Southern District of New York
Press releases recorded for this federal judicial district.
Turkish Banker Convicted of Conspiring to Evade U.S. Sanctions Against Iran and Other OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Dana J. Boente, Acting Assistant Attorney General for National Security, announced that MEHMET HAKAN ATILLA was found guilty today of conspiring with others, including Reza Zarrab, a/k/a “Riza Sarraf,” who previously pled guilty to evading U.S. sanctions among other offenses, to use the U.S. financial system to conduct transactions on behalf of the Government of Iran and other Iranian entities, which were barred by U.S. sanctions, and to defraud U.S. financial institutions by concealing these transactions’ true nature. The jury convicted ATILLA on five of six charges in the controlling indictment following a four-week trial before U.S. District Judge Richard M. Berman.
Acting U.S. Attorney Joon H. Kim stated: “Today, after a full, fair, and open trial, a unanimous jury convicted Hakan Atilla, a senior banker at Halk Bank. Along with the prior guilty plea of Reza Zarrab, two men at the heart of this massive and brazen scheme that blew a billion-dollar hole in the Iran sanctions regime now stand convicted of serious federal crimes. Foreign banks and bankers have a choice: You can choose willfully to help Iran and other sanctioned nations evade U.S. law, or you can choose to be part of the international banking community transacting in U.S. dollars. But you can’t do both. If you lie repeatedly to U.S. Treasury officials and fabricate documents – all as part of a secret scheme to smuggle billions of dollars in Iranian oil money past the U.S. sanctions net – as Atilla did, then you should be prepared for the consequences. The consequence of Atilla’s choice is now a felony conviction in an American court of law.”
Acting Assistant Attorney General Dana J. Boente stated: “For years, Mehmet Hakan Atilla conspired to use the American financial system to conduct millions of dollars’ worth of illegal transactions on behalf of the Government of Iran. He used his high rank at a Turkish bank to disguise the transactions as humanitarian food payments and deceive American officials, but now, after receiving due process of law, he has been held accountable in court, by an impartial jury. This successful prosecution is another example of our resolve to pursue and bring to justice those who violate our sanctions and other laws that protect our national security.”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
Beginning in or about 1979, the President, pursuant to the International Emergency Economic Powers Act (the IEEPA), has repeatedly found that the actions and policies of the government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat. In accordance with these presidential declarations, the United States has instituted a host of economic sanctions against Iran and Iranian entities. This sanctions regime prohibits, among other things, financial transactions involving the United States or United States persons that were intended for the Government of Iran or Iranian entities.
Specifically, ATILLA, Zarrab, and others used deceptive measures to provide access to international financial networks, including U.S. financial institutions, to the Government of Iran, Iranian entities, and entities identified by the Department of the Treasury Office of Foreign Assets Control as Specially Designated Nationals (“SDNs“). They did so by, among other things, using Halk Bank, at which ATILLA acted as Deputy General Manager of International Banking, to engage in transactions that violated U.S. sanctions against Iran. In particular, they took steps to protect and hide Zarrab’s supply of currency and gold to the Government of Iran, Iranian entities, and SDNs using Halk Bank, and in doing so, shielded the bank from U.S. sanctions. ATILLA, Zarrab, and others conspired to create and use false and fraudulent documents to disguise prohibited transactions for Iran and make those transactions falsely appear as transactions involving food, thus falling within humanitarian exceptions to the sanctions regime. As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.
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Mehmet Hakan Atilla, 47, is a resident and citizen of Turkey. Atilla was convicted of conspiracies to defraud the United States, to violate the IEEPA, to commit bank fraud and to commit money laundering, as well as a substantive count of bank fraud. The conspiracy to defraud the United States count carries a maximum term of imprisonment of five years. The conspiracy to violate the IEEPA and money laundering conspiracy counts each carry a maximum term of imprisonment of 20 years. The bank fraud counts each carry a maximum term of imprisonment of 30 years. 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. ATILLA is scheduled to be sentenced on April 11, 2018, before Judge Berman.
Zarrab, 34, also a resident and citizen of Turkey, pled guilty October 26, 2017, to one count of conspiring to defraud the United States, which carries a maximum sentence of five years in prison; one count of conspiracy to violate the IEEPA, which carries a maximum sentence of 20 years in prison; one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiring to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of money laundering, which carries a maximum sentence of 20 years in prison; one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; and one count of conspiring to bribe a U.S. public official and possessing contraband in a federal detention center, which carries a maximum sentence of five years in prison. Zarrab’s sentencing date has not been scheduled.
Mr. Kim and Mr. Boente praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division.
Assistant U.S. Attorneys Michael D. Lockard, Sidhardha Kamaraju and David W. Denton, Jr., and Special Assistant U.S. Attorney Dean Sovolos of the Southern District of New York are in charge of the prosecution, with assistance from Deputy Chief Elizabeth Cannon and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
Statement of Acting U.S. Attorney Joon H. Kim on the Conviction of Hakan AtillaRead the Press Release
“Today, after a full, fair, and open trial, a unanimous jury convicted Hakan Atilla, a senior banker at Halk Bank. Along with the prior guilty plea of Reza Zarrab, two men at the heart of this massive and brazen scheme that blew a billion-dollar hole in the Iran sanctions regime now stand convicted of serious federal crimes. Foreign banks and bankers have a choice: You can choose willfully to help Iran and other sanctioned nations evade U.S. law, or you can choose to be part of the international banking community transacting in U.S. dollars. But you can’t do both. If you lie repeatedly to U.S. Treasury officials and fabricate documents – all as part of a secret scheme to smuggle billions of dollars in Iranian oil money past the U.S. sanctions net – as Atilla did, then you should be prepared for the consequences. The consequence of Atilla’s choice is now a felony conviction in an American court of law.”
Attorney General Jeff Sessions Appoints Geoffrey S. Berman as Interim United States AttorneyRead the Press Release
Attorney General Jeff Sessions today announced the appointment of Geoffrey S. Berman as Interim United States Attorney pursuant to 28 U.S.C. § 546, which provides that “the Attorney General may appoint a United States Attorney for the district in which the office of United States Attorney is vacant.” This appointment will take effect on January 5, 2018.
Attorney General Jeff Sessions said: “Geoffrey Berman brings three decades of invaluable experience to the role of Interim United States Attorney. He was part of the prosecution team charged with investigating the Iran-Contra matter and served as a federal prosecutor in the Southern District of New York. As Interim U.S. Attorney for this same district, he will lead an incredible team of attorneys and investigators and help provide New Yorkers with safety, security, and peace of mind. I am pleased to appoint him to this important role.”
Biographical information for Interim U.S. Attorney Geoffrey S. Berman:
- Mr. Berman is currently a principal shareholder in the New York and New Jersey offices of Greenberg Traurig.
- From 1990 to 1994, Mr. Berman was an Assistant U.S. Attorney in the Southern District of New York, where he handled complex criminal prosecutions, including tax, securities and computer hacking violations.
- Prior to that Mr. Berman was an Associate Counsel in the Office of Independent Counsel Iran-Contra, where he successfully prosecuted a former CIA employee for tax fraud.
- Mr. Berman clerked for Judge Leonard Garth of the United States Court of Appeals for the Third Circuit.
- Mr. Berman received his B.A., magna cum laude, from University of Pennsylvania and his B.A., beta gamma sigma, from the Wharton School. Mr. Berman received his J.D. from Stanford Law School, where he was Note Editor of the Stanford Law Review.
Kaleil Tuzman, Former Chairman and Ceo of Technology Start-Up Company Kit Digital, and Omar Amanat Found Guilty in Manhattan Federal Court of Securities Fraud Related OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that KALEIL ISAZA TUZMAN, the former chairman of the board of directors and chief executive officer of the technology start-up company KIT digital (“KITD”), and OMAR AMANAT, an associate of Tuzman’s, were found guilty this afternoon in Manhattan federal court of various securities fraud-related offenses, after a six-week trial presided over by U.S District Judge Paul G. Gardephe.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Today, after a six-week trial, a New York jury convicted Kaleil Tuzman and Omar Amanat of securities and accounting fraud. Kaleil Isaza Tuzman built the company named after himself, Kit Digital, on a foundation of lies, working with his co-defendant Omar Amanat to defraud investors out of millions of dollars through years of deceit. The evidence of their criminal schemes was so overwhelming that Amanat actually tried to fool the jury by introducing fake emails into the record as exculpatory ‘evidence’ in this trial. Unfortunately for Tuzman and Amanat, the jury saw through their tangled web of lies, convicting them on all counts. Today, Tuzman and Amanat’s lies finally caught up to them, and they now must face what they have been desperately seeking to evade for years – justice.”
According to the Indictment and other filings in Manhattan federal court and the evidence presented at trial:
The Scheme to Defraud Maiden Capital Investors
Stephen Maiden was the managing member of Maiden Capital, an unregistered investment advisory firm that managed portfolios of securities. Between in or about February 2009 and in or about June 2012, AMANAT, along with Maiden and others, devised and carried out a scheme to hide the fact that investments by Maiden Capital clients in Enable, an investment vehicle for which AMANAT raised money (based, in part, on false and misleading representations), had been lost. To facilitate the scheme, Maiden, with the knowledge and approval of AMANAT, generated fictitious client account statements that failed to disclose the Enable losses. In addition, AMANAT wired hundreds of thousands of dollars to a Maiden Capital bank account to support Maiden Capital, including to allow Maiden to repay investors whose redemption requests could not be forestalled and thus to continue to keep secret from Maiden Capital investors the Enable losses for over three years.
Evidence at trial also revealed that AMANAT produced to the Government and entered into evidence at trial email communications that had been fabricated. After two evidentiary hearings into the issue, the Court allowed the Government to present to the jury evidence of AMANAT’s use of false and fabricated email evidence during the trial.
After the verdict, Judge Gardephe revoked AMANAT’s bail and ordered him remanded into custody, citing numerous factors, including that “substantial evidence was introduced at trial that Mr. Amanat fabricated emails” showing “disdain for the court” and its procedures.
The Market Manipulation Scheme
Between in or about December 2008 and in or about September 2011, TUZMAN, Maiden, and AMANAT engaged in efforts to artificially inflate the share price and trading volume of KITD shares. During this time period, during which KITD shares traded on the OTC Bulletin Board and on the NASDAQ, Maiden, at TUZMAN’s and AMANAT’s behest, purchased and sold shares of KITD through Maiden Capital, at times for the purpose of manipulating the stock price and at times for the purpose of creating the illusion of greater volume in the trading for KITD shares.
For instance, Maiden, with TUZMAN’s knowledge and approval, frequently engaged in match trading in which Maiden caused an account under Maiden’s control to buy or sell KITD stock, and on the same day caused an account under Maiden’s control to take the opposite position. TUZMAN also directed Maiden to make timely purchases of KITD stock in an effort to manipulate the price of KITD shares at certain critical moments, including, for example, when KITD was seeking to raise additional capital and in the weeks before KITD’s stock began trading on the NASDAQ. At times, Maiden was responsible for nearly all of the day’s trading activity in KITD stock.
Over the course of the scheme, TUZMAN caused KITD to invest approximately $1,150,000 in company cash in Maiden Capital but failed to disclose to KITD shareholders that these investments with Maiden Capital were not part of an arms-length relationship. Instead, TUZMAN portrayed these investments as efforts to safely invest assets of KITD. In reality, TUZMAN caused KITD to make these investments in order to help fund Maiden’s purchases of KITD shares, as part of the effort to manipulate the market described above. And, on one occasion, TUZMAN caused KITD to invest $250,000 in Maiden Capital so that Maiden could reimburse TUZMAN for a prior, personal investment that TUZMAN made with Maiden Capital, thereby using KITD as his personal bank.
The Accounting Fraud Scheme
From at least in or about 2010 through in or about 2012, TUZMAN, along with Robin Smyth, KITD’s former CFO, Gaven Campion, KITD’s former president,[1] and others, engaged in an illegal scheme to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
TUZMAN, working with others, including Smyth and Campion, devised and executed a scheme to inflate KITD’s revenue falsely. This scheme involved two principal methods: (a) the improper recognition of revenue from so-called “perpetual license” contracts for KITD software (contracts that gave the purchasing customer the right to use the licensed software indefinitely), and (b) the execution of fraudulent “round-trip” transactions that had the effect of using KITD’s own cash, rather than payments received from customers, to pay off bills, known as accounts receivable, that were due and owed to KITD, including those resulting from KITD’s improper revenue recognition practices, rather than disclose to KITD’s auditors and the investing public the fact that the bills were uncollectible or, in some cases, had resulted from fabricated contracts. These fraudulent practices caused KITD to materially overstate its reported revenue, which had the effect of materially overstating KITD’s net income and earnings on its annual and quarterly financial reports issued from the fiscal quarter ending June 30, 2010, through the fiscal quarter ending March 31, 2012.
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TUZMAN, 45, was found guilty of one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud with respect to the market manipulation scheme. For the accounting fraud scheme, TUZMAN was found guilty of one count of conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors. The Counts of which TUZMAN was convicted carry a combined maximum term of imprisonment of 30 years, which includes five years each on the conspiracies to commit securities fraud and 20 years on the conspiracy to commit wire fraud.
AMANAT, 44, was found guilty of one count of conspiracy to commit wire fraud, one count of wire fraud, one count of aiding and abetting investment advisor fraud, and one count of conspiracy to commit securities fraud, all in relation to the market manipulation scheme. The Counts of which AMANAT was convicted carry a combined maximum term of imprisonment of 50 years, which includes five years each on the conspiracies to commit securities fraud and aiding and abetting investment advisor fraud and 20 years each on the conspiracy to commit wire fraud and wire fraud counts.
The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Court.
AMANAT is scheduled to be sentenced by Judge Gardephe on April 25, 2018, at 12:30 p.m. TUZMAN is scheduled to be sentenced by Judge Gardephe on April 26, 2018, at 12:30 p.m.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service. He also thanked the SEC for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams, Andrea M. Griswold, and Joshua A. Naftalis are in charge of the prosecution.
[1] Maiden, Smyth, and Campion have pled guilty to various offenses for their roles in the schemes and cooperated with the Government.
Additional Charges Announced Against Two Bronx Men for A 2014 Murder and 2014 Drug-Related ShootingRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Darcel D. Clark, the Bronx County District Attorney, Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), James J. Hunt, the Special Agent-in-Charge of the New York Field Office of the U.S. Drug Enforcement Administration (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced additional charges in a Superseding Indictment[1] against members of a drug trafficking crew based in the Bronx. In the Superseding Indictment returned on Tuesday, December 19, JASON POLANCO, a/k/a “Jin,” a/k/a “Wolfman,” is charged with the August 31, 2014, murder of Shawn Ross, a/k/a “S.B.,” and RENE RUIZ, a/k/a “Lil’ Rene,” a/k/a “Nae Nae,” is charged with a May 2, 2014, non-fatal shooting.
POLANCO, RUIZ, and 12 others were previously charged in an Indictment unsealed on February 6, 2017. That prior Indictment charged narcotics trafficking, firearms possession, and participation in robberies of commercial establishments in the Bronx and Manhattan. In addition to the new charges described above, the Superseding Indictment re-alleges the charges that had previously been brought in the Indictment against POLANCO, RUIZ, and 10 others. The case is assigned to U.S. District Judge Laura Taylor Swain. POLANCO, RUIZ, and the 10 other defendants charged in the Superseding Indictment were arraigned today.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, Jason Polanco and Rene Ruiz not only participated in a drug conspiracy, but also personally participated in the drug crew’s gun violence, including, for Polanco, a murder. Fortunately, federal authorities and our local law enforcement partners, working together, can make our streets safer, as they did in this case.”
Bronx District Attorney Darcel D. Clark said: “We are pleased to have assisted our federal law enforcement partners in their superseding indictment charging Jason Polanco with the murder of a Bronx man. It is one of numerous violent felonies that Polanco and his co-defendants allegedly committed in the Bronx and Manhattan. In addition to facing justice in federal court, he will face justice in the Bronx for shooting two New York City police officers in 2015. With seamless cooperation between city, state and federal agencies we will continue to do all we can to ensure safety for all who live and work in the Bronx.”
ATF Special Agent in Charge Ashan M. Benedict said: “Jason Polanco, Rene Ruiz and his charged co-conspirators are alleged to have committed a litany of crimes, including firearms offenses and violent crimes. The defendants are alleged to have possessed and used firearms in the commission of violent crimes with some crimes resulting in serious bodily injury and in one case death. The members of this violent drug trafficking crew have been a plague to the citizens of the Bronx and Manhattan for some time. I would like to commend our partners in the Bronx District Attorney’s Office and the United States Attorney’s Office for their collaboration that made this case possible. I also would like to extend my gratitude to the special agents of the DEA and ATF, and the NYPD detectives, who worked tirelessly to bring these individuals to justice.”
DEA Special Agent in Charge James J. Hunt said: “This case shows the intrinsic link between drug trafficking, crime and gun violence. New York law enforcement is committed to weeding out drug dealers in our neighborhoods so law abiding residents can live in neighborhoods free from drugs and safe from the consequences of drug trafficking.”
POLANCO is separately being prosecuted by the Bronx County District Attorney’s Office for his alleged shooting of two NYPD Officers in January 2015. Mr. Kim thanked the District Attorney’s Office for their cooperation in the federal investigation of POLANCO for the alleged murder of Shawn Ross.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Justina L. Geraci, Jordan Estes, Christopher J. Clore, and Amanda L. Houle are 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 set forth below constitute only allegations and every fact described should be treated as an allegation.
Twelve Members and Associates of the Mount Vernon Goonies Street Gang Charged in Superseding Indictment with Murder, Racketeering, Narcotics, and Firearms OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Anthony A. Scarpino Jr., Westchester County District Attorney, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging MARKEL OVERTON, a/k/a “Kellz,” THOMAS BLANTON, a/k/a “LT,” MARQUIS COLLIER, a/k/a “Keise,” KADEEM DINHAM, a/k/a “Polo,” DONNIE DIXON, a/k/a “Scooter,” DAVID HARDY, a/k/a “Mooka,” JERMAINE HUGHLEY, a/k/a “Blacks,” RAHEEM JONES, a/k/a “Rah Trigger,” a/k/a “Trigga,” SINCERE SAVOY, a/k/a “Bitty,” JAMAAL SINCLAIR, a/k/a “Diggz,” NOEL SMITH, a/k/a “Georgie,” and ERNEST WEBB, a/k/a “Ern,” a/k/a “Ern Millz,” with various crimes relating to racketeering, murder, narcotics, and firearms offenses. The defendants have been charged as a result of their membership in the “Goonies” street gang that operated in the City of Mount Vernon, New York. Eight of the defendants were previously charged in United States v. Overton, et al., 17 Cr. 644 (NSR) (the “Indictment”). The Superseding Indictment, S1 17 Cr. 644 (NSR) (the “Superseding Indictment”), charges four additional defendants with racketeering charges and also charges the following two murders in Mount Vernon, New York:
- DAVID HARDY, a/k/a “Mooka,” MARQUIS COLLIER, a/k/a “Keise,” JERMAINE HUGHLEY, a/k/a “Blacks,” and SINCERE SAVOY, a/k/a “Bitty,” with the December 31, 2016, murder of Shamoya McKenzie, a 13-year-old innocent bystander; and
- ERNEST WEBB, a/k/a “Ern,” a/k/a “Ern Millz,” with the September 22, 2014, murder of Dean Daniels.
Acting U.S. Attorney Joon H. Kim said: “When gangs flourish, neighborhoods suffer, parents grieve, and children die. It is as simple as that. Dreams like the ones Shamoya McKenzie must have had for herself — as she sat innocently in the car, next to her mother on New Year's Eve, coming from basketball practice — should be cultivated and allowed to flourish, not violently crushed, a tragic victim of an utterly senseless war between street gangs. Shamoya McKenzie deserved better. Dean Daniels deserved better. Mount Vernon deserves better. And that is why we, with our federal and local partners, have brought this prosecution. Today’s announcement is part of our Office’s ongoing and steadfast commitment to making the streets of Mt. Vernon, and the communities of Westchester safe.”
Westchester County District Attorney Anthony A. Scarpino Jr. said: “For the better part of a decade, the Goonies have had a grip on neighborhoods in and around the City of Mount Vernon. Through intimidation and violence, they’ve jeopardized the safety and quality of life for the hard working residents of Mount Vernon. That violence turned deadly on at least two occasions when the lives of Shamoya McKenzie and Dean Daniels were cut short. While we were able to charge David Hardy for the senseless murder of Shamoya, our partnership with the United States Attorney’s Office and the FBI will now enable us to charge others who also participated in those crimes. Thanks to the collaborative efforts of federal, state and local law authorities, these defendants will all be held accountable for the crimes they now stand accused of.”
FBI Assistant Director William F. Sweeney Jr. said: “The new charges members of this criminal gang now face show just how badly they allegedly terrorized a community. They used violence to push illegal drugs and demonstrate how tough they were as a gang. They didn’t think about who was hit by their bullets, and in the end that disregard cost an innocent young girl her life. The FBI Westchester County Safe Streets Task Force won’t let up on their investigations into gangs that believe they act with impunity. They don’t and now they will face justice for their deadly actions.”
According to the Superseding Indictment[1] unsealed today in White Plains federal court, and prior proceedings in the matter:
From 2007 to 2017, in the Southern District of New York and elsewhere, OVERTON, BLANTON, COLLIER, DINHAM, DIXON, HARDY, HUGHLEY, JONES, SAVOY, SINCLAIR, SMITH, and WEBB were members or associates of a racketeering enterprise known as the “Goonies.” In order to fund the enterprise, protect and expand its interests, and promote its standing, members and associates of the Goonies committed, conspired, attempted, and threatened to commit acts of violence, including murder, attempted murder and robbery; they conspired to distribute and possess with the intent to distribute narcotics; and they obtained, possessed, and used firearms, including by brandishing and firing them. BLANTON, COLLIER, DINHAM, DIXON, and JONES also conspired with one another, and certain other members of the Goonies, to distribute and possess with the intent to distribute crack cocaine and marijuana.
The Goonies have been engaged in a long-standing and violent feud with several rival Mount Vernon street gangs, including, among others, the “Boss Playa Family,” the “Get Money Gangstas,” the “Gunnas,” and the “Much Better Gang,” among others. On December 31, 2016, the intended target of the shooting was a rival gang member. Shamoya McKenzie was in the front passenger seat of a car driving by the shooting location, in the vicinity of Tecumseh Avenue and Third Street in Mount Vernon, New York, and was struck in the head by a bullet, resulting in her death. As set forth in the Superseding Indictment, on or about September 22, 2014, in the vicinity of Park Avenue in Mount Vernon, Dean Daniels was shot to death.
