for firearms and narcotics trafficking. ACOSTA and his co-conspirators sold seven guns, including an AK-47 assault rifle and a SKS assault rifle, a silencer, ammunition, and a bulletproof vest to undercover officers. ACOSTA pled guilty in Manhattan federal court in April 2018 to one count of conspiring to distribute crack cocaine and one count of unlicensed firearms dealing. United States District Judge Kimba M. Wood imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Ariel Acosta sought to put illegal guns and drugs on the streets of New York City. For his crimes he will serve over 13 years in prison. We will continue to work with our law enforcement partners to investigate and prosecute those who would put the people of our city in danger.”
According to the allegations contained in the Indictment and statements made in related court filings and proceedings:
From at least 2016 to August 2017, ACOSTA and other members of a drug trafficking organization sold narcotics near Hughes Avenue and East Tremont Avenue in the Bronx, New York (the “Hughes Avenue DTO”). ACOSTA personally sold crack cocaine to undercover officers on several occasions. Members of the Hughes Avenue DTO are also members and associates of the “Rolling 30s” neighborhood set of the nationwide Crips street gang.
From about October 2016 to May 2017, ACOSTA and two other men, who were both members of the Hughes Avenue DTO, sold firearms to undercover officers. Over the course of six sales, undercover officers purchased seven firearms, including an AK-47 assault rifle, a SKS assault rifle, a shotgun, and several handguns. One of the firearms ACOSTA sold had a defaced serial number. ACOSTA and his co-conspirators also sold a silencer for a gun, ammunition, and a bulletproof vest to the undercover officers.
* * *
In addition to the prison term, ACOSTA, 24, of the Bronx, New York, was sentenced to four years of supervised release. Of the nine members of the Hughes Avenue Crew charged in this case, eight have pled guilty. Charges against one defendant are currently pending before United States District Judge Victor Marerro.
Mr. Berman praised the work of the New York City Police Department and the U.S. Drug Enforcement Administration in this investigation.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Drew Skinner and Anden Chow are in charge of the prosecution.
Deli Owner and Co-Conspirator Found Guilty of Conspiring to Set Fire to Rival DeliRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Ashan M. Benedict, Special Agent-in-Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), and Daniel A. Nigro, Commissioner of the New York City Fire Department (“FDNY”), announced today that REDHWAN SALEH and ANTOINE BOSTICK were convicted by a jury in connection with their participation in an arson in the Bronx, New York. The verdict followed a four-day trial before the Honorable William H. Pauley III.
Manhattan U.S. Attorney Geoffrey S. Berman said: “A unanimous Manhattan jury has found Redhwan Saleh guilty of planning and paying three men to execute the arson of a competing deli in his Riverdale neighborhood. Saleh and his co-defendant, Antoine Bostick, have found out the hard way that playing with fire usually leads to getting burned, and possibly prison.”
ATF Special Agent-in-Charge Ashan M. Benedict said: “The callous actions of Redhwan Saleh and Antoine Bostick caused extensive damage to property and could have resulted in serious injury or harm to first responders and the general public. Thanks to the efforts of the ATF/ NYPD/ FDNY Arson and Explosive Task Force, the individuals responsible were brought to justice. I would like to thank the United States Attorney’s office for their work in prosecuting this case.”
According to allegations in the Superseding Indictment, other filings in Manhattan federal court, and the evidence presented at trial:
SALEH owns a deli near the intersection of 242nd Street and Broadway in the Riverdale section of the Bronx. After SALEH learned that a competing deli was about to open a few stores down from his, SALEH paid three men, including BOSTICK, to set the new deli on fire. On September 11, 2016, a few weeks before the new deli opened, BOSTICK climbed onto the new deli’s roof, poured gasoline down the vent pipe, and lit the gas on fire. The new deli and a neighboring store both suffered extensive fire damage and the new deli’s opening was substantially delayed.
In addition to SALEH and BOSTICK, two other individuals have been convicted in connection with this case. ARTHUR CHERRY pled guilty to conspiracy to commit arson and arson, among other crimes. RICHARD SANCHEZ pled guilty to conspiracy to commit arson.
* * *
SALEH, 37, of Brooklyn, New York, was convicted of conspiracy to commit arson, which carries a maximum sentence of five years in prison, and arson, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. SALEH will be sentenced by Judge Pauley on March 15, 2019.
BOSTICK, 32, of New Rochelle, New York, was convicted of conspiracy to commit arson, which carries a maximum sentence of five years in prison. BOSTICK was found not guilty of arson. BOSTICK will be sentenced by Judge Pauley on March 15, 2019.
The statutory maximum and minimum sentences are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Berman praised the investigative efforts of the Strategic Explosive and Arson Response Task Force of the ATF, the NYPD, and the FDNY.
The case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorneys Adam S. Hobson and Thomas McKay are in charge of the prosecution.
Cesar Altieri Sayoc Charged in 30-Count Indictment with Mailing Improvised Explosive Devices in Connection with Domestic Terrorist AttackRead the Press Release
Cesar Altieri Sayoc, aka Cesar Randazzo, aka Cesar Altieri, and aka Cesar Altieri Randazzo, 56, was charged today in a 30-count Indictment for offenses relating to his alleged execution of a domestic terrorist attack in October 2018, which involved the mailing of 16 improvised explosive devices (IEDs) to 13 victims throughout the country.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Office, and Police Commissioner James P. O’Neill of the NYPD made the announcement. The case is assigned to U.S. District Judge Jed S. Rakoff.
“According to court filings, Cesar Sayoc mailed 16 IEDs to more than a dozen victims throughout the country, including current and former elected leaders. Less than five days after the first IED was discovered, he was tracked down and arrested, thanks to the outstanding work of the FBI, the U.S. Postal Inspection Service and other law enforcement partners,” said Assistant Attorney General Demers.
“Cesar Sayoc allegedly targeted former high-ranking officials such as President Barack Obama, President Bill Clinton, Vice President Joe Biden, Secretary of State Hillary Clinton, and others, as well as CNN, by sending explosive packages to them through the U.S. Postal Service,” said U.S. Attorney Berman. “Sayoc’s alleged conduct put numerous lives at risk. It was also an assault on a nation that values the rule of law, a free press, and tolerance of differences without rancor or resort to violence. Thanks to the diligent and determined work of our law enforcement partners here and across the country, it took just five days to identify and apprehend Sayoc and end his reign of terror. He now faces justice from a nation of laws.”
“As alleged, Cesar Sayoc deliberately targeted 13 individuals with 16 improvised explosive devices, attempting to create an atmosphere of fear and intimidation from California to the eastern seaboard,” said Assistant Director in Charge Sweeney. “Thanks to the seamless integration of FBI JTTFs across the country, working side-by-side with many other law enforcement agencies and first responders, his campaign of terror was brought to a rapid conclusion just five days after the discovery of the first device. The FBI remains steadfast in our mission to protect the American public, and we will move with speed to bring justice to anyone seeking to harm our communities.”
“I commend everyone involved in investigating and prosecuting this case, particularly the agents and detectives on the FBI’s Joint Terrorism Task Force in New York, which includes 56 agencies and 300 individuals – 113 of them NYPD cops,” said Commissioner O’Neill. “Standing shoulder to shoulder with the FBI, the ATF, the U.S. Marshals, the U.S. Postal Inspection Service, the New York State Police, and others, we said from the outset that we would identify and bring to justice the person allegedly responsible for these acts. We could make that promise because of our proven history of effective partnership. The public’s vigilance also greatly assisted this investigation and helped lead to today’s 30-count indictment. What is clear is that New Yorkers are always resilient in the face of threats – we refuse to back down, and we will never be deterred.”
According to the Indictment, Complaint, other court filings, and statements made during court proceedings[1]:
Between Oct. 22 and Nov. 2, the FBI and the U.S. Postal Service recovered 16 padded manila envelopes containing IEDs allegedly mailed by Sayoc from Florida to addresses in New York, New Jersey, Washington, D.C., Delaware, Atlanta and California. Sayoc’s alleged victims, listed alphabetically, were former Vice President Joseph Biden, Senator Cory Booker, former CIA Director John Brennan, former Director of National Intelligence James Clapper, former Secretary of State Hillary Clinton, CNN, Robert De Niro, Senator Kamala Harris, former Attorney General Eric Holder, former President Barack Obama, George Soros, Thomas Steyer, and Representative Maxine Walters.
Each of the 16 envelopes allegedly mailed by Sayoc had similar features, including the return addressee “Debbie Wasserman Shultz” at an address in “Florids,” six self-adhesive postage stamps bearing the American flag, and address labels printed on white paper with blank ink in similar typeface and font size. Each of the 16 envelopes also contained an IED. The 16 IEDs also had similar features, including approximately six inches of PVC pipe packed with explosive material, a small clock, and wiring. Some of the IEDs also contained shards of glass.
Preliminary analysis by the FBI has revealed forensic evidence linking 11 of the 16 mailings to Sayoc. Specifically, latent fingerprints on two of the envelopes have been identified to Sayoc, and there are possible DNA associations between a DNA sample collected from Sayoc prior to his arrest in this case and DNA found on components from 10 of the IEDs (including one of the IEDs that was mailed in an envelope from which a latent fingerprint identified to Sayoc was recovered).
The FBI arrested Sayoc in Plantation, Florida, on Oct. 26 – less than five days after the Oct. 22 recovery of the first IED, which Sayoc allegedly mailed to Soros in New York. The FBI seized a laptop from Sayoc’s van in connection with the arrest that contained lists of physical addresses that match many of the labels on the envelopes that Sayoc allegedly mailed. The lists were saved at a file path on the laptop that includes a variant of Sayoc’s first name: “Users/Ceasar/Documents.” A document from that path, titled “Debbie W.docx” and bearing a creation date of July 26, contained repeated copies of an address for “Debbie W. Schultz” in Sunrise, Florida, that is nearly identical, except for typographical errors, to the return address that Sayoc allegedly used on the packages. Similar documents bearing file titles that include the name “Debbie,” and creation dates of Sept. 22, contain exact matches of the return address allegedly used by Sayoc on the 16 envelopes.
Sayoc possessed a cellphone at the time of his arrest, and the FBI’s ongoing forensic analysis of the device has revealed additional evidence. For example, Sayoc allegedly used the phone to conduct the following Internet searches, among others, on the dates indicated:
- July 15: “hilary Clinton hime address”
- July 26: “address Debbie wauserman Shultz”
- Sept. 19: “address kamila harrias”
- Sept. 26: “address for barack Obama”
- Sept. 26: “michelle obama mailing address”
- Sept. 26: “joseph biden jr”
- Oct. 1: “address cory booker new jersey”
- Oct. 20: “tom steyers mailing address”
- Oct. 23: “address kamala harris”
Sayoc’s phone also contained photographs of some of the victims.