OVERTON, BLANTON, COLLIER, DINHAM, DIXON, JONES, and SMITH were already in custody based on the charges in the Indictment. HARDY and HUGHLEY were already in custody on state charges, and were transferred to federal custody today. SAVOY was arrested this morning in New Rochelle. WEBB remains a fugitive. The defendants who are in custody will be arraigned before the Honorable Lisa Margaret Smith, United States Magistrate Judge, this afternoon in White Plains federal court. The case is assigned the United States District Judge Nelson S. Román.
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The maximum potential sentences in this case are prescribed by Congress and are provided in the attached table for informational purposes only, as any sentencings of the defendants will be determined by a judge.
Mr. Kim thanked the Westchester County District Attorney’s Office and praised the outstanding investigative work of the FBI’s Westchester County Safe Streets Task Force, which comprises agents and detectives from the FBI, Yonkers Police Department, Westchester County District Attorney’s Office, Westchester County Police Department, Peekskill Police Department, Mount Vernon Police Department, New York City Police Department, and U.S. Probation.
The prosecution is being handled by the Office’s White Plains Division. Assistant United States Attorneys Anden F. Chow, Sarah Krissoff, Olga Zverovich, Christopher Clore, and Special Assistant United States Attorneys John O’Rourke and Lauren Abinanti are in charge of the prosecution.
The charges contained in the Indictment and Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Markel Overton, et al.
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
Count One
Racketeering Conspiracy
MARKEL OVERTON
a/k/a “Kellz”
THOMAS BLANTON
a/k/a “LT”
MARQUIS COLLIER
a/k/a “Keise”
KADEEM DINHAM
a/k/a “Polo”
DONNIE DIXON
a/k/a “Scooter”
DAVID HARDY
a/k/a “Mooka”
JERMAINE HUGHLEY
a/k/a “Blacks”
RAHEEM JONES
a/k/a “Rah Trigger”
a/k/a “Trigga”
SINCERE SAVOY
a/k/a “Bitty”
JAMAAL SINCLAIR
a/k/a “Diggz”
NOEL SMITH
a/k/a “Georgie”
ERNEST WEBB
a/k/a “Ern,”
a/k/a “Ern Millz”
Life in prison
Count Two
Firearms Offense
MARKEL OVERTON
THOMAS BLANTON
MARQUIS COLLIER
KADEEM DINHAM
DONNIE DIXON
DAVID HARDY
RAHEEM JONES
JAMAAL SINCLAIR
NOEL SMITH
Life in prison with a mandatory minimum of 10 years in prison
Count Three
Conspiracy to Commit Murder in Aid of Racketeering
DAVID HARDY
MARQUIS COLLIER
JERMAINE HUGHLEY
SINCERE SAVOY
10 years in prison
Count Four
Murder in Aid of Racketeering
DAVID HARDY
MARQUIS COLLIER
JERMAINE HUGHLEY
SINCERE SAVOY
Mandatory minimum: Life in prison
Maximum sentence: Death
Count Five
Use, Carrying, and Possession of Firearms, Resulting in Death
DAVID HARDY
MARQUIS COLLIER
JERMAINE HUGHLEY
SINCERE SAVOY
Mandatory minimum: 5 years in prison
Maximum sentence: Death
Count Six
Conspiracy to Commit Murder in Aid of Racketeering
ERNEST WEBB
10 years in prison
Count Seven
Murder in Aid of Racketeering
ERNEST WEBB
Mandatory minimum: Life in prison
Maximum sentence: Death
Count Eight
Use, Carrying, and Possession of Firearms, Resulting in Death
ERNEST WEBB
Mandatory minimum: 5 years in prison
Maximum sentence: Death
Count Nine
Narcotics Conspiracy
THOMAS BLANTON
MARQUIS COLLIER
KADEEM DINHAM
DONNIE DIXON
RAHEEM JONES
Life in prison with a mandatory minimum of 10 years in prison
DEFENDANT
AGE
MARKEL OVERTON
27
THOMAS BLANTON
24
MARQUIS COLLIER
26
KADEEM DINHAM
26
DONNIE DIXON
28
DAVID HARDY
22
JERMAINE HUGHLEY
25
RAHEEM JONES
29
SINCERE SAVOY
20
JAMAAL SINCLAIR
29
NOEL SMITH
34
ERNEST WEBB
29
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the Superseding Indictment, and the description of the Indictment and Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Press Conference AdvisoryRead the Press Release
There will be a press conference today in White Plains at 11:00 a.m. to announce the arrests and federal criminal charges against a dozen gang members in the Mount Vernon area, including murder charges for the shooting deaths of 13-year-old Shamoya McKenzie and Dean Daniels.
WHO:
Joon H. Kim, Acting United States Attorney for the Southern District of New York
Michael Osborn, Assistant Special-Agent-In Charge of the New York Field Office of the FBI
Anthony Scarpino Jr., Westchester County District Attorney
WHEN:
Thursday, December 21, 2017 at 11:00 a.m.
WHERE:
U.S. Attorney’s Office, White Plains
300 Quarropas St.
White Plains, New York, NY
CONTACT:
James Margolin, Dawn Dearden, Nicholas Biase
(212) 637-2600
Former Embraer Sales Executive Pleads Guilty to Foreign Bribery and Related ChargesRead the Press Release
A former sales executive of Embraer S.A. (Embraer), a Brazilian-based manufacturer of aircraft, pleaded guilty today in connection with a scheme to pay bribes to a high-level foreign government official in exchange for assistance in securing Embraer’s sale of aircraft to Saudi Arabia’s national oil company.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Joon H. Kim of the Southern District of New York, Assistant Director Stephen E. Richardson of the FBI’s Criminal Investigative Division and Special Agent in Charge Robert F. Lasky of the FBI’s Miami Field Office made the announcement.
Colin Steven, 61, a U.K. citizen residing in the United Arab Emirates, was charged by information filed today in the Southern District of New York with one count of violating the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the FCPA, one count of wire fraud, one count of conspiracy to commit wire fraud, one count of money laundering, one count of conspiracy to launder money and one count of making a false statement. Steven pleaded guilty to all of those counts before U.S. District Judge Alison J. Nathan of the Southern District of New York. A sentencing date has not been scheduled yet. The Court set a control date of June 21, 2018.
As part of his plea, Steven, a former vice president of sales & marketing in Embraer’s Executive Jets Division, admitted that he engaged in a scheme to have Embraer pay bribes to a foreign official in exchange for assistance in getting an aircraft sales contract with favorable terms awarded to Embraer; retained a kickback as part of the scheme; and lied to law enforcement officials about his kickback.
Steven consented to the filing of the information, which alleged that Embraer was in negotiations with Saudi Arabia’s national oil company over a potential aircraft sale when Steven and the foreign official devised an arrangement whereby the foreign official would guarantee that Embraer would win a contract and that the contract would involve new rather than used aircraft in exchange for approximately $1.5 million in bribe payments. In early 2010, Saudi Arabia’s national oil company awarded Embraer a contract for three new aircraft, valued at approximately $93 million. The information further alleged that he arranged to disguise the bribes as commissions to a South African company that was owned in part by Steven’s personal friends. The South African company transferred the bulk of the bribe proceeds to the foreign official’s intermediary but, at Steven’s direction, paid a portion of the bribe proceeds to Steven.
In pleading guilty, Steven admitted that he executed, and conspired with others to execute, the bribery and kickback schemes; laundered and conspired to launder the proceeds of those schemes through the South African company and lied to U.S. law enforcement about the kickback.
The guilty plea entered today follows the execution in October 2016 of a deferred prosecution agreement between the Department and Embraer, under which Embraer agreed to pay a $107 million penalty to the Department as part of a $205 million global resolution to investigations by the Department, the Securities and Exchange Commission and Brazilian authorities related to corrupt conduct in several countries, including Saudi Arabia. The agreement acknowledged Embraer’s cooperation with the investigations. With the cooperation of U.S. authorities, Brazilian authorities have charged 11 individuals for their alleged involvement in Embraer’s misconduct in the Dominican Republic. Saudi Arabian authorities have charged two individuals for their alleged involvement in Embraer’s misconduct in Saudi Arabia.
The FBI’s International Corruption Squads, based in Miami, Florida, and Los Angeles, California, investigated the case. Trial Attorneys John-Alex Romano and Nikhila Raj and Assistant Chief David Johnson of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Richard Cooper of the Southern District of New York, are prosecuting the case. The Fraud Section appreciates the cooperation and assistance provided by the SEC in this matter.
The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The Department also appreciates the cooperation and assistance provided by authorities in Brazil, the Dominican Republic, South Africa and Switzerland in this matter.
In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Former Embraer Sales Executive Pleads Guilty to Foreign Bribery and Fraud ChargesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and John P. Cronan, the Acting Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, announced that COLIN STEVEN pled guilty to Foreign Corrupt Practices Act, wire fraud, money laundering, and false statement charges arising from his role in paying bribes to a foreign official in exchange for assistance in obtaining business for STEVEN’s employer, Embraer S.A. (“Embraer”). STEVEN, a former executive in Embraer’s Executive Jets Division, arranged for Embraer to pay over $1.5 million in bribes to an official at the state-owned and state-controlled national oil company of Saudi Arabia (the “Saudi Arabia Company”), and ultimately received a kickback from a portion of the bribe proceeds. STEVEN pled guilty today before U.S. District Judge Alison J. Nathan.
According to the allegations contained in the Information to which STEVEN pled guilty, and statements made during the plea and other court proceedings:
Embraer, an aircraft manufacturer based in Brazil, has operations and subsidiaries in various locations around the world, including the United States and the Middle East. Embraer manufactures commercial, executive, and defense aircraft for governmental and private customers throughout the world. STEVEN, a British national, was an executive responsible for overseeing the generation of sales for a particular Embraer division in regions that included the Middle East.
In approximately 2006, STEVEN learned that the Saudi Arabia Company was interested in purchasing aircraft, and for a period of three years after that STEVEN and a salesperson who reported to him had occasional contact with employees of the Saudi Arabia Company to discuss the potential sale of three Embraer jets. In late 2009, STEVEN met with an official of the Saudi Arabia Company (the “Saudi Arabia Official”) in London, England. The Saudi Arabia Official offered to help Embraer win the aircraft contract from the Saudi Arabia Company, and to ensure that the Saudi Arabia Company would buy new – not used – jets from Embraer, in exchange for a payment. STEVEN agreed to cause Embraer to pay the Saudi Arabia Official $550,000 per aircraft, for a total bribe amount of $1.65 million.
In late 2009 and early 2010, STEVEN developed a plan to use a company based in South Africa (the “South Africa Company”) as a purported agent on the transaction, which would result in Embraer paying the South Africa Company $1.65 million in “finders fees,” when in fact the South African Company would perform no work on the transaction and would be used to facilitate and to disguise the payment to the Saudi Arabia Official.
In early 2010, on the Saudi Arabia Official’s recommendation, a committee at the Saudi Arabia Company approved the purchase of three new aircraft from Embraer for $93 million. A subsidiary of Embraer also entered into an agreement with the South Africa Company, pursuant to which the South Africa Company would purportedly promote the sale of Embraer aircraft to a subsidiary of the Saudi Arabia Company. In reality, the South Africa Company provided no services to Embraer other than serving as a conduit to funnel payments to the Saudi Arabia Official. An Embraer subsidiary subsequently wired $1.65 million to the South Africa Company, in December 2010 and February 2011. Between February 2011 and April 2011, the South Africa Company wired approximately $1.4 million to bank accounts in Switzerland and Bahrain held by an individual who was acting as an intermediary for the Saudi Arabia Official.
STEVEN also developed a plan to take a portion of the bribe proceeds as a kickback, and ultimately received approximately $130,000 in wire transfers from the South Africa Company in October and December 2011.
STEVEN was later interviewed by an agent of the Federal Bureau of Investigation in December 2014, and falsely stated that a wire transfer he received from the South Africa Company in 2011 was for the purpose of buying real estate in connection with a potential business venture between STEVEN and an executive of the South Africa Company.
The guilty plea entered today follows the execution in October 2016 of a deferred prosecution agreement between the Department of Justice and Embraer, under which Embraer agreed to pay a $107 million penalty as part of a $205 million global resolution to investigations by the Department, the Securities & Exchange Commission, and Brazilian authorities related to corrupt conduct in several countries, including Saudi Arabia. The agreement acknowledged Embraer’s cooperation with the investigations.
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STEVEN, 61, resides in Dubai, United Arab Emirates. A chart listing the maximum sentences relating to the charges in the Information is below. As part of his plea agreement, STEVEN is also required to pay forfeiture and restitution. 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. STEVEN is scheduled to be sentenced by Judge Nathan on June 21, 2018.
This case is being prosecuted by the Justice Department’s Criminal Division Fraud Section and the Office’s Complex Frauds and Cybercrime Unit. Trial Attorneys John-Alex Romano and Nikhila Raj as well as Assistant United States Attorney Richard Cooper and Assistant Chief David Johnson of the Fraud Section are prosecuting the case.
The FBI’s International Corruption Squads, based in Miami, Florida, and Los Angeles, California, investigated the case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The Office also appreciates the cooperation and assistance provided by authorities in Brazil, the Dominican Republic, South Africa and Switzerland in this matter.
Count
Charge
Maximum sentence
One
Conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”), 18 U.S.C. § 371
Five years in prison
Two
Violation of the FCPA, 15 U.S.C. §§ 78dd-1 and 78ff(c)(2)(A), and 18 U.S.C. § 2
Five years in prison
Three
Conspiracy to commit wire fraud, 18 U.S.C. § 1349
20 years in prison
Four
Wire fraud, 18 U.S.C. §§ 1343 and 2
20 years in prison
Five
Conspiracy to commit money laundering, 18 U.S.C. § 1956(h)
20 years in prison
Six
Money laundering, 18 U.S.C. §§ 1956(a)(2)(A) and 2
20 years in prison
Seven
False statements, 18 U.S.C. § 1001
Five years in prison
Postal Worker Arrested for Stealing Valuable Items from U.S. MailRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Special Agent-in-Charge Eileen Neff of the Northeast Area Field Office, U.S. Postal Service Office of Inspector General (“USPS-OIG”), announced the arrest of JOSEFINA SALAS, an employee of the U.S. Postal Service for over eighteen years, on charges of mail theft. SALAS was presented yesterday in Manhattan federal court before the Honorable Sarah Netburn.
Acting U.S. Attorney Joon H. Kim said: “During the holiday season when the spirit of giving abounds, Josefina Salas, a postal employee, was allegedly interested only in taking and stealing. Salas allegedly used her access to U.S. mail to steal valuable items from people who trusted their mail would be delivered safely. We thank the U.S. Postal Service for their work to halt postal theft and insure the integrity of the mail.”
Special Agent-in-Charge of USPS-OIG Eileen Neff said: “If an employee of the Postal Service abuses their position and the public’s trust, as alleged in this matter, OIG agents thoroughly and vigorously investigate to resolve the situation.”
According to the allegations in the Complaint sworn out in Manhattan federal court:[1]
Over the course of approximately a year, SALAS, who was employed as an elevator operator at the USPS Processing and Distribution Center (“PDC”) located at 341 Ninth Avenue in New York, New York, stole various items from the United States mail, including cash, gift cards, jewelry, clothing, and a phone. SALAS was previously captured on video using a box-cutter to open mail packages and then stealing the contents of those packages. SALAS was arrested yesterday at the end of her shift at the PDC.
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SALAS, 66, of the Bronx, New York, is charged with one count of mail theft by a U.S. Postal Service employee, which carries a maximum sentence of 5 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the USPS-OIG.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact 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]. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html. The USPS OIG Hotline can be reached by phone 888-USPS-OIG and online at www.uspsoig.gov.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Samuel S. Adelsberg is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Sentenced to 21 Months in Prison for Kidnapping His Children to Saudi ArabiaRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the Federal Bureau of Investigation in New York (“FBI”), announced that FAYCAL TAHIRI was sentenced yesterday to 21 months in prison for international parental kidnapping. TAHIRI pled guilty on July 17, 2017, before Chief U.S. District Judge Colleen McMahon, who imposed yesterday’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Faycal Tahiri, a naturalized U.S. citizen and practicing doctor, kidnapped his own children in order to keep them from their mother. For more than two years, in defiance of court orders from both U.S. and Moroccan courts, he moved from country to country to prevent his young sons from seeing their mother. We are committed to prosecuting all those who, like Tahiri, unlawfully interfere with a parent’s right to be with her child.”
According to the Superseding Indictment filed against TAHIRI, other court documents publicly filed in this case, and statements made in court proceedings, including yesterday’s sentencing:
Between June 2010 and November 2015, TAHIRI kept his two American-born sons outside of the United States and away from their mother, moving between Morocco, Europe, and Saudi Arabia. TAHIRI kidnapped his children to Saudi Arabia in December 2012, and lied to the children’s mother, the FBI, the Moroccan authorities, and an American court about the children’s whereabouts. TAHIRI kept his children out of contact with their mother for approximately two years, and the children were located and returned to the United States thanks to the efforts of their mother and the FBI. The two boys were eight and ten years old when they reunited with their mother.
* * *
In addition to the prison term, TAHIRI, 42, of Bay Shore, New York, was sentenced to one year of supervised release.
Mr. Kim praised the outstanding investigative work of the FBI, and expressed gratitude for the efforts of the FBI’s Child Exploitation Task Force.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Catherine Geddes and Danielle R. Sassoon are in charge of the prosecution.
Juan Thompson Sentenced in Manhattan Federal Court to 60 Months in Prison for Cyberstalking and Making Hoax Bomb Threats to JCCs and Other Victim OrganizationsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JUAN THOMPSON was sentenced today by U.S. District Judge P. Kevin Castel to 60 months in prison for cyberstalking and making hoax bomb threats as part of THOMPSON’s campaign to harass and intimidate a particular woman (“Victim-1”). Over a period of months in 2016 and 2017, THOMPSON, among other things, communicated at least 12 threats to Jewish Community Centers (“JCCs”) and other Victim Organizations in Victim-1’s name and his own name and made false allegations about Victim-1 to Victim-1’s employer. THOMPSON was arrested by the Federal Bureau of Investigation (“FBI”) on March 3, 2017, and pled guilty before Judge Castel on June 13, 2017.
Acting U.S. Attorney Joon H. Kim said: “Today, Juan Thompson was held to account and justly punished for his efforts to harass an ex-girlfriend by sending disturbing and dangerous hoax threats to Jewish Community Centers and other organizations across the country in her name. Thompson’s harassment and threats caused severe distress to both his victim and to Jewish communities around the country. We thank our partners at the FBI for their excellent work on this important case.”
According to the Complaint, the Information, and statements made at sentencing:
In July 2016, THOMPSON began a months-long campaign of harassment targeting Victim-1 after Victim-1 ended their relationship. THOMPSON’s conduct culminated with a series of hoax threats, including hoax bomb threats, targeting JCCs, organizations that provide service to and on behalf of the Jewish community, schools, and police departments.
THOMPSON started his campaign of harassment of Victim-1 in 2016. In July of that year, an email was sent to Victim-1’s employer, which made false allegations about Victim-1, including that she had broken the law, using an internet protocol (“IP”) address that THOMPSON had previously used to access his social media account. On October 15, 2016, an IP address that traced back to THOMPSON’s residence was used to falsely report that Victim-1 possessed child pornography. When confronted by law enforcement on November 22, 2016, THOMPSON claimed that his email account had been hacked a few weeks earlier.
THOMPSON also made at least 12 hoax threats targeting JCCs. For instance, on February 21, 2017, the Anti-Defamation League (“ADL”) received an emailed threat at their midtown Manhattan office that indicated that “[Victim-1’s name and birthdate] is behind the bomb threats against jews. She lives in nyc and is making more bomb threats tomorrow.” The next day, the ADL received a phone call claiming that explosive material had been placed in the ADL’s midtown Manhattan office.
Some of THOMPSON’s threats were made in his own name, as part of an apparent effort to claim that Victim-1 was trying to frame THOMPSON for a crime. For instance, on or about February 7, 2017, a JCC in Manhattan received an emailed bomb threat from an anonymous email account, which stated: “Juan Thompson [THOMPSON’s birthday] put two bombs in the office of the Jewish center today. He wants to create Jewish newtown tomorrow.” The email’s use of the phrase “Jewish newtown” appeared to refer to a December 2012 school shooting in Newtown, Connecticut, in which a gunman murdered 26 victims.
In February 2017, a Twitter account used by THOMPSON (the “Thompson Twitter Account”) was used to accuse Victim-1 of responsibility for the JCC Threats and claim that Victim-1 was trying to frame THOMPSON for her crimes. For instance, on February 24, 2017, the Thompson Twitter Account posted: “[s]he [Victim-1], though I can’t prove it, even sent a bomb threat in my name to a Jewish center, which was odd given her antisemitic statements. I got a visit from the FBI. So now I’m battling the racist FBI and this vile, evil, racist white woman.” On February 26, 2017, the Thompson Twitter Account posted: “The hatred of Jews goes across all demos. Ask NYC’s [Victim-1’s employer]. They employ a filthy anti-Semite in [Victim-1]. These ppl are evil.”
* * *
In addition to the prison term, THOMPSON, 32, of St. Louis, Missouri, was sentenced to three years of supervised release.
Mr. Kim praised the outstanding investigative work of the FBI, and thanked the United States Secret Service, New York City Police Department, and Saint Louis Police Department for their ongoing investigative assistance.
The prosecution is being handled by the Office’s Terrorism & International Narcotics Unit. Assistant U.S. Attorneys Jacob Warren and Andrew DeFilippis are in charge of the prosecution.
Woman Charged in White Plains Federal Court with Sex Trafficking of A MinorRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Donald B. Smith, Putnam County Sheriff, announced today that JENNIFER COVIELLO was arrested for the sex trafficking of a 17-year-old girl. COVIELLO was presented before U.S. Magistrate Judge Lisa Margaret Smith in White Plains federal court this afternoon.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Jennifer Coviello coerced a child to engage in commercial sex acts for Coviello’s profit, introducing the minor to illegal drugs, and fostering a drug dependency in the process. Today’s arrest takes an allegedly dangerous woman off the street and is a testament to the continued cooperation between our federal and local law enforcement partners to combat the exploitation of children in our communities.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “There are simply no words to express how despicable human behavior can be at times, and in law enforcement we see a lot of lows in human behavior. But for a woman to allegedly sell an underage girl for sex is too much to understand. The FBI agents and law enforcement officers who investigate these cases each day should be truly commended for their work, and their dedication to save these children from adults who put them in harm’s way just to make a dollar.”
Putnam County Sheriff Donald B. Smith said: “My office is grateful to the U.S. Attorney’s Office and the FBI for their diligent work in helping to put an end to this deplorable case, stopping the victimization of a young woman and bringing the perpetrator to justice. This case is yet another example of how effective law enforcement can be when local agencies, the FBI, and the U.S. Attorney’s Office all work together to fight crime and to help keep Putnam County and the Hudson Valley safe.”