* * *
Sayoc, a U.S. citizen, is charged in the Indictment with 30 counts: one count of six different offenses for each of the five IEDs that he allegedly mailed to Clinton, Brennan, Clapper, Soros and De Niro in the Southern District of New York. In aggregate, the 30 counts in the Indictment carry a potential maximum penalty of life imprisonment, and a mandatory minimum penalty of life imprisonment. A chart providing more information regarding the charges and potential penalties is set forth below. The statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Counts
Charge
Penalties Per Count
1 – 5
Using a weapon of mass destruction
Maximum per count: life
6 – 10
Interstate transportation of an explosive
Maximum per count: 20 years
11 – 15
Conveying a threat in interstate commerce
Maximum per count: 5 years
16 – 20
Unlawful use of mails
Maximum per count: 10 years
21 – 25
Carrying an explosive during the commission of a felony
Minimum for first conviction: 10 years
Minimum for additional convictions: 20 years
26 – 30
Using and carrying a destructive device in furtherance of a crime of violence
Maximum per count: life
Minimum for first conviction: 30 years
Minimum for additional convictions:
lifeMr. 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 NYPD, and the U.S. Postal Inspection Service. Mr. Demers and Mr. Berman also thanked the U.S. Attorney’s Office for the Southern District of Florida for its assistance.
Assistant U.S. Attorneys Sam Adelsberg, Emil J. Bove III, Jane Kim, and Jason A. Richman of the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorneys David Cora and Kiersten Korczynski of the National Security Division’s Counterterrorism Section.
Cesar Altieri Sayoc Charged in 30-Count Indictment with Mailing Improvised Explosive DevicesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Police Commissioner of the City of New York (“NYPD”), announced today that Cesar Altieri Sayoc, a/k/a “Cesar Randazzo,” “Cesar Altieri,” and “Cesar Altieri Randazzo,” was charged today in Manhattan federal court in a 30-count Indictment for offenses relating to his alleged execution of a domestic terrorist attack in October 2018, which involved the mailing of 16 improvised explosive devices (“IEDs”) to 13 victims throughout the country. The case is assigned to U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Cesar Sayoc allegedly targeted former high-ranking officials such as President Barack Obama, President Bill Clinton, Vice President Joe Biden, Secretary of State Hillary Clinton, and others, as well as CNN, by sending explosive packages to them through the U.S. Postal Service. Sayoc’s alleged conduct put numerous lives at risk. It was also an assault on a nation that values the rule of law, a free press, and tolerance of differences without rancor or resort to violence. Thanks to the diligent and determined work of our law enforcement partners here and across the country, it took just five days to identify and apprehend Sayoc and end his reign of terror. He now faces justice from a nation of laws.”
Assistant Attorney General John C. Demers said: “According to court filings, Cesar Sayoc mailed 16 IEDs to more than a dozen victims throughout the country, including current and former elected leaders. Less than five days after the first IED was discovered, he was tracked down and arrested, thanks to the outstanding work of the FBI, the U.S. Postal Inspection Service and other law enforcement partners.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Cesar Sayoc deliberately targeted 13 individuals with 16 improvised explosive devices, attempting to create an atmosphere of fear and intimidation from California to the eastern seaboard. Thanks to the seamless integration of FBI JTTFs across the country, working side-by-side with many other law enforcement agencies and first responders, his campaign of terror was brought to a rapid conclusion just five days after the discovery of the first device. The FBI remains steadfast in our mission to protect the American public, and we will move with speed to bring justice to anyone seeking to harm our communities.”
NYPD Commissioner James P. O’Neill said: “I commend everyone involved in investigating and prosecuting this case, particularly the agents and detectives on the FBI’s Joint Terrorism Task Force in New York, which includes 56 agencies and 300 individuals – 113 of them NYPD cops. Standing shoulder to shoulder with the FBI, the ATF, the U.S. Marshals, the U.S. Postal Inspection Service, the New York State Police, and others, we said from the outset that we would identify and bring to justice the person allegedly responsible for these acts. We could make that promise because of our proven history of effective partnership. The public’s vigilance also greatly assisted this investigation and helped lead to today’s 30-count indictment. What is clear is that New Yorkers are always resilient in the face of threats – we refuse to back down, and we will never be deterred.”
According to the Indictment, Complaint, other court filings, and statements made during court proceedings[1]:
Between October 22 and November 2, 2018, the FBI and the U.S. Postal Service recovered 16 padded manila envelopes containing IEDs allegedly mailed by Sayoc from Florida to addresses in New York, New Jersey, Washington, D.C., Delaware, Atlanta, and California. Sayoc’s alleged victims, listed alphabetically, were former Vice President Joseph Biden, Senator Cory Booker, former CIA Director John Brennan, former Director of National Intelligence James Clapper, former Secretary of State Hillary Clinton, CNN, Robert De Niro, Senator Kamala Harris, former Attorney General Eric Holder, former President Barack Obama, George Soros, Thomas Steyer, and Representative Maxine Waters.
Each of the 16 envelopes allegedly mailed by Sayoc had similar features, including the return addressee “Debbie Wasserman Shultz” at an address in “Florids,” six self-adhesive postage stamps bearing the American flag, and address labels printed on white paper with black ink in similar typeface and font size. Each of the 16 envelopes also contained an IED. The 16 IEDs also had similar features, including approximately six inches of PVC pipe packed with explosive material, a small clock, and wiring. Some of the IEDs also contained shards of glass.
Preliminary analysis by the FBI has revealed forensic evidence linking 11 of the 16 mailings to Sayoc. Specifically, latent fingerprints on two of the envelopes have been identified to Sayoc, and there are possible DNA associations between a DNA sample collected from Sayoc prior to his arrest in this case and DNA found on components from 10 of the IEDs (including one of the IEDs that was mailed in an envelope from which a latent fingerprint identified to Sayoc was recovered).
The FBI arrested Sayoc in Plantation, Florida, on October 26, 2018 – less than five days after the October 22 recovery of the first IED, which Sayoc allegedly mailed to Soros in New York. The FBI seized a laptop from Sayoc’s van in connection with the arrest that contained lists of physical addresses that match many of the labels on the envelopes that Sayoc allegedly mailed. The lists were saved at a file path on the laptop that includes a variant of Sayoc’s first name: “Users/Ceasar/Documents.” A document from that path, titled “Debbie W.docx” and bearing a creation date of July 26, 2018, contained repeated copies of an address for “Debbie W. Schultz” in Sunrise, Florida, that is nearly identical, except for typographical errors, to the return address that Sayoc allegedly used on the packages. Similar documents bearing file titles that include the name “Debbie,” and creation dates of September 22, 2018, contain exact matches of the return address allegedly used by Sayoc on the 16 envelopes.
Sayoc possessed a cellphone at the time of his arrest, and the FBI’s ongoing forensic analysis of the device has revealed additional evidence. For example, Sayoc allegedly used the phone to conduct the following Internet searches, among others, on the dates indicated:
-
- July 15, 2018: “hilary Clinton hime address”
- July 26, 2018: “address Debbie wauserman Shultz”
- September 19, 2018: “address kamila harrias”
- September 26, 2018: “address for barack Obama”
- September 26, 2018: “michelle obama mailing address”
- September 26, 2018: “joseph biden jr”
- October 1, 2018: “address cory booker new jersey”
- October 20, 2018: “tom steyers mailing address”
- October 23, 2018: “address kamala harris”
Sayoc’s phone also contained photographs of some of the victims.
* * *
SAYOC, 56, of South Florida, is charged in the Indictment with 30 counts: one count of six different offenses for each of the five IEDs that he allegedly mailed to Clinton, Brennan, Clapper, Soros, and De Niro in the Southern District of New York. In aggregate, the 30 counts in the Indictment carry a potential maximum penalty of life imprisonment, and a mandatory minimum penalty of life imprisonment. A chart providing more information regarding the charges and potential penalties is set forth below. The statutory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Berman and Mr. Demers praised the outstanding efforts of the Federal Bureau of Investigation’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department, New York State Police, Westchester County Police Department, the U.S. Postal Inspection Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Mr. Berman and Mr. Demers also thanked the U.S. Attorney’s Office for the Southern District of Florida for its assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Sam Adelsberg, Emil J. Bove III, Jane Kim, and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorneys David Cora and Kiersten Korczynski of the National Security Division’s Counterterrorism Section.
Counts
Charge
Penalties Per Count
1 – 5
Using a weapon of mass destruction
Maximum per count: life
6 – 10
Interstate transportation of an explosive
Maximum per count: 20 years
11 – 15
Conveying a threat in interstate commerce
Maximum per count: 5 years
16 – 20
Unlawful use of mails
Maximum per count: 10 years
21 – 25
Carrying an explosive during the commission of a felony
Minimum for first conviction: 10 years
Minimum for additional convictions: 20 years
26 – 30
Using and carrying a destructive device in furtherance of a crime of violence
Maximum per count: life
Minimum for first conviction: 30 years
Minimum for additional convictions:
life
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the Indictment, and the description of the Complaint and Indictment set forth herein, constitute only allegations and every fact described should be treated as an allegation.
-
Two Men Sentenced in Manhattan Federal Court for Defrauding Investors of over $7 Million in Fuel Cell Company Investor Fraud SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that GEORGE DOUMANIS and EMANUEL PANTELAKIS were sentenced in Manhattan federal court to 53 months and one year and one day in prison, respectively, for defrauding investors in Terminus Energy, Inc., a publicly traded penny stock, of over $7 million. DOUMANIS and PANTELAKIS each pled guilty on December 1, 2017, to one count of conspiracy to commit securities fraud before U.S. District Judge Andrew L. Carter Jr., who also imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “George Doumanis and Emanuel Pantelakis lured investors for a supposed fuel cell technology they knew was a fiction. They duped victims into investing over $7 million with misleading documents, and they used more than $1 million of that to pay their own personal expenses. Today they learned the true price of that kind of criminal deceitfulness.”
According to the allegations contained in the Indictment filed against DOUMANIS, PANTELAKIS, and their co-conspirator, and statements made in related court filings and proceedings:
From at least February 2008 until at least 2014, DOUMANIS and PANTELAKIS, along with their co-conspirator Danny Pratte, who previously pled guilty, engaged in a scheme to defraud investors in the publicly traded company Terminus Energy, Inc. (“Terminus”), by inducing victims to invest in Terminus stock through material misrepresentations and omissions and by misappropriating investor funds for their own purposes.