According to the allegations in the Complaint[1] filed in White Plains federal court:
In December 2017, COVIELLO posted online advertisements soliciting prostitution customers for herself and the victim (“Victim-1”). When COVIELLO received inquiries in response to the advertisements, she emailed and sent by text message photographs of Victim-1, including nude and partially nude photographs. For approximately a week, COVIELLO operated her commercial sex business out of a motel in Putnam County, where she arranged for customers to meet her and Victim-1 to engage in commercial sex acts in exchange for cash. During that week, COVIELLO provided Victim-1 with illegal drugs, including heroin, and arranged for Victim-1 to misrepresent to customers that she was over 18 years old. COVIELLO kept the bulk of the profits from the commercial sex acts.
* * *
COVIELLO, 43, is charged with one count of sex trafficking of a minor, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; and one count of use of interstate facilities to promote a prostitution enterprise, 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 the judge.
The investigation was conducted by the FBI’s Westchester County Safe Streets Task Force with the assistance of the Putnam County Sherriff’s Department. Mr. Kim praised the outstanding investigative work of the FBI and the Putnam County Sherriff’s Department.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jacqueline Kelly is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the charged offenses set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Queens Music School Teacher Sentenced to More Than 11 Years in Prison for Sex Trafficking of MinorsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that OLIVER SOHNGEN, a/k/a “Helmuth Moss,” a/k/a “Stephan Weierbach,” was sentenced today to 135 months in prison for sex trafficking of minors. SOHNGEN pled guilty on August 10, 2017, before U.S. Magistrate Judge Ronald L. Ellis, and was sentenced today by U.S. District Judge Lewis A. Kaplan.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Oliver Sohngen, a teacher at a music school for children, was a sexual predator. He paid to have sex with minor girls at least twice, and attempted to engage in sex trafficking of girls under the age of 14. His significant sentence will ensure that he is no longer a threat to our community, in particular, our children. We remain committed to prosecuting all those who, like Sohngen, prey on our most innocent and vulnerable victims.”
According to the Complaint and Information filed against SOHNGEN, other court documents publicly filed in this case, and statements made in court proceedings, including today’s sentencing:
Between March 2013 and November 2013, SOHNGEN exchanged text messages with a co-conspirator to arrange paid sexual encounters with minor girls ranging in age from 8 to 17. On at least two occasions, SOHNGEN engaged in sexual contact with minor girls at the co-conspirator’s apartment in the Bronx, New York. In addition, between November 2015 and January 2016, SOHNGEN participated in recorded telephone conversations with an undercover NYPD officer who was posing as a 15-year-old girl. SOHNGEN proposed to meet with the purported 15-year-old girl in order to engage in sexual conduct.
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In addition to the prison term, SOHNGEN, 52, of Queens, New York, was sentenced to 10 years of supervised release.
Mr. Kim praised the outstanding investigative work of HSI and the NYPD, and expressed gratitude for the efforts of HSI’s New York Trafficking in Persons Unit and the NYPD’s Vice Enforcement Division Major Case Team. Mr. Kim also expressed gratitude to the Bronx County District Attorney’s Office for its partnership in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Frank Balsamello and Michael Krouse are in charge of the prosecution, with assistance from Bronx County Assistant District Attorney Meagan Powers.
Flight Attendant Charged in Manhattan Federal Court with Airport Security Violations and Unlicensed Money TransmittingRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of the New York Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced yesterday’s arrest of SCOTT McKINNEY, a flight attendant, for conspiracy to violate airport security requirements and operation of an unlicensed money transmitting business. McKINNEY will be presented later today in federal court in San Diego, California, before United States Magistrate Judge Andrew G. Schopler.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Scott McKinney abused his privileges as an airline employee, misusing the Known Crewmember lane to smuggle hundreds of thousands of dollars through security, in furtherance of an illegal money transmitting business. Thanks to the dedicated investigative work of HSI, McKinney’s illegal money transmitting business has been grounded.”
HSI Special Agent in Charge Melendez said: “As a Known Crewmember, McKinney allegedly took advantage of the security access allowed with his position by transmitting large sums of money across the country without a license. Those who choose to use their position’s security clearance at our airports to smuggle cash, narcotics, or any other unlawful good, pose a significant threat to our national security and our efforts are centered to shut down that vulnerability.”
According to the Complaint filed today in Manhattan federal court:[1]
Between July and November 2017, McKINNEY, a flight attendant based in California, conspired with others to operate an unlicensed money transmitting business and to violate airport security requirements. On several occasions, McKINNEY flew from California to New York to pick up packages containing $50,000 or more in cash at JFK Airport or other locations in New York City. McKINNEY then flew back to California with the cash. On some of these occasions, McKINNEY was on the ground at JFK Airport for two hours or less before flying back to California. At the time of these trips, McKINNEY did not have a money transmitting license in New York or California, and was not registered as a money transmitter with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network. In a statement to HSI agents on or about September 15, 2017, McKINNEY admitted that he was aware of the licensing requirement and lacked such a license.
To facilitate the operation of his illegal money transmitting business, McKINNEY used the Known Crewmember (“KCM”) lane to bypass regular airport security screening. The KCM lane allows approved airline crewmembers to pass through security more quickly and, typically, without having their carry-on luggage screened. On several occasions, McKINNEY wore his crewmember uniform and used the KCM security lane – even though he was not working on those occasions – to smuggle bulk cash through airport security.
For example, on September 15, 2017, McKINNEY flew from Los Angeles, landed at JFK Airport not wearing his crewmember uniform, entered the terminal, changed into his uniform, and retrieved a package from a co-conspirator in the airport parking garage. McKINNEY then used the KCM lane to smuggle the package through security. HSI agents subsequently approached McKINNEY while he was waiting to board a return flight to Los Angeles. During a search of McKINNEY’s carry-on luggage, agents found the package that he had just received in the parking garage, which contained approximately $54,000 in cash. McKINNEY told the agents that, on several prior trips, he had transported bulk cash from New York to California and then given the cash to a co-conspirator at the airport in Los Angeles.
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McKINNEY, 49, of San Diego, California, was arrested on December 18, 2017, in San Diego. McKINNEY is charged with one count of conspiracy to enter an aircraft or airport area in violation of security requirements and one count of conspiracy to operate an unlicensed money transmitting business. Each count carries a maximum sentence of five years in prison. The statutory maximum 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. Kim thanked HSI for its outstanding work on this investigation. He added that the investigation is continuing.
This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorney Michael D. Neff is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Mobile Phone Industry Executive Convicted at Trial in Multimillion-Dollar Consumer Fraud SchemeRead the Press Release
Joon H. Kim, the United States Attorney for the Southern District of New York, announced today that DARCY WEDD, the CEO of a U.S. mobile aggregation company called Mobile Messenger, was convicted after a two-week jury trial on eight counts for his participation in a scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages without the customers’ knowledge or consent – a practice known as “auto-subscribing.”
Acting Manhattan U.S. Attorney Joon H. Kim said: “As a Manhattan jury has unanimously found today, Darcy Wedd engaged in a scheme known as ‘auto-subscribing,’ forcing mobile phone users to pay charges for unsolicited and unwanted text messaging services, including horoscopes and celebrity gossip. The conduct of Wedd and his co-conspirators ultimately netted over a hundred million dollars in illegal profits. Thanks to the diligence of the IRS and FBI, the message is clear: perpetrators of consumer fraud schemes beware, federal investigators and prosecutors will protect everyday consumers and look to hold you accountable for your criminal fraud.”
According to the allegations contained in the Superseding Indictment and evidence presented at trial, from in or about 2011, through in or about 2013, WEDD and other co-conspirators engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills, without the consumers’ knowledge or consent, through a practice known as “auto-subscribing.”
WEDD was the Chief Operating Officer, and eventually the Chief Executive Officer, of Mobile Messenger. In the relevant time period, mobile aggregators like Mobile Messenger compiled, or “aggregated,” charges for premium text messaging services – such as monthly horoscopes, celebrity gossip, and trivia facts – on consumers’ mobile phone bills.
In or about 2010, Lin Miao, one of WEDD’s co-conspirators, who was the CEO of another company in the cellphone industry that provided premium text messaging content (the “Content Provider”), decided to begin auto-subscribing mobile phone users to the Content Provider’s premium text messaging services in order to boost the Content Provider’s sagging revenues. Miao and others built a computer program that could spoof the required consumer authorizations for premium text messaging services – i.e., a program that could generate the text message correspondence that one would ordinarily see if a consumer was genuinely signing up to receive the services (the “Auto-Subscription Platform”), which was operational by in or about the middle of 2011.
In or about October 2011, Miao met with WEDD and told him, in sum and substance, that MIAO wanted to auto-subscribe consumers through Mobile Messenger’s billing platform and needed phone numbers to do so. WEDD agreed to assist Miao. WEDD further told Miao, in sum and substance, that co-conspirator Michael Pajaczkowski, who was the Vice President of Compliance and Consumer Protection at Mobile Messenger, would provide phone numbers and assistance to Miao and that all payments needed to go through Pajaczkowski. WEDD later received his portion of the payments from Miao via Pajaczkowski.
Also in or about early 2012, WEDD, Pajaczkowski, and two other co-conspirators, Erdolo Eromo and Fraser Thompson, had discussions about how to increase revenues at Mobile Messenger, which were flagging because premium text messaging services had become less profitable. Among other things, WEDD, Pajaczkowski, Eromo, and Thompson agreed to allow co-conspirator Eugeni Tsvetnenko, who operated a content provider in Australia (“the Australian Content Provider”), to begin auto-subscribing consumers through Mobile Messenger. By at least in or about April 2012, Tsvetnenko had started auto-subscribing consumers. Over the course of the next several months through in or about mid-2013, Tsvetnenko and the Australian Content Provider auto-subscribed hundreds of thousands of phone numbers through Mobile Messenger and generated millions of dollars of revenue, which Tsvetnenko shared with WEDD, Pajaczkowski, Eromo, and Thompson.
The auto-subscription scheme affected hundreds of thousands of consumers and generated over $100 million dollars in proceeds, which the defendants apportioned among themselves and used to fund lavish lifestyles of expensive vacations, luxury cars, and gambling.
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WEDD, 40, was convicted of two counts of conspiracy to commit wire fraud, two counts of wire fraud, and two counts of conspiracy to commit money laundering, each of which carries a maximum term of 20 years in prison. WEDD was also convicted of two counts of aggravated identity theft, each of which carries a minimum term of two years in prison. WEDD was remanded into custody following the verdict and is scheduled to be sentenced on April 2, 2018, before Judge Katherine B. Forrest.
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.
To date, six additional defendants, Andrew Bachman, Miao, Pajackowski, Jonathan Murad, Francis Assifuah, and Eromo have pled guilty in connection with their participation in the fraud, and one additional defendant, Thompson, was convicted by a jury on September 5, 2017, following a three-week trial.
Assifuah was sentenced to 33 months in prison. Thompson is scheduled to be sentenced on January 12, 2018. Sentencing dates have not been set for Bachman, Miao, Pajackowski, Murad, or Eromo.
Mr. Kim praised the investigative work of the IRS-CI and the FBI, and expressed his sincere gratitude to the Federal Trade Commission for their support and assistance with the investigation.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul, Richard Cooper, and Jennifer L. Beidel are in charge of the prosecution.
Manhattan U.S. Attorney Announces Charges Against President of Park Avenue Art Gallery in Manhattan for Defrauding Art Dealers and Collectors of Valuable Artwork and Millions of DollarsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Division (“FBI”), announced today the unsealing of a complaint charging EZRA CHOWAIKI with fraud and transportation of stolen property for using his art gallery located on Park Avenue in Manhattan to defraud art dealers and collectors of millions of dollars. EZRA CHOWAIKI surrendered this morning to FBI agents and will be presented before Magistrate Judge Katharine H. Parker this afternoon.
Acting U.S. Attorney Joon H. Kim said: “While Ezra Chowaiki appeared to buy and sell high-end artwork in his upscale Manhattan gallery, as alleged, he sold clients nothing more than an illusion. Chowaiki allegedly tricked his clients into investing hundreds of thousands of dollars in artwork that he never actually bought and secretly sold artwork that they had entrusted to him. As a result of Chowaiki’s alleged fraud, valuable works of art have been stolen from their rightful owners and unlawfully distributed all over the world.”
FBI Assistant Director William F. Sweeney Jr. said: “Investors believed the subject in this case had their best interests at heart, taking their money in an investment, but never followed through on his promises. When they dared to demand their money back, he allegedly refused. We believe there may be others out there who could be a victim of this scheme, and we ask that they contact us at [email protected].”
According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court:
Until November 2017, EZRA CHOWAIKI was the president and the minority owner of a private art gallery located on Park Avenue in New York, New York (the “Gallery”). CHOWAIKI founded the Gallery in or about 2004, and since that time, CHOWAIKI has used the Gallery to facilitate the purchase, sale, and consignment of works of fine art, as well as for the hosting of various art exhibitions featuring works of art and sculptures by well-known artists such as Pablo Picasso, Alexander Calder, Marc Chagall, and others. CHOWAIKI lost control of the Gallery in or about November 2017 when the Gallery filed for bankruptcy and was taken over by a trustee to oversee its liquidation.
Between at least in or about 2015 and 2017, through the Gallery, CHOWAIKI engaged in a scheme to deceive other dealers and collectors of fine artwork into sending him money or valuable artwork under the false pretenses that CHOWAIKI would engage in legitimate transactions such as the purchase, sale, or consignment of those artworks. In truth, however, CHOWAIKI did not, and often could not, conduct the transactions as promised, and instead kept funds and artwork for himself and the Gallery, or sold them to others both in and outside the United States, without authorization.
For example, a number of victims reported being asked by CHOWAIKI to invest money to purchase artwork through the Gallery that would then be sold by the Gallery, thereby generating profit for the investors. After a number of these investors sent hundreds of thousands of dollars to CHOWAIKI, CHOWAIKI did not use the funds to purchase the artwork, nor did he return the money to the investors. Similarly, other victims reported consigning artwork to CHOWAIKI for sale by the Gallery. After these victims attempted to cancel the consignments, CHOWAIKI refused to return the artwork and, in some cases, purported to sell the artwork to other galleries and auctioneers located in the United States and abroad with the authorization of the work’s rightful owner.
At the time the Gallery filed for bankruptcy and CHOWAIKI was removed as president, the Gallery purported to have only approximately $276,681 in assets, whereas the Gallery owed at least approximately $11.8 million in claims to dozens of art dealers and others, including those who had sent money to the Gallery to buy artwork or who had consigned artwork to the Gallery that was never returned.
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CHOWAIKI, 49, of Brooklyn, New York, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum potential sentence of 20 years in prison, and one count of interstate transportation of stolen goods, which carries a maximum potential sentence of 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim praised the work of the FBI and the New York City Police Department’s Major Case Squad. Any person who believes he/she is a victim of this crime is encouraged to send an email to [email protected].
The case is being prosecuted by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Daniel M. Tracer is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety 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.
Four Men Plead Guilty in Manhattan Federal Court to Two 2016 Bank BurglariesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that four defendants have pled guilty to participating in two bank burglaries. In April and May 2016, MICHAEL MAZZARA, CHARLES KERRIGAN, and ANTHONY MASCUZZIO, assisted by CHRISTOPHER KERRIGAN, stole more than $5 million in cash, jewelry, collectables, and other valuables from the banks’ vaults and safe deposit boxes.
Acting U.S. Attorney Joon H. Kim said: “Like a scene from a movie, these defendants used blow torches to cut into bank roofs, and subsequently vaults and safe deposit boxes, to steal more than $5 million in cash and customer valuables. But the scene in court today was of guilty pleas under oath and the prospect of real-life prison.”
According to the Complaint and Indictments filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:
In April and May 2016, MAZZARA, CHARLES KERRIGAN, MASCUZZIO, and CHRISTOPHER KERRIGAN formed a crew that burglarized banks in Brooklyn and Queens, New York, by cutting into the banks’ vaults and the safe deposit boxes inside. Specifically, from about April 8 to April 10, 2016, MAZZARA, CHARLES KERRIGAN, and MASCUZZIO, with the assistance of CHRISTOPHER KERRIGAN, burglarized an HSBC Bank branch in Brooklyn, and from about May 19 to May 22, 2016, MAZZARA, CHARLES KERRIGAN, and MASCUZZIO, with the assistance of CHRISTOPHER KERRIGAN, burglarized a Maspeth Federal Savings Bank branch in Queens. On both occasions, the burglars used acetylene blowtorches to cut into the top of the banks’ vaults from the roof of the building. At the Maspeth Federal Savings Bank branch, they shielded their activities from view by constructing a plywood shed on the roof of the bank. The burglars then entered the vaults from above and took cash belonging to the bank and broke open customers’ safe deposit boxes, stealing the valuables inside. In total, the crew obtained more than $600,000 in cash and more than $4.3 million in valuables from both banks. Surveillance footage captured some of the burglars’ activities as they prepared for and executed the burglaries. Financial records and video surveillance also showed MAZZARA and MASCUZZIO purchasing some of the supplies that appear to have been used in the Maspeth burglary.
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MAZZARA, 45, of Brooklyn, New York, pled guilty before Hon. Katherine B. Forrest on December 13, 2017, to two counts of bank theft, each of which carries a maximum sentence of 10 years in prison. MAZZARA will be sentenced by Judge Forrest on April 13, 2017.
CHARLES KERRIGAN, 42, of Brooklyn, New York, pled guilty before Judge Forrest on December 11, 2017, to one count of conspiracy to commit bank burglary and bank theft, which carries a maximum sentence of five years in prison, two counts of bank burglary, each of which carries a maximum sentence of 20 years in prison, and two counts of bank theft, each of which carries a maximum sentence of 10 years in prison. CHARLES KERRIGAN also pled guilty to one count of witness retaliation while on pre-trial release, in connection with his assault of an individual who he believed had provided information regarding the burglaries to the Federal Bureau of Investigation (“FBI”) and the New York City Police Department (“NYPD”). That count carries a maximum sentence of 20 years in prison, and a mandatory consecutive term of 10 years in prison. CHARLES KERRIGAN will be sentenced by Judge Forrest on April 6, 2017.
MASCUZZIO, 38, of Brooklyn, New York, pled guilty before Judge Forrest on December 15, 2017, to two counts of bank theft, each of which carries a maximum sentence of 10 years in prison. MASCUZZIO will be sentenced by Judge Forrest on May 4, 2018.
CHRISTOPHER KERRIGAN, 40, of Staten Island, New York, pled guilty before Judge Forrest on November 9, 2017, to one count of conspiracy to commit bank burglary and bank theft, which carries a maximum sentence of five years in prison, one count of bank burglary, which carries a maximum sentence of 20 years in prison, and one count of bank theft, which carries a maximum sentence of 10 years in prison. CHRISTOPHER KERRIGAN will be sentenced by Judge Forrest on March 30, 2018.
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. Kim praised the outstanding investigative efforts of the FBI and NYPD.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Benet J. Kearney and David W. Denton, Jr., are in charge of the prosecution.
Former Honduran Congressman and Businessman Sentenced to 36 Months for Money LaunderingRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that Yani Benjamin Rosenthal Hidalgo was sentenced to 36 months in prison for engaging in monetary transactions in property derived from drug trafficking offenses. ROSENTHAL pled guilty on July 26, 2017, before U.S. District Judge John G. Koeltl, who imposed today’s sentence. During the course of the money laundering scheme, ROSENTHAL was a Honduran congressman between 2010 and 2014, and a candidate for president of Honduras between 2012 and 2013.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As he previously admitted in court, Yani Rosenthal was a prominent Honduran politician and businessman who moonlighted as a money launderer for the Cachiros, a violent Honduran drug organization. Now this former presidential candidate has received a prison sentence called for by his crimes committed on behalf of a ruthless criminal syndicate.”
According to the Indictment, other court filings, and statements made during court proceedings[1]:
ROSENTHAL and his co-defendants – including Jaime Rolando Rosenthal Oliva, ROSENTHAL’s father and a former vice president and congressman in Honduras – used entities associated with a holding company controlled by the Rosenthal family, Inversiones Continental (Panama), S.A. de C.V. (“Inversiones Continental”), to launder drug proceeds for the Cachiros, a prolific and violent Honduran criminal syndicate that distributed huge quantities of cocaine before being dismantled by the Drug Enforcement Administration (“DEA”). Through his conduct, which occurred over a period of at least approximately five years, ROSENTHAL provided the Cachiros with sources of funding for their criminal enterprise, a means to launder their narcotics proceeds, and public legitimacy, thereby contributing to an environment of impunity that allowed the Cachiros to thrive in Honduras and to import tons of cocaine into the United States.
ROSENTHAL and his co-defendants helped the Cachiros launder drug money and gain access to the international financial system. ROSENTHAL enriched himself through this conduct by profiting from business transactions with the Cachiros. In 2012, while ROSENTHAL acted as a Honduran congressman and campaigned for the Honduran presidency, he accepted hundreds of thousands of dollars in drug proceeds from one of the leaders of the Cachiros and another major Honduran drug trafficker who led a separate drug trafficking organization, which were styled as purported campaign contributions. Several aspects of the Cachiros money laundering scheme also received support from Fabio Porfirio Lobo, the son of a former president of Honduras. Lobo was sentenced on September 5, 2017, by U.S. District Judge Lorna G. Schofield in United States v. Lobo, No. 15 Cr. 174 (LGS) to 24 years in prison based on his conviction for participating in a conspiracy with members of the Cachiros and others to import cocaine into the United States.
ROSENTHAL’s money laundering conduct involved a trade-based scheme in which the Cachiros used a front company, Ganaderos Agricultores Del Norte S De RL De CV (“Ganaderos”), to purchase cattle with drug proceeds at auctions in Honduras. ROSENTHAL and others used Empacadora Continental, S.A. de C.V. (“Empacadora”), a cattle- and meat-processing firm affiliated with Inversiones Continental, to purchase the narcotics-derived cattle from Ganaderos. Between 2008 and 2013, while Rosenthal acted as the vice president of Empacadora, he caused Empacadora to buy cattle from Ganaderos, knowing that Ganaderos was financed and supported by drug trafficking proceeds of the Cachiros. By knowingly authorizing Empacadora to engage in transactions in criminally derived property, ROSENTHAL used the company in connection with a process that allowed the Cachiros to conceal the criminally derived nature of the Ganaderos assets, and to obtain fresh funds from Empacadora that were used to promote Cachiros drug trafficking activities and purchase other assets. Empacadora, in turn, processed and exported the meat to the United States, among other places, in exchange for payments to Empacadora from U.S.-based companies that totaled approximately $500,000 between 2008 and 2013. Over that same period, Empacadora paid a total of $6.8 million to Ganaderos in connection with the scheme.
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In addition to the prison term, ROSENTHAL, 52, was ordered to forfeit $500,000 and to pay a $2.5 million fine. ROSENTHAL also remains designated as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act, along with Rosenthal Oliva, Yankel Antonio Rosenthal Coello (ROSENTHAL’s cousin and co-defendant), Inversiones Continental, Empacadora, and Banco Continental, among other entities, as announced in October 2015 by the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”).