Terminus was purportedly producing and marketing a commercially viable solid oxide “fuel cell” as an alternative energy source. DOUMANIS and PANTELAKIS sold shares of Terminus to investors through private offerings. In connection with such sales, DOUMANIS and PANTELAKIS provided investors with private placement memorandums (“PPMs”) that contained materially false and misleading statements. For example, the PPMs falsely stated that (i) Terminus had completed its goal of developing a working fuel cell in mid-2008; (ii) Terminus would use specified investor funds to make payment on third-party development contracts designed to manufacture a working fuel cell; and (iii) Terminus would pay no more than 10 percent in sales commissions. In truth, and as DOUMANIS and PANTELAKIS well knew, (i) there was no working fuel cell; (ii) the third-party contracts had been cancelled after Terminus failed to make payment to the third parties; and (iii) unregistered salespeople were receiving commissions far in excess of 10 percent. The PPMs also failed to accurately disclose the involvement of either DOUMANIS, who was barred from involvement in penny stocks as a result of a 2003 conviction for conspiracy to commit securities fraud, wire fraud, and mail fraud, or PANTELAKIS, who had been permanently barred by the Financial Industry Regulatory Authority (“FINRA”) following allegations that he had made fraudulent misrepresentations to customers in connection with the sale of securities. DOUMANIS and PANTELAKIS also caused similar misrepresentations to be made in business plans, executive summaries, and presentations shared with potential investors, as well as in publicly available press releases. Through these false and misleading statements, DOUMANIS and PANTELAKIS fraudulently induced investors to purchase over $7 million of Terminus stock.
Rather than use the investor money as promised, DOUMANIS and PANTELAKIS misappropriated the funds for their own use and for use by co-conspirators. DOUMANIS personally received at least $573,201 and PANTELAKIS personally received at least $428,997. In addition, the unregistered salespeople collectively received undisclosed commissions of more than $1.5 million.
* * *
In addition to their prison terms, DOUMANIS, 60, of Rocky Point, New York, and PANTELAKIS, 43, of Queens, New York, were sentenced to three years of supervised release, forfeiture money judgments in the amount of $573,201 and $428,997, respectively, and restitution in an amount to be determined by the Court at a later date.
Danny Pratte pled guilty to one count of conspiracy to commit securities fraud and was sentenced by Judge Carter on October 19, 2018.
Mr. Berman praised the work of the Federal Bureau of Investigation and thanked the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christine Magdo and Samson Enzer are in charge of the prosecution.
Real Estate Developer Pleads Guilty in Manhattan Federal Court to Defrauding Investors Out of $58 Million in Years-Long Real Estate Investment SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that MICHAEL D’ALESSIO pled guilty today to operating a years-long scheme to defraud investors in his luxury real estate development projects in Manhattan, the Hamptons, Westchester, and elsewhere, and to making false claims and concealing assets in connection with his bankruptcy case. D’ALESSIO pled guilty before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Real estate developer Michael D’Alessio admitted today to misappropriating investor funds intended for specific luxury development projects by funneling them into shell accounts he controlled. In typical Ponzi-like fashion, D’Alessio comingled over $58 million of investor funds and used them to cash out early investors, cover debts, and pay his own personal gambling debts. When D’Alessio eventually went into bankruptcy, he perpetrated yet another fraud by trying to conceal assets. Today this fraudster has taken responsibility for his actions and faces time in a considerably less luxurious property – federal prison.”
According to the Indictment, Superseding Information, and statements made in court:
MICHAEL D’ALESSIO, a real estate developer and general contractor, served as the president and chief executive officer of a real estate investment and development firm specializing in the design, construction, and management of both residential and commercial real estate properties (“Company-1”). D’ALESSIO and Company-1 developed, and purported to develop, luxury residential real estate properties in Manhattan, the Hamptons, Westchester, and elsewhere.
D’ALESSIO typically followed the same pattern in each real estate investment project: he sought investments by offering for sale shares in a newly formed limited liability company (“LLC”) named after the location of the parcel of real estate to be developed and sold (the “Target Property”). In exchange for a purchase of shares in the LLC, D’ALESSIO promised a guaranteed monthly interest payment and a share in the profits from the sale of the Target Property. In soliciting investors, D’ALESSIO made numerous representations to potential investors, including that investor funds would be used only to develop the relevant Target Property and to cover related business expenses of the relevant LLC.
However, in reality, from at least in or about 2015 through in or about April 2018, D’ALESSIO misappropriated investor funds for his own use and benefit, and made other material misrepresentations. Upon receiving investor funds, D’ALESSIO typically channeled those funds through a series of bank accounts held in the name of shell companies owned and controlled by D’ALESSIO. D’ALESSIO then used much of those investor funds for his own benefit, including to pay off debts and prior investors, and to fund significant gambling and other personal expenses. D’ALESSIO took steps to conceal his fraud, including deceiving investors regarding the progress of various real estate projects and using money raised from investors to make monthly payments to investors in different projects in the manner of a Ponzi scheme. D’ALESSIO defrauded investors out of approximately $58 million.
In 2018, D’ALESSIO went into involuntary bankruptcy under Chapter 7 of Title 11 of the United States Code. In connection with this bankruptcy proceeding, captioned In re Michael D’Alessio, No. 18-22552 (Bankr. S.D.N.Y.), D’ALESSIO submitted forms that fraudulently omitted money and property belonging to his estate, and made a false declaration under penalty of perjury concerning his money and property.
* * *
D’ALESSIO, 53, of New York, New York, pled guilty to one count of committing wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of concealing assets from a bankruptcy court, which carries 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. Sentencing is scheduled for March 22, 2019, at 10:00a.m.
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 investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Amanda Kramer and Daniel G. Nessim are in charge of the prosecution.
Czar Entertainment Founder James Rosemond Sentenced to Life in Prison for Ordering the Murder of Lowell FletcherRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JAMES ROSEMOND, a/k/a “Jimmy the Henchman,” was sentenced today to life plus 30 years in prison for ordering the murder of Lowell Fletcher, a/k/a “Lodi Mack.” A jury convicted ROSEMOND of murder-for-hire, conspiracy to commit murder-for-hire, and firearms offenses following a nine-day retrial before United States District Judge Lewis A. Kaplan, who sentenced ROSEMOND.
Manhattan U.S. Attorney Geoffrey S. Berman said: “James Rosemond’s thirst for revenge following the assault of his son left 32-year-old Lowell Fletcher dead on a dark Bronx street. Our Office has fought for justice for Fletcher’s family for more than four years and through three jury trials. Now, Rosemond’s fate has been sealed and he has been sentenced to spend the rest of his life in prison for this crime.”
According to court papers and the evidence at trial:
ROSEMOND, 53, of New York, New York, was the founder of Czar Entertainment, a rap music management company, and also the head of a large-scale cocaine trafficking organization. In March 2007, members and associates of a rival rap music group known as “G-Unit,” including Marvin Bernard, a/k/a “Tony Yayo,” and Lowell Fletcher, a/k/a “Lodi Mack,” assaulted ROSEMOND’s son. ROSEMOND’s son was not seriously injured in the assault, and Fletcher ended up serving prison time for his involvement in the assault. Nevertheless, in 2009, ROSEMOND recruited a crew of men to murder Fletcher upon his release from prison by promising at least $30,000 in payment for killing Fletcher. At ROSEMOND’s direction, members of the murder crew selected a dark and secluded location for the murder in the vicinity of Mount Eden and Jerome Avenues in the Bronx, and lured Fletcher to that spot. When Fletcher arrived there in the evening on September 27, 2009, a member of the murder crew stepped out of the shadows and fired five bullets into Fletcher’s back and arms using ROSEMOND’s .22 caliber handgun with a silencer. Fletcher died later that night. On October 2, 2009, ROSEMOND had a trusted employee of his cocaine organization provide a kilogram of cocaine – worth about $30,000 in street value – to a member of his murder crew as payment for the murder.
* * *
At the conclusion of ROSEMOND’s first trial, in February and March 2014, a mistrial was declared after the jury was unable to reach a unanimous verdict on the counts against ROSEMOND relating to the murder-for-hire of Fletcher. At ROSEMOND’s second trial in December 2014, ROSEMOND was convicted on all counts. On appeal to the United States Court of Appeals for the Second Circuit, ROSEMOND argued in part that his conviction in this murder-for-hire case should be overturned because certain rulings by the trial court effectively barred him from advancing a line of defense that ROSEMOND wanted to pursue – namely, ROSEMOND’s claim that although he ordered hitmen to shoot Fletcher, he did not intend for the shooting to result in Fletcher’s death. In November 2016, the Second Circuit vacated ROSEMOND’s conviction and remanded the case for a new trial, which began November 6, 2017, and ended on November 28, 2017, when a unanimous jury found ROSEMOND guilty of all the charges against him.
Mr. Berman thanked and praised the U.S. Drug Enforcement Administration, the New York City Police Department, the U.S. Department of Homeland Security, and the U.S. Marshals Service for their persistence and outstanding work in this investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. The trial was conducted by Assistant U.S. Attorneys Samson Enzer, Drew Skinner, and Elizabeth Hanft.
7 Members of $3.1 Million Stolen Car Ring Charged in White Plains Federal CourtRead the Press Release
Geoffrey S. Berman, 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 George P. Beach II, the Superintendent of the New York State Police (“NYSP”), announced today the unsealing of a Complaint charging seven men with operating a national stolen car ring involving approximately 60 stolen cars worth approximately $3.1 million. The defendants are charged with conspiracy and the possession, sale, and transportation of stolen cars. Four of the defendants were arrested today and will be presented in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith. The other three defendants were arrested and will be presented before federal judges in Florida, Pennsylvania, and Rhode Island.
U.S. Attorney Geoffrey S. Berman stated: “As alleged, these defendants operated a nationwide stolen car ring involving stolen luxury cars worth more than $3 million. They stole from rightful owners and used a criminal network of thieves, fraudsters, and forgers to line their pockets, all while driving themselves around in stolen Lamborghinis, Range Rovers, and other pilfered prizes. With our partners at the FBI and the State Police, we have slapped a boot onto these fast-paced heists, and will now tow the defendants off to justice.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. stated: “As alleged, these individuals conspired to steal property, defraud state and local authorities, and unwittingly involve private citizens in an auto-theft ring spanning the country. This kind of criminal activity undermines public confidence and destabilizes communities. Thanks to the diligence and hard work by law enforcement, these arrests have put the brakes on this criminal enterprise.”
NYSP Superintendent George P. Beach II stated: “Through this collaborative investigation among law enforcement partners at all levels, we have uncovered a highly organized, national car theft operation that was allegedly responsible for victimizing car buyers all across the country. I want to commend the efforts of all of those involved in bringing this alleged criminal activity to an end and for the outstanding work that led to the arrests in this case.”
As alleged in the Complaint unsealed today in White Plains federal court[1]:
From October 2017 through November 2018, MARVIN WILLIAMS, NICHOLAS DIXON, a/k/a “Robbie,” JASON HIGNEY, BESAR ISMAILI, STEVEN KLEIN, LASHAUMBA RANDOLPH, and ABDURAHAMIN SHABAZZ, a/k/a “Abdurahmin Shebazz,” a/k/a “Abdur,” operated a stolen car ring, during which they (1) obtained stolen cars from, among other places, Michigan and Florida; (2) transported the stolen cars to, among other places, the Southern District of New York and Connecticut, for resale; (3) created and/or obtained false titles, registrations, and temporary license plates for the stolen cars; (4) used the false car records to deceive car buyers and the South Dakota Division of Motor Vehicles; and (5) used online markets, such as eBay, to solicit buyers of the stolen cars across the country, including in the Southern District of New York.