Mr. Kim 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 OFAC and the U.S. Department of Justice’s Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Matthew J. Laroche, and Jane Kim are in charge of the prosecution.
The charges contained in the Indictment against Jaime Rolando Rosenthal Oliva are merely accusations, and Rosenthal Oliva is presumed innocent unless and until proven guilty.
[1] The descriptions set forth below of conduct by co-defendant Jaime Rolando Rosenthal Oliva constitute only allegations, and every fact described should be treated as an allegation with respect to Rosenthal Oliva.
Canadian-Iranian Citizen Sentenced in White Plains Federal Court to 32 Months in Prison for Conspiring to Violate Iran SanctionsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the Federal Bureau of Investigation in New York (“FBI”), announced that ALI SOOFI, a Canadian-Iranian dual citizen, was sentenced to 32 months in prison for his participation in a conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”). SOOFI was charged and arrested by special agents of the Federal Bureau of Investigation (“FBI”) following a federal investigation. SOOFI pled guilty to one count of conspiracy to violate IEEPA on September 7, 2017, before U.S. District Judge Nelson S. Román, who imposed today’s sentence.
According to the Indictment filed against SOOFI, other court documents publicly filed in this case, and statements made in court proceedings, including today’s sentencing:
Between 2014 and December 2016, SOOFI conspired to export military items from the United States to Iran, both directly and through transshipment to intermediary countries, without a license. In particular, SOOFI acted as a broker on behalf of Iranian clients, including a high-ranking official in the Iranian Revolutionary Guard Corps (“IRGC”), who sought American military technology. Over the course of the conspiracy, SOOFI sought to purchase and ship numerous items, including helicopters, high-tech machine gun parts, tank parts, and military vehicles, from the United States to Iran, all without a license and while knowing that such shipments were illegal under U.S. law. During the multi-year conspiracy, SOOFI worked to fill specific orders for the IRGC by contacting other individuals with access to the requested military items through email, phone, and in-person meetings.
The IRGC consists of an army, navy, and air force, Basij Resistance Force, and Qods Force. Current IRGC forces consist of approximately 150,000 naval, ground, and air fighters, although the number of Qods Force fighters is unknown. The IRGC has been designated as a Specially Designated Global Terrorist, for its activities in support of the Qods Force, which consistently provides support to terrorist groups including Hezbollah, Hamas, and the Taliban.
One of SOOFI’s customers was a Commander in the IRGC, who acted as a key figure at the Iranian Ministry of Defense responsible for procurement of parts and weapons. Among the weapons SOOFI sought on behalf of the IRGC were dampeners – or shock absorbers – which allow high-tech machine guns to be mounted on helicopters and boats. In addition, SOOFI sought to obtain slewing rings for tanks, military helicopters, target sights, jet engines, and military vehicles such as Humvees for the IRGC. During one meeting in December 2016 during which SOOFI sought to acquire some of these military items, SOOFI explained that the items he sought were “for military for defense” and emphasized that the IRGC specifically wanted American military technology.
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In addition to the prison term, SOOFI, 63, of Canada, was sentenced to one year of supervised release.
Mr. Kim praised the outstanding investigative work of the FBI. SOOFI’s arrest is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the U.S. Department of Justice’s National Security Division.
The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorney Maurene Comey is in charge of the prosecution, with assistance from Trial Attorney Elizabeth Cannon from the National Security Division’s Counterintelligence and Export Control Section.
Nineteen Men Charged in White Plains Federal Court with Narcotics Conspiracy in New RochelleRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Anthony A. Scarpino, Jr., the Westchester County District Attorney, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Division of the Federal Bureau of Investigation (“FBI”), and Patrick J. Carroll, the Commissioner of the New Rochelle Police Department, announced the a coordinated operation earlier today in which federal, state, and local law enforcement officers arrested 36 defendants in Westchester County. Nineteen defendants are charged in a federal indictment, unsealed today, charging them with conspiracy to distribute 500 grams and more of powder cocaine and 28 grams and more of crack cocaine in and around New Rochelle, New York, since at least in or about September 2017. The Westchester County District Attorney has charged an additional 23 defendants. Those defendants arrested today who are charged in the federal indictment are expected to be presented in White Plains federal court today before Magistrate Judge Paul E. Davison.
Acting U.S. Attorney Joon H. Kim said: “Today, we have charged 19 defendants with running a narcotics organization in New Rochelle, New York. These men allegedly conspired to sell large quantities of cocaine and crack cocaine. I commend our law enforcement partners for their work to keep our streets free of illegal drugs and the dangers they present.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “The speed with which this group of alleged drug dealers was investigated and arrested should serve as a warning to others who look to fill the void. Our FBI Westchester County Safe Streets Task Force and our outstanding partnerships with state and local law enforcement agencies allow everyone to act with an agility that only gets sharper with each new case. These arrests will have a significant impact on the criminal underbelly in the Westchester County area, and we won't stop working each day to make these communities safer.”
Westchester County District Attorney Anthony A. Scarpino, Jr. said: “I congratulate the New Rochelle Police Department and the FBI for the success of this important effort to stop the flow of illegal narcotics into our communities. We are pleased to join with our colleagues in law enforcement in an ongoing collaborative effort to combat this serious problem.”
New Rochelle Police Commissioner Patrick J. Carroll said: “I am proud of the dedicated efforts of our members and those of our law enforcement partners which resulted in the indictments and arrests of these individuals. New Rochelle will not tolerate the sale of drugs, or the violent crimes that are associated with the narcotic trade. This sends a strong message of our dedication to clearing our community of these dangerous substances.”
As alleged in the Indictment unsealed today in White Plains federal court[1]:
From at least in or about September 2017 up to and including December 2017, ANDRE FRANCIS, a/k/a “Huddy,” a/k/a “Hut,” RAYMOND GILKES, a/k/a “Fresh,” KRISHNA RAGHUBAR, JOSE ACEVEDO, a/k/a “Cake,” ANTHONY JACKSON, a/k/a “Razor,” a/k/a “Worm,” DEVAUGHN BLAKEY, a/k/a “Natron,” CHRIS MABRY, ERIC LANDRINE, a/k/a “E Waterz,” DAVID TUCKER, a/k/a “Prince,” KAREEM PARNELL, a/k/a “Goofy,” JERRY AUGUSTINE, a/k/a “Juice,” JASON ORTEGA, a/k/a “Fetty,” RAKEEM JONES, RYAN HINES, a/k/a “Mooch,” DAVID THOMAS, CHANJU CARROL, a/k/a “Choo,” JACK BENJAMIN, KENDALL MILLER, a/k/a “Swin,” and TROY WILCOX conspired to distribute 28 grams and more of crack cocaine and 500 grams and more of powder cocaine.
The defendants each face a maximum term of 40 years in prison, and a mandatory minimum term of five years in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the respective judges.
The Indictment arises from a joint investigation by the FBI’s Hudson Valley Safe Streets Task Force and the City of New Rochelle Police Department.
Mr. Kim praised the outstanding investigative work of the FBI and the New Rochelle Police Department. Mr. Kim also thanked the Westchester County District Attorney’s Office for its ongoing coordination in the case.
These cases are being handled by the Office’s White Plains Division. Assistant United States Attorneys Celia V. Cohen and Berit W. Berger are in charge of the prosecutions.
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 descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Nigerian Man Sentenced to 41 Months in Prison for Participating in Business Email Compromise ScamsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that DAVID CHUKWUNEKE ADINDU was sentenced today in Manhattan federal court to 41 months in prison for participating in a wire fraud conspiracy and identity theft conspiracy. These charges stemmed from ADINDU’s participation in fraudulent business email compromise scams that targeted thousands of victims around the world, including the United States. Collectively, the scams attempted to defraud victims of more than $25 million. Today’s sentence was imposed by U.S. District Judge Paul A. Crotty.
Acting U.S. Attorney Joon H. Kim said: “As part of a business email compromise scam, David Chukwuneke Adindu tricked thousands of victims around the world into fraudulently wiring him over $25 million. As Adindu learned today, building a business based on fraud can come with a steep price, and that is years in a federal prison.”
According to publicly filed court documents and statements made at public court proceedings:
Between 2014 and 2016, ADINDU participated in Business Email Compromise scams (“BEC scams”) targeting thousands of victims around the world, including in the United States. As part of the BEC scams, emails were sent to employees of various companies directing that funds be transferred to specified bank accounts. The emails purported to be from supervisors at those companies or third party vendors that did business with those companies. The emails, however, were not legitimate. Rather, they were either from email accounts with a domain name that was very similar to a legitimate domain name, or the metadata in the emails had been modified so that the emails appeared as if they were from legitimate email addresses. After victims complied with the fraudulent wiring instructions, the transferred funds were quickly withdrawn or moved into different bank accounts. In total, the BEC scams attempted to defraud over $25 million from victims.
ADINDU and others carried out BEC scams by exchanging information regarding: (1) bank accounts used for receiving funds from victims; (2) email accounts for communicating with victims; (3) scripts for requesting wire transfers from victims; and (4) lists of names and email addresses for contacting and impersonating potential victims.
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In addition to the prison term, ADINDU, 30, of Lagos, Nigeria, and Guangzhou, China, was ordered to pay over $1.4 million in restitution.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation. Mr. Kim also thanked the Yahoo! E-Crime Investigations Team, and noted that the investigation is continuing.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Andrew K. Chan is in charge of the prosecution.
Nephews of Venezuela First Lady Each Sentenced to 18 Years in Prison for Conspiring to Import Cocaine into the United StatesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that EFRAIN ANTONIO CAMPO FLORES (“CAMPO FLORES”) and FRANQUI FRANCISCO FLORES DE FREITAS (“FLORES DE FREITAS”) was each sentenced to 216 months in prison for conspiring to import cocaine into the United States. A jury convicted CAMPO FLORES and FLORES DE FREITAS on November 18, 2016, following a two-week trial before U.S. District Judge Paul A. Crotty, who imposed today’s sentences.
Acting Manhattan U.S. Attorney Joon H. Kim said: “In part to fund an election campaign for the First Lady of Venezuela, Efrain Antonio Campo Flores and Franqui Francisco Flores de Freitas devised a plan to work with the FARC terrorist organization to send literally tons of cocaine to the United States. At their trial last November, a unanimous jury saw their plot for what it was – a massive drug distribution conspiracy. With today’s sentencing, for participating in this brazen cocaine trafficking scheme, they will spend many years in an American prison.”
According to the evidence presented at trial and in connection with sentencing proceedings:
Beginning in August 2015, CAMPO FLORES and FLORES DE FREITAS worked with others in Venezuela, Mexico, Honduras, and elsewhere – including at least one member of Fuerzas Armadas Revolucionarias de Colombia (“FARC”), a designated foreign terrorist organization – in an effort to dispatch large loads of cocaine via private aircraft from premises controlled by Venezuelan President Nicolás Maduro at Simón Bolívar International Airport in Maiquetia, Venezuela. The defendants’ aunt, Cilia Flores, is the First lady of Venezuela, and during the investigation, CAMPO FLORES and FLORES DE FREITAS told individuals acting at the direction of the Drug Enforcement Administration (“DEA”) that they intended to use part of the proceeds of their drug trafficking to fund her December 2015 campaign for a position in the Venezuelan National Assembly. Electronic communications seized from the defendants’ phones also demonstrated, among other things, that CAMPO FLORES and FLORES DE FREITAS had engaged in a scheme to solicit bribes from debtors of Venezuela’s state-run oil and natural gas company, Petróleos de Venezuela S.A. (“PDVSA”), in exchange for promises that a cousin, Carlos Erik Malpica-Flores, would cause PDVSA to approve and make payments on certain debts.
In early October 2015, an individual who was cooperating with the DEA in Honduras (“CW-1”) reported to the DEA that a Honduran national had introduced CW-1 to two Venezuelans – later identified as the defendants – who were interested in sending cocaine-laden aircraft with legitimate-seeming flight plans from Venezuela to Honduras. On October 3, 2015, CAMPO FLORES and FLORES DE FREITAS traveled to San Pedro Sula, Honduras, via private jet to meet with CW-1 to discuss sending hundreds of kilograms of cocaine from Simón Bolívar International Airport to Juan Manuel Gálvez International Airport in Roatan, Honduras. Two days after the meeting, CAMPO FLORES sent text messages to CW-1 that stated: “What I want is to start work because the electoral campaign is almost here and I always contribute . . . [w]ith money if you know what I mean that is why I want to start work.”
In late October 2015, two confidential sources working at the direction of the DEA (“CS-1” and “CS-2”) traveled to Caracas, Venezuela, to meet with the defendants. CS-1 purported to be the Mexican boss of the drug trafficking organization with which CW-1 was affiliated, and CS-2 purported to be an associate of CS-1. On October 23, 2015, during a recorded meeting with CS-1 and CS-2 regarding potential drug shipments, CAMPO FLORES explained: “[M]y mom,” i.e., Cilia Flores, “is running for the election and I need . . . $20 million. . . . In other words, the issue of the money . . . we need it by December [2015].” During the same meeting, CAMPO FLORES reiterated: “[W]e want to take possession again of the . . . National Assembly and . . . several places with power.” In another recorded meeting in Caracas on October 26, 2015, CAMPO FLORES described the defendants’ plan to use some of the drug proceeds to bribe local Venezuelan officials who they anticipated would assist Cilia Flores in connection with the upcoming election. CAMPO FLORES also told CS-1 and CS-2 that there had been an “agreement” involving Venezuelan official Diosdado Cabello that allowed the defendants’ family to “control the oil completely in Venezuela.” At a third recorded meeting in Caracas, on October 27, 2015, CAMPO FLORES and FLORES DE FREITAS presented CS-1 and CS-2 with a kilogram of cocaine, referring to it as a “little animal,” so that they could test the quality of the drugs.
On November 6, 2015, FLORES DE FREITAS and a bodyguard traveled to Honduras via private jet in order to meet with individuals acting at the direction of the DEA as well as co-conspirators, including co-defendant Robert de Jesus Soto Garcia, to further discuss the cocaine shipment. During the recorded meeting, Soto Garcia indicated that numerous officials at the airport in Roatán, including military and police personnel, would participate in receiving the defendants’ drug load. FLORES DE FREITAS and Soto Garcia proceeded to make precise plans for the shipment during the meeting, and FLORES DE FREITAS agreed to send the first load of cocaine on November 15, 2015.
On November 10, 2015, CAMPO FLORES and FLORES DE FREITAS flew on a private jet to Haiti intending to pick up an initial multimillion-dollar payment for the cocaine. During a recorded meeting, CAMPO FLORES described the defendants’ connection to a “supposedly high ranked” “commander for the FARC,” and both defendants indicated that the first drug shipment, consisting of 800 kilograms, was prepared to be dispatched from Venezuela. Following the meeting, CAMPO FLORES and FLORES DE FREITAS were arrested by Haitian law enforcement officers, expelled from Haiti, and flown to Westchester County International Airport in White Plains, New York, on a DEA jet.
* * *
In addition to the prison terms, CAMPO FLORES, 31, and FLORES DE FREITAS, 33, was each ordered to pay a fine of $50,000.
Mr. Kim praised the outstanding investigative work of the DEA’s Special Operations Division, Bilateral Investigations Unit, and New York Strike Force. Mr. Kim also thanked the DEA’s Port-au-Prince Country Office, U.S. Customs and Border Patrol’s National Targeting Center, DEA’s Airwing, the Government of the Republic of Haiti and the Haitian National Police, and the U.S. Department of Justice’s Office of International Affairs for their assistance.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III and Brendan F. Quigley are in charge of the prosecution.
17-398 rrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III and Brendan F. Quigley are in charge of the prosecution.
Former Comptroller of Mortgage Lender Charged with Bank Fraud and Wire FraudRead the Press Release
Joon H. Kim, Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Maria T. Vullo, Superintendent of the New York State Department of Financial Services (the “DFS”), announced today the unsealing of an Indictment charging JOHN REIMER with bank fraud and mortgage fraud in connection with his participation in a scheme to defraud banks of money intended for individuals seeking loans to purchase or refinance their homes. REIMER was arrested today in Boca Raton, Florida, and was presented in U.S. District Court for the Southern District of Florida earlier today before United States Magistrate Judge James M. Hopkins.
Acting U.S. Attorney Joon H. Kim said: “As alleged, John Reimer, vice president of a mortgage bank, defrauded several other financial institutions of more than $12 million. Reimer allegedly falsified documents, kept funding for mortgages that never closed, and even acquired funding multiple times for the same loans as part of the scheme. Fraud schemes that target money intended for home loans can taint the market for honest homebuyers seeking to secure mortgages. We will continue to work with our law enforcement and regulatory partners to ensure that schemes like the one charged here are stopped.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Reimer capitalized on his knowledge of the mortgage-lending industry to exploit its vulnerabilities, causing serious damage to a number of warehouse banks fronting him an advance for the loans his bank was in the business of providing. Mortgage fraud not only affects individual victims and institutions, it risks the overall stability of the housing market, accumulating losses across the board. The FBI continues to support partnerships within the mortgage industry and law enforcement as we work together to combat this serious crime.”
Financial Services Superintendent Maria T. Vullo said: “This defendant allegedly used his position and access as a banker to obtain millions of dollars in fraudulent loans. As regulator of New York’s Financial Services industry, the Department of Financial Services is proud to have assisted the United States Attorney’s Office for the Southern District of New York in bringing this defendant to justice.”
According to the allegations made in the Indictment:[1]
REIMER, who was the vice-president and comptroller of a mortgage lending institution (the “Mortgage Bank”), participated in a scheme to defraud several financial institutions (the “Warehouse Banks”) by causing the Warehouse Banks to provide funds to the Mortgage Bank, ostensibly to fund mortgage loans for residential properties, based on false and fraudulent documentation and representations made and provided by Reimer to the Warehouse Banks.
The Mortgage Bank was in the business of providing mortgage loans for residential properties (“Loans”). Pursuant to agreements, the Warehouse Banks advanced sums of money to the Mortgage Bank so that the Mortgage Bank could fund Loans (the “Warehouse Advances”). Once a Loan closed, the Mortgage Bank typically sold the loan to an investor and used the proceeds of the sale to re-pay the Warehouse Bank for the Warehouse Advance.
In order to obtain a Warehouse Advance for a particular loan, the Mortgage Bank was required, among other things, to provide the Warehouse Bank with certain documents and information about the Loan. In addition, the notes and mortgages executed by the residential mortgagors were provided to the Warehouse Banks as collateral for the Warehouse Advances. REIMER was responsible for providing the Warehouse Banks with the information and documents necessary to obtain the Warehouse Advances.
However, according to the Indictment, with respect to certain Loans, REIMER “double-pledged” residential properties by obtaining multiple Warehouse Advances from more than one Warehouse Bank to fund the same Loan, thus misleading each Warehouse Bank into believing that the Warehouse Advance it made to the Mortgage Bank was fully collateralized.
Moreover, according to the Indictment, with respect to certain Loans, REIMER falsely represented to the Warehouse Banks that the Loans were going to close imminently, when, in fact, such Loans were not imminently closing at the time the Warehouse Advances were made. In some cases, the Loans never closed, but the Mortgage Bank nevertheless retained the Warehouse Advances made for those particular Loans. In other cases, the Loans did close, but the Mortgage Bank used those Warehouse Advances to repay other Warehouse Advances.
According to the Indictment, in furtherance of the scheme, REIMER provided the Warehouse Banks with fraudulent documents, including mortgage notes on which REIMER falsified the signatures of the purported residential mortgagors.
According to the Indictment, from November 2008 through January 2009, REIMER used fraudulent misrepresentations to cause the Warehouse Banks to wire the Mortgage Company at least over $12 million.
* * *
REIMER, 60, of Boca Raton, Florida, is charged with one count of bank fraud and one count of wire fraud, each of which carries a maximum sentence of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Kim thanked the FBI and DFS for their outstanding work on the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Michael D. Maimin is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as allegations.
Former Chief Financial Officer Arrested and Charged in Manhattan Federal Court with Defrauding Company of over $2 MillionRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, Special Agent in Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced today that RANDY WANG was arrested this morning on wire fraud charges stemming from his scheme to defraud his former employer, a company based in Manhattan that manages a global airline alliance whose members consisted of approximately 13 international airlines and their affiliates (the “Company”), by incurring more than $2.2 million in unauthorized charges on the Company’s credit card account, and then making changes to the Company’s accounting system to evade detection. WANG was arrested this morning in Long Island City, New York, and was presented today before United States Magistrate Judge Katharine H. Parker.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Randy Wang took advantage of his position at a major New York-based company to charge millions of dollars’ worth of non-business-related purchases on the company’s credit card. Wang allegedly purchased hundreds of electronic devices, including cell phones, computers, and tablets, and then falsified paperwork to hide the transactions. Wang allegedly tried to take his employer for a ride, but instead he may be facing a trip to prison.”
HSI Special Agent in Charge Angel M. Melendez said: “Using his position as business manager, Wang allegedly developed a scheme to defraud his employer of millions of dollars by means of unauthorized credit card purchases and altered accounting records. Twenty-five years ago, HSI New York formed the El Dorado Task Force specifically to target all levels of financial crime, including wire fraud like today’s arrest. With more than 30 local, state, and federal law enforcement partners under one roof, El Dorado continues to be a leader in financial fraud investigations, working together to bring these perpetrators to justice.”
According to the Complaint unsealed today in Manhattan federal court[1]:
During the relevant time period, WANG was employed as a business manager for the Company, and for approximately the last two months of the scheme, WANG also served as the Company’s interim chief financial officer. From January 2016 through October 2017, WANG incurred more than $2.2 million of unauthorized charges on the Company’s credit card account by making hundreds of purchases at both online and brick-and-mortar retailers. WANG’s purchases, which were entirely unrelated to his official duties and were not for the benefit of the Company, included approximately 443 laptop computers, 241 mobile electronic devices, 24 tablet computers, and numerous other electronics. In order to evade detection of his criminal conduct, WANG made changes to the Company’s accounting records to disguise the nature of the credit card charges.
* * *
WANG, 33, of Long Island City, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the court.
Mr. Kim praised the work of HSI and the El Dorado Task Force.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.
Former Ramapo Town Supervisor Christopher St. Lawrence Sentenced to 30 Months in Prison in Municipal Bond Securities Fraud CaseRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that CHRISTOPHER ST. LAWRENCE, the former Ramapo Town Supervisor, was sentenced to 30 months in prison today in connection with his scheme to defraud investors in municipal bonds issued by the Town of Ramapo (the “Town”) and the Ramapo Local Development Corporation (the “RLDC”). ST. LAWRENCE was found guilty of 20 counts of fraud and conspiracy following a four-week trial last May before United States District Judge Cathy Seibel in federal court in White Plains. It was the first conviction for securities fraud in connection with municipal bonds.