* * *
WILLIAMS, 32, of Torrington, Connecticut, DIXON, 43, of Tamarac, Florida, HIGNEY, 39, of Terryville, Connecticut, and KLEIN, 55, of Easton, Connecticut, are each charged with the sale or transportation of stolen vehicles and conspiracy to do the same, which carries a maximum sentence of 10 years in prison. ISMAILI, 37, of Waterbury, Connecticut, RANDOLPH, 44, of Atlanta, Georgia, and SHABAZZ, 45, of Providence, Rhode Island, are each charged with conspiracy to sell and transport stolen vehicles, which carries a maximum sentence of five years in prison.
Mr. Berman praised the outstanding investigative work of the FBI and the State Police. Mr. Berman also thanked the Waterbury Police Department, the Connecticut State Police, the South Dakota Division of Motor Vehicles, the South Dakota Lake County Treasurer’s Office, and the National Insurance Crime Bureau for their assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Emily Deininger and David Felton are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
14 Members of A Washington Heights Drug Trafficking Organization Charged with Distributing HeroinRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Keith Kruskall, Acting Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), and George P. Beach II, the Superintendent of the New York State Police (“NYSP”), announced today that PEDRO VICIOSO DE LIMA, a/k/a “Pep,” a/k/a “Pepo,” VICTOR HIDALGO, a/k/a “Jordan,” a/k/a “Vico,” DAVID PEREZ, a/k/a “Bori,” a/k/a “Macho,” JACINTO GARCIA, a/k/a “Cuba,” SIXTO VANCAMPER-BRITO, a/k/a “Cito,” CESAR GIL, a/k/a “Ralphy,” JUAN GIL CABRAL, a/k/a “Menor,” ANTHONY BELLIARD, a/k/a “Jafet Montas,” a/k/a “Café,” MAYRA MONSANTO, a/k/a “La Flaca,” RICKY ROSA, a/k/a “Pra,” a/k/a “Black,” a/k/a “Moreno,” MINERVA VENTURA, a/k/a “La Bori,” MARK VIERA, a/k/a “Leo,” a/k/a “Biz,” ROMEO SUNCAR, a/k/a “Stacks,” and ANTONIO YERIS ALMONTE, a/k/a “Ciobao,” have been charged with participating in a conspiracy to distribute heroin. Eleven of the defendants were arrested yesterday evening and this morning and will be presented before United States Magistrate Judge Robert W. Lehrburger in Manhattan federal court this afternoon. PEREZ and ROSA remain at large, and GIL will be transferred from immigration detention next week. The case has been assigned to United States District Judge Colleen McMahon.
U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants operated a distribution network of highly addictive and dangerous drugs, which has been plaguing a Washington Heights community for years. Even after they realized the potency of the drugs they were distributing and selling – and the overdose risk those drugs posed – the defendants allegedly continued to sell their poison in order to protect their brand. Today’s arrests are part of our continued commitment, along with our law enforcement partners, to stop the flow of heroin and fentanyl onto the streets of New York City.”
DEA Acting Special Agent-in-Charge Keith Kruskall said: “Today's heroin is deadlier for two reasons: fentanyl potency and traffickers’ motives. Two to three milligrams of fentanyl can be fatal. And, traffickers, not chemists, are pushing their toxic mixture of heroin and fentanyl on our streets for no reason other than money. New York law enforcement is weeding out those responsible for the record number of fatal overdoses in our city and warning users that every dose could be their last dose.”
HSI Special Agent-in-Charge Angel M. Melendez said: “These individuals allegedly distributed fentanyl laced heroin out of a building on 167th street, with a total disdain for the lives of their customers. This investigation rids the community of Washington Heights of alleged criminals that continue to fuel the opioid epidemic. Opioid addiction touches families and communities across our country, and we will remain focused on criminals who seek to distribute these highly addictive drugs with little regard for the lives ruined.”
NYPD Commissioner James P. O’Neill said: “Abuse of heroin and the deadly additive fentanyl has cut a wide swath across our nation, affecting people from all walks of life, in every neighborhood. To combat this scourge, the NYPD and our partners on the Drug Enforcement Strike Force are relentless in our work to shut down illegal drug supplies, to send dealers away with meaningful prison sentences and, ultimately, to save New Yorkers’ lives. For dismantling this alleged dangerous drug organization based in Washington Heights, I congratulate and thank everyone involved in this important case.”
According to the allegations in the Indictment:[1]
The defendants were members of a drug trafficking organization (the “DTO”) that operated in Manhattan, New York, and controlled heroin sales from a building at 501 West 167th Street (the “DTO’s Drug Building”) and the surrounding vicinity (the “DTO’s Drug Territory”). As a means of marketing its heroin and fentanyl-laced heroin, and to ensure that the only heroin sold in the DTO’s Drug Territory belonged to the DTO, the DTO placed stamps on the glassines of heroin and fentanyl-laced heroin that it sold to customers. Among the stamps the DTO used were “Annuit Coeptis,” “Toyota,” “Ras Baraka,” and “Porsche.” From July 2016 to October 2018, the DTO is estimated to have distributed more than 85 kilograms of heroin, much of it laced with fentanyl.
Glassines marked with the DTO’s stamps were recovered at the scene of fatal and nonfatal suspected overdoses of individuals who were believed to be customers of the DTO. For example, on March 29, 2018, an individual died of a suspected heroin overdose in a building across the street from the DTO’s Drug Building, and glassines marked with the stamps “Ras Baraka” and “Porsche” were recovered at the scene of the overdose death, along with a slip of paper with the name and phone number of a member of the DTO. Certain members of the DTO were aware of suspected overdoses resulting from the use of fentanyl-laced heroin sold by the DTO. The DTO was nevertheless reluctant to change the stamps it used to label the DTO’s heroin and fentanyl-laced heroin because the stamps were known by the DTO’s customers, and the DTO wanted to maintain its reputation for selling a strong product.
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LIMA, 49, HIDALGO, 58, PEREZ, 36, GARCIA, 61, VANCAMPER-BRITO, 51, GIL, 26, GIL CABRAL, 28, BELLIARD, 29, MONSANTO, 59, ROSA, 32, VENTURA, 64, VIERA, 46, SUNCAR, 33, and ALMONTE, 26, each of New York, New York, are each charged with one count of conspiring to distribute heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force. The Strike Force comprises agents and officers of the DEA, the New York City Police Department, Homeland Security Investigations, the New York State Police, the U.S. Internal Revenue Service Criminal Investigative Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, the New York National Guard, the Clarkstown Police Department, the U.S. Coast Guard, the Port Washington Police Department, and the New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”), which is a federally funded crime fighting initiative and part of the Organized Crime Drug Enforcement Task Force (“OCDTEF”) program.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Jessica Greenwood, Aline R. Flodr, and Dominic Gentile 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 Men Found Guilty of Wire Fraud and Money Laundering in Connection with Telemarketing Fraud Scheme Targeting the ElderlyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York announced that ANDREW OWIMRIN, a/k/a “Andrew Owens,” a/k/a “Jonathan Stewart,” and SHAHRAM KETABCHI, a/k/a “Steve Ketabchi,” were found guilty today in Manhattan federal court of conspiring to commit wire fraud and conspiring to commit money laundering in connection with a telemarketing scheme. OWIMRIN and KETABCHI were convicted following 12-day trial before United States District Judge Sidney H. Stein.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Andrew Owimrin and Shahram Ketabchi conspired to target and victimize elderly people through aggressive and deceptive telemarketing. The various so-called investment opportunities were really just variations on fraudulent schemes to steal investors’ money. Now Owimrin and Ketabchi await sentencing for their crimes.”
According to the Superseding Indictment, other filings in Manhattan federal court, and the evidence presented at trial:
Beginning in at least October 2013 through March 21, 2017, OWIMRIN and KETABCHI worked for telemarketing companies (the “Telemarketing Companies”) that engaged in a fraudulent scheme (the “Telemarketing Scheme”), by which they promised to earn victims (the “Victims”) money in exchange for particular Victims making an initial cash “investment” in business development, website design, grant applications, or tax preparation services. Many Victims, the majority of whom are over 70 years old, “invested” thousands of dollars with the Telemarketing Companies, but did not earn any of the promised returns. When Victims sought refunds, or fought credit card charges, the Telemarketing Companies provided explanations and documentation to the credit card companies falsely representing that the Victims had received the promised services. OWIMRIN worked as a sales representative for two of the Telemarketing Companies, Olive Branch Marketing and A1 Business Consultants. KETABCHI, who worked for A1 Business Consultants, was responsible for, among other things, the submission of false documentation to the credit card companies in order to challenge the Victims’ attempts to recover their funds.
Thirteen other individuals have been convicted in connection with this case:
Defendant Name
Companies
Count(s) of Conviction
Arash Ketabchi
A1 Business Consultants,
Elevated Business Consultants,
Element Business Services
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
William Sinclair
Olive Branch Marketing,
Paramount Business Solutions
Wire Fraud and Conspiracy to Commit Wire Fraud
(18 U.S.C. §§ 1343, 1349)
Conspiracy to Commit Money Laundering
(18 U.S.C. § 1956(h))
Michael Finocchiaro
Olive Branch Marketing,
Paramount Business Solutions
Wire Fraud and Conspiracy to Commit Wire Fraud
(18 U.S.C. §§ 1343, 1349)
Conspiracy to Commit Money Laundering
(18 U.S.C. § 1956(h))
Narcotics Conspiracy
(21 U.S.C. § 846)
Joseph McGowan
Carlyle Management Group,
Vanguard Business Solutions
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
Christopher Wilson
Olive Branch Marketing,
Paramount Business Solutions,
CTO Consulting
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
Jack Kavner
Carlyle Management Group,
Vanguard Business Solutions
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
Daniel Quirk
Carlyle Management Group,
Vanguard Business Solutions
Wire Fraud and Conspiracy to Commit Wire Fraud
(18 U.S.C. §§ 1343, 1349)
Conspiracy to Commit Money Laundering
(18 U.S.C. § 1956(h))
Narcotics Conspiracy
(21 U.S.C. § 846)
Peter DiQuarto
Elenchus Business Services
Harbinger Capital
Wire Fraud and Conspiracy to Commit Wire Fraud
(18 U.S.C. §§ 1343, 1349)
Conspiracy to Commit Money Laundering
(18 U.S.C. § 1956(h))
Narcotics Conspiracy
(21 U.S.C. § 846)
Thomas O’Reilly
CTO Consulting
Obstruction of Justice
(18 U.S.C. § 1519)
Raymond Quiles
Prestige Worldwide
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
Brooke Marcus
First Trend
Tri-Star
Elite Business Services
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
Anthony Medeiros
Virtual Business Plus
Narcotics Conspiracy
(21 U.S.C. §§ 846)
Conspiracy to Commit Wire Fraud
(18 U.S.C. § 1349)
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OWIMRIN, 29, of Hackensack, New Jersey, and KETABCHI, 47, of Rancho Santa Margarita, California, were each convicted of one count of conspiring to commit wire fraud and one count of conspiring to commit money laundering, each of which carries a maximum sentence of 20 years in prison. OWIMRIN and KETABCHI are scheduled to be sentenced by Judge Stein on February 12, 2019, at 2:30 p.m. and 3:30 p.m., respectively.