Acting U.S. Attorney Joon H. Kim said: “For years, Christopher St. Lawrence, as Ramapo Town Supervisor, misled municipal bond investors about the state of Ramapo’s finances. At a trial earlier this year, the jury quickly saw through his years lies, and today, he was sentenced to time in federal prison. The integrity of the $3.7 trillion municipal bond market must be protected, and prosecutions like this one should put on all on notice that misleading investors in that market through fraud and deception will lead to prosecution and jail.”
According to the allegations contained in the Indictment and the evidence presented in court during the trial:
As of August 2015, the Town had more than $128 million in outstanding bonds that had been issued for various municipal purposes, while the RLDC, a corporation created and owned by the Town under state law, had issued $25 million in bonds to pay for the construction of Provident Bank Park, a minor league baseball stadium in Ramapo.
While the fraud predated the construction of the stadium, the Town’s financial problems were caused largely by the $58 million total cost of the stadium. The Town paid more than half of that cost, despite the rejection of the Town’s guarantee of bonds to pay for construction of the stadium in a Town-wide referendum in 2010 and ST. LAWRENCE’s public statements that no public money would be used to pay for the stadium.
The Indictment charged that ST. LAWRENCE lied to investors in the Town’s and RLDC’s bonds in order to conceal the deteriorating state of the Town’s finances and the inability of the RLDC to make scheduled payments of principal and interest to holders of its bonds from its own money. ST. LAWRENCE lied to investors primarily by making up false assets in the Town’s General Fund.
The General Fund is the Town’s primary operating fund. The accumulated difference over time between how much money the Town receives in taxes and fees and how much it spends in a year is the fund’s balance. The fund balance is a cushion that can be spent during difficult financial times. The size of the fund balance relative to the amount of the fund’s revenue and trends in the Town’s General Fund balance over time are the primary indicators of the Town’s financial health.
According to the Indictment and the evidence, ST. LAWRENCE lied to the RLDC’s bond rating service in January 2013 when he told them in a telephone call that the 2012 fund balance would remain unchanged from the 2011 balance. Immediately after that call ended, ST. LAWRENCE told Town employees “to do [an upcoming] refinancing of the short term debt as fast as possible because . . . we’re going to have to all be magicians to get to some of those numbers.”
When the RLDC issued $25 million in bonds to build the stadium building itself in 2011, ST. LAWRENCE inflated the size of the Town’s General Fund by including a false $3.6 million receivable in the General Fund. The Town’s financial condition was important to investors in the RLDC’s bonds because the Town guaranteed the payments of principal and interest on the bonds. Without that fake asset, the General Fund’s balance would have been negative in that year.
In addition, ST. LAWRENCE inflated the General Fund with another fake receivable for $3.08 million from 2010 through 2015. It first went on the Town’s books when the RLDC agreed to buy property known as The Hamlets from the Town for $3.08 million. That sale never closed because the land turned out to be a habitat for rattlesnakes. Rather than take the receivable off the Town’s books – and reduce the size of the General Fund balance by $3.08 million, thereby pushing it into negative territory – ST. LAWRENCE claimed the receivable had to do with the RLDC’s purchase of another property from the Town that had already taken place. To keep it on the books, ST. LAWRENCE then caused the Town Attorney to tell the Town’s auditors over a period of years that the receivable would be paid back within a year, which was required if the receivable were going to stay in the General Fund. Without this fake receivable alone, the Town’s General Fund balance would have been negative for years.
In May 2013, the FBI searched Town Hall in connection with this investigation. Less than 10 days later, ST. LAWRENCE inflated another receivable in the General Fund – this one for money from FEMA to reimburse the Town for expenses from Hurricanes Irene and Sandy. ST. LAWRENCE claimed that the Town was going to receive $3.145 million from FEMA when the Town hadn’t even submitted those claims to FEMA yet. Without ST. LAWRENCE’s inflation of this receivable alone, the projected General Fund balance for 2012 would have been negative when the Town sold bonds in May 2013.
Finally, the Indictment alleged and the evidence showed that ST. LAWRENCE told investors in the Town’s and RLDC’s bonds that the RLDC was making the payments on its bonds from its operating revenue, meaning money it was making from its ordinary business of running the baseball stadium and selling condominiums at a development it had built. That was important to investors because it led them to believe that the Town would not have to pay off the RLDC’s $25 million bonds. It also made the RLDC’s bonds look less risky. The RLDC actually made those payments from money it borrowed from the bank or money it got from the Town.
* * *
In addition to the prison term, ST. LAWRENCE, 67, of Wesley Hills, New York, was sentenced to three years of supervised release and a $2,000 special assessment. Restitution, if any, will be determined at a future date.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation and the Rockland County District Attorney’s Office. Mr. Kim also thanked the Securities & Exchange Commission for its substantial assistance in the investigation and trial.
The criminal case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys James McMahon, Stephen Ritchin, and Daniel Loss are in charge of the prosecution.
Press Conference AdvisoryRead the Press Release
There will be a press conference today at 12:00 p.m. to announce federal terrorism charges against Akayed Ullah in connection with yesterday’s bombing at the Port Authority Bus Terminal. The press conference will be livestreamed at https://www.facebook.com/usaosdny/
WHO:
Joon H. Kim, Acting United States Attorney for the Southern District of New York
William F. Sweeney, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation
John J. Miller, Deputy Commissioner of Intelligence and Counter Terrorism for the City of New York
WHEN:
Tuesday, December 12, 2017 at 12:00 p.m.
WHERE:
U.S. Attorney’s Office, Southern District of New York
1 St. Andrew’s Plaza
New York, NY 10007
LIVESTREAM: https://www.facebook.com/usaosdny/
CONTACT: James Margolin, Dawn Dearden, Nicholas Biase
(212) 637-2600
Akayed Ullah Charged with Terrorism and Explosives Charges in Connection with the Detonation of a Bomb in New York CityRead the Press Release
Akayed Ullah, 27, of Brooklyn, New York, and a lawful permanent resident from Bangladesh, has been charged in the U.S. District Court for the Southern District of New York in connection with Ullah’s attempted detonation of a bomb in a subway terminal near the New York Port Authority Bus Terminal in New York City on Dec. 11. At least three people were injured as a result of the detonation.
Attorney General Jeff Sessions, Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Joon H. Kim for the Southern District of New York, Assistant Director in Charge William F. Sweeney Jr., of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD made the announcement. Ullah will be presented before the Honorable Katharine H. Parker.
"The Department of Justice is relentless in taking on the terrorist threat," said Attorney General Sessions. "In my time back at the Department, nothing has impressed me more. Since 9/11, the Department has convicted more than 500 criminals of terrorism-related offenses, and the FBI has open terrorism investigations in every state. To make law enforcement’s job easier, however, Congress must finally fix our broken immigration system so that we admit to this country those who are likely to succeed, not violent criminals, gang members, terrorists, or their sympathizers. The fact that somebody won a lottery or is someone’s relative tells us nothing about their ability to assimilate. Nevertheless, the Department of Justice will prosecute this case and every other case to the fullest extent of the law, and we will bring those who threaten America to justice."
“Yesterday, in the heart of rush hour, as thousands came into New York City through the Port Authority Bus Terminal, Akayed Ullah allegedly came with a hate-filled heart and an evil purpose: to murder as many innocent people as he could and blow himself up in the process, all in support of the vicious terrorist cause of ISIS,” said Acting U.S. Attorney Kim. “Although yesterday he allegedly stood in the tunnels under Port Authority plotting to kill, today he stands charged with federal crimes of terrorism. Those alleged terrorists who target New York City do so because they feel threatened by the strength of our spirit, the height of our ambition and the breadth of our freedom. They come seeking to sow hate, fear and terror. But in New York City, they find instead strength, resilience and hope. Like many before him, Akayed Ullah will also find another great American virtue: justice. That justice will be tough, it will be fair and it will be swift.”
“Akayed Ullah let loose his plan to conduct a mass casualty attack, setting off a pipe bomb, strapped to his body, inside a New York City subway terminal, as we allege today,” said Assistant Director in Charge Sweeney. Like many others before him, we believe Ullah was inspired by a group that exploits technology in an effort to spread a violent ideology, effectively convincing sympathizers to commit terrorist acts worldwide. The nature of this particular strain of the terrorism threat can often mean evaluating behavior that doesn’t mean anything until you combine it with other pieces of intelligence. We rely heavily upon the community’s assistance to accomplish that task.”
“The act of terror committed in New York City yesterday accomplished nothing,” said Commissioner O’Neill. “It has not changed our way of life. It was a cowardly act, fueled by a false sense of purpose — motivated by propaganda in the shadows of the internet. What is clear is the resolve of New Yorkers to live in a free society, devoid of fear. I want to commend the work of the NYPD-FBI Joint Terrorism Task Force and the prosecutors in the Southern District for bringing today’s charges. Finally, our security requires every single member of the public’s help. It requires their vigilance. And it requires their care. If you see something that doesn’t look right, contact law enforcement.”
As alleged in the Complaint:
Islamic State of Iraq and Al-Sham (ISIS)
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, Attack
On Dec. 11, at approximately 7:20 a.m., an improvised explosive device (IED) detonated 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 located an individual later identified as Akayed Ullah lying on the ground in the vicinity of the explosion. Surveillance footage captured Ullah walking through the Subway Terminal immediately prior to the explosion, and then falling to the ground after the explosion.
Ullah was subsequently 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; and (vi) 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 comprised 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.
- Ullah’s radicalization began in at least 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 ago.
- On the morning of Dec. 11, shortly before carrying out the attack, Ullah posted a statement on his Facebook account referring to the President of the U.S., 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, law enforcement agents conducted a search of 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 December 11 Attack; and (iv) a passport in Ullah’s name with multiple handwritten notations, including: “O AMERICA, DIE IN YOUR RAGE.”
Three individuals were injured as a result of the Dec. 11 Attack.
* * *
Ullah is charged in a Complaint with one count of provision of material support and resources to a designated foreign terrorist organization which carries a maximum sentence of 20 years’ imprisonment; one count of using and attempting to use a weapon of mass destruction which carries a maximum sentence of life imprisonment; one count of bombing and attempting to bomb a place of public use which carries a maximum sentence of life imprisonment; one count of destruction of property by means of fire or explosives, which carries a mandatory minimum sentence of five years’ imprisonment and a potential maximum sentence of 20 years’ imprisonment; 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’ imprisonment and potential maximum of life, all in connection with Ullah’s alleged detonation of an explosive device in New York City.
Mr. Sessions, Mr. Boente and Mr. Kim praised the outstanding investigative efforts of the FBI; the NYPD; the Department of Homeland Security, Homeland Security Investigations (HSI); and the Port Authority of New York and New Jersey’s Police Department. Ullah’s arrest 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 and other agencies – and the U.S. Department of Justice’s National Security Division.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The prosecution is being handled by Assistant U.S. Attorneys Shawn G. Crowley, Rebekah Donaleski and George D. Turner of the Southern District of New York, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
Akayed Ullah Charged with Terrorism and Explosives Charges in Connection with the Detonation of a Bomb in New York CityRead the Press Release
Akayed Ullah, 27, of Brooklyn, New York, and a lawful permanent resident from Bangladesh, has been charged in the U.S. District Court for the Southern District of New York in connection with Ullah’s attempted detonation of a bomb in a subway terminal near the New York Port Authority Bus Terminal in New York City on Dec. 11. At least three people were injured as a result of the detonation.
Attorney General Jeff Sessions, Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Joon H. Kim for the Southern District of New York, Assistant Director in Charge William F. Sweeney Jr., of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD made the announcement. Ullah will be presented before the Honorable Katharine H. Parker.
"The Department of Justice is relentless in taking on the terrorist threat," said Attorney General Sessions. "In my time back at the Department, nothing has impressed me more. Since 9/11, the Department has convicted more than 500 criminals of terrorism-related offenses, and the FBI has open terrorism investigations in every state. To make law enforcement’s job easier, however, Congress must finally fix our broken immigration system so that we admit to this country those who are likely to succeed, not violent criminals, gang members, terrorists, or their sympathizers. The fact that somebody won a lottery or is someone’s relative tells us nothing about their ability to assimilate. Nevertheless, the Department of Justice will prosecute this case and every other case to the fullest extent of the law, and we will bring those who threaten America to justice."
“Yesterday, in the heart of rush hour, as thousands came into New York City through the Port Authority Bus Terminal, Akayed Ullah allegedly came with a hate-filled heart and an evil purpose: to murder as many innocent people as he could and blow himself up in the process, all in support of the vicious terrorist cause of ISIS,” said Acting U.S. Attorney Kim. “Although yesterday he allegedly stood in the tunnels under Port Authority plotting to kill, today he stands charged with federal crimes of terrorism. Those alleged terrorists who target New York City do so because they feel threatened by the strength of our spirit, the height of our ambition and the breadth of our freedom. They come seeking to sow hate, fear and terror. But in New York City, they find instead strength, resilience and hope. Like many before him, Akayed Ullah will also find another great American virtue: justice. That justice will be tough, it will be fair and it will be swift.”
“Akayed Ullah let loose his plan to conduct a mass casualty attack, setting off a pipe bomb, strapped to his body, inside a New York City subway terminal, as we allege today,” said Assistant Director in Charge Sweeney. Like many others before him, we believe Ullah was inspired by a group that exploits technology in an effort to spread a violent ideology, effectively convincing sympathizers to commit terrorist acts worldwide. The nature of this particular strain of the terrorism threat can often mean evaluating behavior that doesn’t mean anything until you combine it with other pieces of intelligence. We rely heavily upon the community’s assistance to accomplish that task.”
“The act of terror committed in New York City yesterday accomplished nothing,” said Commissioner O’Neill. “It has not changed our way of life. It was a cowardly act, fueled by a false sense of purpose — motivated by propaganda in the shadows of the internet. What is clear is the resolve of New Yorkers to live in a free society, devoid of fear. I want to commend the work of the NYPD-FBI Joint Terrorism Task Force and the prosecutors in the Southern District for bringing today’s charges. Finally, our security requires every single member of the public’s help. It requires their vigilance. And it requires their care. If you see something that doesn’t look right, contact law enforcement.”
As alleged in the Complaint:
Islamic State of Iraq and Al-Sham (ISIS)
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, Attack
On Dec. 11, at approximately 7:20 a.m., an improvised explosive device (IED) detonated 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 located an individual later identified as Akayed Ullah lying on the ground in the vicinity of the explosion. Surveillance footage captured Ullah walking through the Subway Terminal immediately prior to the explosion, and then falling to the ground after the explosion.
Ullah was subsequently 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; and (vi) 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 comprised 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.
- Ullah’s radicalization began in at least 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 ago.
- On the morning of Dec. 11, shortly before carrying out the attack, Ullah posted a statement on his Facebook account referring to the President of the U.S., 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, law enforcement agents conducted a search of 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 December 11 Attack; and (iv) a passport in Ullah’s name with multiple handwritten notations, including: “O AMERICA, DIE IN YOUR RAGE.”
Three individuals were injured as a result of the Dec. 11 Attack.
* * *
Ullah is charged in a Complaint with one count of provision of material support and resources to a designated foreign terrorist organization which carries a maximum sentence of 20 years’ imprisonment; one count of using and attempting to use a weapon of mass destruction which carries a maximum sentence of life imprisonment; one count of bombing and attempting to bomb a place of public use which carries a maximum sentence of life imprisonment; one count of destruction of property by means of fire or explosives, which carries a mandatory minimum sentence of five years’ imprisonment and a potential maximum sentence of 20 years’ imprisonment; 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’ imprisonment and potential maximum of life, all in connection with Ullah’s alleged detonation of an explosive device in New York City.
Mr. Sessions, Mr. Boente and Mr. Kim praised the outstanding investigative efforts of the FBI; the NYPD; the Department of Homeland Security, Homeland Security Investigations (HSI); and the Port Authority of New York and New Jersey’s Police Department. Ullah’s arrest 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 and other agencies – and the U.S. Department of Justice’s National Security Division.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The prosecution is being handled by Assistant U.S. Attorneys Shawn G. Crowley, Rebekah Donaleski and George D. Turner of the Southern District of New York, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
Akayed Ullah Charged in Manhattan Federal Court with Terrorism and Explosives Charges in Connection with the Detonation of A Bomb in New York CityRead the Press Release
Jeff Sessions, the Attorney General of the United States, Joon H. Kim, the Acting U.S. Attorney for the Southern District of New York, Dana J. Boente, the Acting Assistant Attorney General for National Security, William F. Sweeney Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office (“FBI”), and James P. O’Neill Commissioner of the Police Department for the City of New York (“NYPD”), announced that AKAYED ULLAH has been charged in U.S. District Court for the Southern District of New York in connection with ULLAH’s detonation and attempted denotation of a bomb in a subway terminal near the New York Port Authority Bus Terminal in New York City on December 11, 2017. Three people were injured as a result of the detonation.
Attorney General Jeff Sessions said: “The Department of Justice is relentless in taking on the terrorist threat. In my time back at the Department, nothing has impressed me more. Since 9/11, the Department has convicted more than 500 criminals of terrorism-related offenses, and the FBI has open terrorism investigations in every state. To make law enforcement’s job easier, however, Congress must finally fix our broken immigration system so that we admit to this country those who are likely to succeed, not violent criminals, gang members, terrorists, or their sympathizers. The fact that somebody won a lottery or is someone’s relative tells us nothing about their ability to assimilate. Nevertheless, the Department of Justice will prosecute this case and every other case to the fullest extent of the law, and we will bring those who threaten America to justice.”
Acting U.S. Attorney Joon H. Kim said: “Yesterday, in the heart of rush hour, as thousands came into New York City through the Port Authority Bus Terminal, Akayed Ullah allegedly came with a hate-filled heart and an evil purpose: to murder as many innocent people as he could and blow himself up in the process, all in support of the vicious terrorist cause of ISIS. Although yesterday he allegedly stood in the tunnels under Port Authority plotting to kill, today he stands charged with federal crimes of terrorism. Those alleged terrorists who target New York City do so because they feel threatened by the strength of our spirit, the height of our ambition, and the breadth of our freedom. They come seeking to sow hate, fear, and terror. But in New York City, they find instead strength, resilience, and hope. Like many before him, Akayed Ullah will also find another great American virtue: justice. That justice will be tough, it will be fair, and it will be swift.”
FBI Assistant Director William F. Sweeney Jr. said: “Akayed Ullah let loose his plan to conduct a mass casualty attack, setting off a pipe bomb, strapped to his body, inside a New York City subway terminal, as we allege today. Like many others before him, we believe Ullah was inspired by a group that exploits technology in an effort to spread a violent ideology, effectively convincing sympathizers to commit terrorist acts worldwide. The nature of this particular strain of the terrorism threat can often mean evaluating behavior that doesn’t mean anything until you combine it with other pieces of intelligence. We rely heavily upon the community’s assistance to accomplish that task.”
NYPD Commissioner James P. O’Neill said: “The act of terror committed in New York City yesterday accomplished nothing. It has not changed our way of life. It was a cowardly act, fueled by a false sense of purpose—motivated by propaganda in the shadows of the internet. What is clear is the resolve of New Yorkers to live in a free society, devoid of fear. I want to commend the work of the NYPD-FBI Joint Terrorism Task Force and the prosecutors in the Southern District for bringing today’s charges. Finally, our security requires every single member of the public’s help. It requires their vigilance. And it requires their care. If you see something that doesn’t look right, contact law enforcement.”
As alleged in the Complaint:[1]
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., an improvised explosive device (“IED”) detonated 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 an individual later identified as AKAYED ULLAH lying on the ground in the vicinity of the explosion. Surveillance footage captured ULLAH walking through the Subway Terminal immediately prior to the explosion, and then falling to the ground after the explosion.
ULLAH was subsequently 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; and (vi) 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 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.
- ULLAH’s radicalization began in at least 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 ago.
- 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 conducted a search of 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 December 11 Attack; and (iv) a passport in ULLAH’s name with multiple handwritten notations, including: “O AMERICA, DIE IN YOUR RAGE.”
Three individuals were injured as a result of the December 11 Attack.
* * *
ULLAH, 27, of Brooklyn, New York, is charged in the Complaint with one count of provision of material support and resources to a designated foreign terrorist organization, in violation of 18 U.S.C. § 2339B, which carries a maximum sentence of 20 years in prison; one count of using and attempting to use a weapon of mass destruction, in violation of 18 U.S.C. § 2332a, which carries a maximum sentence of life in prison; one count of bombing and attempting to bomb a place of public use, in violation of 18 U.S.C. § 2332f, 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, in violation of 18 U.S.C. § 924(c), 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.
Mr. Sessions, Mr. Kim, and Mr. Boente praised the outstanding investigative efforts of the FBI, the NYPD, the Department of Homeland Security, Homeland Security Investigations (“HSI”), and the PAPD. ULLAH’s arrest 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 Teresinski of the Counterterrorism Section of the Justice Department’s National Security Division.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Three Men Charged in Federal Court with Narcotics Offenses Relating to 13 Kilograms of Cocaine and Nearly 19,000 Envelopes of Heroin in YonkersRead the Press Release
Joon H. Kim, Acting United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the Drug Enforcement Administration, New York Division (the “DEA”), and Charles Gardner, Yonkers Police Department Commissioner (the “YPD”), announced today the arrest of ANSLEY R. ESTRELLA, RONALD E. LEON, and LUIS OSCAR REYES relating to 13 kilograms of cocaine and nearly 19,000 glassines of heroin in a house in Yonkers. ESTRELLA, LEON, and REYES were all charged Friday in a complaint with conspiracy to distribute and possess with intent to distribute more than five kilograms of cocaine and more than one kilogram of heroin.
Acting U.S. Attorney Joon H. Kim said: “After receiving a call about suspicious activity near a house in suburban Yonkers, responding officers allegedly discovered massive quantities of cocaine and heroin, as well as drug paraphernalia, in that home. We commend our law enforcement partners for their swift and effective response to this potentially dangerous situation, and the citizens who notified them when something just didn’t look right. Citizens can play an important role in keeping dangerous drugs, including opioids, off our streets.”
DEA Special Agent in Charge James J. Hunt stated: “A Parent’s worst fear is a heroin dealer setting up shop next door. This case is a reminder that drug traffickers’ greed outweighs the safety of their neighbors. Law enforcement is committed to keeping a vigilant eye out for drug dealers like these whose trafficking encourages heroin abuse, crime and drug related violence, allegedly.”
Yonkers Police Commissioner Charles Gardner said: “A thorough investigation conducted by the responding Yonkers police officers resulted in the discovery of a large scale narcotics distribution operation and the arrest of three individuals. We are working with our federal law enforcement partners on the follow-up investigation and the prosecution of these males. I would like to thank the U.S Drug Enforcement Administration and the U.S. Attorney’s office for their support and invaluable assistance.”
According to the allegations made in the Complaint:[1]
On the evening of December 7, 2017, YPD officers received a call indicating that three men had pushed a fourth man into a house in Yonkers, New York. YPD officers responded to the house, and saw ESTRELLA walk out of the house. The man said he lived in the house with his girlfriend, and that nobody was in the house. The officers could see – through the closed shades – silhouettes of people moving inside the house. Nonetheless, the man repeated that nobody was in the house.
As YPD officers approached the open front door, they saw REYES, with a surgical mask on, and then LEON, also with a surgical mask on, who had blood on his face. The YPD officers entered the house, where LEON denied being hurt.
YPD officers walked through the house to see if there were any additional people committing an ongoing crime or if there were victims in the house. In a room on the second floor, they found white powder, respiratory masks, and, in an open closet, a large number of glassine envelopes and scales.
In the garage, a YPD officer found a car with an open shopping bag, in which the YPD Officer could see what appeared to be bundles of decks of heroin.
The YPD officers placed ESTRELLA, LEON, and REYES under arrest. LEON had keys in his possession for the car in the garage.
The YPD obtained and executed a search warrant and did a full search of the house and the car in the garage, as well as two other cars. During that search, the YPD found, among other things, 13 kilogram-sized bricks of cocaine, 18,598 glassine envelopes containing heroin, 813 tan pills stamped “M30,” a number of plastic bags and clear knotted twists containing white chunky substances, a scale, five small grinders, assorted stamp pads and stamps, a metal kilogram press, and a money-counting machine.
The Complaint charges each of ESTRELLA, LEON, and REYES with one count of narcotics conspiracy, and one count of distribution and possession with intent to distribute controlled substances, and aiding and abetting the same.
* * *
Mr. Kim thanked the DEA and YPD for their outstanding work on the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Michael Maimin is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as allegations.
High-Ranking “Ygz” Gang Member Sentenced to 45 Years in Prison for Murder of 21-Year-OldRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that KAREEM LANIER, a/k/a “Reem,” a/k/a “Black,” has been sentenced to a term of 40 years in prison, which must run consecutively to a prior prison sentence of five years, for his crimes as a high-ranking member of the “Young Gunnaz” or “YGz” gang, including murdering Dykeem Etheridge on January 24, 2011, and providing assistance to other YGz gang members in connection with three other murders. LANIER was sentenced on Friday afternoon in Manhattan federal court by United States District Judge Valerie E. Caproni, before whom he previously pleaded guilty.
According to the charging and other documents filed in the case, as well as statements made during LANIER’s guilty plea and sentencing proceedings and other court proceedings in the case:
LANIER was a high-ranking member of a set of the YGz gang known as the “Morris Avenue Gunnaz,” which was based in and around Maria Lopez Plaza on Morris Avenue in the South Bronx. From 2005 to 2017, members and associates of the YGz enriched themselves by committing robberies and by selling drugs, such as crack cocaine, and committed acts of violence, including murder and attempted murder, against various people, including rival gang members.
On January 24, 2011, a group of YGz members, including LANIER, assaulted Dykeem Etheridge, 21, as he exited a store on the corner of 154th Street and Courtlandt Avenue. LANIER shot and killed Etheridge as he tried to flee the attack. LANIER later told a fellow gang member that he killed Etheridge in order to enhance his status in the YGz.
On July 3, 2011, LANIER and other YGz members rode on bicycles to the territory of a rival gang on Park Avenue near 158th Street in the South Bronx. Their goal was to shoot and kill a rival gang member on sight, and LANIER went along to support and encourage the other YGz members. A member of the YGz shot at a rival gang member, who survived the shooting. While LANIER and others were fleeing from the scene of the shooting, LANIER’s associate shot Curtis Smith, 23, a bystander, in the head. Smith died several days later.
On October 17, 2011, LANIER provided a firearm to a fellow YGz member, who then used the firearm in a shootout with members of a rival gang that resulted in the death of Devon Jackson, 16, in the vicinity of East 146th Street between Third and Collect Avenues in the Bronx.
On December 22, 2011, after several YGz members murdered Taisheem Ferguson, 17, near Morris Avenue and 151st Street in the Bronx, LANIER helped two of the participants in the murder flee from the scene by hailing and paying for a taxi cab so that they would escape before the police could catch them.
* * *
LANIER, 26, of the Bronx, is the eighth defendant to be sentenced this year by Judge Caproni for participation in a YGz-related murder.
Acting U.S. Attorney Kim praised the outstanding work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the New York City Police Department in the investigation of this case. He also thanked the Bronx District Attorney’s Office for their support in this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Samson Enzer, Gina M. Castellano, and Andrew C. Adams are in charge of the prosecution.
Former Hoboken City Council President Sentenced to 30 Months in Prison for His Participation in A $7 Million Car Loan SchemeRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that former Hoboken, New Jersey, City Council president and attorney CHRISTOPHER CAMPOS was sentenced today in Manhattan federal court to 30 months in prison for fraudulently obtaining millions of dollars in car loans. CAMPOS used approximately 20 straw buyers to purchase more than 200 new automobiles based on false representations that, among other things, the straw buyers would use the cars for their personal use when, in fact, CAMPOS and his co-conspirators obtained the vehicles in order to lease them as livery cabs. After a week-long trial, CAMPOS was found guilty on June 22, 2017, of bank and wire fraud and conspiracy to commit bank and wire fraud. U.S. District Judge Valerie E. Caproni presided over that trial and imposed today’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Christopher Campos, an attorney and former Hoboken City Council president, defrauded lenders out of millions of dollars. He put up straw buyers to obtain loans for ‘personal use’ cars that in fact comprised a fleet of over 200 vehicles leased to livery drivers. Campos has now received the significant sentence his crimes merit.”
According to the allegations contained in the Complaint, Indictment, and the evidence presented in Court during the trial:
Between approximately October 2012 and September 2013, CAMPOS and his co-conspirator Julio Alvarez, among others, orchestrated a scheme to fraudulently obtain new automobiles that they intended to lease to livery cab drivers. In order to secure financing in connection with the purchase of these new cars, CAMPOS and other co-conspirators enlisted and aided individuals with good credit histories (“straw buyers”) to submit fraudulent car loan applications to numerous lenders. In order to obtain the new vehicles, CAMPOS and other co-conspirators sent straw buyers to several car dealerships located throughout the New York City area, where dealership employees helped straw buyers submit fraudulent loan applications.
The auto loan applications submitted by the straw buyers falsely represented that the vehicles would be used for the buyers’ personal use, rather than as part of the defendants’ leasing business. In addition, in many cases, the car loan applications misrepresented personal information about the straw buyers, including their incomes and assets. CAMPOS also caused financing applications to be sent to multiple financial institutions at the same time so that the lenders would not know that the straw buyers were incurring obligations to other lenders in connection with the purchase of multiple new automobiles.
In total, the scheme carried out by CAMPOS, Alvarez, and others involved approximately 20 straw buyers, the purchase of approximately 200 new vehicles, and ultimately resulted in lenders disbursing over $7,000,000 in fraudulently obtained car loans. Most of those loans ultimately went into default.
* * *
Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Kim also thanked the National Insurance Crime Bureau (“NICB”), the New York Automobile Insurance Plan (“NYAIP”), and the New York State Department of Motor Vehicles for their substantial assistance in the investigation and trial.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Dina McLeod, Sagar K. Ravi, and Niketh Velamoor are in charge of the prosecution.
Real Estate Developers Sentenced in White Plains Federal Court for Conspiracy to Corrupt the Electoral Process in BloomingburgRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, today announced that SHALOM LAMM and KENNETH NAKDIMEN were sentenced for conspiracy to corrupt the electoral process, in connection with an election in Bloomingburg, New York. LAMM was sentenced today to 10 months in prison. NAKDIMEN was previously sentenced on September 15, 2017, to six months in prison. Both defendants were sentenced by United States District Judge Vincent Briccetti in White Plains federal court.
Acting U.S. Attorney Joon H. Kim stated: “False and fraudulent voter registrations have no place in our democracy. As the sentences imposed on Shalom Lamm and Kenneth Nakdimen show, those who try to undermine the integrity of our elections will be prosecuted and punished.”
According to the allegations contained in the Indictment, as well as statements made in related court filings and proceedings:
Starting in 2006, LAMM and NAKDIMEN, real estate developers, sought to build and sell real estate in Bloomingburg, New York. From these real estate development projects, LAMM, NAKDIMEN, and others hoped for and anticipated making hundreds of millions of dollars. But by late 2013, the first of their real estate developments had met local opposition, and still remained under construction and uninhabitable. When met with resistance, rather than seek to advance their real estate development project through legitimate means, LAMM, NAKDIMEN, and others instead decided to corrupt the democratic electoral process in Bloomingburg by falsely registering voters and paying bribes for voters who would help elect public officials favorable to their project.
Specifically, in advance of an election in March 2014 for Mayor of Bloomingburg and other local officials, LAMM, NAKDIMEN, and others, and people working on their behalf, developed and worked on a plan to falsely register numerous people who were not entitled to register and vote in Bloomingburg because they actually lived elsewhere. Those people included some who never intended to live in Bloomingburg, some who had never kept a home in Bloomingburg, and indeed, some who had never set foot in Bloomingburg. LAMM, NAKDIMEN, and others took steps to cover up their scheme to register voters who did not actually live in Bloomingburg by, among other things, creating and back-dating false leases and placing items like toothbrushes and toothpaste in unoccupied apartments to make it seem as if the falsely registered voters lived there.
LAMM, NAKDIMEN, and others also bribed potential voters by offering payments, subsidies, and other items of value to get non-residents of Bloomingburg to register unlawfully and vote there.
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In addition to the prison terms, LAMM, 58, of Bloomingburg, New York, was sentenced to one year of supervised release, a $20,000 fine, and 400 hours of community service and NAKDIMEN, 64, of Monsey, New York, was also ordered to pay a $20,000 fine and 400 hours of community service.
Mr. Kim praised the outstanding investigative work of the FBI-Hudson Valley White Collar Crime Task Force, the Sullivan County District Attorney’s Office, the Sullivan County Sherriff’s Office, the Orange County Sheriff’s Office, the Orange County District Attorney’s Office, the Internal Revenue Service, and the United States Postal Inspection Service. Mr. Kim also thanked the Department of Justice’s Public Integrity Section, Election Crimes Branch, for its assistance in the case.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Kathryn Martin, Benjamin Allee, and Perry Carbone are in charge of the prosecution.
Two Men Charged in Theft of over $2 Million in Stock Certificates from Deceased Manhattan WomanRead the Press Release
Joon H. Kim, the Acting 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 an Indictment charging STEPHEN DECKER and LUIS MERCADO with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with a scheme to steal more than $2 million in stock certificates from the apartment of a deceased Manhattan woman, and then use those stolen assets to attempt to purchase over $2 million worth of gold coins. DECKER and MERCADO were arrested this morning in Manhattan. The defendants will be presented before U.S. Magistrate Judge James L. Cott in Manhattan federal court this afternoon. The case has been assigned to U.S. District Judge Lewis A. Kaplan.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, these defendants preyed on a deceased New Yorker’s estate by stealing millions in stock certificates from her home. Then, in an attempt to cover their tracks, the defendants allegedly sold the certificates and tried to purchase more than $2 million in gold coins so that the ill-gotten gains couldn’t be traced to them. Thanks to the outstanding investigative work of the FBI, the defendants will now be held accountable for their brazen actions.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, when Decker and Mercado cashed out on stolen stock certificates, their right to ownership was nothing more than fool’s gold. Not only did the certificates not belong to them, their rightful owner was an elderly deceased woman with no representatives to stake her claim. Taking advantage of those who are powerless to defend themselves or their legacy has always been, and will always be, an inexcusable crime.”
According to the Indictment[1] unsealed today in federal court:
From March 2016 to February 2017, DECKER and MERCADO engaged in a scheme designed to steal over $2 million from a deceased Manhattan woman (the “Victim”). As part of the scheme, DECKER and MERCADO stole stock certificates valued at over $2 million from the Victim’s Manhattan apartment after the Victim’s death in March 2016. In August 2016, based on false representations made by DECKER and MERCADO, a financial institution (“Company-1”) opened a brokerage account (the “Account”) in the Victim’s name. DECKER and MERCADO then deposited the stolen stock certificates into the Account. In September 2016, based on additional false representations made by DECKER and MERCADO, Company-1 sold the shares in the brokerage account opened in the Victim’s name, resulting in a cash balance in the Account of more than $2 million. DECKER and MERCADO then attempted to purchase over $2 million in gold coins using the assets in the Account.
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The Indictment charges DECKER, 59, of Secaucus, New Jersey, and MERCADO, 53, of Manhattan, New York, each with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Alexandra N. Rothman is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations and every fact described should be treated as an allegation.
Five Defendants Arrested in Bottle-Return BustRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Leon Hayward, Acting Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced that ELDAR RAKHAMIMOV, NASIM RAKHAMIMOV, VLADIMIR ZABRODIN, RUSLAN KADIROV, and JOSEPH FINNERAN were taken into federal custody today for participating in a scheme to defraud beverage bottling companies and the State of New York. The defendants were presented this afternoon before U.S. Magistrate Judge James L. Cott.
According to the allegations in the Complaint filed today in Manhattan federal court:[1]
From September 2016 to December 4, 2017, ELDAR RAKHAMIMOV, NASIM RAKHAMIMOV, ZABRODIN, KADIROV, and FINNERAN conspired to defraud bottling companies and the State of New York through a scheme involving recyclable containers.
The defendants’ scheme exploited recycling incentives created by New York State’s Returnable Container Act (the “RCA”). The RCA created a $.05 deposit on bottled soft drinks, beer, and water sold in New York State to promote the recycling of bottles and cans by bottlers, beverage distributors, and container redemption centers. Under the RCA, the first bottler, distributor, or dealer to collect the required deposits on beverage containers is required to reimburse the $.05 deposit to redeeming individuals or entities and to pay a handling fee of $.035 per empty beverage container redeemed by redemption centers.
ELDAR RAKHAMIMOV and NASIM RAKHAMIMOV managed a bottle collection company (“Company-1”) that focused on aggregating recyclable containers and delivering them, in exchange for payment, to redemption centers in the New York City area. ELDAR RAKHAMIMOV and NASIM RAKHAMIMOV, along with ZABRODIN, KADIROV, and FINNERAN, worked together to falsely inflate the number of bottles delivered by Company-1 to induce redemption centers to overpay bottle deposits and handling fees to Company-1.
Using an assortment of deceptive techniques, ranging from doctored invoices to “redeeming” the same bottles twice to impermissibly collecting bottles from New Jersey to paying (or receiving) kickbacks, the defendants extracted hundreds of thousands of dollars from victim companies – and, ultimately, the State of New York.
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ELDAR RAKHAMIMOV, 46, of Brooklyn, New York, NASIM RAKHAMIMOV, 46, of Brooklyn, New York, ZABRODIN, 32, of Staten Island, New York, KADIROV, 32, of Brooklyn, New York, and FINNERAN, 64, of Bay Shore, New York, are each charged with one count of conspiring to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Kim praised the outstanding work of the FBI, the CBP, and the NYPD for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Andrew C. Adams, Frank J. Balsamello, and Andrew Thomas are in charge of the case.
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.
Two Men Plead Guilty to Defrauding Investors of over $7 Million in Fuel Cell Company Investor Fraud SchemeRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that GEORGE DOUMANIS and EMANUEL PANTELAKIS, a/k/a “Manny,” each pled guilty today to defrauding investors in Terminus Energy, Inc., a publicly traded penny stock. DOUMANIS and PANTELAKIS each pled guilty to conspiracy to commit securities fraud before U.S. Magistrate Judge Debra Freeman. They will be sentenced before U.S. District Judge Andrew L. Carter on April 9, 2018.
Acting U.S. Attorney Joon H. Kim said: “Today, George Doumanis and Emanuel Pantelakis both admitted to operating an investment scheme by luring investors in a supposed fuel cell technology which they knew to be fictitious. In furtherance of their scheme, the two used misleading documents to dupe investors into contributing over $7 million into their phony penny stock – which they eventually used to pay their own personal expenses. This Office and our law enforcement partners will continue to keep a watchful eye on the investment markets and prosecute those who mislead the investing public.”
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[1]:
From at least February 2008 until at least 2014, DOUMANIS and PANTELAKIS, along with their co-conspirator Danny Pratte, 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 “fuel cell” as an alternative energy source. DOUMANIS, PANTELAKIS, and Pratte sold shares of Terminus to investors through private offerings. In connection with such sales, DOUMANIS, PANTELAKIS, and Pratte 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 investors’ 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, PANTELAKIS, and Pratte 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 salesmen 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, PANTELAKIS, and Pratte 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, PANTELAKIS, and Pratte fraudulently induced investors to purchase nearly $8 million of Terminus stock.
Rather than use the investor money as promised, DOUMANIS, PANTELAKIS, and Pratte misappropriated the funds for their own use and for use by their co-conspirators. For example, DOUMANIS, entities affiliated with DOUMANIS, and certain of his family members received at least $570,000, including payments to personal credit cards and toward DOUMANIS’s residential mortgage. PANTELAKIS and certain of his family members received at least $420,000, including payments to personal credit cards and to pay for PANTELAKIS’s wife’s Mercedes-Benz. Pratte personally received approximately $1 million. In addition, the unregistered salespeople collectively received undisclosed commissions of more than $1.5 million.
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GEORGE DOUMANIS, 59, and EMANUEL PANTELAKIS, a/k/a “Manny,” 42, each pled guilty to one count of conspiracy to commit securities fraud, 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.
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 Court.
Trial against defendant Danny Pratte is scheduled to commence on May 1, 2018, on charges of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire and mail fraud, and wire fraud. The allegations contained in the Indictment as to Pratte are merely accusations, and he is presumed innocent unless and until proven guilty.
Mr. Kim praised the work of the Federal Bureau of Investigation, and thanked the SEC.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein and Christine Magdo are in charge of the prosecution.
[1] As for the defendant who has not pled guilty, Danny Pratte, the description of the charges set forth herein constitute only allegations.
Bronx Defendant Found Guilty in Manhattan Federal Court of Sex Trafficking OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that a federal jury today found MARIA SOLY ALMONTE, a/k/a “Soly Almonte,” a/k/a “Soly La Fuerte,” a/k/a “SoSo,” a/k/a “SoSo Wavy,” a/k/a “Soly Montana,” guilty of sex trafficking of minors, sex trafficking conspiracy, and use of interstate commerce to promote illegal activity. ALMONTE was convicted following a two-week jury trial before U.S. District Judge Kimba M. Wood.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As a jury unanimously found, Maria Soly Almonte was the ringleader of a sex trafficking conspiracy that exploited children as young as 13. Her predatory conduct shocks the conscience. Protecting children is one of our most important missions, and I thank the FBI and the NYPD for their outstanding work to that end. Almonte now awaits sentencing for her heinous crimes.”
According to allegations contained in the Complaint, Indictment, and evidence presented during the trial in Manhattan federal court:
Since at least 2015, MARIA SOLY ALMONTE operated a brothel in New York City, which trafficked minors as young as 13 years old. The brothel operated at various locations throughout New York, including apartments in the Bronx and Harlem.
ALMONTE served as the brothel’s proprietor. The brothel’s sex workers were required to pay ALMONTE a fee for prostitution services they rendered at the brothel. The brothel advertised its services on the internet and communicated with clients by telephone. During the time period of the conspiracy, at least six minors provided prostitution services at one or more of the brothel’s locations.
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ALMONTE, 33, was convicted of one count of conspiring to commit sex trafficking, which carries a maximum sentence of life in prison; one count of sex trafficking a minor under the age of 14, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison; one count of sex trafficking a minor under the age of 18, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using facilities of interstate commerce to promote illegal activity, which carries a maximum sentence of five years in prison; and one count of conspiring to use facilities of interstate commerce to promote illegal activity, 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 the judge.
Mr. Kim thanked the FBI and NYPD for their outstanding investigative work in this matter.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Stephanie Lake and Alison Moe are in charge of the prosecution.
Three Men Sentenced in Connection with Plot to Kidnap and Murder Husband Who Refused to Grant His Wife A Religious DivorceRead the Press Release
Joon H. Kim, Acting United States Attorney for the Southern District of New York, announced that AHARON GOLDBERG, SHIMEN LIEBOWITZ, and BINYAMIN GOTTLIEB were sentenced today for their respective roles in devising and covering up a plot to kidnap and murder an individual in order to obtain a religious divorce for that individual’s wife. GOLDBERG pled guilty on September 28, 2017, to conspiring to commit kidnapping and murder for hire. LIEBOWITZ pled guilty on July 27, 2017, to conspiring to commit extortion. GOTTLIEB pled guilty on September 15, 2017, to helping to conceal the plot from law enforcement. U.S. District Judge Sidney H. Stein, who presided over today’s sentencings, sentenced GOLDBERG to three years in prison, LIEBOWITZ to two years in prison, and GOTTLIEB to one year’s probation.
Acting U.S. Attorney Joon H. Kim said: “The defendants were involved in a terrifying plot to kidnap, and ultimately to kill, their intended victim. Fortunately, the person they hired to carry out their crime alerted the FBI, and now the defendants have been held accountable for their crimes.”
According to the Complaints and statements made during court proceedings and in public filings:
According to Jewish religious law as observed in certain communities, in order to effect a divorce, a husband must provide his wife with a document known as a “get.” A woman whose husband will not consent to a divorce is known as an “agunah.” In the absence of the husband’s issuing a get, an agunah may be released from her marriage only through the husband’s death.
In or about July 2016, the defendants AHARON GOLDBERG and SHIMEN LIEBOWITZ began working to orchestrate the kidnapping of an individual who refused to grant a get to his wife (the “Intended Victim”). The purpose of the kidnapping was to imprison and torture the Intended Victim until he agreed to give his wife a get. BINYAMIN GOTTLIEB, an associate of GOLDBERG and LIEBOWITZ, placed them in touch with a private investigator (the “CS”), whom GOLDBERG and LIEBOWITZ solicited to personally carry out the kidnapping and torture in exchange for payment. Unbeknownst to GOLDBERG and LIEBOWITZ, however, the CS reported the plot to the Federal Bureau of Investigation and recorded several of his meetings with the defendants.
In July 2016, the CS met with GOLDBERG, in GOTTLIEB’s presence, to discuss the kidnapping plot. Although LIEBOWITZ was not present at the beginning of the meeting, he arrived and joined the conversation after several minutes. The CS made an audio recording of the meeting using a hidden recording device. During the meeting and after LIEBOWITZ arrived, the parties discussed, among other things, the logistics of the kidnapping plot, including the possibility of kidnapping the Intended Victim in the United States and holding him captive in a cage, or kidnapping him in Ukraine and transporting him to Israel. LIEBOWITZ also provided the CS with details to assist the CS in carrying out the kidnapping plot. During the meeting, GOLDBERG and LIEBOWITZ also agreed to advance the CS $25,000 to assist in efforts to plan the kidnapping. Within days of this initial meeting, an envelope containing approximately $25,000 cash was delivered to the CS.