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 Department of Homeland Security, Homeland Security Investigations and the New York City Police Department.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Kiersten A. Fletcher, Robert B. Sobelman, and Benet J. Kearney are in charge of the prosecution.
If you believe to have been a victim of the telemarketing companies listed above, 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 Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at 866-874-8900 or [email protected]. You may also report it to Detective Christopher Bastos at 917-480-7167 or [email protected].
Manhattan U.S. Attorney Announces Conviction of Radio Talk Show Host Craig Carton for Securities and Wire FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the conviction of CRAIG CARTON for securities fraud, wire fraud, and conspiracy to commit those offenses. CARTON’s co-defendant, Michael Wright, pled guilty before U.S. Magistrate Judge Stewart D. Aaron in September 2018 for his participation in the scheme. CARTON is scheduled to be sentenced on February 27, 2018, at 4 p.m. by Chief U.S. District Judge Colleen McMahon, who presided over the one-week trial.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Radio personality Craig Carton solicited investments for his ticket buying scheme by touting his show business contacts and ability to buy blocks of tickets to live events such as Metallica, Barbra Streisand, and others, and sell them for a profit on the secondary ticket market. As a unanimous Manhattan jury has found, Carton was all talk. Carton fabricated contracts for blocks of tickets and spent the almost $7 million he collected from investors on gambling and personal expenses. We commend the jury for seeing through Carton’s blatant lies, and holding him responsible for his Ponzi-like scheme. Today’s verdict is a win for investors; lying to them is a federal crime.”
As set forth in the Complaint, Indictment, and the evidence presented at trial:
CARTON and another individual (“CC-1”) worked together to induce investors to provide them with millions of dollars, based on representations that the investor funds would be used to purchase blocks of tickets to concerts, which would then be re-sold on the secondary market. CARTON and CC-1 purportedly had access to those blocks of tickets based on agreements that CC-1 had with a company that promotes live music and entertainment events (the “Concert Promotion Company”) and that CARTON had with a company that operates two arenas in the New York metropolitan area (the “Sports and Entertainment Company”). In fact, neither the Concert Promotion Company nor the Sports and Entertainment Company had any such agreement with CARTON, Wright, CC-1, or any entity associated with them. After receiving the investor funds, CARTON, Wright, and CC-1 misappropriated those funds, using them to, among other things, pay personal debts and repay prior investors as part of a Ponzi-like scheme.
In the fall of 2016, CARTON, Wright, and CC-1 exchanged emails and text messages regarding their existing debts. On September 5, 2016, for example, Wright emailed CARTON and CC-1, “for the sake of our conversation tomorrow,” and outlined “the debt past due and due next week.” Wright listed several apparent creditors, to whom he, CC-1, and/or CARTON were personally indebted for over a million dollars. Wright listed eight possible options for repaying the debt, including “Run to Costa Rica, change name, and start life all over again – may not be an option.” CARTON responded to Wright and CC-1, stating “don’t forget I have $1m coming tomorrow from ticket investor[.] will need to be discussed how to handle.” On September 7, 2016, CARTON emailed Wright and CC-1, referenced a potential investor (“Investor-1”) in an upcoming holiday concert tour, and suggested “borrow[ing] against projected profits” on that investment.
Later in the fall of 2016, CARTON began negotiating with a hedge fund (the “Hedge Fund”) regarding a transaction in which the Hedge Fund would extend CARTON capital to finance CARTON’s purchase of event tickets, which CARTON would then re-sell at a profit. In early December 2016, CC-1 texted CARTON and Wright and discussed using the Hedge Fund’s capital “to repay debts,” and not for the purchase of tickets.
The next day, December 7, 2016, CARTON emailed the Hedge Fund five agreements between (i) CC-1 and a company controlled by CC-1 (the “CC-1 Entity”) and (ii) the Concert Promotion Company. In each of the purported agreements, the Concert Promotion Company agreed to sell the CC-1 Entity up $10 million worth of tickets to different concert tours. However, as alleged, these agreements were fraudulent and had not, in fact, been entered into by the Concert Promotion Company.
The following day, the Hedge Fund and CARTON executed the revolving loan agreement (the “Revolving Loan Agreement”), under which the Hedge Fund agreed to provide CARTON with up to $10 million, for the purpose of funding investments in the purchase of tickets for events. The Revolving Loan Agreement provided, in sum and substance, that the proceeds of the loan would be used only to purchase tickets pursuant to agreements for the acquisition of tickets, including the agreements with the Concert Promotion Company and for limited business expenses. The Hedge Fund would receive a share of the profits from the resale of the tickets.
The Hedge Fund then sent $700,000 to the CC-1 Entity to finance the purchase of tickets pursuant to the agreements between the CC-1 Entity and the Concert Promotion Company. CC-1, however, then sent this money to a bank account controlled by Wright, who then, on December 12, sent $200,000 to CARTON’s personal bank account (the “CARTON Bank Account”), which CARTON then wired to a casino. Also on December 12, Wright sent another $500,000 to an individual who had previously lent CARTON $500,000, which was due to be repaid that day.
Later in December 2016, the Hedge Fund sent an additional $1.9 million to the CC-1 Entity, to finance the purchase of tickets pursuant to agreements between the CC-1 Entity and the Concert Promotion Company. Once again, the Concert Promotion Company had not entered into any such agreements. CC-1, Wright, and CARTON engaged in text messages regarding the disposition of these funds. Some of the money was used by CC-1 to repay two individuals who had previously invested with CC-1 in a related scheme involving the purported investment in the resale of tickets, and by CARTON to pay casinos and to pay Investor-1 a purported return on an earlier investment in a ticket-related venture.
CARTON also induced the Hedge Fund to wire $2 million to the Sports and Entertainment Company, based purportedly on an agreement he had with the Sports and Entertainment Company (the “Sports and Entertainment Company Agreement”). The Sports and Entertainment Company Agreement purportedly gave an entity controlled by CARTON (the “CARTON Entity”) the right to purchase $2 million of tickets to concerts at one of the venues operated by the Sports and Entertainment Company. CARTON, among other things, sent the Hedge Fund a copy of the Sports and Entertainment Company Agreement that purportedly had been signed by the chief executive officer of the Sports and Entertainment Company. However, this agreement was fraudulent and had never been entered into by the Sports and Entertainment Company or signed by the chief executive officer.
On December 20, 2016, when the Hedge Fund wired the $2 million to the Sports and Entertainment Company, CARTON contacted the Sports and Entertainment Company and told them, in sum and substance, that the wire had been sent in error and should be sent to the bank account for an entity operated by CARTON and Wright, for which Wright is the signatory. After the money was rewired to that account, Wright wired $966,000 to Wright’s personal bank account and $700,000 to the CARTON Bank Account. CARTON then wired approximately $188,000 from the CARTON Bank Account, including at least $133,000 in wires to several casinos.
* * *
CARTON, 49, of New York, New York, was convicted of one count of conspiracy to commit securities fraud and wire fraud, one count of wire fraud, and one count of securities fraud. The conspiracy count carries 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. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the Boston Regional Office of the U.S. Securities and Exchange Commission, which has filed civil charges against CARTON and CC-1 in a separate action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brendan F. Quigley and Elisha J. Kobre are in charge of the prosecution.
Heroin Supplier Convicted After Jury Trial in White Plains Federal CourtRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that LEIBYS MERCEDES was found guilty today of conspiring to distribute heroin. A unanimous jury convicted MERCEDES after a four-day trial before United States District Judge Kenneth M. Karas.
U.S. Attorney Geoffrey S. Berman said: “As proven at trial, Leibys Mercedes contributed to the rising tide of heroin that is plaguing Westchester County and its vicinity. The verdict should send a message to criminals who seek to profit by flooding our community’s streets with lethal drugs.”
According to court documents and the evidence at trial:
From January 2017 up to July 2017, LEIBYS MERCEDES, a/k/a “Celly,” conspired to distribute 100 grams and more of heroin. MERCEDES supplied heroin to other dealers in the Yonkers area.
* * *
MERCEDES, 37, of the Bronx, New York, was convicted of conspiracy to distribute heroin, which carries a maximum sentence of 40 years in prison, and a mandatory minimum terms of five years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
MERCEDES is scheduled to be sentenced on April 9, 2018, before Judge Karas.
Mr. Berman praised the outstanding work of the Drug Enforcement Administration’s Westchester Resident Office and the Narcotics Unit of the City of Yonkers Police Department.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Samuel L. Raymond, Daniel M. Loss, Celia Cohen, and Michael D. Maimin are in charge of the prosecution.
Former Commodities Trading Executive Arrested for Scheme to Defraud Employer by Hiding Trading LossesRead 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 Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal complaint charging DAVID SMOTHERMON with wire fraud, in connection with a scheme to hide from his employer trading losses he incurred, by causing false entries to be made in the employer’s accounting system. SMOTHERMON was arrested yesterday in Houston, Texas, and is expected to be presented in federal court in Houston today.
U.S. Attorney Geoffrey Berman said: “As alleged, David Smothermon lied to his employer to conceal trading losses. He allegedly caused others to make false entries in his company’s accounting system to cover up the losses and reap substantial compensation. Smothermon’s actions allegedly caused his employer significant financial harm. Thanks to the FBI, David Smothermon has been apprehended and awaiting prosecution for his alleged self-dealing.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, after incurring significant trading losses, Smothermon took advantage of his position and manipulated the system to hide those losses from his employer and save his own skin. As a direct result of his selfish and criminal actions, the company lost millions of dollars, and other workers lost their livelihoods. We don’t take these crimes lightly, and we will continue to investigate and bring to justice any individual who criminally misuses his or her position for personal gain.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
From 2005 through early September 2016, SMOTHERMON worked for a privately owned firm, headquartered in Manhattan, engaged in the international marketing, distribution, and trading of commodities products (the “Company”). SMOTHERMON ran a subsidiary of the Company, based in Houston, Texas, specializing in the trading of liquefied petroleum gas or “LPG” (the “Subsidiary”). The Subsidiary engaged in two forms of LPG trading: entering into and executing contracts for the purchase and sale of barrels of LPG, and trading financial derivative products related to LPG in an over-the-counter market.