On or about August 9, 2016, the CS met with LIEBOWITZ and GOLDBERG in Kiryas Joel, New York. During this meeting, the CS, GOLDBERG, and LIEBOWITZ discussed additional details of the kidnapping plan, including logistics and the cost associated with a plan to kidnap the Intended Victim overseas. This conversation was also recorded.
On August 12, 2016, the CS again met with LIEBOWITZ and GOLDBERG, at which time they provided the CS with an additional payment of over $20,000 for use in making arrangements for the kidnapping. In this meeting, which was also recorded, the CS, GOLDBERG and LIEBOWITZ further discussed their plan to kidnap the Intended Victim in the United States and to obtain the get from him in this country.
Subsequent to the August 12, 2016, meeting, the CS had additional conversations with GOLDBERG, in which GOLDBERG discussed his desire not merely to kidnap the Intended Victim, but also to kill him.
On August 25, 2016, the CS met LIEBOWITZ in Central Valley, New York. During the meeting, LIEBOWITZ paid the CS an additional sum of about $12,000 to carry out the kidnapping. Also during the meeting, the CS spoke by phone with GOLDBERG, who was still in Israel, about the kidnapping plan, which the CS and GOLDBERG referred to in code as a “wedding,” as well as GOLDBERG’s desire that the CS kill the Intended Victim. This conversation was also recorded.
On or about September 2, 2016, the CS had another recorded conversation with LIEBOWITZ, during which LIEBOWITZ indicated his understanding that the Intended Victim would be murdered as part of the plan.
Subsequently, on September 6, 2016, LIEBOWITZ and GOLDBERG again met with the CS. During that meeting, LIEBOWITZ and GOLDBERG paid the CS an additional $16,000. The CS led LIEBOWITZ and GOLDBERG to believe that the CS had captured the Intended Victim, had tortured the Intended Victim in order to force him to provide a get, and that the Intended Victim had so far refused to do so. The CS discussed options for what to do with the Intended Victim given his unwillingness to give the get. GOLDBERG replied by referencing his prior directive to the CS to kill the Intended Victim: “I’ve told you whatever I’ve told you, and I even got an okay from one of the rabbis. He [the Intended Victim] cannot slip out of your fingers.” LIEBOWITZ then interjected, “I’m on his side, whatever he says I’m with him.” GOLDBERG resolved that the only way forward was to put a bullet in the Intended Victim. LIEBOWITZ interjected that if LIEBOWITZ were to be killed, arrangements would have to be made to ensure that there was a witness who could verify that the Intended Victim was dead (and that the wife could remarry) without leading back to LIEBOWITZ and his co-conspirators. LIEBOWITZ later stated, “Somebody is going to need to tell a rabbi that I have saw” with respect to the death of the Intended Victim. GOLDBERG and the CS then discussed the possibility of burying the Intended Victim and seeing to it that his body was exhumed and identified using DNA. LIEBOWITZ interjected, “There is no way to put him out on the street somewhere?” The September 6 conversation ended with FBI agents arresting LIEBOWITZ and GOLDBERG.
On September 11, 2016, FBI agents interviewed GOTTLIEB about his knowledge of the plot. At that time, Gottlieb stated that he had no knowledge of any conversation where the plot was discussed, despite the fact that he had been present at the initial meeting between the CS, GOLDBERG, and LIEBOWITZ.
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In addition to their prison sentences, GOLDBERG, 56, of Bnei Brak, Israel, and LIEBOWITZ, 26, of Monroe, New York, were each sentenced to three years of supervised release. GOTTLIEB 34, is from Airmont, New York.
Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department, working through the Joint Organized Crime Task Force.
This case is being handled by the Office’s Violent and Organized Crime Unit and Public Corruption Unit. Assistant United States Attorneys Scott Hartman and Paul M. Monteleoni are in charge of the prosecution.
Thirteen Defendants Charged in Manhattan Federal Court in Scheme to Take over Ride-Sharing Driver AccountsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and David E. Beach, Special Agent in Charge of the U.S. Secret Service, New York Field Office (“USSS”), announced charges today against 13 individuals in connection with a scheme to defraud drivers of two ride-sharing companies (“Company-1” and “Company-2”) by accessing those drivers’ accounts without authorization in order to divert driver funds to bank accounts controlled by the defendants and other members of the scheme (the “Scheme”). Through the course of the Scheme, the defendants compromised thousands of Company-1 and Company-2 driver accounts, and diverted millions of dollars from those accounts. Defendants LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, AKEEM KRUBALLY, THERESA OUTERBRIDGE, DEVON WILLIAMS, HAKEEM BALDEO, QUINTEEN LYNCH, KHALID NAZZAL, FRANCISCO VIRUET, JOHNNY SERRANO, THALIA CAQUIAS, and TANESHA FORD were charged in two Complaints (the “Complaints”) unsealed today in Manhattan federal court. WILLIAMS, BALDEO, LYNCH, NAZZAL, VIRUET, CAQUIAS, and FORD were arrested today and presented this afternoon before U.S. Magistrate Judge Debra Freeman in Manhattan federal court.
Acting Manhattan U.S. Attorney Joon H. Kim said: “These 13 defendants allegedly developed a sophisticated scheme to swindle hard-working drivers out of their income. Through elaborate identity theft and phishing, the defendants allegedly diverted millions of dollars from company accounts to line their own pockets. Thanks to the skilled investigative work of the Criminal Investigators of the U.S. Attorney’s Office and the U.S. Secret Service, the defendants now will be held to account.”
David E. Beach, Special Agent in Charge of the USSS said: “The success in this case demonstrates the investigative capabilities of the United States Secret Service and the collaborative efforts of our law enforcement partners, specifically the U.S. Attorney’s Office Southern District of NY, Federal Bureau of Investigation’s Westchester County Safe Streets Task Force, and Westchester County District Attorney’s Office. The Secret Service will continue to develop innovative ways to protect the financial infrastructure of the United States and combat criminals who use emerging technologies to conduct business.”
According to allegations contained in the two Complaints[1]:
Overview of the Scheme
The charges in the Complaints result from a Scheme to defraud livery drivers and ride-sharing companies using mobile ride-sharing applications. The Scheme targeted drivers associated with Company-1 and Company-2. Scheme members called Company-1 and Company-2 drivers posing as Company-1 and Company-2 representatives, and deceived the drivers into providing unique personal identifiers and other information that was then used to obtain unauthorized access into the online Company-1 and Company-2 driver accounts. Once members of the Scheme logged into Company-1 and Company-2 driver accounts without authorization, they altered information in those compromised accounts and diverted driver funds to bank accounts they controlled.
Overview of the Company-1 Scheme
With respect to the Scheme involving Company-1, members of the Scheme ordered rides on the Company-1 mobile application (“App-1”), which provided Scheme members with the driver’s name, picture, and an anonymized phone number so that the rider could communicate with the driver. Scheme members canceled the rides shortly after receiving the driver’s anonymized phone number. The Scheme members then called the driver on the driver’s anonymized telephone number impersonating a representative from Company-1. During the call, the Scheme member would ask the driver for the driver’s true telephone number and, while remaining on the phone with the driver, the Scheme member would attempt to log into the driver’s Company-1 account. The driver then received a text message from Company-1 containing a unique code on the driver’s cellphone, and the Scheme member impersonating a Company-1 representative then requested that the driver provide this unique code to the Scheme member. In addition, during the call, Scheme members would request that the driver provide the driver’s license number.
Using the victim driver’s telephone number, driver’s license number, and the unique code, Scheme members thereafter logged into the victim driver’s Company-1 account through App-1 or the Company-1 web interface without the driver’s authorization. After Scheme members obtained unauthorized access to the victim driver’s account, they changed the bank account information associated with the account to a bank account that either they or another Scheme member controlled. Once the victim driver’s account had been compromised and the bank account information altered, funds that the victim driver earned from Company-1 were diverted to Scheme members’ bank accounts.
Overview of the Company-2 Scheme
With respect to the Scheme involving Company-2, members of the Scheme ordered rides on the Company-2 mobile application (“App-2”), which provided Scheme members with the driver’s name, picture, and an anonymized phone number so that the rider could communicate with the driver. Scheme members canceled the rides shortly after receiving the driver’s anonymized phone number. The Scheme members then called the driver on the driver’s anonymized telephone number impersonating a representative from Company-2. During the call, the Scheme member would ask the driver for the driver’s true telephone number. The Scheme member would then tell the victim driver that Company-2 would be sending the driver a link to a website that the driver must use to verify the driver’s information in order to obtain a bonus from Company-2.
Thereafter, the Scheme member sent the victim driver a link to a malicious website (the “Fraudulent Company-2 Website”), that was controlled by Scheme members. The Fraudulent Company-2 Website was designed to appear as if it were a website maintained by Company-2, and requested, among other information, the driver’s login credentials, including the driver’s phone number, email address, and unique Company-2 password. Once the victim driver had entered this information on the Fraudulent Company-2 Website, Scheme members used the driver’s login credentials to log into the driver’s account through App-2 or the Company-2 web interface without the driver’s authorization. Once Scheme members logged into the victim driver’s Company-2 account, Scheme members changed the bank account information associated with the account to a bank account that either they or another Scheme member controlled. Once the victim driver’s account had been compromised and the bank account information altered, funds that the victim driver earned from Company-2 were diverted to Scheme members’ bank accounts.
The Defendants' Participation in the Scheme
Through the course of the Scheme, the defendants compromised thousands of Company-1 and Company-2 driver accounts, and stole millions of dollars from Company-1 and Company-2 driver accounts. After receiving unauthorized transfers from Company-1 and Company-2, Scheme members withdrew the fraudulent proceeds from bank accounts, typically through large cash withdrawals or large purchases.
Scheme members played different, and, at times, multiple roles in the Scheme. “Recruiters” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, and DEVON WILLIAMS – used social media, including Snapchat, to bring new people into the Scheme and to coordinate the Scheme.
“Callers” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, DEVON WILLIAMS and HAKEEN BALDEO – made calls to drivers impersonating Company-1 and Company-2 representatives using either their personal phones or a service that allows users to mask the number they use to make phone calls to victim drivers, during which they tricked drivers into providing personal information to allow them to obtain unauthorized access to their driver accounts.
“Account Hackers” – including LOUIS PINA, AKEEM KRUBALLY, DEVON WILLIAMS, and JOHNNY SERRANO – logged into Company-1 and Company-2 driver accounts without authorization to change bank account information.
“Money Receivers” – including LOUIS PINA, MALIK GRAY, GEORGE JOSEPH, AKEEM KRUBALLY, THERESA OUTERBRIDGE, HAKEEM BALDEO, QUINTEEN LYNCH, KHALID NAZZAL, FRANCISCO VIRUET, JOHNNY SERRANO, THALIA CAQUIAS, and TANESHA FORD – received unauthorized transfers into their bank accounts from Company-1 and Company-2 as a result of the Scheme, and then withdrew large amounts of cash from those accounts shortly following these unauthorized transfers.
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PINA, 23, of Bronx, NY; GRAY, 21, of Mount Vernon, NY; JOSEPH, 22, of Mount Vernon, NY; KRUBALLY, 21, of Mount Vernon, NY; OUTERBRIDGE, 27, of Mount Vernon, NY; WILLIAMS, 22, of Mount Vernon, NY; BALDEO, 20, of Rye Brook, NY; LYNCH, 27, of Mount Vernon, NY; NAZZAL, 22, of Yonkers, NY; VIRUET, 19, of Bronx, NY; SERRANO, 25, of Bronx, NY; CAQUIAS, 20, of Bronx, NY; and FORD, 21, of Mount Vernon, NY, are each charged with one count of conspiring to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of conspiracy to commit access device fraud, which carries a maximum sentence of seven-and-a-half years in prison, and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison that must be imposed consecutively to any other sentence. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York and the USSS. Mr. Kim further thanked the Westchester County District Attorney’s Office for their assistance and cooperation throughout this investigation, and also thanked the FBI’s Westchester County Safe Streets Task Force for their assistance.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Sheb Swett and Noah Solowiejczyk are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the texts of the Complaints and the descriptions of the Complaints set forth below constitute only allegations and every fact described should be treated as an allegation.
Recording Artist and Performer DMX Pleads Guilty in Manhattan Federal Court to Tax Fraud ViolationRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that EARL SIMMONS, an internationally known recording artist, performer, and actor known professionally as “DMX” and “X,” pled guilty today in Manhattan federal court to one count of tax fraud for evading the payment of income taxes in the period from 2010 through 2016. In total, during that time period, SIMMONS engaged in a scheme to conceal millions of dollars of income from the IRS and to avoid paying $1.7 million of tax liabilities. SIMMONS pled guilty before U.S. District Judge Jed S. Rakoff.
Acting U.S. Attorney Joon H. Kim said: “Today, Earl Simmons, the actor, producer and recording artist known as DMX, admitted to systematically cheating on his taxes. By insisting to be paid in cash whenever possible and having royalty payments diverted to the accounts of financial surrogates, Simmons concealed hundreds of thousands of dollars of income from the IRS. Today, Simmons made a choice between ‘Right or Wrong,’ and did the right thing, admitting his guilt, and agreeing to pay his tax liabilities. No matter who you are or whatever fame you may have achieved, the law applies equally to all, and no one is exempt from the shared obligation to pay our taxes.”
IRS-CI Special Agent in Charge James D. Robnett said: “Mr. Simmons skirted his responsibilities when he chose to ignore his duty to pay his taxes. We should not forget that the ultimate victims in tax fraud cases are the honest US taxpayers who file and pay their taxes. This guilty plea shows that IRS-Criminal Investigation is working to ensure all taxpayers file and pay their fair share.”
According to the Indictment and statements made at today’s plea proceeding:
SIMMONS, known professionally as “DMX” or “X,” worked as a recording artist, performer, and actor. Beginning in 1997, SIMMONS released a series of hip-hop albums that sold millions of records. Many of his albums went platinum and occupied the top positions on musical charts. During his career, SIMMONS has performed at venues across the United States and around the world, and has acted in motion pictures.
As a result of the income SIMMONS earned from sources including musical recordings and performances, from 2002 through 2005 he incurred federal income tax liabilities of approximately $1.7 million. Those liabilities went unpaid, and in 2005, the IRS began efforts to collect SIMMONS’s unpaid tax liabilities.
During the period from 2010 through 2015, SIMMONS earned over $2.3 million, but SIMMONS did not file personal income tax returns during that time period. Instead, he orchestrated a scheme to evade payment of his outstanding tax liabilities, largely by maintaining a cash lifestyle, avoiding the use of a personal bank account, and using the bank accounts of nominees, including his business managers, to pay personal expenses. For example, SIMMONS received hundreds of thousands of dollars of royalty income from his music recordings. SIMMONS caused that income to be deposited into the bank accounts of his managers, who then disbursed it to him in cash or used it to pay his personal expenses. SIMMONS also participated in the “Celebrity Couples Therapy” television show in 2011 and 2012 and was paid $125,000 for his participation. When taxes were withheld from the check for the first installment of that fee by the producer, SIMMONS refused to tape the remainder of the television show until the check was reissued without withholding taxes.
SIMMONS took other steps to conceal his income from the IRS and others, including by filing a false affidavit in U.S. Bankruptcy Court that listed his income as “unknown” for 2011 and 2012, and as $10,000 for 2013. In fact, SIMMONS received hundreds of thousands of dollars of income in each of those years.
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SIMMONS, 46, of Yonkers, New York, faces a maximum sentence of five years in prison. As part of his plea agreement, SIMMONS is also required to pay restitution to the IRS. 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. SIMMONS is scheduled to be sentenced by Judge Rakoff on March 29, 2018, at 4:00 P.M.
Mr. Kim praised the work of the Internal Revenue Service, Criminal Investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Richard Cooper is in charge of the prosecution.
NYPD Officer Charged with Narcotics, Weapons, Fraud, Identity Theft, and Counterfeit Currency OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and James P. O’Neill, the Police Commissioner of the City of New York (“NYPD”), announced the unsealing of a criminal complaint charging REYNALDO LOPEZ with attempting to traffic narcotics and using a firearm in furtherance of that offense, access device fraud, conspiracy to commit access device fraud, aggravated identity theft, and passing counterfeit obligations. LOPEZ is a police officer with the NYPD, assigned to the Anti-Terrorism Unit in the Transit Bureau. LOPEZ was presented yesterday before U.S. Magistrate Judge Debra Freeman.
Acting U.S. Attorney Joon H. Kim said: “Reynaldo Lopez, a police officer sworn to serve and protect his community, instead allegedly engaged in a shocking crime spree. Lopez allegedly attempted to traffic nearly three kilograms of heroin, stole people’s identities to create and use credit cards for his own use, and knowingly used counterfeit money. Police officers who violate their oath and break the laws betray not only the public, but their fellow officers who have nobly committed themselves serving and protecting our communities.”
FBI Assistant Director William F. Sweeney Jr. said: “The list of allegations Officer Lopez faces is troubling on many levels. Not only is Lopez accused of participating in a fraudulent credit card operation and a counterfeit money scheme, he’s also accused of misusing his position as a police officer to engage in the trafficking into our city of what he believed to be heroin. The NYPD works diligently day in and day out to protect the public from those who engage in these types of crimes. As evidenced by the charges today, nobody is exempt from that practice.”
NYPD Police Commissioner James P. O'Neill said: “Police officers are sworn to protect and serve the public. As alleged, the defendant violated our oath, breaking the law, repeatedly, to traffic narcotics or steal others' identities. Today he finds himself under arrest and charged criminally in federal court after eroding the trust we work on building every day with the public.”
According to the Complaint[1] unsealed today in Manhattan federal court:
LOPEZ is an NYPD police officer assigned to the Transit Bureau’s Anti-Terrorism Unit.
On November 29, 2017, LOPEZ attempted to traffic approximately three kilograms of heroin from a location in New Jersey to the Bronx, New York. LOPEZ agreed with another undercover police officer (“UC-2”) to transport what LOPEZ believed were three kilograms of heroin to a drug dealer located in the Bronx, New York, under LOPEZ’s protection as an NYPD police officer, and was arrested when he attempted to make the delivery. LOPEZ also possessed a firearm in furtherance of this attempted narcotics trafficking.
From May 2017 to the present, LOPEZ engaged in a scheme to create and utilize fraudulent credit cards, including by using identity information stolen from his victims. He was part of a counterfeit credit card operation whose participants used stolen or otherwise illicitly obtained personal identifying information to create fraudulent credit cards, and then used the fraudulent credit cards to purchase merchandise for themselves. As part of his participation in these crimes, LOPEZ also possessed and used a device that applies electronic data to blank physical credit cards.
From October 2017 to the present, LOPEZ possessed, passed, and used counterfeit United States currency. In multiple recorded conversations with an undercover NYPD officer (“UC-1”), LOPEZ discussed his possession of counterfeit money, stating that he previously had successfully used some of the counterfeit currency. LOPEZ also showed UC-1 a stack of currency that LOPEZ claimed was counterfeit, and provided UC-1 with a counterfeit $100 bill.
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LOPEZ, 26, of Brooklyn, New York, was arrested yesterday in the Bronx, New York. LOPEZ is charged with one count of access device fraud, which carries a maximum sentence of 15 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of five years in prison; one count of aggravated identity theft, which carries a mandatory sentence of two years in prison; one count of passing counterfeit obligations, which carries a maximum sentence of 20 years in prison; attempted possession of one kilogram and more of mixtures and substances containing heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison; and firearms use, carrying, and possession in connection with a narcotics trafficking offense, which carries a mandatory sentence of five years in prison.
The statutory minimum, maximum, and mandatory 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. Kim praised the FBI and the NYPD for their outstanding work on the investigation. He added that the investigation is continuing.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alex Rossmiller and Jessica Lonergan are in charge of the prosecution.
[1] The charges contained in the Complaint are merely accusations, and LOPEZ is presumed innocent unless and until proven guilty.
Dentist and Others Charged in Medicaid Health Care Fraud Scheme at Upper Manhattan Dental ClinicRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, the Special Agent in Charge of the New York Regional Office of the United States Department of Health and Human Services Office of Inspector General (“HHS-OIG”), announced the arrests of MEHMET DIKENGIL, ANNA JONES, and LUIS OMAR VARGAS for their participation in a scheme to defraud Medicaid of more than $400,000. DIKENGIL, the owner of Dental Express Broadway, P.C., a dental clinic located in upper Manhattan, employed JONES, an officer manager, and VARGAS, an unlicensed dental provider, in furtherance of the health care fraud, which involved billing Medicaid for dental services that were not provided to patients. DIKENGIL and VARGAS were arrested this morning in New Jersey. JONES was arrested this morning in Queens, New York. The defendants will be presented later today in Manhattan federal court before Chief Magistrate Judge Debra Freeman.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, these defendants, including a licensed dentist, defrauded Medicaid time and again by billing for services that were never provided. Together with our law enforcement partners, we will aggressively prosecute those who defraud federal programs that provide care for low income New Yorkers.”
HHS-OIG Special Agent-in-Charge Scott J. Lampert: “Health providers, including an unqualified ‘dentist,’ allegedly siphoned money from the vital Medicaid program to pay for services not needed or never delivered. Patients and taxpayers need to know that suspected government health program fraud will be investigated and prosecuted.”
According to the Complaint[1] unsealed in federal court:
From at least January 2017, up to and including November 2017, DIKENGIL, a licensed dentist and owner of Dental Express Broadway, P.C. (the “Dental Clinic”), JONES, the office manager at the Dental Clinic, and VARGAS, an unlicensed dental provider at the Dental Clinic, engaged in a health care fraud conspiracy. In furtherance of the fraud, the defendants submitted numerous reimbursement claims to Medicaid for having provided Medicaid patients with dental services, when, in fact, they did not provide such services. Patients were recruited to the Dental Clinic where they were paid kickbacks of $25 to undergo minimal dental procedures. The Dental Clinic then billed Medicaid for any dental services provided to the patients, as well as for additional dental services that were not provided. In addition, VARGAS, although not licensed as a dentist, performed dental work and then billed Medicaid under DIKENGIL’s name. In total, the Dental Clinic submitted fraudulent Medicaid claims totaling more than $400,000.
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The Complaint charges MEHMET DIKENGIL, 69, of Chester, New Jersey, ANNA JONES, 59, of Queens, New York, and LUIS OMAR VARGAS, 45, of Roselle, New Jersey, with conspiracy to commit health care fraud and health care fraud. The maximum sentence on each count is 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the investigative work of HHS-OIG. Mr. Kim also thanked the New York City Human Resources Administration for their assistance during the investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Alexandra N. Rothman is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations and every fact described should be treated as an allegation.