From December 2015 up to and September 2016, SMOTHERMON caused false entries to be entered into an electronic accounting system used by the Company in an effort to hide substantial trading losses generated by the Subsidiary’s derivatives trading. SMOTHERMON repeatedly caused others working for the Subsidiary to make false entries in the accounting systems. For example, in or about August 2016, SMOTHERMAN instructed an employee to make a change in the accounting system to make it appear that a contract for the purchase of LPG entitled the Subsidiary to purchase twice as much LPG as was in fact contracted for, at the same price, essentially doubling the Subsidiary’s profits.
SMOTHERMON caused these false entries to be made in an effort to retain his job and the significant compensation due to him in connection with his employment, including a bonus of more than $14 million awarded to him in May 2016. As a result of the false entries made at SMOTHERMON’s direction, the Company overestimated the Subsidiary’s potential profits by in excess of approximately $35 million.
In the face of an upcoming audit of the Subsidiary by the Company, SMOTHERMAN resigned in or about September 2016. In part as a result of the false entries discovered by the Company in the period that followed, the Company liquidated the derivatives positions held by the Subsidiary at a substantial loss and laid off workers.
* * *
SMOTHERMON, 48, of Houston, Texas, is charged in the Complaint with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the investigative work of the FBI in this case.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Katherine Reilly is in charge of the prosecution.
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 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.
Statement of U.S. Attorney Geoffrey S. Berman on the Conviction of Akayed Ullah for Detonation of A Bomb in New York CityRead the Press Release
U.S. Attorney Geoffrey S. Berman said: “Late last year, Akayed Ullah detonated a bomb during the bustle of morning rush hour under the Port Authority Bus Terminal. Ullah’s sinister purpose was to harm and terrorize as many innocent people in his path as possible, by using deadly violence to make a political statement. Ullah’s conviction by a unanimous jury of New Yorkers falls on an Election Day, which fittingly underscores the core principles of American democracy and spirit: Americans engage in the political process through votes, not violence. Today, Ullah stands convicted, he faces a potential life sentence, and his purpose failed. New York City remains a shining symbol of freedom and hope.”
Akayed Ullah Convicted for Detonation of a Bomb in New York CityRead the Press Release
Akayed Ullah, 28, of Brooklyn, New York, and a lawful permanent resident from Bangladesh, was convicted today on all six counts of the Indictment, which charged him with offenses related to the detonation and attempted detonation of a bomb in a subway station near the New York Port Authority Bus Terminal in New York City on Dec. 11, 2017. Ullah, who faces a possible sentence of life in prison, is scheduled to be sentenced on April 5, 2019, by the Honorable Richard J. Sullivan, who presided over the one-week trial.
Assistant Attorney General for National Security John C. Demers and U.S. Attorney Geoffrey S. Berman for the Southern District of New York made the announcement.
“Less than a year ago, Ullah constructed a pipe bomb and detonated it in a mass transit hub in the heart of New York City to harm and terrorize as many people as possible, all on behalf of ISIS. His crime reminds us that the threat of radical Islamist terrorism remains real,” said Assistant Attorney General Demers. “This guilty verdict holds Ullah accountable, and he faces a potential life term in federal prison for his crimes. I want to thank all the agents and prosecutors whose outstanding work made this result possible.”
“Late last year, Akayed Ullah detonated a bomb during the bustle of morning rush hour under the Port Authority Bus Terminal,” said U.S. Attorney Berman. “Ullah’s sinister purpose was to harm and terrorize as many innocent people in his path as possible, by using deadly violence to make a political statement. Ullah’s conviction by a unanimous jury of New Yorkers falls on Election Day, which fittingly underscores the core principles of American democracy and spirit: Americans engage in the political process through votes, not violence. Today, Ullah stands convicted, he faces a potential life sentence, and his purpose failed. New York City remains a shining symbol of freedom and hope.”
As set forth in the Complaint, Indictment, and the evidence presented at trial:
Islamic State of Iraq and Al-Sham
ISIS is a foreign terrorist organization based in the Middle East and Africa whose publicly stated purpose is the establishment of an Islamic state or caliphate based in the Middle East and Africa that encompasses all Muslims worldwide. ISIS has pursued the objective of an Islamic state through, among other things, killing and deliberate targeting of civilians, mass executions, persecution of individuals and communities on the basis of their religion, nationality, or ethnicity, kidnapping of civilians, forced displacement of Shia communities and minority groups, killing and maiming of children, rape, and other forms of sexual violence. ISIS has recruited thousands of foreign fighters from across the globe to assist with its efforts to expand its so-called caliphate in Iraq, Syria, and other locations in Africa and the Middle East, and has leveraged technology to spread its violent extremist ideology and for incitement to commit terrorist acts.
The Dec. 11, 2017 Attack
On Dec. 11, 2017, at approximately 7:20 a.m., Akayed Ullah detonated an improvised explosive device (“IED”) inside a subway terminal (the “Subway Terminal”) in or around the New York Port Authority Bus Terminal located at West 42nd Street and Eighth Avenue in New York, New York (the “December 11 Attack”). Shortly after the blast, members of the Port Authority of New York and New Jersey Police Department (“PAPD”) located Ullah lying on the ground in the vicinity of the explosion. Surveillance footage captured Ullah walking through the Subway Terminal and detonating his IED.
Ullah was taken into custody by law enforcement. During the course of Ullah’s arrest, law enforcement officers located on his person and in the surrounding area what appeared to be the components of an exploded pipe bomb (the “Pipe Bomb”). Specifically, law enforcement located, among other items, (i) a nine-volt battery inside Ullah’s pants pocket; (ii) wires connected to the battery and running underneath Ullah’s jacket; (iii) two plastic zip ties underneath Ullah’s jacket; (iv) several fragments of a metal pipe, including pieces of a metal end cap, on the ground; (v) the remnants of what appeared to be a Christmas tree lightbulb attached to wires; (vi) metal screws; and (vii) pieces of what appear to be plastic zip ties, among other items.
After Ullah was taken into custody, he was transferred to Bellevue Hospital, where he made statements to law enforcement officers after waiving his Miranda rights. During that interview, Ullah stated, among other things, the following:
- Ullah constructed the Pipe Bomb and carried out the Dec. 11 Attack. Ullah was inspired by ISIS to carry out the Dec. 11 Attack, and stated, among other things, “I did it for the Islamic State.”
- Ullah constructed the Pipe Bomb at his residence in Brooklyn (“the Residence”).
- The Pipe Bomb was composed of a metal pipe, which Ullah filled with explosive material that he created. Ullah used Christmas tree lights, wires, and a nine-volt battery as a trigger to detonate the Pipe Bomb. Ullah filled the Pipe Bomb with metal screws, which he believed would cause maximum damage. Ullah used zip ties to secure the Pipe Bomb to his body.
- Ullah carried out the Dec. 11 Attack in part because of the United States Government’s policies in, among other places, the Middle East. One of Ullah’s goals in carrying out the Dec. 11 Attack was to terrorize as many people as possible. He chose to carry out the attack on a work day because he believed that there would be more people present.
- Ullah’s radicalization began no later than approximately 2014. Ullah viewed pro-ISIS materials online, including a video instructing, in substance, that if supporters of ISIS were unable to travel overseas to join ISIS, they should carry out attacks in their homelands. He began researching how to build IEDs on the Internet approximately one year prior to the attack.
- On the morning of Dec. 11, 2017, shortly before carrying out the attack, Ullah posted a statement on his Facebook account referring to the President of the United States, stating, in substance, “Trump you failed to protect your nation.” Ullah also posted a statement that he believed would be understood by members and supporters of ISIS to convey that Ullah carried out the attack in the name of ISIS.
Items Recovered from Ullah’s Residence
On Dec. 11, 2017, law enforcement agents searched the Residence pursuant to a judicially authorized search warrant. Law enforcement agents recovered, among other items, (i) multiple pieces of metal pipes; (ii) pieces of wire and fragments of what appear to be Christmas tree lights; (iii) multiple screws consistent with the screws recovered at the scene of the Dec. 11 Attack; and (iv) a passport in Ullah’s name with multiple handwritten notations, including: “O AMERICA, DIE IN YOUR RAGE.”
* * *
Ullah was convicted of one count of provision of material support and resources to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; one count of using and attempting to use a weapon of mass destruction, which carries a maximum sentence of life in prison; one count of bombing and attempting to bomb a place of public use, which carries a maximum sentence of life in prison; one count of destruction of property by means of fire or explosives, which carries a mandatory minimum sentence of five years in prison and a potential maximum sentence of 20 years in prison; and use of a destructive device in furtherance of a crime of violence, namely, the use and attempted use of a weapon of mass destruction, which carries a mandatory minimum consecutive sentence of 30 years in prison and potential maximum of life, all in connection with Ullah’s alleged detonation of an explosive device in New York City.
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 Judge Sullivan.
Mr. Demers and Mr. Berman praised the outstanding investigative efforts of the FBI, the NYPD, the Department of Homeland Security, Homeland Security Investigations (“HSI”), and the PAPD. Ullah’s conviction is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the FBI’s Joint Terrorism Task Force – which consists of law enforcement officers of the FBI, NYPD, HSI, PAPD, and other agencies – and the U.S. Department of Justice’s National Security Division.
Assistant U.S. Attorneys Shawn G. Crowley, Rebekah Donaleski, and George D. Turner of the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorney Jerome J. Teresinski of the Counterterrorism Section of the Justice Department’s National Security Division.
Akayed Ullah Convicted in Manhattan Federal Court for Detonation of A Bomb in New York CityRead 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 that a jury returned a guilty verdict today against AKAYED ULLAH in Manhattan federal court on all six counts of the Indictment, which charged him with offenses related to the detonation of a bomb in a subway station near the New York Port Authority Bus Terminal in New York City on December 11, 2017. ULLAH, who faces a possible sentence of life in prison, is scheduled to be sentenced on April 5, 2019, by the Honorable Richard J. Sullivan, who presided over the one-week trial.
U.S. Attorney Geoffrey S. Berman said: “Late last year, Akayed Ullah detonated a bomb during the bustle of morning rush hour under the Port Authority Bus Terminal. Ullah’s sinister purpose was to harm and terrorize as many innocent people in his path as possible, by using deadly violence to make a political statement. Ullah’s conviction by a unanimous jury of New Yorkers falls on Election Day, which fittingly underscores the core principles of American democracy and spirit: Americans engage in the political process through votes, not violence. Today, Ullah stands convicted, he faces a potential life sentence, and his purpose failed. New York City remains a shining symbol of freedom and hope.”
Assistant Attorney General John C. Demers said: “Less than a year ago, Ullah constructed a pipe bomb and detonated it in a mass transit hub in the heart of New York City to harm and terrorize as many people as possible, all on behalf of ISIS. His crime reminds us that the threat of radical Islamist terrorism remains real. This guilty verdict holds Ullah accountable, and he faces a potential life term in federal prison for his crimes. I want to thank all the agents and prosecutors whose outstanding work made this result possible.”