Correction Officer Sentenced to 16 Months in Connection with Cover-Up of Inmate AssaultRead the Press Release
Joon H. Kim, Acting United States Attorney for the Southern District of New York, announced today that RODINY CALYPSO, a former New York City Correction Officer, was sentenced today in Manhattan federal court to 16 months in prison for filing a false “Use of Force” report in connection with his beating of a handcuffed inmate at Rikers Island. CALYPSO was found guilty of filing the false report on August 16, 2017, following a five-day jury trial at which he was also acquitted of one count of violating the civil rights of an inmate and one count of obstruction of justice. U.S. District Judge Valerie E. Caproni imposed today’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Today, Rodiny Calypso received the prison term that his cover-up deserved. A day after being caught on videotape beating a handcuffed man at Rikers Island, Rodiny Calypso undermined the ensuing investigation by repeatedly lying on a report. The integrity of investigations into Constitutional violations at New York’s jails and prisons is critically important, and lying to interfere with them can lead to a federal conviction, as well as time in prison.”
In sentencing CALYPSO, Judge Caproni said: “Make no mistake about it, this is a serious offense. Other correction officers should think long and hard about telling the truth on the Use of Force forms. It is important that they know that it’s not just that use of force that will get you in trouble, but lying to cover it up will, too.” Judge Caproni added that “the message has to be that you will pay dearly, not just with the loss of your job, but with the loss of your liberty” if a correction officer files a false report.
According to the Complaint, Indictment, other documents filed in Manhattan federal court, and evidence presented at trial:
Rikers Island is a jail complex located in the Bronx, New York, maintained by the New York City Department of Correction. At the time of his assault, the inmate (“Inmate-1”) was a pretrial detainee in the Otis Bantum Correctional Center (“OBCC”), a facility that houses, among other inmates, inmates in need of maximum security. Inmate-1 was housed in 5 North, a dormitory area within the OBCC in which inmates were generally kept in solitary confinement in individual cells for 23 hours per day. The shower facilities within 5 North were individual stalls, to be occupied by one inmate at a time, and to which inmates were brought handcuffed, then uncuffed through a port in the shower stall door, and then handcuffed again through the port before being brought out of the stalls by correction officers.
The Assault and Cover-Up
Shortly before noon on February 27, 2014, CALYPSO relieved another correction officer at 5 North while Inmate-1 was in the shower. Inmate-1 and CALYPSO had an extended and heated verbal exchange, during which CALYPSO picked up some personal items Inmate-1 had dropped outside the door through the port. At one point, CALYPSO stepped away from the door and spoke to a fellow correction officer one level down within the dorm area. That person left the dorm area and returned with another officer (“Officer-1”), who looked up at the shower area.
CALYPSO rear-cuffed Inmate-1 for removal and briefly looked down in the direction of the other officer. CALYPSO then opened the door to the shower stall and, within seconds, sucker-punched Inmate-1 several times in the face. He followed Inmate-1 into the shower area, where he put Inmate-1 into a headlock and punched him several more times in the head. CALYPSO then began to lose his footing, and clung to Inmate-1’s side. Officer-1 arrived in the stall at this point. As Officer-1 restrained Inmate-1, CALYPSO regained his footing and elbowed Inmate-1 repeatedly – approximately five times – in the head. As a result of the assault, Inmate-1 suffered lacerations to his face and the back of his head. The entire assault was captured on surveillance video and witnessed by multiple inmates whose cells were positioned opposite the shower area.
The New York City Department of Correction issues directives governing the circumstances under which the use of force against inmates is appropriate. Under these directives, force is to be used as a last resort, when an inmate in restraints is still dangerous to himself and others. The directives also dictate how incidents in which force is used are to be reported – on a “Use of Force” report to be filled out truthfully and promptly.
A full day after the assault, in violation of the directives, CALYPSO filled out a “Use of Force Report” form on which he was supposed to report truthfully the circumstances of that assault. Over multiple pages and numerous answer fields within the report, CALYPSO attempted to justify his conduct by lying about whether and how Inmate-1 had acted aggressively toward him and whether his violent response was necessary. He also mischaracterized and misstated portions of the assault, omitting the punches he delivered while holding Inmate-1 in a headlock and claiming that he had hit CALYPSO only in the “upper torso” area.
CALYPSO was terminated from his job as a correction officer following his criminal conviction.
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Mr. Kim praised the investigative work of the FBI. Mr. Kim also thanked the New York City Department of Investigation, the New York City Department of Correction, Investigative Division, and the Bronx District Attorney’s Office for their assistance in the investigation.
This case is being handled by the Office’s Civil Rights and Public Corruption Units. Assistant U.S. Attorneys Martin S. Bell and Tara M. La Morte are in charge of the prosecution.
New Jersey Fishmonger Arrested for Stealing over $900,000 in Checks from Fulton Fish MarketRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Daniel D. Brownell, the Commissioner of the New York City Business Integrity Commission (“BIC”), announced today the unsealing of a complaint charging VINCENT PERRETTI with bank fraud and conspiracy to commit bank fraud in connection with a scheme to steal over $900,000 in checks from his employer at the Fulton Fish Market. PERRETTI was arrested this morning and was presented this afternoon before Magistrate Judge Debra Freeman in federal court in Manhattan.
Manhattan Acting U.S. Attorney Joon H. Kim said: “As alleged, Vincent Perretti’s fishy scheme involved stealing nearly a million dollars from his employer and spending it on trips and jewelry. Thanks to the outstanding investigative work of the NYPD, Perretti’s alleged two-year scheme has gone belly up.”
Commissioner Daniel D. Brownell said: “Vincent Perretti allegedly directed a blatant, long-term fraud in the Fulton Fish Market, stealing nearly $1 million from his own employer. As the regulator for all of the City’s public wholesale markets, BIC will continue to work to keep the markets fair and competitive, free from corruption and theft.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]
Over a two-year period, PERRETTI and a co-conspirator who also worked at the Fulton Fish Market entered fake invoices into their employer’s accounting system, causing the employer to issue unauthorized checks to PERRETTI for shipments of fish that were neither ordered nor delivered. PERRETTI then cashed the checks and spent the money on personal items, including jewelry and trips to the Bahamas.
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PERRETTI, 49, of Aberdeen, New Jersey, is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison, and one count of bank fraud, which carries a maximum sentence of 30 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the Business Integrity Commission and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Adam S. Hobson is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Czar Entertainment Founder James Rosemond Convicted in Manhattan Federal Court for Ordering the Murder of Lowell FletcherRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JAMES ROSEMOND, a/k/a “Jimmy the Henchman,” was found guilty last night of murder-for-hire, conspiracy to commit murder-for-hire, and firearms offenses for ordering the murder of Lowell Fletcher, a/k/a “Lodi Mack.” The jury convicted ROSEMOND on all counts in the controlling indictment following a nine-day retrial before United States District Judge Lewis A. Kaplan.
Acting U.S. Attorney Joon H. Kim said: “James Rosemond’s team of hitmen assassinated Lowell Fletcher as payback for an assault on Rosemond’s son. Rosemond’s defense at trial – that he hired these men to shoot Fletcher, but did not intend for Fletcher to be killed – was swiftly and unanimously rejected by the jury. Justice for Fletcher’s family has been a long time coming, in part because of a hung jury and an overturned conviction in two prior trials, but that thanks to the unwavering commitment and tireless work of the detectives, agents, and prosecutors on this case, it is finally here.”
According to court papers and the evidence at trial:
JAMES ROSEMOND 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.
For his role in ordering, planning, and paying for the murder of Lowell Fletcher, ROSEMOND was convicted of one count of substantive murder-for-hire, one count of conspiracy to commit murder-for-hire, and two firearms counts. ROSEMOND faces a mandatory minimum sentence of life in prison. ROSEMOND is scheduled to be sentenced on March 13, 2018, before Judge Kaplan.
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. The case was reassigned to Judge Kaplan for retrial. ROSEMOND presented that defense at this third trial, which began on November 6, 2017, and ended on November 28, 2017, when a unanimous jury found ROSEMOND guilty of all the charges against him.
Acting U.S. Attorney Kim 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.
Medical Doctor Pleads Guilty to Selling Fentanyl That Resulted in Manhattan Man’s Overdose DeathRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that AVINOAM LUZON pled guilty this morning to selling fentanyl that resulted in the overdose death of Gabriel Tramiel, 32, of Manhattan, on October 22, 2016. LUZON pled guilty earlier today before Chief Magistrate Judge Debra Freeman.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Avinoam Luzon was a trained medical doctor who sold a lethal dose of fentanyl. Even as he was enrolled as a graduate student in public health, Luzon fueled the nation’s most serious health crisis, the opioid abuse epidemic. As he admitted today, Luzon sold fentanyl to Gabriel Tramiel, a 32-year-old New Yorker, and, tragically, it killed him.”
According to the charging and other documents filed in federal court, as well as statements made in the plea proceeding:
Gabriel Tramiel was found dead by his wife in the early morning hours of October 23, 2016. Tramiel was transported to the hospital and was examined by a medical examiner from the New York City Office of the Chief Medical Examiner who determined that a fentanyl overdose was the cause of Tramiel’s death. Text messages recovered from Tramiel’s phone show a conversation with LUZON the evening of October 22, 2016, in which LUZON requested payment from Tramiel for narcotics and the two arranged a meeting to exchange narcotics for payment. LUZON later admitted to providing the lethal dose of fentanyl to Tramiel on October 22, 2016. LUZON also turned over to law enforcement over 160 grams of fentanyl he was storing in his dorm room in Manhattan, while enrolled as a public health student.
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LUZON, 33, of Manhattan, New York, faces 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 the defendant’s sentence will be determined by a judge. LUZON is scheduled to be sentenced in March 2018, by the Honorable Lewis A. Kaplan, U.S. District Judge.
Mr. Kim praised the outstanding work of the NYPD. He also thanked the New York State Department of Health’s Bureau of Narcotics Enforcement for their assistance with this investigation.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Karin Portlock and Matthew Podolsky are in charge of the case.
Acting Manhattan U.S. Attorney Announces Criminal and Civil Charges Against Prominent Researcher for Theft of Government Funds and Other OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services’ Office of Inspector General (“HHS-OIG”), announced today the filing of criminal and civil charges against ALEXANDER NEUMEISTER (“NEUMEISTER”), a prominent researcher into neurological disorders who, at all times relevant to the charges, was a professor of psychology at a New York City medical school (the “School”). NEUMEISTER was charged with using his position at the School to convert tens of thousands of dollars of federal grant funds, as well as funds belonging to the School, to his personal use by spending them on, among other things, trips for family members and trips and meals for himself and a social friend (the “Friend”). Among other expenses, NEUMEISTER used approximately $9,000 in government funds to pay for eight roundtrip flights from New York City to Salt Lake City to visit the Friend, as well as more than $4,300 in School funds to pay for the Friend to enjoy a nine-day, all-expense paid trip to a resort hotel in Miami Beach. In addition, NEUMEISTER falsely claimed that the Friend was a research study participant in studies that NEUMEISTER was overseeing for the School, and caused the School to pay over $10,000 of the School’s own funds directly to the Friend. To date, NEUMEISTER has not repaid any of the misappropriated funds.
NEUMEISTER was arrested on November 21, 2017, in Ogdensberg, New York, and appeared before a U.S. magistrate judge in the Northern District of New York on November 22, 2017. He will be presented before Chief U.S. Magistrate Judge Debra Freeman in Manhattan federal court today. In addition, a civil case was brought against NEUMEISTER in Manhattan federal court earlier today.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Alexander Neumeister, fraudulently charged tens of thousands of dollars in personal expenses as research or school-related expenses. For allegedly betraying the trust of the medical school that employed him and the government institute that funded his research, Neumeister now faces serious federal charges.”
Special Agent in Charge Scott J. Lampert said: “The defendant allegedly stole thousands of dollars from grants that were meant for important mental health research. We will continue to hold individuals accountable for blatant misuse of federal funds.”
According to the allegations in the Government’s criminal and civil complaints[1]:
From 2012 through 2014 (“Covered Period”), NEUMEISTER was employed by the School and served as the principal investigator for a variety of research studies, many of which were funded by grants issued by the National Institute of Mental Health (“NIMH”). As the principal investigator of these studies, NEUMEISTER was responsible for overseeing all aspects of the studies. NEUMEISTER was provided a credit card by the School, referred to as a procurement card (“P-Card”), and was authorized to charge study-related expenses to the P-Card, but in doing so he was required to identify to which specific funding source (i.e., which grant or other source) each such expense should be allocated. To the extent NEUMEISTER allocated expenses to NIMH grants or School expense accounts, the School would pay the expenses using funds it received from NIMH or its own funds, respectively.
During the Covered Period, NEUMEISTER used his P-Card to charge tens of thousands of dollars of expenses that were personal in nature and unrelated to his research studies or employment at the School. Nevertheless, NEUMEISTER falsely classified, or caused others to classify falsely, these expenses as related to his research or for business purposes related to his position at the School, which resulted in the expenses being paid for using NIMH funds or the School’s own funds. For example, during the Covered Period, NEUMEISTER used his P-Card to charge the following personal expenses, all of which were ultimately paid for with NIMH or School funds:
- airline tickets so that the Friend could travel from Charlotte, North Carolina, or Salt Lake City, Utah, depending on where the Friend was then living, to New York City, where NEUMEISTER was then living;
- airline tickets so that NEUMEISTER could travel from New York City to Charlotte and Salt Lake City to visit the Friend, as well as lodging, bar tabs, meals and other travel-related expenses associated with this travel;
- an all-expense paid trip to Miami Beach for the Friend, during which the Friend was given authorization by NEUMEISTER to use NEUMEISTER’s P-Card to pay for food, beverages, and beach facilities;
- an iPhone for the friend; and
- airline tickets so that NEUMEISTER’s spouse could travel from Newark, New Jersey, to Vienna, Austria, to attend a family event.
When one of NEUMEISTER’s supervisors at the School questioned him in connection with an audit of his P-Card charges, NEUMEISTER, among other things: (1) asked that the audit findings not be disclosed to others because it would jeopardize his job and his children’s ability to attend the School without having to pay tuition; and (2) offered to pay back certain of the expenses that he had charged to the P-Card. Yet, Neumeister never repaid any of the misappropriated funds and later denied much of the improper conduct.
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NEUMEISTER, 51, of Hamden, Connecticut, is charged with one count of theft of government funds, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge. NEUMEISTER is also charged with civil claims under the False Claims Act, through which the Government may recover damages and civil penalties arising from his conduct.
Mr. Kim thanked HHS-OIG for their efforts and ongoing support and assistance with the case.
The criminal case is being handled by the Office’s Complex Frauds Unit, and Assistant U.S. Attorneys Dina McLeod and Christopher B. Harwood are in charge of the prosecution.
The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant U.S. Attorneys Christopher B. Harwood and Anthony J. Sun are in charge of the matter.
The charges contained in the criminal complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the criminal and civil complaints, and the description of the complaints set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
- airline tickets so that the Friend could travel from Charlotte, North Carolina, or Salt Lake City, Utah, depending on where the Friend was then living, to New York City, where NEUMEISTER was then living;
Acting Manhattan U.S. Attorney Announces Conviction of Frank Mercedes on Murder ChargesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that FRANK MERCEDES was found guilty yesterday of murder in connection with a drug conspiracy, murder-for-hire, murder-for-hire conspiracy, and use of a firearm resulting in death, for his role in the murder of Richard Diaz, 28, in Manhattan in 1999. MERCEDES was convicted after a one-week jury trial before U.S. District Judge Richard J. Sullivan.
Acting U.S. Attorney Joon H. Kim said: “Thanks to the work of dedicated agents, detectives, and prosecutors who relentlessly pursued justice, the cold-case murder of an innocent 28-year-old man has been solved after more than 18 years. We hope the verdict brings some measure of peace to Richard Diaz’s family.”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
FRANK MERCEDES, a/k/a “Jabao,” ran a significant drug enterprise in Upper Manhattan in the late 1990s. In the summer of 1999, MERCEDES hired three men, including Jose Luis Gracesqui, a/k/a “Muffler,” to kill one of his drug customers (the “Intended Victim”) after the Intended Victim and a number of his associates stole heroin from MERCEDES.
On the night of July 19, 1999, Gracesqui and a member of his crew saw the Intended Victim in a car with Richard Diaz and began following them through Manhattan. When the car with the Intended Victim stopped at a red light, Gracesqui got out of the car that he had been in, approached the car with the Intended Victim, and began shooting. The shots hit both the Intended Victim and the driver of the car, Richard Diaz. Diaz was able to drive a short distance to the Henry Hudson Parkway, until he lost consciousness and died. The Intended Victim sustained injuries but survived. Shortly thereafter, MERCEDES met with Gracesqui and the other members of the hit team to pay them tens of thousands of dollars in exchange for committing the murder.
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MERCEDES, 51, from the Dominican Republic, faces a mandatory minimum sentence of life in prison. MERCEDES is scheduled to be sentenced on April 4, 2018, before Judge Sullivan.
Gracesqui was previously convicted in January 2016 of charges relating to his role in the murder of Richard Diaz, and is currently serving a life sentence.
Mr. Kim praised the investigative work of the U.S. Drug Enforcement Administration (DEA) New York Drug Enforcement Task Force, which is comprised of agents, detectives and investigators from the DEA, the New York City Police Department and the New York State Police. Mr. Kim also thanked the NYPD.
This case is being prosecuted by the Office’s Violent and Organized Crimes Unit. Assistant United States Attorneys Rebekah Donaleski, Jessica K. Fender, and Laurie A. Korenbaum are in charge of the prosecution.
Two Former Downstate Prison Correction Officers Convicted of Beating an Inmate and Falsifying RecordsRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William Grady, the Dutchess County District Attorney, announced today that KATHY SCOTT and GEORGE SANTIAGO JR., both former New York State Correction Officers, were convicted yesterday of the November 12, 2013, beating of Kevin Moore, a sentenced inmate at the Downstate Correctional Facility in Fishkill New York, and of falsifying records after the fact to cover up the beating. SCOTT and SANTIAGO assaulted Moore in violation of his rights under the U.S. Constitution by repeatedly punching and kicking him in the head and body as he lay prone on the floor – injuries that caused Moore to be hospitalized for two weeks with facial bone fractures, five broken ribs, and a collapsed lung. SCOTT and SANTIAGO were also charged with, and convicted of, conspiring to violate Moore’s civil rights, as well as falsifying and conspiring to falsify Department of Correction records concerning the assault. After a nine-day jury trial before U.S. District Judge Kenneth M. Karas, SCOTT and SANTIAGO were convicted of all charges and immediately taken into custody.
Manhattan U.S. Attorney Joon H. Kim said: “Yesterday, a unanimous jury in White Plains found two New York State correction officers guilty of federal crimes in brutally beating 54-year-old inmate Kevin Moore and then orchestrating a massive cover-up involving scores of lies and even a phony injury. This verdict should send a loud, clear message to the New York State prison system that the protections of the U.S. Constitution do not stop at the prison wall. Although most correction officers are good and honest public servants doing an enormously challenging and important job, there are those who become criminals themselves. Officers who beat inmates, supervising officers who facilitate abuse, and those who lie about it to investigators will face the consequences. And that could be a federal conviction and time in prison as an inmate themselves.”
Dutchess County District Attorney William Grady said: "The United States Attorney’s Office, in agreeing to take the lead in this case, allowed us to avoid the serious legal restrictions that would have been encountered if we had pursued this investigation at the state level. The resulting joint investigation coupled with this jury verdict has allowed our two offices to ensure that there would be full accountability in this horrific case and send the message that every available option was and will continue to be pursued to ensure that justice is achieved."
According to the evidence introduced at trial:
On November 12, 2013, Kevin Moore, then 54, was brought to the 1D Housing Unit at Downstate Correctional Facility to be housed overnight. Moore objected to his cell assignment and a verbal dispute ensued between Moore and a group of correction officers. After Moore yelled, in sum and substance, “I’m a monster,” multiple officers, including SANTIAGO, forced Moore to the floor, held him down, and proceeded to assault Moore as he lay there, repeatedly punching and kicking Moore in the head and body. At no time did Moore ever try to attack, touch, or even make a threatening gesture toward any of the officers. While Moore lay defenseless on the floor, SANTIAGO cocked back his leg and kicked Moore in the face. SANTIAGO also continued to strike Moore after Moore was handcuffed. During the beating, SANTIAGO laughed and taunted Moore, yelling, “Who’s the monster now?”
SCOTT, who was then a sergeant and the supervising officer on the scene, was present for the entire beating and was required to stop the excessive force of her subordinates. Instead of taking action to stop the unlawful violence, SCOTT encouraged it, ordering an officer to hold Moore down on the floor while other officers continued to kick and punch him. During the beating, Moore repeatedly cried out in pain and begged SCOTT and the other officers to stop hurting him.
Immediately after the beating, SANTIAGO and other officers, led by SCOTT, engaged in an elaborate cover-up of the crime they had committed. They made up a false cover story that Moore had attacked one of the officers and that another officer had to strike Moore once in the head. To make this lie believable, the officers claimed that Moore had injured the officer’s back by pushing the officer backward onto a table. Because nothing of the sort had occurred, they created a phony injury. Specifically, SANTIAGO hit one of the other officers repeatedly on the back with a baton and SCOTT photographed the fake injury. SCOTT then prepared a false Use of Force Report of the incident, incorporating the photos and false statements from herself and other officers, including SANTIAGO, and submitted the report to her superiors. SCOTT and SANTIAGO also repeatedly pressured other officers to lie to investigators about what had occurred.
Moore was severely injured, suffering multiple facial fractures, five broken ribs, and a collapsed lung, among other injuries. According to the medical evidence, Moore received at least four forceful blows to the face and torso, including one crushing strike to the right eye that was consistent with a kick from a boot.
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SCOTT, 43, of Saugerties, New York, and SANTIAGO, 35, of Fremont Center, New York, were each convicted of one count of deprivation of rights under color of law, which carries a maximum sentence of 10 years in prison; one count of conspiracy to deprive civil rights, which carries a maximum sentence of 10 years in prison; one count of falsifying documents, which carries a maximum sentence of 20 years in prison; and one count of conspiring to falsify documents, which carries a maximum sentence of five years in prison. SCOTT AND SANTIAGO are scheduled to be sentenced by Judge Karas on April 10, 2018.
Three other former Downstate correction officers pled guilty to the same four offenses. Andrew Lowery pled guilty on July 27, 2016; Donald Cosman pled guilty on August 31, 2016; and Carson Morris, pled guilty on November 1, 2017.
The statutory maximum penalties 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. Kim praised the investigative work of the Federal Bureau of Investigation and the Criminal Investigators at the United States Attorney’s Office. Mr. Kim, also thanked the New York State Department of Correction Office of Special Investigation, and the Dutchess County District Attorney’s Office for their assistance in the investigation.
This case is being handled by the Office’s Civil Rights Unit and the White Plains Division. Assistant U.S. Attorneys Andrew Dember and Pierre Armand are in charge of the prosecution.