As set forth in the Complaint, Indictment, and the evidence presented at trial:
Islamic State of Iraq and Al-Sham
ISIS is a foreign terrorist organization based in the Middle East and Africa whose publicly stated purpose is the establishment of an Islamic state or caliphate based in the Middle East and Africa that encompasses all Muslims worldwide. ISIS has pursued the objective of an Islamic state through, among other things, killing and deliberate targeting of civilians, mass executions, persecution of individuals and communities on the basis of their religion, nationality, or ethnicity, kidnapping of civilians, forced displacement of Shia communities and minority groups, killing and maiming of children, rape, and other forms of sexual violence. ISIS has recruited thousands of foreign fighters from across the globe to assist with its efforts to expand its so-called caliphate in Iraq, Syria, and other locations in Africa and the Middle East, and has leveraged technology to spread its violent extremist ideology and for incitement to commit terrorist acts.
The December 11, 2017 Attack
On December 11, 2017, at approximately 7:20 a.m., ULLAH detonated an improvised explosive device (“IED”) inside a subway terminal (the “Subway Terminal”) in or around the New York Port Authority Bus Terminal located at West 42nd Street and Eighth Avenue in New York, New York (the “December 11 Attack”). Shortly after the blast, members of the Port Authority of New York and New Jersey Police Department (“PAPD”) located ULLAH lying on the ground in the vicinity of the explosion. Surveillance footage captured ULLAH walking through the Subway Terminal and detonating his IED.
ULLAH was taken into custody by law enforcement. During the course of ULLAH’s arrest, law enforcement officers located on his person and in the surrounding area components of an exploded pipe bomb (the “Pipe Bomb”). Specifically, law enforcement located, among other items, (i) a nine-volt battery inside ULLAH’s pants pocket; (ii) wires connected to the battery and running underneath ULLAH’s jacket; (iii) two plastic zip ties underneath ULLAH’s jacket; (iv) several fragments of a metal pipe, including pieces of a metal end cap, on the ground; (v) the remnants of a Christmas tree lightbulb attached to wires; (vi) metal screws; and (vii) pieces of plastic zip ties, among other items.
After ULLAH was taken into custody, he was transferred to Bellevue Hospital, where he made statements to law enforcement officers after waiving his Miranda rights. During that interview, ULLAH stated, among other things, the following:
- ULLAH constructed the Pipe Bomb and carried out the December 11 Attack. ULLAH was inspired by ISIS to carry out the December 11 Attack, and stated, among other things, “I did it for the Islamic State.”
- ULLAH constructed the Pipe Bomb at his residence in Brooklyn (“the Residence”).
- The Pipe Bomb was composed of a metal pipe, which ULLAH filled with explosive material that he created. ULLAH used Christmas tree lights, wires, and a nine-volt battery as a trigger to detonate the Pipe Bomb. ULLAH filled the Pipe Bomb with metal screws, which he believed would cause maximum damage. ULLAH used zip ties to secure the Pipe Bomb to his body.
- ULLAH carried out the December 11 Attack in part because of the United States Government’s policies in, among other places, the Middle East. One of ULLAH’s goals in carrying out the December 11 Attack was to terrorize as many people as possible. He chose to carry out the attack on a work day because he believed that there would be more people present.
- ULLAH’s radicalization began no later than approximately 2014. ULLAH viewed pro-ISIS materials online, including a video instructing, in substance, that if supporters of ISIS were unable to travel overseas to join ISIS, they should carry out attacks in their homelands. He began researching how to build IEDs on the Internet approximately one year prior to the attack.
- On the morning of December 11, 2017, shortly before carrying out the attack, ULLAH posted a statement on his Facebook account referring to the President of the United States, stating, in substance, “Trump you failed to protect your nation.” ULLAH also posted a statement that he believed would be understood by members and supporters of ISIS to convey that ULLAH carried out the attack in the name of ISIS.
Items Recovered from ULLAH’s Residence
On December 11, 2017, law enforcement agents searched the Residence pursuant to a judicially authorized search warrant. Law enforcement agents recovered, among other items, (i) multiple pieces of metal pipes; (ii) pieces of wire and fragments of Christmas tree lights; (iii) multiple screws consistent with the screws recovered at the scene of the December 11 Attack; and (iv) a passport in ULLAH’s name with multiple handwritten notations, including: “O AMERICA, DIE IN YOUR RAGE.”
* * *
ULLAH, 28, of Brooklyn, New York, was convicted of one count of provision of material support and resources to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; one count of using and attempting to use a weapon of mass destruction, which carries a maximum sentence of life in prison; one count of bombing and attempting to bomb a place of public use, which carries a maximum sentence of life in prison; one count of destruction of property by means of fire or explosives, which carries a mandatory minimum sentence of five years in prison and a potential maximum sentence of 20 years in prison; and use of a destructive device in furtherance of a crime of violence, namely, the use and attempted use of a weapon of mass destruction, which carries a mandatory minimum consecutive sentence of 30 years in prison and potential maximum of life, all in connection with ULLAH’s alleged detonation of an explosive device in New York City.
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 Judge Sullivan.
Mr. Berman and Mr. Demers praised the outstanding investigative efforts of the Federal Bureau of Investigation (“FBI”), the New York City Police Department (“NYPD”), the Department of Homeland Security, Homeland Security Investigations (“HSI”), and the PAPD. ULLAH’s conviction is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the FBI’s Joint Terrorism Task Force – which consists of law enforcement officers of the FBI, NYPD, HSI, PAPD, and other agencies – and the U.S. Department of Justice’s National Security Division.
The prosecution is being handled by the Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Shawn G. Crowley, Rebekah Donaleski, and George D. Turner are in charge of the prosecution, with assistance from Trial Attorney Jerome J. Teresinski of the Counterterrorism Section of the Justice Department’s National Security Division.
Manhattan U.S. Attorney Announces Settlement with Hudson Valley Credit Union for Illegally Repossessing Service Members’ CarsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and John Gore, Acting Assistant Attorney General, announced today that Hudson Valley Federal Credit Union (“Hudson Valley”) has agreed to pay $95,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (“SCRA”) by repossessing vehicles owned by SCRA-protected service members without first obtaining the required court orders. Under the agreement, Hudson Valley has agreed to pay $65,000 to compensate seven service members whose cars it unlawfully repossessed and will pay a civil penalty of $30,000 to the United States.
This Office launched an investigation into Hudson Valley’s repossession practices after learning of two private lawsuits filed in the Southern District of New York. In both lawsuits, the plaintiffs alleged that Hudson Valley violated the SCRA by repossessing the plaintiffs’ vehicles after plaintiffs had entered military service. This Office’s subsequent investigation identified seven additional violations and revealed that, prior to August 2014, Hudson Valley did not have any written policies or procedures that addressed the SCRA’s protections against non-judicial auto repossessions.
Hudson Valley, headquartered in Poughkeepsie, New York, is one of the largest credit unions in the country, and has committed to protecting service members’ rights in the future.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Protecting service members is a high priority for this Office and the country. We are pleased that Hudson Valley has taken these remedial steps, and this Office will continue to protect the rights of men and women in uniform.”
Acting Assistant Attorney General John Gore said: “Financial institutions must recognize and honor their responsibilities to our men and women in uniform. Our nation depends upon the selfless devotion and sacrifice of our service members and we must ensure that they receive all rights and protections afforded to them by law.”
The agreement requires Hudson Valley to provide $10,000 in compensation to each of the six affected service members, plus any lost equity in the vehicle with interest. An additional service member, whose vehicle was repossessed but returned within 24 hours, will receive $5,000. Hudson Valley has also taken steps to repair the credit of the affected service members.
The agreement resolves the claims and causes of action asserted in the United States’ Complaint against Hudson Valley filed in the U.S. District Court for the Southern District of New York.
For more information about the United States’s SCRA enforcement efforts, please visit www.servicemembers.gov. Service members and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at www.legalassistance.law.af.mil/content/locator.php.
This case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorney Ellen Blain is in charge of the case.
Manhattan U.S. Attorney Announces $2 Million Settlement of Health Care Fraud Claims Against Metropolitan Retina Associates, Inc., and Dr. Kenneth FelderRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge for the New York Office of Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”), announced today a settlement of a civil fraud lawsuit against DR. KENNETH S. FELDER (“FELDER”) and METROPOLITAN RETINA ASSOCIATES, INC. (“METROPOLITAN RETINA”). The settlement resolves claims under the False Claims Act alleging that FELDER and METROPOLITAN RETINA billed Medicare and Medicaid for (1) substandard fluorescein angiography tests that were of such poor quality that they lacked all diagnostic value and were effectively worthless; and (2) ophthalmic ultrasounds that were either not performed or lacked any supporting documentation. Under the terms of the settlement approved by U.S. District Judge Alison J. Nathan, FELDER and METROPOLITAN RETINA admitted and accepted responsibility for their conduct and agreed to pay $2,064,559 to the United States.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Dr. Kenneth Felder and Metropolitan Retina defrauded taxpayers when they billed Medicare and Medicaid for diagnostic tests that were shoddy, undocumented, and sometimes not performed at all. This settlement sends a strong message that such conduct will not be tolerated.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “The irresponsible behavior by Metropolitan Retina Associates and Dr. Kenneth Felder compromised the integrity of the Medicare and Medicaid programs, and wasted millions of taxpayer dollars. HHS-OIG will continue to ensure that providers who do business with federally funded health care programs do so in an honest fashion.”
METROPOLITAN RETINA is an ophthalmology practice that is wholly owned by FELDER, with offices in Brooklyn and Manhattan. As part of the settlement, FELDER and METROPOLITAN RETINA admit, acknowledge, and accept responsibility for the following conduct:
- FELDER and METROPOLITAN RETINA frequently submitted claims to Medicare and Medicaid for fluorescein angiograms that lacked any diagnostic or medical value because the images were distorted and/or were taken from angles that made it impossible to evaluate the patients’ conditions.
- Medicare or Medicaid would not have paid for these procedures had they known that the fluorescein angiograms lacked any diagnostic or medical value.
- FELDER and METROPOLITAN RETINA frequently submitted claims to Medicare and Medicaid for ultrasounds of the eye that either were not performed or were not supported by any medical record documentation.
- Medicare and Medicaid would not have paid for these ultrasounds had they known that the ultrasounds either were not performed or were not supported by documentation in the medical records.
- As a result of billing for the medical procedures described above, FELDER and METROPOLITAN RETINA received substantial reimbursement from Medicare and Medicaid to which they were not entitled.
* * *
Mr. Berman thanked the Office of the Inspector General for HHS for its assistance.
The case is being handled by the Office’s Civil Division. Assistant U.S. Attorneys Brandon Cowart and Jacob M. Bergman are in charge of the case.
Bronx Tax Preparer Convicted at Trial for Aggravated Identity Theft and Tax FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that REBECCA BAYUO, a Bronx tax preparer, was convicted in Manhattan federal court yesterday of preparing false tax returns on behalf of her clients, filing false tax returns in the names of victims whose identities she had previously stolen, and filing false tax returns on her own behalf. BAYUO was convicted after a two-and-half week jury trial before U.S. District Judge John G. Koeltl.
U.S. Attorney Geoffrey S. Berman stated: “Rebecca Bayuo now stands convicted of multiple counts of tax fraud after she abused her position of trust as a tax preparer by systematically violating the nation’s income tax laws. By repeatedly filing fraudulent tax returns for her clients, including using stolen identities to increase tax refunds, Bayuo stole tens of thousands of dollars directly from the U.S. Treasury. For these egregious crimes, Bayuo now faces significant time in federal prison.”
According to the allegations contained in the Complaint, Indictment, and the evidence presented at trial:
BAYUO owned and operated Breakthrough Insurance Brokerage, a tax preparation business, located in the Bronx, New York. From 2010 through 2014, BAYUO used stolen identifying information of victims to file fraudulent federal income tax returns, which generated tax refunds to which BAYUO was not entitled. Specifically, BAYUO repeatedly used stolen identities of dozens of victims, including 11 New York residents who testified at trial, to file false tax returns and unlawfully collect tax refunds from the Internal Revenue Service (“IRS”) in their names for herself. As a result of BAYUO’s criminal conduct, many of the victims were unable to file tax returns as required by law, and were deprived of tax refunds to which they were entitled.
In addition, from 2011 through 2012, BAYUO prepared and submitted to the IRS fraudulent tax returns for her clients that resulted in increased tax refunds, to which her clients were not entitled. Among other things, BAYUO charged her clients an additional fee in exchange for providing them with the stolen identities of children as false “dependents” to claim on their tax returns. BAYUO recycled the same stolen identities as false “dependents” for numerous tax returns, over at least a four-year time period.
Finally, from 2014 to 2015, BAYUO filed false personal income tax returns in her own name, and included in those filings personal identifying information belonging to other individuals that she had stolen. Specifically, on her own tax returns, BAYUO included false “dependents,” whose identities she had stolen, in order to obtain a larger tax refund to which she was not entitled. Three of the victims of this scheme testified at trial.
* * *
BAYUO, 48, of the Bronx, New York, was convicted of 12 counts of aiding and assisting the preparation of false tax returns, each of which carries a maximum sentence of three years in prison; one count of theft of government funds, which carries a maximum sentence of 10 years in prison; one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison; and two counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
BAYUO is scheduled to be sentenced on April 12, 2019, at 10:00 a.m.
Mr. Berman praised the outstanding investigative work of the IRS. The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Mollie Bracewell, Cecilia Vogel, and Sarah E. Paul are in charge of the prosecution.
Arizona Man Pleads Guilty to Using Scam Political Action Committees to Defraud Tens of Thousands of DonorsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that WILLIAM TIERNEY pled guilty today in Manhattan federal court to conspiring to commit wire fraud for inducing donations to six political action committees (“PACs”) he established and operated by misrepresenting the activities and expenditures of the PACs. TIERNEY was arrested and charged in connection with this scheme in May 2018, and he pled guilty today to one count of conspiracy to commit wire fraud before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Berman said: “William Tierney admitted today that he secretly operated numerous political action committees to obtain small-dollar donations from people who believed their hard-earned money would support the causes described in solicitation calls and mailings. In reality, the PACs were political action committees in name only, contributing less than 1 percent of the money they raised to candidates for office and instead enriching the defendant, who now faces prison time for his crimes. This is the first-ever federal prosecution of fraudulent scam PACs, but it won’t be the last.”
According to the allegations set forth in the Complaint and Information filed against TIERNEY in Manhattan federal court, and statements made in public court filings and proceedings, including TIERNEY’s guilty plea hearing:
TIERNEY defrauded tens of thousands of donors to six political action committees that he established, controlled, and operated. These scam PACs were fraudulent entities operated to enrich the defendant, targeting victims across the country to raise funds on the basis of false and misleading representations. The scam PACs purported to support voter education regarding – and the political campaigns of those who supported – various causes, including autism awareness, law enforcement, and pro-life causes, including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.” In truth, virtually all of the money raised was either paid to TIERNEY or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures. Less than 1 percent of the money obtained by the scam PACs was contributed to candidates for office.
TIERNEY perpetrated the fraud through various deceptive means and methods. For example, he created and utilized a web of shell pass-through entities to conceal and disguise the fraud. Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes – so that payments to the shell entities would appear to be for legitimate expenditures, including when publicly disclosed in Federal Election Commission (“FEC”) filings. In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations. In fact, these and the other shell entities TIERNEY created had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain scam PACs.
TIERNEY also instructed two companies that made telemarketing solicitation calls for certain scam PACs to create their own shell companies – which he referred to as “Stealth LLCs” – with names that concealed any connection with their parent telemarketing vendors. This prevented the FEC, donors, and other members of the public from being able to learn from required FEC disclosure forms that multiple scam PACs were in fact paying the same telemarketing vendors.
To facilitate the fraudulent scheme, TIERNEY used the fake identity of “Bill Johnson” when meeting and corresponding with officials at certain fundraising call centers. Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs; in fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed. TIERNEY also undertook efforts to avoid press coverage of the scam PACs more generally, despite the scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.
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TIERNEY, 46, of Arizona, pled guilty to one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison, and agreed to forfeit and pay restitution in an amount of at least $1.4 million. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentence of the defendant will be determined by the court.
TIERNEY is scheduled to be sentenced by Judge Furman on February 7, 2019.
Mr. Berman praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and of the Federal Bureau of Investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alex Rossmiller and Alison Moe are in charge of the prosecution.
Individual Arrested on Sex Trafficking and Other Offenses in Connection with Missing Person Corinna SlusserRead 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 Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today that ISHI WONEY was charged with sex trafficking and other offenses involving the sexual exploitation of young women. WONEY was arrested yesterday in New Jersey and will be presented today before U.S. Magistrate Judge Sarah Netburn in federal court in Manhattan this afternoon.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Ishi Woney engaged in a vile form of exploitation, using force and other coercion to compel young women to engage in paid sex for his enrichment. We will continue to work with the FBI and NYPD to protect prospective victims of human trafficking and arrest and prosecute their predators.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, Woney compelled his victim to engage in prostitution through force and coercion, and he used both this victim and Corinna Slusser, who has been missing since September 2017, in online advertisements promoting prostitution. Human trafficking is a top priority for the FBI, and, as today’s charges demonstrate, we will continue to aggressively pursue justice for the victims of these heinous crimes. Ms. Slusser was last seen in Queens, New York, and we ask anyone with information concerning her whereabouts to contact us as 1-800-CALL-FBI or online at tips.fbi.gov.”
NYPD Commissioner James P. O’Neill said: “Today’s charges further affirm the NYPD’s unwavering commitment to protecting the victims of sex trafficking in and around the five boroughs of New York City. This crime is among the most heinous in society, and it is our job – and the job of all of our local, state, and federal law enforcement partners – to ensure that anyone who would seek to profit through the abuse and exploitation of another human being be brought to justice swiftly and successfully. I thank and commend the U.S. Attorney’s Office for the Southern District and the FBI for collaborating with us on this critical case. And we urge anyone who has any information related to this case, or any other, to contact law enforcement. Together, we will continue to make the safest large city in the nation even safer.”
According to the allegations in the Complaint sworn out in Manhattan federal court:[1]
Between approximately September 2017 and the present, WONEY engaged in sex trafficking by using force, fraud, and coercion to compel at least one female victim (“Victim-1”) to engage in sex acts in the Bronx and other locations in exchange for money. WONEY also transported Victim-1 to multiple states, including New York, to engage in prostitution, and purchased online advertisements promoting prostitution, some of which featured Victim-1 and Corinna Slusser, who has been a missing person since September 20, 2017, and was last seen in Queens, New York.
If you have any information related to the whereabouts of Corinna Slusser, please contact the FBI at 1-800-CALL-FBI or online at tips.fbi.gov, or the NYPD at 800-577-TIPS.
* * *
The charges in the Complaint against WONEY, 23, of New York, New York, are included in the chart 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 defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of FBI and NYPD.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Daniel H. Wolf 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.
Count
Charge
Mandatory Minimum Prison Term
Maximum Prison Term
One
Use of an Interstate Facility to Promote, Manage, and Carry on Prostitution
N/A
5 Years
Two
Mann Act
N/A
10 Years
Three
Sex Trafficking by Means of Force, Threats, Fraud, and Coercion
15 Years
Life
[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.
Former Reality Television Series “Bad Girl” Pleads Guilty to FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that SHANNADE CLERMONT pled guilty to one felony count of wire fraud for making and attempting more than $20,000 in fraudulent charges using the stolen debit card information of a deceased man she had visited for a prostitution date. CLERMONT pled guilty before U.S. District Judge Naomi Reice Buchwald.
U.S. Attorney Geoffrey S. Berman said: “Former reality TV ‘Bad Girl’ Shannade Clermont stole debit card information from a man she visited for a prostitution date in his Manhattan apartment. When he died of an overdose, Clermont used the deceased man’s identity to make tens of thousands of dollars in fraudulent purchases. She has now pled guilty to fraud and faces time in federal prison. This case demonstrates that in reality, those who commit debit card fraud will be prosecuted to the fullest extent of the law.”
According to the allegations contained in the Complaint and Indictment to which CLERMONT pled guilty:
The NYPD and the United States Attorney’s Office for the Southern District of New York have been investigating the overdose death of a male individual (the “Victim”), who was found dead on the morning of February 1, 2017, in his apartment at 250 East 53rd Street in Manhattan, New York (the “Victim Apartment”). During the course of that investigation, law enforcement learned that CLERMONT visited the Victim for a prostitution date at the Victim Apartment the previous evening (January 31, 2017), and stole two debit cards from his wallet. CLERMONT then used the stolen debit card information to make or attempt to make more than $20,000 in fraudulent purchases during the months following the Victim’s death, including to pay her rent and phone bills, purchase flights, and make several online purchases of thousands of dollars of clothing and other merchandise.
CLERMONT also created and used a fake email account in the Victim’s name to falsely represent to third parties that she was the Victim, in order to commit fraud using the Victim’s identity. Specifically, on or about April 3, 2017, approximately two months after the Victim’s death, the fake email account was used to register an account with Western Union in the name of the Victim, which was used to initiate a fraudulent money transfer of $1,000 from the Victim to CLERMONT.
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CLERMONT, 24, of Georgia, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years. Sentencing before Judge Buchwald is scheduled for February 13, 2019 at 2:30pm.
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 investigative work of the NYPD.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.